European Union Bill

My Lords, I rise to speak to the question of whether Clause 7 should stand part principally to draw attention to a common feature of this clause and succeeding clauses, which was also a feature of Clauses 2 and 3 and to which the noble Lord, Lord Hannay, has drawn attention on a number of occasions. The question concerns the acceptability of the language in Clause 7(3): "““A Minister of the Crown may not vote in favour of or otherwise support a decision to which this subsection applies””." This is the chicken-and-egg problem, as explained by the noble Lord, Lord Hannay. It would be normal before a decision is reached in Brussels that there should be preliminary discussion, the preparation of a text and textual negotiation, and that various rounds should be gone through before there is a decision. I am in no way disagreeing with what Clause 7(3) says about the Minister being banned from voting in favour of the decision. My worry—like the worry of the noble Lord, Lord Hannay, about previous clauses—is simply about the language ““or otherwise support””. One can envisage a situation in which the United Kingdom representative might be keen to say, ““My Government would live with this””, or ““My Government would like this””, but it must be understood that under UK law, under this Bill, it would require an Act of Parliament and a referendum—or, in this case, will require an Act of Parliament. That could be construed as supporting the measure, though explaining that there were steps that had to be gone through before the UK could vote for it. I am nervous about our being unable to say anything in respect of decisions that we favour. That seems to me the effect of this language. The risk is that the negotiator would be accused of having broken the law by supporting the idea or a particular form of the draft decision. Before we come back to this issue on Report, I hope that the Government will think seriously about the point that the noble Lord, Lord Hannay, has made more than once, and which has yet to receive an adequate answer from the government Front Bench. We were assured at one stage that it would be thought about; I hope that it really will. One can envisage various forms of language—for example, Clause 7 is full of the word ““permit””. It occurs all over Clause 7(4). I wonder whether it would be a disaster to the Government, while it would certainly solve my problem, if Clause 7(3) said: "““A Minister of the Crown may not vote in favour””," or permit a decision. That would prevent his taking part or allowing the final decision; it would not prevent his taking part in the negotiation of the terms of that decision, or a prior discussion of principle about the possible decision. I put this forward as a minor technical amendment which I think the Government should think very seriously about. There are a number of other ways of taking the trick, but the argument presented by the noble Lord, Lord Hannay, deserves a proper response. I have two points that I wish to record as suggestions appertaining to Clause 7. The first is about decisions under Article 333(1). I am talking about Clause 7(4)(e), and I am also going to talk about Clause 7(4)(f) and Article 333(2). These are about qualified majority voting and, in particular, enhanced co-operation activities in which the UK is taking part. We are not allowed, other than if there has been a specific Act of Parliament, to agree that for a particular enhanced co-operation or deployment of election monitors qualified majority decisions can be taken on the detail of the deployment. Here I take my text from what was said in earlier days of this Committee about flexibility. I do not think that it is wise to tie the Government’s hands. These provisions are about specific deployments. It is perhaps an unlikely situation that someone who is in disagreement with the majority would agree that decisions should be taken by a qualified majority, but it has happened quite regularly in the European Union’s history. It has been a standard feature of German policy that rather than take on the Bundesrat on a particular issue they prefer to be voted down by a qualified majority. They do not want to stop something happening, but nor do they want to vote in favour of it, so they are happy under qualified majority to vote against and be voted down. I think that I raised this point last Monday in relation to a previous clause. The Government need to think about it. This is not about changing the normal rules for deciding issues that arise in relation to enhanced co-operation activity. This is about specific enhanced co-operations in which, as Clause 7(4)(e) and (f) say, the UK could be taking part. The decision on whether to adopt the qualified majority rules for implementing it would be taken by unanimity, so the Government could prevent a decision to move to qualified majority if they did not want it. My point is about whether the Government have to stop the show and say, ““No, there can’t be qualified majority until we have an Act of Parliament””. In relation to particular enhanced co-operation deployments and activities, that could be very constraining and undesirable for the UK’s interest. I ask the Government please to reflect a little further on that. I draw the Government’s attention to Clause 7(3)(c) regarding a paradoxical provision in the treaty that I personally find hard to understand. I am criticising not the Bill but the treaty. This bit of our Bill says that we would need an Act of Parliament before there was, "““a decision under the provision of Article 64(3) … that permits the adoption of measures which constitute a step backwards in European Union law as regards the liberalisation of the movement of capital to or from third countries””." I find it hard to tell what that is about. The language of Article 64(3) is not very revealing. I had hoped to be able to attack the Government on using such loose language as, "““which constitute a step backwards””," but unfortunately I find that they are quoting precisely from the treaty. Article 64(2) says that for capital movement—that is, "““the movement of capital to or from third countries involving direct investment … establishment, the provision of financial services or the admission of securities to capital markets””—" there shall be qualified majority. That is not the bit of the article that we are talking about at Clause 7(3)(c) of the Bill. The clause talks about Section 3 of the article, which says that notwithstanding the bit that lays down that there shall be qualified majority, "““the Council, acting in accordance with a special legislative procedure, may unanimously, and after consulting the European Parliament, adopt measures which constitute a step backwards in Union law as regards the liberalisation of the movement of capital to or from third countries””." So we have some sort of emergency measure that enables them, if they are unanimous, acting only in consultation with the European Parliament rather than by the slower procedure laid down in the previous paragraph, to take a decision—perhaps sanctions, perhaps when there is some systemic threat to the system, some sort of crisis in the markets—rather than with the European Parliament being co-equal and qualified majority by the standard procedure. If I am right—I may have misunderstood the article; I find it hard to understand—it is a bit odd that this Parliament should be imposing a requirement for a very heavy procedure, an Act of Parliament, for going back to unanimity. In a crisis where everyone agrees that something ought to be done and you have to move fast, you can only consult the Parliament; you do not have time for a full dress Session with the Parliament. My question to the Government is: are they quite sure that Clause 7(4)(c) should find a place in the Bill? Again, I admit that I may not fully have understood its import but it seems paradoxical. The Minister has spoken to us at length about transfer of powers. I understand his reluctance to see moves to qualified majority voting. However, we are talking here about a move to unanimity by exception—clearly in an emergency. The Government should reflect on that and whether this paragraph should be included in the Bill. That said, having registered these three points, I do not intend at the moment to oppose Clause 7 standing part of the Bill.