The EU Bill: Restrictions on Treaties and Decisions relating to the EU - European Scrutiny Committee Contents

3  Part 1 of the EU Bill reviewed

38. Several of the written submissions from legal experts addressed Part 1 of the Bill as well as clause 18.[20] We found the evidence submitted by Professors Craig[21] and Dougan[22] particularly useful, as was that of the recently retired Director-General of the Council Legal Service, Jean-Claude Piris.[23] Where relevant we summarise their arguments below and make some additional ones of our own.

Coherence of the scheme of Part 1


39. The Explanatory Notes contrast competence: "the ability for the EU to act in a given way", with power: allowing "an institution or body of the EU to use the competence conferred on it already [...] in a different way."[24] Two categories of transfer of power are defined in clause 4(1)(i) of (j), and are subject to the significance condition in clauses 3(4) (and 5(4)). In evidence the Minister described the transfer of power as follows:

"Power, as you rightly say, is not defined in the Treaties or European law in the way that competence is a well understood concept. The decision that we took was to define power in terms of important and irreversible changes to the way in which decisions were taken within the European Union to take decisions and to bring forward legislation, so in the Bill, as you will have seen, we use the term "power" largely to apply to the surrender of vetoes, to moves away from the special legislative procedure to the ordinary legislative procedure, and to measures that would take us from a unanimity requirement to a qualified majority vote."[25]

40. Professor Craig said that there are arguments both in favour and against drawing a distinction between competence and power, but that he did not feel strongly as to whether the Bill should have made this distinction. On the one hand, there is a meaningful distinction that can be drawn between the existence of competence, and the powers that can be exercised if such competence exists (a similar distinction is reflected in national systems of administrative law). On the other, he thought the very scope of the competence possessed by the EU in any area will depend on the powers the EU is given in that area:

"The EU Bill is premised on distinguishing between a Treaty revision that extends competence, by for example, broadening the subject matter remit of a Treaty article, and Treaty revision that extends 'power' to impose sanctions. It is however unclear why the latter is not as much an extension of competence as the former, more especially if the extension of power is integrally linked to a particular subject matter area."[26]


41. Professor Craig thought there was, however, a point of some importance that flowed from the distinction drawn in the Bill between competence and power. The significance condition in Clause 3(4) applies only to the conferring of power under Article 4(1)(i) and (j), and then only in relation to a conferring of power pursuant to the simplified revision procedure in Article 48(6) TEU. The assumption is that such a conferral of power may be insignificant, but that creation/extension of competence in relation to the other matters listed in Clause 4 cannot be. This assumption does not withstand examination, according to Professor Craig. The extension of competence in relation to, for example, an area in which the EU has competence to support, coordinate or supplement Member State action might equally be insignificant for the UK, but a referendum would nonetheless be mandatory in such cases.[27]

42. Professor Dougan raised similar concerns in his written evidence.[28] He commented that the Bill treats all the issues falling within clause 4(1) (apart from transfers of power under (i) and (j)) as significant per se, automatically triggering the requirement for a referendum. "Yet it is far from evident that any such measure should always be considered "significant" enough to justify the mandatory holding of a national referendum."[29] He gave examples of where a transfer of competence could be considered insignificant even though triggering a referendum, and of where a transfer of power could be considered significant even though not triggering a referendum.[30]

Exceptions to the referendum requirement—significance and judicial review

43. We asked the Minister whether the significant test in clause 5(4) could not be strengthened as a safeguard by a requirement for parliamentary approval of the Minister's decision. We also reminded him that witnesses who had given evidence in relation to Part 3 of the Bill had criticised the Explanatory Notes for inviting judicial review of a Minister's decision under clause 5(4):[31] a decision on whether a referendum should be held was a matter for Parliament, not the courts. We also asked the Minister whether the reference to "opinion" in clause 5(4) did not diminish the prospects of successful judicial review. The Minister's legal adviser, Ivan Smyth, replied that a Minister's decision will be explained in a "fully reasoned"[32] statement; one of the criteria for judicial review is the reasonableness test, and this will apply to the Minister's statement. We pressed the Minister on why Parliament should not have the final say on whether a transfer of power is significant enough for a referendum, rather than a Minister, arguing that Parliament's view would have more democratic weight than the Minister's. The Minister replied:

"I think that Parliament will have the right to second-guess the Minister. Let us say that the Minister produces his reasoned opinion that this is an insignificant addition to the obligations on the UK and that either there is no challenge by judicial review or that there is a challenge which is unsuccessful. That amendment, under the simplified revision procedure, still has to come before Parliament for a full Act in order to ratify it. So Parliament then can use that opportunity to second-guess the Minister's opinion."[33]

He continued:

"What we have sought to do here is to go further even than giving Parliament the final say, which would be necessary anyway because of the requirement for an Act to ratify any treaty change. We are saying that in addition to Parliament having that right—bearing in mind the fact that you can have Parliaments with extremely large majorities for the Government of the day, and a number of us served in such Parliaments in which it was possible for a determined Government using a large parliamentary majority to take something through if it so chose—the judicial review possibility provides an additional safeguard, over and on top of what Parliament is aiming to do."[34]

44. Professor Craig commented that clauses 3(4) and 5(4) provide no real indication of the criteria of significance; nor do paragraphs 40-42 of the Explanatory Notes. [35] He thought that the availability of judicial review would depend on the circumstances. Judicial review is not in general available against a primary statute, and it would, in his view, be difficult to imagine circumstances in which review pursuant to the Human Rights Act would be relevant. On the other hand, it is possible to conceive of circumstances in which judicial review might be sought of the ministerial statement made pursuant to Clause 5(4) if such an action were brought before enactment of the statute referred to in Clause 3(4). If the courts were willing to hear such a case, the judicial review would almost certainly be "low intensity".

45. Professor Dougan also commented on the lack of express criteria to define the threshold of significance:

"On the surface, Clause 3(4) would therefore seem to leave considerable room for the exercise of ministerial discretion; and to be ill-suited to judicial review other than on procedural grounds or in the event of a manifest excess of discretion."[36]

46. In the absence of criteria, he said that the judgement of whether a transfer of power is significant would have to be informed by the overall scheme of Part 1 of the Bill; in other words, by which transfers of competence require a referendum and an Act of Parliament, which an Act of Parliament, and which approval of a motion without amendment. Professor Dougan's analysis of Part 1 led him to the following conclusion:

"Without doubting that the question of when to insist upon the use of a referendum for the approval of certain EU changes falls to be determined by Parliament, it is nevertheless open to debate whether the current text of the Bill provides an entirely appropriate and consistent model for making that political choice. Some really rather minor changes to the Treaties would nevertheless have been classified a priori as important enough to require a full national referendum. That prospect could, in turn, tend to frustrate any attempt to define implicitly the criterion of "significance", specifically for the purposes of implementing Clause 3(4); or to argue that that criterion is capable of providing a more meaningful yardstick for the judicial review of relevant ministerial decisions."[37]


47. Clause 4(4)(a) provides that a Treaty or Article 48(6) decision does not fall within clause 4 "merely because it involves [...] the codification of practice under TEU or TFEU in relation to the previous exercise of an existing competence".

48. Both Professors Craig[39] and Dougan[40] thought it would be difficult to decide when the use of a measure, such as the flexibility clause in Article 352 TFEU, should be regarded as creating a new head of competence; and both concluded that the application of this clause would be problematic. Professor Dougan commented:

"Answering that question implicitly requires the exercise of subsequent political judgment, which may legitimately involve the choice between competing interpretations of the prevailing state of EU law, as well as taking into account the precise nature of the proposed Treaty or Article 48(6) decision."[41]

49. We agree, but we also think the competing interpretations are likely to be resolved in favour of the EU institutions and that the scope of this exemption is therefore broad. The ECJ ultimately decides how the EU Treaties should be interpreted. Through its judgments it can refine the boundaries of the competences within which EU institutions and Member States are permitted to act, as laid down by the Treaties; and it has been known in the past to interpret Treaty provisions in favour of giving the EU greater competence to act than might be thought to have been expressly conferred on it by the Treaties. One example is the development of the doctrine of implied power for the European Community to enter into international agreements where the legal base did not provide for it to do so. The Court found the existence of such a power from a purposive (teleological) and generous approach to the overall objectives of the EC Treaty, notwithstanding the absence of an express provision.[42] A further example is the principle of pre-emption,[43] whereby the Member States can only exercise their competence in an area of shared competence with the EU if the EU has not exercised its competence. This principle was codified in the EU Treaties as a result of the Lisbon Treaty.[44] Several of the new legal bases in the Lisbon Treaty were incorporated because they were argued to codify existing practice, such as energy[45] and civil protection.[46]

50. We give these examples to underpin our concern that clause 4(4)(a) could be relied on to legitimise competence creep at the hands of the Court. We suggested to the Minister that this means of expanding the EU's competence was significant, but not addressed in the Bill. He replied that the "European Court of Justice decides on the interpretation of European law, but the European Commission, the Council, can take action only on measures where competence is provided for in the treaties."[47] He added that he disagreed "very strongly" that the Bill was flawed because it did not address ECJ judgments, although he accepted:

"that there have been occasions in the past where, for example, a treaty base involving the single market was used to justify a measure that the British Government of the time thought properly ought to have been on a health and safety basis. At that time, from memory, I think what we favoured would have attracted a requirement for unanimity, whereas what the Commission, supported by the Court of Justice, wanted was a single market treaty basis, which would be dependent upon qualified majority voting instead."[48]

He continued that the Bill implicitly accepts the status quo in EU law; but what clause 4(1)(d) does is to require a referendum if the EU is to gain a new area of shared competence (as a result of Treaty change). The Minister's legal adviser confirmed that clause 4(1)(e) does not deal with existing areas of shared competence.

Further gaps in the control mechanisms of Part 1


51. We asked why government decisions to opt into proposals in the Area of Freedom, Security and Justice (FSJ, but also still called JHA) under Title V TFEU were not subject to increased parliamentary control. Such proposals typically place obligations on national criminal or civil law and affect individual rights. The Minister replied that Parliament can have its say through "the vigilance and actions of the Committee".[49] We pressed the Minister further:

"Could you, by way of an amendment, look at the whole question of the opt-ins, which are significant? At the moment, we have an opt-out as far as the relevant chapter is concerned. Could we have at least a parliamentary vote under the parliamentary procedure that you set up in this Bill? That would be a much more satisfactory way of dealing with things-where we can have a resolution in front of Houses of Parliament, a proper debate and a vote on any opting-in to the home affairs chapter."[50]

52. The Minister replied that there were two practical difficulties with that suggestion:

"One is that there is a strict time limit attached to our opt-in-that we have to take that decision within three months. It takes the Government, through interdepartmental consultation, some time to work out what their own assessment of a particular measure is once it is published. The other is that we would expect a lot of these-perhaps 40-in the course of a year. We can't be certain of this because it is still new, but our estimate is that perhaps 30 to 40 JHA measures may be brought forward in the course of a year. There is an issue of providing adequate parliamentary time."[51]

However, he said he would take note of what had been suggested.


53. Professor Dougan pointed to the following loophole in the control mechanisms provided for in Part 1 of the Bill.[52] Article 333 TFEU contains two "internal" passerelle clauses through which the Council (acting unanimously in its restricted formation, i.e. taking into account only the votes of participating Member States) may decide to convert unanimity into QMV or a special into the ordinary legislative procedure, specifically for the purposes of the relevant enhanced cooperation.

54. Professor Dougan said that the control mechanisms cover most, but not all, of the potential scenarios where the UK might forgo its national veto for the purposes of an enhanced cooperation. He gave the following situation as an example. A group of Member States (not including the UK) has been authorised to initiate an enhanced cooperation. Exercising the "internal" passerelle powers conferred upon the Council (acting unanimously in its restricted formation, thus excluding the UK and other non-participating Member States), QMV is substituted for unanimity as regards the relevant legal bases for future measures adopted within the enhanced cooperation. The UK later decides to join the existing enhanced cooperation, and must accept all measures already adopted under it, including the "internal" passerelle decision to abolish unanimity in respect of the adoption of any future acts. Such a situation would fall outside the scope of Clause 2 or 3, read in conjunction within Clause 4.[53]

55. In such situations the Bill makes no provision for any specific form of democratic scrutiny. Bearing in mind the aim of consistency and coherence in the overall scheme of the Bill that omission is perhaps surprising, comments Professor Dougan:

"Even if non-participants cannot (and should not be able to) prevent Member States within an existing enhanced cooperation from making use of the "internal" passerelle clause, one might have expected that the UK's own decision to join an existing enhanced cooperation where QMV has already been substituted for unanimity should be subject to both an Act of Parliament and a national referendum (in the case of Treaty provisions falling within the scope of Schedule 1) or at least to an Act of Parliament (in the case of Treaty provisions falling outside the scope of Schedule 1)."[54]


56. In our view it is not unlikely that a Minister may inadvertently agree, in breach of a provision in the Bill, to an EU proposal that extends its competence or power. If that proposal were directly effective or applicable, it would automatically become an enforceable right under section 2(1) of the European Communities Act. Case law suggests that the European Communities Act is not an Act that can be impliedly amended. So we asked the Minister to say whether the Bill should make provision to clarify that an EU proposal that does extend competence or power in breach of Part 1 can never become an enforceable right for the purposes of section 2(1) of the European Communities Act.

57. The Minister replied that there were already checks and balances in the system to stop that happening. First, the EU institutions were legally bound to act within the confines of the Treaties. Secondly, the UK had a detailed system of scrutiny against competence creep, both through our Committee and the Lords Committee, and through what the Government was doing through the European Affairs Committee. Thirdly, the Government would, under the existing arrangements, lobby and build alliances against competence creep; and if outvoted it would, fourthly, take the case to the ECJ.[55]

58. And in relation to the actual amendment we proposed, he said:

"The problem with the sort of amendment that you are proposing, Chair, is that it would introduce enormous uncertainty into the system. That would affect everybody who has to comply with EU law-business and individuals. If it led to infraction proceedings for non-implementation of EU law, it would be costly and it could lead to claims for Francovich damages against the United Kingdom, so we are not attracted by that course of action."[56]

Compatibility of Part 1 with EU and international law

59. The recently retired Director-General of the Legal Service, and Legal Adviser to the European Council, Jean-Claude Piris, submitted evidence on Parts 1 and 3 of the Bill.[57] He explained that in the Lisbon Treaty, as in previous Treaties, the Member States agreed to insert, in addition to the ordinary revision procedure which requires ratification by all Member States "in accordance with their respective constitutional requirements",[58] other specific provisions which provide for easier procedures in certain cases. These include the simplified revision procedures under Article 48(6) and (7) TEU, and the other passerelle clauses.[59] These latter provisions were inserted in the Treaty in order to achieve a balance between the different views of the Member States. The Parties ratified the Treaty of Lisbon, thereby mutually committing to implement it bona fide—a principle of "overriding importance under international law",[60] he explained—which implies preserving the purpose and effect of all its provisions. He concluded that:

"[i]t is undoubtedly for each Member State to determine the constitutional mechanisms through which it gives effect to those legal obligations. It will be for the other Member States to assess whether the Bill, and more particularly Clauses 4 and 6 thereof, which introduce a referendum requirement with regard to the triggering of most of the passerelles, respect those obligations. If they were to consider that the national legal constraints of the UK were to lead to the practical impossibility of taking certain steps within the Union which would be perceived as necessary or desirable by many or all other Member States, it could not be ruled out that the compatibility of the referendum requirement with international and EU law might become an issue. Furthermore, if, in a specific case, the requirement to hold a referendum were to result in an impasse in the future, this might lead to the UK being sidelined on certain issues. This is because it could trigger a tendency among other Member States to circumvent this situation, either by engaging in enhanced cooperation among themselves without the participation of the UK, or by concluding intergovernmental agreements outside the framework of the EU."[61] (Emphasis added.)

60. Following a similar logic, Professor Craig drew our attention to the conflict between clause 3 of the Bill, a clause which he described as "deeply problematic",[62] and the Lisbon Treaty.[63] Article 48(6) TEU states expressly that a Decision made there under "shall not increase the competences conferred on the Union in the Treaties". Clause 3 of the Bill, by contrast, is predicated on the contrary assumption: that a Decision under Article 48(6) could create or extend, and hence increase, competence. He continues:

"To be sure Clause 3(3) embodies the exemption condition, such that if the Article 48(6) Decision did not engage any of the issues in Clause 4 a referendum would not have to be held, and an Act of Parliament would suffice to validate the measure. This does not, however, alter the force of the point being made here: from the EU's perspective no Article 48(6) Decision can increase EU competence; from the perspective of the EU Bill some such Decisions can do so. This will inevitably lead to legal and political tension between the EU and UK."[64]

61. Like M. Piris, Professor Craig thought it significant that the Lisbon Treaty specifies where EU decisions can be subject to approval in accordance with the constitutional requirements of Member States, "the clear implication being that where this is not specified it is neither required not allowed. The EU decisions/regulations/directives on these matters would be enacted and take effect in the normal manner specified by, for example, Article 289 TFEU and there would be no legal room for any limits in terms of referendum and/or Act of Parliament."[65] He concludes that clauses 6-8, in imposing constitutional requirements where none is foreseen by the Lisbon Treaty, may be in breach of EU law—"This is, as one might say, a 'nice' legal question."[66] The Government could argue before the ECJ that there is nothing to prevent ministerial consent in the Council from being subject to constitutional requirements chosen by a Member State. Alternatively, it "would be perfectly possible to draft the outlines of an ECJ decision which reached the contrary conclusion."[67] He sets these out in greater detail:

"Thus it could be argued that Clauses 6-8 are indirectly undermining the schema of the Treaty. The Lisbon Treaty is quite clear when approval in accord with the constitutional requirements of national law is required. This is true both in terms of Treaty revision, and in terms of the limited instances where such approval is a pre-condition for the validity of a particular EU decision. Viewed from this perspective, the drafting strategy that underpins Clauses 6-8 is simply trying to make approval in accord with national constitutional requirements a pre-condition where the Treaty does not allow it. It could further be argued that if Clauses 6-8 were lawful it would be open to any Member State to pick any other such conditions, which could prejudice passage of EU legislation requiring unanimity. It is, for example, difficult to see why a Member State could not condition its ministerial approval by a requirement that the Draft Decision should not be finalized unless and until national opinion surveys had been conducted over a year to test people's reaction to the draft measure. The preceding arguments could be further reinforced in other ways. Thus it could be contended that the schema in Clauses 6-8 does not meet the requirements of Article 16(2) TEU, whereby the national representative in the Council 'commits' the government of his Member State. It is difficult to see in what sense the national representative would be 'committing' his state when approval in a national referendum was a pre-condition for finalizing the decision. There may moreover be very real legal as well as political difficulties with the idea of a Council draft decision that 'sits there' pending the UK Act of Parliament/referendum."[68]

20   See HC 633-I Back

21   Ev 16 (HC 633-II) Back

22   Ev 34 (HC 633-II) Back

23   Ev 39 (HC 633-II) Back

24   Para 39 of the Explanatory Notes. Back

25   Q 147 (HC 633-II) Back

26   Ev 16 (HC 633-II) Back

27   Ibid. Back

28   Ev 32 (HC 633-II) Back

29   Ev 34, para13 (HC 633-II) Back

30   Ev 34-35, paras 16-20 (HC 633-II) Back

31   Paras 21, 41, and 61 of the Explanatory Notes. Back

32   Q 170 (HC 633-II) Back

33   Q 178 (HC 633-II) Back

34   Q 180 (HC 633-II) Back

35   Ev 19, para 14 (HC 633-II) Back

36   Ev 34, para 10 (HC 633-II) Back

37   Ev 35, para 21 (HC 633-II) Back

38   We deal with the two other examples of exemptions from the referendum requirement-clauses 4(4)(b) and (c)-elsewhere in this Report. Back

39   Ev 17, para11c (HC 633-II) Back

40   Ev 33, paragraph 9 (HC 633-II) Back

41   Ibid. Back

42   Case C-22/70 Commission v Council (ERTA), considered more recently in C-467/98 Commission v Germany (the "Open Skies" case). Back

43   E.g. C-262/88 Barber v Guardian Royal Exchange. Back

44   Article 2(2) TFEU. The Member States were sufficiently concerned by this to insist on the inclusion of a Protocol (No 25) on Shared Competence to the Lisbon Treaty, intended to safeguard their competence to act in areas of shared competence. Back

45   Article 134 TFEU Back

46   Article 196 TFEU Back

47   Q 149 (HC 633-II) Back

48   Q 150 (HC 633-II) Back

49   Q 156 (HC 633-II) Back

50   Q 157 (HC 633-II) Back

51   Ibid. Back

52   Ev 36-7, paras 29-35 (HC 633-II) Back

53   Ibid, para 32 Back

54   Ibid, para 33 Back

55   Q 189 (HC 633-II) Back

56   Ibid. Back

57   Ev 39 (HC 633-II) Back

58   Article 48(4) TEU Back

59   He explained that there are 21 such provisions in the Treaties. Eight of these are so-called passerelles which enable the European Council or the Council to decide to switch from unanimity to QMV. Out of these eight passerelles, three already existed in the previous EC Treaty (Articles 67(2), second indent (family law), 137(2), second subpara., (social policy) and 175(2), second subpara., (environment), renumbered Articles 81(3), second subpara., 153(2), second subpara. and 192(2), second subpara., TFEU). Back

60   The International Court of Justice has held that bona fide is "one of the basic principles governing the creation and performance of legal obligations", see Case Border and Transborder Armed Actions, Rep. (1988), p. 105. Back

61   Ev 39 (HC 633-II) Back

62   Ev 18, para12d (HC 633-II) Back

63   Ev 17-18 (HC 633-II) Back

64   Ibid; see also the example Professor Craig gives of the practical problems which could be triggered in the European Council by clause 3. Back

65   Ev 18, para 12e (HC 633-II) Back

66   Ibid, para 12f (HC 633-II) Back

67   Ibid. Back

68   Ibid. Back

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