HL Deb 31 July 1986 vol 479 cc1004-34

12.22 p.m.

Baroness Young

My Lords, I beg to move that the Bill be now read a second time.

The Bill now before your Lordships' House is designed to give effect to changes in Community law agreed by European Community heads of government last year. Before describing the clauses of the Bill it may be helpful to explain exactly what is entailed, and what is not entailed, in the agreement reached by my right honourable friend the Prime Minister at Luxembourg last December and which is embodied in the document called the Single European Act, printed as Command Paper 9758.

We are all indebted to the Select Committee on the European Communities for its report which has already shed considerable light on the Single European Act and its implications for this country. I shall respond to particular points in the report during the course of my remarks. In order not to take up too much of your Lordships' time now, perhaps I may reserve any comments on the report of the Committee on Delegation of Powers to the Commission (HL 228) to the end of the debate.

The origins of the Single European Act lie in a widespread feeling among all member states of the Community that, after nearly 30 years, the Community must adapt itself to modern require-ments. The Treaty of Rome has served us well. Its central thesis, that peace and democracy in Europe could best be cemented in the bedrock of practical economic co-operation, has proved entirely valid. It is the treaty which has opened up a tariff-free market in Europe and which, through the common commercial policy, has enabled us to fight for our interests in international trade. But the treaty was written in the 1950s—in Europe where the assurance of food supply was as much a priority as industrial regeneration. It predates the massive technological advances of the present day with their consequences for industry Europe-wide. It predates today's knowledge of the impact of industry on the environment and the need to tackle this problem which knows no frontiers. It was written for a community of six nations with a total population of 170 million. It required adaptation for a community of 12 member states with a combined population of more than 300 million.

There was thus a strong sense in the Community—reflected in last year's report on European Union by the Select Committee on the European Communities of your Lordships' House—that too much emphasis had been placed on policies that were suitable to the needs of the 1950s and not enough on policies which would make the Community competitive in the harsh climate of the 1980s; a strong sense that decision-making was too slow and that in particular, almost 30 years after the Community's creation, not nearly enough had been done to complete the single large market in goods and services which is one of the prime objectives of the Treaty of Rome.

The Single European Act is the outcome of the negotiation which followed the Fontainebleau summit. It consists of two main elements. The first is the changes in the EC treaties, which I shall describe. The second are new treaty provisions on European co-operation in the sphere of foreign policy based on proposals put forward by the British Government. These, for the first time, enshrine in international law the agreements and practices of foreign policy co-operation among the member states of the Community which have been built up over the past 15 years. It is the linking of these two elements in one document that gives rise to the title of "Single European Act".

It is only the changes to the Community treaties that fall to be incorporated in United Kindom law. The most significant change, and one which meets a long-standing objective of this country, is that the Community has now committed itself to complete the common market in goods and services by 1992.

In its report on European Union, the Select Committee on the European Communities said: "The wider the home market in which European industry can develop, the better equipped will it be to cope effectively in the world market. This simple truth, repeatedly emphasised by the Select Committee in their reports, is a fundamental reason why completion of the internal market must not be delayed". Yet, as your Lordships know, completion of the internal market has been delayed. For example, it took us 17 years to reach agreement on a measure allowing architects to practice throughout the Community; we have still not yet reached agreement on a similar measure applying to engineers; a whole raft of technical standards of considerable importance to our exporters were delayed for some 18 months due to the obstruction of first one, then another member state; at present it is illegal under German law for a German insurance broker to buy insurance on the London market. Nor will you find a pint of British bitter in a Bavarian beer garden—not because the Germans do not want to drink our beer but because they are not allowed to. It still costs the European traveller twice as much to fly from Paris to London as it docs the American traveller to fly the same distance between Washington and New York.

Completion of the internal market is not about the creation of a free-for-all in which the weakest go to the wall. It is about giving our industries—particularly in the services sector where we are highly competitive—the opportunity to compete on equal terms in markets which are currently denied to them. In its report on European Union, the committee also said: Many of today's problems were not. and could not have been, foreseen by those who drafted the Treaties. The result is that explicit power is lacking in areas important to the internal development of the Community". The Select Committee went on to conclude that the problems of decision-making: must be tackled together and within a comprehensive framework for improvement. If this means amending the present Treaties—and there is much evidence to suggest that it does—the Select Committee believe that the task of amendment should be faced". The Single European Act embodies a move from unanimity to qualified majority voting for several of the treaty articles which govern the measures needed to complete the internal market. Those changes do not guarantee that agreement will be reached. They do, however, give us a much better chance of attaining our objectives. I hope your Lordships will agree that, in negotiating the Single European Act, we followed closely the advice of your Committee.

There is one point in particular on which I wish to comment because I know that it has caused concern to some noble Lords. In their report on the Single European Act the Select Committee suggest that, desirable as the objectives that I have outlined above may be, increased use of majority voting will remove our power to block proposals and therefore weaken the power of British Ministers, and so of this Parliament, and extend Community competence at the expense of member states. This is one issue on which I part company with the committee. Of course, it is true to say that where new Community measures are agreed member states are bound by them. But it would be misleading to suggest that the Single European Act itself represents an extension of competence. There is no extension of Community competence into areas where it does not already exist. We are not talking about giving the Community new areas of competence. We are talking about making it easier to take decisions in those areas where competence already exists and. most important of all, in areas where we have ourselves long pressed for progress.

Of course the unanimity requirement gives you the power to say, no. But what use is it to be able to say, no when our national interest is to say, yes? We have been striving for years to achieve progress towards the completion of the common market. Your Lordships, too, have pressed the case persuasively. That is what qualified majority enables us to do: to achieve our objectives. Nor do I believe that the power of British Ministers in the Council of Ministers is weakened if from now on. by forming a qualified majority with other like-minded member states, we can push through measures which, at present, are delayed or blocked.

For those who fear that measures may be proposed which would go against our interests, I should emphasise that we retain three major protections. Where we need unanimity to protect our interests, for example, on the question of tax harmonisation, unanimity is retained. Where we need them, we have secured explicit safeguards enabling us to retain or introduce national measures to protect our high standards in human, animal and plant health. And nothing in the Single European Act affects the ability of member states to invoke the Luxembourg compromise; in other words to state that, because a very important national interest is at stake, discussion must be continued until unanimous agreement is reached. The operation of the Luxembourg Compromise has in no way been changed by the Single European Act.

The second main area in which the changes to the treaty advance our interests, with those of the rest of the Community, is by making specific provision for Community action in the field of research and development and the environment. Here again I should stress that there is no extension of Community competence. There is a long history of Community action in these areas, but until now it has been ad hoc and ill-defined. As a result of the changes incorporated in the Single European Act, Community action in those areas will be subject to clear criteria that reflect our interests.

In their report to your Lordships the Select Committee devotes considerable attention to the new co-operation procedure with the European Parliament. As my right honourable friend the Prime Minister said in another place when she reported on the Luxembourg European Council last year: We agreed on procedural changes to improve consultation with the European Assembly. There will be better arrangements to enable the Council to take account of amendments to Community legislation suggested by the Assembly. But in all cases, the last word on such legislation will rest with the Council. There will be no transfer of power on these matters from this House". The new arrangements that apply to the European Parliament are designed to enable it to play a construc-tive role in decision taking. But those noble Lords who see in that a significant change from previous practice have perhaps not been aware of the consultations that already take place with the European Parliament and of the existing provisions of Community law. The new co-operation procedure for the European Parliament will apply almost exclusively to those articles of the treaty that affect the completion of the internal market, and under which the Parliament must already be consulted on Commission proposals before the Council reaches its decision.

Under the new system envisaged in the Single European Act, the European Parliament will continue to be consulted, as it is now, when proposals are sent by the Commission to the Council of Ministers. A proposal reaching the Council of Ministers may therefore already reflect the Parliament's views. The Council will consider the proposal from the Commission and reach a view on it. But instead of the proposal being adopted straight away, it will go from the Council to the European Parliament in the form in which the Council has provisionally agreed it. The European Parliament will have the right to propose amendments to the text—or, indeed, to suggest that it should be rejected altogether. But it can only make such recommendations if an absolute majority of all the members of the European Parliament—I repeat, all the members; that is, at least 260 out of 518—agree to do so.

If the Parliament rejects a measure altogether, it will still be open to the Council to adopt it—by unanimity. If the Parliament proposes amendments, it will be for the Commission to decide whether to incorporate those amendments in its own proposal. Where it does so, the Council can either adopt the amended proposal or, by unanimity, reject it or amend it. In no circumstances will the Council be obliged to approve a measure if it is not satisfied with its terms. If there is no qualified majority in the Council for a revised measure, it will simply lapse after three months.

I agree with the verdict of the Select Committee on European Legislation of another place, who recorded in their report of 26th February that, This new procedure enlarges consultation into co-operation: but at the end of the day the European Parliament still has no power to insist and the last word remains with the Council. The Single European Act also includes provisions dealing with foreign policy that do not form part of the Bill because they do not, and will not, form part of Community Law. Those provisions enshrine in an international agreement the practices and agreements that have been built up over the past 15 years. They strengthen the existing commitment to consult on the economic and political aspects of security questions. They are designed to achieve greater consistency between external policies that are decided within the Community framework on matters such as trade and aid and the foreign policy objectives identified by member states in political co-operation. And they establish a very small secretariat in Brussels to improve continuity between presidencies and help each presidency with the administration of meetings.

Few of your Lordships will dispute the growing need for Europe to speak and act with one voice on foreign policy. Nor will they doubt the greater effectiveness of the member states when we do speak as one. The new treaty provisions on foreign policy enhance our ability to act as one. Recently, the Twelve acted together against Libyan state-sponsored terrorism. They have held meetings with Central American foreign Ministers and supported the Contadora initiative. They will be working intensively together before and at the CSCE review meeting in Vienna in November. And of course they are acting together over the very difficult decisions we face on South Africa.

I now turn to the clauses in the Bill. Under Clause 1 the relevant part of the Single European Act becomes a Community treaty within the meaning of the European Communities Act 1972. Clause 2 covers the agreement by Heads of Government to attach a new Court of First Instance to the European Court of Justice. It involves no extension of the power of the European Court into new areas. It merely reflects the fact that the European Court is currently overburdened with cases and that over half of them—involving disputes about the terms of service of Community employees—could and should be dealt with at a lower level.

Clause 3 provides for a change in title of the European Assembly, which will formally be known as the European Parliament once the Single European Act enters into force In this country successive governments have used the term European Parliament in all but formal legal documents. It is the term used by the press, the public, and by all major parties in their manifestos both for direct elections to the European Parliament and the last general election in this country as well.

Clause 3 also incudes provision for the approval of the single European Act for the purposes of Section 6(1) of the European Assembly Elections Act 1978. that section provides that: No Treaty which provides for any increase in the powers of the Assembly shall be ratified by the United Kingdom unless it has been approved by an Act of Parliament". No increase in the powers of the Assembly is involved in the new co-operation procedure. But Articles 8 and 9 of the Single European Act give the European Parliament the right to approve new accessions and association agreements. It is those provisions that give rise to the requirement under Section 6 of the European Assembly Elections Act 1978 for the Single European Act as a whole to be approved by the House. The powers of this Parliament to have the final say in approving new accessions and association agreements are in no way affected. Clause 4 contains the short title of the Bill and consequent repeals.

As the Select Committee acknowledged, the Single European Act achieves the objectives which the Committee recommended in its report on European Union. The changes to the European Community treaties negotiated by my right honourable friend the Prime Minister are practical ones. They are not designed to enable the Community to involve itself in new areas of policy. They are designed to improve the Community's ability to take decisions in those areas where it needs to take decisions in our national interest and in the collective interest.

When we joined the European Community we accepted that our national interest would be best served by acting in co-operation with others in the framework of the Community treaties. Our livelihood depends upon our success as a trading nation. We cannot compete in the world unless we have a large enough internal market and unless we have the ability to develop co-operation across Community frontiers between European companies. It is self-evidently in our interest to play our full part in decisions on Europe's industrial and commercial future.

The emphasis of the Single European Act is on limited change for practical purposes. In describing in another place on 5th December last year the agreement she had reached, my right honourable friend the Prime Minister said that it represented an important step towards enabling this country to realise more fully the benefits of our membership of the European Community. The Single European Act is a significant achievement for this country. I commend this Bill to your Lordships' House. I beg to move.

Moved, that the Bill be now read a second time.—(Baroness Young. )

12.41 p.m.

Lord Bruce of Donington

My Lords, the House is grateful to the noble Baroness, Lady Young, for having set forth her advocacy in such clear and disarming terms. We all know the physical stress to which she must have been subjected these past 48 hours. If I may say so, her clarity of diction and presentation certainly has not suffered as a result.

On behalf of, I think, all Members of your Lordships' House I also venture to congratulate the Select Committee of this House, under the Chairmanship of the noble Baroness, Lady Llewelyn-Davies, for the report that her committee produced. May I also, more particularly, and with some temerity in view of the number of distinguished lawyers involved, offer our congratulations to the noble and learned Lord, Lord Templeman, and his sub-committee for the excellent report that they produced at short notice and which, as they indicate in the concluding paragraphs of the report, is not yet completed.

Both reports once again underline the importance of these Select Committees on European matters. They have undoubtedly created a very considerable impact. When the Bill was introduced in another place on 23rd April last, it was introduced together with a discussion on developments of the Community during the preceding six months as a very low key operation altogether. It was not treated as a Bill of significant importance. It was brought forward as a mere logical development of events that had taken place between ourselves and the Community over a period of years and was presented as a perfectly logical consequence of the events that had gone before.

It was only when the Select Committee report of 6th May came not only before your Lordships' House but before another place that the Bill began to assume an entirely new significance. It must be said that having regard to the issues that were involved, and which your Lordships' Select Committee stated were involved, it became necessary for the Government to apply the guillotine in another place to the very lengthy discussions that emerged following the publication of the Select Committee's report.

One wonders why this Bill should have been introduced at this time. I make no complaint about its being the last day before the Recess; that position has to be occupied by one Bill or another. But I ask myself; why the haste'? What are the reasons for a sudden urge being put on this Bill, particularly in view of its constitutional importance? That importance has been recognised not only by the Select Committee as a whole in its first report, No. 149, but also more particularly in the Select Committee report No. 228, The Delegation of Powers to the Commission. I have been very carefully through the Bill and the Single European Act and have duly amended the Treaty of Rome in accordance with the Single European Act; and I have been very carefully through the reports. It is my considered view that the constitutional issues raised by the reports are of sufficient importance for a Speakers' Conference to have been held upon them. If we are legislating for the future, surely it is far better for all the issues to be most clearly discussed and understood.

It is quite clear from both reports that, first, there is to be a further encroachment on British Sovereignty, as such, and that there is to be a reduction in the powers of the British Parliament. I have only to cite in aid the first report, number 149, which states on page 28: The powers of the United Kingdom Parliament will be weakened by the Single European Act". Again, on page 13 of report No. 228 there is reference to safeguards. I must read this to your Lordships because, in my view, it is a paragraph of the utmost importance. Paragraph 39 states: There are three main interests to be safeguarded. First, there are the interests of those who will be directly affected by the Commission's decisions. These can"— and I give deliberate emphasis to the word "can"— be secured primarily by adequate consultation before the decisions are taken. Secondly, major national interests may be involved. The route to securing these interests lies in opportunities afforded for Member State participation in the procedures for the exercise of delegated powers. Last, but not least, there is the principle of democracy. The tradition of democracy—exemplified in the United Kingdom's practice in relation to national delegated legislation—requires that legislative acts are not delegated to an executive body (such as the Commission in the EEC) without reference to a legislative body (whether the council or a parliamentary' institution) which derives its authority from the electorate. It will be noted that in many succeeding paragraphs—I have them listed—the Select Committee in its report gives a whole series of steps that can be taken by the council to achieve those safeguards. That in itself means that the safeguards are not there now, and it is those safeguards to which the attention of the House must be drawn.

What I have just said about the further reduction in British sovereignty and the reduction in the powers of the British Parliament may provoke one immediate reaction of, "So what? The position has not changed very much since the original Act of Accession in 1972 and more particularly since the referendum of 1975". The position has changed quite considerably, because we have always been assured—and the assurances are so many that it would be repetitious to give the House a complete resume of them all—that in all instances where Britain's national interest was affected, there would still remain the right of veto. It was understood by Members of both Houses of Parliament—and it was an impression that was encouraged during the referendum campaign of 1975 and has been ever since—that the veto was the final safeguard. Since then a number of events have occurred.

First of all, in 1982 we endeavoured in the Council to veto an increase in agricultural prices that we did not much like, particularly in view of the general feeding, which was shared on all sides of your Lordships' House and indeed by another place, that agricultural expenditure was getting out of control in any event. So we applied the veto. However, member states other than ourselves did not think that there were grounds for veto. We thought we had grounds; they thought we had not. So, following that, we are left in the position that the veto is really only effective when other states agree with us that the grounds on which we exercise the veto are in fact valid reasons. This is not really a protection of the national interest.

Being a politician, albeit a very mild one, as your Lordships know, I did not pay over-much attention to that at the time because I thought to myself that perhaps the exercise of this veto or the endeavour to do so might possibly be window dressing, that is to say, we could formally object and be able to tell the United Kingdom Parliament that we had objected and in the full light of that, if we did not object too hard, nevertheless it would benefit the agricultural interests of the United Kingdom. I must confess to the wicked thought that perhaps the Government did not push their veto too far in view of the benefits that in any case would go to the agricultural community.

But that did not apply in the case of the 1986 budget where once again we tried to apply the veto—not I am afraid with conspicuous success. Once again the other member states presumably did not think that vital British interests were affected. We did, but they did not.

Baroness Elles

My Lords, perhaps the noble Lord will give way. If I am correct, I do not think that the noble Lord has it quite right. It was not a question of a veto. The United Kingdom took the European Parliament to court, and quite rightly, in fact, it won. So the United Kingdom's interests were fully protected.

Lord Bruce of Donington

My Lords, I take the noble Baroness's point. I shall come back to the position of the European Court at a later stage in my remarks if your Lordships will allow me. However, it is quite clear that so far as concerns the Council the veto did not apply.

Of course, the veto is based upon a construction of the Luxembourg Compromise. I have been in correspondence with the noble Baroness about this matter and in fact in her reply she admitted to substan-tially what I have said, that of course it is a political factor and not a legal matter at all. The Luxembourg Compromise has no validity in law. It is a purely political instrument which may or may not be effective according to the political circumstances and pressures of the time. Indeed, the noble Baroness, Lady Young, was kind enough to write to me about this very point on 26th June. I have her prior permission to refer to this letter as I told her at the time that I would mention it today. The noble Baroness said: As Geoffrey Howe made clear on 23rd April, the Luxembourg Compromise is not a provision of the Treaty but a component of political reality in the Community". We shall undoubtedly be hearing later, I sincerely hope, the opinions of distinguished noble and learned Lords as to the real value of that in terms of law, and if I may remind your Lordships, we are of course considering the law. We are considering a proposed law—the European Communities Act and the Single European Act itself.

In her letter to me the noble Baroness was kind enough to conclude: In any case, we did not rely on the Luxembourg Compromise to secure our interests when we negotiated the Single European Act.. We secured other safeguards to ensure that our important national interests are protected". I listened very carefully to the noble Baroness and I shall be very glad when she replies in detail on the second of the two reports, as she said that she would do, and tells us precisely how safeguards have been effected in such a form that they are valid in law. As the noble Baroness said, the Single European Act itself gives not only majority voting but also incorporates new powers within the Commission.

Anybody who reads the Select Committee's second report will see the structure and functions of those committees that institute regulations and they will find that they do not always protect the position of the British Parliament. I invite your Lordships' particular attention, in the time at my disposal, to the provisions relating to management committees, advisory committees and regulatory committees where the qualified majority also applies and on which represen-tatives of the Commission sit. I hope that your Lordships will carefully note the powers that are in fact given to the Commission in certain circumstances without any reference to the British Parliament, even in cases where British interests are involved.

If your Lordships go through the numerous paragraphs contained in the report H.L. 228— paragraphs 38, 43, 44, 45, 46, 47, 49, 50, 52, 53, 54, 55,56 and 58—you will find there the steps which the Select Committee suggest can and should be taken to protect the interests of the British Parliament in these various fields. In suggesting what could be done, they highlight what is not the position at the moment. If the Bill and its provisions covered these matters at the moment, it would be unnecessary for them to make suggestions as to what could be done, particularly by the Council.

A further point is the question of who is to ensure that the Council will take up any suggestions. There is no power in your Lordships' House to require the Council to adopt measures and lay down procedures in order that safeguards are made adequate for the purposes of the British Parliament. I think that this is a weakness.

The Government's attitude is really very simple—perhaps it is even more terse than was indicated by the noble Baroness's remarks this morning—but very revealing. It is stated in the Government's rejoinder in Cmnd. 9858, paragraph 20: The Government is convinced, however, that because majority voting has been introduced in areas where we have a strong interest in the Community making progress, on balance these changes will operate substantially to the advantage of the United Kingdom"! We have heard from the noble Baroness today instances in which the new arrangements will operate in the United Kingdom's favour, particularly in the field of insurance other than life assurances, which I recall advocating on the United Kingdom's behalf when I was a member of the European Parliament in 1975; and we still have not come in. So the noble Baroness is correct about that. Will she therefore, in her reply, give some indication of what are the disadvantages which she believes will eventuate? We have heard nothing of those; and I am bound to say that the use of the term "on balance" does not exactly inspire confidence.

Laws will be made within the Community and directives will be issued, but they will be issued within the context of Continental judicial systems which I may venture to suggest differ very markedly from our own. I am trespassing here upon fields in which I am not a complete expert, but as a politician I feel bound to pass comment.

I shall give one example only at the present time. British legislation passed by our Parliament tends to be precise. We take the utmost care in the precise use of words, and by and large, of course, anyone in the United Kingdom can do anything he likes as long as it is not restricted by law. The Continental system is not quite the same. We rely on the strict interpretation of statute and no account is taken by the courts of the intentions of legislators as indicated, for instance, in Hansard or as very often reflected in Royal Commission reports. We rely on the law as it stands.

On the Continent they do not do things in quite the same way, influenced, as they are in varying degrees, by the Code Napoléon, and where the travauxprepara-toires apply. For example, in Continental courts it is permissible to cite and to place reliance upon parliamentary procedures. Use can be made there, in determining the intention of the legislature, of reports. Moreover, as your Lordships will know, in this country when cases come to court we rely on an adversarial procedure in which prosecution, or plaintiff and defendant, can all be represented by barristers who have powers of cross-examination and examination—except of course, in coroners' courts and, to a limited extent, in the early stages of proceedings in Scotland. On the Continent the procedure tends to be inquisitorial.

This may be all very well, but it has some curious results. On the assumption that we have safeguards, particularly in the realm of tax harmonisation, I would invite Her Majesty's Government to convey to the House how it is possible for the Commission to bring a case against Her Majesty's Government requiring them to put a 15 per cent. VAT charge on new buildings. How has that come about? I believe that the case requires the British Government to deliver the required particulars by 4th September, and I believe they are making an application for an extension until 4th October; but the case will be heard and judgment will be delivered early in the new year. How does it come about that the Commission, on its own initiative, has the right to bring a case against the Government to put a 15 per cent. tax on new buildings? I shudder to think of the effect of this if in fact a judgment goes against this country. What are the Government going to do about that? Where is their veto then? It has no relevance. We already know that in the field of competition the Commission has a right to go direct and enforce its own laws, even in the United Kingdom, with a right of appeal to the European Court only.

Anybody who has been before the European Court knows very well its procedures. They involve the submission of written documents and opinions; interrogatories are carried out in writing. The papers are considered by the Judge Advocate General, who then presents his opinion to the court. The court grants facilities for oral hearing but not for the examination or cross-examination of witnesses of any kind. It quite arbitrarily allocates to all sides the time in which they may make their oral presentations. I have been before that court and I know. When the noble Baroness is dealing with tax harmonisation I ask her also to deal with this. What happens? The ancient privilege of another place (not of this House) to initiate such taxation or increase taxation will be taken away from it without the possibility of intervention by Parliament or government. It will be dealt with directly by the European Commission to the Government, for judgment by the court. I think that that is dangerous.

Baroness Elles

My Lords, the noble Lord knows that VAT is contained in the application of the Sixth Directive, which is part of United Kingdom and Community law. The Commission, as the guardian of the treaties, is under a duty to see that that directive is enforced. We have a right to defend ourselves in the European Court. The noble Lord is making rather a meal of this.

Lord Bruce of Donington

My Lords, all I can say is that the noble Baroness's version differs substantially from the views of the Minister, Sir George Young, who said: What has happened is that, for reasons best known to itself, the Commission has chosen to challenge those zero ratings"—[Official Report, Commons, 25/7/86; col. 923.] As the noble Baroness would expect, I have the text of the Sixth Directive. It is an example once again of European legislation. I am bound to say that I cannot see the grounds for all this, but the powers of the European Court are very wide and it can interpret generalities whichever way it pleases on the basis of precedents that have been established. I leave that now. I have already detained your Lordships too long.

I wish to refer to one further matter. The whole drive of the Bill as expressed in the preamble to the Single European Act is European union. What Her Majesty's Government understand by European union (which I understand specifically excludes any kind of federal union) may be considerably different from what other states understand by it. From my experience I know that the nationals of some other states regard European union as equivalent to federal union. That is what they are aiming for. In its report HL 226 the Select Committee of your Lordships' House sets out the three alternative versions of what European union may be.

I know that patriotism has been said to be the last refuge of a scoundrel, in which case we are all scoundrels in time of war and most of us must have been scoundrels at the time of the recent Falklands campaign. Although I fully acknowledge the desirability of co-operating to the utmost in European matters in order to achieve the utmost harmony within practical limitations, I confess that I remain convinced that our country is a country of some importance; our parliamentary institutions surpass those of any other member state and have been in existence much longer. None of the existing continental parliamentary democracies in their present form have been there for more than 40 years. We have been here for hundreds. We should not take lightly any endeavour to alter, from whatever quarter, in whatever way and for whatever reason, the sovereignity of the United Kingdom Parliament. It is my hope that Members of your Lordships' House may reflect the wishes of all the British people. If expressed, they would be broadly in agreement with the concept that I have ventured to lay before your Lordships.

1.15 p.m.

Lord Banks

My Lords, I should like to join in thanking the noble Baroness, Lady Young, for her very clear explanation of the contents of the Bill and of the Single European Act. I must confess that I approach the matter from a standpoint very different from that of the noble Lord, Lord Bruce. I suppose that how one reacts to the Bill and to the Single European Act must depend on one's basic attitude to the concept of European union.

We on these Benches, as the House will be aware, have long supported that concept. We believe that Europe's political and economic potential remain great. Europe's population, share of world trade and gross domestic product are not overshadowed by those of the super-powers, and our political experience is considerable. But we believe that our potential in Europe will be achieved only if we act as one; we believe that Europe's influence will be effective only if we act as one. The importance of that influence in upholding democratic government and western liberal values cannot be overstated.

Holding that view, it is natural that we should welcome the discussion in recent years of further advance towards European union. It is natural that we should react with sympathetic interest to the European Parliament's draft treaty and that we should welcome the Genscher-Colombo plan of a few years ago and agree with the Dooge report (the report of the ad hoc committee set up by the European Council) when it said this: We must now make a qualitative leap and present the various proposals in a global manner, thus demonstrating the common political will of the Member States. At the end of the day that will must be expressed by the formulation of a genuine political entity among the European States, that is a European Union". Compared with those high hopes the Single European Act which emerged from the European Summit was something of an anti-climax. Derek Brown, writing in the Guardian on 4th December 1985, said this: after an extraordinary non-stop negotiating session which started at 9 a.m. and ended after midnight, the summiteers ended atop a molehill rather than a mountain of change". I regret that the United Kingdom Government, if I may change the metaphor used by Mr. Brown, were applying the brake, perhaps not applying it as fiercely as Denmark or Greece but nevertheless applying it. However, such advance as we have is welcome.

Not included in the Bill but referred to by the noble Baroness, Lady Young, and included in the Single European Act is the new treaty on foreign affairs co-operation. That is now to cover security matters as well; just how far it will go will be interesting to see. I know the difficulty that there is in discussing defence matters within the EC, but it will be equally difficult to have a common foreign policy, as distinct from co-operation and alignment of attitude, where possible, without involving defence. Some day I hope that these matters will be discussed within the scope of the treaty.

We welcome the commitment to complete the internal market by 1992. After all, about 48 per cent. of our exports now go to our Community partners and it is a United Kingdom interest to secure the freest possible access to the market as soon as possible. I am glad to see that the goal of economic and monetary union is to be written into the treaty. We are of course a long way from that today, but it would be helpful as a modest step in that direction if the United Kingdom could now become a full member of the European monetary system.

The regional fund is to be written into the treaty, and I am glad of that because should we make progress toward economic and monetary union, the regional fund will undoubtedly become of even greater significance and importance. The treaty is also to be amended to refer to the need for European co-operation in research and technology. That is vital. We need a European strategy—guidance and direction at European level. I believe that that is necessary if Europe is to remain competitive. Everything will depend on what is done to fulfil the aim now to be set out in the treaty.

The main institutional proposals for change, as we have heard, concern the Council and the Parliament. I am glad that the Parliament is to be called a Parliament officially now, and not an Assembly. In the Council there will be majority voting in certain matters relating to the completion of the internal market. The United Kingdom Government will have less opportunity to block the proposals of others but they will have more opportunity to secure the enactment of their own ideas. We may indeed obtain the free market in insurance for which we have been seeking so long.

The Parliament is to be given limited extra power, mainly in matters affecting the internal market. It is important to appreciate, as the noble Baroness told us, that the power is limited. It covers 10 articles, in five of which Parliament already has the right to be consulted. If the council is unanimous, it can override a rejection by the Parliament or an amendment put forward by the Parliament and adopted by the Commission as its own. By majority voting, the Council can reject an amendment which is not adopted by the Commission. That is welcome as far as it goes, but it goes far short of the co-decision of the Parliament and the Council in Community legislation for which some of us were hoping.

As we have heard, the report of the Select Committee of this House, which is most useful and for which we are most grateful, says: The powers of the United Kingdom Parliament will be weakened by the Single European Act.". The noble Baroness, Lady Young, questioned that and, with respect, I also question it. If it had said that the powers of the United Kingdom Government will be slightly weakened, that might have been true. As we have seen the power of the United Kingdom Government to block measures in a restricted field will be less, although their power to have their own proposals adopted will be greater in that same restricted field.

In so far as the power of the European Parliament is increased in relation to Council decisions, the power of the Council and therefore of national governments is to that extent restricted. That process. I believe, is marginal in the Single European Act. If the Council is unanimous, it can reject or amend the Parliament's proposals.

The United Kingdom Parliament, as distinct from the United Kingdom Government, has no power over the Council of Ministers. It can in advance influence the stance taken by United Kingdom Ministers in the Council, and that will continue. The proceedings of the Council are in secret, but in so far as the United Kingdom Parliament is aware of what they say, it can hold United Kingdom Ministers responsible for their actions. That will continue.

The United Kingdom Parliament has no veto or restraint over what the Council does. It is absurd to suppose that the Council can be democratically controlled by 12 separate national parliaments. The case for more powers for the European Parliament rests on the fact that there is no democratic account-ability of the Council. That is why we on these Benches will continue to press for greater powers for the European Parliament. We support the Bill as a very modest, limited step forward. We look forward to further progress in the not too distant future, and we emphasise the great importance for our future of steady and successful progress towards effective and efficient European union.

1.25 p.m.

Baroness Llewelyn-Davies of Hastoe

My Lords, the House will be grateful to the noble Baroness, Lady Young, for setting out so clearly the provisions of this difficult and technical Bill. I am glad to join in the debate, in particular to draw attention to the 12th Report from the European Communities Select Committee on the Single European Act and Parliamentary Scrutiny. I shall move formally to take note of that report at the end of the debate.

That report and the 19th Report on the delegation of powers to the Commission were agreed by the Select Committee with this debate in mind. The report on the Single European Act has been much quoted, both in another place and widely in the newspapers. Some of those quotations were correct and some were distinctly incorrect.

I hope that it will help if I make clear what the report really says. It says two things. First, it recognises the need to make the Community work more efficiently. If the Community's decision-making process can be unblocked and its institutions made more efficient, that will increase the likelihood of Community law taking a form welcome to the United Kingdom. Secondly: the powers of the United Kingdom Parliament will be weakened by the Single European Act". If noble Lords feel that those statements are contradictory, of course I would agree. That contradiction has been in existence since we joined the Community. It is for the House to decide whether the advantages of being in the Community, and making the Community work, are worth the price that has to be paid.

If we agree to give the Bill a Second Reading, we shall have decided to press ahead with the development of the Community, but we must do so with our eyes open. We cannot develop our membership of a multinational body without there being some impact on our national institutions and particularly on our national Parliament.

There are three reasons why the Select Committee believes that the United Kingdom Parliament's powers will be weakened. The first and most important lies in the extension of majority voting. This House exercises its influence over Community legislation through the voices and votes of United Kingdom Ministers in the Council. Any weakening of Ministers' power reduces the influence of the British Parliament. The expansion of majority voting may well increase the number of times that the United Kingdom Ministers are outvoted. At the meeting of Heads of Government last December, the Prime Minister agreed to that proposal, no doubt because the United Kingdom will be in the majority in the Community most of the time.

Here in Britain, we need the completion of the internal market because that should materially help the British economy, as the noble Baroness emphasised. However, we shall not always be in the majority. We must accept that British interests will sometimes be on the losing side.

Secondly, there is the Luxembourg Compromise, to which my noble friend Lord Bruce—in his own words, "mildly"—referred. The Government have said on a number of occasions, and the noble Baroness repeated it this afternoon, that the veto under the Luxembourg Compromise is still available where necessary. The Government have implied that in that respect nothing has changed.

In my view, it is not as simple as that, despite the persuasive arguments put forward by the noble Baroness. The veto still exists but I very much doubt whether it will be usable in any but the most extreme cases. It may not be dead but in our view it is moribund. After all, the agreement that led to the Single European Act could have been designed to by-pass the veto. The need for unanimity was at the heart of the Council's inability to take difficult decisions. The veto filtered down to the Council committees and the officials were able to block progress by using the threat of a ministerial veto later on.

The Single European Act sets out to create a new political momentum. Without it the Community will stagnate, as it has done in recent years. If the momentum develops United Kingdom Ministers will be under great pressure to accept any decisions that are backed by the qualified majority of the Twelve, whether they are palatable to us or not.

The Select Committee therefore considers that the veto has lost a lot of its effect. We state in our report: It must be open to question whether [the veto] would, or even could, be invoked in circumstances where the Commission, the majority of the European Parliament and a qualified majority of Member States were united against the United Kingdom. The third factor affecting the power of this House is the co-operation procedure to which the noble Baroness referred. The procedure is extremely complicated and I shall not in a speech try to unravel its complexities. But noble Lords will find a full description of it in paragraphs 7 and 8 of our report.

There are basically two views about the co-operation procedure. The first is that it will make little difference. The European Parliament will seldom muster the absolute majority needed for action, and the new powers are so similar to those which they already had before that they can be disregarded. The second view takes a longer term approach. If one gives a body a chance to exercise power, sooner or later it will take that chance. The evolution of parliamentary democracy is full of small openings which have been exploited by skilful parliamentarians, not least in the history of our own Parliament. I believe that this view is closer to the truth. The European Parliament has a long way to go. In Parliamentary terms it is very young indeed. But this will change, and the co-operation procedure will help.

Noble Lords will understand that members of the European Parliament recognise the opportunity which is provided and, just as they exploited the notable iso-glucose judgment of the European Court to become more involved in Community legislation, so I expect they will try to take advantage of this new procedure. They now have a foot in the door of Community legislation, or at least those parts of it which are subject to the co-operation procedure.

This will affect us in two ways. It will circumscribe the power of Ministers by involving a parliamentary body over which they have no control and which, moreover, operates in public rather than behind closed doors as does the Council of Ministers. Any increase in the importance of the European Parliament, which is after all the Community's only democratically elected institution, will tend to shift the balance of parliamentary responsibility from the member states to Strasbourg.

The decision before the House is whether it is prepared to accept these limitations on its competence in the interests of making the Community work. Of course, the problem is not a new one. The erosion of some of the power of national parliaments was inevitable as a consequence of our joining the Community. We must now decide whether, as members of the Community, we are content to stand still or press ahead.

May I now turn to the question of Parliamentary scrutiny of European legislation. This is the primary reason for which the Select Committee was set up by the House and, as its chairman, I have a special responsibility for the workings of scrutiny. It has not been easy to forecast how the Single European Act will affect us. The committee is reasonably confident that our terms of reference and working methods are flexible enough to cope with any developments. But we propose some small but important procedural changes. These mainly relate to the co-operation procedure.

First, we make a request, made also by the scrutiny committee in another place, that when the Commission makes a proposal for legislation to the Council of Ministers the Government's explanatory memoranda to both scrutiny committees should identify Community proposals for legislation which are subject to the co-operation procedure. Secondly, any revised proposal under that procedure—known as a "re-examined proposal"—should be submitted to Parliament for scrutiny.

Our third request is that Her Majesty's Government should assume the responsibility for depositing in Parliament the text of any amendments proposed by the European Parliament under the co-operation procedure. This is connected with timing. Your Committee will not have very long to reconsider re-examined proposals and if we are to do our scrutiny job properly we must be ready to take account of any substantial changes introduced by the European Parliament. I do not expect substantial changes to occur at all often but we should not rule them out. We should prepare for such things in the future and be able to make our comments before the Commission has decided which proposals to recommend. Perhaps the noble Baroness will be able to give the Government's reactions to these proposals and also to our recommendation about the parliamentary reserve in paragraph 26 when she winds up the debate.

May I also draw your Lordships' attention to the Committee's statement in paragraph 27 that our opinions on proposals for European legislation should be sent to the European Parliament and the Commission on a regular basis? Although our duty is to this House and our influence is primarily through the House and Her Majesty's Government, we must recognise the peculiar nature of the Community's legislative machinery. As the focal point for decisions about legislation shifts slightly, we must make sure that our views are known in Brussels and Strasbourg as well as in Westminster. I think the House knows that members of the Commission and the European Parliament are often most complimentary about the reports of the House of Lords. I hope that regular contact may be useful.

Before I sit down I should like to turn briefly to the Select Committee's 19th Report on Delegation of Powers to the Commission about which the noble and learned Lord, Lord Templeman, will be speaking later. As my noble friend Lord Bruce pointed out, the Select Committee has produced this report at some speed so that the House could have our views in time for this debate.

Our recommendation on delegated legislation can be summed up in a single sentence. We are in favour of delegating powers to the Commission to implement Community legislation, subject to adequate safeguards. Here in Parliament delegated legislation is not always popular but it is necessary. Without it our work would be quite unmanageable. The Community has come to realise that it too needs delegated legislation and that the Council should delegate more to the Commission. The Single European Act makes new provision for delegation of powers to the Commission and detailed proposals for the methods of delegation have been submitted to the Council. I suggest that the Commission's proposals can be made to work, but as they stand now they pay too little regard to the interests of democratic control.

Some recommendations for amendment have already been put forward by the Committee. The 19th Report is an interim document. There will be further recommendations in the Autumn in a final report. I should like to urge Her Majesty's Government, when considering these proposals, to give more attention to the need for democratic control over the Commission's decisions than has been suggested so far.

We debate the relative merits of the negative and the affirmative procedures for delegated legislation many times in this House. What the Commission proposes, encouraged by the Heads of State, is a system of delegated legislation that involves little parliamentary control at all, neither of the negative nor the affirmative type.

The Select Committee believe that decisions affecting the whole population of the Community should not be handed over to an executive body, the commission, without some recourse to a body, whether the Council or a parliamentary institution, which derives its authority from the electorate. To sum up, I believe that the House can agree to the provisions of the Single European Act for delegation of powers, provided it is made clear that the terms under which powers will be delegated to the Commission are looked at with great care.

From my experience of the work of the Select Committee, I have no doubt that we shall be able to scrutinise and advise on any proposals arising under the co-operation procedure, provided that Her Majesty's Government respond favourably to our modest recommendations on scrutiny procedure.

As for the central question about whether the Single European Act should be implemented in our law, as the Bill before the House provides, the Select Committee have put the facts before the House: the Community needs to improve its ability to take decisions and the price is a further small loss of national sovereignty.

1.41 p.m.

Lord Templeman

My Lords, as your Lordships will be aware, under the Treaty of Rome the Council of Ministers is the primary legislative institution of the Community. It is the Council which makes Community law and not the European Parliament or the Commission. There is democratic control over the Council which consists of Ministers from the member states, each Minister being answerable to his elected Parliament.

The Commission is the primary executive institu-tion of the Community. The Commission carries out the decisions made by the Council and in a large respect the Council controls the Commission. The Commissioners themselves are appointed by member states. In view of some of the remarks made by the noble Lord, Lord Bruce of Donington, I think it only right to say that in the proceedings of the Select Committee the Commission has shown itself very ready to send over its officials to give evidence to the Select Committee. We have always found them very anxious to explain. We have always found the Commission very anxious to carry the member states with it rather than to bully them. As your Lordships will be aware, we have found it very ready to make amendments to its proposals which have been suggested in particular by the Select Committee, and it has always been grateful for, and has never resented any suggestions made by, the Select Committee.

I should not like it to be thought that the Commissioners and their staff are some wholly alien body whose interests are inimical to those of the United Kingdom. On the contrary, we must march together or we shall all perish.

It is common ground that the machinery for enacting and carrying out Community law requires to be more speedy, more effective and more efficient. In the 14th Report of the Select Committee in 1984–85.

it was pointed out that there were then, in 1985, more than 300 proposals from the Commission to the Council for legislative action by the Council if the internal market was to be completed by 1992.

The plain fact of the matter is that the Council cannot cope with all the legislation which has to be put through. It is not a new problem. It can equally be said of the United Kingdom Parliament that it cannot cope with all the legislative measures which require to be carried through in this country. The remedy which we all dislike but with which we all live is delegated legislation. The United Kingdom lays down the principles and sets out as much as it can in primary legislation and then it delegates to Ministers the power, by statutory orders and instruments, to carry those principles into effect by more detailed enactments.

As I have said, it is a system which we all chafe under. We all stem from the old-fashioned principles of having a Parliament which met for three months of the year and laid down noble Acts with which nobody interfered, and they governed the country in that way and with income tax one shilling in the pound. Those days have gone. It is an inescapable fact of life that the United Kingdom must have delegated legislation, subject to safeguards, and that the European Community must live with delegated legislation, subject to safeguards.

Article 10 of the Single European Act amends Article 145 of the Treaty of Rome and authorises the Council to delegate powers to the Commission in the same way as the United Kingdom Parliament delegates powers to Ministers. The article makes it clear that the delegated powers are only to be operated by procedures laid down in advance by the Council acting unanimously on a proposal from the Commission. In other words, whenever the Council delegates to the Commission there will already have been established certain procedures which must be followed and which are in the interests of all member states. On each occasion the Council must make a delegation. The Council will say, "On this particular subject, these are the principles which we say shall be carried out", and it will order the Commission to carry them out by delegated legislation. In other words, the Council will lay down the principles and tell the Commission to get on with the details.

The Commission has put forward a draft regulation for the procedure which it recommends to be followed in the exercise of delegated powers. The 19th Report of the Select Committee on the European Communities, which was published on 15th July (No. 228) makes observations on that draft regulation. On behalf of the committee, I acknowledge the very kind remarks of the noble Lord, Lord Bruce of Donington, who said that the report would be useful to the House. We hope that it will be.

The proposals take the form of a draft regulation by the Commission. That draft regulation has to go before the Council of Ministers. Under Article 10, that regulation can only take effect if the Council is unanimously in favour of it after obtaining the opinion of the European Parliament. That is the answer to the question posed by the noble Lord, Lord Bruce of Donington, about how the safeguards are to be written in.

The answer is that of course we do not know whether Her Majesty's Government will accept the need for the safeguards which we have recommended. However, let us suppose that they do—and we hope that they will—and let us suppose that they say that the draft regulation from the Commission should embody a provision for a right of appeal by a member state to the Council in certain circumstances. Her Majesty's Government can, by withholding the unanimous decision which is necessary in the Council to approve the regulation, prevent the regulation going through. We all know that that will not in fact take place, that the member states will agree and that there is no doubt that the Commission will agree reasonable safeguards. However, the answer is that Her Majesty's Government are in a position to insist on such safeguards as they consider necessary. The reason that the safeguards are not written into the Act is that that is not the right place to write them in. The safeguards must be written into the regulation.

We have heard in evidence that the Commission is perfectly willing to subscribe to proper safeguards. It must of course wait to hear the views of member states. So it sits there with its letter-box waiting for 12 member states to come rattling through with all kinds of different safeguards making all kinds of wild proposals. Those will then have to be sifted. We have no doubt, the Council of Ministers being a sensible body and the Commission being a sensible body, that they will eventually agree on proper safeguards which do not bind the Commission hand and foot but which will enable the rights of member states to be safeguarded. They will then be embodied in the final regulation. Therefore I suggest that there need be no fear that the safeguards have not yet been embodied in the proposal which is at present before your Lordships.

It is important at the outset to understand that in no case is the Council bound to delegate legislation. There will be many cases in which the Council says, This particular matter is so important that we will reserve to ourselves the full right to legislate upon it from beginning to end, and we will not delegate at all". It is only when the Council makes its mind up that it can properly delegate by laying down principles and authorising the Commission to continue that it will then make a delegation.

Assuming that the Council makes a delegation, it will then be for the Council to decide which of three procedures should be adopted by the Commission in relation to it. It will not be for the Commission to decide; it will be for the Council to decide. What the Commission have suggested is this. There has been some minor delegation in the past, and every time there was minor delegation in the past the Council had to agree not only what ought to be done in principle but the method of procedure. And I think we were told that there were something like 16 different procedures with members of the Council—12 again as we now understand, and each having its pet method of procedure—each taking up about four days arguing which sort of procedure should be adopted, before rushing off to see that their representatives were returned in Bavaria, or Stoke Newington, or Newcastle-under-Lyme, or whatever other important matters were on their minds. The Commission said, "We really can't go on like this. If every time the Council wants to delegate powers it is going to spend a week trying to work out the machinery we shall never get anywhere".

Therefore, the Commission have suggested that the procedure should take three forms, which have been well tried in the past and seem perfectly reasonable. They say, "Whenever there is delegation from the Council, the Commission shall be bound to have a committee. The committee will consist of a represen-tative of each of the member states, appointed by the member states. It will be a watchdog committee which will see that we do not get up to all the sort of horrible things which the noble Lord, Lord Bruce of Donington, perhaps had in mind". There will be a watchdog committee, but it will have different powers, which will be selected again by the Council.

There are three forms of committee, as your Lordships will have seen from the report. First of all there will be an advisory committee. There are a large number of matters which have to be decided with great promptness and on which the Commission wish to have the views of the member states, but which are really executive rather than legislative. Where the Council decides that the Commission shall carry on with the advice of an advisory committee, then that will be constituted by members of the member states, and the Commission must consult that advisory committee but need not modify their proposals in accordance with the views of the committee, although I venture to suggest that a strong recommendation by that committee would obviously have great weight with the Commission. But there are some matters which are primarily executive which must be dealt with great speed and where, if necessary, the Commission will have to say, "Well, we have seen your views but we are afraid we think this is the way to do it".

The second—and I stress again that it is for the Council to say which sort of committee shall be appointed—is the management committee. There, if the management committee by a qualified vote disagree with the proposals, then the dispute must be referred to the Council. So that whenever the committee feel strongly about it and disagree with some aspects of the matter suggested by the Commission, then in effect they can appeal to the Council and the Council can decide.

Finally, there is a regulatory committee, which concerns matters where the proposals are legislative in character rather than executive, and there the Commission cannot carry their proposals into effect unless and until the committee agrees. It is envisaged that the advisory committee should deal with minor matters where speed is essential—for example, technical regulations with regard to health and safety, trade with third countries, and matters of that kind. Management committees have already been used in connection with the common agricultural policy, not on the broad principles as to how much and to whom, but on the details. There again decisions have to be taken speedily. Finally, as I have said, the regulatory committee will be used for sensitive matters which are more legislative in character.

The 19th Report of the Select Committee gives a general welcome to and approval of the proposals of the Commission and the limitations of these three different kinds of committee, and recommends certain safeguards. First, the committee suggests that there should be a review after, say, three years to see how things are working out. Secondly, we think it will be desirable for the Council gradually to evolve different principles as to which particular kind of delegated legislation will merit particular committees, so that the Council itself will not have to indulge in long argument about the three committees. They will say, "In this field, in this area, it is obviously right that there should be one sort of committee"; and they can parcel them out.

Thirdly, we have suggested that in the case of management and regulatory committees there should be a right of appeal by one single member state. That recommendation is made in order to quieten some of the fears expressed by the noble Lord, Lord Bruce of Donington. The committees vote by qualified majority, and one hopes that the minority will in nearly every case accept the decision of the majority. We must get out of this habit of always insisting on having our own way in everything, and we must persuade the other member states, or each of them, to adopt the same attitude.

However, there will be cases where an individual member state's representative, although he is in a minority in the committee, and although he is opposed by the Commission, feels so strongly about an issue, on instructions of course from his own government, that he thinks his own government, his own country, will be so prejudiced that he ought to appeal. In that case we have suggested that there will be a right of appeal by that member state to the Council.

In order to speed things up, we hope and expect that that right of appeal will be exercised in only rare circumstances, and that whenever a member state appeals it will be bound by convention to put out in writing the reasons why it thinks it is so important that this decision of the Commission should be overturned by the Council. We hope that that will dissuade member states from using too often the delaying power implicit in a right of appeal.

We also recommend that when there is an appeal there should be a strict timetable, so that when an appeal is made the Council shall be bound to consider it within a month or two, so that the Commission will not again be held up for months more while the appeal comes on.

Lastly, we have mentioned the question of scrutiny by Parliament. There is obviously a difficulty in laying before Parliament all the proposals of the Commission under delegated legislation because some of them will have to be dealt with quickly. I think they all will amount to some thousands, and what we have suggested is that when any proposal of the Commission is referred back to the Council that should be laid before the United Kingdom Parliament by Her Majesty's Government. That will occur either when a committee appeals to the Council from a decision of the Commission, or when under the safeguards that we have suggested an individual member state appeals back to the Council. We have also suggested that the proposals placed before the regulatory committee should be referred to Parliament.

We had a long discussion—and I know that the noble Lord, Lord Broxbourne, who follows me will urge this—as to whether the proposals of the management committee should also be sent to Parliament as well as those of the regulatory committee. I have an open mind on this, but my present view is that it is impracticable. I am impressed by the hundreds of measures that would have to be brought before Parliament, and I think they would be swamped. However, this is a matter on which two minds can reach different conclusions, and the noble Lord will press the other point of view later on. It will ultimately be a matter for Her Majesty's Government to decide as to what particular form of safeguards they will need. Finally, we are still taking evidence on the question of whether, under the new procedure, there is going to be adequate consultation with the European Parliament and consultation with third parties.

On the general Motion before the House with relation to the Single European Act, there is no doubt that people who dislike the European Community will dislike the Single European Act, and will dislike the draft regulations proposed by the Commission with or without any of the safeguards that we have mentioned. Broadly speaking, their view will be dictated by the views which they held in 1970.

The noble Baroness, Lady Llewelyn-Davies, has drawn attention to the fact that in future it is hoped and expected that there will be more reliance on majority voting and less reliance on the ingenious veto invested by the Luxembourg Compromise, on the legal basis of which I propose to say as little as possible despite the invitation given to me by the noble Lord, Lord Bruce of Donington. The fact is that the Luxembourg Compromise still exists, the veto still exists as the noble Minister, Lady Young, pointed out, and what we hope and believe is that the exercise of the veto under the Luxembourg Compromise will become less and less important because we hope that the 12 member states, with the procedures which have been outlined by the Commission, will at the end of the day be able to agree on most and accept those occasions on which they are outvoted.

I agree that the desired effect of what we are now asked to do will be to reduce the operation of the veto and the threat, I hope, to use the veto so much in the future. For may part 1 should regard that as a wholly admirable development.

I wish to say very little about the European Parliament. I do not altogether share the fears of the noble Baroness, Lady Llewelyn-Davies. I cannot convince myself that the European Parliament— which so far has been more remarkable for the hysteria in the media than it has been for the evolution and publication of the very careful reports of its committees—will ever grow into a hydra-headed monster which will threaten the democracy at our roots. The European Parliament has a very important part to play but it is there to give advice and consultation. It seems to me that it is there to represent to the Council and to the Commission the views (and one hopes that it will unify the views) of Europeans as against the views of the members of each member state. Its object is to produce an entirely new team. At the moment we have 12 teams all with different shirts and all feeling compelled to stand up with their banners to shout for their own team.

The object of the European Parliament which has not yet been achieved (but I hope it will be achieved) is to produce a thirteenth view: the balanced view of the true European. We have not yet reached that stage, partly because of the views of some members of the European Parliament themselves and partly because of the natural, I was going to say, resentment of member state Parliaments. They look upon the European Parliament as a competitor. They look upon the European Parliament rather as Distillers looked upon the takeover bid by Guinness, or the other way round. But it is not a takeover bid. We shall suggest, we shall stand up against and we shall easily repel any effort by the European Parliament to take over any of the functions of the United Kingdom Parliament. At the moment I fail to take it seriously as a competitor though I think it has a great part to play.

Your Lordships will see that for my part I welcome the Bill which is before the House. I welcome the proposals of the Commission, subject to the safeguards I have mentioned. I hope that the safeguards will not be used to delay matters and I hope that what is now suggested will be seen as an attempt to improve the European Community and not as an attempt to downgrade the United Kingdom with all its democratic traditions to which the noble Lord quite rightly and movingly referred.

Baroness Llewelyn-Davies of Hastoe

My Lords, before the noble and learned Lord sits down, may I say that I have no fears of a hydra-headed monster appearing in the European Parliament. It is just that I think it will develop as all parliamentary bodies develop and we wish it luck.

Lord Templeman

I am obliged, my Lords.

2.5 p.m.

Lord Broxbourne

My Lords, the distinguished journalist Mr. T. E. Utley started his article on the Bill currently before your Lordships' House by posing a question: Does this Bill represent a substantial change which will weaken Parliament in its relations with the EEC, or is it the piece of trivial plumbing which the Government are determined that we shall think it to be? I should not presume to interpret the intentions of the Government. I am sure, generally speaking, that they are impeccable. But as between those two extremes postulated by Mr. Utley, I think the balance of the argument would be in favour of the former.

The Single European Act is undoubtedly an unusual animal, not only because of its name, but because of its form, its content and its complexity. It consists of a preamble, four titles, 34 articles, many amending articles in the Treaty of Rome and 20 so-called declarations—a form of provision not normal in our statute law. Then there is the further difficulty that the Act includes without express differentiation both those parts which add to and amend the Treaty of Rome and those which are without the treaty altogether, such as the proposals for foreign policy co-operation.

Difficulties of interpretation may well lie ahead, and we shall have to deal with them when we encounter them.

I want to make a little analysis of the constitutional implications, but before doing so perhaps I may briefly catalogue the points in the Act which I welcome. I welcome the measures designed to establish by 1992 an internal market for the free movement of goods, persons, services and capital. These are basic to the workings of an economic community.

I accept that the combined effect of progress to the internal market and the enlargement to a 12-member Community imposes the requirement of some extension of majority voting. I welcome the additional Community competence proposed to be added by extending the provisions of Part IN of the Treaty of Rome in the context of the environment and other social rather than strictly economic matters. Such matters inevitably go beyond national frontiers and it is better in my view to make proper treaty provision for them than have constant efforts to deal with them by seeking authorisation under what I have called the "Open Sesame" provisions of Article 235 of the treaty, which leads to the exercise of powers not expressly authorised by the treaties.

The position in regard to environmental matters is safeguarded by restricting Community action to those objectives which can be better obtained at the Community level than by individual member states. There is also an express reservation to allow states to take more stringent protection, if required, on their own.

I welcome also the provisions in Title III for improved co-operation in the foreign policy context. This is not sought to be institutionalised, and in my view rightly so. What is sought is improved arrange-ments for consultation, co-ordination and implementation of joint action with appropriate staff and executive assistance. These are practical arrange-ments proposed within the existing machinery of sovereign states and will not require incorporation in the Treaty of Rome.

While I welcome these provisions, I share with the Select Committee of the other place their view that it would have been better if this part of the Act had been embodied in a separate treaty, thereby avoiding confusion with those parts which require amendment of the treaty.

I turn now to the constitutional aspect, to the institutional and procedureal changes in the workings of the Community, as proposed in Title II of the Act. They are complex but the drift, I think, is clear—a transfer of power from Council to Commission: that is, from legislature to executive; and thus a derogation from the supervisory power of national Parliaments. I say nothing at all in derogation of the Commission for whom I have considerable respect and regard, and I respectfully echo what the noble and learned Lord, Lord Templeman, so well said in that context a moment ago.

But I am concerned with the constitutional aspect, the relation of what is primarily an executive body with the legislature. Article 7 of the Act, by re-writing Article 149 of the Treaty of Rome, introduces a new co-operation procedure for Community legislation and decision making. As the noble Baroness has said, it is dealt with in paragraphs 7 and 8 of the report to the Select Committee of which she is the distinguished chairman and your Lordships may also find of assistance the flowchart in Appendix D of the House of Commons Select Committee Report.

But the essence of this, behind the complexities, is that the Commission make a proposal, the European Parliament expresses an opinion thereon and the Council, after considering the Commission's proposal and the Parliament's opinion, arrives by a qualified majority at what is called a common position. That might well be supposed to be the end of the matter: but far from it! Back it goes to the European Parliament who have a power to amend or reject. Then, back to the Commission to consider the Parliament's amendments, with a right of revision. And then, again, back to the Council. And then, after all these complex-ities, after all these comings and goings, we come to the heart of the matter—the very limited powers proposed for the Council, for the legislature. The Council may adopt the Commission's re-examined proposals: and that requires only a qualified majority. Or they may amend them; but that requires unanimity—very difficult to achieve in a Community of 12. This involves a substantial redistribution of powers and functions in favour of the executive (the Commission) and against the Council and, in so doing, inevitably involves a material reduction in the ability of national Parliaments and their Ministers to protect their countries' special interests.

The constitutional implications therefore are clear. The increase in Community competence and community law can only be at the expense of national institutions, and paragraph 17 of the Select Committee report makes clear the extent and effect of this in identifying five separate ways in which the powers of Ministers, and therefore of the Parliament to which they are responsible, will be circumscribed. The Select Committee came to the inescapable conclusion, already cited by the noble Lord, Lord Bruce of Donington, in paragraph 28 about the impairment of the powers of the British Parliament. That conclusion was specifically accepted and endorsed by the House of Commons Select Committee in their Third Report at paragraph 58.

Therefore we come to the question so succinctly put by the noble Lord, Lord Bruce of Donington: So what? How important is all this in the present circumstances? Of course we have to remember that the sovereignty of Parliament is not what it was in Dicey's day; it is not that simple and absolute concept on which some of us grew up. Article 189 of the Treaty of Rome changed all that by giving direct effect in this country to the legislation of the Community. We cannot change that. We are bound by the Treaty of Rome in law and in faith.

There were those who discerned the effect that adherence through the treaty to the Community would have on the sovereignty of Parliament and our constitutional position and, for that reason, would have preferred a less rigid association with our European friends and partners. But the decision taken in 1972 was irrevocable—irrevocable in law and in faith, as I have just said, and as I constantly sought to point out in the long debates in the other place on these matters in the 1960s and 1970s. So, that being the position, and we being under an obligation to see that the provisions of the treaty are respected and that Community competence is not given an authorised extension to the detriment of national sovereignty, I accepted (though I did not seek) membership of the old nominated European Parliament and became a Member of its Legal Committee. After two years that committee were good enough to make me their chairman, a position which I held for the ensuing four years.

I have therefore first-hand knowledge of the European Parliament, and I enjoyed, and continue to enjoy, the friendship of many of its members and officials, I agree that it should have a full and proper part in the workings of the Community. Nevertheless I think it would be unrealistic to rely on the European Parliament as a bulwark for the defence of national interests and institutions, including the residual sovereignty of Parliament, particularly as in its directly-elected form, which is constitutionally appropriate, its connection with the national Parliaments is so much weakened.

Indeed, that is evident from the overwhelming majority it accorded to the Spinelli Treaty, a frankly federalist document, going much further in the transfer of functions than the present Act. Again, I hasten to say that it is only the treaty which I criticise and not its author. I have great respect for Mr. Spinelli, who indeed sat under my undistinguished chairmanship in the Legal Committee of those days before he in later years became the distinguished chairman of the New Institutional Affairs Committee.

But I would ask your Lordships, and particularly those friends who continue to sit in the European Parliament, to accept that being a good European does not necessarily involve being federalist. There are other, more practical ways of promoting the wellbeing of the Community and of the nations which comprise it. I have mentioned some. I emphasise also the requirements of information and scrutiny, referred to by the noble Baroness and by the noble and learned Lord, Lord Templeman, which will enable our Parliament to assist our Ministers in the task of protecting the national interest and promoting practical measures.

I certainly have no time to dwell on these. They are well set out in the two reports which have been referred to: the 12th Report, and the recent 19th Report. All repay study and contain valuable suggestions, as indeed do the House of Commons Select Committee reports.

My noble and learned friend Lord Templeman has said that he and I are not entirely ad idem on the scope and extent of the proposed scrutiny and as to how far it should extend to the management committees. On the very rare occasions on which I differ from my noble and learned friend, I have a strong presumption that I am almost certainly wrong. But I think that we shall be able to go further into this important matter as time goes on. What I think is true is that it is only the extent and not the principle on which there is any difference. The principle we all regard as of the greatest importance.

So I conclude by saying this. Given the information and the necessary powers of scrutiny, there is much that we here in Parliament can do to assist and improve the workings of the Community and its institutions, and to protect the constitutional heritage which we continue to prize in the altered circumstances of today. It is in this practical and positive way, rather than in pursuing theoretical and visionary concepts, that our labours will best be expended, and there is certainly much work to do.

2.21 p.m.

Baroness Ewart-Biggs

My Lords, coming after so many very expert and highly-informed speakers, my own short contribution will seem rather low key. However, I should like to say how very grateful I am to my noble friend Lady Llewelyn-Davies for outlining the House of Lords Select Committee's report, which did so much to clarify the consequences of the Bill before us. I am equally grateful to the noble and learned Lord, Lord Templeman, for also bringing out further points to help us understand the consequences of this Bill. I very much look forward to hearing the Minister's reply to my noble friend Lord Bruce who, quite rightly, brought out the all-important concerns of British sovereignty and how the safeguards would be written in.

I must confess that it is a long time since I have spoken in your Lordships' House on Community affairs, and it is an even longer time since, from the vantage point of our Brussels and Paris embassies, I was an observer to the negotiations for Britain's entry followed by her taking up membership in 1972. There can be little doubt that now, in this 14th year of our membership, much of the idealism which I remember inspired our thinking in those early days has been replaced by practical considerations as to the workings of the European Community.

It is for that reason that this Bill, with its objective of up-dating the treaties in unison with the other 11 members, is an important one to consider. Indeed, many might say that it really is high time to move the European Community into line with the changes which have occurred in all member countries during that time. Yet in spite of that, there is little doubt that critics of the Bill, both in Parliament and in the press and outside, have over the last months sought to use it as a vehicle for re-opening all those old arguments regarding Britain's membership, which were, after all, conclusively settled more than a decade ago. So the time has surely now come to look forward rather than backwards and to consider what real contribution the Single European Act will make to changing the Community in the ways which will benefit most the people of this country.

There is much that we should like to see the Single European Act do which we know it will not do. For example, it will not curb the excesses of the common agricultural policy and bring about the agricultural reforms which this House considers essential. It will not ensure that less of the Community's budget is spent on the creation, storage, disposal and even destruction of unwanted surpluses, and more on modernising the structure of our economies and the social adjustment which that entails. These are all important priorities.

On the other hand, we must remember that the Single European Act does, at least, give the Community a basis for policies which are relevant to 90 per cent. of the Community's workforce who are not engaged in agriculture. My Lords, as I said, the -Minister and previous speakers have already described what the Single European Act does and I certainly should not want to go over that, but I should like to comment on one or two aspects of the changes outlined. First, there are the new provisions on technology, the environment and social affairs. These really seem to fill genuine gaps in the existing treaties. With the competition we are now facing, not only from the United States and Japan but also from some of the newly industrialised countries, co-operation in Europe must be the only way to ensure our long-term survival. Indeed, I should not like to see a de-industrialised Britain which had to depend on tourism and the City of London to pay for its imports when North Sea oil runs out.

In the environment too, my Lords, there is another gap in the existing treaties. The Community needs to do more in actually tackling Europe's environmental problems. Many of these problems, of course, are purely local and need local solutions, but some of them transcend national boundaries and require Community action. The new provisions set out what seem to be sensible and well balanced criteria. There are also social provisions, and it cannot, frankly, be said that they go very far beyond what the Community already does in practice. Protecting the health and safety of workers and encouraging dialogue between management and labour are objectives which ought to have been written into the community treaties from the start. Therefore, I think we should welcome any new provisions, however limited in their scope, which might help make the Community more aware of the social dimensions of its policies.

There was a great deal of discussion in the debate in the other place about the role of the European Parliament, but, for my part, I am astonished how on the one hand we so often criticise that Parliament for its failings, whilst at the same time we resist any changes which might enable it to be more effective. It is like urging a horse to gallop whilst hobbling it at the same time. Moreover, I must confess to feeling a certain respect for the European Parliament's record on equal rights, on environmental issues and on other social and employment issues. I am glad the noble Baroness, Lady Elles, has returned to her seat to hear me say that. I feel that the European Parliament has instigated some progressive reforms, such as parental and family leave, to name but one, which have helped workers very much in the EEC. For my part, I very much welcome the provision in the Single European Act which will strengthen the Parliament in relation to the Council of Ministers.

Lastly, my Lords, so far as political co-operation goes, there is no doubt that Governments of both parties have rightly regarded participation in political co-operation. This, after all, goes hand in hand with our membership of the Community and is one of the most valuable features of our wider commitment to Europe. I strongly believe that many of our national goals can be achieved only in co-operation with others. I will give two examples. We talk about controlling multinational companies, but how can one country on its own control the strength of multinationals? Indeed, the Council of Ministers a few years ago, missed a very good opportunity to exercise control when they voted against the proposal of the Parliament which would have allowed workers in multinational companies to have much more information about the way their companies operated. My second example is the importance of co-operation regarding the methods of dealing with terrorism. There can be little doubt that the very nature of modern international terrorism demands an effective international response. Although advances have been made, I believe European framework could be used much more by member states to devise ways of making the horrendous task of a terrrorist more difficult.

My Lords, may I end by saying that I have long believed and still believe that this country's national interests are best served from within the European Community. Cruelly though it has disappointed in so many hopes placed in it, nonetheless the European Community is better than any alternative organisation which could conceivably be brought into existence to replace it. I believe that that view also represents the attitude of the British people. In spite of its failings, we have grown accustomed to the European Community. We grumble about it much as we grumble about the weather; but in the same way as we should like to see the weather improved, we should also like to see the workings of the Community improved. In my understanding (and I see it in a very modest way) that is what the Bill is trying to do.