Select Committee on European Union Twenty-Fourth Report

CHAPTER 4: The Legal Base

79.  The legal base proposed for the Institute is Articles 13(2) and 141(3) of the EC Treaty. Article 13(1) allows the Council of Ministers to take appropriate action to combat, among other things, sex discrimination. For measures adopted under Article 13(1), unanimity is required. However, Article 13(2) provides a derogation from the requirement for unanimity: where the Council adopts "incentive measures" to support action by Member States which contributes to the objectives referred to in Article 13(1), qualified majority voting applies. Article 141(3) provides that the Council shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in employment matters. These measures shall be adopted by qualified majority voting.

80.  The Government's position is that the legal base proposed by the Commission is inappropriate. They consider that Article 13(1) is to be preferred to the combination of Article 13(2) and 141(3). However, they acknowledge that a "substantial pay element" in the proposal brought Article 141(3) into play. Because Article 13(1) requires unanimity voting and Article 141(3) requires qualified majority voting, these two articles cannot together form a legal base for the proposal. This is because the[39] legal bases are considered to be "incompatible", (i.e.: each requires a different voting procedure).

81.  In case C-178/03 Commission v Parliament and Council,[40] the European Court of Justice confirmed that the choice of legal base must be based on objective factors which are amenable to judicial review, including in particular the aim and content of the measures. Where the measure pursues a twofold purpose and one of those is identifiable as the predominant purpose whereas the other is merely incidental, the act must be based on a single legal basis, namely that required by the predominant purpose. However, where the proposal pursues a number of objectives that are indissociably linked, it should be founded on both legal bases. In Case C-178/03, the Court held that there was no incompatibility of legal bases because both prescribed qualified majority voting. Although there were different procedural requirements under each article, Parliament's rights were not undermined because the proposal would be adopted under the co-decision procedure as provided for by one of the two legal bases. The Court gave no guidance as to how Member States should proceed where the proposal has dual purpose, neither of which is incidental, but the legal bases prescribed different voting procedures.

82.  Given that under Article 13(2), qualified majority voting is required, this article may be combined with Article 141(3) without giving rise to the difficulties created by the use of Article 13(1). For Article 13(2) to be appropriate, the creation of the Institute would have to be "an incentive measure" to support action by the Member States to combat sex discrimination. What is meant by "incentive measure" is unclear. The Government, however, took the view that in the present case Article 13(2), rather than Article 13(1), is an acceptable legal base for the Institute.[41] They intended to lodge a Minute Statement setting out their position on the legal base.

83.  The proposed legal base raises a number of concerns. The first, mentioned above, is whether or not the creation of an Institute of this nature can constitute an "incentive measure", as understood by Article 13(2) of the EC Treaty. The second is whether it is technically correct to refer to Article 13(2) without reference also to Article 13(1). A third question relates to the approach of the Member States to the question of legal base and the need for consistency. These concerns are dealt with more fully in the following paragraphs.

84.  In seeking an explanation of how the Proposal could be seen as an "incentive measure", we asked whether any other agency had been created on the basis of Community powers to adopt "incentive measures". In this respect, we referred to the position taken by the Government on the proposal for the creation of a European Monitoring Centre for Drugs and Drug Addiction. In that case, the Government stated that "the establishment of a body does not constitute an incentive measure".[42]

85.  The Government explained that a number of Member States took the view that the role of the Institute would be to support action taken by the Member States in order to contribute to the aim of combating discrimination. The Institute's tasks would include collecting, analysing and disseminating information, developing methods for improving the comparability of data and organising conferences and meetings with stakeholders to exchange information and good practice. These could constitute measures designed to encourage and facilitate and (in a broad sense) provide incentives for Member State action in the field of gender equality.

86.  The Government referred to a previous matter in which an "incentive measure" legal base (in this case, Article 152(4) on public health) was used to adopt Regulation 851/2004 establishing the European Centre for Disease Prevention and Control. In that case, the Government objected to the legal base and produced a joint Minute Statement with Germany[43].

87.  In our view, doubts remain whether the creation of an Institute can properly be based on an article permitting the adoption of "incentive measures" to support action taken by Member States to combat discrimination. However, in the absence of any guidance in the Treaty or from the Court as to how the term ought to be construed, it is difficult to reach any conclusive opinion on this matter.

88.  We recommend that the Government, together with the Member States and the Commission, should develop an understanding of what "incentive measures" means and what kind of proposals should be adopted on the basis of an "incentive measures" legal base. Given the current divide in opinion within the Council, is seems likely that this will not be an easy task.

89.  As explained above, Article 13(1) allows for measures to be adopted to combat sex discrimination. Article 13(2) is phrased as follows: "By way of derogation from paragraph 1, when the Council adopts Community incentive measures … to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in [Article 13(1)], it shall act in accordance with the procedure referred to in Article 251." The procedure in Article 251 is the co-decision procedure requiring qualified majority voting.

90.  On examining Article 13, we were concerned that the reference to Article 13(2), without including reference also to Article 13(1), might be technically incorrect. We suggested to the Government that Article 13(1) was the enabling provision allowing appropriate action to combat sex discrimination. Article 13(2) merely provided that where this appropriate action took the form of incentive measures, the voting should be by qualified majority instead of unanimity.

91.  The Government did not agree with this reading of Article 13. Although they agreed that Article 13(2) was "in some respects parasitic" on Article 13(1), they concluded that there was a clear intention in the EC Treaty that Article 13(2) should be available as a separate and stand-alone legal base. This, they argued, was evidenced by the fact that it was subject to a different decision-making and voting procedure. The Government also referred to Articles 94 and 95(1) where, they claimed, a similar relationship exists. Article 95 was used widely, without reference to Article 94(1), as the legal base for internal market proposals.

92.  Interpretation of the EC Treaty is not straightforward and is ultimately a matter for the European Court of Justice. Although we accept that the Government's position is not without foundation, we remain concerned that it is technically incorrect to rely on Article 13(2) as a legal base without referring to Article 13(1).

93.  This view is supported by the fact that Article 13(2) in its terms is a derogation only from the voting requirements in Article 13(1); in the absence of Article 13(2), incentive measures would have to be adopted by unanimity voting. The Government drew a comparison with Articles 94 and 95(1). However the drafting of Article 95(1), though expressed to be a derogation to Article 94, creates a separate power, as we believe the legislative history (the Single European Act) will confirm. It provides that "The Council shall … adopt measures for the approximation of the provisions laid down by law … in Member States …". There is no similar provision in Article 13(2).

94.  It remains unclear why Member States would not support a legal base of Articles 13 and 141(3) for this proposal. In substance, this legal base is no different from a legal base of Article 13(2) and Article 141(3). The same procedure and voting rule would be prescribed. On a technical level, however, it gets round our concerns as to whether there is any power in Article 13(2) to adopt measures. Although we put this question to the Minister during correspondence,[44] she did not explain why the Member States have chosen not to take this route. In our opinion, this would create a technically sound legal base for the proposal while retaining qualified majority voting in the Council and avoiding the problem of incompatible legal bases.

95.  In recent months, we have scrutinised several proposals which seek to create agencies or bodies at a European level. The proposed legal base is often controversial, and in some cases the approach taken by the Government appears to be inconsistent. One example is the case of the European Monitoring Centre for Drugs and Drug Addiction discussed above. In response to our question on this apparent divergence of views, the Minister replied that she did not consider that there was "any significant difference between the two Departments in the legal approach to identifying the most appropriate legal base". It appears that the Government, while objecting outright to the use of a particular legal base, will nonetheless support the proposal on its merits and deal with its objections by the lodging of an appropriate Minute Statement.

96.  As we have previously noted,[45] it is regrettable that proposals are being adopted on legal bases which seem to the Government to be inappropriate. While we consider that the Government's willingness to compromise is laudable where it considers that there is a compelling need for the proposal to be adopted, we see a danger that this approach may undermine the limits of the Community's competence as set out the EC Treaty.

97.  We also note the pending judgment in Case C-217/04 United Kingdom v Parliament and Council regarding the establishment of the European Network and Information Security Agency. We hope that this judgment will add clarity to the criteria governing the selection of a legal base for the creation of an agency.

98.  The issue of legal base is central to the division of competence between the Community and Member States and we will therefore continue to pay close attention to the appropriateness of the legal base proposed in the course of our scrutiny of draft EU legislation.

99.  We recommend that the Government should, in principle, adopt a consistent line in dealing with legal bases. We welcome the Government's clarification of how they intend to approach legal bases for proposals which create agencies and urge them to ensure that all Departments are aware of the agreed approach.

39   p 31 Back

40   Judgment of 10 January 2006 (See Case no C-178/03 Commission v Parliament and CouncilBack

41   pp 29-30  Back

42   See Department of Health EM 12143/05 COM (2005) 399 final and letter dated 4 November 2005 from Lord Grenfell to Minister of State, Department of Health (See Correspondence with Ministers, March-December 2005 due to be published April 2006) Back

43   HL Paper 140, 25th Report, Session 2003-04, pp 150-152 Back

44   p 32 Back

45   See Chapter 8 of the Committee's Report on Paediatric Medicines (20th Report of Session 2005-2006, HL Paper 101) Back

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