House of Commons - European Scrutiny

Select Committee on European Scrutiny Thirty-Fifth Report

European Union Intergovernmental Conference

(28791)

11625/07

COM(07) 412

Reforming Europe for the 21^st Century: Opinion of the European Commission, pursuant to Article 48 of the Treaty on European Union, on the Conference of representatives of the governments of the Member States convened to revise the Treaties

Legal base —

Document originated 10 July 2007

Deposited in Parliament 17 July 2007

Department Foreign and Commonwealth Office

Basis of consideration EM of 25 July 2007

Previous Committee Report None; but see HC 63 xvi (2002-03)(25 June 2003), HC 38-xiv (2004-05) (23 March 2005)

To be discussed in Council No date set

Committee's assessment Legally and politically important

Committee's decision Cleared

Background

1. At its meeting in Laeken in December 2001 the European Council agreed that the European Union needed to become "more democratic, more transparent and more efficient"[1] and that for this purpose a number of specific questions needed to be addressed. To examine these questions the European Council agreed to establish a 'Convention' which would consider the key issues arising for the future development of the European Union and to identify various possible responses. The questions in issue were "a better division and definition of competence in the European Union", "simplification of the Union's instruments", "more democracy, transparency and efficiency in the European Union" and the simplification and reorganisation of the Treaties. In this latter case, the European Council raised the question of whether such simplification and reorganisation "might not lead in the long run to the adoption of a constitutional text in the Union".

2. In the event, the Convention, which ran from 2002 to 2003, drew up a Draft Constitutional Treaty which was presented to Member States in July 2003. The text formed the basis of an intergovernmental conference (IGC) which led to the adoption in October 2004 of a "Treaty establishing a Constitution for Europe" (the Constitutional Treaty)[2]. In June 2005 the Constitutional Treaty was rejected by a popular referendum in France (with a 'no' vote of 54.5%) and in the Netherlands (by a 'no' vote of 61.6%). Following a "period of reflection" the European Council in June 2006 asked the German Presidency to produce a report to the June 2007 European Council. This report was to "contain an assessment of the state of discussion with regard to the Constitutional Treaty and explore possible future developments".[3]

3. The report of 14 June from the German Presidency[4] recommended that the European Council should agree to the "rapid convening of an IGC" and to giving a "precise and comprehensive mandate (on structure and content) to the IGC". Although the IGC would be asked to adopt a "Reform Treaty" amending the existing Treaties rather than repealing them, the report stated that "the mandate for the IGC should set out how the measures agreed upon in the 2004 IGC with a view to a more capable and democratic Union should be inserted into the Treaty on the European Union and the 'Treaty on the Functioning of the Union'". The Presidency report noted that a number of Member States had underlined the importance of the "impression which might be given by the symbolism and the title 'Constitution' that the nature of the Union is undergoing radical change" and that for them this also implied "a return to the traditional method of treaty change through an amending treaty, as well as a number of changes of terminology, not least the dropping of the title 'Constitution'". The report found that such an approach was "not incompatible" with the demand from those Member States which had already ratified, that "as much of the substance of the Constitutional Treaty as possible should be preserved". The report noted that these Member States "insist on the need to preserve the substance of the innovations agreed upon in the 2004 IGC".

4. Under the rubric "The way forward", the report recommended the rapid convening of an IGC with a view to adopting an amending Treaty, but noted that a number of changes from the measures agreed at the 2004 IGC would be needed to reach an overall agreement. The report went on to note that, to this end, "there should be further discussions" with regard to a number of issues, namely, "the question of the symbols and of the primacy of EU law", "possible terminological changes", "the treatment of the Charter on Fundamental Rights", "the specificity of the CFSP", "the delimitation of competences between the EU and the Member States" and "the role of national parliaments".

5. In the event, a 'Draft IGC Mandate'[5] containing a series of detailed prescriptions on each of the above issues, as well as an outline of the proposed treaty, was circulated by the Presidency on 19 June as the "exclusive basis and framework" for the IGC. Since the Presidency report was distributed on Thursday 14 June, and the draft IGC mandate was first circulated the following Tuesday on 19 June at 5:00 pm in the evening, we require the Government to clarify what "further discussions" on the issues identified in the Presidency report took place before the draft IGC mandate was produced .[6]

6. The 'draft IGC Mandate' provided the basis for discussion at the European Council, which began just over 48 hours later at 5:30 pm on 21 June. The European Council concluded in the early hours of 23 June, having agreed an IGC Mandate in substantially the same terms as the draft of 19 June. The European Council agreed to convene an IGC and invited the Presidency "without delay" to take the necessary steps in accordance with Article 48 EU[7] with the objective of opening the IGC before the end of July. The German Presidency made a formal proposal on 27 June reproducing the agreed IGC Mandate. The Commission adopted its opinion on 10 July, and the European Parliament gave its opinion the following day. The IGC was subsequently opened on 23 July.

Our consideration of the preparations for the IGC

7. We were concerned at an early stage that the process which was leading up to the convening of an IGC was proving to be far from transparent. We raised this issue with the then Foreign Secretary when she came to give evidence to the Committee on 7 June, referring to a background of "non-transparency" and to the fact that despite an avowed welcome for 'parliamentary contributions to the debate'[8], the Government had resisted requests from the Committee for a statement of its views on what sort of changes there should be to the present institutional arrangements or for sight of either the Berlin Declaration[9] or Presidency progress reports ahead of the relevant European Council meetings.

8. In her evidence in reply, the then Foreign Secretary commented that she understood our concerns and that the Government itself would have wished to have an earlier sight of the Berlin declaration than it did.[10] The Minister stated that there was no proposal to bring back the Constitutional Treaty in its original form and that the Government was "on record at various levels as saying that was such a proposal made we would continue to take the view that that would require a referendum"[11]. The Minister went on to assure us that:

"There has not been anything that you could really call negotiation and not much that you could really call discussion perhaps because the differences of view are still so considerable that it is hard for people to identify the ground on which that discussion might take place." [12]

9. The Minister recalled that, in relation to its negotiating position, at that stage the Government was determined to "keep its powder dry". The Minister described the Government's attitude in these terms:

"We have continued to say quite succinctly, I think, that what we would look for is a treaty which is very different from that proposed as the Constitutional Treaty for something that was in a perfectly understandable and straightforward, historical lineage, an amending treaty. It should be very different from the Constitutional Treaty proposals and, to use the phrase of the Prime Minister which I find quite helpful, it should not be proposing the characteristics of a Constitution. That is where we have hung our hats and where we stay."[13]

10. Despite the statements from the then Foreign Secretary, work had clearly been ongoing within the Presidency, resulting in the circulation only 12 days later of a draft IGC Mandate setting out a series of detailed amendments together with an outline of a proposed draft Treaty. In his evidence to us on 4 July, the Minister for Europe confirmed to us that the Presidency circulated the draft IGC Mandate for the first time at 5:00pm on 19 June[14]. It was also confirmed on his behalf that the process of preparation for the European Council began with a meeting of each country's representatives, referred to as "focal points",[15] with the Presidency in Berlin on 24 January, with a further such meeting on 2 May, with no draft text provided or discussed on either occasion and that the first time any text was given was 5:00 pm on 19 June and that "there had previously been no negotiations" — merely a statement of each country's position.[16]

11. We were also struck by the evidence given on 4 July that those representing the UK did not see the draft IGC Mandate until 5:00 pm on 19 June, even though the European Council was due to commence just over 48 hours later. We wrote to the Minister on 11 July asking to be told whether responsible Ministers were consulted about the draft mandate during that brief period and for an account of such consultations. We also asked for the Government's views on whether it was acceptable for a process which had taken two years then to be "bounced" into the European Council in two days. Although the Minister replied to our letter on 31 July, he did not offer any comment on this point.

12. In order better to understand the process whereby the IGC was being prepared, we asked the Minister on 19 July formally to deposit the Commission's opinion of 10 July on the convening of an IGC and to supply an Explanatory Memorandum explaining the Government's views on the opinion. The Minister acceded to our request and supplied an Explanatory Memorandum on the document on 25 July.

The Commission's Opinion

13. The Commission's Opinion, entitled "Reforming Europe for the 21st Century", is given pursuant to Article 48 EU. The Opinion consists of three parts. Part I "Reforming Europe together", briefly reviews the state of the European Union over the last decade, the process which led to the Constitutional Treaty and the subsequent outcome. This part of the opinion claims that the European Union "is uniquely well placed to find the answers to today's most pressing questions" and asserts that "after fifty years of integration and enlargement, the vision set out by Europe's founding fathers holds as good as ever". It goes on to argue that the European Union has the potential to reinforce its policies in the areas of modernising the European economy to face new competition, keeping Europe at the forefront of efforts to address climate change worldwide, securing sustainable energy supplies, managing migration effectively, combating terrorism, helping developing countries to fight poverty and seeing "European values promoted effectively in the global community", but that this potential "must not be held back by outdated ways of working".

14. The Opinion further argues that the European Union needs modernisation and reform, but that the "delicate balance of the Union's institutional mix still provides the best combination to bring together Europe's strengths" and that "the 'Community method' — and more particularly the European Commission's special role and its right of initiative[17] — is the key to the success of the European system". We are far from convinced that a Commission monopoly of the right of initiative needs any longer to be preserved and maintained and would be grateful for the Minister's assessment.

15. The Opinion notes that the Constitutional Treaty has been ratified in a majority of Member States, but "failed to secure unanimous support". In the Commission's view, although the ratification of the Constitutional Treaty was "at a standstill", the need to reform Europe's way of working "remained as compelling as ever". The Opinion states that the steps towards an "institutional settlement", namely the European Council in 2006, the Berlin Declaration in March 2007 and what the Commission describes as "a comprehensive agreement on the elements for reform in June 2007" have been realised.

16. Part II of the Opinion describes the outcome of the European Council of June 2007. The Commission notes that the European Council agreed a "precise mandate" for the IGC which it describes as "the fruit of a carefully crafted compromise", and the effect of which it summarises as follows:

"Together with many positive elements, which are to be welcomed, this compromise meant that some of the changes agreed in the 2004 IGC were not retained, and a number of derogations were granted to individual Member States. The disappearance of some elements, including some symbolic ones, as well as changes that reduced the readability of the Treaty text, were necessary parts of a package agreement which could be subscribed to by all Member States."

17. The Commission also notes that the European Council emphasised that during the IGC and during the process of ratification "the EU should reinforce communication with its citizens, providing them with full and comprehensive information and involving them in permanent dialogue"[18]. In the Commission's view, the approach of amending the existing Treaties "makes it particularly important to communicate the proposed reforms and their underlying rationale, and to make available as soon as possible an easily accessible and readable text of the Treaties".

18. Part II of the Opinion continues by reviewing salient features of the Reform Treaty under the headings of "A More Democratic and Transparent Europe", "A more effective Europe", "A Europe of rights and values, solidarity and security" and "Europe as an actor on the global stage".

19. Under the first of these headings, the Commission states that, with the Reform Treaty, "Europe's democratic infrastructures will be refreshed and reinforced". This is to be achieved by an increase of co-decision to around 50 new areas which "will see the European Parliament placed on an equal footing with the Council for the vast bulk of EU legislation", and giving national parliaments "greater opportunities to be involved in the work of the EU while respecting the established roles of the EU institutions". However, we doubt the significance of the "greater opportunities" for national parliaments to be involved in any meaningful manner in the workings of the EU without independence from Government whipping systems on subsidiarity and a "red card" system that compels the Commission to withdraw any proposal which threatens to breach the subsidiarity principle. The Commission also refers to the provision for a "Citizen's Initiative" whereby a petition from a million citizens from different Member States can trigger an invitation to the Commission to bring forward a new proposal.

20. Under the heading "A more effective Europe", the Commission argues that the Community method provides the basic structure to enable the interests of different states and peoples in Europe to be married with the interests of the Union as a whole. In this connection, the Commission notes that it "attaches particular importance to the primacy of EU law, clearly established in existing case law and recognised in the mandate".

21. The Opinion continues by describing the main features of the institutional changes made by the Reform Treaty. These include the move to Qualified Majority Voting (QMV) in justice and home affairs which is described as bringing "swifter and more consistent decisions" as well as meaning a "step change in Europe's ability to combat terrorism, to tackle crime and human trafficking, and to manage migratory flows". It is also pointed out that QMV will be extended to more than 40 new matters (see Annex) and "will make a reality of EU action in these areas". Reference is also made to "new and reinforced legal bases" in relation to energy policy, public health and civil protection, climate change, "services of general interest", research and development, "territorial cohesion", commercial policy, space, humanitarian aid, sport, tourism and administrative cooperation. Finally, this part of the Opinion notes that future changes to policies within existing competences, and extensions of QMV and co-decision "can be agreed without needing to call a new IGC", and that what is described as the "confusing distinction" between the European Community and the European Union will be brought to an end. We are concerned that removing the "distinction" between the EU and EC in relation to matters now dealt with under the Third Pillar (with the consequent increase in the powers of the Commission to bring infraction proceedings and those of the ECJ to interpret and apply Union measures) will change the legal relationship between the EU and national governments in a way that will increase their powers in relation to UK law. We call on the Government to set out the safeguards they will expect to gain from the IGC to prevent this happening.

22. Under the heading "A Europe of rights and values, solidarity and security", the Commission draws attention to the statement of the Union's values and objectives which it considers will serve as a point of reference for citizens. Also highlighted is the Charter of Fundamental Rights which the Commission describes as offering citizens guarantees "with the same legal status as the treaties themselves". The Commission states that the Charter "will also apply in full to acts of implementation of Union law, even if not in all Member States".

23. The day before the Commission's Opinion was published, we asked Commissioner Wallström to expand on a remark she had made in a speech to the European Parliament that "the Charter will be binding … for Member States when they implement EU law, even if this does not apply to all of them". The Commissioner replied that this meant that "the Charter cannot be invoked in front of UK courts"[19]. The Commissioner was further asked if a ruling of the ECJ would be binding on all Member States, even the UK, if it concerned the implementation of EU law. The Commissioner replied that the provision for the UK "simply means that one Member State has an opt out and that has to be respected, but I did not talk about the Court of Justice".[20]

24. The Commission Opinion also states that "gaps in judicial protection ensured by the European Court of Justice" will be filled "to ensure jurisdiction in freedom, security and justice". Also noted are a new "solidarity" clause to give "force" to the obligation of Member States to support each other in the event of terrorist attack or natural or man-made disaster, and the need for solidarity in the case of shortages of energy supplies.

25. A final section is entitled "Europe as an actor on the global stage" and is concerned with the conduct of external relations by the EU. The Commission argues that all aspects of external relations ("external action policies") need to be "geared to work together to better effect". It states that the IGC Mandate recognises this point by providing that all such policies — CFSP, trade, enlargement, development and humanitarian assistance — "are placed on an equal political and legal footing". In apparent contradiction, the Opinion notes that respect for the particular interests of Member States will be maintained by "retaining specific decision-making procedures" (i.e. unanimity) in the area of the Common Foreign and Security Policy. We note that this could be interpreted as contradictory and call on the Government to set out clearly what safeguards it will expect from the IGC to ensure that the particular interests of the UK 'will be maintained'. The Opinion also notes that the European Security and Defence Policy "will be brought more clearly into the Union", but that special decision-making arrangements (i.e. unanimity) will be preserved, whilst paving the way for reinforced cooperation among a smaller group of Member States. (In this case, only those countries which wished to proceed with a particular matter would be under any obligation to do so).

26. The Opinion comments on the question of establishing a single legal personality for the Union in these terms:

"Establishing a single legal personality of the Union will strengthen the Union's negotiating power, making it even more effective on the world stage and a more visible partner for third countries and international organisations."

27. The Opinion concludes with a brief Part III stating that the "Reform Treaty will underpin some of the most deep-seated aspirations of European citizens". The Opinion cites no evidence for this conclusion, and refers only obliquely to the rejection of the Constitutional Treaty by popular referendum in France and the Netherlands.[21] The Opinion goes on to welcome the convening of an IGC, stating that "Europe needs a Reform Treaty to be agreed and ratified ahead of the June 2009 European elections" and that "it is the responsibility of all participants in the Inter-Governmental Conference to create the conditions for this goal to be met".

The Government's view

28. In his Explanatory Memorandum of 25 July the Minister for Europe at the Foreign and Commonwealth Office (Jim Murphy) explains that the Government notes the publication of the Commission Opinion. The Minister adds that the document covers a broad range of issues regarding the IGC, and that the Government's position on the IGC is set out in the White Paper "The Reform Treaty: The British Approach to the European Union Intergovernmental Conference" (Cm 7174) published and laid before Parliament on 23 July .

29. The White Paper sets out the Government's approach to the IGC and includes a glossary of EU terms and the text of the IGC Mandate agreed at the June European Council. The White Paper explains that in the run-up to the European Council in June the UK argued that the EU needed a new amending Treaty "without constitutional characteristics" and that it set out four pre-conditions (referred to in the foreword as 'red lines' ) for agreement on a new Treaty. These four pre-conditions are stated as follows:

"protection of the UK's existing labour and social legislation;

protection of the UK's common law system, and our police and judicial processes;

maintenance of the UK's independent foreign and defence policy;

protection of the UK's tax and social security system."

—TREATY STRUCTURE AND THE 'CONSTITUTIONAL CONCEPT'

30. The White Paper discusses the IGC Mandate in some detail, beginning with a discussion of the proposed treaty structure. The White Paper explains that the Constitutional Treaty would have abolished the existing three pillar structure (i.e. European Community, CFSP and JHA), would have merged the existing EC and EU treaties into one and by replacing all of the existing Treaties[22] with a single, new, consolidated Treaty "would — in effect — have refounded the European Union". The White Paper refers to the statement in the IGC Mandate that "the constitutional concept, which consisted in repealing all existing Treaties and replacing them by a single text called 'Constitution' is abandoned". The White Paper then argues that the IGC Mandate "rejects the Constitutional Treaty approach" and that the "Reform Treaty" will instead be an amending Treaty which will amend the existing EU, EC and Euratom Treaties. It explains that the current EC Treaty will be amended and will be renamed the "Treaty on the Functioning of the Union". The White Paper acknowledges that the third pillar for JHA matters (which are currently dealt with intergovernmentally) will be abolished for what it describes as "residual areas of JHA" (but which in fact include the whole field of police and judicial cooperation in criminal matters including the general criminal law and criminal procedure) but also explains that the 'opt-in' arrangements now applying to Title IV EC matters will be extended to judicial and police cooperation in criminal matters. In consequence, the UK will retain a right not to participate in any new JHA measures proposed at Union level.

31. The White Paper then discusses the effect of the proposed changes on the Common Foreign and Security Policy (CFSP), European Security and Defence Policy (ESDP) and Justice and Home Affairs (JHA) before turning to more general questions such as the Charter of Fundamental Rights, tax and social security, subsidiarity and the role of national parliaments, the legal personality of the Union and a number of institutional issues.

— COMMON FOREIGN AND SECURITY POLICY

32. In relation to the CFSP, the White Paper states that "CFSP will remain an intergovernmental process" and that decision-making by unanimity "will remain the norm". The White Paper also refers to a declaration in the IGC Mandate[23] "confirming that the provisions on CFSP will not affect the responsibilities of the Member States, as they currently exist, for the formation and conduct of their foreign policy, or of their national representations in third countries and international organisations". The White Paper also notes that the Reform Treaty will provide for a "High Representative of the Union for Foreign Affairs and Security Policy" in whom will be merged the roles of the existing High Representative and of the Commissioner for External Relations.[24] The White Paper explains that the High Representative will chair the Foreign Affairs Council rather than the Foreign Secretary of each Presidency as at the moment and "will be able to present agreed Union positions in international organisations"[25] as the High Representative does at the moment on designated areas of EU interest, but that where the UK wishes to pursue its aims independently, it may do so. The Committee notes that the High Representative will also acquire a new right to present EU positions at UN Security Council meetings when requested by those Member States which sit on the Security Council.

— EUROPEAN SECURITY AND DEFENCE POLICY

33. In relation to the ESDP, the White Paper states that the Reform Treaty will preserve the principle of unanimity for ESDP policy decisions and for initiating missions and will recognise the provision of the UN Charter (Article 51) that Member States may come to each other's assistance in the event of armed aggression. It is also stated that the text "will explicitly make it clear that, for its members, NATO remains the foundation of their collective defence and the forum for implementing such a commitment".[26]

— JUSTICE AND HOME AFFAIRS

34. In relation to Justice and Home Affairs (JHA) the White Paper notes that the Reform Treaty will move JHA matters to the First Pillar, with the result that QMV and co-decision will apply as the general rule in this area. The White Paper states that the UK has always been clear that EU cooperation must be in the national interest and that it "must not affect fundamental aspects of our criminal justice system, nor undermine our ability to safeguard national security". In this connection, the White Paper refers to the safeguard of the current "opt-in" arrangements for cooperation in asylum, immigration and civil justice matters.[27] This opt-in arrangement will be extended to police and judicial cooperation in criminal matters when these move to the First Pillar. The White Paper also refers to the retained safeguard of the "emergency brake" whereby certain proposals for legislation in criminal matters may be referred to the European Council if they would affect fundamental aspects of a Member State's legal system. If referred to the Council, the proposal will fall unless all members of the European Council agree, or will go ahead only in those Member States which wish to adopt it, provided they constitute a third of EU Member States.[28]

35. The White Paper notes that the Reform Treaty provides for the creation of a European Public Prosecutor, but points out that the Government sees no need for such a prosecutor and adds that "under the new Treaty, the UK would be able to prevent a European Public Prosecutor from having any role in the UK"[29] . We would seek firm confirmation that this safeguard has been agreed by the IGC and that, even where a relevant regulation had been adopted under enhanced cooperation, there could be no question of a European Public Prosecutor having any role in the UK, except with the UK's agreement.

— CHARTER OF FUNDAMENTAL RIGHTS

36. In relation to the Charter of Fundamental Rights, the White Paper states:

"The Government sought to ensure that nothing in the Charter of Fundamental Rights would give national or European Courts any new powers to strike down or reinterpret UK law, including labour and social legislation. This has been achieved."

37. The White Paper also explains that the Charter of Fundamental Rights is currently not legally binding but that the Reform Treaty will make the Charter legally binding on the EU institutions and on Member States when implementing EU legislation. The White Paper makes the following statement in relation to the position of the UK:

"A UK-specific Protocol annexed to the Treaty, as set out in the IGC Mandate, will clarify beyond doubt the application of the Charter in relation to UK laws and measures, and in particular its justiciability in relation to labour and social articles. This Protocol is legally binding and sets out clearly that the Charter provides no greater rights than are already provided for in UK law, and that nothing in the Charter extends the ability of any court to strike down UK law."[30]

— SUBSIDIARITY AND THE ROLE OF NATIONAL PARLIAMENTS

— SINGLE LEGAL PERSONALITY FOR EU

39. The White Paper notes that the European Community and Euratom already have express legal personality and that the Reform Treaty would formally give the EU a single legal personality. The White Paper comments that, when it acts in CFSP and some JHA matters, the EU already has a "degree of 'functional' legal personality by virtue of its power to make international agreements" and adds that conferring a single legal personality "will be simpler than the existing situation and will therefore allow the EU to act in the international arena in a more coherent way" and that this "should lead to streamlined procedures for negotiating agreements throughout the EU".

40. The White Paper states that conferring a single legal personality "does not create any new powers for the EU" and refers to a declaration to be made by all the Member States that "the fact that the European Union has a legal personality will not in any way authorise the Union to legislate or act beyond the competences conferred upon it by the Member States in the Treaties"[32]. The White Paper also comments that conferring a single legal personality "will not impact on the independence of Member States' foreign policies". We accept that the mere fact of conferring legal personality may not have this effect, but it should be noted that Article III-323 of the Constitutional Treaty (now reproduced as Article 188l of the Reform Treaty) confers a wide power on the Union to conclude international agreements, not only where the Treaties expressly provide, but also where "the conclusion of an agreement is necessary in order to achieve, within the framework of the Union's policies, one of the objectives referred to in the Treaties, or is provided for in a legally binding Union act or is likely to affect common rules or alter their scope". In relation to Title IV EC matters, (i.e. justice and home affairs) a declaration (No.25) will be adopted confirming that Member States are entitled to conclude agreements with third countries and international organisations in these areas[33], in so far as such agreements are consistent with Union law.[34] In the case of Title IV matters where the UK has not 'opted in', it seems to us that the freedom of the UK to enter into agreements with third countries will not be affected, but we invite the Minister to confirm if this assumption is correct. We would wish the Government to make clear whether or not these powers will in any way prevent the UK from concluding its own treaties in the same areas as the Union, despite the provisions of the new Article 3(2) EC on exclusive external competence.

— OTHER INSTITUTIONAL ISSUES

41. The White Paper reviews a number of institutional changes proposed by the Reform Treaty, including the provisions for a permanent President of the European Council, a reduction in the size of the Commission, the extension of QMV, (also proposed by the Constitutional Treaty) and the introduction of a new system of majority voting, referred to as Double Majority Voting. Under this formula (which was also contained in the Constitutional Treaty[35]), the support of 55% of Member States (i.e. 15 out of the current 27) representing 65% of the Union's population is required for the legislation to be adopted, but the formula will not apply until 2014.

42. The White Paper also refers to procedures for 'simplified treaty revision' i.e. the amendment of the Treaties without going through the full procedure of an intergovernmental conference as currently provided for in Article 48 EU. The White Paper states that procedures to revise the Treaties without an IGC already exist in the Single European Act and Treaties of Maastricht, Amsterdam and Nice. We ask the Government to clarify the relevant provisions as they are not identified by the White Paper. We note that the "simplified revision procedure" was provided for in Articles IV-444 and 445 of the Constitutional Treaty and was described, in each case, at the time by the Government as a new provision[36]. The simplified revision procedure[37] would allow a change from unanimity to QMV (except in relation to decisions with military implications or in the area of defence) or from other legislative procedures to co-decision to be effected by Council decision, not requiring the convening of an IGC. The same simplified procedure may be used to amend all or part of the provisions of Part Three of the Treaty on the Functioning of the Union (i.e. the EC Treaty as re-named), except where the proposal would increase the competences conferred on the Union by the Treaties. There is some similarity with the so-called "passerelle" provisions of Article 42 EU, which provide for the transfer of police and judicial cooperation from the Third Pillar to the First (Title IV EC), but the new Article 33 EU is much more extensive in scope, since it would allow revisions to be made of any part of the provisions, including voting rules, on Community policies in the Treaty on the Functioning of the Union (i.e. the EC Treaty as renamed), even if it would not allow any increase in the competences of the Union. We are concerned that these provisions could allow substantial changes to be made without convening an IGC and so lead to even less transparency in the way the EU is governed, and less accountability of governments to their national parliaments. We ask the Government to outline what safeguards they would put in place to prevent this further erosion of transparency and accountability.

Assessment of the Commission's opinion and of the Government's response in the White Paper

43. Neither the Commission's Opinion nor the Government's White Paper seeks to explain in any detail how the proposals for a Reform Treaty will differ from those in the Constitutional Treaty. The White Paper also fails to set out clearly and specifically what proposals will allow the UK to guarantee the 'red lines' they claim to have set or to safeguard those red lines over time. The IGC Mandate is itself largely concerned to explain those proposals which are to be included in the Reform Treaty, but which differ from the corresponding provisions in the Constitutional Treaty. As much of the Constitutional Treaty itself restates existing provisions of the EU and EC Treaties, as well as making substantial amendments, it has been rendered difficult to assess what the overall effect of the Reform Treaty will be.

44. Such an assessment would have been facilitated by a consolidated text which set out the proposed European Union Treaty and the Treaty on the functioning of the Union, with an explanation of the origin of each provision i.e. whether it was a restatement of the existing EU or EC Treaties, a provision of the Constitutional Treaty, or a new provision proposed in the IGC Mandate. As far as we are aware, no text of this kind has been published by the EU institutions or the Government. Indeed, no draft of the Reform Treaty had been published prior to publication of the Commission's Opinion or the White Paper, and it appears that both those documents were based on the textual amendments described in the IGC Mandate. A draft of the proposed Reform Treaty was made available (but only in French) on 24 July. An English version of that draft was first made available on 30 July.

— THE CONSTITUTIONAL TREATY AND THE REFORM TREATY COMPARED

45. As an aid to assessing the Reform Treaty and its relationship with the Constitutional Treaty, we have prepared a concordance table enumerating the provisions of the Constitutional Treaty, and showing where these now appear, either in the Reform Treaty or in those provisions of the EU and EC Treaty which have remained unamended. For this purpose, we adopt the classifications made in the Government's Commentary and presented to Parliament in February 2005[38] as to whether a provision of the Constitutional Treaty was a new provision or was a re-statement of existing provisions of the EU and EC Treaties. We have also based our analysis on the text of the Reform Treaty as first made available in English on 30 July[39]. The table is set out in the Annex to this report. It shows that, in accordance with the IGC Mandate, the Reform Treaty will introduce into the existing Treaties all the "innovations" resulting from the 2004 IGC (apart from I-8 on symbols). It also shows that wherever the Constitutional Treaty restated the provisions of the EU and EC Treaties in an amended form, those amendments have been taken up in the Reform Treaty. Taken as a whole, the Reform Treaty produces a general framework which is substantially equivalent to the Constitutional Treaty. Even with the 'opt-in' provisions on police and judicial cooperation in criminal matters, and the Protocol on the Charter, we are not convinced that the same conclusion does not apply to the position of the UK under the Reform Treaty. We look to the Government to make it clear where the changes they have sought and gained at the IGC alter this conclusion in relation to the UK.

— THE 'CONSTITUTIONAL CONCEPT'

46. The IGC Mandate emphasises that the 'constitutional concept' has been 'abandoned' in the Reform Treaty, but it should be recalled that the 'constitutional concept', as referred to in the IGC Mandate, was only the proposition that the existing EU, EC and Euratom Treaties[40] should be replaced by a single text. As the IGC Mandate itself makes clear, the intention is nevertheless to integrate the "innovations resulting from the 2004 IGC" into the existing Treaties.

47. The IGC Mandate also asserts that the EU Treaty and the Treaty on the Functioning of the Union "will not have a constitutional character". In support of this assertion, the IGC Mandate refers to the fact that the term 'constitution' will not be used, that the "Union Minister for Foreign Affairs"[41] will instead be called "the High Representative of the Union for Foreign Affairs and Security Policy" and that the terms "law" and "framework law"[42] will not be used to replace the existing classification of legal acts as "regulations", "directives" and "decisions". The IGC Mandate also refers in support to the fact that there "will be no article in the amended Treaties mentioning the symbols of the EU such as the flag, anthem or motto" and that the IGC will adopt a Declaration on the primacy of EU law in place of the provision on primacy in I-6 of the Constitutional Treaty.

48. Article I-6 of the Constitutional Treaty provided that "the Constitution and law adopted by the institutions of the Union in exercising competences conferred on it shall have primacy over the law of the Member States". This provision will not be taken over in the Reform Treaty but will be replaced by a Declaration. As the Declaration will provide that "in accordance with the settled case-law of the EU Court of Justice, the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case-law", no substantial difference from the effect of I-6 of the Constitutional Treaty seems intended, or is likely to result.

49. Nevertheless, these changes are clearly regarded as substantial by the Government. The Committee is aware that changes in names may be viewed as no more than changes in terminology, whilst the flag and the anthem of the EU were in fact adopted as long ago as 1986[43]. We recognise the Government's wish to distance itself from the previous public perception of taking part in the creation of a constitution. We would wish to explore the reality and significance of the new approach with the Government.

50. Whereas the term 'constitutional' may have a precise significance in the national law of those Member States which have written constitutions, its significance is less clear at EU level. There is clearly a divergence of opinion on whether the existing EU and EC Treaties can be said to be 'constitutional' in that they constitute the European Union and European Community. If this is so, then it would then follow that amendments to those documents are themselves 'constitutional', even if the amendments made were relatively minor. It has also been pointed out that the Constitutional Treaty did not supplant all the previous Treaties in any event, since it only amended the Euratom Treaty, and in that sense did not create a 'Constitution'. Accordingly, we do not consider that references to abandoning a 'constitutional concept' or 'constitutional characteristics' are helpful and consider that they are even likely to be misleading in so far as they might suggest the Reform Treaty is of lesser significance than the Constitutional Treaty. We believe that the Government must offer evidence if it is to assert that the processes are significantly different.

— THE GOVERNMENT'S 'RED-LINE' ISSUES

51. The table in the Annex shows that the overall effect of the Reform Treaty for countries which do not seek agreements that some parts of the new Treaty do not apply is substantially equivalent to the Constitutional Treaty. Given the importance which the Government has attached to its "preconditions" or "red lines" for agreeing to any new Treaty, we think it useful to examine the extent to which the Reform Treaty marks a difference from the corresponding provision made in the Constitutional Treaty and meets those conditions, or whether any further amendments are required for those conditions to be met.

52. In his appearance before the Liaison Committee on 18 June the then Prime Minister in response to questions from the Committee's Chairman stated the Government's position prior to the European Council as follows:

"First, we will not accept a treaty that allows the Charter of Fundamental Rights to change UK law in any way. Secondly, we will not agree to something which displaces the role of British foreign policy and our foreign minister. Thirdly, we will not agree to give up our ability to control our common law and judicial and police system. Fourthly, we will not agree to anything that moves to qualified majority voting, something that can have a big say in our own tax and benefit system."

53. These four conditions are re-stated (although in more general terms) in the White Paper as "protection of the UK's existing labour and social legislation", "maintenance of the UK's independent foreign and defence policy", "protection of the UK's common law system, and our police and judicial processes" and "protection of the UK's tax and social security system". Additionally, the White Paper stated that the Government wished "to clearly establish that national security is a matter for the Member States". In terms of the Reform Treaty these matters are covered in the provisions concerning the Charter of Fundamental Rights, the CFSP and ESDP, Justice and Home Affairs and on the extension of QMV to social security, respectively.

— THE CHARTER OF FUNDAMENTAL RIGHTS

54. In relation to the Charter of Fundamental Rights, the White Paper states that the Government has achieved its aim of ensuring that "nothing in the [Charter] would give national or European courts any new powers to strike down or reinterpret UK law, including labour and social legislation". To support this statement the Government relies on the Protocol which appeared at footnote 19 to the IGC Mandate and which is now set out in Protocol No 7 to the Reform Treaty. The Protocol has two main substantive articles, the first[44] of which provides that:

"1. The Charter does not extend the ability of the Court of Justice, or any court or tribunal of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or action of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that it reaffirms.

2. In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to the United Kingdom except in so far as the United Kingdom has provided for such rights in its national law."

55. We raised with the Minister a number of issues concerning the effect of the Protocol. As the Charter would apply to Member States when implementing Union law, the question arises of whether the UK would be bound by ECJ case law when the latter interprets Union law as implemented in other Member States in circumstances where the same Union law is also implemented in the United Kingdom. On the one hand, the Protocol states that the Charter does not "extend" the ability of the ECJ to find that UK law is inconsistent with the Charter, but, on the other, the Protocol is itself expressed to be "without prejudice to other obligations of the United Kingdom under the Treaty on European Union, the Treaty on the Functioning of the European Union, and Union law generally".

56. In view of this possible inconsistency between the Protocol and the Treaties, we asked the Minister, when he gave evidence to us on 4 July, whether the general obligation to ensure the uniform application of Union law would give way to the Protocol when it came to the interpretation of Union law which had been implemented in the United Kingdom. The Minister replied that the ECJ already insists on the uniformity of application of EU law to which the UK has agreed, but that the Charter "does not create any new rights but brings together existing rights found under the ECHR, current EC Treaties and other instruments so there are no additional powers of consequence of the chapter being treated in this way"[45]. In our letter of 11 July to the Minister we said that the Minister appeared to acknowledge that the ECJ already interprets measures adopted at EU level in a uniform way and that interpretations by the ECJ in the light of the Charter would be binding on the UK in respect of measures to which the UK had already agreed. We asked the Minister if, by reason of the Protocol it was the Government's position that the same consequence would not apply to new measures i.e. those adopted after the Protocol comes into force.

57. In his letter of 31 July the Minister replies as follows:

"The UK-specific Protocol which the Government secured is not an 'opt-out' from the Charter. Rather, the Protocol clarifies the effect the Charter will have in the UK. The UK Protocol confirms that nothing in the Charter extends the ability of any court to strike down UK law. In particular, the social and economic provisions of Title IV give people no greater rights than are given in UK law. Any Charter rights referring to national law and practice will have the same limitations as those rights in national law. The Protocol confirms that since the Charter creates no rights, or circumstances in which those rights can be relied on before the courts, it does not change the status quo."

58. We recall that the Commission's opinion on the IGC Mandate states that the Charter "will apply in full to acts of implementation of Union law even if not in all Member States", from which it could be inferred that ECJ interpretations based on the Charter would not apply to measures adopted in the UK to implement Union law. It could be argued that such an inference is not sustainable as the words of the recital reaffirm that the Protocol is "without prejudice to other obligations of the United Kingdom under the Treaty on European Union, the Treaty on the Functioning of the European Union, and Union law generally". The Minister also confirms that the Protocol is not an 'opt-out' from the Charter. If it is intended that ECJ case law based on the Charter should have no effect at all within the UK, we would have expected some provision in the Protocol to make it clear that the Protocol takes effect notwithstanding other provisions in the Treaties or Union law generally. This would be the more necessary given the tendency for any derogation from the Treaties to be interpreted restrictively by the ECJ. To take a possible example, the Working Time Directive[46] contains provisions limiting the weekly hours of work of a worker to 48 hours per week, but with the possibility of agreements to waive those limits. As Article II-91(1) of the Charter provides that "every worker has the right to limitation of maximum working hours" we have some concern that it seems quite possible that following a reference to the ECJ from some other Member State the Court might find that, in the light of the Charter, the derogation from the Directive allowing such waivers has to be interpreted more restrictively than before (i.e. before the Charter had legal effect).

59. As another possible example, Article II-81 of the Charter prohibits discrimination "on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation". We would be concerned that, following a reference to the ECJ from some other Member State, the Court might find that a measure adopted at EU level (such as Council Directive 200/43/EC) had to be given an extended interpretation in the light of the wide grounds[47] for prohibiting discrimination under the Charter.

60. If the Member States have indeed agreed in the IGC Mandate that a ruling from the ECJ in such cases should have no effect in the UK, then this ought to be made clear. In our view, there is here at least an ambiguity which should be resolved and the UK's safeguards made firmer in the course of the IGC if the results claimed by the Government are to be secured. We would wish the Government to show how they have secured the UK from such interpretations and ask that they secure the phrasing "notwithstanding other provisions in the Treaties or Union law generally" in the text of the Protocol.

61. A secondary issue which we raised with the Minister was whether the provisions of Article 1(2) of the Protocol applied to the whole Charter or only to Title IV. We note the Minister's confirmation in his letter of 16 July that the Protocol applies to all the Titles of the Charter, but we also observe that in the IGC Mandate text the reference to Title IV in Article 1(2) was in square brackets, so that it was not clear to us if the provision in Article 1(2) (which was a particular provision for the avoidance of doubt) applied only to Title IV or to the Charter as a whole. The Minister confirmed in his letter of 16 July to us that Article 1(2) referred only to Title IV.[48] The Minister described the provision as securing "in particular that the Charter will not extend the ECJ's or national courts' power to challenge or reinterpret UK employment or social legislation" [our emphasis]. We accept that this was intended to underline the Government's particular concern to secure its industrial relations legislative position.

62. We would be concerned if the assurances given by the Minister that the provision will secure the results which have been claimed prove to be flawed. As far as we are aware, avoidance of doubt provisions are a rarity in the Treaties and lead us to question why, in this case, the specific reference was only to Title IV. We would seek more concrete evidence from the Government that this provision could not be read as suggesting that the other provisions of the Charter do create justiciable rights applicable to the United Kingdom. We accept that the avoidance of doubt provision does not apply "in so far as the United Kingdom has provided for such rights in its national law". The application of this exception would, ultimately, be a matter for the ECJ in the event of a dispute involving UK law. We would seek to clarify with the Government what protection there is for their safeguards in this area and if the ECJ could decide that the exception would not apply, because the UK had made provision of some kind in an area (e.g. in relation to limits on working time) even if the provision did not exactly match what the ECJ might consider was required by the Charter. We would wish to know what value the Government's claimed safeguards would provide if this was to occur.

— CFSP AND ESDP

63. The Constitutional Treaty provided for European decisions relating to the Common Foreign and Security Policy to be adopted by unanimity, "except in the cases referred to in Part III".[49] These cases largely corresponded to those for which QMV is already provided for by Article 23(2)EU, but now include decisions on proposals from the High Representative where these have been specifically requested by the European Council by unanimity, the decision to establish 'permanent structured cooperation' in defence by those Member States willing to do so, and decisions (by the special legislative procedure) for cooperation on diplomatic and consular protection. These provisions of the Constitutional Treaty will be taken over in a new Title V EU which will maintain the largely intergovernmental nature of the CFSP and ESDP.

64. A point which concerned our predecessors when they considered the Constitutional Treaty was that the jurisdiction of ECJ was not excluded in respect of Article I-16 CT (which set out Union competence and provided for a duty on Member States actively and unreservedly to support the Union's common foreign and security policy) even though the ECJ had no jurisdiction in relation to CFSP under Part III of the Constitutional Treaty. We welcome the clarification (by a new Article 11(1) EU) that the ECJ will not have jurisdiction, save in respect of monitoring compliance with the provisions Article III-308 (which preserve the non-CFSP competences of the institutions) and in relation to the legality of restrictive measures imposed on natural or legal persons.

— JUSTICE AND HOME AFFAIRS

65. The provisions of the Constitutional Treaty on judicial cooperation in criminal matters will be reproduced in the Reform Treaty in the form of an amended Title IV which will incorporate Articles III-257-277 of the Constitutional Treaty and, accordingly, measures under that Title will for the most part[50] be adopted by QMV and codecision. The previous Committee drew attention to similar proposals when it considered the Convention[51]. The previous Committee was not persuaded that there was any need to abandon the safeguard of unanimity in such sensitive areas, and paid particular attention to the so-called 'emergency brake' which was introduced in the Constitutional Treaty and would allow a Member State to require that a proposal should be referred to the European Council if it affected fundamental aspects of its criminal justice system.[52] The previous Committee had reservations about the voting arrangements for the adoption of criminal justice measures under that Treaty, but accepted that the 'emergency brake' procedure could provide an effective mechanism to protect Member States which are initially outvoted.[53] However, an emergency brake cannot be applied very frequently and it may be difficult to protect against the repackaging of controversial proposals into smaller measures.

66. A further safeguard for the UK (and Ireland) is now proposed in the Reform Treaty to the effect that the existing 'opt-in' arrangements under the Protocol on the position of the United Kingdom and Ireland[54] should also apply to the new provisions now transferred to Title IV. It is clear from the 'opt-in' arrangements that the United Kingdom is free to decide whether or not to take part in the negotiation of proposals under the transferred provisions, and to that extent is able to protect the distinctive features of the legal systems of the UK, including criminal law and procedure.

67. It is less clear if, having once made a decision to opt in, the United Kingdom remains free not to take part in a measure should the negotiations produce a text which is not acceptable. The Protocol does not provide for any revocation of the decision to opt in and, as far as we are aware, there has been no case in which the UK having once opted in to a measure under Title IV EC, has subsequently not taken part in that measure. There is, therefore, a risk that having once opted in to a draft measure, the UK will find itself unable to prevent amendments in the course of negotiations which are disadvantageous to the UK, since these will be adopted by QMV and codecision. This is a particular risk in civil matters where the 'emergency brake' is not available. Even where the emergency brake is in principle available, we consider that the interests of the UK would be better protected if it were confirmed that the UK is free to revoke its decision to opt in if the final text is not acceptable. We will seek to explore with the Government the necessity of achieving this agreement at the IGC.

— THE ROLE OF NATIONAL PARLIAMENTS

68. Whilst we welcome in principle the provisions in the Reform Treaty on the role of national parliaments, we consider that their effect can easily be exaggerated. The mechanism proposed in the Constitutional Treaty[55] required only the review of a proposal which had been objected to on subsidiarity grounds by one third of the national parliaments in the EU, with the Commission or other relevant institution remaining free to proceed. A number of small improvements to that position are proposed in the Reform Treaty. First, the period within which a national parliament may submit a reasoned opinion why a proposal does not comply with the principle of subsidiarity is increased from six to eight weeks. Secondly, it is proposed that where a majority of national parliaments object to a proposal on subsidiarity grounds, the Commission is to be obliged to re-examine the proposal, but to remain free to maintain it. If the proposal is maintained, the Commission must produce a reasoned opinion. The opinion would then be considered by the Council and the European Parliament. If at that stage 55% of the members of the Council or a majority of the European Parliament agree with the objections, the proposal is not to be given further consideration. However, since this degree of opposition would in any event be sufficient to prevent adoption of a measure by co-decision, we consider that the procedure adds very little by way of democratic control over the Commission and the EU institutions. In our view, the required thresholds for preventing further consideration of a proposal must be much lower if the procedure is to have any real utility.

69. A matter we regarded as being particularly serious was the drafting of a new provision which appeared to place a legal obligation directly on national parliaments. The provision (which now appears in the Reform Treaty as a new Article 8c EU) stipulates that "national parliaments shall contribute actively to the good functioning of the Union" [our emphasis] and shall do so by "seeing to it" that the principle of subsidiarity is respected, by taking part in evaluation mechanisms in relation to JHA matters, by taking part in Treaty revision procedures and by taking part in inter-parliamentary cooperation between national parliaments and with the European Parliament.

70. In our view, these are matters of entitlement, not obligation and it is wholly a matter for Parliament to decide whether it wishes to use these opportunities: there should be no question of being under any legal obligation to do so.[56] We put this point to the Minister on 4 July who said he took the point we were making and undertook to "continue that dialogue on the matter"[57] . Subsequently, the Minister stated in a letter of 31 July to the Chairman of the EU Select Committee in the House of Lords that the wording of the new Article on the role of national parliaments was "inappropriate" and that this would be raised in the IGC, where the Government would press for more appropriate language.

Conclusion

71. We welcome the emphasis placed by the European Council on providing EU citizens with "full and comprehensive information" and involving them in "permanent dialogue" which is said to be "particularly important" during the IGC. However, the evidence until now has not been consistent with these ideals, with an essentially secret drafting process conducted by the Presidency, with texts produced at the last moment before pressing for agreement. The compressed timetable now proposed, having regard to the sitting terms of national parliaments, could not have been better designed to marginalise their role.

72. As far as the substance of the Reform Treaty and its comparison with the Constitutional Treaty are concerned, we accept that references to the "constitutional concept" or "constitutional characteristics" in trying to distance the present proposals from the creation of a Constitution are less than helpful. What matters is whether the new Treaty produces an effect which is substantially equivalent to the Constitutional Treaty. We consider that, for those countries which have not requested derogations or opt outs from the full range of agreements in the Treaty, it does, and refer readers to the table in the Annex to this report.

73. We explain in this report our concerns about the security of the United Kingdom's position under the Charter. In our view, it requires to be made clear that the Protocol No.7 to the Reform Treaty takes effect notwithstanding other provisions of the Treaty or Union law generally.

74. We note that the 'opt-in' arrangements under the Protocol on the position of the United Kingdom and Ireland will apply to the areas transferred by the Reform Treaty to Title IV. In our view, it should be made clear that the United Kingdom retains the ability also to 'opt-out' of participating in a measure in these sensitive fields, if UK interests are not fully protected in the final text of any measure.

75. We note the new provisions on the role of national parliaments. In our view, these mark only a minor improvement on the proposals contained in the Constitutional Treaty. If these are to have any real utility, the threshold for discontinuing a proposal which has been objected to by national parliaments on subsidiarity grounds must be made lower than 55% of the members of the Council or a majority of votes in the European Parliament.

76. We wish to emphasise that the proposals in the Reform Treaty raise a serious difficulty of a constitutional order in as much as they appear to impose, whether by accident or design, a legal duty on national parliaments "to contribute actively to the good functioning of the Union" by taking part in various described activities. National parliaments, unlike the European Parliament, are not creations of the Treaties and their rights are not dependent on them. In our view, the imposition of such a legal duty on the Parliament of this country is objectionable as a matter of principle and must be resisted.

77. Pending further information from the Government and answers to the questions we have posed, we are holding the document under scrutiny.

1 Annex 1 to Presidency Conclusions 14 and 15 December 2001, the 'Laeken Declaration on the future of the European Union'. Back

2 (2004) Cm 6429. Back

3 Presidency Conclusions 15/16 June 2006, paragraph 47. Back

4 10659/07 of 14 June 2007. Back