European Union Bill

I am grateful to the right hon. Gentleman for that. I wish now to discuss the significance test. New clause 9 would submit all referendum criteria, all treaty changes and all uses of article 48(6) to a significance test, but even the narrow use of the significance test, as set out in the Bill, has been the subject of a great deal of concern, so I wish to be clear about what it means for the Bill as it stands and to explain why it is needed. The significance test can be used only in very specific circumstances. Clause 4 identifies 13 instances when a treaty change transferring competence or power to the EU would attract a referendum. The significance test applies not to 13, but to two of those instances. Moreover, it can be used only when a decision under article 48(6) is being taken. It cannot be used for treaty amendments adopted under the ordinary revision procedure. Article 48(6) decisions could seek to confer on a European institution a power to require this country to act in particular way, or to impose sanctions on the UK for our failure to act in a particular way. Although that could be done only within existing areas of competence, and not within new ones, it would enable EU institutions or bodies to use those existing competences in a different way. A future proposal under article 48(6) to do either of these things would, as a matter of general principle, require a referendum to be held. Let me give the Committee a hypothetical example. There might be a proposal to allow an EU agency to impose sanctions on a national regulator or to act in a way that compelled British businesses to do something that would increase significantly the burdens on British business and harm the competitiveness of this country. That sort of decision would, in my view, be classed as significant and should attract the referendum lock, but there might equally be instances in the future—the hon. Member for Cheltenham was right—where article 48(6) might be used to give a new power to a body in an area that is not significant to this country. For example, it might require a national regulator or some other British organisation to provide an EU agency with a set of statistics annually. Let us consider, for example, the European Maritime Safety Agency. It was set up to provide member states of the Commission with technical and scientific assistance in the field of maritime safety and the prevention of pollution by ships. If, in the future, it was decided to change the treaty so that that agency could issue binding directions to national regulators and that that would be a permanent cession of authority and powers, that would be a significant power within the meaning of clause 4(1)(i) or (j). If, however, the proposal was to change the treaty to allow the agency to require national regulators to provide it with an annual digest of statistics, I do not think that that would be a significant power under the Bill. That is why we have provided for the significance test. Amendments 3 and 5 would remove the significance condition from the Bill, so it would in practice require a national referendum on such things as the provision of statistics. I think that most people in this country would accept that such technical changes should be left to the Government, under the scrutiny of Parliament, who of course would still have to authorise the minor treaty change through primary legislation—a formal Act of Parliament subject to detailed scrutiny and capable of amendment in either House. In all those instances the proposal would need to be thoroughly analysed and we have ensured that any use of the significance test would be subject to strong scrutiny and accountability. When he spoke about amendment 11, my hon. Friend the Member for Hertsmere took a different approach to parliamentary scrutiny. His amendment would require a Minister to seek parliamentary approval not to hold a referendum on the basis of the significance test, through both Houses agreeing to a motion without amendment. I have a great deal of sympathy for where my hon. Friend is coming from and I do not for one moment challenge his passionate commitment to the duty of Parliament to hold Ministers to account or his wish to see the powers of Parliament over European Union business and ministerial decisions on Europe strengthened and improved. If I felt that his amendment would secure that objective better than the provisions in the Bill, I would be with him on the detail. However, I want to explain why I do not believe that it does that. First, when a Minister makes the statement required by clause 5 on whether a proposed amendment requires a referendum, they must give reasons why the proposed change does or does not meet the significance test. Those reasons will need to refer to the criteria set out in clause 4, so their reasoning will need to be clearly set out. There is a first measure of protection already in the Bill. Secondly, the Bill ensures that every proposed treaty change, regardless of whether the significance test applies, would require the approval of Parliament through primary legislation. That would allow sufficient time for Parliament to scrutinise the use of the test to legislate for a referendum if it deemed such a provision necessary. Thirdly, there is the risk that having a separate debate on significance in the way that amendment 11 proposes could weaken Parliament's scrutiny of the primary legislation that the Bill requires. That point was made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) in an earlier intervention. In view of the dynamic of the House of Commons, it would be tempting for a Government who wanted to rush through a particular treaty change to schedule an early debate on the motion not to require a referendum and then, when the ratification Bill came forward and Members of Parliament had had the opportunity to look at the detail, perhaps consider the evidence of a Select Committee, and listen to what outside experts had to say on the matter, they would find their Whips coming up and saying, ““We've already voted on this. You personally went through our Lobby to support the proposition that a referendum was not required. How can you change your mind and try to insert the requirement for a referendum at this stage?”” The unintended consequence of amendment 11 could be to strengthen the hand of the business managers and to weaken the independence of judgment that Members would be able to exercise under the requirement for primary legislation laid out in the Bill. Amendment 11 would also weaken any prospect of a successful judicial review. Judicial review is not a panacea, but the House should see it as a significant step to give the citizen the right to challenge a Minister's decision, where that decision is irrational or unreasonable. There are two important distinctions between what we are proposing here and what we saw in the Wheeler case, to which a number of Members referred in the debate. First, the Minister has to give reasons, and give reasons by reference to the Bill. That opens up the possibility that a court might wish to consider a challenge to the reasonableness of the Minister's decision. Secondly, whereas in Mr Wheeler's case the Court was invited to judge the wording of the constitutional treaty against the wording of the treaty of Lisbon and declined to do so, in this case we are talking about a possible invitation to the Court to judge the actions and decision of a Government Minister in his Executive capacity against the statutory duties on that Minister set out in the language of the Bill. Those are important distinctions.