Lords Sitting of 21 May 2004

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of. Salisbury.

European Court of Justice (EUC Report)
Lord Scott of Foscote Lord Scott of Foscote rose to move, That this House takes note of the report of the European Union Committee on The Future Role of the European Court of Justice (6th Report, HL Paper 47).
The noble and learned Lord said: My Lords, I express my gratitude on behalf of the European Select Committee, of which I have the honour of being a member, to those responsible for arranging this debate this morning. The debate is on the Select Committee's report published on 15 March, on The Future Role of the European Court of Justice. I express my gratitude also to the Government for making their response to the report available to us this week in time for the debate. That was most helpful.
The inquiry that led to this report was embarked on at a time when the negotiations and discussions on the draft constitutional treaty proposed by the Giscard d'Estaing Convention were still in progress. We assumed that a constitutional treaty somewhat along the lines of the draft would eventually emerge, and we thought it opportune to examine the role that the European Court of Justice would play and the jurisdiction that it would have under the new constitution.
As your Lordships will know, discussions on the proposed constitution were adjourned in December last year, but are continuing now in Dublin under the Irish presidency. I imagine that there will, in due course, be some agreed constitution, and the issues relating to the future role of the ECJ are as important now as they were when we began our inquiry. The only difference is that the time in which to consider what should be done about some of the difficulties that we perceive to be presented by the proposed constitution is rapidly running out. In due course, and perhaps soon, any agreed constitutional treaty must be brought before Parliament for endorsement, but by then it might be too late for any changes in the proposed treaty to be made. Parliament, and eventually the electorate, will be presented with an agreed package to be approved or rejected as a whole. Therefore, while there is still time, the issues that need attention are that much more important.
There is very little said in the proposed treaty about the role of the ECJ. In their response to our report, the Government said:
"The court's jurisdiction and role will remain essentially the same as under the European Community Treaty although the scope of the Constitutional Treaty itself will, of course, he different".
This statement is correct as far as it goes, but I respectfully suggest that it gives inadequate recognition to the increase in importance of the role of the ECJ. There are a number of particular features to which I wish to draw your Lordships' attention this morning.
First, perhaps the most important issue of all, is the jurisdiction of the Court. At present, the ECJ has jurisdiction to give authoritative interpretations of European law falling under the first pillar—in short, European Community law. The ECJ does not, at present, have jurisdiction in respect of second or third pillar matters. The second pillar is common foreign and security policy matters; the third pillar is police and judicial co-operation in criminal matters. Under the new constitution, the three pillars will be collapsed. There will simply be European Union law which, according to Article 10.1 of the proposed constitution, will have primacy over domestic, national law.
In respect of all European Union law, the ECJ will have jurisdiction except where the jurisdiction is expressly excluded by the constitution. There are a number of important exclusions. Jurisdiction in common foreign and security policy matters is excluded under Article 282. Police and law enforcement matters, and matters relating to the maintenance of law and order and the safeguarding of national security, are also excluded under Article 283. Outside these specifically excluded areas, the ECJ will have jurisdiction.
Even in the areas from which ECJ jurisdiction is excluded, European law will have primacy—Article 10.1 says so. It is an oddity that European law will have primacy over member states' domestic law, even in the areas where the ECJ does not have jurisdiction. I will return to that oddity. An important jurisdictional issue, which is left unresolved by the proposed constitution, and which may receive different answers in different member states, is whether, in a case where there is a challenge to the competences of the Union institutions, the ECJ will be entitled to give the definitive ruling.
The competences of all the European Union institutions including the ECJ, are subject to the important principle of conferral. This principle has perhaps always been present, but is spelled out in the proposed new constitution. Article 9.1 says:
"The limits of Union competences are governed by the principle of conferral".
That means that the Union has only the competences conferred on it by member states. Article 9.2 says:
"Competences not conferred upon the Union … remain with the member states".
It is obviously inevitable that issues will from time to time arise as to whether particular European Union legislation is within the competences of the Union. The categories of competences shared between the Union and member states are set out in Article 13. In Article 16, one finds what are called "areas of supporting, co-ordinating or complementary action" that may be taken by the European Union, but where the member states will have the main competency. There are a number of possible overlaps between the listed items under these two

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categories. So, issues about competences are inevitable. What courts will have the final word on such issues when they arise?
Under the principle of conferral, the ECJ itself has competence only if the matter is one in which competence has been conferred. In their response to our report, the Government have said that the ECJ should, in the event of any dispute about competence, have the final word on the matter. That is, in my view—and in that of the committee—the only sensible solution. The constitutional courts of some member states have taken the view that, in the last resort, it is for them, not the ECJ, to resolve an issue about what competences have been conferred by their national parliament on European Union institutions. The German courts and the Danish courts, in particular, have taken that view.
The existence of the issue is well known and has been for many years, but it is simply ducked in the draft Constitutional Treaty. I suggest that it should not be ducked. We in the United Kingdom should not accept a position in which we attribute to the ECJ a breadth of jurisdiction to decide our competences, when we know well that several other member states deny that jurisdiction. Surely, the issue should be addressed and dealt with in the proposed constitution, as it could be, with the appropriate political consent. Could the Minister indicate the Government's view on that point? At the moment, it is simply being left outstanding.
I draw your Lordships' attention to another side of the same coin. European Union law has primacy over domestic law in the areas of conferred competences, as set out in Article 10.1. European Union law is part of our domestic law and, as such, must be applied by our domestic courts. So what must our domestic courts do if faced with domestic legislation, passed by this Parliament, that appears to the courts not to be consistent with existing European Union law? The logic of the primacy rule, if it becomes part of our domestic law through the adoption of the treaty, is that the domestic court should treat as invalid domestic statutory provisions that the court perceives to be inconsistent with European Union law. That, after all, is what the Appellate Committee of the House did in the Factortame case in 1991. It is not clear from the Government's
response to the report what their view is on that point. Parliament can, of course, repeal the statutes under which European Union law is part of domestic law and is given primacy, but do the Government accept that, short of such a repeal, the courts of this country, in order to give effect to the primacy rule, may from time to time have to treat domestic legislation as invalid?
I now come back to the areas where the jurisdiction of the ECJ is excluded, notwithstanding that they are areas where the European Union institutions are given legislative and executive competence. Surely, we cannot tolerate a situation in which there are black holes in which no courts have jurisdiction. We could take for an example the CFSP. The European Union has competence over,
"all areas of foreign policy".
That is what Article 15.1of the draft constitution says. If, pursuant to that competence, the European Union sends troops to some foreign country to assist in peacekeeping operations—an entirely likely future scenario, I suggest—and, in the conduct of those operations, individuals are or perceive themselves to have been injured by misconduct on the part of EU troops, it cannot possibly be suggested that the injured individuals would have no legal remedy. But what courts would have jurisdiction? Surely, the EU courts should have jurisdiction to deal with misfeasances alleged to have been committed by persons acting on behalf of the EU. If EU institutions are to be given CFSP competences, which is what is proposed, the EU courts must be given corresponding jurisdiction.
We do not yet know what the United States Supreme Court will say about the jurisdiction of federal courts to deal with complaints made by Guantanamo Bay prisoners, but we cannot possibly justify creating a comparable jurisdictional black hole here in Europe. Yet, that is what we risk, if the ECJ is denied any CFSP jurisdiction. I respectfully invite the Government to think again about the issue. Either the EU should not have CFSP competence at all, or the exercise of that competence should, like all other competences, be subject to the rule of law.
The black hole problem does not apply on the exclusion of ECJ jurisdiction in police and law and order matters which I have already referred to—the Article III-283 exclusions. Each member state can apply its own domestic law with regard to the resolution of issues arising from EU legislation in those areas. However, if disputes about the boundaries of EU competencies in that area arise—and they may—the domestic courts of member states may produce different answers, none of which will be binding on the others. Here, too, therefore, the consequences of divorcing legislative and executive competence, on the one hand, from judicial competence, on the other, are potentially chaotic.
Finally, I shall say a word or two about the standing rule, which determines when individuals, persons or companies can commence proceedings before European Union courts challenging European Union measures that, they think, adversely affect them. Their ability to do so at present is severely limited. The draft constitution proposes a slight relaxation in the standing rule, but nothing very much. Article 47 of the Charter of Fundamental Rights requires that every person whose rights and freedoms are guaranteed by Union law should have the right to an effective remedy before a court or tribunal.
When giving evidence to the inquiry that we conducted preceding the report, the noble Baroness, Lady Scotland, explained that, in her view, any further relaxation of the standing rule than currently proposed would be impracticable because the ECJ and its subsidiary courts would risk being swamped by such a volume of cases that they would be unable to cope. She suggested that the national courts should therefore act as a filter of cases before they reached European Court level. Of course, that is a question of time. Should a case really have to work its way through the national

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courts up to the Appellate Committee of this House; then be referred to the European Court of Justice and join the long queue that is already there?
The counter side of the present proposal is the danger that on the adoption of the new constitution, in which the Charter of Fundamental Rights will be incorporated, the EU may find itself at once in breach of Article 47 of the Charter. The absence of any effective remedy in relation to the time within which the remedy can be obtained must be an important factor. If the EU accedes to the European Convention on Human Rights, as is also proposed, without first reforming the EU court system that has led to an excessive backlog of cases, it may also find itself in breach of Article 6 of that convention, which refers expressly to the availability of a remedy within a reasonable time.
Many other matters are referred to in the report, which, in the view of the committee, are of importance. Some of them are fairly technical. In the short time that I have had today, I have mentioned those matters which seem to me to be of the greatest importance. I commend the report to the House.
Moved, That this House takes note of the report of the European Union Committee on The Future Role of the European Court of Justice (6th Report, HL Paper 47). — ( Lord Scott of Foscote.)
11.22 a.m.
Lord Inglewood: My Lords, I do not think that any Member of your Lordships' House, having heard the remarks of the noble and learned Lord, Lord Scott, can be under any illusion about the significance of the report that we are discussing today or, indeed, having heard his exposition of some of its points, be unaware of the far-ranging implications that some of those matters may have for us all.
Before embarking on my remarks proper, while I share with the noble and learned Lord the fact that we each of us passed Bar exams, that is where our legal careers diverge considerably. I also think that in the context of this debate we should bear in the mind the possibility that there will not be a treaty in June. Many seem to take it as axiomatic that that will happen, but I am far from certain.
The great achievement of the European Union has been to achieve a single legal area across a series of distinct sovereign states. That contrasts with many empires—for example, the Austro-Hungarian empire, the Russian empire or even our own empire—where there was a single ruler, but within the empire there were completely distinct legal regimes. That achievement of the European Union is a very remarkable political development. It vindicates those who say, as is commented on in the report, that the European Union has created a new legal order.
That being so, it seems that there are two crucial points: first, it exists, which may sound obvious; and, secondly, if we want to learn about it, we have got to learn about it from looking at it. That should not pose any problems to this country, given our unwritten and evolving constitution. A criticism made about the development of the European political order is that it
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is novel. I merely ask: Why not? After all, the traditional western European way of doing things is of relatively recent origin. If one looks, for example, at the East, where I have worked recently, the perspective on a lot of the developments that we are seeing in Europe has been entirely different over the years.
Where there is a single Europe legal area, there must be a court at its head. That, of course, is what the European Court of Justice is. Briefly, I should like to touch on, first, the primacy of European Union law; secondly, the issue of "Kompetenz-Kompetenz"; thirdly, the doctrine of direct effect; and, fourthly, the Charter of Fundamental Rights, on which I shall make a few comments.
Again, it seems to be axiomatic that where there is a single jurisdiction, the law of that jurisdiction must have primacy. Where that jurisdiction encompasses distinct different sovereign states, the constitutional arrangements of the single order—that is, the European Union—must be subordinated to the constitutions of the member states. Of course, it is on the interface between the two where the problems arise, as the noble and learned Lord said so eloquently. That is often described in the shorthand German phrase, "Kompetenz-Kompetenz".
It is interesting that, basically, whichever jurisdiction determines the questions, the questions will be the same. At least, in theory, we are discussing the same law. In one sense, it is merely a question of jurisdiction.
In the interesting summary in the report, the debate begins by seeing those issues in terms of legal questions. Then the discussion evolves, and it ends by suggesting that perhaps it is as much a political issue as a legal one. Certainly, as an academic legal point it would he good for consideration in university finals. As someone who is not a distinguished or academic lawyer—indeed, only just a lawyer at all—I should like to ask: how much of a real question is this actually? Ultimately, this matters only if it matters politically.
Of course, political problems have to be solved, ultimately, by political solutions. It may be that a court's decision can provide the political solution, which it frequently does, in which case there is no further difficulty. But even if there is a judicial ruling, if it does not solve the underlying political problem, a political solution still has to be found regardless of what the law may say at the time. Here, we are talking about hypothetical issues. As we all know, until the matter arises, the courts cannot address it because courts do not, in general, deal with hypothetical problems.
It is an extremely interesting topic to debate, but I just wonder how much we should worry about it at this stage. If a problem of that kind occurs in the future, it will occur because there is a real political problem precipitating it. I am not sure that one can necessarily solve that real political problem in advance of it occurring because it is too hypothetical.
Certainly, the kind of political problem that could emerge from debates about "Kompetenz-Kompetenz" and serious disputes could, under certain circumstances, explode the European Union. But is that really what will happen or is the nature of the political legal process in

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which we are all engaged in countries across western Europe one which contains within it sufficient slack and flexibility to be able to deal with the issues as they arise?
Turning now to the doctrine of direct effect, as someone who has been—indeed, still is, just—a Member of the European Parliament, at public meetings, when talking about the workings of the single market, I often say, "Everyone cheats. All foreigners cheat". Then I go on to say, "Of course, if you make this speech as I have done in other countries, we are some of the foreigners". It is important that where we have a legal order of the kind that is the single market, the citizens' rights in respect of the state of affairs that their legislators have put in place should not simply depend on transposition.
The best way to guarantee the integrity of the system is to give those affected rights of access to courts. Perhaps we may take, for example, the relatively recent incident of the ban on British beef. Eventually, UK farmers won access to British beef in France under the provisions of European law. But it was a very drawn out and, in my opinion, unsatisfactory process. Would it not have been much better if the importer had been able simply to go to the equivalent of the Calais county court to obtain an injunction? But I agree that a second problem arises in saying that this will solve all the problems because there is no guarantee that the Calais county court would give effect to European law.
In my capacity as an MEP I have looked to see whether any research has been undertaken on how well European law is implemented in the lower courts in other member states. The short answer is that it is very unclear. The right response to these problems is not, in the long run, for political pressure to be brought to bear on other political organisations, rather it should be for the citizens to be able to gain redress in the place where they have suffered damage.
However, as the noble and learned Lord has pointed out, the more that European law is determined, the more disputes about it will arise. One of the major problems we now face, as the noble and learned Lord pointed out so lucidly, is that the workload in the European Court of Justice is extremely heavy. For that reason, I think that the conclusion reached by the committee that one wants to be careful about granting direct access to the Court regarding all these matters should be taken very seriously. No court is any good if it takes ever longer for the justice it dispenses to be handed out.
Finally, I turn to the Charter of Fundamental Rights. I have absolutely no problem with the concept of judicially enforceable rights. Many common law countries have both written constitutions and entrenched rights. Indeed, I would go further and say that I think there is a lot to be said for it. But the problem over the Charter of Fundamental Rights in this context is that it contains a very wide range of rights. Some of the social and economic rights—I think particularly of Article 29 covering the right of access to placement services—seem rather out of place in this context. While I do not want to trespass on the debate that is to follow, if we look at the way in which the European Social Chapter has
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operated in practice, we can see how things have developed. Whether one is an employer, an employee or merely an observer of the UK labour market, one regrets what has taken place through, one might almost say, the law of unintended consequences.
For that reason, I am concerned about the proposal to incorporate the Charter of Fundamental Rights into the proposed treaty, making it judicially enforceable. We may end up in a position where we face a large raft of litigation which would better not have been there in the first place. That is not because people should not have rights, rather it is a matter of how those rights are organised and enforced. For example, look back at John Major's Citizen's Charter. If you wish to have rights of that kind available in the general form described, some sort of administrative process for enforcing them is infinitely preferable. So I feel strongly that Jack Straw is right in trying to see what he can do within the ongoing negotiations to try to change some of these provisions.
When all is said and done, Europe is a creature of law or it is nothing. If there is no single legal order across the European Union, we will have anarchy and chaos, and the whole thing will fall apart. That being the case, we must have a single court at its apex. From my perspective, just as the European Union itself is still evolving, the construction site is still subject to a lot of work. We do not want to be too prescriptive about how we see this evolving. We should be pragmatic about it because, as I said earlier, the relationship between the legal and political structures within the European Union provides a sufficiently flexible framework for us to be able to deal with these issues as work in progress.
11.33 a.m.
Lord Thomson of Monifieth: My Lords, I rise to speak as a member of the EU sub-committee chaired by the noble and learned Lord, Lord Scott, and I join the noble Lord, Lord Inglewood, in his praise of the magisterial presentation of the report before us and of the great issues implicit in that report as the European Court of Justice faces changes to its role in the face of an enlarged Community. For my part, I should like to express my appreciation for the work of the legal officials of our sub-committee, Dr Kersh and Dr Mitsilegas. I hope that the reforms the Government presently have afoot on the domestic front in setting up a supreme court over here will not deprive us totally of the wisdom of noble and learned Lords such as the noble and learned Lord, Lord Scott, and the work of the European committees of this House.
As one of the first Commissioners to the EEC in 1973, and brought up in the pragmatic British tradition of an unwritten constitution where law officers rarely, if ever, appeared at a Cabinet meeting, I was fascinated to see that in Brussels, our Service juridique of the European Commission were present all the time and did not hesitate to intervene if they thought that we Commissioners were getting above ourselves and in danger of falling foul of the European Court of Justice.

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As we say in paragraph 10 of the report, the European Court of Justice is no ordinary court:
"International courts having jurisdiction over sovereign states are … relatively rare … But when establishing the European Communities the Member States went even further. They created institutions having the power in certain areas to make laws which were directly applicable in the Member States".
I must say that as part of the generation to suffer a second catastrophic European war within a period of 30 years, I found the concept, embodied in the European Court of Justice and the judicial role of the Community generally, of European law rather than European war an inspiring one. I am bound to say that we should not forget that aspect of it. It is as true today as it was when the European Community was first set up and when Britain joined it in 1973.
However, the economic and political success of the European Union since that time means that much has changed. The European Community, in alliance with the United States through NATO, helped to win the Cold War and prevent nuclear Armageddon. Today our grandchildren face a frightening new world with new forms of international terrorism and menaces to peace. In this situation, the USA as a single superpower needs, I believe, a European Union—now a Union of the east and west of Europe—with Britain at the very heart of it as a balancing and sometimes restraining partner.
These are the global issues that lie behind the work of the Discard d'Estaing commission and the current IGC summit. Making a success of that work is vital. Enlargement from 15 to 25 nations simply cannot succeed without a new treaty. I emphasise that when using the word "treaty", I refer to an intergovernmental treaty of the character that is now under discussion at the IGC. The label "constitutional treaty" is unfortunately ambiguous in terms of the present debate. The reality is that it is an inter-state treaty rather than a new constitution for a new European super-state.
The role of the European Court of Justice is therefore right at the centre of this further stage of the development of the European Union. As our report remarks, and as the noble and learned Lord, Lord Scott, pointed out, it is surprising that so little has been said so far about the role of the Court in the convention proceedings and in the IGC. The noble and learned Lord was absolutely right to draw attention to those great issues. I hope that our report will help to correct this and inform the debate more fully, at least within the United Kingdom.
As a layman I have a certain diffidence about commenting on many of the judicial details of our recommendations. I recall an occasion when there was a slight misprint in a Foreign Office telegram. I was reported as having spoken in "broad, brash terms" at an important meeting of European Ministers. Of course it should have said "broad-brush terms". I am therefore conscious that I am a layman in these matters. I will confine myself to very few remarks on the details.
I hope, however, that the Government will back the text put forward by my noble friend Lord Maclennan of Rogart—who will be speaking in your Lordships' House later today—as an amendment to Article III-270(4) for
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widening individual access to the Community courts. The arguments are set out very clearly in paragraphs 149 to 151 of our report.
Having said that, however, I am much in sympathy with what the noble Lord, Lord Inglewood, said about bringing a pragmatic sense of proportion to bear in relation to the operations of the ECJ in the field of individual human rights—and, indeed, generally—and in the challenges that lie ahead following enlargement. Like the noble Lord, Lord Inglewood, I am wary of too much duplication in the human rights field between the European Court of Justice in Luxembourg and the Court of Human Rights in Strasbourg. Human rights will not be helped greatly by increasingly longer queues at more institutions. There is a need for a sense of proportion.
Whatever the nature of the arguments in the past, the way in which the European Union has developed has been primarily as a union of sovereign states. The new members of the European Union have behind them decades of a centralised Soviet tradition and are themselves relatively poor in resources. It therefore seems to me that the top challenge for the European Union as a whole, and for the European Court of Justice within it, will be to adjudicate over inter-state relations primarily and to face the limitations of some painful budgetary priorities in its own operations.
I remember that great British public servant, Sir Con O'Neill, who was a major architect of British entry into the Community, telling me, as a Labour Minister, that once I got to Brussels I would learn lessons in pragmatism that I had never dreamt of in the Fabian Society. He was absolutely right. And the noble Lord, Lord Inglewood, is absolutely right to draw our attention to the fact that the European Union, as an international animal and international organism, is absolutely sui generis. It cannot deal with its problems by means of tidy blueprints that fill all the black holes; it can deal with them only by a gradual process and a pragmatic approach. Ultimately, the judicial problems within the European Union always turn out to be political problems requiring a political tolerance and political give and take in order to find solutions. Nor will the European Union succeed in its enlarged state if it insists on unanimity for every advance being sought on the basis of referendums in individual member states.
I was proud to be one of the members of the Labour government who helped to take Britain into the European Union. I cannot tell your Lordships how depressing it is for me that a Labour Government, who claim that they want to be at the heart of the European Union, should for the second time—for reasons of purely short-term domestic tactics—do a U-turn and resort to a referendum as an alternative to parliamentary leadership. As I have done before, I plead with the Government that if they are going to take that course they should put their heart into it and ensure that the case for the advantages—not only for Britain and Europe but for the international community as a whole—of having a successful European Union working in world affairs is made in strong and clear terms.
11.45 a.m.
Lord Slynn of Hadley: My Lords, I did not put my name down to speak because it seemed to me, as a former member of the Court of Justice, that this was an occasion to listen and to learn rather than to put forward one's own thoughts on the admirable report. But, in the light what has been said in the past few minutes, I hope your Lordships will allow me to make four very short points.
The first and most essential point that has to be made—I think the noble Lord, Lord Inglewood, has made it—is the importance of the European Court of Justice having the power to declare the law for the Community as a whole. Even in the days when there were six members—and certainly in the days when there were 13 and 15—it was very important that there should be a coherent, structured body of law for the region which is now the European Union. With 25 member states it is even more important that the Court of Justice should have the final say on all matters of law—not only in regard to the states but also in regard to the various tribunals and courts which it may be considered should be established to deal with specific matters.
There have been proposals that there should be panels or an increased number of courts in the Community. However, it is critically important—I hope that the Government will always insist on this—that the final decision on all aspects of the law should lie with the European Court of Justice. If it does not, there will be not only a divergence between states but also a divergence between various subsidiary courts and tribunals in the Community.
The second point I wish to make relates to the workload of the court, a matter to which the noble Lord, Lord Inglewood, referred. It is absolutely clear that, despite the creation of the Court of First Instance—now to be called the High Court—the European Court has a very heavy workload. Most of its cases come to it by reference from national courts. In my view, the obligation on courts to refer should be looked at again.
Judges below final courts have a complete discretion over whether or not they send a case to Luxembourg. In the treaty as it stands, final courts are obliged to refer questions to the European Court. The court itself has slightly relaxed that requirement, but not sufficiently. In my view, it is unfortunate that the recommendation of a committee set up by the Commission two or three years ago to relax the obligation on final courts was not accepted.
What is happening in many states is that final courts are deciding matters for themselves. That is not in accordance with the wording of the treaty, but it should be made quite clear that the final court obligation is limited to sending cases which either have a constitutional significance or are important from the Community point of view. There are many cases in which final courts can decide matters and it seems to me that there is a great deal to be said for relaxing that obligation and coming out, quite cleanly and clearly, with what is the obligation and what are the restrictions.
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The Commission, of course, is afraid that if final courts are not obliged to send there will be considerable disparity and differences between various states. That could be remedied by adopting our own system whereby the Attorney-General can refer a question of law in a case in a criminal court, and the decision is limited to the law without deciding the issue in the case.
I realise that my time is up and that I must mention my other two points very briefly. I think that it is unfortunate—I hope the Government will pursue this—that the ability of, particularly, traders to take challenges to the European Court will be enlarged further than it has been, as is referred to in the report.
My final point, in 30 seconds, relates to the charter of human rights. If it has to deal with that, as is the intention, the role of the Court of Justice in the future will be of very great importance. We have to make quite clear the relationship between the Luxembourg court and the Strasbourg court in relation to the application and interpretation of the charter.
11.50 a.m.
Lord Lester of Herne Hill: My Lords, I am glad that the noble and learned Lord, Lord Slynn of Hadley, intervened. He has been one of the great British judges and a member of the European Court of Justice. He speaks with unique authority in this House, having served in this country and in Luxembourg in a high judicial office. It is a particular pleasure for me to speak not only in his wake, but also in that of my noble friend Lord Thomson of Monifieth, who is a wise European and British statesman with a truly international perspective. I well remember reading Cabinet papers which showed how he heroically stood up against the Commonwealth Immigrants Act 1968 in the deliberations of the Government. That showed his high ethical sense and courage.
I was privileged to be a member of Sub-Committee E, chaired by the noble and learned Lord, Lord Scott, during the preparation, but not the completion, of the report. Although the report appears to be dry and, at first sight, to be the concern of judges and lawyers, it addresses matters of considerable political importance, as was apparent in the powerful speech of the noble and learned Lord, Lord Scott. It was a pleasure to serve under him and the noble and learned Lord, Lord Slynn, as a member of that important committee.
The Minister will have a formidable task in replying to the debate in place of the person whom one might have expected to reply to a debate of this importance; namely, the Lord Chancellor. I have the greatest respect and admiration for the Minister. I always enjoy listening to her, but if she will permit me to say so, she is relatively junior to be dealing with a matter of such enormous importance. No doubt she will be able to demonstrate in her reply that she is better by far than any judge or lawyer.
The description of the draft treaty as a "constitution" lends itself to misuse, particularly by Euro-sceptic opponents, who seek to distort its true nature as though it were a US-style federal constitution for a European super state. It is no such instrument. It is an intergovernmental

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treaty to consolidate the previous treaties, from Rome to Nice, and to adapt them to the need to add 10 new member states. It is the product of the inevitable compromises emerging from the Convention on the Future of Europe that brought together politicians from 28 countries over a period of 16 months.
The draft treaty is neither concise nor perfectly drafted, but as the Financial Times pointed out yesterday,
"it promises to make the EU more manageable and accountable to the elected European and national parliaments. It is an advance on the present rag-bag of incomprehensible treaty texts".
The draft treaty aims to make an enlarged EU workable, to clarify its responsibilities and to increase accountability. The framework designed for the founding six member states needs urgently to be adapted to a greatly enlarged Union. The draft treaty envisages a stronger role for national parliaments to promote subsidiarity. As my colleague, Nick Clegg MEP, noted in an article in the Financial Times on Monday, the draft treaty is a surprisingly conservative revision of the EU treaties. As he explained in that article,
"breathless charges"—
that the draft treaty will—
"lead to wholesale tax harmonisation, a raft of new EU policy powers, the subversion of British monarchical prerogatives and persecution by EU criminal prosecutors are based on fantasy … the new constitution does not add a single new policy power to the EU … Given that gridlock would undoubtedly result without some extension in majority voting, the constitution's critics must explain why they wish to condemn the EU to decision-making impotence".
There is little, if anything, in this balanced report that we are debating today to provide grist to the Euro-sceptics' mill. Paragraph 25 of the report points out that the European Court's,
"value and effectiveness are based on the importance of law and legal order to the creation, functioning, cohesion and development of the Union and also on the Court's independence".
That point was emphasised by the noble Lord, Lord Inglewood. The report concludes in paragraph 31 that the Court already has a constitutional character and that it is unlikely that any change in the role of the Court would result from the difference of wording between the existing treaty and the draft treaty. However, it states:
"The Court would more clearly take on the mantle of a Constitutional Court for the Union".
The noble and learned Lord, Lord Scott, emphasised that point.
The report also points out, in paragraph 51:
"It is not surprising that Part 1 of the Constitutional Treaty includes a statement of the primacy of Union law. The doctrine is a well established and key element of the Community's legal order".
I hope that the Official Opposition will take particular note of that, given some rather ignorant suggestions that the draft treaty creates a new primacy and threat to national systems of government and law. It does no such thing.
The report notes:
"The Court of Justice, as a matter of Union law, has jurisdiction to rule on the division of competences between the Union and its Member States and on whether a particular matter is within the vires of the Union as set out in the Treaty. That is not new.
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Member States, and their courts, generally respect the rulings of the Court on these and other matters … What is new is the classification and division of competences set out in Part I of the draft Treaty".
The report then raises the critical question, emphasised by the noble and learned Lord Scott in his introduction, of,
"which court, the Court of Justice or national courts, will finally decide whether a matter falls within Union competence".
In one of the most important passages, in paragraph 77, it continues—and I make no apology for quoting it—as follows:
"In principle there should be one court in the end able to say whether the European Union institutions have exceeded their powers or not. A strong argument can be made that the effective functioning of the Union requires the Court to be the ultimate arbiter of the extent of the Union's competences and of the validity of its acts. It is difficult to see how the Union could work if the courts of each Member State had jurisdiction to declare EU law invalid. There would be a risk of conflicts of decision, 'limping' regulation (with legislation valid in some States and invalid in others) and no legal certainty in the absence of a unified legal system".
The report observes, as the noble and learned Lord, Lord Slynn, has rightly emphasised, that,
"if the Court is the ultimate arbiter on the extent of the Union's competence it follows that Court also has the final say in defining the extent of Member States' powers".
The Government's response makes it clear that they agree with the argument contained in those passages. That is a most welcome response to the issue, as was that of the noble Lord, Lord Inglewood.
However, it is important to know the Official Opposition's standpoint on that important question, because the draft treaty will otherwise become embroiled in electioneering without our knowing their position. What is the response of the Government and the Opposition to paragraph 103 of the report, which refers to the committee's earlier report on the future status of the EU Charter of Fundamental Rights? That report concluded that, in principle, the actions of the Union and/or member states in giving effect to CFSP should be subject to judicial review or supervision in both the European Court of Justice and the Strasbourg Court.
The report then goes into the dangers to the rule of law in there being a European legal black hole. I strongly agree with the noble and learned Lord, Lord Scott, about the pressing need to avoid a legal black hole and I would be grateful to hear the Government's reasons for apparently rejecting that part of the report.
I also hope that the Minister will inform the House of the Government's response to the committee's reflections on enlarging the Court's jurisdiction over the third pillar. The committee concluded that there are strong arguments for the Court having jurisdiction over all justice and home affairs matters that are within EU competence, including co-operation in relation to criminal law and procedure.
As we said in our earlier report on the European Charter of Fundamental Rights, recent developments, in particular the European arrest warrant, show that such matters may impinge directly on the interests and rights

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of individuals. The Court should be entitled to measure the legality of action, whether that of the Union or of member states and their authorities, when implementing Union legislation, against the norms contained in the Charter. That is a very important part of the report and I hope that the Minister, for whom I feel compassion, will be able to explain—and not just in a single sentence—why the Government apparently reject the need for the European Court of Justice to be able to review measures taken by member states relating to police and law enforcement operations. It is hard to see how the European rule of law can be effectively secured in this important and increasing area of Union activity unless there is effective judicial review.
The noble and learned Lord, Lord Slynn, mentioned the importance of avoiding conflict between the two European courts on human rights matters. Again, Sub-Committee E has in the past urged the Government to support the accession to the European Convention on Human Rights by the European Community, now the European Union, so that it is quite clear that in the hierarchy of courts the Strasbourg Court will remain the ultimate arbiter on the European Convention. Again, we would welcome a response from the Government to that important suggestion.
I agree with all noble Lords who have spoken in this debate so far that the standing rule is too restrictive and fails to provide effective judicial remedies. Like other noble Lords, I very much hope that the Government will support the text of my noble friend Lord Maclennan of Rogart that was put forward during the convention deliberations and mentioned in paragraph 151 of the report.
The detailed changes made by the draft treaty need, as Gisela Stuart MP has observed, to be combined with a strong political vision of the ideas which should inform the European agenda. Very regrettably, I am not convinced that the Government have such a vision. Nick Clegg MEP is surely right in commenting that for Mr Blair it is difficult to see how the referendum can be won without a successful challenge to the anti-European propagandists in the press. He also said that that will be hard for the Prime Minister and that his premiership has always operated in thrall to much of the press that has forced him, through ill-disguised political blackmail, to concede a referendum. Like my noble friend Lord Thomson and other noble Lords on these Benches, I very much regret that that has occurred.
It is a far cry from the referendum campaign 30 years ago, so brilliantly led by Roy Jenkins, a statesman who sacrificed the possibility of leading a Labour government because of his unswerving commitment to an ever-closer European Union, and who devoted huge energy to that campaign. I well remember working with him in the Home Office and trying to focus him on Home Office matters when he was rightly devoting at least half of his mental and emotional life to leading that great campaign. I have to say that I see no sign of a similar commitment or similar political energy among the heavyweights in the present Government as we approach the June European elections and beyond.
12.4 p.m.
Lord Howell of Guildford: My Lords, I wholeheartedly join other noble Lords in thanking the noble and learned Lord, Lord Scott, for chairing and steering his committee towards this fascinating report and for the skilled and measured way in which he presented the findings to us at the beginning of the debate.
I must confess that I am not part of the very select club of learned judges and lawyers who tend to address these issues and some of my remarks may sound as though they come from outside the club. I hope that they will not cause too much offence. However, there are a number of comments I want to make about the report.
I have only just had the opportunity, during the debate, of seeing the Government's reply. I am sorry that the powers that be did not feel able to get a copy to me earlier and did not even warn me that a reply was coming. I think that that was not quite up to the Government's usual standard of courtesy. I have done what I can to read it during the course of the debate but it would have been easier to know that it was there and even easier if someone had sent me a copy.
There can be no question that the issue before us in this report, the future of the European Court of Justice, is central to the whole negotiation on a future constitution for the European Union. A number of noble Lords have recognised that this morning. The noble Lord, Lord Thomson of Monifieth, in a very wise speech based on his long experience, remarked on the scant attention that the convention seemed to give to this crucial question of the law underpinning the entire enterprise, namely the European Court of Justice—the motor, as it were. The plain and obvious fact is that a constitution must have a constitutional court to rule upon it. The report says that this will be the more so given the constitutional dimension of the current treaty. Indeed the Government's reply recognises that fact. The European Court of Justice is going to be the constitutional court. Its future shape is vital to our life and welfare as a nation and the report is right to pose, and in some cases to answer, some absolutely fundamental questions on which, so far, the Government have been deplorably silent.
Indeed, the report begins by confirming, almost on the opening page, that:
"In a number of respects the powers of the Union would be increased",
by the constitution. That simple statement in itself nullifies the numerous ministerial statements to the effect that the balance of power would be shifted to the member states. That is not so. The learned authority behind this report confirms that it is not so.
As to the questions raised, the report first asks whether the ECJ now becomes a supreme court, the "ultimate arbiter" of the constitution and its powers. The answer, at paragraph 31 of this report, is a clear yes.
The report asks whether the draft does not merely confirm, but extends the doctrine of the primacy of community law. We all know that the doctrine is there; the

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question is whether it is extended. Contrary to the views of the noble Lord, Lord Lester, to whom I always listen with the greatest respect because of his considerable learning, it seems to me that at paragraph 52 and in the conclusions on page 45, the matter is by no means settled. Indeed, the suggestion is that with the collapse of the former separate intergovernmental pillars there is considerable uncertainty and lack of clarity. Of course, that characterises the nature of the draft constitution for which some have praise but for which I have very little praise. Certainly, as this report wisely and correctly makes clear, this is not a matter that has been addressed. It needs to be addressed because it is of central importance.
The report asks whether the Court will ultimately decide the boundaries and divisions of all competences, which, as one witness remarks in the report, are,
"grey and not black and white".
The answer to that question, at paragraph 76, is a pretty firm yes. I want to expand on the enormous ramifications of that in a moment.
The report asks whether the jurisdiction of the Court will come to embrace all Union activities, despite exemption clauses. Again, the answer is uncertain, because the constitutional draft is uncertain, but if noble Lords look at paragraph 78 and the conclusion it is probably yes.
Finally—or finally in my list, although there are many other fascinating questions—the report asks whether the ECJ's jurisdiction under the treaty extends over common foreign and security policy despite the clear excluding articles 139 and 140 in the draft treaty. The answer—at paragraph 102 of this report, to which the noble Lord, Lord Lester, rightly referred—is that it could well be so. I want to elaborate on that also.
Those are highly significant conclusions with considerable implications for all of us. It is extraordinary that we have not been able in the debate so far to give them the airing and attention which this excellent report rightly brings to bear.
I began by mentioning the report's firm conclusion, reinforced by your Lordships' speeches this morning, that the ECJ is already in a sense the constitutional court, but that it now takes on what the report calls the definite mantle of a constitutional court. From our perspective that is important because our own proposed Supreme Court—when it comes, and when it finds a place to work—will not have constitutional jurisdiction as some continental constitutional courts do, notably the German court, which of course raised the competence issue. So that is more or less accepted. Everyone agrees that that is what is going to happen.
Turning to the next key question, that of primacy of Community law, the issue is how far the draft extends it beyond present assumed levels. Professor Denza, who gave evidence to the committee, at paragraph 39, expresses no doubt that it extends so far that it calls into question the independence of a nation state's foreign policy—that is, our foreign policy. But even if one does not go quite as far as that, it is obvious that, with the new powers assigned to the Union and the long list of shared competencies which have been identified and the proposals about supportive involvement, which the noble
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and learned Lord, Lord Scott, mentioned, Union law will be enlarged and therefore the primacy of that law will be enlarged.
As the report says at paragraphs 52 and 53, where there has been uncertainty before and primacy has been challenged in certain courts, draft Article 10(1) appears to apply generally across all Union business, including common foreign and security policy. If that is right, that is a substantial and incontrovertible new incursion into our laws and freedoms. I do not think that that should be pushed aside under phrases such as "tidying up" and so on.
The next question on my list—indeed the next question posed in the report'—concerns this central matter of divisions of competencies and who decides them. The clear answer is that the ECJ will decide them, which means, as paragraph 78 makes absolutely explicit, that this court will also decide the final extent of member states' powers as well, an outcome that the report says is "unacceptable"—that is the word used in the report. Yet this really is an issue that touches on the fundamental nature of the Union, and there it is embedded in the draft which is currently being discussed in Dublin and unchallenged by our Government—although, as the noble and learned Lord, Lord Scott, reminded us, and as the report reminds us, various national constitutional courts in other countries have challenged these matters in the past and may well challenge them again, particularly as there are so many ambiguities in this far from simple draft treaty.
It is going to be, of course, the European Court of Justice that will have to grapple with these matters—with the concept of shared competencies; with the fact that all these divisions are, as I said, far from being clarified and are, as I already said, grey rather than black and white; and the fact that, as the noble and learned Lord, Lord Scott, said, there are overlaps, which there certainly are.
As for matters of competencies being raised in national courts, I think I understood from the fascinating intervention of the noble and learned Lord, Lord Slynn of Hadley, that there is a problem that they have to go again—as paragraph 57 seems to confirm— to the European Court of Justice as the final court. So in the end nothing seems to be excluded from the ECJ. It can be claimed that the ECJ can have no jurisdiction over matters that have no EU element in them, but we go round in a circle. Who decides about that EU element? Even that is not clear. The draft constitution is riddled with new blurred areas and obscurities. It is bound to be the constitutional court that has to deal with them, which is why we are so right to be focusing on this issue.
Lord Lester of Herne Hill: My Lords, I wonder whether the noble Lord can clarify an obscurity in what he has been saying. Is he saying to the House that his party would welcome the avoidance of European legal black holes by giving the Court jurisdiction to review EU activity in the area of defence and foreign affairs and justice and home affairs, for example, in relation to the police? As he knows, that is an area

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where the Government are apparently not accepting our recommendations. It is important to know what the Official Opposition think about that in view of what has been said by the noble and learned Lord, Lord Scott.
Lord Howell of Guildford: My Lords, I was coming in some detail, if your Lordships will permit me, to the question of jurisdiction in common foreign and security policy. Perhaps the noble Lord will allow me to deal with that question in some paragraphs to which I should like to come in a moment. I am trying to go in sequence through the issues and was dealing with the broader question of competencies.
I just wanted to add to that that there is a mention in the Government's reply to the report of the principle of conferral. It is often claimed that the principle of conferral, which is clearly restated in the draft treaty, will protect us and prevent any competence drift and so on and so forth; the noble Lord, Lord Tomlinson, who is a great doughty champion of these matters, is often claiming just that. Again, one is left uneasy by this report, because it could be the Court that will be called upon to sort out just what has been conferred and what has not been conferred. These two matters, as well, are not clear and precise in the new treaty.
Perhaps I can try one other line of defence we hear from the apologists of the constitution—that is, that there is a clear ruling at Article 139 that expressly excludes the ECJ from foreign policy and defence matters; here I come on to the point that the noble Lord, Lord Lester, rightly raised. Is that right? It is not if one studies the detail of the draft and not if one studies this excellent report. It is not necessarily so, say the learned authors of this report. As we heard, aggrieved individuals will be free to challenge and test the legality of the member states' or the Union's actions in CFSP matters and the ECJ would be within its powers to rule on them, as paragraph 101 states.
Moreover, as the report also observes, the Union is increasingly involved in various peacekeeping and security activities which all member states will be obliged to support "actively and unreservedly" under Article 115 of the draft treaty. That obligation, says the report, would not be excluded by this constitution from the Court's jurisdiction—that is at paragraph 110—which means that it would be included if it is not excluded. That is the "black hole" to which the noble and learned Lord, Lord Scott, rightly referred. The question arises whether the answer to the black hole is to urge still more powers and involvement by the ECJ in our foreign policy and our defence policy, or whether it is to look much more closely at this draft constitution and realise that it takes us in the direction of that dilemma and these problems, and urge instead that we go in another direction, as I and my party would very much like to do in the interests both of this country and of Europe as a whole.
Lord Lester of Herne Hill: My Lords, I am sorry to press the point but I am still not clear. The Official Opposition have to have a position on the matter.Are
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they saying that they are content that there be a European legal black hole over matters such as Guantanamo, policing and so on, or that they would like the ambiguity to be resolved by a complete no-go area? The rule of law depends on answers to that question.
Lord Howell of Guildford: My Lords, that does not have to be resolved in the context of the constitution and the European Union at all. The issues are great and important—I do not question that for a moment—but we certainly do not need a new constitution that itself, by expanding the role of the ECJ in such areas, creates the black hole. I do not accept the premise behind the noble Lord's question that a political party must have a position on something that we would not wish to create in the first place. It is an absurd proposition.
The report is highly authoritative—we shall hear a lot more about it—and shows beyond all doubt that the draft constitution would extend the ECJ's reach into nearly every walk of life, which is of course what Lord Denning warned some years ago. When combined with the new charter of rights—it still sits firmly in paragraph 11 as an integral section of the draft, despite the Government's promises that they would resist that—it confirms the ubiquity of the Court's powers and the rule of its judges as never before under any previous treaty. That is why the constant claim of Ministers that the constitution is no different from wording in previous treaties is so misguided and utterly misleading. Moreover, the Government keep claiming that the constitution will be the same as that of a golf club. However, a golf club has no ECJ, and no right to tax or sanction force.
An expanded ECJ with much wider jurisdiction, as the report rightly foresees, certainly means more separation of the judges from our national affairs. Frankly, that is no guarantee of their complete political independence from broad political currents and trends. On the contrary, all experience confirms that the ECJ will be under strong political influence to he one-sidedly favourable to more integration by the EU and more central power. What could be more political than that?
I have trespassed too long on your Lordships' patience, although we have had some exchanges and dialogue, which I always welcome in debates. The report confirms our conviction that although a new and simplifying treaty is doubtless required to embrace the union of 25 states, the constitution does not provide it. Even if all the so-called red lines are held or claimed to have been held—those claims look extremely questionable—that will not solve the matter. The constitutional draft extends, expands and strengthens a higher legal order that we do not want, and that is unnecessary and undesirable both for ourselves and for Europe's future. We can do much better for Europe, and we will.
Lord Maclennan of Rogart: My Lords, the noble Lord claimed that the difficulties to which he devoted his speech stemmed from the inadequate drafting of the convention's draft constitutional treaty. Will he

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make a little more clear the proposed remedy that he has in mind to determine disputes between member states about the interpretation of treaty duties imposed on the institutions of the Union in spheres of common foreign and security policy and home and justice policy, if it is not to be the Court? If there is disagreement among the member states, how is it to be resolved?
Lord Howell of Guildford: My Lords, they would be resolved as they were in the past. I question the entire way in which the convention was constructed and operated to produce this unfortunate new constitution. We still had in the European Union, up to the time of the attempt to impose the constitution on it, a system whereby foreign policy and defence co-operation could be developed in pragmatic and sensible ways, with discussion between political leaders. We did not see the need to bring the rule of judges into the centre of such matters. Problems will obviously arise, but I do not see the need for the whole constitution to be drummed up to answer them. There are better, more practical and more limited ways of addressing the issues as we go along. That is what we did before; that is what we can do in future. I see no problem.
12.25 p.m.
Baroness Crawley: My Lords, I am sure that the whole House will be grateful, as the Government are, for the impressive and thorough work of the committee of the noble and learned Lord, Lord Scott of Foscote. It was unfortunate that the noble Lord, Lord Howell of Guildford, had not seen a copy of the response, and I shall speak to him outside the debate about that.
I seem to be almost alone among the speakers today in not being a lawyer, so I am conscious, in responding to the detailed and highly informed report, of my relative lack of expertise in the complex and technical legal issues that it raises. None the less, I base my speech on the Foreign Secretary's considered views from his reading of the report, as expressed in the Government's response. I must apologise if time does not allow me to cover every point made in the report or in the speeches of noble Lords. I shall write to them to follow up, and they are of course welcome to write to me or the Foreign Secretary with any outstanding points that they wish to address.
We welcome the report and the careful thought and research that has gone into its preparation. I underline the praise given to it by the noble Lord, Lord Lester. It is a sign of the detail of that work that the report itself asks for relatively little comment from the Government, and makes instead a number of observations and recommendations. The report addresses four principal issues: the primacy of Union law; the power of the Court to rule on the extent of EU competence; the jurisdiction of the Court over common foreign and security policy and police and judicial co-operation; and individual access to the Court.
The report raises the question of the Court's overall role. We welcome the committee's assertion that Article I-28(1) of the draft treaty would be unlikely to bring about any change in the Court's role. The jurist-linguist
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process, carried out after political agreement of the treaty, will provide the opportunity to ensure that different language versions are consistent with each other. Overall, the Court's jurisdiction and role will remain essentially the same under this draft treaty as under the European Community treaty, although the scope of the constitutional treaty itself will, of course, be different.
We welcome the committee's judgment that:
"It is not surprising that Part I of the Constitutional Treaty includes a statement of the primacy of Union law. The doctrine is a well established and key element of the Community's legal order as defined in the jurisprudence of the Court".
That sensible and sound conclusion stands at variance with the claims made occasionally in another place that the statement of the primacy of Union law is somehow novel and dangerous.
In addition, as the committee says, the declaration which will be attached to the article will state clearly that the conference notes that the provisions of Article I-5a—formerly Article 1–10—
"reflect existing Court of Justice case law".
The committee suggests that the existing case law is unclear. As we explain in our response, we are clear on the current meaning of primacy and that the declaration would clarify that Article I-5a was not intended to expand the meaning of primacy beyond its meaning under existing ECJ case law.
Lord Howell of Guildford: My Lords, this is a matter that has been the subject of exchanges in this Chamber before, but, regarding the doctrine of primacy of Community law, what do we make of the challenges by the German and the Danish constitutional courts? Is it the case that we cannot challenge because we do not have our own constitutional court? Or is it that all those past challenges will be overruled and subsumed under the new constitution? Can the Minister give a clear answer?
Baroness Crawley: My Lords, I am very happy to write to the noble Lord and answer his detailed question.
The report also raises the question sometimes known as "Kompetenz-Kompetenz", which many noble Lords raised this morning. It states in paragraph 76:
"The critical question is which court, the Court or national courts, will finally decide whether a matter falls within Union competence. This is not just a drafting question … but an issue touching upon the fundamental nature of the Union and its relationship with the Member States".
The answer to this question of Kompetenz-Kompetenz is and always has been the European Court of Justice. As the report says, in paragraph 77:
"A strong argument can be made that the effective functioning of the Union requires the Court to be the ultimate arbiter of the extent of the Union's competences and of the validity of its acts."
That is an argument that we make. As the report goes on to say:
"It is difficult to see how the Union could work if the courts of each Member State had jurisdiction to declare EU law invalid".

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Certain noble Lords in our debate on 11 May on the IGC, to which the noble Lord, Lord Howell of Guildford, referred, and has been raised again today, seemed to regard the Kompetenz-Kompetenz: question as a party-political hot potato. In fact, the Kompetenz-Kompetenz controversy arose in the context of the particular constitutional situation in Germany, as interpreted by the German constitutional court. The UK's position is different. The effect of treaties on UK domestic law is decided by Parliament and, in any event, as the Committee has concluded in paragraph 81, and the noble and learned Lord, Lord Scott of Foscote, has mentioned:
"In practice Kompetenz-Kompetenz issues may be no more likely to arise in future than in the past. Were a problem to arise, the Community Courts and national courts would and should seek to work together in a spirit of mutual respect and cooperation".
We fully agree with that judgment.
The report notes, in paragraph 80, that the draft Treaty does:
"reaffirm and strengthen the position of the national courts by seeking to define the division of competences and by restating, explicitly, the principle of conferral".
Indeed, it is clear from Article 1–9(2) of the draft Constitutional Treaty that competences not conferred upon the Union by the treaty remain with the member states. The committee states that does not dismiss the possibility of,
"the argument being advanced that Parliament did not intend, by the European Communities Act, the final definition of the Union's powers to be determined by the Court".
In fact, however, the role of the ECJ of ensuring observance of Community law, and thereby deciding issues of competence where applicable, was clear at the time of Parliament passing the 1972 Act.
The ECJ does not have jurisdiction over CFSP and we see no basis for changing that. CFSP is, and will remain, a distinct area of activity, subject to separate and distinct procedures. However, the Court will have the jurisdiction to rule on proceedings to review the legality of restrictive measures against natural and legal persons adopted on the basis of the CFSP chapter.
Lord Lester of Herne Hill: My Lords, I am sorry to interrupt the Minister and I do not expect her to reply now, because my question is about an important and technical issue. However, can she and her department reflect on what I am about to say? She has just recited the Government's response to our report on that issue. But it is meaningless. I have looked 10 times at Article III-209 of the draft constitution and I still do not understand what it means—it seems to be, if I may say so, gobbledegook. I also do not understand the Government's response when they say that the ECJ will have jurisdiction to review the legality of European decisions in relation to Article III-209, providing for restrictive measures against natural or legal persons.
I simply do not know where that comes from. It may be that the noble and learned Lord, Lord Scott of Foscote, will be able to explain that, but it seems not
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to be warranted by the text and I simply do not understand this area at all. It is critical to find that out. However, I do not expect an answer from the noble Baroness today.
Baroness Crawley: My Lords, I am grateful to the Noble Lord for that. I have taken a note of what he said and will ensure that he is given a detailed reply. Indeed, the noble Lord and learned, Lord Scott of Foscote, may well wish to refer to that in his summing up.
This is in addition to the Court's jurisdiction in relation to restrictive measures adopted under Article III-224 and any rights of redress that individuals have before national courts. We consider this to be an adequate solution that balances our interest in a common standard of judicial redress for individuals with preserving the distinct status of CFSP in EU law and procedure.
While the Government support greater EU action to safeguard collective security, we remain of the view that the ECJ should not be given the competence to review measures taken by member states relating to police and law enforcement operations—again raised by noble Lords today—or to the exercise by a member state of its responsibility to maintain law and order or its security. The constitution reaffirms that the maintenance of law and order and the safeguarding of its security is the responsibility of individual member states—a position that is already enshrined in the existing treaties.
As Article II-51 of the draft treaty makes clear, the provisions of the Charter of Fundamental Rights are, it states,
"addressed to the Institutions, bodies and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law".
The ECJ will examine the conformity of the action taken by these addressees with the relevant charter articles in respect of the areas for which the ECJ will have jurisdiction.
We take the views of the committee very seriously, and have given thought to its views on individual access to the Court. The committee considers that the draft treaty's provisions on this are an improvement on the existing situation, but want them to go further. It prefers the text put forward by the noble Lord, Lord Maclennan of Rogart, during the convention. The Government feel, however, that the issues of widening individual access to the EU were extensively discussed in the convention. A range of views were canvassed. In addressing the ECJ discussion circle, the then president of the ECJ noted that,
"the Court considers the current system, which is based on the principle of subsidiarity in that the national courts in particular are responsible for protecting the rights of individuals, satisfies the requirements essential for the effective judicial protection of those rights, including fundamental rights".
Lord Maclennan of Rogart: My Lords, I am grateful to the Minister for giving way. I fear that the government gloss on what happened in the convention on the discussion of the locus standi might be regarded by some of the participants as a little misleading. So far from it

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being extensively canvassed, the discussion group which was set up was established at an extremely late date with inadequate time to deliberate fully on the issue. It understandably heard the President of the ECJ speak in the sense which the Minister has voiced but was also conscious of contrary views within the European Court of Justice. Furthermore, it was conscious of the reluctance of member governments, led as spokesman in that circle by the noble Baroness, Lady Scotland, on behalf of our Government, concerning the potential cost of any additional expansion of the rules on locus standi and the effect that might have on the work of the court, bearing in mind the extremely parsimonious attitude of government to expenditure on the Court. I hope that it will not be thought that as a matter of principle the convention was convinced by the argument she has adduced.
Baroness Crawley: My Lords, the noble Lord's views are now on the record and we take note of them.
We strongly endorse this view of the fundamental role played by national courts in providing legal remedies at the local level. We have to disappoint the committee in saying that we also underline in our response the need to ensure that the workload of the ECJ is kept within manageable proportions. We consider that the increase in individuals' access to the ECJ set out in Article III-270(4) represents a balanced and wholly sufficient reflection of the convention's deliberations.
I am sorry to have to disagree with the committee on this point, but we strongly welcome the inclusion of the wording in the second sub-paragraph of Article 28(1). It provides explicit recognition of the fundamental role that national courts currently play in applying and enforcing Community law and ensuring that there is access to legal remedies at local level, as the noble Lord, Lord Inglewood, pointed out. The enforcement of Union law by national courts will, as now, be secured by the implementation of the Constitutional Treaty in domestic legislation.
In the time remaining to me, I shall deal with some questions that have arisen. The noble and learned Lord, Lord Scott, raised in his excellent intervention— as did the noble Lord, Lord Lester—the many issues around CFSP. He asked whether, if we leave this to national courts, there would not be inconsistent ruling in different countries on the same CFSP and no way of resolving such discrepancies. The Government acknowledge that there would be a potential for some inconsistency but no more than exists at present where two or more countries adopt a foreign policy. The Government also disagree with the principle of extending ECJ jurisdiction to CFSP.
The noble and learned Lord, Lord Scott, raised other issues on CFSP. We say that we cannot have an institution of the Union subscribing actions that sovereign governments wish to take together under the CFSP framework. This does not mean that CFSP actions are above the law. National courts will have jurisdiction. National courts would be most likely to be asked to consider restrictive measures against individuals.
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The noble and learned Lord, Lord Scott, asked for the Government's view of the issue of competence, which he said was outstanding. Our legal advice is that if some national courts do not consider that the ECJ has the final word, that is a breach of Union law.
He also asked whether the Government accept that, short of appeal, they have to give effect to primacy law if the domestic law is invalid. We would have to reply to that in writing.
We will also reply in writing to the noble Lord, Lord Inglewood, on his criticisms of the Charter of Fundamental Rights.
The noble and learned Lord, Lord Scott, asked the Government to think again on the ECJ being denied any CFSP jurisdiction. I must disappoint him in saying that we stand by our response on this matter.
The noble and learned Lord, Lord Slynn, and the noble Lord, Lord Inglewood, sought clarification on the relationship between the ECJ's role on the charter and the Court of Human Rights. We say in reply that the Court of Human Rights will have no role in ruling on the charter. This will be exclusively for the ECJ.
The noble Lord, Lord Lester, for whom I have the greatest respect, too, raised my junior position in replying to the debate. We checked through the usual channels that it would be acceptable for me to speak on behalf of the Foreign Office and the committee did not object.
The noble Lord, Lord Thomson of Monifieth, raised the issue of the legal and other implications of terming the treaty a "constitution". The treaty, as he knows, would not be a constitution for the United Kingdom. The European Union, as he has said, currently has treaties which set out its competences and govern its operations. These treaties already form, as he has also said, a constitutional framework for the European Union. This treaty's use of the term "constitution" only makes this explicit. It would not turn the European Union into a state any more than UNESCO is made into a state by possessing a constitution, for example.
The noble Lord, Lord Lester, asked about the implications of changes in Article III-282. That revised article ensures that the rights of the individual are safeguarded. The Court can rule on the legality of restricted measures taken under the CFSP framework against individuals; for instance, visa bans. The Court also retains the power to rule on other restrictive measures currently falling under the EC treaty taken on the basis of Article III-224 (economic and financial sanctions). Individuals also have the right of redress before national courts.
I am out of time. I will follow up the other questions in writing. In conclusion, I congratulate the committee on its fine work. Its 15 reports on the convention's text have informed and shaped the Government's negotiation strategy during the past months. While I agree with the noble Lord, Lord Inglewood, that political decisions have in the end to be made and there are occasions when we will respectfully disagree with them, we value the committee's contributions and consider them extremely carefully. I am sure that we

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would all agree with the noble Lord, Lord Thomson of Monifieth, who so eloquently put it: better European law than European war.
12.48 p.m.
Lord Scott of Foscote: My Lords, I am grateful to all noble Lords and to the Minister for the contributions they made to our interesting discussion on the report. I echo what was said by the noble Lord, Lord Thomson of Monifieth, by way of tribute to the legal advisers who assist Sub-Committee E and the Select Committee in preparing the reports. Whatever merit there is in the report is largely due to the learning and hard work put in by those legal advisers and I am grateful to the noble Lord for mentioning it today. I also want to express my particular gratitude to my noble and learned friend Lord Slynn for the remarks that he made and to the Minister for the nice things that she said about the reports that we have been producing.
The noble Baroness was presented with a number of difficult questions in the course of the debate. It is not to be expected that there could have been one-line answers to them. They are difficult and important questions arising out of the proposed draft constitutional treaty. An answer needs to be considered and account needs to be taken of all kinds of political and other points of view. They are matters for discussion over a period and one cannot expect them to be dealt with in short.
When preparing the report, it struck me from time to time that we were very fortunate, as perhaps would be expected, in having in both the sub-committee and the Select Committee members who represented both what may be the called the Euro-sceptic and the Europhile opinions. Naturally, the holders of those opinions take somewhat different views on the merits of the proposed constitution. We endeavoured to produce a report which was neutral on those issues and, so far as it could be, informative about the issues that arose and had to be considered. We also endeavoured to produce a report which was relatively neutral on the answers to those issues from a political point of view. Having listened to the speeches here this morning, I think that we may have succeeded in achieving that neutrality. I commend the report to the House.
On Question, Motion agreed to.

Pensions Bill
Brought from the Commons; read a first time, and ordered to be printed.

European Union Social Chapter
12.52 p.m.
Lord Lea of Crondall Lord Lea of Crondall rose to ask Her Majesty's Government what benefits have been gained by people at work in Britain arising from the signing of the European Union Social Chapter in 1997.
The noble Lord said: My Lords, the undoubted impact of the Social Chapter over the past 10 years, and in particular since the Labour Government signed up to it in their first major act when they were elected in May 1997, is thanks to careful groundwork—above all, by Jacques Delors when President of the Commission in the late 1980s. He recognised that there must be complementarity between economic and social policy if the aim is to create an internationally competitive and socially just society, which, in turn, means an economy able to handle rapid structural change with confidence and support across the Community. Therefore, we had the Single European Act and the Social Chapter and, later, the move to economic and monetary union, with huge implications for the creation of one Community.
I know that some of that is anathema to one kind of English mind-set. The question whether the European Union, under whatever label, was to be just a single market or not just a single market has been the counterpoint of debate over the whole of the past 50 years—indeed, for as long as most people can remember. Surely no one can now doubt that where we cross cultures and languages, with all the stresses of history and consciousness, we need co-operation between the civil society institutions—by far the most significant in this sphere of social and employment policy being the trade unions.
Therefore, although I shall concentrate today on the past 10 years, we can all recall landmark legislation over a much longer timescale, including in the social field. For example, it is well over 20 years since we accepted obligations on employers to give equal pay for work of equal value. Let us remind ourselves of something else from Europe that we now take for granted: the protection of terms and conditions of employment when businesses change hands, whether in the public or private sectors. All 28 million people in Britain at work are covered by that in one way or another.
In recent years, the TUC has had no doubts about the importance of the European dimension to the development of employment rights in Britain—certainly not since the historic address by Jacques Delors to the Trades Union Congress in Bournemouth in 1988. That commitment to co-operation in depth across Europe has been confirmed by the fact that John Monks last year agreed to be translated from General Secretary of the TUC in London to General Secretary of the European TUC in Brussels.
The European Trades Union Confederation of some 50 million members in 35 European countries is also the social partner for negotiations under the Maastricht Treaty, which we know as the Social Chapter. It so happens that I was involved in the exercise from the start, participating in a series of private meetings with Mitterrand, Kohl, Gonzalez, Andreotti, and so on, before Maastricht so that we knew we would succeed there.
Given the tradition of political discourse in Britain, it is not surprising that there was sniping against the Social Chapter right from the start—not least from the Conservative Party, and Michael Howard in particular.
It was on this issue that he threatened to resign his post as Employment Secretary in John Major's government when the possibility of the British government signing up to some form of agreement was mooted at Maastricht in 1991.
It was as if the sky would fall in—in Rupert Murdoch's case, some of us sometimes wished that it had. But I think it is fair to say that that has not been the consequence of us signing the Social Chapter when Labour came to power in 1997. Those were the days before some of our colleagues became even more in thrall to Mr Murdoch than had previously been the case. The new rights have been widely accepted and, indeed, have become popular—in Bristol, Birmingham, Belfast and Berwick-upon-Tweed. The implicit question now, indeed, is: what was all the fuss about?
The EU has been an innovator in a number of ways, which I shall enumerate, but the essential procedure is itself remarkably bold. I quote the relevant clause of Maastricht:
"Should management and labour so desire, the dialogue between them at Community level may lead to contractual relations, including agreements".
The procedure is that, if such agreements are reached, they are then submitted to the Council of Ministers. But it should be noted that in one respect the employers have a veto in the sense that they are involved with the trade unions in the negotiations, with a number of consequential advantages—not least the fact that employers can live with the result, otherwise they would not have reached the agreement.
The substantive range of agreements covers very wide and varied fields, some broad themes of which can be identified: making working life more friendly for women, for example, and the related issues of what we now call "work/life balance". These precepts have been given a massive boost by the measures on parental leave, working time and part-time workers. I shall spell some of that out.
Not all the measures affect all 28 million people at work in Britain—certainly not all at once. But I say without fear of contradiction that every worker in Britain benefits from the generally improved framework conditions affecting the quality of the contract of employment. There are now 6 million part-time workers in this country, all benefiting from the European Part-Time Work Directive, which provides that they are not to be treated any less favourably pro rata than full-time employees.
Incidentally, some 10 years ago, the European Commission started to dub these provisions as legislation for "atypical" workers. Some of us pointed out, tongue in cheek, that, the way things were going, the atypical workers would soon become more typical than the formerly typical workers, and I sense that quip becoming true.
Although the Working Time Directive was not introduced under the Social Chapter—it came earlier via a different route—it is often put into this category. I estimate that some 10 million workers are benefiting from the four weeks' paid holiday. The majority of manual workers never had such rights and many were
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not covered by collective agreements. The same is true of many millions of white-collar office and shop workers; Easy Jet must have seen it all coming.
In my local pub I have heard people say that they are now moving from the bogus self-employment status prevalent in the construction industry to proper contracts of employment precisely because they will have four weeks holiday paid upfront. Workers on short-term contracts are now receiving the pro rata rights and benefits of workers on open-ended contracts.
All in all we are talking about a huge improvement in the quality of contracts of employment. Take the right to 14 weeks' maternity leave, which most do not realise stemmed from Brussels, or the right to three months' unpaid parental leave or time off for urgent family commitments, also negotiated under the Social Chapter. All those advances assisted the changing economic structure of part-time work and work on fixed-term contracts by recognising those as mainstream employment affecting many millions of people at work in Britain.
I would like to make one further point before concluding. I am sure that the argument will be made that we should be quite capable of making such reforms in Britain on our own and that they should have nothing to do with Brussels. I hope that the answer to that is obvious. As every trade union official in the country can testify, employers will always cite international competitiveness as the reason why we cannot do that kind of thing on our own. The fact is that it is enormously beneficial in the area where we conduct most of our trade—the EU—to have progress on social measures on a concerted basis. By the way, the EU has a trade surplus with the rest of the world, unlike the US, but that is a wider story.
The next measure to be introduced is on information and consultation rights. It is extremely timely. All the surveys show that in Britain we are way behind as regards keeping workers in touch and getting feedback from them on a whole range of issues, from technology to training and pension planning. When that is phased in, to the point where all undertakings of over 50 workers are included, it will cover three-quarters of all employees, as and when those measures are triggered into effect, industry by industry. Potentially, about 21 million workers out of 28 million workers in Britain will be covered.
In itself that is a very significant further shift from a purely voluntary system of employment relations in Britain to one with a broad framework of minimum statutory rules. It will mean that employers will need to be more systematic in their explanations of their future prospects and plans.
I think it was Frankie Howerd—not Michael Howard—in one of those "Carry On" films who, not noticing that there were several Roman legions marching in his direction, asked the rhetorical question, "What have the Romans ever done for us?". In our case, the answer is quite a lot. I think it is very timely for people at work in Bristol, Birmingham, Belfast or Berwick-upon-Tweed to show their appreciation for what has been achieved so far and to resolve to keep this good work going in conjunction with a Labour government in the future.
1.3 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, I very much welcome the opportunity for this short debate. I thank my noble friend Lord Lea for initiating it.
In discussing people at work, I think that it is appropriate today to refer to the sad passing of my friend—he was a friend—Lord Murray this morning. He was an enormous figure in this House. He was quiet, but nevertheless a man of enormous intellect and integrity. He gained the respect of anyone with whom he came into contact. He was brought to the trade union movement by his profound Christian beliefs and that led him into a life of service for working people and society as a whole in Britain. I am sure that all noble Lords will agree that he will be sadly missed as a Member of this House.
The debate deals with the European Union Social Chapter, as it has become known. It was agreed in 1991, but not until a couple of months after the Labour Government were elected in 1997 did the UK sign up to it. My noble friend covered a great deal of the detail of the Social Chapter and I shall not take up more time of the House by duplicating that. It covers essential areas.
I want to deal with the benefits to the working people of Britain and to Britain itself. The Social Chapter covers not only those in work but also their families and it covers benefits to employers. It brings into the workplace a civilising environment for relationships between employees and employers. Many good employers have brought about some of the changes initiated by the Social Chapter.
As my noble friend has rightly said, quite often in negotiations I would suggest matters, such as equality or pensions, and be told, "That cannot be done because the competitors down the road will not do that; they will undercut us and we shall lose jobs". Alternatively, if the competitors down the road were prepared to do it, it could not be done because we were in competition with Europe. If the matter were laid down in law, the situation would be different. At national level, governments of the day would often say, "We cannot do that because we are in competition internationally".
Here we have a proposal that comes from an initial idea in Europe, which was about the single market, although for me it was about much more: it was about a peaceful Europe, a Europe that would be a civilised place in which to live, making life better for all members of the Community.
I regard the Social Chapter as being more than just rights for people at work. It has assisted considerably those on occupational pensions. I gather that Britain is the only country in Europe to have an anti-racial discrimination law. That is a very progressive law and it is good to see that initiated by the Social Chapter. There is the change to the burden of proof—our law was very short on that. Last year was the year of disability in Europe, identifying the special needs of people with disabilities. There is a whole range of other matters.
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One key area is the term "social partnership". Part of Britain's economic problems have arisen because too often the place of wealth generation—the workplace—has not been a place of social partnership, but a place of strife. It has been almost a battleground, with "them" and "us". The Social Chapter brought about a whole environment, including the introduction of social partnership, which the TUC always supported, as I did. I could see that those for whom I was privileged to be union officer would be better off in successful companies because successful companies can afford to be good companies. No one wants to work for a failing company. That is at the heart of what the Social Chapter is about and why there have been benefits for working people.
There is a whole range of activities and areas of protection, which are national issues, international issues and issues of a single market. I take the point made by my noble friend Lord Lea about the opposition and it will be interesting to hear what is said in response to the debate. But I think opposition is difficult to come by because we now have the benefit of hindsight. We now do not have a situation of being told, "This will not work; it will bankrupt the country and it will put companies out of business", because we now have the benefit of hindsight. Today over 70 per cent of our population is in work and that is little short of the highest number of people ever in employment. Certainly in numbers, there are more people in work today than ever before—more than 28 million people.
So I believe that it is about a step-by-step incremental approach, about having a workplace environment where we can have these discussions and where we can move forward with companies. It is also about engendering what is absolutely needed in work today in Britain, and that is looking to the future. Because of the demographic trends, because of globalisation, Britain today needs more than ever a knowledge-based society in which employees have a loyalty to the company born no longer out of the fact that they have a job for life, because that does not happen, but out of a need for training. However, it also concerns what is contained in the partnership between them as employees and the company: what compact the company will enter into to ensure that they want to stay with the company. Yes, training is a factor, but so are family-friendly policies. Pensions are another— controversial at present, I agree.
Discrimination is another area. The number of women in employment in Britain is growing. We have among the highest proportion outside the Scandinavian countries of women in work today. That will not change. My goodness, we do not want it to change; if it does, it will affect the economic viability of Britain.
In conclusion, I welcome the debate. We need to have more of this kind of debate to get a balance in the European discussions that we will, it is to be hoped, have in Britain, which, unfortunately, until now have taken place in closed arenas such as this one. I do not suggest that people are excluded from the debate, but we need to spread the discussion about Europe more widely and have a more balanced discussion then we

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have been able to achieve in the country thus far. So I welcome the debate and look forward to hearing the response from the three Front Benches.
1.10 p.m.
Lord Maclennan of Rogart: My Lords, I begin by associating myself and my noble friends with the words of the noble Baroness, Lady Dean of Thornton-le-Fylde, about the passing of Lord Murray. He was indeed a statesman of the Labour movement. During what in my lifetime must be regarded as the most tempestuous and confrontational period, he never lost a sense of the dignity of labour, which he personified. We shall all remember him with pride and sadness at his passing.
I am also enormously grateful to the noble Lord, Lord Lea. for introducing this extremely timely debate. For it takes place against a background in which the prevailing mood of the British people emphatically emphasises what are perceived to be the disadvantages of the European Union. It is so important that we do not take for granted the great, abiding benefits that have come in the daily lives of many people as a result of European Union initiatives, especially in the field of the workplace, which affect all our citizens in so many aspects. It is right to recall those in some detail, as did the noble Lord, Lord Lea; and, indeed, as I wish to do.
As this country is being asked effectively to accept the continuance of that role of the European Union or to reject it—for we should be in no doubt that the loss of the referendum by those who advocate it would be seen as, and in practical terms be, a discontinuity of damaging proportions to our relations with the European Union—we should remember that those positive benefits, and others to come, are what the great debate will be about. If we reflect on the development of social policy in Britain during the past two decades, few of us would doubt the valuable impetus for reform that has come from the European Union.
I parenthetically recall one occasion—not strictly about employment law policy—in which I had personal involvement as a junior Minister in the Labour government of the day. Despite the wishes of some Ministers, that government shied away from the banning of corporal punishment in the classroom and it was left to the European Court of Justice to declare it unlawful.
More startlingly and publicly, other noble Lords may recall the debate in 1983 when the late Alan Clark introduced the order to give effect to the European Court of Justice ruling in a case about equal pay for work of equal value. One remembers well his personal attempts to distance himself from the impact of what was being done and his distaste for the fact that it was the necessary consequence of European Union law. Who could doubt that it would never have happened under the government led by the noble Baroness, Lady Thatcher, without that requirement of law?
Europe has provided the thrust for reform, but in so many ways Britain has tended to be the laggard. The lesson, which some Ministers still have not learnt, is
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that our partners will no longer accept that Britain should be permitted to act as the drag anchor when they are agreed on how to advance. One sometimes has the impression that Ministers regard the European Union as a mortally weakened bull in the ring, maddened by every pass of the Foreign Secretary's red-lined cape under its nose. Our partners are wise enough to recognise that the grandstand before which such behaviour is conducted is back home and has been softened up by the press to accept those predictable rituals for what they are—archaic, death-dealing entertainments.
As he embarks on the current negotiations on the convention, including discussion of the Charter of Human Rights, which widely touches on issues of employment law and social policy, I do not doubt that the Prime Minister will be conscious that if Britain seeks to step off the moving travelator towards improving the condition of life of our citizens, the European Union will go on. We shall he left in the position of the late petitioner, seeking to catch up, as was the case when the Labour Government came to office in May 1997 and embarked upon the catch-up provision over the Social Chapter.
It is worth recalling what happened. It is also worth remembering how the present leader of the Official Opposition fought tooth and nail against the Social Chapter of the Maastricht treaty and how he resisted every attempt to enhance the European Union's competence in that sphere. Fortunately, he and his colleagues were firmly rejected in the opinion polls.
However, there was a catching-up operation to be done by the new government, which included: the introduction of the right to four weeks' paid holiday a year, one day off a week and a general limit of 48 hours in the working week, 13 hours in the working day and eight hours in night work—a directive that had been introduced in 1993 for the rest of the European Union. It involved, belatedly, introducing the right to three months' unpaid parental leave and to time off for urgent family reasons. It involved the requirement for undertakings or groups of undertakings with at least 1,000 employees located in the European economic area and at least one establishment employing a minimum of 100 workers in each of two member states to establish works councils. It involved the extension to Britain of the right of part-time employees not to be treated less favourably than those working on a full-time basis.
Subsequently, further measures were introduced, not as catch-up provisions but measures in whose shaping we were able to take part, having subscribed belatedly to the Social Chapter and effected the revision of the European Community Treaty to encompass it. It included the right of fixed-term workers not to be treated less favourably than comparable permanent workers; the right to four weeks' paid holiday a year; and the extension of limits on working time to the excluded sectors: transport, sea fishing, offshore industries and junior doctors.
One remembers also how under the race discrimination directive new rules were introduced for the benefit of our citizens: on the burden of proof in race discrimination

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cases and the removal of the exemption covering racial discrimination in employment in a private household. Indeed, many scandals on that front have been brought to the public's attention. It also involved the prohibition of discrimination in employment on the grounds of religion or belief or sexual orientation, giving effect to the European Employment Directive 2000/78/EC of November 2000. There remains more in the pipeline. There is the age discrimination strand of the European Employment Directive 2000/78/EC, which requires that regulations be enforced prohibiting discrimination on the grounds of age by 2 December 2006.
There are other measures, but I was advised not to weary the House by putting too much on the record. Nevertheless, they are significant matters, whose provenance it is right to remember. It is also right to remember the threat to their continuing enactment at this time, when we hear so much bilious rhetoric poured upon the work of the European Union by those who seek to return this country to the status of an offshore island dragged along in the wake of the United States. Those matters have been addressed comprehensively and with a forward-looking sense of purpose in the draft treaty on the European constitution.
The draft treaty sets out clearly the shared competence of the European Union in respect of social policy. Article 13(2) sets out those aspects dealt with in Part 3 of the constitution. It is clearly intended to subserve the definitions of the objectives of the European Union as set out in Article 3(3) of Part 1 of the constitution. It is in part a social Union. The original philosophy underlying its establishment—that the social dimension, referred to in the preamble to the Treaty of Rome, could be brought about merely by improving the mobility and freedoms in the Union—was not enough. It had to be directly assisted by legislative activity that was social in purpose. One could not rely solely on the freeing of the market to bring about those changes. No doubt the theory will continue to be argued by the ideologues and self-interested individuals who seek to present their case for protecting their own employment practices by invoking arguments of a less obviously selfish nature.
It is my judgment that that argument has now effectively been decided in the European Union. The Union has a social dimension, and the issue is not whether it should have competence in the sphere, but precisely how it should exercise those competences, and, where it is necessary or helpful to do so, to avoid distortions of the marketplace and to encourage the laggards to take action where it is required. I have no doubt that the Minister will be ready robustly to reject the suggestion, with which we lived before 1997, that the introduction of such changes in our employment law would have a disastrous effect on British competitiveness. The actuality is that Britain is among the more competitive countries in the global economy. Evidently our position has not been hampered one whit by the adoption of those important social measures in the workplace.
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I congratulate the Government on their record of innovation so far and look to them to be equally robust in providing, through the convention's draft treaty, the means to continue this benign development of our own law.
1.27 p.m.
Lord Howell of Guildford: My Lords, I share with noble Lords regret and sadness at the passing of Lord Murray of Epping Forest, who we remember as Len Murray. Obviously, my view of how to better society differed from his in some ways, but we served together on the National Economic Development Council at the beginning of the 1980s and got on extremely well. I had some very valuable discussions with him and we found common ground, although I confess that it was not all common ground. He was a very great figure and will be missed.
The Unstarred Question initiated by the noble Lord, Lord Lea, takes me down memory lane into past battles. When I saw the debate listed I tried to think why we all felt so deeply about some of the issues raised by the Social Chapter, which, as part of the social aspirations of the European Community, were there from the Treaty of Rome onwards. There is nothing very new about the original social and economic aspirations. But it must be recalled, as I am sure the noble Lord, Lord Lea, can, that in the atmosphere of the 1970s, and perhaps the 1980s, the whole country was assailed and appalled by the ways in which militant trade unionism of a certain kind—the noble Lord, Lord Lea, was utterly disassociated with that aspect—abused workers' rights. Proper rights and well-established and fought-for rights were openly and flagrantly abused, and as a result dreadful cruelties were imposed on the most vulnerable members of society and this country was brought to its knees, culminating in the winter of discontent. Those who had questions in their minds, and still may look critically at the piling on of more social rights of this, that and the other kind, as particularly instanced in the present Charter of Fundamental Rights'—which will apparently be part of this new constitution, if it happens—have a fair case to make.
Certainly, for the first half of my political life, this country was constantly embroiled in bad industrial relations in contrast to more recent times, and suffered appalling disruptions of normal daily life and work, which we could not stand. They turned us into the sick man of Europe in those days, something that we ceased to be during the 1980s and 1990s. I am not sure that many people of older generations will either forget or forgive what was done so irresponsibly and unaccountably to our country in those terrible days. We never want to see that period come back again. I look with a little unease when I hear the loud-voiced claims of those inside vital public services that their rights must be upheld even at the expense of grave and direct disruption and possible danger to human life. It is sad that that attitude persists even to this day.
That certainly explains why Social Chapter debates were so intense in the past. It explains why the present Government—the Labour Government—are fighting

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so hard at this minute to resist new legal rights on top of our own extensive armoury of worker rights, and to resist them being imposed through legal status being given to the new Charter of Fundamental Rights in the new constitution. The Government—from the Prime Minister downwards—promised that would not happen. It looks to me as though it will happen. I hope that Ministers will win the battle and stand on the ground on which they said that they would stand. Frankly, it looks to me as though that battle is already lost, unless the whole constitution is sunk. I, for one, think that outcome is now highly likely. I was bold enough to write in the International Herald Tribune a few weeks ago predicting that the rush for trying to get a draft by 17 June was like the rather wild horseman running at the fence too fast, stirrups flying, and those pushing this course of action were riding for a fall. That fall is about to come.
All this goes along with the concurrent push—in a sense this is the next phase of the Social Chapter story—to make the UK give up its exemption from the 48-hour working week directive. Of course, 48 hours sounds like a long time to work, and it is a perfectly desirable limit to have on some kinds of work. Surely—this is part of a more general theme that I shall develop—this is something to be negotiated with employers or left to individuals to choose freely if they want to work longer. In a modern, service-based economy, hours are bound to be flexible and unpredictable to fit in with the other aspects of people's lives, such as leisure, work and family duties.
In the professions, jobs must be finished, even if it means working through the weekend or through the night. Services must be delivered and deals completed overnight. The doctrine of trying to apply a central control of hours must be a huge error in modern economic conditions. The French Government have found out just how appallingly damaging their 35-hour working week has proved to be. It is no doubt one of the factors that have brought the French economy to the virtual coma and stagnation that it now faces. All those thoughts are raised by going back over the Social Chapter. I supported it, although I was not a member of that government. That was what the government were thinking about when they sought the opt-out of the Social Chapter at the time of the Maastricht Treaty.
A second matter raised in this debate was touched on by the noble Lord, Lord Lea, and the noble Baroness, Lady Dean. Many aspects of the social and labour legislation that govern work practices in this country are thoroughly admirable. I have often felt—standing aside from party politics for a time—that in some areas one party or another, including my own at times, could have pushed these things much more vigorously. I am not too sure that I include in that approval the point raised by the noble Lord, Lord Lea, about the advances in status of part-timers. A lot of part-timers may have a better deal, but I wonder how many part-timers are not part-timers at all, as a result of employers saying, "This is really too difficult for us; we would rather not get involved in these additional obligations". I do not know. It is a balance and a
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debate that will no doubt go on and never be fully resolved. In some areas, it is fair to say that my party has been a pioneer in social legislation. Why, oh why, do we so definitely need a supra-national body to impose these laws and carry forward proper working conditions for working people? What is wrong with our own legislative and social aspirations? They were powerful enough in the past. Why can we not do it on our own?
I accept, if anyone wishes to point out, that in the past employers in some areas of the United Kingdom—certainly in the 19th century and maybe the 20th century as well—behaved like idiots and did not pursue the conditions for their workers that would have been in their own interests and would have raised their productivity. I have always personally held it against the employing fraternity of Britain that we were much too slow—and may be still too slow—to see a much wider ownership of capital. I mean turning earners into owners, and bringing to everyone—but everyone—the dignity and security of ownership that is often assumed by the middle classes and the employer classes to be their privilege. That is nonsense. The dignity and security of ownership should be everyone's. I would like to have seen much more legislation encouraging that in this country from either government, but I have not seen it, and I have not seen it from Brussels either.
If Europe is such a necessary driver to social and employment legislation, why did the Labour Party for most of its existence oppose membership of the European Community? It is the only party that ever has. My party has never opposed membership. For most of my political life, the Labour Party was dead against it, vigorously against it, argued against it, and yet here we are being told that it is a necessary driver of social legislation. That is putting it much too strongly. It contributes here and there, but to put it at the centre of the drive for social improvement cannot be right—
Lord Lea of Crondall: My Lords, I am most grateful to the noble Lord for giving way. On that point, the principle of socialism in one country was a precept that began to be questioned precisely because of some of the factors that we have been discussing this morning. I do not know whether the noble Lord would agree with that, or whether he is a "socialism in one country" man himself.
Lord Howell of Guildford: My Lords, the noble Lord has touched on an even more fascinating point—how socialist was the early Labour Party? That is the question. I agree with him. These are fascinating discussions about the universality of socialism. The noble Lord will remember the very strong stand that the Labour Party took 30 or 40 years ago—20 years ago, even—against involvement in the European Union, which was widely regarded as a free market, capitalist plot. There is still time to change, and we see that attitudes can change.
The Library kindly gave me a list of the rights affecting employment that have emanated from European Union law in the past seven years. I take

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that period because it is the time-span that others mentioned and because it is roughly the period since the chapter was signed up to by the incoming Labour Government, as one of their first acts. It is a long list. It includes directives on length of holidays; parental leave; works councils; treatment of transsexuals; part-time employees; and all kinds of prohibitions on discrimination. I heartily support the prohibitions on discrimination. I get more and more in favour of prohibiting age discrimination, as time goes on. There are directives on working-time rights for air crews and on all aspects of consulting and informing employees and so on.
Those are all matters that should be attended to vigorously on their merits, but, in each case, I ask why there must be a centralising and standardising EU-wide template placed on it. Why centralise and standardise throughout the diverse European continent? That question still stands unanswered. In the network age, the aim of management seeking to promote good relations between employers and employees and create successful and highly productive firms is to decentralise and allow variety, which makes the question more relevant than in the past.
Unlike the noble Lord, Lord Lea of Crondall, who has been at the centre of such affairs for many years, I see little in the original Social Chapter, as devised, conceived and embedded in the Maastricht amendments to the Treaty of Rome, that we could not have done for ourselves and probably done better. I see a great deal that we should have avoided and that still has the potential to damage our economy, our well-being and the prosperity of our people.
At some stage, as we survey the high unemployment and economic stagnation throughout the euro-zone, the lesson will have to be learnt that the best social legislation should come from the bottom up, from the grass roots. Ideally, it should be home-grown, even if, thereafter, one seeks collaboration and intimate international co-operation to harmonise it. It must be recognised that that should be the source of the best improving social legislation, of which we always need more. In an age of increasing variety and diversity, the imposition of central norms and rigid rules and more central norms and more rigid rules through the proposed—and unnecessary—constitution will take the peoples of Europe backwards, not forward to the standard of living that should rightly be theirs.
1.43 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, it has been an interesting debate. I thank my noble friend Lord Lea of Crondall for raising such an important issue and for describing some of the history of the Social Chapter and the benefits that have flowed from it for people at work in this country.
I also endorse the views expressed by my noble friend Lady Dean of Thornton-le-Fylde about Lord Murray of Epping Forest. He was a man of very great integrity who, during his career, had to deal with many difficult political
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issues. He was respected by everyone who had to deal with him and by everyone in the House. We mourn his passing very much.
First, I must say to my noble friend Lord Lea of Crondall that I welcome the appointment of John Monks as general secretary of the ETUC. I agree that it will be of enormous benefit to measures agreed in Europe, and it is good that we have, at the heart of the debate, someone who can take account of the different traditions and practices of labour markets in Europe. Our system of voluntary agreements between trade unions and employers is different from the Scandinavian model, which is different from the German model, which is different from the French model and so on. It is encouraging to have someone at the heart of the debate with such experience.
The Government's 1997 election manifesto committed a Labour government to accept the Social Chapter. We did so at the European Council at Amsterdam in June 1997, when we ended the UK opt-out. The Social Chapter allows for directives to be agreed in a range of fields, including working conditions, information and consultation and equality between men and women. Some of those stem from agreements between the social partners in Europe and from business organisations working alongside unions. The Social Chapter does not allow for directives on pay, the right of association, the right to strike or the right to impose lock-outs. Those are rightly left to member states to determine. There will be no EU minimum wage under the Social Chapter, and there will be no directives from Brussels undermining our national laws on strikes and collective action. The new constitution retains this position.
Why did we sign up to the Social Chapter? We signed up because it was a good opportunity to implement certain standards of fair treatment to which all employees should be entitled. Social justice has always been at the heart of our approach. We have common values with other member states: tackling poverty, removing discrimination and combating social exclusion.
People at work in Britain have benefited enormously from the Social Chapter by having their employment rights extended. They now have the right to parental leave, which gives parents the right to 13 weeks' unpaid leave at the birth or adoption of a child. Because of the Social Chapter, part-time workers are entitled to the same pro-rata terms and conditions of employment as full-time workers, thereby removing any discrimination and improving the quality of part-time jobs. That benefits Britain's 6 million part-time employees, many of whom are women. It is only right that part-time workers should be on an equal footing with their full-time colleagues.
The noble Lord, Lord Howell of Guildford, said that there might be fewer part-time workers as a result. There is a careful and sensible balance to be struck. If we push the argument too far, we will reduce the number of part-time workers, who play a critical economic role. Equally, however, if we do not have good conditions, people who, often, can decide

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whether or not to work will not take advantage of part-time work. I think that the right balance has been struck.
We now have rights under the fixed-term work directive that provide equal treatment and prevent the abuse of fixed-term contracts. People should not have to put up with the uncertainty of an endless succession of fixed-term contracts. Those on fixed-term contracts should not be paid less for doing the same work. The Social Chapter makes it easier for women to tackle unfair treatment in the workplace. Once a prima facie case has been made in an employment tribunal claim, the burden of proof is placed on the defendant—usually the employer—who will need to demonstrate that sex discrimination has not occurred.
The European works council directive requires companies with at least 1,000 employees in total and at least 150 workers in each of two member states to establish structures for consulting workers on issues that affect them. In addition, the information and consultation of employees directive, to be implemented in the UK by March 2005, establishes a right to new minimum standards for workforce communication and involvement in large firms.
We do not see such measures as burdens; we see them as protecting fundamental rights. Millions of workers have gained from the improvement to their life. There is no evidence that the changes have adversely affected the economy. There has been no loss of flexibility in the labour market.
Our critics predicted that those regulations would destroy jobs. I am very happy to follow the prediction made by the noble Lord, Lord Maclennan, in robustly rejecting those fears of disaster. As my noble friend Lady Dean pointed out, we have the benefit of hindsight. We can see that the fears of those who predicted a disaster have not come to pass. Today, we have the lowest levels of unemployment for 30 years. Employment is at a record level; that is, up by more than 1.7 million since May 1997.
We have succeeded on both scores. We have proved that provided the implementation is right, there does not have to be a contradiction between job creation and greater rights at work. We have kept burdens on business to a minimum. We need to separate the administration costs—the red tape element which we want to eliminate—from the costs of the actual benefits that workers receive. The administration cost of benefits of the directives that we have implemented under the Social Chapter are extremely low. Leaving aside the Working Time Directive, the annual recurring implementation costs are less than £750,000 across the whole of the economy, but under the directive—the right to 20 days paid leave, rest breaks and a maximum working week—the annual administration costs are only £10 million. That is less than one penny per worker per week.
The main costs to employers stem, quite simply, from the benefits that are provided to employees: that is between £50 million and £83 million for parental leave;
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between £170 million and £370 million for giving fixed-time workers the same rights as full-time workers; and the cost of giving people 20 days paid annual leave., which is something that is now taken for granted and, indeed, exceeded by many employers. The total cost of all measures that we have introduced amounts to less than 1 per cent of the annual bill.
The 2002 OECD report was right. The UK is at the forefront of regulatory reform in the OECD. It noted that entrepreneurs face a better business and regulatory environment in the UK than in most other OECD countries. At the same time, I agree with my noble friend Lady Dean when she said that the Social Chapter has had a civilising force.
I agree with the noble Lord, Lord Maclennan, about the timeliness of this debate. This is a time when some people want to stoke up, feed and take advantage of a short-sighted fearful nationalism. It is important to have a rational debate about the benefits and the advantages of the EU.
However, I disagree with the noble Lord on the position of the UK in Europe. Increasingly, the UK is seen as taking a lead on many issues that are of great concern to the members of the EU, particularly as regards job creation. The other agenda for the people of this country, which is of key importance, is that alongside the improvement of social conditions we also keep our flexibility.
Lord Maclennan of Rogart: My Lords, for the avoidance of doubt, I was speaking historically of such matters as our exclusion from the euro-zone and the Schengen agreement. I was not seeking to cast doubt on the energy of the Minister or his colleagues in the area that we are talking about today.
Lord Sainsbury of Turville: My Lords, I appreciate that comment. I think that we have now a new approach to Europe, which is much more in tune with the debate within Europe today on how those factors are balanced.
The noble Lord, Lord Howell of Guildford, in a very thoughtful and cogent speech, explained why members of his party had opposed the Social Chapter in the past. However, I do not think that trips down memory lane are always the best guide to current policy making in Europe. Today, we must face the issues that concern us and get the right balance between the social dimension and flexibility in the economy. That is the balance for which we must strive. We should look at the issues on the basis of today's realities rather than battles that have been fought before.
My noble friend Lord Lea dealt well with the argument put forward by the noble Lord, Lord Howell, on why it is necessary to have a European initiative on some issues. He rightly said that employers will always cite international competitiveness as the objection to improvement. Therefore, there is a case for European action to move things forward.
We signed up to the Social Chapter to show that we wanted to be part of social Europe and to provide basic rights in the workplace without burdening business.

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The Government believe that a fair and flexible labour market is essential for job creation. It benefits both employers and workers, enabling business to adapt to changes in the market while providing opportunities for participation in the labour market for workers who might otherwise be excluded. It improves choice for all.
Employers complain of burdensome European regulation. Does anyone really think that 20 days paid leave each year is excessive; or that it is unfair for part-time workers to get the same treatment as full-time workers; or that we should not have basic parental leave provisions that enable people to reconcile work and family responsibilities; or that workers should hear on the radio that they have lost their jobs?
The Government will use the implementation of the information and consultation directive to contribute to their promotion of high performance work places and partnerships and of ongoing genuine dialogue between employers and employees and to enhancing the contribution of everyone involved in the business to the benefit of the company itself and all its staff.
Let us not forget the benefits that these laws generate, including employer benefits from protection from less scrupulous competitors, from better motivated staff, and from lower staff turnover. They need to draw from the full pool of talent available and promote diversity and choice. Exclusion from workers from any group does not make economic sense.
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That a typical worker does not fit the normal pattern of nine-to-five, five-days-a-week, working for a single employer throughout one career should be regarded as a positive and not a negative feature of the dynamic labour market. A variety of working hours provides choice that suits employees and employers. Agency work acts as a good entry point to enable people to gain work place experience and to develop skills. But that must be made an attractive option by providing adequate protection.
If we are to maintain our high level of employment, we need to have both a flexible and a fair labour market. We have the most flexible labour market in Europe. We can see the benefit of that in our employment position today. Flexibility is also now near the top of the EU agenda. The EU is looking at how labour markets can be made more flexible across Europe. Europe needs an adaptable workforce which has the skills training and mobility that are necessary to cope with change. Labour market reform must focus on those issues.
This Government have shown consistently that social justice goes hand in hand with economic progress. Our constructive adoption of measures under the Social Chapter have benefited many and have allowed us to maintain our competitive advantage. I am delighted that my noble friend Lord Lea and this debate have drawn attention to the very real benefits that have been gained by people at work in this country.
House adjourned at two minutes before two o'clock.