European Union Bill

William Cash Excerpts

Tuesday 25th January 2011 Commons Chamber

Similarly, the European public prosecutor’s office might at some stage in the future be of importance to our country, to the Government, whatever their colour, and to the House. At the beginning of the previous decade, we heard exactly the same arguments against the European arrest warrant. People said that it was an intolerable interference in British sovereignty, with Brussels marching in to arrest anyone it wanted. By the time of 7/7, however, when one of the wanted suspects had fled to Rome, where the civil liberties lawyers, the judges, the left and the supporters of Islamism were wrapping their arms around him to protect him, the EAW had—thank goodness—become part of our law, having been adopted by the European Union, and so that gentleman was back on a plane to London before he could say “strong cappuccino”.

[Mr William Cash (Stone) (Con)]

Does the right hon. Gentleman recall the case of the person in Leek, Staffordshire whom it was proposed, under an arrest warrant, should be taken over to Italy, and who was convicted in his absence to 15 years, but who, thanks to the intervention of my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley) and the Prime Minister, has been completely exonerated? He was not even within 1,000 miles of where the murder took place.

[Mr MacShane]

The hon. Gentleman is perfectly right, but we could all list examples in Britain of improper arrests. It does not vitiate the need for international co-operation against criminality—I mentioned trafficking, but there are other examples—if that is what we want. International co-operation on the basis of, “Well, you’ll co-operate with us, but we won’t co-operate you”, will never happen. I am glad that there was not a referendum lock on the EAW, because otherwise that gentleman from 7/7 would still be waiting in Rome until we had had our referendum.

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[Mr MacShane]

Well, I am tempted to—

[Mr Cash]

Sit down?

[Mr MacShane]

To be told to sit down by the hon. Gentleman, who, to his great credit, has never long warmed a Bench if he could stand up, is undoubtedly a real pleasure to be had from my small contribution to this debate.

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[Mr MacShane]

I will not give way. The hon. Gentleman will make his points in due course.

In opposition, it was possible for the Conservatives to campaign as Eurosceptics, but they cannot but govern as Euro-realists. This we have seen in whole range of—

[Mr Cash]

rose—

[Mr MacShane]

I am sure that the hon. Gentleman will have a chance to make his point very shortly.

As Euro-realists, this Government have been—by my standards—responsible and helpful, shovelling out money to Ireland and working with Chancellor Merkel on serious treaty amendments that will increase economic surveillance of all the 27 member states, on foreign policy and on other issues. I really have no huge complaints to make about the Government at all. I say again, however, that it is inconceivable that any Minister of any Government in the future is going to come back from Brussels and say, “I’ve signed such a bad treaty. I’m not really sure about it. It is so significant in its alteration of the powers between the UK and the rest of the EU that I want it put to a referendum.”

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[Mr Cash]

The right hon. Gentleman is making a big show about all this. First, there was a referendum in 1975 under a Labour Government. Secondly, there was also a promise in the Labour manifesto about a referendum on the constitutional treaty. Thirdly, if the right hon. Gentleman had been here yesterday, he would have heard those on his own Front Bench proposing a mechanism to ensure that, in certain circumstances, there would be a referendum on all matters within the treaties. So, for practical purposes, he needs to ask himself whether the Labour party is now contradicting the position that he is adopting.

[Mr MacShane]

I will leave that point for my right hon. and hon. Friends on the Front Bench. I am not sure whether their new clause has been selected for debate today, but it proposes to set up a broad oversight committee, which might indeed be a rival to the Committee of the hon. Member for Stone (Mr Cash). I do not think that the proposal will make much progress, however.

The worry for me is that, at least among the majority party on the Government Benches, we have a Eurosceptic majority. We have to accept that. There are also many Eurosceptics on these Benches—[Interruption.]

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[Mr Cash]

The investigation order has not yet been debated in the European Committee, as far as I am aware, so we should bear it in mind that although the Minister made a statement—on 15 June, I think—it is none the less still subject to scrutiny.

[Chris Heaton-Harris]

I thank the Chairman of the European Scrutiny Committee for correcting me. He knows that I am often wrong, so he corrects me quite regularly. I appreciate the help and assistance that he gives me, as a new Member in this place.

In the simplest terms, on the JHA ratchets, the Government have wisely looked at article 86 of the TFEU and have closed down in the Bill many of the policy areas that could be taken up to European level. Article 86 deals with the European public prosecutor, as I think the hon. Member for Wolverhampton North East (Emma Reynolds) alluded to earlier. However, it does not pay attention in the same way to the justice and home affairs criminal law ratchets, because those are contained in article 83. Is there a reason for that? Essentially, I am seeking from the Minister an idea of how we will deal in this place with matters similar to the European investigation order when the Bill is enacted.

The criminal ratchet clauses are often very important, but some, while important in themselves, would not be as important to the British people on the whole. It would be a very daring move for anybody—a Eurosceptic, a pro-European, or any Minister—to recommend such matters for a referendum. I am quite happy to think that we could deal with this by putting before both Houses of Parliament a motion or Bill that could be amended to include a referendum clause, should the need arise. However, we can do justice and home affairs scrutiny a lot better. Although the written ministerial statement goes some way in that regard, could the Minister give us some real-life examples to explain how such matters will be dealt with in future?

I do not want to detain the Committee further. I have explained the reasons for my amendments on family law—I will not be pressing those to a vote—and on the JHA ratchets, which I hope I will not need to press to a vote. All parties should be able to agree in general terms to better parliamentary scrutiny of justice and home affairs opt-ins—or, indeed, opt-outs. This is the right place for that to be done, and I look forward to the Minister’s comments.

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[Emma Reynolds]

That is certainly true, but I remind the hon. Gentleman that both the Single European Act and the Maastricht treaty involved a much greater transfer of powers than anything we have seen since and the Foreign Secretary voted against a referendum on such matters. Let us talk not only about consistency on this side, but about consistency by those on the Treasury Bench, too.

The Government have decided to opt in to eight pieces of justice and home affairs legislation since the general election. The hon. Member for Daventry has mentioned one of them—the European investigation order. The Opposition would have liked to have had a say on the Government’s decision not to opt in to the EU directive to combat human trafficking. Indeed, we judge the Government’s decision not to opt in to be a dereliction of duty as regards combating this modern form of slavery. I imagine that some Back Benchers sitting behind the Minister—as I have said, the hon. Member for Daventry has mentioned this—would have liked more time on the Floor of the House to discuss not only the European investigation order but the other seven measures that the Government opted into.

Another area that the Government have totally neglected to mention in the Bill is the wholesale transfer of the body of justice and home affairs legislation to the jurisdiction of the European Court of Justice. The decision that the Government have to take in 2014 either to opt in to the body of legislation in its entirety or not to do so was also referred to in the Minister’s written ministerial statement last week, but it is not mentioned in the Bill and is surely of equivalent significance to many of the changes in clause 6. In fact, the Conservative party manifesto stated that the Conservatives wanted to repatriate powers in employment and social affairs and criminal justice.

In his ministerial written statement, the Minister said there would be a vote in the House on the decision in 2014—we welcome that. However, I am sure that some of his Back Benchers will tell him that it is his best chance to repatriate powers in the field of criminal justice. Such a move would be unilateral and could be carried out with relative ease. The Government will not be able to do the same in the field of employment and social affairs without the unanimous agreement of all the other 26 member states. Given that this is the Government’s only chance to fulfil that manifesto commitment, are they minded to take up this opportunity? Are not these changes more important than those in clause 6?

[Mr Cash]

Perhaps the hon. Lady is getting to this point, but I should like to know whether the Opposition are going to push this issue to a vote, or at least encourage one.

[Emma Reynolds]

We are not in favour of repatriating power; I am simply pointing out that according to their manifesto, the Conservatives committed to doing so. Far be it from me to intrude on private grievances, but I am simply trying to point out that there may be disagreement on these issues between those on the Government Front and Back Benches.

[Mr Cash]

The hon. Lady has been talking with great eloquence about opt-ins and the number of opt-ins that have taken place and she has referred to the excellent amendments of my hon. Friend the Member for Daventry (Chris Heaton-Harris), which reflect the views of the European Scrutiny Committee. In the light of her eloquence and determination, and the expressions of support she has given to my hon. Friend and therefore to the Committee, I should like to know whether the Opposition would be interested in voting on these matters.

[Emma Reynolds]

I was simply pointing out inconsistencies and contradictions in the Bill.

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[Emma Reynolds]

I have read it, and it is unforgettable, but perhaps that is not for this debate. We have become more sensible since then.

[Mr Cash]

The hon. Lady may not remember the precise terms of the 1983 Labour manifesto, but it was described as

“the longest suicide note in history”.

On the treaties, the Maastricht treaty indeed represented a massive transfer of powers. As Professor Simon Hix confirmed, in his view it should have been subject to a referendum. There are very few on the Conservative Benches now who do not agree that we were right when we pressed for one at the time. However, the Lisbon treaty contains the ingredients of the Maastricht treaty. That is where the problem lies. A referendum was required on that because of the things that are now entrenched in the Lisbon treaty which come out of Maastricht, Amsterdam and Nice, plus all the add-ons that the Front-Bench team of the Labour party in government put through.

[Emma Reynolds]

I know that the hon. Gentleman is disappointed that back in 1993 he did not manage to win the vote on securing a referendum on the Maastricht treaty. I would like to look forward, rather than look back. I shall continue and conclude my remarks.

The changes outlined in clause 6 and other parts of the Bill pale into insignificance compared with the wholesale transfers of power in the Maastricht treaty and the Single European Act, as I outlined. In the House, on the Second Reading, both the Foreign Secretary and Minister for Europe reiterated the Government’s commitment, as set out in the coalition agreement, not to agree to any transfer of power from Westminster to Brussels for the duration of this Parliament. If the Government are so committed not to transfer power, why do we need the Bill? Is it that their own Back- Benchers do not trust them to keep to the text of the coalition document?

The Bill is unnecessary. It is a dog’s breakfast. It is a political gesture to calm the fears of the Eurosceptics on the Conservative Benches. The Government have failed to achieve their objective.

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[Mr Cash]

Will my hon. Friend bear it in mind that the infamous Merchant Shipping Act was taken through the House in 1988? It was struck down by the House of Lords for not being in compliance, it argued, with the European Communities Act 1972. I do not want to trespass too much on her speech, but I think she may appreciate that she is in what I would describe as extremely sensitive and, in my view, very sensible waters.

[Priti Patel]

I thank my hon. Friend for his remarks. There is no doubt that these are sensitive issues.

The Bill is significant and designed to protect Britain’s interest, and now and in future we must think about the safeguarding of our territorial waters. We know about the state of fishing in this country, and I seek from the Minister an assurance that we will not concede more powers but consider the implications when changes come to the fore affecting our sovereignty and decision making in this House.

I shall touch on a couple of other issues. During the debate a fortnight ago on clause 8, the Minister for Europe, when challenged at length by my hon. Friend the Member for Stone (Mr Cash) and others, gave a very strong reassurance that this Parliament is sovereign on all matters. On this narrow issue regarding the common fisheries policy, however, my amendment would allow Parliament to exercise its constitutional power and disapply EU law that in my view is clearly not in our national interests.

As my hon. Friend says, these are sensitive issues, and I am not advocating a bust-up with Europe over them, but the amendment is about asserting our parliamentary sovereignty, on which many Members will agree. I seek the Minister’s assurance that the Government are listening to the points that I have made. To summarise, I hope that they will safeguard the powers that we have over our territorial waters and that they are prepared, come what may, to defend the country’s interests on this issue.

[Chris Bryant]

I congratulate the hon. Member for Witham (Priti Patel) on her speech, but it exemplified the fundamental problem that I have with clause 6 and, for that matter, schedule 1. The Euroscepticism at the heart of the clause is a classic example of our exaggerated understanding of our own significance—in particular the significance of Britain and of our parliamentary tradition. That has been exemplified in many speeches this afternoon.

I always think it is ironic when people inveigh against other Europeans, often misquoting John Bright to say that this Parliament is the mother of all Parliaments, when he actually referred to England as the mother of all Parliaments. It is particularly ironic when people then refer to the first summoning of commoners to a royal Parliament—Parliament is of course a French word, not an English word—by Simon de Montfort. They quite often forget that he was in fact a Frenchman, and a profoundly anti-Semitic one at that. Incidentally, we only know the names of those who attended the 1258 Parliament because they had their expenses paid.

[Mr Cash]

We are enjoying the hon. Gentleman’s speech, but I thought I would mention that although he is right about what John Bright said—I have just finished writing a book about him—John Bright was defending democracy. Given the problem of the democratic deficit that we so often have, he would have been appalled at clause 18 and absolutely appalled at the manner in which power has been accumulated and moved away from the people of this country, particularly those who are less well off.

[Chris Bryant]

I think that John Bright would have been appalled by nearly every economic decision that has been taken by the coalition Government since they came to power, so I do not think that the hon. Gentleman is on good territory in summoning him up in support.

I also point out that the first royal to build on this site was King Canute, who, of course, was Danish. We must therefore take a less effortlessly superior approach to the European Union in our discussions.

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Amendment 8, which refers to the European financial stability mechanism, says that it is all right to extend it to Ireland but not to any other country. That misses the point. If it is right to be able to extend it to Ireland without a referendum—I presume that the argument would be that it is in our direct economic interest because of our historic ties with Ireland—why would it not be the same if we obtained direct economic benefits from ensuring that the Spanish, Portuguese or French economies do not collapse? Why should that require a referendum, whereas the situation in Ireland does not?

[Mr Cash]

The hon. Gentleman refers to an amendment that I hope to address shortly. Part of my argument will be that that financial mechanism is unlawful. It was entered into by a former Chancellor of the Exchequer and endorsed by the coalition Government in circumstances that I shall describe. It is also still subject to scrutiny by the European Scrutiny Committee.

[Chris Bryant]

I look forward to hearing the hon. Gentleman’s arguments. However, I do not understand why it is okay to support Ireland without a referendum, but impossible to provide such support to another country without a referendum.

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[Chris Bryant]

Indeed. Obviously, a referendum would also incur significant costs. The Government are trying to argue that holding the alternative vote referendum on any day other than 5 May this year would cost some £30 million. I presume that any referendum under the amendment would also cost some £30 million, and I think that that is inappropriate. The clause refers to “a common EU defence”, and although I do not want to hand over the setting up of a standing army to the European Union, I acknowledge that there is already a European army, because there are troops from member states acting in Kosovo—and they have done so in Bosnia—as well as Swiss troops under an EU banner. I am reluctant to say that a referendum would be needed on any aspect of a common defence policy, because that would be a mistake in our national security.

[Mr Cash]

The hon. Gentleman referred to the cost of a referendum, but my amendment provides that a referendum would be held on the mechanism if the decision involved £5 billion or more. That is a vast amount, and that is why it should not go off to Spain or Portugal. I shall explain why if I get the chance to speak.

[Chris Bryant]

I look forward to hearing the hon. Gentleman’s arguments.

My final point is that my anxiety about the drafting of this Bill, and in particular this clause and its attendant schedule, is that it is a lawyers’ paradise. There will be constant judicial review of decisions made by Ministers. For instance, in the case of the agreement on the External Action Service, the eventual format would have been agreed by a Minister from any political party in this House, but it could well be subject to judicial review under the amendment. It is also true of many other elements of the clause, and it means that Ministers’ actions at meetings in Europe will constantly be subject to judicial review. Rather than increasing the power of Parliament, that will actually increase the power of the judges in this country, which I consider to be a very big mistake.

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[Neil Carmichael]

My position is that neither of them needs to be supported. I believe that the present situation is perfectly acceptable, and we need to concentrate on the question of power and competence.

The European financial stabilisation mechanisms are also very important. The critical point is that we are not in the euro, and that ECOFIN makes the decisions through the qualified majority voting procedure, so any attempt to make changes in that regard would not necessarily have the desired effect. We have no plans to join the euro. Amendment 8 would be necessary only if we decided to join it, which we certainly do not intend to do. I might add that this legislation will make it a necessity, for the first time, to have a referendum before we are able to join the euro. That is really useful.

[Mr Cash]

My hon. Friend is talking about my amendment, but I am afraid that he really does not seem to understand what it says. I say that with great respect. It has nothing to do with the euro; it relates to a financial mechanism that was brought in by the previous Chancellor of the Exchequer on 9 May last year and endorsed by our own Government. I can assure him that the amendment has nothing to do with the euro, so he can relax.

[Neil Carmichael]

But it has got something to do with ECOFIN and with our interest in ensuring that the euro remains strong, because we must remember that 50% of our trade is with the euro area. That is not to say that we should join the euro; we should not. I am simply reflecting our economic position.

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[Mike Gapes]

Thank you, Ms Primarolo. I take it, then, that if I widen my remarks, I will remain in order—subject, of course, to the occupant of the Chair.

I begin by following up a comment of the hon. Member for Stroud (Neil Carmichael) when he said that the former Prime Minister had said, “They are our fish”. One thing about fish is that they do not stay in one place; they can move. If they do not move, they may be over-fished, and there may be a need to have some kind of collective policy to protect “our fish”. It is very easy to say that these are “our fish”, but the fish might swim away and not come back another day.

[Mr Cash]

When fish are thrown overboard, they are dead; then they do tend to stay where they are.

[Mike Gapes]

That is very true. The hon. Gentleman should therefore welcome the fact that I am a signatory to an early-day motion on this very issue, which was tabled recently by one of his colleagues.

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[Mr Cash]

As the hon. Gentleman knows, I tabled amendment 8. He has described the apparent tremendous advantages of the eurozone to us, and indeed the Government sometimes say much the same. The problem is that as a result of the failures of European economic governance and the failure to repatriate the regulations that are imposed, there is no growth in the EU as a whole. We are in the process of being enmeshed in an imploding European Union. So I do not entirely agree with the hon. Gentleman, although the reasons for my amendment are not directly connected with that.

[Mike Gapes]

The hon. Gentleman and I have been debating these issues for nearly 20 years. We have never agreed on matters relating to the European Union, and I do not think that we are going to do so now.

I do not believe that it will benefit our country if the European Union and the European economies implode, as the hon. Gentleman seems to wish them to do. Certainly there are problems in some—not all—European Union economies, and some, including the German economy, are growing quite rapidly. At the same time, the world’s economic centres are shifting, overwhelmingly to Asia but also to other parts of the world, and as a result we as Europeans will face a very difficult period in the coming years and decades. We need to think carefully about what will happen if the British economy is speculated against in the next 10, 15 or 20 years, and—given that the coalition Government are presiding over a return to recession—about what will happen to the long-term future of the economy if, as the hon. Gentleman wishes, the European economies fail and the European Union implodes.

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[Mike Gapes]

Perhaps when he makes his own speech the hon. Gentleman will be able to clarify whether the Liberal Democrats are still in favour of a “big bang referendum”, as was suggested on some occasions, whether—as happened with the Lisbon treaty—they will vote in three separate ways on any of the issues that arise from clause 6, and whether the Liberal Democrats in the other place will vote in line with their Front-Bench colleagues here or will also be split in three directions.

I believe that the measures before us are not necessary and should be rejected. I shall vote against clause 6 and the amendments concerning, in particular, the European financial stability mechanism, which I think would be positively damaging to the future of our country.

[Mr Cash]

Excellent amendments have been tabled by my hon. Friends the Members for Daventry (Chris Heaton-Harris), for Witham (Priti Patel) and for Hertsmere (Mr Clappison), and perhaps by others whom I have omitted to mention. There are quite a few amendments here which deal with matters raised by the European Scrutiny Committee, and which relate in particular to gaps—as we described them in our report—in the control mechanisms of part 1. Those matters, which have been discussed quite extensively, involve extensions of European Union competence in criminal law and procedure and in family law, opt-in decisions, and enhanced co-operation in internal passerelles. The amendments deal comprehensively with those issues, and in doing so demonstrate their necessity.

The proposal relating to criminal procedure has been raised by the European Scrutiny Committee in the past. In particular, the Committee has raised the issue of serious crime with a cross-border dimension. Despite denials over the past decade or so that there would be any serious engagement in the field of criminal law, there has been an increasing encroachment on it. There are serious problems, which are often procedural. We should also consider the manner in which criminal justice is activated and operated in other member states. We do not want to assume that everything that we do is perfect; indeed, we have plenty of evidence that it is not. However, there are certain basic principles that go to the heart of the manner in which trial by jury operates and the manner in which people are arrested. I could continue at great length.

[Mr Clappison]

My hon. Friend is making an extremely powerful speech about a very important point. He has referred to the rationale behind the proposals from the European Union, and has cited serious crime with a cross-border dimension. Can he confirm that when jurisdiction is given to the European Union through an opt-in, it applies not just to cross-border crime but to all criminal law, and brings all the criminal law in this country within the jurisdiction of the European Court of Justice and future proposals from the European Commission?

I do not wish to use the word “bogus” or the word “misleading”, but the European Union’s rationale is apt to mislead. The creation of a common European criminal justice system is profoundly significant.

[Mr Cash]

Indeed. I pay tribute to my hon. Friend, who, as a member of the European Scrutiny Committee, played an important role in the preparation of its report. As I am sure he will speak in the debate, and given his expertise as a member of the Select Committee on Home Affairs, I shall restrict my own remarks, and leave it to him to deal with these questions in his own time and his own way.

I simply make the point that these are well-founded concerns, and I can think of no reason on earth why the Minister would not want to accept these amendments. Perhaps he will, but while the Government have had regard to what the European Scrutiny Committee has said in a report that has been universally welcomed—by both Front-Bench teams and by all those with the competence to understand these matters—they have tended to ignore that almost entirely in considering our recommendations. I shall return to that issue later, but not today.

I turn to the reasons that we gave in the European Scrutiny Committee report regarding questions of criminal law:

“To be consistent with the extension of shared competence under clause 4”—

we debated that yesterday—

“the application of both of these provisions”—

the two provisions and the amendments relating to criminal procedure and serious crime—

“should be premised on a referendum and Act of Parliament, as in clause 6; not an affirmative vote before the Government’s opt-in decision and an Act of Parliament before it agrees to the adoption of the legislation.”

The fact that the report states that ought to be put on the record. Our view is that family law

“is…of similar if not greater importance to social or environmental policy and ought to come within clause 6, triggering a referendum as well as an Act.”

We can see no reason for not doing all those things.

On opt-in decisions, I defer entirely to my hon. Friend the Member for Hertsmere. Our conclusion is that it

“would seem to us consistent with the aim of Part 1…for all opt-in decisions to be subject to formal Parliamentary approval.”

My hon. Friend the Member for Witham referred to fishing, and there she was in sensitive and deep waters. She explained very well the six-mile limit, the fisheries limit of up to 12 miles, the 2002 regulation and the associated issues, but that does not alter the fact that this is a serious problem for the fishermen of the United Kingdom. In considering the idea that there should be any restriction of our sovereignty and territorial limits in these matters, we should remember that the entire fisheries policy, which we shall not debate in detail today, I can assure you, Mr Caton, is a complete travesty. There is no question about it: it constitutes the most monumental waste of good fish, which are thrown away and literally left to rot. It is pathetic, and I need say no more than that. That we should regain a degree of sovereignty and territorial competence in relation to fishing is to my mind a given.

[Mr Redwood]

My hon. Friend has made a very powerful comment. Many of us have felt for many years that the fisheries policy was a scandal. Successive Governments have said that they would do something about it; none have yet succeeded. Does this not show why we are also worried about the surrender of criminal justice powers? We are surrendering them to the very people who have made such a mess of our fisheries.

[Mr Cash]

Absolutely, and the same problem permeates so much of what goes on in the European Union. I am anxious not to get into discussing the merits of the European Union as a whole, and I shall certainly ensure that I keep to the amendments; but I entirely agree with my right hon. Friend. I will come on in a moment to the financial stability mechanism, and try to demonstrate exactly how wrong I think the hon. Member for Ilford South (Mike Gapes) is about the broad questions attached to it. I shall also deal with the mistaken remarks of the hon. Member for Rhondda (Chris Bryant) regarding the necessity for my amendments.

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[Mike Gapes]

Just for the record, is it not a fact that the outgoing Chancellor would have consulted the then shadow Chancellor, who was about to become Chancellor, at that time? So rather than inadvertently giving the wrong impression, perhaps we should put it on the record that in that transition period it would have been necessary and proper for the previous Chancellor to be in discussion with his successor, so that there would be no ambiguity about what would happen.

[Mr Cash]

The hon. Gentleman is absolutely right on that important point, and I was immediately coming to it—I have in my hand the explanatory memorandum, to which I referred before he intervened, precisely for that purpose. It stands in the name of the Economic Secretary to the Treasury. A scrutiny matter is still outstanding, so paragraph 26 comes under the heading of “Other observations” and states:

“The Government regrets that the Scrutiny Committees”—

those of the Commons and the Lords—

“did not have time to consider this document before it was agreed at Council.”

I can tell the House that that happened because we were in a caretaker period and the European Scrutiny Committee, as such, was not sitting in that interregnum. The memorandum continues:

“It should be noted that whilst agreement on behalf of the UK was given by the previous administration, cross-party consensus had been gained.”

That is why I made the point that the responsibility lies with both this Government and the previous one.

[Austin Mitchell (Great Grimsby) (Lab)]

I am following the discussion with great interest and some concern. As I understand it, we are talking about a decision that could have been taken, and was being taken, by a majority vote, and our outgoing Chancellor could not have stopped it anyway. Is that correct?

[Mr Cash]

People keep saying that, but let us examine the actual operation of the European financial stability mechanism. The final decision is taken under the regulations concerned—this is what happened in the context of Ireland—only after the request has been made by the member state. I do not know whether this is one of the reasons why the current Taoiseach—only for the time being, it appears—is in deep trouble, but that is possible. What I do know for certain is that the prescribed procedure laid down under the regulations made under article 122 of the treaty on the functioning of the European Union was infringed by the manner in which the International Monetary Fund, the European Central Bank and others moved into Dublin before a request had been made. As we can recall, the Irish Government were saying that they had not made a request and that they did not need the money. It is also true to say that Mr Socrates is saying much the same at the moment.

[Austin Mitchell]

The hon. Gentleman is being very patient with us and the serious explanation he is giving is well worth considering. I also understood that article 122 was intended to apply to a destabilisation of the euro because of some kind of natural disaster. The destabilisation that took place was caused by the inherent faults in the euro, so why has article 122 been extended to cover a destabilisation resulting from the cracks and failures of the euro itself, given that it should have applied only to natural disasters?

[Mr Cash]

The hon. Gentleman and I have engaged in debates on the European question since we first met. I have the greatest respect for him and he has hit the nail right on the head here, because this problem does not just arise because of our exposure to what happens in Portugal and Spain in the future; it also arises from the lack of a sound legal base for the decision taken in the first place by the outgoing Chancellor and endorsed subsequently by the incoming Chancellor. We know that there was a consensus and that an agreement was reached—that answers the question put by the hon. Member for Ilford South. I would not be going about this if I did not believe that substantial matters of principle and of huge cost to the taxpayer are involved.

[Mr David]

The hon. Gentleman has raised an extremely important point. I wish to emphasise that he is correct to say that there was a consensus between the outgoing Chancellor and the incoming Chancellor—proper discussions and consultation took place—but that was not the impression given to this House by the current Chancellor of the Exchequer.

[Mr Cash]

I was not necessarily here when an impression was being given one way or the other. What I do know is that I have an accurate record of what did take place. I also have with me an article from Monday 10 May containing what are clearly accurate descriptions of the position of the then Chancellor—I believe he was just still the Chancellor then, because the coalition agreement had not been entered into. I recall writing to the Prime Minister on that day, suggesting, among other things, that he should go for a minority Government. I also said that if he was determined to go down the route of a coalition, he should require the Liberal Democrats to abstain on any matters relating to Europe that came up. That possibly explains some of my concerns as matters have developed and more and more European decisions, roadblocks and other difficulties in respect of the decisions we took in our manifesto have emerged.

[Austin Mitchell]

I am grateful to the hon. Gentleman for giving way; he is very patient. I normally agree with his views, even though I usually express them in rather shorter compass. He still has not answered my question, however, about whether what was agreed at the meeting was a distortion of the original purpose of the machinery, which was intended for coping with natural disasters and should never have been extended to destabilisation and problems caused by the euro.

[Mr Cash]

Absolutely, and I shall elaborate on that very quickly. Article 122 concerns matters of emergency and natural disasters, and its use for the purposes of financial stability is clearly—as the European Scrutiny Committee has said—not based on a sound legal footing. That is the issue. I had made that point, but I am happy to repeat it. However, it goes further: because of the failure of the legal base, the whole deal is vitiated. That is the problem. The deal was done in an interregnum and by consensus between the two Chancellors, but it ends up being vitiated as a matter of law. That is very serious given that the whole deal is for €60 billion—£52 billion—but according to the right hon. Member for Edinburgh South West (Mr Darling), the United Kingdom is exposed to a risk of £8 billion.

[Mr Redwood]

Although we must ask the former Chancellor and the Chancellor to speak for themselves, as I understand it the former Chancellor quite properly consulted the then shadow Chancellor, who said, “You are the Chancellor”—he could not be sure at that point that he was about to become the Chancellor, because there was no coalition agreement—“and it is for you to make the decision.” It is also fair to say that I do not think that the present Chancellor objected to the proposal or sought to block it. I think he felt that it was not his decision to make. It was not a co-decision; it was a decision by the former Chancellor, which the present Chancellor knew about.

[Mr Cash]

It was indeed. Furthermore, this is not just a bit of esoteric dancing on the head of a pin. The Select Committee on Political and Constitutional Reform has examined the matter and I happened to be watching its proceedings when there was a discussion involving Professor Hennessey and two other eminent professors, Professor Hazell and Professor McLean. My hon. Friend the hon. Member for Isle of Wight (Mr Turner) asked a perceptive question about the status of the arrangement in the context of the Cabinet manual, which, as we know, is now out in the open and being discussed by that Committee in relation to caretaker Governments. The conclusion was that it was within the province of the incoming Chancellor to enter into such a bilateral arrangement in that context, in which he made his decision based on the information he was given by the outgoing Chancellor. My right hon. Friend the Member for Wokingham (Mr Redwood) is right. The problem is that, if that was unlawful, there was no basis on which either of them should have come to that conclusion.

[Mr Redwood]

As I understand it, the current Chancellor refused to make a decision. It was not a co-decision. He did not object or support it, but said that it was for the outgoing Chancellor to make the decision. Of course, in practice, if he had not agreed he would have unscrambled it when he got into office, because he had the majority and the outgoing Chancellor did not.

[Mr Cash]

I am very happy for that matter to be looked into further. My right hon. Friend might well be right, but I have an article that quotes the outgoing Chancellor of the Exchequer on the BBC’s “Today” programme, saying:

“Overall it is a very good deal for all of us in Europe but also for the wider world. It is”—

something for us “together”. He also said:

“Our exposure for the additional amount of money could be £8 billion”.

The article also states that he

“confirmed he had spoken to Shadow Chancellor George Osborne and Lib Dem Treasury spokesman Vince Cable about…responsibility for it”

and goes on to state:

“All three had agreed ‘there was no way Britain was going to underwrite the euro’.”

When he was pressed, he said:

“I am not going to disclose the conversations we had, because we had them on the basis that they were private and confidential.”

The article goes on:

“A statement issued after the talks confirmed that the new fund placed the potential risk squarely with the eurozone.”

That worries me. I do not know where that came from, because it most emphatically is not the case, as we are not part of the eurozone.

I hope that the Select Committee on the Treasury will look to considering all that. We are talking about substantial sums of money, about an interregnum period and about a rather unusual situation. We might be talking about errors of judgment involving considerable exposure for the taxpayer. For all those reasons, it is very important that we get to the bottom of this. We do not need to turn it into a witch hunt—I do not believe in those sort of things—but as regards scrutiny and accountability, this is an important matter that needs to be resolved properly and efficiently.

Proper answers need to be given, the Treasury needs to put forward the arguments that it presented and it should disclose the papers. We know perfectly well that, in the kerfuffle of 9 May and the days leading up to it, the then Chancellor might understandably have had a lot on his mind. In the circumstances, all sorts of things could have gone wrong. That is the moment, as I see it, when important strategic decisions involving enormous amounts of money and affecting the taxpayer on what I would term an unlawful basis—a basis that certainly is not legally sound—need to be considered very carefully.

It might not surprise some hon. Members that I tabled amendment 8. In all such circumstances, other than the situation vis-à-vis the Republic of Ireland, attention should be drawn to these matters, but under no circumstances whatsoever should we give money to Portugal or Spain when there is a facility, agreed at around the same time, for €400 billion to be available for the eurozone. Now a new arrangement has emerged which will be made available permanently after March 2013. If Portugal and Spain are going to go under, however, they will definitely go under before March 2013.

[Mr Redwood]

On the important point raised by the hon. Member for Great Grimsby (Austin Mitchell), is it not the case—my hon. Friend the Member for Stone (Mr Cash) would know—that the German Government are so worried about the legality of what was done under article 122 that they think we need a new treaty to cover that point?

[Mr Cash]

My hon. Friend is absolutely right. I have here an incredibly interesting article from this week’s edition of Newsweek. It is headlined, “To Rule the Euro Zone”. Hon. Members will know that I have tried to take a mild interest in European matters since I came to the House—I notice that one or two people are quite surprised—and I do so for good reasons. Indeed, in the first book I wrote on the subject, “Against a Federal Europe”, I drew attention to what I then perceived to be a significant danger that Germany would take a disproportionate and predominant role in European affairs, for which I received a great deal of censorship and some abuse. It was suggested that I was talking about the Germans in rather disrespectful terms, which was quite untrue. However, the sub-heading to an extremely interesting article by Stefan Theil, dated 23 January 2011, reads:

“The unified currency was supposed to limit German power. Now the Germans are in charge—and no one is happy, not even the Germans.”

The article merits careful reading.

[Mr Clappison]

I am listening to my hon. Friend with great interest. In his analysis, if the events that he predicts were actually to occur, how would they be covered by the Bill as it stands, without the benefit of his amendment, or would they not?

[Mr Cash]

The short answer is not at all—that is the problem. That is why I tabled the amendment. I am very sad that more people do not have the opportunity to listen to this, because we are talking about a grand total of £8 billion of British money, which is a vast amount given the austerity that is expected of people. After the Irish bail-out payment has been excluded from the same zone, there is also the completely unwarrantable notion to which the decision commits us, unless it is unlawful and is challenged. I invite the Government to challenge it in the European Court—that is the route they should be adopting. That is what I have recommended to the Chancellor. I said, “You must vote against this and challenge the legality of it.” Whether or not he entered into some understanding at the time is a matter to be unravelled, but what is certain, to come back to the point made by the hon. Member for Great Grimsby (Austin Mitchell), is that the decision does not come within the framework of article 122—and the European Scrutiny Committee believes the same.

[Austin Mitchell]

I am puzzled, because the hon. Gentleman is attaching his faith to the €400 billion fund, which would mean that the new arrangement, which was agreed by the then Chancellor and the European Council on 9 May, would not be necessary. That is a puny fund compared with the scale of the problems. If Portugal goes and Spain follows, all that fund will be absorbed and will be necessary, and we will have to fall back on the provisions of article 122. The Irish loan has been portrayed by the hon. Gentleman and the Chancellor as a one-off loan between friends and business partners, but it must have been paid under the article 122 arrangement, so we have already sold the pass.

[Mr Cash]

The hon. Gentleman is not wrong to say that the situation has already taken place for Ireland, but that must be seen in light of what has yet to be established—whether or not it was lawful. More investigation is needed on whether that payment would ultimately be ultra vires, or beyond the law, and therefore reclaimable. I do not want to go too far down that route other than to say it needs to be looked into. Furthermore, the financial stability mechanism has not yet passed the scrutiny of the European Committee that is meeting on 1 February, so it is still subject to a decision of the House, although some might argue that the Rubicon has already been crossed.

[Austin Mitchell]

This is an important amendment for which I shall certainly vote, and I hope that the hon. Gentleman pushes it to a Division so that I have that opportunity. The legality of the decision and the use of article 122 in this way—for a purpose for which it was not intended—is subject to a decision by the European Court, which is a federal institution and always rules in favour of the federal side of the argument. So, I am afraid that his hope that the decision will be ruled illegal will not prevail.

[Mr Cash]

That is a general proposition with which one might agree in many instances, but analysis of the use of article 122 in this case, if it is examined as carefully as it should be, would give rise to so many uncertainties that the Court would have grave difficulty in trying to justify its use. However, that is looking to the future.

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[Mr Clappison]

It is difficult in the field of civil and criminal procedure to disconnect one step from another. The European Court of Justice, whose jurisdiction will be opened up, can always come along and make a decision that goes far beyond what was originally envisaged. We must look at the whole system of civil and criminal justice, including whether decisions are taken in this House, or whether we abnegate self-government and hand those decisions over to the EU.

The hon. Gentleman can make his case, but I am concerned about the scrutiny and decision making that take place each time we take one of these decisions. He referred to technical matters, but in the course of this short Parliament we have already had two very important directives in the field of freedom, security and justice: the European investigation order and the draft directive on the right to information. I do not know whether he or his colleagues took part in the debate we had in the European Committee, but it was accepted on both sides—it was put forward by the Secretary of State for Justice—that it was an important step in itself. I am not sure what his party’s participation in that was, but that was the basis of the decision. That process took place under the existing scrutiny of this House.

The European Commission has an ambitious programme for the year ahead, and the Minister has conceded that there are 30 or 40 more such measures coming along from the EU. In Mr Barroso’s work programme, “Pursuing the citizens’ agenda: freedom, security and justice”, the first three items listed are: a legal instrument on European contract law; a regulation on improving efficiency and enforcements on judgments in the European Union; and a directive on the rights of and support for victims of crime. With respect to the hon. Gentleman, I do not think any of those could be described as minor or technical.

[Mr Cash]

My hon. Friend is not only an expert on this matter, but knows what he is talking about. The reality is that every time one of those decisions is taken—I say this with great respect to the hon. Member for Cheltenham (Martin Horwood), when he starts talking about comparative advantage—it relates to people and justice. It is about whether they get a fair trial and matters of that kind, which are matters that his constituents would be concerned about. It is terribly important to remember that one paragraph of one of these directives, or even one line, is equivalent to an entire Act of Parliament that we might spend the best part of six months discussing in both Houses. Does my hon. Friend agree that under the proposals such matters will just go whistling through?

[Mr Clappison]

The hon. Member for Cheltenham (Martin Horwood), whose opinions differ from mine, has made his case very honourably, and it is one that might attract many people outside this House. I have to ask whether he is happy with the ways in which those matters are currently dealt with before this House. The amendment tabled by my hon. Friend the Member for Stone seeks to make those matters subject to an Act of Parliament and a referendum. My own humble amendment, which we will come to later—I hope that this debate will not prejudice its consideration—would make matters within the area of freedom, security and justice subject to approval by a vote of this House, which I hope is not too radical a step to propose.

On any view of it, these are matters that will come before the House, whether as my hon. Friend describes, or, as I shall try to argue later, as a minimum, in the way I am seeking. The hon. Gentleman must look at the system that we have in place for scrutiny of these matters as they come before the House. When they come before the House, as in the case of the investigation order and the right to information order, which we have already had, it is very hard for the House to express its view on those important issues.

My right hon. Friend the Minister has brought forward some proposals and made a statement last week on how to improve scrutiny of opt-ins to the area of freedom, justice and security. If I may pay my right hon. Friends the Minister and the Foreign Secretary a compliment, I should say that they have made a real step forward with their proposals, but we need to find out just how far that step forward is going to go.

The following questions are relevant to amendments 36, 37 and 38, because they cover the same area. In each case, when the opt-in to certain European areas such as freedom and security is exercised, a decision will be taken whether the United Kingdom is going to opt into specific measures that the European Union has brought forward. There have been half a dozen already, and there are another 30 or 40 down the track, but, under my right hon. Friend the Minister’s scrutiny proposals, will the House have an opportunity to vote on each occasion? That is very important.

How will the scrutiny override proposals work? I hope the hon. Member for Cheltenham agrees on this point, because he would want to make his case about what a good idea such measures were, and what benefits they would bring. I should want to make my case that such measures should be decided in the House, but we could each make our case and have a vote in the traditional way. I should hope that that was not too dramatic a step for any hon. Member.

I am concerned about what my right hon. Friend the Minister said about scrutiny override in his statement. That is one aspect on which we could improve, because he said:

“As currently, the Government will not override the scrutiny process unless an earlier opt-in decision is essential. Where the Government consider an early opt-in to be necessary, it will explain its reasons to Parliament through the statement set out above. In these circumstances, it would usually be appropriate for the statement to be made orally.”—[Official Report, 20 January 2011; Vol. 521, c. 52WS.]

I am not sure that we should put the administrative matters that lie behind the decision, the timetable of the European Union and whatever interminable administrative processes have to be gone through in the Foreign Office before the House’s approval. It really does not put us in a very good place—behind what are termed “essential” decisions. The House should have an opportunity to express its view on the decision first, so I invite my right hon. Friend to go away and think about that. It is all very well having a statement after a decision has been taken, but the House would like the opportunity to express its view through a vote before such a decision is taken.

I have taken part in European Scrutiny Committee debates, and decisions have been taken, the Government have agreed to legislative measures and then we have had the debate in a European Committee. We do not have any opportunity to inform the Minister’s thinking or to debate the matter before the decision is taken, let alone to take a vote on it. Under the current procedures of the House, we cannot do so; it is very difficult to have a substantive vote on security matters. The most that the European Scrutiny Committee can do is to hold a matter in reserve until it has been debated in a European Committee, but neither those nor debates on the Floor of the House provide for a vote to approve or disapprove of particular legislation.

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[Austin Mitchell]

That is true. Under the old system, the inflation rates in France and Italy were higher than that in Germany, so they were constantly getting out of kilter and becoming uncompetitive. They constantly resorted to devaluing, which brought them back to a competitive level because it reduced their costs of production in terms of foreign currencies. There is a history of France and Italy devaluing. They cannot do that when they are in the euro.

[Mr Cash]

Would the hon. Gentleman be interested to know that the Library has given me some figures showing that our balance of payments deficit with Germany was £12 billion in 2009? Heaven alone knows what it is now. Between 1999 and 2009 there was a deficit of £5 billion between the other 26 EU member states and ourselves, but we have a surplus of £11 billion with the rest of the world. His point is extremely sound—the EU is just not working.

[Austin Mitchell]

I am grateful for that point, which is absolutely true. We are earning a surplus in the rest of the world, which then goes as a tribute to finance our deficit in Europe. Before we entered the Common Market in 1972, we had a surplus in our trade with Europe. It then became a deficit, which has become ever heavier as the years have gone on because of our economy’s uncompetitive nature compared with the German economy. All the other weaker European economies face the same problem, and there is no way for them to get around it without facing a diet of cuts, freezes and squeezes for decades, and having to depress the living standards of their own people to keep costs down. That strain is built into the system, which Germany dominates and swamps because of its competitiveness and low inflation. Good luck to it—it has worked for that and run its economy in a very sensible fashion, but a common currency cannot be maintained in that situation. There will therefore be crises.

Those inevitable crises have, under article 122 of the Lisbon treaty, now been portrayed as the results of a natural disaster. That means that we, who have wisely stayed out of the scheme and warned of the consequences of going ahead with that insane regime, must also contribute to cost of clearing up the mess that is implicit in the system. That is a monstrous imposition.

I take it that at his last Council of Ministers meeting on 9 May, our previous Chancellor was conned. He was told that article 122 would apply under qualified majority voting, so it was no use his opposing it because we would be bound by it in any case. That was just not true, because if it applies to mutual support in the event of natural disasters, it cannot apply to faults inherent in the structure of the euro itself. That is not a natural disaster; it is a folly of man.

[Mr Cash]

I add a point that I really ought to have made in my own contribution. When the European Council arrived at the new mechanism that it has just set up, which the Prime Minister announced the other day, it used the most extraordinary language. It used the expression that there was “no need” for the continuation of the mechanism that was set up last May. It is not anything to do with need, however; it is about the fact that they know perfectly well that it was unlawful.

[Austin Mitchell]

Absolutely right. We need to be intellectually devious in trying to read through European documents, because they are extremely cunningly written and always cover up the reality very well. The same is true of Government statements on matters European. The Government do not want the full horror to emerge, so statements are rewritten to make them safe, saleable and acceptable. Once again, the hon. Gentleman is correct, and he has done the Committee a great service today in warning us of the situation and pointing out the consequences if it is prolonged. I believe that the arrangement extends to March 2013, or is it May?

[Mr Cash]

March.

[Austin Mitchell]

Right, and then it will lapse. Until then, we could be liable for enormous sums. Imagine what the British electorate would say. We have already extended a massive loan to Ireland, even though the Chancellor tells us that our country is over-borrowed and cannot borrow any more because world markets will cancel our credit cards and stop our credit on the bond markets. Suddenly, however, he can borrow huge sums—billions—to help Ireland. He says that it is a one-off and not a precedent, but if it is carried out under article 122 of the Lisbon treaty, it is a precedent for acceptance of a mechanism that is designed to deal with natural disasters.

The hon. Member for Stone hoped that the mechanism would be ruled illegal by the European Court, but I have given up faith in the European Court. It never rules how I want it to rule, whereas our courts do sometimes. It is probably composed of Liberal Democrat jurists, for all I know. It certainly gives that appearance.

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[Stephen Gilbert]

It is a pleasure to have the opportunity to contribute to this debate. Anybody watching us must think that they have fallen through the looking glass. We are debating amendments to a Bill that prevents further transfer of power from the UK to the European level of government, in the context of a coalition that has said that it will allow no further significant transfers of power in the duration of its office, and yet Conservative and Labour Members are attacking the Bill while Liberal Democrat Members try to defend it.

[Mr Cash]

I cannot resist intervening. The hon. Gentleman knows perfectly well that the Minister for Europe has said that there is no chance or intention of holding a referendum under the proposals in this Bill until the next Parliament at the earliest—we are in dead parrot territory. The Minister will not deny that. The debate is about what is happening right now. Europe is in total chaos. Every country bar Germany is imploding, but the hon. Gentleman is carrying on as if everything is fine.

[Stephen Gilbert]

I feel like I am entering into my own version of “Back to the Future” in debating the EU with the hon. Gentleman. The Government’s position is quite clear. There will be no referendum over the next five years because there will be no significant transfer of power or competences. The Liberal Democrats welcome that, and I would have thought that he would too.

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[Stephen Gilbert]

The Bill is absolutely clear on that. A number of criteria have to be met and a number of hurdles must be jumped. We debated the significance test yesterday—the hon. Gentleman was in the Chamber and would have carefully listened to the debate—but let me give him an example. At the moment, in the objectives of the EU as I understand them, there is no requirement to combat climate change. Of course, the EU is rightly and properly taking action on environmental issues, but the simple codification of that into one of the objectives of the EU would be quite a minor change, and one that we would all welcome and accept as necessary and important.

[Mr Cash]

Almost everything the hon. Gentleman says demonstrates the complete divergence of views between many Conservatives and many Liberal Democrats. Does he accept that a key problem facing the coalition Government is not only the integral federal views of the Liberal Democrats on matters relating to Europe, by which they are totally besotted, but the implementation of the Lisbon treaty? That is where the problem arises. People talk about transfers of power, but actually, the implementation of existing arrangements under the Lisbon treaty is causing so much difficulty—it is also an embarrassment to Opposition Front Benchers.

[Stephen Gilbert]

I am grateful to my hon. Friend, but it is not for me to judge who or what might be an embarrassment to those on the Front Benches. The reality is that there are clearly a number of safeguards in the Lisbon treaty, including the emergency brake clauses, which can be exercised by national Parliaments. In some cases, they would not require the UK Government to take a view—Parliament can take a view of its own volition. However, I shall resist further temptation from hon. Members and press ahead with my comments on some of the specific amendments in the group, particularly amendments 81, 54, 8 and 79.

Amendment 81 is in the name of my hon. Friend the Member for Witham (Priti Patel), and I have a slight declaration of interest to make in that my great-grandfather was a fisherman along the north Cornwall coast out of Padstow. My constituency also includes many fishing communities, for whom the common fisheries policy in its current iteration is a significant problem. There is huge agreement across the House that having nationally decided quotas rather than regionally set quotas is a problem. The discard policy is also a problem, because it is absurd for this nation to have to throw back hundreds of tonnes of perfectly good fish when we could be using it to feed people in this time of pressures on food security around the world and concerns about the sustainability of fish resources.

I share my hon. Friend’s determination to secure real reform of the CFP. We need to put sustainability at its heart and ensure that local communities are driving it. We also need to review the policy on discards. However, amendment 81 is—to shamelessly snag a pun that has already been used tonight—a red herring. I do not see how it will strengthen our hand when it comes to reform of the CFP—

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[Mr Cash]

On the question of human rights—of course, our manifesto committed us to the repeal of the Human Rights Act 1998—what makes the hon. Gentleman think that the people of the United Kingdom would have been that much worse off if the European Human Rights Act had never been passed? What makes him believe that the vast amounts of money going to all the lawyers in the human rights environment are doing the people of this country any great service?

[Stephen Gilbert]

I am grateful to the hon. Gentleman for his contribution. The European Human Rights Act gave rights to people in this country that they did not enjoy previously. Those rights are now in statute. Of course, hon. Members can make the argument that the House could have conferred those rights—but then this House is exactly the body that did confer them, first through the 1972 treaty, and secondly under the previous Government through bringing the European human rights treaty into British statute, as I understand it.