Foreign Affairs CommitteeSupplementary written evidence from the Foreign and Commonwealth Office

Letter from Rt Hon William Hague MP, Secretary of State for Foreign and Commonwealth Affairs

Thank you for your letter of 14 February. You asked five questions about the evidence I gave to your Committee’s inquiry The future of the EU: UK Government Policy. The answers to your questions are below.

1. Would any future Government seeking to renegotiate the terms of their membership of the EU need to give notice to the European Council under Article 50 of the Treaty on European Union?

The Conservative Party starts from the premise that we will negotiate changes to reform the European Union and then seek the consent of the British people on that new settlement. As the Prime Minister said in his speech, “I want the European Union to be a success. And I want a relationship between Britain and the EU that keeps us in it.”

Article 50 of the Treaty on European Union provides a mechanism for states to withdraw from the EU. It is not intended to provide a mechanism for Member States to force a renegotiation of the terms of their existing membership of the EU whilst remaining within the EU. The withdrawal process that Article 50 sets out does include a period of negotiation. However, Article 50(2) makes clear that this negotiation follows a decision by a Member States to leave and states that the purpose of this negotiation is to set out the arrangements for a Member State’s withdrawal, taking account of the framework for its future relationship with the European Union. In addition, Article 50(4) deprives the withdrawing State not only of a vote on the terms of the withdrawal agreement but also of the right to take part in discussions about that agreement in either the European Council or the Council. The Prime Minister, by contrast, envisages a British Government playing an active and positive role in securing reforms of the EU as a whole, including through changes to the Treaties.

Amendments to the Treaties may be adopted in accordance with either the ordinary or simplified revision procedure both of which are provided for under Article 48 TEU. Article 48(2) sets out that proposals can “serve either to increase or to reduce the competences conferred on the Union in the Treaties”. Therefore, I do not consider that any future Government seeking to renegotiate the terms of their existing membership of the EU would need to give notice under Article 50.

2. Is it the Prime Minister’s policy to negotiate what would be the terms of the UK’s trade with the EU as a non-Member State before any in/out referendum takes place?

No. As the Prime Minister said in his speech, “Britain’s national interest is best served in a flexible, adaptable and open European Union and [the] European Union is best with Britain in it”. Achieving such a settlement in the European Union is the goal of his policy and negotiations to that end. In the event of the majority of British voters deciding that the United Kingdom should leave the EU in a referendum the terms of the UK’s trade with the EU would be resolved under the process set out in Article 50 of the Treaty of the European Union.

3. The number of votes in the Council of Ministers on which the UK has faced a Eurozone bloc

In the period 2009–12, the Council of Ministers (in all its configurations) voted 373 times. The number of times each Member State’s vote matched that of the UK is shown in the Annex and ranged from 317 to 335 occasions, with little difference between the record of ins and outs. We do not have data that shows on how many occasions the Eurozone as a whole lined up against the UK. But our concern remains for the future when a greater degree of political and economic integration in the Eurozone could lead them to vote more often as a block.

4. Safeguards requested at the December 2011 European Council:
(a) Identify the Treaty or other legislative provisions that these proposals sought to amend or—otherwise, and where relevant—specify by what legal instrument the Prime Minister sought to realise these proposals

At the December 2011 European Council we sought agreement to the principle that safeguards were needed to protect the single market as greater integration took place.

We were as flexible as possible in our approach and we did not specify the precise amendments for achieving the protections that we sought. There are a number of ways these could have been incorporated into the existing Union framework, such as a protocol to the Treaty. Establishing the precise method for doing this would have been subject to negotiations that would have taken place if this principle had been accepted.

(b) Tell the Committee whether any of these proposals have by now been realised, for example through the agreement on the European Banking Authority reached at the end of 2012

The need for protections to maintain the unity and integrity of the single market was subsequently accepted at the June 2012 European Council. It remains important that any proposals for further integration are fully compatible with the single market, and we sought protections on this basis.

For example, it was agreed that the Commission would bring forward proposals to transfer prudential supervision of credit institutions in the euro area (along with non euro area members that chose to participate) to a new Single Supervisory Mechanism led by the European Central Bank. These proposals were brought forward under Article 127(6) of the Treaty on the Functioning of the European Union, which requires unanimity.

As part of the Council’s approach to the Commission proposals, we agreed an explicit duty for the ECB to have regard to the unity and integrity of the internal market in performing its supervisory tasks. Furthermore, none of its actions, proposals or policies should directly or indirectly discriminate against any Member States or group of Member States as a venue for the provision of banking or financial services in any currency.

The Council’s agreement on the European Banking Authority in December 2012 secured additional protections to balance the influence of those in banking union and those remaining outside. EBA powers and decisions will apply equally to the ECB and other supervisors, and voting on key issues will be on the basis of a “double majority” of participating and non-participating Member States.

(c) Tell the Committee if the Government is still pursuing, or would pursue, these proposals, and if so under what circumstances

Our overall objective in negotiations on financial services legislation is to preserve and strengthen a competitive and open single market. We will continue to strive for targeted protections based on the specific proposals that are under negotiation. For example, as part of agreeing a Council approach on banking union, we sought and obtained protections that addressed in the EBA the changing nature of the ECB and how it would interact with other EU institutions and agencies.

5. Does the Government consider there are some elements of the TSCG that could be incorporated into the legal framework of the EU only through treaty change?

The Contracting parties to the TSCG have made clear it is their intention to incorporate the Treaty into the legal framework of the EU within five years of it entering into force. Some aspects of the TSCG have already been proposed in Secondary Legislation under the EU Treaties, namely the “two pack” of economic governance proposals that apply only to the euro area. The Government believes that if other elements were to be incorporated in the Treaties, they would need to be brought in through EU Treaty change. Specifically: Article 3, including measures constituting the Fiscal Compact; Article 7, which amounts to an agreement of the participating Member States to accept Commission proposals for decisions under the excessive deficit procedure unless there is a QMV majority against the proposal (so-called “reverse QMV”); and Article 8, which confers jurisdiction on the ECJ on compliance with Article 3 (2).

24 February 2013

Annex

A	B	C	D	E	F
UK matching with:	Total votes	Matching votes	%	Non matching	%
Austria	373	319	86	54	14
Belgium	373	335	90	38	10
Bulgaria	373	328	88	45	12
Cyprus	373	335	90	38	10
Czech Republic	373	331	89	42	11
Denmark	362	320	88	42	12
Estonia	373	329	88	44	12
Finland	373	331	89	42	11
France	373	335	90	38	10
Germany	373	317	85	56	15
Greece	373	335	90	38	10
Hungary	373	335	90	38	10
Ireland	370	327	88	43	12
Italy	373	327	88	46	12
Latvia	373	333	89	40	11
Lithuania	373	335	90	38	10
Luxembourg	373	330	88	43	12
Malta	373	335	90	38	10
Netherlands	373	332	89	41	11
Poland	373	325	87	48	13
Portugal	373	327	88	46	12
Romania	373	329	88	44	12
Slovakia	373	332	89	41	11
Slovenia	373	335	90	38	10
Spain	373	330	88	43	12
Sweden	373	335	90	38	10

Column B shows the total number of times the Council voted from 2009 to December 2012.

The figures in columns C & D show the number of times the UK cast a vote in Council that matched with each of the countries listed in column A.

The figures shown in columns E & F show the number of times the UK cast a vote in Council that did not match with each of the countries listed in column A.

Source: VoteWatch Europe: www.votewatch.eu