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These notes refer to the European Union Bill as introduced in the House of Commons on 25th January 2005 [Bill 45]
EUROPEAN UNION BILL
1. These explanatory notes relate to the European Union Bill as introduced in the House of Commons on 25th January 2005. They have been prepared by the Foreign and Commonwealth Office and the Department for Constitutional Affairs in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. Where a clause or part of a clause does not appear to require explanation or comment, none is given.
3. The Treaty establishing a Constitution for Europe (the Constitutional Treaty) reorganises the European Union's existing treaties into one main treaty. It replaces and repeals the Treaty on European Union and the Treaty establishing the European Community (the EC Treaty) and the treaties amending them. The Treaty establishing the European Atomic Energy Community (the Euratom Treaty) continues to exist alongside the Constitutional Treaty.
4. In addition to consolidating the existing treaties (apart from the Euratom Treaty) the Constitutional Treaty makes a number of changes to those treaties. The key changes include:
5. The White Paper on the Treaty establishing a Constitution for Europe (Command Paper Cm6309) contains further details of the changes made by the Constitutional Treaty. The Constitutional Treaty has been published as Command Paper Cm6429.
6. The Prime Minister gave a commitment to Parliament on 20 April 2004 that the British people would be consulted on the ratification of the Constitutional Treaty through a referendum. The Treaty was signed by all member states in Rome on 29 October 2004. This Bill establishes the details of the referendum that will be held in order to fulfil the Government's commitment. It also makes provision for the Constitutional Treaty to be given effect in United Kingdom law if the referendum approves its ratification.
7. Parts 1 and 2 of the Bill apply to the United Kingdom. Clause 5(11) allows for the extension of provision made under clause 5 to the British overseas territories. Part 3 applies to the United Kingdom and to Gibraltar, as does Part 4 in so far as it applies to Part 3. Further detail on territorial application is given in the commentary on clauses.
TERRITORIAL APPLICATION: WALES
8. The whole Bill applies to Wales. Clause 4 of the Bill confers powers on the National Assembly for Wales within areas for which it exercises transferred functions. Under clause 6 (3) in Wales the question on the referendum ballot paper will be set out in both English and Welsh with equal prominence.
OTHER RELEVANT LEGISLATION
9. The Political Parties, Elections and Referendums Act 2000 (PPER Act) is relevant for the purposes of this draft Bill and should be read alongside it.
10. The PPER Act established the Electoral Commission. Among other things, Part 7 of the PPER Act sets out the legal framework within which national and regional referendums are held. These provisions apply to United Kingdom-wide referendums. The key provisions as regards United Kingdom-wide referendums are:
COMMENTARY ON CLAUSES
Clause 1: Revision of meaning of "the Treaties" etc.
11. Subsection (1) amends section 1(2) of the European Communities Act 1972 ("the 1972 Act"). It replaces the list of "Community Treaties" in that subsection with a new list of "EU Treaties". These are the treaties which will be given effect in domestic law under the 1972 Act when the Constitutional Treaty comes into force.
12. The new list of EU Treaties includes the Constitutional Treaty and the Euratom Treaty. (The Constitutional Treaty will be defined in the 1972 Act as the "EU Treaty" - these notes refer to it as the Constitutional Treaty in order to distinguish it from the existing Treaty on European Union.) The provisions of the Constitutional Treaty relating to the common foreign and security policy (CFSP) are excluded from the list: they are dealt with separately under clause 5 of the Bill and explained in more detail below. As is now the case under the 1972 Act, a number of other treaties and instruments feature in the list. They include the Act concerning the election of representatives of the European Parliament by direct universal suffrage; the Agreement on the European Economic Area; and the Communities' own resources decisions.
13. The list concludes, as is now the case under section 1(2) of the 1972 Act, with two categories of agreements. The first is external agreements entered into, with or without the Member States, by the Communities to date, and by the EU in the future. The second is agreements entered into by the Member States which are ancillary to the EU Treaties. A new subsection (2C) to be inserted in section 1 of the 1972 Act defines these two categories of agreement in more detail.
14. Subsection (6) is included to meet the requirement of section 12 of the European Parliamentary Elections Act 2002. The requirement is that "no treaty which provides for any increase in the powers of the European Parliament shall be ratified by the United Kingdom unless it has been approved by an Act of Parliament". A number of provisions in the Constitutional Treaty alter the powers of the European Parliament in comparison with their powers under the previous treaties, chiefly by increasing the occasions on which EU legislation must be adopted by co-decision (renamed "ordinary legislative procedure" in the Constitutional Treaty) between the Council and the European Parliament.
Clause 2: Parliamentary approval for treaty changes
15. Articles IV-444 and IV-445 of the Constitutional Treaty create simplified procedures for revising the Treaty. Article IV-444 allows changes to be made to the voting requirements or legislative procedure governing articles in Part III of the Treaty. Article IV-445 allows changes to the provisions on the internal policies of the Union in Title III of Part III of the Treaty. Clause 2 creates a requirement that any changes to the Treaty made under these Articles must be approved by Parliament in order for them to be recognised in domestic law.
16. A decision under Article IV-444 is not subject to any national ratification once adopted. Subsection (3) therefore builds in a requirement for Parliamentary approval of the initiative for such a decision before it is made. The resulting decision can only be recognised in domestic law if it has been approved in accordance with subsection (4). Under subsection (4) the initiative is approved by Parliament if the House of Commons sent a message to the House of Lords asking for its opinion on whether the House of Commons should resolve to approve the initiative and the initiative was approved by resolution of the House of Commons not less than 20 sitting days after the House of Lords received the message.
17. A decision under Article IV-445 is subject to approval by the Member States in accordance with their constitutional requirements following its adoption by the European Council. Subsections (5) and (6) provide for approval of such a decision by Order in Council approved by resolution of each House.
18. It is possible that section 12 of the European Parliamentary Elections Act 2002 could apply to a European decision adopted under Articles IV-444 or IV-445. For example, such a decision might increase the powers of the European Parliament by extending the ordinary legislative procedure to new areas of EU action. Subsection (7) provides that Parliamentary approval for treaty change in accordance with clause 2 will also constitute approval for the purposes of section 12 of the European Parliamentary Elections Act.
Clause 3: Statements on subsidiarity
19. This clause supplements the requirements of Protocol No. 2 to the Constitutional Treaty on the application of the principles of subsidiarity and proportionality. The Protocol requires that draft European legislative acts should be forwarded to national parliaments. Under article 6 of the Protocol a national parliament may, within six weeks of the date of transmission of a draft legislative act, send to the Presidents of the European Parliament, the Council and the Commission a reasoned opinion stating why it considers that the draft in question does not comply with the principle of subsidiarity. In addition to this role given to national parliaments under the Protocol, clause 3 imposes a duty on the Minister of the Crown with responsibility in relation to the matters to which the draft legislative act relates to lay before Parliament, during that six-week period, a statement about whether, in his opinion, the draft legislative act complies with the principle of subsidiarity.
Clause 4: Amendment of enactments and continuity
20. The replacement of the existing Treaty on European Union and Community Treaties with the Constitutional Treaty raises issues of legal continuity both at the level of EU law and of domestic law. At the level of EU law these issues are dealt with in Article IV-438 of the Constitutional Treaty (on succession and legal continuity). Broadly speaking, that Article operates so as to maintain in force the existing acquis of the Community and Union. It also maintains the validity of existing ECJ jurisprudence and applies that jurisprudence, mutatis mutandis, to the new treaties.
21. In order to mirror this continuity at the domestic law level, it is necessary to update cross-references and terminology in existing domestic law which are based on the current treaties. Clause 4 works together with Schedule 2 to achieve this task. Schedule 2 makes a number of direct technical modifications to existing law. Its provisions are described further below. Clause 4 creates a new delegated power to supplement the modifications made by Schedule 2.
22. Subsection (2) sets out the purpose of the delegated power. It enables a Minister of the Crown or the Treasury, by order or regulations, to make consequential and other modifications of domestic legislation to give effect in domestic law to the provision made in Article IV-438 for succession and legal continuity. It also allows delegated legislation to disapply or modify the effect, in relation to a particular piece of legislation, of any of the general modifications made by Part 3 of Schedule 2. Subsection (3) confers other powers for continuity purposes. Subsection (4) gives further detail of how the new delegated powers may be used.
23. The new power is also to be exercisable by the devolved administrations. Subsection (6) makes the appropriate provisions for this. Subsections (7) to (9) set out the Parliamentary procedure governing the exercise of the power. Where the power is exercised by a Minister of the Crown or the Treasury the statutory instrument may be made subject to annulment in pursuance of a resolution of either House of Parliament or may be laid in draft before Parliament for approval by a resolution of each House.
Clause 5: Implementation of common foreign and security policy
24. The CFSP provisions of the Constitutional Treaty are defined in subsection (12) of clause 5. These provisions are excluded from the definition of the EU Treaties for the purposes of the 1972 Act under the new subsection 1(2A) of the 1972 Act in clause 1 of the Bill. As a result, the UK's obligations under the CFSP provisions of the Treaty will not be implementable under section 2(2) of the 1972 Act. Clause 5 provides a new delegated power for implementation of the CFSP provisions modelled on, and parallel to, section 2(2).
25. Subsection (1) confers power on the Secretary of State to make regulations to implement an obligation of the UK created by or arising under the CFSP provisions. It also allows for implementation of treaties entered into by the UK or the EU on the basis of the CFSP provisions of the Constitutional Treaty. These are defined as "related agreements" in subsection (13). Section 1(3) of the 1972 Act is to apply for determining whether any such treaty entered into by the UK is to be regarded as a related agreement for the purposes of clause 5. This means that any such treaty may not be regarded as a related agreement for the purposes of clause 5 unless it has been specified by an Order in Council under section 1(3).
26. Subsection (2) allows regulations made under clause 5(1) to amend primary or secondary legislation. This reflects the position with implementing legislation under section 2(2) of the 1972 Act. Subsection (3) provides that the powers conferred by clause 5 include power to create new criminal offences carrying a maximum term of imprisonment of 10 years. This degree of penalty reflects the fact that this clause is likely to be used to implement sanctions measures imposing restrictions on third countries and groups of individuals. It is comparable with existing powers used to implement international sanctions measures: the Export Control Act 2002 allows for penalties of up to 10 years' imprisonment, whereas the United Nations Act 1946 allows for unlimited penalties.
27. Subsection (5) provides that regulations under this section must be laid before Parliament and approved by a resolution of each House, unless they contain a declaration by the Secretary of State that the urgency of the matter makes it necessary for the regulations to be made without that approval. In the latter case, subsection (6) provides that the regulations must be laid before Parliament after being made. If they are not approved by a resolution of each House within forty days (as defined by the Statutory Instruments Act 1946) they cease to have effect, although anything previously done under them remains valid.
28. The new delegated powers created by this clause are to be exercisable for devolved purposes by Northern Ireland departments and by the Scottish Ministers. Subsections (8)-(10) make the necessary provisions. Subsection (11) contains a provision allowing Her Majesty by Order in Council to extend provisions made under this section to British overseas territories.
Clause 6: Holding a referendum
29. Clause 6 establishes the duty to hold a referendum on the issue of the United Kingdom approving the Treaty establishing a Constitution for the European Union.
30. Subsection (1) gives a Minister of the Crown the power to set the date by order. The order is subject to the affirmative resolution procedure. The referendum will be held throughout the United Kingdom and Gibraltar on the same date.
31. A Minister of the Crown may also set by order, under subsection (3)(a), the referendum period, subject to the affirmative resolution procedure. The period will start on a date to be determined by the order, and will end with the date of the poll.
32. Subsections (2), (3) and (4) together set out the question to be asked in the referendum in both English and Welsh, and provide for the equally prominent use of the Welsh language on ballot papers in Wales.
33. The question in English is "Should the United Kingdom approve the Treaty establishing a Constitution for the European Union?" In Welsh the question is "A ddylai'r Deyrnas Unedig dderbyn y Cytuniad a fyddai'n sefydlu Cyfansoddiad i'r Undeb Ewropeaidd?"
34. Subsection (7) provides for Schedule 3, the effect of which is outlined in further detail later.
Clause 7: Entitlement to vote in the referendum
35. Clause 7 provides for who is entitled to vote in the referendum under the Bill. So under subsection (1)(a), a person is entitled to vote in the referendum if, on the date of the referendum, he is entitled to vote as an elector at a parliamentary election in any constituency; under subsection (1)(b), if, on the date of the referendum, he is a peer entitled to vote as an elector at a local government election (or a local election in the case of Northern Ireland) in any electoral area; or, under subsection (1)(c), if he is a Commonwealth citizen entitled to vote in Gibraltar as an elector at a European Parliamentary election.
36. The electoral register compiled for use at European Parliamentary elections in Gibraltar will be used for the purpose of identifying those entitled to vote in Gibraltar.
37. Subsection (2) gives a Minister of the Crown the power by order to allow the electoral registers used in the referendum to be closed to amendments made after a certain date. This is a common provision in electoral law. The order is subject to the affirmative resolution procedure.
Clause 8: Legal challenge to the referendum result
38. Clause 8 limits the circumstances under which the formal result of the referendum under the Bill may be challenged in legal proceedings. It does this by prohibiting the courts from considering any challenge to a certificate of the number of ballot papers or votes cast unless the challenge is brought by way of judicial review commenced within six weeks of the certificate. There are precedents in electoral law for this type of clause, and most recently the Regional Assemblies (Preparations) Act 2003 contained such a clause, as did the draft Single European Currency (Referendum) Bill, published on 10 December 2003 as Command Paper 6081. The six week period is intended to ensure that there is not an unacceptable delay caused by any challenge to the result.
Clause 9: Financial provisions
39. Subsection (1) of clause 9 enables payment from money provided by Parliament to cover expenditure of the government in connection with the Bill and any increase attributable to this Bill in the sums so payable under any other Act.
40. Subsection (2)(a) requires the expenditure incurred by the Electoral Commission under paragraph 6 of Schedule 3 to be charged on and paid out of the Consolidated Fund. In addition, subsection (2)(b) will allow for charges on the Consolidated Fund arising under the Bill by virtue of the use of the power in paragraph 8(2)(h) of Schedule 3 to provide for free referendum addresses in Gibraltar.
Clause 10: Supplemental provisions
41. Subsections (4) and (5) deal with commencement of Parts 1 and 2 of the Bill and the repeals. Part 3 and Part 4 other than the repeals, providing for the referendum, enter into force on Royal Assent. Subsection (4) provides that Parts 1 and 2 and the repeals, which give effect to the Constitutional Treaty, are to be brought into force by order made by a Minister of the Crown. Under subsection (5) an order may only be made if the majority of the votes cast in the referendum is in favour of the UK approving the Constitutional Treaty.
Schedule 1: Definitions relating to the European Union etc.
Part 1: Substitution of new schedule of definitions
42. Part 1 of Schedule 1 substitutes a new Schedule 1 to the 1972 Act. That Schedule contains the definitions of the key terms in the 1972 Act. The new Schedule replaces definitions based on the existing Community Treaties with new definitions reflecting the terminology of the Constitutional Treaty and the 1972 Act as amended. Paragraph 3 of the new Schedule 1 provides for continuity between the old and new Schedules.
Part 2: Applications of definitions to enactments generally
43. Schedule 1 to the Interpretation Act 1978 extends the definitions in the existing section 1 of, and Schedule 1 to, the 1972 Act to apply to enactments in general. Paragraph 2 amends the Interpretation Act 1978 to reflect the revised definitions in the 1972 Act.
44. Paragraph 2 also adds two new definitions which do not appear in the 1972 Act: these are definitions of "EEA Agreement" and "EEA State". Finally, paragraph 2 introduces a rule of interpretation aimed at simplifying references made in UK domestic legislation to EU instruments which have previously been amended.
45. Paragraph 3 and 4 make equivalent amendments to the corresponding provision applying in Scotland and Northern Ireland.
Schedule 2: Modification of enactments etc. and continuity provisions
Part 1: Amendments of the 1972 Act and related savings
46. Part 1 of Schedule 2 makes amendments to the 1972 Act. Many of the amendments simply reflect the different terminology of the existing Community Treaties and the Constitutional Treaty. Substantive amendments made by Part 1 of Schedule 2 are described in the following paragraphs.
47. Paragraph 2(2)(a) amends subsection 2(2) of the 1972 Act to allow Statutory Instruments to be made by order, rules, regulations or schemes, in contrast with the existing powers which do not allow for orders, or rules or schemes. This change is designed to allow section 2(2) to be used in combination with delegated powers in other legislation which allow for orders, rules and schemes.
48. Paragraph 8 increases the scope for imposing criminal penalties using the powers of section 2(2) of the 1972 Act which cannot currently be used to impose penalties exceeding two years' imprisonment. The increased penalties are to be allowed for two purposes only. The first is when implementing framework laws adopted under Article III-271(1) or (2) of the Constitutional Treaty to establish minimum rules in relation to criminal offences and penalties. The second is when implementing EU sanctions measures imposing restrictions on capital movements or interruptions of economic or financial relations with a third State or persons.
49. Paragraph 8 works by inserting new subparagraphs (2A) to (2C) into paragraph 1 of Schedule 2 to the 1972 Act. These paragraphs disapply the restriction in paragraph 1(1)(d) of Schedule 2 on creating criminal offences punishable with more than two years' imprisonment. The new subparagraph (2A) relates to implementation of obligations relating to co-operation in criminal matters. It allows for a penalty of more than two years' imprisonment where this is needed to implement an obligation created or arising by or under Article III-271 (1) or (2) of the Constitutional Treaty.
50. The new paragraph (2C) relates to implementation of EU sanctions obligations arising under Article III-160 or III-322 of the Constitutional Treaty (restrictions on capital movements etc). It allows for criminal penalties of up to ten years. This potential term of imprisonment matches the term possible when using clause 5 of the Bill to implement sanctions measures adopted under the CFSP provisions of the Constitutional Treaty.
51. Paragraph 9 inserts a new paragraph (1A) into Schedule 2 to the 1972 Act. When section 2(2) is used to implement an EU instrument, paragraph (1A) will allow that implementing legislation to pick up future amendments to that EU instrument. This provision is aimed at the situation where an EU instrument will be the subject of subsequent technical amendments. It allows the legislator to avoid the need for fresh secondary legislation under section 2(2) for successive technical amendments.
52. Paragraph 10 governs the Parliamentary procedures applicable when section 2(2) is used to implement EU measures on judicial co-operation in criminal matters and on police co-operation generally (not just those where more than two years' imprisonment is imposed). It also applies in all cases where more than two years' imprisonment is imposed. The basic rule in these cases is that the section 2(2) instrument is subject to affirmative procedure.
53. This is achieved by inserting new sub-paragraphs (1A) to (1G) into paragraph 2 of Schedule 2 to the 1972 Act. The new paragraph 2(1A) of Schedule 2 provides for secondary legislation to be laid in draft before Parliament and approved by a resolution of each House. This procedure is required in the following cases:
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