European Union (Amendment) Bill

The noble Lord is quite wrong about direct taxation—but let me come to that in due course. I thank him for moving his amendment and all other noble Lords who have spoken in this debate. I particularly welcome the noble Baroness, Lady Noakes, to her place on the Front Bench in this debate. Her remarks have already been subject to a number of comments, both favourable and not so favourable. But I think that she is used to that. Amendment No. 129 would insert a clause stating that neither the Bill nor the treaty will create an offence of xenophobia for which a UK citizen could be prosecuted in the UK or elsewhere. The UK Government deplore racist and xenophobic behaviour and we already have tough national laws in this area. As such, we also support the fact that the prevention and combating of such conduct is one of the aims of the Union, as reflected in the general provisions of the JHA chapter of the treaty. We will continue to work with member states to prosecute those who break our laws in this area. I shall give a short history lesson. The first EU measure on combating racism and xenophobia was adopted by the Council in 1996. That measure will be replaced by a new framework decision on combating racism and xenophobia, which, similarly, has been agreed by the Council on the basis of the existing treaties and is expected to be formally adopted this year. This new framework decision requires all member states to have in their laws basic offences and penalties for such conduct. We support this; it is important to make it clear that we will not tolerate such behaviour within Europe. In negotiating that instrument—and this is significant—we ensured that the UK’s domestic threshold for criminal liability in this field would apply. That means that for criminal liability to be triggered, any behaviour must be carried out in a manner likely to incite violence or hatred and must be threatening, abusive or insulting or likely to disturb the peace. In terms of UK law, there are various relevant pieces of legislation: the Public Order Act 1986 contains a number of offences covering Acts intended or likely to start racial hatred. The Crime and Disorder Act 1998 introduced nine racially or religiously aggravated offences, which make available to courts higher penalties when there is evidence of racist or religious motivation or hostility in connection with an offence. Most recently, the Racial and Religious Hatred Act 2006 created an offence of incitement to racial hatred. That piece of legislation came into effect on 1 October 2007. As for the extradition and prosecution of UK citizens in other member states under the framework decision on the European arrest warrant, to which the noble Lord referred in slightly disparaging terms, we will extradite to another member state individuals to be prosecuted in that member state for offences committed there. This could include an offence involving racism and xenophobia. Similarly, we would expect to be assisted by other member states in bringing to justice individuals who had committed offences under our rules in the UK—for instance, in this context, offences under the legislation that I mentioned a moment ago. Any new measures on racism and xenophobia proposed under the Lisbon treaty would be subject to the UK’s opt-in, which, as noble Lords are well aware, applies throughout the justice and home affairs chapter. We therefore have clear safeguards in this area, were a measure to be proposed that would not be in the UK’s national interest. I did not hear the noble Lord, Lord Pearson of Rannoch, say this, but if he has a concern for himself or for any others who feel as he does that expressing opinions against the EU, even in fairly robust terms, might lead to either his extradition or prosecution in another member state, I can reassure him that that is not the case. I finish by saying that the Lisbon treaty sets out a closed list of areas of crime for which the Union can set minimum offences and penalties. That list does not include racism and xenophobia. Were the Union to decide to legislate further to set minimum offences and penalties on racism and xenophobia, the Council would have to agree, unanimously, to add those two matters to that list. The opt-in would apply to that decision to add to the list, as well as to any measure subsequently proposed on the basis of the inclusion of racism and xenophobia on the list. This is a consequence of the welcome greater clarity in this treaty as to where the Union has competence to legislate in this field. Amendment No. 130 relates to direct taxation by EU institutions and harmonisation of direct tax rates across the EU. This amendment is unnecessary. With regard to the first part, there is no suggestion in the Lisbon treaty or elsewhere in the EU treaties that EU institutions should be able to impose a tax directly on EU citizens. So far as concerns the second part of the amendment, government policy on tax harmonisation is crystal clear: harmonisation of direct taxes is unnecessary and undesirable. Since we have ensured that decisions on tax matters must be taken by unanimity, we will be able to prevent any proposals that attempt to bring about such harmonisation. In a word, the Government have a clear position on EU tax matters: decisions should be taken by unanimity and open, flexible and competitive national tax systems allied with renewed international co-operation, not tax harmonisation, are the right response to the challenge of a global economy. We have no intention of changing that position. Since unanimity is needed for any taxation measure, we believe that we will be able to maintain the position with our EU partners. I briefly mention the role of the European Court of Justice in taxation matters. I agree with the noble Lord, Lord Brittan, whose experience of the matter is so much greater than mine. The ECJ, in very simple terms, is responsible for giving definitive interpretations of the treaties. In the field of indirect tax its ruling clarifies the large body of EU law on VAT and indirect taxation. For direct tax where, as I have just emphasised, policy rests with individual governments, the Court’s role is to ensure that national rules remain within the parameters set by or under the treaty, either in the small number of directives concerning direct tax or in the general principles laid down in the treaty. I repeat: the Government will defend resolutely the UK’s tax laws against challenge before the ECJ. On that basis, I hope the noble Lord will not press his amendments.