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I hope my noble friend will also recall that we on these Benches-those Benches, as it was-he, I and courageous Labour rebels, succeeded in amending the Political Parties and Elections Bill to prevent foreign-based billionaires spending huge sums to influence the outcome of British elections. Mr Jack Straw subsequently caved in and stopped the implementation of that measure before the recent general election. Will we now return to that very important issue? Will my noble friend give your Lordships' House an explicit assurance that cleaning up this mess will not be postponed any longer? The democratic audit reminds us that the role of the Electoral Commission is critical to this whole exercise, as, indeed, my noble friend has already said. However, the report states:

"The capacity of the Electoral Commission to enforce compliance and penalise non-compliance represents the other principal concern with the current arrangements ... Further additions to the regulatory framework will almost certainly require that the Commission is granted additional powers to investigate and to enforce compliance".

I think that the democratic audit was thinking not of that putative treasurer of the St Albans Liberal Democrat association, but rather of the much bigger, wider ways in which our democratic system can be undermined. Again, it seems we have to ensure that the sledgehammer of investigation and policing implied in this order is reserved for cracking the big nuts-the really big-scale attempts to corrupt our democratic system.

The introduction of these new disciplines and the failure to make progress on the bigger reforms threaten to discourage further individual, voluntary involvement in the democratic process, as the noble Lord, Lord Martin, said. Our political parties are wholly dependent on the commitment, enthusiasm and self-esteem of volunteers. Truly active involvement in the public life of our country, through the political parties, is an essential element in the so-called big society. The order is, of course, useful but it is a tiny answer to a much bigger problem.

Lord Bach: My Lords, I shall be fairly brief but I cannot resist commenting that it is slightly ironic that we should be debating this matter on the afternoon when staff in the Ministry of Justice-whether front-line staff or those who work in the main office-are being decimated by a Statement made in another place. The staff who produced this order and the Bill, which became the Act, are the ones who will have to suffer. It seems to me ironic that we should discuss such a good order on the very day when they are to be decimated as a result of government policy.

I thank the Minister for outlining so clearly and in such detail the statutory instrument that we are being asked to approve. We support the order, which is hardly surprising as it flows from two Acts of Parliament introduced by the previous Government. As we have heard, the civil sanctions were introduced by the Regulatory Enforcement and Sanctions Act 2008, and these regulations flow from the Political Parties and Elections Act 2009. As it happens, I played a small part in taking both those Bills through this House, so I am interested in the order which flows from those Acts.

The use of civil sanctions was not approved without controversy in this House when it considered the Bill. Their use, as opposed to criminal proceedings, is a

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flexible, sensible and proportionate step for many of the offences-for that is what they are-committed under the 2000 and 2009 Acts. As has already been said, criminal proceedings are appropriate and necessary in cases where a person has acted in a knowing or reckless way, but I hope that those cases are rare.

I say this with perhaps more feeling than some. I share the view of the noble Lord, Lord Tyler, on this and, no doubt, that of the noble Lord, Lord Martin. I was a constituency Labour Party treasurer for many years and now, for my sins, I am a chairman of a constituency Labour Party.

Noble Lords: Hear, hear!

Lord Bach: I am very grateful to the House for that acknowledgement. Both as treasurer and chairman I could be affected by the legislation that is now on the statute book.

I congratulate the Electoral Commission on the note it sent to noble Lords on this order, but I invite it to use its considerable powers-and they are considerable, as has been pointed out in the debate-with care, tolerance and humanity, bearing in mind the voluntary nature of so much political activity in this country. We support the order.

Lord McNally: My Lords, I shall reply briefly to this debate. I am sure that we are all impressed by the climb of the noble Lord, Lord Bach, from treasurer to party chairman. Disraeli called that climbing the greasy pole.

I shall also respond briefly to the noble Lord's point about the Ministry of Justice. Twelve years ago, I served on an inquiry, initiated by this House and chaired by the late Lord Slynn, into whether the ethos of public service was still alive and well in our Civil Service after the changes that had taken place in the 1980s and 1990s. Our report stated that yes, it really was alive and well-people in our public service were motivated by a sense of public duty and public service. Since returning into government five months ago, my experience has been such that I would not change a word of that report. I have been much moved and impressed by the dedication of the public servants with whom I have worked at all levels. I am well aware that percentages are meaningless for the individuals concerned. For them, the unemployment is 100 per cent. Therefore, we will try to manage the changes that we judge to be inevitable with a duty of care to those people and with as much humanity as we possibly can.

I am very familiar with this topic because more than a decade ago I was on the Benches opposite arguing about the Bill and many of the things that the noble Lord, Lord Martin, raised. I remember the noble Baroness, Lady Gould, and myself, as two former party officials, pointing out that the Bill was couched in terms that made the treasurership of a political party sound like one of those golden prizes in politics, whereas the hard truth is that it is usually given to someone who has inadvertently left the room at the wrong time. It was argued at the time that the commission would have all kinds of talents except perhaps the most valuable talent of all-the ability to run elections at the sticky end for the political parties. The most recent appointments to the commission have been an

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attempt to remedy that, because the nominees have come from the political parties. I hope that that answer meets the point that was raised.

The noble Lord, Lord Martin, and my noble friend Lord Tyler asked whether the heavy hand of sanctions would come down on inexperience or on genuine mistakes. The Electoral Commission, in putting forward how it wants to approach these matters, said:

"We recognise that many of those responsible for complying with the law on party and election finance are volunteers ... The new civil sanctions will allow us to use more constructive approaches to secure compliance in cases where the law has been broken. For example, we could issue a statutory notice designed to improve future compliance, rather than just imposing a less flexible penalty such as a fine."

As the noble Lord, Lord Bach, said, a lot of work was done on this before the general election, and this order reflects that. The thinking behind it is that the Electoral Commission was faced with using either a tap on the wrist or a criminal prosecution. The order gives it a range of measures. What is in the order, and what is in the remarks that I made when I introduced it, is the point that the Electoral Commission is in no doubt that proportionality will be expected of it. With political experience in the commission, I hope that it will be able to use these powers with due proportionality and that there will be no sledgehammer, as the noble Lord, Lord Martin, and my noble friend Lord Tyler feared.

My only other point is in response to my noble friend Lord Tyler, who asked about the funding of political parties. This is a firm commitment in the coalition agreement. It was mentioned in the Queen's Speech. I am tempted to say that the Government will move directly to the measure as soon as reform of the House of Lords has passed, but that might be seen as not the kind of commitment that the House is looking for. As my noble friend Lord Tyler said, noble Lords on all sides of the House know that in the previous Parliament we came very close to getting agreement on party funding. The coalition Government are committed to try again and we hope, as the Opposition are nodding vigorously, that if we initiate a new attempt to get agreement on party funding, we will succeed this time.

Lord Bach: I absolutely agree with everything that the noble Lord has said, but if he wants to know the reason why the talks on political funding failed-as Christopher Wren said when asked for what his monument would be-he should look around him. It is the people with whom he is in coalition who have prevented it happening.

Lord McNally: I would prefer to leave those matters to the historians. We are looking forward. The Committee on Standards in Public Life is making a report. The report to which my noble friend Lord Tyler referred is on my desk at the moment. I think that we have a really good chance of taking matters forward. As I have said before, all the major parties have at some time or other faced problems, embarrassments and difficulties because of our way of funding political parties. If we really apply ourselves early in this Parliament to the problem, we could and should find a solution.

I commend the order to the House. It will help the party activists. I finish by endorsing the comments made by my noble friend Lord Tyler and the noble

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Lords, Lord Martin and Lord Bach, who all have campaign medals as party activists. Nothing annoys me more during a general election than knocking on a door only to be told by some proud person that they never vote and that we are all in it for what we can get. We know that our democracy works because of the tens of thousands in every political party who are willing to do those hard, dull jobs such as sticking things through doors and knocking on the doors of perfect strangers to engage them in discussion. They are the people who make our democracy work. I pay tribute to them and hope that this order will make that voluntary work a little easier.

Motion agreed.

Subsidiarity Assessment: Seasonal Workers (EUC Report)

Copy of the Report

Motion to Take Note

6.17 pm

Moved By Lord Roper

Lord Roper: My Lords, I beg to move the Motion in my name on the Order Paper. With your Lordships' leave, I shall also speak at the same time to the second Motion in my name.

The report before the House is the first of its kind. This is the first occasion on which this House is being asked to exercise new powers under the Treaty of Lisbon that allow it to communicate to the European institutions a formal opinion that, on a particular topic, legislation by the European Union is unnecessary. I stress that word "unnecessary". Legislation may be desirable, but if so, the member states could enact it at national level. It is not necessary for the European Union to legislate. That principle of subsidiarity has been part of Community law for a long time and was first enunciated in the Treaty of Maastricht nearly 20 years ago. The Treaty of Amsterdam added a lengthy protocol on the application of the principle that included the words:

"The Community shall legislate only to the extent necessary".

However, it was only on 1 December last year, with the entry into force of the Treaty of Lisbon, that national parliaments were granted the right to give, in a reasoned opinion, their view that a particular proposal for European Union legislation did not comply with the principle of subsidiarity and that the Commission-the originator of the proposal-should have an obligation to review it if enough parliaments did so.

The procedure for the House to deliver a reasoned opinion was suggested by the Procedure Committee in its second report of last Session. Its recommendation, which the House agreed on 16 March, was that, when the European Union Committee comes across an EU legislative proposal that in its view does not comply with the principle of subsidiarity, it should produce a

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report with a reasoned opinion to that effect for debate by the House. That report is debated as usual on a Motion to Take Note, as we are doing tonight, but alongside that, as noble Lords will see, is a free-standing Motion inviting the House to support the reasoned opinion and to instruct that it should be forwarded to the presidents of the three European institutions. That second Motion, which we are debating along with the first, is of course amendable and divisible.

I turn now to the substance of the matter before us. Most countries rely to a greater or lesser extent on immigrants as seasonal workers, in particular for agriculture and tourism. Nationals of member states are of course allowed to enter other member states as seasonal workers, but that has nothing to do with it. The committee's report concerns a proposal from the Commission on the entry and residence as seasonal workers of persons who are not citizens of a European Union country. Such people are referred to as third-country nationals. At present, the number of third-country nationals entering each member state and the conditions under which they enter and reside are matters for the national laws of the individual member states. The numbers remain a matter for national law because the treaties so provide, but the Commission's proposal is for a directive that would unify the laws governing the conditions of entry and residence.

Because immigration is one of those matters on which the European Union and the member states share a competence, the Union can act only if, and to the extent that, the member states cannot use their national laws to govern the conditions of entry and residence of third-country nationals as seasonal workers. The view of the European Union Committee is that such matters can be regulated at member-state level and therefore should be regulated at member-state level; the Union should not be legislating in this field.

The committee's reasons for believing that are set out in the report that we are examining tonight. I do not propose to go into the details of them now, but suffice it to say that the European Commission gave four reasons for thinking that action at EU level was necessary. However, none of the four convinced our sub-committee or the full European Union Committee. I am not totally convinced that they persuaded the Government either. In their Explanatory Memorandum, the Government set out the four Commission reasons and stated that,

Therefore, it seems that they were not very impressed by the other three reasons either. I look forward to hearing from the Minister whether that is the case.

Our committee is not alone in having concerns about subsidiarity. One House of the Austrian Parliament and both Houses of the Czech and Dutch Parliaments have already issued reasoned opinions, and other Parliaments have expressed doubts without going as far as issuing a reasoned opinion. The European Scrutiny Committee of the other place also has concerns. It has not issued a formal reasoned opinion but its chairman has written to the European Union institutions to voice that committee's concerns.

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I think that I should point out one other thing about the directive. Immigration measures, of course, do not apply to the United Kingdom unless we choose to opt in. When we considered the directive on 12 October, the three-month period for opting in still had three days to run. Therefore, when your Lordships' committee agreed the report, we were not certain whether the Government would opt in. We now know that the United Kingdom has not done so. The fact, however, that an EU measure on these lines would not apply to the United Kingdom does not, in my committee's view, in any way affect our power, and perhaps our duty, to make the House's views on the subsidiarity issue known to the European institutions.

Unfortunately, the long Summer Recess has caused problems with the timing of our debate today. The treaties allow national parliaments eight weeks within which to issue a reasoned opinion. For this proposal, the eight weeks expired on 15 October, a large number of the weeks having occurred during our Recess. I make no complaint at all about the timing of this debate. The committee is very grateful to the usual channels for arranging it at such short notice. However, the committee was faced with the choice of sending a report to Brussels which would be in time but which would not be a reasoned opinion of the House, or of waiting until today's debate so that, if the House were so minded, what went to Brussels was the view of the House and not just of the committee.

The Commission has also said that it will not rely on technicalities in giving weight to views of national parliaments, so we chose the second course. That means that, if the House agrees to issue a reasoned opinion today, it will not count towards the threshold for triggering the formal Lisbon treaty procedures. That threshold could not have been met even if we could have had our debate last week. Therefore, I am confident that the political weight of the opinion of this House will not be in the least diminished.

6.26 pm

Lord Inglewood: My Lords, I do not propose to comment on the substance of the Motion. However, I would like to make a few remarks about the process. Like the noble Lord, Lord Roper, I must mention that this is an historic occasion. After all, it is the first time that the House has considered whether it wishes to pass a reasoned opinion. As the effect of a number of reasoned opinions from different member states, when added together, can change the direction of the European legislative process, albeit somewhat tentatively, it is a new form of involvement in the European system of law-making which directly involves parliaments of the member states. It is, of course, in line with the provisions that were brought in under the Lisbon treaty because this House is one of two Chambers of a bicameral parliament of a member state of the Union. Indeed, if I think back to the debate on the Lisbon treaty, there was not agreement about very much but, as I recall, this was one of the few proposals which seemed to command general support.

We are talking about the direct involvement of this House in European law-making. We are not talking about political process; we are not talking about scrutiny; we are not talking about participation in

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COSAC; and we are not even talking about domestic legislation. We are talking about something very new. It follows that this House is entirely at liberty in these circumstances to take a different view from either the Government of the day or of the other place. They too, in their own way, have their own role in European legislation. As has been explained, it seems that in this instance the Government and this House are more or less at one, both on process and on substance, but that is not necessarily always going to be the case.

As a result, there are two questions I would like to ask the Minister-I hope she has been warned about them. First, what is the Government's policy towards a draft piece of legislation which they consider to be in breach of the principle of subsidiarity, but of whose substance they approve? Secondly, I would be grateful if the Minister could confirm that, in their view, the primary principle for this House and for another place in considering these matters is to ensure that the constitutional integrity of this country's relationship with the European Union is maintained.

6.29 pm

Lord Stoddart of Swindon: My Lords, I thank the noble Lord, Lord Roper, for introducing this debate and for his Motion, which I shall support if there is a vote tonight. It is not my usual practice to congratulate the committee of which he is the chairman; I usually have a lot of criticism. I think that the last time I was able to praise it was for its masterly report on the Maastricht treaty-or it may have been on the Single European Act. However, I congratulate it on its watchfulness and on being prepared to use the one clause of the Lisbon treaty that was any good to put the point of view of this House on the directive.

The directive is long and detailed, so the noble Lord's explanation of it was very useful. It is entirely correct that he and the committee should challenge it on the grounds that it does not comply with the principles of subsidiarity. His Motion should receive support from all quarters of the House.

The admission of third-country nationals is surely a matter for nation states and not the European Union. The trouble with the Union is that it seems increasingly to want to intervene and interfere in every nook and cranny of national life. It must be confronted on this and I am glad that we are doing something about it tonight. Who comes to this country or any other country, where they come from, why they are here and what they can do is none of the EU's business; it is absolutely for national Governments and national law. I am glad to hear that the Government are not acceding to the directive, because it would place restrictions on employers and transfer to the European Union powers that it does not already have.

I hope that the Select Committee will continue to get tough. It has a wonderful opportunity to do so. In the face of the welter of initiatives and power grabs that have been coming from the European Commission and the European Parliament since the implementation of the Lisbon treaty, it will be more than ever necessary for it to be watchful. As it now recommends, it should be tough and use the provisions of the Lisbon treaty that allow national parliaments, in particular this

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Parliament, to make comments and to try to alter or have withdrawn matters that are coming from the Union.

Unfortunately, this debate does not allow me to make a protest about scrutiny override-or perhaps it does. I was concerned that the Government used the scrutiny override to accede to the European investigation order.

Lord Roper: The Government have decided to opt in to the matter, but that was not an override of the scrutiny. We have not completed scrutiny. Scrutiny of the directive is continuing. It has not been agreed yet.

Lord Stoddart of Swindon: I see. Perhaps it is to be agreed. That means that Parliament will have a say beforehand. I am very pleased to hear that.

There is plenty more that I would like to say in this debate, but it is a specific debate and I hope that we will be able to discuss the European Union and our future in it when the sovereignty Bill comes forward. We will have a lot to say but, in the mean time, I hope that the European Union Select Committee will keep up its observations, control and what have you of all the matters coming from the European Union that are not in this country's interests.

6.35 pm

Lord Williamson of Horton: My Lords, I am truly being spoilt today, as I find myself on the speakers list sandwiched-if that is the word-between the noble Lords, Lord Stoddart of Swindon and Lord Pearson of Rannoch. I am sure that the moderation and content of my remarks will satisfy both of them, which is not always the case.

I intervene briefly to support the European Union Committee's first report of this Session, which assesses whether the proposal for an EU directive on conditions of entry and residence of nationals from third countries for seasonal employment reasons does or does not-and the committee says that it does not-comply with the principle of subsidiarity.

First, because this Parliament, under Article 5(3) of the Treaty on European Union and Article 6 of the protocol on the application of the principles of subsidiarity and proportionality, can submit a reasoned opinion on Commission proposals to the European Parliament, the Council and the Commission itself, it is important that we should use this provision and that it should not go by default. I am glad that the EU Committee has examined this specific proposal and made this recommendation.

Unfortunately, the word "subsidiarity", which sounds very technical, does not ring many bells in the United Kingdom. None the less, it is important, because it is a serious attempt to define the boundary between potential action at EU level and action by member states under their national arrangements, as in matters of shared competence the EU can act only if and in so far as the objectives of the proposal cannot be sufficiently achieved by the member states. Just as in this House we have a duty to scrutinise the activities of our Government and to ensure that they do not go beyond what is necessary, so we need also to present our views on the respect of the principle of subsidiarity and proposals being put to the EU institutions.

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Although the UK opted out of the immigration regime in the original so-called Schengen provisions and we decided to operate our national border controls, it is remarkable that, in recent years, perhaps the number one concern of citizens has been the question of immigration and our operation of our border controls. None the less, I believe that the entry to and residence in the UK of third-country nationals as seasonal workers can be controlled by market forces and our national arrangements. That is what the EU Committee has said. Otherwise, we would have to follow the EU directive, if the Government had decided to opt in, and I do not think that we should do that.

Finally-this is a last word-those of us who work in this House know that we have been bombarded in recent years by a large volume of national, not EU, legislation, both as Bills and, more particularly, as secondary legislation. In the period from 1 August 2008 to October 2009, for example, 2,366 statutory instruments were made, of which only 94 directly implemented EU law. None the less, if we can avoid a proposal that, in the view of our EU Committee, does not respect subsidiarity, that is good.

6.39 pm

Lord Pearson of Rannoch: My Lords, like my noble friend Lord Stoddart, I never thought that I would have the pleasure of supporting a report from your Lordships' European Union Select Committee; but I do so now, and will be happy to support the Motion in the name of the noble Lord, Lord Roper. I hope they will not be too embarrassed if I go further and congratulate the noble Lord, Lord Hannay-who I am sorry to see is not in his place to hear this-and his Home Affairs Sub-Committee on the brevity and clarity with which they have put their case.

This report is perhaps a cause for even greater celebration. As far as I am aware, if your Lordships agree with the Motion of the noble Lord, Lord Roper, this evening, it will be the first time that your Lordships' House has voted to prevent a power being passed from this Parliament to Brussels since 30 January 1997, when the House supported a Bill in my name to withdraw from the European Union altogether. So, on the face of it, this report and the vote tonight should be good news for Eurosceptics and the country. I hope it will not detract from what I have said if I ask the noble Lord, Lord Roper, and indeed the Government-I am not quite sure who will be replying-the question: a quoi bon? What chance have we got of actually keeping control of the admission of third country nationals as seasonal workers? What happens next?

As I understand it, and as the noble Lord, Lord Roper, mentioned, I think we are supported in our opposition to this directive by only five other houses of parliament in the EU: the Austrian lower house and both houses in Holland and the Czech Republic. I gather that unhappy noises have also been made in other houses of parliament, including the House of Commons, which has not had the time, or perhaps the inclination, to debate the matter. I hope I am being pessimistic; and so I would ask the noble Lord, Lord Roper, and/or the noble Baroness, Lady Neville-Jones, who is to reply for the Government, to tell us how they

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see the directive proceeding from now on. For instance, can the Minister remind us how many member states' houses of parliament are required to object to this directive before the Commission has to take action? Not much action though-as I understand it, it merely may have to reconsider it and then decide to proceed on its merry way anyway.

Noble Lords will appreciate that I ask this question against the background of Brussels and the Luxembourg Court's long history of dishonestly interpreting the treaties to allow the EU to take ever more power at the expense of the member states. Perhaps the best example of this has been their use of Article 308 in the original treaty of Rome, which became Article 352. This allowed Brussels to exercise powers that the treaties did not grant, but only,

So, it was designed to facilitate minor tariff adjustments and so on in the original Common Market. Yet over the years this clause has been used: to grant food aid to developing countries; to promote urban renewable in Northern Ireland; to provide assistance to economic reform in Mongolia; to co-ordinate our social security systems; to establish the EU's Agency for Fundamental Rights; to fund a £235 million propaganda campaign; to allow Brussels to get involved in the prevention and aftercare of terrorism and in the control of civil emergencies; and, for good measure, to regulate glucose and lactose. I will say no more now, but students of the EU's ability to abuse the treaties for its power-seeking purpose will find a fuller account of it in your Lordships' Hansard for 18 June 2008, cols. 1073-76.

The situation after Lisbon becomes worse, because Article 308,-now Article 352 in the Lisbon treaty-now replaces,


which gives new space for the judicial activism of the Luxembourg Court, and no doubt it will continue to use it.

Before I sit down, in the same vein, could I ask what has happened to the finding in the committee's 14th report in the 2008-09 Session, The future of EU financial regulation and supervision? That finding was that EU supervision of our financial affairs was not legal under the treaties. It required a treaty change, yet such supervision is proceeding apace and, as far as I am aware, the treaty has not been changed. I ask the Government whether the committee was wrong or whether its views are simply being ignored by Brussels as usual.

In conclusion, I fear the question becomes this: even if the committee is right that subsidiarity should legally apply in this case-and the committee clearly is right-what chance is there that Brussels will go along with its own law? I look forward to the Government's reply.

6.46 pm

Lord Richard: My Lords, this is the first time in 20 years that I have spoken in the gap. First, I apologise to the House for that because on the whole I think that debates should proceed in the normal and acceptable way. In my defence, I took the view that this would not be a debate that required a list, but I was wrong.

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This is a very strange debate in many ways. I have views on the EU, as most Members of this House will know, and I find myself agreeing with the noble Lord, Lord Stoddart, and part-agreeing with the noble Lord, Lord Pearson of Rannoch. I have to say to him that I find it very strange that he sits behind me. There is a little prickling in the middle of my back every time I know he is there.

Lord Pearson of Rannoch: My Lords, I am afraid the Conservatives had me for 12 years, and I understand that the Bishops are not keen to have me either.

Lord Richard: The place the noble Lord should be is obviously on the other side of the House.

What is to happen in this instance is very simple. When the issue came before the sub-committee, various members of the sub-committee looked at it and thought that subsidiarity applied and that it was incumbent upon the committee to say so. We could have said nothing about it, fairly reliant upon the fact that the Government were going to opt out, in which case, as far as Britain was concerned, it would be pretty academic. On the other hand, we took the view that since this was the first time that this procedure would ever be used, it was important, on an issue of principle, that we should make our views known and that therefore this novel procedure should be explored.

On the whole, the procedure-and it is process not substance that I really want to talk about-has worked. The sub-committee produced its report, it went to the main Select Committee, which approved the report, and it has now come to the House. If the House takes the view that it is invited to take, there will be a reasoned opinion of this House that will go back to the Community institutions. It is an admirable procedure. The only trouble was that we were out of time. It was no one's fault, but it meant that when the committees were looking at this, there were about three days before the time limit ran out. The noble Lord, Lord Roper, explained at the outset that there was a choice. Either he could write a letter to the institutions in Brussels or we could get a reasoned opinion of the House and send that to Brussels. That is the view that he took, and I support it.

I again apologise for having taken up the time of the House in speaking in the gap.

6.49 pm

Lord Hunt of Kings Heath: My Lords, this is a most important debate and I am indebted to the European Union Committee and to its Home Affairs Sub-Committee for the work that they have undertaken. I say to my noble friend Lord Richard that I am delighted that the views of the committee have been made known to us in this way. As the noble Lord, Lord Roper, has indicated, this is the first occasion on which the House is being asked to exercise new powers under the treaty of Lisbon. But I would also suggest that it is one of the first occasions on which the new Government's policy towards the EU has been put to the test.

I disagree fundamentally with the noble Lords, Lord Stoddart and Lord Pearson, when it comes to matters European, but they are right to put the approach of Her Majesty's Government under the spotlight.

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The matter arises from Europe's need for third-country seasonal workers. The Commission believes that there is a need for low-skilled and low-qualified workers, which will continue expanding; that there is a more permanent need for unskilled labour within the EU; and that these gaps are unlikely to be filled with EU-national workers because, as we well know, such seasonal work is often unattractive.

We are also informed in all the useful documentation that we have been able to see that the Commission sees the proposals before us as part of the EU's effort to develop a comprehensive immigration policy. It cites in its defence a number of political mandates to justify such action and sees its proposals as contributing to implementation of the EU 2020 strategy and to what it describes as effective management of migration flows for seasonal temporary migration.

As the noble Lord, Lord Roper, has already suggested, because immigration is a matter where the Union and the member states share competence, the Union can act only if and to the extent that the member states cannot use their national laws to govern the conditions of entry and residence of third-country nationals as seasonal workers. As the noble Lord said, the committee's reasons for believing this are set out in the report. They do not need repeating. In my view, they are substantive and persuasive.

It is significant that a number of other national parliamentary legislatures have also expressed concerns. Substance to the Select Committee's reasoning is also given by the House of Commons European Scrutiny Committee, first, at its meeting on 15 September where it concluded that, while there is an appropriate legal basis for the draft directive, the committee was less certain that the measure respects the principle of subsidiarity. At its subsequent meeting on 12 October, the House of Commons committee undertook what can only be described as a very careful analysis of the draft directive and the Commission's rationale for its actions. It concluded that there were continuing reasons to doubt whether the draft directive complied with the principle of subsidiarity.

It is rather surprising that the Minister for Immigration, Mr Damian Green, did not appear to share that concern. He told the committee that he believed that the draft directive is consistent with the principle. In his argument to the committee, he said that he believed that it complies with subsidiarity on the basis that decisions taken by one member state on the rights of third-country nationals could affect other member states and distort migratory flows. He also suggested to the committee that labour mobility within the EU, especially from new to old member states, may cause or aggravate a shortfall in seasonal labour in the source countries, which needs to be met from outside the EU, and that this inter-relationship argues for EU-level measures to manage the admission of seasonal workers from outside the EU.

I found that a rather surprising analysis by the Minister. As the Conservative Party manifesto seemed to suggest that it would be rigorous in its efforts to prevent,

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one would have thought that one might have had a rather more convincing argument from Mr Green as to the approach that the Government took. It would be helpful to the House if the noble Baroness could define what the Government consider subsidiarity to be. I thought that the questions asked by the noble Lord, Lord Inglewood, were extremely important in that context. I agree also with the noble Lord, Lord Roper, that simply because Her Majesty's Government have decided not to opt into the directive, it does not detract from raising the serious question about their judgment and response to the subsidiarity question.

I end by coming back to the point made by my noble friend Lord Richard, who raised the issue of timing. As the noble Lord, Lord Roper, has explained, the long Summer Recess has caused problems. The timing also exercised the Commons European Scrutiny Committee. In its letter of 13 October to the president of the European Parliament, the chairman of the committee, Mr Cash, pointed out that the parliamentary timetable did not permit the Commons to issue a reasoned opinion by 15 October, when the eight-week deadline expired. I know that the committee was aware that the former Commissioner for Institutional Relations and Communication Strategy had already said that the Commission would listen to the views of national parliaments even if there were an insufficient number of reasoned opinions to require the Commission formally to review its draft legislation. However, ideally one should not have to rely on the good will of the Commission in that respect.

I should like to put this point to the noble Lord, Lord Roper. In view of the timetabling difficulty and given that this might arise again in the future, particularly in the circumstances of the Summer Recess, will he consider, in conjunction with the Commons European Scrutiny Committee and the Leaders' Group in this House which is looking at procedures, whether there is a way of avoiding this problem in the future? Overall, however, from the Opposition Benches, I have no hesitation in supporting the Motions tabled by the noble Lord, Lord Roper.

6.56 pm

The Minister of State, Home Office (Baroness Neville-Jones): My Lords, along with the Benches opposite, I am grateful to the committee for its report and for the unusual degree of unanimity and agreement that has arisen in consideration of a matter concerning the European Union. As the noble Lord, Lord Roper, said, this is a first and our debate is about an important issue-the test of compliance of the draft directive with the principle of subsidiarity. Indeed, as he pointed out, the fact that something is desirable is not enough to meet the principle of subsidiarity; it has to be necessary.

I start by responding to the important points raised by my noble friend Lord Inglewood. The Government are a strong supporter of the Lisbon treaty arrangements for national parliaments to be given a direct say in the application of what we regard as the crucial principle of subsidiarity in EU lawmaking. That is defined in the treaty and the Government respect the right, irrespective of their own view, of the Houses to take

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their view on the European institutions to ensure that the Commission's application of the principle remains within the bounds of the treaty. We believe that this constitutes an important step towards the democratic legitimacy of the European Union.

I was asked about the relationship between subsidiarity and the policy objective. When considering any directive, the Government's policy is to assess as a matter of course the proposal on the grounds of subsidiarity irrespective of its substance. The Government carry out the subsidiarity test by checking whether, where the treaty allows for action by both the Union and member states, the objectives of the proposed action cannot be sufficiently achieved by member states by reason of the scale or the effects of the proposed action and so could be better achieved by the Union. That is the high test. Should the Government conclude that the action cannot be better achieved at the Union level, they would submit their views to the Commission. I hope that that makes it implicitly if not absolutely explicitly clear that the Government's view is that subsidiarity takes precedence.

Before moving on to the specific issues raised by the committee, I should like to set out the Commission's position on this directive. As a number of speakers have noticed, the Government have decided that the UK will not opt in to the measure. The UK's immigration system does not currently provide for the admission of seasonal workers and our view is that our seasonal labour needs can be met from an expanded EU labour force. The seasonal agricultural workers scheme was closed to third-country nationals on 1 January 2007 by the previous Government and within the EU it is now open only to nationals of Bulgaria and Romania. We have no reason to suppose that that supply of labour will be inadequate. The Government have proposed setting a limit on the future volume of non-EU migrants allowed to enter the UK and are carrying out consultations on the options for implementing this policy.

Against that background, it would not have made sense for the UK to participate in an instrument that provides for common rules for the admission of third-country nationals for seasonal work, nor would it be sensible to lock ourselves into a directive that limits our freedom to decide what kind of controls we might want to apply to seasonal workers in the future.

The subsidiarity test is not always as straightforward as it seems, as it depends on an assessment of whether the proposal would have the results that it sets out to achieve. It is clear that in given instances it is possible for lawyers to disagree on these matters and for legal advice to be different, as implicitly noted in the contribution of the noble Lord, Lord Richard. The Commission's view is that the need for seasonal workers is a "common occurrence" in most member states and that the terms on which one member state admitted such workers could distort migratory flows; it suggests that decisions by one member state could affect other member states. The committee argues that the need for seasonal workers may nevertheless differ between member states and that the treaty on the functioning of the EU recognises that volumes of admissions are for determination by each member state.

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The Commission argues that the action is needed to reduce overstaying and illegal entry in an area without internal borders. The committee rejects this view on the basis that it does not see why having common rules would reduce this risk. The Commission's proposals include provisions that would facilitate repeated re-entry as a seasonal worker on the basis that those admitted as seasonal workers would be less likely to overstay if they had some certainty that they would be able to re-enter after they left.

The Commission's third argument is that exploitative working conditions need to be addressed by a,

The committee has objected that national measures may be equally binding and at least as effective. The test in this case, therefore, depends on whether we think that the intended result is better achieved through collective action.

Finally, the Commission suggests that the measure is crucial for effective co-operation with third countries. The Government share the committee's assessment that this is unpersuasive given that nothing in the measures provides leverage for negotiation of wider agreements with specific third countries.

The Government take the view that the case for compliance with the subsidiarity principle is arguable, as noble Lords on the Benches opposite have noted, in respect of migratory flows and the risk of overstaying. However, the fact that there is a divergence between the applicability of compliance with this directive and the principle of subsidiarity does not detract from our belief that the view of the House on the European institutions and their duties should take precedence and should not be trumped by the Government's view on compliance with given articles. The earnest of our view is that we give precedence to the committee's view despite our differing opinion on the application of subsidiarity in relation to a couple of the clauses.

Lord Hunt of Kings Heath: I am sure that the House will be gratified to learn that the Government are not going to disagree with the Motion being put forward tonight, which is the implication of what the noble Baroness has said. Yet the fact is that the Minister clearly said, at least to the Commons scrutiny committee, that he believes the draft directive complies with subsidiarity. If that is the case on that particular aspect, to what extent does that create a precedent in relation to the Government's approach to the EU's clear wish to develop a comprehensive immigration policy? For instance, if the Government are unwilling to argue with the Commission on subsidiarity in relation to this order, does it go wider than that?

Baroness Neville-Jones: The noble Lord grossly overstates what I have just said, which was that in these two instances there was an arguable case. Every single proposition put forward by the Commission will be treated on its merits by the Government and, as I have indicated, it will certainly be subjected first and foremost to the test of subsidiarity. The general position of the Government is well known; we regard immigration as something which is in the purview of the United Kingdom.

Lord Hunt of Kings Heath: I am sorry to interrupt the noble Baroness again, but when she says it is arguable that that is the Government's case, that is not

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what the Minister in the other place told the scrutiny committee. I have already read out what he said. He does not say it is arguable, but that he is satisfied that the draft directive complies with subsidiarity. I would have thought that that sets a precedent for other areas of immigration in which the Commission may wish to involve itself in future.

Baroness Neville-Jones: I am saying that we will treat each of these proposals as put forward by the Commission on its merits. I hope that it will be discouraged from putting forward further proposals by the reaction from member states. It does not follow that, because we have taken a view on a couple of these articles, we will take a wider view of the rights of the European Commission or the competence of the European Union in immigration policy.

I turn for a moment to the questions raised by the noble Lord, Lord Pearson of Rannoch. He asked what was likely to happen next. As a student of these matters, he will know quite as well as I do that if one-third of national parliaments object on subsidiarity grounds, the proposal is sent back to the Commission. That is the yellow card; if a majority of parliaments oppose a Commission proposal, it gets the orange card. I do not know how many cards there are on the table, but we certainly regard this process of showing the European Commission what position the national parliaments take as being an important part of the process-and well said that this is a direct intervention in the legislation process of the European Union.

The noble Lord's other point was about financial supervision and the progress of what the Commission is doing. I am afraid I will have to write to him on that, as it is not something on which I have been briefed. I think it is something in the purview of the Treasury, but I undertake to write to him.

Lord Pearson of Rannoch: I think the noble Baroness rightly said that one-third of national parliaments would be necessary before the Commission had to think again. As I understand it, we have only five houses of parliament, so there is the difficulty of our being a long way from what is required to make the Commission think again, is there not? Riding over and above that, there is surely the question of the law. Assuming that the committee is right-I think that your Lordships are taking that view this evening-my question was: what hope is there that the law will prevail, or will the juggernaut carry on regardless, as usual?

Baroness Neville-Jones: I would hope, given that this is the first test for the European Commission, that it would take note of the reservations being expressed in a number of parliaments of the European Union, irrespective of whether there are enough for it to be obliged to take notice. There needs to be further discussion in the European Union. If we have one of those situations in which the formal requirement has not been fulfilled but nevertheless it is clear that there are reservations, this is a moment when the Commission should be given pause to think again about the direction in which it is trying to go. I cannot anticipate what the result of that debate might be, but I hope that there would be one.

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I can say that, irrespective of what that discussion would lead to, the United Kingdom will not be bound by this directive. We have not opted in and we have no plans to consider so doing after adoption. In the rather unlikely event that there was some consideration of that possibility at a future date, there is no doubt that the Government would take full account of the committee's view on subsidiarity at that time.

Lord Stoddart of Swindon: Will the Minister clear up one point? As I understand it, the Government are not going to oppose the Motion of the noble Lord, Lord Roper, today. Undoubtedly, the Motion will therefore be passed. But suppose that the Government did not agree with the amendment of the noble Lord, Lord Roper-then what? The Lisbon treaty refers to national parliaments, not national governments. Can we have an assurance that if the Government disagreed with a Motion coming from the European Select Committee, Parliament would be allowed to make the decision unwhipped?

Baroness Neville-Jones: My Lords, clearly I did not make myself clear enough; I hoped that I had dealt with this point in response to the noble Lord, Lord Inglewood. It follows from the Government's position on the sovereignty of Parliament that Parliament's view on subsidiarity would trump-would come ahead of-the view that we would take on substance. I hope that that is clear.

7.12 pm

Lord Roper: My Lords, I should perhaps begin in response to something that was said by the noble Lord, Lord Pearson of Rannoch. The noble Lord, Lord Hannay, the chairman of the sub-committee who was responsible for this report, was unavoidably detained and unable to be here today, but he asked me to let the House know how sorry he was that he could not be here. I am glad that the noble Lord, Lord Pearson, reminded me.

This has been an historic occasion in more ways than one. Not only have we had people who have gained medal honours on one side of the European debate being in favour of this matter and a former Member of the European Parliament, a former Secretary-General of the Commission and a former commissioner all supporting the position, but people who have gained medal honours for taking different positions on Europe over the years have also shown their support for the work of this committee. The committee must therefore be very pleased. I will report that back, and those of my colleagues who are here will have noted it. We appreciate that the work that we have done has been taken so seriously.

I shall comment on one or two of the things that have been said. On the question of the 14th report on the future of European Union financial supervision, I should let the noble Lord, Lord Pearson of Rannoch, know that our Sub-Committee A is doing further work on this subject and will be producing a report to the House before long. The matter is under active attention.

On the question that was raised by the noble Lord, Lord Stoddart of Swindon, congratulating us on our watchfulness, perhaps I can let him into a secret: another of our sub-committees adopted a reasoned

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opinion this morning that it will be sending to the full committee. This is not a one-off matter; it something that your Lordships will hear about again, although not necessarily too often. My estimate is that there will probably be six or eight occasions in a year, but we will see. It is interesting that we have already had so many.

One of the reasons I am tackling the matter in this way is to ensure that a formal reasoned opinion will be sent by the Clerk of the Parliaments to the various authorities. It is important to get this on the record, let other Parliaments know what we have done in this regard and offer them encouragement, even though it is now too late to act in terms of the threshold.

The noble Lord, Lord Hunt of Kings Heath, referred to timing. This is a particularly difficult case. The original Council proposal is dated 15 July. The Government's Explanatory Memorandum is dated 28 July-the very beginning of our Summer Recess. We could not have had a more difficult case as regards timing. However, we considered this matter in this House when we considered the original procedure. The Procedure Committee report, to which I referred in my opening remarks, said that new procedure was,

In my view it is too early to say whether this is the case but that undertaking is obviously very important.

I have not seen the letter that Mr Green sent to the Commons subsidiarity committee; I have seen only the views on subsidiarity in the Explanatory Memorandum which was sent to both Houses, where the Government seem to hang mostly on the first of the four. We appreciate that different legal interpretations are possible. As the Minister knows, we disagree with the legal interpretation of the Commission's case and consider that the matter should be queried. However, we are extremely grateful to the Government for giving their opinion but then allowing the House to come to its own conclusion. This is a case of Parliament having an opportunity to act. As I said at the beginning, this is an historic occasion. I am very pleased that we have had this debate and that consensus has been reached on all sides of the House.

Motion agreed.

Subsidiarity Assessment: Seasonal Workers (Reasoned Opinion)

Copy of the Report

Motion to Resolve

7.17 pm

Moved By Lord Roper

Motion agreed.

House adjourned at 7.17 pm.

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