HC Deb 11 March 1993 vol 220 cc1127-201

Amendment proposed [8 March]: No. 29, in page 1, line 9, after 'II', insert '(except Article 3(b) on page 10 of Cm. 1934 relating to the principle of subsidiarity.)'.—[Mr. George Robertson.] Question again proposed, That the amendment be made.

The Chairman of Ways and Means (Mr. Michael Morris)

I remind the Committee that we are also considering the following amendments: No. 77, in clause 1, page 1, line 9, after 'II', insert '(other than Article 3b)'.

No. 105, in clause 1, page 1, line 9, after 'II', insert '(except Article 3b on page 10 of Cm. 1934).'

No. 126, in clause 1, page 1, line 9, after 'II', insert '(excluding Article G B(5) on page 10 of Cm. 1934).'.

No. 340, in clause 1, page 1, line 9, after 'II', insert 'except the second paragraph of Article 3b on page 10 of Cm 1934'.

4.38 pm
Mr. Charles Kennedy (Ross, Cromarty and Skye)

On a point of order, Mr. Morris. Have you had any intimation from Ministers that a statement is to be made to the Committee about the discussions and the decision in the European Parliament this week arising from the De Gucht report? On a vote of 207 to 80 it was agreed that there should be a uniform electoral procedure to the European Parliament by a system of proportional representation. Such a statement would be relevant to our consideration of the Maastricht treaty. Have you received any word about that from the Government, or is it appropriate that the Government should make a statement about whether they intend to use the British veto?

The Chairman

I have received no such request.

Mr. Tony Marlow (Northampton, North)

On a point of order, Mr. Morris. We are about to debate the subject of subsidiarity—one of the most important aspects of the treaty and something the Government say secures the interests of the United Kingdom. I asked the Prime Minister during Question Time whether the principle of subsidiarity would allow this House, and this House alone, to make the decision on the 48-hour week. The Prime Minister, understandably, was unable at that time to answer the question. There is no complaint about that, but as it is the kernel of this debate, would it be possible to have the Attorney-General here so that all questions of this sort, on these vitally important matters, can have an authoritative reply?

The Chairman

The hon. Gentleman should open his eyes.

Mr. Bill Walker (Tayside, North)

When the debate ended on Monday evening, I was agreeing with the hon. Member for Greenock and Port Glasgow (Dr. Godman) that subsidiarity will in no way arrest the growing centralisation of decision-making within the European Community. I shall hope to demonstrate that that statement is a fact. Amendment No. 29, the leading amendment in this group, properly calls for the removal of article 3b. Why properly? I shall endeavour to explain my view. I put the question to my hon. and right hon. Friends: what is the legal meaning of subsidiarity? We know that the Edinburgh declaration explained: Subsidiarity is a dynamic concept and should be applied in the light of the objectives set out in the treaty. It allows Community action to be expanded where circumstances so require. But I would say that that is everything to everybody and to all people it can be whatever they want it to be. I was told at a dinner the other evening by a lawyer that he has never seen anything quite so impossible to define in law.

I submit that subsidiarity, as explained in Edinburgh, instead of being purely a decentralising concept, is, as stated in Edinburgh, and can be, used—I claim, will be used—to widen Community powers.

Based on experience, can anyone seriously deny that the effect of the Single European Act has been the widening of Community powers? Was this not all about the achieving of the objectives of that Act? I say that because it is objectives that come in with article 3b. When matters have gone to the European Court of Justice, have we not seen the court decide in favour of the objectives? That is very important.

The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Watford (Mr. Garel-Jones), has already conceded that the court has traditionally been a centralising institution. We did riot need him to tell us that. We all knew that. I know that my right hon. Friend now has a vision of a changed European Court of Justice and that he believes it is not fair to assume that the court will necessarily and at all times make centralising judgments." —[Official Report, 27 January 1993; Vol. 217, c. 1058.] He claims that he can see clear signs of a change of emphasis and he believes that the trend will be reinforced by the Maastricht treaty. I for one do not believe that. Nor have I seen any evidence to support my right hon. Friend's view. It is like going before a hanging, pleading for mercy and for a change of his standard hanging policy and saying in mitigation—Scots will understand me—"I didnae ken, my lord," and the judge replying, with great compassion, as they always do, "Weel, ye ken noo."

The plain truth is that I think that is what will happen when we come before the European Court of Justice. Does anyone seriously believe that the court will not take note of what is happening under the social chapter in the other 11 states? If by chance we had another Hoover experience and the Commission or the aggrieved state losing the jobs, decided to take the case to the court, would not the court be persuaded in favour of that aggrieved state?

I submit that subsidiarity will be no defence in these circumstances. On the contrary, it strengthens this treaty basis and the court is more likely to decide that the United Kingdom should conform because it is necessary to achieve the objectives of the treaty as stated in article 3b.

4.45 pm
Mr. Nigel Spearing (Newham, South)

I can well understand the hon. Gentleman's point about the decision of the European Court of Justice in the case he mentioned, but is it not probable that many people, including even our own Prime Minister, were misinformed initially, some time ago, about the nature of subsidiarity. The Prime Minister said: an article that specifically enshrines the crucial concept that the Community should undertake only those measures that could not be achieved at a national level."—[Official Report, 18 December 1991; Vol. 201, c. 278.] That was the Prime Minister's view of what it was about, but does the hon. Member agree that that applies only when there is no exclusive competence and only when it is thought to be better achieved? That is a matter of judgment.

Mr. Walker

I hope in the course of my remarks to amplify that very point. It is because of these matters that that article 3b should be seen in that light and the amendment to remove it supported.

Sir Teddy Taylor (Southend, East)

Has my hon. Friend read the Daily Mail this morning, which says that the European Parliament voted last night to outlaw the culinary use of lettering on Blackpool and Brighton rock? With the study that he has made of the subsidiarity clause, can my hon. Friend tell us how we go about preventing the EC outlawing the culinary use of lettering on Blackpool and Brighton rock? I am not sure. Will my hon. Friend give me some guidance as to how we can go about this?

Mr. Walker

I am grateful for that helpful comment but I cannot give my hon. Friend any guidance because we cannot find any means by which guidance can be introduced or implemented and that is another reason for supporting amendment No. 29. If that is not enough justification, I suggest that we look further at what was said at Edinburgh: Only to the extent that the treaty gives the institution concerned the choice of when to act We all know that the Commission, led by Jacques Delors, will make proposals to the Council of Ministers. That body will effectively decide, when it enacts legislation, how to implement subsidiarity. I suggest that that will happen because nobody will or can deny that the council has the will, and with the qualified majority, it will find the way. All experience shows us that that is how things are achieved.

Mrs. Edwina Currie (Derbyshire, South)

I am listening carefully to my hon. Friend and to what was said about colouring matter in food. Is that not the very reason why we need subsidiarity? Are not all the examples he has given those of problems caused by not having subsidiarity in the first place? It will have been written in had we been involved in the first place. We now very much need it and he should vote for it.

Mr. Walker

If my hon. Friend will be a little patient, I will continue and then I shall ask her to consider whether what I have been saying is distorted and wrong. I am always prepared to mend my erring ways. My wife will confirm that.

Sir Teddy Taylor

Would my hon. Friend remind our hon. Friend the Member for Derbyshire, South (Mrs. Currie) that, sadly, the clause makes it clear that subsidiarity, even if it did work—and I do not see that it will—only applies in areas where the EC does not have exclusive competence. As food is obviously an area where the EC does have exclusive competence, this could not apply. It is down here in black and white, unless the Lord Advocate can tell us differently. It seems quite clear, but even if it did apply, what we want to know is how we go about saving Blackpool rock.

Mr. Walker

I believe that we will see many more examples of that. I cannot believe that article 3b as worded will do other than strengthen the Council's hand. Where the Council has the will, it will have its way. That is our experience.

In such circumstances it is not realistic for a member state, particularly the United Kingdom, to invoke subsidiarity to prevent a directive being forced upon it. The court will simply throw it out. Once the Council has decided, there will be no case for a member state to make. That is particularly important in regard to the social chapter where the so-called United Kingdom opt-out will not protect British employers from the combined effect of the Single European Act and article 3b.

When my right hon. Friend the Foreign Secretary wrote in a letter to The Sunday Times on 22 November that subsidiarity is an important legally binding constraint on Community action", he should have explained that the only constraint that subsidiarity provides is that which the Council is prepared to impose upon itself.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

Is it not instructive to read the terms under which the European court was set up, because they make it clear that the court has one single duty above all: to ensure that the treaties are applied? Far from subsidiarity being clear, it is obvious that the court will interpret it narrowly as requiring all member states to do exactly the same.

Mr. Walker

I agree with the hon. Lady.

As we now know, there is no protection from the working-time directive through subsidiarity, nor is there any protection for the bilateral and important civil air agreements, about which I shall have more to say.

The protocol on social policy provides that the other 11 states should enact their social chapter policies through the Council of Ministers. If the other 11 vote to impose social costs upon themselves, subsidiarity will be no protection for the United Kingdom and will not stop the other 11 from out-voting the 12th state, the United Kingdom, thus ensuring that we have to face the same costs and bear the same burden. If the other 11 satisfy themselves that the proposed action passes the subsidiarity test, there will be no reason to allow the United Kingdom to be an exception, particularly if we have more Hoover-type experiences.

I remind the Committee that articles 2, 3 and 5 provide the base context for Community objectives, which are economic and social cohesion and solidarity among member states. So it is simply a question of going to one of the majority voting provisions, such as article 118a, and asking the court to stretch the meaning, as has happened in other areas of Community law.

Also, the protocol, or so-called opt-out, is not part of the main body of the text in one regard. It says nothing which affects essentially the means by which people will import social provisions. Words to that effect are not there, but that is what is meant. That cannot be a basis for anyone to suggest that articles 2, 3 and 5 will not be used; I believe that they will be. Consequently we are not opting out of any social provisions contained in the Single European Act or the treaty of Rome.

My right hon. Friend the Foreign and Commonwealth Secretary, a man whom I admire greatly and who has a better understanding of what is happening with the people of Europe than many of his colleagues, said in the debate earlier this week: I do not think that there is any great disagreement. Of course, we have had problems with the legal reach of the existing treaties in the social sphere. The working; time directive is one example. However, the fact that there are problems with the existing arrangements does not mean that one should multiply—double, triple, quadruple—those problems by adopting a treaty base that would turn what is now an exception into an everyday affair. He went on to say that my hon. Friend the Member for Colchester, North (Mr. Jenkin) is making a fascinating and able speech. It is fascinating because it is outside the debate that has been taking place inside the Community for the past two years… The point is that it is not so long ago when what my hon. Friend is challenging, objecting to and saying is inevitable was orthodox. People believed in the centralising tendency. Every advance made towards Community jurisdiction was judged a good thing in itself. That has changed. I accept that the change is not perfect and that there are people around who hold to the old view. However, it is a little out of date for my hon. Friend to look from outside the institutions of the Community and say that things cannot he challenged or changed by member states. Of course it is only member states who give power to the Community, as my hon. Friend acknowledged when he explained the first sentence of article 3b. What is happening now, however—I ask my hon. Friend to take my word for it—is that the different institutions are changing. That is reflected in article 3b, the Edinburgh declaration, the activities of the Commission and the sharp reduction in the number of legislative proposals coming forward. That is political fact before it is a legal obligation. It is important that I read this, Mr. Morris; you will understand why when I make my next observations: We have the option to say that such changes are not any good, to be cynical and to say, 'They would say that, wouldn't they?' We have the option to reject the changes, but that would be a mistake, because our arguments are beginning to bear fruit and here they are."—[Official Report, 8 March 1993; Vol. 220, c. 746–7.] So said my right hon. Friend on Monday. In shorthand, he asked us to look at what was happening and to take his word that the institutions are changing. I agree with my right hon. Friend that in the last two years there has indeed been change. The people of France, Ireland and Denmark have voted, and they have changed. Sadly, I do not believe that the political leaders, who compose the Council and the Commission, have changed.

Why do I say that? Several of my hon. Friends, including my hon. Friend the Member for Colchester, North, paid a recent visit to the Commission, where they discovered that no one believes that the opt-out would prevent the United Kingdom from being forced to accept most, if not every, aspect of the social chapter. My hon. Friends also discovered that officials and politicians believed that the move towards union was continuing, regardless of what was being said by Ministers in the United Kingdom.

Mr. Stephen Milligan (Eastleigh)

My hon. Friend says that the Commission has not changed. Is he aware that in the last year the number of proposals put forward to the Council by the Commission has diminished by more than 50 per cent., that the Commission has drawn up a list of more than 20 directives that are to be scrapped and that the Commission is scrapping many other existing proposals? Does he not welcome all that as a step in the right direction?

Mr. Walker

Of course I welcome it, but I draw attention to critical and important key areas. We all know that politicians endeavour to put on an acceptable front during periods of uncertainty, such as periods immediately before general elections; I suggest that the passing of the treaty has a similar impact throughout Europe.

If my earlier comments have not been enough to cast doubt on the view that the centralising tendency has been reversed, let me give another concrete example. Everyone who has studied the treaty of Rome, the Single European Act and the Maastricht treaty, is aware that transport, particularly in article 3f of Maastricht, is an area of European competence. Hon. Members will also be aware that in transport in Europe the move towards open skies has been, and still is, slow and painful. They will also be aware that a United Kingdom success story over the last 20 years or more has been the completion of many valuable bilateral air service agreements.

All have been negotiated by United Kingdom Ministers and Department of Transport officials. The Commission and its officials have not been responsible for those important and highly prized aviation freedom rights. Because we have had such effective and efficient negotiators, the United Kingdom has probably the best air transport operations in Europe, if not in the world.

5 pm

Enlightened civil aviation policy in the United Kingdom has created more viable and profitable airlines in this country than in any other Community state. Skilled negotiations via bilateral agreements have created at Heathrow the world's busiest international airport. That is a splendid example of subsidiarity in operation. It should be used in the new enlightened Europe as a model for every other member state.

Based on the comments by my right hon. Friend to which I referred, I would expect our new and enlightened Community friends to support that continuing subsidiarity. Sadly, experience leads one to a different conclusion. The Commission, no doubt encouraged by enlightened members of the Council of Ministers, is determined to take over the negotiations for air service agreements.

I attended a conference on open skies in Europe and listened to a lady representing the Commission. She had spent three years working on the paper that she presented. At the end of her presentation, I felt it necessary to tell her that I had heard a better paper given by a sixth former. If that represents the level of negotiations, I shudder. Even so, the Commission has the power to take over, as my right hon. Friend said, because of the legal reach of existing treaties. So where is the example of the new, non-centralising action of the Commission in that important sphere for the United Kingdom?

Mrs. Currie

I agree with my hon. Friend's assessment, but does he agree that the success of air travel in Britain has been due to the fact that we privatised the airlines and the airports, which is not common practice in most countries, particularly in Europe? Does he agree that it would be wise for us to encourage that type of monumental change, which results in better business practice and awareness of the interests of customers? If so, how shall we he able to encourage our European colleagues to follow our example if we are not at the heart of Europe?

Mr. Walker

My hon. Friend has a great gift for jumping feet first into areas of which she has little knowledge, as she just demonstrated. I referred to enlightened aviation policy, in which I included the privatisation of British Airways and so on. I did not go into the detail of the matter because I am anxious not to filibuster. I am concentrating on the facts. Bilateral negotiations are conducted by Department of Transport Ministers and officials, who are the best chaps in the world to conduct them. We should not allow such activities to be taken over by the Community.

Where is the example of the new, non-centralising action of the Commission? The truth is that nothing of substance has changed in the institutions of the Community. Subsidiarity and opt-outs were, and are, designed to give the impression of change. In reality, just as many of the concerns which were pooh-poohed during the passage of the Single European Act will come hack to haunt us, so that the so-called opt-outs and subsidiarity will be found to be of little substance.

Amendment 29 should be accepted because subsidiarity, like most things to do with the European Community, has been oversold. Anyone with experience of selling knows that, when a product or service is oversold, the consumer backlash can be dramatic. I fear that we face that danger. So those of us who have doubts about the legal validity of subsidiarity working in favour of decentralising should not be subject to abuse.

I have a long record of actively trading throughout Europe. I want trade to flow freely. I want eastern Europe and the Scandinavian countries to enjoy trade throughout Europe. I want the European Community to trade freely with the world, and I do not support protectionist views or policies. I do not want, and have never wanted, Europe to have a federal or unitary state structure, and I know that the Foreign Secretary holds the same view; he has said so many times in my presence, and I do not doubt his word.

I could support subsidiarity if I were persuaded that it was a legally binding vehicle for repatriating powers from the Community back to the nation states. Sadly, it is not. Subsidiarity and the Union are important to Scots, which is why I hope that the Prime Minister will read my comments. I have admired and supported him, particularly in the way he understood and grasped the Scottish nettle of the Union—[Interruption.] I refer to the Union of 1707 and, as I have said many times in the Chamber, we Unionist Scots know and understand what it meant by the Union.

Sadly, others—including a previous Conservative Prime Minister—have embraced another, meaningless, description, which goes by the word "devolution." Devolution, like subsidiarity, can be properly assessed only when it is adequately legally defined, as the Scotland Act was. No such legal definition of subsidiarity exists in the treaty of union or in the Bill.

Mr. Tim Devlin (Stockton, South)

As my hon. Friend says that subsidiarity and the Union are important to Scots people, may ask him to say which is more important, subsidiarity or the Union? If he is in favour of the Union—because it has brought great benefits to Scotland—why is he not in favour of European union, which might bring great benefits to Britain?

The Chairman

Order. The hon. Member for Tayside, North (Mr. Walker) should not be tempted down that path.

Mr. Walker

I hope that the Prime Minister and other Members of the Government will grasp the European nettle just as they grasped the Scottish nettle and admit that union means union of the kind in Europe which we in the United Kingdom created in 1707. It was union that the people of England and Scotland wanted, rather than an unwanted union as contained in the Maastricht treaty. The group of amendments would, if passed, remove article 3b, and thus subsidiarity, from the treaty.

I submit that subsidiarity as originally defined by the Roman Catholic Church is the desirability of devolving power, and the exercise of power, to the lowest level in the hierarchy of the Church. So it assumes initially that all power is vested at the top, for the top to be able to devolve downwards—that the top decides how much, and what, power shall be devolved and that the bottom accepts as much or as little power as the top decides to give it. None of that is subject to democratic control. It is all perfectly proper for the Roman Catholic Church and for the institution that is that Church, and I have no quarrel with that. But as a Presbyterian, I am forever grateful to a gentleman named John Knox.

We are tonight not dealing with a church but with separate nation states and their parliaments which rightly consider themselves to be equal in law with each other and with the Community and in no way subservient to the Commission or the Council. We are not dealing with Jacques Delors as the Pope with all the power, and with Prime Ministers as the bishops who accept what power the Pope gives them. Nor are we the humble laity who accept whatever power is passed down to us.

As the group of amendments would remove article 3b, we must examine what that article says. First, it concerns action taken by the Community under the treaty of Maastricht and earlier treaties, such as regulations and directives. Subsidiarity is not defined in a way that covers interpretations of the actual provisions in the treaty.

Secondly, subsidiarity applies only to areas that do not fall within the Community's exclusive competence. That means that all areas in which the Community has assumed competence are already excluded from the principle of subsidiarity. That interpretation is confirmed by the doctrine of the "occupied field" in the 1988 report of the European Commission versus the United Kingdom.

Thirdly, the Community still acts instead of the member states if, because of the scale or effects of the proposed action", the objectives of that action will be better achieved by the Community. The Community—which means the Commission—will decide.

Subsidiarity might be thought to apply if the matter at issue were solely internal to the United Kingdom, and did not affect any of the other Community countries. Again, that is not so: the justification for Community action lies in the objectives of the proposed action. If those objectives are listed somewhere in the Maastricht treaty, or in earlier treaties, the Community can pursue a course of action to achieve them, even if it applies to only one member state.

Let us take an example that was discussed earlier. A certain level of social protection is an objective within the treaty, and we have subscribed to that. Under article 3b, the Community—that is, the Commission and the Council —is entitled to take action to impose on the United Kingdom measures that the Commission considers will achieve a high level of social protection in the United Kingdom.

Mr. Ray Whitney (Wycombe)

My hon. Friend keeps saying "the Community, which means the Commission"; but he has just said "the Community, which means the Commission and the Council". There is a fundamental difference. The decisions that matter are made in the Council of Ministers: I think that my hon. Friend has overlooked that basic principle.

Mr. Walker

I am trying not to say the same thing too often. I apologise for using shorthand when I should probably have gone into more detail. I accept that the Commission will initiate legislation, but all that legislation must be approved by the Council of Ministers.

Under the Single European Act—with which I did not agree—we introduced qualified majority voting. We can be out-voted. If the other 11 states want to go ahead with social protection, we shall be in no position to prevent that from happening, in the United Kingdom or anywhere else.

Sir Teddy Taylor

I am sorry to interrupt my hon. Friend again, but I feel that he should point out to his hon. Friend the Member for Wycombe (Mr. Whitney) that today, in a Lobby briefing by one of our Ministers, a major change in British law was announced. That change, involving the Transfer of Undertakings (Protection of Employment) Regulations 1988, will knock privatisation on the head, and could involve massive payments by firms that have been privatised since 1977. It was not secured by the Council of Ministers; it was not achieved by a democratic body. It was brought about simply because the Commission took infraction proceedings—in other words, someone in the Commission wrote a letter—

The Chairman

Order. This does not have much to do with subsidiarity.

Sir Teddy Taylor

The Government have said—it is in today's Financial Times—that they hope to use subsidiarity to get out of this mess. I have the cutting here.

The Chairman

Order. In future, will the hon. Gentleman explain what he is referring to at the beginning of his remarks, rather than waiting until the last word?

Mr. Walker

My hon. Friend has made his own point very well. I thank him for his useful intervention.

It will be argued that enforcing such restrictions as the 48-hour week on the United Kingdom is within the competence of the Community under article 3b, which puts the whole matter of competition within the single market very much within Community competence. The restriction on working hours—or the lack of it—affects competitiveness. Never mind what the social chapter has to say; I believe that the Commission can act under article 3b.

The same argument applies to the social chapter. No protocol or agreement is needed: the Commission and the Council can impose their will in the whole field of social cohesion, simply by using article 3b. The objectives are already in the treaty, and we have accepted them. This is the same article 3b that, according to Ministers, protects against such Community impositions.

Let us suppose that action were taken by the Commission and the Council against the United Kingdom under article 3b. Let us suppose that the United Kingdom objected to that action, claiming that it contravened the principle of subsidiarity. We could take our dispute to the European Court of Justice, provided that the Commission had claimed in its original proposal that it had considered the principle of subsidiarity, but had decided that it was proper to act, for the various reasons contained in article 3b—had decided, that is, that the "scale or effects" of the action to achieve its objectives justified central action.

In such circumstances, the Court of Justice could not possibly find in our favour. I suggest that the whole interpretation of article 3b is within the competence of the Commission. Provided that the Commission has gone through the motions of considering subsidiarity, there is no provision for the court to substitute its opinion for that of the Commission.

5.15 pm

Let me make an obvious political point. It is in the interests of the Commission, and of individual Commissioners, to exercise as much power as they can. Their very existence depends on their building and maintaining their empire. Similarly, it is in the vested interests of the permanent officials of the Council to fight their individual corners. In the same way, Members of the European Parliament want to build up the prestige and authority of that Parliament. Was it not our own hon. Member for Derbyshire, South (Mrs. Currie)—who is seeking to stand for the European Parliament—who described it as the youngest, biggest super-power in the world"? She may well be disappointed.

Mrs. Currie

I am sure that my hon. Friend realises that the European Community now accounts for 340 million people, as many as the United States and Japan together. Its gross domestic product is 20 per cent. higher than that of the United States alone. In the remark to which my hon. Friend refers, I was identifying the way in which other countries—especially those on the eastern fringe of the Community—see the Community. I implied no more than that, except that the Community—which means all of us—has certain obligations. Various of my colleagues have referred to those obligations: my hon. Friend the Member for Northampton, North (Mr. Marlow), for instance, referred to them when he was talking about Russia earlier today.

Mr. Walker

I do not doubt the hon. Lady's sincerity. She has a view of Europe, and she believes in sharing it. I defend her right to hold that view; I hope that she will be as considerate about my views.

Most important of all, it is in the interests of the President of the Commission, whoever he or she may be, to corner as much of the decision making as he or she can. None of the Community institutions that I discussed when we were discussing the last group of amendments had any interest in devolving powers back to national Governments or Parliaments; yet those very institutions are charged with interpreting the doctrine of subsidiarity in any particular case. As I have shown, they can easily use article 3b to their advantage, deciding that, in any specific case, Community action is preferable.

Did not the summits at Birmingham and Edinburgh shift the balance towards national Governments when they clarified the principle of subsidiarity? That is what I will be asked, but my answer is no. On the contrary, the declaration at Edinburgh reinforced the interpretation that I have given—namely, that the Community and its institutions remain supreme.

The Edinburgh declaration states that the principle of subsidiarity does not relate to and cannot call into question the powers conferred on the European Community by the Treaty as interpreted by the Court. It provides a guide as to how those powers are to be exercised at the Community level, including in the application of Article 235. The application of the principle shall respect the general provisions of the Maastricht Treaty, including the 'maintaining … of the acquis communautaire', and it shall not affect the primacy of Community law nor shall it call into question the principle set out in Article F(3) of the Treaty on European Union, according to which the Union shall provide itself with the means necessary to attain its objectives and carry through its policy". That surely takes us in exactly the opposite direction to that in which Ministers say it takes us.

I have three questions for members of the Government Front Bench. First, does the principle of subsidiarity mean that we need not apply a 48-hour week? Secondly, under subsidiarity, can we decide our own Sunday trading laws even if the goods traded are made elsewhere in the Community or, on the ground that they are Community goods, and for the sake of competition, can the Commission and the Council dictate the terms? Finally, if the Commission decides that the subject at issue falls within its competence, pursues the objectives of the treaty and is of a scale or effect touching on more than one country, and if the decision whether all that is true is to be taken by the Commission and not by us, where does that leave the principle of subsidiarity?

If anything, the Edinburgh declaration reinforces the view that the interpretation of subsidiarity will in practice be left to the Commission. As the Edinburgh summit did not amend article 3b at all, as we are now seeking to do, how can Ministers claim that it gave more power to national parliaments? Given that the interpretation of article 3b rests ultimately with the Commission, which has the sole right to initiate Community legislation, does that not give it the power to cover anything that it wants—the social chapter, economic union, education, cohesion, transport or anything else?

Mr. Marlow

A good test of whether subsidiarity will be effective is the important question of the 48-hour week. Will it be possible for European institutions to apply the 48-hour week to the United Kingdom, or will it be a matter for the House to decide? According to my hon. Friend's reading of subsidiarity within the treaty and the Edinburgh declaration, will the House be allowed to make the decision, or is it in the hands of Mr. Delors and the European court?

Mr. Walker

Sadly, I believe that the House will not be able to affect the issue one way or the other. We shall have to accept what majority voting brings, in this and many other respects. Lord Mackenzie-Stuart called subsidiarity "gobbledegook". As a former President of the European Court of Justice, he should know. He said that subsidiarity would render the court's task almost impossible.

The treaty on European union, and article 3b, is all about creating the legal entity of union. At the general election, my right hon. Friend the Prime Minister showed that he knew and understood what union meant. On Tuesday, he and the Secretary of State for Scotland declared their support for the union. They recognised that the union and the unitary state were indivisible. They set out to strengthen the Union and did so because they have the statutory powers to do so. I believe that under article 3b and previous Acts, the European institutions will enjoy powers similar to those that the Prime Minister enjoys within the United Kingdom.

The White Paper on Scotland stated: To honour that pledge"— to undertake a detailed consideration of Scotland's constitutional issues— the Government embarked on a lengthy and wide-ranging examination of the Union of 1707 and the way it works for Scotland. My right hon. Friend the Secretary of State for Scotland said: The Government are deeply conscious of the importance of the Union to Scotland and of Scotland to the Union. We believe that the integrity of the Union is critical if Scotland's prominent role within the United Kingdom and the United Kingdom's key role in the outside world are to be maintained. I now draw the comparison. The White Paper continues: The Act of Union contained 25 Articles providing for the unification of the Kingdoms, the Act of Succession and the creation of one Parliament of Great Britain with a set number of seats for Scottish members. However, it then states: Other Articles"— I ask you, Mr. Morris, to listen carefully to this— provided for a free trade area and economic and fiscal union, and the Treaty as a whole brought Scotland and England together in a full economic and political Union. Does not that sound very familiar?

Mr. Hugh Dykes (Harrow, East)

Is not that a wholly different union? I cannot understand why my hon. Friend is comparing the two structures and concepts. Is he not reassured by the common provisions in article F(1), which clearly states: The Union"— completely different from the English and Scottish Union— shall respect the national identity of its Member States, whose systems of government are founded on the principles of democracy."?

Mr. Walker

My hon. Friend is trying to tempt me into an argument. Three hundred years ago, it would have been nonsense to talk about democracy as we know it today. One must study the treaty of Union of 1707 in the circumstances in which it arose. I have read it and I invite my hon. Friend to do the same. I do not want to bore the Committee, so I shall not give details of all 25 articles in the treaty of 1707. [Interruption.] Let me make it clear that, north of the border, my comments are considered to be important. If my hon. Friends do not think so, I remind them of the stand taken by my right hon. Friends the Secretary of State for Scotland and the Prime Minister during the general election. They spoke about union, and made no qualifications. They accepted the 25 articles in the treaty of 1707 and the powers that those articles bestowed on them.

I shall draw the Committee's attention to the similarities between the powers of the treaty of 1707 and those contained in this treaty, especially those in article 3b.

Sir Teddy Taylor

Will my hon. Friend be fair to my hon. Friend the Member for Harrow, East (Mr. Dykes) and confirm that the Union with Scotland allowed the Scottish people to keep their own £1 note, in exactly the same way that, as a result of the triumph at Maastricht, we shall be able to keep a separate British £1 note? However, will he make it clear to him that having a Scottish El note does not mean that the people of Scotland have control over their economic and monetary policy?

Mr. Walker

Exactly, but I do not want to digress into such matters. I am always delighted to debate the details and technicalities involved in the Act of Union between Scotland and England. I have read that treaty, just as I have read the Maastricht treaty. I understand both where I can or where it is legally possible to understand. When I have asked people for legal advice, most have been unable to tell me what the Maastricht treaty means.

I was referring to the White Paper. In response to a question on Tuesday, my right hon. Friend the Secretary of State for Scotland said: I am grateful for my hon. Friend's welcome for my announcement. The number of seats in the House derives form the Act of Union, which guaranteed Scotland a certain number of seats. However, I entirely agree that it is high time the boundary commissioners got down to work on the relative size of constituencies."—[Official Report, 9 March 1993; Vol. 220, c. 796.] That is important if we bear in mind what is happening to European constituencies, which is why I draw the Committee's attention to it. He also said: The Act of Union of 1707—

Mr. Devlin

It is not in the treaty.

Mr. Walker

I know what is in the Act of Union. My hon. Friend the Member for Stockton, South (Mr. Devlin) should not get into an argument with me about it. He should go to the Library and get a copy of the amended Act of Union. I suggest that he goes to the Scottish library and gets a copy of the Act of Union, which was passed in Scotland, accepted by this Parliament and subsequently amended. The important issue is the 25 articles in the original Act which were accepted. My hon. Friend has not read them.

The Secretary of State for Scotland also said: The Act of Union of 1707 secured for the Scottish people a strong and special place within the United Kingdom. It guaranteed the continuance of Scotland's separate legal, educational and local government systems." —[Official Report, 9 March 1993; Vol. 220, c. 787.] 5.30 pm

I remind the Committee that article 3b says: Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty. I submit that the creation of one parliament in 1707 and the articles of that treaty, which provided for a free trade area and economic and fiscal union, combined with full political and economic union, were much the same objectives as those contained in the treaty of union which we are debating today.

My right hon. Friend the Foreign Secretary said that the Single European Act presented problems with the legal reach of that treaty. During the passage of that Act, I asked about the definition of ever closer union.

Mr. Devlin

Could my hon. Friend explain why he thinks that the Act of Union has been good for Scotland and why a further Act of Union would not be good for Britain?

Mr. Walker

If we put it to the people and they said that they wanted it, I would accept that, because I am a democrat. I have never made my position on that uncertain. The comparisons are odious in that one is being told that we are getting certain things built into a treaty which others, who are better equipped legally to analyse such things, tell me is legal gobbledygook. Surely, I, as a Scottish Member of Parliament, have every right to protect the interests of the Scots, who joined the 1707 Union which was profitable for both parties, because that union is being changed by this union. My hon. Friend the Member for Wycombe (Mr. Whitney) shakes his head. He should tell me that when Scotland separates from the rest of the United Kingdom. I am determined to maintain the Union.

I must draw attention to the probable hazards because we must accept that there will be a backlash if we sell a prospectus which does not live up to the sales pitch. On 23 April, 1986, I said: My right hon. Friend will be aware that union means something north of the border, and certainly in Northern Ireland; it is something we care deeply about. This afternoon an explanation was given why it was right to call the European Assembly a Parliament. Would it not be correct to assume that, if we continue to use the word 'union' in the way it has been used and is being used, we Scots will be justified in thinking that the word means union as we understand it?"—[Official Report, 23 April 1986; Vol. 96, c. 334–335.] At that time, I was told that I was wrong, but today we know that I was right. I also said: The hon. Gentleman will be aware that I have been in my place from the moment that the debate began and that I have not been called to participate in it. He will be aware also that, being a unionist, union means something to me. But if talk about union within Europe is in the same context as union in Scotland, even the hon. Gentleman will understand that that is not quite what we in Scotland believe should happen."—[Official Report, 23 April 1986; Vol. 96, c. 383.] I draw attention to that because there is a suggestion in some quarters that one is being disloyal.

I have demonstrated that subsidiarity as contained in the union treaty can and will give powers to European institutions which are not dissimilar to those contained in the 1707 Act of Union. Consequently, it is wrong to claim that the current evidence from the Community is against centralisation or ever closer union. The evidence on air service agreements is testimony to the movement of decision making and negotiations from the United Kingdom Government to European bureaucrats.

We know that, on the past record of the European Court of Justice, it will decide in favour of the treaty's objectives. Community institutions will use the union objective powers as contained in article 3, just as my right hon. Friend the Prime Minister and former United Kingdom Prime Ministers have used the powers contained in the 1707 Act. The objectives and articles in that Act are not dissimilar to those contained in the European treaty of union.

It is not good enough for my right hon. Friend the Foreign Secretary to say that attitudes have changed. The bureaucrats are still in place. New centralising politicians can and probably will emerge. We will not always have my able and talented right hon. Friend to protect our interests, and that aspect worries me.

Subsidiarity, as contained in article 3b and defined at Edinburgh and Birmingham, will not reduce or remove the centralising powers of the treaty of Rome, the Single European Act and the treaty of Union. At best, it is unwise to leave such powers to future politicians. At worst, it is foolhardy to hand over such powers without the full-hearted consent of the people. Next year or 10 years from now, it will be too late and our children and our children's children will not thank us for giving away their power to change the law within the United Kingdom by voting out a Government with whom they are unhappy or changing the incumbent Government's attitude to a specific policy.

Every week in the House, we hear Scottish Members complain about the powers exercised by this Parliament and by the United Kingdom Government in Scotland and Westminster. That is after almost 300 years of political and economic union, of free trade and of economic and fiscal union. Does anyone seriously believe that we will not see, in this age of mass communications, early evidence of disillusionment, especially when it becomes evident that the so-called opt-outs and subsidiarity have little or no impact on the way in which the Community institutions and the European Court of Justice move to implement the objectives contained in titles I, II, III, IV, V, VI and VII and in article 3? I shall not read those articles because I am sure that everyone knows them by heart.

I ask my right hon. and hon. Friends on the Front Bench why they are reluctant to debate the details of the treaty. Why are they unwilling to admit that the Single European Act, the single market and the treaty of Rome will still be in place even if the treaty fails to be ratified? We will still have a single market. Why are they trying to make out that people such as me and other hon. Members are being disloyal? I remind my right hon. Friends that, on constitutional matters affecting Scotland, I have not changed my position over the past 40 years. My party and my Government have changed on more than one occasion.

I remind my right hon. and hon. Friends that, during the debate in the country in the late 1960s and early 1970s, I asked questions about union and its legal meaning, and I continued to ask such questions in Parliament during the passage of the Single European Act. I remind them that I opposed entry to and membership of the exchange rate mechanism. It was the Government who changed their policy. At what time was I being disloyal? I remind them that, as a Scot, I have constantly striven to get the House to address what the meaning and practice of political, economic and monetary union would be within Europe if it followed the experience of almost 300 years of union within the United Kingdom.

Subsidiarity is legal nonsense. The objectives of the treaty, the treaty of Rome and the Single European Act are legal and binding, just as the articles in the 1707 treaty of Union were legal and binding. If we are to accept such a commitment, the people must be consulted. We must have a referendum. In the absence of a referendum, article 3b should certainly be removed from the treaty. That is why I support amendment No. 29 and the other amendments in this group.

Mr. Denzil Davies (Llanelli)

It is good to see the Foreign Secretary present for the debate. I mean that properly. He feels strongly about subsidiarity. He sees it perhaps as something for which he has worked hard, although, of course, it has been in the treaty for 40 years. I remember that on one occasion he made a speech—he makes good speeches—in which he said that he had no intention of seeing the House of Commons become something like Oxford county council. I mean no disrespect to that body. The Secretary of State may feel that subsidiarity is his contribution to ensuring that the House does not become something like Oxford county council. I fear that he is mistaken.

I do not believe that the concept of subsidiarity will stop the centralising progress and process of the Community. It may arrest it in certain areas, because such things ebb and flow. If one reads about the American constitution, one finds that from time to time the Supreme Court upholds state rights against federal rights. But in general the movement is towards the centre and away from the states.

Indeed, a study of the jurisprudence of the European Court shows that there was a time in the 1950s and 1960s when the judges paid attention to the concepts behind subsidiarity, if not subsidiarity directly. But then, as we moved through the 1970s, and certainly now, the court is moving in the other direction. We shall debate the European Court next. It may take congnisance of the notion of subsidiarity.

The Solicitor-General is here. It is nice of him to come here. I do not criticise him, but he does not have too much work to do on subsidiarity. I agreed with the Commission when it said in its paper to the Edinburgh summit that subsidiarity was essentially a political principle. The European Court does not have much part to play. That is purely a personal view. I would not pretend to be a lawyer with any great knowledge of subsidiarity, but I suggest to the Committee that the only area in which the court might invoke its jurisdiction is a judicial review.

The European Court might examine decisions made by the Commission, but I do not believe that it would tell the Commission that it was wrong and should not have made a certain proposal because subsidiarity applied. It would not do so because that would be to arrogate to itself a political and administrative decision. I know that it is a political court in one sense, but I do not believe that it would go that far.

The European Court might apply the principle of reasonableness—one of the great principles of British law. It might rule that the Commission had arrived at a decision which a reasonable official would reach and had followed the principles of natural justice, so its decision was not wrong. Many lawyers who have given evidence to the Select Committee on Foreign Affairs, such as Mr. Jeremy Lever, whom the Solicitor-General knows well, have reached the same conclusion. It is probably the safest conclusion that one can reach.

We are talking about an essentially political principle. It will ebb and flow, as indeed the views of people in Europe ebb and flow about this strange, not federal but European union which is basically a union of institutions. We are talking about institutions coming together and having different competences and powers. The three most important institutions are the European central bank, the European Commission and the European Court of Justice. I hate to describe them as a troika, or, if that is not correct, a triumvirate. They will continue whatever negotiations take place.

There will be more negotiations and perhaps more treaties. Institutions will fight among themselves to gain more power. The power of the Council of Ministers will decrease a little. The European Parliament will receive a little more power. But the Court, the Commission and the bank will continue and will arrogate to themselves more power.

We shall have a Europe of institutions, as we have now. Attempts will be made at the fringes in the European Parliament and the Council of Ministers to inject some democracy. The Foreign Secretary looks perplexed, but that is the basic danger to democracy of the European state or super-state. People may call it federal, but I do not believe that it is federal or confederal. It is institutional power. That is the real danger we face.

5.45 pm

I wish to ask a few questions about subsidiarity. I obtained from the Library the conclusions of the presidency reached at Edinburgh on 12 December 1992. I read them merely in an effort to understand. Under "Basic Principles" the document says: European Union rests on the principle of subsidiarity. That must be a typing error—it must mean "recognises" the principle of subsidiarity. It continues: as is made clear in Articles A and B of title I of the Treaty on European Union. One has to read those articles right to the end. At the end they say that the treaty also recognises the principle of subsidiarity. I hope that the Foreign Secretary can put my nit-picking Welsh lawyer's brain at rest by telling me that the conclusions of the presidency contained a typing error. European union cannot "rest" on the principle of subsidiarity. It recognises that principle and perhaps seeks to incorporate it, but it does not rest on the principle of subsidiarity.

Then we are told that the principle of subsidiarity contributes to the respect for the national identities of Member States and safeguards their powers. I do not know what the phrase contributes to the respect for the national identities means. It does not mean anything very much. I shall come back to the question of safeguarding the powers of member states. Subsidiarity may safeguard those powers, but it does so only in the limited areas in which the powers do not rest within the competence of the Commission, the court or the Community and its institutions.

We have heard about article 3b. Indeed, it is mentioned in a footnote to the conclusions of the presidency. We are told in the conclusions: Article 3b of the EC treaty covers three main elements. I am surprised that the Government could write such meaningless nonsense for the conclusions of the presidency at the Edinburgh summit. The document says that the first element is a strict limit on Community action. The use of the word "strict" is odd. The Government try to say that the Community's powers are strictly limited. The powers are limited by the treaty. I suppose that that is a strict limit. The Foreign Secretary nods his head. Why write that at all? Everyone knows that any institution, unless it happens to be the Soviet Communist party, has strict limits. Even the Soviet Communist party was limited by something or other. Every institution in the western world, if it exists within a democracy, is not—[Interruption.] If my hon. Friend the Member for Houghton and Washington (Mr. Boyes) wishes to have a discussion of the limitation of the powers of the Soviet Communist party, I am happy to do so.

Mr. Marlow

Is not the problem that the institutions are limited not by a strict limit but by a vague limit? The essence of the treaty is its vagueness, which allows the institutions of the European Community to apply power in whatever area they want.

Mr. Davies

Strict or vague—perhaps a bit of both. The point is that there is a limit and the limit is the treaty. How one interprets it and what it means in a given circumstance is work for lawyers. I am sure that the Solicitor-General agrees about that. It is a splendid treaty for lawyers. Lawyers are doing well out of this European nonsense. Of course there is a strict limit, but why bother to tell us something that is fairly obvious and does not add anything?

Mr. Spearing

My hon. Friend mentioned competence, but as he knows from article 3b, subsidiarity—whatever it be—applies only outside areas of exclusive competence. When I asked the Attorney-General to list those areas which were within the exclusive competence of the Community so that we could find out where subsidiarity operated, he declined to do so. He said: The answer to the hon. Member's question about exclusive competence is the same as to his question about exclusive jurisdiction, mutatis mutandis: the European Community has exclusive competence where that is conferred upon it by treaty provision or measures … Current examples include the common agricultural policy, the common commercial policy and the external tariff."—[Official Report, 19 May 1992; Vol. 208, c. 67.] There are many other examples, but he could not define the areas of exclusive competence.

Mr. Davies

My hon. Friend is right; there are many other things.

Paragraph 2 of the conclusions of the presidency paper says—I am sorry to bore the Committee—that "the three paragraphs", by which it presumably means those in article 3b, cover three distinct legal concepts which have historical antecedents in existing Community Treaties or in the case-law of the Court of Justice. That is fair enough. The first principle is that the Community can only act where given the power to do so". Again, that is understandable. It then develops quite an interesting argument: implying that national powers are the rule and the Community's the exception. The Commission paper that was considered at the Edinburgh summit advances the same proposition. The original thinking was probably correct: a few powers went up to the Community, but most of the important powers stayed with nation states.

The Maastricht treaty proposes a reversal of that thinking. Now, if one includes stage 3 of economic and monetary union, most of the important powers—certainly those for domestic and economic legislation, but leaving aside foreign affairs and defence—are held at Community level. Once stage 3 is achieved and we have a common currency—as, no doubt, we will—with the powers of the European bank, of the European Court of Justice and all the economic powers, national powers will be the exception.

That change has been taking place over the years, and it is crystallised and almost codified in the Maastricht treaty. That is how I see it, but I may be incorrect. That is why we are debating a substantial sea change under the Maastricht treaty.

Sir Nicholas Fairbairn (Perth and Kinross)

Does the right hon. Gentleman regard the definitions that he has just read as vaguely strict or strictly vague?

Mr. Davies

I was reading not a definition but the conclusions of the presidency and of the Commission's paper. Perhaps the hon. and learned Gentleman should ask the Foreign Secretary.

The paper continues: An agreement shall be sought to this effect"— that is, the relationship with subsidiarity— between the European Parliament, the Council and the Commission, in the framework of the interinstitutional dialogue"— these institutions talk to each other all the time— which is taking place among these Institutions. I have not followed this closely, so will the Foreign Secretary tell us whether there will be some kind of an agreement? Are we working on it now? Is it ready? What is the agreement supposed to do? The conclusions of the presidency refer to it.

The paper continues: The principle of subsidiarity does not relate to and cannot call into question the powers conferred on the European Community by the Treaty as interpreted by the Court. There is very little left. The Foreign Secretary no doubt put his name to this or negotiated it. It continues: It provides a guide as to how those powers are to be exercised at the Community level … The application of the principle shall respect the general provisions of the Maastricht Treaty, including the 'maintaining in full of the acquis communautaire', and it shall not affect the primacy of Community law nor shall it call into question the principle set out in Article F(3) of the Treaty on European Union, according to which the Union shall provide itself with the means necessary to attain its objectives and carry through its policies. That does not mean much.

Rather typically for such a document, it continues: Subsidiarity is a dynamic concept". Perhaps the Foreign Secretary will give some examples of this great dynamism outside acquis communautaire, outside the treaty, outside the court, outside the competence of these institutions, outside the bank. Where will this dynamism come from?

The last paragraph says: The principle of subsidiarity cannot be regarded as having direct effect; however, interpretation of this principle, as well as review of compliance with it by the Community institutions are subject to control by the Court of Justice, as far as matters falling within the treaty". Perhaps the Attorney-General or the Foreign Secretary will tell us what that means. Can an individual who believes that subsidiarity has been breached bring an action in the British courts or European Court of Justice? My hon. Friend the Member for Ashfield (Mr. Hoon) was a Member of the European Parliament and will know the answer, so I shall give way to him.

Mr. Geoffrey Hoon (Ashfield)

An individual can bring an action if he is directly affected by the decision that he is challenging.

Mr. Davies

I am sure that the Foreign Secretary will confirm that my hon. Friend is right. An individual can challenge a decision taken by the Commission in respect of subsidiarity, which is good to know.

Mrs. Dunwoody

Is not one of the worrying aspects the fact that European people who are unhappy with decisions made by institutions which, for example, are responsible for the common agricultural policy, are taking direct action, as fishermen have done not in one country but in several?

Mr. Davies

My hon. Friend makes a very good point. I do not know whether I should follow it, but if we have a Europe of institutions with no democratic outlet, people may take such action. Some of the posher British newspapers may be upset about our making fools of ourselves in the House by putting on funny hats, but doing that and trying to assert the rights of the Opposition is preferable to chucking cobblestones. Perhaps it is our way of throwing cobblestones. There is a danger that people will take such direct action, especially when they feel very little allegiance to those institutions.

Mr. Ron Leighton (Newham, North-East)

Is my right hon. Friend convinced that subsidiarity will enable an individual to take his case to the European Court of Justice? No doubt the Foreign Secretary will answer that, but subsidiarity is not new. Commission officials will claim that the committee already acts in accordance with subsidiarity. Are there any precedents of an individual making a challenge under the principle of subsidiarity? An individual might challenge a matter under something completely different, but I have not heard of an individual taking an action to the European Court of Justice under the principle of subsidiarity.

Mr. Davies

I defer to my hon. Friend, who is a great expert. Unless the Attorney-General says that my hon. Friend is wrong, I am happy to accept what he says.

Mr. Marlow

The right hon. Gentleman referred to the conclusions of the presidency at the European Council in Edinburgh. Subsidiarity is fundamental to the Government's case that things are moving in our direction, that we will have more control over our own affairs and that Europe is now being decentralised. However, as the right hon. Gentleman has just said, the Edinburgh Council concluded that the interpretation of the principle of subsidiarity, as well as the review of compliance, are subject to the control by the European Court of Justice.

What is the possibility that the Government have sufficient influence over the European Court of Justice to ensure that the principle of subsidiarity is applied in the way that the Prime Minister and the Government are suggesting to the country that it is being applied?

Mr. Davies

We must leave that to the court. Whatever may be the mood of the Foreign Secretary, it is clearly the present mood of the European Court of Justice to interpret everything for the benefit of the union. It has always done that. The court threw out the arrangements in relation to the European Free Trade Association and the EC in the first place. It stated that it should interpret the directives for the benefit of the furtherance of the union, because that is what the court is there to do.

6 pm

Over the past 10 or 15 years, the European Court of Justice has been moving rapidly towards the concentration of the power of the union at the centre and away from the rights of the states—if one can use the example of the United States. That may change, but I would be surprised if it happened.

I believe that the European Court of Justice will not decide questions of subsidiarity. It will simply decide a judicial review procedure. It will say, "Yes, the Commission officials sat down, had a meeting and could reasonably have reached the decision that they did. They followed the procedures that were laid down." As I understand it, there may be a proposal in the intergovernmental and inter-institutional arrangement for rules which the Commission must follow when deciding whether to apply the principle of subsidiarity.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

My right hon. Friend has made a good point. If the principle is to be applied politically, we do not know what institutional procedures will be used to determine whether a particular policy or area of activity is to be judged as subject to subsidiarity. Will that be achieved by qualified majority or through the Council of Ministers? If my right hon. Friend could enlighten us about that, it would be very helpful.

Mr. Davies

I cannot really do that. However, I assume that the Commission will take a decision. It may be easier for the Commission to do that than the Council of Ministers. Within its area of exclusive competence, presumably the Commission will have to decide whether it should act or leave it to the principles of subsidiarity. If it takes that decision, so far as I can tell, only the courts can question that. My point is that the courts will be likely to question only on the basis of judicial review.

Mr. Marlow

I think that I can help the right hon. Gentleman. If a matter is to be decided by majority voting, the decision as to whether that is a matter for subsidiarity will also be decided by majority voting. If a matter is put through, and the United Kingdom is in a minority, we can do something about it only by taking the matter to the court. If we take it to court when the matter has been decided on the basis of majority voting and subsidiarity has been decided by majority voting, our chances of making a challenge would be zilch.

Mr. Davies

If the Council of Ministers has exclusive competence over the matter, subsidiarity does not apply. If the Council of Ministers decides by majority voting and it reaches a decision, that is the end of the matter if that matter if within the exclusive competence of the Council of Ministers. As I understand it, the question of subsidiarity arises only if there is a division of responsibility or there is seen to be such a division of responsibility.

Frankly, one could go on for hours referring to the areas that are within the exclusive competence of those institutions. We can identify many of them. However, so far as I am aware, no one has worked it out. If the matter is not within the exclusive competence of the Council of Ministers, presumably a nation state can make a challenge. As my hon. Friend the Member for Ashfield said, even an individual can make a challenge through the courts on the basis that subsidiarity should have applied and the nation state should have been allowed to take a decision on its own.

Mr. Spearing

Even if it is conceded that a nation should be able to act on its own, are not the proponents of this extraordinary doctrine forgetting that article 3b does not say, "If the nation can do it, let the nation do it." Instead, it states whether it should be "sufficiently achieved"—whatever sufficient is—or, if it can be achieved, whether it can be better achieved by the Community in future. As the whole thing is a proposition, surely it is an hypothesis and, as my right hon. Friend said much earlier, wholly a question of political judgment, which is a matter of opinion and not of legal fact.

Mr. Davies

It is mainly a political matter, although there may be legal consequences.

In paragraph III, headed "Procedures and Practices", of the conclusions of the presidency, we are told under (a), which refers to the Commission: The overall monitoring by the Commission of the observance of the provisions of Article 3b in all its activities is essential and measues have been taken by the Commission in this respect. What happened to that idea? Quite a few people put that idea to the Foreign Office. Sir Jeremy Lever QC produced a paper for the Select Committee on Foreign and Commonwealth Affairs. I understand that he wrote to the Foreign Office. He wanted to know why the Commission should be entrusted with monitoring whether the Commission itself was carrying out the guidelines on subsidiarity. In his paper to the Select Committee, Sir Jeremy Lever said that he did not receive an acknowledgement to his letter. Why was it necessary to allow the Commission to carry out the monitoring? There was no need for that.

The monitoring could have been carried out by another organisation. Indeed, we could have had another institution to perform that task. The monitoring could have been carried out by a body comprising Welsh nationalists, councillors or community councillors. We could have had another institution because no doubt by 1996 there will be many more such institutions. A sub-group or perhaps the court of first instance could have carried out the monitoring. If we are really striking a blow for the nation state, why allow the Commission to monitor its own progress?

No doubt those matters have been considered. Perhaps the Foreign Secretary lost the argument. Perhaps he did not put the argument. I cannot get much more out of the presidency paper. Therefore, I will briefly refer to 'the Commission's paper and to a letter dated 5 November 1992 from Jacques Delors to the Foreign Secretary in his capacity as President of the Council of the European Community. That document is very interesting because the Commission tells us what it thinks of subsidiarity. It states: the powers that a State or a federation of States wields in the common interest are only those which individuals, families, companies and local or regional authorities cannot exercise in isolation. I do not know why the Commission bothered with that first paragraph. It likes to write things like that. The document continued: In the Community context, subsidiarity means"— one then gets very excited, as we expect the Commission is about to tell us what it means— that the functions handed over to the Community are those which the Member States, at the various levels of decision-making, can no longer discharge satisfactorily. I did not think that subsidiarity meant that. Member states have handed over functions to the Community and the Community states that they can no longer discharge them satisfactorily. I do not know about that.

Surely subsidiarity does not mean that the functions handed over to the Community are those functions. I thought that it was the other way round. However, we are back to the anomaly. The Commission is still operating under the old jurisprudence, acquis communautaire, and the belief that a few powers are handed up and then everything fits in. That has changed. The Commission has the powers now and it may allow a few to dribble back down through the principle of subsidiarity. That is how I read it.

It then says in paragraph 3: For more than 40 years the subsidiarity principle has satisfied two requirements. So it is nothing new; it has existed for a long time, as has proportionality in the way in which the court interprets the necessary part of the article.

The document goes on to delineate certain policies: The common policies within the exclusive competence of the Community— the creation of a frontier-free area and the flanking policies provided in the Single Act—all these initiatives have been fully justified by the imperatives of European integration. Everyone accepts that these tasks could only be effectively undertaken at European level. The results speak for themselves. The letter also states: national powers are the rule and the Community's the exception. What a load of nonsense. That appeared in a letter that Jacques Delors sent to the Foreign Secretary. Has the Foreign Office questioned it? Does anybody go through these things? Of course, that is no longer true. National powers are not the rule, and if Maastricht goes through, Community powers will certainly not be the exception. We have to examine how things are evolving and in my opinion that old jurisprudence has gone.

The letter continues in the same vein until paragraph 2 on page 6 where it talks about The block of exclusive powers". That is the block on subsidiarity. It states: So that the Community can attain its objectives, certain obligations to act have been imposed upon it"— poor Commission to have had such terrible powers imposed upon it. These include, in particular, the creation of an area without internal frontiers, the strengthening of economic and social cohesion"— we now return to the point about 48-hour weeks— and the establishment of economic and monetary union. All those powers provide the block of exclusive powers, again outside the competence of subsidiarity. We then have a long list of all the other powers.

In conclusion, perhaps the Foreign Secretary thinks that he has done well and obviously there has been an attempt to nibble away at the extended powers that have given to the Commission, the Community and the bank by the Maastricht treaty. A little will come back for subsidiarity, but it will depend on the political climate at the time, the strength of the Commission and the feeling in member states.

The centralisation process will continue. As those institutions gather more power to themselves and as nation states cannot bring themselves to transfer democratic powers to them, we will have a hybrid of Community institutions with little democracy and people will react and demonstrate against it. They will feel that they have no part to play in it and that is the danger for the people of Europe.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd)

I apologise to some right hon. and hon. Members, certainly to the hon. Member for Hamilton (Mr. Robertson), for not having been here at the beginning of the debate on Monday. I have read what was said, and I shall try to pick up some of the points that were raised.

The principle of subsidiarity, as its critics and supporters have acknowledged, lies at the heart of our idea of the Community. We joined the Germans in negotiations to ensure that there was proper provision for it in the treaty. We put our case, we won the argument, and we are now putting it into effect.

The existence of article 3b, and much else that has been said and done in the past 18 months, illustrates a change in the nature of the debate on Europe. In an opposite sense I am following the point that the right hon. Member for Llanelli (Mr. Davies) has just made.

The old orthodoxy with which many of us grew up, although we did not all accept it, was that Europe would be built by doing more things together and transferring decision making in a steadily increasing number of areas to Brussels. Every such transfer from national to Community action was hailed as a success and as progress. That principle imbues the treaty of Rome and the Single European Act. There are still priests of that orthodoxy, and from time to time they restate the doctrine to themselves and to others.

6.15 pm

The negotiations for Maastricht, the treaty and what has happened since signify a change in direction. The principle of subsidiarity is now for the first time enshrined in the treaty as a substantial and legally-binding decision.

At Edinburgh we agreed procedures and guiding criteria for ensuring that subsidiarity is applied rigorously across the board of Community activity. That is why I believe that article 3b is one of the significant parts, and I would say gains, of the Maastrich treaty.

My hon. Friend the Member for Tayside, North (Mr. Walker) was absolutely right to say that it is dangerous to oversell an argument, and I do not want to oversell this one, but I believe that the article offers the chance to arrest the centralising, harmonising tide. I do not claim that it marks the end of the debate; the debate will continue and it is crucial that Britain should play a full and central role in it. We will not do ourselves any service if we stand aside from the debate and the decisions that will powerfully affect us.

Mr. Leighton

The Foreign Secretary knows that the great new area of Community competence that the Maastricht treaty provides is economic and monetary union and a single currency. What subsidiarity is there in monetary policy? As far as I know, there is absolutely none at all.

Mr. Hurd

The treaty provides for a single bank and a single currency. Obviously, we could not have several banks and several currencies. That is one reason why we have an absolute opt-out on that part of the treaty.

Let me deal with one point that was raised by the hon. Member for Hamilton and the hon. Member for East Lothian (Mr. Home Robertson), who is not here today.

Mr. John Home Robertson (East Lothian)

Yes, I am.

Mr. Hurd

I beg the hon. Gentleman's pardon. He is not in the seat from which he spoke on Monday. I do him an injustice.

The hon. Members for Hamilton and for East Lothian tried to read across the question of subsidiarity to relationships within the United Kingdom. They are entitled to a view on that, but it is not relevant to the debate.

Mr. Home Robertson

It should be.

Mr. Hurd

No. The hon. Member for Hamilton said on Monday: we must ensure that national identities and decision making are protected"—[0fficial Report, 8 March 1993; Vol. 220, c. 727]: That is exactly what is done in the treaty. Article 3b refers only to the relationship between the Community and member states, and the Birmingham declaration states that it is for each member state to decide how its powers should be exercised domestically. Whatever the case for or against devolution in the United Kingdom, it has nothing to do with the treaty of Maastricht, and that is made clear.

Were we having a domestic debate, I would say that transferring powers to parents in schools and to patients in the national health service is a substantially better effort at bringing decision making closer to the citizens than to play about with legislative assemblies in Cardiff and Edinburgh. As we are not having a domestic debate, it would be out of order for me to make that point.

Mr. Marlow

Can my hon. Friend say at this early stage whether the House of Commons will be able to decide whether we should have a 48-hour week in the United Kingdom?

Mr. Hurd

I shall come later to the working time directive and related matters.

Mr. George Robertson (Hamilton)

The Secretary of State is making a pedantic point about nation states. The fact that the United Kingdom is made up of nation:; and not simply regions should not escape him, but is he not aware that the concept of subsidiarity was first used in the European Community in an attempt to resolve the problems in the Federal Republic of Germany between the federal level and the Milder state level and it was convenient then to do so. For the British Government alone to say that subsidiarity is confined to a relationship between the nations of the Community and the Community itself puts Britain in a class of one. Everybody else sees the subsidiarity principle as one that takes decision making to the level closest to the citizen. That must have implications for the internal organisation of the states.

Mr. Hurd

No. The hon. Gentleman cannot have understood what I was saying. I quoted from the Birmingham declaration—not from the Government's view but from the Community's view, which is that inside a nation state the arrangements are for that state to decide. The United Kingdom was not alone. Spain, for example, was strongly in favour of the declaration, and it prevailed. As for the treaty, the discussions and the signing of the treaty, the position is clear. It does not affect the pros and cons of devolution and it has nothing to do with the treaty of Maastricht.

Mr. Peter Shore (Bethnal Green and Stepney)

I intervene to fortify, in a sense, what the right hon. Gentleman says. Surely it would be a wholly unacceptable extension of Community competence to allow European union to decide the structures of government within the United Kingdom.

Mr. Hurd

Precisely. The right hon. Gentleman, with his usual robust attitude to these matters, has hit the nail correctly on the head.

Mr. Home Robertson

Will the right hon. Gentleman give way?

Mr. Hurd

I am anxious to get on, but as I referred to the hon. Gentleman I shall give way to him.

Mr. Home Robertson

My intervention may be helpful to the right hon. Gentleman. If he is having difficulty in grasping the dangers of failing to acknowledge the status of nations within the United Kingdom, he may care to read an interesting novel called "Scotch on the Rocks", which he wrote himself.

Mr. Hurd

It was a cautionary tale. Various lessons can be drawn from it, but not the one that the hon. Gentleman is suggesting.

My hon. Friend the Member for Spelthorne (Mr. Wilshire) discussed in an interesting speech the levels by which society structures itself. He asserted that the sense of national identity is one of the deepest levels. Indeed, I think he said that it is the deepest level. There is much truth in that, and that truth has reasserted itself in the past year or so. It did so, indeed, in the Maastricht negotiations. That is one of the purposes and points of subsidiarity.

I am not saying that that is a solution to the problem. Again, I do not wish to oversell the argument, but interdependency, as it has developed in the modern world, means that there is some discussion and some tensioning between the different levels that my hon. Friend the Member for Spelthorne was talking about. By means of the article and the procedures adopted as a political fact before there is a legal obligation, we are trying to ensure that within the Community we shall do our best and be careful to assign actions to the level where they can best be taken.

My hon. Friend the Member for Colchester, North (Mr. Jenkin) made a well-researched speech. I think that he was rather the victim of a doctrine of historic inevitability, rather as the communists used to feel that there was an inevitability about the triumph of communism. My hon. Friend seems to feel that, if we remain in the Community, we are on a sort of conveyor belt that inexorably, whatever is written down and whatever people say or pretend, will sweep us into oblivion as a nation. Many hon. Members feel that. I shall respond to their position before I resume my place.

I do not think that there is such inevitability. Those who hold the defeatist view of inevitability underestimate our influence and the instincts of many people throughout the Community. A draft treaty was submitted to us which reflected that view. There was a time in the negotiations when the Dutch presidency felt that we were straying too far from the traditional orthodoxy. There is the business of the three pillars, two of which do not give the Commission a monopoly of initiative. Two of them are specifically outside the jurisdiction of the European Court.

The Dutch presidency felt that this was unorthodox, and it tabled a draft that re-established the orthodox. If it had been in the treaty, it would have given substance to what my hon. Friend the Member for Colchester, North was talking about. In fact, it was rejected in September 1991, three months before Maastricht, not because we objected but because the majority of member states saw that it was not on. That is a substantial piece of evidence that change is taking place.

We moved on to the treaty as it stands, with the three pillars that I have described and the principle of subsidiarity. Article 3b does not represent an attempt to prevent all forms of Community action or to repatriate powers that have been given by nation states to the Community. There are many activities that can best be undertaken at a European level.

Let us take the single market, for example. Left to themselves, member states are hardly likely to blow the whistle on illegal aids or other breaches of common rules that give their companies an unfair advantage over the companies of their partners. That is why so much of the pressure for Community action comes from our companies and interests. Britain gains from the existence of strong institutions and can enforce the disciplines of the single market and help to forge common solutions to common problems, such as transnational pollution.

What we need—it is something that we have not had, but we are trying to create it—is a proper mechanism inside the Community to ensure that it, the Community, does only what it should do and can properly do. That is why we argued for an effective definition of subsidiarity. The final wording of article 3b bears the imprint of that effort. As the right hon. Member for Llanelli rightly said, it is a threefold test.

The three paragraphs deal with three separate matters. The first question is whether the Community can act. Does it have a legal base to do so under the treaties? The first paragraph underlines that the Community acts within the limits of its treaty powers and objectives. The right hon. Gentleman says, "Why say that? It is obvious." It is not obvious to many right hon. and hon. Members.

I have so often heard the argument that subsidiarity is merely a gracious delegation by a Community that has grabbed all the powers. It is asserted that it is a delegation outwards and downwards in certain particular instances to national institutions. It is necessary to say that that is not the position. The powers that are available to the Community's institutions are those granted by treaty.

The second question is whether the Community should act. That is taken up by the second paragraph of the article. Can the objective of the proposal be sufficiently achieved by member states? If not, can it be better achieved by the Community?

Thirdly, how much should the Community do? That is a question that covers all Community activity. Is it using the lightest possible form of legislation, leaving as much as possible to the discretion of its member states, consistent with achieving the objective?

I return to the first question, which is whether the Community can act. It is sometimes said that the doctrine of subsidiarity is flawed because the presumption is that the Community should act unless the power to act is delegated to subsidiary bodies. That is the exact reverse of the true position. I shall quote, as others have done, from the Birmingham declaration, which we all agreed: The Community can only act where the member states have given it the power to do so in the Treaties. Action at Community level should happen only when proper and necessary: the Maastricht Treaty provides the right framework and objectives for this. I shall use an anecdote to explain the position. I remember the discussion that took place at Birmingham. One participant was a veteran of Community discussions who had been away for a bit. He had returned after an interval of years. He took the microphone and said, "We cannot say this." He had realised suddenly that orthodoxy had changed and that the old idea that the more the Community did the better was out of date. His view did not prevail; it was considered to be out of date. We went on to agree the words which I have quoted. That illustrates the change that has taken place.

Sir Teddy Taylor

Can my right hon. Friend give us an example of how the provision could be used to protect Britain against a majority vote directive that we believed infringed the principle of subsidiarity? How do we go about it? What do we do? How can we use the provision if we believe that something is being done that infringes the principle?

Mr. Hurd

I am dealing now with the clause itself. In a moment I shall come to what is being done to make this a political fact before it is a legal obligation, which is where my hon. Friend's point will become relevant.

The Edinburgh statement refers to the principle that the Community can only act where given the power to do so—implying that national powers are the rule and the Community's the exception". [Interruption.] The right hon. Gentleman does not believe that, but it is stated and restated. National powers are the rule, and Community powers the exception.

Then it is said that this has always been a basic feature of the Community's legal order. That may be so, but I do not believe that it would have been said two or 10 years ago. This is another sign of the way in which the debate is flowing in the direction for which all parties in the House of Commons, with the exception of one or two individuals, have consistently argued.

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Mr. Bernard Jenkin (Colchester, North)

I am grateful to my right hon. Friend for giving way, as I believe that I can say something to facilitate the debate.

In respect of one element, we are talking at cross purposes. My right hon. Friend keeps talking about actions that the Community may take, whereas the principal concern is the extent of legal competence of the Community's institutions. The Council of Ministers might have a political argument about whether particular action should be undertaken centrally or by individual member states. However, my right hon. Friend is not arguing with my basic thesis, which is that the development of the legal competence of the Community is a one-way street.

Competence tends to expand. What we have here is the doctrine of the occupied field. Nothing about subsidiarity begins to reverse the trend. Moreover, the way in which subsidiarity is framed with reference to the objectives of the treaty demonstrates that Community competence will continue to expand and that we shall be able only to make a case that things should be delegated from that legal structure. The legal basis for unilateral action by member states is not strengthened.

Mr. Hurd

My hon. Friend is dealing with the question of competence. What is laid down on subsidiarity deals, in the first paragraph, with competence by saying simply that the Community does not have powers that are not yielded to it by treaty. It goes on to say that within the areas where there is mixed competence, where one can argue about whether action should be at Community or at national level, the presumption should be for national action. In real life, that is very important. It is very important in the way in which the Community operates.

I shall come in a moment to the third paragraph about which I think my hon. Friend the Member for Colchester, North is wrong. The first and last questions—"Can the Community act?" and "How much should the Community do?" —apply to all areas of Community activity. The second question—"Should the Community act?"—applies only to areas of mixed competence, where there is a choice between Community action and national action. Within areas of exclusive competence, where the treaty itself requires a comprehensive body of rules covering a whole field—for example, the common commercial policy—there is no such choice. The question there is how the Community should act—in what way and in how much detail.

My hon. Friend the Member for Colchester, North not only asserted that the test introduced in the third paragraph of article 3b— Any action by the Community shall not go beyond what is necessary to achieve the objectives of the Treaty"— was flawed but argued that it actually strengthened the centralising tendency of the Community by opening up new fields of possible action. I regard that as a perverse conclusion which indicates misunderstanding of the context of the quoted sentence.

This part of article 3b is concerned not with the scope of Community action but with its intensity, establishing that, where the Community does act, it should use the least constraining instrument available to achieve the common purpose. For example, there is no reason why the Community should use a regulation that is directly applicable in member states when a directive that leaves the method of implementation to member states would suffice. It is precisely this over-regulation of action that causes much ill feeling towards the Community. Too often in the past, over-regulation has been continued in Whitehall.

The Committee will know that one aspect of policy at which we are looking is intended to tackle the habit, which has grown in some quarters, of introducing extra zeal, extra effort and extra complication into this country's implementation of Community rules and legislation. This question of proportionality—choosing the lightest type of action compatible with objectives—is very important.

Mr. Spearing

I am grateful to the right hon. Gentleman for giving way, particularly as the Attorney-General is with him.

Is not the nub of the problem the fact that, in this treaty, there is no separation of powers whatsoever and that, therefore, we do not know what subsidiarity applies to, outside the very extensive area of exclusive competence? Even in the case of the mixed area, to which the Foreign Secretary has just referred, we have the words where the scale or effects of the proposed action can be better achieved by the Community". But as the action is being proposed by the Council or the Commission collectively, surely it is a matter of pure conjecture whether what is desired could he achieved better collectively at Community level or at national level. As my right hon. Friend the Member for Llanelli (Mr. Davies) has said, surely that is a matter of political faith or belief.

Mr. Hurd

That is why, in a few minutes' time, I shall come to what is actually happening. At the moment there is not a legal obligation. What is being provided for is political action—a matter to which I shall come as it bears on the hon. Gentleman's point.

Mr. Denzil Davies

The Foreign Secretary is quite right not to oversell article 3b. At the end of the day, there is not all that much to sell. The third paragraph, to which he has just referred, deals with proportionality. That doctrine has been developed by the court over the past 20 years or more. There is nothing new about the third paragraph. It is about proportionality in action.

Mr. Hurd

What is new is that the position is clearly stated in the treaty. Also new are the steps that are being taken to implement. This is the result of the change that is taking place inside the Community. I shall give some examples in a minute.

Mr. Jenkin

My right hon. Friend has quoted copiously from the Edinburgh declaration. He took issue with my assertion that subsidiarity could be used to expand the legal competence of the Community. The Edinburgh declaration says: Subsidiarity is a dynamic concept and should be applied in the light of the objectives set out in the treaty. It allows Community action to be expanded where circumstances permit.

Mr. Hurd

Let my hon. Friend continue to quote.

Mr. Jenkin

The declaration goes on to say that there may be delegation downwards, but that does not alter legal competence, which means that the Community, once it has the legal competence, cannot give it up.

Mr. Hurd

If my hon. Friend quotes, he ought to quote in full. The balance of the whole sentence, the second part of which he has indirectly quoted sotto voce, completely alters the thrust of his argument.

The three questions that are raised and dealt with in article 3b are the article's essence. This is a legally binding provision requiring that whichever of the questions apply should be answered satisfactorily for all proposals for Community action. It is binding in the first instance upon the EC institutions engaged in the legislative process—the Commission as it proposes; the European Parliament as it is consulted and suggests amendments; and the Council as it decides.

As with other provisions of the treaty, the ultimate arbiter in case of dispute about whether the principle has been complied with will be the European Court of Justice. The hon. Member for Ashfield (Mr. Hoon) was perfectly correct in answering a question from the right hon. Member for Llanelli about the ability of an individual to have recourse to the court if he feels that he is directly concerned by the decision in question.

Much has been made of the apparent difficulties that the court may encounter in interpreting this provision. In this debate, lawyers have been quoted. I should like to refer hon. Members to the answer given by the Lord Chancellor in another place on 8 July last year. The noble and learned Lord said that he believed that the principle was perfectly enforceable by the European Court of Justice, as it enforces other principles of general application.'—[Official Report, House of Lords, 8 July 1992; Vol. 538, c. 1140.] The court takes notice of the purposive character of Community provisions. Once the treaty has been ratified, article 3b will be in it. It will be a powerful expression of the purpose and intentions of the treaty—to reduce the scale and intensity of legislation.

In the past, all the signposts put up by member states have encouraged the court down the path of centralisation. Article 3b is different; it points the Community and the court in a different direction. Member states have made a conscious shift of direction and the court cannot, and I am sure will not, ignore that.

Those who say that the court simply implements the treaty have to accept that once the treaty is ratified—not now, when we deal only with the treaty of Rome and the Single European Act, but when the treaty of Maastricht is ratified—the court will have a signpost in a different direction. That is the crucial point for those who have difficulties about the court.

I do not believe that it is the court that will be crucial. The court is there and it will be the legal underpinning for subsidiarity. But, if it were constantly invoked, as the right hon. Member for Llanelli, I think, said, the principle would not be working properly. It is a fallback, an underpinning.

What we have to do, and have begun to do even before the treaty is ratified, is to make this principle a working fact in the life of the Community. If the institutions at which the principle is primarily aimed abide by it, there will not be cause to challenge any Community action as having violated it. That is why we have begun to establish the procedures.

New procedures were agreed at Edinburgh by the Council to ensure that the subsidiarity aspects of every proposal are fully examined. Any member state will be able, for example, to insist that a proposal which raises issues of subsidiarity should be put on a later Council agenda for a specific debate including those aspects. All new Commission proposals will include justification on grounds of subsidiarity, and that has already begun to happen in practice. So these procedures will provide the focus for a debate in the Council as to whether Community action is really necessary before there is a debate on what form it should take.

The next question is, what are the tests; what form does this kind of discussion take? The European Council has agreed a set of rigorous criteria to guide the Council in making these decisions. I do not agree with the right hon. Member for Llanelli that the result of Maastricht is to strengthen the institutions that he mentioned—the bank, the court and the Commission. The body that will be most strengthened by Maastricht is the European Council, because it is the apex, the architrave, of the three pillars. The foreign affairs pillar and the home affairs pillar have nothing to do with the Community, or the monopoly of the Commission, or the court. This is a side issue, but the right hon. Gentleman raised it, and I believe that it is the European Council, representing the Heads of State or Government, that will be the chief gainer from Maastricht.

I come back to the criteria to guide the Council in making these decisions. When there is a choice between Community and national action, the judgment will be made against such criteria as whether there is a significant cross-order effect; can the objective proposed be sufficiently met by national action alone; are there economies of scale involved; would the absence of Community action damage member states' interests, for example, by distorting the level playing field and giving competitive advantage?

Mr. Denzil Davies

The right hon. Gentleman has said that the Council of Ministers would consider whether there was national or Community competence. Who decides that first question? Is it the advisers of the Council who will decide whether there is exclusive competence, because, if there is exclusive competence, subsidiarity does not apply? Who decides whether there is mixed competence—the court?

Mr. Hurd

In the end it is, of course, the court. But the right hon. Gentleman is wrong in saying that subsidiarity does not apply. The proportionality part of article 3b, the third paragraph, applies right across the field. That is why we specifically had the third sentence of article 3b as a separate paragraph and not as part of the second paragraph. That was a deliberate part of our negotiating stance.

Mr. Shore

The right hon. Gentleman is putting forward a very reasonable and reasoned argument, but I put to him a question which he rather dodged and which was put to him a bit earlier. Does not the whole balance of the argument about the tendency to centralise, as opposed to what he would like to see—the tendency to decentralise —crucially rest upon whether there is to be a central European bank and economic and monetary union? His only defence against that so far has been to say that there is an opt-out protocol, but does he not agree, in his judgment of the balance of the treaty, that, if we do not exercise that opt-out protocol, it is clearly a centralising measure?

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Mr. Hurd

Certainly, if there are not several banks and several currencies, it is a centralising measure; I do not think that that can be refuted. But, as I say, that would be relevant to the House of Commons if and when there was a proposition before it that we should adhere to and adopt a single bank and a single currency.

Even when it is accepted on these and other criteria that the Community should act, it is also agreed—this is following the proportionality point—that the Community should not do any more than is required to address the problem, that is the last paragraph of article 3b. Here again, criteria were agreed, including, for example, that measures proposed should minimise financial and administrative burdens on member states and leave as much scope as possible for national action, and that there should be a preference for setting a minimum standard rather than for harmonising across the Community.

Mr. Harry Barnes (Derbyshire, North-East)

On proportionality, is it possible that the interpretation of the amount of proportionality that should apply should in some cases be nil, so that it would not be a case that should be dealt with by the Commission, but one that should be left to the nation states? Is that a legal possibility?

Mr. Hurd

It is a legal possibility, of course. There are areas, such as agriculture, which are exclusive competence, but there are all kinds of agricultural matters which are dealt with by nation states, and I think always will be, under the doctrine of proportionality.

There has been a lot of questioning on the commitment of the Commission to this principle. I believe that, no doubt reaching the conclusion by its own intellectual route, it now take this principle very seriously indeed. Early in 1992, the Commission's annual work programme said: If a success is to be made of Maastricht and the Single Market, the Commission will have to comply fully with the principle of subsidiarity. Indeed, its future existence depends on this. Beginning in 1992 the Commission, working with the other institutions, will have to establish how subsidiarity is to operate and devise procedures to ensure that no attempt is made to regulate matters that are best dealt with at national level and to avoid a surfeit of legislation. Those are not just words; this has happened to the extent that, whereas in 1990 there were 162 legislative proposals from the Commission and in 1991 there were 145, in 1992 118 were planned, but only 50 actually came forward. My hon. Friend the Member for Eastleigh (Mr. Milligan) has already made this point. This shows that there has been a very sharp falling off of the volume of legislation coming out of the Commission for consideration by the Council.

Mr. Marlow

Is it just possible that less legislation came out of the Commission last year because it is waiting for ratification, and that once ratification takes place there will be a rush of directives, regulations and other issues by the Commission?

Will my right hon. Friend address himself to the point in the guidelines that subsidiarity is said not to apply if any member state takes action which conflicts with the principle of cohesion? Is that not a fairly powerful area? Does it not mean that a lot of things that we might wish to do in the United Kingdom could be taken as interfering with social cohesion in the Community and therefore as matters not for subsidiarity but for regulation and legislation at the European level?

Will my right hon. Friend come back to the point which I made earlier about the 48-hour week? Under the principle of subsidiarity, is that a decision that we would be able to make in this country, in the House of Commons,

Mr. Hurd

It may well become a matter for the European Court to decide whether the working time directive is ultra vires. It has nothing to do with the treaty of Maastricht. I will come back to that point in a moment, because I believe that it underlines a weakness in my hon. Friend's position.

The hon. Member for Hamilton said that we must try to work out a flexible method by which subsidiarity can be taken out of the statute books and made to work in political practice. Exactly.

That is why the Commission was asked to produce, by the end of this year, a full review both of pending proposals and of existing legislation, with suggestions for amendment or even repeal on grounds of subsidiarity. At Edinburgh, it produced the first fruits of the exercise. For example, it accepted that environmental legislation needs to be simplified and updated, in particular, directives on air and water.

On agriculture, the Commission will give more responsibility to national authorities for applying Community legislation. A proposal for the regulation of zoos will be scrapped. The bathing water directive will be revised, and many similar irritating, bureaucratic directives on food will go. That is relevant to the news that my hon. Friend the Member for Southend, East (Sir T. Taylor) reported from the European Parliament today.

Mr. Bill Walker

Will my right hon. Friend please address the point that I made about air service agreements?

Mr. Hurd

My hon. Friend made a cogent and prolonged argument on that point. I shall come back to him on it rather than answer off the cuff.

The Commission, in action and in words, has shown that it is conscious of the need to legislate by setting minimum requirements rather than resorting to heavy-handed harmonisation across the board.

That is only the beginning. It is not enough for the Commission to act in that way, although it has to do so. Member states should also come forward with their own idea of where proposals and existing legislation might fail the subsidiarity test, and during our presidency we encouraged them to do so. We are doing that.

The proposal for European works councils, for example, seeks to impose a uniform system for informing and consulting workers. The British ask why that is better accomplished at a European level rather than being left for member states to adapt their procedures to national and local conditions.

Measures relating to speed limits and alcohol levels in drivers' blood are two other ideas which we believe and which we are pressing should be abandoned forthwith on subsidiarity grounds. We shall maintain pressure on those and other proposals in the months ahead.

This is not a paper or a theoretical exercise. The Community—no doubt not with the speed that we would wish—is turning that principle into a political operating fact even before it is a legal obligation.

Mr. Michael Lord (Suffolk, Central)

I am sorry to have to take my right hon. Friend back briefly to a point that was made a few moments ago. I think that he conceded that the idea of a single currency and a central bank made the treaty a centralising treaty for those people who sign up for that. Does that therefore mean that this is a centralising treaty for 11 nations but not for us?

Mr. Hurd

I was asked about that aspect of the treaty, not all the other aspects on which the Committee has spent so much time.

I was asked about the proposal for a single bank and a single currency. Obviously, by definition, if one has a single bank and a single currency, one does not have several banks and several currencies and therefore one does not have several monetary centres.

The Community has to decide whether to do that. We in the House of Commons will, or may eventually, have to decide whether we want to do that. That decision will be taken by the House. It does not affect the general movement in the Community which I have illustrated and, I hope, documented—not just what is proposed in article 3b but what is happening on the ground in the institutions of the Community.

Mr. Roger Knapman (Stroud)

My right hon. Friend referred to the speed with which subsidiarity is being applied and to a proposal on the conditions in which animals are kept in zoos, but even that has not yet been agreed. Can he confirm that the only three directives that have been withdrawn are one on the compulsory indication of nutritional values on packaged foods and two on radio frequencies? With due respect, that is not exactly the white-hot heat of politics. Some of us fear that it must be left to national Parliaments to decide what powers they wish to give away, not vice versa.

Mr. Hurd

It is for national Parliaments and Governments to decide what powers they yield to the Community. My hon. Friend is right. He is also right to be impatient at the pace of change. As I have said, we are constantly pressing for that to be accelerated. What we had at Edinburgh was the first fruits, but the first fruits before the treaty was ratified, before the Commission was under any legal obligation. It has begun to act.

I agree that the speed with which the Commission is acting is too slow, but my hon. Friend has shown, even in his small examples, that those are movements in the right direction, not movements in the direction which is constantly prophesied and feared in the House of Commons. All right, it is a slow movement, it is only the beginning, it is only the first roots, but it is happening. It is not a myth, and it should be the instinct and interest of the House to encourage and develop it.

Mr. Marlow

The point of the question by my hon. Friend the Member for Stroud (Mr. Knapman) is that the power to decide on the speed of the move towards subsidiarity is in the hands, not of the House of Commons, but of the European institutions. At the moment, we are waiting on potential ratification. Does my right hon. Friend really think that, once that is out of the way, the European institutions will surrender their powers back to this House?

Mr. Hurd

They are going to. The powers are those that have been granted previously or now by national Governments. How they are used is what subsidiarity is principally about. I have illustrated the change that is happening, as my hon. Friend the Member for Stroud (Mr. Knapman) documented. It is in our interests to move that forward.

I pause for a moment on the attitude of those who criticise the clause, the Bill, the treaty. There are some in all parts of the Committee who have, throughout, opposed our membership of the Community and would like us to withdraw now. I see them around me in different places. That would be disastrous, whether for Britain's prosperity or for its place in the world, but at least that is a logical and understandable position, which has been sustained by some right hon. and hon. Members for many years.

What to me is far less understandable and lacks logic is the stance of those who are in favour of our membership of the Community but against the clause, against the Bill and against the treaty. Where would they end us up? We would have torn up a treaty which, with the approval of the House, the Government had signed. We would thus, I promise the House, have robbed ourselves for a number of years of any effective influence in the future of the Community to which we would continue to belong.

We would be left with a treaty of Rome and the commitment to the ever closer union of peoples. We would be left with a whole system of Community law, which my hon. Friend the Member for Colchester, North and many others have criticised. We would be left with the monopoly of initiative of the Commission in all areas of Community competence. We would be left with the jurisdiction of the European Court. We would be left with the argument about the working-time directive. That would not be altered in any way. We would be left with article 235 and the possibility of the extension of competence. All that would remain if we remained in the Community but rejected the treaty.

We would have lost the possibilities of subsidiarity, which I hope that I have documented, we would have lost the exclusions in article L of the role of the European Court from the areas of the pillars for foreign and security policy and home affairs matters. We would have lost for the foreseeable future any possibility of enlarging the Community. We would be left with all the things which so many of my right hon. and hon. Friends and Opposition Members most dislike and most criticise.

We would be left with those aspects of Community life on which hon. Members base their criticism of the treaty, although they are the result of existing treaties and obligations. We would have lost our influence in Europe and the hopeful aspects of the Maastricht treaty and, in particular, of article 3b. I cannot imagine a more feeble and foolish posture.

Sir Peter Tapsell (East Lindsey)

Does my right hon. Friend agree that we would also be left with free access to the single European market?

Mr. Hurd

Yes, of course—policed by the Commission with all the difficulties and all the arguments about regulations and directives. We would be left with the single market and all the associated structure of Community law. My right hon. and hon. Friends have sat through many of these debates and they will know that so much of the criticism is based on the existing structure. That is what has turned many people—understandably—against the Community and its works, but that is not an argument for refusing to ratify the treaty.

It is an argument for moving forward. That is what the House of Commons and this country ought to do. The debate is not over. I am not claiming that it is over in Europe, in our favour. There are different views in Europe about the future development of the Community. That is inevitable.

7 pm

The member states are a heterogeneous bunch, seeking to protect different interests. There has long been a view of the Community as a system of centralised institutions, with responsibility for all fields of policy. That 'view has now been checked. It is checked by the structure of the treaty, by the pillars and by this article. I am convinced that we should now, whether we are talking as a party, as a Government, as a House of Commons, or as a country, ratify the treaty and move on, working out for ourselves our own ideas as a country which we should put to the next conference, to the next set of discussions with, I hope, an enlarged Community, ideas that we put forward positively, and not simply react to those of other people. They would be ideas based on what most people in this House want—an open, expanding, free-trading, decentralising Community.

That can be built only on the basis of this treaty and on the principle of subsidiarity.

Mr. Barnes

The Secretary of State made an interesting distinction between the three paragraphs in article 3b. He described the first as setting out action that could be taken on a legal base. Could action be taken? Secondly, should it be taken? Thirdly, in the paragraph on proportionality, how much action should be taken?

In an intervention, I asked the Secretary of State whether it would be possible for no action to be taken on proportionality at all, even though the Community could act according to the provision in the first paragraph. If that is the case, the second paragraph which contains the term "subsidiarity" is unnecessary, because the nil proportion is something that could apply from the third paragraph.

I ask hon. Members to look at amendment No. 340, which does not seek the deletion of the—[interruption.]

The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)

Order. I am sorry to interrupt the hon. Member, but there are far too many private conversations going on. If people wish to engage in those, they should leave the Chamber.

Mr. Barnes

I do not seek to delete the entire article, but only the second paragraph, which applies to subsidiarity. From the position that was put forward by the Secretary of State, logically the second paragraph is unnecessary and counter-productive. It is important that we should have an understanding, which we do not have from this debate, of what subsidiarity is, its full definition and how it is to apply.

I am a member of the Select Committee on European Legislation, which has now received a letter from the Leader of the House stating that in future all measures coming before us on regulations and directives will contain a paragraph on subsidiarity. The Government will be putting it to us whether measures meet or do not meet the provisions on subsidiarity. On that Committee, we need to be in the position to judge whether the paragraphs being put forward meet the criteria which, it is argued, are now being adopted by the Commission and other areas of the Community institutions.

Mr. William Cash (Stafford)

Does the hon. Gentleman, who sits with me on the European Legislation Committee, recall that we already have these paragraphs in the reports presented to us, but that they say nothing, other than the assertion that, in the opinion of those who have prepared them—Ministers—in that particular instance the situation falls within the subsidiarity rule? It is a meaningless exercise and does not get us anywhere.

Mr. Barnes

I agree that it is a meaningless exercise. All it is at most, even though it is more detailed, is a retionalisation of a decision already determined by the Commission and in the Government's response to Commission proposals.

We can continue to have this check list thrown about all over the place, but all it will do is reinforce decisions that would have been made in any case. It seems that we should have been having the subsidiarity provisions throughout the time the Select Committee has been operating, because what is said in the letter that was read out by my right hon. Friend the Member for Llanelli (Mr. Denzil Davies) is that, for 40 years, the principle of subsidiarity is one on which the Community is supposed to have been acting.

This debate follows a debate that we had on the institutions. The two are related. I argued in the debate on the institutions that the institutions of the Community which were developed, especially from Maastricht, were undemocratic, centralised and highly bureaucratic and were leading us down the road to a unitary state or a state of the institutions.

It is often argued now on subsidiarity that there might be something in that when related to the institutions, but that it is all okay because there is the sacred principle of subsidiarity which now begins to correct all that and means that the tendencies contained within the institutions can somehow be overcome by applying this notion. It will restore democracy; it operates forms of decentralisation; it tackles over-bureaucracy; and begins to return areas of sovereignty to nations.

If it is a concept like that, it is highly important and significant. If it were to be so, it would have to be a constitutional and legal notion and not merely a social and philosophical set of ideas with some possibility that it might operate in the future. We should have to tie things down in that area. That would run contrary to the arrangements contained within the institutions with terms in legal and constitutional provisions that take us in the opposite direction.

We are faced with a notion which is nonsense and meaningless; it sounds as though it is saying something, but it is intended to mean different things to different people. There is no way in which the terms contained in it can be effectively checked in any area.

There is a principle in philosophy called verification, by which one seeks to verify what has been said in different areas. How can one verify the correctness of subsidiarity and whether it is applied in a particular area? Anyone can agree or disagree that it is applied. It is merely the wildest form of value judgment to say that it is operating.

Mr. Spearing

Is not that wholly borne out by the words of the article? While in a court of law one verifies what has happened or what is, the essence of subsidiarity, as defined or attempted to be defined, is that one is trying to look into the future and come to some conclusion about which way the dice will fall. That is almost impossible in the modern world.

Mr. Barnes

That is an extra aspect to the points I am making—what is being applied to developments and progress in the future. It is not merely a judgment of what a set situation is, which is what people would normally be trying to apply when they were operating laws.

It would be nonsense to have a measure before us containing the concept of subsidiarity. Many Scottish and Welsh Members have argued strongly to have the principle of subsidiarity applied in the United Kingdom. If that notion is meaningless for the whole of Europe, including this nation and its links, it is nonsense to operate within this system. We would find ourselves in the most difficult arrangements if we had in front of us a measure affecting Scotland, for instance, which included this term. It is a value-laden notion that we would not normally be concerned with in constitutional and legal matters.

Mr. Andrew Rowe (Mid-Kent)

The hon. Gentleman seems to be treading on thin ice. The House constantly trades in exactly the kind of concept which he is vilifying because it is difficult to verify. The word "devolution" is but one example of such a concept. My right hon. Friend the Foreign Secretary pointed out how this arguable concept might apply in practice. That made it much more tangible than the hon. Gentleman is arguing it to be.

Mr. Barnes

I agree that we deal with matters in which value judgments come to the fore. In legislation we often have the word "reasonable", and there is much argument about whether the word should be included, or whether we should be more precise. In regard to devolution, if there is not a clear definition problems would emerge in various areas. Things change according to changes of degree. If a term is so shot through with value considerations that it cannot be cashed in, we are in serious difficulty in dealing with legislation. Of course, we can put anything we want, however nonsensical, in a Bill, but we may find ourselves in considerable difficulty in carrying out the law.

Mr. Bill Walker

Will the hon. Gentleman take it from me that devolution means all things to all people, particularly in Scotland, where there are so many ideas, including the declaration of Perth to which I listened a long time ago? It is all a question of who is talking about it, when, what they are talking about, and what it means to them.

Mr. Barnes

Legislation would have to spell out exactly how devolution was to apply. In regard to Northern Ireland, we would have to establish in the legislation whether there was to be a parliament in Northern Ireland and whether a Bill of Rights was to be associated with it.

Recently I introduced the Representation of the People (Amendment) Bill. I went through it word by word to see whether it included anything of a value nature which was anywhere near the concept of subsidiarity. Nothing begins to approach it. There is a reference to access for disabled people and various audits being done, as well as terms which begin to nudge near value judgment considerations, but there is nothing as sweeping as the provision with which we are dealing, which involves all the nations in the European Community. We should not have to deal with nonsensical provisions. That is why I want to delete the term.

Never have so many hopes been based upon such a flimsy and inadequate concept. Maastricht tells us that subsidiarity means that the Community is only allowed to act when member states cannot officially achieve a Community objective and that this is better achieved by the Community itself, provided that the European treaties do not already give the Community exclusive competence in the areas concerned. The exclusive competence area expands and grows all the time. There is exclusive competence in regard to the common agricultural policy. Last night we voted on a measure which added the potato regime to the CAP. So competence in that area has been extended very recently.

7.15 pm

Who is to judge when conditions of subsidiarity apply? None other than the self-same institutions to which I have referred and which were discussed in earlier debates—the Commission, the Council of Ministers and perhaps, if it can find a way in by consultative processes, the European Parliament, which is mentioned very little in any of these discussions. There is a great democratic deficit in Europe which should be before us all the time.

In cases of dispute, the European Court might be called in to make a judgment, but its judgments will be purely arbitrary because it will have merely the undefined principle of subsidiarity before it. We have the agreement made by the heads of state at Edinburgh and the document which has been quoted from at length in our debates. But those are not part of the Maastricht treaty. Nor does the treaty contain provisions acceptable in international law which would have some feedback into arrangements under the treaty.

Nobody has suggested the use of mechanisms to ensure that those provisions are added to the treaty. In the end we have little legal guidance about how this vague, obscure motion is to be dealt with, yet, when judges make decisions, those decisions will be constitutional and should be made under the provisions of the treaty. They will be of such significance that they should be acted upon only if adopted by referendums in all the member states.

The recent European Council meeting of Heads of State at Edinburgh attempted to elaborate on subsidiarity. Far from deciding to devolve powers to national or regional levels throughout Europe, they stressed the centralising nature of subsidiarity. The hon. Member for Colchester, North (Mr. Jenkin) quoted at length from the document that was agreed at Edinburgh. We should be fully aware of its contents.

The centralising aspects of the provisions in the document are considerable. It states that it cannot call into question powers conferred on the EC by the Treaty", as several hon. Members have mentioned. It says that it shall not affect the primacy of Community law nor call into question…(that) the union shall provide itself with the means necessary to attain its objectives and carry through its policies". It continues: it allows Community action to be expanded where circumstances require". Someone will have to judge what the circumstances are which will allow the area to be expanded. It also says: the more specific the nature of a treaty requirement, I he less scope exists for applying subsidiarity". Let us consider the documents in front of us. There are many areas in which there are specific requirements. Yet subsidiarity cannot apply to any of those areas. In the end subsidiarity is to be no more than an item on a checklist. It is like the plaque which some people have on their walls saying that everything is well in the home. It is compatible with what is happening in the home, where everything is peaceful, and we expect it to influence behaviour. There are similarities with the principle of goodness. We are all in favour of goodness, but its definition occupies some people for considerable periods of their lives. Subsidiarity is a moral and philosophical notion that has been given no legal or constitutional application in the Maastricht treaty. It means whatever the institutions of the Community wish it to mean.

We must contrast that with the concept of federalism. A form of federalism that was democratic would define the different areas in which the federal and nation states would be involved. We are bound to wonder whether we are being offered federalism by the notion of subsidiarity. In other words, are we engaged in a development towards federalism? Is it a subterfuge or con trick designed to move us towards federalism? I would like to see the establishment of a democratic federal Europe with, among other things, a social agenda, but I do not want a half-federal arrangement creeping in without the necessary democratic institutions.

Constitutional documents must contain terms that are clear, precise, open and democratic. After all, a number of alternatives could be adopted in developing collective arrangements. Nations could come together in voluntary co-operation under general treaties from which departures could be made at later stages, nations could move into a unitary system in which they surrendered their sovereignty entirely, or nations could move into a federal or confederal arrangement.

The only other possibility would be a mixture of those alternatives. Is it suggested that the European Community will be such a mixture, with some areas of exclusive competence representing unitary provisions, with areas outside involving nation states. In that event, would, say, local government taxation issues be for national parliaments, with other large areas between being covered by mixed competence? We should be told just what are the different areas and what applies to them. We need clear terms defining the principle of federalism which would allow those areas to be divided.

The Secretary of State said that we were being presented with something entirely new from the point of view of the European Community. Apparently, the traditional concepts of unitary states, federal arrangements and voluntary agreements between nations do not apply because something totally new is being constructed. If so, the details should be spelled out precisely and related to what might be called the old notions, so that we may understand exactly what is being proposed.

I doubt whether, even though the issue may be examined in general, political, constitutional or democratic terms, there is anything new under the sun. It might be possible, as I say, to arrive at a combination of arrangements. If that is being proposed, the details must be spelled out. We must be sure that any provision containing anything as constitutionally obnoxious as the notion of subsidiarity is defeated.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the amendment be made:

The Committee divided: Ayes 34, Noes 289.

Division No. 193] [7.24 pm
Ashton, Joe Marshall, Jim (Leicester, S)
Austin-Walker, John Michie, Bill (Sheffield Heeley)
Bennett, Andrew F. Mitchell, Austin (Gt Grimsby)
Campbell, Ronnie (Blyth V) Molyneaux, Rt Hon James
Cann, Jamie Parry, Robert
Corbyn, Jeremy Prentice, Ms Bridget (Lew'm E)
Cummings, John Redmond, Martin
Davis, Terry (B'ham, H'dge H'I) Robinson, Peter (Belfast E)
Dunwoody, Mrs Gwyneth Ross, William (E Londonderry)
Forsythe, Clifford (Antrim S) Shore, Rt Hon Peter
Hanson, David Skinner, Dennis
Hughes, Roy (Newport E) Smith, Llew (Blaenau Gwent)
Janner, Greville Smyth, Rev Martin (Belfast S)
Jones, Barry (Alyn and D'side) Spearing, Nigel
Leighton, Ron Wise, Audrey
Livingstone, Ken
Loyden, Eddie Tellers for the Ayes:
Madden, Max Mr. Bob Cryer and
Mahon, Alice Mr. Harry Barnes.
Adley, Robert Clifton-Brown, Geoffrey
Ainsworth, Peter (East Surrey) Coe, Sebastian
Aitken, Jonathan Colvin, Michael
Alexander, Richard Congdon, David
Alison, Rt Hon Michael (Selby) Conway, Derek
Amess, David Coombs, Anthony (Wyre For'st)
Ancram, Michael Coombs, Simon (Swindon)
Arbuthnot, James Cope, Rt Hon Sir John
Arnold, Jacques (Gravesham) Cormack, Patrick
Arnold, Sir Thomas (Hazel Grv) Couchman, James
Ashby, David Currie, Mrs Edwina (S D'by'ire)
Aspinwall, Jack Curry, David (Skipton & Ripon)
Atkinson, David (Bour'mouth E) Dafis, Cynog
Atkinson, Peter (Hexham) Davies, Quentin (Stamford)
Baldry, Tony Davis, David (Boothferry)
Banks, Matthew (Southport) Day, Stephen
Banks, Robert (Harrogate) Deva, Nirj Joseph
Bates, Michael Devlin, Tim
Bellingham, Henry Dickens, Geoffrey
Beresford, Sir Paul Dorrell, Stephen
Blackburn, Dr John G. Douglas-Hamilton, Lord James
Booth, Hartley Dover, Den
Boswell, Tim Duncan, Alan
Bottomley, Rt Hon Virginia Dunn, Bob
Bowden, Andrew Durant, Sir Anthony
Bowis, John Dykes, Hugh
Brandreth, Gyles Eggar, Tim
Brazier, Julian Elletson, Harold
Bright, Graham Emery, Rt Hon Sir Peter
Brooke, Rt Hon Peter Evans, David (Welwyn Hatfield)
Brown, M. (Brigg & Cl'thorpes) Evans, Jonathan (Brecon)
Browning, Mrs. Angela Evans, Nigel (Ribble Valley)
Bruce, Ian (S Dorset) Evans, Roger (Monmouth)
Bruce, Malcolm (Gordon) Evennett, David
Burns, Simon Faber, David
Burt, Alistair Fabricant, Michael
Butterfill, John Fairbairn, Sir Nicholas
Campbell, Menzies (Fife NE) Fenner, Dame Peggy
Carlile, Alexander (Montgomry) Field, Barry (Isle of Wight)
Carlisle, Kenneth (Lincoln) Forman, Nigel
Carrington, Matthew Forsyth, Michael (Stirling)
Channon, Rt Hon Paul Forth, Eric
Churchill, Mr Foster, Don (Bath)
Clappison, James Fowler, Rt Hon Sir Norman
Clark, Dr Michael (Rochford) Fox, Dr Liam (Woodspring)
Clarke, Rt Hon Kenneth (Ruclif) Fox, Sir Marcus (Shipley)
Freeman, Roger McLoughlin, Patrick
French, Douglas Madel, David
Gale, Roger Maitland, Lady Olga
Gallie, Phil Major, Rt Hon John
Garel-Jones, Rt Hon Tristan Malone, Gerald
Garnier, Edward Mans, Keith
Goodlad, Rt Hon Alastair Marland, Paul
Goodson-Wickes, Dr Charles Marshall, John (Hendon S)
Gorst, John Marshall, Sir Michael (Arundel)
Grant, Sir Anthony (Cambs SW) Martin, David (Portsmouth S)
Greenway, Harry (Ealing N) Mates, Michael
Greenway, John (Ryedale) Mawhinney, Dr Brian
Grylls, Sir Michael Mayhew, Rt Hon Sir Patrick
Gummer, Rt Hon John Selwyn Mellor, Rt Hon David
Hague, William Merchant, Piers
Hamilton, Rt Hon Archie (Epsom) Michie, Mrs Ray (Argyll Bute)
Hamilton, Neil (Tatton) Milligan, Stephen
Hanley, Jeremy Mills, Iain
Hannam, Sir John Mitchell, Andrew (Gedling)
Hargreaves, Andrew Mitchell, Sir David (Hants NW)
Harris, David Monro, Sir Hector
Haselhurst, Alan Montgomery, Sir Fergus
Hawkins, Nick Moss, Malcolm
Hayes, Jerry Needham, Richard
Heald, Oliver Nelson, Anthony
Heath, Rt Hon Sir Edward Neubert, Sir Michael
Heathcoat-Amory, David Newton, Rt Hon Tony
Hendry, Charles Nicholls, Patrick
Heseltine, Rt Hon Michael Nicholson, David (Taunton)
Hicks, Robert Nicholson, Emma (Devon West)
Higgins, Rt Hon Sir Terence L. Norris, Steve
Hill, James (Southampton Test) Onslow, Rt Hon Sir Cranley
Hogg, Rt Hon Douglas (G'tham) Oppenheim, Phillip
Horam, John Ottaway, Richard
Hordern, Rt Hon Sir Peter Page, Richard
Howard, Rt Hon Michael Paice, James
Howarth, Alan (Strat'rd-on-A) Patnick, Irvine
Howell, Rt Hon David (G'dford) Patten, Rt Hon John
Hughes Robert G. (Harrow W) Pattie, Rt Hon Sir Geoffrey
Hughes, Simon (Southwark) Peacock, Mrs Elizabeth
Hunt, Rt Hon David (Wirral W) Pickles, Eric
Hunt, Sir John (Ravensbourne) Portillo, Rt Hon Michael
Hunter, Andrew Rathbone, Tim
Hurd, Rt Hon Douglas Redwood, John
Jack, Michael Renton, Rt Hon Tim
Jackson, Robert (Wantage) Richards, Rod
Johnson Smith, Sir Geoffrey Riddick, Graham
Jones, Gwilym (Cardiff N) Robathan, Andrew
Jones, leuan Wyn (Ynys Môn) Roberts, Rt Hon Sir Wyn
Jones, Nigel (Cheltenham) Robertson, Raymond (Ab'd'n S)
Jopling, Rt Hon Michael Robinson, Mark (Somerton)
Kellett-Bowman, Dame Elaine Roe, Mrs Marion (Broxbourne)
Kennedy, Charles (Ross,C&S) Rowe, Andrew (Mid Kent)
Key, Robert Rumbold, Rt Hon Dame Angela
Kilfedder, Sir James Ryder, Rt Hon Richard
King, Rt Hon Tom Sackville, Tom
Kirkhope, Timothy Sainsbury, Rt Hon Tim
Kirkwood, Archy Scott, Rt Hon Nicholas
Knight, Mrs Angela (Erewash) Shaw, David (Dover)
Knight, Greg (Derby N) Shephard, Rt Hon Gillian
Knight, Dame Jill (Bir'm E'st'n) Shersby, Michael
Knox, David Sims, Roger
Kynoch, George (Kincardine) Smith, Sir Dudley (Warwick)
Lait, Mrs Jacqui Smith, Tim (Beaconsfield)
Lamont, Rt Hon Norman Soames, Nicholas
Lang, Rt Hon Ian Speed, Sir Keith
Leigh, Edward Spencer, Sir Derek
Lennox-Boyd, Mark Spicer, Sir James (W Dorset)
Lester, Jim (Broxtowe) Spink, Dr Robert
Lidington, David Spring, Richard
Lightbown, David Sproat, Iain
Lilley, Rt Hon Peter Squire, Robin (Hornchurch)
Lloyd, Peter (Fareham) Stanley, Rt Hon Sir John
Llwyd, Elfyn Steel, Rt Hon Sir David
Luff, Peter Steen, Anthony
Lyell, Rt Hon Sir Nicholas Stephen, Michael
Lynne, Ms Liz Stern, Michael
MacGregor, Rt Hon John Stewart, Allan
MacKay, Andrew Streeter, Gary
Maclean, David Sumberg, David
Sykes, John Ward, John
Taylor, Ian (Esher) Wardle, Charles (Bexhill)
Taylor, John M. (Solihull) Waterson, Nigel
Taylor, Matthew (Truro) Watts, John
Temple-Morris, Peter Wells, Bowen
Thomason, Roy Wheeler, Rt Hon Sir John
Thompson, Sir Donald (C'er V) Whitney, Ray
Thompson, Patrick (Norwich N) Widdecombe, Ann
Thornton, Sir Malcolm Wiggin, Sir Jerry
Thurnham, Peter Wigley, Dafydd
Townsend, Cyril D. (Bexl'yh'th) Willetts, David
Tracey, Richard Wilshire, David
Tredinnick, David Wolfson, Mark
Trend, Michael Wood, Timothy
Trotter, Neville Yeo, Tim
Twinn, Dr Ian Young, Sir George (Acton)
Tyler, Paul
Viggers, Peter Tellers for the Noes:
Waldegrave, Rt Hon William Mr. Sydney Chapman and
Walden, George Mr. Nicholas Baker.

Question accordingly negatived.

Mr. John Morris (Aberavon)

I beg to move amendment No. 32, in page 1, line 9, after 'II', insert '(except Article 171 on page 46 of Cm. 1934 relating to the European Court of Justice.)'.

The Second Deputy Chairman

With this, it will be convenient also to discuss the following amendments: No. 228, in page 1, line 9, after 'II', insert 'except Article 172'.

No. 329, in page 1, line 9, after 'II', insert `(except Article 168a on page 46 of Cm. 1934)'.

No. 330, in page 1, line 9, after 'II', insert `(except Article 171 on page 46 of Cm. 1934)'.

No. 331, in page 1, line 9, after 'II', insert `(except Article 172 on page 46 of Cm. 1934)'.

No. 411, in page 1, line 9, after 'III', insert '(except Articles 32, 32(d) and 33 on pages 64 and 65 of Cm. 1934)'.

No. 416, in page 1, line 9, after 'IV', insert '(except Articles 137, 140a, 143 and 146 on pages 73 and 74 of Cm. 1934)'.

No. 152, in page 1, line 10, after '1992', insert `but not Article 143 in Title IV thereof'.

Mr. Morris


The Second Deputy Chairman

Order. Will hon. Members who are leaving the Chamber please leave quickly and quietly? The noise that they are making is very discourteous to the right hon. and learned Member for Aberavon (Mr. Morris), who has the floor.

Mr. Morris

Amendment No. 32 is a probing amendment, but a number of questions arise from it. I know that many hon. Members on both sides of the Committee are concerned about the powers of the European Court, and about the way in which it exercises those powers. We must give careful consideration to any transfer of power from elected representatives to the judiciary in Europe, which is not elected. We must also give careful consideration to any increase in power, including the power to impose penalties.

The test is this: is such action necessary, and is the present system deficient? Does the proposed remedy meet any deficiency in the system? Are there any disadvantages? The European Court makes important decisions; when additional powers are sought for it, we must examine them carefully—given, that is, that my basis premise is valid —and decide whether Europe, and the United Kingdom as part of Europe, will be better off at the end of the day.

Perhaps the Minister can tell us something of the philosophy of the European Court. Is it an interpretative court, maintaining the status quo and defining situations as they arise? Or does its track record suggest that it is an innovative court? Will it lead to centralisation?

I listened with interest to the last few minutes of the debate on subsidiarity. In due course, the European Court may have to interpret that difficult concept; that, too, will be interesting. Eminent lawyers have given very different views. If the matter became the cause of litigation, I fear that we should have to wait for an interpretation of that important concept, which is of interest to us all. Only a few moments ago, the Foreign Secretary said that the signposts are now pointing in a different direction. If he is right, it would he interesting to anticipate or perhaps hear the Minister of State's views about how the court might interpret those signposts.

When the court began its operations, and with the coming of the Single European Act, there was concern about whether it would operate on the basis of judicial restraint, or whether its aim would be further to strengthen the Community legal order. Early in 1991, the learned editors of the Common Market Law Review said: Some time ago the thought was widespread that the coming into force of the Single European Act would more or less coincide with the onset of a period of judicial restraint on the part of the Court of Justice. It was thought unlikely that the Court could continue to hand down judgments of major institutional importance. Would the Court not be overstepping the limits of its authority if it were to take decisions which were liable to further strengthen the Community legal order, e.g. by specifying the effects which Community provisions must have within the national legal order and by identifying the type of judicial remedies and procedures which the national legal order must make available to private individuals in order to secure 'the useful effect of the direct effect' of the Community provisions? Since 1991, and the coming of the Single European Act, I wonder whether that prophecy has been fulfilled. Is there judicial restraint, or is the court an innovative court? Perhaps the Minister of State might tell us something about the philosophy of the court so that we can judge the proposal to give it additional powers.

Mr. Cash

On a point of order, Mr. Morris. In the light of what the shadow Attorney-General has been saying, am I right in thinking that we should have a response not from the Minister of State but from the Attorney-General? It seems incongruous for a Minister to give opinions on a matter such as the Court of Justice, which is of great legal importance, in which he has absolutely no competence.

The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse)

Order. I am looking forward to the day when I can deal with a genuine point of order. The hon. Gentleman knows that that is not a point of order for the Chair.

Mr. Morris

The hon. Member for Stafford (Mr. Cash) follows these matters very closely. We have the benefit of the presence of the Attorney-General as well as having the wise words of the Minister of State. We were all encouraged by his remarks on 20 January and further encouraged by the Attorney-General's remarks some weeks later. If we add the two lots of encouragement together, and take into account the fact that they are both present in the same place and sitting on one and the same Bench, I am confident that the hon. Gentleman will not be disappointed. We may have one contribution from the Minister and another from the Attorney-General, although I cannot guarantee that they will be of the same order or along the same lines. There is plenty of time.

Mr. Cash

In the light of the experience that the right hon. and learned Gentleman has just described, does he agree that it is rather like the case of Tweedledum and Tweedledee in "Alice's Adventures in Wonderland" and "Through the Looking-Glass"?

Mr. Morris

I have been a Member of this House for a while and I should not want to be so offensive as to describe two distinguished Members, who approach matters from a different legal standpoint, in that way. However, the hon. Gentleman made a very good point— not the last point but the previous one. I am sure that we shall hear the Minister's advice based, as he told me in answer to a parliamentary question only a week ago, on the authority of his legal advisers because he consults them before he—

Mr. Dennis Skinner (Bolsover)


Mr. Morris

Well, he did on 20 January. I asked him a week or so ago, and on a Friday he gave me an answer to my question as to whether he had consulted his legal advisers. His short answer was yes. On that basis, I rely on him. [Interruption.] I am being diverted from the main tack of my speech and being seduced by hon. Members of both parties. I must restrain myself or I shall be out of order.

7.45 pm

The new article 171 states: If the Court of Justice finds that a Member State has failed to fulfil an obligation under this Treaty, the State shall be required to take the necessary measures to comply with the … Court of Justice. It is now sought to give additional obligations to that requirement by providing that if the defaulting state fails to comply with the judgment of the Court, the Commission shall, after giving the defaulting state an opportunity to submit its observations, issue a reasoned opinion setting out the points on which the defaulting state has failed to comply. I do not think that anyone could seriously quarrel with that. It is part of the principle of our courts that before reaching decisions, we should give reasons for them. Indeed, there has been a growing tradition for that to be done.

Secondly, under the new proposal, it is suggested that the Commission have a power to bring a defaulting state back before the court with a recommendation that it pay a specified lump sum or penalty payment". The Committee will want to study that suggestion very carefully. In addition, the court is granted the power to impose such a lump sum or penalty payment on the defaulting state.

It could perhaps have been explained in fewer words than used in the two separate paragraphs, but we must take them as they stand: they provide the power to bring the state back to the court and then to impose the penalty.

We want the help of the Minister and, in due course, that of the Attorney-General on this issue, because the new proposal gives the court some teeth by substituting more precise powers for the words to take the necessary measures". If one accepts the principle of the European Court having jurisdiction to adjudicate on European matters, there is clearly a strong argument for such a provision to ensure that there is a better and more precise power of enforcement than that provided by the ambiguous words "necessary measures". Those words do not appeal to me, because they are far too open-ended and not sufficiently precise.

The Committee would be glad to hear why the new power is necessary. That is of the utmost importance. How did the existing powers fail? It is interesting that actions under article 170, by which one member state can bring proceedings against another member state for failure to fulfil an obligation, are rare. There has been only one notable case, which involved France and the United Kingdom in a dispute over the size of fishing net mesh. The United Kingdom was found to be in breach of treaty obligations by the Commission. France took the case to the European Court, which upheld the Commission's opinion.

Article 170 has tended to be used as a threat rather than as a means of vindication, thus avoiding major confrontations between member states. In the section "The Contentious Jurisdiction of the Court" in "Law and Institutions of the European Communities", the learned authors, Messrs Lasok and Bridge said: in the last analysis the success of the Communities depends upon the good faith of member states. A member state's failure to implement a judgment given against it would also be likely to have an unfavourable political effect on its relations with its fellow members. Against the background of the reliance on good faith in the past, one is intrigued by the words: One of the innovations of the Maastricht Treaty would be to give the ECJ the right to fine member states for Treaty infringements, a sanction the court has hitherto not been able to apply. Unhappily, the cases in which member states generally—I said that the United Kingdom is not among them—failed to comply in the correct way are not isolated incidents. In 1990, which is the last date I have, the number of court judgments with which member states failed to comply was 83. In 1989, it was 82. Most cases involved failure to transpose Community directives. More than a third of the cases—33—involved Italy. Perhaps that may be an indication of something. It may be an indication of why this specific provision is required.

Is this additional provision—or these new teeth—necessary because of countries such as Italy? What level of lump sum or penalty is envisaged? There may be other cases in which judgments were made against us, but that one has been drawn to my attention. I am not aware of any failure on our part to comply. I suspect that the United Kingdom is one of the most diligent countries in the European Community.

Given our history of compliance with the court's judgments, what will be the likely exposure of the United Kingdom to such penalties? That may be an unfair question to ask the Minister. I anticipate that we might be in difficulty. There must have been a great deal of consideration before adoption of that part of the treaty dealing with the level of punishment which is envisaged.

The court has a useful function in resolving uncertainties. In view of the court's interpretative role and its powers of interpretation by way of preliminary advice, and in view of amendment No. 27—which we have spent a great deal of time debating in Committee—I wonder whether, if there continues to be uncertainty between the eminent legal advisers who are advising the Minister and the Attorney-General, it might be useful for the Government to refer such a matter to the court.

Sir Teddy Taylor

As the right hon. and learned Gentleman has obviously studied this matter carefully, can he tell us whether any guidance is given to the court in article 171 as to the factors that it should take into account in assessing what might be an appropriate fine? Is any guidance given to the judges, or will they simply have to take pot luck?

Is any guidance given in article 170 as to what the court can do when a member state such as Italy, which is a free country in such matters, decides not to pay the fine? I am confused and I would appreciate it if the right hon. and learned Gentleman could explain it to me.

Mr. Morris

Fortunately, I do not have to advise the hon. Gentleman on the Government's views. I am sure that his point will have been heard by them. I suspect that the court will have only the provisions which deal with the setting up of the court itself. If there are other political factors of either a centralising or non-centralising nature, the Committee will be interested in them. I share the hon. Gentleman's curiosity.

If political influences are to be brought to bear on the court, it is necessary for us to consider the new powers. Against that background, the hon. Gentleman has made an important point. It is not for me to clarify his curiosity. He has a second point which I have forgotten—I have not been a Minister for some years.

Sir Teddy Taylor

One of my hon. Friends who knows about these matters—the right hon. and learned Member for Aberavon (Mr. Morris) is one of those clever people —told me that the clause simply said that the court should impose fines which it considered appropriate. There was no guidance as to how the court should make that up—whether it should consider damage, political threat or whatever. I do not know whether any other court in the world has such a power. Perhaps the right hon. and learned Gentleman can tell me whether it is a case for establishing a court which will simply determine fines on the basis of what it considers appropriate.

What guidance is contained in the treaty as to what the court, the European Community, or indeed, the Minister of State, Foreign and Commonwealth Affairs can do if a country does not pay the fine?

Mr. Morris

I apologise to the hon. Gentleman for not remembering his second point. I am not interpreting the treaty, but I shall add my voice to his concern. It would appear that the authority to impose a fine is unlimited.

The hon. Gentleman should read article 172, which I shall come to later. I want to have the advice of the Minister and the Attorney-General on the words unlimited jurisdiction with regard to the penalties". I am sure that we will receive advice on that. If I am wrong in my interpretation, or if the hon. Member for Southend, East (Sir T. Taylor) is wrong, it will be a great pleasure for him to hear from the Minister that there is a limit to the powers.

On my reading of the article—I am not advising the Committee, but querying the provision—it seems that the court will have the power simply to impose lump sums or penalty payments which are regarded as appropriate in the circumstances. When articles 171 and 172 are coupled together, jurisdiction is certainly "unlimited" with regard to the penalties. I wonder what jurisdiction means in that context.

Mr. Budgen

Can the right hon. and learned Gentleman give his opinion about what would happen if a member state refused to pay the fine imposed? Would there be a system, which might be described as a sort of European attachment of earnings order, by which money would go out in some other fund for—shall we say for argument's sake—a well ordered, stable country such as Italy? Let us say, for argument's sake, that Italy said specifically that it felt that it would not pay the fines but, naturally, wanted to receive the tiny subventions which are so generously and willingly given to it. Will there be a system by which the court will be able to say that, if the member state will not pay the money directly, it will deduct the fine out of the country's subsidy, the regional fund or whatever? Will that be possible?

Mr. Morris

I am always delighted to give advice to hon. Members.

Sir Teddy Taylor

How much do you charge?

Mr. Morris

I would prefer it if I could charge but I cannot, I fear, in the circumstances. That is my personal regret. It matters not for the moment.

Mr. Skinner

Is it still guineas?

Mr. Morris

No. We are operating under the metric system.

It appears to me that there is no legal power of enforcement. There is certainly nothing similar to what the hon. Member for Wolverhampton, South-West (Mr. Budgen) thought of in his wildest moments as an attachment of earnings order. There are no court bailiffs or periods of imprisonment in default. The political will of the other countries would have to bring to bear whatever pressure they could on the defaulting country. In the treaty there does not appear to be any machinery for enforcement.

8 pm

Several Hon. Members


Mr. Morris

I will give way to the hon. and learned Member for Montgomery (Mr. Carlile) in a moment. I ask hon. Gentlemen to restrain themselves because otherwise I shall find myself replying on behalf of the Minister. I noticed one of my colleagues doing that in the previous debate and I do not intend to tread along that path.

Mr. Alex Carlile (Montgomery)

I am interested in the right hon. and learned Gentleman's view on unlimited fines. Let us take the example of Welsh lamb. Let us suppose hypothetically that the French Government decided not to allow imports of Welsh lamb into France, heaven forfend. Is the right hon. and learned Gentleman saying from the Labour Front Bench that fines should be limited in such a case? Or does he agree with me that the court should have the power to fine on an unlimited basis so that Welsh sheep producers were entitled to see the French Government pay compensation?

Mr. Morris

As the son of a Welsh sheep farmer and the brother of more than one Welsh sheep farmer, I must declare an interest. I am simply asking the questions which the hon. and learned Gentleman is putting in his own way. Whether the penalty is for preventing the import of Welsh lamb or any other product, should we not be worried about the extent of the penalty? We shall now hear from a much better prophet than me, the Minister of State, to be followed by the Attorney-General.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones)

Will the right hon. and learned Gentleman confirm, for the benefit of the Committee, that it is not uncommon in the United Kingdom, where there is no fixed penalty for an offence, for the fine to be at large? We look to the courts to exercise proportionality in such matters. As the right hon. and learned Gentleman has been kind enough to tell the Committee that amendment No. 32 is a probing amendment, I would be grateful if he would say whether he regards such an arrangement as appropriate for the European Court, as, indeed, it is for the British courts.

Mr. Morris

I am sure that the Minister will want to consult about whether it is appropriate with the Attorney-General, who will give a much better view than me.

Mr. Garel-Jones

What is the right hon. and learned Gentleman's view?

Mr. Morris

I am coming to that. If the right hon. Gentleman will have a little patience, of course I shall tell him.

Mr. Budgen

Will the right hon. and learned Gentleman give way?

Mr. Morris

No, I am sorry, I cannot. I am replying to the Minister. One at a time.

Of course—[Interruption.] If the Minister would listen —in our courts we frequently have provision for fines at large. But we have the advantage of knowing what the courts have regarded as reasonable in the past. We have procedures for appeal if the fine is too large. Or indeed, as the Attorney-General will advise the Minister, where the penalty is too lenient the Attorney-General can refer the matter to the Court of Appeal. However, we have the advantage of precedents. We do not have precise precedents for each particular case, but we know how our courts have operated in the past and are likely to operate in the future on the basis of what would be upheld either on appeal by a defendant or on a reference by the Attorney-General.

However, we are giving a new power to the European Court of Justice to impose a penalty. The only power that it previously had was the power which I have referred to as "necessary measures". We are moving from "necessary measures" to fines and lump sums. There are no precedents for a court which is being given a new power. What discussions took place between the participating countries before the provision was agreed? Or did they come to it blind? If they came to it blind, without any idea what the court would impose, a frank and honest answer —which we expect from the Minister—will help the Committee a great deal. Did the countries come to it blind?

Mr. Garel-Jones

I simply seek to ascertain whether the right hon. and learned Gentleman and his party support this provision in the treaty of Maastricht. The Committee would be interested to know that. I shall certainly give the Government's view when I catch your eye, Mr. Lofthouse.

Mr. Morris


Mr. Budgen

Will the right hon. and learned Gentleman give way?

Mr. Morris

No. I have given way a great deal and I am grateful for the assistance of the hon. Gentleman.

I suppose that we shall have to wait for the answer to my question. It may well be some hours. It might have helped the Committee to have a preliminary view from the Foreign Office. If it was wrong, it could be corrected by the Attorney-General later. We would then have the advantage—

Mr. Garel-Jones

What is the right hon. and learned Gentleman's view?

Mr. Morris

If the right hon. Gentleman was listening, as I am sure that he was because he is a courteous gentleman, and if he took me at my word, he will know that I said that amendment No. 32 was a probing amendment to discover the extent of the power and what thought was given to an apparently unlimited power. What were the views of the participating powers or did they come to it blind? When he quotes as a parallel what happens in our country, he must learn that we have a system of precedents in our courts. We know from recent and past history—I hope that it will operate in the same way in future—that we have a machinery for appeal.

I cannot see any machinery in the treaty for appeal. If a penalty were imposed which was so great as to bankrupt a country, would the hon. and learned Member for Montgomery be willing to see imposed a penalty which might bankrupt a country?

Mr. Alex Carlile

The right hon. and learned Gentleman gives me the opportunity to reply to him with a good constituency point. The answer to his question, if Montgomeryshire lamb is being burned at Calais harbour, is yes.

Mr. Morris

Well, we know where the hon. and learned Gentleman stands. I have the utmost sympathy with him about the destruction of any food, and particularly Welsh lamb. He may want to develop that argument. I have asked certain questions and we should be interested in the Minister's advice on that aspect.

Mr. Skinner

There is a problem here. Let us suppose that a country decides to break the law and the penalty could bankrupt it. Then the learned people in the Common Market get together and say, "Well, we have a problem here. That country is bankrupt already." It is like this country. We have a £50 billion public sector borrowing requirement. We are up to our neck in debt. We have a balance of payments deficit. People will say, "We would like to make this Tory Government bankrupt but they have already done it." How do they go on then?

Mr. Morris

I am not answering on behalf of the Government.

Mr. Budgen

He should be; he is supporting them.

Mr. Morris

The hon. Gentleman should not jump to too many conclusions.

Mr. Tam Dalyell (Linlithgow)

Could we go back to the interruption by the hon. Member for Southend, East (Sir T. Taylor), who, like me, is not a lawyer? Will my right hon. and learned Friend confirm that the people who are appointed from this country—and, indeed, from other countries—are extremely distinguished lawyers? The idea that Judge David Edward or his Scottish predecessor Lord Mackenzie-Stuart would be subject to political pressure is far-fetched. Having had experience of the Court of Human Rights, in a case in which the present Lord Chancellor was counsel, I can say that any political pressure from me or any other body would be dismissed as snash. We would not have dared to do that because it was a formidable operation and it would have been counter-productive. These are impressive people. Is not that part of the answer?

Mr. Morris

I concur with my hon. Friend. Members of the court are extremely distinguished and would do what they could in accordance with their oath. The hon. Member for Southend, East (Sir T. Taylor) put a particular point and I was seduced into answering it. He was not suggesting that members of the judiciary would have their arms twisted but he was asking a serious question about what guidance would be available. My answer was simply that it is not in the treaty.

Sir Teddy Taylor

Will the right hon. and learned Gentleman reassure the hon. Member for Bolsover (Mr. Skinner) that if a fine were imposed that could bankrupt a country, under the convergence criteria of the Bill that country would be entitled to a substantial grant from the cohesion fund? Will he therefore make it clear that if an excessive fine were imposed a country could get its money back under the cohesion fund?

Mr. Morris

I shall not pursue that argument. I am sure that you, Mr. Lofthouse, would rule me out of order if I were to do so. That matter can be raised in the debate.

Amendment No. 228 deals with article 172—an important article that we have already begun to consider. The article contains a curious phrase: Unlimited jurisdiction with regard to penalties I should like the advice of the Attorney-General on this matter. If unlimited penalties could be imposed under the article, it is a draconian measure. What concerns me—this is where we need clarification—is whether article 172, interpreted with article 171, confirms the view that I have expressed that there does not appear to be any power to limit in any shape or form the amount of the lump sum or the penalty. That needs to be justified.

Article 172 proposes an additional restriction: Regulations adopted jointly by the European Parliament and the Council … pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction. 8.15 pm

That introduces the European Parliament for the first time and makes the application of the unlimited jurisdiction dependent on its adoption by both parties, Parliament and the Council. I would find it very difficult to support amendment No. 228, but I know that concern has been expressed and we should be reassured about what "unlimited jurisdiction" means.

The new article 168a creates a mandatory obligation that a court of first instance shall be created and the Council's power is limited. After consulting the Commission and the European Parliament, and acting unanimously, the Council shall determine the type of case that a court of first instance is to hear, and its constitution.

Why has a mandatory power been substituted for the existing discretionary power? What has changed? I recall some years ago, if my memory is correct, that the machinery of the European Court was clogged by it having to take up so much of its time resolving domestic disputes arising from the rights, duties and obligations of its employees. Against that background, we should like to know a little more about the court of first instance. If it is the same as the one that is functioning already, perhaps we could be less apprehensive, but it would interest the Committee to learn why this new mandatory power has been substituted and what the background was to the agreement of all the parties.

I need not comment on amendment No. 330 because it is the same as amendment No. 32; likewise amendment No. 331 is the same as amendment No. 228. Amendment No. 411 proposes that the European Court of Justice should be required to sit in plenary session—attended by all its members— when a Member State or a Community institution is a party to the proceedings". It is proposed to add the words: When a party to the procedures requests it to". Under existing provisions, it is required to sit in plenary session in such a case regardless of the wishes of the parties. The Committee would like to know why this new requirement has been inserted in the treaty, what caused it, whether there were any specific problems with the operation of the existing article and why it is proposed to come into effect.

Mr. Garel-Jones

Will the right hon. and learned Gentleman remind me—I am sorry if I did not hear him correctly—which amendment he is referring to?

Mr. Morris

I am referring, unless the order has changed, to article 32 and to amendment No. 411, which proposes that the court should sit in plenary session when a Member State or a Community institution that is a party to the proceedings requests it. I hope that I have referred to the correct amendment.

Mr. Garel-Jones

indicated assent.

Mr. Morris

I see that the Minister acknowledges that I have. If that is the case, why was that change made? What was the background?

I repeat that amendment No. 32 is a probing amendment. I hope that I have not wearied the House unduly by commenting on some of the other amendments. We would be grateful for the Minister's view about these matters.

Mr. Garel-Jones

I thank the right hon. and learned Member for Aberavon (Mr. Morris) for making it clear that amendment No. 32 is a probing amendment which has been moved by the Opposition Front Bench to allow us to discuss these important matters.

Amendment No. 32 seeks to delete from the Bill article 171 of the Maastricht treaty. That article gives the European Court of Justice a new power to impose fines on member states which do not comply with earlier judgments by the court in respect of their carrying out their Community obligations.

Although the right hon. and learned Member for Aberavon has quite legitimately raised several issues, as amendment No. 32 is a probing amendment, I take it that the Opposition are broadly content that article 171 should be included in the treaty. The power in the article is perhaps the most important new power to be given to the European Court of Justice by the Maastricht treaty. That power was given to the court on the initiative of the United Kingdom Government. The provision of that new power for the court is something that we regard as one of our achievements in the Maastricht negotiations.

It would not be unfair to say that one of the aspects of the European Community that has caused justified anxiety among our citizens and among successive British Governments is that, while as one of the Marx brothers would have said, "Nobody's perfect", the British Government seek internationally, in general, and in the European Community, in particular, to comply as rigorously as we can with our legal obligations.

The right hon. and learned Member for Aberavon was good enough to quote figures to the Committee. Perhaps I can amplify those figures by quoting the number of references to the European Court of Justice between 1987 and 1991. I will not read out the whole list, but Italy heads the list with 87 references. Greece has 52 and Belgium 47. At the bottom of the list there is Portugal with five references, Denmark with eight and the United Kingdom with nine. While I have not worked out the proportion of references bearing in mind the relative sizes of the United Kingdom, Denmark and Portugal, the right hon. and learned Member for Aberavon was right when he said that United Kingdom Governments, as a general proposition, seek to be diligent in complying with the law.

There is general agreement, certainly on the Conservative Benches, that the single market and the free trade area that is the European Community matters very much to Britain. If that single market is to succeed, we need to ensure that the European Court of Justice has the ability to enforce that single market. We must ensure that there is a system of justice in the European Community which is capable of enforcing that single market which matters so much to the United Kingdom.

Mr. Stuart Randall (Kingston upon Hull, West)

As a matter of interest, can the Minister give us some idea of what the nine referrals, in relation to the United Kingdom, involved?

Mr. Garel-Jones

I cannot provide that information off the cuff. However, if I can provide it after advice before conclude my remarks, I will do so.

The Committee would expect any United Kingdom Government to behave in the way that I have described. In the list to which I have referred, the United Kingdom has never been taken to the European Court of Justice twice. I regret to say that, on occasions, member states have been taken to the court, have been found to be not in compliance, have not then complied and have been taken to the court once again. Such cases have rightly caused indignation in the House and in Britain as a whole. That is why this most extensive new power for the court was brought forward on a British initiative. We make no apology for that. Indeed, we regard it as one of our achievements in the negotiations that the court should have the new power.

Mr. Budgen

My right hon. Friend will appreciate that the term "enforcement" has a special meaning for lawyers. If my right hon. Friend will forgive me, he is saying that there is an additional penalty which is a fine. The problem is that there is no method of enforcement.

Mr. Alex Carlile

What about Wolverhampton magistrates court?

Mr. Budgen

For the sake of argument, the European Court of Justice can say to the Italians, "We hereby fine you 3 million ecu." However, there is no reason to suppose that the Italians will be any more willing to hand over 3 million ecu than they have been to disclose the number of olive trees that they possess. The difficulty is that the European institutions have half the pretensions of a state, but they do not have all the means of a state.

Mr. Denzil Davies

What about an army?

Mr. Budgen

Exactly. If the Wolverhampton magistrates court, to which the hon. and learned Member for Montgomery (Mr. Carlile) has just referred, fines me £1,000 and I do not pay it, in the end a policeman can come and feel my collar and take me to the Wolverhampton magistrates court—

The First Deputy Chairman

Order. The hon. Gentleman is making a lengthy intervention which is very nearly a speech. I hope that the hon. Gentleman will take note of what I have said.

Mr. Budgen

In the end, the Army can enforce the fine. If I refuse to deal with the police, the Army can be brought in. In the end, the state depends on force. As I was saying to my right hon. and learned Friend the Minister, those institutions have the pretensions, but not the means, of a state.

Mr. Garel-Jones

I am grateful to my hon. Friend for that short speech and for the fact that he inadvertently, no doubt impressed by the legal skills that I have already demonstrated to the Committee, described me as his right hon. and learned Friend. I am sure that he would wish that to be corrected. If I may say so mischievously, my hon. Friend has been giving the House the benefit of his views on enforcement in another context. The right hon. and learned Member for Aberavon also touched on that point and I shall deal with it later in my speech.

Mr. Dalyell

The mind boggles at the thought of the Shropshire light infantry being sent south to sort out the hon. Member for Wolverhampton, South-West (Mr. Budgen)—[Interruption.] His own regiment would doubtless not comply. However, it is a serious issue. Can we have a comparison like for like, because neither the figures for Germany nor those for France were given? Either on advice, or from his brief, can the Minister give us the comparisons? Those of us who have experience, albeit of the indirectly elected European Parliament, know that Italy is sui generis and comparisons with France or the Federal Republic might be more relevant.

8.30 pm
Mr. Garel-Jones

I did not want to weary the Committee, but I have the figures to hand. They are Italy 87; Greece 52; Belgium 47; France 34; Germany 34; Netherlands 20; Ireland 18; Luxembourg 16; Spain 12; United Kingdom nine; Denmark eight; and Portugal five.

Mr. Denzil Davies

Will the Minister give way?

Mr. Garet-Jones

I am responding to the point raised by the hon. Member for Linlithgow (Mr. Dalyell).

The cases against Britain were two cases on the internal market, two cases on environment, three on statistics, one on the customs union and one on employment. I regret that I do not have the details on each individual case.

Mr. Denzil Davies

Will the Minister give way? Mr. Marlow: Will my right hon. Friend give way?

Mr. Garel-Jones

I shall make a little progress and then I shall give way.

The first point that I would seek to establish—I do not think there will be any difference between myself and the right hon. and learned Member for Aberavon or the hon. and learned Member for Montgomery (Mr. Carlile) that Britain took the initiative to give the court those powers—is that we feel, not over-boastfully, that we are diligent in seeking to comply with the law. We feel that some member states are perhaps not as diligent as they should be and therefore it is right that the European Court should have the right to back up its judgment with a fine.

Mr. Marlow

We have a problem with Greece. Europe has a responsibility for trade policy and has decided to take trade sanctions against Serbia to prevent arms, fuel and other supplies of war from getting into Serbia. Yet Greece is pouring the stuff in as if there were no tomorrow. Under the existing trade policy, is it mandatory that Greece should impose sanctions, or is it voluntary? Will it be mandatory or voluntary under the Maastricht treaty? In either case, what will the court do about it and, if the court does nothing, what can we do to make sure that the court does something—and in quick time because there is a war going on?

Mr. Garel-Jones

First, any decisions taken now under European political co-operation and later, when the Maastricht treaty is ratified, under the common foreign and security policy, would not come under the jurisdiction of the European Court of Justice. My hon. Friend is quite right that decisions that have a trade implication are often taken under European political co-operation and eventually under the common foreign and security policy. Therefore, a foreign policy decision by member states could trigger a trading action or sanction by the Community. Once an aspect of any decision moves into the competence of the Commission and the treaty of Rome, the European Court of Justice is able to rule on it.

Sir Nicholas Fairbairn

Will my right hon. Friend give way?

Mr. Garel-Jones

I shall give way in a moment, but I must make some progress.

One of the important questions that the right hon. and learned Member for Aberavon raised was whether I could give him a flavour—it would be no more than that—as to whether the European Court of Justice was beginning, in its creative judgments—I think that was the term he used —to move in a less centralising way than it has done in the past.

The Committee has had a lengthy and interesting debate on this issue, prompted by my hon. Friend the Member for Chingford (Mr. Duncan-Smith) who is in his place. Without wearying the Committee in a repetitious way, no more than any hon. Member would seek to anticipate judgments by our own courts, I would not want to anticipate judgments by the European Court on any matter. However, this is one debate that has raged throughout the Committee. The Government believe that in the Maastricht treaty and the tendency within Europe the tide is beginning to turn against centralism.

In the debate on 27 January I was able to quote three recent cases where the judgments of the European Court have seemed to be more in favour of the positions of member states. The first was in July 1992 on national insurance contributions, where the court upheld the maintenance of different state pensions for men and women in the United Kingdom. In December 1992, in the most recent batch of Sunday trading cases, the Court upheld the United Kingdom Sunday trading legislation. Finally, in a judgment that concerns the environment, in the Wallonia waste disposal case, the Court upheld a ban on the import of waste by the Belgian region of Wallonia and in doing so allowed generous derogations from article 30 of the treaty.

Although it would be wrong and inappropriate for me to try to anticipate specific judgments, I believe that there is some evidence that the climate created by the Maastricht negotiations has brought about change. The Committee touched on the subject in the previous debate when my right hon. Friend the Foreign Secretary was able to demonstrate that article 3b on subsidiarity, even before it has come into effect, has already had a significant impact on the way in which the Commission goes about its work. I hope that without any disrespect to the European Court of Justice, it would not be improper to say that there is some indication that it may be moving in the way in which the right hon. and learned Gentleman suggested.

Sir Nicholas Fairbairn

Since Greece has been mentioned, may I ask about the implications for Britain if Greece were to be treated according to the proposals from the bureaucrats in Brussels? If we got the same percentage per capita as Greece, we would have to pay no income tax, corporation tax, heritage tax or VAT and we would be able to have vast advantages. That must be addressed whether we are centralists or decentralists.

The First Deputy Chairman

Order. I do not know how the hon. and learned Member's intervention relates to the European Court of Justice. If he will base his question on the court, I shall deem it to be in order.

Sir Nicholas Fairbairn

Certainly, Mr. Lofthouse. As someone who has probably appeared in the European Court of Justice more often than anyone else in the Chamber, I understand what you say. The most important matter which I have had to address was whether brut meant that the wine in the bottle had been grown from grapes from a vine in soil over which German was the official language. Against that background, I think that I do know something about the court. It is important that we understand that this trivialist, asinine, bureaucratic and unjuridical farce should be restricted rather than enlarged.

Mr. Garel-Jones

I always listen with interest and respect to what my hon. and learned Friend says. I believe it to be the case, as do the Government, that many of the abuses and problems by which our citizens, the House of Commons and the Committee have been disturbed are met by the Maastricht treaty. The amendment that we are debating, which bears on the ability of the European Court to impose fines, is just one opportunity to demonstrate that.

My hon. Friend the Member for Southend, East (Sir T. Taylor) raised in an intervention the important question of whether there is no limit to the fines.

Sir Teddy Taylor

No guidance.

Mr. Garel-Jones

Yes, whether there is a limit and whether there is guidance. I said—this was confirmed by the right hon. and learned Member for Aberavon and the hon. and learned Member for Montgomery—that it is not uncommon in Britain, where there is no fixed penalty, for a fine to be at large. The right hon. and learned Gentleman was able to say that as the legal and judicial system in Britain has a slightly longer pedigree than that of the European Court of Justice, there is a body of precedent which gives us some guidance on what we can rely upon.

The existing treaties already give powers to fine under competition policy, to which article 87 refers. Those powers are not subject to limit or guidance. The position so far is that the Commission imposes the fine, after which there may be an appeal to the court. On many occasions the court has reduced or confirmed such fines. There is a body of practice. I am not aware that there has ever been any objection to that or to the fines imposed being too high or out of proportion. I should tell the right hon. and learned Gentleman that consideration was given to whether there should be a limit. That consideration was given before the signing of the treaty. It was decided to rely upon the discretion of the court, which it has already shown, in the cases to which I referred, albeit in the areas of competition and anti-dumping. We believed—I understand that other member states take the same position —that the court could be trusted in this matter.

Several Hon. Members


Mr. Garel-Jones

I shall complete my response and then I shall give way, first, to the right hon. Member for Llanelli, because he has been waiting rather longer than others for the opportunity to intervene. I shall then give way to a small selection of my hon. Friends.

The talk of fines that will bankrupt a country is pure fantasy. I am confident that the court will show the sense of proportion which it has always demonstrated.

Mr. Budgen


Mr. Garel-Jones

My hon. Friend has made a sedentary observation.

Sir Teddy Taylor

It is the Commission.

8.45 pm
Mr. Garel-Jones

I hope that my hon. Friend will be able to contain himself. I realise that it is difficult sometimes to do that. I am often an excitable and voluble person. If my hon. Friend contains himself, I promise that I shall give way to him in due course. There is no need for him to pop up, as it were, and wave at me.

The answer to the sedentary interjection of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) was given by the hon. Member for Linlithgow (Mr. Dalyell). When we consider the calibre of those from the United Kingdom and other countries who have been chosen to sit on the European Court of Justice, I think that any reasonable person who is not indulging in fantasies will recognise that it is a distinguished court that is entirely impervious to any sort—

Mr. Cash

Will my right hon. Friend give way?

Mr. Garel-Jones

I shall give way in due course. As I have said, I want to complete my response to the question asked by my hon. Friend the Member for Southend, East and Opposition Members.

The answer is that we considered, of course, whether there should be a limit to the fines. We believed that the discretion of the court could be relied upon. The fine is proposed by or is a recommendation from the Commission. My hon. Friend the Member for Southend, East is right about that. However, the court decides—not the Commission—whether that fine is appropriate and proportionate.

Mr. Denzil Davies

I wish to ask a general question about article 171. We have now discovered that a very distinguished court will be moderate in imposing fines. As I read article 171, a member state is required to take certain measures to comply with the judgment of the court. Let us suppose that Her Majesty's Government could take those measures only after an affirmative vote of the House of Commons. Let us suppose also that they failed for some reason—that happens from time to time—and were unable to secure the affirmative vote so as to have authority to take the necessary measures. Would the Government still be fined?

Mr. Garel-Jones

I shall seek to give the right hon. Gentleman an authoritative reply when I have been properly advised. It is a good and important question and I shall seek to give him—

Mr. John Morris

Properly advised!

Mr. Garel-Jones

I am seeking to the best of my ability to take seriously the questions that are put to me. I make no apology to the Committee. The right hon. and learned Gentleman has teased me quite properly. On one occasion I gave the best legal advice that was available to me at the time, which proved to be incorrect. My right hon. Friend the Secretary of State made a statement to the House of Commons as soon as the changed advice was available to us and apologised to the House. I accept that the right hon. and learned Gentleman will tease me about that. If I am asked a serious question by a senior Labour Back-Bench Member who is a Privy Councillor and I am not confident that I can answer it off the top of my head, I think that it is right that I should seek proper advice.

Several Hon. Members


Mr. Garel-Jones

I want to make progress—

Mr. Robert Hughes (Aberdeen, North)

Will the Minister give way?

Mr. Garel-Jones

Of course.

Mr. Hughes

I ask a question in all honesty. We were told that the Law Officers would be here to give authoritative advice. Why cannot we have that advice? The Law Officers are here.

Mr. Garel-Jones

The Law Officers are here to answer any points of law that may be raised. If any point of law arises that I am not briefed to answer or if any such matter needs consideration, my right hon. and learned Friend the Attorney-General will give the Committee the advice that it seeks.

Mr. Cash

On a point of order, Mr. Lofthouse. The Minister has just said that the Attorney-General will come forward and give opinions on matters of law. But the whole of this treaty is a matter of law. Therefore we are entitled to the Attorney-General's opinion on any question that arises.

The First Deputy Chairman

That is not the responsibility of the Chair; it is a matter for Ministers.

Mr. Garel-Jones

There is another point to which I wish to reply.

Sir Richard Body (Holland with Boston)

My right hon. Friend said that the United Kingdom Government were instrumental in proposing these new powers for the European Court. Before making that proposal, did they, perchance, study what had happened in the United States of America? When the American Supreme Court was given additional powers, it became an engine for federalism and for the centralisation of power. Was that example considered by the Foreign Office?

Mr. Garel-Jones

I have already explained at some length why we regard this as an important new power for the European Court of Justice and why it was an initiative of the British Government. My hon. Friend the Member for Stafford (Mr. Cash) is a staunch supporter of the Single European Act. I do not think that the figures I have quoted and the inability of the European Court to assert its authority by way of a fine are at all satisfactory.

Mr. Cash

Perhaps the Minister could explain why nobody knows who has given a judgment. Judgments are delivered anonymously. That is a pretty extraordinary state of affairs for such a distinguished court as my right hon. Friend has described. Secondly, can my right hon. Friend explain why, to all intents and purposes, it is the Advocate-General who gives the main thrust of the advice at the end of the day? Thirdly, why, in a recent case—as I was told by one of the plaintiffs—did the judges not even have their translation equipment up to their ears, so that they could not even hear what was going on?

Mr. Garel-Jones

My hon. Friend is fond of anecdotal evidence. He says that someone told him that the judges did not have their translation equipment up to their ears. The Committee will not expect me to treat that point even remotely seriously. I can hardly be expected to take seriously yet another example of anecdotal evidence. On a previous occasion my hon. Friend quoted a letter. He would not tell us who had written it. We asked him to place it in the Library, but he would not do so. The debate cannot be conducted on that basis. [Interruption.]

The First Deputy Chairman

Order. It will be helpful to the Committee if the Minister is given silence to answer the questions that have been put to him.

Mr. Garel-Jones

On the question of the Advocate-General, my hon. Friend the Member for Stafford is simply wrong. These are collective judgments for the court.

Mr. Allan Rogers (Rhondda)

The right hon. Gentleman has put us in a dilemma. My right hon. and hon. Friends and I tabled probing amendments. The Minister knows that we did not intend to press them to a vote. My right hon. and learned Friend the shadow Attorney-General initiated the debate specifically for the purpose of putting questions to the Government. My right hon. Friend the Member for Llanelli (Mr. Davies) has put a very pertinent matter before the Committee. When will we receive an answer to his question? The Attorney-General is sitting next to the Minister. It would be easy for the Minister to give way to the right hon. and learned Gentleman so that we might be given a definitive answer. What my right hon. Friend has said is very important. The only purpose of our amendments is to establish exact meaning.

Mr. Garel-Jones

That is a perfectly reasonable intervention, except to the extent that, so far, I have sought —perhaps inadequately—to answer four of the points that were made by the right hon. and learned Gentleman. There are more to come. I have told the Committee that before I finish my speech I shall seek to reply to the points that have been made.

Several Hon. Members


Mr. Garel-Jones

I want to make some progress and then I shall give way to hon. Members who have asked me to do so.

Mr. Marlow

Will my right hon. Friend give way for a question about the matter that has been raised by the hon. Member for Llanelli (Mr. Davies)?

Mr. Garel-Jones

No. I shall reply to that question when I am able to do so. If my hon. Friend wishes to intervene at that stage, I shall give way to him.

Mr. Marlow


Mr. Garel-Jones

I want to make some progress in answering the questions that have been put to me by the right hon. and learned Member for Aberavon.

The right hon. and learned Gentleman asked about the court of first instance. In article 168a, the treaty confirms the existence of the court of first instance, which was set up in 1988. The original version of article 168a was introduced in the Single European Act. Yet again, we can be grateful to my hon. Friend the Member for Stafford. Narrow limits were placed on the potential jurisdiction of the court of first instance. Only actions brought by natural or legal persons and staff cases could be transferred to the court. That potential jurisdiction is now very nearly used up.

Thus, we welcome the fact that the new version of article 168a allows the Council, by unanimity, to assign to the court of first instance any category of jurisdiction of the European Court of Justice, without limit and without need of further treaty amendment. I hasten to reassure the Committee that this article does not represent an absolute increase in jurisdiction, but simply refers to how jurisdiction should be divided between the two courts.

The court of first instance has proved itself an efficient and respected tribunal in its limited field—competition and staff cases—and, in our view, it should be used for more cases for the purpose of speeding up the process of justice. The simpler procedure for expanding its jurisdiction which the Maastricht treaty introduces will facilitate moves to reduce the work load of the Court of Justice and the attendant delays in litigation. I repeat that the United Kingdom strongly supports the rule of law in the Community. We depend on the court to enforce it. That is why we have consistently sought, in the negotiations relating to both the Single European Act and the Maastricht treaty, to facilitate the effective dispatch, as it were, of the court's business and thus assist it in its task of upholding the law.

Mr. Marlow

I am sorry to come back to a question that I asked before, to which my right hon. Friend kindly gave me half an answer. It concerns the problem of Greece. What can the court do to prevent Greece from carrying on sanctions-busting with regard to Serbia and the war? If it cannot do anything now, what will it be able to do after the treaty is in place? What action can we take to make the court take action so that we have a level playing field on this issue?

Mr. Garel-Jones

My hon. Friend, as he rightly says, has asked me this question before. I have given him the answer that I think I should, and I do not want to go any further on that.

Sir Teddy Taylor

Does not my right hon. Friend consider that it is perhaps erroneous to give the impression that there is a huge advance in judiciary powers in the court when, if he reads article 171, he will see that it says that, after the judgment is made, the Commission will decide if it has been complied with, the Commission will declare a time limit by which it must be done, the Commission will recommend the fine, and it is only at the final point that there is an appeal to the court? Does he accept that, while there may be a good case and a bad case for article 171, it could mislead the Committee if the impression were given that there was an advance in the judicial system? It is an advance in the powers of the Commission, which can say that it has not been done, this is when it must be done, and this is the recommended fine. Would not it be fairer to express it in that way?

9 pm

Mr. Garel-Jones

Unlike my hon. Friend and, I think, like the majority of the members of the Committee, I do not regard, nor do I think that the United Kingdom should regard, either the European Court of Justice or the Commission as our enemy. I want the Commission to be effective in seeking out areas where compliance is not taking place. I want it to be robust in pursuing that. I want it to make recommendations to the European Court. I repeat that the amount of the fine will be decided by the court, not by the Commission.

Mr. Budgen

This is not on the substance of the answer that my right hon. Friend intends to give to the right hon. Member for Llanelli (Mr. Davies)—it is about the process of discussion. Will he explain to the Committee why the Foreign Office put forward this procedure as an exciting new addition to the powers of the institutions of the Community without being in a position to brief my right hon. Friend about the method by which the money for a fine might be raised even in Britain? I quite understand that there might be a difference of opinion as between the Foreign Office legal advisers and the Attorney-General, but it is absolutely amazing that my right hon. Friend cart stand as proud as a peacock before the Committee saying that this is one of the great advantages of Maastricht that we and the heroes of the Foreign Office have achieved, yet cannot even tell us from his Foreign Office advice how the system would work in this country. It seems to me to be grossly incompetent.

Mr. Garel-Jones

All that I can say to that is that my hon. Friend is easily astonished. I know that I will not be able to convince him of this, but I hope that other Members in all parts of the Committee will not feel that I have been presumptuous or arrogant in my approach.

Mr. Jenkin

As regards the additional power and discretion that article 171 gives to the Commission, my right hon. Friend is extremely fond of telling the Committee that the Commission is not a signatory to this treaty and therefore its centralising aspirations are of no consequence. But here we have an example of huge additional power and discretion being given to the Commission in the exercise of its centralising agenda.

Mr. Garel-Jones

In the previous debate my hon. Friend sought to give a quotation that was incomplete and he had to be pulled up by the Foreign Secretary. I am afraid that I must now pull him up, too. I have never said that the Commission's ambitions and agenda are of no consequence. Of course, the Commission has an agenda and of course it has a substantial amount of power within the European community. It is required by the treaty to have power. I would be grateful if my hon. Friend would be careful not to say that I have said any such thing.

Mr. Hoon

Dealing with the relationship between articles 171 and 172, the hon. Member for Southend, East (Sir T. Taylor) pointed out rightly that it is for the Commission to recommend the amount of penalty or fine appropriate in the circumstances—

Sir Teddy Taylor

Specify, not recommend.

Mr. Hoon

Very well, specify. Presumably that has some reference to the nature of the harm done, and the Commission might calculate along those lines. The Minister responds properly by saying that then the court has the right to determine the amount at large—there being no limit. In that eventuality, why is article 172 necessary at all? I know that article 172 is an ancient provision that has been only slightly changed by the addition of the European Parliament, but if the amount of the fine in article 171 is at large, presumably there is no need for any regulation.

Mr. Garel-Jones

Article 172 is a purely technical amendment which seeks to reflect the European Parliament's enhanced legislative role under the negative assent procedure of article 189B. Hence the reference to regulations—a point raised by the right hon. and learned Member for Aberavon as well, so I can respond to both Members at the same time—adopted jointly by the European Parliament and the Council.

It is important to remember—the hon. Gentleman, who still has a double mandate, will be well aware of this—that the Council remains the decision-making body and that the European Parliament may block legislation after the Council has taken its final decision that may not amend it.

There is a second point that I would like to make to the Committee about the role and powers of the court which picks up a point that I think was made in the earlier debate about subsidiarity. The role and powers of the court—the Committee should remember this—were set out in the original Community treaties.

The treaty of Rome describes the court's basic tasks in article 164: The Court of Justice shall ensure observance of law and justice in the interpretation and application of this Treaty. The treaty goes on to set out the basic jurisdiction of the court, the remedies available and the procedures. Those have not substantially changed, either in the Single European Act or at Maastricht.

Naturally, as member states have decided to increase the competences of the Community, so the ambit of the court's jurisdiction has been increased. But most of the fears about the role of the court raised by critics of the treaty in and outside the House are fears about powers that the court already has. The critics often claim that they are not against the existing treaties, only against this treaty. There is an illogicality there which my right hon. Friend the Foreign Secretary pointed out in the previous debate and which it is entirely appropriate to point out again.

The most substantial new power given to the European Court in the Maastricht treaty is this new power for imposing fines, and, as I say, it was given on the initiative of the United Kingdom. It will go a substantial way to improve observance and compliance with Community law and that is something that we in the United Kingdom welcome.

Sir Nicholas Fairbairn

Forgetting for the moment what changes the treaty may make on fining, the fact is that the European Court has abrogated to itself powers of the interpretation—

Dame Elaine Kellett-Bowman (Lancaster)

On a point of order, Mr. Lofthouse. It is in order for an hon. Member to be talking to the civil servants in the Box during the debate?

The First Deputy Chairman

It would not be in order if he was seeking advice.

Mr. Cash

I am not seeking advice; I am giving it.

Sir Nicholas Fairbairn

I was trying to give advice as well—to the Committee.

What is important is not the increased powers under the Bill—let us ignore them—but the fact that the Court of Justice has abrogated to itself powers that were never intended and interprets the law of this land, far less of the other members of the Community, present or apparent, in a manner which overrides the distinctive principles of our law, our judges and our courts. That is my concern. Having appeared in the court frequently, I am worried that, when the Advocate-General gives judgment, the judges wander in and wander out to their chauffeurs.

Mr. Garel-Jones

I would go along with my hon. and learned Friend up to a certain point. We had an interesting debate about this some weeks ago. There is no doubt that over the past 10 or 20 years many judgments of the European Court have been of a centralising tendency. I also contend that there is now evidence—growing evidence once we have ratified this treaty—that the mood and climate has changed, but the principle of the jurisdiction of the European Court was set out in the treaty of Rome. To the extent that this treaty does anything at all, the only areas in which it enhances the court's powers to a considerable degree are those to which I have referred.

There are two other points which have been raised by hon. Members, including that raised by the right hon. Member for Llanelli to which I am anxious to reply. The first leads on from a point made by my hon. Friend the Member for Southend, East. That has also been taken up by other Members.

There is no specific procedure in the treaty for the enforcement of fines against member states. The intergovernmental conference considered various possibilities, including a mechanism for direct deduction of the amount of a fine from payments due to a member state from the Community budget, for example, from agriculture structural funds. It was decided not to do that, partly because it would tend to hit the wrong people. Why should Italian farmers suffer because Italy had failed to implement a directive totally unrelated to their fields?

That was the reason why we decided not to go down the road of direct deduction—[Interruption.] I am trying as best I can to answer my hon. Friends. We considered direct deductions during the intergovernmental conference and rejected them for the reason I have just given the Committee. In the end it was considered that member states who were shamed in this public way, in addition to the public ignominy of being fined by the European Court, are under a treaty obligation to pay their fines, and that they could be expected to pay.

If that proves not to be the case—I do not expect this —we shall not hesitate to propose and press for an amendment to be introduced into the treaty providing for a mechanism for direct deductions of such fines.

The right hon. and learned Member for Aberavon put his finger on it while he was asking his question. He was reminding the Committee that there is no process for enforcement in that way. He said that he felt that in the end it would be peer pressure, political pressure, that would shame member states which were fined into paying. That is what we expect. That is the judgment that we made during the negotiations. If it proves not to be the case, I have no doubt that in the next intergovernmental conference in 1996, one of the things that Her Majesty's Government will be seeking to do is to ensure that a method of enforcement is brought in.

Mr. Rogers

The Minister's last remark fills me with dismay—that political peer pressure is expected to get countries to pay fines. I do not think that that answer is good enough. I think it was the Davignon plan, introduced in 1980, which made steel allocations to member states. In the United Kingdom capacity had to be reduced from 22 million to 11 million liquid tonnes. We complied with that. At the same time as our steel workers were being put out of work, the Italians increased their steel-making capacity. Under the regulations laid down by the treaty of Rome, the Commission imposed a fine which I understand it has never been able to collect. In this instance, with the unlimited fines that might be imposed under this botched-up provision, how will payment of the fines be enforced?

9.15 pm
Mr. Garel-Jones

I do not want to be dismissive, but I hope that the hon. Member is not being deliberately obscurantist. I have explained to the Committee that we considered the option of direct deductions. The member states—not just the United Kingdom—came to the conclusion that it was sufficient for the time being to give these extra powers to the European Court. If the procedure does not seem to be working in the way that we hope it will, we will seek to build on it when the next opportunity arises.

Mr. Randall

I have a genuine doubt about peer group pressure. It has already been reported publicly that the Italians have had 87 referrals, the Greeks 57 and the Belgians 47. One would think that peer group pressure would have worked for referrals rather than having to rely on fines. I am not sure that pressure would increase appreciably because a fine had been imposed. I am doubtful whether the provision will work without strong enforcement.

Sir Teddy Taylor

The hon. Gentleman is right.

Mr. Garel-Jones

I accept the reservations expressed by the hon. Member for Kingston upon Hull, West (Mr. Randall), which are supported by my hon. Friend the Member for Southend, East. If their fears prove to be the case, I have no doubt that we will seek to give even further powers to the European Court of Justice; I am sure that we would have the support of my hon. Friend in that endeavour.

The right hon. Member for Llanelli asked whether we would be fined if we were found to be in breach by the European Court and were denied by the House the means to give effect to the Court's judgment. The answer is yes. A state cannot invoke its inability to give effect to a treaty obligation as a reason for not complying with a judgment. I do not expect the United Kingdom to be in that position. I regard it as a relatively far-fetched example. The United Kingdom has never yet failed to give effect to a judgment, and I find it hard to believe that the Committee would deny the Government the means to implement a lawful judgment.

Mr. Denzil Davies

Perhaps it is not so far-fetched. There might be a minority Government who could not get a majority. On that basis, what would be the legal authority for Her Majesty's Government paying the money? On the one hand the European Court would impose a fine; on the other, Her Majesty's Government would be stealing British money in order to pay the fine.

Mr. Garel-Jones

I hear what the right hon. Gentleman says and I will give him what I hope is a brisk and proper reply. Understandably—and I make no complaint about this—the right hon. Gentleman deploys all his considerable intellect and ingenuity to find—

Sir Teddy Taylor

Please just answer the question for once.

Mr. Garel-Jones

If my hon. Friend could restrain himself for a moment, I am seeking to reply to a very important question asked by a right hon. Gentleman. I do not need the advice of my hon. Friend while I am doing so. If my hon. Friend then wishes to ask a question, I will happily try to answer him.

The right hon. Gentleman put forward what I regard as an unlikely hypothesis, one in which the United Kingdom has not yet found itself. My answer to his question is that if—it is a consummation for which the Liberal party devoutly wishes—after a general election we had a hung Parliament, and a coalition Government of some description, one principle would underpin that Government and Parliament, the principle that I adumbrated at the outset of my remarks. It is that we in Britain believe, not only in this country but in the European Community, in the rule of law. I cannot believe that the House of Commons would deny any British Government the ability to comply with their legal obligations.

Mr. Marlow

On a point of order, Mr. Lofthouse. You will appreciate that this is an important debate about a very important institution that can overrule this Parliament and any decision taken by it. The Minister made a brave effort in difficult circumstances, but I was reminded—I do not mean this pejoratively—of a donkey trying to pull a six-furrow plough. The Minister has beside him the Attorney-General. Questions have been put and have not been answered. Will it be possible for the Attorney-General to respond later in the debate because a whole series of issues need to be cleared up—

The First Deputy Chairman of Ways and Means

Order. I responded to the hon. Gentleman when he put the same point earlier. He knows that it is not a matter for the Chair.

Mr. Alex Carlile

I suggest to the Minister that the answer to the question posed by the right hon. Member for Llanelli (Mr. Davies) about the legal authority for the payment of a fine is the Bill that we are debating, if it is enacted. That would appear to give the British Government the authority to pay a fine, even if an affirmative resolution had not been passed by this Parliament.

It may sound far-fetched, but it is true that on the hills of Plynlimon and Penybontfawr in my constituency there are some hard-working and rather impoverished people who, although they may not realise that what they have in mind is article 171 of the treaty, actually care greatly about the meat of that article—and I hope that I shall be forgiven for the pun on the word "meat."

Two or three years ago, I arrived at the Montgomery county show in my constituency on the day on which some French farmers had set fire to lorryloads of Welsh lamb. That action caused great anger, particularly because at the time the French Government seemed to be turning the other cheek and showing less than full interest in what had happened near the French channel ports. They appeared to be less than enthusiastic about bringing to justice the perpetrators of those activities, who had been filmed on television and were clearly identifiable.

I recall that on that occasion we started in Montgomeryshire a temporary but effective boycott on the purchase of French wine, an action that would have pained at least one Conservative Member, although I do not see him in his place right now. The farmers who were behind that boycott of French wine, which was well supported by an independent supermarket in my constituency, had a particular point in mind. It was the difficulty of enforcing treaty obligations under the treaty of Rome, particularly those relating to fair competition in the selling of goods across borders, when Governments were reluctant to ensure that those obligations were honoured.

I am sure that it is with that general subject in mind, of which Welsh sheepmeat is an example, that the Government sensibly suggested that there should be a new article 171. If that means that enforcement of treaty obligations will be achieved more successfully, it will be welcomed on the slopes of Plynlimon and the hills around Penybontfawr.

We have heard some interesting statistics from the Minister of State about successful complaints to the Court of Justice of the European Communities. It is comforting to know that the United Kingdom Government come near the bottom of the league table—indeed, in proportional terms they are probably at the very bottom. It follows that, relatively speaking, the United Kingdom obeys the laws of the European Community and the treaty obligations. That very statistic, however, is evidence of the frustration that is felt by sheep farmers in my constituency.

What those sheep farmers feel may be replicated in many industries throughout the country, both manufacturing and service. They feel that the French Government in particular have been less than enthusiastic about obeying the obligations imposed by the treaty of Rome and the amendments made to it. They feel that the United Kingdom should perhaps have copied the example of the French, and banned the import of French goods. Perhaps we should have discriminated against French wines; perhaps lorryloads of bottles should have been broken as they entered our channel ports.

The law-abiding farmers of Montgomeryshire, however, would far rather have a level playing field for the enforcement of treaty obligations than follow the rather unseemly example set by the conduct of French farmers towards sheepmeat from the hills of Montgomeryshire, which is the finest in the world.

Mr. Bill Walker

Will the hon. and learned Gentleman give way?

Mr. Carlile

I will give way in a moment.

Mr. Rogers

Will the hon. and learned Gentleman give way?

Mr. Carlile

I shall give way first to the hon. Member for Tayside, North (Mr. Walker); then I shall give way to the hon. Member for Rhondda (Mr. Rogers).

Mr. Rogers

I was only going to be facetious about Rhondda sheep.

Mr. Carlile

In that case, I shall not give way to the hon. Gentleman.

If what the Government proposed at Maastricht means that treaty obligations can be enforced more effectively, we should all welcome that on grounds of common sense.

Mr. Walker

The hon. and learned Gentleman has had a distinguished career in the courts. Does he really believe that the imposition of any fine is worth anything when there is no means of enforcing payment? Can he provide evidence of such a system actually working?

Mr. Carlile

I strongly suspect that it will be easier to enforce fines in the Court of Justice in the European Communities through political peer pressure, as it has been called, than to enforce fines in the Wolverhampton magistrates court—which was mentioned earlier—in the case of impecunious defendants who have no intention of paying. The point that has been made about enforcement is about as bad as any that we have heard in the House, even in debates on Maastricht.

I am pleased that the Attorney-General is present. I am sure that he will recognise the seriousness of the point that I am about to make. The structure of new article 171 strikes me at least as very fair. It ensures that a finding will be made that there has been a failure to fulfil an obligation; it ensures that a carefully considered recommendation is made to the court about the level of the fine; and it gives the court—a very experienced and high-quality court—jurisdiction to consider the level at which the fine should be imposed.

It is possible, however, that during the time that that will take, several lambing seasons will pass before enforcement takes place. Can Ministers assure us that one of the aims of the new article, and one of the purposes of the discussions surrounding it, was to ensure that it was rendered effective?

If I have to go back to the sheep farmers in what I believe is still the most agricultural constituency and tell them that the new rules look good but will be ineffectual, I shall not be offering them much comfort. If, however, I can tell them that the new structure, which provides chambers of a small number of judges to deal with these matters, will offer an efficient and effective remedy, then, in the example that I gave, the French Government would be forced to pay their fine. It would be a great comfort to me if I were to be assured that the enforcement of a fine would mean that the money was paid to those very farmers who had lost as a result of the illegal activity of a foreign Government.

Mr. Rogers


Mr. Carlile

I shall give way to the hon. Gentleman on the condition that he does not disappoint us, that he is not facetious and that he has a serious point to make. If he is going to make a point about the quality of sheep from Rhondda, may I settle with him now? If I say that sheep from Rhondda produce sheepmeat as good as that from Montgomeryshire, will it satisfy him?

9.30 pm
Mr. Rogers

That point is not worth answering. I wish to ask the hon. and learned Gentleman about the enforcement of fines. He said earlier, I presume in answer to the hon. Member for Wolverhampton, South-West (Mr. Budgen), that the points made about the enforcement of fines were probably the worst in any of our debates on Maastricht. I thought that that was a rather supercilious remark but, having said that, he went on to talk about the enforcement of fines. As I understand it, the issue raised by my right hon. Friend the Member for Llanelli (Mr. Davies), my right hon. and learned Friend the Member for Aberavon (Mr. Morris) and some Conservative Members was how the fines were to be assessed, enforced and collected. That is surely a reasonable question to put to the Minister of State. The Labour party tabled the amendment, but we are still waiting for a response.

Mr. Carlile

The hon. Gentleman asks a serious question. I hope that I have made it clear that I believe that, for the reasons already outlined, there is no problem with the enforcement of fines. My point is quite different. Fines should be imposed sufficiently quickly for the provisions to have effect.

The right hon. and learned Member for Aberavon (Mr. Morris) is a very distinguished lawyer whom I greatly admire. He suggested that the drafting of article 171 was less clear than it should be. He acquired a great deal of expertise some years ago in debates on the Criminal Justice Bill of 1988. I venture to suggest that those of us who, from time to time, have to make submissions to the courts on some parts of that Act would be very much happier if it was as clearly drafted as the new article 171.

Mr. Edward Garnier (Harborough)

As I understand it, the amendments are probing amendments, tabled by the Opposition and supported, to some estent, by some of my hon. Friends. Amendments Nos. 32 and 330 would remove article 171 from the treaty. There has been a good deal of debate about article 171. Its first paragraph contains what is to be found in the original article 171, but paragraph 2 contains new material.

The amendment would allow the present unsatisfactory position to continue whereby member states which fail to follow European Community law make their own provision for compliance and, in many cases, do nothing. That is detrimental to our national interest because, as has been said, we tend to play by the rules. The amendment would deny us the opportunity, through the Community, to ensure that other countries did the same.

It should be noted that the research staff in the Library have kindly produced a research paper which explains the current position. I quote: There are at present no sanctions that can be taken against a member state which fails to implement EC legislation or implements it inadequately, according to a judgment by the ECJ"— the European Court of Justice. The proposal to fine member states which did not comply with an earlier judgment on the implementation of a directive or a regulation was a United Kingdom initiative which was taken up by the Intergovernmental Conference on political union in 1991. The lack of an ECJ mandate to sanction the recalcitrant member states had been seen as one of the weaknesses of the Community legal system. In joining the EC member states agree to the primacy of EC law over national law and accept the direct applicability of the Treaties and the instruments of Community law. The Treaties have created their own legal system which is an integral part of the legal systems of member states and which their courts are bound to apply. Yet there has been no punishment for failure to fulfil these obligations. Fines might encourage a more conscientious approach to implementation, although doubts have been expressed as to the implications. This matter was considered earlier this decade in another place when my right hon. and learned. Friend the Lord Chancellor said: It is not tolerable that if there was a judgment against a member state that state should do nothing at all about it and nothing should happen thereafter. That situation is detrimental to the rule of law."—[Official Report, House of Lords, 4 July 1990; Vol. 520, c. 2090.] It is not only lawyers in the Chamber but all hon. Members who are concerned, rightly, that the rule of law should be adhered to. Any amendment to the treaty of Rome which makes clearer and surer the obligations to abide by the rule of law must be welcomed. Article 171 of the treaty on European union which was agreed at Maastricht does exactly that. In paragraph 2 we find the advantageous clauses which we have been looking for.

In the past, it has been said that limited resources have been the reason for the Commission's failure to pursue infringements of European Community law. For example, in competition policy, there are always hundreds of cases awaiting examination. We have been told that DG4, which is the competition directorate-general, is not keen to increase its work load. The best tactic has been to press one case, issue a token fine, make a lot of fuss about it and hope that that will act as a warning to others. However, we know that it does not.

Under article 171, the European Court of Justice is empowered to impose unlimited fines. The imposition of unlimited fines and the threat of such fines act as a deterrent on the recalcitrant member states which, despite the original provisions of article 171, ignore Community regulations.

The new powers under article 171 will deter heel dragging as well as punish defaulters. The United Kingdom has no fears because it has always done its best to comply with regulations and directives. Articles 171 and 172 assist the national interests of the United Kingdom whereas the amendment, if passed, will not.

If we are to have a European Community—be it a political or economic association, or both—to which member states have granted powers to act in designated areas for their mutual benefit, we must also have a legal framework as the essential basis of decision making and decision application. We must have a body of law defining the powers and responsibilities of the EC institutions. The member states must also have those powers defined. We must have a body to give independent rulings on what the law is and means. Article 164 of the original treaty makes clear what are the duties and powers of the European Court of Justice. It says: The Court of Justice shall ensure that in the interpretation and application of this Treaty the law is observed.

Mr. Iain Duncan-Smith (Chingford)

Will my hon. Friend give way?

Mr. Garnier

I trust that that is something which my hon. Friend the Member for Chingford (Mr. Duncan-Smith) welcomes.

Mr. Duncan-Smith

While I agree with the idea that there must be some way of sorting out the law and dealing with those who transgress and those who stick to the legal prescriptions, does my hon. Friend agree that the key to the whole argument is not so much that a system is not something to strive for, as that the European Court of Justice as it exists provides no real checks and balances on the constant extension of that power in a political sense?

Mr. Garnier

If I follow my hon. Friend's point, I think that it is answered by article 3b of the treaty.

I suggested that we must have a body of law to define the powers and responsibilities of both EC institutions and member states. We must have a body to give independent rulings on what the law is and means. The law provides the background for all EC activity. Decisions are made against that background. The law tells us what must be done, what cannot be done, and what may be done.

It is also essential to have a common interpretation of EC legislation so that it is applied in all member states equally. I suggest that the concept of order and respect for the rule of law is not foreign to the British or to members of the British Conservative party. It should be welcomed when it is found in the Maastricht treaty.

I further suggest that the legal order of the European Community derives from several sources: first, the treaties; secondly, the Community legislation; thirdly, international law; fourthly, the general principles of law; and fifthly, judicial interpretation. I shall deal with the treaties first.

The treaties as amended by subsequent treaties form the primary legislation—the constitution, if one likes—which creates the institutional structure for decision making. They also establish the limits of the powers of the structure. It is most important to the interests of the member states that those powers are limited. The Maastricht treaty especially limits the powers of the EC structure. It also contains enunciated policy and intent, for example, on the promotion of competition and free movement of goods, services, capital, labour and so on.

Community legislation is the means by which the policies in the treaties are implemented. They are mostly the regulations and directives which the Commission issues. The EC is itself a body corporate, with its own legal personality. Therefore, international law impinges upon it. The general principles of law that we are discussing are also to be applied by the European Court of Justice. The court is charged with the task of ensuring that in its interpretation and application of the treaties the law is observed.

It is with judicial interpretation that some of my hon. Friends perhaps find most difficulty. However, in Britain we are used to judicial interpretation, whereas mainland Europe has the codified system. Judicial interpretation is an important role when EC legislation in the treaties or the laws is unclear or incomplete. Judgments have to be given based on a lack of detail in some of the EC statutes. It has been seen to be filling in the gaps, thus creating law.

Community law is primarily concerned with the economic activity of member states, which is not surprising as it is an economic community. We are concerned primarily with commercial law, competition law, business law, intellectual property law and law on the free movement of goods, services, labour and capital. That law must sit side by side with national and domestic law. We have companies legislation, copyright legislation, civil torts on intellectual property and laws that prevent the stifling of free competition. The EC law and the domestic law of Britain sit most comfortably with each other, compliment each other and do not detract from each other. Business is all the better structured and organised by those two partners.

9.45 pm

Environmental law is increasingly being developed by the EC to deal with matters such as toxic waste and protection of animal species. We must have EC law to cover matters that do not respect national boundaries, such as river pollution, acid rain and so on. No domestic law passed by the House will be able to deal with international disasters of the sort created by environmental problems.

The European Court of Justice has two main functions. The first is to apply the law in certain cases, and the second is to interpret the provisions of EC law and ensure that it is consistently and uniformly applied by the national courts. It is accepted that Community competence has been extended by court judgments, about which my right hon. Friend the Minister of State indicated regret, especially in creating the single market. By ruling that certain practices were illegal, and by forcing the Commission or the Council to act in line with EC legislation, the court has played its part in forging the single market. I should have thought that that was dear to the hearts of many hon. Members' constituents and businesses practising in their constituencies.

Article 173 of the treaty is clear that the court cannot act of its own motion. English courts have that power. Our courts can issue bench warrants and have an inherent jurisdiction. The European Court of Justice has no jurisdiction to act other than specified by treaty. Its powers are entirely codified and written down. Conservative Members should be grateful for that certainty. Cases must be referred to it, mostly by the Commission, where there has been a failure to fulfil a Community obligation, or they can be referred by member states and individuals. One can apply to it for an application for an annulment to strike down decisions of the Commission, the Council or the European Parliament and that, too, is to be found in article 173, which, as I understand it, the amendments propose to delete.

Article 173 provides the court with a power akin It) our judicial review system. Where a Minister or Department overstep their powers or act ultra vires, the divisional court has the power to review that decision. Under article 173 of the treaty, the court of justice has a similar power to control the overweening power of other institutions.

Under articles 171 and 172, the European Court of Justice has unlimited power with regard to penalties. It can also review penalties imposed by the Commission. Until recalcitrant nations face peer pressure from other member states backed up by the power of unlimited fines, the less well behaved nations will not obey the rules of the treaty.

The European Court of Justice can rule on failures to act by any institution. If the EC, the hank, the Commission or the Council fail to do something that they are obliged to do, the court can act to ensure that they do that. It has a mandatory injunctive role.

The court can rule on the non-contractual liability of the EC. That is specified in this section of the treaty. The court can also receive references for preliminary rulings from national courts. My right hon. Friend the Minister of State referred to the Sunday trading case that came before the court earlier last year.

The Single European Act established an additional procedure to break the logjam of cases that were stacking up before the European Court of Justice. It has provided a mechanism of a court of first instance to deal with competition law and disputes between the EC and its staff.

One of my several complaints about the EC is that it takes too long to reach conclusions. I urge the Government, in their intergovernmental meetings and in meetings in the EC, to speed up the process of the European Court of Justice. At the moment, there is a gap of 12 to 15 months between cases being lodged and the giving of a preliminary ruling. In substantive cases, there is a gap of nearly two years. That is too long and that holds up domestic legislation or domestic cases. If anything can be done to speed up, where sensible, the processes of the European Court of Justice, so much the better.

The European Court of Justice has done a great many things and the section of the treaty that we are considering will give it additional and necessary powers that must be considered within the framework of article 3b. If any of my Conservative colleagues are concerned about the powers of the European Court of Justice—I see my hon. Friend the Member for Chingford (Mr. Duncan-Smith) grinning away as he is obviously enjoying every moment of my speech—and wish to criticise the court and the way in which its powers are provided through the treaty, they should study article 3b carefully. As my right hon. Friend the Minister said, the atmosphere is now changing, and my colleagues should bear that firmly in mind.

Mr. Hoon

I am grateful for the opportunity to address such an attentive and interested Committee on the vexed question of the amendment tabled to the treaty of Rome about the European Court of Justice. Members of the Committee will be excited at the prospect of discussing this matter.

I agree with the hon. Member for Harborough (Mr. Garnier) that it is difficult to see how the amendments in the Maastricht treaty provoked such antagonism from some hon. Members. After all, the European Court of Justice is a court and it has responsibilities similar to those enjoyed by courts in this country. It is responsible for interpreting and upholding the law.

There are obviously many improvements that I would like to see in the operation of our courts and in the operation of the law which those courts must uphold. However, that is not the same as saying that there should be no role for those courts and, in this context, no role for the European Court of Justice.

Mr. Duncan-Smith

I wonder whether the hon. Gentleman would like to give the Committee his opinion on the real problem, which is not so much that the amendments on the Maastricht treaty and all that goes with it concerning the court change very much, as the nature of the court as it exists now and post-Maastricht. Nothing has been done to change those excesses, to check them or to restructure the court.

Mr. Hoon

As ever, the hon. Gentleman makes a fair point, but the Committee is dealing specifically with the amendments on the Maastricht treaty. Those amendments should be seeking to improve the operation of the European Court of Justice and, to that extent, as we have already heard from right hon. and hon. Members, the Maastricht treaty is broadly successful.

The Minister of State made great play of the success of the British Government in upholding European Community law, but the same British Government, in the intergovernmental conference leading up to the Maastricht treaty, did most to threaten the coherence and integrity of the law applied by the European Court of Justice. By opting out of the social chapter, they have produced a new, damaging divergence of legal competence in the European Community, which the court has to try to resolve.

As a result of the British Government opting out, 11 member states will now have the opportunity of making new European law that has to be interpreted by the European Court of Justice under the protocol on social policy. It is clear that, when new law is made under the protocol, at some stage the European Court of Justice—[Interruption.]

The Chairman of Ways and Means (Mr. Michael Morris)

Order. I should be most grateful if hon. Members would listen to the hon. Member for Ashfield (Mr. Hoon). He is making an important speech.

Mr. Hoon

I am grateful, Mr. Morris.

It is clear that any directive made under the protocol on social policy will at some stage have to be interpreted by the European Court of Justice. The difficulty for the European Court of Justice having made a decision in a case in which it will have reviewed the case law of the European Community, looked at the treaty and considered the directive in question, is that it will then have to give a decision.

It is not clear—I should be grateful if the Attorney-General would consider this question—what then happens to the case law of the European Court of Justice. Having made the ruling on the interpretation of a particular directive and having taken into account previous cases and decisions and the treaty itself, that case will stand as precedent for other cases in future.

The problem is for which countries will that case be a precedent? If it is a case determined under a directive, passed under the social protocol, how will we know whether that case applies to the United Kingdom? Will it mean that in future the European Court of Justice will have to set out in the headnote of the case that some cases apply to all 12 member states and some may apply to only 11? By opting out of the social policy chapter, British citizens will be denied rights before the European Court of Justice which are enjoyed by all other European Community citizens. I should be grateful if the Attorney-General could comment on whether he feels that that breaches the basic principle of equal treatment before the law for all Community citizens. [Interruption.]

The Chairman

Order. The Committee is being very unfair to the hon. Member.

Mr. Hoon

Once again, I am grateful, Mr. Morris.

I hope that the Attorney-General will accept that this arrangement, with one country opting out of the ability to make law in the European Community, is unprecedented and produces a potential situation in which there is one law for United Kingdom citizens and quite a separate legal system for European Community citizens from Ireland and the continental countries. That appears to produce great uncertainty for the law and lawyers.

It will be necessary, obviously, for lawyers in the United Kingdom to advise their clients of their rights. It will not be clear whether those rights are similar to those enjoyed by other citizens in the European Community. I wonder whether the Government have given consideration to whether the European Court of Justice will have to produce separate decisions for the United Kingdom. Was that considered by the Government in the exercise of opting out of the protocol on social—

It being Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.

Committee report progress.

To sit again tomorrow.

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