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European Union (Amendment) Bill

Volume 701: debated on Tuesday 29 April 2008

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The LORD SPEAKER in the Chair.]

Clause 2 [Addition to list of treaties]:

7: Clause 2, page 1, line 12, after “excluding” insert—

“(i) Article 1, paragraph 8, replacement Article 6 TEU, paragraph 1, concerning the Charter of Fundamental Rights; and(ii) ”

The noble Lord said: I shall speak also to the other amendments in this group. Your Lordships are already familiar with the way in which Amendment No. 7 works. In addition to excluding the provision in the Bill relating to the common foreign and security policy, it would also exclude important aspects relating to the charter. On the other amendments in this group, I refer in particular to Amendment No. 117, which is in the name of my noble friend Lord Blackwell. In effect, this amendment achieves in a different way the same objective as we seek. The great merit of my noble friend’s amendment is that it states in terms exactly why he believes that the charter should not be given any form of legal status in the United Kingdom.

As many noble Lords are aware, the Government’s view is that the charter will make no difference at all to the legal landscape in the United Kingdom because it is incapable of creating new rights. It is fair to say that that is the view of many of the academics who have given evidence to the various parliamentary committees which have been engaged in investigating this issue.

At page 23 of the third report of Session 2007-08 of the scrutiny committee in another place, the Foreign Secretary, the right honourable Mr Miliband said that,

“the Charter records existing rights; it does not create a single new right. Some people would like it to create new rights, but it does not … the Charter, in words of one or two syllables, makes absolutely clear that there is no extension of the reach of the ECJ or of any other court”.

If that is so, two questions immediately arise. The first is: why were the Community draftsmen so keen on amending the treaty to include the charter? Why have the charter if it makes no difference whatever? Let us assume for a moment that it does not make any difference. What could it possibly bring? I have long taken the view that the European institutions have consistently refused to sign up to the European Convention on Human Rights because they did not want the Court in Strasbourg to have the last word on the definition of human rights. It was almost a question of prestige. Now that the charter of fundamental rights has been established through the Lisbon treaty and is about to get legal force, the Community institutions can be much more relaxed about this matter. It comes as no surprise to see that now, at last, they are indeed prepared to become signatories to the European Council’s own convention, because they believe that their court and their legal system now carry a weight as heavy as that of the European Council. That is one reason why having the charter is consistent with it having, in other respects, no legal effect whatever.

The other question that arises is: if it is true that the charter has no legal effect, why did Mr Blair, then the Prime Minister, make such a fuss about the red lines? Was he just grandstanding—“impossible”, I am sure many noble Lords might say—or does he not share the Foreign Secretary’s confidence? Why did Mr Blair think that he needed the protocol?

The crucial clauses of the protocol are Articles 1.1 and 1.2, which, I remind your Lordships, read as follows. Article 1.1 states:

“The Charter does not extend the ability of the Court of Justice … or any court or tribunal … of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or action … of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that it reaffirms”.

Article 1.2 states:

“In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to … the United Kingdom except in so far as … the United Kingdom has provided for such rights in its national law”.

If Mr Blair is right and Mr Miliband is wrong, does the protocol put the matter beyond doubt?

Article 1.1 simply reiterates the proposition advanced by Mr Miliband in his evidence to the scrutiny committee. Indeed, in his evidence in the third report of the 2007-08 Session, Mr Miliband simply sees Article 1.1 as restating the legal position in the treaty. I apologise to your Lordships for making another quotation but I think that it is germane to the argument. He says that,

“the Protocol is important because it has legal status as much as an Article, and the Protocol is absolutely clear that there can be no extended reach before the ECJ or anyone else, and that is why, in the case of working time or anything else, any judgment of the court cannot have reach into changing the laws that apply in this country ... As I say, the Charter records existing rights but there is a double-lock, because the Protocol records that the Charter shall not be used to extend the reach of the Court of Justice”.

Curiously, Article 1.2 makes a reference only to one matter—Title IV—and might be said to enhance its status by comparison with other matters in the chapter.

However, the protocol has a preamble, which would form part of the materials that the European Court of Justice will use to construe the protocol. That preamble states, inter alia, that the protocol is expressed to be without prejudice to other obligations of the United Kingdom,

“under the Treaty on European Union, the Treaty on the Functioning of the European Union, and Union law generally”.

What conclusions can we draw from all this? The first and perhaps most important one is that it is plain that, irrespective of the protocol, the charter does apply to the United Kingdom. Secondly, it is also plain that the final arbiter of just what effect it will have is the European Court of Justice. So the construction of the charter will, in the last resort, be a matter not for our own courts but for the ECJ. That is the basis of many people’s concern about the likely development of law once the charter is incorporated into the Community’s jurisprudential system.

Compared with the United States Supreme Court, the European Court of Justice has had a short history that is not unlike the early history of that court. Neither the United States constitution nor the treaty of Rome contained any clause about the primacy of community law over national law, and yet within a very short time—in 1803 in the case of the United States, with the famous case of Marbury v Madison; and in 1964 in the case of the European Community, in the equally well known case of Van Gend en Loos—the United States Supreme Court and the European Court of Justice both declared that federal law, and European law in the case of the European Community, did indeed have primacy over domestic law.

Although the intensification of legal integration has varied over the decades, there is no doubt whatever about in which direction the European Court of Justice is going; and although the protocol refers to rights, it does not refer to interpretation. The real concern is that the arrival of the charter will affect the way in which the European Court of Justice interprets the law that currently exists under the treaties. It will be through that mechanism that its influence shall be felt.

The third conclusion I draw is that since the charter applies to the UK and to our courts, all our institutions will have the obligation to ensure the uniform application of European Community law. Does the protocol trump that general obligation? Mr Miliband was effectively asked that question, in a letter written to him on 11 July 2007, by the chairman of the scrutiny committee in another place. His reply of 31 July is recorded in the committee’s 35th report, and I apologise to your Lordships for taking you again to the text. It states:

“The UK-specific Protocol which the Government secured is not an ‘opt-out’ from the Charter. Rather, the Protocol clarifies the effect the Charter will have in the UK. The UK Protocol confirms that nothing in the Charter extends the ability of any court to strike down UK law. In particular, the social and economic provisions of Title IV give people no greater rights than are given in UK law. Any Charter rights referring to national law and practice will have the same limitations as those rights in national law. The Protocol confirms that since the Charter creates no rights, or circumstances in which those rights can be relied upon before the courts, it does not change the status quo”.

Here the Minister omits to address the crucial problem of interpretation, which in the last resort is, as I hope I have already indicated, a matter for the European Court of Justice.

In commenting on the right honourable gentleman’s letter, the chairman of the committee very fairly pointed out that as the protocol is not an opt-out from the charter, and if the Government intended that ECJ case law based on the charter should have no effect at all within the UK, then the words in the preamble to which I drew the Committee’s attention earlier, “without prejudice”, should have been replaced by the word “notwithstanding”. In other words, instead of saying “without prejudice” to all the other obligations that Community law brings to the United Kingdom, it ought to have said “notwithstanding” all these other obligations.

The point has been developed by a number of other commentators in a slightly different context. It has, for example, been asked: “What if the European Court of Justice is called on to interpret a provision in litigation taking place in another member state where that provision is identical to provisions that are already on the statute book in the United Kingdom and the court makes a decision to change the interpretation of the law in the United Kingdom?”. If the protocol operates “without prejudice” to our general obligation to implement Community law, such a decision in another member state which is relevant to an obligation that we already have to the European Community would become the law in the United Kingdom.

The most obvious example, to which reference was frequently made in another place, is the working time directive. There are extremely powerful provisions in the charter regarding Title IV. If a matter such as the 48-hour week is considered in another jurisdiction, it is possible, because of the way in which the preamble of the charter is drafted, that a more rigorous interpretation by the European Court of Justice of a measure that is identical to the one in the United Kingdom will change the law in the United Kingdom.

An entirely distinct point relates to the second part of the protocol, which, curiously, refers not to all aspects of the charter but only to Title IV. The Committee will recall especially the words in Article 1.2. What do we make of this? Does it mean that Title IV is only one example of all the examples taken in the charter—in which case, to that extent, one can be relaxed—or does it mean that Title IV is singled out to get special treatment which is not accorded to the other parts of the charter? That remains unclear and I would be interested to know the Minister’s view.

The Committee will be extremely relieved to know that I am coming to my concluding observations, both of which are in the form of questions to the noble Baroness. It appears that the EU institutions are at last going to sign up to the European Convention on Human Rights. However, can the noble Baroness tell us something about the timetable envisaged by the member states, and, in particular, what mechanisms are likely to be put in place to allow appeals to the European Court of Human Rights on decisions of the European Court of Justice?

My final observation also relates to the relationship between the European Court of Justice and the European Court of Human Rights. If there is litigation in this country about a decision which involves the charter and a dissatisfied party wishes to take that matter further and since the United Kingdom is already a signatory to the European convention and it is now perfectly possible through the Human Rights Act 1998 to raise convention matters in the domestic courts, what is to prevent an individual taking this matter up in litigation in this country on the grounds that the European Court of Justice had got the matter wrong and that the better view—if there is already a decision, or ought to be, if there is not yet a decision—is that held, or likely to be held, by the European Court of Human Rights? How does the Minister foresee these matters being handled in domestic litigation? I beg to move.

I was about to ask the noble Lord, Lord Kingsland, a question, but I can now do it by explaining my opposition to Amendments Nos. 7, 87, 88 and 89. The noble Lord, Lord Hunt of Wirral, has added his name to this group of amendments and I am delighted to see him in his place. They are designed, in one way or another, to exclude the charter and the UK protocol from the Bill and from UK law.

Eight years ago, I had the privilege of serving on Sub-Committee E of the Select Committee on the European Union, chaired by the noble and learned Lord, Lord Hope of Craighead, when we prepared our report on the EU Charter of Fundamental Rights. Other members included the noble Viscount, Lord Bledisloe, my noble friend Lord Goodhart, the noble and learned Lord, Lord Fraser of Carmyllie, and the noble Lord, Lord Norton of Louth. What is noteworthy for this debate is that another member of the committee was the excellent noble Lord, Lord Hunt of Wirral.

We had the benefit of a wide range of experience. Our report, published on 16 May 2000 as HL Paper 67, identified in paragraph 119 as one of the significant gaps needing to be filled,

“the absence of a catalogue of fundamental rights in the Treaties”.

We described in paragraph 121 the charter as presenting,

“a major opportunity for giving more effective protection to the individual in relation to the activities of the institutions of the EU. Translating the principles described above into a reality which is readily recognisable to the peoples of Europe and meaningful in their daily lives is perhaps one of the greatest challenges which confronts those who have been given the task of preparing the Charter”.

We noted in paragraph 126 that while,

“a declaratory Charter might help to clarify the obligations of the institutions of the EU, it would not confer direct and tangible benefits on individuals”.

In paragraph 127, we observed that the line then being adopted by the Government ran,

“the risk of appearing to be extremely negative when it comes to the practical protection of the individual against the infringement of rights by the EU institutions”.

We identified in paragraph 128,

“a significant gap, in that individuals in Europe are not fully protected against the misuse of power by EU institutions that breaches the ECHR. The individual’s ability to challenge a measure on fundamental rights grounds is more restricted where the measure is taken by an EU institution than it is where it has been taken by a national authority”.

The adopted charter and the Lisbon treaty meet the very approach taken by the committee of which I and the noble Lord, Lord Hunt, were members. I find it difficult to understand the justification for supporting amendments of this kind. Paragraph 1 of the new Article 6 of the treaty addresses the charter, which was absent from the old Article 6. It recognises the rights, freedoms and principles contained in the charter, giving them, as we had hoped, the same legal value as the treaties.

Amendment No. 87 would keep this out of the Bill, with the 10th paragraph of the preamble to Protocol 7 on the application of the charter to Poland and the UK reaffirming that references in the charter to the operation of the specific provision of the charter are strictly without prejudice to the operation of other provisions of the charter. Amendment No. 87 would also exclude the 12th paragraph, which provides that the protocol is without prejudice to the operation of other provisions of the charter. Amendment No. 88 for good measure—or bad measure—would exclude recital 12, stating that the protocol is without prejudice to other obligations devolving on the UK under Union law. Amendment No. 89 would exclude specific reference to Title IV of the charter, on economic and social rights, in the UK protocol from Section 1 of the 1972 Act.

Presumably, we legislate on the basis of evidence and informed opinion. The House has had the great benefit of three reports. One was by its Constitution Committee, which includes the noble and learned Lord, Lord Woolf, assessing the implications for the UK constitution of the Bill and the Lisbon treaty. That was published on 28 March. Another, the report of the EU Committee chaired by the noble Lord, Lord Mance—to which, I hope, I made some contribution—giving its impact assessment on the Lisbon treaty, was published on 13 March. There was a third report by the EU Committee some eight years ago, to which I have referred and to which the noble Lord, Lord Hunt, and I contributed. None of those reports contains anything in the opinions of the committees of this House that in any way supports amendments of the kind now before the Committee. The Constitution Committee’s report concluded in paragraph 67:

“We conclude that the change in status of the Charter from political document to having the force of a treaty would be less of a radical step than at first it may appear. This is because the Charter is declaratory of rights already recognised”,

in the legal systems of the UK and Poland. In other words, it adds nothing new. The EU Committee report reached similar conclusions, but in this case, as any noble Lord will see, we reviewed in great detail, on the basis of evidence, each and every right and principle contained in the charter to examine its effect. We noted in paragraph 5.68 that,

“declaring the Charter to be legally binding will send a clear message to all institutions and citizens within the Union about the EU’s commitment to uphold the rights set out in the Charter”.

I apologise for all these quotes, but they are necessary, I think. We said in paragraph 5.80:

“Since we consider that the Charter reaffirms rights and principles which already substantially exist, albeit in many cases only at an international level, we expect the effect of the change in the Charter’s status to be limited. Courts at both national and EU level will continue to refer to international treaty obligations to interpret the scope of fundamental rights and identify those fundamental principles which are general principles of EU law, whether or not the Charter becomes legally binding”.

All this is well known to the noble Lord, Lord Kingsland, who, like me, has had the benefit and burden of reading some of the Luxembourg judgments on these issues. We expect that reference to the charter would, if the treaty of Lisbon comes into force, become more frequent as the charter’s legally binding status would make it more straightforward for individuals to enforce rights that are guaranteed under international law. We also clarified the broad legal effect of the protocol in paragraph 5.103—I will spare the Committee by not reading it now.

During the debate in Committee on 22 April, the noble Lord, Lord Forsyth of Drumlean—who I am now delighted to see is in his place—accused Liberal Democrats of telling lies and practising deceit. The noble Lord is apparently unimpressed by Standing Order 33—

“Asperity of speech to be avoided”—

which was adopted by this House as recently as 13 June 1626. I hope that I shall not be found guilty of using “sharp and taxing language” in breach of Standing Order 33 when I say that the amendments tabled by the Conservative Front Bench, in this grouping, are manifestly ill founded and fly in the face of the painstaking work done by three authoritative committees of this House.

I agree respectfully with the Government’s legal opinions about the effect of the charter and the treaty in this context. Neither the charter nor the treaty threatens the integrity of our legal or political system in any respect. To the contrary—and this point has not been dealt with yet by the noble Lord, Lord Kingsland—we will have, enshrined in EU law for the first time, protection against the abuse of power by EU institutions. I would have thought that the Official Opposition would cheer and welcome something that will make the institutions accountable and uphold the European rule of law. It will do nothing to disturb the work of the Strasbourg court; it will clarify the relationship between the two European courts; and I have heard no specific example of any way in which it will undermine the political or legal system of this country. I therefore oppose these amendments.

I support my noble friend on the Front Bench and support Amendments Nos. 7 and 87. I do so with some trepidation, not being a lawyer myself. However, I think that the issues raised by the charter are ones on which all Members of the Committee should be allowed to comment.

Like other noble Lords, I have followed the progress of the Charter of Fundamental Rights. I was on the Select Committee when the Minister, Mr Vaz, appeared before us and described it as no more significant than the Beano. We then moved on to a different stage, where Ministers became rather alarmed about the charter and remarks about the Beano were dropped. If they were alarmed, they should not be surprised that some of us, to this day, retain some caution and some scepticism about what is proposed, because the Government have constantly shifted their position. The previous Prime Minister, Mr Blair, at one point declared that we had an opt-out from the Social Chapter. Then the Minister of State, Mr Murphy, told the House of Commons that we did not have an opt-out. Then the Secretary of State for Justice, Mr Straw, told the House that the Government had never wanted an opt-out.

The Government also tried to strike down many provisions of the charter—for example, those relating to children’s rights. Obviously the Government themselves at one point had real concerns. The Government originally argued that they wanted the charter not to be legally binding. On 11 December 2000, the Prime Minister said:

“Our case is that it should not have legal status and we do not intend it to do so”.—[Official Report, Commons, 11/12/00; col. 354.]

Article 6(1) clearly states that the charter has legally binding status and, as my noble friend from the Front Bench emphasised, on exactly the same basis as the treaties.

Much has been made of the point that the charter creates no new rights, but even if we accept that—and I shall come to it in a minute—it remains a point of anxiety that the responsibility of the European Court of Justice will be greatly increased. Until now, the court’s role has been to interpret the treaties, directives and specific legislation. If the safeguards are not watertight, the ECJ’s jurisdiction will be extended to other areas. The rights that are to be its concern are expressed in very general terms. That is where there is a clear risk of judge-made law expanding massively.

Of concern to non-lawyers is accountability. One of the problems with the way in which the EU works is the one-way street of so much legislation and the difficulty of reversing it, because to do so one has to achieve unanimity. If a judge in this country makes law and the Government disagree with it, they can, if they have a majority and the willingness to do so, legislate to reverse that judgment and be accountable to the electorate for what they do. A different system operates in the EU. It is extremely difficult for judge-made law then to be reversed unless it is unanimously agreed by the 27 members of the Council.

For that reason, it is extremely important to ask whether the safeguards that the Government obtained are really watertight. Nobody could criticise the Government for lack of effort or the number of elaborate devices—there are four safeguards in all. There is the protocol, particularly Title IV; there are the horizontal provisions, Title VII; there is the explanation of the origins of the rights that are included in the charter, which is, I regret, not in the Printed Paper Office; and there is Article 6 of the treaty, which explains how it does not expand the competencies of the Union. One’s fear is that it may extend the competence not of the institutions but of the ECJ.

Are all these devices effective? That the Government have resorted to no fewer than four—I know that this may seem a rather unfair point—and have gone to such ingenious, elaborate lengths to make the protocol watertight makes one rather doubtful of the assertion that the protocol was insignificant. My noble friend Lord Kingsland said that many academic lawyers had agreed with the opinion that the charter does not create new rights. I am certainly aware of many academic lawyers both in this country and abroad, including former commissioners and professors of law in European countries, who have doubted whether the safeguards in the legislation—the protocol that the Government have obtained—are watertight.

My noble friend Lord Kingsland referred to Article 1.1 of the protocol. I do not want to read it out again, but I draw the Committee’s attention to Article 1.2, which states:

“In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to Poland or the United Kingdom except in so far as Poland or the United Kingdom has provided for such rights in its national law”.

This is repeated in Article 2, where the last words are,

“to the extent that the rights or principles that it contains are recognised in the law … of the United Kingdom”.

So there could be a situation where the ECJ would adjudicate on rights, as long as they were expressed in UK law.

The Government have constantly returned to the theme—I am sure that we will hear it again—that the charter does not create new rights. As I said, perhaps that is not the only point. Vaguely and generally defined rights may easily become justiciable in a new way by a new institution. However, is it really true that the charter creates no new rights? The Commission’s website states that the treaty of Lisbon protects,

“existing rights while introducing new ones”.

Article 13 of the charter says that,

“scientific research shall be free of constraint”.

That looks very much like a new right. The charter’s explanatory notes, which describe the origin of all the charter’s rights, confirm that that right is not recorded in any other treaty to which we are a party.

The explanatory notes also buttress the claim that there are no new rights, but some sources from which these rights are said to be derived, such as the European Convention on Human Rights, are not treaties to which the UK has been a party, although obviously not the ECHR. For example, Articles 5 and 50 are derived from the Schengen agreement. Additionally, in some people’s opinions, several articles deriving from the ECHR appear to have had their scopes considerably widened.

Many other points could be made about the rights. Some seem more like welfare rights, such as the right to a free placement service, which reads rather curiously in a document of this kind. Others are extremely vague and general; for example, the respect for private life in Article 7 could easily be extended. I am not aware that we have a law of privacy in this country. I know that newspapers and their editors have been extremely concerned that we might get one by the back door, which appears to be made more likely by this provision—

I am not sure whether the noble Lord is aware of the difference between new rights against EU institutions and matters that affect UK law. To take the example of personal privacy, we are now given protection against invasions of our personal privacy by the EU institutions, but in our domestic law that is already covered by Article 8 of the European Convention and the Human Rights Act 1998. One cannot confuse the two. I wonder whether the noble Lord is aware of the important difference between that which protects us against EU institutions under European Union law and that which protects us against British constitutional law, in terms of the right of privacy worded in identical terms in Article 8 of the convention and in the charter.

I am of course aware of the distinction made by the noble Lord and I am grateful for his intervention, which perhaps goes some way to answering the questions I raised about what is said in Article 7 about respect for private life.

Another question concerns the provisions that appear to conflict with UK law. Perhaps the noble Lord will intervene on this one as well. One of the charter’s provisions is that no one should be convicted for an offence of which he has already been acquitted. This point has already been raised. The Government have set about altering the rules on double jeopardy in certain cases.

The more one looks at the charter in detail, the more one sees ways round the safeguards, which is why I begin to see why the Government have tried so hard in so many different ways with so many ingenuous devices to try to make it watertight, but I doubt whether it works. I also wonder why we need both this charter and the ECHR. One has a slight suspicion that the EU just wanted to have one as well. In the event of a conflict between the ruling of the ECJ and the European Court of Human Rights in Strasbourg, which one will have priority? I imagine that it will be the ECHR.

In speaking to Amendment No. 87, my noble friend Lord Kingsland raised the question of whether, when the ECJ makes a ruling on the charter that is justiciable in another country, that ruling will apply to this country as well, because the charter will have to be applied through its incorporation into EU law as a decision concerning another country. When that point was raised in Committee in another place, the Minister, the Parliamentary Under-Secretary—admittedly she had very little time—replied by making two very simple points. First, she asked whether we were not all aware that the ECJ’s decisions had been binding since 1957 and, secondly, she said that the charter created no new rights. Although those answers have the merit of being simple and direct, they are not actually an answer to the question raised. There is a way in which this could have been addressed: the protocol should have said that it has effect, regardless of other treaties or EU law. In that way, the protocol would have been much more likely to be watertight.

I remain deeply sceptical. I raise these questions and await the Minister’s reply but, because of all my doubts, I am strongly sympathetic to the first amendment, moved by my noble friend, that the charter should be struck out.

I shall very briefly intervene in this debate. The noble Lord, Lord Lamont, made only one point on which I wish to follow him because I fundamentally disagreed with everything else that he said. He raised the possibility of European Union accession to the European Convention on Human Rights. That is very much in the treaty. I have not followed the amendments through that far yet, but I would assume that Her Majesty’s loyal Opposition are opposing that in the same way as they oppose everything else. Just in case they are not, I hope that they will join in the appeals that are being made universally, almost, to the Russian Government to get them to ratify protocol 14, which is the fundamental requirement in the Council of Europe for the accession of the European Union to the European convention to take place. Forty-six member states have so far ratified protocol 14; only one state has not. I hope that all noble Lords want to see that take place, as it will be a protection against some of the fears that they have expressed, which will be somewhat mitigated by the fact of European Union accession and binding itself to the judgments of the European court.

To start back where the noble Lord, Lord Kingsland, began, he appeared singly uncomfortable in moving his amendment. I was somewhat surprised that he had to keep going through green-backed documents to find selective quotations from the Select Committee in another place. I wondered whether that was because of the quality of the reports from the Constitution Committee and the European Union Committee in this House. Those reports were much less easy to fillet appropriate quotations from that supported his argument. The quotations were not particularly helpful and he would have done much better to stick clearly to the words in the charter and, in particular, the very clear words in the protocol on the application of the Charter of Fundamental Rights to Poland and the United Kingdom.

I am most grateful to the noble Lord for giving way with his customary generosity. I can answer his question very simply. It is in those documents that the Government most clearly set out their view of the charter. That is precisely why I used them because Mr Miliband and Mr Murphy both express in no uncertain terms their view about what the charter does. It was for that reason that I relied on those documents. You do not get the same statements in the House of Lords documents.

But you have infinitely better quality reports, which are argued with great cogency and clarity. When the report was presented to this House at the time of Second Reading it was universally welcomed by the House as being authoritative and a basis on which we ought to proceed when we looked at the whole question of ratification. I will give way but I promised to be brief and I do not want to be filibustered.

I have no intention of filibustering in these proceedings but the noble Lord must not say that the report of your Lordships’ Select Committee was unanimously accepted in this House. Indeed, he may recall that I had a debate before the House rose in July, which pointed out the composition of your Lordships' Select Committee, which contains only one Eurosceptic. All the other members, including the chairman, are among the most ardent Europhiles in the House. It is scarcely surprising that this—

I hesitate to intervene but I do not wish the noble Lord accidentally to assume anything about the integrity of the individuals on the committee. His remarks could be interpreted to imply that because one is pro-European one might not look at things totally impartially. I am sure that is not what the noble Lord meant but I wanted to clarify that as anyone reading what he said might get that impression.

My noble friends on my left are saying that there is no possibility of my remarks being construed in that way. I was merely pointing out that your Lordships’ Select Committee is almost wholly in favour of the project of European Union and of this treaty. Therefore, a number of us did not take its conclusions at all seriously.

I remind the noble Lord that the chairman of the committee is the noble and learned Lord, Lord Mance, and that the chairman of the other committee was the noble and learned Lord, Lord Hope. Both are Law Lords and it is inappropriate to suggest that they are politically motivated.

I am sure noble Lords will understand that I have almost forgotten what I was going to say. However, I can be persuaded back to the protocol that I was going to quote from. It has a clarity of language which everybody should accept as saying what it means and meaning what it says. We should not look for hidden elephant traps which are not really there. Article 1 states:

“The Charter does not extend the ability of the Court of Justice of the European Union, or any court or tribunal of Poland or of the United Kingdom, to find that the laws, regulations or administrative provisions, practices or actions of Poland or of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that it reaffirms”.

That simplicity of language was devised so that people who are proud to profess themselves non-lawyers can understand it without the obfuscation that lawyers frequently introduce into the argument. Paragraph (2) of Article 1 has the same level of simplicity.

All I want to say, in what would have been a very brief contribution were it not for multiple interventions, is that the Charter of Fundamental Rights is clear. It records existing rights. The charter sets out a list of the rights and freedoms that people already have and enjoy as EU citizens. In conclusion, I ask my noble friend to confirm one thing when she replies so that, as a humble non-lawyer, I can see whether my understanding might have some modicum of truth. Are the Government confident that a legally binding charter preserves the legal status quo in the United Kingdom? That is a simple question, capable of a “yes” or “no” answer. I look forward to her answer, which she can give with great brevity.

I wish to ask a short question. Does the noble Lord appreciate that it is not a question of extending the jurisdiction of the ECJ? It has got it already. It has exercised it since Messina. Perhaps the noble Lord would exercise his mind to this and reply. I know of no circumstance in which that court has not interpreted and applied the reasoning of the European Court of Justice, so there is a composite judicial power which can be exercised and does not make the position watertight, which is against our interests.

I think that the question was: do I appreciate that? I appreciate the right of the noble Lord to interpret it that way. Do I appreciate it to the extent that I agree with it? The answer is emphatically “no”.

The message seems to be that we do not have much to worry about, but that is inconsistent with the way in which the Government have worried and worried about this charter for years and years. It was not long after the remarks about the charter being no different from The Beano that the Government began to say that the charter was very dangerous and had to be resisted, not least because of its far-reaching social and employment ramifications.

Then the Government said that because the charter was so dangerous, they could not possibly agree to it. They then said that if they were to agree to it, there would have to be a protocol to make sure that the charter would not damage Britain in the way that they thought it would damage others. That is the history of the matter and that is why I am slightly sceptical when people get up to tell us that there is nothing whatever to worry about.

The wording of the protocol was referred to by the noble Lord who has just spoken. We have a protocol on Article 1 and the first paragraph contains very curious wording. It states:

“The Charter does not extend the ability of the Court of Justice of the European union… to find [UK law] inconsistent”

with the charter. It states that it does not extend the ability of the ECJ to do that. It does not say that the ECJ has no power to rule that the UK is inconsistent with the charter. No wonder the legal adviser to the Commons Scrutiny Committee stated:

“I doubt if what appears to have been agreed secures this result”—

that is, the result that the Government apparently intended. I want to make this simple point: it seems to me, and it clearly seems to others, that the protocol ensures that British people get the worst of all worlds.

Will the noble Lord, Lord Waddington, proceed to the second paragraph on Article 1 in the protocol. It states:

“In particular, and for the avoidance of doubt, nothing in Title VI of the Charter creates justiciable rights applicable to Poland or the United Kingdom except in so far as Poland or the United Kingdom has provided for such rights in national law”.

That really does answer the noble Lord’s Aunt Sally—or, rather, it knocks it down.

I am not sure that the noble Lord is right, but perhaps I will be able to develop on that in a moment.

Does not my noble friend agree that what the noble Lord has just read out rather supports my noble friend’s case? It says,

“except in so far as Poland or the United Kingdom has provided for such rights”.

Where the United Kingdom has provided for such rights, there is a justiciable issue. The court is able to rule where the UK has provided for such rights in its own law—that is, the ECJ has jurisdiction over UK law. That is repeated in subsection (1) of Article 1 as well.

I am very grateful to my noble friend. One need say no more at this stage than that the wording is, to say the least, very curious, and it is highly doubtful whether it has the effect which the Government apparently thought that it would have. Certainly the legal adviser to the Commons Scrutiny Committee thought that it was completely ineffective to do that which the Government apparently intended. But why did the Government intend it in the first place? They could not possibly have taken the view that the charter creates no new rights because if that were the case, there would be no need for any fuss at all.

The Government are accepting that the charter may produce new rights and that is why, if the protocol is effective, it ensures that British people get the worst of all worlds. British citizens cannot go to the European Court of Justice if they think their rights under the charter, such as their trade union rights, have been infringed. That surely follows from Article 1(2) of the protocol and Article 2. British citizens will be bound by the decisions of the court as a result of proceedings brought by citizens of other countries. Cases will be brought by the citizens of other countries, the European Court of Justice’s interpretation of the charter will become part of European law and, as European law has primacy over our law, our courts will follow the European Court’s ruling. That would be clear enough, even without the preamble to the protocol which stresses that this protocol is without prejudice to other obligations devolving upon Poland and the United Kingdom under the treaty on the European Union, the treaty on the functioning of the European Union and Union law generally.

I cannot for the life of me see how British people should applaud the Government for introducing this protocol because if any real new rights are created as a result of the charter, the British people are, by the action of this Government, barred from benefiting from them. According to the Commons European Select Committee, the only way of ensuring that the charter does not affect UK law in any way is to make it clear that the protocol takes effect, notwithstanding the treaties or Union law in general. Finally, why have the Government not taken the advice of that Commons Select Committee? If they had, they would not be in the mess which they are now clearly in.

In our previous proceedings, the noble Lord, Lord Owen, asked the very important question: what are the limits on the powers of the European Court of Justice? By way of answering that question, I shall put in your Lordships’ Library a brief two-page article written by the well known constitutional lawyer, Mr Martin Howe, which shows that there are in fact no limits on the power of that court and therefore no limits on the way the court will eventually interpret the Charter of Fundamental Rights. For the purposes of this debate it might be worth putting on the record a few very short quotations from the court over the years which show how the court has advanced its own powers beyond the powers conferred in the treaties.

Mr Howe makes the very important point that the feature which sets the European treaties apart from all other international treaties is that it is a system of law which penetrates inside the member states and takes precedence over the national laws in the domestic courts of the member states. It is that internal penetration of the treaty of Rome which sets it apart.

One of the key points is that the treaty articles having direct effect inside the member states are not actually stated in the treaties. This was decided by the European Court in the Van Gend en Loos case in 1963, which has already been mentioned by the noble Lord, Lord Kingsland, in his opening remarks. It is worth citing the judgment in that case. The court said that,

“this Treaty is more than an agreement which merely creates mutual obligations between the contracting states.  This view is confirmed by the preamble to the Treaty which refers not only to governments but to peoples … The Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals”.

So in 1963, although the court is beginning to advance its jurisdiction, it does say that it is within limited fields. That will change, as we shall see.

We then go on to the Costa v ENEL case in 1964, when the court said:

“The transfer by the States from their domestic legal system to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights”.

That is what the court said; it is not in the treaty. By 1970, in the Internazionale Handelsgessellschaft case the European Court declared its view that Community law should take precedence even over the constitutional laws of the member states, including basic entrenched laws guaranteeing fundamental rights.

In 1987, in the Foto-Frost case, the court ruled that national courts had no power to question the validity of Community measures and reserved that power exclusively to itself, even though there was nothing in the treaty or in general principles of international law that would require states to recognise the validity of acts which are outside the powers conferred by the treaty. Judicial activism again.

So the story goes on. In 1992, in the European Economic Area Agreement, the court made it clear that the objective of all the Community treaties was to contribute together to make concrete progress towards European unity. It went so far as to say that the provisions of the treaty of Rome on free movement and competition, which is what that particular judgment was about, far from being an end in themselves,

“are only a means for obtaining those objectives”.

By now, those objectives were to be enforced in “ever wider fields,” no longer the limited fields that we had before.

The story continues: in the 1998 Silhouette case, when the court dealt with trademarks, and in the 1999 agrochemical case. I will not try the Committee’s patience with quotations from those cases, but it all continues in the same direction.

We come now to the recent tax cases. I asked the Minister at our last sitting whether the Lisbon treaty could lead to the harmonisation of direct tax. The treaty has been silent on direct tax, but refers to indirect tax. The answer is that the court is already there. It has already invaded corporation tax and invoked the general clauses of the treaty on non-discrimination to strike down national tax legislation. An important example is the 2002 Lankhorst-Hohorst case on tax credits on payments by a subsidiary to its parent company in a member state. I mentioned that in our previous proceedings; it denudes national treasuries of huge sums of money, although it is quite favoured by the finance directors of international companies.

Then we come to the court setting up its own criminal areas, such as in 2005, with the environmental protection case. The court decided that the EU can specify and impose criminal offences and penalties in the very wide fields where the EC has existing competence. If that was right, the court had these powers over criminal law from the day the treaty of Rome was signed on 25 March 1957. Yet if anyone had said that in 1957, they would have been laughed at.

As the noble Lord, Lord Kingsland, mentioned, we saw how the opt-out from the 48-hour week, which was negotiated at Maastricht, was circumvented because the Commission said that it did not come under social policy but under health and safety at work. The court agreed and the United Kingdom lost. In our previous proceedings I read out the resultant letter from Mr Major to Mr Santer complaining about what had happened.

It does not help, therefore, if noble Lords say that there is nothing new in this. The process will go on as before. The court is free to interpret the treaties in the way it wants and nothing that is put in the treaty— certainly nothing in the charter—can be safely relied on. It will, I am afraid, be reinterpreted by the court to expand those powers ever further. I therefore support the amendment.

Lord Denning made the point some time ago that anything that this court interpreted as within its jurisdiction—and he appreciated that it had created its own jurisdiction—was supranational law, to which we were subjected. This was an objective view from a great lawyer, and that is where we have got to today.

I was a member of the European Court of Justice for 11 years. I declare that interest without the overwhelming sense of guilt or shame that one or two noble Lords appear to suggest I should feel. As has just been said, it is clearly right that in some areas the European Court has developed important issues and principles and has created a structure for the Community which has been long established. It did not need a political motivation to interpret the treaty in those ways. The cases which have been cited with great skill—I was very happy to be reminded of them; I certainly could not have done it myself at this stage—were, however, all fully in compliance with the provisions of the treaty.

It is inevitable that the European court will be involved in questions concerning the interpretation of the charter. This will include working out the relationships that have already been indicated between the charter and the European Convention on Human Rights and between the Luxembourg court—the European Court of Justice—and the European Court of Human Rights at Strasbourg.

Regarding the decisions of the court in other areas, to suggest that if it comes to interpreting the charter the European Court of Justice is bound to run amok and do dreadful things is not borne out by the history of human rights. It is quite obvious that it was the European Court of Justice which introduced into the European Community the concept of fundamental rights. I believe that that has been to the great advantage of the European Union, not only the institutions but the states and their citizens over the years. In doing so, the court moved in a very moderate way, and here I am talking about the European Convention on Human Rights and the protection of fundamental rights.

It was not surprising that when the European Parliament and the Council of the European Community saw the way in which fundamental rights had been recognised as applying in the Community, although not specifically included in the treaties, they saw that they were necessary for the good health and working of those treaties. The European Parliament and the Council both expressed complete approval and full support for what had been done, and indicated that in the future, these fundamental rights must be regarded as part of European Community law. There was no criticism at that stage of the kind one now hears implied, that the court had got it all wrong in developing these fundamental principles. On the contrary, people accepted that what had been done was necessary and fully justified by the terms of the various treaties.

As I have said, it is suggested that the European Court of Justice will run amok in some way, but let us look at what happened in the past when the court was developing these fundamental points, which were not expressed in the treaty and were not binding on the Community through the European Convention on Human Rights. The principles declared by the court were developed with what had been done in Strasbourg in mind. It was my experience that the court moved slowly in this regard because it was reluctant to take fundamental decisions on questions raised in cases before it where the Strasbourg court had not spoken, and where it had spoken, it was our practice to follow and apply as far as applicable in the Community the principles that Strasbourg had already laid down. I suggest that that attitude is likely to govern the approach of the European Court of Justice in dealing with fundamental rights issues in the future.

Finally, it was suggested some years ago that there should be a reference procedure similar to that between national courts and the Luxembourg court by which that court could refer questions on interpretation of the convention—and now perhaps in the future—on interpretation of the charter to the Strasbourg court. It was not adopted at the time, although it was suggested by my predecessor as Advocate-General in the court, and I do not believe that it is necessary now. But if difficulties were to arise, this could be looked at again. It may be that the Strasbourg court could be consulted in some way by the Luxembourg court in terms of the interpretation of these various rights and non-rights as set out in the charter. That may be something that should be looked at again.

All I suggest is that one should not be driven into a state of total fear and anxiety by the thought that the European court in Luxembourg may have, from time to time, to comment on the meaning or content of a particular fundamental right, and on the way in which it should be applied.

Perhaps I may ask the noble and learned Lord a further question; like other noble Lords, I have found his intervention extremely helpful. Some noble Lords have been adumbrating the theme of the European Court of Justice running amok. But is it not fair to say that that could not happen without redress?

Perhaps I may give an analogy from UK history. In the trade union world, the most famous case of the past 100 to 150 years was the 1901 Taff Vale judgment which overturned what we had thought was the common law right to strike. Parliament, under the then Liberal Government, of course reversed that judgment in 1906 with the famous words about tort and no court taking action in contemplation of a trade dispute. By analogy with, let us say, competition law, if the European Court found that the existing law meant such and such but the Community institutions realised that that was not what they wanted to achieve, and if there was a wish to change the rules governing competition policy through treaty or a decision of the Council of Ministers and the European Parliament, then that would, ex hypothesi, be binding on the European Court of Justice. Does the noble and learned Lord believe that something along those lines would be a fair way of looking at the limitations on the powers of the European Court of Justice?

As I understand it, certainly; once the court has spoken, the law is binding. However, through the co-decision procedure, it is always open to the Council—as it is to Parliament in this country—to change the law and the practice. That is what I have always understood democracy is about in this country. It is equally so in the European Union.

Perhaps the noble and learned Lord could also help me; I found his speech very useful. I bear a scar because I was elected to Parliament and was a member of the Government who gave a manifesto commitment about implementing the Maastricht treaty and who secured the opt-out under the Social Chapter. I made many speeches and told people there was no possibility of the working time regulations being approved because we had a veto. However, the European Court decided that the regulations were a health and safety measure. That seemed an extraordinary decision in the face of the assurances given by the Government of the day and by elected Members. As this health and safety matter could be passed by a majority and could not be amended, we as Members of Parliament were unable to reverse it.

I am nervous about the conduct of the European Court because of that experience. That experience is why the noble Lord, Lord Pearson of Rannoch, has expressed concern about the Court running amok. I would not go as far as saying that, but that experience is at the root of our anxiety and nervousness. Can the noble and learned Lord help me on this?

During my time there I never had any feeling that my colleagues were driven by political motivation or that they were setting out to achieve anything that was not clearly and expressly covered by actual provisions of the treaty. I never had any ambition to create a new Europe all of my own or to develop principles that happened to be dear to me personally. I believe that we all looked at the wording of the articles of the various treaties and gave effect to it. Giving effect to it sometimes surprised people. People who had never read the treaty thought that it was just a Common Market treaty. They had not read the social provisions; they had not even read all the economic provisions to understand what was included in the treaty.

I well understand that people react adversely to decisions of the Court. I have suffered from that not only in Luxembourg but, at different levels, in the courts of this country, including in the Judicial Committee of your Lordships’ House, of which I am grateful to have had the opportunity of being a member. People sometimes resent the decisions of the Court. Noble Lords who read the press sufficiently will know that even the courts of this country are constantly being assailed by those who write about these matters. There will certainly be decisions in future that some people will not like. What is essential is that one should be sure that the Court is genuinely seeking to give effect to the provisions of the treaty. For my own part, in the light of my time there, and from following what it has been doing to some extent since, I am quite convinced that that has always been its intention and its wish.

Can the noble and learned Lord answer two questions, which arise from his eminent intervention? He said that the Court’s powers are limited and that, although there is no appeal against the judgments as such, national parliaments and the Council and so on are free to revisit the judgments by going back, passing laws and reaching unanimity in the Council to reverse what the Court has said. Therefore, my first question is: can he give your Lordships any example of where that has happened since we joined the European Community in 1972, leaving out, I suggest, the Factortame case, where the United Kingdom Parliament attempted to reverse a treaty provision and a Court judgment, and failed? What examples are there of this theory in practice?

Secondly, does the noble and learned Lord feel that anything that he said disagrees with the judgment of the Court that I read out? I shall read one sentence of it again:

“Article 1 of the Single European Act makes it clear that the objective of all the Community treaties is to contribute together to making concrete progress towards European unity”.

The Court went on to say that the treaties are,

“only a means for attaining those objectives”,

and that those objectives should be—

Perhaps the noble Lord will give way. Of course, he is entitled to speak as often as he likes in Committee, but I hope that your Lordships will forgive me if I remind the Committee that we are still on the first amendment on a very important subject. We have a great deal to go through if we are to complete the Committee stage in the agreed time. I wonder whether the noble Lord and others—I am not picking on him—would mind directing their questions briefly to those who have already spoken so that they can be answered and we can move on. I hope that the Committee will forgive me but I think it is time that that was said.

I sympathise with the noble Lord’s position but we are dealing with the powers of the Court of Justice, which are crucial to our membership of the European Union. We have had a very important and somewhat unexpected intervention from a former judge of that court. I had finished with my quotation and simply ask the noble and learned Lord whether anything that he said goes against that judgment of the Court—that it is there to make judgments in ever wider fields towards the construction of the unified Europe. What examples are there of when his theory has worked out in practice, and does he disagree with the judgments of the Court that I read out?

In view of what has been said from the government Front Bench, I should like to keep both questions for a later amendment. Having looked at the amendments that have been tabled, there seem to be many opportunities for that to arise. However, briefly, the Court has said that the Community is moving to a state of greater unity, and if you read the treaty—even the first five or six articles—it is plain as a pikestaff that that is what it is required to do. The Court has on many occasions taken decisions in regard to the member states which are not popular but which have simply set out to achieve what the treaty is doing.

I am delighted to follow the noble and learned Lord, Lord Slynn of Hadley. He has been a personal friend of mine for over 50 years and I greatly respect his judicial work. What he said today, he said with immense authority. I believe that he has far more authority to speak on this subject than any other Member of your Lordships’ House. He has done that today to great effect.

As I said at Second Reading on 1 April—a not entirely auspicious day—I believe that giving the charter legal status will serve a useful purpose. First, it fills in a black hole in the operation of human rights law in the European Union. Unlike the member states, the European Union is not bound by the European Convention on Human Rights, because that convention does not apply to acts of the European Union or its institutions. It applies only to acts that come within the member states, and the EU is obviously not a member state. While the ECJ can take into account the general principles of human rights recognised by the member states, there has until now been no clear definition of what those rights are. The charter of fundamental rights will provide not an ideal definition but certainly a considerably better one than we have now.

The effect of the charter is both limited and modest. As stated in its preamble, the charter reaffirms rights and does not create them. Article 51.1 of the charter states:

“The provisions of this Charter are addressed to … the Union … and to the Member States only when they are implementing Union law”;

while, as stated in Article 51.2, the charter

“does not establish any new power or task for … the Union”.

The charter does not apply to domestic law, as the European Union Committee of your Lordships’ House makes clear in chapter 5, paragraph 60 of its extremely valuable and useful report.

The charter is far narrower in scope than the ECHR or the Human Rights Act, which apply to all acts in exercise of public authority except for Parliament itself. It restricts the powers of the European Union and of its institutions. It enlarges the powers to challenge EU legislation or activities. I agree with the report of the Constitution Committee of your Lordships’ House that,

“the change in status … from political document to having the force of a treaty would be less of a radical step than at first it may appear”.

Is the need for the charter of fundamental rights eliminated by the accession of the European Union to the ECHR? It is true that the charter and the ECHR have many similarities, and there is some risk that without a mechanism to solve this problem, the ECJ and the European Court of Human Rights may come to different interpretations of similar texts. For that and other reasons I would certainly welcome the accession of the EU to the ECHR, which would give the ultimate decision to the European Court of Human Rights if there was any divergence. As the report of the European Union Committee of your Lordships’ House says in chapter 5, paragraph 118:

“This would assist to avoid any risk of conflict between European Union law and the European Convention on Human Rights as interpreted in Strasbourg, by placing fundamental rights on a single consistent foundation throughout the EU”.

Article 1.8 of the Lisbon treaty requires the EU to accede to the European Convention on Human Rights. Unfortunately, that is not quite as simple as it sounds. Such accession requires a new protocol, currently the draft protocol 14, to be ratified by all member states of the Council of Europe. The draft protocol has in fact already been ratified by all member states except for one. Unfortunately that member state is Russia, and Russia’s present attitude to the West makes it uncertain whether the protocol will be ratified in the near future. Perhaps the Conservatives, whose delegates to the Council of Europe sit in the same group as the Russians, might put some pressure on their colleagues to achieve that. The fact that there could well be a significant delay in the accession of the EU to the European Convention on Human Rights certainly strengthens the case for the charter, which reaches parts that the ECHR cannot reach. I do not see the charter as a threat to the United Kingdom or to our legal system. No doubt the charter could have been better—it is somewhat clumsy and sometimes long winded—but it is plainly a step in the right direction.

The protocol on the application of the charter to the United Kingdom and Poland serves as a defence against largely imaginary threats. As the EU Committee pointed out in Chapter 5.87, the protocol is not an opt-out. I think that that is now generally accepted. It is a pleasantly short document among many long documents and states in its preamble that the charter does not create new rights or new principles. In Article 1, it states that the charter does not extend the present powers of the ECJ to rule that UK laws are inconsistent with the rights or principles of the charter. It also states, in Article 1.2, that the rights mentioned in Chapter 4 of the charter on social and economic rights are justiciable in the United Kingdom only so far as the United Kingdom has provided for justiciable rights in its own laws. It is almost certain that the social and economic rights in Chapter 4 of the charter are not justiciable in any event. However, if we are wrong on that, this protocol will prevent it. I disagree with what the noble Lord, Lord Waddington, said on that.

The effect of Article 1.2 is to remove the binding effect in the United Kingdom of ECJ decisions on social and economic rights in relation to other countries. It is possible that the law on social and economic rights may therefore vary between the United Kingdom and/or Poland and other EU countries. What will not happen is that decisions in relation to, let us say, France would also apply to the United Kingdom if that would be contrary to the clearly expressed intention of Article 1.2. Article 2 states that, in application to the United Kingdom, references to national laws apply only to the extent that rightful principles in the charter are recognised in the law and practices of the UK.

All the protocol does is emphasise and clarify the interpretation of the charter, which is already implicit in it. That was the broad view of the EU Committee, as set out in Chapter 5.103 of its report. There is no need or justification for any of the amendments in this group.

The debate so far has taken a direction which I had not anticipated. Until the noble Lord, Lord Goodhart, spoke it had concentrated mainly on the ability of the European Court of Justice to decide exactly what is and is not law. The noble Lord, Lord Goodhart, at least mentioned the charter—which it seems we are not going to discuss—the details of which are very important. The last time we discussed them was when we debated the treaty of Nice, although that treaty did not incorporate them in a judicial sense. The charter deserves a very close examination because some of its effects on British law will be very severe indeed. I will not go into all of them because we are clearly spending a great deal of time on this amendment. The noble Lord, Lord Bach, wants us to get on so I will try to do that.

The noble Lord, Lord Campbell of Alloway, mentioned Lord Denning. As the debate has concentrated on the powers of the ECJ, it is worth referring to a speech that Lord Denning made in this House on 31 July 1986. I shall read this summary of that speech:

“Acts of Parliament and decisions of our courts have been set aside and rendered invalid by decisions of the European Court, which is superior in all matters of EEC law not only to British Courts, including the House of Lords, but also to Parliament where their Acts past, present or future have been, can be and will be declared illegal by an overweening court sitting in a foreign capital. As we proceed with the completion of the internal market the powers and decisions of this supranational court will impinge more and more on every aspect of our national life, social, legal, political, business, labour, economic and, indeed, on our relations with countries in the rest of the world outside the EEC. Business and individuals will find themselves, unwittingly, breaking laws of which they have no knowledge and which have been made, not by their own Parliament in public, but by the institutions of the EEC meeting in private, probably after wheeling and dealing in secret”.

Those are not my words. I am not clever enough to deliver such a judgment as that, made by one of our most famous Law Lords. However, if we take his view as correct, as I am sure we will, he really put the matter in its true perspective. The European Court will eventually decide whether the Charter of Fundamental Rights will be justiciable in regard to this country. The noble Lord, Lord Pearson, referred to a number of cases where the European Court has decided matters in spite of what Parliament felt about it and had decided. He mentioned in particular the Factortame case, which really established the superiority of the European Court because it forced a British Government to reverse an Act of Parliament which it had made to protect the livelihoods of Scottish fishermen. It reversed the decision of Parliament and of the British Government to protect their own citizens or a section of their citizenship. The result was that Spanish fishermen were allowed open access to Scottish and of course British waters and the state had to pay, I believe, between £200 million and £300 million in compensation. That confirms where the power really lies.

Before I sit down, perhaps I may read one or two quotations, if I can find them. The EU Commissioner Margot Wallström said:

“The Charter will be binding for the European institutions, and also for Member States when they implement EU law, even if this will not apply to all of them”.

By the Government’s own admission, 70 per cent of all legislation comes from Europe. Whatever they say, the charter will apply in a good many instances. Then there is the former EU justice Commissioner, Antonio Vittorino, who questioned the legal basis for the British opt-out from the Charter of Fundamental Rights and said that it would not work.

I ask the Minister: what is the view of the European Commission? Has its view been sought? If not, why not, and will it be sought now? The Commission is an important part of this business and it would be useful to know whether it agrees that our opt-out is watertight. I very much doubt that it will. With that, I support the amendment and those that go with it.

I was fascinated by what the noble and learned Lord, Lord Slynn, had to say and was sorry that his exchange with the noble Lord, Lord Pearson, was curtailed. The powers, role and behaviour of the European Court are central to all this. I think that the noble Lord took it as a criticism of the Court’s behaviour, but I felt that the noble and learned Lord, Lord Slynn, was reinforcing some of the points made by the noble Lord, Lord Pearson. When he said that everything the Court had done was consistent with the treaties, that was precisely the point the noble Lord, Lord Pearson, was making. It was not consistent, however, with what those of us who are pro-Europeans—

I notice some laughter from the Liberal Benches. They are so pro-European that they cannot think of a single amendment to put down for discussion in the consideration of this treaty. I voted yes, and have always supported Europe. One of the reasons I have been so opposed to the tendency towards centralisation in Europe is that I believe it will destroy the European project because we will end up with an institution that does not carry political consent and where people are unable to make changes that affect their lives. That is what will destroy Europe, and those people who wish to hasten the process of federalism and integration are actually the enemies of the European ideal because they will destroy it. There is no monopoly of wisdom here.

I am grateful to the noble Lord for giving way. Having sat and listened to my noble and learned friend Lord Slynn, I did not draw the conclusion from his words that the noble Lord, Lord Forsyth, appears to have done, nor did I think that one single word that he said in any sense validated the fears that have been expressed about the Court of Justice. My noble and learned friend said that the Court applied the treaty. What on earth does the noble Lord, Lord Forsyth, think it would do otherwise? What does he think it was set up to do? Of course it applies the treaty. My noble and learned friend said clearly that in doing so it was not politically motivated but motivated by its position as legal minds set up under the treaty to apply it.

I say to the noble Lord, Lord Hannay—I have to be careful about asperity of speech—that I thought the Court was doing what he and his former colleagues in the Foreign Office told us, when we were in government, that it was doing; that the Court would look at the terms of the treaty itself in the way that we in this Parliament are used to looking at the terms of the Bill. Instead, the Court has looked at the wider considerations, and the noble and learned Lord, Lord Slynn, pointed to that. The noble Lord, Lord Pearson, gave several examples—I do not want to detain the Committee by repeating them—of judgments that showed the Court taking the view that it was part of its role to promote a wider and closer European Union in interpreting specific areas of law. So I thought that the noble and learned Lord, Lord Slynn, was being supportive of the argument of the noble Lord, Lord Pearson.

I shall make this point and then I shall give way. The argument of the noble Lord, Lord Pearson, was that the Court was not behaving other than by looking at the acquis and the treaties and was doing something that was perhaps not anticipated by some of us. His concern in respect of the amendment is how we can have confidence that this process will not continue. That is the question that I should like the Minister to deal with. Like some of us who have been in government, she may find in the future that, having said things and given assurances on the basis of advice from officials and others, they turn out to be wrong because the European Court behaved in a particular way. That is my concern. I give way to the noble Lord.

I am grateful to the noble Lord, whose asperity I enjoy. Does the noble Lord agree that his party has always stood for the rule of law as a fundamental principle of Conservatism? Does he further agree that, within the European Union, we have a system founded on the rule of law and that we entrust to the European Court of Justice the ultimate responsibility for interpreting and applying the treaties in accordance with the rule of law? The question then is: who other than the European Court of Justice is to decide, for example, whether the principle of subsidiarity is breached? Who else would he have decide these important questions of law? Would it therefore not be better to support the European rule of law and the European Court of Justice instead of attacking them?

The noble Lord is absolutely right—of course we support the rule of law. However, there is another principle that we support. I refer to the principle of democratic accountability. What the noble Lord is not taking account of is that, if we have the European Court taking a view that promotes a wider Europe—or a deeper Europe or whatever expression one wants to use—and deciding, for example, that working time is a health and safety matter, it should be possible for democratically elected politicians in the countries affected to reverse that. Unfortunately, it has become more and more difficult to do that, particularly as the veto has been eroded in more areas of national life. I know that the noble Lord is committed to Europe—if not always to the manifesto promises on Europe that have been made by his party. However, if one has an institution that makes laws that people cannot change when they turn out to be bad laws, that institution will come into conflict and will undermine respect for the rule of law. I believe that it is part of supporting the rule of law to have institutions that are democratically accountable. My concern about this treaty, and the reason I support the amendment of my noble friend on the Front Bench, is that we may be walking into yet more areas where laws are changed in ways that do not carry consent, where Parliament is unable to intervene and voters feel frustrated. I thought that the speech made by the noble Lord gave some weight to that. Perhaps the Minister will explain how it will be different this time.

On TUPE, on working time and on a range of other things, we gave assurances that turned out not to be correct. I supported the Single European Act when I was Parliamentary Private Secretary to my noble and learned friend Lord Howe of Aberavon. I had doubts about it then. People argued that it would not be used to extend the competence of the Community. We were given assurances that this would not be the case, that it was the letter of the law that would matter and not the general spirit. So we feel “once bitten, twice shy”. I hope that the Minister, in railroading this legislation through the House, does not find that she, too, is bitten. I hope that she can give us assurances about that. I shall give way briefly.

I am most grateful to the noble Lord for giving way. This is the third or fourth time, on the first and second day of Committee, that he has taken as his principal example the working time directive. That was introduced under the health and safety provisions of Article 118, which of course preceded the Maastricht treaty—it was not introduced under that treaty. He has repeated the travesty that we were given specific assurances that the Maastricht treaty opt-out meant goodbye to the working time directive. I do not accept that anybody in Brussels would agree that such specific undertakings about the effect of the Maastricht treaty were given. It confirms that the European Court of Justice was not influenced by any wider political considerations but just by the question of whether health was centrally tied up with long working hours, which it found to be the case. We should not cast any aspersions on the European Court of Justice by suggesting that it had any wider political or other motivation. I can well understand that the fact that the noble Lord’s advice to the Prime Minister was wrong has got under his skin, but his history is woefully wrong.

I shall try to deal very briefly with that. The Government may have been wrong, but we stood on a platform of maintaining workplace laws and conditions within the competence of the United Kingdom. The opt-out from the Social Chapter of the Maastricht treaty, which this Government gave away on being elected in 1997, was fought for hard, because there were concerns about the effects on competitiveness.

The noble Lord was correct on the timing of the working time directive. The point that I was making was that we had a clearly defined policy; we assured people that it was possible to deliver it, because it was subject to qualified majority voting—under Article 118A, if I remember correctly, but it was a long time ago. That was then overturned, because the Commission reintroduced it as a health and safety measure, with the European Court holding that working time was a health and safety issue, thereby stretching the elastic beyond a point of breaking.

That was a highly contentious and political decision, making it a matter that required unanimity in the Community and the Commission to bring it forward. It therefore became impossible for a democratically elected Government to deliver the policy in respect of working time on which they might have been elected. That was the point that I was trying to make, if perhaps not terribly expertly. I hope that the noble Lord now understands my concern about the role of the Court.

In respect of the future, I am concerned that the Minister may be in the same boat in thinking that she has all these red lines and has secured the position, only to find that the Court will continue to behave as it has done from the beginning, which is to promote a wider and deeper Europe and stretch the elastic to breaking point. That may very well damage the European Union and the institutions to which I know the noble Lord is committed.

I want to intervene on the word “railroading”, because I want it to be clear in Hansard that, before we determined the number of days in Committee, I consulted the Front Bench of the noble Lord’s party and that of the Liberal Democrats. I consulted the noble Lords, Lord Stoddart, Lord Willoughby de Broke and Lord Hannay, as well as the noble and learned Lord, Lord Howe of Aberavon. I have had an open session at 1 pm every day that the Bill has been in Committee—I believe that that has been on the Whip of all the political parties and has been made known to the Cross Benches. At no point has anybody come to me and said that we have inappropriate time or are being railroaded. The noble Lord, Lord Stoddart, has made representations to me that, because of his concerns, we should try to finish at 10 pm every evening. There is no suggestion in that of railroading. I have listened with great care to all the representations and at no point has anybody put that to me. I hope that the noble Lord will accept that he has had ample opportunity to put his points to me in other ways.

The Leader of the House is always extraordinarily accommodating, courteous and helpful in Committee. That has been my experience. My reference to railroading was about an intervention on the noble Lord, Lord Pearson, who has tabled a number of amendments to the Bill and who is putting across a point of view that I know the Government do not share. When the noble Lord, Lord Bach, intervened, the noble Lord, Lord Pearson, was making a very important point—it is not often that we have an opportunity to speak to someone who was at the European Court. I felt that, if we pressed on—perhaps people felt that enough time had gone by—an important issue would be railroaded. I apologise to the noble Baroness if she felt that that was a criticism of her general conduct in relation to the Bill, but the Front Bench was being a little bit unfair to the noble Lord, Lord Pearson, in trying to hurry him on when he was making an extremely important point.

If there are problems with having only six days, we on these Benches would be quite happy to extend until midnight from now on in order to make sure that we get this through. However, I hope that it may expedite discussion on later amendments—since we have extended from discussing the charter to the role of the Court of Justice as a whole—if I ask the Conservative Front Bench, when summing up, to spell out its view on the role of the Court. In this debate, we have heard a number of noble Lords objecting to the idea of any foreign court having jurisdiction over British law and any limitations on the British Parliament.

The noble Lord, Lord Kingsland, will be aware that there is a parallel debate in the United States to the one that we are having in the United Kingdom on exactly this subject. Radical defenders of sovereignty—for example, Professor Alan Dershowitz at Harvard Law School, Justice Scalia on the US Supreme Court, the current Attorney-General, Alberto Gonzalez, and others —take the view that it is not possible to accept international law overriding US domestic law and that the expansion of international law, conventions and institutions cannot be allowed to affect the United States.

That is much the same argument as we have been hearing from a number of noble Lords, including Members on the Conservative Front Bench, about the European Court of Justice. I would like the noble Lord, Lord Kingsland, to clarify whether he shares that view. In the United States, it has led to an argument that says, “We cannot accept further UN conventions, particularly those that involve such human rights issues as the protection of children”. Leading on from that is the argument that the United States must reject the Geneva Convention and a whole host of other things, in defence of the sovereignty of the American constitution and the US Congress.

That is a similar argument to the one advanced by some noble Lords and which will no doubt be repeated on future amendments when we get down to the role of the ECJ in general. It would be helpful if the Conservative Front Bench would spell out whether it shares this view or has a rather more nuanced one. In a world that is increasingly globalised, we have to share sovereignty both regionally and globally. It is convenient on occasions to negotiate agreements within a European Union in which we share sovereignty with a rather smaller number of Governments of rather more like mind. There are positive aspects to that.

This has been an interesting and diverse debate. I am not entirely surprised to find that it ranged so widely across many of the issues. I say again to noble Lords that any interventions from the Front Bench have been to be helpful in reminding ourselves how much time we have and how much more we want to discuss. I have no fears about the ability of the noble Lord, Lord Pearson of Rannoch, to listen with great care to what is said by any of us on the Front Bench and then to make his own decision about whether he will continue to speak.

When I first started to talk to noble Lords about how we might construct our debates on the EU treaty, I proposed that we try to find a way of having a big debate on the European Court of Justice, as I knew that it would figure largely in debates on a number of occasions and I wanted, as far as possible, to be able to gather the main players in that, not least the noble and learned Lord, Lord Slynn, to inform us in our work.

I know that on the Conservative Front Bench there was a real desire, which I completely understand, to look at the issues line by line in the treaty. That is a completely reasonable way in which to approach it, but I am a little sorry that that did not allow us the opportunity to have what I would have enjoyed—a much longer, more detailed debate on the European Court of Justice. Some noble Lords may blanch at the idea of a longer and more detailed debate, but it is important to have that debate, not least because of the varying views that are expressed about the Court’s relevance, how it works, and the appropriateness of its judgments.

I am very grateful to those who have participated. I shall take us through the amendments and deal with the issues that noble Lords have raised. I begin where several noble Lords began, with what we want to say about the rights in the charter. I agree with those noble Lords who have assured the Committee that the rights are not new; they already bind the UK and all the member states, whenever we implement European Union law.

I made some promises about whom I would quote, which I may have to stretch to answer one of the points that has been made. However, I shall try to restrict myself to Members of this House or another place or to that which is contained in the documents and reports of either House. My noble and learned friend Lord Goldsmith, who cannot be here today, made a speech to the British Institute of International and Comparative Law in January. Noble Lords will recall that he played a terribly important part in negotiations around the charter. I hope that we will have the opportunity at some point before we finish our deliberations on this treaty to hear from him. However, my quotation from him in a sense answers the question that the noble Lord, Lord Kingsland, raised about why we should have the charter. He said that,

“the Charter performs the valuable function of providing a clear, accessible statement of the rights and obligations which create limits on the EU’s powers to legislate and to act. The Charter will not impose new obligations on Member States. It will not create new rights. As the Charter reflects only existing rights, the underlying rights will continue to have effect in the UK, as in all Member States, as they always have done”.

If we question the whole principle of the charter, we question those underlying rights, which the charter simply reports. Bringing existing rights together in one place makes clearer to citizens the rights that they can expect the EU institutions to respect, as member states already do when they implement EU law. The noble Lord, Lord Lester of Herne Hill, made that point in his contribution. In agreeing to make the charter binding, the UK insisted on a package of safeguards to provide greater legal clarity to define the scope of the obligations that a binding charter would place on the Union and the member states. These safeguards include improved charter general articles, improved explanations to the charter, an upfront reference to the charter in the Lisbon treaty and the UK-Polish protocol on the charter.

The noble Lord, Lord Lamont, rightly talked about the journey that the UK Government have made in their concerns about the charter. Our concern was that, drafted as a political declaration, it would be insufficiently precise and detailed to be made legally binding. When we negotiated around the now dead constitutional treaty, we secured improvements to the general provisions in the charter. We also secured agreement that the courts should take due regard of a detailed commentary on the charter—in other words, the explanations that identify the precise source of each charter right, a copy of which I would be very happy to give to the noble Lord, if that would be of use to him. While the Government were satisfied with the package secured in the constitutional treaty, we wanted to address continuing concerns about the effect of the charter on national law, so we also secured a legally binding protocol, making it clear how the charter is to be applied.

There are three key safeguards to ensure that a legally binding charter simply maintains the existing legal position. There are the detailed general provisions in the charter itself, which set out the limits on how it is to be applied. These are reiterated in Article 6.2 of the treaty. There is a binding reference in Article 6.2, requiring due regard to be had to the explanations. These are also published in the charter, in the Official Journal. There is also a protocol to the treaty, setting out that the charter is to apply to the UK and Poland; this is not an opt-out but a legally binding guarantee as to how the charter is to be interpreted and applied. In particular, Article 1.1 in the protocol says that it does not create new justiciable rights and, under Article 1.2, charter rights that refer to national law are limited to those rights as defined in national law. I say to the noble Lord, Lord Kingsland, that Article 1.2 makes it particularly clear that solidarity rights—Chapter 4 of the charter—do not establish rights that do not exist in national law. This chapter, which also covers the right to strike, was of particular political concern. It does not in any way undermine existing rights.

The charter’s general articles set out and limit the scope and application of the charter. They make it clear that the charter is addressed primarily to the Union institutions and affects member states only to the extent that they implement European Union law. They also clarify that the charter does not extend the powers of the Union or give it any new power or task.

The charter’s general provisions, and the explanations, make it clear that the rights in the charter sourced from the European Convention on Human Rights and EU law must be interpreted and applied in the same way as they are in their source instruments; that is, from where they come. The charter cannot be used to extend existing rights. As noble Lords who have read them will know, the explanations also set out the difference between enforceable rights in the charter and principles, which guide the actions of the Union’s institutions and the member states when implementing Union law but are justiciable only in the interpretation of such actions.

Treaty of Lisbon Article 1.8, which replaces Article 6, will provide the key safeguards in the text of the treaties. The article provides that,

“the Charter shall not extend in any way the competences of the Union as defined in the Treaties”,

that the charter provisions must be interpreted in accordance with the charter’s general articles and that “due regard” must be given to the revised charter explanations.

In addition, as I indicated, the UK secured a legally binding protocol to the charter. The UK’s position has always been that the charter sets out existing rights. It does not create any new rights and does not extend the powers of the courts. Where, as in many cases, charter rights are based on national laws and practices, they must mirror the extent and content of those national provisions. The protocol’s intention therefore is simply to confirm these points for the UK—to put it down in black and white for all to see.

The protocol has the same legal force as the treaties and is very clear. No court, including the European Court of Justice, can ignore it or strike it down. It confirms that the charter does not create any greater rights than already apply in EU law and does not extend the powers of any court—European or domestic—to strike down UK laws. It also guarantees that, to the extent that the charter refers to national laws and practices, it applies in the UK only to the extent that the rights or principles concerned are recognised in the laws and practices of the UK.

All these legal safeguards, including the protocol, will ensure that the charter does what it was intended to do, which is to record the existing rights, freedoms and principles that apply in the Union. As has been said, the European Union Committee report states clearly that the committee,

“expect the effect of the change in the charter’s status to be limited”.

There is no question of UK citizens having fewer rights than other EU citizens due to the UK protocol. That is because the charter creates no new enforceable rights. The existing rights and principles recorded in the charter will continue to have effect as they always have done on EU institutions and member states when implementing EU law.

Amendments Nos. 87, 87A and 88 relate to the UK protocol to the charter that I have described. The amendments would remove three non-binding interpretative paragraphs in the preamble to the UK protocol to the charter. Noble Lords involved in legal matters—

I apologise and thank the noble Baroness for giving way. This is a very short point. It is not a question of striking down English law; the problem is that, given the jurisdiction of that Court—for example, as regards strikes—if it assumes jurisdiction and makes a decision giving health reasons or whatever, we cannot do anything about it. We cannot strike down its law. As far as we are concerned, it assumes a jurisdiction that we, as a democratic country, cannot do anything about. It is total deference, not a striking down.

I thought that the noble Lord had sat down and I did not catch his last sentence. It is not right to say that the court can assume jurisdiction. The European Court of Justice’s role is to look at and interpret how the institutions of the European Union are interpreting the law and make sure that the law in each country is relevant, appropriate and put into practice properly. The UK Government have for many years supported the role of the European Court of Justice in doing that. If you wish to make law stick across member states, it is important for there to be a legal body that can determine that that law has been put into practice properly. That has been the tradition of this country for hundreds and thousands of years. It is very important.

Noble Lords may not always like the decisions and judgments of European courts—indeed, on occasion they dislike the decisions of the domestic courts. None the less, I have stated the purpose of the courts. Therefore, I contest the idea that the role of the European Court of Justice is somehow to land grab by making decisions in the way that has been described.

The noble Lord who raised the issue of health is, in a sense, referring to the working time directive and I will make comment on that shortly. It is about making sure that the interpretation of the law in terms of where that principle sits is correct and proper. But when one looks at the charter and the list of where all of the articles come from and where they are grounded—whether it is in the European Convention on Human Rights—

The noble Baroness said that all the articles can be traced. Where does Article 13 of the charter come from?

I can tell the noble Lord where every single article comes from. I am very happy to provide that information, because it is incredibly useful. For those noble Lords who do not have it in front of them, Article 13 is on freedom of the arts and sciences. It states:

“The arts and scientific research shall be free of constraint. Academic freedom shall be respected”.

It derives from Article 10 of the European Convention on Human Rights, which is already part of EU law and is the same as that article.

The noble Lord specifically asked about the genesis of Article 7 on:

“Respect for private and family life”.

In a sense, the noble Lord, Lord Lester, dealt with that when he said that it was part of Article 8 of the European Convention on Human Rights and is, therefore, already part of EU law. The noble Lord asked me about Article 29 on:

“The right of access to placement services”.

In this context, it is a principle to guide the EU institutions when they legislate. It is not an enforceable right. We continue to determine our own placement services.

If noble Lords would find it helpful, I would be more than happy to provide more detail, because it might help to assuage some of their concerns. We have tried to put as much as we can in the Library of the House, but I am always conscious that I should not overload noble Lords. We will make sure that we provide that detail as soon as possible.

Amendment No. 89 seeks to remove the additional protection for UK social and labour laws from the UK protocol to the charter. Ensuring that the UK’s labour and social legislation was protected was, and remains, a UK “red line”. The charter protocol guarantees that the charter cannot be used to undermine existing UK laws—in particular, but not exclusively, economic and social legislation. To those who have been concerned about the potential impact of a binding charter on UK law, it is right to say that the social and labour rights in the charter have been the principal source of concern.

I can reassure the House that this concern is not justified, as all the social and labour provisions in Title IV of the charter are either existing rights in UK law, are tied back to national law, or are guiding principles—for example, the one on placement services—rather than rights. Rights cannot, therefore, be created, except in so far as they are provided for in national law. A specific reference to Title IV helps to clarify the existing position on those provisions. Perhaps I may quote my noble and learned friend Lord Goldsmith from the same lecture to which I have referred. He said:

“As all the provisions in this Title [Title IV] are either existing rights in UK law, tied back to national law or are guiding principles, it clearly follows that they cannot create rights except in so far as they are provided for in national law.”

However, he continued,

“sometimes, as we all know, it is necessary for reasons of clarity and reassurance to reiterate points provided for elsewhere”.

So although UK social and labour laws are protected, we do not reduce the level of protection enjoyed by UK workers. I could go on, but I will not, to talk about the importance of social rights and the benefits of parental leave, European work councils and the rights for part-time workers that I believe are so essential to providing the right framework for the people in our workforce.

Amendment No. 117 aims to prevent domestic courts recognising the legal status or to take account of any proceedings in courts outside the UK based on the charter. Amendment No. 118 adds from the noble Lords, Lord Pearson of Rannoch, Lord Willoughby de Broke, and Lord Stoddart, a further sentence—namely that the word “notwithstanding” be added at the start. There is an intellectual legal difficulty with Amendment No. 117. It runs against, I would argue, the whole scheme of the 1972 Act, which is the mechanism by which European law is implemented in the UK, because it prevents the charter having effect.

I am putting forward a very simple proposition. The UK is a member of the European Union and, as such, bound to implement EU law. Members of the Committee may not like that and may wish us elsewhere, but while we are a member of the European Union, we are bound to implement EU law. I think noble Lords know that we derive great benefit from that. It is right that the fundamental rights, freedoms and principles that are recognised in the charter apply across the whole field, binding the Union institutions and the member states when they are implementing Union law. Accepting the amendment would mean that the courts could not take account of the charter and that the UK could not ratify the Lisbon treaty.

Let me answer as many of the specific points as I can. The noble Lord, Lord Stoddart, asked whether we had consulted the Commission on the UK charter protocol. The protocol forms an integral part of the treaties—primary EU law agreed by the member states—and the Commission is a creature of the treaties so it does not have any free-standing right to rule on what is set out in the treaties. The only way of answering the noble Lord, Lord Stoddart, is to break my own promise about not quoting people. The noble Lord, Lord Howell, will have to forgive me—I will try not to do this again but I cannot think of another way of doing it. On the “Today” programme, Mr Barroso described what he believes to be the case on behalf of the Commission. He said:

“I think the deal done by Britain was very clear in keeping the role of the British courts and I think there are no dangers of revision of the conditions negotiated by Britain through … the jurisdiction of Brussels”.

That is as close as I can get to giving the noble Lord what he seeks. Bearing in mind what I have said, it would be inappropriate, at best, to formally consult a creature of the treaties about the role of the treaties.

The noble Lord, Lord Kingsland, and other Members of the Committee asked about whether the European Court of Justice in Luxemburg or the Court of Human Rights in Strasbourg has priority. The charter does not change the position. The European Court of Justice will be able to decide how fundamental rights apply in European Union law. That is what it does now. The Court of Human Rights will have the final say about the meaning of the rights in the European Court of Human Rights. So EU law has the European Court of Justice as its final arbiter and the European Court of Human Rights in Strasbourg has the final say on human rights, as is the position now. Nothing has changed.

The noble Lord, Lord Kingsland, also said—

I wonder whether I am right in saying that recently in the Bosphorus airline case the Strasbourg court made it clear that it will do its best to make sure that there are no conflicts between the two courts and that both courts in their recent case law have done their best to ensure that there will be no conflicts.

The noble Lord is right and, of course, knows far more about the workings of the court than I could ever dream of. I, like the noble Lord, Lord Lamont, am not a lawyer and it shows in my case more often.

The noble Lord, Lord Kingsland, asked me about litigants who do not agree with what the European Court of Justice says about fundamental rights being able to open the case. They already can—again, no change is suggested.

The noble Lords, Lord Lamont and Lord Kingsland, asked what mechanisms or timetable are in place for our EU accession to the European Court of Human Rights. I take the point that was made by my noble friend and by the noble Lord, Lord Goodhart, about the role of Russia in the ratification in Protocol 14. Article 6(2) of the EU treaty provides for the Union to accede to the ECHR but it does not give any timetable. The protocol to the treaty says an agreement on accession must include provisions on EU participation in the ECHR control mechanisms—for example, the Council of Ministers—and the mechanisms that determine which member states should be involved in these cases. If someone wants to take a case to Strasbourg, who do they litigate against—the EU or member states? It also says that the accession must not affect competence, and that individual derogations and reservations held by member states must not be affected. So any derogations that we have will be respected. No decision can be taken on any accession agreement until after the entry into force of the Lisbon treaty and any decision must be taken by unanimity in the Council of Europe and in the European Union. That is as much information as I am able to give on that.

The noble Lord, Lord Lamont, asked me about Article 50 in the treaty—double jeopardy, or ne bis in idem in Latin. Article 50 is about the right not to be tried twice in criminal proceedings for the same criminal offence. The European Court of Justice confirmed this right as a general principle of EC law in 2002 but a case can be reopened if new evidence appears. Article 4 of the ECHR’s Protocol 7 says—and UK law reflects this—that:

“The provisions of the preceding paragraph shall not prevent the reopening of the case in accordance with the law and penal procedure of the State concerned, if there is evidence of new or newly discovered facts, or if there has been a fundamental defect in the previous proceedings, which could affect the outcome of the case”.

I shall end with another quote from my noble and learned friend Lord Goldsmith. The charter I have described will ensure the charter does what it is intended to do. He said:

“We should put aside the hyperbole and welcome the Charter for what it is—a clear, accessible statement of our rights and of the limits on the EU’s powers to legislate. The Charter will not impose new obligations on Member States. It will not create new rights. The Charter instead provides a clear and valuable statement of the rights, freedoms and principles which the Union’s institutions should respect”.

I hope the noble Lords will withdraw their amendments.

I am most grateful to all noble Lords who have contributed to this remarkable debate on the charter. I think all noble Lords will agree it has been greatly enriched by the contribution of the noble and learned Lord, Lord Slynn, who sat for many years as a judge in the court and who brings that unique experience to our deliberations.

I was asked a question by the noble Lord, Lord Wallace of Saltaire, from the Liberal Front Bench about the Opposition’s policy towards the European Court of Justice generally and the issue of sovereignty in particular. He may be disappointed to know that although the Opposition Front Bench has many robust policies on a wide range of political matters, it has not yet got a policy on sovereignty and the powers of the European Court of Justice. However, in a personal capacity, I will try and respond, telegraphically, to his question.

It is important not to confuse two concepts of sovereignty. One concept of sovereignty—a concept in public international law—is about the relationship between one nation state and another. Year in, year out, the United Kingdom signs many international treaties and almost invariably the consequence of the signature and subsequent ratification of an international treaty is some constraint on the sovereignty of the British state to operate internationally. A very good example is the recent convention on torture. I cannot imagine that anybody of any political party would wish to remove that power from a nation state in international society. There, I think, there would be no difference between myself and the noble Lord, Lord Wallace.

However, the issue of sovereignty that this debate raises is not the issue in public international law but the issue in domestic constitutional law, which is an entirely separate concern. Here, the point has been well made by several noble Lords from whatever point of the political compass they have been travelling. Of course, when we joined the European Community, the great cases of Van Gend en Loos, Costa and ENEL were already decided. Before we entered the Community in 1972, it was clear that European Community law had the last word on matters that fell within the terms of the treaty. The concern that has grown during the past 20 years is the scope and outreach, as the Americans say, of the powers exercisable under the treaty. It is not the principle, it is the scale that has provided the problem.

My noble friend Lord Forsyth got to the root of that problem. The Community has been extremely successful in developing the rule of law; it has been extremely weak in developing a parallel concept of democracy. The speed with which the rule of law has travelled over a wider and wider range of issues and the failure of democracy to keep up with it is the fundamental weakness of the Community. As my noble friend and many other noble Lords have said, once a law is on the statute book in the European Community, it is almost impossible to reverse it—unlike the situation domestically where, if one does not like a decision of the Appellate Committee of your Lordships' House, the new Parliament can change the law and reverse it. That is almost impossible, and certainly almost inconceivable now in a European Community of 27 states. That is why there is so much concern about the charter and whether the protocol is really watertight.

I heard what the noble Baroness said about the efforts of the noble and learned Lord, Lord Goldsmith, and I salute those efforts; but I cannot help thinking that he would have been much better instructed by the Government to use his energies to get the Community to adhere to the European Convention on Human Rights rather than to invent an entirely new Charter of Fundamental Rights which, in my view, is otiose.

I think that it is clear—I certainly accept—that the charter does not create new rights or new competencies. I am also convinced that it cannot be used to expand existing rights; but those are not the problems that our amendments raise. They raise the problem that there is nothing to prevent a new interpretation of existing rights in the context of the charter which had their origin in the European Community changing the effect of existing law in this country. That is our concern. I am not yet convinced from what I have heard from the noble Baroness that the Government have got the wording of the protocol right. That is precisely why we have tabled our amendments.

I am most grateful to the noble Baroness for her reply. It did not convince me. I shall take the amendments away and reconsider the matter, but she can be confident that I am likely to return to them on Report. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

8: Clause 2, page 1, line 12, after “excluding” insert—

“(i) Article 1, paragraph 15, inserted Article 9A TEU, first paragraph, first sentence, the words “and budgetary”;(ii) Article 1, paragraph 17, inserted Article 9C TEU, first paragraph, first sentence, the words “and budgetary”; and(ii) ”

The noble Lord said: Since I became involved in the issue of European unity when I became a member of the European Movement in the 1960s, looking back over those 40 years, one of the clouds that has hung over my vision of a peaceful and prosperous Europe has been the European Commission's handling of its financial accounting. I hope that in this debate we will focus on the budgetary affairs and the new procedures, which have been outlined, and examine how they could improve or make more complicated the structure within which the European Union will operate.

Noble Lords will know that the budgetary affairs of the European Union are a source of considerable concern to the people of this country, to the Government, I know, to many of us and to the European Union's own Court of Auditors. In November last year, the European Court of Auditors refused to sign off the EU's annual accounts for the 13th year in a row. It found that material errors had affected between 60 and 85 per cent of the European Union’s entire budget for 2006.

Aside from the apparently deep-seated problems of mismanagement and alleged fraud in the budget's implementation, there is also the whole question of the misallocation of resources. The common agricultural policy still represents about 40 per cent of all European Union expenditure. Despite all the talk of reform, the specific elements of the CAP that can distort market conditions continue to represent about a third of all European Union expenditure. The Government themselves and many Members of the European Parliament participating in this debate have always made it clear that EU spending needs real and fundamental reform. Of course it does, but how best should we proceed? Despite all the talk of reform, we do not appear to have made the progress that many of us had hoped for.

In Global Europe, which was published last October and which bore the signatures of the Prime Minister and the Foreign Secretary, they said:

“The current EU budget does not equip the EU to meet the challenges of globalisation”.

They continued,

“it is essential that resources are used more effectively … We must recognise the limits to EU budgetary intervention. Expenditure is just one of a number of policy levers, alongside coordination, sharing best practice, and legislation or regulation”.

They reminded us:

“The CAP remains the most visible and expensive common policy of the EU, but it distorts the Single Market, hampers innovation, and is increasingly out of step with the need for Europe to respond to the challenges of globalisation. Internationally, it continues to attract criticism, creates tensions in the EU’s relations with trading partners, and imposes significant costs on developing countries. Domestically, it imposes substantial costs on consumers and taxpayers and is inefficient in delivering support to farmers and promoting an attractive rural environment. Indeed”,

the Government concluded,

“much of the CAP still has a negative impact on the environment”.

So we have heard all those ambitions of the Government. They want to change the European Union budget so that it is fit for the 21st century. They want to restructure the budget so that less is spent subsidising agricultural production and more is spent on scientific and technological research and development. The Government also always stress that they want to ensure financial discipline in the use of money under the EU budget.

Against that background, perhaps we can pause for a moment and judge what the Government are presenting to us. It is difficult to understand why the Government have agreed to a measure, which we are being asked to ratify, that transfers so much control over the European budget away from the Council of Ministers to the European Parliament. In this treaty they are also presenting us with a complicated structure that I do not think will produce the financial discipline that we all seek. That is why I am moving this amendment. It seeks to exclude from ratification the new overarching provisions of the Lisbon treaty that refer to the European Parliament’s budgetary power.

The biggest change to specific budgetary procedures comes in the replacement Article 272 in what is currently called the Treaty establishing the European Community but which will be known as the Treaty on the functioning of the European Union if the Lisbon treaty enters into force. This deals with the procedure for drafting and adopting the annual EU budget. Let us remind ourselves of the existing procedure, which many of us find rather unsatisfactory. The current Treaty establishing the European Community makes a distinction between EU expenditure that is defined as compulsory under the EU treaties and expenditure that is not compulsory. Non-compulsory expenditure represents around 60 per cent of the total EU budget and compulsory expenditure around 40 per cent. Compulsory expenditure is effectively the common agricultural policy. Non-compulsory expenditure is just about anything that is not agriculture.

Under the current Article 272, the European Parliament can propose what the treaty calls “modifications” to expenditure that is defined as compulsory under the treaties. On the other hand, it can propose what the article calls “amendments” to expenditure that is defined as non-compulsory. The Council can reject the European Parliament’s modifications to compulsory expenditure and the European Parliament cannot reinstate them when the revised budget is sent back from the Council to the Parliament for final adoption. On the other hand, acting by a majority of its component members and three-fifths of the votes cast, the European Parliament can overturn alterations to amendments the Parliament wanted in areas of non-compulsory expenditure. The EU budget is then finally adopted.

In other words, at present the European Parliament has the final say over non-compulsory expenditure whereas the Council has the final say over compulsory expenditure. However, under Article 272, the European Parliament does have the power to veto the entire budget and ask the Commission to restart the whole process from scratch with a new proposed budget, exercising what has come to be called the nuclear option.

What do the Government find wrong with this existing procedure? Under the new provisions we will move to replacement Article 272, where there is no distinction at all between compulsory and non-compulsory expenditure in the EU budget. The European Parliament will therefore be able to propose amendments to anything in the budget, including to what used to be called compulsory expenditure, which means the common agricultural policy. If the Council does not agree in the first instance on the European Parliament’s amendments there is then formed something called a conciliation committee. In this committee the Council and representatives of the European Parliament have to agree a joint text of the budget. If they do not, the whole budget falls and the Commission must then present another draft budget. Both institutions, therefore, get a new power to block amendments to areas of the budget that they do not have the final say on in the current treaty. The Council is able to block amendments that the Parliament wants in relation to non-compulsory expenditure and the Parliament is now able to block changes that the Council wants over compulsory expenditure.

All else being equal, I thought at first sight that this would seem to be a better deal for the Council as currently non-compulsory expenditure is a greater share of the overall budget. However, the new budget procedure contains other changes that make it easier for the European Parliament to assert its wishes over the Council. The representatives of the European Parliament in the conciliation committee act by a simple majority. This is in contrast to the current treaty provisions under which the European Parliament has to vote by a majority of all its members and three-fifths of the votes cast to overturn Council changes to the Parliament’s amendments to non-compulsory expenditure. Therefore the Lisbon treaty makes it easier for the Parliament to block Council wishes in what would now be termed non-compulsory expenditure. By contrast, under the current treaty, the council votes by qualified majority to overturn European Parliament changes to compulsory expenditure. Under the Lisbon treaty’s new provisions, it continues to vote by QMV in the conciliation committee.

My conclusion, therefore, is that the Lisbon treaty does not make it easier for the Council to overturn the European Parliament. The Lisbon treaty’s procedure following the conciliation committee is also very significant. If the representatives of the European Parliament and the Council reach agreement in the conciliation committee, their budget agreement still has to be approved by the respective full institutions. It is here that the Lisbon treaty’s empowerment of the European Parliament in relation to the Council is at its most apparent. If the European Parliament rejects the budget, acting by a majority of its component members, the whole budget falls and the process has to start again from scratch. This is equivalent to the nuclear option that the European Parliament currently has under Article 272.8 of the TEC.

The Lisbon treaty makes it easier for the European Parliament to exercise this power. This is because the current treaty says the Parliament has to command the majority of its component members and three-fifths of the votes cast to invoke this veto. The Lisbon treaty’s replacement article requires the Parliament to vote only by a majority of its component members. On the other hand, if the Council rejects the budget but the European Parliament approves it, the budget will be finally adopted on the basis of the joint budget produced by the conciliation committee. On top of this, however, if the European Parliament votes by a majority of its component members and three-fifths of the votes cast, it can insert any of the amendments to any part of the budget it made prior to the conciliation committee.

In summary, if the European Parliament and the Council ultimately disagree on the budget and the Council does not wish the budget to be adopted, the Lisbon treaty allows the European Parliament to assert its preferences over the entire budget, which will then be adopted. Under the current treaty Parliament can finally overrule the Council only in areas of non-compulsory expenditure, which does not include the CAP. So the Lisbon treaty also makes it easier as well for the European Parliament to veto the entire budget, frustrating the wishes of the Council.

So where are we? I think that we are facing what will undoubtedly become a much bigger European Union budget overall. As the history of European Parliament decisions shows, it tends to be the biggest spender of all the EU institutions, and typically it does its best to reverse limitations on spending introduced by the Council. One has only to look at the process for drawing up the 2008 budget, where the European Parliament sought a total EU budget that was much higher than the Council’s draft budget. Indeed, the Parliament budget was even higher than the Commission’s original proposal.

One effect of all this, on which I would very much welcome the Minister’s comments, is that we may now see a continued over-allocation of resources to the common agricultural policy, expenditure which the Council can currently control, but no longer if these changes go through. By way of example, in the drafting of the 2008 budget, when it came to the heading largely comprising the common agricultural policy, the Council sought a total expenditure of €36.542 billion, whereas the European Parliament sought €36.995 billion, an increase of €453 million. I worry, therefore, that the other detailed changes which the Lisbon treaty makes will, in the Government’s own words, erode financial discipline in the arena of a much bigger EU budget.

The Council currently adopts the EU financial regulations that set out how the EU budget will be implemented and the accounts presented and audited, and decides the procedure for adopting rules governing checks on those overseeing the budget’s implementation, with consultation only by the European Parliament. However, under the Lisbon treaty the adoption of these rules will move to co-decision, giving the European Parliament the power to veto the Council’s wishes. When the same changes were proposed at the time of the earlier negotiations the Government opposed them. They said:

“The UK does not support extension of co-decision to these articles in which Council control is fundamental to maintaining budget discipline”.

We need to know from the Government what has changed. What has given rise to this recommendation in this treaty? As I understand it, David Miliband, the then Secretary of State at Defra, and Paolo di Castro, the Italian agriculture Minister, signed a joint communiqué on 19 March last year on the Italian and British shared position on the future of the European agricultural policy, and soon afterwards David Miliband suggested that his recent discussions had indicated that the UK agenda for CAP reform had “growing support”. It is really hard to understand how that can possibly be true with these Lisbon treaty changes. They will make it more difficult for the UK to address the clear and serious problems of the EU budget. Indeed, I think it will be much harder to tackle those concerns, and that is why I beg to move.

I made a declaration of interest at the start of the Committee stage and I do not think I need to repeat it now. I know that the noble Lord who moved this amendment is a bold noble Lord, and it is certainly very bold indeed to strike out of the Bill the entire budgetary powers of an elected parliament, which would be the consequence of the amendment, although he has spoken on some other matters. The European Parliament has had powers over the setting of the budget for many years, and I am one of those who believe that the changes proposed are an improvement. Part of the problem in the past has been that agriculture expenditure is too high. It has been under the control of the Council, and over many years agriculture Ministers have determined a very large part of that expenditure. In the amended system, they will not be able to do that on their own. I think that that is very satisfactory.

The budgetary role of the Parliament is only part of the steady increase in the democratically elected Parliament’s control of legislation and the budget over many years. Originally it was largely advisory, and the role in setting the budget, as the noble Lord pointed out, was strictly limited by the exclusion of the so-called obligatory expenditure, principally on agriculture and largely out of the control of the European Parliament. In earlier treaties the European Parliament increased its responsibility as co-decider on legislation over a much wider range of matters. I would say that those changes have now been largely completed, and if the Treaty of Lisbon is ratified, almost all legislation and the budget will be decided jointly by the elected representatives of the people in the Parliament and the representatives of the member states in the Council. Over a period of time that is likely to lead to a greater sense of financial discipline and the allocation of resources in a better way.

In my view, for democratic reasons it is surely right to support the change in the decision-making procedure on the EU budget, and it is worth noting that when the Ministers controlled it, we all said that expenditure on agriculture was far too high. That will be changed by a change in procedure. While we know that agriculture takes over 40 per cent of the budget, I would like to stress that the figure does not really paint a complete picture of the budget of the European Union as part of the total public expenditure of the member states in their national budgets. The figures are striking and I think that they should be brought out. Certainly for the past 20 years, the European Union budget, which we are discussing in this amendment, has represented about 2 per cent of the public expenditure of the member states of the Union. The published figure for 2006 showed that the EU budget represented 2.1 per cent of member states’ general government expenditure, the remaining 97.9 per cent being spent by member states on education, health, welfare, defence and the many other elements of public expenditure that we know all about.

In the Lisbon treaty, as I said earlier, the European Parliament will take over responsibility jointly with the member states and the Council for European Union agricultural expenditure. This is important and I think it is an improvement, but I would like to make it clear that what we are talking about represents only around 1 per cent of member states’ total public expenditure. I do not think that we should delete from the Bill, as proposed in this amendment, the budgetary responsibilities of the European Parliament.

In the previous debate, the contribution of the noble and learned Lord, Lord Slynn, elevated our discussion by reference to his very great experience. I think that we can listen with similar admiration to the views that have just been expressed by the noble Lord, Lord Williamson of Horton. In his own personal experience, he has observed the process of budget making at close quarters, and I am bound to say that I prefer his judgment that it is more likely that agricultural expenditure will be brought under control with the new proposed disposition than that which has relied on the judgment of the Council of Ministers.

Indeed, it is strange to hear the noble Lord, Lord Hunt of Wirral, suggest that a movement towards greater democracy, in giving the European Parliament more parity of influence in both compulsory and non-compulsory expenditure, is unwelcome. That is particularly strange, having heard the speeches made on the previous amendment in which we were assured that what was being criticised was not the excessive law making of the European Court of Justice, so much as the inability of the European Union to amend its decision-making procedures in a more effective, democratic way. I want only to make the general point that co-decision making over all budgetary expenditure seems to me both logically sensible and democratically more accountable than the present arrangements and, if one looks at the representation of districts in the European Parliament, clearly alters the balance very considerably in a direction which is not likely to lead to greater looseness of control over other expenditure.

The very fact, as the noble Lord, Lord Willamson, said, that this is such a tiny proportion of public expenditure makes it imperative and very much in the interests of the European Parliament that control is exercised in a way that renders expenditure effective, targeted and visible. That is what will result from these beneficial amendments.

I was intrigued by the repeated references of the noble Lord, Lord Hunt, to the prospect of what he called a bigger budget for the European Union as a consequence of the changes being produced in the Lisbon treaty. I can certainly understand why he makes the detailed arguments but I cannot follow him in that particular argument. I should just like to pursue it for a moment.

At present, as the noble Lord, Lord Williamson, highlighted on the basis of his very great experience, the European Union budget is around about 2 per cent of total public expenditure of the member states of the European Union. Sometimes it is a little less than 2 per cent, sometimes it is a little more, and it has been thus for decades. That budget is also equivalent—or has been for most of the past several decades—to about 1.15 per cent of the total gross national product of all the member states. It is actually slightly lower than that now as a consequence of the last budgetary exercise undertaken by the Council in 2004 and concluded under the British presidency. Eighty-five per cent of the budget—again a decades-old figure which is still valid—is spent in the member states. Indeed, most of it never leaves the member states and is obviously a book transaction in any case. That is entirely how it should be.

The fact of the matter is that in the reform treaty, despite the alterations to which the noble Lord, Lord Hunt, drew attention in decisions about the allocation of the budget, the total of the budget remains in the hands of the member states in the Council. There is no power on earth—other than by the decision of those member states in the Council—that can produce an increase in the total of the budget. I find it very interesting that within that total there will be a new dynamic that involves the Parliament in decisions relating to so-called compulsory expenditure, which, as the noble Lord, Lord Hunt, said, is overwhelmingly the common agricultural policy.

Having discussed these matters with European parliamentarians and Westminster parliamentarians for many years, I take the view, as the noble Lord, Lord Williamson, does, that the CAP budget will be a great deal more liable to amendment, reduction and re-orientation, because of the introduction of authority from the elected Parliament, than previously, despite the reforms that have taken place, when it has been the sole property of the Council and the agriculture ministers. Part of the impetus in the Parliament to make changes in the CAP and the common agricultural fund will come from the fact that it shares the view—it is certainly a majority view in this House and in comparable Parliaments elsewhere in the European Union—that too great a proportion of the total budget is still going to particular forms of agriculture support. That will produce a pressure on the CAP.

Secondly, there are, as the noble Lord, Lord Hunt, rightly said, other ambitions for different priorities within the Parliament. There is a strong view—this has been the case for several years—that Community expenditure on research and development, consistent with the ambitions of the Lisbon strategy of 2000, should be much bigger. The budgetary exercise in 2004 cut to €19 billion the proposed €31 billion budget over the seven years of the current budgetary period proposed by the Commission. I did not think that that was a sensible direction in which to move in circumstances in which we are repeatedly told that the greatest source of effective competitiveness in the globalised economy is knowledge, scientific and technological prowess, and innovation. I simply think that that is worth investing in. The will of the Council, rightly representative of the elected governments, prevailed and democratically that is how it should be, however much I regretted the outcome.

In the Parliament, that kind of ambition will be reflected. There will be an ambition to strengthen the commitment in the European budget to emergency aid, but, more particularly, to systematic long-term support for development in the Third World. There will be arguments over that too. I do not anticipate a huge increase in that area, but it certainly will be an alternative presented against the current level of agriculture spending as a proportion of the budget.

Those tensions are healthy, democratic tensions. Those pressures are democratic pressures that really do reflect the changing priorities of modern Europe, including this country. I do not think there would be anything remotely like majority support for maintaining even the level of spending as a proportion of budget that has been reduced, that still goes on the common agricultural policy. It is to the credit of the member states and the Commission that, in the years since the mid 1980s, the proportion taken by the CAP has gone from about 70 per cent, then down to just over 50 per cent and is now about 40 per cent and should not just be lower, but should be allocated in a different way. There would be a stronger mandate even for spending 40 per cent of the budget on agriculture, broadly defined, if a larger proportion of that 40 per cent was going to rural development so that communities were provided with alternatives and attractions to encourage young people to stay in the rural areas. I do not think there would be a terrific argument about that. However, that, too, is one of the arguments that will now be heard in consideration of the European Union budget to the degree that it was not heard outside the Commission or in the Council in past years.

I think that we are observing a healthy development in two respects. First, no change is implied in the total of the European Union budget, because I foresee no substantial change of will in the member states to bring about an increase in the total—certainly not one of any significance. Secondly, there will be a new source of argument about the priorities to be pursued with the money available in the European Union budget over a budgetary period. As the noble Lord, Lord Williamson, said, it will deprive the agriculture Ministers, with particular constituencies and priorities to serve over the decades, of a monopoly in conclusive decision-making on the way in which the budget for agriculture is spent. That budget still takes up a substantial part of the budget of the European Union.

Legitimate though his arguments are in a parliamentary context, I hope that in the detail the noble Lord, Lord Hunt, will seek an opportunity to withdraw the claim that the consequence of the changes in the Lisbon treaty will be that the budget will be bigger. That will not be the case. Indeed, I believe that the changes will bring about a better, more accountable and more democratic form of decision-making because it will be a new method of shared decision-making between elected parliamentarians and elected Governments. That will be an advance for the European Union and the people who pay for it—the taxpayers.

I apologise to the noble Lord, Lord Grenfell, who may want to intervene now. If he does, I will give way, but if it is convenient I shall carry on. I think we should all be very grateful that in this brief debate—I am sure we hope that it will be brief, because there are plenty of other amendments to follow—we have had the great benefit of having in this Chamber two of the key experts on budgetary matters in the form of the noble Lords, Lord Williamson and Lord Kinnock. I am personally extremely grateful, as I am sure these Benches will be. I thank the noble Lord, Lord Kinnock, for his remarks, which to some extent reiterated some of the comments of the noble Lord, Lord Williamson, but they also put a modern gloss on the matters that we will see in the new budget mechanism in the future if all works out well.

What surprised me about the rather masterly analysis of the noble Lord, Lord Hunt, which I think we all enjoyed, was that it sounded like an explanation of the budget of several years ago—particularly the CAP components and so on, and the distinction between compulsory and non-compulsory expenditure. He is right to say that the system will persist for a few more years before the changes come about but it sounded like living in the past. I apologise for repeating a point that was made last week by me and perhaps by others but this issue comes back to the nature of the origin of the amendment, which I think was Amendment No. 89 on page 563 of the House of Commons Marshalled List, probably of 3 February, if my memory of the numbers and date is correct. However, on that occasion, it was put forward not by Mr William Cash and Mr David Heathcoat-Amory but by Mr William Cash and Mr John Redwood. Presumably, in anticipation that the noble Lord, Lord Hunt, would be introducing this amendment today, the media sources in Vulcan—they have prescience and foresight there, which we do not yet have electronically in Great Britain or our universe—have been sending him the explanation of the budgetary system which will be replaced. I strongly agree with the assertion of the noble Lord, Lord Kinnock, that there is no way in which the belief of the noble Lord, Lord Hunt, that the budget will automatically grow too big beyond the existing level can be proven just by the change in this mechanism.

I regret very much that a person who has honourably described himself as a European enthusiast—I accept his explanation—would seek to put a spanner in the works with this amendment. That is why I hope that it will not be pressed and that he will withdraw it at the end of this debate. It is a spanner in the works of a modernisation of the budgetary system which has been extensively worked on, fought for and struggled for over recent years both by Members of the European Parliament and—strangely, because it may seem as though there is a conflict of interests—by members of the Council of Ministers of the various member states. They see the need for modernisation and for the abolition of the distinction between compulsory and non-compulsory expenditure.

This European budget remains a minuscule proportion of the total public, central government and other expenditure in all the member states. It is of the order of 1.5 per cent of total public spending, as was mentioned by the noble Lord, Lord Williamson. That is a tiny proportion. It remains a virtuous system in the sense that its receipts automatically equal its payments. That is particularly the case given that the UK now has an uncomfortably large budget deficit—the Conservative Benches in the Commons suggest that historically it is one of the biggest deficits ever. How many member states will be in that position? The answer is: not many. A while back, that was regarded as a virtue for member Governments—or individual national Governments before the European Community was created.

Bringing in the European Parliament must surely be seen as sensible by noble Lords on the Conservative Benches, including the noble Lord, Lord Forsyth, and others, who earlier lamented the lack of a sufficient democracy within the European Union. That is precisely why this mechanism is being modernised under the proposals of the treaty. Therefore, it seems a shame that, once again, the Conservatives are not bringing us all up to date on what the Conservative Party in the Lords really feels about the European Union, our membership of it and this Lisbon treaty. It is a modest modernising treaty if ever I saw one—it is totally different from the old constitutional proposals—and the budget is a good example of that. The Conservatives are stuck in a groove, reflecting the other place, with the much deeper hostility towards Europe that is always encountered there.

Subject to further arguments in this debate, surely we must back the Government in the proposal to support new Article 9A in the Lisbon treaty in order to bring about greater involvement by the European Parliament. The need for a health check for the CAP would coincide with that process. That would be mainly a Council of Ministers function and the European Parliament would react to it rather than being a prime mover. That is right because this will be a decision between sovereign member Governments. Personally, I do not believe that the French Government will be as difficult as some of the British newspapers suggest. They see the reality of the changes in the agricultural world, even in France. No one can criticise France, where the agricultural population has now fallen to 3 per cent; after the war, it was traditionally 25 per cent but many farms in France have closed down. The French see the logic of the modern system of the single farm payment, providing for the resuscitation of the environment and all sorts of other activities linked to farming. The end to production subsidies will come about quite soon—over the next few years—and, instead, there will be support for environmental and agricultural modernisation and investment. That must be the way forward. The elected representatives of the European Parliament, as well as the national MPs of all the national parliaments, will work together to achieve that objective. They will work with the Governments rather than follow the old-fashioned system that the noble Lord, Lord Hunt, seems to think should carry on for ever.

I hesitate to intervene. I assure the Committee that I shall intervene very rarely in the Committee and other stages of the Bill, and I hope that I stick by that. The report of your Lordships’ Select Committee seems to be something of a Cinderella in the debate. By consensus, we reached some conclusions which I think the Committee may want to recall. If I may, I shall mention one in particular, and I do so in no partisan spirit—I am neither for nor against the amendment. I am simply recalling what the all-party committee agreed by consensus as a conclusion on the question of the European Parliament being part of the co-decision procedure on compulsory expenditure—in particular, in relation to the common agricultural policy. Therefore, perhaps your Lordships will forgive me if I quote from paragraph 10.39 on page 230 of our report, which I hope will be helpful to the Committee:

“The future policy impact of the move to co-decision is not clear. Much depends on the European Parliament itself, but the weight of the evidence suggests that the agriculture and fisheries committees of the European Parliament will in future represent, and be closely overseen by, a wider range of interests than the narrow producer interests that have historically dominated those committees. For these reasons, we expect that the change is likely to assist rather than impede further reform of both the common agricultural and fisheries policies”.

That was a consensus conclusion.

I give rather lukewarm support to this somewhat lukewarm amendment. Before dealing with the amendment itself, I will comment on the usual Europhile canard that has been put forward by the noble Lords, Lord Tomlinson and Lord Kinnock, supported by the noble Lord, Lord Dykes.

I meant the noble Lords, Lord Williamson, Lord Kinnock and Lord Dykes. I apologise to the noble Lord, Lord Tomlinson—

I fancy that the noble Lord would agree with the other three noble Lords that we really need not worry about this question of the EU budget because it amounts to only some 2 per cent of GDP and so is not worth bothering about.

That canard is closely associated with that other line that we generally get from Europhiles, which is that there is really nothing much to worry about with the European Union because there are only 30,000, or 40,000, or perhaps 60,000 civil servants employed in Brussels—fewer than the Scottish Office used to have. Of course, the answer to that is that those 30,000, or 40,000, or 60,000 civil servants, whose number is difficult to discern accurately, make the law supported in the Council that is then executed by the civil services in all the member nations, which control the democracies of hundreds of millions of people. I hope that we will not get too much more of that in these debates.

On the amendment itself, it is of course good that the European Parliament will now have more control over the budget, as the noble Lord, Lord Hunt of Wirral, explained. Well, it would be good if the European Parliament were actually going to use its new powers. The basic point here is that no European institution—not the Parliament, the Commission or the Court—wants to halt, inconvenience or hold up the gravy train that is the European Union.

We have the clearest possible demonstration of that in the story of Marta Andreasen, who, as your Lordships may know, is now treasurer of the UK Independence Party. Mrs Andreasen was the first qualified accountant ever to be appointed to the position of chief financial officer in the European Union and, under the treaties, the chief financial officer had the power to control and be responsible for the budget. What happened? When she refused to sign off the first set of accounts that were put in front of her, she was first suspended and eventually dismissed. She is now appealing, so I do not want to say much more about her case, except that the first stage of that appeal—at some form of staff court in Brussels—found entirely against her and merely parroted the Commission’s position. There is no hope, then, of reform coming in this area from the European Union institutions.

As other noble Lords have mentioned, the accounts have not been signed off for 13 years. I remind the Committee that that process has been undertaken by the EU’s internal auditors; this is an organisation whose internal auditors have refused to sign off its accounts for 13 years. If that happened anywhere else in the normal world, the directors would have been locked up at least 10 years ago, so I have a proposal that I hope that the Government will take seriously. I am sure that they will put this to the appropriate channels in Brussels. It is, quite simply, that the Court of Auditors should be abolished and a leading firm of international accountants appointed in its place, for perhaps five years. That leading firm should be selected by the donor nations to the EU’s profligate coffers.

In other words, the countries that produce the money for that absurd circus should be the ones to select a major firm of international auditors to get inside Brussels and see what is happening. Then the taxpayer might begin to get better value from this project and a greater understanding of it—and thus a greater determination to leave it. I would be grateful to know what the Government think of that considered suggestion.

It is always a pleasure to follow the noble Lord, Lord Pearson. I enjoyed him getting his canards in a twist just now; I am glad that he sorted them out eventually. However, on this issue, I was rather astonished to see this amendment proposed on the Marshalled List. I wondered why on earth those who oppose this Bill and treaty were looking a gift horse in the mouth. I understand a bit better now; I suppose that the real answer is that the red flag of more influence for the European Parliament had gone up and was considered to be a conversation stopper.

Through all my experience of the European Union, which has covered quite a few years, British Governments and Members of the European Parliament have railed against the distinction between obligatory and non-obligatory expenditure. Now that that is about to be abolished, they discover that they wish that they had had more of it. I honestly do not think that wise.

The introduction by the noble Lord, Lord Hunt, was subtle and careful, as usual, but he did not mention a couple of fairly germane points. First, what he called the nuclear option brings about something that could bring everyone to their senses if it ever had to be used, as the European Union would go on to what are called provisional twelfths. That is to say, it would have to spend per month what was available the year before. That is a conservative measure, so we should not feel worried by the possibility that it might arise in circumstances where one or another institution was going too far.

Secondly, the noble Lord did not mention something rather important on the European Parliament—and although I do not wish to get into it, the proportion of gross national income covered by the European budget is a genuine issue. It is that the European Parliament, in so far as it gets more influence on the obligatory spending—when that becomes obligatory no longer—will still be totally constrained by the financial perspectives for the next six years and thereafter. These are agreed by inter-institutional agreement between the Parliament, the Council and the Commission. The flexibility given in all this will be pretty modest, so the amount of risk in giving the Parliament more say on the matter is pretty small.

I will not stand here and argue that it is a sure, done deal that the Parliament will actually use its powers on every occasion as we would wish, but the words of wisdom from the European Union Select Committee should be considered rather carefully. The balance has shifted in the parliamentary committees and I hope very much that this amendment will not, on reflection, be agreed.

Over 20 years ago, I was the commissioner in charge of the budget. Of course, much has changed in the mean time and my recollections are, no doubt, out of date. However, I would like to cover some of the same ground as the noble Lords, Lord Hannay and Lord Williamson, both of whom I had the pleasure of working with when I was a commissioner. They were then British civil servants.

First, I agree very much with the point made by the noble Lord, Lord Hannay, about what my noble friend Lord Hunt called the nuclear option. It is far from that; the budget was indeed rejected one year when I was the budget commissioner and everything went along smoothly thereafter on the one-twelfth system—a very effective way of curbing public expenditure. I am not suggesting that it should be used very often but, far from laying waste to the budget, it enables controls to be exerted.

I agree with the point made by the noble Lord, Lord Williamson, that the European budget should be seen not in isolation but as a part of the totality of public expenditure within the European Union—as part of the totality of what is spent at the Union level and what is spent at the national level. In my opinion and the opinion of many noble Lords, rather more is still spent on agriculture than is justifiable but, as the noble Lord, Lord Williamson, said, we are talking about something like 1 per cent, which helps to put it into context.

I do not agree with the noble Lord, Lord Pearson of Rannoch—I rarely do on these occasions—that because we point out that the European budget is only a very small proportion of European public expenditure, those of us who support the European Union feel that it somehow does not matter. Of course the budget should be subjected to exactly the same disciplines and constraints as public expenditure at the national level or at the local level. No one in his or her right mind—I am sure that the Minister will agree on this point—would suggest that you should exert discipline on public expenditure at one level but not at another level. It is quite absurd of the noble Lord to suggest otherwise.

My penultimate point is that, rather than being about a larger or smaller European budget, the argument ideally should concentrate on whether expenditure can be most effectively made at the European level or at the national level. It is not a case of saying a big European budget is good or bad; it is a case of saying at what level—European, national, local or whatever it may be—expenditure can most effectively be made in the public interest.

The burden of proof in those circumstances should almost always be on those who wish to transfer expenditure from the national to the European. I do not think that a large budget is a sign necessarily of a vigorous European Union. The European Union is about many things other than the budget and many of them are more important to the life of the European Union than the budget. In my view, the burden of proof should in general be on those who wish to transfer expenditure from the national to the European level.

For that reason, I support a cap on the proportion of public expenditure that can be spent at the European level. I am in favour of a cap partly because I do not share the confidence that some others have in the European Parliament. Where you have an elected assembly—whether it is the European Parliament on the one hand or the Scottish Parliament on the other, to take two examples—that has the power to vote expenditure but is not responsible for voting the taxes that go to fund that expenditure, you tend to get the members of those assemblies generally in favour of spending. It is always nice to be in favour of spending and it is always less pleasant to be in favour of higher taxes. My own experience of the European Parliament—now a very long time ago—was that, in general, there was always a majority for spending more.

If the European Parliament is to exert the kind of discipline on the budget that we wish to see, it needs to be within the context of a cap so that more on one lot of things will mean less on another lot of things rather than more on everything. The lessons of the European Parliament in relation to public expenditure might very well be applied in dealing with the Scottish Parliament.

The debate has reminded me of my 15 years as a member of both the Budget Committee and the Budgetary Control Committee in the European Parliament. It has reminded me of one of the happier moments—the noble Lord, Lord Tugendhat, referred to this—when the budget was rejected and we went on to provisional twelfths. It was quite remarkable how, just before the summer holidays, the rational European Parliament realised how much in pay and allowances was being stored up by provisional twelfths. I am sure that it had a salutary effect on its members to approve the budget just before the break in order to give themselves sufficient resource to go and enjoy it.

That was one of the better experiences. The worst was when the noble Baroness, Lady Thatcher, introduced into the European budgetary debate the question of the juste retour: “Can I have my money back?”. She completely failed to understand the importance of the non-compulsory expenditure part of the budget to European parliamentarians. That was the money that was being spent on environmental policies, where you did not get your money back but you got a decent European policy; on development assistance in the third world, where, again, you did not get the money back but you did something right and proper for trading relationships in the third world; and on the regional policy that helped countries such as Greece, Spain and Portugal to equip themselves to join the European Union. Without those, how much money would we have spent on the defence of the southern flank of NATO without ever mentioning it as public expenditure? The nonsense of the juste retour was one of the worst aspects.

I say with absolute clarity to the noble Lord, Lord Pearson, that no one has said in the debate that the European Union budget is insignificant. Any expenditure at that level is always significant. The European Union budget is perhaps the most examined, the most clearly scrutinised, the most pored over part of our public expenditure. If we pored over defence expenditure and got paranoid about the times when the accounts of social security and work and pensions were qualified by the Comptroller and Auditor-General in the same way as we do over this rather mythical refusal to sign off the budget, we would perhaps have a better state of public expenditure.

I see the noble Lord, Lord Willoughby de Broke, has had his instructions from the noble Lord, Lord Pearson, and that it is his turn to intervene.

The noble Lord said that the challenges to the accounts were mythical. Can he remind the Committee whether the accounts have been approved or qualified for the past 13 years?

If the noble Lord had controlled himself, he would have had the answer by now, because I was just coming on to that issue.

We have to consider what the Court of Auditors does. It produces a statement of assurance based on a particular statistical base that produces—I say this to my noble friend Lord Kinnock—far too small a sample to necessarily predict the underlying transactions correctly. I said that frequently as a member of the Budgetary Control Committee. Of the two parts of the statement of assurance, the balance sheet has always been approved and there is always a questioning of the regularity and the reliability of the underlying transactions.

It is all very well to smirk about the underlying transactions, as the noble Lord is doing, but they are 85 per cent expended in the member states. Most of the criticisms of underlying transactions are criticisms of what happens in departments such as Defra. Of the underlying transactions that take place in this country, as my noble friend Lord Kinnock explained, most of the money is transferred money and does not even leave the United Kingdom.

There is a serious problem with fraud and irregularity. However, if we look at fraud and irregularity in the European Union budget carefully, we find that the majority of it is not on the expenditure side of the budget but on the revenue side—the collection of own resources. One of the things that we have to do on the budget—the people who have been taking the lead in this are the members of the European Parliament Committee on Budgets—is to get away from the traditional own resources, which are both a diminishing part of the budget and the most fraud-prone part of the budget, and get a more sensible system of financing the European budget.

The noble Lord, Lord Hunt, paints a picture of the European budget inevitably leading to a bigger budget, but there is nothing inevitable about that because the final control of traditional own resources is a power retained by Parliament. National parliaments retain the power for the ultimate approval or disapproval of the level of own resources in the budget.

I believe that the abolition of the distinction between compulsory and non-compulsory expenditure is a proper, right and necessary course. We have been slow to adopt it. It has been on the agenda for a long time; a large number of parliamentarians, including me, supported it during the Convention on the Future of Europe. Tonight we should be inviting the Opposition to withdraw their amendment, although we need not in any sense beg them to, because, if we test the opinion of the Committee, the amendment will be defeated.

I am grateful to all noble Lords who have spoken in this debate, particularly for the expertise and experience that has been evident in all the contributions.

I begin where the noble Lord, Lord Maclennan, began, in saying how much the UK has always been in favour of increasing democratic accountability and transparency of EU procedures and policy-making. As many noble Lords have pointed out, scrutiny of the budget by Parliament and Council is key to ensuring democratic accountability and transparency. Giving the European Parliament joint authority with the Council over the annual budget will increase democratic accountability, as the European Parliament will share with the Council the important task of agreeing the annual budget. However, the key budgetary decisions on the multi-annual financial framework expenditure ceilings and own resources, which I will explain further in a moment, will continue to be taken in Council—by unanimity.

Noble Lords are correct in their assumptions that in the context of the annual budget procedure, the Lisbon treaty will expand member states’ influence. As the noble Lord, Lord Hunt of Wirral, said, the treaty will remove the distinction between “compulsory expenditure” and “non-compulsory” spending. As the noble Lord indicated, compulsory expenditure is mostly common agricultural policy spending, over which the Council currently has the final say and which is approximately 35 per cent of the budget. As noble Lords have pointed out, the non-compulsory element is the 65 per cent over which the European Parliament currently has the final say.

Under the treaty, all spending will be subject to the same classification, and therefore no one part of the budget authority will have the final say over particular areas of the budget. We believe that that increases the Council’s leverage across the budget as a whole.

The noble Lord, Lord Grenfell, kindly indicated the comments made by the committee in its report and I am extremely grateful to him. The conclusion of the paragraph that the noble Lord referred to says:

“The abolition of the distinction between compulsory (agricultural) and non-compulsory expenditure is a significant step alongside the application of the ordinary legislative procedure to agriculture policy. The change will make the agricultural budget-setting process more transparent, open and balanced”.

I want to deal with some of the specific points that have been raised before I outline what the procedure will be and, I hope, address the central point made by the noble Lord, Lord Hunt of Wirral. I was grateful to the noble Lord, Lord Pearson of Rannoch, for his contribution and for his suggestion about the Court of Auditors. I will explain what the Court of Auditors currently is, because I am not entirely convinced about the noble Lord’s suggestion; I believe that the court does what the noble Lord was suggesting it should. First, there is one member per member state. Secondly, the individuals must have belonged, at national level, to an external audit body, or be especially qualified. Thirdly, their independence must be beyond doubt. I think that that brings together a group of people of extraordinary experience, as expert as any independent group of auditors from any nation state.

That may indeed be a somewhat hopeful description of the Court of Auditors, but it is not working. The accounts continue to be qualified. Billions are being wasted. If it were subject to a serious audit from an outside firm of auditors, we would get a very different result.

I dispute the fact that it is not working; the Court of Auditors does its job very well. Members of the Committee have already commented on the fact that this is the 13th year in succession that we have not had what I would describe as a clean bill of health. We are not happy about that—we are concerned. However, this is not equivalent to finding fraud. Most of the irregularities that the court has found have been genuine errors which are later rectified. As in previous years, the court has said that the transactions underlying the financial statements for 2006 were legal and regular in respect of revenue, commitments and administrative payments. Further, there has been some improvement from the 6 per cent of accounts that it signed off in 2003, the 35 per cent signed off in 2004 to just over 40 per cent in 2006. Much of its difficulty in giving a positive statement arises from the areas of expenditure which are jointly managed by the EC and member states. This was almost 80 per cent of the EU budget funding in 2006.

We are talking in large part about making sure that those procedures function effectively and not about allegations of fraud. The fact that so many errors are rectified later does not mean that the court is not able to do its job properly. That is incredibly important.

But the Commission is still responsible for all the expenditure. The Commission does not have to go on giving millions of pounds to crooked Greek olive farmers or whatever. It could follow it through and withhold the money, but it does not, so the fraud—the irregularities—continue.

The Commission is technically responsible. I am not saying that it is doing this, but under the treaties, the chief financial officer and the Commission are responsible for all the expenditure.

That is not the allegation that I was referring to. If noble Lords look at Hansard, it will be very obvious what the noble Lord, Lord Pearson, actually said. I do not think that we should do that in your Lordships’ House; we must be clear that the word “crooked” is inappropriate. I would argue that it is never appropriate, but I do not think we should use it in these debates.

The noble Lord is making a separate point about the role of the Commission. The point I was making is that a lot of expenditure is through member states and that the European Court of Auditors made the point that when there is joint expenditure, some issues arise. Noble Lords who have dealt with getting accounts in public bodies will know that quite often, qualified accounts are not about irregularities that are fraudulent or cause concern; the irregularities have simply occurred in administrative measures. It does not mean that we are complacent or happy about it, but I am concerned that we are clear about what we are describing .

Members of the Committee talked about the Common Agricultural Policy and its proportion of expenditure. Agricultural expenditure has already fallen from around two-thirds of the budget in the 1980s to 44 per cent in 2007. In the course of the 2007-13 financial prospective spending, it will fall in real terms by 7 per cent.

I would like to describe the procedure as it will be, so that noble Lords who are not familiar with how it will work, as I was not, can understand it. I hope that that will be helpful, not least as noble Lords look back on this and think about other stages of the debate. I apologise to noble Lords who know this extremely well, but what is called the financial perspective is agreed by member states by unanimity. That is the overall expenditure for general areas for a seven-year period. The treaty will put that on a secure basis for the first time. There are six areas involved: sustainable growth, which is 44 per cent; natural resources, including agriculture, which is 42 per cent—I am rounding these figures up; justice, home affairs and citizenship, which is 1 per cent; external relations, which is 5 per cent; administration, which is 5 per cent; and compensation to new states, which is 0.2 per cent.

The own resources decision that is then made by unanimity sets the size of the contributions to the EU budget for the period of the financial perspective—in other words, for the seven years—including member states’ contributions and rebates. That is unchanged from the current arrangements and is implemented in the UK by primary legislation, with which noble Lords will be very familiar. The annual budget procedure, which sets the levels of detailed expenditure for each year within the ceilings that have been determined by the financial perspective by unanimity by the Council, is jointly decided by the Council and the European Parliament.

I hope that puts it in perspective: the overarching figures are agreed by unanimity, there are decisions about the percentage breakdown within that, and then what happens within those budgets is jointly decided. After that, the Commission proposes a budget. Both the Council, by QMV, and the Parliament, by simple majority, can propose amendments if they wish. If they cannot agree on the amendments, the Council and the Parliament meet in what is now described as a Conciliation Committee, which is new. The Council, again, acts by QMV. The committee’s proposals are sent back to the Council and back to the Parliament. If the Council rejects them but the European Parliament agrees them by a three-fifths majority, they are adopted. If the committee cannot agree, the Commission must submit a new budget.

The critical part of that process is that when the Conciliation Committee comes together, it consists of the Parliament and the Council. Whether the Council representatives are Ministers or officials—the treaty is silent on that; that is to be worked through—they will be mandated, whoever they are, probably by ECOFIN but certainly by the Council, to speak on behalf of the Council. They will go to that committee and try to reach agreement.

If the committee cannot agree, the Commission has to start again. If the committee agrees—in other words, we have mandated representatives as if we were the European Council and our representatives on our behalf are no doubt reporting back and keeping us informed of each conclusion with which the Parliament agrees—and for some reason, having done that, the Council rejects it when it goes back, the European Parliament then has a say.

That addresses the point of the noble Lord, Lord Hunt of Wirral. I was searching my mind because when I went through this process I was looking for where the Council keeps and grows its strength, in a sense. Its strength is that if its mandated representatives cannot reach agreement in that committee with the Parliament, the whole thing is off. It is only if they have reached agreement and then the Council decides to ignore its mandated representatives that the European Parliament can step in. That is an important way in which the Council retains and, indeed, develops its role and responsibility.

Having said all that, I take nothing away from the importance and value of the role of the European Parliament. I hope that on that basis the noble Lord can withdraw his amendment.

My Lords, this has been such an important debate. I am grateful to everyone who has participated, particularly the former commissioners, my noble friend Lord Tugendhat and the noble Lord, Lord Kinnock. To echo the words of the noble Lord, Lord Maclennan of Rogart, I was particularly pleased that the noble Lord, Lord Williamson, participated.

The one question I do not think the Minister answered was when the Government changed their mind. They went into these discussions about control of the budget with Mr Peter Hain saying clearly that they could not accept the European Parliament jointly exercising the budgetary function; that was clearly laid down, whether it was a “red line” or whatever. I do not think the Minister has explained to us satisfactorily when it all suddenly changed and what had been unacceptable became acceptable. Anyway, she has done her best with the brief she has, and we will carefully examine all the points she has made.

The noble Lord, Lord Maclennan, mentioned greater democratic control. I dare say the other place would have loved to have been able to rewrite the Budget of Mr Brown and Mr Darling; had it been left to the Parliament, I am sure it would have done. One therefore has to ask oneself: what does one mean by greater parliamentary control and greater democratic control?

The noble Lord, Lord Kinnock, reassured me on a number of points. He promised—and I am going to hold him to this—that the change would result in amendment reduction and the reorientation of the common agricultural budget. He believes it, and that is wonderful to behold—but he has believed a few things in the past and then changed his mind, as he reminded us on Second Reading.

If the noble Lord is so nervous about the abolition of obligatory expenditure, why, during the convention—when, as the noble Lord, Lord Tomlinson, recalled, the idea was first discussed—were the French Government the Government who were most nervous of it and opposed it most strongly? The Governments who strongly supported it were the budget-disciplinarian Governments—that is, those of northern Europe. The only strong support the French had was from the Polish Government. Can he explain that?

That is all to do with the common agricultural policy and the track record. We all know where we are; the question is, where are we heading and where are we going to end up? That is why I found this debate very interesting. I hope everything that the noble Lord, Lord Kinnock—to whom I was referring before I was quite rightly interrupted—has told us is going to happen will indeed happen.

I am grateful to the noble Lord, Lord Grenfell, for reminding us of those consensus words, but I remind him that his committee reported that it believed the balance on the European Parliament committees had changed. I am not yet persuaded, but if he and his committee are right, that is some hope for the future.

I do not think I am going to satisfy the noble Lord, Lord Pearson, because he has already identified me as a European enthusiast. Although I would rail as much as he does against wrongful expenditure, I am not going to be able to answer him.

The noble Lord, Lord Hannay, made some important points about the “provisional twelfths” and introduced some relevant comments from my noble friend Lord Tugendhat as a very effective way of curbing expenditure. That was also useful. Ideally, as my noble friend said, expenditure has to be at the right level. He is a wonderful exponent of that great principle of subsidiarity. That was a helpful contribution, too.

I thought the noble Lord, Lord Tomlinson, erred in giving the European Parliament a slightly bad name about its motivation for passing the budget just before it went on holiday. However, I realise that it was a pleasantry, and I accept it as such.

I recognise the relevance of what the Minister said regarding the Court of Auditors. All I would say in support of some of the comments that have been made is that in 2005 the European Anti-fraud Office was in receipt of 12,000 reported cases of irregularities involving the EC budget, including one involving grants totalling more than €1 thousand million. There is a situation that requires remedy; whether it is through the democratic control we have spoken about in this debate or through some other route, we can continue to speculate.

This has been a valuable debate. Indeed, the noble Lord, Lord Dykes, said what a good debate it had been. I agree with him, but he has to recognise that it would not have taken place had it not been for the fact that the official Opposition have put down this amendment, which he and his colleagues are refusing to do on any part of the Bill. We would have no debates at all if it were left to the noble Lord. I would like to reflect on what has been said, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9: Clause 2, page 1, line 12, after “excluding” insert—

“(i) Article 1, paragraph 16, inserted Article 9B TEU, paragraph 6, so far as it relates to the role of the President of the European Council in external representation of the Union; and(ii) ”

The noble Lord said: I approach this amendment with trepidation, because I am aware that it is the only thing that stands between your Lordships in Committee and some fortification before we turn to even more important issues that lie immediately ahead. As this is the first opportunity I have had to move an amendment on the second day of Committee, I start with what is best described as a correction. My memory of the precise numbers of Hymns Ancient and Modern was at fault. It was kindly pointed out to me—both by the former Permanent Under-Secretary of State at the Foreign Office, the noble Lord, Lord Jay, and by the noble Lord, Lord Wallace of Saltaire—that I had got either the number or the hymn wrong. It was not Abide with Me, it was Lead, Kindly Light, hymn 215. I want to put that on the record and I hope that your Lordships will allow that correction.

We come to a debate of considerable significance—I hope that most people, possibly even our Liberal Democrat colleagues, will agree on that—concerning the new role of the more entrenched president. Of course, there were presidents before, but Article 15(b) of the new treaty proposes, under subsection 6(d):

“The President of the European Council shall, at his or her level and in that capacity, ensure the external representation of the Union on issues concerning its common foreign and security policy, without prejudice to the powers of the High Representative of the Union for Foreign Affairs and Security Policy”.

It adds:

“The President of the European Council shall not hold a national office”.

We have already touched on this matter in debate, although rather tangentially. The wording is identical to that in the earlier, rejected constitution, except that the reference now is to the High Representative of the Union for Foreign Affairs instead of to the Union Minister for Foreign Affairs—otherwise, it is just the same. This president is to be put in place for two and a half years, renewable once and chosen by qualified majority voting. This is identical to what is in the constitution. I know that we have had long debates, and will no doubt have more, about the degree to which this treaty represents what has gone before in what was called the Constitutional Treaty, and indeed, since our last Committee meetings, the noble Baroness has been good enough to circulate quite a few letters that we have all received. The noble Baroness has been extremely busy in her letter-writing and one letter she sent explains her views on why this treaty is different, and attaches a long paper from a learned professor to that effect. I said that I would not trade quotations and I am not going to trade professors, either—although I have a whole raft of professors of considerable distinction saying the opposite to her professor. I think we would tire each other if we paraded all their views at length. All that can be concluded is that professorial opinions and academic opinions of equal weight, worth and reputation are in total conflict on this issue that the Government have rather dug in on; namely, their claim that the Constitutional Treaty and this treaty are not broadly the same.

I turn to the role of the president, as proposed in his or her new capacity. We should give considerable time to this—possibly more than our colleagues in the other place were able to, for various reasons—because the democratic instinct needs to be mobilised and applied carefully when it comes to appointing new figures, placing them on high pedestals and giving them powers that in the modern world can lead—this is the result of the networked world and the information age—to the magnification of celebrity at one extreme and the suppression of run of the mill and ordinary performance at the other. It is said that the effect of the information age is to increase the disparities between the lucky or meritorious ones who become famous, and the rest of us who fall into grey obscurity. We need to approach this presidential issue very carefully.

The noble Lord, Lord Wedderburn, in his recent pamphlet, warns us—no, he is not in his place—that we should be very careful when it comes to presidents.

I am sorry to interrupt, but I thought the noble Lord would want to know that the noble Lord, Lord Wedderburn, has had an emergency operation. I think that he is doing fine, but he has not been well at all. I thought that I should put that on record.

I am extremely sorry to hear that. He is an extremely wise contributor to these issues. He has written a pamphlet with some observations on this treaty debate. I strongly recommend them to all your Lordships as full of wisdom. He warns us that we need to be very careful when it comes to presidents and giving them powers. He points out—and this is obvious to all of us—that this treaty, like the constitution before it, in effect gives us several presidents. It gives us the new two-and-a-half-year or five-year president of the Council; it gives us the rotating president of the Council, who was there before; the Commission president, who was there before; and of course the European Parliament president, who was there before. It also gives us the person who was called the Foreign Minister in the Constitutional Treaty and is now called the high representative, who has quasi-presidential powers as the double-hatted vice-president of the Commission and the chairman, so I understand—this is one of the many issues that have not been clarified—of the new Foreign Affairs Council. That figure will hold a very important role in defining the stance of the European Union on foreign policy issues, and how that fits in with the stance of the new president, as defined in the new treaty that I have just read out, is a bit of a mystery. We need to examine that carefully and give our combined views as guidance for the many issues that have yet to be resolved in this field. These are not settled matters—it is not a question of reopening the treaty, but of influencing many decisions yet to come.

One argument used for the longer-term presidency is that the six-monthly business was very inefficient. That is the assertion that we hear from experienced officials and those who are anxious to improve the efficiency of Europe. The same argument, interestingly, is used on the website of the Foreign and Commonwealth Office. In the section entitled Lisbon Treaty myths, it talks of the need to enlarge the powers and lengthen the term of office of the president—and also, incidentally, to combine the roles of the high representative, both as a vice-chairman of the Commission and a member of the Council—because, it says, this will overcome and eliminate “wasteful wrangling”. This is a wonderful insight into bureaucratic minds. Do these people not realise that what they think is wasteful wrangling is, to democrats, healthy argument and disagreement, which are necessary ingredients for successful democratic institutions to live and breathe? The truth is that time and again, we come up against a state of mind that I find quite objectionable, which, when it talks about efficiency, is actually talking about being able to shovel through the European Union sausage machine more laws and more regulations, more quickly, so that the ambitions of those who want more laws and more regulations can be satisfied more swiftly. That is not the kind of efficiency that a democrat should welcome, and it certainly does not bring the institutions of the European Union nearer to the people, which was the original ambition of the Laeken Council.

The noble Lord has made an assertion. Will he kindly clothe it in fact? It is no use simply asserting something; you have to prove it.

One way in which I could prove it is by pointing out that a great many regulations and laws have poured out of the European Union authorities and institutions, and that is labelled by some people as efficiency. But I am talking about arguments and opinions, and saying that we have been told that the longer-term president will increase the efficiency of the European Union. I am giving a rival opinion. If efficiency means more regulations and instruments emerging from the legislative machine, that is not the kind of efficiency which the democrat would necessarily welcome.

I have a feeling that we are confusing efficiency and effectiveness. Those who support this treaty and the role given to the new President of the European Council, particularly in the external field, do so in the belief that it will increase effectiveness. It has nothing whatever to do with the legislative process or the speed with which sausages are made in the Brussels machine—I am sure that we will hear plenty about that from the noble Lord, Lord Pearson. Effectiveness is different. As the noble Lord will know, it is very often the British Government’s practice to talk about efficiency and effectiveness in respect of reform of international institutions. They are two different things. We are talking about effectiveness in this case.

It is a lovely distinction and I respect it, but when it comes to bottom-up democracy and the demand for humble institutions to call people to account, whether they are being more efficient or effective becomes a fine distinction. Is it more effective, for instance, that the European Union should ram through its energy policy on biofuels? The answer, we all know now, is no. What a pity it is that the people concerned were so effective or efficient that they put the policy together, because it is turning out to be a disaster—although that is not yet fully recognised by the Commission. We can think of many other cases where effectiveness and efficiency have combined to produce a policy at the centre which has been damaging and could have been stopped by more democratic argument and wrangling, with more doubts and difficulties put in the way before it was rushed into.

I do not want walk right into the cry of comparing apples and onions, but the approach of the most democratic country in Europe, which everyone recognises to be little Switzerland, which is not a member of the European Union, is to have a president changed once a year and for that person not to be placed on a particularly high pedestal. It used to be the principle in this country, underneath our own monarchy but within our elected sphere of government, that the president should be primus inter pares, although some recent incumbents have slightly ignored it. That is the healthy democratic instinct which I would expect a Parliament such as ours to support and urge before we endow some more deeply entrenched president with a longer term of office and considerable powers—although they have yet to be decided. I am obviously vulnerable to the cry that one cannot compare a gigantic Union with little Switzerland, but one can compare democratic principles wherever they flourish.

How can the noble Lord reassure us by comparing the small country of Switzerland, which has a presidential system of a totally different construction—it is an esoteric country, too, which is apart from other countries, as we know—with the co-ordination among 27 member states of a European Council president operating for a longer period and of their agreed policies? Does he not agree that one of the reasons why the Commission is often wrongly blamed for rushing out policies is the pressure created by member Governments constantly asking it to deliver those policies as quickly as possible?

I realise that I was opening myself up to that intervention, but the argument cuts either way. If the principle in a small democracy is not to elevate on a pedestal too high a particular individual, particularly in this celebrity, media-driven age, but to have a regular rotation so that no one acquires too much power, personality or personal influence, one could perhaps argue that, in this enormous Union of around 500 million people, with its 27 rising to 28 members, the case for avoiding the overglorification of a presidential figure is even stronger. It is a cause for some sorrow to hear from the Liberal Democrat Benches that they are not worried by endowing an individual at a very high level with great power, which will probably be the case, although we have not worked out what that degree of power is meant to be.

I turn from the efficiency/effectiveness issue to the rather interesting letter that the noble Baroness the Lord President has circulated since our previous Committee stage debate. It is from the Minister of State, Mr Jim Murphy, to my noble friend Lord Grenfell.

Will the noble Baroness circulate the letter a little more widely? It does not follow that some of us who have not spoken yet do not have ideas. We would like to know, for example, what was said by the learned professor, to whom reference has been made.

The letters that I have circulated went to everybody who participated and everybody I could think of—well, they should have done. I ask noble Lords to check their pigeon holes. They are all in the Library of the House.

The noble Baroness will now see that there is a great thirst for her letters, and we are asking for more. I do not know whether they will shorten our proceedings, but they are certainly extremely interesting and informative. The letter to which I refer is one that I had not seen before. It is dated 22 April and addressed to the noble Lord, Lord Grenfell, as chairman of his very distinguished committee. It comes from Jim Murphy and is concerned with “implementation issues”. It raises a whole string of concerns about the Council presidency and the role of the president, which the Slovenians, who hold the presidency until 1 July, when the French take over, want resolved. They affect us very much, as they do the powers and role of the president. We are not clear whether this will be a ceremonial or an executive figure. Will the president have real hands-on power and the capacity to influence by words, comments, speeches and opinion-forming the entire global posture of the European Union and its 27 members? We just do not know which sort of president we are dealing with. It is only fair to suggest that, before we proceed further with the ratification of this Bill, those who are placed in authority to make these decisions should, first, have reached them and, secondly, report them to the national parliaments in considerable detail so that we can look at them. It is no wonder that the Slovenian president is complaining about back-door deals and saying, probably in vain, that “we need a democratic process” in settling the presidency issues and candidatures. I do not blame him for saying that at all.

That brings me to the third aspect of the amendment, which concerns the future role of the president and interrelationship with the high representative, who will now be the vice-president of the Commission and a member of the European Council. We have already touched on this matter in Committee debates, but inevitably many of these issues are cross-issues that come up again and again and we cannot necessarily cut them out of future debates—

Perhaps I misheard the noble Lord, but the high representative is not going to be a member of the European Council, which is reserved for the Heads of State or Government of the member states. He is going to chair the Foreign Affairs Council, but he certainly will not be a member of the European Council.

I am sorry, but the Foreign Affairs Council is a child of the former general council. The General Affairs Council and the Foreign Affairs Council are now split, and he will chair the latter. That is what I call a European council.

I think that the noble Lord misunderstands. The Lisbon treaty formalises the European Council, which is distinct from the Council of Ministers. The high representative will chair one of the Councils of Ministers. He will not be a Member of the European Council, which is made up of the Heads of State or Government of all the member states and meets every six months.

The noble Lord is right: I should have said Council of Ministers, not the European Council. It is perfectly clear that he is not a Head of State. I am sorry if that was obscure. He is right to say that I missed out words. Council of Ministers is what I meant.

I come now to the issue of whether the president of the Council should be double-hatted and also be, as was rumoured, the President of the Commission as well. In an exchange we had the other day, that was dismissed as unlikely and, indeed, impossible. We know what the Government wanted. Some time ago, in 2003, in an impassioned speech, the current Secretary of State for Justice and Lord Chancellor made it clear that the Government were very unhappy about any kind of treaty that might leave the door open in any way to this combination of offices. The British Government wanted tough clarification in the old constitutional treaty that that should not be so. In practice the British Government did not get what they wanted, and in practice we were left with the phrase, in relation to the president, “shall not serve national office”. That is all. That is in both the old constitutional treaty and in the present one.

The other night there was a series of exchanges, which I found extremely misleading, in which it was claimed that the British Management Data Foundation’s Lisbon treaty grid, a massive document, was incorrect about this matter. The noble Baroness said that it was not true that nothing in the treaty prevented the President of the Commission also becoming the President of the European Council and she urged whoever had written that to get in touch with her, which they have duly done. I expect that she has received a letter.

It seems to me that the noble Baroness’s dismissal was incorrect. The issue is being constantly aired by senior European officials, including the former Italian Prime Minister. Indeed, it has been proposed that the president should be directly elected by the current President of France. Nothing in the treaty could stop that except the words that I described. The earlier and much stronger words that the British Government wanted have failed to get into either the constitutional treaty or the present one.

Why do I spend any time on this? Why does it matter if it is said to be so unlikely? Why did it matter so much to the Government before? It is for a very obvious reason. It blurs the role between the supranational and supposedly independent Commission and the international Council. It also blurs the issue of whether or not the common foreign and security policy is ring-fenced, as Ministers repeatedly claim it is. We will come later on to that whole debate in much greater detail, as we will to the noble Baroness’s fascinating observation in one of her letters that the ECJ’s role in these matters is to police the frontiers between the common foreign and security policy and other Community matters.

We have always sought and wanted practical co-operation with our EU neighbours on a wide range of issues in foreign policy, such as Burma, the Balkans and maybe Russia, although many countries in the European Union are quietly doing their own thing in their relations with Russia. We had a try at the Iran situation, although it did not have much effect in the end. We are still struggling with that. The question is whether we want to codify and legalise all this so rigidly. That is the question. It is the question posed by this amendment. I beg to move.

I beg to move that debate on Amendment No. 9 be adjourned.

Moved accordingly, and, on Question, Motion agreed to.

I beg to move that the House be resumed. In moving the Motion, perhaps I may suggest that the Committee stage begin again not before 8.36 pm.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.