European Union Bill

My Lords, I thank my noble and learned friend Lord Mackay of Clashfern for moving the amendment in the name of the noble Lord, Lord Kerr of Kinlochard. Indeed, I thank all noble Lords who have taken part in an important debate, which has flagged up the importance of the basis on which community law has effect in the legal systems of the United Kingdom. My noble and learned friend said that there was nothing in principle that divides us on this matter. As the noble Lord, Lord Triesman, said, it is a technical matter that to some extent relates to statutory interpretation. I hope that everything that has been said previously in Committee, and what I will say today, will reassure the noble Lord, Lord Kerr, that there is neither sinister intention, nor are any dog whistles being blown. The purpose is to assert the position that almost everyone who has contributed to the debate has made clear—European Union law has effect in the United Kingdom by virtue of statute passed by Parliament. I join the tributes paid to my noble and learned friend Lord Howe of Aberavon, who, we fully understand, has gone to a memorial service. My noble friend Lord Lester of Herne Hill quoted Lord Denning in the case of Macarthys Ltd v Smith, in which he indicated that, "““Community law is part of our law by our own statute””." Dealing with the question of where Parliament stood on this, in the passage from the debates on the 1972 legislation quoted by the Constitution Committee in its report, my noble and learned friend Lord Howe of Aberavon said: "““the position is that the ultimate supremacy of Parliament will not be affected, and it will not be affected because it cannot be affected””.—[Official Report, Commons, 5/7/72; col. 627.]" That is something to which we as a Government would certainly subscribe. The key reason for wanting this declaration is that in spite of that, and in spite of the near unanimity in this Chamber that that is the position, we are aware that others have advanced arguments in courts or have written articles that have cast some doubt on that assertion. I know that there are always reservations about what are essentially declaratory clauses in Bills, but this one is important. As your Lordships’ Constitution Committee indicated, "““Clause 18 is self-evident: it restates, but does not change, the law””." In response to one of the points made by the noble Lord, Lord Pannick, I should say that including such a declaration in no way raises doubts about other issues of parliamentary sovereignty. The Constitution Committee said: "““We are confident that if parliamentary sovereignty were to be questioned in any other context, the existence of clause 18 would not prevent the courts from upholding the well understood and orthodox position””." We come down to why the wording in the Bill is to be preferred to that in the amendment. I agree with the proposers of the amendment that directly effective and applicable European law can take place within the United Kingdom's legal order only provided that Parliament has determined that through its Acts. Where our views diverge is on whether the European Communities Act 1972 alone is the basis on which that has been achieved within the United Kingdom or whether other Acts of Parliament may also give effect to directly applicable and directly effective European law, independent of the 1972 Act. I am grateful to my noble and learned friend Lord Mackay of Clashfern for making himself available to discuss the matter with my noble friend Lord Howell and me. I know that he is aware that the Government have considered the amendment very carefully indeed. I shall set out to the House the reasons why our strong, firm preference is for the wording as in the Bill. The amendment is based on the proposition that EU law takes effect within the United Kingdom legal order by virtue of the 1972 Act. I shall come on to deal with the point made by my noble friend Lord Waddington that it does not say, ““by that Act alone””. That may have been the intention, but it does not say that. In so far as other primary UK legislation may be given effect, those who have argued for the amendment argued that other legislation is merely consequential on the existence of the 1972 Act. I can assure your Lordships' House that, in drawing up the Bill, we carefully considered whether it would be sufficient to couch a clause in terms very similar to the amendment, but after consideration we determined that it would not. My noble friend Lord Deben used the phrase ““pivotal place”” to describe the 1972 Act. The 1972 Act undoubtedly has a pivotal place. It is the key mechanism by which directly effective and directly applicable European Union law has been given effect in the United Kingdom, but on analysis of the full range of legislation under which EU obligations have been given effect, we concluded that to refer solely to the 1972 Act would not provide a sufficiently comprehensive and accurate statement of the legal position. Other pieces of UK primary legislation exist independently of the European Communities Act and have been giving effect to EU law obligations. For example, the devolution settlements require Ministers to act in a manner compatible with EU law. Some of those instruments define EU obligations in a manner similar to the language used in Section 2(1) of the 1972 Act but, significantly, not by reference to it. For example, Section 126(9) of the Scotland Act defines Community law as, "““all those rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Community Treaties, and … all those remedies and procedures from time to time provided for by or under the Community Treaties””." I accept that the term ““Community treaties”” is defined under Schedule 1 of the Interpretation Act 1978 by reference to Section 1 of and Schedule 1 to the European Communities Act 1972, and has meanings prescribed by that Act, but there is no cross-reference to Section 2(1) of the 1972 Act. It might be suggested that all other legislation would be considered consequential on the 1972 Act rather than free-standing, but our conclusion is that that legislation is independent of the 1972 Act: that in so far as it makes directly effective or directly applicable European Union law within the United Kingdom legal order, it does so in its own right and not as a consequence of the 1972 Act. It has been suggested that if the 1972 Act were ever repealed, all those other statutes would be utterly deprived of their content—that was the point made in advance by my noble and learned friend—at least in so far as those statutes relate to Community law. The Government accepts that if the 1972 Act were ever repealed, other references in other pieces of legislation would also be repealed. The circumstances in which that happened would be of fundamental political importance. However, that would not be as a consequence of the repeal of the 1972 Act per se, but because the 1972 Act and all the other legislation would be repealed only in the context of the United Kingdom’s withdrawal from the European Union—which, I hasten to add to reassure the majority of the House, is certainly not on the Government's agenda. In other words, the existence of these other Acts is independent of the 1972 Act. They flow from the United Kingdom’s treaty obligations and do not depend on the European Communities Act 1972. If, for example, the provisions in Section 126(9) of the Scotland Act, to which I referred, were not repealed, they would still be self-standing. I accept that the problem would be the question of definition of ““Community treaties””, and that might well have to be argued before the courts. I suspect that my noble and learned friend would argue that it was devoid of meaning, but it is not clear that that would be the case. Indeed, it might well be argued that the very fact that Parliament chose not to repeal these provisions—in what is seen as a very important constitutional piece of legislation defining the powers and the scope of the Scottish Parliament—gave the matter some significance. That is hypothetical and may well be academic, but it was against that background that we wished to make sure that, when we put this provision into the Bill, we were being comprehensive. In Committee, my noble friend Lord Howell mentioned on Clause 18 that there were other pieces of legislation. Examples include the Company Directors Disqualification Act 1986, the Chiropractors Act 1994 and the Competition Act 1998. Perhaps I may illustrate by reference to the Company Directors Disqualification Act 1986 the precise issues on which I should like the House to reflect. Under Section 9A of that Act, the United Kingdom must make a disqualification order against a person in certain circumstances, including where an undertaking commits a breach of competition law under either Articles 81 or 82 of the EC treaty, now Articles 101 and 102 of the TFEU. The Act refers directly to these treaty provisions without reference to the 1972 Act, and thus a court would be required to take these provisions into account, even in the absence of the 1972 Act. As I said, we are getting into statutory interpretation here. Nevertheless, we have proceeded as we have because we wished to be comprehensive. Perhaps I may refer to the point made by my noble friend Lord Waddington. The amendment misses out what I believe to be an important qualification or point in the proposed new clause. The words at the beginning of Clause 18 make it explicit: "““It is only by virtue of an Act of Parliament that directly applicable or directly effective EU law … falls to be recognised and available in law in the United Kingdom””." The amendment misses out the word ““only””, leaving open the possibility of arguments being made that—