Session 2010-11
Publications on the internet

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 633-iii

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

EUROPEAN SCRUTINY COMMITTEE

EUROPEAN UNION BILL

MONDAY 6 DECEMBER 2010

MR DAVID LIDINGTON MP, ALISON ROSE and IVAN SMYTH

Evidence heard in Public

Questions 112 - 198

USE OF THE TRANSCRIPT

1.    

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

Oral Evidence

Taken before the European Scrutiny Committee

on Monday 6 December 2010

Members present:

Mr William Cash (Chair)

Mr James Clappison

Michael Connarty

Chris Heaton-Harris

Kelvin Hopkins

Chris Kelly

Penny Mordaunt

Jacob Rees-Mogg

Henry Smith

Examination of Witnesses

Witnesses: Mr David Lidington MP, Minister for Europe, Foreign and Commonwealth Office, Alison Rose, Head of Communications, Institutions, Treaty and Iberia Group, and Ivan Smyth, Legal Adviser, gave evidence.

Q112 Chair: Minister, welcome this afternoon. I’m sorry we’re running a tiny bit late, but we’ll get on with the business straightaway.

Before the Bill was presented, you indicated your willingness to give evidence to the Committee shortly after First Reading. The main value in taking evidence from a Minister is the ability to put to him the comments made by other witnesses. It is, therefore, common practice for Ministers to appear before Select Committees at the end of inquiries. As you know, we have been given less than a month to conduct an inquiry into a matter of great complexity, and you now give evidence on the eve of Second Reading. That may be keeping to the letter of your commitment, but it is hardly keeping to its spirit. It has meant that the Committee had to agree its report before having had the benefit of testing your evidence.

My first question is as follows: the Government have extended the Session until 2012, so why are you rushing the Bill?

Mr Lidington: The Bill is a key part of the Government’s legislative programme. We think, therefore, that it is important that we take action to get it on the statute book at the earliest possible opportunity. Obviously, I regret that you and the Committee are dissatisfied with the amount of time between First Reading and Second Reading. Clearly the Government’s business managers considered your request for a longer delay, but they had to take decisions on this Bill in the context of a very heavy, completely committed legislative programme for the whole Session, taking us up to the next Queen’s Speech.

Q113 Chair: Could you tell me why the Secretary of State declined to come to the Committee when we asked him?

Mr Lidington: The Secretary of State took the view, which I share, that the Minister directly responsible for the Bill and for taking it through its Commons stages is best placed to come and give the sort of detailed evidence to the Committee that you and your colleagues are seeking.

Q114 Chair: The Bill will be considered in Committee of the whole House. No date is yet set. Could you make representations to the business managers to ensure-I say ensure-that we are given more time before the Committee stage, specifically so that consideration of part 1 of the Bill is not taken until the second week back after the recess?

Mr Lidington: I will certainly pass on that request to the business managers. My understanding is that the arrangements for the Committee and subsequent stages are under discussion through the usual channels and they are close to being agreed-the Government very much hope that an agreement can be reached through the usual channels on the best way forward.

Michael Connarty: I want to put it on record that I also take a very dim view of the fact that the Foreign Secretary did not accede to the Chair’s request to come to give evidence to this Committee. Certainly in my experience of the past 12 years of this Committee, including my period of chairmanship, I do not think that such an important matter as this has ever not been addressed by the appropriate Secretary of State. I hope that that message will be carried back. I don’t know what the logic behind it was, and I am in no way implying that the Minister isn’t adequate to the task, but I just think that the responsibility lies with the Secretary of State, and he should have been here.

Q115 Chair: We will now move on to clause 18-the purported sovereignty clause. The explanatory notes in part 3 of the Bill have come in for trenchant criticism from the various witnesses who have submitted or given evidence on that part of the Bill. Not least, there is "great controversy", as Professor Tomkins put it, about whether parliamentary sovereignty is, and I quote, "a common law principle" and whether it can be "put on a statutory footing". It seems to us that the explanatory notes are far from impartial in this respect.

So can you explain-if you feel it necessary to seek some advice from your legal adviser, we would be interested to hear that advice-how the explanatory notes were drafted, by whom and whom you consulted? If proper research and consultation took place, why did they not accurately reflect the range of sharply contrasting views on the status and scope of the doctrine of parliamentary sovereignty? Why were-apparently, entirely deliberately-relevant passages from the judgments in Macarthys Ltd v. Smith and Thoburn not included? Lastly, why did your written evidence state that Thoburn was a Court of Appeal decision? It certainly was not; it was a decision, at first instance, in the divisional court. Can you explain how that occurred? Was it sloppiness, or was it that whoever prepared the explanatory notes didn’t know the difference?

Mr Lidington: Chairman, I perhaps ought to take the opportunity to introduce the two officials who are accompanying me to this session. On my right is Alison Rose, who heads the Bill team that will be taking the European Union Bill through its parliamentary stages. On my left is Ivan Smyth, who is from the legal advisers’ side of the Foreign and Commonwealth Office.

The first thing that I would say is that I want to make it clear what we are seeking to do and what we are not seeking to do with clause 18. What we are not seeking, and never have sought, is to provide some all-embracing doctrine of parliamentary sovereignty. From my brief look at the evidence given to your Committee hitherto, it is clear to me that when the legal commentators have discussed parliamentary sovereignty, they’ve talked not just in terms of the relationship of United Kingdom law to European Union law and to the authority of the European Court of Justice, but have also alluded to the impact of the devolution settlements and to the impact upon the doctrine of parliamentary sovereignty of the European convention on human rights and the decisions of the European Court of Human Rights giving effect to that convention.

Clause 18 is not concerned with those wider definitions. It is about the means by which United Kingdom law gives effect to European Union law in the territory of this country. It is declaratory in intention and in substance. The clause states in statutory form what the common law has hitherto declared to be the position; namely, that there is only one reason why European law has effect in this country and why European law is given primacy over domestic law when the two conflict, which is that Parliament has willed, by a sovereign Act, that that should be the position.

Q116 Chair: But you’re saying that in the context of the common law principle, are you?

Mr Lidington: I’m saying that, in clause 18, we are declaring in statutory form what the established common law position is at present.

Q117 Chair: When I say "the common law principle", of course, there are those who claim that it is the common law principle, but there are others-and this is the great controversy to which Professor Tomkins has referred-who say that there is no credibility to be attached to the argument about the common law principle. There are those of us who might believe-and do believe-that, in fact, you bought the argument of some of our witnesses but disregarded that of others. I think your legal adviser knows what I mean.

Ivan Smyth: The reference to common law in this case is by contradistinction to statutory law, in the sense that there is no statement of the principle of parliamentary sovereignty in statute. That is the context in which you have to read the reference to common law.

Q118 Chair: We’d like you to answer one or two of the other questions about how the explanatory notes were drafted, by whom, who was consulted, and what the basis of the research was. There are a number of aspects of the explanatory notes that we find rather discouraging, shall we say?

Mr Lidington: The truth is that the explanatory notes were drafted in the way that all explanatory notes are-by officials in Whitehall. Certainly, when it came to the framing not only of clause 18, but of the Bill more generally, legal advice was taken from across Government.

Q119 Chair: So why were huge chunks left out, such as the judgments in Macarthys, and Denning’s judgment in particular, which was about the whole question of inconsistent law, where it is expressly and clearly stated, on the one hand? And why, in the Thoburn case, were all these questions about constitutional statutes left out? That was quite obviously deliberate.

Ivan Smyth: If I may answer, Chairman? The purpose of the explanatory notes is to explain what we are actually trying to achieve with the clause, namely reflecting what the courts have actually said about how EU law is imported into the UK through the European Communities Act. There are lots of comments and judgments that could be quoted in explanatory notes, but those included were the comments which we thought were most germane to the nature and purpose of the clause as drafted.

Chair: Well, some of us think it was very distorted in the way that it was presented, even to the point of negligence, but that is a matter of comment. James, would you like to ask the next question?

Q120 Mr Clappison: What a lot of people in the country are concerned about is the constant drip, drip, drip of transfer of power to the European Union. I know that this is a different point about sovereignty, but we have had witness after witness come before the Committee-highly academic and eminent witnesses-and when we have asked the same question, they have said that the Bill makes no difference. I think that what you are telling us today is that what is in the Bill confirms the existing position, but doesn’t go further.

Mr Lidington: No, I don’t agree. It’s not clear to me whether Mr Clappison’s point refers to the Bill in general, and not solely to clause 18.

Q121 Mr Clappison: The sovereignty clause. One of the witnesses said that it might make things worse, but all the others said that it made no difference. I think you are confirming that, aren’t you?

Mr Lidington: The purpose of the sovereignty clause is declaratory, and I would disagree with your witnesses who argue that it makes no difference. It provides a very clear point of reference in statute, which is not there at the moment, for both parties and judges in any future case where the question of autonomous-as opposed to parliamentary-authority of European law was being debated. It provides them with that point of reference, written into statute for the first time. I think that that will provide an extra safeguard against any risk that jurisprudence would otherwise drift towards according European law some autonomous status, which we do not believe it should be accepted as having.

Q122 Mr Clappison: But, we’re fighting speculation that may take place in the future. The witnesses told us that this is the position as it currently stands, and you’re confirming that.

Mr Lidington: Yes, absolutely, and the Government have never argued that this was anything other than declaratory.

Q123 Mr Clappison: So, it is a sort of battle against academic speculation.

Mr Lidington: I think it’s more than academic speculation. These are arguments that have been used, most obviously in the Metric Martyrs case. They have also been deployed in cases, admittedly not referring to European law, by judges such as Lord Steyn and Lord Hope in other cases, in various obiter. These are live arguments in jurisprudence at the moment.

Q124 Mr Clappison: They’re dead arguments, with respect, because they have been knocked on the head. The Metric Martyrs case specifically disagreed with the proposition that you are advancing. The Metric Martyrs case put things on the same basis that you are putting them today; it knocked the argument that you are frightened of on the head.

Mr Lidington: Yes, I think that judgment was welcome, but I think that that should not prevent us from trying to ensure that there are stronger safeguards against the arguments that the prosecution put in that case succeeding in future.

Chair: A Trojan horse is coming out of Pandora’s box.

Q125 Penny Mordaunt: In the explanatory notes you say that parliamentary sovereignty is a common-law principle, and so is decided by judges; is that not in itself an attack on the principle that clause 18 supposedly protects?

Mr Lidington: No, I don’t think that it is. I think that this is reinforcing the position that there is only one source of European law’s authority in this country and that is Parliament, principally through the European Communities Act 1972, but through certain other Acts as well.

I know that some have argued that putting clause 18 on to the statute book means that there would be a risk that, if it were subsequently amended or repealed, the entire argument that European law relied for its authority on Parliament would be harmed. I do not believe that that is the case, because then the common-law position would still obtain. If clause 18 had been in law but was subsequently repealed, we would revert to a position where it was simply a matter of successive judgments by individual judges in particular cases that determined the position as regards the authority of EU law in the United Kingdom. So you would not have that additional safeguard that we are seeking to introduce through this measure.

Q126 Jacob Rees-Mogg: If I can continue on that, as I understand the evidence we have received, the supremacy of Parliament is not a common-law principle. As I understand it, we have been told that the common law is decided by judges and precedents and so on, and that against that is the fact of the supremacy of statute law. Saying that the statute law’s supremacy is a construct of the common law means that the supremacy of Parliament was ultimately granted by judges, at some point in the past, and therefore could be removed by judges. There is a concern that by saying in the explanatory notes that the sovereignty of Parliament is a common-law principle, a mistake is being made, and that that phraseology needs to be clarified to make it certain that it is known that statute law is supreme as an original fact , and that it doesn’t have a basis beyond political reality.

Mr Lidington: I’ll ask Mr Smyth to intervene, but I think Mr Rees-Mogg is tempting me on to very important constitutional territory that goes beyond this piece of legislation. Clause 18 is about the relationship between European law and United Kingdom law. We have not sought to go beyond that into broader questions about the origins and extent of parliamentary sovereignty. That would quite properly be a matter for the Lord Chancellor, who I am sure would be happy to come and give evidence to the Committee, if it wished.

Ivan Smyth: As I said earlier, the use of the reference to "common law" in this case is in contradistinction to statute law. Lord Bingham recognised that in a speech he gave to King’s College, where he said that there is no statute under which parliamentary sovereignty is established. We have to be clear that that is the context in which the reference to common law is being used here.

Q127 Chair: I’m sorry, Mr Smyth, but in the whole of that lecture and, indeed, for that matter, in chapter 10 of the book, The Rule of Law, which I am sure you have read very carefully, Lord Bingham goes out of his way to attack several Supreme Court judges with whom he sat on the Jackson case, specifically because-in contradistinction to what you have just said-he so fundamentally disagreed with their approach.

Ivan Smyth: What I am saying is that the context is that we are actually using this because we can’t define parliamentary sovereignty by statute. There is no statute that defines parliamentary sovereignty.

Q128 Jacob Rees-Mogg: I agree with everything you are saying, with one exception. As I understand it, "common law" has a very precise definition, but it is being used in the explanatory notes in a very imprecise way-in a way that most laymen would understand, but that, to the lawyers, actually means something rather different. I think the concern of the Committee is perhaps a rather pedantic one: it is that the term "common law" is being used imprecisely to create a false impression about what the statute is trying to do. If this phraseology could be tightened, a lot of the Committee’s concerns would be answered.

Chair: Before you respond to that, Mr Smyth and Minister, may I quote what Lord Bingham said? I think that might help the Committee and the public. He said: "I cannot for my part accept that my colleagues’ observations are correct. It is true of course that the principle of parliamentary sovereignty cannot without circularity be ascribed to statute, and the historical record in any event reveals no such statute." He then went on to say, crucially: "But it does not follow that the principle must be a creature of the judge-made common law which the judges can alter: if it were, the rule could be altered by statute, since the prime characteristic of any common law rule is that it yields to a contrary provision of statute." By the way, he also said that he regards the work of Professor Jeffrey Goldsworthy in his books on parliamentary sovereignty as "magisterial".

Mr Lidington: Before Mr Smyth comments, I will just say again that, while these issues are important, they go beyond the scope of this Bill. One reason why clause 18 does not include the word "sovereignty" is because it does not have a precise statutory definition. When we have looked for use of the term "sovereignty" in previous statutes, we have found that it is used to describe territorial sovereignty in, for example, the Cyprus Act, establishing Cypriot independence, which refers to sovereignty in the context of the British sovereign bases that remain in that country. Mr Smyth may want to add more.

Ivan Smyth: I can say little more to you than what I have already said. If you look at the explanatory notes in their entirety, you will see that they explain what is being sought to be achieved by putting the principle of parliamentary sovereignty on a statutory footing, so that people can see that EU law is incorporated into the UK through the European Communities Act, and that that is the only means by which it has been imported into the UK.

Chair: One of our witnesses said that he thought that the whole Bill was constructed as an invitation to legislation. It seems to me that you are confirming that.

Q129 Jacob Rees-Mogg: Minister, I think I know what your answer will be, but although the clause is not trying to define sovereignty more broadly, because the explanatory notes state that parliamentary sovereignty is a construct of the common law, that opens it up to further interpretation by the judges. Therefore, the Bill and its notes are taking on something that they were not intending to, are failing to answer the broader sovereignty question, and produce an opening for the judges to get involved, if you take the clause in conjunction with the explanatory notes.

Mr Lidington: I think that between them, as Mr Smyth said, both the Bill and the explanatory notes make clear the Government’s intent, as well as the limits to the intent and scope of this legislation. Certainly, we have never argued that clause 18 is other than declaratory. We have never sought to argue that it goes beyond a description of the means by which European law has effect in the United Kingdom and is given primacy in the United Kingdom.

Q130 Jacob Rees-Mogg: Finally, is it your view that parliamentary sovereignty is derived from common law?

Mr Lidington: Mr Rees-Mogg is again tempting me on to territory that is properly the-

Q131 Jacob Rees-Mogg: But that’s what the explanatory notes say. So, do you agree with your own explanatory notes?

Mr Lidington: What I repeat to Mr Rees-Mogg is that he needs to look at the content of the Bill and the content of the explanatory notes in their entirety. I think they make it very clear what the scope and the limits are to what this piece of legislation seeks to achieve.

Mr Cash: I think the problem is that you use the expression, "the common-law principle", as if by assertion it is automatically the basis of the principle whereby EU law takes effect in the UK through the will of Parliament and by virtue of an Act of Parliament. The problem is that that is a matter of great controversy and, not only that, it goes to the question that Mr Rees-Mogg has just raised about opening the gateway to the Supreme Court and the rather unsatisfactory declarations by Lord Steyn and Lord Hope on the issue of sovereignty. I now pass to Michael Connarty.

Q132 Michael Connarty: Thank you very much, Chairman. Let me be quite honest, Minister, about where I am coming from. Having looked at the Bill and the clause, I see it as a piece of window-dressing hiding the fact that the Government promised the people of the UK something and are not delivering it. They promised them some definition-a clear statement, a clear move forward-that would somehow put parliamentary sovereignty back on the statute book in a way that would be satisfactory to those who are unhappy with the power of EU law. That is a fact; that is what people thought they were getting.

What we have got from the evidence we have taken confirms my view. I have asked the same three questions of all the witnesses, and they are dismissive of the clause. It does not alter anything. In fact, Professor Allan went as far as to say-I quote-"It is not, however, possible to place a common law principle on a statutory footing, because the principle concerns the nature of continuing legislative authority." He then goes on to argue that if any new statute’s purport was to override or derogate from directly applicable EU law, it would conflict with the legal consequences of the European Communities Act, and we would be back in the courts, basically, and there would have to be a judgment made in the courts on the matter.

Everyone seems to come to the conclusion that clause 18 is only declaratory and a restatement of what is there already. The evidence of many people is that it is therefore unnecessary. We actually had evidence that it was in fact dangerous, because it seemed to try to put some common law into a Bill that would then cause more complications; as the Chairman has said, that would lead to temptations and invitations to litigation, rather than clarifying the position. The question is, apart from being window-dressing to try to pacify those people who were conned into voting for a Eurosceptic Conservative manifesto, why is the clause needed, since it changes nothing?

Mr Lidington: We’ve never argued, as I have said repeatedly, that it changes the current law position; it declares the current position.

Q133 Michael Connarty: Not since you got into Government, but you promised before you got there.

Mr Lidington: The position, as Mr Connarty knows, is that the coalition programme promised that we would examine the case for a sovereignty Bill and come forward with our conclusions, which is what we have done. I think Mr Connarty is inviting me to comment on the Conservative party manifesto. My recollection of that document is that it said that the Conservative party would enact a sovereignty Bill to make sure that ultimate power rested with the British Parliament. Now, I would argue that clause 18 does that by making it clear in statutory form, for the first time, that the only source of authority for European law and the European Court of Justice in the United Kingdom is the deliberate Act of a sovereign Parliament. It therefore provides a statutory test that helps to guard against any risk that the current position, established by the judges in successive cases, might be eroded through future judicial decisions. That is the purpose behind this.

Mr Connarty invited me to look at the hypothetical situation in which a future Parliament might decide explicitly to change the law in some way that was at odds with the United Kingdom’s obligations under the European Union treaties. Now, what I am clear about is that Parliament has the right to do that, if it so wishes. That would clearly precipitate a political crisis, because the UK would be acting in a way that was quite deliberately at odds with binding treaty commitments that we had entered into. There would have to be a political solution if a political argument were to take place.

Q134 Michael Connarty: You haven’t quite explained to me why the clause is needed, given that all the evidence we had was that without clause 18, we would be in the same position anyway. You would have to have this same judgment made and challenges made in the courts. Without clause 18, there would still be the same argument about where we stand, in relation to the dualist position that we are in at the moment, and about many other things-there is the argument that there is never such a thing as sovereignty of Parliament anyway, because it is always moderated by the courts and the rule of law and all the other factors. So it does not add anything, but it confuses people, because it seems to tell people that the promise has been delivered, and that clarity has been added to the law by having this clause. Everyone has heard evidence saying that it does not lead to clarity at all. So why is it needed, apart from as a fig leaf for the Government’s promises?

Mr Lidington: I think it does give the clarity that Mr Connarty seeks, in the way that I have described on a number of occasions so far this afternoon. Without clause 18, we would be relying entirely on the continuing good sense of the judges, case by case, to ensure that European law was not accorded some autonomous authority in this country, not dependent on Acts of a sovereign Parliament. We are providing here for the first time a clear statutory point of reference for any future court to consider if these arguments come before it.

Q135 Mr Clappison: I am relieved to hear, Minister, that you feel that Parliament still has the right to withdraw from the European Union if it wishes to, or to act inconsistently with the European Union, but I have to say there seemed to be a note of doubt in your answer. On the question of the position of European law, this would not affect the supremacy of European law over UK law as matters stand, would it? European law would take precedence over UK law, as matters stand. United Kingdom law that was found to be inconsistent with European law by the European Court of Justice would be struck down. The same would apply to any future European law that was made within the competences of the European Union. That would remain the case, wouldn’t it?

Mr Lidington: Yes, those statements are true and, of course, the reason why European law has that primacy is because that was expressly provided for in the European Communities Act 1972.

Q136 Mr Clappison: That primacy will continue, and the areas within which there is primacy can go on expanding as they have done since 1972, since when, as we all know, they have expanded greatly?

Mr Lidington: The areas of primacy are determined, as Mr Clappison said, by the competences given to the European Union by successive treaties. The purpose of much of the Bill is to provide additional protection by way of a requirement for parliamentary authority, or for the authority of the people in a referendum, if changes are proposed to add to those competences in the future.

Q137 Mr Clappison: As we all know, there is already a very long list of competences within which the European Union acts. We have more questions on that later. This is a political question. You talk about safeguarding the present position, but it is the present position that concerns so many people, isn’t it?

Mr Lidington: Yes, and it is certainly true that the Government have accepted that the position established by the various treaties up till now, and up to and including the Treaty of Lisbon, is our starting point. We work within that legal framework. Both Mr Clappison and I remember voting against the ratification of the Lisbon Treaty when that came before Parliament, but the Government have taken a considered view that, Lisbon having been ratified, we work within that framework.

Q138 Mr Clappison: I support what the Government have done on that; I think it is actually correct, but presentation-wise, there has to be some care taken, doesn’t there, that we don’t mislead people into thinking that this Bill does more than it does, with ringing declarations about sovereignty and the ultimate sovereignty resting with Parliament, when the present position will continue to prevail?

Mr Lidington: I don’t think those two points are contradictory. The ultimate sovereignty does remain with Parliament, and I think that clause 18 of the Bill entrenches that position in a way that has not been the case up till now; but it is certainly the case-neither the Foreign Secretary nor I have claimed otherwise-that the Government’s starting point is the legal framework and the competences established by existing treaties.

Q139 Chris Heaton-Harris: Following up on this point, the Law Society says it’s not convinced about the need for a declaration of parliamentary sovereignty, given that there’s already a principle in common law that Parliament is sovereign. It’s concerned to ensure that the consequences of the declaration of parliamentary sovereignty are fully assessed, together with the principle of primacy of European law, and is concerned that legal certainty is undermined by the clause. What would you say to the Law Society?

Mr Lidington: I don’t think it is right in saying that the doctrine of ultimate parliamentary control is undermined. For the reasons I’ve previously given, I think that, on the contrary, it is strengthened if clause 18 is enacted. I don’t think, either, that I’m persuaded by the argument that, because the courts up till now have upheld the position that we are seeking to embody in statute, in clause 18, we would be right simply to rest on the assumption that that is the position that will always be upheld. I feel that we will be on surer ground if we have the additional safeguard provided by statute.

Q140 Michael Connarty: A very simple question: let’s put it in terms for people who are interested in the promises made at the election, who might then say, "What is this law going to change for us?" If the British Parliament passed a law that contradicted a power given to the European Union under either the European Communities Act or the Lisbon Treaty, but that did not contain a clause amending either of those treaties, or repealing them, would you expect the UK courts, without having to go to the European Court of Justice, to strike down that law and say that it cannot be applied and that EU law should be applied instead?

Mr Lidington: I have to preface what I say and make it clear that I am not a lawyer, but my belief is that in those circumstances, if the British Parliament were quite specifically to pass a statute that repealed or disapplied a particular piece of European legislation, the British courts would follow that decision by Parliament here.

The consequences, though, would be that the European Commission would almost certainly begin infraction proceedings; and we would, I think, have an unsustainable position in front of the European Court of Justice, which would be likely to apply the various penalties incurred by any country that was in default of a particular piece of binding European legislation. So the position that the Government of the United Kingdom and the Parliament of the United Kingdom would be in, in those circumstances, would be a matter of whether they wished to embark upon a course of action that would certainly lead to a major crisis in relations between this country and the European Union.

It is no part of the intention of the present Government to seek to provoke such a crisis, and I cannot, off the top of my head, think of a hypothetical situation in which a future British Government or Parliament might wish to follow the course that Mr Connarty has suggested, but I think that the sequence of events would be as I have described.

Q141 Chair: Could I ask a question on that? After all, we have instances-we know that they are going on in the German constitutional court at the moment-on bail-outs, the stability and growth pact, the question of constitutionality, and the current issue of the Roma and the French. In all those cases, are you not really exaggerating when you talk about provoking a crisis? I think that this is just a lot of flummery, if I may say so. It is not going to constitute a crisis; it is simply that if Parliament decided that it wanted to repatriate the Working Time Directive, because it was in our national interest, that should prevail.

Michael Connarty: Chairman, I was thinking more of the common fisheries policy, and instructing that all fish that are caught should be landed and not thrown back into the sea, which has been ongoing for the past 20 years.

Chair: We could draw up quite a substantial list.

Mr Lidington: I am sure that everybody here could draw up their own list. I am sure that if we were talking to our counterparts in a number of other EU countries, they would have lists of their own, which might include single market measures that we regarded as being very much in the interests of this country to have at a European level. That is the bargain that EU membership entails.

I have lost my train of thought for the moment. Chairman, you had a question.

Chair: It was with respect to the question of-

Mr Lidington: The Germans and the German constitutional court.

Q142 Chair: It was also the question of national interest and which prevails?

Mr Lidington: Whether national interest prevails is a decision that Governments and Parliaments in particular countries have to take, bearing in mind the consequences for their membership of the European Union. In your question, you referred to the German constitutional court. It is striking that so far, although the German constitutional court under the competence-competence doctrine has declared that it possesses the ultimate right to determine whether or not a piece of European law breaches the fundamental law of Germany, it has not actually put that to the test in terms of a particular judgment. The constitutional court has rather shied away from ever defying a piece of European legislation or the authority of the European Court of Justice.

Q143 Chair: We might have a moment to consider that when we look at the implications of extending the financial stability mechanism to Portugal, Spain and other countries. That would be an interesting one.

By the way, I would just mention the fact that I think you voted for my clause, which had a "notwithstanding" provision in it, when we were in opposition. I am sure that that is worth putting on the record.

Mr Lidington: I’ll have to check the Division list.

Chair: I think you’ll find that I’m right. Michael Connarty, would you be good enough to look at questions 21 and 22?

Q144 Michael Connarty: One of the things that came up in the evidence, being volunteered by our invited legal brains, was a problem about the legislation’s proposed system of referendum locks-it is as if the sovereignty of future Parliaments is being limited by the Bill in relation to legislation on the EU. Do you not think that recourse to a referendum sits ill in this Bill, which is supposed to be designed to place parliamentary sovereignty on a secure footing?

Mr Lidington: The Bill is designed to put on a more secure footing the position that European law has authority in this country only by virtue of Acts of Parliament, but it also seeks to do other things. It is quite deliberately providing for Parliament to have more of a say in how decisions are taken by Ministers in the European Union on behalf of this country. For example, there is a provision in the Bill that any future treaty change, no matter how minor, must require a full Act of Parliament for ratification rather than, as is sometimes the case under our present law, simply a resolution of the two Houses.

We have also taken a decision that it is right-were an attempt to be made at a further treaty change to transfer competencies from this country to the European Union, or to give up important vetoes over decisions on particular areas of competence-that ratifications should have the authority of the British people freely expressed in a referendum. It is a limit not so much on Parliament as on the power of Ministers to take decisions in the future.

In future, Ministers will have to have much more regard to opinion in Parliament and in the country. It is, of course, right-I think this lay behind Mr Connarty’s question-that since no Parliament can bind its successor, it would be possible for a future Parliament to decide that it would repeal or amend this legislation and decide that it did not wish to require referendums, or it wished to give the Government of the day more power to take through new European initiatives unchecked. I think, though, that the politics of such a decision would be horrendously painful for the Government concerned. It is that political cost to any future Government of trying to get Parliament to go back on the safeguards that we are providing here that offers the best protection that this is going to be enduring.

Michael Connarty: I am sure we’ll come back to it in other questions, Chair.

Chair: I would like to turn to the issue of part 1 of the Bill, which is the restrictions on treaties and decisions relating to the European Union.

Q145 Henry Smith: It begs the question: wouldn’t a proper sovereignty clause be the answer to future political angst? With regard to some of the issues listed in clauses 4(1) and 6(4), how can you guarantee that there would be sufficient voter turnout in a move from a special to an ordinary legislative procedure? In reality, a substantial enough turnout would not occur, would it?

Mr Lidington: I would put my answer in two parts. I think that if there were to be a move to amend the treaties by means of the ordinary revision procedure, that is such a time-consuming and politically arduous process involving, as it does, not only a full intergovernmental conference but-unless the European Parliament waives its right to insist on one-a convention involving EP member states and national Parliaments all debating the contents of the treaty. It is not going to be attempted unless it is a package of fairly ambitious treaty changes of the sort that we have seen most recently with Lisbon and previously with Nice, Amsterdam and Maastricht. So I think that, in those circumstances, the turnout would be pretty large, because the issues raised would be so obviously of political importance, and the debate over the content of such a new treaty or set of amendments would have been going on for a considerable time.

Mr Smith’s concern about a ridiculously low turnout for a referendum might have more weight if we were talking about the simplified revision procedure where we can have a much more narrow treaty change, or the passerelle clauses where we have also provided for a referendum lock. In answer to that, I would say two things. It would be illogical for us to say that the transfer of new competencies or powers to the EU is so politically important-over, say, common foreign and security policy-that we should have a referendum, if that is done by the ordinary revision procedure. But no referendum should apply if the same objective is to be secured through simplified revision procedure, or through a passerelle clause, which is possible in respect of common foreign and security policy through the surrender of vetoes. That would almost invite a Government that wanted to see such a change take place in the future to go for one of the latter routes, rather than the full treaty-making process of ordinary revision procedure.

Secondly, we have made a distinction in the Bill, in a limited number of areas, between those things that are significant enough to attract a referendum and those that are not. There is a blanket referendum commitment for any transfer of or addition to competence, but, in a limited range set out in clause 4 and when we come to the passerelles, we have tried to distinguish in detail in the Bill between those things that we think are politically significant-on which, therefore, it is right to ask the public to express a view and on which, for that reason, the public will be willing to turn out and vote-and those things that we think are less significant.

The only other thing that I would add to Mr Smyth is that any talk of treaty change presupposes that the Government of the day have decided that they want to take part in it, because, obviously, if the British Government of the day are against such a treaty change, they have a complete right of that veto, so that change would not happen.

Q146 Henry Smith: On that point, although the question might be on a specific area, would it not inevitably become a referendum on this country’s membership of the European Union?

Mr Lidington: No, I don’t think it would. I think people are mature enough to take a decision on the basis of the choice put in front of them. If, to take an example from the news at the moment, there were to be a proposal in the future that the United Kingdom should join the euro, it would be quite right that that decision should be put to the people, because it would be so far-reaching in its long-term effect on this country and the conduct of economic policy. I think that the people would distinguish between wishing to join the euro and wishing to remain a member of, or leave, the European Union as a whole.

Q147 Henry Smith: Finally for now, on some of those more technical points, when the Bill was being drafted was consideration given to an alternative method for determining whether some of those more technical competences could be transferred or not-a two-thirds majority of the House of Commons, for example?

Mr Lidington: We looked at a whole range of alternatives at different stages of the Bill’s preparation. At the very beginning, we looked at the option of not specifying in any detail the occasion on which a referendum would be required, but instead writing in a test expressed in more general language and, therefore, leaving it much more to the discretion of the Government and the Parliament of the day to decide whether that test of significance had been met. We looked at a number of options in terms of parliamentary safeguards. The Government’s collective decision was that the distinctions set out in the Bill, between a referendum requirement, a requirement for an Act of Parliament and a requirement for an affirmative resolution of both Houses, is the most sensible way in which to proceed.

Q148 Chair: You speak of competences and powers, and, in fact, the coalition agreement and, for that matter, other explanatory notes make the distinction. A competence is generally understood to be a provision that enables, under the legal base in question, the establishment of a new European jurisdiction. A power is distinguishable from that and is, shall we say, of a lesser order. Let’s leave to one side competences, on which I don’t think there is any dispute.

Why is it that with respect to the word "power", it is assumed, so it would appear, that in terms of the implementation of the Lisbon Treaty, which does transfer matters such as are contained in the investigative order, for example, or, in the past, the Working Time Directive, those powers are not to be regarded as an extension of power? When you’re dealing with the past, quite clearly you’re dealing with a situation that would not give rise to a referendum in the future, but when you’re dealing with something where you’re implementing Lisbon, are you not thereby transferring power?

Mr Lidington: No. We’ve made a distinction between two things. First, we have accepted the Lisbon Treaty as our starting point. We’ve therefore accepted that the-

Q149 Chair: I’m talking about law, not policy.

Mr Lidington: Yes, but this goes to the point that you’re making, Chairman. We’ve accepted not just the areas of competence set out in the Lisbon Treaty, but the means by which those competences are translated into particular European Union measures-pieces of legislation-so if something takes place by qualified majority vote, we have accepted that that is how the United Kingdom Government have to operate, and we have to seek to get what we want through that process.

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.

We are not seeking to impose new rules on measures where the EU already has competence to act, provided that there is unanimity. We’re saying that if a British Government sign up to that, that is fine. To go back to my common foreign and security policy point, the 27 member states were able to agree on a common programme of sanctions against the Iranian nuclear programme. That was done under the authority of the existing treaty arrangements for common foreign and security policy. We’re not seeking to question that. What we are saying, though, is that if there were a proposal in the future that that type of decision should be taken by QMV rather than by unanimity, that would attract the locks in the Bill.

Q150 Chair: So it’s really a sort of grand cherry-picking operation, isn’t it?

Mr Lidington: No, not at all.

Q151 Mr Clappison: You were telling us earlier, Minister, about competences and what Ministers accepted. You had no choice but to accept them: that was the European law to which we all signed up and what was included in the Treaty of Lisbon. On the question of competences, could you tell us this: if a question arises about whether the EU is acting within its competences in an area where there is qualified majority voting-or even where there is unanimity, but let’s say qualified majority voting-who decides whether the EU is acting within its competence or not, ultimately?

Mr Lidington: Well, 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.

Q152 Mr Clappison: But the question whether the treaties provide that competence or not-whether it can be interpreted so as to provide the competence to make the decision or to pass the legislation in question-is entirely for the European Court of Justice. Everything that you’ve told us is correct, but makes no difference whatsoever.

Mr Lidington: I disagree very strongly with Mr Clappison’s last proposition. He is, of course, right in what he is saying by implication, which is 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.

Q153 Mr Clappison: Well, you’ll be happy to know that health and safety is now an EU-

Mr Lidington: That is a matter of subsequent treaty change that has put that beyond any doubt.

To argue that this makes no change at all is quite wrong. I think that one of the things that is true about Lisbon, for all its imperfections, is that it does define the scope of European Union competence much more precisely than in the past. It is not just the United Kingdom, but other member states that are pretty vigilant now on avoiding any risk of competence creep. That is something that the European Affairs Committee of the Cabinet is keen to keep under very close scrutiny, and I am sure that this Committee is committed to doing so as well.

Mr Clappison: We were invited to do the same thing with the pillars, actually, back at Maastricht, if you can remember.

Q154 Michael Connarty: To try to bring us back now to the level at which people might be discussing what is proposed, a question was asked by my fellow Committee member, Henry Smith. I just cannot imagine-I would like to ask the Minister to try to estimate-what interest there would be and what kind of turnout there would be for a referendum on, for example, the decision to move from majority and unanimity to qualified majority voting on something like an EU carbon tax, which is an example that has been suggested.

It is such a huge list that it seems to be overpowering people with all the options that referendums might be used in. I don’t particularly find myself attracted to referendums at all. I think that Lisbon, for example, was well dealt with in the House and would not have received such thorough scrutiny if there had been a referendum run by the red tops and the popular tabloids. In that situation, if we decided to have referendums, how can you justify a referendum on an issue like that, where it would cost a lot of money and would not be likely to attract many people? It comes back to the point that it would have to be-it would no doubt be generated by the very same popular press-a referendum on membership of the EU, regardless of what was the actual question on the paper, which would be about moving from unanimity to qualified majority voting on a very specific area of policy.

Mr Lidington: I disagree with Mr Connarty about Lisbon. I actually think that one reason, but not the sole reason, for the depth of public disaffection with European Union membership in this country is that people feel that they were promised a referendum on Lisbon and then were denied that, especially when they saw their neighbours in the Irish Republic having that.

Q155 Michael Connarty: I don’t deny that at all in such a large issue like that, but I am talking about what is in this Bill, not what is in the past.

Mr Lidington: Let’s go to the carbon tax example that Mr Connarty cited. What the proposition before people would be is that not just for a particular measure to do with carbon tax, but permanently, in the future, decisions about environmental taxation at European level could be taken by qualified majority and the United Kingdom outvoted on measures that would impose new or additional taxes upon the population of the United Kingdom, without the United Kingdom electors being able to get rid of the politicians who had been responsible for imposing them. That seems, to me, to be something that would attract the public to the ballot box.

Q156 Michael Connarty: You would only, as a Government, put that to a referendum when you had decided that you want to do it.

Mr Lidington: Yes.

Q157 Michael Connarty: So, it would lie in the power of the Parliament not to do it, and in the power of the Government not to do it. Is that not the legitimate purpose of a sovereign Parliament with a Government, that you do not do those things, that you would only put a referendum to the people when you decided as a Government to do them? The Bill is all superfluous, because surely the Government’s responsibility is to say, "We would not give that power to the European Union at any time."

Mr Lidington: I would hope that that is the position that a future Government would continue to take.

Michael Connarty: So do I.

Mr Lidington: The point of having the referendum lock is to guard against the risk that, in future, powers would be transferred to the European Union, without the consent of the British people in the way that has happened in the past. I very much want to see the UK not only remaining a member of the EU, but being a very active participant as well. One of the difficulties in us taking on that role with confidence has been the fact that people in this country feel that vital decisions have been taken in the past, about which they were not consulted and about which they ought to have had a say, and about which the populations of other European countries have been able to have a say.

Chair: Like the Maastricht Treaty.

Q158 Chris Heaton-Harris: Minister, as you know, first of all, I do not think that the Bill goes far enough, but you would expect me to say that based on our conversations in the past. I am very interested in a couple of detailed aspects of the Bill. Anybody who has followed European law understands the description of the salami slice. That happens when Europe wants something and it cannot get the big principle agreed by everybody at the start. It tends to cut away and get little pieces of it all the time, and all of a sudden you have what you did not want in the first place.

We are very happy that the European Public Prosecutor’s Office is covered by the Bill, because we are not in favour of it. Having been involved in the debate on the European Public Prosecutor when it first came up, what were the significant points in that debate? They were the European arrest warrant-got that-and European investigation orders-got them. In lots of these issues in justice and home affairs we have this opt-in, opt-out thing going on, where Parliament does not have much of a say and nor does anyone else. I am concerned that if those things are not properly covered by clause 6, a future Government could allow the European Public Prosecutor’s Office to be established by other member states, without the UK. At the end of the day, we might say, "Well, we’ve got it anyway" and seek to opt-in. The Bill seems to apply no parliamentary or public control on such a course of action. Can you tell me where I can find that in the Bill?

Mr Lidington: It is in clause 6(4), paragraphs (c) and (d). Those are the key parts of the Bill in this matter. If other member states went ahead and set up the European Public Prosecutor’s Office, as Mr Heaton-Harris suggests, there would still, under the Bill, need to be a referendum before a future Government decided to opt into that particular operation. Were we a participant in a future EPP, the referendum lock would still apply to a move to enlarge the scope of the European Public Prosecutor’s function.

Q159 Chris Heaton-Harris: The Tampere summit, ages ago, described what a European Public Prosecutor would be and, through agreements that we are opting in or out of, we are now getting the whole thing, without the icing on the cake, which is the European Public Prosecutor’s Office. I am wondering when Parliament and the people of the United Kingdom get their say on those issues.

Mr Lidington: Parliament can have its say on opt-ins that were part of the Lisbon Treaty through the collapsing of the pillar structure, partly by the vigilance and actions of the Committee.

Mr Clappison: No, I’m not having this.

Mr Lidington: It is open to the Committee to ask for a debate and table a motion that is amendable.

Q160 Mr Clappison: The Minister is making a very fair point in a very fair way, but there is a big "but" here. The procedure for dealing with opt-ins is totally unsatisfactory. We have had two significant ones so far in this Parliament. I don’t think that the first, the European investigation order, even came before this Committee for it to decide whether or not to have a debate, for various reasons to do with the composition of the Committee. The second one, the European information order in criminal proceedings, was a very important order indeed, and we debated it in a Committee on Thursday.

Chair: Last week.

Mr Clappison: Last week. It was set up at the last minute so that a Minister could go to Brussels the next day and give his assent to it. All we could do was take note of that at the end of the Committee-there was no point in having a vote-and it is down on the Order Paper for this evening, without debate, in the House. I am not sure whether anybody can vote on it tonight. I think that that is it, as far as that legislation is concerned.

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 both Houses of Parliament, a proper debate and a vote on any opting-in to the home affairs chapter; unless you are going to tell me that what I have just described is covered by paragraph 9, but I don’t think it is. I think it is very limited and it looks as though your expert-your assistant-agrees with my proposition. Can you look at that as an amendment?

Mr Lidington: A number of justice and home affairs areas are caught by the various provisions-we can go into those if Mr Clappison or other members of the Committee wish-but the question was about the JHA opt-in procedure under Lisbon. I think that there are two practical difficulties with what Mr Clappison is suggesting. 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, but I will take note of what Mr Clappison has suggested.

Mr Clappison: Can I come back on those? The first part of that was quite unsatisfactory, if I may say so. What you are saying is that we are all too busy to be bothered with Parliament. That’s basically what you were saying-we can’t fix up time for a parliamentary debate within three months because our interdepartmental consultations are more important.

The second point, which I can imagine a Government business manager looking at, was that there might be quite a lot of these things. If that’s the case and if they are not controversial, presumably they will go through the House without too much trouble or too much time being taken on debate. If there is something controversial in them, we can debate them. That’s what we are here for as MPs, rather than to act as rubber stamps.

Q161 Henry Smith: Following on from that point, I think it unsatisfactory that the answer to the potential transfer of some fairly fundamental principles is that we don’t have enough time for due process in this place. Following on from some of the matters that Mr Connarty was talking about, isn’t that even more reason-we are talking about the points made by Mr Clappison and Mr Connarty-to have a proper sovereignty clause, rather than clause 18 as currently constituted?

Mr Lidington: What is meant by "proper sovereignty clause" in this context?

Henry Smith: Something wider than the scope that this Bill is fairly narrowly-

Chair: Something that enables us to go back into the European Communities Act, any treaty or, for that matter, any provision made under a treaty, in line with what Lord Denning had in mind, and simply to say that we would apply the principles of McCarthys Ltd v. Smith in that way, and to guarantee that, if we wanted to repatriate in the national interest, we would actually do so. However, I think we can move on from that to Kelvin Hopkins, because he has some questions.

Q162 Kelvin Hopkins: Thank you. In his evidence to the Committee, Professor Hix says that increasing the constraints on British officials in COREPER and our Ministers in the Council when making decisions can strengthen the hand of our delegates in negotiations. How far are the domestic constitutional constraints intended to strengthen the Government’s negotiating hand in Brussels?

Mr Lidington: Our prime motivation here has been to give the British electorate and the British Parliament new powers over how Ministers take decisions in the European Union, which the people and Parliament don’t have at the moment. 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. I think that 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. I have noticed that other countries represented at Council of Ministers meetings are very concerned about whether a particular proposal might cause a referendum in their own nation, and that is something their colleagues around the table take account of in discussion.

Q163 Kelvin Hopkins: Professor Hix also says, by contrast, that the member states might start to develop creative ways to "move forward without the UK." I would not describe it as moving forward, but that is what he says. Indeed we heard from James Clappison about the salami-slicing approach to get through things that we don’t like.

Mr Lidington: There are provisions, as Mr Hopkins knows, in the treaties for an enhanced co-operation procedure. There are elements of variable geometry written into the treaties, including our opt-out from justice and home affairs matters, including our being outside Schengen, including our being outside the euro. Denmark and the Irish Republic have certain comparable arrangements over particular areas of EU competence. But I think it implausible to assume that the other member states and the Commission are going to want to find a way to press ahead with absolutely everything agreed at the level of the 26, pushing the United Kingdom into a corner on its own. It has been striking, for example, that in the debates within the EU about economic governance, the German Government, in particular, have said that even though Britain is not in the euro, it is very important that the United Kingdom is at the table when important discussions about economic strategy are taking place.

Q164 Kelvin Hopkins: My own view is that if we are sidelined in negotiations, we have a right to say, "Well, if they come to a conclusion, it should not apply to us." That is not simply QMV, but if they negotiate something without our being involved and they sideline us, we can just say that it does not apply to us.

Mr Lidington: That is self-evidently true. If there is provision under the treaty for enhanced co-operation and for other member states to go ahead and act on their own, and it is we who decide to remain outside-it is not necessarily us who would be the country who wished to remain outside the enhanced co-operation process-then by definition, that is not going to apply to us.

Q165 Kelvin Hopkins: This approach could lead-we have talked about a two-speed Europe-to a multi-speed Europe. Even now, to an extent, some could argue that we have a pick-and-mix Europe and we have chosen to have derogations on a number of areas. There are some countries that are outside the euro, some that are in, some that are unlikely to join and some that want to get out of it. All sorts of possibility arise. Would that not lead to the kind of Europe that many of us would want, which would be a looser arrangement with a higher degree of independence for democratic states?

Mr Lidington: I think that what one journalist called a Europe of consenting adults is a good model to have in mind. I think that the larger and more diverse the European Union becomes, the more it will make sense for different countries to co-operate more closely on particular areas of policy. We see this, for example, in the way in which the Baltic and Scandinavian countries are getting together to talk about a Baltic strategy and Romania, Bulgaria and the Visegrad countries are talking about a Danube and Black sea strategy, to be pursued within the ambit of the EU, but which particularly involves those nations.

At the same time, though, I think I have a word of warning for Mr Hopkins, which is that there are some aspects of the EU’s work-most obviously the single market-where it is very much in the interests of this country that we maintain a Community-wide approach, rather than allowing individual countries to opt in or out of single market measures. There are some countries that would love the chance to have more state aids, or to impose new restrictions upon free trade. That’s not in the interest of the UK.

Q166 Chair: Would you not agree, on that point, with Professor Roland Vaubel of Mannheim, who says that under the single market and the majority voting arrangements countries have developed a very sophisticated method of what he calls regulatory collusion, whereby they gain comparative advantage by using the majority voting system in order to enhance their own particular interests, so that this idea that somehow we’d be held hostage is countered by the fact that countries-and Germany in particular-are using the majority voting system in a way that’s very satisfactory to their own national interests?

Mr Lidington: I think the truth is that every one of the 27 member states of the EU pursues its own national interest extremely vigorously.

Q167 Chair: You mean to get further and deeper in-

Mr Lidington: I think that the United Kingdom needs to be more adept at using the European system in order to get our way-to pursue our interest. I would like to see, for example, a much higher priority being given in the Commission’s work to new measures to extend and deepen the single market; to measures-as President Barroso declared as his intention-to cut the costs of European regulation upon small and medium-sized enterprises; to enlarge the scope of the EU’s free trading agreements with other nations and regions of the world. Now, not every member state is going to share our ambitions, but we need to be very energetic and active in building alliances in order to secure those objectives, and I’m confident we can do so.

Q168 Kelvin Hopkins: I think we are digressing into what are political debates. I would like to debate the single market any time; but, on the principle of derogations, we have a number of those already, but they’ve been negotiated at the time they’ve been imposed. Is it not a possibility-I would certainly hope it would be-that we could give notice that we might seek further derogations? My particular concerns-and I’ve mentioned these many times in the Chamber-are the common agricultural policy, which I think is a nonsense, and the common fisheries policy, which I think is a nonsense. But at least keep that possibility of further derogations open, so that we could have something that would certainly be to the benefit of Britain.

Mr Lidington: As Mr Hopkins knows, there’s an ongoing process of negotiation. It think it’s probably fair to say that the EU is engaged in a process of permanent negotiations. Obviously the option of derogation from particular measures, either permanent or transitional, is something that can be considered during any particular discussion of one or other dossier.

Kelvin Hopkins: Oh well, that’s good. I shall continue to pursue those two issues.

Q169 Mr Clappison: Two quick points, Minister. You said a few moments ago how frustrated people felt when they saw other countries having referendums, and they weren’t able to have one. Can I ask you about the process for the way in which the treaty deals with the accession of new member states? Under clause 4(4) it would seem that if a treaty only involves the accession of a new member state it is provided that there won’t be a referendum. I can understand the problem that you may have with non-controversial countries, perhaps small countries, acceding to the European Union, but one can think of examples without too much difficulty of where the accession would be controversial, and where there will certainly be referendums in other countries, some of which are required by constitution and others which I believe have been promised in certain cases. Wouldn’t this rule out having a referendum in those cases?

Mr Lidington: Yes, it would in terms of this legislation. The reason is that we have followed a particular principle; which is that a referendum should be required where there is a transfer of competence or power, and an accession treaty transfers competence and power from the acceding state to the EU. I would add, which may give Mr Clappison some heart, is that, of course, every accession treaty will have to be ratified by a separate Act of Parliament here.

Q170 Mr Clappison: That is the case already.

Mr Lidington: Yes, and what that means is that, although I personally sitting here today would be against imposing such a requirement, it would be open to Parliament when enacting that Bill to ratify an accession treaty, to introduce an additional requirement for a referendum in that case.

Q171 Mr Clappison: But, of course, as we all know, you are still going to have a problem. If there isn’t a referendum, and people in other countries are having a referendum and people here aren’t, people are going to say, "Why aren’t we having one?"

Mr Lidington: I think that one of the great triumphs of the European Union has been enlargement-a British initiative-and that has entrenched the rule of law, democracy and human rights in parts of our continent where those traditions were crushed for most of the 20th century.

Q172 Mr Clappison: No doubt those arguments could be made but people could have their own say on this referendum in a particular case. Time is running short, so can I take you on to another matter where there has been a lot of adverse press comment? The witnesses we had were scathing. Under some of the provisions of the treaty-clause 5(4)-if certain events take place, a referendum is not required if the Minister thinks it is not "significant" enough. Our witnesses were just scathing about that. One wonders if this would not be improved if there were not some sort of mechanism for Parliament having a vote, so that all MPs could say whether they thought it was significant or not, rather than just leave it to a Minister sitting in his office, saying, "No, I don’t think I’ll have a referendum on this one."

Mr Lidington: Well, Parliament will have vote and the Minister will be accountable to the possibility of judicial review as well.

Q173 Mr Clappison: Our witnesses were particularly scathing about that. They said they had never seen that in a Bill before, catering for the possibility of a judicial review. It is something that Parliament should be doing itself, not leaving it to judges. That is what the witnesses said.

Mr Lidington: Let me take Mr Clappison through the argument. As he knows, under clause 6(4), there is a list of a dozen, I think, criteria, that if met would require a referendum. I’m sorry, I am being corrected, I meant to refer to clause 4(1)(i) and (j). If a treaty change or an article 48(6) decision fell within any of the categories other than (i) and (j) or in addition to (i) and (j), then the referendum lock would apply. The significance test only comes into consideration if we have a proposal which only attracts the referendum lock because it falls within either (i) or (j).

Q174 Chair: If I may, Minister, perhaps you might like to ask your legal adviser to come in at this point because the words "in his opinion" are well established in terms of judicial review, and the question of whether or not it would be successfully challenged if anybody did do so, is rebutted by the use of the words "in his opinion". Is that not right?

Ivan Smyth: When providing his statement, he is going to have to give a fully reasoned statement. Obviously, one of the criteria for judicial review is that the reasonableness test will apply to what the Minister has put forward.

Q175 Chair: Yes, but if you took out the words "in his opinion", would that make you feel a lot less comfortable?

Ivan Smyth: No, because it is his opinion that has to be reasonable.

Q176 Chair: So you would be happy to see the words "in his opinion" removed from the Bill?

Ivan Smyth: No. I don’t think that there needs to be an amendment to the Bill.

Chair: I’m sure you’d say that. [Laughter.]

Q177 Chris Heaton-Harris: I have a couple of issues about "significance" and I am sure that you will be able to help me.

First, the Bill very kindly describes what we are talking about, namely, article 48(6) decisions, which are simplified revision procedures, are they not? Does that mean that the Lisbon Treaty would not have fallen under this Bill, because that was not "significant"?

Mr Lidington: The Lisbon Treaty, the Amsterdam Treaty, the Nice Treaty, the Maastricht Treaty would all have required a referendum under this Bill.

Q178 Chris Heaton-Harris: Okay. So amending treaties all require a referendum?

Mr Lidington: Amending treaties under the ordinary revision procedure, which transfers competence-

Q179 Chris Heaton-Harris: So that’s on top of the provisions of article 48(6)?

Mr Lidington: Yes. The significance test only applies to proposals under the simplified revision procedure and only applies to that type of proposal that falls under (4)(i) or (4)(j) and not under any of the other tests listed under clause 4 of the Bill.

Q180 Chair: Can I just ask a question in relation to the financial stability mechanism treaty? We were told by officials in Hungary when we visited there last week that, in fact, it is already agreed, other than the mechanics, so this would be a treaty extending our role to a permanent arrangement, or at all, which would be significant or not.

Mr Lidington: I’m afraid that I can’t be helpful to the Committee on that point, Mr Chairman, because whatever Hungarian officials may believe, that treaty has certainly not been approved by Ministers and indeed no text has yet been circulated among Ministers here.

Chair: Interesting-but we heard it quite unequivocally at the time.

Q181 Mr Clappison: Minister, may I just come back to you on my earlier point? Your answer to me was that this might not arise very often and that it is only in these very limited circumstances where it would arise. However, it remains the case that you have catered for them in the Bill and you have this mechanism where a Minister makes a statement as to whether, "in his opinion", the change is "significant" and then has to make such a statement to the House. What is the problem with giving Parliament a vote on this, to say whether Parliament thinks that it is "significant" or not? The Bill could be amended to do that.

Mr Lidington: I think it’s important that we have some means of addressing the point that Mr Smith raised in an earlier question, about distinguishing between a change that imposed significant new obligations on the UK and something that, although it imposed new obligations on the UK, imposed obligations that were very minor. The example that we cite would be if there were some new carbon trading system.

Q182 Mr Clappison: I take all that on board. However, that is all in "the opinion" of the Minister. Are you in the business of thinking about amendments to this that could improve the Bill? Are you thinking about them?

Mr Lidington: It is open to any Member to table amendments and the Government will look at whatever amendments are tabled. However, 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.

Q183 Mr Clappison: That is true of any Act. I am more worried about what Parliament decides rather than what the courts decide. I am suggesting to you that, rather than the Minister saying, "This is not significant enough for a referendum", the parliamentary approval mechanism should be used, which is in the Bill, and applied to this, so that it is Parliament that says something is not significant enough for a referendum. We can all make amendments to Bills; we can try to amend anything we want. The problem that will come-I can see it in my mind’s eye-is that a Minister will turn round and say, "Well, this isn’t significant enough and Parliament has catered for just this possibility, because it said in the Bill that we do not need to have a referendum if it’s not significant enough and I don’t think it’s significant enough, so there you are". And there is nothing that MPs can do.

Mr Lidington: Yes, they can, because that treaty change can only be ratified by means of an Act of Parliament.

If Parliament, by the resolution that Mr Clappison is advocating, were going to overturn the Minister’s verdict or to substitute a different opinion of its own, it would have exactly the same right and opportunity to do that under the mechanism that we are establishing.

Q184 Mr Clappison: That’s an argument against having any of the referendum locks at all, because you could do that in any of the cases that you have put forward in the Bill. You could do exactly the same thing. You could have an Act of Parliament and say, "Well, let’s leave it to Parliament to move a motion, or to put an amendment down for a referendum." Why leave it to the Minister’s own opinion? What is wrong with letting Parliament have a say on it? I come back to that point. Surely Parliament’s view of significance carries far more weight than just the Minister’s.

Mr Lidington: 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.

Mr Clappison: You can’t get into an argument of saying that the electorate were wrong there. I am in favour of the principle of parliamentary democracy, not of saying, "Well, I don’t agree with the Parliament that has been sent by the electorate." If the electorate choose that Parliament, it is a matter for them. I am saying that it is Parliament rather than the courts that should have the decision on this.

Chair: I think we have covered quite a lot of that ground, and very effectively.

Q185 Chris Heaton-Harris: Are there not a couple of loopholes in here, though? I am thinking especially of clause 7(2)(d), relating to own resources. We are saying that own resources, as currently defined, just need approval by an Act. You know and I know that the State of the Union address that President Barroso gave a few months ago talked about a redefinition of own resources to include an EU income tax, for want of a better word. That is a fairly fundamental shift that surely must trigger a referendum.

Mr Lidington: I’ll ask my colleagues to comment on the detail of this. What we are doing over own resources is following existing requirements-namely that we need an Act of Parliament to approve an own resources settlement. What can be included in a multi-annual financial framework depends of course on the extent of competence given by the treaties. At the moment, I think I’m right in saying that the European Union has no power to levy an income tax of the sort that Mr Heaton-Harris describes.

Q186 Chris Heaton-Harris: But it has power to levy own resources, which are based on a whole-

Ivan Smyth: It is subject to unanimity. The own resources decision is subject to unanimity of votes.

Q187 Chris Heaton-Harris: That’s a matter for a veto-I am very glad that you have pointed that out. We don’t get many vetoes nowadays; there are very few ever around. Surely a veto involves a transfer of power that is significant, and therefore that should trigger the significant-

Mr Lidington: Loss of veto over the own resources multi-annual financial framework would trigger a referendum.

Q188 Chris Heaton-Harris: Absolutely?

Mr Lidington: Yes, absolutely.

Q189 Chris Heaton-Harris: So it doesn’t need to have the significance test?

Mr Lidington: No, the significance test does not apply to that.

Q190 Chair: Under clause 4(1)(e), Minister, there is an obligation on the United Kingdom to have a referendum before there is an extension of the EU’s competence in a field shared with member states. The reality, though, is that the Commission can already propose legislation in a field of shared competence where it thinks that the member states have not acted without any revision to the treaty. When it does so, the Court of Justice upholds its actions and says that member states cannot propose their own legislation in this field. That is the doctrine of the occupied field. Do you agree that the Bill does not address this extension of EU competence, and how do you think that can be addressed?

Mr Lidington: As I’ve said on a number of occasions, we are accepting the current situation as regards treaties and the acquis. What clause 4(1)(d) does is to require a referendum before the treaty is changed to provide for a new area of shared competence. Where there is an existing area of shared competence-

Q191 Chair: We are referring to clause 4(1)(e).

Mr Lidington: Yes, clause 4(1)(e)-"shared with the member States". If that competence is extended by way of treaty change, a referendum would be required.

Q192 Chair: The problem-if I can help, Minister-is that this is actually more about practice. The question, which I am sure your legal adviser will be able to deal with or at least address, is about the problem where it is a matter of practice by the Commission that it takes this particular line and the Bill does not actually deal with that.

Ivan Smyth: It doesn’t deal with the situation where we are acting within existing areas of shared competence. What clause 4(1)(e) is designed to deal with, as the Minister has correctly stated, is if we were to expand the number of areas listed under the treaty that are subject to shared competence.

Mr Clappison: It is quite difficult, because there are such a lot of them already. There’s not that much left that isn’t.

Q193 Chair: In fact, the doctrine of the occupied field has reached the point where there is almost nothing left in the field anyway, but that’s another story.

The final question relates to where, for example, a Minister may inadvertently agree, in breach of a provision in the Bill, to an EU proposal that extends its competence or power, and that proposal is directly effective or applicable and would automatically become an enforceable right under section 2(1) of the European Communities Act. Case law suggests that the ECA is not an Act that can be impliedly amended. So, in your view, should provision be made in the Bill to clarify that an EU proposal that does extend competence or power in breach of part 1 of the Bill can never become an enforceable right for the purposes of section 2(1) of the European Communities Act?

Mr Lidington: There are already checks and balances in the system to stop that happening. First, the EU institutions are legally bound to act within the confines of the treaties. Secondly, we have the detailed scrutiny against competence creep, both through this Committee and the Committee in the Lords, and through what the Government are doing through their European Affairs Committee. Thirdly, we will, under the existing arrangements, as a Government, lobby and build alliances against competence creep, but if we were outvoted-fourthly-we would take the case to the ECJ.

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.

Q194 Kelvin Hopkins: Presumably, we could have a situation with a rogue Minister-even a rogue Prime Minister-who could just give away something on the hoof, as indeed Tony Blair did at the end of our last presidency with the budget. Apparently to the astonishment of fellow European leaders, he gave away billions on our rebate without so much as a telephone call, it seems.

Mr Lidington: With respect, Mr Hopkins, that is a different argument, because the former Prime Minister agreed to a particular bargain in the course of a negotiation. He then came back and got approval through the mechanisms that existed at that time for what he had negotiated on behalf of the country. That all took place within the framework of the treaties, as they existed at that time. What the Bill is about is changes to the treaties and Article 48(6) decisions. It is not about particular legislative measures under existing treaty powers.

Q195 Kelvin Hopkins: I think there is a fine line, at points, between what is constitutional and what is policy. I use that as an example. A constitutional point might be given away by a rogue Prime Minister who was a secret federalist trying to defy Parliament. Perhaps he would even sacrifice his own parliamentary career and say, "I did the right thing by Europe."

Mr Lidington: The reason why we’ve gone into such detail in trying to anchor this Bill to particular articles of the treaties is precisely to guard as best we can against the sort of risk that Mr Hopkins describes.

Q196 Jacob Rees-Mogg: In terms of the whole Bill and this theory of Lord Justice Laws in Thoburn about constitutional Acts, if the Bill becomes an Act, would it be a constitutional Act in your opinion?

Mr Lidington: I’m afraid I am going to be completely straight and duck that question. It is an important question, but one on which any Minister would seek legal advice from the Law Officers as well as from his own Department. The whole Laws description of a category of Acts that have a particular constitutional status is one that, quite properly, is a matter for the Lord Chancellor rather than me.

Q197 Chair: Minister, in conclusion, do you believe that this Bill as a whole-given that it includes clause 18, on which we are issuing our report this evening, and in relation to the whole referendum question-really is a de minimis operation? We are witnessing increasing integration of European governance on the Irish bail-out and the question of investigation orders. There is a whole stream-a tsunami, if you like-of provisions that are going ahead, yet we’re given something in this Bill that doesn’t deal with the 1972 Act in its application to past arrangements, where we might need repatriation in the national interest, but actually is merely looking to the future. Would I be right in saying that what you’re really doing is just drawing a line under past legislation, saying, "We’re not going there," and simply allowing the floundering European Union, with its economic problems with the euro and so on, just to continue without actually any serious attempt to re-address the question of the relationship between ourselves and the European Union in terms of the Lisbon Treaty and previous legislation?

Mr Lidington: I think it’s a lot more than a de minimis measure. I think that the introduction of additional powers for Parliament to insist on giving its assent before certain decisions are taken, and the new powers for the people to have the final say over any future proposal to transfer competence, are very significant changes to our law. What is true is that the Bill does not set out to revisit previous treaties or the existing legal order as regards the directly effective nature and primacy of European Union law in this country.

What the Bill is doing is delivering two of the Government’s commitments under the coalition programme. It brings in legislation to require a referendum before transfers of competence and to require primary legislation before passerelle clauses are used. Secondly, it delivers on what was in the coalition programme simply as an agreement to consider the case for a sovereignty Bill-that Bill is being introduced by the means of clause 18. There was a third limb to the coalition programme’s commitments on Europe, which was to examine the balance of competencies between this country and the European Union and, in particular, to examine ways in which the operation of the Working Time Directive could be made less onerous. That work is going on.

Q198 Chair: I have one last question. Could you possibly tell us-in fact we would be very glad to know-how many days the Bill will receive in Committee on the Floor of the House?

Mr Lidington: My understanding is that there will be five days allocated in Committee. I understand that that is the proposal that has been agreed through the usual channels and that will be on the Order Paper tomorrow.

Chair: Minister, thank you very much indeed.