European Union (Amendment) Bill

My Lords, after a lot of heat, I shall try to offer a little light. I invite the House to take note of the report of the European Union Committee, entitled The Treaty of Lisbon: An Impact Assessment, which was published on 13 March. Last October, the Select Committee agreed that we could most usefully assist the House by undertaking a detailed, objective, evidence-based analysis of the treaty, and an assessment of its impact on the institutions of the EU, on the member states, and on the UK. We wanted to explain exactly what the treaty does, by comparing its provisions with the status quo, and thus determine what significant changes it would introduce, if it came into force, relative to where we are now. We were not therefore interested in comparing it with the defunct constitutional treaty or in entering the debate on whether there should be a referendum. Nor did we wish to deliver an overall judgment on the treaty or make any recommendation as to whether the UK should ratify it. That was a matter for Parliament as a whole. In an unprecedented collaborative effort, the Select Committee and its seven sub-committees worked at it for four months, considering evidence from more than 140 witnesses of all opinions, both here and in Brussels. The committee was able to adopt our final report by consensus, which was gratifying. If we have succeeded in our goal of producing a report that can usefully inform the debate in this House, as I hope we have, the credit goes to the 80 Members of your Lordships’ House, and to our superb staff. As Chairman, my gratitude to each and every one of them is unbounded. Our report looks at every significant provision of the treaty and our conclusions are summarised in chapter 12 of the main report. As this is a complex treaty and it is going to be a long debate, I have no wish to try the patience of the House. I shall therefore be selective in my choice of issues to address, mindful that colleagues on the Select Committee and the sub-committees will also be speaking. In chapter 2, we deal with the EU’s competences—that is to say, its powers. The treaty sets out for the first time a clear statement that the Union may exercise only such competences as the member states have conferred on it—the principle of conferral. All other competences remain with the member states, which may decide to reduce the EU’s competences. The significance lies in the articulation of those principles, the content of which has always been implicit in the treaties. The treaty also specifies new or extended competences. By the Government’s count there are 17 of them, and in almost all of these areas, as the Minister for Europe reminded us, the EU already takes action under other legal bases. Seven of the competences, by my count, are new. The EU’s competences are not affected by the conferral of a single legal personality on the Union. The European Community in relation to the first pillar has always had express legal personality, and the European Union has had it implicitly to the extent that it has powers under the current treaty of European Union to enter into international agreements. What the Lisbon treaty does in extending a single legal personality to the whole of the Union is to include the areas currently covered by the second—foreign and security policy—pillar and the third—justice and home affairs—pillar, in the application of the attributes of the status of express legal personality, such as the ability to join international organisations or to take, or be subject to, proceedings in international tribunals. In our third chapter, we examine the proposals for simplified revision procedures and passerelles or bridges which could be used to alter significantly the provisions on the face of the treaties. Any treaty revision by means of simplified procedures and any changes to decision procedures by means of passerelles will be subject to veto by the Government in the European Council or the Council of Ministers. Further, under the Bill before us today, as the noble Baroness the Leader of the House reminded us, government agreement to any such move will be subject to approval by both Houses of Parliament. In addition, two of the passerelles—the second simplified revision procedure and the passerelle for measures concerning family law with cross-border implications—are subject under the treaty to a direct veto by each national parliament, exercisable within six months. We doubt that it will ever be needed here since both Houses will have this separate veto on government agreement in the Council. The treaty’s impact on the EU's institutions is examined in chapter 4. It makes highly significant changes to the European Council, aimed at making it work better. The creation of a full-time European Council president, serving a two and a half year, once renewable term in place of the current six-monthly rotation among heads of government, could mean a more active and activist European Council, a consequence which our report recognises as likely to be welcome in some quarters but not in others. The European Council president will have two broad roles—leading the Council and ensuring the external representation of the EU on issues concerning the common foreign and security policy at his or her level without prejudice to the high representative for foreign affairs and security policy. Concerns have been raised about the relationship between the European Council president and the Union's other senior leaders, in particular the high representative, the rotating presidency of the Council of Ministers, and the president of the Commission. The treaty has little to say about how this will work, and that is understandable. Only practical experience, not to mention the manner in which the various personalities interact, will tell. The extension of the use of qualified majority voting to more than 40 new areas, including the whole of justice and home affairs, is a significant change for the Council of Ministers. Where there is a move from unanimity to QMV, the UK will have to construct a blocking minority rather than use its veto if it wishes to block legislation. It is marginally helpful that the UK's share of a blocking minority rises from 32 per cent to 35 per cent. As we also note, the extended use of QMV may help to advance UK interests in some cases. The veto can be a double-edged sword, and it is worth recalling that the single market would never have happened without using QMV to achieve common standards and harmonisation, and QMV could lead, for example, to improved decision-making in humanitarian aid. As the noble Baroness the Leader of the House noted, the treaty's new system for calculating a qualified majority is more equitable and takes more account of population. That is a significant revision. We also find important the provision requiring the Council of Ministers to meet in public when it legislates, which is a useful contribution to greater transparency. The reduction in the size of the College of Commissioners, in the interests of increased effectiveness, to two-thirds of the number of Union members is an important change. From 1 November 2014, the posts will be allocated to member states on a rotation system meaning that each member state will not have a commissioner in the college for five years out of every 15. Commissioners ought not to be regarded as national representatives, but the concern that a member state without a commissioner is disadvantaged will doubtless be raised, whether justified or not. If this new arrangement just does not work, the European Council will be able to rethink. The treaty further states that the European Council will need to take into account the elections to the European Parliament in nominating its candidate for election by the Parliament to the Commission presidency. That does not prevent the Council from coming to its own decision as to its preferred candidate, but it will be unlikely to put forward a candidate who could not command the parliamentary majority necessary for election. In that sense, there is no fundamental change from the present system whereby the Parliament must approve the European Council's nominee. The European Parliament itself finds its powers considerably increased by the Lisbon treaty, in particular by the extension of co-decision now named ““the ordinary legislative procedure”” to a substantially larger range of areas including agriculture, fisheries, transport and structural funds, in addition to the whole of the current third pillar of justice and home affairs. This means that the European Parliament will become co-legislator with the Council for most European laws. Another EU institution whose role is significantly expanded is the European Court of Justice, which will gain jurisdiction over the justice and home affairs area as a result of the merger of the third pillar with the first. But of course the court's jurisdiction in relation to the UK will differ from that in relation to other member states to the extent that the UK uses its opt-in/opt-out from all justice and home affairs legislation. The ECJ's jurisdiction will not be extended to the common foreign and security policy except in two narrow and clearly defined areas. I come now to the European Charter of Fundamental Rights, with which we deal in chapter 5. We were not persuaded by suggestions that the charter itself creates or contains new rights which differ from those in the underlying national and international instruments and documents from which the charter indicates its provisions are derived. The scope of its rights will ultimately be a matter for the courts. However, the broad rights and the language in which they are expressed in the charter reflect existing national, EU and international obligations, in particular the European Convention on Human Rights. Furthermore, it does not apply to situations involving purely domestic law. For the charter to be directly relevant, there must be a link to Union law. The UK's concern, which led to the drawing of a ““red line””, was to ensure that its existing labour and social legislation was protected. We are satisfied that the charter does not create a free-standing right to strike; it is clear that within the Community framework the right to collective action, including the right to strike, is already recognised as a general principle of law. The relevant charter article stipulates that workers and employers have the right to collective bargaining, "““in accordance with Union law and national laws and practices””, " and the European Court of Justice has, in very recent judgments, indicated the significance of those limitations. It is important to recognise that the protocol on the application of the charter in the UK and Poland, which has the same legal value as the treaties, is not an opt-out from the charter. The charter will apply in the UK, but the protocol reflects the fact that the charter creates no new rights, and appears to put beyond all doubt the fact that nothing in the charter's Title IV on solidarity rights creates justiciable rights applicable to either the UK or Poland, except in so far as such rights are provided for in their national laws. I now turn to the area of freedom, security and justice, dealt with in chapter 6. The treaty's merger of the first and third pillars brings criminal law and policing within the ordinary legislative procedure, that is to say, QMV and co-decision with the European Parliament. That is clearly a significant change which could speed up decision-making in the Council and prevent legislation being adopted at the level of the lowest common denominator. But it could also increase the volume of legislation in this area. Family law, meanwhile, will continue to be decided by unanimity. The veto's removal in respect of criminal law and policing means that one member state, or a small group, can no longer block measures supported by the UK. The other side of the coin, of course, is that in some cases the UK could be bound by a measure against its will. But the likelihood of that will be greatly reduced by the general right the UK will have under the amended FSJ and Schengen protocols not to opt in to any proposed measure in the entire freedom, security and justice area. That is the second of the UK's ““red lines””. Where the UK has not opted in to a proposal, it can still participate in the discussions. Even though it would have no vote, it could still influence the outcome, witness the case of what is known as Rome I, a measure governing the law of contract. The opt-in provisions will also apply to amending measures, but other member states are permitted to eject the UK from an existing measure where it declines to participate in a relevant amending measure, though only if UK non-participation in the amending measure would render the system demonstrably inoperable. Such cases should be rare. Like the amended FSJ protocol, the amended Schengen protocol permits the UK, along with Ireland, freedom to decide whether or not to participate in Schengen measures. It is also clear that the UK will no longer be bound to take part in Schengen-building measures where it participates in the underlying acquis. That is a significant change. What is clear then is that under the FSJ and Schengen protocols, the UK cannot be forced to participate in an FSJ measure against its will. So, if the UK takes the view that a proposed measure has features that cannot be accommodated within a common law system or are otherwise unsuitable for application to the UK, it is free to refuse to opt in and, if it wishes, to play no further part at all in relation to the proposal. A decision not to participate in an amending measure or a Schengen-building measure may have consequences, and if threatened with ejection from an existing measure, the Government will have to decide which course of action best serves UK interests. But we do not expect such cases to arise frequently. At present, there is no systematic parliamentary scrutiny of UK decisions on whether or not to opt in to particular FSJ measures. The European Scrutiny Committee in another place has drawn attention to this in the context of the Lisbon treaty. We do so too, and we intend to give the matter further consideration. Meanwhile, your Lordships' Constitution Committee, in its excellent report on the treaty's impact on the UK constitution, has made a specific recommendation in this regard, and we shall certainly be examining that carefully. I come now to the impact of the Lisbon treaty on the EU's foreign, defence and development policies which we discuss in chapter 7. I am happy that the noble Lord, Lord Roper, will be speaking. He chairs our Sub-Committee C, which undertook a thorough examination of the treaty's impact on this area of EU activity. I do not wish to pre-empt. I just want to draw attention to our conclusion that the treaty neither changes the scope of the CFSP nor transfers any additional powers to the EU in this area. The new provisions could lead to a more active role for the EU in the area of CFSP, but much will depend on the degree of consensus among member states regarding such a role. I should also like to emphasise our conclusion that the treaty has preserved the independence of the UK’s foreign and defence policy, subject to the constraints arising when unanimous agreement does prove possible. This was a third red line. On the treaty's significant institutional changes—in particular the changes to the post of high representative and the creation of the External Action Service—the noble Lord, Lord Roper, will, I know, have some interesting things to say. I come now to social affairs, which we cover in chapter 8. In the area of employment and social affairs, the UK Government drew a fourth red line. In order to maintain member states’ financial autonomy, the UK negotiated an ““emergency brake”” with regard to social security measures for migrant workers and their dependants, an area which has moved from unanimity to QMV. The emergency brake enables any member state to request that a proposed measure be referred to the European Council should the state believe that it would affect important aspects of its social security system. The Department for Work and Pensions has indicated its belief that the mechanism maintains the UK’s ultimate control over any changes to social security measures for migrant workers. Incidentally, a similar emergency brake arrangement applies in the field of criminal law. The inclusion among the treaty’s objectives of the protection of children’s rights will, in our view, have an important impact by making future legislative instruments potentially subject to an assessment of their impact on children’s rights. We find it significant that the treaty introduces sport as a new competence, emphasising that the Union must take account of the specificity of sport and its social and educational function, although any harmonisation of the member states’ laws and regulations in this area is specifically excluded. The provision of a legal base for sport is also intended to ensure that EU legislation does not impose unintended consequences on sporting activities. After all, one does not want the popular Clean Bathing Water Directive to prevent the Oxford and Cambridge Boat Race from being rowed on the Thames. Chapter 9 deals with finance and the internal market. We find that the impact of the Lisbon treaty on the internal market will be limited, but there are four points worth briefly making. The treaty gives the EU a clearer and more explicit shared competence in energy policy, and moves it to QMV. With respect to competition, we considered the significance of the exclusion, on the initiative of France, from the TFEU’s list of principles and objectives of a commitment to undistorted competition, as appears in the current TEU. It was agreed instead to include in a protocol on the internal market and competition a reference to, "““ensuring that competition is not distorted””." We would be concerned if any possible symbolic downgrading were translated into efforts to depart from the principles of free competition which have formed the cornerstone of the internal market. However, since treaty articles and protocol articles have the same legal weight, the change ought not to be significant in reality. Environment, agriculture and fisheries are dealt with in chapter 10. I am very grateful to my committee colleague, the noble Lord, Lord Sewel, for participating in this debate since he is chairman of our Environment and Agriculture Sub-Committee and will be addressing these issues. The fact that climate change is mentioned for the first time in an EU treaty is significant, as is the provision on civil protection in relation to environmentally-related disasters. The move to co-decision in agriculture and fisheries is clearly significant, and equally significant for this area is the abolition of the distinction between compulsory expenditure, which includes agriculture, and non-compulsory expenditure. I know that the noble Lord, Lord Sewel, will address these issues. The final area in which we made an impact assessment was that of the role of national parliaments. Noble Lords will find that in chapter 11. We regard it as settled that the Lisbon treaty places no obligations on national parliaments even if a sense of obligation can be construed from the provisions as translated into some other languages. But in English it is perfectly clear. Though we are asked to ensure the EU institutions’, in particular the Commission’s, compliance with the principle of subsidiarity, and to contribute actively to the good functioning of the EU, it is inconceivable that anyone would seek to enforce these obligations. That said, national parliaments will in our view be under a strong political obligation to take seriously the new opportunities created by the treaty, and in this House I am sure we will want to do so. The treaty introduces new procedures which have become known as the ““yellow”” and ““orange”” cards. Within eight weeks from the date of transmission of a draft legislative Act in all of the Union’s official languages, any parliament or chamber may submit a reasoned opinion stating why it considers that the draft in question does not comply with the principle of subsidiarity A voting system then applies, with two votes for each parliament, one vote for each chamber in a bicameral parliament, operated separately. Chapter 11 of our report details the differences between the two cards, the orange card wielding heavier sanctions but at a higher voting threshold. Suffice it to say that we believe these sanctions will rarely be invoked, but their existence gives scrutiny teeth while making it less likely that the sanction will need to be deployed, which is just as well. Despite the novelty of the card procedures, and their prominence in the treaty, we should not overestimate their importance. Breaches of the subsidiarity principle in draft legislative Acts are quite rare. That said, parliaments will no doubt take the new procedures seriously, but it should not distract attention from the scrutiny of policy, which is crucial. My final point is that the Lisbon treaty will have consequences for the procedures of this House and for our committee. We have set them out on page 246 and I will not weary the House with a recital of them. If the Bill is passed, we will need to put some of these matters to the Procedure Committee. Your Lordships have been very patient, and I apologise for the length of my intervention. But, as I said at the start, this is a very complex treaty, and our committee owes it to the House to contribute through our report to a proper understanding of what its impact really is. I therefore commend the report to the House.