Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Bruce of Donington: It is always easy to make agreeable progress when the facts revealed are agreeable. I can understand the noble Lord's discomfiture on having these matters brought to his

28 Apr 1998 : Column 169

attention. That will not deflect me from my duty in these matters, to which I have devoted 25 years of my life. I owe it to the Committee to explain the position as I see it. Members of the Committee may disagree with me but I ask them to bear with me a little longer. After all, I did not spend one and a half hours yesterday discussing the completely irrelevant subject of the social chapter. The matters now before the Committee are of considerable importance and should be attended to.

Why is it that after three years the Council of Ministers--which normally operates, at ECOFIN level, in a responsible manner--has not able to allow the Court of Auditors to certify accounts in accordance with the requirements laid upon it by the treaty? If the Community's accounts and the auditor's report were furnished to member states and Governments immediately after they were submitted, the Council of Ministers would have an up-to-date picture. Instead, the following procedure is adopted in striving for financial regulation, to which I objected at the time in the European Parliament.

Before the report of the Court of Auditors is published it has to go back to the Commission for its replies. But by the time that the Commission has completed those replies another six months has elapsed, which means that when the Council receives the document it is already obsolete. At that point, the Council may be disposed to think, on the basis of the voluminous explanations provided six months later by the Commission, that some progress is being made and may, therefore, decide to "let it go".

It is almost the same as a public company in the United Kingdom withholding the circulation of its report to the public and its shareholders until after the directors have had an opportunity to comment on the auditors' report which accompanies the accounts. Everyone knows that that would be quite an impossible position. If a public company tried to hold up the publication of its accounts until after the directors have had an opportunity to comment on them, it would, however short the delay, probably lose its quote on the Stock Exchange. That is what is wrong and is what should be altered.

I am afraid that there will have to be an exercise of courage and determination by governments of member states. I expect and hope that, far from allowing this matter to slide year after year with millions of pounds being lost through fraud and irregularity, our own Government will in the current year at ECOFIN put their foot down and demand the necessary explanations and the necessary changes. I beg to move.

Lord Whitty: I believe it would be helpful if I were to intervene at this point. I share some of the concerns expressed by the noble Lord, Lord Wallace, but I thought that my noble friend was probably coming towards the end of his remarks at various points in his speech, especially when he started talking about the mechanism involved. I say that because this amendment deals with the mechanism and it was grouped with all the other amendments on QMV that we debated at

28 Apr 1998 : Column 170

length last night. I do not intend to go over that ground again--and I do not think that the Committee should--on the basis of this amendment.

In relation to fraud, as the noble Lord, Lord Wallace, pointed out, there will be a substantive debate in that connection when we discuss Amendment No. 56 later tonight. I do not suggest that the Committee has the substantive debate at this time. Therefore, unless other noble Lords persist in pursuing the debate now, I shall confine my response to saying that everything that my noble friend said about the necessity for tackling fraud is shared by the British Government. However, it is an overwhelming case for what this amendment actually deals with; namely, moving from a paralysis of unanimity required on anti-fraud measures to one of QMV. Indeed, the noble Lord made more eloquently than any of us could the case for not accepting this amendment and for accepting the change in the Treaty of Amsterdam to move to QMV for anti-fraud measures--and the quicker the better.

Lord Bruce of Donington: With the leave of the Committee, and with considerable thanks to my noble friend, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

Lord Stoddart of Swindon moved Amendment No. 26:

Page 1, line 18, at end insert ("and the Protocol annexed to the Treaty establishing the European Community on the Application of the Principles of Subsidiarity and Proportionality"").

The noble Lord said: In moving this amendment, I believe that it will be convenient for me to speak also to Amendments Nos. 26A, 30 and 54C. The Maastricht Treaty was sold to Parliament--that is, to the House of Commons and to the House of Lords--on the whole question of subsidiarity. Far from being a centralising treaty, as many of us believed that it was, we were told that it would be a decentralising treaty and that in future, far from being more centralised and gathering more power to itself, the European Community would give back to member states powers which had been taken from them and that it would be very strict about not taking any further powers.

Indeed, the subsidiarity clause says that:

    "The Community shall act within the limit of the powers conferred upon it by this treaty and of the objectives assigned to it therein".

Some of us expected that that would be taken seriously and that we would see a whole raft of measures, which had gone for decision by the Community, returned to national governments and national parliaments. However, so far as I know, no significant item has been returned to the jurisdiction of national governments and parliaments at all under the subsidiarity clause. So far as we can see, a number of inquiries carried out since then have elicited the following information: subsidiarity cannot apply to any measure to do with the single market; in other words, nothing to do with the single market can be returned. That means, in effect, any measure dealing with economic activity. Even if certain products are not sold on the Continent but either

28 Apr 1998 : Column 171

domestically or to third countries, they have to comply with single market regulations. Further, despite various promises, not one single piece of Community legislation has been withdrawn, as I have already mentioned, in accordance with the principles of subsidiarity, though there has been some vague talk about legislation not being presented because of it. But, once again, we cannot have a list of those particular measures.

The new definitions of subsidiarity make it clear that the concept cannot question the powers of the Community defined by the treaty, as interpreted by the Court of Justice. The criteria will not apply to any area where the Community has exclusive competence. These have always been defined by the Community itself; in other words, it remains true that the decision of what is and what is not subject to the concept of subsidiarity is decided at the centre--not at the periphery and not by the member states. It is decided by the centre. So decisions are to be taken from the top down rather than from the bottom up. I believe that even the Liberal Party will be concerned about that aspect. I say that because we all know--at least, I have always been taught so--that in a real democracy, such democracy grows from the grassroots upwards. It is not imposed from the top downwards, because that is not democracy at all.

The new clauses on subsidiarity concentrate on the form that Community action should take rather than its substance. The following paragraph is added, in case anyone should get any strange ideas:

    "Member States are required to take all appropriate measures to fulfil their Treaty obligations and not to prevent the attainment of the Treaty objectives".

Paragraph 2 of the Protocol on Subsidiarity and Proportionality also adds that these principles,

    "should take into account Article F(4) of the Treaty on European Union, according to which 'the Union shall provide itself with the means necessary to attain its objectives and carry through its policies'",

whatever they may be. The worries expressed about this particular article at the time of the Maastricht debates have been fully justified. It is incompatible with any serious application of the concept of subsidiarity, which we all believed in and which we all said we wanted; but in fact it is what we have not got.

The concept of proportionality is supposed to take over from subsidiarity to limit the scope of Community action and to ensure that this does not go beyond the terms of the treaty. Again, the definition is from above rather than from below. The whole system is self-referential and circular. It has not resulted in less or less detailed legislation, as we have seen by the rafts of directives and regulations that keep coming from the Community to be put into operation by national governments.

According to leading European jurists, subsidiarity is not a legal but a political term. In the last resort it is the European Council that decides on the criteria and their fulfilment.

On the subject of the extent of legislation, it is worth noting that even official European Union publications are not certain how many legal Acts are in force. It is

28 Apr 1998 : Column 172

almost inconceivable, if not laughable, that they do not know how many legal Acts are in force. If they do not know how many are in force, how can they enforce them and how can people obey them? If the European Union does not know what the law is, how on earth can everybody else know what the law is?

Since many of the directives are amendments of old ones and are not counted as separate pieces of legislation, though they clearly are that, the closest anyone has come to giving a figure is the Danish MEP, Jens-Peter Bonde, who calculated that by 1996 there were 23,027 pieces of EEC/EU legislation in force--23,027. I repeat that figure so that it should sink into people's minds. But even he admitted that that is not completely accurate because "there are no complete statistics of the EU Acts".

According to a recent reply in the House of Lords, there were 1,845 pieces of secondary legislation, mostly regulations, which do not go through national legislatures at all. In 1997, at the same time, 1,124 such pieces were repealed or expired. That left a net increase of 721. But that, of course, did not include directives. It is not clear, so far as I can see, whether decisions or Commission opinions are included in that figure, so the whole business of EEC legislation seems to be shrouded in doubt, if not secrecy.

This may be a convenient moment to raise the question of accountability. The main initiator of legislation in the EU is the Commission, as we all know, though most directives are passed by the Council of Ministers. Whether the Council of Ministers always know what they are talking about is another matter, but those who have attended Council meetings will know more about that than I do. Neither of those bodies is, strictly speaking, accountable to anybody--the Commission obviously so, while the Council of Ministers regularly flouts agreements of obeying the will of national legislatures. We, in this Parliament, cannot bind Ministers to do what we believe they should do. Of course, under QMV, it would not matter anyway as long as the decision was taken by QMV in Europe.

It is also important to remember that of all the EU legislation, only directives have to be approved by the national legislatures. Mostly, they go through this place, the House of Commons and ourselves, in the form of statutory instruments. In other words, they are not debated at all. Regulations and other pieces of legislation are, on the other hand, effective from the date of publication or the designated date directly on individuals.

It seems to me that we need some proper answers on subsidiarity: what it means, what it is going to mean in the future and when we can expect the subsidiarity proposals to be put into effect. It is about time our Government, perhaps together with other governments, reviewed all the directives, all the measures that have come from the EU and which are operated by them, to see, first, whether they are still necessary--and if they are not necessary they should be repealed--and whether the European Union is exercising powers which ought now, in the light of experience and further experience, to be exercised in the member states. Above all, we

28 Apr 1998 : Column 173

ought to know just how many laws are in operation. The European Union or the Commission should be told that that is essential information which people and governments want if they are to understand exactly what is happening within the Community itself.

So I hope that my noble friend does take this matter seriously, that he really does believe, and this Government believe, in subsidiarity, that decisions should be taken at the point nearest to the people that those decisions will affect. Increasingly those decisions are being taken away from those whom they affect. I hope that on this issue the whole House will be able to unite, including my noble friend, in getting the subsidiarity proposals in proper context and to make them work as they were meant to work and as we were assured they were going to work when we discussed the Maastricht Treaty. I beg to move.

4.30 p.m.

Lord Moynihan: All Conservative members welcomed the principle of subsidiarity in another place, and I believe noble Lords from all sides of this House would echo their support for this principle. Subsidiarity or decentralised decision making is at the very core of what should be the appropriate vision for Europe, a vision of partnership of nation states in a competitive, decentralised and efficient Europe. But Amendment No. 26A and the new Clause 54C that I have tabled are both designed to highlight the unsatisfactory nature of the wording of the new protocol on the applications of the principles of subsidiarity and proportionality contained in the treaty and, in particular, paragraph 2.

Despite the new protocol's length, far from strengthening that important principle I have reservations to the effect that it will weaken it. From these Benches our main concern is that the principle of subsidiarity will not be developed and enhanced by Protocol 7 but instead its purpose will become confused and its progress impeded.

The principle that action should be taken at European level in areas where objectives cannot be achieved by action at national level, leaving only those areas where solutions need to be found by international agreement to be taken at Community level, was advanced by the former Prime Minister, John Major, during the Maastricht negotiations. Its inclusion in the treaty was a major achievement with a capital M. Following Maastricht, the previous government sought to develop the principle of subsidiarity at subsequent European councils in order to achieve a careful balance. On the one hand, the principle ensured that action at the level of the nation state should be the rule and community action the exception, while on the other hand it was important to ensure that subsidiarity could not be used to avoid single market obligations or, indeed, to circumvent requirements for the proper management of funds from the European Community budget.

It was the initiative of the previous government that led to proposals being brought forward to entrench subsidiarity further into European decision making. It was decided to include in the Amsterdam Treaty

28 Apr 1998 : Column 174

elements of the detailed rules for the application of subsidiarity, which had been agreed at the 1992 Edinburgh European Council. Indeed in 1996 the Government's White Paper, The Partnership of Nations, which set out Britain's negotiating position before the IGC, stated,

    "The Community should only act where it has been given express competence and where action at the European level will bring clear benefits which cannot be achieved by member states acting alone".

In other words Brussels should play no part in matters best left to nation states. The Opposition believe that this principle is an essential safeguard against remote, bureaucratic and unnecessary interference. But, equally, it allows matters that require common action to be handled at European level such as migration, environmental degradation, nuclear proliferation, political instability to the east and, especially, drugs. It is fair to say that once again people throughout Europe are benefiting from an idea that stems from the Conservative Party and the United Kingdom, formed by enshrining subsidiarity as an established principle of the European Union by which to determine European decision making. The treaty provided an important safeguard against over-centralisation and represented a major success for the British vision of a decentralised and deregulated Europe.

There are critics of subsidiarity and it is important that the Committee considers their views. They ask, for example, what regulations have been changed or what direct action has been taken as a result of subsidiarity. They complain that the Maastricht Treaty made few or no provisions for making the concept of subsidiarity a reality in the European Union. However, I think it is right and proper that I point out to those critics and to the Committee that the volume of new European Union legislative proposals being put forward has fallen rapidly with only 19 proposals for principal legislation in 1996 compared with 61 six years previously in 1990. I accept that this partly reflects the completion of the legislative programme which was required for the creation of the single market, but it also reflects the change in approach to Europe symbolised by the concept of subsidiarity.

Before Maastricht it should be remembered that there was no general presumption in favour of action at national level in any of the treaties, nor have we ever claimed that Article 3b of the Maastricht Treaty was perfectly applied and implemented. But the principle is an important one, as the noble Lord, Lord Stoddart, has mentioned. Article 3b represented a step in the right direction. We look forward to further steps as a result of the Amsterdam Treaty. But we have been gravely disappointed. The former Prime Minister, John Major, said,

    "Take subsidiarity which I call national precedence. Subsidiarity enshrines in EC law the principle that the Community should not be permitted to do what member states can do themselves".

I believe this is a critical set of amendments. It focuses on subsidiarity which represents an honest attempt to assert the primacy of the nation state. In my view such a concept connects particularly favourably at this time with what most people in Europe want. An increasingly integrated Europe is out of step with the

28 Apr 1998 : Column 175

heartbeat of most of the people of Europe. A major factor in people's concerns about the European Union is the perception that Europe generates too much legislation which is intrusive, over-regulatory and unclear. People fear integration by the back door and subsidiarity is a welcome response to that fear--a measure to improve the quality of legislation and to resist integrationist developments.

Against that background I believe the Committee needs to go further and ensure that subsidiarity has indeed become, as I am sure the Government will claim, a more effective safeguard as a result of their negotiations. We certainly look to those negotiating to ensure that the Treaty of Amsterdam achieves that. The aim of reinforcing the principle of subsidiarity through a treaty protocol, particularly to ensure that the European Union makes laws only when individual member states are not better placed to do so, was chief among the previous government's objectives for Amsterdam. That is why it was such a grave disappointment that the Government's new protocol on subsidiarity failed to fulfil this objective and represented no improvement, as the noble Lord, Lord Stoddart, has pointed out. We should look at the relevant wording which is critical. Let us consider the relevant wording in the Maastricht Treaty. Article 3b states,

    "the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community".

That is clear, but we must now consider what Protocol 7 in the Amsterdam Treaty achieved, especially key paragraph (2) which states,

    "The application of the principles of subsidiarity and proportionality shall respect the general provisions and the objectives of the Treaty, particularly as regards the maintaining in full of the acquis communautaire and the institutional balance; it shall not affect the principles developed by the Court of Justice regarding the relationship between national and Community law, and it should take into account Article F(4) of the Treaty on European Union, according to which 'the Union shall provide itself with the means necessary to attain its objectives and carry through its policies'."

The noble Lord, Lord Stoddart, was right; this is greater centralisation. That paragraph shows that for the first time the principle of subsidiarity has been expressly subordinated to those very principles, pillars and institutions, that created the supra national activity in the first place.

It is clear that paragraph (2) of Protocol 7 makes the concept of subsidiarity subject to the acquis communautaire, the European Court of Justice and Article F(4). Far from being improved by Protocol 7, the principle of subsidiarity has to a great extent been neutered and emasculated. As a result I put it to the Committee that subsidiarity will not be more effective--as I hope everyone in the Committee would wish--but less. Is it not the case that rather than genuinely clarifying and tightening the application of subsidiarity, this key paragraph (2) ensures that the sum effect of the protocol is that the principle of subsidiarity will mean what the Council, Commission and Court of Justice intend it to mean at any one time?

28 Apr 1998 : Column 176

Under Maastricht the European Union unleashed a watchdog and they allowed it full licence to roam throughout the Community to restrict the extent to which the European Union sought to do those things that could be better done at national level. People may have reservations about the effectiveness of that watchdog, but at least there was such a sentinel. According to The Times the Government brought back from Amsterdam,

    "a dog's dinner of a treaty".

In the case of this protocol it is truly a dog that is muzzled and cannot whimper, let alone bark. Protocol 7 is now long and complex. Instead of stating a simple principle which everyone understood, even if it was ineffectively implemented, we now have a lengthy and unwieldy protocol full of contradictory statements. This will prove fertile ground for the European Court of Justice which will be able to interpret the protocol according to its vision of and attitude towards European Union development. Does anyone believe that such an interpretation will enhance and support the principle of subsidiarity? I believe it risks giving free rein to dominance by the institutions of the European Union and it will serve to confuse and undermine the principle.

The Government have said that the protocol is an improvement because if we believe a matter should be dealt with under subsidiarity and the Commission does not deal with it in such a way, it will be open to any nation state, including ourselves, to go to the European Court of Justice to redress the matter, whereas such a course would have been difficult under the previous provisions. But surely now the Court of Justice in effect becomes the arbiter on what is, or is not, subsidiarity and proportionality. Therefore the benefit of this will be dependent on the way in which the court chooses to interpret the confused and contradictory provisions of the protocol.

I very much hope, and indeed believe, that it will be of considerable assistance to the Committee if the Minister can respond to the legal points that arise from these comments. Will he reassure the Committee that the application of the principle of subsidiarity has not taken a backward step thanks to the complex Protocol 7, which has indeed been improved and enhanced? I also hope that when the noble Lord responds he will clarify the apparently contradictory nature of some of the paragraphs of Protocol 7.

On his return from Amsterdam, the Prime Minister said:

    "The treaty gives subsidiarity, ensuring that decisions are taken at the European level only if there is real added value in doing so--real teeth through a binding protocol".

On my interpretation, he was wrong. I believe that the protocol has in fact pulled the teeth of the principle. It seriously undermines it; and that seriously damages the national interest.

The basis of this country's approach to Europe has been one of balance--between the nation state and the European Union; between integration and intergovernmental action; between action at European level and decisions which are best left to individual

28 Apr 1998 : Column 177

nation states. From these Benches, we seek assurances from the Government that they will not act to disrupt the balance any further.

4.45 p.m.

Lord Renton: This group of amendments is very important. It could be thought by some to deal with a somewhat technical matter. But I am sure the Committee will agree, having heard the speeches of the noble Lord, Lord Stoddart, and my noble friend Lord Moynihan, that the amendments relate to a matter of fundamental importance--a complicated matter, unfortunately, but of great importance.

The European legislative process has become so difficult that at times it is almost unworkable. I mentioned earlier in this Committee stage, and perhaps I may remind noble Lords, that the principal lawyer who, a year or two ago, was responsible for supervising the negotiations on harmonisation among the 15 member states was almost in despair when he spoke at the European law conference in Rome which I attended. He said that we have to have fewer laws, and better laws. The problem is two-fold. It is partly due to the fact that there are now 15 member states with 11 different languages and at least half-a-dozen different types of legal systems. That makes harmonisation, which is an obligation under the Treaty of Rome, almost impossible and a very dilatory process--one which, frankly, is being achieved (a point that he made quite clearly) by a lot of fudging and proposed compromises which may be acceptable to some countries and not to others.

The principle of subsidiarity to some extent, though not so great an extent as we might wish, mitigates the problem. There is no doubt that our then Prime Minister, Mr. John Major, and our then Foreign Secretary, my noble friend Lord Hurd, did a great thing in persuading the representatives of the other European countries to agree to the principle of subsidiarity. There was one unfortunate result. Some members of the Commission produced a memorandum in an attempt to explain the application of subsidiarity, and did so in such a lengthy and complicated a way that the British representative on the European Court of Justice at that time (three or four years ago) described the memorandum as gobbledegook.

With that background, surely it is right that we should have some provision on the lines of Amendment No. 30, and go a little further, with a provision along the lines of Amendment No. 54C, in order that our own Parliament and people can be kept informed as to the effect of the attempt at harmonisation, modified by subsidiarity, upon our own laws, most of which have been established for years. Of course, we have to keep on legislating to keep up with modernity, but fundamentally our basic laws, and the principles that apply to them, have been with us for generations.

We must be very careful, however earnest some of us may be about wanting the European Community to succeed, to ensure that it does not merely create a new superstate which ignores the liberties, and the laws on which those liberties are founded, of the various member states. That is why this group of amendments

28 Apr 1998 : Column 178

deserves application by the Government. We are not pressing for amendments at this stage. However, I should very much like to see this group of amendments, and some other groups, passed by this place in order to give the Government and Members of the other place the opportunity to think again for the benefit of our people.

Next Section Back to Table of Contents Lords Hansard Home Page