House of Commons Hansard Debates for 11 Mar 1993

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together, jurisdiction is certainly "unlimited" with regard to the penalties. I wonder what jurisdiction means in that context.

Mr. Budgen : Can the right hon. and learned Gentleman give his opinion about what would happen if a member state refused to pay the fine imposed? Would there be a system, which might be described as a sort of European attachment of earnings order, by which money would go out in some other fund for--shall we say for argument's sake--a well ordered, stable country such as Italy? Let us say, for argument's sake, that Italy said specifically that it felt that it would not pay the fines but, naturally, wanted to receive the tiny subventions which are so generously and willingly given to it. Will there be a system by which the court will be able to say that, if the member state will not pay the money directly, it will deduct the fine out of the country's subsidy, the regional fund or whatever? Will that be possible?

Mr. Morris : I am always delighted to give advice to hon. Members.

Sir Teddy Taylor : How much do you charge?

Mr. Morris : I would prefer it if I could charge but I cannot, I fear, in the circumstances. That is my personal regret. It matters not for the moment.

Mr. Skinner : Is it still guineas?

Mr. Morris : No. We are operating under the metric system. It appears to me that there is no legal power of enforcement. There is certainly nothing similar to what the hon. Member for Wolverhampton, South- West (Mr. Budgen) thought of in his wildest moments as an attachment of earnings order. There are no court bailiffs or periods of imprisonment in default. The political will of the other countries would have to bring to bear whatever pressure they could on the defaulting country. In the treaty there does not appear to be any machinery for enforcement.

8 pm

Several Hon. Members rose --

Mr. Morris : I will give way to the hon. and learned Member for Montgomery (Mr. Carlile) in a moment. I ask hon. Gentlemen to restrain themselves because otherwise I shall find myself replying on behalf of the Minister. I noticed one of my colleagues doing that in the previous debate and I do not intend to tread along that path.

Mr. Alex Carlile (Montgomery) : I am interested in the right hon. and learned Gentleman's view on unlimited fines. Let us take the example of Welsh lamb. Let us suppose hypothetically that the French Government decided not to allow imports of Welsh lamb into France, heaven forfend. Is the right hon. and learned Gentleman saying from the Labour Front Bench that fines should be limited in such a case? Or does he agree with me that the court should have the power to fine on an unlimited basis so that Welsh sheep producers were entitled to see the French Government pay compensation?

Mr. Morris : As the son of a Welsh sheep farmer and the brother of more than one Welsh sheep farmer, I must declare an interest. I am simply asking the questions which the hon. and learned Gentleman is putting in his own way.

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Whether the penalty is for preventing the import of Welsh lamb or any other product, should we not be worried about the extent of the penalty? We shall now hear from a much better prophet than me, the Minister of State, to be followed by the Attorney-General.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones) : Will the right hon. and learned Gentleman confirm, fothe benefit of the Committee, that it is not uncommon in the United Kingdom, where there is no fixed penalty for an offence, for the fine to be at large? We look to the courts to exercise proportionality in such matters. As the right hon. and learned Gentleman has been kind enough to tell the Committee that amendment No. 32 is a probing amendment, I would be grateful if he would say whether he regards such an arrangement as appropriate for the European Court, as, indeed, it is for the British courts.

Mr. Morris : I am sure that the Minister will want to consult about whether it is appropriate with the Attorney-General, who will give a much better view than me.

Mr. Garel-Jones : What is the right hon. and learned Gentleman's view?

Mr. Morris : I am coming to that. If the right hon. Gentleman will have a little patience, of course I shall tell him.

Mr. Budgen : Will the right hon. and learned Gentleman give way?

Mr. Morris : No, I am sorry, I cannot. I am replying to the Minister. One at a time.

Of course-- [Interruption.] If the Minister would listen--in our courts we frequently have provision for fines at large. But we have the advantage of knowing what the courts have regarded as reasonable in the past. We have procedures for appeal if the fine is too large. Or indeed, as the Attorney-General will advise the Minister, where the penalty is too lenient the Attorney-General can refer the matter to the Court of Appeal. However, we have the advantage of precedents. We do not have precise precedents for each particular case, but we know how our courts have operated in the past and are likely to operate in the future on the basis of what would be upheld either on appeal by a defendant or on a reference by the Attorney-General. However, we are giving a new power to the European Court of Justice to impose a penalty. The only power that it previously had was the power which I have referred to as "necessary measures". We are moving from "necessary measures" to fines and lump sums. There are no precedents for a court which is being given a new power. What discussions took place between the participating countries before the provision was agreed? Or did they come to it blind? If they came to it blind, without any idea what the court would impose, a frank and honest answer--which we expect from the Minister--will help the Committee a great deal. Did the countries come to it blind?

Mr. Garel-Jones : I simply seek to ascertain whether the right hon. and learned Gentleman and his party support this provision in the treaty of Maastricht. The Committee would be interested to know that. I shall certainly give the Government's view when I catch your eye, Mr. Lofthouse.

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Mr. Morris : Obviously--

Mr. Budgen : Will the right hon. and learned Gentleman give way?

Mr. Morris : No. I have given way a great deal and I am grateful for the assistance of the hon. Gentleman.

I suppose that we shall have to wait for the answer to my question. It may well be some hours. It might have helped the Committee to have a preliminary view from the Foreign Office. If it was wrong, it could be corrected by the Attorney-General later. We would then have the advantage--

Mr. Garel-Jones : What is the right hon. and learned Gentleman's view?

Mr. Morris : If the right hon. Gentleman was listening, as I am sure that he was because he is a courteous gentleman, and if he took me at my word, he will know that I said that amendment No. 32 was a probing amendment to discover the extent of the power and what thought was given to an apparently unlimited power. What were the views of the participating powers or did they come to it blind? When he quotes as a parallel what happens in our country, he must learn that we have a system of precedents in our courts. We know from recent and past history--I hope that it will operate in the same way in future--that we have a machinery for appeal.

I cannot see any machinery in the treaty for appeal. If a penalty were imposed which was so great as to bankrupt a country, would the hon. and learned Member for Montgomery be willing to see imposed a penalty which might bankrupt a country?

Mr. Alex Carlile : The right hon. and learned Gentleman gives me the opportunity to reply to him with a good constituency point. The answer to his question, if Montgomeryshire lamb is being burned at Calais harbour, is yes.

Mr. Morris : Well, we know where the hon. and learned Gentleman stands. I have the utmost sympathy with him about the destruction of any food, and particularly Welsh lamb. He may want to develop that argument. I have asked certain questions and we should be interested in the Minister's advice on that aspect.

Mr. Skinner : There is a problem here. Let us suppose that a country decides to break the law and the penalty could bankrupt it. Then the learned people in the Common Market get together and say, "Well, we have a problem here. That country is bankrupt already." It is like this country. We have a £50 billion public sector borrowing requirement. We are up to our neck in debt. We have a balance of payments deficit. People will say, "We would like to make this Tory Government bankrupt but they have already done it." How do they go on then?

Mr. Morris : I am not answering on behalf of the Government.

Mr. Budgen : He should be ; he is supporting them.

Mr. Morris : The hon. Gentleman should not jump to too many conclusions.

Mr. Tam Dalyell (Linlithgow) : Could we go back to the interruption by the hon. Member for Southend, East (Sir T. Taylor), who, like me, is not a lawyer? Will my right hon. and learned Friend confirm that the people who are

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appointed from this country--and, indeed, from other countries--are extremely distinguished lawyers? The idea that Judge David Edward or his Scottish predecessor Lord Mackenzie-Stuart would be subject to political pressure is far-fetched. Having had experience of the Court of Human Rights, in a case in which the present Lord Chancellor was counsel, I can say that any political pressure from me or any other body would be dismissed as snash. We would not have dared to do that because it was a formidable operation and it would have been counter- productive. These are impressive people. Is not that part of the answer?

Mr. Morris : I concur with my hon. Friend. Members of the court are extremely distinguished and would do what they could in accordance with their oath. The hon. Member for Southend, East (Sir T. Taylor) put a particular point and I was seduced into answering it. He was not suggesting that members of the judiciary would have their arms twisted but he was asking a serious question about what guidance would be available. My answer was simply that it is not in the treaty.

Sir Teddy Taylor : Will the right hon. and learned Gentleman reassure the hon. Member for Bolsover (Mr. Skinner) that if a fine were imposed that could bankrupt a country, under the convergence criteria of the Bill that country would be entitled to a substantial grant from the cohesion fund? Will he therefore make it clear that if an excessive fine were imposed a country could get its money back under the cohesion fund?

Mr. Morris : I shall not pursue that argument. I am sure that you, Mr. Lofthouse, would rule me out of order if I were to do so. That matter can be raised in the debate.

Amendment No. 228 deals with article 172--an important article that we have already begun to consider. The article contains a curious phrase :

"Unlimited jurisdiction with regard to penalties"

I should like the advice of the Attorney-General on this matter. If unlimited penalties could be imposed under the article, it is a draconian measure. What concerns me--this is where we need clarification--is whether article 172, interpreted with article 171, confirms the view that I have expressed that there does not appear to be any power to limit in any shape or form the amount of the lump sum or the penalty. That needs to be justified.

Article 172 proposes an additional restriction :

"Regulations adopted jointly by the European Parliament and the Council pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction."

8.15 pm

That introduces the European Parliament for the first time and makes the application of the unlimited jurisdiction dependent on its adoption by both parties, Parliament and the Council. I would find it very difficult to support amendment No. 228, but I know that concern has been expressed and we should be reassured about what "unlimited jurisdiction" means.

The new article 168a creates a mandatory obligation that a court of first instance shall be created and the Council's power is limited. After consulting the Commission and the European Parliament, and acting unanimously, the Council shall determine the type of case that a court of first instance is to hear, and its constitution. Why has a mandatory power been substituted for the existing discretionary power? What has changed? I recall some years ago, if my memory is correct, that the

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machinery of the European Court was clogged by it having to take up so much of its time resolving domestic disputes arising from the rights, duties and obligations of its employees. Against that background, we should like to know a little more about the court of first instance. If it is the same as the one that is functioning already, perhaps we could be less apprehensive, but it would interest the Committee to learn why this new mandatory power has been substituted and what the background was to the agreement of all the parties.

I need not comment on amendment No. 330 because it is the same as amendment No. 32 ; likewise amendment No. 331 is the same as amendment No. 228. Amendment No. 411 proposes that the European Court of Justice should be required to sit in plenary session--attended by all its members--

"when a Member State or a Community institution is a party to the proceedings".

It is proposed to add the words :

"When a party to the procedures requests it to".

Under existing provisions, it is required to sit in plenary session in such a case regardless of the wishes of the parties. The Committee would like to know why this new requirement has been inserted in the treaty, what caused it, whether there were any specific problems with the operation of the existing article and why it is proposed to come into effect.

Mr. Garel-Jones : Will the right hon. and learned Gentleman remind me--I am sorry if I did not hear him correctly--which amendment he is referring to?

Mr. Morris : I am referring, unless the order has changed, to article 32 and to amendment No. 411, which proposes that the court should

"sit in plenary session when a Member State or a Community institution that is a party to the proceedings"

requests it. I hope that I have referred to the correct amendment. Mr. Garel-Jones indicated assent.

Mr. Morris : I see that the Minister acknowledges that I have. If that is the case, why was that change made? What was the background? I repeat that amendment No. 32 is a probing amendment. I hope that I have not wearied the House unduly by commenting on some of the other amendments. We would be grateful for the Minister's view about these matters.

Mr. Garel-Jones : I thank the right hon. and learned Member for Aberavon (Mr. Morris) for making it clear that amendment No. 32 is a probing amendment which has been moved by the Opposition Front Bench to allow us to discuss these important matters.

Amendment No. 32 seeks to delete from the Bill article 171 of the Maastricht treaty. That article gives the European Court of Justice a new power to impose fines on member states which do not comply with earlier judgments by the court in respect of their carrying out their Community obligations.

Although the right hon. and learned Member for Aberavon has quite legitimately raised several issues, as amendment No. 32 is a probing amendment, I take it that the Opposition are broadly content that article 171 should be included in the treaty. The power in the article is perhaps the most important new power to be given to the European Court of Justice by the Maastricht treaty. That

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power was given to the court on the initiative of the United Kingdom Government. The provision of that new power for the court is something that we regard as one of our achievements in the Maastricht negotiations.

It would not be unfair to say that one of the aspects of the European Community that has caused justified anxiety among our citizens and among successive British Governments is that, while as one of the Marx brothers would have said, "Nobody's perfect", the British Government seek internationally, in general, and in the European Community, in particular, to comply as rigorously as we can with our legal obligations.

The right hon. and learned Member for Aberavon was good enough to quote figures to the Committee. Perhaps I can amplify those figures by quoting the number of references to the European Court of Justice between 1987 and 1991. I will not read out the whole list, but Italy heads the list with 87 references. Greece has 52 and Belgium 47. At the bottom of the list there is Portugal with five references, Denmark with eight and the United Kingdom with nine. While I have not worked out the proportion of references bearing in mind the relative sizes of the United Kingdom, Denmark and Portugal, the right hon. and learned Member for Aberavon was right when he said that United Kingdom Governments, as a general proposition, seek to be diligent in complying with the law.

There is general agreement, certainly on the Conservative Benches, that the single market and the free trade area that is the European Community matters very much to Britain. If that single market is to succeed, we need to ensure that the European Court of Justice has the ability to enforce that single market. We must ensure that there is a system of justice in the European Community which is capable of enforcing that single market which matters so much to the United Kingdom.

Mr. Stuart Randall (Kingston upon Hull, West) : As a matter of interest, can the Minister give us some idea of what the nine referrals, in relation to the United Kingdom, involved?

Mr. Garel-Jones : I cannot provide that information off the cuff. However, if I can provide it after advice before I conclude my remarks, I will do so.

The Committee would expect any United Kingdom Government to behave in the way that I have described. In the list to which I have referred, the United Kingdom has never been taken to the European Court of Justice twice. I regret to say that, on occasions, member states have been taken to the court, have been found to be not in compliance, have not then complied and have been taken to the court once again. Such cases have rightly caused indignation in the House and in Britain as a whole. That is why this most extensive new power for the court was brought forward on a British initiative. We make no apology for that. Indeed, we regard it as one of our achievements in the negotiations that the court should have the new power.

Mr. Budgen : My right hon. Friend will appreciate that the term "enforcement" has a special meaning for lawyers. If my right hon. Friend will forgive me, he is saying that there is an additional penalty which is a fine. The problem is that there is no method of enforcement.

Mr. Alex Carlile : What about Wolverhampton magistrates court?

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Mr. Budgen : For the sake of argument, the European Court of Justice can say to the Italians, "We hereby fine you 3 million ecu." However, there is no reason to suppose that the Italians will be any more willing to hand over 3 million ecu than they have been to disclose the number of olive trees that they possess. The difficulty is that the European institutions have half the pretensions of a state, but they do not have all the means of a state.

Mr. Denzil Davies : What about an army?

Mr. Budgen : Exactly. If the Wolverhampton magistrates court, to which the hon. and learned Member for Montgomery (Mr. Carlile) has just referred, fines me £1,000 and I do not pay it, in the end a policeman can come and feel my collar and take me to the Wolverhampton magistrates court--

The First Deputy Chairman : Order. The hon. Gentleman is making a lengthy intervention which is very nearly a speech. I hope that the hon. Gentleman will take note of what I have said.

Mr. Budgen : In the end, the Army can enforce the fine. If I refuse to deal with the police, the Army can be brought in. In the end, the state depends on force. As I was saying to my right hon. and learned Friend the Minister, those institutions have the pretensions, but not the means, of a state.

Mr. Garel-Jones : I am grateful to my hon. Friend for that short speech and for the fact that he inadvertently, no doubt impressed by the legal skills that I have already demonstrated to the Committee, described me as his right hon. and learned Friend. I am sure that he would wish that to be corrected. If I may say so mischievously, my hon. Friend has been giving the House the benefit of his views on enforcement in another context. The right hon. and learned Member for Aberavon also touched on that point and I shall deal with it later in my speech.

Mr. Dalyell : The mind boggles at the thought of the Shropshire light infantry being sent south to sort out the hon. Member for Wolverhampton, South-West (Mr. Budgen)-- [Interruption.] His own regiment would doubtless not comply. However, it is a serious issue. Can we have a comparison like for like, because neither the figures for Germany nor those for France were given? Either on advice, or from his brief, can the Minister give us the comparisons? Those of us who have experience, albeit of the indirectly elected European Parliament, know that Italy is sui generis and comparisons with France or the Federal Republic might be more relevant.

8.30 pm

Mr. Garel-Jones : I did not want to weary the Committee, but I have the figures to hand. They are Italy 87 ; Greece 52 ; Belgium 47 ; France 34 ; Germany 34 ; Netherlands 20 ; Ireland 18 ; Luxembourg 16 ; Spain 12 ; United Kingdom nine ; Denmark eight ; and Portugal five.

Mr. Denzil Davies : Will the Minister give way?

Mr. Garel-Jones : I am responding to the point raised by the hon. Member for Linlithgow (Mr. Dalyell).

The cases against Britain were two cases on the internal market, two cases on environment, three on statistics, one on the customs union and one on employment. I regret that I do not have the details on each individual case.

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Mr. Denzil Davies : Will the Minister give way?

Mr. Marlow : Will my right hon. Friend give way?

Mr. Garel-Jones : I shall make a little progress and then I shall give way.

The first point that I would seek to establish--I do not think there will be any difference between myself and the right hon. and learned Member for Aberavon or the hon. and learned Member for Montgomery (Mr. Carlile) that Britain took the initiative to give the court those powers is that we feel, not over-boastfully, that we are diligent in seeking to comply with the law. We feel that some member states are perhaps not as diligent as they should be and therefore it is right that the European Court should have the right to back up its judgment with a fine.

Mr. Marlow : We have a problem with Greece. Europe has a responsibility for trade policy and has decided to take trade sanctions against Serbia to prevent arms, fuel and other supplies of war from getting into Serbia. Yet Greece is pouring the stuff in as if there were no tomorrow. Under the existing trade policy, is it mandatory that Greece should impose sanctions, or is it voluntary? Will it be mandatory or voluntary under the Maastricht treaty? In either case, what will the court do about it and, if the court does nothing, what can we do to make sure that the court does something--and in quick time because there is a war going on?

Mr. Garel-Jones : First, any decisions taken now under European political co-operation and later, when the Maastricht treaty is ratified, under the common foreign and security policy, would not come under the jurisdiction of the European Court of Justice. My hon. Friend is quite right that decisions that have a trade implication are often taken under European political co-operation and eventually under the common foreign and security policy. Therefore, a foreign policy decision by member states could trigger a trading action or sanction by the Community. Once an aspect of any decision moves into the competence of the Commission and the treaty of Rome, the European Court of Justice is able to rule on it.

Sir Nicholas Fairbairn : Will my right hon. Friend give way?

Mr. Garel-Jones : I shall give way in a moment, but I must make some progress.

One of the important questions that the right hon. and learned Member for Aberavon raised was whether I could give him a flavour--it would be no more than that--as to whether the European Court of Justice was beginning, in its creative judgments--I think that was the term he used--to move in a less centralising way than it has done in the past.

The Committee has had a lengthy and interesting debate on this issue, prompted by my hon. Friend the Member for Chingford (Mr. Duncan-Smith) who is in his place. Without wearying the Committee in a repetitious way, no more than any hon. Member would seek to anticipate judgments by our own courts, I would not want to anticipate judgments by the European Court on any matter. However, this is one debate that has raged throughout the Committee. The Government believe that in the Maastricht treaty and the tendency within Europe the tide is beginning to turn against centralism.

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In the debate on 27 January I was able to quote three recent cases where the judgments of the European Court have seemed to be more in favour of the positions of member states. The first was in July 1992 on national insurance contributions, where the court upheld the maintenance of different state pensions for men and women in the United Kingdom. In December 1992, in the most recent batch of Sunday trading cases, the Court upheld the United Kingdom Sunday trading legislation. Finally, in a judgment that concerns the environment, in the Wallonia waste disposal case, the Court upheld a ban on the import of waste by the Belgian region of Wallonia and in doing so allowed generous derogations from article 30 of the treaty. Although it would be wrong and inappropriate for me to try to anticipate specific judgments, I believe that there is some evidence that the climate created by the Maastricht negotiations has brought about change. The Committee touched on the subject in the previous debate when my right hon. Friend the Foreign Secretary was able to demonstrate that article 3b on subsidiarity, even before it has come into effect, has already had a significant impact on the way in which the Commission goes about its work. I hope that without any disrespect to the European Court of Justice, it would not be improper to say that there is some indication that it may be moving in the way in which the right hon. and learned Gentleman suggested.

Sir Nicholas Fairbairn : Since Greece has been mentioned, may I ask about the implications for Britain if Greece were to be treated according to the proposals from the bureaucrats in Brussels? If we got the same percentage per capita as Greece, we would have to pay no income tax, corporation tax, heritage tax or VAT and we would be able to have vast advantages. That must be addressed whether we are centralists or decentralists.

The First Deputy Chairman : Order. I do not know how the hon. and learned Member's intervention relates to the European Court of Justice. If he will base his question on the court, I shall deem it to be in order.

Sir Nicholas Fairbairn : Certainly, Mr. Lofthouse. As someone who has probably appeared in the European Court of Justice more often than anyone else in the Chamber, I understand what you say. The most important matter which I have had to address was whether brut meant that the wine in the bottle had been grown from grapes from a vine in soil over which German was the official language. Against that background, I think that I do know something about the court. It is important that we understand that this trivialist, asinine, bureaucratic and unjuridical farce should be restricted rather than enlarged.

Mr. Garel-Jones : I always listen with interest and respect to what my hon. and learned Friend says. I believe it to be the case, as do the Government, that many of the abuses and problems by which our citizens, the House of Commons and the Committee have been disturbed are met by the Maastricht treaty. The amendment that we are debating, which bears on the ability of the European Court to impose fines, is just one opportunity to demonstrate that.

My hon. Friend the Member for Southend, East (Sir T. Taylor) raised in an intervention the important question of whether there is no limit to the fines.

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