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4.34 pm

Mr. David Heathcoat-Amory (Wells) (Con): I beg to move amendment No. 39, page 2, leave out lines 12 and 13 and insert—

‘(c) may be made only if a draft of the order has been—

(i) laid before Parliament; and

(ii) approved by a resolution of each House’.

Clause 3 is, if one includes the schedule attached to it, the longest part of the Bill. Together they run to some three and a half pages. On that ground alone, it is worth studying in some detail.

The clause is headed “Changes of terminology”, which rather implies that these are technical matters, but I shall, I hope, show that it deals with substantive matters of importance. For instance, the schedule attached to the clause makes nearly 50 amendments to the European Communities Act 1972, the founding Act that has governed our relationship to the European Union ever since that date. Clearly, those are matters of substance.

One of the purposes of clause 3 and its schedule is to delete references to “European Community” and replace them with “European Union”. That is not a technical change; it is a matter of substance, because the two are not the same. To remind the Committee, when we joined the Common Market, as it was then called, there were three treaties: the European Coal and Steel Community treaty signed in 1951; the European Atomic Energy Community treaty, usually known as EURATOM; and the European Economic Community treaty, usually abbreviated to the EEC, set up by the treaty of Rome in 1957. Collectively, those treaties formed what were known as the European Communities.

Since that time, the coal and steel treaty has expired and is no more. EURATOM still exists but is only of marginal significance—that is not to say that the European Union will not legislate on energy and atomic power; under the additional sections in the treaty of Lisbon, I anticipate that it will pass a great deal more legislation on that, but not through EURATOM. For the purposes of this debate, therefore, we can ignore that treaty.

A separate treaty on the EU, the Maastricht treaty, renamed the EEC the EC, and crucially, added two intergovernmental pillars, the first dealing with common foreign and security policy, and the second with justice and home affairs. That was a critical and innovative solution, and in my view and that of many of my persuasion, the intergovernmental method of co-operation is to be preferred. It cuts out the monopoly of initiative
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enjoyed by the European Commission, and does not come under the jurisdiction of the European Court. But it allows for extensive international co-ordination and co-operation in tackling matters of common interest.

Today, essentially, we have two treaties. We have the EC treaty, derived originally from the treaty of Rome, as then amended by the Single European Act, the Amsterdam treaty, the Nice treaty and so on. Separately, we have the EU treaty from Maastricht, covering the intergovernmental areas.

The current treaty abolishes the EC. Article 1 of the treaty states:

Crucially, however, the EU will also include those previous intergovernmental policy areas that I have described, such as the common foreign and security policy and parts of criminal justice and policing.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): My right hon. Friend has made an important point. Is he saying that the treaty, and clause 3 in particular, abolishes what was the European Community? Was it not precisely on the claim that the European constitution abolished the former structures and replaced them with a new one that the Government based their promise of a referendum? They said that this treaty did not do that, and that therefore we did not need a referendum. Now my right hon. Friend is saying that the treaty does do that—in which case, surely, the Government’s promise of a referendum would have to be reinstated even if we believed in their rather bogus excuse for getting out of it.

Mr. Heathcoat-Amory: My right hon. Friend is spot on. This treaty does exactly the same as the constitutional treaty: it founds a Union that encapsulates and incorporates all the EC and EU treaties, and indeed establishes a single legal personality for the purpose.

Mr. William Cash (Stone) (Con): My right hon. Friend may not have heard some remarks I made during the last debate about the mandate which—as he knows very well, because he is a fellow member of the European Scrutiny Committee—was brought in through the back door, in deceitful circumstances, on 20 June last year. Does he agree that it had the effect not only of replacing the word “Community” with the word “Union”—with, as he said, a single legal personality replacing and succeeding the Community—but of collapsing many of the pillars that he mentioned earlier, thus undermining the whole constitutional basis on which the original arrangements were made? That fundamental change is the reason why we should now have a referendum.

Mr. Heathcoat-Amory rose—

The Second Deputy Chairman of Ways and Means (Sir Michael Lord): Order. The right hon. Gentleman is being tempted to extend his remarks rather more widely than the amendment allows. It is quite narrowly drafted.

Mr. Heathcoat-Amory: I am well aware of the narrowness of the amendment, Sir Michael, but I wish to put it in the context of what is happening to the EC,
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as opposed to the EU. As you will see, a large part of clause 3 is concerned with replacing the EC with the EU. I agree with my hon. Friend the Member for Stone (Mr. Cash) that the two are not the same. Clause 3 attempts something of a three-card trick, making what are apparently name changes but, in fact, changing the substance. The EU will not only replace the EC but include the formerly intergovernmental aspects of common foreign and security policy, criminal justice and policing. Moreover, subsections (4) and (5), which are the subject of my amendment, give the Secretary of State or the Treasury power to

That is quite a wide power. The amendments are not defined or limited, and the power obviously includes power to amend primary and secondary legislation. The amendments must “reflect changes in terminology”, but are not limited to such changes.

We are not simply dealing with changes of name. Just as the change from EC to EU is a matter of substance, other matters of terminology could and, in my view, will entail substantive and material changes.

Kelvin Hopkins (Luton, North) (Lab): Terms are important, and people understand their significance. We have moved from a common market to a European Economic Community to a European Community to a European Union. Could it not be said that we are not far off becoming a Federated State of Europe?

Mr. Heathcoat-Amory: The hon. Gentleman is right. There has been a baffling series of name changes, all of them in the wrong direction. In the Convention on the Future of Europe, I—along with some other delegates—suggested yet another name change, but a change in the right direction. We proposed a Europe of democracies. We submitted a minority report to give effect to such a concept, which is essentially intergovernmental. I agree with the hon. Gentleman that names and terms are important. Whichever direction we take, it is vital that the House has the right to scrutinise and authorise the changes when they are made. I commend my rather modest amendment, which would ensure that so-called terminological changes are made by affirmative resolution, giving both Houses an express decision, replacing the negative resolution procedure whereby the changes are made unless they are emphatically blocked.

4.45 pm

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I am genuinely trying to understand the right hon. Gentleman. Is he arguing that if we do not agree to his amendments to schedule 1 and to some of the name changes, the intergovernmental nature of some of the policy areas that the Government currently feel are protected will lose that protection because we are merging the Community into the Union, so making those policy areas vulnerable? Is that his key point?

Mr. Heathcoat-Amory: No, that is not my argument. The so-called innocuous change from EC to EU is not simply a change of terminology, because the EU incorporates not just the EC, but intergovernmental policy areas such as common foreign and security policy and criminal justice. In the same way, the other changes that the Government may propose to give
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effect to the treaty in existing UK legislation will also encompass matters of substance and are not simply matters of terminology.

To demonstrate that, I need to pick up a number of themes that have emerged in the debates so far. The first point is that the treaty is almost the same as the European constitution, which failed at the hands of the French and Dutch electorates. That observation is now not seriously contested by Ministers. There are a few apologists from the Labour Back Benches who occasionally pretend that they are two different treaties but the Select Committee reports are decisive on this. When the Prime Minister says that the constitutional approach has been abandoned, he must know that that refers only to the form of the treaties rather than to their substance. The constitutional treaty brought the two treaties into a single document; the present one simply amends the two existing treaties without formally merging them. In substance and legal effect, however, the two treaties are the same.

Mr. John Gummer (Suffolk, Coastal) (Con): My right hon. Friend is making the case that the use of the word “Union” and the change in terminology have greater importance than they are given. At the same time, however, he is trying to make the case that it is not of great importance to cease to have a constitution and to have instead a treaty. I should have thought that he would agree that to have a treaty between sovereign nations rather than a constitution is a fundamental difference, even though I agree that the Government’s promise on a referendum certainly did not contain that caveat.

Mr. Heathcoat-Amory: I judge treaties and constitutions by their substance and effect. It is now indisputable that the substance of the treaty of Lisbon is in almost all cases the same as that of the constitutional treaty. That was the conclusion of the European Scrutiny Committee and that of the Foreign Affairs Committee, in so far as it looked into the foreign policy implications of the treaty. That is good enough for me. It may be a coincidence that I serve on both of those Committees, but I did support their conclusions; both, of course, have Labour Chairmen and majorities. Therefore, it is beyond dispute that they are the same document in legal effect.

It follows from that that the many amendments that the Government tabled to the constitutional treaty during the Convention on the Future of Europe also apply to the treaty of Lisbon. As most of their amendments failed, it also follows that many unamended parts of the treaty are not to the Government’s liking, and also that any changes that the Government might seek to make to existing United Kingdom laws by using this part of the Bill are not to their liking either as they were the subject of failed British Government amendments. That is an additional reason for them to be closely scrutinised by the Committee on a case-by-case basis according to the affirmative procedure.

My next theme is that this treaty is not a reform treaty, despite its earlier name. The Laeken declaration of December 2001 set in train a reform process. It recognised that decision making in the EU was remote, that the whole procedure had lost the confidence of the public, that the treaties were too complex and not democratic enough, and that the EU was interfering
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too minutely in the lives of ordinary citizens. Instead of following that reform instruction, the Convention on the Future of Europe consolidated more powers in the very institutions that were the cause of the disillusionment in the first place, and where reforming amendments were tabled, such as to the EU budget, they were ignored. It follows from that that the UK Bills to be amended in accordance with this clause will not reflect the reform process that the British Government supported. It is also worth noting that much of the UK legislation to be amended was passed some years ago when genuine reform of the EU was in prospect. Therefore, when the House passed provisions in those Bills referring to the European Union, it might have confidently expected that the relevant sections of the treaty concerned would be reformed, instead of which reform has been ignored and powers have been consolidated at the EU.

My next theme is, therefore, the failure of subsidiarity. Not only has the reform process taken more powers upwards, but the subsidiarity principle is not working. That principle dictates that the EU can act only if the objective or policy cannot be achieved adequately at national level. That has been in treaty law since 1993, but it has not been an effective check on the EU’s activities. Examples have been given in previous debates of how even the exchange of best practice at EU level has been thought sufficient to justify EU action. Nor has the European Court of Justice been an effective check on subsidiarity. How could it be, as it is itself an EU institution? It is part of the project, and under the treaty of Lisbon matters will get worse as it will be required by treaty law to practise “mutual sincere cooperation” with the other institutions of the EU. Therefore, the subsidiarity check for national Parliaments, which is supposedly a new feature of the treaty of Lisbon, is something of a sham.

Mr. Cash: Does my right hon. Friend accept that the extension of exclusive or shared competences turns the whole question of subsidiarity inside out, because national Parliaments will not be able to legislate, by statutory instrument or otherwise, in the spheres in which those competences are being granted, and that this is therefore just a monumental con trick?

Mr. Heathcoat-Amory: My hon. Friend is right to say that if the treaty is ratified, subsidiarity will be overtaken by the new division of powers in the treaty. One of the reasons why the Lisbon treaty is a constitutional treaty is because it attempts a division of powers between member states and the EU institutions—that is inescapably a constitutional matter. Such a provision is found in the United States constitution, which enumerates states’ rights as against those of the federal Government. The Lisbon treaty attempts to do exactly the same, in a way that is almost entirely in the EU’s favour. The definition of “exclusive competence”—that list is longer—will completely prevent any legislation by member states in areas where it applies. Even the definition of a “shared competence” will prevent member states from legislating if the EU moves into the area where it applies. It is a funny definition of sharing, which in practice will simply allow member states a residual competence. The arrangement will overwhelm any attempt to enforce the subsidiarity principle.

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Mr. James Clappison (Hertsmere) (Con): My right hon. Friend is making a powerful case. In his long experience of European matters, is he aware of any area in which the EU has evacuated a shared competence and handed it back to member states?

The Second Deputy Chairman: Order. Before the right hon. Gentleman responds, may I say to him that he is going wide of his quite tightly drawn amendment? I do not intend to stop him, but I trust that if he is making points that should be made during the clause stand part debate, he will not seek to make them again then.

Mr. Heathcoat-Amory: I can directly relate this matter to the amendment, Sir Michael, because the amendments permitted under subsections (4) and (5) will reflect the new division of powers and sharing of competences in the treaty. My hon. Friend the Member for Hertsmere (Mr. Clappison) was right: although the Laeken declaration suggested that some powers might be returned to member states, I can think of no example of where that has happened. Things have gone entirely in the opposite direction—the ratchet has operated upwards and never downwards—and it therefore follows that the amendments to “Acts or instruments” will reflect the new division of powers. We know that this House disapproves of that division; it was stated many times in debates leading up to the treaty that even the British Government were alarmed by the degree to which the powers and responsibilities were moving upwards and, in no sense, downwards.

We must also consider the general transfer of powers from member states to the EU illustrated in the new policy areas such as energy provision. That is a new competence provided for in the treaty. Given that it will be decided by qualified majority voting, it too is a transfer of authority in the wrong direction. We must also take into account the advances into criminal justice and policing, and immigration and asylum, and the new areas to be decided by QMV. I believe the Government have admitted to 51 such areas, which is a record; the Single European Act extended QMV into 12 new areas, but 51 is by far the most extensive advance of QMV in any treaty.

To give an example of where that can act against the interests of this House and this country, may I remind the Committee of the artist’s resale right, which was granted in a directive some two years ago, against the British Government’s wishes? It gives artists a percentage of the sale price of a work when it is resold, and has been a feature of French law since the 1920s. The British Government opposed it because they understood that it would drive business out of the United Kingdom to jurisdictions such as America where no such levy applies, and because the British art market, which is by far the biggest in Europe, stood to lose the most. Almost 50,000 people are employed in the British art market, and if it were eroded or business were to move to other art markets in the rest of the world, it would be a loss not just to Britain but to Europe. That was why the Government rightly opposed and voted against the directive. A recent study has shown that the fears raised at the time have been confirmed: the British art market has been damaged, and artists have not benefited. In any case, only the more successful artists stood to gain anything from the levy.

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5 pm

That is an example of majority voting under existing treaties being detrimental to the interests of an important part of British business. The problem was seen by the House and the Government, but they could do nothing about it. The situation can only get worse under the treaty, because majority voting is to be extended to 51 new matters and will become the norm.

Amendments that may be made under the powers in the clause will include provisions reflecting the new reality of majority voting as contained in the treaty. I shall give examples of changes that may be in Ministers’ minds. A clue comes from the European Union Bill of 2005, which had a Second Reading and would have given effect to the constitutional treaty but was abandoned when the French and Dutch electorates voted against the constitution.

Interestingly, that Bill contained a similar power to amend existing UK statutes and instruments to give effect to the constitution. In all major respects, the constitution was exactly the same as the treaty currently before the House, so the Bill’s provisions are still relevant. It took a different approach from the present Bill: instead of giving Ministers a general power to make amendments to Acts or instruments, part 2 of schedule 2 to the Bill named specifically a great many statutes to which modifications and amendments would be required. Presumably—I hope that the Minister will confirm this—the Government still have it in mind to make the modifications listed. However, instead of setting them out in the schedule to the current Bill, they seek to give themselves a general amending power. That is a regressive move, which will further erode the House’s ability to scrutinise the changes.

The list of Acts to which the 2005 Bill stated that modifications were required is interesting, and backs up the observations that I have made about the existing treaties. For instance, the Civil Jurisdiction and Judgments Act 1982 is listed as requiring the deletion of a reference to article 68 of the existing treaty and the insertion of a reference to an article in the constitutional treaty. Exactly the same modification is presumably required, except that not an article in the constitutional treaty but an article in the treaty of Lisbon will be required.

This is not simply a matter of terminology; it is a matter of substance. The reference to article 68 in the 1982 Act limits the jurisdiction of the European Court of Justice, whereas the replacement article in the existing treaty does things differently, as it has been substantially amended. We are not simply talking about a technical change; we are talking about a matter of substance, and I hope that the Minister can confirm that when he replies to the debate.

Amendments to the Government of Wales Act 1998 involve the deletion of the word “regulations” and the substitution of the phrase “any order, rules, regulations or scheme”. Again, that is not simply a matter of terminology; it is a matter of substance.

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