I have to inform the House that the address of 18 July, praying that Her Majesty will appoint as electoral commissioners: (1) Maxwell Marshall Caller CBE for the period ending on 31 December 2011; (2) Henrietta Campbell CB for the period ending on 31 December 2011; (3) Ian Maxwell Kelsall OBE with effect from 19 January 2008 for the period ending 31 December 2012; and (4) John McCormick with effect from 19 January 2008 for the period ending on 31 December 2012, was presented to Her Majesty who was graciously pleased to comply with the request.

With permission, Mr Speaker, I want to make a statement about the outcome of the informal European Council in Lisbon. The new agreed text of the amending treaty to support the enlargement of the European Union has been placed in the Libraries of both Houses.

Alongside the treaty, it was agreed at Lisbon that the priority for the European Union must now be the global challenges that we face in relation to employment, prosperity, competitiveness, climate change and security. Today—in a document, “Global Europe”, published this afternoon and available to the House now—the Government set out how we will advance those new priorities in the future.

The mandate for the IGC made it clear that “the constitutional concept”—[Interruption].

Order. The Prime Minister is making a statement, and it is not helpful for hon. Members to intervene.

The mandate made clear that

“the constitutional concept, which consisted in repealing all existing Treaties and replacing them with a single text called ‘Constitution’, is abandoned”.

My intention throughout the summer and autumn of negotiations has also been to ensure that the detailed safeguards for the British national interest are written into the text of the treaty. I invite the House to examine in detail both the treaty and the protections that we have secured by our insistence on special treatment for the UK in a range of areas where our national interests demand it.

First, I will ensure that Parliament has the fullest opportunity to examine the protocol on the charter of fundamental rights. The protocol, which is legally binding and enshrined in the treaty itself, provides an essential safeguard for the UK. It states that

“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 the Charter reaffirms”.

The legally binding protocol ensures that nothing in the charter of fundamental rights challenges or undermines the rights already set out in UK law. The treaty also ensures that nothing in the charter extends the ability of any court, European or national, to strike down UK law. The point is reaffirmed in the protocol:

“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.”

Secondly, we have secured in detail vital safeguards to our criminal law system and police and judicial processes, while making it possible to co-operate across borders when we choose to do so and when it is right in matters vital to our security. The safeguards are also enshrined in legally binding protocols to the treaty. They prescribe in detail our sovereign right to opt in on individual measures when we consider it in the British interest to do so, but also to remain outside if that is in our interests. In the past, for example, we have opted in on measures dealing with combating illegal immigration and the exchange of information when such measures are unquestionably in Britain's interests. The new treaty gives us freedom to protect the fundamentals of our common law system if we believe that it could be jeopardised, while at the same time allowing us to participate in areas where co-operation is in the national interest. The agreement set out in the details of the text is that it will be in our exclusive power to decide, on a measure-by-measure basis.

As a result of our recent negotiations, the opt-in now covers all types of measures, including completely new measures and amendments to existing measures. When measures come forward under the Schengen agreement, we also have the right to opt out. We can choose to participate in any and every measure, but we cannot be forced to do so. If we choose not to, there is a fair, objective and robust system for consequential changes, but no financial or other penalties. We have secured a comprehensive, legally binding opt-in on all justice and home affairs measures, which will enable the UK to choose whether or not to participate in any justice or home affairs measure in the future.

I turn to the common foreign and security policy. I welcome further scrutiny by this House of the agreements that we have secured because, again, I believe it is now absolutely clear that the basis of foreign and security policy will remain intergovernmental—a matter for Governments to decide. The intergovernmental basis is unchanged, and subject to distinct rules and procedures that protect that position. The declaration that we secured expressly states that nothing in the treaty affects the existing powers of member states to formulate and conduct their foreign policy, including maintaining their own national diplomatic services and membership of the United Nations Security Council. There is no sole right of initiative for the Commission, and there is no role for the European Parliament in decision taking. Voting by unanimity is the rule for all policy decisions. Apart from two specific and limited provisions in foreign policy—appeals against EU sanctions and, as now, any overlap, for example, with international development assistance—there is no jurisdiction for the European Court of Justice.

The declaration agreed on Friday made it clear that the European Parliament would have no new role in the appointment to the new post of high representative, which will be made by the European Council. And there will be no change to the way EU foreign policy is decided—it will continue to be governed by unanimity. There is, in addition, a clear declaration that nothing in the treaty, including the Office of the High Representative and the External Action Service will

“affect in any way the existing legal basis, responsibilities, and powers of each Member State in relation to the formulation and conduct of its foreign policy, its national diplomatic service, relations with third countries, and participation in international organisations, including a Member State’s membership of the Security Council of the UN.”

On social security, we have secured an effective veto power on any proposals for important change. We can insist on taking any proposal to the European Council and, because it will be decided by unanimity, we have a veto where we—Britain—determine that a proposal would impact on important aspects of our social security system, including its scope, cost or financial structure. In justice and home affairs, the amending treaty gives us the right not to participate; in social security, it gives us the right to insist on unanimity.

Many qualified majority voting measures, for example, rules for the euro or special state aids for Germany, do not affect the United Kingdom. The remaining areas of QMV agreed in June are decisions on emergency humanitarian aid to third countries—manifestly in Britain’s interest—and energy market liberalisation, again in our interest. Others are technical or procedural and simply relate to the efficient functioning of the Union, for example, the internal rules for appointing the Committee of the Regions, judges and the Economic and Social Committee.

While there is a two-and-a-half-year presidency of the Council, the President of the Council has been appointed as the servant of the leaders of the national Governments—and the purpose is to strengthen the Council of national Governments in relation to other EU institutions.

The new treaty also expressly provides that national security is the sole responsibility of member states. The declaration to the treaty makes it clear that while the European Union, like the UN and the International Monetary Fund, can sign international agreements, this does not, and cannot, authorise the Union in any way to legislate or act beyond the powers conferred on it by member states in the treaties.

As a result of our negotiation, we are agreed that the new text will make it clear that national Parliaments have the right, but are not obliged, to contribute to the work of the Union. Under the amending treaty, national Parliaments have a new right to force the EU to reconsider proposals if a third of Parliaments feel that the issue is better dealt with at member state level. And symbols of statehood that were the characteristic of the rejected constitutional treaty—European flags, anthems or mottos—have been abandoned in the treaty.

As I have already made clear, the Government will only agree the amending treaty in December if, in the final text, all the UK protections that I have outlined are included in the detail we have negotiated. Parliament will have the opportunity to debate this amending treaty in detail and decide whether to ratify it. The Government will recommend that there is sufficient time for debate on the Floor of the House so that the Bill is examined in the fullest of detail and all points of view can be heard—[Interruption.]

Order. Mr. Penning, I must ask you to behave—[Interruption.] Order. Let me deal with it. It is not the first time that the Opposition have called on Ministers to come and make statements to the House. The Prime Minister is doing that. If hon. Members do not co-operate with me, I have powers to deal with the matter. I ask the House to listen to what the Prime Minister has to say. Do not shout out questions. If there are questions, I will recognise Members and let them put their questions to the Prime Minister. That is the way that we will do it.

In addition, we propose to build further safeguards into the legislation. To ensure that no Government can agree without Parliament’s approval to any change in European rules that could, in any way, alter the constitutional balance of power between Britain and the European Union, we will make a provision in the Bill that any proposal to activate the mechanisms in the treaty that provide for further moves to QMV, but which require unanimity of member states, will have to be subject to a prior vote by this House.

The amending treaty will not be fully implemented until 2014. Indeed, one section does not have full effect until 2017. I can confirm that, not just for this Parliament but also for the next, it is the position of the Government to oppose any further institutional change in the relationship between the EU and its member states. In our view, there is also a growing consensus across Europe that there should be no more institutional change for many years.

The December European Council will also consider a declaration proposed by Britain that Europe moves to a new agenda. The new priorities are a focus on jobs, competitiveness, prosperity, climate change and security, so that Europe can play a far stronger part in the competitive economy of the world and be a leader and success story in the new global order. So because it is right that Europe now focuses not on more institutional change, but on the reforms that are needed to meet the challenges of the global era, we are publishing today our agenda for the new priorities that we as a European Union must adopt—a renewed focus on completing the single market, in which the priority is the liberalisation of the energy and telecommunications sectors; a commitment to free trade and openness, with the priority of ensuring a successful outcome to the world trade talks and promoting better EU-US trade links; tackling climate change and energy security; combating terrorism and organised crime; reducing global poverty; and reforming the European Union budget.

It is by putting in place those changes that we can create a truly outward-looking, globally focused European Union that helps deliver prosperity, opportunity and security for all, with an agenda that is good for Britain and good for Europe, and that allows us to continue to benefit from our membership of the European Union and, by working together, to have a greater influence in the world.

The protections we have negotiated defend the British national interest. We are putting in place new procedures to lock in our protection of these interests. We will oppose any further proposals for institutional change in the European Union this Parliament and the next. We will lead the debate in Europe to move to a new agenda of new priorities that focus on the economic and social needs of our citizens. I commend this statement to the House.

The Prime Minister says that he wants Europe to focus on competitiveness and climate change and is opposed to further institutional change. I have to say that people will ask why he did not say that boldly at the start of the intergovernmental conference, rather than lamely at the end of it.

There is one fundamental question arising from today’s statement. When a party makes a promise in a manifesto, can it be trusted to keep it? The Prime Minister has described the Labour manifesto as an issue of trust. That manifesto promised a referendum on the EU constitution. If this Prime Minister goes back on that promise, how can he expect his promises to be believed in future? In his statement, he did not even mention that R word once. As his hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), who helped to write the constitution, said:

“If Labour can’t trust the people, why should the people trust Labour?”

First of all, let us look at the content of the treaty. Will the Prime Minister confirm that the treaty gets rid of the veto in 60 areas, including in energy, transport and self-employment law? The Prime Minister has given up on the veto but he says that is okay because he has got rid of the motto. Well, I have a motto for him: “Let the people decide”.

Will the Prime Minister confirm that this treaty means an EU President and Foreign Minister and an EU diplomatic service in all but name? Will he confirm that it includes a new ratchet clause that allows even more vetoes to be scrapped without the need for a new intergovernmental conference? The Prime Minister says that there will be no more institutional change for 10 years but he has just agreed a treaty that allows institutional changes to take place every year.

The Prime Minister deploys two main arguments against holding a referendum: first, he says, the treaty is not the same as the constitution and, secondly, he says that Britain is a special case because of our opt-outs and our red lines. Let me take the two arguments in turn: first, the claim that the new treaty is substantially different from the constitution. The Irish Prime Minister says that it is 90 per cent. the same. The Spanish Foreign Minister says that it is 98 per cent. the same. The German Chancellor says:

“The substance of the constitution is preserved…That is a fact.”

Why does the Prime Minister think all of them are wrong and he is right?

What is more, is not it the case that even his colleagues do not believe him? His new trade Minister, Lord Jones of Birmingham, days before his appointment said:

“This is a con to call it a treaty—it’s not. It’s exactly the same—it’s a constitution.”

The Prime Minister’s colleagues on the Labour-dominated European Scrutiny Committee say that the EU treaty is “substantially equivalent” to the constitution, even for Britain. They say that pretending otherwise, as the Prime Minister keeps doing, is “likely to be misleading”.

Next, the Prime Minister says that even if it is a constitution for other countries it is not for Britain because of our opt-outs and our red lines. Will he confirm that the red lines do not include the EU President, the single legal personality, the vetoes or the ratchet clause? That is why his hon. Friend who helped to draft the constitution described the red lines as “red herrings”.

Even the areas covered by the red lines are falling apart; take the red line on tax. The Government told the BBC that it was a bit of a con and “purely presentational” because tax was never going to be part of the treaty anyway. Is not it the case that the red line on foreign policy is only in a declaration? It is not legally binding and legal advice to the European Scrutiny Committee says that it may turn out to be “meaningless”.

With the red line on the charter of fundamental rights, the former Prime Minister promised us an opt-out. Will the Prime Minister confirm that the Minister for Europe had to write to the Scrutiny Committee to explain that it was not an opt-out after all, but just a clarification? That actually matters. The Prison Officers Association has already announced that it will take the Government to court so that it can have the right to strike that is set out in the charter of fundamental rights.

The red line on criminal justice has also been torn apart by the European Scrutiny Committee. The Chairman of the Committee said:

“We believe that the red lines will not be sustainable…we believe these will be challenged…and eventually the UK will be in a position where it will have all of the treaty…we think”—

the red lines—

“will basically leak like a sieve.”

So much for the red lines, but even if they were totally robust and watertight it would not affect the case for a referendum, because they are the same red lines as the Prime Minister’s predecessor set out for the constitution. Then, as now, the Government claimed that the charter would not affect UK law. Then, as now, the Government claimed that we were protected from measures on foreign policy, tax and criminal law and then, as now, they claimed that there was no great constitutional change at stake. So why promise a referendum then, but not now? Is not the answer perfectly clear?

The last Prime Minister, standing at the Dispatch Box, said,

“let the battle be joined”;—[Official Report, 20 April 2004; Vol. 420, c. 157.]

whereas this Prime Minister says, let battle be avoided wherever possible, especially if people are to have their say. That is why he is not having a referendum. He does not think he would win it. Why does he continue to treat people like fools by pretending otherwise? Why does he continue to put forward arguments that do not even convince his own colleagues?

This is the Prime Minister who stood outside Downing street four months ago promising to restore trust in politics, but now he is betraying people’s trust. He promised to listen, but he refuses to give people the chance to speak. He promised to honour his manifesto, but he is breaking one of the most important manifesto commitments of all. He says that this issue will be settled by Parliament, so perhaps he could start his response by answering a simple question: when Parliament votes on whether to hold a referendum, will he allow his side a free vote? He has absolutely no democratic mandate to sign this treaty without a referendum. If he breaks his trust with the British people, they will rightly say, “How can we ever trust him on anything else again?”

I will answer every point in detail, but I notice that the right hon. Gentleman mentions nothing about the long-term agenda for Europe—not one thing. Is it not remarkable that, after six years of debate about institutions, not one Government in the rest of Europe—not one of the 27—support his opposition to the amending treaty? Is it not remarkable that only one Government—Ireland—who are constitutionally obliged to do so, think that the issues justify a referendum now? Is it not also remarkable that, in his own shadow Cabinet, those members who were there in 1992 all voted against a referendum on a more far-reaching treaty in Maastricht?

As for the individual questions that the right hon. Gentleman put to me, the first was on the passerelles—as for those that he raised, I have to tell him that they were legislated for in the Single European Act by Lady Thatcher. The implementation of passerelles requires unanimity, and sometimes I think that he does not listen to me, because I said directly that, in the House of Commons, Members of Parliament would have a vote on whether to implement any of the passerelles.

I think that the right hon. Gentleman will accept that foreign policy remains an intergovernmental matter and the decisions remain to be made by unanimity. Those are the two building blocks of the common foreign and security policy: the decisions are intergovernmental and taken by unanimity. That means that Britain has the right to decide. The right hon. Gentleman raised that issue in terms of justice and home affairs, but the fact is that we have an opt-in on all the important issues that have to be decided—an opt-in that has been negotiated by us, including in relation to Schengen measures, where we can opt out if we choose to do so. The fact of the matter is that, on this issue too, Britain will decide.

On social security, because we have a veto on any further new decision, it is Britain that will decide. As for the charter of rights, I think that the right hon. Gentleman should read the protocol, which means that there are no rights in British law as a result of that charter. It is exactly for that reason that the CBI has issued a statement saying that it supports our interpretation of it.

I am afraid to say that, because the Leader of the Opposition is not prepared to look at the long-term agenda for Europe, people will rightly draw the one conclusion that is drawn from the behaviour of Conservative Members: not only are they against the amending treaty, but they wish to renegotiate the membership of the European Union; they wish to withdraw from employment and social legislation; and not only that, they have a decision to make on whether, when the treaty is ratified, they will support a referendum even after the ratification, which means that they have to renegotiate with all the other 26 members on our membership of the European Union. For a country where 62 per cent. of our trade lies with Europe, I have to say that the years of economic uncertainty and instability that would result from such renegotiation would, in my view, be unacceptable to British business and unacceptable to the British people.

The House should also know, in conclusion, what friends the Conservative party has in Europe. The Conservatives said that they would form the Movement for European Reform. They said that other countries would join, and they announced at a press conference that the Czech party had joined and then that the Bulgarian party had joined. Then, only a few days ago, the European People’s party announced that the Bulgarians had already withdrawn from the Movement for European Reform. Then, the right hon. Gentleman has got his last remaining friends, whom he calls his closest allies in Europe—the Czech Civic Democrats—but his only allies in Europe support the amending treaty. [Interruption.]

Order. Once again, we cannot have shouting.

The right hon. Gentleman’s only remaining friends in Europe, the Czech Civic Democrats, support the amending treaty and are against a referendum, and the Czech Prime Minister has said,

“We cannot afford any further failure on the path to this common goal”

in Europe. The right hon. Gentleman has no friends in Europe, and he has no support from any Government; he will have to change his policy. We will defend the national interest.

More, more!

Order. I call Vincent Cable.

I welcome the statement. We believe that the treaty is necessary. It is in the British national interest that the European Union should work efficiently and effectively, but there remains the issue of legitimacy. We believe that there should be a referendum. The public should decide whether Britain should remain a committed member of the European Union. A great deal has changed since the Harold Wilson referendum in 1975. There has been a pooling of sovereignty through Mrs. Thatcher’s Single European Act, John Major’s Maastricht treaty, Tony Blair’s Amsterdam and Nice treaties, and now this treaty. The time has come for consultation with the British public on the cumulative effect of those treaties, because there is anxiety about national sovereignty, and that has to be addressed through public debate.

We cannot continue with the approach perfected by the Conservative party, which, when in office, supported European integration without referendums, but which, when in opposition, supports the worst features of anti-European populism.

May I take the Prime Minister back to his early political career in Scotland? He will remember that a movement was launched by great figures such as the late John Smith and Donald Dewar, and by lesser figures such as the Prime Minister and me, to persuade the then sceptical Labour movement of the merits of the European Union. We won that argument, and we ask him to return to it, because very few people under the age of 50, including the Foreign Secretary, have been able to engage in the debate. If the Prime Minister does return to that argument, it will help him to escape from the image that he created of someone who is afraid of the ballot box. He may also persuade the leader of the Conservative party to say whether he is in favour of Britain being in or out of the European Union, or both at the same time.

I now turn to the specifics of the treaty. The red lines were of course understandable, but on the vision, as the Prime Minister describes it, what is he doing to promote a more decentralised and devolved Europe, rather than the European superstate that is the figment of Europhobes’ imagination? Why did he not do more to promote the concept of subsidiarity, which is so weak in the treaty? Does he not realise that it is highly corrosive to public confidence when the European Commission promotes issues such as rules on working time, which should be a matter of national competence, instead of using its energy to deal with cross-border issues such as global warming and the aviation industry’s contribution to it?

We support the Prime Minister’s vision of an open, outward-looking Europe, but why has he not rebuked his friend and former colleague, Peter Mandelson, who, instead of getting down to his job of delivering liberalised world trade negotiations, is launching protectionist attacks on China? What is the Prime Minister doing to address the urgent deteriorating political situation in Turkey, partly created by rebuffs from the European Union? Will he at last give us a timeline for fundamental reforms of the wasteful, economically illiterate common agricultural policy?

My final question to the Prime Minister is this: will he come out of his bunker and join the Liberal Democrats in supporting a referendum on British membership of the European Union, and join us in making the European case, and campaigning for a yes vote?

I welcome what the hon. Gentleman said about the long-term agenda for the European Union, and I hope he will read the document that we have published today, in which we set out the case for an open Europe that looks out to the world, as well as the case for a world trade agreement. We support the hon. Gentleman in urging all parties to make that agreement soon. We support EU outreach to Turkey, and we hope that the negotiations with Turkey will start soon. In the document, we also support wide-scale reform of the EU budget, including reform of the common agricultural policy. The hon. Gentleman will remember that there was an agreement that those reform discussions should start next year, and they will do so.

I agree, too, that it is time to have a debate about the future of Europe in the context of Britain being positive about its membership of the EU. It is unfortunate that the debate has not concentrated on the things that European countries can do together, including environmental action, in which we can work with our partners to deal with climate change as well as action to open up the single market. Sometimes, we forget that 62 per cent. of our exports go to the European Union; 40 per cent. of all financial services activity in Europe comes through London; and 80 per cent. of the burgeoning carbon market for the whole of Europe is based in the City of London. We are in a privileged position because, through the United Kingdom’s financial services in particular, we can benefit from the extension of the single market and make it the means by which we can create jobs for the future.

I am pleased that the two candidates for the leadership of the Liberal party—at least the two candidates who have announced that they are standing for the leadership—have said that they do not regard this as a constitutional treaty. They regard it as an amending treaty that does not require a referendum, so they share the view of every single Government in Europe, apart from that of Ireland, where there is a constitutional obligation to hold a referendum. I hope that we can proceed on the basis that there will be a full debate in the Chamber in the House of Commons on all the details of the legislation; that every Member of Parliament who has views can contribute to that debate; and that we can look in detail at the provisions that have been agreed as part of the amending treaty. I think that people will come to the conclusion that we have defended the British national interest, and built in the necessary protections for the future.

I welcome the agreement by 27 sovereign countries. The Prime Minister referred to the appointment of a high representative for foreign and security policy. Will he confirm that that individual will not be the Foreign Minister, that the representatives of the European external action service will not form a foreign ministry, and that we will not have European Union embassies but EU missions throughout the world?

I am grateful to my hon. Friend, who is the distinguished Chairman of the Foreign Affairs Committee. I stress that foreign policy will remain intergovernmental. We have always said that decisions will be made unanimously and that the treaty does not, as people have claimed, remove our seat at the United Nations Security Council. We have always said that the organisation and function of any external action service must be agreed unanimously, too. I can therefore reassure my hon. Friend on each point that he made.

Will the Prime Minister explain how the home affairs and justice opt-ins that he negotiated will work at the end of five years?

There are three separate ways in which the justice and home affairs opt-ins work. First, we have the right to opt in to any new measures. Secondly, we have the right, if we so choose, to opt out of existing measures that we have accepted if they are amended. The third option, to which I think the hon. Lady was referring, applies to Schengen measures. After a period of five years, they will stop being intergovernmental measures and become part of the treaty. At that stage, we will have the right to opt out, if we choose to do so.

Will my right hon. Friend confirm that the year before last, he and I were both elected on a manifesto pledge to campaign wholeheartedly for a yes vote on the new constitutional treaty, that that pledge was scuppered, as was the treaty itself, by the no votes in France and Holland, and that that being so, those who write well remunerated articles reminding the Labour party of manifesto pledges have either not read the manifesto or prefer money to truth?

The constitutional concept, as was stated in the declaration, has been abandoned. If anybody has any doubt about the special treatment that has been accorded to Britain as a result of our negotiations, Valéry Giscard d’Estaing, who is hardly a supporter of what we have been trying to advocate, said only a day ago, on 20 October:

“As to the balance sheet of the changes, it mainly favours Great Britain, which will enjoy a special status: It is ‘placed in an exceptional situation’ with respect to monetary union; it does not apply the Schengen agreement; it is not bound by the constraints of the Charter of Fundamental Rights…. and it retains its discretion to interpret certain judicial matters.”

That is how we have defended the British national interest, and that is why the amended treaty is quite different from the original constitutional treaty. We have secured the protections for the British national interest.

Does the Prime Minister recognise that the history of the European Union is hugely shaped by the Courts, and that they have always, through judicial activism, changed elements in the treaty in the direction of ever closer union? As they were the ones to find in favour of European law having primacy—not this House or any other Parliament—does he not realise that the Courts will progressively find in the direction of a single legal personality, and that his opt-outs will no longer exist?

I do not accept what the right hon. Gentleman says. The protocols that we have negotiated are part of the treaty and they are legally binding, no matter what he wishes to believe. If he is in any doubt about what has happened, the President of the European Parliament only a few days ago, writing in The Daily Telegraph—as a Christian Democrat, he should support the Conservative party but does not do so on this matter—stated:

“The special deal . . . in this area even goes as far as allowing withdrawal from previous agreements where the UK had opted-in.”

He went on to say that

“we have reverted to a classic treaty between 27 sovereign states under international law similar to all previous EU treaties”.

If the Conservative party did not support a referendum on Maastricht, why should it support a referendum on the constitutional treaty?

May I remind the Prime Minister, in response to the question from the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), that the destiny of Europe was set when we signed the Single European Act in 1986 under a Thatcher Government? The House should welcome my right hon. Friend’s statement that 62 per cent. of our exports now go to Europe, whereas it was 57 per cent. 10 years ago. The House should welcome his emphasis on jobs, competitiveness, prosperity, climate change, security, the single market, free trade and openness. I assure him that these will be the subjects of debate when we come to discuss the reform treaty.

I am grateful to my hon. Friend, who will very much be part of the debate on the Floor of the House when we discuss all the provisions. I welcome the chance to debate the treaty and to show that the protocols and the opt-ins that we have succeeded in achieving defend the British national interest. My hon. Friend is right. At some point, even the Conservative party will have to come to terms with the fact that we benefit from our membership of the European Union. It is not just 62 per cent. of our trade and 40 per cent. of all financial services activity of the EU in London—50 per cent. of investment banking is in London—[Interruption.] The Conservatives do not seem to be concerned that millions of jobs are dependent on our membership of the European Union. It is estimated that our trade with the European Union makes possible 3 million jobs, and if the Conservatives want to create a period of economic instability, I know where business and the British people will be. They will want economic stability.

Does the Prime Minister recall the statement that he made in this House in July on constitutional reform, in which he promised to devolve more power directly to the people? He asserted:

“The right of all the British people to have their voice heard is fundamental to our democracy”.—[Official Report, 3 July 2007; Vol. 462, c. 818.]

Does he realise the damage that he is doing to people’s faith in democracy, when he breaks his own manifesto promise to hold a referendum on the treaty, which in substance and legal effect is almost identical to the previous one, and when he ignores and contradicts the words that he uttered on direct democracy only three months ago in this House?

If we were voting on a decision to join the euro, there would be a referendum; and if we were discussing the old constitutional treaty, there would be a referendum. We have secured the defence of the national interest in such a way that no fundamental change is taking place in the relationship between the European Union and Britain, which is shown in the protocols as well as in the opt-ins that we have achieved. The right hon. Gentleman should think again before his next intervention, because he was one of the Conservative Whips when the Conservatives opposed a referendum on the Maastricht treaty.

First, I commend the Prime Minister for correctly quoting the European Scrutiny Committee report when he uses it. We said:

“We consider that, for those countries which have not requested derogations or opt outs from the full range of agreements in the Treaty…the new Treaty produces an effect which is substantially equivalent to the Constitutional Treaty.”

Of course, we do have derogations and opt-outs.

Secondly, turning to the Schengen building agreements and framework decisions, there are 70 to 80 areas in which we have agreed that there is no role for the European Court of Justice, but if we opt in to these and to clauses 62 to 69 of the reform treaty, those areas will be controlled by the European Court of Justice and the Commission. Will the Prime Minister assure us that whatever Bill he introduces in this House will include detailed procedures so that this House knows its role in deciding whether the Government should be advised to opt in or not to opt in to those things, or whether to accept the opt-out in certain areas, as we go along through the five years and debate whether there will be transposition of all those 70 to 80 areas?

I assure the Chairman of the European Scrutiny Committee that there will be a full opportunity to debate those issues on the Floor of the House. In particular, he will find that we have an opt-in on all those matters, and it will be for us, the British people, to decide whether we opt in on those issues.

As far as my hon. Friend’s more general point is concerned, I am pleased that the Committee takes the view that the treaty as it affects Britain is quite different from the treaty as it affects other countries. Britain will decide on justice and home affairs, because we have the opt-in; Britain has the protocol on the charter of rights; Britain has an intergovernmental decision on foreign policy; national security has been exempted from the treaty; and we have a veto on social security. In all the areas where there were question marks beforehand, we have defended the British national interest. As my hon. Friend has rightly said, the treaty is different in its consequences for Britain and for other countries.

Does the Prime Minister recognise that there is always an ongoing responsibility on this or any other British Government who are playing their role properly in Europe to do more to explain and inform people about developments within the European Union and Britain’s role within those developments? Will he acknowledge—we have all experienced this, whatever our views on the European issue—that when it comes to “Question Time”, “Any Questions?” or Radio Five Live phone-ins, the most common complaint is that people do not feel they get sufficient unbiased information on which to make a judgment about Europe? That will not change to any great extent given the arcane and at times impenetrable debates that will take place in this House on the minutiae of the draft treaty. Does he have any specific initiatives in mind, running concurrently with the passage of this treaty, to get more information out to the British public—particularly, perhaps, through the education system?

I note that the right hon. Gentleman has become the president of the European Movement. It is, of course, part of the work of the European Movement to stimulate debate in the country about the future of the European Union. There will be time to debate all the detailed parts of the amending treaty in the House of Commons, which will also provide an opportunity to inform the public about the consequences and implications of the amending treaty. I believe that the public will come to the view that we have taken the right decisions to protect the national interest.

If the Scottish First Minister grants Scottish voters a say on the treaty, will the Prime Minister protect English voters and grant them a similar privilege?

The decision for a referendum on European Union matters is a decision for this Parliament.

The Prime Minister has not answered the question whether there will be a free vote for his side on a referendum. We now know that the Liberals will opt out. Will he say whether, given the question marks described by some of his colleagues and the doubts about the language, which he himself referred to in December, he will let the British people—rather than just him and his Government—decide whether the treaty should be signed?

I have already made it absolutely clear that if we secure all the detailed amendments that we have sought and that are in the text at the moment, we are prepared to sign the treaty and recommend to the House that the treaty be ratified. As far as the hon. Gentleman’s position is concerned, I see that he has signed the early-day motion calling for a referendum even after ratification.

The Conservative party will have to make a decision, because if it wants a referendum after ratification, it is effectively asking the European Union to reopen the conditions of membership of the European Union. I believe that the Conservative party will find it very difficult to get support—even from the Czech Civic Democrats—for that position. It will find that 26 out of 27 members of the European Union do not want to go along with its proposals for changes. The Conservative party will have to make a very difficult decision. I believe it will have to decide what is in the interests of the British people.

Does the Prime Minister agree with the trade unions and me that we must not under any circumstances put jobs in this country at risk? Some 62 per cent. of our exports go to the European Union. If we put exports at risk, we are putting jobs in this country at risk.

There is not a constituency in this country that does not depend on trade with the European Union. That trade has grown substantially since we joined the European Union in the 1970s and it will continue to grow over the next few years. What would put it at risk is a prolonged period of instability with people not knowing whether we proposed to continue with our membership of the European Union or we were trying to renegotiate that membership. I believe that there is no support in the country for putting that—and thus jobs and the prosperity of the British people—at risk.

There is considerable concern that protocol 7 is not sufficient to prevent the European Court of Justice from using the charter of fundamental rights in future to create new, individual legal rights in the United Kingdom. Presumably, the Government have taken legal advice on that. I should be grateful if the Prime Minister told me whether that legal advice is absolutely 100 per cent. unequivocal and whether he will publish it.

The charter records but does not create new rights and the protocol has the full force of law. That is both the legal advice that we have had and, I suspect, the legal advice that anybody else who has looked at the issue has had. I believe that the Confederation of British Industry has also looked at it very closely, and it has come to the view that we have defended the British national interest.

As someone who, on many occasions, has not been over-enthusiastic about various aspects of the European Union, I ask my right hon. Friend whether he agrees that, bearing in mind what he has said about the opt-outs, many of the objections today really amount to little more than xenophobia. Some of the talk very recently about Munich, betrayal and so on is utter rubbish from start to finish.

I agree with my hon. Friend. The problem is that some Conservative Members do not just want to stop the amending treaty but want to renegotiate the whole membership of the European Union. That is why they start with employment and social legislation; they then say that even if the treaty is ratified they will still want a referendum. That will open up the question whether we are serious about our membership of the European Union. I hope that at some point the Conservative party will come to its senses and realise that we are in Europe and that we are in Europe to stay.

The Prime Minister has conspicuously avoided responding to the request from the Leader of the Opposition to reconcile his remarks on the protocol with the letter from the Minister for Europe to the European Scrutiny Committee on 31 July. On that occasion, the Minister said that the protocol

“is not an ‘opt-out’ from the Charter. Rather, the Protocol clarifies the effect the Charter will have in the UK.”

If all other member states of the European Union are going to be bound by the charter of fundamental rights and if the Government themselves believe that we do not have an opt-out, will the Prime Minister use this opportunity to clarify to the House what, in the words of the Minister for Europe,

“effect the Charter will have in the UK”?

I can clarify to the right hon. and learned Gentleman that the protocol is legally binding in the UK. I would have thought that he, as a lawyer, could see that it is part of the treaty and is therefore legally binding. That is the position of the Government. I would have thought more of his comments if he had voted for a referendum in 1992, which he did not do.

The Prime Minister referred to the enforced liberalisation of the energy market in Europe. That is very important because we have been trying to persuade the French to do this for a long time so that British companies may own French energy companies just as French energy companies own British ones. Is this not even more important as we face up to Russia and try to ensure our energy security into the future?

Will the Prime Minister welcome article 84 of the treaty, which is about intellectual property rights? We have been campaigning to try to ensure that, as the Gowers review said was necessary for the British economy, we have strong intellectual property rights across the whole of Europe, which will now come in thanks only to this treaty.

My hon. Friend is absolutely right. Both in intellectual property and in energy, we benefit from the action taken within the European Union. As far as energy liberalisation is concerned, I detected that one or two Conservative Members supported me when I said that qualified majority voting on energy liberalisation is in British interests. Let me read the letter from the chairman of Centrica and the chairman of National Grid to the Financial Times:

“The draft Reform Treaty can…help to promote energy liberalisation by moving this to majority voting…this will be a way of circumventing cases of protectionism.”

That is in the interests of the British economy and of British energy companies trying to sell in Europe, and in the interests of growth in the European economy as a whole.

Does the Prime Minister accept that by refusing to hold a referendum he is putting not only himself on trial but Parliament itself? Does he not appreciate that 27 million people have been denied the opportunity of a referendum since 1975? Given the circumstances of deceit and the manner in which this treaty has been negotiated, as the European Scrutiny Committee has indicated, it is absolutely essential that we have a referendum. No wonder only 59 per cent. of people bother to vote at all. Does he not understand the responsibility upon him?

We have had many debates over the years, and I think that the hon. Gentleman will concede this: that if there had been a decision to recommend joining the euro, I was the first to argue that there should be a referendum—[Interruption.]

Order. The hon. Member for Stone (Mr. Cash) has asked a question and now he will not hear the answer. He must be quiet and hear the answer. I know that it is very difficult for him, but he should try to hear it.

If we were making a decision on the old constitutional treaty, we would have had a referendum. The hon. Gentleman cited the European Scrutiny Committee. He must therefore accept that its Chairman has said, as I believe, that the treaty as negotiated for Britain has the protocols—the opt-outs and opt-ins, in certain respects—that make it a quite different treaty for Britain than it is for other countries in Europe. The hon. Gentleman should also accept that his real reason for having a referendum is, as he has said on a number of occasions, “We must withdraw from the European Union.” That is his true position.

Will the Prime Minister indicate what positive measures the treaty could deliver in addressing regional disparities in the United Kingdom?

The regional work of the European Union, including that of the European Economic and Social Committee, does a tremendous amount to try to deal with the question of inequalities. For example, over the last Parliament we succeeded in persuading the European Union that there should be regional venture capital funds and that we should be able to have regional investment that did not come up against state aid legislation so that the regions of our country could receive benefits from membership of the European Union. Of course, regional policy will move towards eastern Europe over future years, but benefits will still come to all the regions of the United Kingdom from membership of the European Union. We must not forget that 3 million jobs depend on the trade relationships that we have with Europe, and we should do nothing to put those at risk.

May I put a direct question to the Prime Minister? Does he fervently believe in honesty, trust and honour? I want a direct answer to that. Would he indicate why, if this treaty-constitution and Europe are so good for this country, he is not prepared to put it to the people of this country in a referendum and ask them what they think rather than telling them what he thinks?

I believe that trust is built in this country by defending and advancing the British national interest, which is what I shall continue to do. We had better be clear about the agenda of the hon. Gentleman, for whom I have a great deal of respect. He is a member of Better Off Out and it is pretty clear what he wants to achieve.

When members of the European Scrutiny Committee, including me, looked at these issues, we raised legitimate concerns about the firmness of some of the red lines. Does my right hon. Friend agree that the appropriate place for those to be debated and discussed is in this Chamber, by Members of Parliament elected to scrutinise such treaties? Will he confirm that there will be sufficient time for every Member of this House to participate in those discussions?

My hon. Friend is a member of the Scrutiny Committee and I welcome the chance for us to debate in detail, on the Floor of the House of Commons, the protections that we have secured for the British national interest. It is interesting that most of the questions from the Conservatives today are not about the detail of the amending treaty at all. I welcome the debate that we will have in future months on this matter, and we will show, as we show the Committee with the questions it has asked of us, that we have secured the proper protections for Britain.

The Prime Minister knows that the common fisheries policy has been a disaster in Scotland. It has also been a serious impediment to Norway or Iceland ever joining the EU. Having chosen to disregard that red line issue for the Scottish Government, will the Prime Minister tell the House what advantages he foresees by enshrining the common fisheries policy as an exclusive treaty competence?

I have to tell the hon. Gentleman that the treaty does not change the competence on fisheries.

The Prime Minister referred to the Maastricht treaty a number of times. Is not the difference between the Maastricht treaty and the Lisbon treaty that the Government at the time of the former did not promise a referendum, whereas this Government—my Government—did?

I say to my hon. Friend, for whom I have considerable respect, that if this were the old constitutional treaty, we would be having a referendum. The fact that we have secured major protections for the British national interest, while the constitutional concept has been abandoned, leads us to the conclusion that the best way of debating the matter is in detail on the Floor of this House, so that we can show people that we have protected the national interest.

If the Prime Minister rejects the judgment of some leading European statesmen that this treaty represents 90 to 98 per cent. of the original constitution, what figure would he put on it?

I have just quoted Valery Giscard d’Estaing, who said that:

“As to the balance sheet of the changes, it mainly favours Great Britain” .

I could quote the President of the Commission, who said that there are “important differences” as far as this affects Britain. I could go on to quote the President of the European Parliament, who says exactly the same—that

“The special needs of the United Kingdom have been … taken into account.”

The way in which the treaty affects Britain is different from the way it affects the other 26 countries. Again, I would think more of what the hon. Gentleman was saying if he had not voted against a referendum in 1992.

Does my right hon. Friend agree that one of the most compelling global issues that we face is climate change and the role of emissions trading? Europe is vital in dealing with that issue. Does he agree that a debate on the treaty would be a diversion from the real work that we should be doing with Europe and that, by calling into question this Government’s commitment to Europe, it would undermine our ability to shape that debate?

I hope that my hon. Friend will have the chance to read “Global Europe”, the document that has just been published by the Government, which seeks to set the agenda for future years. There is general agreement that the environment, and how Europe deals with climate change, is an important issue on which we will make very little progress without co-operation across Europe. I hope that Opposition Members realise that if we are to make progress on climate change, we need to work with our European partners. We are very happy to follow the agenda that we have set down, and I hope that my hon. Friend will join us in pressing our European colleagues to move faster on the matter.

As the Prime Minister has repeatedly said that the House will have full opportunity to debate the treaty, will he give a firm, unequivocal and binding commitment that that business will not be timetabled?

There will be a full chance to discuss all the issues in Parliament.

Does my right hon. Friend believe, like me, that the siren voices calling for a referendum are abdicating their responsibility as parliamentarians by trying to bypass the House’s decision-making powers?

There will be ample opportunity for the amending treaty to be debated in full in the Chamber of the House of Commons so that people can judge for themselves whether we have secured the proper protections. Although eight or nine countries proposed referendums for the old constitutional treaty, only one country in the European Union—Ireland, which is constitutionally obliged to hold referendums on many matters, including the treaty—will hold a referendum. All the other countries that previously proposed referendums will not have them.

Does the Prime Minister accept that the enlargement of the European Union was the biggest peaceful realignment of Europe since the decline of the western Roman empire? As it represented a major British triumph, will he conduct the debate in terms of the achievement of British objectives, and resist the temptation that so much of the press offer to regard our membership of the European Union as a continuation of world war two by other means?

I am grateful for what the right hon. Gentleman has said. Every part of the House supported the enlargement of the European Union. The reason for the new treaty is that we have to take into account the fact that there are 27 members of the European Union and the arrangements that were suitable for six, 12 or 15 are no longer appropriate when representatives of 27 countries are sitting round a table. Many of the changes in the treaty are directly to deal with that fact. I hope that we can say to countries in eastern Europe that we welcome their participation in the European Union and that we will do everything we can to integrate them into its workings. The treaty is very much part of that. On the protections for Britain, we can assure the British people that we have defended the British national interest in the way they expect us to do.

Does the Prime Minister understand that many pro-Europeans who do not believe that a referendum is appropriate for the treaty nevertheless believe that a time is coming when we will have to hold a referendum to reaffirm our membership of the European Union, and that that will help focus men’s minds, including those in the Conservative party and the press? It would be make-your-mind-up time and we would be able to go out to argue with them in favour of membership of the European Union. That would distinguish between those of us who see it as a force for good, reconciliation, commerce and politics and the flat earth society, which seems to dominate the Conservative party.

When the debate is held in the House of Commons on the amending treaty, people will come to the view that our membership of the European Union is in the national interest. They will see the number of jobs that comes from our membership, the contacts in business from which we benefit and the scope for our making progress on the environment, and they will realise that, when the common foreign and security policy works, with Europe working together in unanimity, that can often make a huge difference in the conduct of foreign affairs. As we have that debate, I hope that people will see that our membership of the European Union benefits Britain.

rose—

Order.

On a point of order, Mr. Speaker. I have given notice of this point of order to the right hon. Member for Bristol, South (Dawn Primarolo). The Independent today quotes an official setting out details of the evidence that the right hon. Lady will give in response to questions to be put to her by the Select Committee on Science and Technology on Wednesday this week. Surely Ministers’ evidence to Select Committees should not be set out in advance of their receiving the questions from the Committees. How can the Science and Technology Committee function if Ministers treat us, Parliament and the public with such discourtesy? Will you look into the matter and, if necessary, ask the Minister to come before the House to explain her position?

The hon. Gentleman gave me notice of the point of order.

On a point of order, Mr. Speaker.

Let me answer the previous point of order. I gather that the Department’s written evidence to the Committee, which has been published, has already indicated the Minister’s view on the issue. The hon. Gentleman will, in any event, have a chance to question the Minister on Wednesday in the Committee.

On a point of order, Mr. Speaker. During altercations with the Prime Minister just now, I understand that it was not appropriate for me to ask the question that I would now like to put to you as a point of order. However, the Prime Minister made certain assertions about what I have said in the House. I should like to put it on record that I request chapter and verse from him. I think, Mr. Speaker, that you will find that his assertions were not accurate.

The hon. Gentleman is awfully good at pursuing the argument through points of order. I will not rise to the bait.

I beg to move,

That, for the purposes of any Act resulting from the Serious Crime Bill [Lords], it is expedient to authorise the recovery of costs in relation to authorised monitors.

The resolution is necessary because if the House chooses to accept the amendments tabled in the name of the Home Secretary, the Bill will include provision for recovering the costs of authorised monitors from those organisations that have been involved in serious crime. The resolution is a financial provision that is minimal in terms of the amounts of money involved as a whole. We anticipate roughly 30 orders to be made each year. The vast majority of such orders will be against individuals, with only a small number anticipated each year for use against organisations. Of that small number, we do not think that the inclusion of an authorised monitor will be appropriate in many cases. The overall number of such orders will therefore be minimal, but they could be useful where used.

Monitors take forward the Government’s commitment to approaching the regulation of business in an intelligent, risk-based fashion. It is not useful or an encouragement to economic growth to engage in blanket regulation of the business sector, where that is avoidable. However, where organisations are involved in serious crime—for example, where they are being used as tools for money laundering or fraud—we must act to intervene in a targeted and specific manner. That is why the Bill provides that serious crime prevention orders can be used against organisations. That will give law enforcement a flexible means of preventing continued involvement in serious crime by the organisation.

Any regulation comes with a cost to it, which is precisely why we want to avoid spreading the burden of that regulation too widely. Monitors will be able to provide a useful service, in ensuring that the other terms of an order are being complied with. For example, an expert in corporate governance will be able to—

Order. I am reluctant to interrupt the Minister, but we are actually on the ways and means resolution. Is that what the Minister is speaking to?

It is, Mr. Deputy Speaker. I am trying to outline why the costs that are implicit in the Bill are relevant and appropriate.

Any regulation comes with a cost to it, which is precisely why we want to avoid spreading the burden of that regulation too widely. Monitors will be able to provide a useful service to ensure that the other terms of an order are being complied with. For example, an expert in corporate governance will be able to make an assessment of whether a requirement to put in place appropriate systems in a company to ensure that it is not used for serious criminal purposes has been complied with. That is expertise that law enforcement might well not have.

As well as such terms of an order being used rarely, as I have said, the costs to the organisation will be reasonable and proportionate. We have also included certain safeguards, to ensure that the costs are proportionate to any organisations that might be made subject to a serious crime prevention order. Such a term of an order will require only those organisations that have been proved to be involved in serious crime to pay an additional reasonable and proportionate cost, in order that we can ensure that they are not engaged in serious crime. That is surely preferable and more proportionate in achieving the desired end, in that it steers a course between letting the criminal behaviour continue and seeking to end the activities of that organisation altogether. As a result, I am confident that the imposition of costs is appropriate.

This proposal, relating to the establishment of new monitors under serious crime prevention orders contemplated in the Bill, is a late addition. I note what the Minister has said about the necessity for the monitors, but that is a matter for our debate on the substantive elements of the Bill and on the way in which the Government have tabled the amendments to it. It is surprising that the Government are tabling such amendments at this late stage, especially as the Bill has already been scrutinised in the other place. It raises concerns about the extent to which the provisions have been examined, but we will debate that in greater detail outside the Ways and Means resolution. We shall not oppose the resolution, but that should not be taken as our acceptance of, or acquiescence in, the general arguments on the creation of monitors arising from serious crime prevention orders.

Question agreed to.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following:

Government new clause 2—Costs in relation to authorised monitors.

Government amendment No. 15.

In his report, “Regulatory Justice: Making Sanctions Effective”, Professor McCrory advocated that

“regulatory sanctions were consistent with, and appropriate for, a risk based approach to regulation, as set out in recommendation eight of the Hampton Review. The Hampton Review recommended that the penalty regime should be based on the risk of re-offending and the impact of the offence…with tougher penalties for rogue businesses that persistently break the rules.”

There is a significant read-across between the approach that he advocates and the innovative and targeted approach to involvement in serious crime that we are proposing in the amendments. We have already discussed the fact that businesses are increasingly used by serious criminals as the means by which they, for example, launder money or attempt to disguise activities such as people-trafficking or drug-trafficking. Businesses can be in more than one place at a time, they can have complicated legal structures and they can carry out exceedingly complex business and large amounts of transactions on a daily basis. All those things make them very difficult to interdict for their involvement or use in serious criminal enterprises.

The Serious Organised Crime Agency, the Serious Fraud Office, Her Majesty’s Revenue and Customs and the rest of the law enforcement community are constantly developing and using innovative approaches to dealing with this problem. They are having significant successes and should be commended. However, the inexhaustible potential for using businesses in different ways to further serious criminal ends means that that work is not always enough.

The amendments will mean that, for example, where a business has been proved to be involved in serious crime, an order can require it to provide its accounts or other information to an authorised monitor, to ensure that it complies with a requirement not to conduct its business in a particular way. That will be effective where the information is particularly complex and where someone such as a forensic accountant will be able to make a far better assessment than a law enforcement agency of the way in which the business is conducting itself. If the court authorises a law enforcement agency to employ a monitor, it can go on to provide, as a term of the order, that the organisation that is the subject of the order must pay the costs that the law enforcement agency incurs in employing the authorised monitor. That effectively increases the regulatory burden on a business because it has been proved to be involved in serious crime. The provisions target regulation in a risk-based manner, and mean that burdensome regulatory approaches do not have to be taken to deal with the few bad apples in any business area. Regulation does impose a cost on business, but we can all agree that this is better than the results of no regulation at all.

The Minister has talked about the application of the orders and the way in which they would need to be monitored, and I understand his point about the complexity of corporate structures and how businesses might be used. Will he explain, however, whether the orders will require the recipient to have knowledge that they have committed or been involved in a serious crime? There could be a risk that someone unknowingly involved in such a crime could be the subject of an order and have to pay the cost of the monitoring.

We went through that debate at great length in Committee. The applicant authority would have had to go to court over any organisation that was the subject of a serious crime prevention order. Only in circumstances where someone had either encouraged or facilitated a crime would they be made the subject of a serious crime prevention order. The hon. Gentleman’s point would have been considered by the court before deciding whether to apply the order. There is the potential, in appropriate circumstances, for there to be a burden on the business concerned, but that is to be preferred to the potential cost of having to regulate an entire sector.

The Minister talks about the assessment of the costs of the order and of the monitoring. How is it likely to be presented to the court and what scope would there be for any re-assessment of such costs, which, at the outset, may not be readily calculable when the court is considering the matter?

As the hon. Gentleman will know, the practical arrangements for deciding how costs are to be arrived at will be done through order. It is one important aspect of the order making power, so as it goes through, we need to consider the practical consequences, how costs will be apportioned and what amounts are appropriate. The important point in respect of the primary legislation, however, is the existence of safeguards for any business, organisation or partnership—and they are set out in the provisions. As I have explained, we want to ensure that businesses made subject to a serious crime prevention order by the courts abide by the terms of that order. By the use of a forensic accountant or other suitable professional, we want to ensure that businesses comply, but we do not want to do so in a disproportionate way—hence the safeguards that I have outlined. I rather think that the hon. Gentleman knew the answer to his question before he asked it: costs will be subject to the order making process.

The new clause strikes an appropriate balance between the need to ensure that businesses are not used by serious criminals and the need to ensure that the business sector as a whole is not damaged by measures designed to combat the few. I thus commend the new clause to the House.

The first thing to note about new clause 1 and the accompanying new clause 2 is that they are obviously very late in consideration. Given what the Minister has said about their importance and necessity, it is surprising that we are considering these proposals on Report—after the entirety of the Bill has already been examined.

I acknowledge what the Minister has said about the complexity of what is involved. I accept that in serious and organised crime, criminals will go to great lengths to ensure that their true purpose is disguised and that different corporate structures may be used to try to hide criminal activity. On the face of it, whatever the merits of serious crime prevention orders—we will come on to debate them later—if they are to apply and be effective, there is clearly a need for monitoring to ensure that their terms are adhered to. Without proper monitoring the orders will be ineffective, because it will not be known whether they have been breached and whether the appropriate sanctions should apply. I realise that the position is complex and that on the face of it there is a need for experts to be involved, but the new clause leaves a good deal of room for improvement.

I want to raise a few points on which I have sought elucidation from the Minister. The key point is that, while a person or corporate body subject to a serious crime prevention order would need to appear before a court, that person or body would not necessarily have committed a serious offence, but would only have had to be involved in a serious crime. We shall discuss that more fully during our wider debate on the orders themselves.

It might be said that involvement in a serious crime indicated a direct link and was therefore extremely important, but the wording of the Bill suggests that the link may be somewhat more indirect. Clause 2(1)(b) and (c) make it clear that such involvement could include a person’s facilitating the commission of a serious offence, or conducting himself

“in a way that was likely to facilitate the commission”

of a serious offence. There is no requirement for intention in those circumstances. Indeed, clause 4(2) imposes what is almost a reverse burden of proof on the person who is potentially subject to an order, who must show that his actions were “reasonable in the circumstances”.

The Minister said that only about 30 orders a year would be issued, and that has been stated consistently and clearly throughout the review of the draft legislation. What is not clear is whether this measure is really about the Mr. Bigs or whether it is likely to be used far more widely than the Minister intends, purely because of the way in which it is drafted. That is worrying in this context and a number of others. Notwithstanding possible assurances that the measure is supposed to be limited and to attack only the very central figures, it could be interpreted as allowing peripheral figures who, despite having no direct intention and no direct knowledge that they have facilitated or been engaged in facilitating serious crime, may find themselves subject to a serious crime prevention order—and, subsequently, to another order requiring them to pay for the monitoring of their compliance with it.

That potential injustice leaves me extremely uncomfortable with the ambit of the new clause, despite the Minister’s statement that it is intended to focus only on a very small group of corporates, and to ensure that forensic accountants and experts are brought in to aid the monitoring, enforcement and interpretation of the orders. That second aspect—cost—strikes me as extremely important. I have already described the legislation as wide ranging and potentially draconian. New clause 1(4) states

“A serious crime prevention order which provides for an authorised monitor may require any body corporate, partnership or unincorporated association which is the subject of the order to pay to the law enforcement agency concerned some or all of the costs incurred by the agency under the arrangements with the authorised monitor.”

It goes on to state that payments on account may also be required, which effectively means that payment must be made in advance of the monitoring.

As we have heard from the Minister, it is unclear how those costs will be assessed; in essence, they will be drawn in through secondary legislation. It is also unclear how the court will determine those costs and, therefore, the impact on the business concerned. He has tried to point out the protections in new clause 1(7), which is intended to give the courts a particular role in assessing the relevant circumstances, examining

“(a) the means of the body corporate…

(b) the expected size of the costs”.

The provision also deals with the effect that the order and the monitoring would have on that body corporate.

We do not know what those costs will be, how they will be assessed and how they will be measured. The court will be put in a difficult position in assessing the impact of the order on the body—the company or business—because it will have to undertake a detailed examination and review of the finances, the business and the way in which the company operates to assess whether the order would have a particular effect and whether it would risk the bankruptcy, liquidation or winding up of the company. That will be a hard decision for the court to make, particularly given that it will have to make an assessment of costs that may subsequently change.

I am sure that the Minister will say that the Government will set out in the order what the compliance should be, what the terms of the order are and therefore why there is a need for monitoring, but difficulties are involved. Given my professional background, I know that sometimes the costs that one is given in advance may not end up being the costs that arise. The monitor—this expert—will have to make a judgment about what is involved and what its own professional costs are likely to be in seeking the order in the first place.

The court will be in a difficult position. How will it go about assessing the costs and the impact when it may have limited information on that body corporate? It will clearly not have a full understanding of how that company conducts its business, the pressures on it and the market conditions. This provision could have a significant adverse impact on businesses if a wrong judgment is made, with the best of intentions, based on information that is not complete at the time that a monitoring condition is applied. We could risk creating injustice, particularly if an order was granted against a company whose involvement was peripheral, not intended, not direct and almost without knowledge, even though the court may have been able to show that it should have taken some other action and that is why it is brought within the scope of the serious crime prevention order in the first place.

New clause 1(6) deals with the tests for making serious crime prevention orders. The Minister will be familiar with our debates on Second Reading and in Committee about harm reduction versus punishment. He has said on many occasions, as I am sure he will say this afternoon and this evening, that the Bill is only about harm reduction—it is about preventing serious crime—and that it is not about punishment. One can form one’s own judgment about whether that is the reality in the Bill, but subsection (6) raises interesting questions that deserve greater scrutiny.

Does the hon. Gentleman see a distinction, as I do, between using these powers to restrict the freedoms of people whose prison sentence has been spent but who have been convicted of an offence, and using them in a preventive capacity in respect of people who may never have been convicted of any offence?

Well, there is an issue in the way in which civil orders can be used for crime prevention. The hon. Gentleman is right to highlight the fact that the orders can be used in two separate ways. One is almost as a post-bail or a post-conviction prevention order, in which the intention is almost to get someone back behind bars as soon as possible by virtue of a breach. That is a criticism that has been levelled at some of the other civil orders that the Government have introduced. The other is use of the order before any criminal conviction has been obtained, and that raises issues of appropriateness, especially when the criminal law could be applied and some sort of criminal sanction invoked. That is a point that we will debate in greater detail when we reach serious crime prevention orders later.

New clause 1(6) states:

“The tests for making or varying a serious crime prevention order”—

it then lists various sections—

“do not operate in relation to an order so far as the order contains terms of the kind envisaged by subsections (4) and (5) above.”

In other words, monitoring should occur. The particular parts of the Bill that are being carved out by that provision are those to do with preventive measures. For example, I draw the Minister’s attention to clause 1(1)(b), which provides that the court may make an order if

“it has reasonable grounds to believe that the order would protect the public by preventing, restricting or disrupting involvement by the person in serious crime in England and Wales.”

In other words, that limb—the necessity for the court to be satisfied that the order would prevent crime—would be carved out by new clause 1(6). That is a bit odd, if the intention is to prevent, rather than to punish. That is an important point for how the orders are used and, in terms of the European convention on human rights, to ensure that the Bill is not construed as providing for punishment. It is essential that the orders should be preventive, not punishment, but new clause 1(6) would take out all the relevant provisions on orders that will have a monitor granted to them. That is perverse and bizarre and, when the Minister winds up, I trust that he will give some explanation of it.

The way in which the provision is drafted suggests that it may also apply to the whole of the serious crime prevention order, rather than just to the monitoring aspects. That would make the orders very wide and draconian in their application in the particular aspects. The late inclusion of this wide-ranging new clause raises many questions, and it has not had proper scrutiny and debate.

The hon. Gentleman made a reasonable point about the application of new clause 1(6), but then made the wild assertion that it would apply to serious crime prevention orders as a whole. If he reads further, he will see that it is limited to the new clause, and does not apply to the whole Bill.

I am grateful to the Minister if that is what is intended, but new clause 1(6) states that it does not operate

“in relation to an order”.

While it may continue

“so far as the order contains terms of the kind envisaged by subsections (4) and (5) above”,

it does imply that it could apply to orders more generally. However, I welcome the Minister’s intervention to make it clear that the provision is intended to deal only with the monitoring aspects, not the aspects of wider concern. Even so, in terms of monitoring, surely the orders should be intended to prevent crime. Otherwise, why are they there? He has said that the provision is not intended more generally, but it is still questionable whether the removal of the sections in question will cause problems with compliance with the European convention on human rights. Perhaps he can reflect on that point in further detail when he winds up.

The Minister said that the costs will be dealt with in secondary legislation, so we do not yet know how they will be assessed. How will appeals against the costs work? New clause 2 states that costs could be subject to appeal, and that

“Such provision may, in particular, include provision about appeals.”

Can the Minister shed any more light on the Government’s intentions relating to appeals against costs? The costs could be significant and the regulations could have a damaging impact on businesses.

The proposals note that the steps an enforcement agency can take to recover costs will also be covered by secondary legislation, but again the Minister has not talked in great detail about the Government’s intentions in that regard. Will the relevant enforcement agencies have the right to bankrupt and wind up a company that is unable to pay for monitoring costs—however damaging their impact might be?

The Government have decided to introduce these provisions hurriedly at a late stage, and there is a lack of detail in terms of costs, how the courts will assess companies, whether appeals against the costs will be allowed and how they will operate, what the time scales will be and what the rights of challenge will be. Once the costs are in place, what rights will enforcement agencies have and how will they operate in practice? What discretion will the agencies have in recovering the costs?

I accept that if costs are levied it is right, on the face of it, that the company should pick them up, but there is a duty on law enforcement to deal with its monitoring. The proposals could place a significant burden on companies and the House is not yet clear about the context for the provisions or their scale and nature. Based on the information we have been given, I remain concerned about the risk of injustice due to the lack of clarity and certainty in new clauses 1 and 2.

I am grateful for the opportunity to speak briefly on new clause 1.

I echo the concerns that have just been expressed about the introduction of such wide-ranging and important provisions at this stage of our deliberations. We had opportunities for exhaustive discussion of the Bill in Committee, when we went through it in great detail, so it is alarming that new provisions are being introduced in this way.

Three aspects of the new clause give me cause for concern, and I shall be interested in the Minister’s response. The first is that the provision is extremely wide-ranging. It shines a light on a larger concern about the Bill as a whole, which is that there are conflicting stories about the number of people who will be caught up by the provisions.

In Committee and in his speech today, the Minister was keen to stress that the provisions will apply to only a small number of people. Those assurances are not in writing in the Bill, but the background mood music is that we need not be overly concerned that the provisions will be routinely applied, as they will catch only a small number of particularly burdensome criminals. None the less, representations to me from agencies and others who are broadly supportive of the measure make much more extravagant claims about its impact on my constituents. If 30 or 40 people a year are caught up by the provisions, it is unlikely that any of them will be my constituents. Of course, there will be a knock-on effect in terms of the impact that is caused, but it would be interesting to know how many people are likely to be caught by these provisions. Although there is a point of principle, a matter of degree also applies, and so far, that is not at all clear.

The second point that gives cause for concern is that the specific people are not defined in the Bill. Therefore, it is difficult to understand how, when such services are contracted out to various outside agencies, checks and balances will be in place to ensure that the powers are wielded responsibly and in a way that would satisfy an elected representative, such as myself.

The third issue that gives me cause for concern—I would be interested to hear the Minister’s response—was raised by the hon. Member for Hornchurch (James Brokenshire) and relates to the obligation on the subject of the order to pay the costs. That could be a very serious sanction against someone who has not necessarily committed a criminal offence. I would be interested to know whether the Minister felt that there could be a cap on those costs. I ask him for more detail on how he thinks that will work in practice.

I am grateful to the hon. Member for Hornchurch (James Brokenshire) for recognising the complexity of the Bill and for, quite frankly, the decent way in which he admitted that fact. Some of these provisions are very technical, complex and difficult. That is why some of these amendments are being debated on the Floor of the House. I make no apology, however, for introducing something that will significantly improve the Bill. It would be somewhat ridiculous if, because I might be embarrassed about the fact that the hon. Gentleman would complain about such late additions to the Bill, I did not introduce amendments that improve it and make a significant difference to it. All I can say to the hon. Gentleman is that I apologise for the late introduction of new clause 1 and to the House for the lateness of some of the amendments, but I do not apologise for the fact that provisions, such as new clause 1, will make a significant difference and are significant improvements to the Bill, and it is therefore important that we debate them today.

The Minister says that he believes that new clause 1 will make a significant difference. He has also said that, in essence, about 30 such orders will be granted a year. How many orders does he think will be granted subject to the monitoring requirements set out in these new clauses?

I do not know the answer to that, but the serious crime prevention order as laid out in the Bill should be available to the courts. That will be a matter for the courts, and it will be for the applicant authorities to go to the courts where they think it appropriate and where they think that a serious crime prevention order will seriously impact on crime. With respect to new clause 1, the inclusion of authorised monitors is important because it will make the serious crime prevention orders more effective, as they apply to businesses and organisations. Let me suggest to the hon. Gentleman and to the hon. Member for Taunton (Mr. Browne) that I would have thought that all of us are united in wanting to ensure that serious crime prevention orders imposed on businesses and organisations are enforced and made to work, so that we can all see that they have credibility, and the use of authorised monitors will ensure that the terms are agreed to and, importantly, complied with.

The Minister highlighted the point about the assessment of the court, but that is really a question of the information presented to the court. It may not be presented with a full picture. He chided me for criticising him for the late notice of the new clauses, and our late consideration of them. What discussions has he had with the Law Society, or similar third parties that are acutely involved in considering the provisions, given that the provisions are complex, and will sit on top of an already complex situation? The complexity of the new provisions causes me concern because of the potential injustices that may arise as a result of it.

I apologise if I chided the hon. Gentleman too harshly; I did not mean to. He will know that we are taking forward the amendments as a result of the Hampton review and the Macrory report. They pointed out the need for appropriate and proportionate regulation, and that is what we have ensured. The hon. Gentleman talked about new clause 1(6), which switches off the test in clause 1(1)(b), and asked what the justification was for that measure. It is difficult to show that authorised monitors would directly prevent serious crime, but it is important to ensure that the parts of the order that would directly prevent serious crime are complied with. That is why we included the authorised monitors in the provisions.

The hon. Gentleman asked whether the Bill complies with the European convention on human rights. He will have seen my statement on the subject but, again, I refer him to the protections in the new clause, which ensures that a court cannot appoint an authorised monitor to supervise a serious crime prevention order without taking into account certain circumstances, particularly those in proposed new subsection (7)(c), which refers to

“the effect of the terms on the ability of any body corporate, partnership or unincorporated association which is carrying on business to continue to do so.”

In other words, if a serious crime prevention order is served on an organisation, and if an authorised monitor is used to ensure compliance with the order, the court must ensure through proposed new subsections 7(a), (b) and (c), that the measure is proportionate and takes into account the ability of the organisation or partnership to comply with it. With those comments, I urge the House to support the new clause.

Question put, That the clause be read a second time:—

The House proceeded to a Division.

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following: Government amendments Nos. 14, 18, 19, 23 to 41 and 48 to 53.