European Union Bill

William Cash Excerpts

Monday 11th July 2011 Commons Chamber

[Mr Lidington]

I welcome what I take to be the hon. Gentleman’s support for a reversal of some of the Lords amendments and a restoration of the Bill to the state that it was in when it left this House. However, I am in his hands and those of other Members in terms of the time that it will take to deal with the amendments. I feel that we should do justice to the consideration that the House of Lords devoted to the Bill by dealing in turn with the amendments for which it voted.

[Mr William Cash (Stone) (Con)]

If I may quote the hallowed words of, I believe, John Bright, we should perhaps

“Be just, and fear not”.

Will the Minister be kind enough to confirm that he will do everything possible to ensure that the amendments relating to clause 18, to which the European Scrutiny Committee gave such careful consideration and on which it produced such a comprehensive report, will be reached so that we can at least discuss those questions emphatically? They are extremely important, and will allow us to discuss the Supreme Court and its potential interpretation of laws that might inhibit the supremacy of this House.

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[Mr Cash]

Having listened with enthusiasm and interest to my right hon. Friend’s earlier remarks about timing, on the basis that I think it is generally conceded that this particular batch of amendments is entirely uncontroversial and that the whole question of the amendments’ content could be dealt with in about 30 seconds flat, will he be kind enough to address them as swiftly as possible, to ensure that the House can get its views across on all matters?

[Mr Lidington]

I am encouraged by my hon. Friend’s remarks to be increasingly confident that we can reach the group of amendments on which he is anxious to speak in good time. I remind him, however, that four hours have been set aside for our deliberations on these three groups of amendments, and I think it is right that we should do justice to the consideration that the House of Lords gave to the Bill by addressing each of the amendments it approved.

On Lords amendment 1, all I want to say further is that the phrase “or otherwise supporting” is included to remove any doubt—just as the previous Government used that phrase to remove any doubt when drafting the European Union (Amendment) Act 2008—and to ensure that a proposal could not be adopted in such a way without the appropriate authority required under the provisions of the Bill.

Lords amendments 2 and 4 make it clear beyond doubt that, under the terms of the Bill, a referendum would not be required in the United Kingdom if a treaty change did not apply to the UK but only to Gibraltar, and this would not transfer competence or power from the United Kingdom. I say straight away that it is hard to work out a scenario in which a treaty amendment that constituted a transfer of competence or power would apply only to Gibraltar and not to the UK. It is possible in theory, and this point was raised in the other place, and we have sought to assuage that concern by proposing these two technical amendments.

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[Mr Lidington]

I ask the House not to support the Lords in these amendments. I am afraid that I am going to have to test the patience of my hon. Friend the Member for Stone (Mr Cash) a little on this group, because these Lords amendments were passed against the Government’s wishes and, in our view, significantly weaken the Bill’s safeguards.

The amendments would restrict the scope or operation of the referendum lock that was approved by this House. They are contrary to our clear intention to ensure that any future proposal to amend the European Union treaties to transfer further competence or power from this country to the European Union should be subject to the consent of the British people. The purpose of the Bill is to reconnect with the people whom we serve. It aims to re-engage them with key decisions on the direction of the European Union, on which they have, in the past, been denied their say. The amendments would not deliver on those aims but, on the contrary, make it much more difficult to achieve them.

[Mr Cash]

Will my right hon. Friend join me in deploring what recent events have demonstrated? Does he, thus, agree that it would have been extremely desirable to ensure that a referendum should apply to any treaty, either current or future, which attempted to change the fundamental relationship of the United Kingdom to the European Union, including in respect of the creation of a two-tier Europe—between the eurozone and the EU—in economic governance? Does he agree that that is a matter on which a referendum is every bit as important? This is not merely a question of a transfer of competence and powers but one that goes to the very heart of the constitutional relationship between the UK and the EU.

[Mr Lidington]

If, as I hope, this Bill obtains Royal Assent and goes on to the statute book, this Government and future Governments will, from the moment its powers are commenced, be bound by the provisions of this legislation with regard to the way in which they handle any future proposal to amend the European Union treaties, negotiate and agree a completely new treaty or invoke one of the passerelle clauses in the treaty of Lisbon. As my hon. Friend knows, in certain cases a Government would have to hold a referendum before a particular treaty could be ratified by this country. For any treaty change, even one that according to the provisions of this Bill would not automatically require a referendum, an Act of Parliament—primary legislation—would be needed, and it would of course be open to Parliament at that time to decide to go further even than the provisions that we are putting forward in this legislation.

[Mr Cash]

May I say that I am delighted by that delightfully disingenuous response? As my right hon. Friend knows perfectly well, I am referring to the treaty that has already been made, and I immediately realised what he was up to when he talked about “any future” treaty. I accept that an Act of Parliament may be needed, but does he not, by the same token as the principles that he has set out in great detail, also agree that we should have a referendum on the creation of such a two-tier Europe, which creates constitutional change in the relationship between the EU and ourselves?

[Mr Lidington]

The principle on which the Government have consistently sought to act in preparing and introducing this legislation has been that a change to the treaties that transferred new competencies or powers from the United Kingdom to the institutions of the European Union would require the agreement of the British people in a referendum. That is the principle, so for us the test for the sort of hypothetical treaty change that my hon. Friend is describing would be whether it transferred competencies or powers from this country to the EU. I do not want to stray too far from the subject of the Lords amendments we are discussing, but the hypothesis that he describes could just as well be a question of a quite separate intergovernmental treaty between members of the eurozone, for example, as an amendment to the treaty of Lisbon, which would require the assent of the United Kingdom.

[Mr Cash]

Let me have one last shot. Does the Minister concede that there is a world of difference between the members of the coalition Government having entered into an agreement between themselves for purposes that suit them and the constitutional convention that a referendum is required when there is a fundamental constitutional change in the relationship between us and the European Union? It is as simple as that.

[Mr Lidington]

We sought in this Bill to define a constitutional change of the sort that my hon. Friend describes in terms of a transfer of competencies or powers from the United Kingdom to the European Union. That seems to us to be a significant constitutional change and the definition is one that we have incorporated into the Bill. Now, if he will forgive me, never mind how delightful I find his interventions, I think I ought to make some progress in addressing the Lords amendments directly.

Let me deal first with Lords amendments 3 and 5, which one might term the threshold amendments. They would provide for a turnout threshold of 40% for any referendum under the Bill. If that threshold were not met, regardless of the result the final decision over whether to ratify a treaty change would pass from the people back to Parliament. That runs contrary to the spirit and intention of the Bill and would leave the British people in real doubt about the effect of their vote.

I know that the intention of colleagues in the House of Lords was to safeguard the sovereignty of Parliament, but I do not agree with them that the Bill would challenge the status of Parliament. In fact, Parliament will have a much stronger role than ever before.

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[Mr Lidington]

I am not going to speculate on a hypothetical Scottish referendum. We have said clearly not just on this Bill but on the Bill that authorised the referendum on the alternative vote system that we felt the decision should be taken by those people who voted, and the outcome should not depend on any artificial threshold that we chose to impose.

[Mr Cash]

My right hon. Friend may recall that it was my amendment that led to the question of the threshold in the AV Bill. Does he accept that something profoundly different went on in the 1970s regarding Scottish devolution, because it was a different formula? On this particular issue, however, there is no doubt that the same kind of spontaneous combustion would occur in relation to any referendum on the European issue, fortunately, and the same kinds of figures would prevail as were registered in parts of Staffordshire—80% against the Government’s proposals to enter into a treaty that was unacceptable to the United Kingdom. There is nothing that anyone can do about it. Tests, thresholds and all the rest of it would be swept away.

[Mr Lidington]

I am confident that if and when a British Government made a proposal to support a treaty change to give extra powers to the European Union and put that to the people, the turnout would be significantly above 40%. I have confidence in the voters.

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[Mr Lidington]

One thing that I have learned in my 19 years in this place is that each House is very jealous of its own procedures and privileges, including what the rules should be on the declaration of financial interest, so I think we should leave that to the House of Lords authorities to decide.

I am surprised that the threshold amendment was supported in the House of Lords by the official Opposition Front-Bench team. I hope that when the hon. Member for Caerphilly (Mr David) catches the Deputy Speaker’s eye, he will provide some explanation of that course of action and indicate whether he plans to lead his party through the Lobby in defence of a 40% threshold, although he has probably given up hope of leading the hon. Member for Luton North.

That support is particularly astonishing because the hon. Member for Caerphilly is seriously at odds with his, and my, immediate and distinguished predecessor. It was the hon. Member for Rhondda (Chris Bryant), who was Labour’s spokesman on Europe, who said repeatedly in debates on 2 November last year that he disagreed fundamentally with the very idea of thresholds, saying:

“I do not agree . . . about thresholds in referendums because, broadly, they are not a good idea.”—[Official Report, 2 November 2010; Vol. 517, c. 846.]

He repeated that a few columns later. As a Conservative politician, I feel slightly nervous trespassing on the frontier between Caerphilly and the Rhondda, but the hon. Member for Caerphilly owes the House an explanation for this departure in Labour party policy that he has presumably devised and implemented.

Amendments 6 to 13 are very significant indeed in their impact. They would remove from the referendum lock several passerelle decisions that would transfer power and competence from Britain to the European Union. The other place accepted that decisions to adopt the euro, give up UK border controls, or create a single, integrated military force should require a referendum. That was a welcome step, but it is not enough. The coalition agreement set out clearly that

“no further powers should be transferred to Brussels without a referendum.”

All the decisions included in clause 6 as it left the House of Commons would constitute such a transfer.

Some Members of the Lords felt the original clause 6 did not provide Ministers with what they termed sufficient “pragmatic flexibility”. I would say in response that it is a direct consequence of the abuse of so-called “pragmatic flexibility” in the past that there is such lack of trust in the European Union today, and in Governments as a species, for decisions taken on European Union matters. It is that lack of trust which the Bill seeks to address. Speaking as someone who disagrees with some of my hon. Friends on the Back Benches, I want to see the United Kingdom playing a vigorous, active, constructive role on behalf of our people within the European Union. Our ability to do that and to enjoy the confidence of the British people in so doing will be enhanced if we can point to the safeguards that are provided for in the Bill included in clause 6.

[Mr Cash]

On that important point, is my right hon. Friend aware of the remarks of the Prime Minister as reported in The Spectator only a few days ago on the question of the renegotiation of the existing treaties, which I called on the Prime Minister to do when he came back from the last European Council summit? Does the Minister for Europe know that I tabled a written question to the Prime Minister asking him what objectives he has set to maximise what he wants from the UK’s engagement with Europe, and whether such objectives will include any opportunity to renegotiate the UK’s relationship with the EU? As the Minister must know, the answer that I received today says that the Prime Minister is not going to answer that question, I am afraid, and that he has transferred it to the Secretary of State for Foreign and Commonwealth Affairs. Does the Minister have an answer for me, therefore, to the question that seems to have been transferred to him?

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[Mr Lidington]

The hon. Gentleman is nodding, so he must explain why members of his party—not just Labour Back Benchers but official spokesmen in the House of Lords—trooped through the Lobby to say that they wanted to scrap the British veto and allow the fate, for example, of the UK’s rebate to be subject not to consensus but to qualified majority voting. That would be the impact of the measure. The hon. Gentleman is saying that he would remove from the referendum lock a decision to switch from unanimity to QMV on that matter.

[Mr Cash]

Does my right hon. Friend agree that perhaps it has something to do with the report on the question of economic governance, in which it appeared as if the underlying theme expressed by certain Opposition Members in the House of Lords was edging us towards the prospect of fiscal union? There really is a substantial difference in policy, principle and philosophy, if I can use that expression, in their attitude to the EU and that of the House of Commons.

[Mr Lidington]

My hon. Friend makes a good point. The Opposition need to own up to where they are coming from. If the hon. Member for Caerphilly wants to intervene and say that his Front-Bench colleagues in the House of Lords had gone rogue and he was unable to control them, that he was sorry and he did not really mean it, a plea for forgiveness might be entertained. But if he really supports the proposal to remove decisions on the MFF from the referendum lock, he should say so clearly to the House, because the Labour party did not say that when the Bill was debated in the House of Commons.

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[Mr David]

I find it amusing and surprising that the Minister is dismissive of senior Members of the House of Lords such as Lord Brittan, who not only had reservations and disagreed with parts of the Bill, but said that there was nothing in the Bill at all with which he could agree.

[Mr Cash]

He has got a pension too.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. It has been interesting to hear hon. Members discuss their opinions of the careers of distinguished Members of the House of Lords, but I should like the Minister to return to the business before the House, which is Lords amendment 3, and his views on that, rather than on anyone in the House of Lords.

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[Mr Lidington]

My hon. Friend is quite right. In a previous Parliament, when we voted for constitutional legislation as far-reaching as the devolution of power to the Scottish Parliament and the Assemblies in Wales and Northern Ireland, we did not vote for the inclusion of sunset clauses. Parliament took the view that if that legislation, in due course, proved not to be workable, or if there were a profound change in the public mood or a new Government were elected with a mandate from the people to effect changes and reverse that devolution, that was a matter for the future Parliament at that time. The idea that we should impose a sunset clause in this case simply because it is something new seems to be completely inconsistent with the way in which Parliament and successive Governments have approached previous constitutional reforms.

[Mr Cash]

I am interested in the line that my right hon. Friend is taking. Without pre-empting any other discussion, does he agree that this is also about the whole question of our membership of the European Union being only on loan from this House because under the Factortame decision Lord Bridge made it clear that it was a voluntary act and no more? Does he therefore think that inserting a reference to the European Communities Act 1972, as proposed in the amendment tabled by the former Lord Chancellor, Lord Mackay of Clashfern, would be making a profound mistake in thinking that this all hinges on the Act when in fact it depends on Parliament itself?

[Mr Lidington]

My hon. Friend is inviting me to comment on the subject matter of the third group of amendments. I hope that he will forgive me if I delay commenting in that fashion until we reach those amendments.

This Bill places Parliament at the heart of every decision to be considered. Each decision will need parliamentary approval, whether by Act or by resolution. The sunset clause would take that power away from Parliament, and until such time as part 1 was revived, none of the controls in part 1—not just the referendum lock but none of them—would apply. Some colleagues in the other place claim that the Government are binding future Governments and not themselves. However, we have already said that we will use the Bill to ratify the current treaty change on the eurozone stability mechanism, and we will also use it to consider the treaty change required for Croatia’s accession. Once the legislation is enacted, this Government, too, will be bound by it.

There is another reason why a sunset clause is unnecessary. The previous Government set up a system of post-legislative scrutiny under which the Government of the day are required to publish a memorandum to Parliament on the operation of each Act of Parliament up to five years after the commencement of that Act. This is examined by relevant parliamentary Committees, which can decide whether to conduct a detailed examination of that legislation. I am happy to put on record that we think that this is a good idea and that a future Government must publish a full report on how this Bill has been used within five years of its becoming law. That will result in the clarity and the reflection that colleagues in the other place seek, but without arbitrarily depriving the British people of their say.

The case for this Bill is simple: it is to give the British people the chance to have their rightful say over future changes to the EU treaties, whether through formal revision or use of the passerelles that transfer competence or power from this country to the EU. The Bill does not substitute the British people for Parliament, for Parliament will continue to have a central and strengthened role in approving such key decisions, but it provides a vital opportunity to address the disconnection that has developed over the years between the British people and the decisions taken in their name by Parliament and Government. This group of Lords amendments would not help us to achieve these goals—indeed, they would seriously jeopardise our chances of doing so—and that is why I hope that this House will disagree with them.

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[Mr David]

That is an important qualification, which I will come on to address specifically. It is important at this stage to make the general case that this is a central part of our unwritten constitution.

[Mr Cash]

Does the hon. Gentleman accept that the question of fettering a future Parliament is secondary these days, unfortunately, to the fact that the Supreme Court could, as the European Scrutiny Committee examined in its evidence and report on this Bill, assert that it has ultimate authority in certain circumstances? That is the mischief that we must ensure does not happen under any circumstances. We will come on to debate clause 18 and the Government’s proposals, which open that door in an alarming fashion.

[Mr David]

Like the Minister, I do not want to stray into that debate. One thing that has been clear from this whole debate, including on Second and Third Reading, is the real threat to this institution comes from judicial activism. That threat does not come so much from the European Union as from our own judiciary. We must be mindful of that.

Another expert witness who gave evidence to the hon. Gentleman’s Committee was Vernon Bogdanor, a research professor at King’s college London and a former tutor of the Prime Minister. He said that

“the purpose of the bill must be to prevent a future government from supporting such an amendment or transfer without a referendum. The bill seeks, in other words, to bind a future government. That seems to me inconsistent with the declaratory proposition that Parliament is sovereign.”

That is an extremely powerful statement. We must consider the full impact of this legislation.

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[Mr David]

No, it would not pass to the Government, because we are talking about Parliament itself deciding. In our electoral system, it is the Executive who are accountable to Parliament. We are talking about parliamentary sovereignty.

[Mr Cash]

Will the hon. Gentleman please reflect on what he just said? Is he trying to maintain the fiction that it is Parliament that makes decisions, when most decisions are in fact taken at the direction of the Prime Minister and the Government through the Whips?

[Mr David]

I very much hope that in this Parliament that will not be the case. I have taken heart from the rebellious comments and actions of the hon. Gentleman. I very much hope that Parliament will assert itself through the course of this Parliament and that his concerns will prove to be mistaken.

I hope that most Members of this House would uphold the time-honoured doctrine, despite the qualifications that have been expressed, of one Parliament being unable to bind its successor. I hope that Members do not question that. We should never seek to dictate in one Parliament what should happen in the next. I concede that, strictly speaking, the European Union Bill does not bind future Parliaments because, as has been said, those future Parliaments could modify the legislation. Nevertheless, at the very least, the Bill questions that principle and strongly goes against its spirit. I say that because the heart of the Bill will effectively come into operation during the next Parliament.

In the other place, Lord Howell said from the Government Front Bench that the Bill will be “operative” in this Parliament. He cited the Government’s commitment to bring forward an Act of Parliament on the European stability mechanism, the so-called bail-out mechanism, and its inclusion in the treaty. The Minister has just said that an Act of Parliament will be brought forward if Croatia accedes to the European Union. The Government have said consistently that they will not agree to any transfer of sovereignty to Brussels during this Parliament. That is an important qualification. There will therefore be no need to hold a referendum. Of course, we may see a significant transfer if the Government decide to opt in to the European Court of Justice opt-in provisions. The Government are illogically against holding a referendum if they decide to opt in. That reinforces the point that the main intention behind the Bill is to influence future Governments and Parliaments. What happens during this Parliament under the Bill will be relatively small beer. We are talking about a piece of legislation that will have a direct influence on the Governments and Parliaments of the future, after the next election. That is the fundamental point. Despite the qualifications that have to be expressed for the argument to hold up, that is an important and telling point.

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[Mr Cash]

The little matter that the hon. Gentleman happened conveniently to leave out of that remark was the voice of the British people, was it not?

[Mr David]

It is important that we recognise that the British people have a voice, which is why we have been clear that it is important that referendums are held on major constitutional issues and the issue of a single currency. It is important that the British people are engaged in the debate about Europe in a way that they have not been for a good time. However, the way to do that is through constructive and rational debate. There is nothing wrong with having referendums on big, important issues, but we are firmly against having referendums on paper clips and minutiae.

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[Mr Jenkin]

I agree with my hon. Friend. I rather like the hon. Member for Caerphilly, who is an engaging and assiduous parliamentarian, but I do not know whether he has given vent to his real feelings on these matters. Unfortunately, if one is speaking from the Front Bench, one’s real feelings rarely matter. One just has to do the bidding of one’s superiors. I just wish to end by—

[Mr Cash]

Before my hon. Friend ends his speech, would he be good enough to allow me to put one thought to him? The number of occasions when the referendum will be required has been dramatically, drastically and absurdly reduced by the Lords amendment. However, does he agree that the fundamental question is not whether we select what functions might or might not be affected, but the whole business of our relationship with the EU, that completely failed project, which is quite clearly causing enormous damage not only to the UK but to other countries? That is the test on which a referendum should be determined. It should not be determined just on the minutiae of individual questions, including the single currency, foreign policy and so on.

[Mr Jenkin]

If I follow my hon. Friend’s question, he thinks that we should have a referendum on more questions than are raised in the Bill. I agree with him.

[Mr Cash]

My hon. Friend is a genuine friend. The referendum should be not on more questions, but the question: the European question.

[Mr Jenkin]

I know that my hon. Friend does not advocate an in-out referendum, but the general direction of the EU certainly merits a referendum at some stage. I still flirt with the idea that we should have a referendum on the proposed treaty amendment. My right hon. Friend the Minister for Europe adverted to the fact that four fifths of the British public think that we should have a referendum on any treaty amendment. That seemed to be the substance of the Government’s original commitment, which has been hedged in the Bill.

Perish the thought that I am straying from my support for the Government on the Lords amendments—I would rather stay where I am—but I would finally wish to remark that the authors of the Lords amendments have a track record of their own. The introducers of the amendments are not minor figures. The amendment on the threshold was introduced by Lord Williamson of Horton—he who was secretary-general of the Commission during the passage of the Maastricht treaty; he who was the secretary-general who pushed through the social action programme, which negated any effective UK Government opt-out from the social chapter; and he who was one of the architects of economic and monetary union, which is now collapsing around our ears.

In Lords amendment 8 to clause 6, which incidentally completely fails to define, as my right hon. Friend the Minister for Europe said,

“a single, integrated military force”,

Lord Williamson is pretending that we should have a referendum on defence matters. However, I would just pose this question: does NATO constitute

“a single, integrated military force”?

I would submit that it probably does not. We could therefore form a NATO-style command structure in the EU, which successive Governments have set their face against, and pass such powers into the treaties of the EU, without a referendum. I hardly think that the British people would vote for that.

The noble Lord Hannay, former permanent secretary at the Foreign Office and former chief negotiator for the UK in the EU—an illustrious and distinguished person—is also an author of the Lords amendments. Do not mistake me: I have great admiration for the ability and sincerity of those people, but I just advert to their track record of advocating policy on the EU. Lord Hannay said quite recently that the single currency would be quite a good thing for the UK, as did Lord Kerr of Kinlochard. As recently as 26 May 2009, the latter delivered a lecture in Edinburgh on monetary union, in which he lamented that we were not trying to join the single currency.

I raise those points not to stray from the substance of the debate, but just to question whether the people who proposed the Lords amendments should not stop trying to get Britain further into the EU, and start apologising for the appalling judgment and advice that they have given to successive Governments. Their advice has put this country into a perilous economic position—because of the state of the EU and the euro—but they have also advised successive Governments to hand over more and more powers. I would not usually criticise civil servants in public, but they are now taking part in the political process having advised successive Governments to hand over more and more powers, as a result of which Governments have been in an ever-weaker position from which to defend our national interests.

The Bill is a small step towards starting to redress the balance in the relationship between the overweening power of the EU and the people in this country governed by the laws it makes.

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[Kelvin Hopkins]

I will speak on these amendments only briefly because much has been said already that I need not repeat. I took the trouble to spend some time in the Library going through the Order Paper and amendments, and I wrote against each of them, “KH against”—those are my initials, so it meant that I was personally against all of them—which seems to be in line with the Government’s position. I hope therefore that my hon. Friend the Member for Caerphilly (Mr David) will advise Labour Members either to abstain or to support the Government’s position.

The amendments have clearly been moved by people who are trying to undermine and wreck the Bill by making it toothless. It is not a strong Bill but, with the amendments, it would be feeble indeed. To restrict referendums to these three areas only would leave enormous scope for those who want constitution creep to succeed. I do not want it to succeed; I want the Government at least to consider a referendum for any significant change to any EU constitution. As to joining the euro, I think that the Labour Front Bench has become more Eurosceptic. There is no prospect of us supporting joining the euro, and one can see that very few Labour Members are willing to come along and take a strongly pro-euro position, as was perhaps the case under the previous Government and ones before that. I am pleased about that because I have been critical about joining the euro for many years.

The euro is in very serious trouble. As of today, we are talking about Italy—not just Ireland, Portugal and Greece—as being a significant problem. I also understand that the French proposal to roll forward the Greek debt and not to take too strong action has been rejected––I suspect by Germany. The euro faces serious problems, and I suspect that before long the euro may unravel and that several national currencies may be re-established to allow countries to adjust to their economic needs and choose their own interest rates and parities with other currencies, including with what remains of the euro.

[Mr Cash]

Does the hon. Gentleman accept that over the past few months we have been trying to stem a tsunami, and that for practical purposes it all boils down to one thing, which is the European question as a whole? Does he also agree that the invasion of the Italian interest, and possibly the Spanish and others, is proof that the whole project is a total failure and that the British people agree?

[Kelvin Hopkins]

The hon. Gentleman recently said that the tectonic plates were starting to move. I think that he is right. Senior civil servants have even said in public that the game is over. I have talked about the sands shifting rather than tectonic plates—different metaphor, same thought. The Governments of Europe will now have to listen not just to their own people, who are increasingly Eurosceptic, but to those in the global financial system who now have doubts about the future of the euro.

My hon. Friend the Member for Caerphilly said, “We’re not going to have a referendum on paper clips.” Such matters are indeed referred to the European Scrutiny Committee, of which the hon. Member for Stone (Mr Cash) is Chair and, on the Committee, we leave no stone unturned, as I am sure he agrees. Paper clips are not a constitutional matter, although some people might argue that we do not want the EU interfering in our paper clips. On constitutional matters, we want to leave things open for Governments to choose when a referendum is appropriate, not to restrict the provisions to the areas in the amendments. There are those who would seek to use every opportunity to extend the EU’s control by skirting carefully around these tight definitions of areas that would require referendums. However, the Committee, led by our Chair, does a good job on non-constitutional matters—several of its members are in the Chamber now and would, I am sure, agree.

The sunset clause puts the onus on a Government after an election to reintroduce the legislation, and no doubt a sensible Government would do that, but if there is no sunset clause, the onus is on the new Government to get rid of the legislation. They could do that by repealing it, but they would then face the anger of the British people for having taken away their referendum rights. A sunset clause is very different from the possibility of repeal after election. The House can repeal any legislation—even, I suspect, treaty obligations. Over time, we could say that we wish to withdraw from a treaty. No doubt we would have to give notice and negotiate, which would cause all sorts of difficulties, but the House could, if it chose, withdraw from a treaty. If there were to be a referendum on membership of the EU and there was a substantial vote in favour of withdrawing, the House would have to debate withdrawing from a treaty. It would have to tell that to the EU. I am not saying that that is going to happen any time soon, but it is a possibility. If a particular piece of legislation is not to the taste of a future Government, they could repeal it, but that is very different from having it automatically die at the point of an election. I therefore strongly oppose the sunset clause, and if there are Divisions on any of the Lords amendments, I will certainly vote against them.

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[Chris Heaton-Harris]

If only the hon. Gentleman’s Front Bench were as wise as he is. I know that he has been campaigning on this issue for a long time, and I thank him for his contribution.

If only those on the hon. Gentleman’s Front Bench could come clean and tell the British what they actually believe on these matters. Do they trust the British people enough to give them a vote on these matters? We are not sure, because up at the other end of the building, where the red Benches are, Labour Members—including Front Benchers—have trooped into the wrong Lobby on these matters on too many occasions. We would very much like to know where Labour Members stand on this. This is the fog of war as far as they are concerned. They want to rattle a few cages and see what comes out, but they certainly do not want to get caught stating any policy. However, these matters are fundamental to the sovereignty of the United Kingdom, and it would have been good to hear something definite from the hon. Member for Caerphilly tonight. Perhaps the hon. Member for Wolverhampton North East (Emma Reynolds) will help us out later.

[Mr Cash]

In a sense, this whole group of amendments is a con trick and an illusion. The test to be applied in regard to the number of people who vote in an election is a matter on which I spoke very strongly in the AV referendum debate. As my hon. Friend the Member for Daventry (Chris Heaton-Harris) said, many of the people who tabled amendments on thresholds were not the slightest bit interested in them at that time. There is therefore an inconsistency of principle involved. What they are promoting, and everything that they have been doing over the past 27 years since I have been on the European Scrutiny Committee, during which time I have had the pleasure of watching their perambulations and machinations, is designed to force us further and further down the route towards European integration. They have advised Governments of all hues on the Maastricht treaty, the European Government, the exchange rate mechanism and the Nice and Amsterdam treaties.

I must have tabled the best part of 1,000 amendments against those treaties over the past 27 years, and with great pleasure. I have devoted, I suppose, almost a political lifetime to opposing every single thing that those noble Lords have put forward. I do not need to specify them individually; all I will say is that I regard them as having conducted a process that has led to the destruction of the European Community and, now, the European Union. One has only to look at what is happening today and to ask who is responsible for what has occurred. It has been a concert party—a concert party involving not only the United Kingdom establishment but, worse still, the European establishment alongside the United Kingdom establishment—that has led to the mess that the European Union is in now. As I said to my right hon. Friend the Prime Minister when he came back from the European Council the other day, although we are glad that he felt obliged to deny that we would be involved in the Greek bail-out—having conceded, I am sad to say, that we would be involved in the bail-out of Portugal—he now has the opportunity, as the Prime Minister of this country, to go forward in the national interest and renegotiate the treaties, to get us out of the mess that those noble Lords, individually and collectively, have got us into.

[Steve Baker (Wycombe) (Con)]

We are all grateful to my hon. Friend for his lifelong service on this issue, but on the esoterica of this group of amendments, can he clarify for me that, taken as a whole, they are simply spoiling amendments?

[Mr Cash]

They are, and it is for that reason that I will not be able to vote for them, even though I happen to have some sympathy for the idea of a reasonable test for referendums. However, these amendments are a blind—an attempt to get people to go along with the 40% test for the electorate on the one hand, but also to associate them with a whole range of matters that are entirely inimical to the interests of the United Kingdom. I am not particularly interested in the list that the Government have produced; as I said at the beginning of the proceedings on this Bill, I think that it is a mouse of a Bill. The issue on which we now need to concentrate is the big landscape and the fact that, as the European Council on Foreign Relations paper argued the other day, Maastricht has to be revised. We will have to return to the question of what kind of Europe we want.

This list of proposed matters—which will never come up in this Parliament, as we know—is, therefore, a blind in its own way, but to reduce it to three core issues really makes it an absurdity. I say to my right hon. Friend the Minister that on the big landscape, this is the time for us to take a bigger, more responsible and more statesmanlike view, in the interests of the people of this country, to see the European question as the failure that it is and to get down to the serious business of renegotiating all the treaties and moving to an association of nation states, so that we can work together co-operatively, rather than by co-ordination, to deal with the real, practical problems that this country faces—the Brazils, Indias and Chinas of this world—instead of dancing on the head of a pin, as we are with most of this Bill.

My argument to my right hon. Friend is very simple. He may have the advantage of having come forward with a few proposals that touch at the margins of this issue, but the real question is what is he—or, indeed, the Prime Minister—going to do to get us out of the mess that those treaties have got not only us but the people in Europe into? Indeed, young people aged between 18 and 25 in several countries are now suffering unemployment of 47%. It is absolutely impossible to accept that, and as I said in the 1990s, when this whole system collapses, it would not surprise me to see the rise of the far right and massive unemployment, destabilising the entire European Union, with the most devastating consequences for the international order. That is the problem that we are faced with, and that is why these amendments are not to be accepted.

Lords amendment 3 disagreed to.

Lords amendment 4 agreed to.

Lords amendments 5 to 13 disagreed to.

Clause 18

Status of EU law dependent on continuing statutory basis

[Mr Lidington]

I beg to move Government amendment (a) to Lords amendment 14.

[Mr Lidington]

I should like first to recognise that the issue we are debating is, to an extent, an issue of detail that has aroused some fairly intensive debate, involving some extremely experienced and high-powered lawyers. It is not an issue related to the rationale for clause 18 as a whole, and I welcome the acceptance by the House of Lords of the rationale for a provision of this nature. Indeed, the author of Lords amendment 14, Lord Mackay of Clashfern, said when he presented his amendment on Report in the other place that there was very little between his position and that of the Government on the point of principle, saying:

“It is important that this declaratory measure”—

that is, clause 18—

“should be made because of the theory sometimes propounded that Community law in the United Kingdom derives from the treaty alone by virtue of the European Union legal order. I believe that it is right that we should make it plain at this juncture that that is not so.”—[Official Report, House of Lords, 15 June 2011; Vol. 728, c. 790.]

However, noble Lords who voted in support of Lords amendment 14 took the view that the European Communities Act 1972 is the only route by which EU law takes effect in the United Kingdom, and that all the references to directly effective or applicable EU law in other Acts are linked to that Act. Lords amendment 14 therefore amends clause 18 to refer specifically to the European Communities Act 1972, rather than to the wider reference point of “an Act of Parliament”, in order to affirm that this is the sole route by which directly effective and directly applicable EU law takes effect in the UK.

[Mr Cash]

I rather suspect that my right hon. Friend expected that I would rise at about this point. Very quickly, the European Communities Act 1972 might be the Act of Parliament by virtue of which we voluntarily entered into the acceptance of European law—as it has accumulated, like a tsunami, since 1972, both widening and deepening—but does he not agree that the crucial words are those of Lord Bridge in the Factortame case, who said that we voluntarily did that? Therefore, the special significance of the 1972 Act has to be tempered by the fact that it was what Parliament decided at that time. That is the crucial question to which we shall turn shortly.

[Mr Lidington]

I agree with my hon. Friend, and I am sure he will recall the debate on these matters on Second Reading and particularly on the first day in Committee when we spent an entire day debating clause 18. He will also recall—it is clear from Hansard—that I made it clear on behalf of the Government that the European Communities Act 1972 had effect in this country, so European law had effect here insofar as it stemmed from that piece of legislation, because Parliament had willed that that should be the case. If a future Parliament were to decide to repeal that Act, it would be perfectly within that Parliament’s power so to do, although my hon. Friend would be the first to appreciate that there would be immediate consequences for the UK’s treaty obligations. There would be a political crisis at that point. We debated that important issue of principle for a day in Committee, as I said, but I want to try to focus on the Lords amendments now.

[Mr Cash]

Indeed. That is precisely why my right hon. Friend knows I must move on to ask him about the assertions of certain members of the Supreme Court—criticised by the late Lord Bingham in severe terms—to the effect that Parliament has only a qualified sovereignty and that the ultimate authority effectively rests with them. It is precisely for that reason that we should be extremely anxious to ensure that no words are imported into this clause, as the Bill leaves this House and will finally be enacted, that would in any way allow the Supreme Court to move in on that territory and claim ultimate authority.

[Mr Lidington]

rose—

--- Later in debate ---

[Mr Lidington]

I want to make some progress.

It is not only the devolution legislation that mentions European Union law. The Company Directors Disqualification Act 1986, the Chiropractors Act 1994 and the Competition Act 1998 are further examples of legislation that allows European Union law to have direct effect in this country. Section 9A of the Company Directors Disqualification Act requires the United Kingdom to make a disqualification order against a person in certain circumstances, including circumstances in which an undertaking commits a breach of competition law under either article 81 or article 82 of the EC treaty—now articles 101 and 102 of the treaty on the functioning of the European Union. That Act refers directly to the treaty provisions without referring to the 1972 Act.

The amendment accepted by the other place removed the reference that makes it explicit that only by virtue of such Acts does directly effective and directly applicable EU law take effect in this country. Removing that reference leaves open the possibility of arguments that directly effective and directly applicable EU law could enter our law by other means, thus undermining the rationale behind the clause. The amendments that the Government propose seek to restore that important qualification, and to remove any doubt about whether directly effective or applicable EU law could enter United Kingdom law by other means.

[Mr Cash]

Will my hon. Friend give way?

[Mr Lidington]

We welcome the acceptance in the House of Lords of the principle of clause 18, and recognise the concerns raised by colleagues there about the formulation of the clause. We believe that our amendments will both meet the concerns expressed by the proposers of the amendment and ensure that the provision reflects the law accurately. I therefore urge Members in all parts of the House to support them.

[Mr Cash]

I am sorry that the Minister deemed it unnecessary, or undesirable, to accept my intervention, but that does not prevent me from making my point.

As the Minister will recall, it was the clear view of the European Scrutiny Committee that clause 18 was unnecessary. I am glad to say that a conversation in which I engaged today with one of my—let us call him—long-standing contestants in matters European, Lord Howe of Aberavon, confirmed that he shared our view. I have great respect for his legal knowledge, and I am delighted that we have achieved such a degree of understanding.

The Government are embarking on what is, in matters constitutional, an extremely dangerous path to tread: a primrose path that could lead to disaster. I know that there was a great deal of detailed discussion—I hear of these things—with Lord Mackay of Clashfern, who, after all, used to be Lord Chancellor, and indeed was Lord Chancellor at the time of the Maastricht treaty. I remember well, as I am sure he does, that the whole business of European government was conceded, to our deep regret; hence the rebellion which I had the pleasure to lead.

The Government appear to have been caught on the horns of a dilemma, and I think that they should have dealt with that in a different way. On one hand they are confronted with the European Scrutiny Committee, the expert legal advice that it has received, the further consideration that it has given to these questions throughout the intervening period, and its conclusion that clause 18 is unnecessary and undesirable. On the other hand—the other horn of the dilemma—is the view of Lord Mackay of Clashfern that the amendment is merely declaratory.

--- Later in debate ---

[Mr Jenkin]

May I just test my understanding? Am I right in thinking that my hon. Friend is saying that the original wording of the clause, covered by the Interpretation Act, covered everything, but referring specifically to the European Communities Act 1972 serves to limit the meaning of the clause so that future amendments to the 1972 Act will not be covered by it and are therefore subject to the interpretation of the Supreme Court?

[Mr Cash]

Effectively yes, and that is the one thing we wanted to avoid above all else. That is why the Committee took the view that it did on clause 18, as shared by Lord Howe of Aberavon, who is by no means a Eurosceptic. On a matter of clear interpretation after very considerable consideration—he is both a former Foreign Secretary and distinguished Queen’s counsel who brought the European Communities Act into being in the House of Commons in 1972—he says that clause 18 is completely unnecessary. He agrees with the Committee, and now, for the sake of trying to counter-balance the views of Lord Mackay of Clashfern, the Government are falling into the trap that I have described and making the potential for interpretation by the courts extremely dangerous.

--- Later in debate ---

[Mr Lidington]

I respect my hon. Friend’s expertise in this area, but to suggest that Lord Mackay of Clashfern would be party to any kind of sleight of hand is not to do him justice, and I hope that my hon. Friend would reconsider that point.

[Mr Cash]

I have no problem in acknowledging someone’s powerful views on constitutional questions. For example, I remember during the Maastricht proceedings that the noble Lord was quite clear on the question of whether the Maastricht treaty took us further and deeper into the integration process. He argued that it did not make any difference in principle because the 1972 Act already conceded that there had been a change in the constitutional position and, to all intents and purposes, there was, thus, no real change in the substance of the issue. That is not to accuse anybody; it is merely to recognise that they have a constitutional viewpoint and to recognise how they really regard the encroachments on our sovereignty, which were evident in the Jackson case, in the evidence that the Committee received from many distinguished witnesses and in the fact that the Government’s previous explanatory notes led us into a situation where we criticised the Government and they withdrew the offensive words, precisely for the reasons that I am presenting.

The reality is that we have caught out the Government on their wording and they have now acquiesced in other wording which opens the door to statutory interpretation by the Supreme Court. That is the kernel of this matter. Whether or not my right hon. Friend the Minister really likes the way in which I have expressed this is neither here nor there. The real question, on which I challenge him, is this: does he deny that the wording in the Government’s amendment, in response to the Lords amendment, imports the opportunity for the Supreme Court to apply statutory interpretation and, thereby, to create a situation that could be best avoided, as set out by Lord Howe of Aberavon, our European Scrutiny Committee and the evidence that we received from so many people, by having no clause at all, rather than the current clause 18?

The Minister knows that I feel very strongly about the fact that we promised in our manifesto a sovereignty Act, and that was the consequence of discussions at the very highest level with the leadership. We knew that that was put into the manifesto as a direct response to the promises that were made. The bottom line is that we were given a second-rate provision that is unnecessary and that has since been criticised by the European Scrutiny Committee and eminent constitutional experts, including Lord Howe of Aberavon, and what the Government are introducing merely acquiesces to a degree in what Lord Mackay of Clashfern has proposed. That simply is not good enough and the Government should withdraw the proposed clause while they have the opportunity to do so. It is for those reasons that I shall be voting against it.

[Mr David]

This long debate, which has taken place over a number of months, has almost come full circle. I recall that we began our deliberations with the hon. Member for Stone (Mr Cash) and others saying that what had been originally promised was a sovereignty Act but what was proposed was a truncated, boiled-down and diluted version of their intention in the form of a solitary clause—clause 18. Whichever permutation of clause 18 one looks at, be it what was originally suggested by the Government, the Lords amendment or the Government amendment to the Lords amendment, one finds that it is basically a declaratory statement. It does not take us back or forward; it is a pious declaration, a statement of fact and a statement of the legal position at the moment. Therefore, it does not do any harm and, in fact, it could possibly be useful.

There has been a modest change of emphasis in Government amendment (b) to the Lords amendment, and it is a sensible one. The words “by virtue of an Act of Parliament” were omitted from the Lords amendment and we were concerned that the emphasis was being placed solely on the 1972 Act. Although we recognise that that is the most important piece of legislation regarding the primacy of European law, other items of legislation are involved here. I was particularly pleased that the Minister referred to the legislation on the devolved institutions, as that is important in ensuring that we take a comprehensive approach. Therefore, the Government have put forward a modest improvement to what was suggested by the Lords. I recognise that they have gone some way towards accommodating what the Lords have said and I welcome that, which is why we will be supporting the Government amendment.

--- Later in debate ---

[Mr Cash]

Is the hon. Gentleman actually saying that he agrees with the Government’s proposal, notwithstanding what has been said by the European Scrutiny Committee, Lord Howe of Aberavon and all the other people I have mentioned, and notwithstanding the most powerful legal advice that has been submitted, which suggests that this is a very unwise and dangerous move, for the reasons that I have set out?

[Mr David]

With all due respect, I say to the hon. Gentleman that I have read in great detail all the evidence that was given to the European Scrutiny Committee and I think that his summation of it is his interpretation of the evidence given. Most of the witnesses to the European Scrutiny Committee said, as I have said, that clause 18 is a statement of fact and that it does not take us forward or back. Therefore, we should not get hot under the collar about it.

[Mr Jenkin]

I do not wish to detain the House for more than a few minutes. I had not intended to take part in this debate, as I took part extensively in the debate on clause 18 in Committee and I thought that we had covered all the issues then. I had become reconciled to accepting the clause as the Government had drafted it and I came to today’s debate expecting my hon. Friend the Member for Stone (Mr Cash) to make a technical argument, but one that would not necessarily excite me—of course I was wrong. The hon. Member for Caerphilly (Mr David) says that the clause does not take us back and it does not take us forward, but he has missed the fundamental point about the revised drafting of the clause. I am not a lawyer—I am an amateur lawyer—but ever since we started discussing this clause earlier this year, I have had the sinking feeling that we are in very deep water and that we are potentially creating completely unnecessary problems for this House and for Parliament. I say that because the sovereignty of Parliament is axiomatic; it is self-evident and it is a historical fact.

We do not need to legislate in any way to maintain the sovereignty of Parliament. There would have been some virtue in a declaratory Act with the legal effect of returning powers to the United Kingdom from the European Union to redress our relationship so that we had the ability to negotiate, but this clause, which has erroneously been nicknamed the “sovereignty” clause but is no such thing, does not even attempt to do that. In fact, it does not even refer to the word “sovereignty”.

The clause puts in statute issues that are contested by the European Union legal structures in a context that means that the Supreme Court might have to interpret them. We know that some justices of our Supreme Court question the very notion of the sovereignty of Parliament as I have described it and think it is a matter of common law rather than of history and fact. I believe they are wrong and that Parliament will always be able to prove them wrong by legislating, as statute law always overrides common law.

[Mr Cash]

Would my hon. Friend be interested to know that I was talking to an extremely eminent lawyer, although I hesitate to say who it was, and when he heard my arguments on clause 18, he said, “If a majority of the justices of the Supreme Court took the view that you are taking, it would be open to Parliament the next day”—he used those words—“to reverse that”? That troubles me, because if that happened it would precipitate a 100% crisis.

[Mr Jenkin]

I am grateful to my hon. Friend for drawing the House’s attention to that conversation. We are potentially engaged in the early skirmishes of a dispute between Parliament and the judiciary about which has supremacy. By legislating on this issue, which touches on the sovereignty of the Queen in Parliament, we are tempting the justices of the Supreme Court to begin toying with those concepts. They have already done so in some of their ancillary statements to cases—I forget the right word for such statements. We know that they are tempted in that direction and putting this clause into statute, as the evidence received by the European Scrutiny Committee showed, could be the red rag to the bull, providing meat for the justices of the Supreme Court to chew on.

--- Later in debate ---

[Mr Cash]

That may well be but as the Minister rightly says it will be the Minister’s view that is taken into account by the court and the Whips will make darn certain this evening that we lose this vote. That is the problem and that is one reason why I take such exception to this.

[Mr Lidington]

My hon. Friend has made his point. Not only Lord Mackay but the Lords Constitution Committee recognised that clause 18 is a reflection of the existing position in United Kingdom law. I do not want to get into a long argument with my hon. Friend the Member for Stone about the report of the European Scrutiny Committee, but that report focused largely on the bigger question of whether parliamentary sovereignty was a common-law principle. I repeat to the House what I said during Committee—that this clause does not get into that issue at all. It makes clear the basis on which European law takes effect in our domestic legal order.

Let me address the detailed point that has been put. Both my hon. Friends the Members for Stone and for Harwich and North Essex argued that the reference to the 1972 Act taken together with the Interpretation Act meant there was a risk of future amendments to the 1972 Act falling outside the scope of clause 18. This point was specifically considered in the drafting of the Government’s amendments to the Lords amendment. That is exactly why the Government’s amendments, especially amendment (b), do not limit the clause to the 1972 Act but also take account of all Acts that might give rise to directly applicable and enforceable EU law, which will include any Acts amending the 1972 Act. I hope that with that reassurance colleagues on both sides of the House will be able to endorse the Government’s amendments.

Amendment (a) made to Lords amendment 14.

Amendment (b) proposed to Lords amendment 14.— (Mr Lidington.)

Question put, That the amendment be made.