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Lord Neill of Bladen: My Lords, I am a member of the Select Committee and of Sub-Committee E, which looks at quite a lot of the incoming legally focused drafts coming from the Commission, sometimes draft directives or framework decisions and at other times the early stages of Green Papers, so I have seen a little of this. I, too, pay tribute to our chairman, the noble Lord, Lord Grenfell, for his work and for the clarity with which he presented the issues today.

I start from the premise of forgetting about the constitutional treaty. I assume that for the time being it has been placed on ice and a process of reflection is taking place, but I agree entirely with all those who say that that is no reason at all for us to sit back, be complacent and not think about subsidiarity as an important topic.

I wish to flag up in particular the evidence that we heard from two professors, Professor Stephen Weatherill and Professor Derrick Wyatt. If noble Lords take the time to read their written evidence and oral testimony, they will be impressed not only by the scholarship and the care with which their views are formulated but by the very depressing picture that they give of the standing of subsidiarity as an effective doctrine in European affairs. I think that nearly everybody agrees that subsidiarity was brought in as a brake on the legislative centralism of Brussels and particularly a brake on the Commission. They point out that it has been largely ineffective.

Professor Weatherill gives three reasons. First, he says, the definition of subsidiarity is badly drafted—I will come back to that in a moment. Secondly, he says, the European institutions—he is thinking particularly of the Commission but of others as well—have not had subsidiarity at the forefront of their mind since Amsterdam or even the earlier stages when it first appeared, as the noble Lord, Lord Grenfell, said. They
 
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do not think along those lines. Thirdly, on the basis of knowledge of the jurisprudence of the European Court of Justice, Weatherill, in particular, says that the Court has been no supporter of the principle of subsidiarity. That is traced back to an observation by Lord Mackenzie-Stuart, the first British judge on the European Court of Justice. He took the view, echoed by the noble Lord, Lord Wallace of Saltaire, that subsidiarity was a matter of politics not law. That is a very odd statement, given the new protocol, which specially devises a procedure whereby parliaments, through whatever becomes the right process, can challenge subsidiarity in the ECJ. I venture to suggest that it has distinct legal aspects. I shall give an example later where it is pretty obvious that a subsidiarity issue arises and, to my mind, that the principle has been transgressed, just as in some cases that Sub-Committee E has looked at.

The definition point is interesting; I have never seen it argued so well. I remind noble Lords of the definition, which I quote from the 14th report at page 61. It comes out of the proposed constitutional treaty but is almost exactly the same as the Amsterdam text. It reads as follows:

The Amsterdam protocol assumes that there are two separate limbs to that definition. What Professor Wyatt demonstrates in his written evidence is that those two aspects merge into one. Of the first bit—

he says that it will always be part of the Commission's objective to achieve pan-European legislation. The first bit is not satisfied. You cannot say of a pan-European proposal that it could be sufficiently achieved by the member states. In other words—study it for yourselves—the argument goes that there is only one test: is this a job that the centre can do perfectly well?

One of the examples that we have examined in the sub-committee is a current one on European small claims procedure. Most member states have, if they want them, their own procedures for handling very small claims. Here we have a limit of £5,000. A small claim below that limit can be dealt with in a simplified and, it is hoped, much cheaper and quicker manner than the big cases that go through the High Court. Other countries have their own procedures. In Sub-Committee E, we are looking at a proposal for a European small claims procedure that would deal not only with cross-border claims—such as when you go to a hotel in France and you are let down or have a crash in the middle of Paris and some claim arises cross-border—but with small claims in the UK. The sub-committee is likely to reach the conclusion that, internally, it is wholly unnecessary to have a European Union model. We have our own rules, they work perfectly well, and we can amend and adopt them as we
 
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want. What is potentially useful as a tool—subject to getting the cost, translations and certain difficulties like that right—is a weapon for attacking the hotel keeper in Bonn or wherever when you have a cross-border claim. It is an example in which the draftsmen who produced it at the centre have, unthinkingly, made it applicable to internal cases as well as cross-border. It reflects an attitude of mind that should not be there; they ought to be more sensitive to the issue.

The other example is the Green Paper on criminal penalties for all manner of crimes. It is an extraordinarily elaborate paper—it runs to 100 pages—examining every aspect of criminal law. It is certainly intended, if followed up and adopted, to enter right into the system of criminal penalties for domestic crime in all member states. We discussed that earlier in the summer, and I think that the feeling on the sub-committee then was that we would look to the Government to take a pretty strong line on it. We have our own criminal law and can take our own view of what is right for rape or armed robbery and so on. Other countries can take different views about those issues; that is for them. It again reflects an attitude of mind that ought not to be there.

I entirely agree with the recommendation that the way forward is to follow the experiment outlined by the noble Lord, Lord Grenfell. We must take a much tougher approach to the notion of subsidiarity and treat it as it was first intended to be: a break on excessive zeal from the centre.

6.04 pm

Lord Kerr of Kinlochard: My Lords, I am a member of Sub-Committee A but have nothing whatever to do with the excellent report presented by the noble Lord, Lord Grenfell, and I pay tribute to it. I am inadequate as a substitute for the noble Lord, Lord Pearson of Rannoch, and fear that I shall fail in that task.

The subsidiarity mechanism, like transparency in the Council, is one of the many good things included in the constitutional treaty, but one of the few that can be implemented in the absence of the constitutional treaty. Just as there is nothing in the present treaties that requires the Council to legislate behind closed doors, immune from public scrutiny, so there is nothing in the present treaty that bans improved scrutiny by national parliaments. It would take only a simple majority decision in the Council, amending its rules of procedure, to open the doors to permit the press and television to witness the legislative process. It should do that. It would take even less to bring about the practical benefits of better scrutiny of subsidiarity by national parliaments. It is intriguing that everyone who has spoken in the debate so far believes that that is a desirable aim—that is what we should be trying to do. I do not know why we do not just do it.

Nothing in the present treaty bans the Commission from sending its draft proposals directly to national parliaments, and they are now available at the flick of a switch the moment they are produced. Nothing in the treaty bans national parliaments from commencing their scrutiny and discussion before governments do so
 
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in the Council. Nothing is more damaging to public understanding of and support for the European Union than the obscurity of the EU legislative process and its separation from national political debate.

The cherry picking argument has been referred to and dismissed—rightly—by the noble Lords, Lord Grenfell and Lord Bowness. I distinguish two kinds of anti-cherry pickers. There are the endearingly idealist and the ruthless realpolitik schools. The endearingly idealist tend to be people who favour the constitutional treaty and fear that there will be no chance of ever getting such a treaty ratified if the best bits are implemented in advance. That is endearing but wrong. Given the weight of hostility to and ignorance of the Union revealed in the referendum campaigns, it is rather urgent to try to ensure a more informed debate in capitals and a more open debate in Council more closely followed in capitals. If, or rather when, the subsidiary mechanism proves popular, making it permanent and giving it legal force by enshrining it in the treaty will also be popular. So much for the endearing idealists—I do not think that there are any speaking today.

I do not know whether we will hear a ruthless realpolitik speaker in a moment. Looking at the noble Lord, Lord Howell, who is legendarily ruthless in his realpolitik, I would say that the argument that as the treaty was not ratified it would be wrong to bring into effect any part of it—even parts like the subsidiarity mechanism that were uncontroversial and probably rather popular—is a difficult argument to sustain. The motives of some who advance that argument can only be that they do not want the EU to work better. They do not want it to be more in touch with public opinion. They do not want it to be better understood. They want to go on denouncing it as obscure, inefficient and incomprehensible, so they are not interested in transparency or subsidiarity. They want it to stay the same. That is what I would call a ruthless realpolitik argument, and I hope that the noble Lord, Lord Howell, will not advance any such argument against what seems to be highly desirable cherry picking.

The most intriguing sentence in the 15th report was a sentence in the Government's reply to the 14th report. The Government say that they are,

In principle, it ought to be possible to do that, given that all 25 member states represented in the Council, the Commission and the European Parliament supported the measure when it was placed in the constitutional treaty. I hope that the noble Baroness, in reply to the debate, may be able to tell us how that consideration in Government has advanced and what steps have been taken during the UK presidency to bring it to fruition.

Of course, we do not need a decision by the European Council—we could just do it. I favour the COSAC mechanisms, as described the noble Lord, Lord Grenfell, and spelt out in the report, but I also
 
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very much agree with the practical points made by the noble Lord, Lord Harrison. It seems to me that to put ourselves in a position to make use of the subsidiarity mechanism informally and to make use of this COSAC co-ordination machinery, we need to look to our own procedures and see if we can improve them.

It would be good if the scrutiny process started the moment that the proposal emerged from the Commission. For example, the excellent Commission communication on a strategy for the simplification of the regulatory environment came out on 25 October. As I understand it, our scrutiny in the House began when we received the Government's Explanatory Memorandum on 21 November. That scrutiny lasted one week, because we thought that the report was very good—it was not my committee—and we were happy to wave it through. But suppose it had been a bad communication; suppose it had been a document that did not fully reflect subsidiarity. We have to put ourselves in a position to act quickly, and I hope that, when he responds to the debate, the noble Lord, Lord Grenfell, may be able to reassure us that he continues to work with the Government on ways to ensure timely receipt and effective scrutiny of EU legislation.

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