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European Court Of Justice (Compliance With Judgments)

Volume 21: debated on Wednesday 31 March 1982

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4.26 pm

I beg to move,

That leave be given to bring in a Bill to provide for the temporary prohibition or restriction on imports of goods in transit from member states which remain in breach of judgments of the Court of Justice of the European Communities.
The Bill empowers the Secretary of State for Trade, after consultation with the Commission, to restrict the import of any class or classes of goods from an EEC member country that has remained in breach of a judgment of the European Court of Justice for more than three months. Once the Secretary of State is satisfied that the member State has remedied the matter complained of, the restriction on imports shall be ended.

It is worrying that member States should even contemplate defying a declaration from the European Court of Justice. It is also unsatisfactory that we have to contemplate introducing trade sanctions agains fellow member States that defy declarations of the European Court. Almost every hon. Member, whatever his view on EEC membership, agrees that member States should observe Community obligations and co-operate with the Community institutions while they are members.

For many years it has been commonplace for member States to ignore EEC directives that they believe are against their national interest. My right hon. Friend the Prime Minister drew attention this afternoon to the slow progress being made on the Commission's service industry directive.

A more worrying trend has emerged in recent years of member States ignoring judgments from the European Court of Justice. It is extraordinary that Governments who constantly urge their own citizens to obey the laws that they pass should themselves ignore the laws of a Community that they joined voluntarily. I can think of no political or sectional justification for such action. Governments should behave in the way that they expect their citizens to behave towards them.

Not only is the attitude of member States to the European Court undermining respect for the law and the concept and future of the Community, but it is having a serious economic effect on this country, because it particularly adversely affects the Scotch whisky industry. The French Government have refused to comply with a declaration given by the European Court of Justice in February 1980.

Since January 1978, when we attained full membership of the EEC, the discriminatory taxation levied by France on Scotch whisky has amounted to £135 million—about two and a half times the United Kingdom's net contribution to the EEC last year. President Mitterrand would do well to look to the canard in his own back yard before criticising our attitude towards budget payments. It is well known that France is not the only member State that has ignored the judgment of the European Court in the past.

I hope that the House will bear with me if I go very briefly through the history of the action taken by the Commission against France in relation to taxation on Scotch whisky. In the early 1970s the Commission started discussions with the French Government about the ways in which French Government taxes discriminated unfairly against foreign spirits, particularly Scotch whisky. After that long period of discussion, formal proceedings were initiated by the Commission in March 1976. Despite this, the French, in both 1977 and 1978, increased the discrimination against Scotch whisky and eventually, in August 1978, proceedings were lodged with the Court of Justice.

It was not until February 1980 that France was condemned by the European Court of Justice. Yet, rather than accept the inevitability of the judgment of the court, the French Government have simply ignored it. We know for certain that the illegal tax will be levied at least until February 1983, and we have no certainty that it will be rescinded thereafter. It is intolerable that, some three years after the judgment and some seven years after the commission acted formally, the French Government have still not complied with both the wishes of the Commission and of the European Court.

It is not surprising that the Scotch whisky industry feels particularly hard done by, since some of our companies in this country that export Scotch whisky have been at the receiving end of orders from the European Court with which they have had no choice but to comply.

The reason for member States' lack of interest in the judgments of the court is, in part, that there is no sanction that can be carried out by the court, by the Commission or by any other member State. The judgment of the court cannot be enforced if a member State wishes to defy it. The Bill that I am introducing today is designed to give the United Kingdom a sanction against action by another member State in defiance of the European Court of Justice.

It has been put to me that it is curious to respond to a fiscal restriction on trade within the Community by the imposition of another restriction. I am told by some that it would be best to pursue political remedies. Yet the very fact that a case comes before the European Court is itself a recognition that political means have failed. When, two and a half years after a European Court judgment, the member State concerned still prefers to defy that judgment, that is a recognition not only that political persuasion has failed but that the law has failed.

We should therefore be prepared to introduce this Bill. I hope that it will never be used. I hope that the fact that the Secretary of State for Trade possesses such a sanction will persuade the offending member State that it should obey the ruling of the European Court of Justice. Nevertheless, I feel that this House and the Secretary of State should have the power that my Bill would give them.

Does the hon. Gentleman seek to oppose the Bill?

Yes, Sir, I do, but extremely briefly. I have no intention of calling a Division because, as we all know, the Bill the hon. Gentleman seeks leave to introduce has no chance whatever of reaching the statute book. I do, however, oppose the proposition because I would not like people to feel that the arguments that he adduced are sufficient. When I say that I shall not call a Division, that is a point on which I could change my mind before the end of my speech if I find my own arguments sufficiently persuasive and if what I said at the beginning were to create a problem. Perhaps, on second thoughts, I would be prepared to call a Division at the end of my speech if I find my argument persuasive enough, unless I change my mind—[Interruption.]

More seriously, I hope that the apparently sound arguments that the hon. Gentleman has advanced in the cause of adherence to the law are not thought to lack any other aspect. I do not wish to suggest that I disagree with him on the subject of Scotch whisky, because, as he may know, if he knows anything about Scotch whisky, no representative of the borough of Islington would be likely to do that, since the borough of Islington is the only part of this country, south or north of the border, that has ever tried to get good statutory provisions with regard to Scotch whisky.

My opposition to the hon. Gentleman is based upon the consideration that if the Community progressively and swiftly seeks to advance to being what amounts to one country, with the law of that union enforceable throughout it in the rigid fashion that he suggests, the Community will break up and will deserve to do so. I suggest to the House that the attitude of the French is correct, not with regard to Scotch whisky but with regard to Community law. The French say that if Community law operates in a manner that is severely detrimental to the interests of France Community law must be bent or broken to protect French interests.

We should do the same with regard to British interests. That is not only a British national point that is being made there, but one that is in the long-term interests of the Community and those who want to see the Community continue indefinitely. A swift move to rigid union within the Community is something that will break it, not preserve it. I hope, therefore, that no one listening to the speech of the hon. Gentleman will feel that there was not a very strong argument for the other side of the case.

Having put that argument, I think it would not be helpful to the House if I were, after all, to press this matter to a Division.

Although I do not know whether the hon. Gentleman has persuaded himself, he has certainly persuaded me that he intended to vote against the Bill. He cannot be compelled to vote or to put in Tellers.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.

Bill ordered to be brought in by Mr. Tim Eggar, Mr. Roger Sims, Dr. J. Dickson Mabon, Mr. John Spence, Mr. Ian Campbell, Mr. Michael Ancram, Mr. David Myles, Mr. Dick Douglas, Mr. Bowen Wells, and Mr. Richard Shepherd.