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4.45 pm

It will be for the legislation to authorise a referendum, and for the Electoral Commission to specify exactly what rules should apply to any referendum or group of referendums held as a consequence of the legislation, precisely because we cannot predict today what referendum might be held in six years' time or 10 years' time, whether one or two questions will be asked on the same day or what the issue will be. It is right that such detailed provision be made in legislation nearer the time and take account of any changes to the general law on elections and referendums that might be made between now and then.

Mrs Main: Will a set amount be put aside in the Budget every year as a contingency fund for the possible multiple referendums to which my right hon. Friend refers?

Mr Lidington: No. The matter will be decided at the time. We will not operate on a hypothetical basis-that there might or might not be a referendum in any particular year. We would make provision for it as and when required.

Chris Bryant: I am not sure whether the Minister therefore means that the Foreign Office would make provision, whether the Ministry of Justice would do so under the referendums provision or whether it would come out of the contingency, but my anxiety is that one might end up with the same situation as we have in Wales for the next referendum on 3 March. Nobody has been identified as the official no side of the argument, so there will be no public money for either no or yes, because if there is not an official no campaign there cannot be an official yes campaign.

Mr Lidington: The regulations for the referendum will be those set out in the Political Parties, Elections and Referendums Act 2000. I suggest not that any changes are planned, but that, in accordance with any amendments made to that legislation between now and the date of any future referendum on a European issue under the Bill, the rules for its conduct would change. Today, we propose, however, that, as long as the 2000 Act remains in force in its current form, the rules that apply to it should apply to any referendum held under the auspices of the Bill.

Emma Reynolds: On the Minister's previous point, may I gently suggest that the difference between the alternative vote system and first past the post is that the
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candidate should receive more than 50% of the vote? So, there is a difference, even if only one candidate is listed. On clause 19, what does he estimate the cost to be of a referendum on any of the Bill's measures that would trigger a referendum? Given the Government's slightly confusing messages-they promise not to transfer power to the European Union, as set out in the coalition document, yet they demonstrate their eagerness through the Bill to commit to a referendum when a trigger is in place-will he estimate how many referendums we will have in this Parliament and, therefore, how much of a drain they will be on the Consolidated Fund?

Mr Lidington: I really do not know how many times I have to keep repeating this before the Opposition understand: there is a clear pledge in the coalition agreement that the current Government will not, during the lifetime of this Parliament until 2015, agree to a treaty amendment-under either the ordinary or simplified revision procedures-that would transfer competences or powers, as defined in this legislation, from the United Kingdom to the European Union. Therefore, the question does not arise: as the United Kingdom will have the right of veto over any such measure, we are making it clear that we are not going to agree to it. By bringing this legislation into effect, however, we are enacting provisions, to apply during this Parliament, for enhanced parliamentary controls over treaty changes. My right hon. Friend the Prime Minister has made it clear that the proposal on the table for a narrow treaty change under the simplified revision procedure to establish a permanent crisis resolution mechanism for the eurozone countries would, under the 2008 legislation, require simply a resolution in both Houses for it to be ratified by the United Kingdom, but, once this Bill comes into force, primary legislation will be required for that ratification. So as a consequence of this Bill, irrespective of the fact that we do not anticipate agreeing to anything that would require a referendum, there will be enhanced parliamentary control over any promised or hypothetical further treaty change or invocation of one of the passerelle clauses expressly provided for in the Bill.

Mr Peter Bone (Wellingborough) (Con): Of course, the situation is exactly as the Minister says while this coalition Government are in power. However, we are in a fixed-term Parliament and there is no guarantee that this coalition Government will still be the Government, so the additional clauses are there to protect us.

Mr Lidington: It is very important that we legislate on the basis that we want to give people the assurance that they have this protection against any future Government choosing to railroad through the transfer of new competencies to the European Union institutions without the people being given the right to have their say. Any future Government of any political colour will be taking a pretty massive political risk if they try to rob people of the right to have the final say about the transfer of competencies and powers from this country to Brussels. That will be a very powerful deterrent against any future Government being tempted down such a course.

Chris Bryant: The Minister said that this Government have no intention of having a referendum because they do not intend to trigger one under their own Bill,
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thereby proving that the whole Bill, like Z, is an unnecessary letter. Will he now get on to the point made by my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) about how much a referendum is going to cost?

Mr Lidington: On current prices, a referendum, if held on its own, could cost between £80 million and £100 million. If it were combined with other elections on the same day, the figure might well be considerably less. However, these things would have to be calculated in detail at the time. It depends on factors such as whether another election is being held on the same day, so all the apparatus of paying for staff to set up polling stations and to count ballot papers is already being provided for, or it is being done as a one-off solely as a referendum on a European subject.

Mr David rose -

Mr Lidington: I was trying to respond to the hon. Member for Rhondda (Chris Bryant), but I will give way.

Mr David: These are very important issues. At a time of austerity, as the Government say, it is of great concern that there is such a lax approach to quite considerable sums. Does the figure that the Minister mentioned include merely funding for the conduct of a referendum, or does it also include the grants to organisations to enable them to put the respective arguments in a referendum?

Mr Lidington: I will come back to the hon. Gentleman having taken advice on that point. I would say gently to him, however, that giving the people their say, in the way they would expect, about the transfer of significant powers to act and make policy from this Parliament and this country to Brussels ought to be a high priority for Government expenditure. The reputation, not just of his party but of British politics in general, would have been a lot higher had the previous Government given a higher priority to spending money on the referendum that they had promised on the Lisbon treaty, rather than making a saving on that while spending billions of pounds on other objectives, many of which were of significantly less importance to the people whom we represent.

Emma Reynolds: I say gently to the Minister that if he goes back and reads our manifesto commitment, he will find that we promised a referendum on the constitutional treaty. If he asks his officials, with whom I was working at the time-

The Chairman: Order. We are getting carried away and are drifting. I am sure that the Minister wants to get back to the point.

Mr Lidington: I will leave it to the hon. Lady to try to explain that distinction on the doorstep.

The hon. Member for Caerphilly (Mr David) asked about expenditure authorised by clause 13. We have to understand the distinction between an authority to spend, which is what we are debating, and what the level of any expenditure should be. If we did not have the authorising power, as set out in clause 19, the Electoral Commission would simply not be able, without going
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ultra vires, to promote public awareness of a referendum or the subject matter of a referendum. The Electoral Commission, like any other Department or organisation funded by the taxpayer, has a budget that is set through negotiation with the relevant Departments and the Treasury, and it will have to make provision from within that budget. If it really feels that it needs more, it will have to come back to the Government to seek agreement for a supplementary authorisation for additional spending, in the way that such things are usually provided for. We are debating a power under the clause for the Electoral Commission lawfully to spend money on a particular set of objectives, and nothing more.

Chris Bryant: Rather unfortunately, the Minister unpicked my support for the clause in the speech that he just made. He is right that this is the only point at which Members will decide how much should be spent on referendums, should they come into play. As he said, the rules on elections and referendums are set out in the Political Parties, Elections and Referendums Act. The Government may wish to change some of those elements in the future, but Members will never consider this element of funding again. The moment that the Government want to have a referendum, they will have one and we will not have an opportunity to decide the cost of it.

The Deputy Prime Minister said that a major reason for holding a referendum on the same day as the local elections in England, the Assembly elections in Wales and Northern Ireland, and the Scottish Parliament election is the saving of some £30 million. I am not quite sure how that matches with the figures that the Minister gave for the cost of a stand-alone referendum. I wonder whether the Foreign Office is operating on slightly different figures from those of the Cabinet Office, which are being advanced by the Deputy Prime Minister.

I say to the Minister that to propose a Bill that provides no assurance that the financial sense of holding a referendum will be considered, and that provides only for the ideological sense of having a referendum to be considered, is a failing. As an example, I will give a failing of the previous Labour Government. There will be a referendum on new powers for the Welsh Assembly on 3 March. I have knocked on a lot of doors in the Rhondda recently, and I have been hard-pressed to find a single person who knows that the referendum is taking place. I suspect that very few people will take part in it. I know what machinations led to the provision in the Government of Wales Act 2006 that has put us in that situation, but I am unsure whether it is a good use of public money constantly to go to voters in referendums. I would have thought that a Government who wanted to get the best value for money, especially in a time of austerity, would want to have a value for money test as part of the decision about whether there should be a referendum. My anxiety is that there will be referendums on piddling matters, because lawyers will force them to happen. That will cause significant cost to the Government and no actual benefit to voters, who will effectively vote by not voting.

5 pm

Mr David: I take my hon. Friend's point about the comparison with the referendum in Wales on 3 March, but at the same time it could be said that that referendum
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is on an important constitutional issue-whether the Welsh Assembly is to have primary legislative powers. My concern is that the current Bill could lead us to have a multiplicity of referendums on very small, technical issues. A lot of public money might be spent on that basis.

Chris Bryant: My hon. Friend has essentially made my point for me again. As you are looking quizzical, Mr Hoyle, there is no need for me to detain the House longer. [Interruption.] No, it is quizzical, honestly. Well, it certainly is now, even if it was not a few seconds ago. I look forward to hearing the Minister explain why there is no provision in the Bill for a value for money test before there is a referendum.

Mr Lidington: First, to make the record absolutely clear, I say to the hon. Members for Wolverhampton North East (Emma Reynolds) and for Blackley and Broughton (Graham Stringer) that the former was right to correct me about the way in which votes would be counted in the somewhat unlikely event of a by-election. In effect, it would be an alternative vote election but with just one candidate from each party. The candidates would be numbered, so the question of a tie, to which the hon. Gentleman drew my attention, would not arise. I am grateful to both hon. Members for their interventions, which have made it certain that we have got the correct facts on the record. I am sure that in the hypothetical case of a by-election being called, they will find the Hansard record of these exchanges very helpful.

To respond to the point that the hon. Member for Rhondda (Chris Bryant) made about finance, the detailed financial provision for any referendum would be made in the Bill authorising that referendum. When we debated earlier clauses, I explained that there would need to be primary legislation for that purpose-I think it would almost certainly be part of the Act of Parliament to ratify a treaty change.

I believe that there is simply disagreement between the hon. Gentleman and me about that matter. I take the view that we should have a referendum when the question to be determined is significant enough in principle to require it. We have laid out in detail in the Bill the changes to European treaties, and the transfers of decisions from unanimity to qualified majority voting, that we think are of such constitutional or political importance that a referendum of the British people should be required before any Government could decide to accept them not just for their own term of office but permanently and, in the eyes of many in the EU, irrevocably.

The problem with introducing a measure such as a value-for-money test is that it opens up a wide area of discretion for the Government of the day, who could say, "Well, this decision might be of legal and constitutional importance, but frankly, the costs involved do not justify all the trouble of asking people to come out and vote and they aren't really interested anyway." That way of thinking is part of what got Europe into the democratic deficit in which it is now trapped. There is a gulf of mistrust between voters and the political elites who govern them in far too many European countries, each of which has proud democratic traditions. We see that in this country in how Parliament is regarded-it is not just down to the EU; it is down to all sorts of other things as well. Such a measure would be another element in that deficit.

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Allowing people to have the final say over decisions that are important to the future of their country is one way to remedy that deficit. I think it better to define the circumstances in which that will happen in legislation, as we have done with the Bill, than to leave it to the discretion and judgment of Ministers, who might decide on the ground of public interest or of value for money. For that reason, I prefer our approach.

Chris Bryant: The fact that the Minister and I disagree on this matter or on the Bill is no great revelation. Even his private office might have worked that out. He gave the game away a bit when he said that the matter of principle is that one must give the people the right to decide when the transfer of power is sufficiently significant, but significance is not an absolute but a comparator. That is my problem.

The Bill provides for the addition of a new MEP. Will he assure the House that there is no need to provide for a situation in which that MEP, having been appointed, decides to leave or unfortunately dies? Will that seat simply be gathered up in the normal process of by-elections?

Mr Lidington: The answer to the hon. Gentleman's question is yes. The normal processes for filling a vacancy in the European Parliament would apply in those circumstances too.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clause 20


Question proposed, That the clause stand part of the Bill.

Mr Lidington: The clause provides that the Bill extends to the whole United Kingdom. The subject matter of the Bill is reserved to the Westminster Parliament and it contains no provisions that fall within the terms of the Sewel convention, or that would require any legislative consent motions in respect of the devolved legislatures. In any case, I can confirm to the Committee that the devolved Administrations were consulted on the Bill prior to its introduction, and are content with its provisions.

Part 2 of the Bill, which provides for the implementation of the transitional protocol on MEPs, also extends to Gibraltar, because the people of Gibraltar, as has already been mentioned, participate in UK elections to the European Parliament. Where clauses 20, 21 and 22 touch on part 2, they also extend to Gibraltar.

As I made clear early in Committee, and as you would certainly expect of me, Mr Hoyle, I have discussed the approach taken in the Bill with the Chief Minister of Gibraltar. He has made it clear that he approves of our approach, in terms of both the application of part 2 to Gibraltar, and the provisions in part 1 that ensure that the people of Gibraltar can participate in any referendum that is held when a treaty change affects them by virtue of our membership of the EU and the UK's Act of Accession.

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Mr David: I am pleased that the Minister has gone out of his way to emphasise that there has been consultation and agreement with Gibraltar-I am sure that you, Mr Hoyle, will be especially pleased about that. However, will the Minister clarify further what consultation there has been with the devolved Administrations? I am thinking of the Scottish Parliament and Executive in particular, because I noted in evidence submitted to the European Scrutiny Committee that concern was expressed that elements of the Bill might impinge upon devolved areas. Certainly, when the evidence was submitted, those concerned were not entirely satisfied that the Government had taken that fully into account. Will he give a cast-iron commitment-if I can use that phrase-that there has been consultation, and that all parties are happy?

Mr Lidington: Yes, we consulted the devolved Administrations in 2010, at the same time as final policy approval was sought from Departments. The text of the Bill was circulated to the devolved Administrations as soon as it had been drafted and was available for circulation in Whitehall. We have tried to keep them as much in the picture as possible and as soon as was practical. As the hon. Gentleman will understand, the Government took office in May last year, and arranging policy clearance and then the drafting of the Bill has been an intensive piece of work. However, I do not think that the devolved Administrations have been treated in any way unfairly. I have assured them that the Government remain completely committed to what the Prime Minister has termed the "respect agenda", and that we are committed to honouring in full the various memorandums of understanding between the Government of the United Kingdom and the devolved Administrations. I am happy to make clear that commitment once again.

Chris Bryant: I am afraid that it was the words "the respect agenda" that turned my stomach and made me get to my feet suddenly. My experience of the Government thus far, in relation to other constitutional developments, has been that the respect agenda has been more honoured in its breach. To be fair, however, the Foreign Office has discussed the matter openly and fairly with the Governments in Scotland, Wales and Northern Ireland to ensure that the legislation might suit their needs. However, there might be some areas-particularly in relation to the different legal system in Scotland-where, although it might not feel like the UK Government have surrendered a power in negotiations in Brussels, it might feel more like they have in Scotland. At those moments, the people of Scotland might say, "We want a referendum, because we do not like what you are doing", while the Government and Parliament might not think that there is any need to do so.

I want to make a second point about Gibraltar. We have all referred, Mr Hoyle, to your personal interest in Gibraltar, and I bow at that altar as well. The Minister used a particular phrase that seemed like it had been crafted very carefully through the decades by Foreign Office mandarins. Having used such phrases before myself, I wonder whether it might not help were the Minister to unpack it. I think he said that the people of Gibraltar would be allowed to vote in a referendum where they are affected by a measure. I do not know how one would determine whether Gibraltar has been affected. I am not sure whether the Minister is being too clever by half, or whether I am being too foolish by half, but I am sure that he will enlighten us.

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Mr Lidington: Let me deal with Gibraltar first. As I am sure the hon. Gentleman will recall from when he had responsibility for such matters, Gibraltar is part of the European Union, but it is not subject to all of the acquis. Therefore, the referendum will extend to Gibraltar where the treaty amendment, passerelle clause or article 48(6) decision concerned affects an area of European Union competence that covers it. If the proposed treaty change dealt with an area of competence from which Gibraltar was completely excluded, it would not take part in the referendum.

5.15 pm

On the devolved Administrations, I would say a couple of things to the hon. Gentleman. First, we are talking about reserve powers, and the United Kingdom is the member state that has signed the accession treaty. When it comes to our day-to-day or month-to-month dealings with the European Union in pursuit of United Kingdom interests, it is also necessary that the Government should take fully into account the interests and sensitivities of the three devolved Administrations. That is why, when a Minister sends an explanatory memorandum to the European Scrutiny Committee, one of the headings under which such measures are normally analysed is their impact on the devolved Administrations. It is also why the Prime Minister and the Foreign Secretary have asked every Department to take into account the interests of the devolved Administrations when considering their negotiating position on a particular piece of European Union business, and to ensure that proper consultation takes place.

The need to take the interests of the devolved Administrations into account is also why we have taken a policy decision that, where appropriate and agreed by the Secretary of State responsible for a particular policy area, it should be possible from time to time for a Minister from one of the devolved Administrations to take the United Kingdom chair at a Council of Ministers meeting, and to speak for the United Kingdom and advocate its position, as has happened on a small number of occasions since this Government took office.

When it comes to the Bill, the European Scrutiny Committee drew attention in its report to comments made by the European and External Relations Committee of the Scottish Parliament. We considered the Bill's devolution implications, consulting both the Government's experts on Scottish law and the devolved Administration's experts in the normal way. The provisions of the Bill are not intended to replace or alter the current provisions in either the memorandum of understanding or the concordat on co-ordination of European Union policy issues between the United Kingdom and the Administrations in Scotland, Wales and Northern Ireland. Those documents set out clearly the principles on which the United Kingdom Government engage now, and should continue to engage, with the devolved Administrations in formulating UK policy touching on matters falling within the responsibility of the devolved Administrations. That would include, for example, proposals for treaty change that touched on areas of devolved competence, but within the context that it is the United Kingdom Government who retain overall responsibility for any such negotiations. In the memorandum we are committed as a Government to involving the devolved Administrations as fully as possible in discussions about the formulation of the UK's policy position.

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Chris Bryant: I can feel a peroration coming on, so I just want to check something to do with Gibraltar. Notwithstanding the remarks that the Minister has made, clause 11(1)(c) refers to who gets to vote

but who decides whether the referendum is held there? Would that have to be laid out in the Bill that was implementing the individual referendum in question?

Mr Lidington: No, it would be a matter of treaty and law. I refer the hon. Gentleman to clauses 2(2)(a) and 3(2)(a). They provide for the circumstances relating to whether a referendum on whether a treaty should be ratified should be held throughout the UK-"or", and this is the important provision,

The referendum will extend to Gibraltar where the treaty matter that is subject to the referendum is a matter that includes Gibraltar. If it is a treaty matter from which Gibraltar is excepted, the referendum will not include the people of Gibraltar.

Chris Bryant: So why does clause 20 not say that the Act extends to the whole of the United Kingdom and Gibraltar?

Mr Lidington: Because the provisions for Gibraltar are laid out in clauses 2 and 3, as I have explained.

Question put and agreed to .

Clause 20 accordingly ordered to stand part of the Bill.

Clause 21


Mr James Clappison (Hertsmere) (Con): I beg to move amendment 15, page 12, line 12, leave out subsection (3) and insert-

'(3) The day appointed under subsection (2) shall be within one month of the day on which this Act is passed.'.

Under clause 21, certain provisions will come into force quickly, while others will do so at a later date. Clause 15 will come in straight away, as will part 3, which includes clause 18, the sovereignty clause. The amendment would bring in the whole Bill all at once within one month of its passing through all relevant stages. I know that my right hon. Friend the Minister has said elsewhere that it is the Government's intention for the entire Bill to come into force within two months of Royal Assent. I am giving my right hon. Friend an opportunity to say a few more words about the clause, and I am sure that he will be able to deal with it as comprehensively as he has just dealt with the many points put to him by the hon. Member for Rhondda (Chris Bryant). All those points were put to bed and I am sure that he will put this point to bed in the same way.

Mr Lidington: The Bill radically changes how the UK approaches the consideration of future key decisions on the European Union. It is therefore right that the provisions of this legislation should be applied as soon as possible after Royal Assent. It is also right that any treaty change currently being considered should be examined
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through the prism of this legislation. The Prime Minister, the Foreign Secretary and I have all made it clear that the Government's firm intention is that the provisions will apply to the eurozone treaty change, which is expected to be agreed at EU level at the spring European Council.

Under the usual arrangements, the provisions of Acts of Parliament enter into force, unless otherwise stated, two months after Royal Assent. This Bill, however, has a slightly different set of provisions when it comes to commencement. Clause 21 makes provision for the Bill's entry into force; subsection (1) provides for clause 15 and part 3 to come into force on the day of Royal Assent.

Clause 15 allows our country to be able to ratify the transitional protocol on MEPs as soon as possible, and two months earlier than we would otherwise have been able to. Article 2 of the MEP protocol stated that it should be in place, if possible, on 1 December 2010. At the moment, it looks unlikely that we will be the last member state to ratify that transitional protocol, but I would want us to be in a position where, if it turned out that we were bringing up the rear, there would be no delay and we would be able to bring our ratification into effect and allow the provisions of the protocol to take effect immediately after Royal Assent. We thus consider early commencement of that part of the Bill to be appropriate in order to reduce the delay and ensure that early commencement of the provision would not have any undue or adverse effects.

Clause 21(2) enables the Bill's other provisions to be brought into force by one or more commencement orders made by the Secretary of State, and subsection 3 allows different days to be appointed for different purposes. The subsections were intended to give the Government the flexibility to bring the remaining provisions into force earlier-I emphasise the word "earlier"-than might otherwise have been the case, but we did not fix back in November, when we introduced the Bill, the date on which the provisions would enter into force. We allowed for flexibility so that individual parts could be brought into force at times that would maximise the Bill's effectiveness.

Amendment 15 aims to ensure that all parts of the Bill are in force within one month of Royal Assent. I entirely understand the wish of my hon. Friend the Member for Hertsmere (Mr Clappison) to ensure that the Bill is in force as soon as possible, and I share his enthusiasm, but I hope I can persuade him that his amendment is not necessary. As we have already made clear, the Government have a firm commitment to use the Bill's provisions for any future treaty change, not least the forthcoming eurozone treaty change. Because of the timing of that change, Parliament will have two bites at the cherry. Under the 2008 Act introduced by our predecessors, it will have a vote before the March European Council; it will then have to consider a Bill under the provisions in this Bill. We introduced Government amendment 56 precisely to ensure that this Bill could apply to the eurozone treaty change.

Mr Clappison: My hon. Friend is giving a very helpful explanation, but can he tell me which parts of the Bill will cover the proposed eurozone treaty change, whether or not the Bill is in force? As he has said, it does not
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matter whether it is in force or not, because the Government will abide by its terms regardless of whether it has been commenced.

Mr Lidington: All relevant parts of the Bill would apply to the treaty change. The Minister responsible would have to make a formal statement setting out whether the change transferred competences or powers-as defined in the legislation-to the European Union and therefore triggered a referendum, or whether it fell into one of the exempt categories.

As my hon. Friend knows, the Government believe that the treaty amendment that is now being considered applies only to the eurozone. It does not transfer any competences or powers from the United Kingdom to Brussels, and therefore, although primary legislation would be required for its ratification, a referendum would not be required. However, under this Bill we will require the Minister to set out his argument in the detail that we would expect to be demanded in relation to any other treaty change proposal.

There would then need to be primary legislation for the United Kingdom to ratify the treaty change. Although it does not affect the United Kingdom directly, it must be ratified by all 27 member states in order to take effect. It is therefore important for Parliament to have the right to examine the implications of the change in detail. We consider that primary legislation represents a better, more democratic approach than the simple debate on a resolution which is all that is provided for the ratification of such a change under the 2008 Act.

Clause 21 allows for flexibility to introduce provisions in the Bill at different times if required. I can assure my hon. Friend, on behalf of the Government, that we will lay an order to ensure the commencement of all the provisions that are not already in force by then one month after Royal Assent. We want to ensure that Parliament and the public are able to exercise the new rights that the Bill gives over EU decision-making as soon as possible. I hope that that gives my hon. Friend the assurances that he seeks, and that I can therefore persuade him to withdraw his amendment.

5.30 pm

Mr Clappison: I am grateful to my right hon. Friend for his comments. This has been a worthwhile debate and a worthwhile amendment, particularly in light of what he has just said. He has brought the commencement date forward one month further than had previously been indicated by the Government. Also, I agree with him that the arrangements in the Bill are much more satisfactory than the current arrangements, which were left to us by the previous Government, when it comes to any treaty changes that might come about as a result of changes to the eurozone. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr David: I should like to say a few words about the clause. The whole issue of when the Bill comes into effect causes us some concern, because it has been our contention from the start of our deliberations that the Bill is essentially window dressing. It is not an attempt
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to introduce genuine participation and accountability, but is instead, as a Minister has said, a rather crude attempt to tie future Governments.

Certainly, in terms of parliamentary scrutiny, I welcome what the Minister has said today and previously. Logically, many of things that the Government have announced in the Bill and in recent written statements are to be welcomed. We are firmly in favour of as much parliamentary accountability and involvement as practicable. Indeed, that was the whole tenor of the Opposition's amendment at the start of our Committee deliberations. However, it worries me that we still have the important issue of the justice and home affairs opt-ins, particularly the European Court of Justice provisions, which will have to be considered during this Parliament. The Minister has been absolutely firm in his determination to ensure that although we will have additional scrutiny considerations regarding whatever a Government may decide to do, there will not be a referendum on this extremely important issue. These matters worry us greatly, because we contend that there is a certain amount of illogicality in the Bill. It is contradictory, it does not hold together and there is not a great deal of intellectual sense behind it. That is clearly illustrated by the whole issue of the ECJ opt-in provisions.

If the Government were true to their rhetoric, they would insist that the legislation would be introduced and that a referendum would be held during this Parliament if they decided to opt into those provisions, as some suggest they would like. That is why the whole issue of when different parts of the Bill commence and have legal effect is of tremendous importance. I want to register and reinforce the Opposition's concern that the Government are approaching this matter in what we consider to be a totally ham-fisted way.

Mr Lidington: I shall be brief. I think the hon. Gentleman has a bit of a nerve. It was actually the Government whom he supported and served who agreed to the treaty that collapsed the third pillar, which communitised justice and home affairs, bringing those areas of policy under European Court of Justice jurisdiction when previously they had been intergovernmental. As we debated last week, we have as a Government announced that we shall be discussing with the scrutiny Committees and others the ways in which we can strengthen parliamentary scrutiny over justice and home affairs and give greater accountability of the Government to Parliament for those decisions.

We have said publicly, on the record, that the decision that must be made by 2014 on whether to opt out of or remain party to the pre-Lisbon corpus of justice and home affairs measures will be subject to a debate and to a vote in each House of Parliament. The previous Government made no provision for such an arrangement. They were content for the 2014 decision, which the hon. Gentleman now describes as of great magnitude, to be subject simply to the normal scrutiny provisions and for the Committee to determine whether to call it in for debate. I note that, despite all the hon. Gentleman's strictures about there being no need for this Bill, he did not suggest that a hypothetical future Labour Government would seek to repeal the legislation. He knows the penalty that would accrue to any political party that tried to deny the people the democratic rights that they are being given under the Bill.

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Mr David: In response to the Minister's last remark, I would say simply that we have belief in the parliamentary process, and although the Bill may pass through this House, we are sure that Members of the other place will have enough wisdom and common sense not just to give it a mauling but to reject it.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Clause 22 ordered to stand part of the Bill.

New Clause 7

Annual report on Part 1 of the Act

'(1) The Prime Minister shall prepare and lay before the House each year a report on the operation of Part 1 of this Act.

(2) The report shall identify-

(a) any statements made in the previous 12 months under section 5, indicating specifically where Ministers have indicated an opinion under section 5(3) as to whether a treaty or Article 48(6) decision falls within section 4 of this Act, and any opinion given under section 5(4) of the Act on the significance of the relevant provision in relation to the United Kingdom;

(b) any powers and competences transferred under the terms of the TEU or TFEU from the United Kingdom to the European Union within the previous 12 months which-

(i) have, and

(ii) have not

required specific authorisation under any provisions of Part 1 of this Act;

(c) any powers and competences arising under any of the provisions of the TEU or TFEU referred to in Part 1 of this Act which have been repatriated to the United Kingdom from the European Union over the previous 12 months; and

(d) any such powers and competences which the Prime Minister seeks to repatriate to the United Kingdom from the European Union.

(3) The report shall also include-

(a) an assessment of the likelihood of further transfer of such powers and competences in the succeeding 12 months;

(b) a cost benefit analysis of the impact on the United Kingdom of any decisions made in the past 12 months under any of the provisions of the TEU or TFEU powers referred to in Part 1 of this Act.'.- (Priti Patel.)

Brought up, and read the First time.

Priti Patel (Witham) (Con): I beg to move, That the clause be read a Second time.

This is a straightforward probing amendment, designed to provide greater openness and transparency in connection with the Bill, and particularly the transfer of powers. It will give the public and Parliament an annual opportunity to review, in one comprehensive report, the powers transferred to the EU under part 1-for example, by providing a cost-benefit analysis of the impact on the UK of those transfers of powers-details of the powers that are likely to be transferred to the EU over the 12-month period and an indication of the powers that the UK seeks to repatriate from the EU.

Since coming to office, the Government have been at the forefront of pioneering the transparency agenda across all our politics. The new clause builds on those efforts, as the EU should not be exempt from robust parliamentary and-especially-public scrutiny. I believe it is essential that we keep a close eye on the powers that
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are being transferred to the EU, whether through referendum, Act of Parliament or ministerial decisions, for three reasons.

First, there is the matter of keeping a track record of the cost to this country of the EU's having more powers, and letting people know who is governing Britain. Secondly, there is the matter of democracy and the public's being able to hold the EU, the Government and Parliament to account for the decisions they take and the powers they ultimately exercise. Thirdly, there needs to be scrutiny of the powers handed over that are not deemed to be significant. After a single transfer, they may appear to be innocuous, but a series of such transfers over time may constitute naturally something more significant.

The Minister will be aware that the Government publish some of the details on the transfer of powers, such as the report on EU justice and home affairs matters that details the use of the opt-in protocol. More information of that nature across the Government should be published, and the new clause would facilitate an opportunity for the Prime Minister to present it to the House.

Graham Stringer: This is a particularly imaginative new clause. Does the hon. Lady imagine that there would be votes on such reports, or would they just be for information?

Priti Patel: I would not rule out anything, to be honest. As I started by saying, the new clause is designed to generate more openness and transparency in the transfer of powers and, ultimately, the amount of say that the EU has over us in this country. Right hon. and hon. Members, as well as the public, could therefore review the report, audit the EU and further hold decision makers to account, so I would welcome the opportunity not only to discuss but to vote and to have full-blown transparency.

The new clause is necessary because the monitoring of EU policies and the transfer of powers is not as effective as it should be. I pay tribute to the European Scrutiny Committee for its tremendous work. Unfortunately, the Chair of that Committee is not here this afternoon. It should be of concern to the legislature that such information is not always readily available and that important qualitative and quantitative data on the EU are not easily accessible.

Martin Horwood (Cheltenham) (LD): I am slightly surprised. Given the evidence of the past three weeks, is my hon. Friend really suggesting that even the slightest scintilla of power moving from this country to the European level will not be noticed by the hon. Member for Stone (Mr Cash) or the hon. Member for Wellingborough (Mr Bone) or all her other hon. Friends? They seem to be on to these things like terriers most of the time.

Priti Patel: And quite rightly so. Of course, we have a House full of assiduous Members and the European Scrutiny Committee has been very effective, but I am talking about an annual report and more openness and transparency.

1 Feb 2011 : Column 770

By asking a range of parliamentary questions of 10 Departments, I received information stating that at least 79 current EU directives were pending transposition into UK law at a total cost in excess of £20 billion, and that is just one example. Of course, assiduous Members will ask many other questions and do a lot more fact finding to identify and uncover other transfers, too.

There is no reason why such information should not be published regularly, and Ministers must endeavour in future to be more transparent and accountable. It is therefore important in going forward with the Bill that information on the costs, benefits and powers exercised by the EU is available and accessible, as that greater transparency and opportunity to hold Government policy to account over the EU would, in my view, be most welcomed by the British public.

The new clause would go somewhat further than just making more transparent the EU, the Government's policies on the EU and transfers of power, because it effectively asks the Government in their annual report to publish details of plans to repatriate the powers and competences from the EU that they believe should be held by this country. As drafted, the Bill will establish a referendum lock and safeguards against further significant transfers of power, which I have consistently supported and welcome, but it does not cover the approach that should be taken to repatriate powers to this country that the EU currently holds that are not in our national interests and on which the public expect us to act.

We have heard about many opinion polls in these Committee proceedings, but I shall refer to another one. An opinion poll conducted four years ago, before the previous Government handed over even more power under the Lisbon treaty, found that 58% of the British people believed that the EU should have less power and that more decisions should-surprise, surprise-be taken nationally and locally, and that 68% of people thought, quite frankly, that the EU did not represent ordinary people in our country.

Across a diverse range of policies, the public and parliamentarians of all parties can point to powers that the EU should not have, and that the British people believe should be brought back to our country, for a range of democratic reasons as well as on cost grounds. They include policies on access to our territorial waters, which we debated last week when discussing fisheries, as well as on justice and home affairs.

5.45 pm

Mr David: I am following the hon. Lady's argument with a great deal of interest. I know that she used to be a member of the Referendum party. Have any of her views changed since she joined the Conservative party?

Priti Patel: Absolutely not! I believe that the Conservative party has very much embraced the views of the party that I represented back then. I have been campaigning for a referendum for more than 15 years, and the Conservative Government are now proposing it.

I was talking about the powers that have been handed over to the European Union. The European arrest warrant has been the subject of a great deal of debate in the House, and social and employment policies have cost the UK more than £38 billion. We have heard mention of the working time directive, as well as of
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waste in regional policies, economic controls and financial services, not to mention the endless regulations that burden our businesses, the £1 billion that the EU is seeking to fine the UK and the £50 billion, which I mentioned during questions today, that the UK is set to hand over as a net contribution over the next few years to 2016.

Martin Horwood: Many of us think that the European arrest warrant is a useful and positive counter-terrorism measure. Would it not be better to take what would presumably be an annual debate on the hon. Lady's proposed report and broaden it out into a debate on the work of the European Union or the Commission's work programme as a whole? That would subject the whole programme of the European Union to scrutiny in this place, and allow those of us who have a more positive view of the EU to put our case as well.

Priti Patel: I suggest that timetabling the required number of hours and days for such a debate could be quite challenging, because it would have to cover a vast number of issues.

In my view, the British people deserve to know what their Government are planning to do, not only about the powers that the EU seeks to exercise but about those that it currently uses and-dare I say it-abuses, according to some in this House. Like all Conservative Members, I stood on a manifesto that clearly stated:

Following the ratification of the Lisbon treaty, we made a commitment not to let matters rest, and to negotiate the return to Britain of criminal justice powers and the opt-outs of the charter of fundamental rights and of social and employment legislation. The new clause would give the Government and the Prime Minister an annual opportunity to update the House on the actions being taken to deliver that, and to bring genuine openness and transparency to these proceedings.

Forty years ago, when we entered what was then known as the European Economic Community, few could have predicted with any accuracy how deeply integrated and ingrained the EU has now become. Had we known that at the time, I am sure that this Bill would have been even more robust than it is.

Emma Reynolds: Does the hon. Lady acknowledge that it was a Conservative Government, with the Single European Act in the 1980s and the Maastricht treaty in the early '90s, who gave away the largest transfer of powers from this Parliament to Brussels?

Priti Patel: That is genuinely a matter of record now. We have now seen how far the EU has gone, and that is the reason for my probing new clause. We need to look to the future and be more vigilant. This is not just about the past; it is about what is coming in the future.

Kate Hoey (Vauxhall) (Lab): The hon. Lady is probably aware that the vast majority of the public do not care which Government gave away our powers. They are fed up with the fact that more and more powers have gone to Europe and they want those powers back. Does she agree that until this country faces up to the fact that for far too long the public have had no say in whether we
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want to stay in Europe or not, and that until we get a referendum on that, we will never clear the air and be able to go forward in Europe as progressive Europeans, or go out of Europe and go forward as progressive UK citizens?

Priti Patel: I thank the hon. Lady for her contribution. I entirely agree. The air needs to be cleared, and the British public naturally feel upset and uneasy about that. The issue is a sensitive one, hence the need for greater openness and transparency.

I ask the Minister to consider the points that I have made-fundamentally, the issue of openness and transparency. We have handed away far too many powers. The Bill is about the future, and I would welcome the Minister's views.

Mr Lidington: The new clause moved by my hon. Friend the Member for Witham (Priti Patel) raises important issues, and it is right that we should devote some time and attention to her arguments today. I share a large number of the concerns that she expressed, and I welcome her wish to see much more transparency and clarity in the way in which the European Union operates. Having said that, I shall argue that the method proposed by my hon. Friend in her probing amendment is not necessarily the best one to secure those objectives. I shall deal with the main components of the new clause in turn and explain why, although I share many of her concerns, I do not think that the proposal as drafted is the best vehicle to deliver those goals.

Let us look first at how to police the boundaries of European competence. I share the anxiety expressed by my hon. Friend, and I believe that this is the mischief that subsection (2)(b) of new clause 7 is intended to address. That subsection requires that a list of any powers or competences transferred from the UK to the EU under the terms of the treaties in the previous 12 months, which have or have not received specific authorisation under any provisions of part 1 of the Bill, be included in the annual report.

The treaty position is clear. A competence should be transferred from the UK to the EU only if there is a treaty or treaty amendment unanimously agreed by all member states using the ordinary revision procedure, whereby we have a continuing power of veto. Power, as defined in the Bill, is changing the treaty to give an EU institution or body the power to impose a requirement or obligation on the UK, to impose sanctions on the UK, or to abolish what are defined in the Bill as significant vetoes.

Given that those changes to competence or power are covered by the referendum lock as set out in the Bill, there ought to be no possibility of the need for any entries at all in the report under subsection (2)(b) because competence cannot lawfully be transferred by any other means. What lies behind my hon. Friend's argument, I think, is a concern that competence may be extended in ways other than formal treaty change.

It is important to try to distinguish the issues. There are cases where the EU has competence-we may argue about whether it ought to have such competence, but that competence has been granted by one or other of the previous treaties-but where the UK has particular views about how the European Union should legislate
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on the basis of that competence. We may believe that a particular measure is unjustified on grounds of subsidiarity, or that the costs of a particular measure are disproportionate to the benefits being claimed.

I offer the Committee an example. We do not dispute that the EU has competence to legislate on the terms and conditions for pregnant workers, but we have very strong views about the content of the particular proposal that is on the table, and we successfully built firm opposition in the Council to the European Parliament's approach, which has effectively brought those negotiations to a standstill. At heart, that is not a matter of competence; it is a matter of policy. Those matters are debated carefully in the discussions about negotiating strategies that take place in the European Affairs Committee of the Cabinet, and they are also covered in the explanatory memorandums that we as a Government submit to Parliament.

There are other areas where there are concerns about whether a Commission proposal for new EU legislation or action oversteps the boundaries of existing EU competence. Again, the Government rigorously assess every proposal coming out of Brussels to ensure that it falls within the scope of competence and that the treaty base put forward by the Commission is justified. To give another example, we have been rigorous in asserting our position with regard to matters to do with the EU's eternal competence.

Let us look at the External Action Service and consular work. We have firmly restated the treaty position that the EAS has no formal role in consular work, and should support it only by facilitating co-operation and the co-ordination of member states' actions. The competence for consular functions remains with member states. We have made it clear to Baroness Ashton and to the Commission that we would oppose Commission proposals for the EAS to have a direct role in providing consular assistance or in any other way seek to expand the institutions' role beyond the competences set out in the treaty.

As a further example, at the Cancun UN conference on climate change, we insisted on prior agreement on when the presidency and the Commission would be authorised to represent the position of the member states, and the forms of words that they would use when doing so. We did that in order to safeguard the position that competence remained with the member states and had not been given exclusively to the institutions of the European Union. In the last resort, if we considered that a proposal went beyond the competence of the EU, we would challenge it during the legislative process and, if necessary, at the European Court of Justice.

One of the reasons I hesitate to endorse an annual report is that I think what the Government should be doing is to make clear their views on competence as they affect particular measures whenever those measures are brought forward. If we adopted the proposed annual report, there would be a risk of Whitehall saying, "Let's wait for the 12 months to elapse for the annual report." My hon. Friend will probably have received some parliamentary answers; when I was a free spirit, I used to get parliamentary answers saying that the information would not be made available now, but if I wanted to hang on for six months, it would be made available in
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that Department's annual report, or when a promised review was published. I would not like us to get into that situation with regard to these matters.

I have asked that every explanatory memorandum sent to Parliament should not simply state what legal base the Commission has given to it, but give some assessment of the suitability of that legal base.

We need to be much more forward-looking and smarter. Right across Whitehall, we must pay more attention to the Commission's forward work programme, so that we can identify up front any potential issues of concern over competence creep at an early stage, preferably even before the publication of a proposed directive or other measure. That is the way forward for continuing work in government to scrutinise every proposal on competence grounds, and much more openness and activity in Parliament as well.

Emma Reynolds: In the interests of transparency and openness, which the hon. Member for Witham (Priti Patel) spoke so eloquently about, why do the Government not consider reintroducing the pre-European Council debates that used to take place in the House?

6 pm

Mr Lidington: Because those debates were explicitly transferred from the Government to the Backbench Business Committee when it was established, along with responsibility for a number of other debates which had previously been held in Government time. The report that recommended that transfer was adopted unanimously in the House, with the support of the Labour party as well as that of Conservative Members.

Mr Bone: The Minister is exactly right on that point. I have the privilege of sitting on the Backbench Business Committee, and we always look forward to representations on the European issue. The Committee can bring a motion to the House, rather than just a general debate, and force the Government to do something.

Mr Lidington: Indeed. My hon. Friend is not exactly averse to opportunities to debate the EU. For hon. Members on both sides of the House who feel that there needs to be a debate on the Commission's work programme or any aspect of that, the way forward is to ask the Backbench Business Committee to use the time allotted to them for consideration of those matters.

Mr Philip Hollobone (Kettering) (Con): The Minister mentioned competence about a hundred times in his remarks, quite rightly, but subsection (3)(b) of the new clause mentions a cost-benefit analysis of the impact of any decisions made. Will the Minister address that point? Will Her Majesty's Government at any point undertake a comprehensive cost-benefit analysis of our membership of the EU?

Mr Lidington: My hon. Friend pre-empts me, because I am about to come on to the question of cost-benefit analysis. I very much agree with my hon. Friend the Member for Witham that the EU has to provide much better value for money. The Government are clear that the EU needs to change and can do things a lot better than it does at present. My right hon. Friend the Prime Minister has argued in the House and elsewhere that the
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EU cannot be immune to the budgetary realities that every member state Government in the EU and every family in the EU has to face. That is why it was the Prime Minister and this country that led the process to ensure that the 2011 EU budget did not grow in line with the unacceptable demands of the Commission and the European Parliament, and why at the end of last year the Prime Minister secured the important principle that over the next financial perspective the EU budget should reflect the consolidation efforts being made by Governments right across the EU.

James Wharton (Stockton South) (Con): Does the Minister agree that this is not just about value for money within the EU as a body and the way it functions, but about the impact on value for money across all that Government do and across our society as a whole of the measures implemented by the EU? We talk about what appears to be mission creep from the EU, which we often see when competences are used in an elastic manner to drive forward new centralised European policies. Will the Minister please make a statement on ensuring that we look for value for money in how they are implemented as well?

Mr Lidington: My hon. Friend makes an important point. The Government seek to ensure that there is much better value for money and a more rigorous cost-benefit analysis of measures at the EU level, and to apply those same principles to the transposition of European legislation into our own domestic arrangements. I suspect that hon. Members on both sides of the House will have been familiar in the past with European legislation that has all sorts of gold-plated extras that add to the cost and complexity that businesses or voluntary organisations face when the legislation reaches its final form here, usually by way of statutory instrument.

My hon. Friend the Member for Witham (Priti Patel) rightly says that we must ensure that the EU too addresses this challenge, and we are going about that in a number of ways. First, we are working with like-minded European partners to encourage smarter regulation by applying more rigorous use of evidence in the EU. We welcome the Commission's smart regulation communication, published in October 2010, which set out a four-year strategy to reduce the regulatory burden on EU legislation on business. That communication reflected a number of this country's priorities, including further strengthening of the impact assessment process and post-evaluation adjustment of laws.

We need to see much more progress on impact assessment. The Commission has a commitment to produce impact assessments for all its proposals, but, to be honest, the quality is variable and we continue to press for improvements. The Parliament and the Council do not have a routine commitment even to produce impact assessments as a matter of course, and we believe that those two institutions should be doing that as well. It is now a fact of life that most areas of European law-making involve the European Parliament as a more or less equal partner with the Council of Ministers. That means that on a number of important measures, for example on employment matters and other pieces of social regulation, the Council might agree a position and then the Parliament can choose to vote through measures that introduce greater costs that industry has to bear.

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Mr John Redwood (Wokingham) (Con): Does not the Minister understand that we do not want better impact assessments, but less regulation? How will the Government deliver their very good one-in, one-out policy on regulation if they cannot stop the torrent of regulation that is still pouring out of Brussels now that it is occupying the whole of the financial services field, for example?

Mr Lidington: We have to do both. The two are not alternatives. Impact assessments are valuable, and they focus the minds of other European Governments, and of the groups representing industry in those member states, to become more active in pressing home their interests than is sometimes the case at the moment. The more transparency that we get in the European legislative process, the more likely it is that we will move towards the objective that both my right hon. Friend and I seek.

I would share with my right hon. Friend a wish to see the EU legislate less. There is too often a culture in the Commission that identifies a problem and then seeks a remedy in the form of new law. Non-legislative measures can often be more effective, and certainly less burdensome and complex, than legislative measures. That is something that my colleagues across Government are pursuing with colleagues from other countries who share our views on this matter, and we seek to encourage other countries to work with us to look for non-legislative ways of addressing problems and challenges, rather than looking for a new directive as the first resort every time.

Mrs Main: An impact assessment may work on EU law, but what about the gold-plating that goes on when the law is already passed and we seem to add to it in reams in this country?

Mr Lidington: That has certainly been a genuine problem, and it is a priority for the Reducing Regulation Committee, chaired by the Secretary of State for Business, Innovation and Skills, to address. The Government now have an established policy not to gold-plate. When we implement European legislation, we will be certain to do no more than is required of us by the words of the legislation. Ministers are now under an agreed political obligation to resist any attempt from within their Departments to add extra bells and whistles to what is required of us by a directive. We should do what our competitors and partners in Europe are doing and no more.

Mr Shepherd: I applaud the Minister's aspirational words, but those of us who have been here as long as he has have heard them said so many times. It is an old song, and yet nothing is ever resolved on the issue. Why is he confident that action will now follow those same old words?

Mr Lidington: I am confident because of what I see and hear when dealing with Ministers from other European Governments who have woken up to the scale of the competitive challenge that Europe faces from other regions of the world. When one talks with Ministers from Germany, Scandinavia, much of central and eastern Europe and even France, which has historically had a different approach to business and trade than we have had, one realises that there is a real fear that we are facing not only a difficult economic downturn and an
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ongoing economic crisis, with high unemployment across our continent, but a profound, long-term challenge to the competitiveness, and therefore prosperity, of our societies. I find Ministers from other countries alive to that challenge and so have greater hope that we can make progress than does my hon. Friend the Member for Aldridge-Brownhills (Mr Shepherd).

Mr Douglas Carswell (Clacton) (Con): Will the Minister not find that that is precisely the sort of lip service that was paid to reform at the time of the Lisbon agenda more than a decade ago, when Ministers throughout Europe said that they would achieve reform and precisely nothing happened? Have we not been here before and heard that song sung too often?

Mr Lidington: The Lisbon agenda was certainly a grievous disappointment, and our chief concern about the Europe 2020 programme is that it will go the same way by being much too concerned with targets and inputs and not looking at competitiveness. However, if we look at the history of this country's relationship with the EU, we can see how the UK has at key moments helped lead a movement that has changed Europe for the better.

I was teased earlier by Opposition Front Benchers about the impact of the Single European Act, but the creation of the European single market gave opportunities to business and individual workers in this country and in every other member state, and that has helped us to become more competitive and prosperous now than we would have been had Margaret Thatcher and Lord Cockfield not had the vigour and commitment to see it through.

6.15 pm

Similarly, although it has more to do with politics and diplomacy than economics, it was the UK that was the foremost champion of the enlargement of the EU into central and eastern Europe. That has helped to entrench the rule of law, human rights and democracy in parts of the continent where those traditions had been crushed for most of the 20th century.

I am not complacent at all. Ministers are educated very quickly about the scale of the challenges when they start attending European Council meetings and see the torrent of documents that flow into Whitehall. The Government, from the Prime Minister down, are utterly determined to try to get the EU heading in the right direction, because that is essential to securing the well-being, prosperity and competitiveness of our country. That is why the Prime Minister wants to bring in a one-in, one-out rule for new European regulations and implement that principle at the national level and why he says we need a new and tougher target for reducing the total regulatory burden over the life of the Commission. That is why he wants Europe to consider giving small businesses, which are the engines of job creation, an exemption from major new regulations.

Emma Reynolds: I agree with much of what the Minister has just said, including his comments on the Single European Act and the benefits of the single market, so there is an agreement between the two Front
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Benches on that. Does he agree with the argument that when European legislation is drafted properly and replaces 27 sets of legislation, for those business trading across borders it can actually be a deregulatory measure?

Mr Lidington: It is possible for that to happen, but it depends crucially on the content and complexity of the measure. Regulation is not desirable simply because it takes place at a European level and replaced national regulations. It is especially undesirable from the UK's point of view if a familiar system of regulation that reflects the way we do business is replaced by something modelled on completely different practices from a different member state.

Mr Carswell: The Minister sings the virtues of the single market, so will he explain to the Committee why we have had a trade deficit with Europe every year since we joined the single market, whereas before we had a trade surplus? Will he also explain why non-EU states such as China seem to have no difficulty in gaining market access without having signed up to many of the regulations he supports?

Mr Lidington: I am sorry that my hon. Friend seems to regard Margaret Thatcher as having sold out to Europe when she agreed to the single market. I ask him to talk to UK businesses, as he will find that they regard the single European market as a great boon. It was the combination of the UK being in the single European market and at the same time offering the best deal, with regard to regulation and low taxes, that led the UK, under the Conservative Government that he and I supported, to attract the lion's share of foreign direct inward investment into the entire EU.

Mr Hollobone: Will the Minister give way?

Mr Lidington: I will give way, but I am conscious that we have another important new clause to debate and do not want to get drawn too far away from its content.

Mr Hollobone: We will have plenty of time to enjoy ourselves with that this evening. The Minister is stressing the benefits, as he sees them, of our membership of the EU, so I will return to the point I made some moment ago: why will Her Majesty's Government not undertake a comprehensive audit of the costs and benefits of our EU membership?

Mr Lidington: There are some elements of EU membership that could be put into such a calculus, but we cannot measure, in the way my hon. Friend wishes, things such as the diplomatic leverage that we obtain by being able to work in partnership with other European countries. [Hon. Members: "No!"] Some will differ from me in that analysis, but the fact that we were active members of the European Union helped us to achieve a package of sanctions against the Iranian nuclear programme last year that was tougher and more effective than either the United States or the Government of Iran believed possible. We were there at the table, so we were able to exert a powerful influence, in partnership with others, in the defence and enhancement of our national interest in securing sanctions against that programme, and we were able to overcome opposition from a number of other member states that weighed in the balance
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some very big commercial interests in Iran. That sort of advantage does not lend itself easily to the calculation that my hon. Friend invites me to make.

There are all sorts of things wrong with the EU as well, and we can find other occasions to debate its flaws, but the Government's position is that membership of the European Union is one of the key ways in which we seek to advance the United Kingdom's influence in the world.

Mr David: The right hon. Gentleman makes some very important points, but would it not be far better if he spent time talking, as he has, about the benefits of the European Union, rather than about this stupid, nonsensical Bill?

Mr Lidington: I do not regard as insignificant or risible giving the people of the United Kingdom a final say over treaty changes that transfer new powers and competences from this Parliament to Brussels. We would have much more public confidence in politics, and a much better chance of positively putting the case for British membership of the European Union, if the public did not feel so betrayed by the absence of any endorsement, by means of a referendum, of past treaty changes.

On new clause 7, which my hon. Friend the Member for Witham moved, my response to our hon. Friend the Member for Kettering (Mr Hollobone) indicates why some of what it seeks is not suitable. Proposed new subsection (2)(a), for example, requires a report on

both the statement about whether such a treaty or decision transfers power or competence, and the statement on whether any transfer under section 4(1)(i) or (j) is significant.

It would not be onerous to include that requirement in an annual report, but there are unlikely to be so many treaties or decisions in any one year, so there would not be any real value in that information being collected and set out in an annual report. Under the Bill, there will be a minimum requirement for a written ministerial statement and an Act of Parliament before any such measures can be agreed, and that seems to represent sufficient transparency.

On repatriation, I listened to my hon. Friend the Member for Witham, who put her argument very powerfully and cogently. She knows that, under the coalition agreement, the Government are committed to examining the existing balance of competences and what they mean for Britain, and we continue to look at that issue.

The new clause raises some very important issues, and I welcome my hon. Friend's aims of seeking much better value for money, more transparency and vigilance against competence-creep within the European Union. Those matters are not for the Bill, however, which deals with treaty changes and ratchet clause transferring powers or competences to the EU. We need to focus immediately on the individual issues to which she refers, measure by measure, as they arise in the Commission or as individual items of legislation, rather than taking up time preparing retrospective reports that I fear would be of largely historical interest.

What is relevant and important to the work of Ministers throughout Whitehall is for the Government to pursue with Parliament ways in which we can improve the
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scrutiny of EU issues and the opportunities for Parliament to hold Ministers to account for their stewardship of the United Kingdom's interests in European discussions. I therefore urge my hon. Friend to withdraw her new clause.

Priti Patel: I thank the Minister for his response to my new clause. I shall say a few words, because a number of issues arose in his reply.

There is a range of issues that clearly must be aired and discussed-that was the purpose of my new clause-in relation to competence-creep and the ever-increasing powers that have been sucked away to Europe over the years. The Minister has a valid point about the proposed report being more retrospective, and if nothing else his assurances about the role of this House and Parliament in the scrutiny not just of legislation but items as they arise, and about the forward-look in terms of the Commission's work programme, are absolutely vital. As we heard in the earlier debate, a number of assiduous Members will continue to bring those issues to the Floor of the House, to pursue them and to persist with them.

I intend to withdraw my new clause, but my final point to the Minister is about cost-benefit analysis, which is fundamental. The Government could still do a lot more to assure the British public that their hard-earned money was being spent more effectively when it comes to EU matters. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 11

Provision for further referendum

'In order to meet the referendum condition referred to in section 2, section 3 and section 6 of this Act, the Act providing for the approval of-

(a) a treaty under the terms of section 2; or

(b) a decision under the terms of section 3; or

(c) a decision or draft decision under section 6

shall also provide for a further binding referendum to be held on continuing United Kingdom membership of the European Union, if the majority of those voting in a referendum held under the terms of the relevant section are opposed to the ratification of the treaty, decision or draft decision, as the case may be.'.- (Mr Bone.)

Brought up, and read the First time .

Mr Bone: I beg to move, That the clause be read a Second time.

It is a great pleasure to follow my hon. Friend the Member for Witham (Priti Patel), who made such a powerful speech. I hope that I am able to tempt her into joining us in the Division Lobby later tonight, given what she said about new clause 7. It would be wrong of me not to pay tribute to the Whips' Office for allowing me this time tonight, and for arranging matters so that my amendment 48 was not debated last week, when there clearly was not enough time for it. Now, we have absolutely hours and hours to discuss new clause 11, and I congratulate the Whips on that.

The new clause, which stands in my name and those of other hon. Members, reads:

"In order to meet the referendum condition referred to in section 2, section 3 and section 6 of this Act, the Act providing for the approval of-

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(a) a treaty under the terms of section 2; or

(b) a decision under the terms of section 3; or

(c) a decision or draft decision under section 6

What does that actually mean? For the first time, this Parliament would have an option to debate whether we should have an in/out referendum on the European Union. In other words, there would have to be a binding in/out referendum on our membership of the European Union if the new clause were passed and two hurdles cleared: first, a referendum would have to be triggered under the European Union Bill, owing to a proposed transfer of competency; and secondly, the British people would have to vote against such a transfer of power.

Thomas Docherty (Dunfermline and West Fife) (Lab): I am very grateful for having stumbled into this debate. Does the hon. Gentleman not accept the danger that, although people might not be in favour of voting yes in the first referendum, they would be forced-with the proverbial gun to their head-to vote yes to such a transfer of powers because they did not want an in/out referendum?

Mr Bone: I am grateful to the hon. Gentleman for his intervention, but that matter comes somewhat later in my address. In fact, I think that it would work to the reverse of what he said.

6.30 pm

Kate Hoey: My name is also on the new clause. I was cheered when I heard the hon. Gentleman say that we had a long time to discuss it, because unfortunately I have to be out of the Chamber for about an hour on an important matter, and I want to be here for the vote. I therefore hope that the debate will continue for a very long time. Does he believe that this proposal offers a way out of the current situation whereby the one thing that unites all the establishment parties is that they do not want the British people to have a say on whether to stay in or move out of the European Union?

Mr Bone: I am grateful for the hon. Lady's intervention. Her views on this have been most helpful and supportive. I am sure that other Members will try to catch your eye, Mr Evans, and I hope that the debate will still be going on when she returns. She makes the fair point that when both sets of Front Benchers agree on something, it is almost certainly wrong.

Martin Horwood: I think that the hon. Lady might have been excluding the Liberal Democrats from the establishment parties, which I would obviously be very pleased about.

The hon. Gentleman will acknowledge, I hope, that Liberal Democrat policy remains in favour of an in/out referendum, although not in the way that his new clause suggests, and we argued for it strongly during the passage of the Lisbon treaty Bill.

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Mr Bone: I appreciate my hon. Friend's intervention and, yet again, that supportive point. I will turn to that argument in some detail later.

Mrs Main: I was extremely cheered, as I am sure was my hon. Friend, to hear the hon. Member for Cheltenham (Martin Horwood) asking for an in/out referendum, and I very much hope to see him and his colleagues in same Lobby as those who feel the same way. He was denied the opportunity the first time, so I hope that he might grasp this second opportunity.

Mr Bone: I am grateful for my hon. Friend's support and her argument. In fact, I would take it a stage further. Because there is support for the new clause on both sides of the Committee, and because I am moving it in a coalition spirit, as Members will discover, I have every expectation that there will not be a vote tonight and that the Minister will accept it.

Let me explain why the Committee should support my new clause. First, it would not alter in any way the purpose of the European Union Bill. The Bill is designed, under certain circumstances, to give the British people, through a referendum, a say on our relationship with the European Union. My proposal would merely extend the referendum lock, under certain circumstances, to whether we should remain part of the European Union.

Why do I think that this would improve the Bill? If the British people have a chance to approve or disapprove of a transfer of power in the future, and they say yes, then there is clearly no need for an in/out referendum, as it would show that the British people are happy with their relationship with Europe. If they say no, clearly they are unhappy with a proposed change to the European Union. Surely it is right that the alternative question is then put as to whether the British people wish to remain in the European Union.

An added advantage is that the in/out referendum would be triggered by an event, not by politicians. In the past, referendums have been timed to favour the proponents of the referendum, not necessarily for the benefit of the British people.

Mr Hollobone: Would not my hon. Friend's new clause strengthen the referendum lock, because Her Majesty's Government, in proposing a transfer of powers to the European Union, would have to think even more carefully about doing that, if they did indeed value our membership of the European Union, because they would know that if it failed, they would then be subject to his referendum as well?

Mr Bone: As usual, my hon. Friend is absolutely right. Again, I will return to that point later.

I was talking about the gerrymandering of referendums, and that brings me rather nicely to the AV referendum, which is being gerrymandered for a particular day to maximise a particular outcome. Because my trigger for the in/out referendum would be decided by an event, such gerrymandering could not take place in future.

The last time the British people had any say on our relationship with Europe was under the premiership of Harold Wilson, on 6 June 1975, when a national referendum was held asking:

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This referendum took place nearly 36 years ago, which means that only people who are lucky enough to be over the age of 54 have had any say on the European issue. It is wholly unacceptable that a generation of Britons have not had a direct say on their relationship with Europe.

Mr Clappison: I will let the Committee into a secret: I am old enough to have voted in that referendum. It is not only younger people who would like a chance to have a second look at this, but older people who believed what they were told in the course of the campaign and the safeguards that were set out in the literature sent to every household, nearly all of which have proved to be unfounded.

Mr Bone: As usual, my hon. Friend is absolutely spot on. Again, I want to explore that a little later in my speech.

The relationship with Europe affects everybody, no matter what their walk of life, in the most profound of ways. Other countries have consulted their citizens through a referendum, but not the United Kingdom. The issue raised by the 1975 Wilson referendum was whether we should stay in the Common Market: it was about an economic relationship, not a superstate. In 1975, guess what our net contribution to the Common Market was: £1 billon, £500,000 million, £250 million, £25 million? No-the EEC paid us. They paid us £56 million, but of course that was at 1975 value; the current equivalent is £500,000 million. In fact, as far as I can see, this is the only time it paid us a net contribution. Strange that the European referendum was held in that year. It rather backs up what my hon. Friend the Member for Hertsmere (Mr Clappison) said about the facts and figures.

Since then, of course, things have changed. It is no longer just a free trade area: it is a European union, with a huge price tag for Britain. Instead of receiving money from the EU, over the next five years our net contribution to it will be a staggering £41 billion. However, it is not just our economic relationship with Europe that has changed. There is a European state with its own president, Parliament, flag, currency and courts. It now has its own foreign service and its own embassies.

The European Union came into force on 1 November 1993. The British people have never had a referendum on the EU.

Mr Hollobone: My hon. Friend mentions the astonishing sum of £41 billion that will be paid over the next five years by the coalition Government. Is he aware that that is more than twice the £19 billion that was paid to the European Union under the previous Labour Government?

The First Deputy Chairman of Ways and Means (Mr Nigel Evans): Order. This is a fascinating and amazing debate that would clearly take place if the in/out referendum came about, but if we could now focus on new clause 11, perhaps we could make a little progress.

Mr Bone: Of course, Mr Evans. I thank my hon. Friend for his intervention, but I will not respond to it, because I might mention it later if I can sneak it in.

If anyone doubts that an EU referendum is what the British public want, they should check my e-mail inbox or my post to see the hundreds of letters and e-mails of
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support that an in/out referendum is getting. These are coming not only from my constituency or from Conservatives but from Liberal and Labour voters. They just want to have their say on the important issue of our membership of the European Union.

A recent ComRes opinion poll on 27 October 2010 showed that 75% of the British people think that there should be a referendum on our membership of the European Union. A BBC and ComRes poll on 19 March 2009 found that 84% of the British people wanted a referendum. James Pryor, the chief executive of EU Referendum Campaign, said:

Mrs Main: My hon. Friend is giving huge figures. Asking the question does not necessarily mean that there will be a negative answer. If he is saying that when one asks the question, there is an affirmation that this is a good idea, surely it would be a good idea at this time to check whether we are down the right path. If we do not get a negative answer, it will be all to the good for the Government.

Mr Bone: My hon. Friend argues an important point, which, again, I hope I can touch on in a little while.

I shall turn to the Daily Express and its crusade to get Britain out of the European Union. Yesterday, I and a number of hon. Members from across the House helped to deliver a petition of more than 370,000 names, which were collected by the Daily Express, demanding an in/out referendum.

Stephen Pound (Ealing North) (Lab): That is twice its readership.

Mr Bone: From a sedentary position, the hon. Gentleman says that that is its entire readership. It is amazing if everyone who reads the Daily Express has signed the petition. I thank the hon. Gentleman for that intervention.

Those referendum pledges were sent in individually by readers of the Daily Express. They had to cut them out, fill them in, write an envelope, stick a stamp on it and post it in. For 370,000 of our citizens to go to that length shows the strength of feeling about a referendum. I congratulate the Daily Express on its efforts. By passing new clause 11 today, we will show that Parliament has been listening to the British people.

Mr Andrew Turner (Isle of Wight) (Con): Is my hon. Friend aware that some Liberal supporters on the Isle of Wight vote Liberal because when there was a referendum on Europe, in which they voted no, they recognised that it was the Conservatives who took us into Europe? I was not there at the time, but I have consulted them since. That is how they saw it-we were taken into Europe by the Conservatives. They found that a reasonable justification to vote Liberal. They were unhappy voting Labour, so they voted Liberal. They have voted Liberal ever since
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because we-the Conservatives-took the country into Europe. I was not among those Conservatives because I voted no, but many voted yes.

Mr Bone: As usual, my hon. Friend speaks on behalf of the people of the Isle of Wight and in response to their views. However, I do not want to get drawn away from new clause 11 by debating whether people deserted the Conservative party at the last election and stopped us having an overall majority because we went back on our pledge on Europe. I do not want to discuss that point.

Recently, I was browsing through a thoughtful, persuasive and enlightened book entitled, "Invitation to Join the Government of Britain-The Conservative Manifesto 2010". I admit that it was interesting and had some bold ideas. More importantly, all Conservative candidates stood on that manifesto at the last general election, and all Conservative MPs should be committed to it. One bit jumped out at me. On page 67, under the heading, "Make government more accountable and representative", it talks about

There we have it-more free votes for Conservative MPs.

6.45 pm

If there is a free vote, it will allow Parliament to do the job that the British public elected us to do. Each and every one of us who is fortunate and honoured enough to sit in this Chamber was elected not just on party policies, but because our constituents wanted us to act on our independent judgment in representing them. They want us to hold the Government to account, whichever party-or parties-is in power. They want us to scrutinise and improve legislation. They certainly elected us to put country first. The only way in which we can do that is to have more free votes, particularly on issues of constitutional importance, such as new clause 11.

Emma Reynolds: Is the hon. Gentleman therefore arguing that Government Members should have had a free vote on whether there should be a referendum on the alternative vote?

Mr Bone: The hon. Lady will have heard the Leader of the House confirm in the past three business questions that we have free votes in Committee of the whole House. This is not retrospective. We have free votes in Committee of the whole House.

I shall quote from somebody else, because I can see that the hon. Lady-I will not say that she does not believe me-is concerned:

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I will link this quotation very carefully with new clause 11 in a moment, Mr Evans, but it would be wrong if I did not give the full quotation, because otherwise it would lose its impact and it could be suggested that I was misleading the Committee. It goes on:

The First Deputy Chairman of Ways and Means (Mr Nigel Evans): Order. That is a good try and the hon. Gentleman is smiling nicely, but perhaps he will now return his comments to new clause 11. I would have thought that there was enough meat in the new clause to mean that he does not need to go outside it.

Mr Bone: I apologise, Mr Evans. I am also sorry that I did not finish the quotation from my right hon. Friend, the Prime Minister.

I wanted to make it clear to the Committee that Conservative Members will have a free vote if the new clause comes to a vote. I think that there is some confusion about that, and that the Chief Whip does not quite understand the Prime Minister's instruction. I just hope that some of my colleagues are not put off voting for new clause 11 tonight because of that.

The people of Britain put us in a coalition Government. We must therefore work together as a team-a unit-that works in the very best interests of this country. The public must have seen certain aspects of the Liberal Democrat and Conservative manifestos that they liked. I will deal with the point that my hon. Friend the Member for Cheltenham (Martin Horwood) raised. I would like to think that the following part is what particularly caught the eye of Liberal voters. To quote another piece of literature that was interesting, although not quite as good as the first:

That is straight out of a good piece of literature, the Liberal Democrat manifesto 2010, "Change that works for you-Building a fairer Britain". It certainly works for me, and I hope it works for the country.

Martin Horwood: Would the hon. Gentleman like to complete the sentence from our manifesto that he quoted?

Mr Bone: I am afraid I have already tried your patience, Mr Evans, so I will not quote any more.

Martin Horwood: The end of the sentence, which the hon. Gentleman omitted, stated that we were committed to a referendum when a significant transfer of power takes place from the British to the European level. In essence, that was an alternative to the current Bill, which the Conservatives instigated. We can have one or the other, but not both.

Mr Bone: I really should have added that, because it helps my case, and I apologise for not having done so. The hon. Gentleman is absolutely right, and that is exactly what my new clause would achieve. If there were
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a significant transfer of power, an in/out referendum could occur. That is exactly what the Liberal Democrats want, so the new clause should gain their support more than a proposal to have a referendum that was not even in the Conservative or Liberal manifestos, such as on the alternative vote.

Martin Horwood: I am afraid that what the hon. Gentleman is proposing is not what was in the Liberal Democrat manifesto. The question is, what should trigger a referendum? In our view, it should be a substantial transfer of power. His new clause suggests that it should be the loss of a previous referendum, presumably only weeks or months before.

Mr Bone: I am afraid that we are in a coalition, and we do not get everything we want, but we get the best of it. I am taking the best of the Liberal suggestion, and it is only fair that I go on to examine the Conservative view.

Mrs Main: My hon. Friend and I sat for many an hour on the Opposition Benches discussing the matter, and I remember some gentle teasing from the Liberal Democrats about whether we would support holding an in/out vote. Now is their golden opportunity to have the next best thing to what was proposed in their manifesto. I would have thought that we would have their support in that.

Mr Bone: I agree entirely, and of course when the Liberals brought forward a vote on an in/out referendum in the previous Parliament, I and a number of my hon. Friends voted for the motion.

Dr William McCrea (South Antrim) (DUP): Does the hon. Gentleman not find it strange that so many Members are afraid of consulting the people about such an important issue?

Mr Bone: Yes, and I will turn briefly to that point later, if I may.

I wish to turn to the Conservative position-having been helpful to the Liberals, I now want to be helpful to the Conservatives. At the European elections, the Conservative party pledged a referendum. In fact, it was so keen to get the message across that it produced car stickers to support it. They were about a foot long, in Tory blue and had a picture of a loud hailer. In huge, bold letters, they said, "Give us a referendum." For the convenience of the Committee, I have removed mine from the back of my car, where it has remained since the last European elections, and I have it with me for the Committee to see. [Interruption.] Members apply to a higher authority; I wish that I could invoke it to get the Government to accept the new clause.

Surely, then, my new clause 11 is not a Tory new clause or a Liberal new clause. It is a coalition new clause, and it should unite all Members on the Government side of the House.

To respond to the hon. Member for South Antrim (Dr McCrea), there is only one reason not to support the new clause, which is the fear of the outcome of a referendum. Is that a reason not to let the people of Britain have a choice? An in/out referendum would be a momentous occasion. It would finally put an end to the
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debate about whether the British people want to be in the EU. Whether the people voted to stay in the EU or to withdraw from it, at least they would have a choice. It would also allow Euro-enthusiasts and Eurosceptics to unite in allowing the British people to have the final say.

In my opinion, most of the public want a chance to vote on whether we are in or out of the European Union, and the new clause would give them such a chance. If it were law, it would prevent a future Government from supporting a transfer of powers to the EU. It would also give us, or whoever was in power, a very strong bargaining position with the EU in relation to a possible transfer of powers. Any future Government who tried to transfer powers to the EU without the safeguard of an in/out referendum would be in most serious difficulties.

When there are job cuts, tax increases and spending cuts, which I believe have all been essential to cut the deficit, how can it be right that in the last five years of the Labour Government our net contribution to the EU was £19.8 billion, while in the next five years, under the coalition Government, it will be £41 billion? With drastic cuts at home and vast spending in the EU, I think that enough is enough and that we should come out of the EU. However, what I think is totally irrelevant. It is what the British people think that matters. It is time for an in/out referendum on the European Union.

Mark Reckless (Rochester and Strood) (Con): My hon. Friend the Member for Wellingborough (Mr Bone) has performed a significant service for us today, because I believe this is the first time since the 1970s that we have had a discussion here about whether the British people should be allowed to decide how they are governed.

I believe that we should be an independent country, trading with Europe but governing ourselves. More than that, however, I believe that it is up to the British people to decide how they are governed. Do they prefer to be governed, and have their laws made, by this House, so that they can throw out the people involved if they do not like how those laws are made, or by a qualified majority including 26 other countries? Do they prefer to have those countries decide their laws for them, and to pay £10 billion a year for the privilege? That question is subject to conditions in the new clause, but for the first time since the 1970s, that issue of principle is before us for debate.

My hon. Friend the Member for Grantham and Stamford (Nick Boles) put it very well earlier in the Committee stage, when he said that for a long time-since the late 1980s, I think he said-the British people had had a settled view about the European Union. They thought, "This far but no further." Yet there is a logical inconsistency in that position, because the process began in the late '80s by which we had the Single European Act, then the Maastricht treaty, then the treaty of Amsterdam, then the treaty of Nice, then the proposed European constitution that the Labour Government then re-described as the treaty of Lisbon. Each and every one of those treaties has given more and more power to the EU.

I believe it is true that by the late '80s or early '90s the settled view of the British people was that we had gone quite far enough and that they did not want to go any further, yet they keep on being dragged further and further. One reason why there is a growing detachment
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between the people and politicians, of which I would say the expenses issue was a mere symptom, is that year after year the British people hear their politicians-particularly those on the Conservative Benches-tell them that they are Eurosceptics. Those politicians say, "We don't support all these transfers of power to Europe. We want to get power back, and we want more power here in Britain." They tell people that we can be in Europe but not run by Europe, and they suggest that Europe is coming round to our way, that the British agenda is winning and that there is compromise. The truth, however, is that the House and the country want only to decide whether or not to be part of what is happening. New clause 11 gives us a chance to vote on that, subject to conditions.

7 pm

Many Government Members describe themselves as Eurosceptics. I first met the Minister in October 1992 at a dinner at Southampton university, at the invitation, I believe, of my hon. Friend the Member for Bournemouth West (Conor Burns). The Minister was sitting between me and a friend over the water, as I shall describe Mr Hannan, who believes so strongly in the European issue that he also believes we should be able decide to abolish the Parliament that pays his salary. That evening, the talk was of the Danish no vote and of a motion before the House of Commons that called for a fresh start in Europe. I am pleased to say that the day after that conversation, the Minister, whom I congratulate on eventually becoming Minister for Europe, signed that motion. Eighteen or so years later, our constituents now ask, "Where is that fresh start in Europe?" They want to decide how our country is governed, and it surely their right to do so.

Jim Shannon (Strangford) (DUP): The people of the UK are well renowned for their freedom of speech and liberty. Does the hon. Gentleman agree that a referendum would allow them to express themselves more adequately and correctly? A referendum of all in the UK would provide a marker for the House.

Mark Reckless: Indeed. I support giving a referendum to all in the UK. That is how we should decide our future. I could not agree more with the hon. Gentleman. That principle is why I support new clause 11.

There is also a political issue at stake. We have heard some description of the Liberal Democrats' position and the in/out referendum they demanded. Indeed, I believe that the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), felt so strongly that we should have an opportunity to vote in an in/out referendum that he was suspended from the Chamber for a day. As far as I can tell, that is still the Liberal Democrat position.

The Conservative position is that the Lisbon treaty should have gone to a referendum. When the treaty was pushed through the House and we were not allowed that referendum, we had to consider our position.

Mr Clappison: As somebody who took part in the Lisbon treaty debates, I am slightly surprised to hear of the Liberal Democrats' current position. They have an honourable position on Europe-they are in favour-but
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they would now like a referendum on a substantial transfer of power to Europe. They wanted an in/out referendum on the Lisbon treaty, but voted in favour of the treaty.

Mark Reckless: My hon. Friend is correct, but the key point is that we can still have the referendum that the Liberal Democrats wanted. The Conservatives cannot go back to the pre-Lisbon EU position because the founding treaties have changed. We have the Lisbon treaty, but we could still decide to hold an in/out referendum.

Martin Horwood rose-

Mark Reckless: The in/out referendum is still an option, and I would hope the hon. Gentleman still supports it.

Martin Horwood: It is no surprise that the Liberal Democrats voted for the Lisbon treaty-we were in favour of it. Is the hon. Gentleman arguing against the logic of the Bill? Under new clause 11 there would be an in/out referendum when a transfer of power happens, but the Bill proposes specific referendums on those transfers of power. There is absolutely no logic to having an in/out referendum after a transfer of power is defeated in a referendum, because no transfer of power will have taken place.

Mark Reckless: I am saying that the principle of an in/out referendum is important. The Liberal Democrat position, as I understand it, is that the British people should decide whether we stay in the EU with Lisbon, or whether we leave. Let us have that referendum.

The most important point in respect of the Bill is that Ministers seem not to have noticed that the world has moved on. A Bill that would have been perfectly satisfactory in 1992 at the time of Maastricht is now, after 19 years of further transfers of powers to the EU, utterly inadequate for its task. My constituents are not especially concerned about referendums on technical transfers of power five or six years-at the earliest-down the road; they want to vote on our membership of the EU, and they want to do so now.

Ministers have made a serious mistake in thinking that the Bill will somehow buy off dissent, or that my constituents will believe it really changes the EU situation. My constituents believe that the transfer of powers to the EU has already gone much too far. The only thing that can deal with that situation is an in/out vote, so that we can re-establish our independence as a nation.

I am more surprised about the political error that Ministers are making in thinking that the Bill is sufficient. They do not consider what they leave themselves open to if the right hon. Member for Doncaster North (Edward Miliband) flips position, as I believe he might. We have debated the Liberal Democrats' position, but Conservatives cannot assume that we will always be on the popular side of the argument relative to the pro-European Labour party. There are very few Labour Members in the Chamber, but what defines the Labour party in respect of Europe is not that it is pro-European but that it does not feel that strongly about Europe relative to other issues.

My friend over the water whom I mentioned says that there is a first rule of politics. He says that, essentially, all parties in government are pro-European, and only
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Opposition parties become genuinely Eurosceptic. What will happen if in two or three years, the right hon. Member for Doncaster North flips position and says, "The Labour party is pro-European and we want to put that case, but it is for the British people to decide." Where will that leave the Conservatives? Will the Minister accept that the principle of the in/out referendum is now overpowering? Will he allow the British people their choice?

Jacob Rees-Mogg (North East Somerset) (Con): New clause 11 is extremely interesting and worth looking at with care, because it comes out of a mix of genius and anger. The genius of it is that it has succeeded in initiating a debate on the question of an in/out referendum, which is clearly not the purpose of the Bill. I know that deft parliamentary draftsmanship was required to have such a proposal selected for debate, and I am full of admiration for that and for the genius that is generally the attribute of my hon. Friend the Member for Wellingborough (Mr Bone), who is a great parliamentarian. Every time one listens to him, one is inspired by the thought that people care about the powers of this House and of the people who send us here.

The proposal is also, however, the product of anger-a righteous anger that the British people have seen their powers given away, but been denied the opportunity to decide whether that ought to have happened. Whether that was done by the Single European Act, or by the Maastricht, Lisbon, Nice or Amsterdam treaties, does not really matter. The British people were not properly consulted, and many of them are upset about that.

Unfortunately, that combination of genius and anger leads to a proposal that makes no sense, which is why-reluctantly-I oppose it. The difficulties are manifold, but the main problem is that it proposes that one thing leads to another automatically, without any consideration of the first thing. My hon. Friend the Member for Cheltenham (Martin Horwood) made the very obvious point that we cannot have it both ways. Under the new clause, we could decide by referendum not to transfer powers, and then follow that up with a vote to stay in altogether. If we vote to stay in altogether, surely we would be signing up to everything with gusto, but that is the last thing we would want to do if we had recently objected to a treaty that gave more powers to the EU. Therefore, if we vote to stay in, we could contradict a no vote that we had just achieved.

Mrs Main: I am following my hon. Friend's logic, but it is possible to say, "I want to stay in the European Union, but I am not happy with that transference of powers." I do not see that a no vote on a transference of powers and wanting to stay in the EU are mutually exclusive.

Jacob Rees-Mogg: I thank my hon. Friend for that intervention, but I think there is a slight confusion. If we have an in/out vote, and it is won by the pro-Europeans, it is a vote for the EU as it exists and with all the powers that it has. Those of us who support this referendum lock Bill do not want further powers going to the EU or to get accidentally into a situation in which we sign up to things we probably opted out of. That is the complication of having an in/out vote that is won by the "in" side but not on the issue discussed and subject to the referendum lock. That is the danger; that is the unintended consequence.

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The unintended consequences go further than that. Should there ever be a Labour Government again-I am sorry to say that there probably will be, although possibly not in my lifetime-those of us who support the Bill would want them to accept it and ensure that the referendum lock held as an important constitutional change. We would also want any change to the powers of the Europe Union to be subject to a referendum of the British people. However, if the Government concerned were unpopular, as happens to Conservative Governments too-and even, possibly, to coalition Governments-and felt they had to sign up to some marginal European treaty requiring a referendum, but knew that it could result in an in/out vote, they would be more likely to repeal the Bill lock, stock and barrel and say, "Look, we cannot do that because we would then have a vote against us at the second stage". The second unintended consequence, therefore, is that we would weaken the whole effect of the Bill by making it less likely to become the accepted constitutional practice, which is what I would very much like to see.

Mr William Cash (Stone) (Con): Does my hon. Friend accept that this is in fact a debate about an ingenious device-I hope I am right in thinking he mentioned the word "genius"-and that it is about the principle of continuing membership? Does a question not then arise that has not yet been answered-namely, membership of what?

Jacob Rees-Mogg: My hon. Friend always puts his finger on the nub of any European matter. I agree that the new clause is a device concerning a strong principle-that is the genius and anger I was talking about. The problem is that in its anger, it could achieve the wrong result. We do not want to set our firm principles on a weak base and a new clause that would actually undermine what those of us who are supporting the Bill wish to see achieved.

I agree with many hon. Members that there may well come a time when we would want an in/out referendum, but it needs to come when it has been the subject of important and urgent debate up and down the country; it needs to come when the British electorate are marching to say, "Now is the time to decide whether we should stay in this rotten institution, corrupt as it is, or whether we will put up with it in spite of its corruption, its inconvenience and all the problems associated with it, because there are some marginal trading advantages and we have got a few sanctions against Iran-or whatever the other arguments are in favour of it." We need to have the referendum at the right time, as a matter of a discussion of and about itself, not as a result of the random collision of atoms and following a debate on something completely separate-for example, a minor extension of some European power or competence.

Neither should an in/out referendum suddenly follow a referendum in which 20 people or 20% of people-let us be generous-have voted. Suddenly, we would have thrown all the balls in the air without any proper consideration or deliberation, and without having set out the framework for the debate we want. Those of us who are broadly Eurosceptic should oppose the new clause, because it undermines exactly what we want to achieve, and should support the general thrust of the Bill, which is designed to protect this country from
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further sacrifices of our authority and the people's power. We should rightly remember-it being a referendum lock-that it is not the power and mystique of these green Benches that are being given away, but the power and mystique of the British people themselves. They are the people we should trust. We should trust them with a referendum lock, and not rush headlong out of anger into a confusing and mistaken new clause that would undermine this lock that we are giving to the Great British people.

7.15 pm

Andrew Percy (Brigg and Goole) (Con): I do not intend to speak for long; I just want to make a few observations about the new clause.

I listened intently to my hon. Friend the Member for Wellingborough (Mr Bone), who will know from our communications that I have some concerns about how the new clause would work. I have some sympathy with what my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said about the new clause's unintended consequences, but I take a slightly different view from him as I think that it is worth supporting, if for no other reason than to send a message to Ministers about what many people in my constituency and of my generation feel about the European Union. I was not born when we last had a referendum on the EU-I am a few years younger than the proposer of the new clause. My generation has never had the opportunity to express its view at the ballot box on the EU as an institution.

Mr Hollobone: Actually, nobody has had the chance to express their view on the European Union, because it was not the European Union in 1975-it was the common market.

Andrew Percy: I stand corrected. Many of my constituents who took part in that referendum, including my own parents-at least one of them was sound enough to vote no-tell me that it was not what they voted for. My hon. Friend is entirely right to correct me.

My generation has had no opportunity through the ballot box to express a view on whether we should remain a member of the European Union, because broadly speaking both parties have always supported membership. My view is firm-I do not think that we should remain a member-but I am not arrogant enough to suggest that it is for me to dictate to the British public. I simply want the British public at some point to have a say on whether we should remain a member of what has become a very interesting institution-as one hon. Member called it.

Ben Gummer (Ipswich) (Con): Over the past few days, I have had nearly 100 emails and letters about forests, but since 7 May I have not had a single letter or email about withdrawal from the European Union. This debate shows the difference of opinion across the country, and the genius and magic of this place that it matches Members so closely to their constituents in their passions and needs.

Andrew Percy: I thank my hon. Friend for that intervention. I would be happy to take him to Goole,
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where he could talk to people in my community who are concerned about the large amount of immigration resulting from our membership.

Dr McCrea: On the point about the letters and postbag, how many letters has the hon. Gentleman received in support of the European Union?

Andrew Percy: The answer is fairly simple: a big, fat zero.

Mrs Main: If we are going to judge from our postbags, we would not be having a referendum on the alternative vote system, which has been mentioned to me by only one person-a local Liberal Democrat, who said, "You'll never again be able to say, 'Nobody has ever mentioned AV to me'". We cannot use the postbag of my hon. Friend the Member for Ipswich (Ben Gummer) as some sort of barometer of opinion.

Andrew Percy: All we would end up debating from my postbag is the state of our roads following the recent cold weather-but that is not how politics works.

I have been led away from my line of argument, which is that it is time that the people had a say on the EU. As I said in response to my hon. Friend the Member for Ipswich (Ben Gummer), many people in communities such as Goole, which has seen large amounts of immigration as a result of EU expansion, would say, "Lots of people come here to fill jobs people here won't do. They come here to work incredibly hard, but we have had such a mass influx, and nobody asked us for our permission through the ballot box for the extension of immediate rights to come to this country and work without any requirements or immigration controls." Nobody asked the British public, who are rightly angry about that, and that is why they wish to have a referendum.

John Mann: I thank the hon. Gentleman, with whom I share a boundary, for giving way. Is he aware that his Government, whom he so vigorously supports, are maintaining the current level of European immigration over five years, with an extra 700,000 projected by the Office for Budget Responsibility? Government Members seem unwilling to discuss that in the House.

Andrew Percy: The hon. Gentleman-my neighbour on my southern border-makes an interesting point. Thanks to what was given away by the previous Government, it is pretty much impossible to do a great deal on this issue, which is one reason why we now either accept a mass influx of uncontrolled immigration or we get out of the European Union. That is really the only choice that the public have.

There are some technical problems with the new clause. If we had an in/out referendum following the rejection of an initial referendum, that would lead to problems with the debate on the first referendum. It would probably become a debate about whether we should have an in/out referendum, which would be undesirable. I mean no disrespect to the genius of my hon. Friend the Member for Wellingborough when I say that new clause 11 is not perfect. However, from my point of view, I could not vote against anything that introduced an in/out referendum, which is why I shall be supporting this imperfect but well-meant new clause.

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Keith Vaz (Leicester East) (Lab): I hope to be as brief as the hon. Member for Brigg and Goole (Andrew Percy). I came into the Chamber this evening to support new clause 11. That support was underlined by the thoughtful contribution of the hon. Member for Rochester and Strood (Mark Reckless). I was then a little confused by the speech of the hon. Member for North East Somerset (Jacob Rees-Mogg), because he is very clever and I wondered whether I had the right new clause. However, I then listened to the hon. Member for Brigg and Goole, who spoke about the one factor that will weigh most in my mind, which is the fact that he has not had a chance to vote. We therefore need to have an in/out referendum, to give him the opportunity to do so.

I am teasing the hon. Gentleman. In fact, I believe that it is important that at some stage in the near future-I am not saying that it should be 5 May, when we decide on AV-the British people ought to have an opportunity to deal with this subject. I am confident that, given that opportunity, they will vote overwhelmingly in support of remaining in the European Union. I know that there are those on both sides of the Committee who believe that the British people would do the opposite and that, given the opportunity, they would vote to come out of the European Union. However, I have attended many debates in this House when Members on both sides have been passionate about remaining in the European Union. However, at the end of the day, it should be up to the British people to make such an important decision.

Mr Hollobone: When the right hon. Gentleman says "overwhelmingly", what does he mean by that?

Keith Vaz: It is 11 years since I was the Minister for Europe. I can well remember the day that I was appointed. I think I got a call from either Alastair Campbell or Tony Blair-I cannot remember which of the two it was, and I have not checked the diaries to see whether either recorded this important footnote in history-to inform me of my appointment. I was completely shocked. I was a junior Justice Minister and was on my way to Blackburn when I got a call to say that I had to go down to Downing street because I was the new Minister for Europe. I remember my first conversation with the Prime Minister. I said, "I know absolutely nothing about the European Union," and he said, "You are the perfect Minister for Europe," so I was appointed.

What was interesting about those two years is that my instructions from No. 10 were to make the domestic argument to the British people about the importance of being in the European Union. We therefore had a Foreign Office roadshow, as part of the public diplomacy team. We had a coach that went round various parts of the country. We did not get to Somerset, but we did get to Wigan and other interesting places such as that, to remind the British people of the benefits of being in the EU. At the same time, the then Leader of the Opposition, now the Foreign Secretary, decided to have his own roadshow. He hired a lorry-you may remember this, Mr Evans; I think you were in the House at the time-and went round the country on the back of it, trying to convince people of the need to save the pound. He was convinced that the Labour Government were about to get rid of the pound and make us join the euro.

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