The EU Bill: Restrictions on Treaties and Decisions relating to the EU: Government Response to the Committee's Fifteenth Report of Session 2010-11 - European Scrutiny Committee Contents

Appendix: Government response


1. The Coalition's Programme for Government, in its chapter on 'Europe', committed this Government to the establishment of a 'referendum lock' on any future treaty that sought to transfer further competence or power from the United Kingdom to the European Union. It also set out that the use of any passerelle (or 'ratchet') clauses in the existing EU Treaties would be subject to an Act of Parliament.

2. In a Written Ministerial Statement to Parliament on 13 September 2010, David Lidington MP, the Minister for Europe, said,

"The Government will introduce a Bill, which would require that:

(a) any proposed future EU treaty, agreed by all EU Member States' Governments, including the UK Government, which sought to transfer areas of power or competence from the United Kingdom to the European Union would be subject to a referendum of the British people; and,

(b) the use of ratchet clauses or passerelles, provisions in the existing EU Treaties which allow the rules of the EU to be modified or expand without the need for a formal treaty change, would require an Act of Parliament before the Government could agree to its use."[1]

3. The Government introduced the European Union Bill into the House of Commons on 11 November 2010. The House of Commons European Scrutiny Committee immediately announced that it would conduct an inquiry into the Bill, split into two parts.

4. The Government submitted written evidence to the Committee in respect of the first part of the inquiry, focussed on clause 18 of the Bill, on 29 November 2010. The Minister for Europe gave oral evidence to the Committee on 6 December 2010 in respect of both parts of the inquiry; and the Government submitted written evidence on the second part of the inquiry, focussed on Part 1 of the Bill, on 15 December 2010.

5. The Government's response to the Committee's report on clause 18, published on 7 December 2010, was sent to the Committee and published the day before the consideration of clause 18 in Committee Stage, on 10 January 2011.

6. This response concerns the Committee's Report on the EU Bill: Restrictions on Treaties and Decisions Relating to the EU (Fifteenth Report of Session 2010 -2011), published on 20 January 2011. As with the response to the previous report on clause 18, this response has been produced in a shorter time period than the usual two months in order that the Committee and other Members can review the response before the remaining stages of the Bill's passage through the House of Commons. The reply takes the form of responses to the evaluation and conclusions in Chapter 6 of the Committee's report, as well as addressing a number of additional points raised in the review of the Bill in Chapter 3.


Issue 1: The likelihood of referendums being held pursuant to Part 1 of the Bill

7. The Committee makes the following points in its report:

"It is unlikely that clause 2 of the Bill will come into play in the near future, except possibly in the case of an accession Treaty under Article 49 TEU which incorporates additional transfers of competence or power." (Paragraph 91)

"The referendum lock is more likely to be considered as a consequence of the use of the simplified revision procedure under Article 48(6) TEU - the quickest and simplest way for the EU to gain power in a particular field." (Paragraph 92)

"But we question how likely it is that the Government of the day will want to give up its veto right if it objects to a policy." (Paragraph 93)

"It is in reality unlikely that most of the Treaty provisions which attract a referendum under the Bill will ever successfully be invoked." (Paragraph 95, first indent)

8. The Government agrees that a treaty change under the Treaties' Ordinary Revision Procedure, which would trigger a referendum under clause 2, should not be negotiated during the lifetime of this Parliament. This Government has resolved not to agree to any Treaty changes which transfer power or competence from the UK to the EU for the duration of this Parliament.

9. An Accession Treaty may, however, be concluded and therefore require Parliament's approval by means of an Act during this Parliament. We would not expect, or accept, an Accession Treaty which would include any transfers of competence or power from the UK to the EU.

10. Nevertheless, the Bill requires that all Accession Treaties be carefully scrutinised by Government and Parliament to ensure that they do not transfer power or competence from the UK to the EU. All Accession Treaties would still require a statement to be made by a Minister of the Crown in accordance with clause 5, and require Parliamentary approval by Act of Parliament. In the unlikely event that an Accession Treaty included a transfer of power of competence from the UK to the EU in the future, the British people's consent in a referendum would also be required.

11. We welcome the acknowledgement in the report that, "if and when an ordinary revision were to take place … it would be likely to require a referendum under one or several of the subsections in clause 4."

12. We agree that the Simplified Revision Procedure provided for in Article 48(6) TEU, a provision first introduced by the Lisbon Treaty, is likely to be used more frequently than the Ordinary Revision Procedure. This is why we have provided for the same process of Parliamentary, and where relevant public control, to ensure that any uses of the Simplified Revision Procedure are considered carefully and assessed thoroughly as to whether any such change would involve a transfer of power or competence from the UK to the EU.

13. As some other witnesses have made clear, the Simplified Revision Procedure should not, according to the Treaties, be used to increase the competence of the EU. However, we are not taking this for granted. We want to ensure that all decisions under either the Ordinary or the Simplified Revision Procedures receive the same level of consideration. Therefore, every Article 48(6) decision — including the one to be taken in March in relation to the Eurozone — will need to be assessed by the Government to ensure that it does not transfer either power or competence from the UK to the EU. And Parliament will have the opportunity to test that assessment as a Bill will be required before the Government can approve an Article 48(6) Decision. As is explained later in this response, the determination of how the UK scrutinises and ratifies such decisions, and treaty changes, is for the UK alone, and not for the institutions of the EU.

14. With regards to paragraph 93 of the report, this Government certainly does not want to give up any of the vetoes included in the referendum lock. However, we want to ensure that the people have their say should any future Government decide it wishes to surrender one of these vetoes. We therefore think that the referendum lock on the general and the individual ratchet clauses specifically cited in the Bill do have a purpose.

15. In response to the point raised in footnote 13 of the Committee's report, the Government does consider that the loss of any "emergency brake" in subsection 4 (1)(l) and (m) would amount to a transfer of power, and that an Act of Parliament and a referendum would be required before the UK could approve any removal of the "emergency brake".

Issue 2: Exceptions to the referendum requirement significance, exemption and judicial review


16. The Committee's report makes the following comment at paragraph 97:

"We seek clarification from Government on what circumstances the imposition of new obligations or sanctions would be considered insignificant."

17. The 'significance condition' in the Bill can only be used in very specific circumstances. Clause 4 identifies thirteen instances where a treaty change that transfers competence or power from the UK to the EU would attract a referendum. The significance condition only applies to two of these, and only in respect of a decision taken under Article 48(6) TEU (the Simplified Revision Procedure). It cannot be used for Treaty amendments adopted using the Ordinary Revision Procedure.

18. Article 48(6) decisions could seek to confer on an EU institution a power to require the UK to act in particular way, or to impose sanctions on the UK for their failure to act in a particular way. Although this should only be done within existing areas and the existing extent of EU competence, it would enable EU institutions or bodies to use those competences differently. An Article 48(6) decision to do this would, under the provisions of the EU Bill, usually require a referendum to be held. For example, a proposal to allow an EU agency to impose sanctions on a national regulator, or to compel British businesses to do something which would increase burdens upon British businesses unnecessarily, would require a referendum to be held.

19. However, there may be instances where an Article 48(6) decision might confer a new power on a body in an area where there would be no significant impact on the UK. For example, a requirement for a national regulator or other national body to provide an EU agency with statistics. In this instance, the impact on the UK may be minor, and we believe that is something most people would accept ought to be left to Government to decide, subject to scrutiny by Parliament which of course would still have to authorise the Article 48(6) decision by Act. In all instances a proposal would need to be thoroughly analysed, and we have ensured that any use of the significance condition would be subject to effective Parliamentary, and possibly legal, scrutiny.

20. Martin Howe QC wrote on the ConservativeHome weblog on 2 January 2011:

"I positively welcome the fact that the Bill contains machinery under which a referendum need not be called if certain kinds of transfer of power are judged not to be 'significant'."


21. The Committee's report make the following statements:

"The scope of the 'exemption condition' is similarly unclear." (Paragraph 99)

"… codification of practice … In our opinion, this exception is significant: it would cover the practice of EU institutions pushing at the boundaries of their competence (competence creep), sometimes supported by judgments of the ECJ, and subsequently codified in a revision of the Treaties." (Paragraph 99a)

"… any provision that applies only to other Member States… This subsection is not qualified at all, for example by a requirement to consider the impact of the provision on the UK, and so could cover Treaties or European Council decisions which have a profound effect on the UK even though they are expressed not to apply to the UK." (Paragraph 99b)

"… accession Treaties, which we think is anomalous given the effect of the accession of new Member States both on UK relations with the EU and on the voting power in the Council…" (Paragraph 99c)

"We conclude that the exemption condition, read together with clause 4(4) and the relevant paragraphs of the Explanatory Notes, is sufficiently broad and open-ended to allow a Minister wide discretion to consider a provision exempt." (Paragraph 103)

"We conclude that the exceptions above have been drafted to allow the Government to support certain EU policies, such as strengthening of the eurozone, including through harmonisation of economic, fiscal and social measures if necessary, or enlargement, without triggering the referendum lock. This concerns us because it is not how Part 1 of this Bill has been promoted: it has been promoted as a referendum lock with minor exceptions. It also concerns us because it denies access to the referendum lock even where the issue is profoundly significant to the UK public, for example where a re-concentration of power among other EU Member States takes place." (Paragraph 106)

"The whole question of excluding the accession Treaties implies that one major item of constitutional change in the EU has been left out of the Bill because it suits the Government to do so, and we regard this as anomalous." (Paragraph 119)

22. We considered the drafting of the provision on codification very carefully, as we share the Committee's concern; namely that codification could be used as a vehicle for transferring power or competence from the UK to the EU, and that therefore this provision could potentially provide a loophole to allow such a transfer under a future Treaty change without a referendum.

23. We are confident that the provisions on codification in this Bill will only apply to treaty changes which are genuine codifications, and will not in any way weaken the fundamental requirement that a referendum must be held before the UK can agree to any treaty change which transfers power or competence from the UK to the EU.

24. It may help to give an example of a treaty change which we do not consider to be codification. Under the Lisbon Treaty, Article 189 TFEU provides the EU with an explicit legal basis "to draw up a European space policy". It goes on to specify that:

"To this end, it may promote joint initiatives, support research and technological development and co-ordinate the efforts needed for the exploration and exploitation of space."

25. This extends the previous competence used for the Galileo programme, which was based on treaty provisions concerning research, technological development and industry; and therefore was not a simple codification. Had the EU Bill been in place at the time of the Lisbon Treaty, this extended competence would have triggered a referendum before the Government could have ratified the Treaty.

26. An example of a treaty change which we do consider to be a simple codification would be the introduction of a separate legal base for action previously taken to provide macro-financial assistance to some third countries. Article 352 TFEU, the 'enabling clause', was used in April 2004 to provide macro-financial assistance to Albania. It was then used a further seven times to provide macro-financial assistance in a similar way to other countries. The Lisbon Treaty provided a new specific legislative base under Articles 212 and 213 TFEU to cover economic, financial and technical cooperation with third countries which, in effect, codified this existing practice. The Lisbon Treaty would have required a referendum on many other grounds as a result of this Bill, but this particular change was a genuine codification and, on its own, would not have triggered a referendum.

27. The Government believes that genuine codification is not a transfer of power or competence. The EU competence in question already exists and the EU has already acted to that effect. Even if the UK blocked an attempt to codify existing practice by means of a treaty change, this would not prevent the continuing use of the relevant existing competence.

28. However, the Government considers it vitally important that claims that a certain treaty change or Article 48(6) decision merely codifies and does not extend existing competence are thoroughly tested and scrutinised. This Bill provides for that rigorous examination, and a Minister would need to set out his or her reasoning to Parliament in the statement required by clause 5 of the Bill. Parliament would then still need to approve the Treaty change or Article 48(6) decision by Act of Parliament.

29. On the question of the impact of Treaty changes or Article 48(6) decisions on the UK, we agree that the UK should be able to consider whether and how such a treaty or decision would have an impact on the UK. In relation to the ongoing discussions on the use of the Simplified Revision Procedure in connection with the European Stability Mechanism for the Eurozone, that is what is happening. The Prime Minister has British interests very much to the fore. As he told the House of Commons on 20 December 2010:

"No one can doubt ... that stability in the Eurozone is in our interests. Nearly half our trade is with the Eurozone. London is Europe's international financial centre. And no one can deny that the Eurozone faces very real challenges at the moment. We want to help the Eurozone to deal with the issues it faces … Part of that is a permanence mechanism for assisting Eurozone countries that get into financial difficulty. Enabling Eurozone countries to establish such a mechanism is in our interests."[2]

30. We also believe that Parliament should have much greater opportunity than it does at present to consider the impact of Article 48(6) decisions, whether or not they involve a transfer of power or competence from the UK to the EU. That is why we have included in clause 3 of this Bill the provision that the minimum level of scrutiny of any treaty change or Article 48(6) decision will be an Act of Parliament. That is why the Prime Minister told the House of Commons on 20 December, in relation to the Article 48(6) decision on the European Stability Mechanism that the European Council is scheduled to agree on March 2011, that:

"If this Treaty change is agreed by all Member States, then its ratification in this country will be subject to the terms of our EU Bill and so will be subject to primary legislation."[3]

31. Where a treaty change or Article 48(6) decision would not transfer any power or competence from the UK to the EU, it is not appropriate for the UK to hold a referendum. For example, the UK is not in the Eurozone and this Government has no plans to join the Eurozone. It would therefore be inappropriate to have a referendum on a treaty change or Article 48(6) decision that would only affect how the Eurozone operates. It would be similarly inappropriate for other Member States to hold a referendum on issues which would affect us but not them, for example in order to approve whether or not the UK could opt in or opt out of justice and home affairs measures. In the event that any future Government thinks it would be in the UK's interest to join the Eurozone, the EU Bill requires that the British people must first give their consent to Eurozone membership in a referendum. In the process, it would be vitally important that the British people were made fully aware of all the implications of joining the Eurozone.

32. Also, provided the accession of any new Member State does not involve any transfer of power or competence from the UK to the EU, there will be no referendum on Accession Treaties under the provisions of the EU Bill. Accession Treaties do not transfer power from the UK to the EU; they transfer power from the acceding country to the EU, and normally only concern adjustments to the composition of institutions and bodies to accommodate representation from the new Member State(s).

33. However, if an Accession Treaty included a provision or Protocol, possibly unconnected with enlargement, which would result in a transfer of power or competence from the UK to the EU, a referendum would then be triggered. The chances of this happening are extremely low. Under Article 49 TEU Accession Treaties may only make "adjustments" to the TEU and TFEU, not "amendments". Furthermore, we believe that the accession of a new Member State to the EU, such as Croatia, should be judged on its own merits and not combined with some other unrelated Treaty change during ratification.

34. It is worth making a general point here in relation to all of the exemption criteria. Under this Bill, all proposed Treaty changes or Article 48(6) decisions would require an analysis by the Government of whether it involved any one of the criteria in subsection (1) of clause 4. A statement to that effect, with reasons, must be laid before Parliament within two months of the relevant decision at EU level, in accordance with clause 5. The existence of subsection (4) of clause 4 does not remove the obligation on the part of the Government to make this statement and to conduct this analysis. Ministers must still assess if a Treaty change or Article 48(6) decision would or would not transfer power or competence from the UK to the EU, and explain this reasoning in a statement to Parliament.

35. If a Minister decided that there would be no transfer of competence or power according to the criteria in clause 4(1), and that a referendum is not needed, Parliament would still need to pass an Act approving that Treaty change or Article 48(6) decision, before the Government could agree to that change. Parliament would have the opportunity to scrutinise the Minister's assessment during the progress of the Act, and could add a referendum requirement at that stage if it disagreed. Furthermore, as with all Ministerial decisions, the reasoning would be subject to legal challenge.

36. The exemption condition and clause 4(4) do not provide any discretion for a Minister to consider a provision exempt from the referendum requirement where any of the criteria in clause 4(1) apply. They are designed only to apply where there is no transfer of competence or power from the UK to the EU under a treaty change or Article 48(6) decision.

Judicial review

37. The report makes the following points:

"We think the possibility for successful judicial review of a ministerial decision whether a transfer of power under clause 4(1)(i) and (j) is significant will, in practice, be limited." (Paragraph 98)

"We conclude that recourse to judicial review is a more illusory safeguard than the Explanatory Notes imply." (Paragraph 104)

"The decision whether to hold a referendum is ultimately a political one, and therefore one in which the courts will, rightly, be reluctant to interfere." (Paragraph 105)

38. We are confident that the provisions of the EU Bill would provide the pre-conditions to allow for judicial review in the Courts, in order to determine whether or not a Minister had acted reasonably in complying with the obligations of the Bill. The Bill requires the Minister to set out his or her assessment clearly in the statement to be laid in accordance with clause 5, including by reference to the criteria in clause 4. The statement would provide the basis on which a judgement could be made as to whether or not the Minister's decision is reasonable.

39. We cannot, however, give an absolute guarantee that a court would grant judicial review, or that a case would find against the Minister's assessment. It is up to the courts to decide whether or not a challenge would be heard, when to hear it and whether or not that challenge should be upheld. Nevertheless, we do believe that by being as clear and explicit about the criteria for a referendum as we have been in the Bill, and by specifying the requirement to set out the Minister's reasoning in a statement in the way we have done in clause 5, this will maximise the chances of judicial review.

40. Professor Paul Craig said in his evidence to the Committee:

"The EU Bill is framed in mandatory language. The holding of a referendum is not a matter within the discretion of the Government. It must be held where mandated, subject to the exemption condition, the significance condition, and clause 4(4). This suggests amenability to judicial review. This is more especially so because there will often be no plausible argument that the exemption condition applies, given the breadth of clause 4, and the significance condition can only serve to deny a referendum in very limited circumstances concerning clause 4(1)(i) and (j)."

41. Martin Howe QC has also said in relation to the statement required under clause 5 that:

"That ministerial decision would be subject to judicial review. Although the courts would be likely to give a Minister a wide ambit on exercising this kind of judgement, it would not be unlimited."[4]

Issue 3: Further 'gaps' in the control mechanisms of Part 1

Extensions of EU competence in criminal law and procedure and family law

42. The Committee's report makes the following points:

"To be consistent with extension of shared competence under clause 4(1)(e), the application of both [Article 82(2)(d) TFEU and Article 83(1) TFEU] should be premised on a referendum and Act of Parliament, as in clause 6; not an affirmative vote before the Government's opt-in decision and an Act of Parliament before it agrees to the adoption of the legislation." (Paragraph 108)

"Article 81(3) of TFEU… is in our view of similar if not greater importance to social or environmental policy and ought to come within clause 6, triggering a referendum as well as an Act." (Paragraph 109)

43. We do not subscribe to the view that referendums are suitable for approving the use of these three ratchet clauses, whether in respect of an opt-in from the outset, or post-adoption. These ratchet clauses already form part of the existing Treaties and we have been clear that we are not revisiting the existing Treaties. The Bill provides safeguards for exercising these existing clauses, providing that an Act of Parliament would be required to approve the UK's adoption of any agreement to use of the ratchet clause. Furthermore, any use of these ratchet clauses would make relatively technical changes to EU powers: for example, we anticipate that the EU may in the next few years propose that the crime of female genital mutilation should be added to the list of serious areas of cross-border crime where the EU can set minimum standards under Article 83(1) TFEU. The UK already has legislation in place on this crime and it would not be proportionate to subject these technical questions to a referendum, given the Bill's commitment that an Act of Parliament would be needed to approve this decision.

44. Under the European Union Treaties as amended by the Treaty of Lisbon, specifically under Protocol 21 or the 'AFSJ Protocol', the UK has the choice whether to opt-in to any proposals under these legal bases and any proposal based on the other articles of Title V of the TFEU. These issues will be considered on a case-by-case basis, in line with the policy outlined in the Coalition's Programme for Government. If the UK wished to opt into the negotiation of a future proposal to add a further area of serious cross-border crime to the list in Article 83(1) TFEU, each House of Parliament would first have to agree that it should do so within the non-extendable three month period in which the UK must decide whether to exercise its opt-in. Before the UK could finally adopt such a decision, once the detailed negotiation of the proposal had taken place, there would first have to be an Act of Parliament under the terms of clause 9 of the EU Bill. Should the UK decide not to opt into the negotiations initially, but later decide to opt into the final measure adopted by the other Member States, there would similarly need to be an Act of Parliament before the UK could do so.

45. We think the EU Bill provides for an appropriate level of control for such decisions, both at the point of deciding whether to opt in, and at the point of deciding whether to agree the final text of a decision. It is in line with the Coalition Government's commitment that 'the use of any passerelle would require primary legislation.' It is a considerable increase in the amount of control provided for under the European Union (Amendment) Act 2008, under which the Lisbon Treaty was approved, as at present there is no additional Parliamentary control at all for two of these JHA ratchet clauses.

46. Unlike the other two provisions referred to above, the ratchet clause in Article 81(3) TFEU only provides for a change from the special to the ordinary legislative procedure in respect of measures concerning family law with cross-border implications which are currently subject to unanimity. We did consider carefully whether to subject this ratchet clause to the referendum lock. However, because Article 81(3) TFEU is within Title V — to which the UK's opt-in Protocol applies — it is in a different position from the ratchet clauses on social and environmental policy. In the unlikely event that the EU sought to use either the Ordinary or Simplified Revision Procedure to move Article 81(3) TFEU to the ordinary legislative procedure, and the UK voted against and therefore blocked the move, the other Member States could then use the ratchet clause in Article 81(3) TFEU to switch the decision-making procedure without UK participation and, 'after a reasonable period', simply proceed with the measure without the UK's involvement in accordance with Article 3(2) of the AFSJ Protocol. If this happened, the UK would of course not be bound by the proposal in question. The opt-in applying to JHA measures provides the real safeguard here, and distinguishes this issue from other areas in the Treaty, such as social and environmental policy matters.

47. Furthermore, the Treaty itself provides for a national parliamentary veto over any proposal to use the ratchet clause in Article 81(3) TFEU — a safeguard that is distinct from the UK opt-in. Therefore, Parliament has a separate, independent measure open to it when considering the use of this ratchet clause.

48. Should the UK decide not to opt into the use of the ratchet clause, but later decide to opt into the final piece of legislation on family law with cross-border implications agreed under the ordinary legislative procedure, there would first need to be the Act of Parliament as this would require, in effect, the UK opting into the ratchet clause in order to participate in the decision-making process of the substantive measure. Again, we think this is the appropriate level of control and a considerable increase in the simple requirement for a vote in both Houses as currently required under the European Union (Amendment) Act 2008.

49. On this basis, we conclude that it is not sensible to put a referendum lock on the use of the Ordinary Revision Procedure or Simplified Revision Procedure to change the legislative procedure under Article 81(3) TFEU. A referendum would not have the effect of stopping a move to the ordinary legislative procedure - and therefore QMV - for specific individual measures of family law with cross-border implications. The protection for the UK comes rather from the ability to determine whether to opt into any such proposal or not.

50. The ratchet clauses in clause 9 of the EU Bill, Articles 81(3), 82(2)(d) or 83(1) TFEU, could provide for modification of the existing Treaties. The decision for the UK to adopt a measure through any proposed use of the ratchet clauses would be subject to approval by Act of Parliament. This is quite different from the ordinary exercise of the UK's opt-in protocol not involving a ratchet clause. Such ordinary use of the UK's opt-in Protocol is already fully provided for within the existing Treaties.

Opt-in decisions

51. The Committee states in its report at paragraph 110 that:

"It would seem to us consistent with the aim of Part 1 of the Bill for all opt-in decisions to be subject to formal Parliamentary approval."

52. The European Union Bill is primarily about greater public and Parliamentary scrutiny of future Treaty changes and the use of ratchet clauses. It is not intended to cover the exercise by the EU of competences already conferred to the EU under the existing Treaties, except in certain exceptional and specified cases where the exercise of that competence would have far reaching consequences, such as — for example — the creation of a European Public Prosecutor.

53. Given the strict time limits applying to the UK's decisions to exercise an opt-in, placing a primary legislative lock or parliamentary resolution requirement on the exercise of the ordinary opt-in could pose significant practical problems. The three-month deadline to make the decision to opt-in or not is not extendable.

54. The Government recognises that these are important decisions that need proper Parliamentary scrutiny. The production of the first annual report to Parliament on the application of Protocols 19 and 21 to the Treaties in relation to EU JHA matters has provided a useful opportunity to reflect further on the current arrangements for Parliamentary scrutiny over EU Justice and Home Affairs decisions and to consider ways to further enhance the current arrangements for Parliamentary scrutiny of EU JHA matters.[5]

55. As announced in the statement from the Minister for Europe on Thursday 20 January, the Government has therefore agreed an important package of measures to strengthen Parliamentary scrutiny of EU business, including in the important area of Justice and Home Affairs, which will be elaborated and implemented in close consultation with the Parliamentary Business Managers and the relevant Parliamentary Committees. This Government is committed to upholding the right of Parliament to hold the Government to account on EU issues and this package will provide Parliament with further tools to enable it to do this job effectively.

56. The package includes:

  • Before making its formal decision on exercising the opt-out provided within the Treaty of Lisbon of a five-year transitional period ending in 2014 after which the infringement powers of the European Commission and the jurisdiction of the European court of Justice will apply to all unamended police and criminal justice instruments adopted under the pre-Lisbon 'third pillar' arrangements, the Government commits to a vote in both Houses of Parliament. The Government will conduct further consultations on the arrangements for this vote, in particular with the European Scrutiny Committees, and the Commons and Lords Home Affairs and Justice Select Committees.
  • A written statement to Parliament on all opt-in decisions to ensure that Parliament is fully informed of the Government's decision and of the reasons why it believes the decision is in the national interest.
  • Where appropriate and necessary, this statement may be made orally to Parliament.
  • In the Written Ministerial Statement, the Government also urges the Committee to take full advantage of their existing right to call a debate on an amendable motion on any opt-in decision and expresses its willingness to participate in these debates to ensure full transparency and accountability of opt-in decisions.
  • In circumstances where there is particularly strong Parliamentary interest in the Government's decision on whether or not to opt in to such a measure, the Government expresses its willingness to set aside Government time for a debate in both Houses on the Government's recommended approach on the opt-in.

57. A copy of the Written Ministerial Statement announcing this package is attached at Annex A.[6]

Enhanced cooperation and internal passerelles

58. The Committee recommends in paragraph 111 of its report:

"[T]hat a decision by the UK to enter enhanced cooperation where the voting procedure has been changed from unanimity to QMV [should] be subject to a referendum lock."

59. If the UK decides to apply to join an enhanced cooperation arrangement after it has been established and after it has moved to QMV, then that is an open and clear decision to participate in a specific enhanced cooperation arrangement, in the full knowledge of what has already been agreed — that any future negotiation to amend that legislation will be decided on the basis of QMV.

60. This is very different from a decision to move to QMV within an enhanced cooperation arrangement in which the UK has participated from the outset — and which would result in a significant change to the arrangement after we had confirmed our participation. A move to QMV could lead to the unintended consequence of the UK being outvoted on a final piece of legislation.

61. Any decision to move to QMV in an area of existing enhanced cooperation in which the UK is already a participant will be subject to the relevant controls in the EU Bill. Any decision to join an area of existing enhanced cooperation in which QMV already applies would continue to be subject to Parliamentary scrutiny in the normal way. However, the Government will look at the arrangements for Parliamentary scrutiny of enhanced cooperation particularly carefully in the review of scrutiny which we have just announced, and we would be happy to discuss with the relevant Parliamentary Committees how to further ensure that the scrutiny arrangements in this area are effective.

62. The provisions in the EU Treaties on enhanced cooperation include the following:

"Member States which wish to establish enhanced cooperation between themselves in one of the areas covered by the Treaties, with the exception of fields of exclusive competence and the common foreign and security policy, shall address a request to the Commission, specifying the scope and objectives of the enhanced cooperation proposed."[7]

63. Some witnesses and academic commentators have suggested to the Committee that this means that enhanced cooperation could cover a wide area, and that therefore any move to QMV within the enhanced cooperation could be significant. If the UK were therefore to join an enhanced cooperation arrangement which had already decided to move to QMV, the UK could find itself operating under QMV for a large part of a sensitive area.

64. We do not consider this to be a credible risk. Article 20(2) TEU provides that enhanced cooperation is a mechanism of 'last resort'; there has to have been a concerted effort to agree a proposal for EU action among all Member States before enhanced cooperation can be used. In other words, there is a bias towards keeping as much activity at the level of the entire membership of the EU as possible, and only moving to enhanced cooperation where this is really not possible.

65. Enhanced cooperation is also subject to several conditions. It must not undermine the internal market or economic, social and territorial cohesion. It must not constitute a barrier to or result in discrimination in trade, or distort competence between Member States. It must also comply with the existing competence of the EU as set out in the existing Treaties and under European Union law.

66. It has also been suggested that the EU Bill's provisions related to Schedule 1 will result in an increased use of enhanced cooperation in those areas, as Member States may seek to enter into it in an area subject to unanimity without the UK and then agree to move to QMV within that enhanced cooperation. However, all of the vetoes included in Schedule 1 and on which a referendum would be required have long been sensitive in the UK and, in many cases, in other Member States as well. One only has to look at the list of UK 'red lines' in previous IGC negotiations. There is nothing surprising in this list for our EU partners. As Sir John Grant said in his evidence to the Committee:

"I don't think the question about whether the Bill will lead to more enhanced cooperation is a very big question. It's a good question —you have to ask it —but I think the answer is: maybe in the odd, relatively limited case."[8]

67. There have only been two uses of the enhanced cooperation provisions since their introduction under the Amsterdam Treaty in 1999, and these have been on very specific measures - on divorce law, where the UK has not participated, and on the European patent where we have indicated that we intend to participate but reserve the option to withdraw.

Inadvertent breaches of the provisions contained in Part 1 of the Bill

68. Paragraph 112 of the Committee's report says:

"We recommend that the Minister consider an amendment to the European Communities Act to avoid inadvertent breaches of the provisions contained in Part 1 of the Bill being automatically incorporated into national law."

69. We stand by the response that the Minister for Europe gave to the Committee on this point, where the Minister explained the problems with such an amendment. This approach would introduce enormous uncertainty into the system, which would affect everyone who has to comply with EU law, whether businesses, organisations or individuals.

70. However, the Government does take the potential issue of an EU proposal extending the EU's competences or powers very seriously. Under this Government, before a Minster can obtain clearance for a negotiating strategy careful consideration must be given to whether there is any possibility of an extension of competence.

71. The Government also intends to look at issues around competence in our review of the Government's engagement with Parliament on Parliamentary scrutiny of all European Union business, which was announced in the Written Ministerial Statement in Annex A.

Issue 4: Compatibility of Part 1 with EU and international law

72. Paragraph 113 of the Committee's report says:

"Both M. Piris and Professor Craig raise serious doubts about whether some of the domestic control mechanisms introduced by Part 1 of the Bill are compatible with EU or international law… we recommend that this be addressed during the Bill's consideration in Committee."

73. It is for the UK to decide the appropriate national process under which the UK would consider and conclude whether to approve treaties or agree to Article 48(6) decisions, as is the case for all EU Member States. It is not for the European Union institutions to comment on, or object to that - as European Council President Herman Van Rompuy stated in response to a question raised on this point during his visit to Europe House on 13 January 2011.

74. All of the ratchet clauses on which the Government has proposed approval by Act of Parliament and referendum are subject to unanimity. There is nothing in either the TEU or TFEU that puts any constraints on the way in which a Member State decides how to cast its vote in the Council or the European Council. The duty of loyal cooperation does not mean the UK has to say "yes", or place any constraint on the way in which we could say "no". We would not try to tell any other Member State how to decide their vote, and we would not expect them to tell us. The requirements the UK may choose to put into place before a Minister can vote, or otherwise support certain decisions, is a matter for national law and not EU law.

75. In response to the points raised by Professor Craig in his evidence to the Committee, the Court of Justice of the European Union has a remit to interpret the European Union's Treaties as they stand, and not to interpret a proposed Treaty change or decision, prior to ratification or approval of that decision. The Court does not have the jurisdiction to pass judgement on how the UK ratifies Treaty changes or decisions.

Issue 5: Article 352 TFEU - the 'flexibility clause'

76. The Committee, in paragraph 114 of its report, states that:

"We welcome the default control mechanism of an Act of Parliament which clause 8 introduces before Article 352 TFEU can be used as a legal base, but recommend that the exceptions to the requirement for an Act of Parliament in clause 8, subsections (4)-(6), be carefully considered in Committee."

77. The Council can use Article 352 TFEU (sometimes referred to as the 'flexibility' or 'enabling' clause) to adopt measures in order to attain one of the EU's objectives. It can only do this where the existing Treaties have not explicitly provided the necessary powers to do so already, but where nevertheless the measure concerned is necessary to attain one of the objectives set out in the Treaties.

78. Because of its nature, Article 352 TFEU can be used for a broad range of proposals. This means it can and will be used both for low-impact changes, but also potentially in areas where there may be concerns over 'competence creep'. Our aim is to ensure that the appropriate level of accountability and control is applied to future proposals to use Article 352 TFEU, to protect against 'competence creep'.

79. However, where legislation based on Article 352 TFEU is equivalent to a previous measure, or prolongs or renews an existing measure, or extends a previous measure, we do not think it is a good use of Parliamentary time to require an Act of Parliament to agree that further legislation as Parliament will already have scrutinised the previous use of Article 352 TFEU (or its predecessor Article 308 TEC). The use of Article 352 TFEU has already been accepted in respect of its first use, and if there is nothing novel or new about the proposed subsequent use, we do not believe that it would be an appropriate use of Parliamentary time to require such a high level of Parliamentary control repeatedly, particularly as the proposals will be subject in any event to the normal Parliamentary scrutiny arrangements applicable to EU legislation. We have therefore exempted many of these from the requirement for primary legislation.

80. In these cases, the Minister would be required under clause 8 to lay a statement before Parliament, explaining why the proposal related to one of the exemptions in subsection (6):

a.  any proposal using Article 352 TFEU as its legal base which is, in substance, the same as a previous measure agreed by the UK;

b.  an extension in time of an existing Article 352 TFEU measure, for example a measure that has a three-year timeframe but on which it is decided to extend the measure for a further three years;

c.  an extension in breadth of an existing Article 352 TFEU measure to incorporate another Member State or third country, such as a measure that proposes to extend or repeat an existing training programme in one third country to safeguard against counterfeiting of the Euro in another third country;

d.  any proposal to repeal an existing Article 352 TFEU measure; and

e.  any proposal to combine a number of existing Article 352 TFEU measures into one EU legal instrument or to consolidate several amendments of an existing measure in one text without changing the substance.

81. Article 352 TFEU, on its own or in combination with other legal bases, has been used in the past for urgent or emergency uses, where rapid EU action has been agreed but where there was no explicit legal basis in the Treaty on which to base that action. This facility could prove important in a time of crisis. For instance, sanctions were pursued against Al Qaida and the Taliban and individuals or entities associated with them under Regulations adopted under the predecessor of Article 352 TFEU combined with other legal bases (although in future, with the Lisbon Treaty in force, such action would now be covered by a separate legal base).

82. Where such an emergency use is required, it is still subject to a UK veto, and the Bill still requires Parliamentary control in the form of a positive vote in both Houses. Furthermore, where there is a subsequent use of Article 352 TFEU for a similar measure which does not require urgent action, primary legislation will be required.

Issue 6: Implementation of the referendum lock

83. The Committee's report makes the following points:

"… whether there would be sufficient turnout, whether there would be a proper debate on the issue, whether people would really form their opinions on the questions that were on the table." (Paragraph 116)

"We are concerned whether the Government has considered the important issues raised by Professor Hix. Similarly, it is not clear to us that the Government has considered the potentially profound constitutional implications of the referendum lock provisions for the principles of Parliamentary democracy and direct democracy in the UK." (Paragraph 117)

84. Evidence from previous referendums in the UK show that there is popular interest in having a say on important issues. Turnout figures have generally been comparable with those for General Elections. This picture is supported by evidence from around the world. Evidence from Denmark, Montenegro and, closer to home, Ireland suggests that people will vote on issues which are important to them. In the UK, people are ready and eager to debate EU issues; we want to give them that chance. But it is important to remember that the Coalition Agreement makes clear that there will be no agreement to any Treaty change or ratchet clause decision which would transfer power or competence from the UK to the EU for the duration of this Parliament.

85. We do not subscribe to a view that the British people cannot be trusted to make informed decisions about important topics. We believe that they are capable of deciding which facets of an issue are important to them and not allowing others to set the agenda. In addition, clause 13 of the Bill provides that the independent Electoral Commission will have a role in promoting awareness during any referendum campaign of the specific question to be voted on, and of the issues involved.

86. We welcome the point raised by Professor Hix in his evidence to the Committee that,

"A referendum, quite rightly under the rules of the Bill, can say that it is not about a policy issue, but about a procedural change that could allow policy in the future."

87. We believe it is right for the people to decide which competences and powers their Government and Parliament are able to confer on the EU. Under the EU Bill, a future Government is only required to put the question of whether to agree to a proposed extension of EU competences to the British people if that Government wants to support the extension. If a future Government knows that it will have to win a referendum first, then it will need to be sure that a proposed extension of EU competences is in the UK's interests before it can seek to convince first both Houses of Parliament, and then the British people, of the merit of the extension.

88. Professor Dougan suggests that clause 4(1) would require a referendum for some insignificant issues and would not require one for some significant issues, without further 'political judgement'.[9] As outlined above, in the EU Bill we have applied the significance condition to only two specific instances in clause 4(1); this was not extended further in order to ensure a consistent approach under the provisions of the Bill to transfers of power or competence under this and future Governments. The remaining parts of clause 4(1) are intended to capture those areas we consider to be sufficiently important to attract a referendum, such as any extension of the objectives of the EU, or the extension of a competence on the coordination of economic and employment policies, common foreign and security policy, and other policy areas on which the EU has been given the power to act. This is intended to ensure that there is no "wriggle room" for bringing decisions on such important areas to Parliament and the people.

89. On the point raised in paragraphs 62 to 65 of the Committee's report that referendums are most appropriate for areas of constitutional significance, the Government is pursuing the use of referendums on issues including the UK voting system and on further devolution to the National Assembly for Wales, as well as establishing a referendum lock on future treaties or decisions that transfer power or competence from the UK to the EU. We believe these to be areas of great constitutional significance and, particularly on measures such as the UK joining the Euro, we think that these are decisions that should be put to the British people in a referendum. By providing that level of public control we can begin to rebuild trust between the people and their Government, reconnecting them to decisions made at the EU level.

90. Professor Hix raises a point that it would be preferable to use a two-thirds majority requirement in Parliament rather than a referendum condition.[10] Whilst Parliamentary scrutiny of a range of EU decisions will be increased as a result of this Bill, a key aim was to give people more control over decisions made by the Government in the EU in their name. The Government wants to decentralise the power from the centre to the British people, giving them a say on big decisions on the direction of the EU. A two-thirds majority requirement would remove that, and does not provide a more straightforward ratification process than the one provided for in the Bill.

Issue 7: Potential impacts of the Bill on UK-EU relations?

91. The Committee states in paragraph 118 of its report that:

"Nevertheless, is hard not to conclude that the Bill is intended to send a signal, even if it is not as strong as to "accentuate British exceptionalism."

92. The Government believes that membership of the EU is in the national interest of the United Kingdom. We also believe there is a need for the EU to change and do things in more efficient and effective ways. We want the EU to be looking outwards and making a more effective contribution to the world, rather than being engaged in institutional "navel-gazing". We are committed to ensuring that the EU and its Member States are fully equipped to face the challenges of the future, whether economic, environmental or social.

93. The purpose of the Bill is not to put a brake on activities at the EU level or UK participation in them. The Government has been clear that our objective is to increase public and Parliamentary control over, and the accountability of, UK decision-making in the EU. We believe that this will ensure that the British people are engaged and active participants in the UK's future within the EU.

94. Nonetheless, as the Minister for Europe said in his oral evidence to the Committee:

"The question of strengthening our negotiating hand is a secondary consideration. It is not what motivated us to bring forward the Bill in the first place. [But] an awareness that a particular change has to win approval from Parliament, or from the British people, or both, is a useful check to have."[11]

Issue 8: Devolution

95. Paragraph 120 of the Committee's report says:

"The European and External Relations Committee of the Scottish Parliament points out that given the nature of devolution, the powers or competences to be transferred from the UK to the European Union could be ones that have been devolved under the Scotland Act 1998. The impact of the transfer of such powers or competences might be quite different in Scotland (or other devolved areas) to the UK as a whole. It is not clear that the Government has considered the implications of this and we trust the matter will be addressed by Ministers during the Bill's consideration in Committee."

96. The Government has indeed considered carefully the devolution implications of the EU Bill, and consulted the Government's own experts on Scottish law and the Devolved Administrations in the usual way.

97. The provisions of the EU 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 UK and the administrations in Scotland, Wales and Northern Ireland.

98. Those documents set out clearly the principles upon which the UK Government engage now, and should continue to engage, with the devolved administrations in the formulation of UK policy in this area which "touch on matters which fall within the responsibility of the devolved administrations".[12] This would include, for example, proposals for treaty change that touched on areas of devolved competence, within the context that the UK Government retains overall responsibility for any such negotiations. The Government is committed in the Memorandum to involve devolved administrations "as fully as possible in discussions about the formulation of the UK's policy position".[13]

1   HC Hansard, vol 515, col 31WS, 13 September 2010. Back

2   HC Hansard, vol 520, col 1187, 20 Dec 2010. Back

3   Ibid. Back

4   Martin Howe QC, Back

5   Cm 800, published in January 2011. Back

6  p.20. Back

7   Article 329(1) of the Treaty on the Functioning of the European Union. Back

8   Q104 (HC 682-ii). Back

9   See paragraph 42 of the Committee's report, HC 682 (2010-11). Back

10   See paragraph 81 of the Committee's report, HC 682 (2010-11). Back

11  Q161 (HC 633-iii). Back

12  Paragraph B4.3 of the Concordat. Back

13  Paragraph 20 of the Memorandum of Understanding. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 3 March 2011