European Union Bill

House of Lords, 26 April 2011.

Committee (2nd Day)

Lord Liddle (Labour)

My Lords, I shall speak also to Amendment 16B. These are amendments to Clause 3 and their purpose is to allow Ministers pragmatic flexibility to act in the national interest in cases of urgency. The arguments I will make are very similar to those I will make for Amendments 17, 18 and 19, and I intend to move those formally when the time comes. Amendments 17, 18 and 19 are about extending the significance test that the Bill gives Ministers to a wider range of issues than currently listed in Clause 4(1).

It is important when debating these amendments to emphasise that we are not talking about treaties that are subject to the full ratification process. We have different views about whether those should be subject to referenda, but that is not the topic of the amendments. They are about the use of referenda in cases where, under Article 48(6) of the treaty, the simplified revision procedure is used. This procedure can be used only when it does not extend the European Union's competencies. Its purpose is to give member states flexibility to meet new situations that the treaty drafters had not anticipated when they wrote the treaty. Any changes agreed under these provisions would of course be subject to full parliamentary ratification. On this side of the House, we are not disputing that requirement.

On the first day in Committee, we considered amendments by the noble Lords, Lord Hannay, Lord Dykes, Lord Tomlinson and Lord Richard, who argued that in such cases only parliamentary ratification should be necessary and that that should be the end of the matter. In reply, the noble Lord, Lord Howell, argued, on behalf of the Government, that this was simply not good enough to restore public trust in the European Union. However, I regret to say that, from our perspective, he was unable to give a satisfactory answer as to why this was not good enough, and he was unable to cite examples of where, in these special circumstances, referenda would be required in other member states. This set of amendments enables us to come back to the same issues of giving Ministers more flexibility of action in another way.

Clause 3(4) introduces the concept of significance into whether a referendum is required. We think that that is quite a sensible approach. The Minister should have the flexibility to decide what is significant and insignificant, and put that to Parliament. Unfortunately, the Bill restricts this ministerial discretion very narrowly indeed. The Minister can apply this test of significance only under Clause 4(1)(i) and (j). The noble Lord, Lord Howell, gave us an example of what that test might be-for instance, if the Government decide that the new reporting requirements they have to make to Eurostat, in order to comply with the new economic governance arrangements, are not a change of sufficient significance to require a referendum. I think we would all agree with that.

However, we are seeking, first in this set of amendments, a provision that no referendum should be required in urgent cases; and, in Amendments 17 to 19, that the significance test should apply to all those matters listed in Clause 4(1). Why does this make sense? It is for the obvious reason that what is being talked about is a requirement to put fairly minor changes through a double ratification process. The Lisbon treaty went through a thorough ratification process in this House and the other place, but this Bill states that, to use its provisions, we have to go through yet another ratification process-this time involving a referendum. This double ratification does not seem to make any sense, particularly when it is not on issues of major significance.

That is not to deny that on this side of the Chamber we of course accept that the European Union has a significant legitimacy problem, and I think we are all alarmed by the rise of populist parties in various member states. However, our analysis is that the root of the problem is not so much an accretion of power to Brussels as a failure of political leadership in Europe to use the powers that Europe has to address the economic problems, social malaise and environmental and political challenges facing the Union. I think that this affects Britain as much as any other member state. We all recognise-at least I hope that we do-that in this world of interdependence there are a lot of these challenges and they can be met only by our acting together.

No one on this side of the Chamber is arguing for a transfer of powers to Brussels simply for its own sake. However, the huge problem with the Bill is that it is designed not, as its promoters claim, to build support for Europe in Britain but rather to appease those who do not really want us to be members of the European Union at all. By introducing this new constitutional concept of perpetual referenda, the Bill rules out the pragmatic flexibility that we need within the European Union to pursue our national interests. It is ironic that as, next week, we approach the first nationwide referendum in 36 years in this country, we should be debating in this Bill the possibility of 56 different issues which could be subject to a referendum. That does not seem to make sense; it is a denial of the pragmatism for which the British are famed. I think that this is a very un-British piece of legislation, and it is very limiting. Who can tell what urgent situations might arise or what minor changes might be necessary to make the EU effective?

I dearly hope that later, either in Committee or on Report, we will be able to argue and persuade this House to accept amendments that will sunset the Bill and mean that it does not apply beyond the present Parliament. However, if that attempt fails, we need to find pragmatic solutions within the context of the Bill that will enable the UK to continue to play a leading role in the European Union. We have to strike a better balance than the Bill does at present between what we need to do in our national interest and what needs popular assent. Therefore, with these amendments we are arguing for an exemption from the referendum requirement in cases of genuine urgency and where the test of significance can be applied more widely.

The Government say that they are trying to institute a referendum lock on major decisions. I think that what we have here is referendum paralysis on lots of minor decisions. I believe that the amendments would help to make a bad Bill marginally less bad and increase Britain's ability to negotiate from a position of strength in Europe.

Baroness Hayman (Non-affiliated)

It may be for the convenience of the Committee if I report that my understanding is that, after the debate on this group of amendments, we will take the Statement on the Middle East and north Africa.

Lord Waddington (Conservative)

My Lords, I was wondering when the Statement would be made, hence my hesitation. I hope that I will be forgiven for making a few general remarks on this my first speech in Committee. It is very important that people should be clear about the context in which almost all the amendments are brought forward. We know perfectly well the origins of the Bill, which of course lie in the coalition agreement, but it is important to be clear where the opponents come from. The supporters of these amendments, and many others, seem to say that as there is no issue of lack of trust, there is no harm in blunting the instrument devised by the Government to restore trust. That is what it is all about. It is, therefore, a very good idea to allow a Minister to try to avoid a referendum in as many cases as possible by saying that the matters are "not significant". They, like almost all opponents of the Bill, seem to think that any dislike of the EU is due not to any failings at all on the part of the EU, but because, as my noble friend Lord Deben said, a week or two ago,

"a large number of people spend a great deal of time misleading as many people as possible"-[Official Report, 5/4/11; col. 1637.]

You cannot talk more nonsense than that.

Surely it would be very surprising if some people were not annoyed at some of the facts, not the myths about the EU, and the truths, not the falsehoods. It would be surprising if there was not in some quarters a feeling of disillusionment and dismay. It would be odd if there was dancing in the streets to celebrate the EU budget and if people were congratulating the EU on improving the lifestyle of Hungarian dogs and securing first-class travel for MEPs. It is nonsense to say that there is no dissatisfaction; there clearly is. I note that my noble friend Lord Wallace said that when he went to Yorkshire recently he got an earful. When people hear of some of the goings-on in Brussels they get pretty cross. They are cross, for instance, about the enormous salary paid to the new President of the European Council, which is more than the salary paid to the President of the United States, and wonder what on earth that is all about.

Lord Foulkes of Cumnock (Labour)

Has the noble Lord noticed that in the past year there has been some dissent and public concern about salaries and expenses in Westminster, both in the other place and here? That does not mean to say that Westminster does not have an important function to perform, just as the European Union does.

Lord Waddington (Conservative)

The noble Lord is perfectly entitled to pick on what I said about salaries but, of course, it goes very much further than that. I could quote umpteen examples of things that have caused enormous annoyance. There is also enormous annoyance at the salary paid to the new EU Foreign Minister, and goodness knows how much will be paid for the European External Action Service. It is worth remembering at this stage where we are. Mr Blair was not going to have an EU Foreign Minister at any cost and was totally opposed to an external action service, but of course at the end he gave way, rolled over and agreed to it.

Of course, both posts were created by the constitution/Lisbon. I venture to suggest that if the people had had a say, not about the constitution or Lisbon but in the matter of either of those posts, they would have said, "Certainly not. Why should we pay for pointless EU aggrandisement?". There have been some terrible betrayals by the Government of this country. Take, for instance, the surrender by Mr Blair of a large part of our hard-won rebate. It was supposed to be for reform of the agricultural policy, but no reform has taken place. There were all the carryings-on over the constitution/Lisbon. Some insist that there was enough difference between the two to justify Mr Blair ditching his promise of a referendum, but surely there is one thing on which we can all agree. With all the parties promising a referendum in 2005, and with the main changes proposed in the constitution reappearing in Lisbon, it was not at all strange that a lot of people felt that they were entitled to have a say in what was afoot, but they were told to mind their own business. They did: they went off in large numbers to vote for UKIP.

Lord Pearson of Rannoch (UKIP)

My Lords, I did not want interrupt the excellent speech of my noble friend, if I may refer to him as that, except to ask him about the intervention from the noble Lord, Lord Foulkes, sitting beside me. Surely the difference is that the British people can do something about what happens in Westminster. They can elect and dismiss the people who make their laws, who defraud their expenses and all the rest of it. In what goes on in Brussels, the British people and the Select Committees of both Houses of Parliament are completely powerless. That is the difference. I apologise again for interrupting the noble Lord's very important speech.

Lord Waddington (Conservative)

Undoubtedly, history has shown that it is extremely difficult to give the people the role to which they feel that they are entitled through our parliamentary structure. That is an additional argument that, in certain circumstances, there ought to be referendums.

I mentioned our Government having let the people down, but I must also point out that sometimes the EU itself has not enhanced its reputation for fair dealing. The reintroduction of the working time directive as a health and safety measure to destroy Britain's opt-out from the social chapter was, some might say, barefaced cheating. It was certainly most extraordinary behaviour. The misuse of Article 308 was a disgrace. Is not what happened with Article 308 a complete answer to the argument, which has been advanced time and time again on the other side of the House, that there is no need for referendums in Article 48(6) cases because it is not supposed to be used to increase a competence conferred by the treaty? What on earth is to stop the Commission and the Council of Ministers determining that something does not increase competence when it clearly does? That is precisely what the Commission and the Council did with Article 308, which was supposed to be used to further the common market but was used for all sorts of extraordinary things, such as giving aid to Mongolia.

Some noble Lords say that they are against referendums as a matter of principle because they are an affront to parliamentary democracy. I see their point.

Lord Hannay of Chiswick (Crossbench)

The noble Lord was waxing eloquent on Article 308. Can he confirm that the Government of which he was a member voted-as was required, because it required unanimity-for any number of measures under Article 308?

Lord Waddington (Conservative)

The noble Lord is entirely right, which proves the point that there ought to be referendums in such circumstances to stop Governments behaving in that way.

As I said, some noble Lords say that they are against referendums as a matter of principle, but it is a pathetic argument in the context of the EU. We elect MPs to use the powers that they have inherited. We certainly do not elect them to give those powers away. I find it interesting that all those who go on about being against referendums as a matter of principle turn out to be Europhiles who, at the time of Lisbon, knew that a referendum would result in an emphatic no and would mean a pause in the constant leaching of power from Westminster to Brussels.

Some say that the Bill will make it very difficult for Governments. They may favour a proposal but stop short of embracing it because that would mean a referendum they might lose. That gives me no sleepless nights. It does not frighten me one little bit. The whole trouble is that while most Europhiles protest that they do not want us to lose our independence as a nation, every step we take involving a sacrifice of sovereignty brings us closer to that end. So reluctance by Ministers to sign away any more of our powers would be a very welcome development.

The wording of the first group of amendments supports my assertion that those attacking the Bill do not accept that there is any real problem to be addressed. If in the circumstances listed in Clause 4(1), and not just in the circumstances listed in paragraphs (i) and (j) in this group of amendments, a Minister could argue that the effect of a particular decision on the UK would be insignificant, you would be giving the Minister far too much wriggle room and far too great an opportunity to avoid a referendum. There could be repeats of what happened over Lisbon rather than the rebuilding of trust that is the object of this exercise.

I cannot for one moment support these amendments, and I fear that almost every amendment on the Marshalled List at present is designed to blunt the instrument that has quite rightly been put before Parliament by this Government.

Baroness Rawlings (Conservative)

I am reluctant to intervene at this stage, but I remind noble Lords that the Companion advises that in Committee noble Lords should not make Second Reading speeches but should keep briefly to the amendment concerned.

Lord Risby (Conservative)

Listening to the proceedings on the Bill, I was struck by the comments made by the noble Baroness, Lady Williams of Crosby, and the noble Lord, Lord Maclennan of Rogart, who reminded us of the important reasons why we should have a positive relationship with the European Union. I also agree with comment made by the noble Lord, Lord Hannay, that had we been involved at an earlier stage, many of the difficulties that have subsequently arisen could have been dealt with more satisfactorily. As we reflect on the situation today, there has been a breakdown of trust right across the European Union. It is not something that is confined to the United Kingdom, but is found in many parts of the rest of the European Union.

What has happened in this country is that scepticism has grown because of a sense of disconnection between successive Governments and the people. This Bill is designed to define very clearly exactly what the important considerations are for the calling of a referendum to assure people that it is necessary to try to bridge the gap between the attitudes of the people and the sense of failure in our relationship with the European Union. I disagree that having a referendum would not achieve this.

Specifically on the issue of national interest and the question of urgency, as my noble friend said, this gives room for Ministers to make judgments. We have been through this time and time again. We need to be specific in drawing up legislation to give back to people the sense of confidence that they now lack. That is why extending the definition of national interest or urgency in this way would not be satisfactory. After all, something that is urgent could well require some important constitutional consideration. In that sense, I believe that we need to look at these two amendments.

Finally, I return to the point that it is perfectly legitimate for people not to accept the value of referendums, but they are now part of the political culture of this country and of many other countries in the European Union that face this problem. It is hugely important that we narrowly define what is in the Bill to maximise the credibility of this legislation. The amendment does not do that.

Lord Hannay of Chiswick (Crossbench)

I speak in support of this amendment, though I support more drastic surgery in terms of reducing the number of areas in which a referendum would be required. This amendment, however, goes in the right direction. In supporting it, I make two points, which arise from what the noble Lords, Lord Liddle and Lord Waddington, said.

The noble Lord, Lord Liddle, made an extremely important point, which has been overlooked so far, but which is integral to my own approach and some of the amendments I have put down for later debate. It is not suggested that we should go back to the status quo ante, to the situation prevailing under this House and the other place's ratification of Lisbon, a situation where these decisions should be endorsable purely by a resolution of both Houses. The noble Lord, Lord Liddle, said in his introduction that his amendments accepted that it would go back to primary legislation. The position of Parliament in approving these matters would be strengthened over the present situation. That is, frankly, a very important point. I hope that the Government will take due account of that. There is an acceptance among a number of us-and that is true of amendments of a more drastic kind that I have tabled and which we will debate later-that we should not just be going back to the Lisbon provisions, but should be going back to Lisbon plus.

The second point relates to points made by the noble Lord, Lord Waddington. As one of those who are moving amendments, I do not contest the analysis that the Government have made, namely that support for the European Union in this country has been losing ground and that there is often dissatisfaction with measures taken in Brussels. It would be quite stupid to deny that. What I, and probably some others who are moving amendments, contest is whether a whole list of referendums on matters of highly technical, and some might say trivial, interest would actually help to deal with that situation. My own view-and I would be interested to hear anybody contesting this-is that it would actually make it worse. If we went around the country trying to persuade our compatriots why they should vote in a referendum on whether or not additional advocates-general should be created by qualified majority voting, or whatever, they would think we were certifiable. Certifiable or not, the reason I am supporting these amendments, and moving my own amendments, is not because I dispute the analysis, but because I dispute the prescription.

Lord Flight (Conservative)

My Lords, it is a sad fact that this legislation is needed because successive Governments have let down the people of this country in failing to protect our national interests-particularly the last Government.

A sensible balance has been achieved in this Bill. There are as many items that do not require referenda as those that do require referenda. A reasonable, practical and sensible balance has been achieved. This amendment is about waiving the referendum in cases of urgency and national interest. I am not quite sure what that means, but it occurs to me that we are right now living at a time when several European countries are in dire financial straits, largely as a result of being uncompetitive, having adopted the common currency. I can just see a financial crisis coming up in due course in Europe and the classic argument being put that, in the interests of urgency and in protecting us from some of the contagion, there is an urgent need for the introduction of far greater collective decisions on matters fiscal and economic. This would be the ultimate objective of achieving a European state with fiscal and economic powers. Should this, as has been suggested, slip by under one of the three different new powers that we have for introducing measures without referenda if it qualifies as being in the national interest out of urgency? No, the Bill has struck a sensible balance, as I have said, and putting up a whole list of new potential excuses that should remove the need for referenda is merely ducking the issue and trying to weaken the impact of the Bill.

Lord Tomlinson (Labour)

My Lords, I was not going to speak to this group of amendments, but I have been provoked by the previous speaker. He seems to suggest that we are implying in these amendments that there will be circumstances in which we seek to hide behind amendments such as these in order to deal with circumstances of economic and monetary convergence. We should, however, look at the current reality.

I have just come back from spending two and a half weeks with some of our continental friends in the European Union. Even though I am a teetotaller, I spent a number of hours in a number of quite agreeable bars speaking to expatriate Brits there, among others. They are not complaining about the strength of sterling and the weakness of the euro; they are complaining about the exact opposite. They are complaining about how weak the pound sterling is and how few euros it buys them in what they had anticipated would be golden years spent in the sunshine. I recall, when I first became involved in buying a property in Spain some five years ago, buying euros at the rate of 65p to the euro. Now I have managed to sell my house in Spain, I was able to repatriate money at the rate of 89p to the euro. That shows that the euro has improved by 38 per cent vis-à-vis sterling. There is a serious point to this, because when we talk about the rising costs of our membership of the European Union, they are the rising costs of a budget that is denominated in euros.

Baroness Oppenheim-Barnes (Conservative)

Does the noble Lord agree that, in view of what he said, it is somewhat surprising that the German economy is booming at the moment because of the weakness of the euro?

Lord Tomlinson (Labour)

The euro might be weak in relation to some other countries, but it is certainly not weak in relation to the pound sterling. The pound sterling is doing abysmally in relation to the euro, and partly in consequence of that so is our budgetary contribution to the European Union, about which there are permanent complaints from Members opposite. Complaints are being made very merrily at the moment about what will happen if Mr Cameron and Mr Osborne fail to control the Commission with regard to the budget for next year, for which the aspirations are for an increase of 4.9 per cent. The 4.9 per cent is largely the product of the relationship of the pound sterling to the euro. We, and not just the countries in euroland, have a responsibility in that regard.

I think that your Lordships are becoming engaged in a rather tortuous argument. That started off with the noble Lord, Lord Waddington, who I think should be a worried man when he gets praise for what was the alleged excellence of his speech by the noble Lord, Lord Pearson of Rannoch. In his speech, he flipped over quite a number-

Lord Waddington (Conservative)

I was grateful for the intervention made by the noble Lord, Lord Pearson, because it enabled people to recognise the truth that there is he on the Eurosceptic wing, there on the other wing are the Europhiles, and here is the moderate centre.

Lord Tomlinson (Labour)

If that is the moderate centre, I wonder why I gave way so easily to the noble Lord, Lord Waddington, when he seemed somewhat reluctant to do so himself when he was on his feet. The intervention was not really worth the anticipated value.

Many of the points made by the noble Lord, Lord Pearson, during his speech were rather inaccurate, so just for the sake of making the record clear-

Lord Pearson of Rannoch (UKIP)

My Lords, on making the record clear, is the noble Lord referring to the noble Lord, Lord Waddington, or to me?

Lord Tomlinson (Labour)

Has the noble Lord finished? When the noble Lord, Lord Waddington, was speaking, I think I quote him accurately when he talked about Labour's broken promise in relation to a referendum. That is not-

Lord Waddington (Conservative)

My Lords, I think I can say that there was a time when that might have been my view, but it is not what I said today. Even if you accept that the difference between the two arguments was enough to allow Tony Blair to say that there was no need to have a referendum, there were so many similarities that it was hardly surprising that many people in the country felt that they ought to have a shout, and that has added to the disillusionment. I was trying to avoid the argument which the noble Lord is now raising.

Lord Tomlinson (Labour)

My Lords, now that we have had five or six sentences of clarification when I have managed to get only half a sentence out, the noble Lord, Lord Waddington, will now understand that I will not give way to him until I have finished my point.

The noble Lord made it clear that he thought the broken promise of the last Labour Government, the alleged broken promise, was a matter of fact. He knows perfectly well that he does not have to take just the clear points of argument which were the prevailing view in this House during the ratification of the Lisbon treaty; he can take points of view from places like the Dutch constitutional court. Having looked at the matter carefully, in its judgment the court made it clear that the issue on which there had originally been discussion of a referendum, not only in this country but in countries like Holland as well, was about a referendum on a constitutional treaty. By the time Ministers had finished at the Council of Ministers, there was no constitutional treaty and a referendum was no longer necessary because what we got was a change in the existing treaty base. It was the Maastricht treaty and the Treaty of Nice being changed in a similar way to that in which all previous treaties have been changed, so it would not be a constitutional treaty. So the point was never quite necessary.

My final point is that, again, the noble Lord, Lord Waddington, has attributed views to the former Prime Minister, my right honourable friend Tony Blair. When he checks his record about that which Mr Blair was alleged to have decided, he will see that it was not in fact true. It would be a hard task to show clearly where Mr Blair ever said that he was opposed to the role that was fulfilled by Javier Solana and subsequently is now being fulfilled by the noble Baroness, Lady Ashton.

Lord Kerr of Kinlochard (Crossbench)

My Lords, it is a pleasure to follow the noble Lord, Lord Waddington, and to welcome both him and the noble Lord, Lord Tomlinson, back to the debate. However, I intend to follow neither of their arguments and to set a dangerous and reprehensible precedent by speaking to Clause 3. I wish to speak in support of Amendments 16A and 16B, proposed by the noble Lord, Lord Liddle. It might be convenient if I were also to explain why I have given notice of my intention to oppose Clause 3.

I started our discussion in Committee by asking why we needed Clause 3.

Lord Pearson of Rannoch (UKIP)

My Lords, are we not still on Amendments 16A and 16B? We have not come to the Question whether Clause 3 should stand part of the Bill.

Lord Kerr of Kinlochard (Crossbench)

I am open to correction. I thought that it might be convenient if I made now the points which I have on Clause 3. Most of them are in relation to Amendments 16A and 16B, but they are also on the general question of Clause 3. I will do as the Committee wishes.

Lord Kerr of Kinlochard (Crossbench)

I asked at the start of Committee why we needed Clause 3. Clause 3 refers to the simplified or accelerated method used in Brussels for producing a treaty amendment. Clause 2 refers to the product of the normal method used in Brussels. The product, by the time it reaches us, is exactly the same: it is a treaty amendment. How it began, who proposed it and which process was followed in Brussels are irrelevant to the ratification requirements here. We should decide the ratification requirements and any necessary referendum requirements on the basis of the weight of the amendment, not of the means by which the amendment was agreed in Brussels. I therefore asked why we needed Clause 3 as well as Clause 2. I have read very carefully the Minister's answer at the end of the debate. He did not answer the question. He cleverly lured me into a semantic debate about competencies and powers, which we played into the sand, but we did not hear the answer as to why we needed Clause 3.

There is a difference between Clause 3 and Clause 2. If you eliminated Clause 3, you would eliminate something that is not in Clause 2. That is the final section of Clause 3, which contains the significance test. It is to that section that the noble Lord, Lord Liddle, is now proposing an amendment.

There is no significance test in Clause 2, which is the first of the two clauses setting out what we do when a treaty is amended. Does that mean that the Government believe that any treaty amendment made by the traditional method, however insignificant, must require a mandatory referendum? That seems to be the implication of having the test only in Clause 3 and not in Clause 2. I would be inclined to argue that we should eliminate Clause 3 now but transfer subsection (4) to Clause 2, so that the significance test, whatever its form-the form in the Bill, the form as revised by the noble Lord, Lord Liddle, or the form as revised by others-applies to any treaty amendment. That seems to be logical.

The noble Lord, Lord Howell of Guildford, used two arguments which perhaps play on the question. One was implicitly that Article 48(6), the accelerated method, would be used for the trivial, whereas the full-dress method, Article 48(2) to (5)-Clause 2 of this Bill-would be used for the heavy stuff. That may be so, but it does not seem very plausible to me. The noble Lord argued that we need not worry about having a series of referenda on the trivial because amendments would be bundled. He said that, from his long experience of Brussels, he knew that that was the way it worked. That is completely correct. In the past, treaty amendments have been brought together in a bumper-package intergovernmental conference, resulting in a new treaty or a massive treaty amendment.

In my view that will not be the case in future. A lesson has been learnt that it is not right to lump a whole series of questions together. The answer in the French referendum and the Dutch referendum came about partly because a whole lot of measures-not all of them necessarily very large-were put together and people were asked whether they would buy the package. If there is anything in such a package that you do not particularly like, the reasonable answer is to say no. The European Union has learnt from that and the Article 48(6) method-the Clause 3 material-will not be trivial relative to the Clause 2-or Article 48(2) to (5)-material.

Lord Anderson of Swansea (Labour)

Is there not a logical problem in saying that because a number of insignificant matters are lumped together, they will by definition become significant? If they were to be lumped together as the noble Lord is saying, surely it would be very difficult for someone who accepts one matter but not others to vote in a particular way. But surely a bundle of insignificant matters does not by itself therefore become insignificant; it becomes significant.

Lord Kerr of Kinlochard (Crossbench)

That seems likely to be the case. I agree with the noble Lord.

The second argument that the noble Lord, Lord Howell, used was about time. Here I have to say that I warmly welcome the amendment proposed by the noble Lord, Lord Liddle, which brings in the concept of urgency. It seems to me that the situation in which Article 48(6) is likely to be used will be the urgent situation. That is what was in the minds of those who invented the Article 48(6) procedure. The heavy procedure under Article 48(2) to (5)-Clause 2 of our Bill-contains provisions for a convention of representatives of national parliaments and the European Parliament meeting with representatives of the member states. It also contains provisions for doing away with that and concludes with a two-year period for national ratification. These timetable elements, and the reference to the convention, drop out in the accelerated method. The idea of a two-year delay has gone in Article 48(6), just as the convention has gone. People had in mind that there could be crisis situations in which the European Union would need to revise its texts quickly-hence Article 48(6). That makes it a little paradoxical that we are insisting on adding a referendum requirement.

More than that, we are-as the noble Lord, Lord Goodhart, pointed out at the start of our first day-doing something that we have never done in this country before: we are providing for an Act of Parliament to be overruled by a referendum. That is literally unprecedented, and we would be doing it in relation to matters, if they were under Article 48(6), where we had voted in the Council for an urgent change, since nothing can be done other than by unanimity in the Council. Everybody has voted for it; it is sufficiently urgent to justify the accelerated procedure; it goes through the House of Commons and through the House of Lords; but under this Bill it then requires a referendum which could overrule an Act of this Parliament. That is why I think that there is something really dangerous in the Bill, not just in terms of our position in the European Union but in terms of our basic constitutional position in this country. I really do worry about it.

I come back to the amendment tabled by the noble Lord, Lord Liddle. It must be right to introduce the concept of urgency and to make the tests not cumulative. It seems to me that Amendments 16A and 16B deserve our support. However, even if they were included in the Bill, I would still argue that Clause 3 should not stand part of the Bill, because in logic you do not need different procedures depending on how it started over there. The procedures you follow should be decided by the significance of the measure itself.

Baroness Rawlings (Conservative)

My Lords, I sense that it is the feeling of the Committee that the Question on Clause 3 stand part should be debated with this grouping of Amendments 16A and 16B, as suggested by the noble Lord, Lord Kerr. I therefore invite the Committee to proceed on that basis.

Lord Dykes (Liberal Democrat)

My Lords, I think that the Committee generally will very much welcome the Government's suggestion.

Lord Stoddart of Swindon (Independent Labour)

My Lords, on the point that the noble Baroness raised, I do not think that I heard a loud voice saying that we should not debate Clause 3 stand part. So if anybody wishes to debate Clause 3 stand part, when the Question is put to the Committee, any Member can get up and speak to it. Is that not right?

Lord Stoddart of Swindon (Independent Labour)

Good. Thank you.

Lord Dykes (Liberal Democrat)

The Committee can now benefit from the correction provided by the Independent Labour Member on the Cross Benches. It enables us to make progress because, in a way, the linkage between Clauses 3 and 4 is dangerous, to use the word of the noble Lord, Lord Kerr, and the more we think about it the more dangerous it becomes. It is quite astonishing to reflect on the fact that Clause 4-even if it was included and referred to the Article 48(6) differences-would have been better as a brief clause of perhaps five lines at the most, without the long and lethal list of possibilities for passerelles and other areas of quite routine procedure within the European institutions which have to be automatically referendable in this system.

We forgive the noble Lord, Lord Kerr, for the length of his speech on 5 April, because on that occasion he said some very pertinent and welcome things that will help us to improve this Bill if the Government accept that improvements are necessary, as I hope they will. Perhaps the noble Lord will forgive me for quoting his own material, but towards the end of the last but one paragraph in col. 1634, he put a question on which there has, as I understand it, been total silence despite a two and a half week Recess and time for the Government to give at least a provisional indication. I am ready to be corrected if it is not true that no answer has been given. Briefly, in that last but one paragraph, the noble Lord said:

"Therefore, it seems to me that the references to Article 48(6) and simplified revision procedure in the Bill are otiose. The only other explanation for them could be that the Government envisage referenda on EU issues where no transfer of powers or sovereignty is envisaged".-[Official Report, 5/4/11; col. 1634.]

If that is so, are they doing it because of a small number of active anti-Europeans in this country who hate the European Union? There is no indication that the public in general are very excited except by the concept of the remoteness of Brussels. That is certainly an issue, but it is an issue that the European Union is trying to address through various measures such as the Lisbon treaty and other means which are gaining ground.

The number of visitors to the European Parliament is massive compared with the numbers visiting even those national parliaments, such as this one and the German Bundestag, which get the most visitors. The number of people visiting the European Parliament has increased massively over the past 10 years, and especially over the past 20 years, and the vast majority of responses from those visiting the European Parliament -from people of all political persuasions and orientations and from people of none, who visit for all sorts of reasons-show that people are gaining a greater understanding of how the institutions of the Union work in a complicated matrix. There are now 27 member states of the Union, as opposed to six when it first started, and complicated machinery is inevitably needed to deal with all the possibilities and ramifications.

It seems to me to be a pity that the Government are persisting obstinately in not entertaining the idea of any substantial or far-reaching amendments, particularly to Clause 4 and the end of Clause 3. I share what I perceive to be the general approbation for the amendments, including the two new additions at the beginning of this cluster proposed by the Labour Front Bench today. We need to spend some time on this, aware as I am that there is a Statement coming along about a very important subject-Libya and the Middle East.

There are three conditions: the referendum condition, the exemption condition and the significance condition. The end of Clause 3 deals really with the significance condition but partly with the exemption one and Clause 4 gives an exhaustive and dangerous list of referendable items. By reversing the whole process and putting back into the list deliberately virtually all the Clause 4 list the Labour Front Bench and others who are in favour of these amendments, and Amendment 28 as well, can show the full absurdity by widening out fully ministerial discretion on everything so eventually nothing in Clause 4 would need to be subject to referendum apart from the very significant matters mentioned in one or two of those paragraphs-not very many of them, I hasten to add.

The clause does direct damage to the existing competences under the treaties and prevents any member state even responding within the powers already granted by treaty. That is the most extraordinary thing, hence the anxieties of the noble Lord, Lord Kerr, and of my noble friend in front of me who expressed fears about an Act of Parliament then being overturned by a referendum. My noble friend Lord Goodhart emphasised that in the first Committee sitting, and I hope that he will have a chance to emphasise it again as this one proceeds.

Such treaty competences or powers surely have the reverse effect of what the Tory antis, UKIP and the Independent Labour Cross-Bencher say. In my estimation they enhance the intrinsic sovereignty of both an individual member country and the union. These provisions emasculate this country in these crucial areas but not the other member states. A British Government would have an automatic and hugely burdensome disadvantage built in. A huge ball and chain would be attached to the Minister's leg every time he or she appeared in the Council chamber, whatever ministerial Council it might be-not just the European Council and the Council of Ministers. It would be the beginning of us being marginalised in the European Union, with the other member states saying, "The United Kingdom already has more grumbling and whining about Europe, more derogations, offsets, excuses, opt-outs, exemptions than any other member state and now it is inflicting this absurd and, indeed, crazy Bill on the body politic of its own country and inflicting it on the Council of Ministers as well".

The Government are therefore, I suggest, effectively abrogating existing treaty duties even by interposing a new interruption or cancellation procedure which directly damages the capacity of a sovereign member Government to deal with routine treaty additions or changes. Many items in the Clause 4 long list are capable of further rational development in coming years. If we exclude defence, which some people would want to do, and particularly because of the recent bilateral deal with France, then the loss of sovereignty of us doing a bilateral deal with France is axiomatic. It is bound to be, yet there is no objection from the anti-Europeans on that matter. There is no objection from them from us losing our sovereignty seemingly by being ordered by an American general to carry out bombing raids in Libya or a NATO senior commander giving us orders. Why is just the European Union singled out for these absurd and self-imagined fantasies about the loss of sovereignty? What does sovereignty mean in the interdependent modern European Union and the world community at large?

Lord Stoddart of Swindon (Independent Labour)

To assert that those of us who are a bit sceptical about the European Union are quite happy to accept defence arrangements with France and are prepared to take orders from the United States is simply not true. I do not want to take orders from the United States. We take far too many orders from the United States but certainly not with my consent as a European sceptic. There are and would be dangers of having too close an association with the French in matters of defence. What I want and what most Eurosceptics want is for this country to be free to make its own decisions.

Lord Dykes (Liberal Democrat)

I thank the noble Lord for intervening. I took a chance on including Independent Labour in these grumblings of mine and I should not have done so; he has a noble tradition of wanting us to be a solitary country on our own, making our own "sovereignty" decisions. That is a perfectly respectable view and I respect it. If people want to hark back to the past, however many hundred years ago it might be-maybe even only 50 or 100 years-they are entitled to do so.

Lord Stoddart of Swindon (Independent Labour)

I-

Lord Dykes (Liberal Democrat)

It would be a bit unfair to repeat the same subject.

Lord Stoddart of Swindon (Independent Labour)

I would not want the noble Lord to misrepresent me. I do not believe that this country should be on its own. I want it to be worldly and to make bilateral agreements; indeed, I want it to exploit the great Commonwealth of nations that we have built up over so many years.

Lord Dykes (Liberal Democrat)

That is an improvement, then. The noble Lord is now saying that this country should sign lots of treaties with other countries for all sorts of arrangements. Why can they not include the most sensible treaties of all-the treaties of European union and the two treaties listed in the Bill, which enable us to increase our own intrinsic sovereignty rather than reduce it?

Lord Pearson of Rannoch (UKIP)

Because those other organisations do not make our law without the consent of this Parliament or our people. That is the difference.

Lord Dykes (Liberal Democrat)

We do not want to get into a permanent Second Reading debate; I am sure that that would be very irritating for those gathered in the Chamber today. The sovereign Government of this country are asked to go to Brussels, within the international organisation, following the result of the latest general election, whenever that might be, and represent the people. That is the power that the people give to the Government and the Parliament. There is no loss of sovereignty in that process at all. We actually gain in sovereignty.

Lord Janner of Braunstone (Labour)

I-

Lord Dykes (Liberal Democrat)

I hope the noble Lord will forgive me; he has not been here since the beginning of the debate.

I shall quote from the Lisbon treaty itself. One of the most important clauses of all shows the intrinsic respect for national sovereignty that comes into the treaty as well as the collective obligations and duties that any treaty applies to its members. That is the case in the European Union. It is nothing to be afraid of. One of the most important preambular clauses states:

"Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties".

The tasks that flow from the treaties include the long list in Clause 4, the Article 48(6) items and others as well. There is nothing to fear from any of the minor extensions that come from there, and any of the significant ones can be referendable if the Government do not say what any Government of this country always say that they will do, which is to veto an unacceptable proposal in the Council of Ministers, meaning that a treaty obligation therefore lapses and is not carried.

The Lords Constitution Committee said on 17 March that most referendum-lock items would never be covered because of policy decisions. That would make some sense, but can we really rely on the Government being able to stand up to their very vocal lobby of Eurosceptics and chauvinistic characters, particularly in the House of Commons, who have got worse and worse, as we have seen in debates in the Commons on this Bill? If they wanted to maintain sanity in a difficult world, Ministers could therefore issue a non-significant decision every few weeks or months. Would that make sense? Indeed, the unique national British referendum requirement could actually be at odds with international law-but I suppose that we would not mind that too much, least of all the antis.

There is a great deal of doublethink and confused thinking here among senior members of the Government, including, I am sad to say, the junior partner-I never thought that I would say that in this House but that is the reality that we have to face-but it is time for the Government to consider these amendments seriously and accept them today.

Lord Richard (Labour)

My Lords, we have had a brisk debate so far, to put it mildly. I want to try to meet an argument that has been put today by two noble Lords opposite about the question of balance. It says that the Bill basically provides a sensible balance between the position that the European Union is not the most popular institution with the great British electorate and what should be done about it. The question of balance is being raised.

Let us just analyse this for two seconds. It applies to Clauses 3 and 4, to Clause 6 and to the schedule. The basis for the so-called balance is that if certain issues arise, the great British public will be reassured because there will have to be a referendum. That is the whole basis of the Bill. Clauses 3 and 4 set out which treaty amendments will require a referendum. I see that under Clause 4(1)(a) to (m) a referendum will be required. Quite how would you frame a question for a referendum on, for example under paragraph (d),

"the conferring on the EU of a new competence shared with the member States".?

Will you ask, "Are you in favour of this new competence shared with the member states, which the Government have already approved and put to Parliament"? Does that make sense? Is that balanced? Of course not; it is a gross distortion of the whole process.

That is Clause 4-the height of the Bill. Go to Clause 6, which is unbelievable as far as balance is concerned. The Bill gets worse as it goes on but I will just deal with Clause 6, which says:

"The decisions to which subsection (1) applies are ... a decision under the provision of Article 31(3) ... that permits the adoption of qualified majority voting".

Look at paragraph (c), which refers to,

"a decision under Article 86(1) ... involving participation by the United Kingdom in a European Public Prosecutor's Office".

That will demand a referendum. What will we ask? Will we say to the British people, "Are you in favour of the United Kingdom's participation in a European public prosecutor's office"? Will it be feasible to have a referendum campaign on that? Will people be lined up on each side of that argument, saying "Yes, I am in favour of a public prosecutor's office" or "No, I am not in favour of a public prosecutor's office"? Look at the next one.

Lord Foulkes of Cumnock (Labour)

Will my noble friend give way?

Lord Richard (Labour)

No, not yet. The next paragraph refers to,

"where the United Kingdom has become a participant in a European Public Prosecutor's Office, a decision under Article 86(4) ... to extend the powers of that Office".

What will you ask in relation to that? Will you say, "We have already decided that we will be a member of the public prosecutor's office. Are you, the great British public, now in favour of an extension of those powers"? It is fatuous. How could you possibly campaign on that, and how could you possibly respect any result that you got?

Lord Goodhart (Liberal Democrat)

I am most grateful to the noble Lord for raising these points. I should make it clear that I have tabled amendments, which will be dealt with later when we get to Clause 6, that deal specifically-and very much in line with what the noble Lord has said-with these subjects and other rather similar ones.

Lord Richard (Labour)

I am glad to have such approval of what I am saying in advance. I entirely agree with what the noble Lord appears to want to do.

Go on and read the thing. See what it demands in terms of a referendum. Further on, the Bill gets even better. I implore the two noble Lords who talked about balance to look now at Schedule 1 to the Bill. Its heading is:

"Treaty provisions where amendment removing the need for unanimity, consensus or common accord would attract referendum".

There are lists under Parts 1 and 2. Look at the list under Part 1, particularly,

"number of, and system for appointing, Commissioners".

Will we have a referendum in which we go the British public and say, "Do you agree with this system for appointing commissioners, or would you prefer that system for appointing commissioners"? How on earth could you run a campaign on that basis? You could not because the issue is so narrow. You certainly cannot use it as balance.

Lord Foulkes of Cumnock (Labour)

My noble friend illustrates the matter brilliantly in relation to the extension of powers of the public prosecutor's office and the issue that we are now discussing. I ask him to contemplate this referendum taking place if the two sides of the coalition were on different sides of the argument and the dialogue that might occur between Nick Clegg and George Osborne, to take a random example. Would not the dialogue in that case be far more vitriolic even than the dialogue that is taking place at the moment if they were talking about the public prosecutor's office?

Lord Richard (Labour)

My Lords, I can promise my noble friend one thing: if such a referendum were to take place, the turnout would be absolutely minimal. I do not understand how in those circumstances anybody could conceivably rely on that result as providing balance vis-à-vis the argument that the European Community is at the moment unpopular and deserves to become more popular.

Lord Pearson of Rannoch (UKIP)

My Lords-

Lord Richard (Labour)

With respect, I have given way a great deal. If the noble Lord will let me make progress, I will give way later.

Part 2 of Schedule 1 is even better. There is a whole page of it-35 lines-referring to, for example,

"police co-operation ... cross-border operation by competent authorities ... harmonisation of indirect taxes ... broad guidelines of economic policies ... conferral on European Central Bank of specific tasks ... measures on working conditions".

All these issues are there for the purpose of achieving balance, according to the two noble Lords who spoke. Is it conceivable that you can have referenda on any of these issues and properly consult the people of the United Kingdom? You cannot. To pretend that you can is, frankly, dishonest.

Lord Pearson of Rannoch (UKIP)

My Lords, I disagree with the noble Lord because I would have thought that it was perfectly possible to hold a referendum on whether we wanted a European public prosecutor's office or an extension of its powers, and certainly on the indirect taxes that he mentioned. All these subjects are much closer to the British people's heart than the referendum that we are about to have on the method by which we send people to Parliament, given that those people cannot do much when they get there, as the powers have been passed to Brussels. I would be perfectly happy to run a campaign against the noble Lord and I can tell him that there would be a big turnout and I would win it.

Lord Richard (Labour)

My Lords, all I can say in answer to that-

Lord Goodhart (Liberal Democrat)

My Lords-

Lord Richard (Labour)

With respect, I will respond to the noble Lord, Lord Pearson, before giving way to the noble Lord, Lord Goodhart. The only answer that I can give to the noble Lord, Lord Pearson, is that his remarks indicate clearly what is wrong with the position of UKIP. If he really believes, as a member and, indeed, as a quasi-leader-I suppose that is what we should call it-of a serious political party in this country, if it is meant to be serious, that we could have a sensible referendum campaign on those issues, that seems to me highly indicative.

Lord Goodhart (Liberal Democrat)

The noble Lord said that people would be very upset by having a European public prosecutor's office, but is he aware that the EPPO would deal only with matters of international litigation and would have no effect whatever on any litigation inside the United Kingdom?

Lord Richard (Labour)

My Lords, I am sorry that I gave way to the noble Lord, Lord Goodhart, because he was interrupting the noble Lord, Lord Pearson, and that point has nothing to do with me. I am sure that he is right and that we will consider that matter in due course.

Finally, I urge noble Lords to read the Bill before they make up their minds on any of these issues because, frankly, in 45 or 50 years of political activity, I have never read a Bill that I find more distasteful or absurd.

Baroness Symons of Vernham Dean (Labour)

My Lords, in light of what the noble Baroness, Lady Rawlings, said a few moments ago, I seek a little guidance, before we go any further, about taking these amendments with the clause stand part debate, which will be voted on separately. Will the Minister reply to all these amendments and clause stand part together? It would help those of us who are going to speak on the second group of amendments to know in advance what the Minister is proposing to do.

Lord Howell of Guildford (Conservative)

The answer is yes.

Lord Pearson of Rannoch (UKIP)

My Lords, to come back to Amendments 16A and 16B, I oppose them because they make it possible for the Government of the day to avoid a referendum if they think that some new EU power grab, whatever it happens to be, is sufficiently urgent or if they think that it is in the national interest. I fear that the supporters of these amendments have not yet grasped the point that the British people do not want any more powers passed to Brussels, period, as the saying goes-full stop. In fact, a growing majority of the British people want all their powers back; they want to be a democracy again with the power to elect and dismiss those who make all their laws.

I am afraid that the amendments do not work in detail, either. Who is to decide the urgency of the decision or whether it is in the national interest? The octopus in Brussels of course, not the British Government or Parliament. To be certain of this, we have only to look at the way in which Brussels has treated both our Government and Parliament over many years. I refer of course to its constant indifference to our scrutiny reserve. I remind your Lordships for the record, and for those outside your Lordships' House who may not know, what the scrutiny reserve is. It is a promise made to Parliament-to the House of Commons and your Lordships' House-by Governments of all persuasions over many years that they will not sign up to any new law or initiative in Brussels if the Select Committee of either House is still considering it. If the Select Committees have finished looking at it or have agreed it, or if it has been debated in Parliament, the Government of the day are free to sign up in the Council of Ministers in Brussels to whatever initiative is concerned. That is the promise or scrutiny reserve.

A Written Answer to me from the noble Lord, Lord Howell of Guildford, on 7 February this year reveals that in the past five years alone the scrutiny reserve has been overridden-in other words, the Government's promise has been broken-no fewer than 267 times in the House of Commons and 248 times in your Lordships' House. That means that in the past five years more than 500 proposals from Brussels, which the Select Committee of either House thought sufficiently important to examine and to advise the Government on, became law anyway. The juggernaut rolled on regardless. It is worth adding that the situation does not appear to be improving, despite regular complaints from the Select Committees to the Government. In 2010, 151 overrides were notched up between the two Houses-79 in the House of Commons and 72 in your Lordships' House.

Lord Sewel (Labour)

Would the noble Lord be good enough to inform us how many of these-I forget the numbers, so could I be reminded?

Lord Pearson of Rannoch (UKIP)

It is over 100 a year; 515 in the past five years.

Lord Sewel (Labour)

Of those 500, how many would have been subject to a referendum?

Lord Pearson of Rannoch (UKIP)

My Lords, that is not the point. The point is that it will not be the British Government or this Parliament that makes the decisions covered by these amendments; Brussels will go on doing it.

It is partly this situation, together with the fact that Brussels pays almost no attention to what our Select Committees and Parliament manage to say when they are not being completely ignored, that has led me to suggest that perhaps we do not need quite the number of Select Committees that we have, although that is perhaps a debate for another day.

Lord Hannay of Chiswick (Crossbench)

I am not quite sure of the relevance of this discussion to the amendment that we are debating. The noble Lord does not reveal how much of this is double-counting. He has given a number for the Commons and a number for the Lords, but perhaps he could enlighten us as to how many are for the same measure. Secondly, he gave figures for 2010, which was a general election year here. During that lengthy election period, the House of Commons in particular did not have a European Scrutiny Committee. It has always been recognised that there are overrides during such a period. Thirdly, I wish that the noble Lord would recognise that the scrutiny reserve is a matter for consideration between the two Houses of this Parliament and the Government. It is not a matter for the European institutions and it never has been. That has always been clear. It would therefore be good if we could get back to discussing the amendment in the name of the noble Lord, Lord Liddle.

Lord Pearson of Rannoch (UKIP)

My Lords, the noble Lord is trying to ameliorate an intolerable situation. It is a fact that the scrutiny reserve is a promise given by the Government of the day to Parliament that has been broken more than 500 times in the past five years. Therefore, it will not be the British Government who make the decisions covered by Amendment 16B, but Brussels-as it always has been. No British Government can therefore be trusted to decide on these issues, as set out in the amendments, because Brussels will simply go ahead, even if the British Government of the day could be trusted. If necessary, as the noble Lord, Lord Waddington, reminded us, the Commission will simply bring forward the EU's new powers under treaty clauses that were not designed for that purpose. However, that has never stopped the Commission, as I also pointed out in our Committee proceedings on 5 April at col. 1640.

In conclusion, and without wishing to go anywhere near making a Second Reading speech, a number of noble Lords today-the noble Lords, Lord Risby and Lord Hannay, among others-as well as the Minister in Committee and at Second Reading, lamented the disconnect, as they put it, between the British people and their Government and the European Union. I should like to put to the Minister a point that I have not yet put to him; I should be grateful if he would answer it either on this occasion or at some future point in our proceedings.

The reason for the disconnect between the British people and the European Union-and, indeed, the Finnish people and the European Union, and a growing number of people in France, Germany and elsewhere-is that the big idea that gave birth to the project of European integration, honourable though it was at the time after the last war, has, in fact, gone horribly wrong. I need hardly remind the Minister of what that big idea was. It was that the nation states, with their unreliable democracies, had been responsible for the carnage of two world wars and the long history of bloodshed in Europe. Those nation states, therefore, had to be emasculated and diluted into a new form of supranational government run by technocrats. That is where the Commission gets its monopoly to propose in secret all our European legislation. That is where COREPER comes in. That is why the Council votes in secret on what is becoming the majority of our law, if that is not the case already. Surely that is what has gone wrong. Until we address it, realise and confess that the whole project has failed-not just the currency, which has clearly failed-and get out of it as soon as possible, we are all barking up the wrong tree.

Baroness Williams of Crosby (Liberal Democrat)

My Lords, perhaps I may refer briefly to the remarks made earlier by the noble Lord, Lord Liddle, on his amendment, and those of the noble Lord, Lord Richard, which would satisfactorily fall within the purview of Clause 3.

We have not addressed in any sensible way in this debate the issue of the referendum. I should make it clear that the amendment moved by the noble Lord, Lord Liddle, and those amendments in the name of the noble Baroness, Lady Symons-I shall not for now discuss them further-are all attempts to address the issue of a referendum as something that is a special, rare and significant constitutional development that should embrace the interests and concerns of the bulk of the British people.

If there is to be an adequate turnout in a referendum, and if there is to be adequate understanding of, and information on, what it is about, one dare not spread the referendum concept over one relatively insignificant issue after another. We will bore the people of Britain absolutely stiff if we continue in the way suggested in what is in some ways, if I may say so, this somewhat ridiculous Bill. Perhaps I may give a couple of examples; I shall not detain the Committee for more than a few moments.

If one pursues many, many referenda, the turnout will steadily decline. The concept will become a joke and the subject of television satire, and more and more people will wonder what on earth they are being asked to do. We have already seen falling turnouts in referenda. For example, the number of votes in the Welsh and Scottish referenda was not particularly outstanding, even though at the time the matter was close to the hearts of the people of Scotland and Wales. Therefore, unless we change the Bill in the way suggested by the noble Lord, Lord Liddle, and, I suspect, the noble Baroness, Lady Symons, we will simply wreck the currency of referenda to the point where they become totally insignificant and are treated as nothing more than an addition of no great importance.

As well as boring the electorate into very low participation in referenda, there is a second matter that we should carefully consider. It is closely associated with experience in the state of California in the United States, where there is growing evidence that referenda are won on the basis of how much money is spent on them by special interest groups with an interest in the outcome. That was the story of the property law referendum in California. It increasingly became an issue between estate agents and customers but it did not interest large sections of Californian citizens. Exactly the same will happen here. Whether a referendum is carried will depend on the willingness of people to finance information, propaganda and so on in trying to get the electorate to come out. Quite quickly we will see these referenda become the politics of only the most extreme interest groups on either side. The whole purpose of referenda-to try to discover the broad interests and concerns of the British people-will effectively be destroyed by the fact that they become increasingly the referenda of conflicting interest groups.

The paradox is that those who support the Bill, believing it to be an important weapon in reducing the power of the European Union, will in fact rapidly destroy their own case through their ludicrous attempt to include every minor issue within the spectrum of things to which a referendum might be considered appropriate. Even from their point of view, which I do not for one moment share, it is in no one's interest to do what is being done in the Bill-that is, to spread the concept thinly across a huge range of subjects, many of which, as the noble Lord, Lord Richard, pointed out in a brilliant and eloquent speech, will be of very little interest to anyone other than the small handful of people directly involved.

I plead with those who support the Bill, as well as with those who, like me, oppose it, to consider very seriously the constitutional consequences of what they are engaged on. The noble Lord, Lord Kerr of Kinlochard, set out brilliantly how we might endanger the whole role of Parliament by allowing a referendum with a small turnout to veto an existing Act of Parliament. That is a very dangerous path to go down. Even if one does not go that far, there will be a gradual destruction of the constitutional structures that are about making law with a relationship to the European Union as well as more widely, and people will find that they have kicked away the very structure that they claim to care so much about-the structure of representative democracy. I strongly suggest that we address this issue with due seriousness.

Lord Grenfell (Labour)

The noble Lord, Lord Kerr, applied the test of common sense to the relationship between Clauses 2 and 3. Sometimes I wonder about the common sense on the other side of the House as I do not hear much of it in this debate. He concluded his remarks with a devastating argument against the inclusion of Clause 3 on the grounds that it is simply not necessary, and that with the amendments to Clause 2 it really should not be there. The great French writer Antoine de Saint-Exupéry said that perfection is reached not when everything that could be written has been written but when everything that need not be written no longer remains. I have that pinned on my computer at home when I write. If he had been listening to this debate he might well have come to the conclusion that Clause 3 fell under that rule and that it is not necessary. I shall certainly support those who claim that it should not stand part of the Bill.

Lord Hamilton of Epsom (Conservative)

I had not intended to be drawn into the debate but, having heard my noble friend Lady Williams of Crosby saying that people would be bored by referenda on European issues, I wonder how bored they will be on a referendum on the alternate vote system, where I suspect the turnout will be minimal. I am not sure that there will be a large number of referenda on these issues for the simple reason that Ministers will have grave doubts about whether they are likely to win those referenda, so they will not be able to give way on these matters in the European Union anyway.

There is a terrible misunderstanding of the disillusion in this country and the way in which the British people have been misled by successive Governments on so many issues dealing with the European Union. We started by being told that we were joining a free trade area when it was never to be that, and from then on we have seen transfers of sovereignty which have never been popular in this country. The reason why people dislike the EU so greatly is because they see sovereignty being drained away and successive Governments lying about what they claim to have achieved in the European Union when in fact they have transferred sovereignty from this country to the European Union.

Lord Waddington (Conservative)

Is not my noble friend guilty of excessive moderation? When one thinks about it, there is no need for a single referendum and no need for any further transference of either competences or powers. The trouble is that there have been so many transferences that the whole machine has indigestion, so the demands in this country are not for giving more powers to the EU but for repatriation to our Parliament of the powers that have been taken.

Lord Hamilton of Epsom (Conservative)

I agree absolutely with my noble friend. I only wish that I could believe that we were going to see repatriation of powers, but unfortunately with the acquis and so forth that will be extremely difficult.

The plea that has been made for the amendments is that, in special circumstances and when there is great urgency, discretion should be given to Ministers to allow things through without a referendum. You can imagine how that will be abused. The procedure, like so much done by past Governments, will be abused to let things through without referenda and we will be back where we started. I totally oppose the amendments.

Lord Goodhart (Liberal Democrat)

If the noble Lord, Lord Hamilton, thinks that what happens in the European Union is of immense concern to the average member of the United Kingdom, will he consider the result of the general election in 2001, when the right honourable Mr Hague was the party leader and fought that election largely on the basis of dislike of the European Union? Perhaps the noble Lord remembers the result of that election.

Lord Hamilton of Epsom (Conservative)

Yes, and perhaps my noble friend would like to remind himself why William Hague fought the election on European issues. It was because he had done so incredibly well in the European elections not much before, and it seemed at that point that the country did not want to have anything to do with Europe.

Lord Pearson of Rannoch (UKIP)

Perhaps I may also remind the noble Lord that Mr Hague did not fight that election on the issue of Europe; he fought it on the issue of the euro, the currency. He said that the election was, in effect, a referendum on the currency. That was not wise, because a referendum on the currency had already been promised by all parties. That election was not fought on the issue of Europe.

Lord Howell of Guildford (Conservative)

My Lords, perhaps your Lordships might find it useful if I were to intervene at this stage, because one or two noble Lords have had a bite at the cherry, as it were, and it might be helpful if I were to answer some of the many questions that have been put to this Bench and comment on all the amendments, although I should like first to address the two original amendments, Amendments 16A and 16B, which have a particular element to them which is very important and needs to be addressed. Then I will come to the broader issues raised by the broader amendments, of which the central theme is whether the significance condition should be enlarged or extended. It is interesting to note that in the other place, all the pressure was for them to be reduced, so there is a certain contrast between your Lordships' views and those of the other place. Often that is healthy.

I say at the beginning that I strongly agree with the remark of the noble Lord, Lord Liddle, that proper leadership in Europe best comes through using the powers that the EU already has. That is a strong statement and highly relevant to what we are debating in the Bill. I ask noble Lords to reflect on it, because I think that many of the worries about what the effect of the Bill might be in checking the expansion, development, changes of treaty, new ideas and proposals for the EU stand in contrast to the wisdom of that remark. An enormous amount can be achieved in our neighbourhood, in relations with the rest of Europe and in the reform of the EU itself to make it suitable to meet the totally changed international landscape which we now all confront, by existing powers rather than further changes in the treaty or transfers of power from member states to the European institutions.

I turn to the first two amendments, which would insert into Clause 3 a new type of exemption from the referendum lock in respect of Article 48(6) decisions, otherwise known as the simplified revision procedure. Perhaps I can deal right at the beginning with the comments of the noble Lord, Lord Kerr of Kinlochard, whom I very much respect for his vast experience in this area. He asked me-he said that I did not answer him very well before, but I will try to do better now-why we needed Clause 3 as well as Clause 2. The answer is simple. Clause 2 deals with ordinary revision procedures for changing the treaties; Clause 3 deals for the special revision procedure for transferring powers from the nation state-the UK in this case-to the European Union. It is the desire of many, not just in this country-I shall give examples from other countries-that changes, whether of the treaty or in powers, should be dealt with in the same way, regardless of whether they are dealt with under the ordinary revision procedure for treaty change or under the special revision procedure, otherwise known as the passerelle procedure. That is why we need Clause 3. I hope that that clarifies that aspect. Of course I shall come to the detail much more extensively in a moment.

Lord Kerr of Kinlochard (Crossbench)

I apologise to the noble Lord and am grateful to him for giving way. He does not agree, clearly, that the way we handle a treaty amendment should depend on the nature of the treaty amendment, not the process in Brussels which started it. I do not understand that. I do not know why treaty amendments should not be treated as treaty amendments whether they come under the procedure that we are now dealing with under Clause 2 or the procedure which we think appropriate to Clause 3. This is nothing to do with the passerelle. That comes later in a different clause. We are not talking about Article 48(7); we are talking about Article 48(6) here. I accept that the passerelle, on which I will disagree with the Minister on the substance, is a separate issue. I do not see why treaty amendments should not be handled by a single clause setting out a single procedure. In fact, I still think it would be better.

Lord Howell of Guildford (Conservative)

The reasons lie in the procedures that flow from the Lisbon treaty, which gave birth, rather unwillingly, to the ordinary revision procedure. The whole idea of it getting into that treaty was a compromise, as noble Lords who followed it all closely will remember, but that is where it comes from. Whether powers are transferred or treaties are changed by the ordinary revision procedure or by the special revision procedure is of no particular interest to those concerned with our powers and competences moving away from this country to the European Union in ways that are not fully explained or subject to the appropriate procedures and rules that this Bill lays down.

I hear exactly what the noble Lord says, but he asked me a specific question and I have given him the specific answer that whether these changes are under the simplified revision procedure or the ordinary revision procedure they should ideally be treated in the same way. That is what is happening in other countries. I have a note here that states that Ireland and Denmark examine all uses of Article 48(6), the simplified revision procedure, in the same way as the use of the ordinary revision procedure to decide whether a referendum is required. It is done by the Attorney General in Ireland and by the Ministry of Justice in Denmark. I am told that it is now going on in Denmark in relation to the simplified revision procedure applied to the matter, already discussed in this House, of changing the treaty to accommodate the European stability mechanism. I will come back to that in more detail, but that is the answer to the noble Lord's question.

In addition to the significance condition already provided for in Clause 3, the amendment would insert a provision that would allow for the possibility of a Minister seeking to rely on urgency as a reason to avoid holding a referendum. In a previous debate in Committee, we debated what the Government mean by a transfer of power, and I will recapitulate some of the points in detail when I come to my comments on the other amendments in this group. These two amendments would mean that if a Minister deems a particular decision to be urgent and in the national interest, he could dispense with the referendum requirement regardless of the nature of the transfer of power from the UK to the EU or the significance of that transfer of power. If there was ever a proposal under Article 48(6) to give up the member states' veto over the areas where we will still retain the right to oppose measures taken at EU level, such as decisions on the seven-year financial perspectives or on social security, if these amendments are agreed, a Minister could claim that giving up these vetoes was considered urgent and in the national interest and therefore should not be put to the British people for them to have a say but should rather by approved solely by Parliament.

This shows a lack of understanding of how the system works and how the simplified revision procedure works. Let me give noble Lords an example. The use of the simplified revision procedure to enable member states in the euro area to set up the European stability mechanism to safeguard the financial and economic stability of the euro area is obviously a matter of vast import. It will take 21 months-one year and nine months, which is admittedly not two years-to be finalised. It was agreed in March 2011, and the target date for final approval is the end of 2012. That is hardly what most people would consider urgent. Even under the simplified revision procedure, which may or may not be associated with the passerelle-I agree with the noble Lord, Lord Kerr, that they are in a sense separate, although criss-crossing, issues-the whole process of changing treaties, whether by the simplified procedure or the ordinary revision procedure, takes a long time. The urgent issue of saving the eurozone from its tribulations will take one year and nine months. This example of an urgent and important treaty change certainly sets a precedent that shows that there would be more than enough time for the UK to hold a referendum, should one be necessary, under any future uses of the simplified revision procedure that I described. I remind noble Lords that one will not be necessary for the current use of the simplified revision procedure as the present change to do with the European stability mechanism does not apply to the UK.

The truth of the matter is that while urgent issues arise, the business of putting them through the simplified procedure or the ordinary procedure is extremely lengthy. This is one reason, which I shall come to in a moment, why these things will only rarely occur. The picture of a series of small referenda issues coming along is a completely unrealistic. In fact, it is a fantasy. Whether they go through one way or the other, it will be a lengthy and complicated process, and nations will rightly seek to exert the leadership that the noble Lord, Lord Liddle, referred to of using existing competences rather than having to resort to the kind of treaty change that leads to major debates of the kind we saw over Lisbon. The truth of the matter is that this amendment would have no practical impact as there would not, in practice, be a situation where an Article 48(6) decision could be rushed through in a matter of weeks or months-it is more likely to be months and years-and the amendment would, in fact, be pointless.

That has dealt with those two amendments concerned with urgency, and I now want to turn to the broader issue.

Lord Radice (Labour)

The Minister said that it is a fantasy that there would be a series of small referenda. If it is an absolute fantasy, why do we need 58 policy areas described in the Bill that would trigger a referendum?

Lord Howell of Guildford (Conservative)

If the noble Lord casts his mind back to the Lisbon treaty and the previous treaties, some of them tend to turn up in the great package treaties that emerge from the European Union from time to time. They emerged at the time of Lisbon and caused so many of the agonies and concerns, the consequence of which we are now debating. I forget the number of issues of this kind that were in the Lisbon treaty, but the answer is almost certainly a considerable number.

Now I want-I will give way again, but I have to say that I am trying to help the Committee and guide it through. I will give way once more, but after that I think I am entitled within the custom of the House to be rather reluctant to yield to constant interventions on things I am just about to say anyway.

Lord Hannay of Chiswick (Crossbench)

I am most grateful to the Minister, and I will certainly not intervene in his speech again. Like the noble Lord, Lord Wallace, earlier in the debate, the Minister has taken us down this road that there will not be all these minor referendums provided for in the Bill because the habit of the European Union is to group all these things together in a major grouping.

I would plead with the Government not to go down that road of reasoning. Most of us, even those of us moving these amendments, believe it is not in the interest in the European Union or this country to have any major package of institutional reform in the period ahead, yet here the Government are using an argument that is inciting people in the other member states to go in that direction-they can read Hansard too. All they will see is that the noble Lord and his colleague are saying, "Do not worry, none of these mini-referendums will take place; it will all come together in a big package". I ask that the Government not pursue that line because there is no difference between the two sides of this argument. Nobody wishes to argue-I certainly do not-for pushing towards a new major institutional package, but the Minister is making it impossible to avoid one.

Lord Howell of Guildford (Conservative)

My Lords, I fear that that is a good example of taking part of an argument, which I wish to develop much more fully, and giving it a particular boost. That is just one of a whole series of reasons why there will not be referenda over trivia and over small issues, which will come out separately, and why these matters simply will not arise. I could straight away give a long list of other reasons why it will never happen. Where there is no transfer of power or competence anyway, there will not be a referendum. There are plenty of powers already, as the noble Lord, Lord Liddle, has said. Where it does not apply to the UK, there will be not be a referendum; as with the current treaty change going through. Where there are accession treaties, there will be no referendum-not in this country anyway. Where there is codification under existing competencies there will be no referendum. Where there are significant tests-we have yet to debate that in full-there will be no referendum. So there are five other reasons, as well as the question of the package, why we will look at these things in a mature and rounded way.

It is really quite pointless citing one issue and trying to project it to be the explanation of the whole situation. When you look at the whole situation it is perfectly clear that there will not be a whole series of tiny referenda on complicated issues that people will not want to vote for. That applies to almost everything that has been mentioned in this debate, including-I would love to dilate on it but it is probably out of order-the whole question of the European public prosecutor's office, on which the noble Lord, Lord Goodhart, is a great expert. We are going to debate that in Clause 6. Certainly it is one of many issues that may well come up, but the chances of it coming up as a separate issue as part of a treaty change, to which the Government would then agree and that other nations would all agree to, are very remote indeed-in fact, I would say, non-existent.

At this stage, it might be worth going over some of the essential points from the lengthy debate we had at the start of the Committee stage on the role of Article 48(6) of the Treaty on European Union and the rationale for Clause 3, which I mentioned in an exchange with the noble Lord, Lord Kerr, a little while back. There are two types of treaty change. This does not seem to be totally understood. I will try my best to remind your Lordships what they are. There is the ordinary pattern which requires an intergovernmental conference and the simplified type of treaty change which does not require an IGC. Both of them result in an amendment to the treaty and so both should be treated in the same way.

It is not right as the noble Lord, Lord Liddle, said in the earlier debates that the whole point of the passerelle is to dispense with the paraphernalia of treaty change. It is not true. It has the same elaborate systems of treaty change through the simplified revision procedure as does the ordinary revision procedure. People simply will not understand that because one method of treaty change is being used a referendum would be required yet if the same treaty changes-in this case dealing with powers rather than competencies-were being proposed and agreed under the other type of treaty change, then it would not be required. It is just that kind of incoherent approach which will go against the Bill's aims-they may be disputed by noble Lords opposite but they are our aims-of regaining some of the trust of the British electorate and seeking to reconnect them. It would leave people completely baffled-it would certainly leave many of the experts baffled-and not enlightened at all.

Several of your Lordships wanted to ascertain what we mean by transfer of power and wanted us to give examples. Again, if I did not give enough examples at Second Reading or earlier in the Committee stage, I will try to do so now. There was confusion over the term "power" relative to "competence". As I tried to make clear at Second Reading and during the previous debate, "competence" is a term set out in the EU treaties, but "power" clearly is not. That is why we have set out in Clause 4(1) what we mean for the purposes of the Bill by the transfer of power. I want to elaborate on that. The first would be a move to qualified majority voting in those areas set out in Schedule 1 to the Bill which are currently decided by unanimity, consensus, or common accord. It is a long list in that schedule, I agree, but that is what the schedule is about. For example, the removal of the veto on legislation proposed under Article 77(3) of the Treaty on the Functioning of the European Union relating to passports and identity documents where potentially a piece of legislation could lead to the introduction of an EU-wide identity card scheme or a common European passport.

The second would be any proposal to amend or remove one or more of the emergency brake provisions of the treaties, which we will look at in much more detail when we come to Amendment 21.The third would be if a treaty amendment conferred a new or extended power on an EU institution or body to impose a requirement or obligation on the UK, or removed any limitation on such a power. That indeed would be a transfer of power. The fourth would be if an EU institution or body were conferred with, or empowered with, a new or extended power to impose sanctions on the UK. It is the last two transfers of power covered in Clause 4(1)(i) and Clause 4(1)(j) which are subject to the significance condition, to which I will come.

Some of your Lordships expressed the view that the giving up of the veto was not a transfer of power. That is a good point. We disagree with it. We believe it clearly is and is seen as such in public debate and in public concerns. Giving up a veto would remove the UK's powers to block legislation in sensitive areas and has done so in the past. To be clear, we are not proposing a referendum before the UK can agree to legislation based on articles in Schedule 1. We are proposing a referendum before the UK can agree to a treaty change giving up its right to veto such legislation. That is where a transfer of power would take place.

Perhaps we should also be clear that there is no consensus or appetite in the EU to remove these vetoes, and this Government would not agree if there was. We also made clear that we were confident that this would not lead to referenda on trivial issues, a matter to which I have already referred. As a further safeguard-I mentioned it in the list in replying to the noble Lord, Lord Hannay, a moment ago-we have proposed the significance condition in order to ensure that referendums would not be held on proposed transfers of power when they are on matters of little significance and where a referendum would clearly not be appropriate. I hope that meets at least some of the many observations of those who appear to be convinced that there would be an endless stream of small referenda.

We have proposed to limit the extent of the significance condition in Clause 3 only to Clause 4(1)(i) and Clause 4(1)(j), and only in relation to the simplified revision procedure. It is certainly true that the significance test and the significance procedure are limited. This is because under the simplified revision procedure the imposition of a new requirement, or obligation, or sanctions on the UK can be done only within existing competences. The noble Lord, Lord Kerr, was quite right to point that out at the beginning. Under the SRP you cannot transfer competencies but you can without doubt transfer powers. They may be considerable powers and considerable derogations from the authority of this country in very sensitive areas, which would not add to the popularity of the European Union and indeed might not improve their administration at all. The significance condition would mean that the Government of the day would be able to distinguish between significant and trivial changes that might not warrant the need for a referendum, and to explain this publicly and transparently to both Houses of Parliament. A good example would be a proposal to allow an EU agency to impose requirements on a national regulator. Such a requirement might well not be significant if it concerned co-operation between member states in the field of education, such as in sharing statistics on the number of hours of teaching for IT across the EU. It would obviously be inappropriate to have anything like that in a referendum.

As your Lordships will recall from our earlier discussions on the simplified revision procedure, one of the constraints of this method of treaty change is that it cannot be used to increase the competences conferred upon the European Union. I am sorry if it sounds as though I am repeating myself, but it cannot be said too often. Now we are providing under this Bill for our Parliament to be given the chance to test that no such increase of competence is taking place, as part of our overall aim, to which we have referred again and again and to which my noble friends have referred in several speeches, of increasing trust and accountability. We will not solve these problems by these measures alone, but we believe that they will make a substantial contribution.

If it were found that the simplified revision procedure had inadvertently been used to extend competence, the only option would be to require the treaty amendments to be resubmitted under the ordinary revision procedure. The EU is a creature of law and must act legally and not beyond its powers, so it would not be appropriate to say that, if a proposal for treaty change goes beyond what is permitted under Article 48(6) but the extension of competence is not considered significant, this change can be allowed under Article 48(6). That is why we cannot accept Amendments 17 and 18.

Amendment 19 would extend the significance test to decisions under Article 48(6) to give up one or more of the vetoes in Schedule 1, or one or more of the emergency brakes listed in Clause 4. Here, again, we are not convinced of the merits of extending the significance condition to cover these two scenarios. That would go the wrong way. The list of areas where unanimity, consensus or common accord apply in the EU treaties in Schedule 1 is a list of what the Government consider to be areas in which giving up a national veto would be significant enough to require the prior consent of the British people. There are a number of other vetoes in the treaties which the Government consider not to be significant enough to warrant a referendum but where instead Parliament would be required to approve such a move by Act, such as Article 355(6) on the Treaty on the Functioning of the European Union and the EU status of Danish, French or Dutch country or territory, which obviously has few implications for the UK and would not touch us.

The Government have already made clear that we consider the addition of a significance condition to be useful to help guard against referendums on trivial issues-a matter that has so concerned your Lordships-but we have also made clear that we consider that the Bill should set out as clearly as possible where a referendum should and should not be required in the future, in whatever form in which it actually came in front of this nation and other member states throughout the European Union.

As part of the Government's wider aim to reconnect the British people to the decisions that are being taken by Governments on the EU, we have made it clear that we want to play a perfectly straight bat and set out precisely where a referendum would or would not be needed. A significance condition with a wide scope, for which these amendments push, would do little to achieve this ambition and would even exacerbate the problem by increasing cynicism and inconsistency, as each time a treaty change is proposed the British people would know that it would still be down to the Minister to decide whether he or she, or the Government of which he or she was a member, thinks such a treaty change is significant enough in their view to put to the people. That is precisely the status quo that has led to the sensation of what has been called competence creep but which can also be described as power creep-a feeling that stealth and non-transparency are prevailing-and which has undermined the general public consensus on the virtues and achievements of the European Union of the kind that exists on the virtues and achievements of NATO, of the United Nations and of the other great institutions of the 20th century but that has not been accorded to the European Union.

Instead of the clarity and transparency offered by the Bill, the amendments would leave us with the distant and disconnected approach, described by my noble friend Lord Risby and others, that has driven UK approval of these decisions in the past. All the long-standing accusations of decision-making behind closed doors without public consent would therefore still hold true.

Baroness Williams of Crosby (Liberal Democrat)

I thank my noble friend for giving way for a moment. How would he escape from the horns of a very difficult dilemma? If, on the one hand, Ministers, in order to avoid a referendum, had to tell themselves that something was not in the national interests of Britain, would one not find oneself subsequently an extremely weak force in the European Union? If, on the other hand, they decided to press on with something that they regarded as being in the national interest and that would attract a referendum, would they not find themselves subject to the kind of fragmented referenda that we discussed earlier and which the Minister described earlier in his own speech?

Lord Howell of Guildford (Conservative)

I do not think that that would be the case, for the very good reason that the great issues that concern our national interest can be delivered very largely by the co-operation and development of close working within the existing competences of the existing treaty. My noble friend has in her mind some thought that new treaty requirements would indeed come along that would somehow be in the national interest but which Ministers would be reluctant to push for fear that they would have to expose them to the British people. There might well be issues in the future, although I cannot see any countries at the moment being terribly willing to go through the complex treaty procedure for them, which Ministers believe are in the national interest and of value and which can be pursued only by treaty change. In that case, they would rightly be required first to come before both Houses of our Parliament so that it could be explained whether they were significant or not. If they were significant, they would then be required to be put to the test of a referendum, with the Government arguing that these changes, or this package of changes, were necessary to improve the national interest and the strength of this country. That is the kind of debate we should have had over the Lisbon treaty, but of course we did not.

Lord Dykes (Liberal Democrat)

My Lords-

Lord Howell of Guildford (Conservative)

No, I am not going to give way again, I am afraid. We have had enough interventions.

I was concluding by saying that all the long-standing accusations of decision-making behind closed doors without public consent would therefore still hold true if these amendments were accepted and the wider and wider number of decisions were left to the judgment of Ministers as to whether they were significant. There are concerns, as I have said, that creeping power and creeping competence are not being properly debated and explained and not justified as being in the national interest, and have weakened the European cause.

People talk about the need for "reconnection"-that phrase came up. We have to be realistic and accept that reconnection has failed. It is failing here in this country, although we are not the only country in which it is failing. Some noble Lords seem to want to continue as before and seem to be happy to see a continued advance of European treaty changing, competence transferring and power transferring, which are precisely the trends that have so undermined public trust, weakened the European cause and made the European Union today in need of reform and less well positioned to meet the colossal challenges of the future than it should be.

I must say that I hope that some noble Lords who are my noble friends, and noble Lords who I greatly admire, will not be offended if I see them as the last knights or the lost lords of the old Europe, of the Euro elite. They are the ones who want to go back while the world goes forward, and indeed I myself sometimes have the same wish that things could go back, but they cannot. We are now in the information age. In the age of the internet and the website, the age of public empowerment, those ideas are as out of date as the Teutonic knights with their armour and their glories. So I urge the noble Lords who have moved and spoken to these amendments to withdraw them and to understand that we are living in a changed age in which the requirements of a strong and democratic European Union will change in themselves and will require new and agile legislation, understanding, and a new connection with the people of Europe.

Lord Liddle (Labour)

My Lords, we have had a long debate on a series of relatively small amendments designed to improve the Bill, but it has been a very interesting one. Three weeks ago, when we had our first day in Committee, I have to say that I felt a bit sorry for the noble Lord, Lord Howell. He cut a rather lonely figure, with no one on the Benches behind him coming to his defence. I thought that he was having difficulty persuading the House that the Bill before us is essentially as he described it: a pro-European measure. In the mean time, the Government have called in their reinforcements. We have heard speeches from the noble Lords, Lord Waddington, Lord Flight, Lord Risby and Lord Hamilton of Epsom, all defending the Government's position. I wonder if the Minister feels any better as a result of the people who have come to his aid, because my reaction to what they said is that if they-the noble Lords, Lord Waddington, Lord Flight, Lord Risby and Lord Hamilton of Epsom-truly represent balance and the moderate centre on these issues, then God help us and particularly God help Britain in Europe. The only reason that they see their position as balanced is that this Bill essentially does not contain what they really wanted. What they really wanted was an in-or-out referendum on Britain's European membership and the repatriation of powers. I hope that the scales are beginning to fall from the eyes of some of their Lib Dem coalition partners about what really lies behind the motive for this piece of legislation. It is to appease anti-Europeanism-I was going to say Euroscepticism, but it is not scepticism, it is anti-Europeanism in this country.

Lord Pearson of Rannoch (UKIP)

My Lords, does the noble Lord accept that those of us who are described as Eurosceptic are not anti-European? We are against the project of European integration. We love the real Europe, the Europe of separate nations each with its glorious and distinctive past and future, if it could get out of this ill-founded and unfortunate project.

Lord Liddle (Labour)

I certainly do not want to contradict what the noble Lord has said, but he ought to remember that, loving Europe's history as I do, I know that it is also a history of bloody conflict, of massacre and genocide, which the European Union has played a major part in bringing to an end. I listened to the Minister's supporters speaking from his Benches, and it seems that they all think that the history of the European Union is essentially one of betrayal. So when Winston Churchill called for Europe to unite, that was a betrayal, and when Harold Macmillan decided to take us into the Common Market, that was a betrayal.

Lord Waddington (Conservative)

I wonder if the noble Lord would allow me to put him right on this matter because it was raised the other day by my noble friend Lord Howell. In his great speech at Zurich, Winston Churchill said that he wished America, Britain and even perhaps the Soviet Union to be the godfathers of the new Europe, and he quite obviously was not considering that we were qualified for membership because of our own worldwide interests. He said that Germany and France should bury their differences and build a new Europe of which we would be the godfathers. We want no more of this nonsense of pretending that Winston Churchill committed himself to Britain being a member of the European Union, because he said exactly the opposite.

Lord Liddle (Labour)

We can all trade our Winston Churchill quotes, but certainly the thrust of his intervention was greatly to promote the cause of European union. Was it a betrayal when Lord Cockfield pursued the White Paper on the single market? Was it a betrayal when the noble and learned Lord, Lord Howe, fought for the Single European Act in order to bring that White Paper into legislative effect? Was it a betrayal when the noble Lord, Lord Brittan, as a Commissioner, fought tooth and nail to extend the single market? And was it a betrayal when John Major and the noble Lord, Lord Hurd, agreed to the Maastricht treaty, which has led to a more effective Europe on issues such as cross-border crime, freedom of movement, an effective presence in the world and progress towards co-operation in defence? The trouble for the noble Lord, Lord Howell, is that although he is right to say that the leaders of Europe can take Europe forward largely by using the existing powers granted to the European Union, most of those sitting behind him seem to think that those existing powers are a great betrayal. I do not understand the logic of their position.

The noble Lord, Lord Risby, argued that referenda are now part of our political culture. Let us be clear: Members on this side of the Committee believe in referenda on big issues. Were we to join the euro, there should be a referendum. Were there to be some equivalent of the European constitutional treaty, there should be a referendum. But the point of this Bill is not major referenda of that kind, but proposals for, I think, 56 different issues on which referenda could be held. Next week, we will have the first national referendum in Britain for 36 years. This is not a coherent policy. The fact is, as my noble friend Lord Richard brilliantly outlined, that many of the topics which are to be subject to a referendum would just be the subjects of ridicule if we ever got to the point of having such a contest. Indeed, as the noble Baroness, Lady Williams, pointed out, there are grave dangers to our democracy in multiple referenda, which give power to big money because it is big money that wins. That, of course, may be the position in the referendum next week.

I would say that, yes, Europe should largely work within its existing powers and we should not be arguing for big transfers of powers. That is not the purpose of these amendments. Their purpose is to give Ministers pragmatic flexibility to deal with situations in the real world as they arise. I was not at all satisfied by what the Minister had to say about crises. What would Britain do if there was a major banking crisis which affected cross-border banks and something needed to be done at the European level in order to rescue the banking system? This is a hypothetical case, but what would Britain do? How can a Government credibly sign up to measures to tackle the problem if they know that they have to go to the country in a referendum? That is the basic argument for the amendment, which would allow Ministers to sign up to things in cases of urgency.

Listening to the Minister, one might think that there is a lot of pragmatic flexibility in the Bill to decide whether matters are significant. But that is not what the Bill says. The significance test is presently limited to Clause 4(1)(i) and (j). Its application is therefore very limited.

We are not arguing for massive transfers of powers; we are arguing for pragmatic flexibility within the structure of the Bill, and that is why we have put forward these amendments. Doubtless we will come back to these issues on Report. In the mean time, I am happy not to press Amendments 16A and 16B.

Amendment 16A withdrawn.

Amendment 16B not moved.

House resumed.

Committee (2nd Day) (Continued)

Lord Liddle (Labour)

My Lords, I will speak to the amendments in this bloc-Amendments 17, 18, 19, 19A and 28. They relate to matters that we discussed extensively in our earlier debate. To help the House, I am willing not to move these amendments at this stage, on the understanding that we will probably come back to these issues of pragmatic flexibility on Report. We have had a very long discussion on this and the best thing is probably to move on. However, there may be Members who wish to have a bit of a discussion on whether Clause 3 should stand part.

Amendments 17 to 19A not moved.

Debate on whether Clause 3 should stand part of the Bill.

Lord Stoddart of Swindon (Independent Labour)

My Lords I had not intended to speak on whether Clause 3 should stand part. However, I wanted to follow the noble Lord, Lord Hamilton, but was not permitted to do so because the Minister got to his feet and obviously wanted to intervene. I was later unable to intervene on the noble Lord, Lord Liddle, who did not seem to want to hear what I had to say. The first thing I want to say is that I agree entirely with what the noble Lord, Lord Hamilton, said. Indeed, he got to the core of the matter. The reason we are in this difficulty today, the reason we have this Bill, and the reason we are talking about referendums is that Parliament, under the European Communities Act 1972, cannot do its job. That is why we have this difficulty.

Under normal circumstances, when great changes take place Parliament is able to discuss and amend. However, when Ministers and the Government agree to hand new powers to the European Union and make a treaty, we can discuss the treaty but we cannot amend its provisions. That is not how Parliament should work. If Parliament is to work properly, the European Communities Act needs amending so that Parliament can do its job. Then, when a treaty-or whatever means of handing further power to the European Union-happens, Parliament can properly discuss the Bill with some effect by moving amendments, voting on them and disagreeing if necessary with what has been agreed by Ministers. In particular there was great concern about Clause 3, which refers to Article 48(6), in another place and-as the noble Lord, Lord Howell, knows-in this place as well. He expressed his grave concern about the possible use of Article 48(6) of the Lisbon treaty.

The whole basis of the European Union is wrong as far as democracy is concerned. The problem is that the more power that is acceded to the institutions of the European Union, the less democratic it becomes. That has been shown. The noble Lord, Lord Pearson, referred earlier to setting aside the provisions of our own Select Committee as well as the Select Committee of the House of Commons. If the Government believe that something is urgent, they just ignore everything that has been said here. What is more, the discussions we have here are long and good; there is no question about that. The European Union Select Committee works extremely hard, takes a lot of evidence and brings forward good suggestions and reports. However, they are either set aside or ignored by the European Union itself. I do not believe that any recommendation made by this House through its Select Committee has been accepted. What on earth is the use of that? The Select Committee makes reasonable proposals which are discussed and accepted by this House but are then not accepted by the European Union. In spite of the fact that the Select Committee is a good committee doing hard work, in the last analysis it has no power.

Lord Grenfell (Labour)

I am most grateful to the noble Lord for giving way. However, he has not quite grasped the purpose of the European Union Select Committee. The purpose is not to advise the European Union but to advise the Government. If, in their sovereignty, the Government choose not to accept our advice, there is nothing that we can do about it. However, I do not think you can say that we are not performing our function just because the institutions of the European Union might not accept what we have said.

Lord Stoddart of Swindon (Independent Labour)

That is precisely what I did not say. I said that the Select Committee was performing its function and doing it very well but-whether it is a case of what the Government will accept or what the European Union will accept-in the last analysis, its recommendations have not been accepted, which is a great pity. Some of the changed arrangements for the Select Committee might make it more effective, but I very much doubt it.

I remind the noble Lord, Lord Liddle, who would not allow me to intervene in his speech, that the peace in Europe has had nothing to do with the European Community or the European Union but has been kept by NATO. The greatest threat to Europe occurred in 1949 with the Berlin blockade. The treaty of Rome was not signed until 1957 although I think that it was thought of before then. The United States and Britain ensured that the Russian blockade was broken; it had nothing to do with any other European state, with the exception perhaps of France which gave a little help. Therefore, it is about time that we stopped talking about the European Community or the European Union being responsible for keeping the peace in Europe-NATO has kept the peace in Europe. I do not know what would have happened without NATO and the American deterrent, so please let us give credit where it is due.

Lord Pearson of Rannoch (UKIP)

My Lords, while the noble Lord is on this subject, would he care to comment on the European Union's record in Yugoslavia?

Lord Stoddart of Swindon (Independent Labour)

That would take rather a long time. I think that perhaps Germany rather than the European Union had some strategic purpose in regard to the break-up of Yugoslavia, but I had better not go into that at this time. Time is getting on and I have no doubt that noble Lords want to get to dinner, so I shall sit down.

Lord Kerr of Kinlochard (Crossbench)

I apologise as I am standing up. Mine is the first name attached to the Clause 3 stand part Motion on the Marshalled List. The Minister gave extremely courteous answers to the questions that I asked. I am very grateful to him for taking my questions seriously, but I have to say that the answers that he gave do not satisfy me. He has not explained the substantive reason why we need Clause 3 as well as Clause 2, nor has he answered my question about why there is no significance test in Clause 2 but only in Clause 3. He and I agree that you cannot use Clause 3 to transfer competence; you can use it only for things that do not transfer competence. The converse is not true. In Clause 2, you could, under the ordinary treaty revision procedure, do things which did not transfer competence. You could do very small things such as changing the number of justices in the Court of Justice. You would have to do that as a treaty change and you would probably, almost certainly given the structure in Brussels and the advice you would want to take from the court, do it with the heavy procedure. Therefore, it seems to me that the significance test ought in logic to apply in Clause 2 unless the Minister's position is that anything, however insignificant, done under the standard treaty revision procedure will require a mandatory referendum.

The minatory warning of the noble Lord, Lord Hannay, about the foreigners who read our Hansard is valid as regards bundling. I would add a second-the idea that, as the Minister said, what will happen is that,

"a whole raft of issues requiring attention can be wrapped up and packaged".-[Official Report, 5/4/11; col. 1670.]

If we are imposing a referendum requirement on that package, it really is an insult to the public. We are asking them to vote on a package, not on the merits of individual measures. It seems to me that the idea of bundling is not just bad practice in Brussels, and not likely to be followed in future in Brussels-people are trying to get away from it-but is also inimical to the idea of a referendum, where the purpose, presumably, is that the people answering the question understand it. If there is a raft of six or eight questions and you get only one yes or no because it is a bundle, that seems to me to be acutely unsatisfactory as a way to proceed.

I also did not hear a satisfactory answer to the point made by the noble Lord, Lord Liddle, about urgency. It is perfectly possible to envisage circumstances where waiting for a year, a year and a half or two years might not be in the UK's interest. Therefore, it seems to me that the Liddle clause, bringing in urgency and national interest, is an extremely good idea. But even if that were accepted, I cannot see any need to have Clause 3. I will not press my point now and I apologise for burdening the House with my arguments at too great a length, but we will have to come back to this on Report. Will the Minister please read what we have said in this debate and my questions and consider whether they deserve serious answers? Will he also please look back to what the noble Lord, Lord Deben, said in his striking speech at the start of our first day in Committee in which, as a member of the Minister's party, he gave strong advice that there would be many fewer problems with this Bill if there could be some movement on the 48(6) procedure in Clause 3?

Lord Empey (UUP)

My Lords, in the short time that I have been in this House, it has seemed very difficult to have discussions without noble Lords dividing on the basis that they are either for or against the European Union. Virtually every comment seems to boil down to that issue. However, I do not believe that that is right. People should not be put into one box or another; we are in the European Union and these measures-some of which have significant inelegancies, one has to admit-are there for a purpose. When the concept of nations working together is a perfectly good idea, when there is evidence that there is practical advantage in that, how is it that the general population do not share that view? Disillusionment has crept in because over a prolonged period of years Governments of different persuasions have made promises on these matters which they simply have not kept. This has built up a resistance; it has been seized on by red tops and tabloid newspapers and become a very stale and futile argument.

Nevertheless, we have to realise that there are certain practicalities. For instance, no subject is better at bringing Members into their places than a debate on Europe. I looked back and discovered that the largest number of Lords participating in a vote was in the Maastricht treaty debates in the 1990s, when 621 turned up to vote-the largest number that had appeared in this House since 1831. This clearly indicates that there is a huge interest and I suspect that it is because people are still on separate sides of the argument. We have to move away from that. We are in the European Community. I do not see any prospect of us being out of the European Community in the foreseeable future, so the issue is how can we make it more acceptable, more flexible and more answerable to the population?

Some very interesting arguments have been put forward about the measures, and we will have them again at Report. I suspect that their purpose is to try to get away from a position where Ministers make promises which they simply will not keep. That has undermined support for the European Union, from which there are many advantages to be had. For eight years in Brussels I gained experience on a modest organisation, the Committee of the Regions. There are Members on all sides of the House who were on that committee, some of them at the same time as I was. I have to say that it was not a particularly successful part of the European apparatus.

Europe and the bubble in Brussels have become disconnected from the ordinary person and that is a most unfortunate development. I fear that if Clause 3 is removed without this Chamber taking a more comprehensive view on what we should do about this disconnect, and if we go back to the old ways where Ministers make decisions and put them through the House under the Whip, then there can be little confidence about gaining the acceptance of ordinary people. The Minister referred to the danger of people becoming elitist-we say that people do not understand things. However, if we put propositions to people then we should jolly well ensure that they do understand. People are perfectly capable of understanding the significance of certain things. I therefore feel that we should not run scared. If you believe in something and you think that it is worth doing as a Minister and as a Government, you should jolly well go to the people and put it before them and ask for their support.

Lord Mandelson (Labour)

My Lords, I do not want to detain your Lordships so near to the dinner break; I shall make only three observations in relation to Clause 3 and whether it should stand part of the Bill. What we have seen during the course of this debate is a series of false assumptions and non sequiturs advanced to justify the Bill, and in particular this clause, which the Government are bringing forward.

My first observation is that we must be absolutely clear that there is no intention on the part of any Government or any member state in the European Union to claim further powers for the institutions of the European Union at the expense of member states. If anyone can jump up and point to a position, a policy, a statement, a direction of thinking on the part of any member state that would suggest otherwise, I would be perfectly prepared to hear it. Instead, what you have among the 27 member states of the European Union is not a determination to claim more powers-on the contrary. You have a determination, rightly, to better use the existing powers for the EU and its institutions, with a better sense of strategic direction for the European Union, a better set of priorities which really support our long-term economic and other interests in Europe and a better quality of decision-making on the part of the institutions, including the Commission and the European Parliament, as well as the European Council.

Lord Pearson of Rannoch (UKIP)

My Lords-

Lord Mandelson (Labour)

If I may persist, I am not going to make very extensive remarks and we have heard a lot from the noble Lord.

On the basis of my first observation there is really no need for this Bill.

Secondly, if there were a move by one or more member states or institutions in the European Union to secure the transfer of more powers to the EU, the Government would not win their case or prevail against this argument or mood or sentiment by picking up the blunderbuss weapon that such a referendum would represent. For the Government to persuade others to their point of view, they need to use argument, they need to use persuasion and negotiation. If we were proposing something and another member state said that it was having nothing to do with this and was, indeed, going to put us over a barrel and blackmail us into submission by holding a referendum in its country that would bring the whole thing to a grinding halt, do you think that we would give in to that sort of blackmail or pressure? Of course not. We would want to hear the argument, we would want to be persuaded, there would have to be negotiation. That would be the case if the opposite situation arose.

I slightly hesitate to make my third point as I always fear I might go too far in conceding too much to the Government, but judging by their record to date as far as Europe is concerned, they are in reality and in practice adopting a largely pragmatic and common-sense approach. Why on earth would they allow themselves to be diverted in this ridiculous way by an absurd Bill, simply to console and accommodate the extreme Europhobic views of a portion of the Tory party? Much better, in my view, to go back to what the Prime Minister said in an earlier incarnation when he was leader of the Opposition. David Cameron used to say that what we need is a strong, determined, focused European Union with all the combined strength that it can bring to address the really great global problems and challenges that we face in the world. I remember him writing an article in the Sunday Telegraph where he talked about the needs of global growth and tackling global poverty; the great challenge of global warming, the insidiousness of global terrorism for which, he said, we need a strong European Union in order to combine our strength to address these great issues. How right he was.

I wish only that the Government would revert, in time and in rhetoric, to those words and that sentiment expressed by the Prime Minister in an earlier incarnation. Instead, we are grinding through the Committee stage of the Bill, trying desperately to put the equivalent of lipstick on a pig. Let us be honest, these amendments will make the mildest and most modest difference to a pathetic and inadequate Bill. I hope that the Government will recognise this, see sense before it is too late, and resolve to get on with following their largely pragmatic and common-sense approach to Europe that has, in the main, characterised their policy since the election.

Lord Pearson of Rannoch (UKIP)

My Lords, as the noble Lord, Lord Mandelson, did not take my brief intervention, which is slightly against our school rules-he is something of a new boy, so I of course forgive him-I would just comment that it is of course true that if the corrupt octopus in Brussels does not want or try to take any more powers, it is because it does not need any. As the noble Lord, Lord Waddington, pointed out today, and as I have often pointed out in the past, you have to look only at the European Union's use and abuse of Article 308 to see how it takes powers, even when they are not clearly sanctioned by the treaties.

My main point is to the noble Lord, Lord Empey, who extolled the virtues of governmental collaboration. We all agree with governmental collaboration, but I am afraid that that leads me to the question I put to the Minister in our earlier debate. I do not expect him to answer now, but I would like to keep it on the agenda, because he moved magnificently from the proceedings on the Bill to the Statement, and then straight back to these proceedings. Perhaps he therefore has not had time to consider my point, which was echoed by my noble friend Lord Stoddart. It was that the idea behind the European Union-the object of the exercise-is precisely that the nation states should lose their national democracies. It is precisely that the nation states were responsible for two world wars and all the rest of it, and they therefore had to be emasculated and diluted into this new form of supranational government, which is not working.

The euro-a subject that noble and Europhile Lords are going out of their way to avoid-was never an economic project, as I have pointed out many times over the years since its conception. The euro was designed as a cement to hold the emerging mega-state together. The euro is in deep trouble. With any luck it will not be with us in its present form for much longer. However, that does not get us away from the original project of European integration, which remains highly dangerous and is finally being rumbled by the people of Europe. Quite frankly, the sooner the whole thing collapses and we go back to intergovernmental collaboration, as extolled by the noble Lord, Lord Empey, and others, with democratic nations freely trading and collaborating together, the better. It is impossible to think of any so-called achievement of the European Union that could not have been achieved by friendly intergovernmental collaboration among the consenting democratic nations that the countries of Europe, thankfully, are. I want to keep that deep question on the Minister's agenda, and I trust that we can address it before we conclude on the Question that the Bill do now pass.

Baroness Symons of Vernham Dean (Labour)

My Lords, I should like to talk about Clause 3 standing part of the Bill, if that is agreeable to your Lordships.

The EU factsheet that the Government put out stated that the Bill is designed to strengthen the connection between the British people and the European Union. Actually, Clause 3 seems to be almost perversely designed to do the exact opposite of that perfectly reasonable ambition. The noble Lord, Lord Waddington, who, sadly, is not in his place, said that those of us who had supported the amendments to Clause 3 were in denial about the lack of popularity of the European Union. I am afraid that that is simply not true. I agree with much of the diagnosis about the EU's lack of popularity, but I absolutely disagree with the treatment that the Government are putting forward by means of Clause 3.

The exceptions to the referendum lock are very limited. On most issues, that lock is unbreakable, as was pointed out earlier. It is enormously strict, and the purpose of the amendments has been to give Parliament greater flexibility in respect of whether or not a referendum is necessary. The Government are on record as saying that referendums should be kept for exceptional issues and important decisions that ought to be taken on a nationwide basis.

In an earlier debate in your Lordships' House, the noble Lord, Lord Williamson of Horton, described this as a "watershed" Bill. The measures in Clause 3 are watershed measures that need to be tempered by greater flexibility-the sort of flexibility that the amendments provided for-that will maintain the authority of this Parliament, which would otherwise be hugely undermined. We are a parliamentary democracy; that is the basis of our government. This Bill drives a coach and horses through that concept.

The noble Lord, Lord Hannay of Chiswick, said that it cannot be denied that the frequent use of referendums will seriously damage the legitimacy of Parliament. I think that the situation is much worse than that. The measures in Clause 3 will engender enormous cynicism among the British people if they are asked to take part in referendum after referendum, as the noble Baroness, Lady Williams of Crosby, said. Worse, there will be not just cynicism, but ridicule-the worst of all possible weapons that can be used.

In time, Parliament will recognise that that is the case and will probably, therefore, avoid using referendums. The noble Lord, Lord Waddington, said earlier that he would welcome avoiding such referendums, because it would mean that a block on EU decision-making could be made. Of course we may be able to block EU decisions in order to avoid a referendum, but other countries may have decided to go ahead under the enhanced co-operation provided for in the Lisbon treaty. The Minister has not answered that point. There is no such thing as an absolute block in many areas because of the provisions of the Lisbon treaty in allowing for that enhanced co-operation, and I should be grateful if the Minister said a little more about those provisions and the likelihood-indeed, some would say, the inevitability-of them being used. If that is the case, this country would be pushed to the margins of Europe again-as a result, distancing the British people even further from Europe and even further from the objectives that the Minister so passionately espoused when putting forward the Bill.

The amendments that we discussed today have been designed to provide that greater flexibility and to give Parliament the ability to look at what really merits a referendum and consider the serious issues on which the people of this country, on a nationwide basis, should be called upon to take decisions. Somehow the impression has been given-notably by the noble Lord, Lord Waddington-that if the United Kingdom blocks a measure, that is the end of it. Those of us who went through the Lisbon treaty know that that simply is not true. On this issue I look particularly at the Liberal Democrat Benches. They are good Europeans. I regret to say that in many ways they have been better Europeans than my own party. That is the truth of the matter, and that they can go along with these sorts of measures in Clause 3 frankly beggars belief.

Lord Howell of Guildford (Conservative)

My Lords, we have discussed the principles and details embraced in this clause at some length and I am grateful for the additional points that have been raised in the stand part debate.

I apologise straight away if the noble Lord, Lord Stoddart, thought that I cut him short or intervened as he expressed his very sincerely held views. I thought that he had commented earlier but I am very glad that he has now had an opportunity to speak. He raised issues that go wider than the Bill, although they are not totally unrelated to it. He raised the question of scrutiny in our two Houses, which is something that we want to strengthen. He is absolutely right that in the past the reasons for not observing or waiting for the scrutiny process were possibly a little too cavalier. These are matters that we have all argued for and there is a constant search for improvement. However, I think that the operation of our own European Union Committee and the European Scrutiny Committee in the other place are commendable. They cover an enormous amount of ground with very great thoroughness. Speaking from this government position, I can say that it certainly is right for the Government to pay maximum attention to that. It makes complete sense.

There is the broader question of the democratic nature of the European Union and the kind of issues that were addressed in the Laeken declaration. That declaration pleaded with the European institutions and national Governments to seek ways to bring European affairs closer to popular consent and to the people so that they had a greater understanding of where the European Union benefited its members-as a home club or home team it could achieve greater things in combination-and where it should not necessarily intrude on affairs that were properly the concern of nation states and those close to the ground of intimate local issues, which were best governed and decided at national or local level and possibly not at the loftier level of the European Union. That is a broader issue which we shall perhaps come to.

The European Union, like any great institution and certain institutions of the last century, needs reform. We are now facing totally different conditions from the ones that we faced even a couple of years ago, and so is Europe. Power has moved, wealth has moved and economic activity has moved. The things that some of us forecast 15 years ago, such as the rise of easternisation, as we called it-the rise of the eastern powers-have taken place. That is a question not just of shifting economic gravity but of shifting political gravity as well. In those conditions, Europe as an institution needs to move ahead and the nation states within it need to achieve greater popular support and democratic consensus than they have achieved so far. I shall come to that point again in a moment when I address the views of the noble Lord, Lord Mandelson, which were extremely interesting and stimulating.

I turn, first, to the noble Lord, Lord Kerr. I am sorry that he did not think that my answers were serious. They were intended to be deadly serious; obviously I did not have quite the right tone. However, I emphasised as strongly as I could that we need Clause 3 as well as Clause 2. Clause 3 is needed to address areas where there can be transfers of power and where the special short revision procedure is employed. The noble Lord asked why there was no significance test in the case of Clause 2. The answer is that in Clause 2 we are dealing with treaty changes where competences are shifted or not. In the case of the judges that he mentioned, there would not be a transfer of powers, so there would not be a transfer of competences. If more judges were appointed, the issue would not arise, so there would be no need for any of these procedures at all. Otherwise, all the issues in Clause 2 require treaty changes; and treaty changes, unless they are exempted or unless there is no transfer of power, qualify for and attract a referendum. In Clause 3 the pattern is completely different. There, we are dealing with transfers of powers which are not defined in the treaty, although they are defined to a considerable extent in the Bill. I have listed them again and again until I have become almost short of voice. This is a whole range of powers that can be transferred, and a degree of judgment-although not a vast degree-is required in relation to their significance. That is the difference.

A little earlier the noble Lord, Lord Kerr, asked about another matter and I did not answer as thoroughly as I would have wished. It concerned the difference between Article 48(6) and Article 48(7). Article 48(6) addresses any part of Part 3 of the treaty on the internal policies of the European Union but only those where there is no increase in competence, because an increase in competence would not be consistent with Article 48(6). Article 48(7) is about the removal of vetoes in a whole range of cases, excepting those with military implications, which can be removed only under the ordinary revision procedure, which of course would be governed by Clause 2, and the extension of co-decision by the European Parliament. That is the difference between Article 48(6) and Article 48(7), which the noble Lord asked me about. I hope he feels that those are serious answers.

The central theme of the Bill is that some contribution-obviously this is not a total solution-to the restoration of trust about where we stand in relation to the present and the future of the European Union needs to be established. It has been draining away very fast indeed. A whole range of things, some of which the noble Lord, Lord Mandelson, touched on, can be addressed to reverse this and to bring to the European issue some kind of settled public consensus of the kind that, as I said earlier, is available to this day in relation to NATO, the United Nations and many other bodies. The British people are happy to be an interdependent, integrated part of these great organisations. However, that is not so in the case of the European Union because the hand has been played wrong again and again, the language and tone have been wrong, and the trust has evaporated. We are trying to make some contribution to reversing that situation.

As to the other point that the noble Lord, Lord Kerr, made about bundling treaties, I am not quite clear which side he is now on. Is the criticism that there will be too many individual treaties or that only big treaties tend to come along? We all have in our minds the Lisbon treaty and we took different views-I freely confess that there are different views among the coalition partners-on whether it was or was not like the constitution of the EU. We debated that for many hours and nights, and some of us had very strong views. We recall that the Government of the day, of whom the noble Lord, Lord Mandelson, was, I think, a part at that time, believed that there should be a referendum on the constitution. Indeed, all parties said that there should be, but then somehow it all slipped away and suddenly only one party was prepared to stick to its undertaking that there should be a referendum. It seems to me that that is also going to be the pattern of the future. When we think of the vast complexities of getting treaty changes through the entire system of the 27 members of the European Union-soon to be 28-small changes involving transfers of competence or significant transfers of power to the European Union being proposed and having to go through the elaborate 21 or 24-month treaty change process is so unlikely as to be incredible. We will not see that. Although many people at the time of Lisbon said that they hoped there would not be another treaty, I suspect that there will be a treaty vehicle coming along. It may be a big one and it may include a whole number of issues involving transfers of competence and treaty changes.

Some of us, though not all, thought at the time of Lisbon that such matters should have been put to the British people. That seemed a reasonable thing to do and the failure to do so seems to some of us to be part of the further slump in support for the European Union. I note some fascinating figures showing that in some countries which did have a referendum on the Lisbon treaty-Denmark is one-there was some improvement in support and enthusiasm for the work of the European Union as a result of people being consulted. Some of the cynicism along the lines of "This won't help. This will do the opposite", as said by the noble Baroness, Lady Symons, may not be well founded. If it is known that the political establishment-the elite and the governing forces in Parliament-is prepared to justify changes that it believes to be in the national interest in a referendum and to put them boldly and strongly, that will help, not hinder, the European Union.

I agree with a great deal of the tone of the noble Lord, Lord Mandelson, who comes to these matters with his customary realism and acute perception. Of course, the European Union needs to improve its operations. In many areas it is not delivering and is unable to be the combined, focused, united group that many of us wanted to see since the earliest days when we went to the Avenue de la Joyeuse Entrée in the early 1960s before the UK began to think about membership. Some of us dreamt that the kind of Europe that would emerge would be flexible, effective and able to come together on a number of issues. It has done so. It has agreed great things but in some areas it has run into increasing public cynicism and doubt, and in others it has clearly overplayed its hand.

The noble Lord, Lord Mandelson, said that persuasion and negotiation are required, which is absolutely right, and it would be so if next time we had a referendum on a substantial block of proposals for further reform of the European Union, particularly if they are the kind of proposals that I would like to see. They would be carried but that would need to be by persuasion and negotiation. The noble Lord, Lord Mandelson, talks about using a blunderbuss, but when Mr Blair suggested a referendum on the European constitution-it was riddled with all kinds of provisions for competence transfer, all of which eventually went ahead under the guise of the Lisbon treaty-did he think that that was a blunderbuss? I do not think that it was; it was a perfectly sensible prospect that was never put into action, although it was in France and the Netherlands, for arguing the next stage of development for the European Union. If we want a strong, focused Union, I should have thought that requirement number one was the closer involvement between the institutions and the people, which means a more politically supported European Union understood for its values and its limitations, and that is seen as an effective and balanced organisation of which we the British are proud to be members, as we hope are the other 27 members. All of us in many areas, though not all, face the enormous challenges of the modern world.

The noble Baroness, Lady Symons, spoke about trust. We just have to disagree on that. We do not believe that the trust is there and we shall begin painstakingly to put it back, which is why I want the Bill to become the pattern and the way of things not only in this country but increasingly in others, many of which already have their own referendum provisions in certain instances and very elaborate filters in the approval of any treaty changes or transfers of power. We want that pattern to go forward and we think that it will help to build the trust that is clearly not there.

Noble Lords referred yet again to the frequency of referenda. For the reasons I have described again and again, if there are no transfers of competence there will be no referendum; when there is an accession treaty there will be no referendum; when Britain is not affected there will be no referendum; when matters are not significant there will be no referendum. There will be referenda when issues covered by the schedule and in the detail of the Bill would produce reasons for treaty change. There would then be, as noble Lords who have been involved in such things know perfectly well, elaborate bargaining, which will go on for many months. There are a lot of negotiations so that some things dear to one country are held in place while others are traded away, and there emerges a bundle, which the noble Lord, Lord Kerr, does not seem to like. A bundle of proposals for the further reform of the European Union will emerge. We-all parties-will fight for a pattern of reform that entrenches freedom, justice and more democracy. I hope that we would get the support of other member states in that direction.

That is what will emerge and it will trigger referenda, as it will probably contain further proposals of transfer of competence. It may not but if it does it will trigger a referendum. I do not see that there is any worry about the so-called blocking of decisions. With a veto behind us we often negotiate vigorously on all sorts of decisions and we will join eagerly in the decisions that benefit this nation. We do not need treaty changes, threats, cajoling, blackmail or anything else to be effective negotiators in Brussels, as the noble Lord, Lord Mandelson, probably knows better than all of us put together because he was effective in certain key areas. How we or other nations handle these matters is completely divorced from how we conduct our affairs in Brussels. The noble Baroness mentioned enhanced co-operation but, frankly, that is not affected by this Bill. We shall be debating aspects of that in a later amendment so I shall not make further comments on that.

Those are the views that I have and which I offer to your Lordships about this Clause 3 stand part. It is a central brick in the building block in this house of trust that one is trying to construct to bring Europe away from its elitist label and its unpopularity, and to ensure that in this country people trust those in charge concerning the sovereignty of this country, which is a role we can play as an active and positive member of the European Union. That is how we see the European Union reforming and making itself fit for purpose, if I may use that phrase, in the 21st century. That is why I believe that the clause should stand part of the Bill.

Clause 3 agreed.

House resumed. Committee to begin again not before 9 pm.

Lord Liddle (Labour)

My Lords, there is a danger in this Committee that we will be accused of mind-boggling pedantry on the clauses of the Bill, and I am very aware of that. However, I think that that is because of the nature of the Bill, which is basically pedantic and full of unnecessary detail. The amendment I am proposing would amend Clause 4(1)(i) to make it clear that there would be no question of a referendum arising,

"except where such conferral strengthens the ability of the European Court of Justice to enforce compliance with European Union law".

In other words, we are trying to provide that the ability of the European Court of Justice to do its job is a vital national interest of Britain and, if the need arises, we should be able to enhance its powers. Again, this would not be a change of major institutional or constitutional significance, although I suppose it would be anathema to our friends who believe that any acceptance of the European Court of Justice's role is a denial of British sovereignty. But for those of us who think you have to have a European court in order to make the structure of the European Union work and hold member states to their obligations, it is very important that we are clear that we are prepared, if necessary, to see the powers of the European Court of Justice enhanced.

I raised this as a matter of principle when I tabled the amendment on behalf of the Opposition, but at the weekend I glanced with interest at the recently published report from Sub-Committee E of the European Union Committee. The summary of conclusions is rather stark:

"We predict another crisis of workload soon ... We agree ... that 'structural solutions need to be found'".

Later in the summary of conclusions it states:

"We do not make any suggestion likely to involve Treaty change because in the short term other solutions are available. But the Member States should not be put off from undertaking necessary reform involving Treaty change when the opportunity arises in the longer term".

The purpose of this amendment is simply to say that we need an effective European Court of Justice and that we should be open to such changes. Frankly, the fact that under the Bill such changes might be subject to a referendum requirement could well mean that a British Government would not agree to changes in the workings of the Court which were actually in the British national interest. That is why I am moving the amendment.

Lord Hannay of Chiswick (Crossbench)

I support the amendment of the noble Lord, Lord Liddle. He is about to move a whole raft of amendments which are designed to do what we were debating before dinner-that is, to introduce a little more flexibility into the application of what the Government call a referendum lock. That could be done either by importing the significance criterion into Clause 2 or in the way that is now being suggested. I should just recall that the British Government of the day, who form one part of the present Government, spent a great deal of time in the 1990s doing precisely what the amendment of the noble Lord, Lord Liddle, would do, which is to strengthen the powers of the European Court of Justice. The noble Lord, Lord Kerr, is no doubt too modest to say so, but he played a major role in securing the provisions which enabled the European Court of Justice to levy fines on member states which were in gross breach of their obligations. That was not easy to do; it was certainly in Britain's interests that it be done. I would be subject to correction, but I do not believe that any British Government have ever been caught by those provisions, although quite a lot of other people have.

The amendment is very sensible. I make a plea to the Government to think very carefully between now and Report about ways in which they could introduce a bit more flexibility into the Bill. A whole number of different ways are being put forward in different amendments, of which this is just one. By the time we come back on Report, I hope that it will be possible for the Government to show a bit of flexibility on this, so that future British Governments have a certain degree of flexibility, too.

Lord Flight (Conservative)

My Lords, I am not quite clear what the amendment is intended to achieve. If it is intended to block any real transfer of power to the European Court of Justice, those of us who believe that it is inappropriate obviously could not support it. However, it seems to me that that is not quite what it is saying; indeed, I am not entirely clear what it is saying. I would therefore be grateful if the noble Lord could in due course be a little more specific about his real objective.

Baroness Falkner of Margravine (Liberal Democrat)

Having heard the explanation of the noble Lord, Lord Liddle, I wonder whether my noble friend might be able to tell us whether the powers required by the ECJ, were any transfer contemplated, would be covered by the significance test. My understanding is that they would be.

Lord Wallace of Saltaire (Liberal Democrat)

My Lords, I welcome a debate in which we are discussing the amendment in front of us rather than having another Second Reading-type debate as I felt at some point this afternoon we were doing. I can see where this amendment and the other probing amendment in the name of the noble Lord, Lord Liddle, are going, but they are based on a fundamental misunderstanding of the purpose of the Bill. The Bill does not intend to tie a British Government hand and foot to prevent them co-operating within the terms of the treaty.

The coalition agreement accepts the Lisbon treaty. That is, after all, a major step forward. The Lisbon treaty includes a substantial extension of competencies. As the noble Lord, Lord Mandelson, said in his very useful speech before dinner, the task that the European Union now needs to pursue is to use effectively the competencies that it has to make good decisions and then to implement worthwhile policy within those existing competencies. I have been struggling, with this and a number of the other probing amendments that the noble Lord has put down, to discover what particular difficulties these will cause for the British Government.

The European Union, as we all know, has often preferred-or at least those enthusiasts and habitués of Brussels have-to spend time writing new laws and devising new institutions rather than getting on with implementing policies. Part of the hole that we now find ourselves in and the mistrust we have across the European Union is the result of 25 years of treaty amendment, from the Single European Act, through the Maastricht treaty, the Amsterdam treaty, the Nice treaty, the Convention and the Lisbon treaty. They have provided very substantial competencies for the European Union, many of which have not yet been used.

My noble friend Lady Hamwee produced a very interesting paper the other week on the number of powers that the previous Labour Government had acted to put into the law, which have not yet been implemented. There was this great feeling in that Labour Government that when something happened, you passed a new Act or created a new criminal offence. There is now, as a result, a huge list of things on the statute book that have not yet been implemented and which I rather hope that this Government will get around to repealing.

As far as the EU is concerned, there are now substantial competencies. There are a large number of regulations in force, many of which unfortunately have not been fully enforced or implemented. I am puzzled by what it is that one needs to do with the European Court of Justice for which Article 256-which I have read, again-does not provide the powers that we need. The noble Lord, Lord Kerr, has said-on at least one occasion and I think more often-that we will need to change the number of judges in the European Court of Justice, which will require a treaty change and therefore a referendum. My understanding on this-and I may be wrong-is that to change the number of judges on the court, which we all know is overloaded, would require unanimous agreement by Governments of the member states in an intergovernmental conference; but in terms of this Bill, that would not involve a change to the treaty and certainly not the provision of extra powers or competencies. Yet again, I fear we may be dashing off after a hare that is bolting rather faster than we did.

Lord Kerr of Kinlochard (Crossbench)

The number of judges in the court is defined in the treaty. So changing the number of judges in the court requires an amendment to the treaty. There is no doubt about that. Whether that would require a referendum-which is the point that the noble Lord, Lord Howell, was debating with me before dinner-is another question. He may well be right: it depends on whether you view an increase in the number of judges as an increase in the power of the court. If you did, then, under this Bill, you would require a referendum; if you did not, then, under this Bill, you would not. However, it is certainly a treaty amendment.

Lord Pearson of Rannoch (UKIP)

Before the Minister replies, can I ask the noble Lord, Lord Kerr, whether, with his great knowledge of these matters, anything can be done about the quality of these judges? Is it not true that none of them would pass muster as a judge in even the lowest and least distinguished of British courts? Is there anything we can do about that under the treaty? Who decides it?

Lord Wallace of Saltaire (Liberal Democrat)

I think the noble Lord, Lord Kerr, is not going to answer. I had something in my notes about how the European Union attracts pedants and conspiracy theorists, but I thought I would not use that on this occasion. As the noble Lord, Lord Liddle, said, we all know that we are sometimes a little pedantic on this. I am a Eurobore of some considerable standing, having helped to write several textbooks on the subject and struggled each time to remember how the treaty articles have been renumbered and so on. We could go on for a great deal of time.

We have heard one or two conspiracy theories this afternoon and this evening. Noble Lords may be aware that I received an even better conspiracy theory today from Migration Watch suggesting that the increased migration under the previous Labour Government was a deliberate attempt to increase the ethnic vote, which would split down for Labour. That is an even better conspiracy theory than anything that I have ever heard from the noble Lords, Lord Pearson of Rannoch and Lord Stoddart of Swindon. I encourage the members of the Labour Party to have a go at that when they have appreciated it fully.

Lord Stoddart of Swindon (Independent Labour)

I do not think that I have ever said that. I have never accused the Labour Party of gerrymandering and bringing millions of people over here to vote for it. The noble Lord might have seen it in a newspaper but I have certainly never used it.

Lord Wallace of Saltaire (Liberal Democrat)

I apologise to the noble Lord, Lord Stoddart. I was in no way suggesting that his imagination had stretched that far. Perhaps I might return to the amendment because I hope that after dinner we are going to keep to each of them. My puzzlement on this one is that I see nothing in the Bill that cramps the powers and competences of the European Court of Justice to enforce compliance with European Union law. Her Majesty's Government support an effective European Union-as did our predecessors, as the noble Lord, Lord Mandelson, said-and strongly support the better implementation of European Union law. We shall continue to do so.

Lord Liddle (Labour)

There is a lot with which I agree in what the noble Lord, Lord Wallace of Saltaire, has said. I agree with the basic analysis: that the question is of how the powers of the Union, as granted by the Lisbon treaty, should be used. What the noble Lord glosses over in his defence, as it were, of the Government is that the Lisbon treaty covers much of the ground that we need to cover but this Bill is designed to cramp the flexibility that it contains. That is the fundamental issue which noble Lords from around the House are trying to address. We are saying: "Look, we're not asking for a mandate for vast new powers for the European Union. That isn't what the argument is about". We are saying: "The Lisbon treaty? Fine-but there is flexibility within it. Why are the Government ruling out using that flexibility where we, as the United Kingdom, think that it is in our national interest and where the British Government support it?". Those are the conditions which would have to be met.

I am not a great expert on the European Court of Justice, unlike other noble Lords who may be in the Chamber. However, in its analysis of that Court your Lordships' own committee, under the noble Lord, Lord Bowness, pointed to the possibility of the need for some change in the treaty. We ought to be open to that possibility and to a little bit of give on this kind of thing. If the Bill is to have a less troublesome Report stage than it looks as if it might otherwise have, the Government have to find a way of accommodating the view that we need more flexibility on some of these more detailed provisions.

Baroness O'Cathain (Conservative)

The noble Lord stated that the Bill seeks to cramp parts of the Lisbon treaty. Does he not agree that if you look at it in a dispassionate way-I know it is very difficult to look at this Bill in a dispassionate way-and use the word "moderate" it might actually be more acceptable. If you felt that this was to moderate rather than to cramp, it is not a physical thing of trying to stop but one of trying to get an acceptable level of agreement throughout. I just wish we could pursue this on that basis.

Lord Liddle (Labour)

The noble Baroness has made a helpful point. My fear in all of this is that what we are doing through adopting this very restrictive position is putting British Ministers in a position where they would want to agree things that they regard as being good for Britain and they are going to have to say no because they believe that the referendum lock would apply. That is not very sensible where the issues are not of great concern to the public, where there is not real competence creep and where the benefits of change could be quite considerable.

Lord Pearson of Rannoch (UKIP)

My Lords, is that not one of the disadvantages of this amendment? It does nothing to prevent competence creep. If the noble Lord does not agree with that, would he care to comment on the remarks made by the noble Lord, Lord Waddington, earlier this evening and indeed by myself about the way the European Court of Justice has permitted and supported the abuse of Article 308 of the treaty of Nice, as it then was, which allowed Brussels to get involved only,

"in the course of the operation of the common market".

That was the wording in the original treaty, which lasted right through until Lisbon when it was strengthened in the Court's favour.

The noble Lord, Lord Waddington, mentioned aid to Outer Mongolia as being justified by the Court in this matter. There was urban renewal in Northern Ireland, the co-ordination of our social security systems-quite a big one that-the prevention and aftercare of terrorism, establishing the EU's agency for fundamental rights and a £235 million "information campaign", which to those of us who understand these things is of course propaganda.

The European Court has been able to abuse the treaties in these ways and there are many other clauses such as flexibility clauses which the European Union has abused. Indeed, in 1996 when the use of Article 308 was taken to the Luxembourg Court, in its judgment the Court said that the point of this article was to pursue the interests of the Union. In its judgment it did not mention the first words of the clause:

"If in the course of the operation of the common market".

I really do not see how this amendment is going to do anything to stand up to that sort of behaviour. There is no appeal against the judgments of this so-called Court, the quality of whose judges, I repeat and I am not trying to be amusing, is extremely low and unacceptable. I really do not see why we should have anything in this Bill which enforces the powers of this particular creation. As the noble Lord said when he introduced his remarks, those of us of a Eurosceptic bent would rather they had nothing to do with us or our law at all.

Lord Wallace of Saltaire (Liberal Democrat)

I am sure that the noble Lord knows Justice Scalia of the US Supreme Court well. Justice Scalia has argued on a number of occasions that no American court could ever give credence to international treaty law or to any international court because intrinsically United States law is superior to that of any other state or court-a fundamentally nationalist line that is familiar to us. I am sure that the noble Lord shares it from an English perspective.

I do not wish to pursue that much further. I merely wish to say that my puzzlement on this amendment and on those that follow is that there is considerable flexibility in the treaty that is now before us. It is not the aim of the Bill to tie the British Government or to repatriate powers. We have heard today, even from some of the people behind us on the coalition Benches, that the Bill is inadequate and that what they wanted was repatriation and a reduction of the powers. That is not what we planned. What we are asking for is a pause. Pauses are sometimes used to try to rebuild public confidence in a range of different policy areas and it seems entirely appropriate that, after the considerable extension of competence that the EU has been through over successive treaty changes, there should now be a pause.

We should draw a line under the conspiratorial suspicions and fears-the noble Lord, Lord Liddle, used the word "fears" about his views on what the Bill might have behind it, underneath it or somewhere in a back cupboard-that Brussels is going to slide things past us by saying, "Let's work within the existing treaties for the foreseeable future and then, when we are absolutely clear that additional powers or competences may be needed, we will return to this process". However, I hope that all Members of this House will agree that we have spent far too long with Governments and members of the European Commission and Parliament who love discussing institutional change-much more than they wish to discuss real policy outcomes. What we need to do now in the EU is to improve our real policy outcomes using the substantial amount of competences that we now share. I encourage the noble Lord to withdraw his amendment.

Lord Liddle (Labour)

I shall of course withdraw the amendment at this stage. What I find puzzling, though, is that when the Minister reads the Bill he sees in it lots of flexibility and possibilities for dealing pragmatically with the challenges that arise but when I and other noble Lords, such as the noble Lord, Lord Kerr of Kinlochard, and the noble Lord, Lord Hannay, read the Bill we see real inflexibility and an attempt to tie a British Government down in a way that is contrary to our national interests. I urge the Minister to have another think about this. Although he is a highly intelligent man who knows a lot about the European Union, his perception of the Bill is not shared by some of the most formidable experts on these issues in the country. I hope very much that the Government will have another look at these matters when we come to Report. I beg leave to withdraw the amendment.

Amendment 20ZA withdrawn.

Amendment 20ZB

Moved by Lord Liddle

20ZB: Clause 4, page 3, line 28, at end insert ", except where such conferral strengthens the ability of the European Commission to enforce European Union competition, state aid and single market rules"

Lord Liddle (Labour)

This is a similar amendment, which is an attempt to insert in Clause 4(1)(j) an exception of where a conferral of powers would strengthen the ability of the European Commission to enforce European Union competition, state aid and single market rules. Why move this? This is a clear national interest. The Prime Minister has just produced a great glossy booklet about the single market, which he has sent around the chancelleries of Europe to convince his partners that Britain is fully engaged in the European Union. It is a central interest of the United Kingdom. We face a constant complaint that there is, in practice, a lack of a level playing field within the European Union. To enforce the single market, we are largely dependent on the ability and strength of the European Commission in enforcing its rules. I am not saying that immediate changes to those rules are required, but we should have the flexibility, again, to look in a positive light if proposals are made. Again, these are not fundamental issues that involve transfers of powers. These are issues where action could well be in the British national interest, giving us something we want: a deeper, more integrated single market that is good for British business.

We all know that there are areas of the single market where action is much needed. The services directive has been passed; how will it be enforced? The Commission says that it will act. What will be the result when it tries, and what conclusions will be drawn from that? We do not know at this stage. We should be open to seeing what might have to be done to make the services directive effective. Similarly, on the Commission's competition powers, I should like to see a more proactive European Commission in enforcing competition. However, we do not know whether the existing procedures will prove adequate to the purpose. On state aid, again, there is a very difficult balance to be struck between too much interference in the minutiae of state aid-activities by member states that should not go anywhere near Brussels-and the need to create a level playing field for the future. All I am saying here is that there are issues that might, in future, require us to accept changes. We should be open to that, rather than ruling them out. That is why I beg to move this amendment.

Lord Waddington (Conservative)

Surely there is a point to be made with regard to this amendment, which could have been made with equal force about the previous amendment. It is not a mere drafting point. You may have a conferral of power that strengthens the ability of the European Commission to enforce European Union competitive state aid and single market rules, but also has other very serious consequences. This is just one of the examples where you have to be very careful to make sure that one power is not used for a different purpose. It is plain-and not just a question of bad draftsmanship-that if you were to do this, you would allow the conferral of a power that did a lot of mischief as well as the things that the noble Lord rightly wants to see done.

Lord Davies of Stamford (Labour)

My Lords, I support my noble friend's amendment but let me first deal with the point that the noble Lord, Lord Waddington, has made. It is clear that any powers can be abused, and it is clear that any suggestion that powers should be changed or extended in any way should be the subject of lively debate among member states in the Council of Ministers, as has always been the case. Only when we are satisfied that something is in our national interest should we consent to any proposal from the Commission or anybody else. That is how the European Union has always been conducted and, I trust, always will be conducted. I do not think the fact that a power can always be abused is a reason for not providing for the possibility that we might need to adopt it or to grant it to the European Union.

As my noble friend said in introducing the amendment, the inspiration for this amendment is similar to that which led to the previous one. I rise to speak particularly on this amendment because it deals with the single market. That is an area where I always thought that there existed an all-party consensus-this was true until very recently-that a positive, what you might call forward, policy on the single market was in the interests of this country. Indeed, I remember a time when the Tory party took enormous pride in having created the single market under Lord Cockfield and Jacques Delors who, with the strong support of Margaret Thatcher, brought through those 300 directives and created a single market. When I entered the House of Commons as a Conservative, as the House knows, we all felt-I felt this, as did most of my Conservative colleagues-a great sense of pride that this was a great Conservative achievement. Now we have a situation in which the Tory-dominated coalition Government are trying to bring an end to this forward policy. When I say "forward policy" what I mean is an acceptance in principle that the best way we are likely to be able to achieve our national purposes in the single market area is by according strong regulation-making and enforcement powers to an objective central authority-in this case the European Commission but also the European Court of Justice.

The noble Lord, Lord Kerr, reminded us a few moments ago that in the 1980s among the Conservative achievements in this area was to successfully override the opposition of other member states to, and then to implement, new enforcement powers for the European Court of Justice, including the very memorable historic move forward at that time of introducing the concept of fines on member states. It is extraordinary that in the course of 20 years-this has been part of the agony of my political life-the Conservative Party has done a complete somersault on this.

In referring to the Conservative Party, I can anticipate the remarks that the noble Lord, Lord Wallace, might make when he sums up, following what he said on the previous amendment. I recognise that the Lib Dems are very uncomfortable with this process. As I know him well, I recognise that the noble Lord, Lord Wallace, will have played the most positive part he could in trying to prevent complete extremists and head-bangers setting out the agenda that was to be adopted by the coalition Government. Indeed, the Lib Dems saw off the threat of repatriation of powers, which has been a very strong demand by a great majority in the Conservative Party for far too many years. Of course, that is splendid. I understand what the noble Lord, Lord Wallace, is really saying to us: namely, that they tried their best and could not do any better and therefore they ended up with a compromise, a kind of stalemate, between Conservative Eurosceptic extremism and Lib Dem pragmatism, if you like. That is where we are.

I say to the noble Lord, Lord Wallace, that we all understand the dramas in his party and in the coalition but that is not a good basis for legislation. We should be trying to legislate as far as we possibly can on the basis of a dispassionate analysis of the country's interests. I do not believe that the country's interests have changed in the area of the single market at all since the 1980s when, as I say, the Conservative Party took the lead in creating what we now call the single market, and a fine achievement it was. Should we say that we have certain powers which should be used-that is correct and I quite agree with that-and that we should exclude the idea that any new powers may be needed? However, life is not like that. Life always presents you with new challenges, difficulties and unexpected problems that you cannot possibly anticipate.

I am not brilliant enough to anticipate what might happen but of course there could be financial scams and major problems requiring new legislation or regulation. Big threats could arise to competition in some areas which may show up the inadequacy of our present competition powers. Problems could arise in implementing the single market. It may be shown that the one reason why we have so far failed to implement the single market in the energy area is because our powers are inadequate and therefore it might be necessary to take more powers. I am not suggesting that we should take more powers and I am certainly not clever enough to anticipate in what hypothetical circumstances we might need them. I am simply saying that-I think that we are saying this on this side of the House generally-it would be very stupid to exclude ab initio the possibility that we might need to develop the portfolio of powers that we currently have to try to build up and nurture a successful single market and to assume that all the problems that we face exist now and have revealed themselves once and for all and that there will be no surprises in the future. That is not a realistic way of conducting the nation's business; it is certainly not a way one would ever conduct a private business, of course not. One would know that what was needed, to use my noble friend's term, was the flexibility to respond to the unexpected. That will never cease; as long as human history continues we shall always need to do that. And here we are depriving ourselves of that flexibility, let there be no doubt about it.

Of course the Eurosceptics on both sides of the Chamber will say that the Government will not have a referendum because it might be lost. Well, a referendum may be lost or gained but it is quite clear to me-I made this argument at Second Reading and I believe it firmly-that in most cases a Minister will be deterred from getting into the position where there might be even some legal doubt about whether an action or decision by him could trigger one. It would be the end of a Minister's career to come back from Brussels to be told by his legal advisers a few days later that what he had agreed to would require a referendum. The Prime Minister would sack him on the spot. No Prime Minister wants a referendum suddenly landed on him.

Irrespective of what the British nation might feel or whether the great public expect to be asked by us to do all the homework, to read the documents, to come to a substantive decision on technical issues, the very fact that a referendum could be triggered under the regime the Government propose with this Bill will act as a total deterrent and a total freeze on any flexibility at all. So, from having led the way on the single market with an imaginative, forward-looking and enterprising approach, sadly after a generation we are now, substantially under the leadership of the party that more than any other in Europe should be given credit for the single market, producing a situation in which, by definition, we cannot be part of any change however sensible because, irrationally and substantively, a referendum is clearly a political impossibility. It is certainly an impossibility if it is on a technical matter which might be considered to be rather minor by the British electorate. As politicians in this House, we all know that is the truth.

That is what we are letting ourselves into if we pass this Bill, unless we do so with the kind of amendments which my noble friend has introduced to bring a little bit more reality and realism and a sense of the way the world is into its operation. I therefore wholeheartedly support my noble friend. I hope that, if this amendment is not pressed now, we shall get into serious business at Report stage and that we manage to change the Bill into a more sensible direction along the lines he has proposed.

Lord Flight (Conservative)

My Lords, it seems perhaps surprising but state aid is yet another area where powers granted to the EU have exceeded themselves. Noble Lords will have been aware that, in the recent Budget, the Government quite rightly wished to provide additional support for small companies and to widen the EIS to do that because the equity funding gap is up to £10 million. This has been limited because the state aid rules, which were rightly intended to stop unfair massive state subsidy of uncompetitive industries, have been used to decree that you fall foul if there are any sort of tax incentives to companies with more than 50 employees or those raising more than £2 million per annum. This ridiculous intrusion into the economic life of this country has been put in under the guise of state aid, so the Government have rightly said "We are going to go back and renegotiate this". However, instead of being able to put in the financial support when it is needed-when the economy is on its back as a result of the last Government's failures-we have to wait another year to try to negotiate to widen these issues.

I have some sympathy with what the noble Lord has said in principle but, when it comes to experience, the last thing I want to see is any more state aid powers.

Lord Davies of Stamford (Labour)

I had thought to myself, "Dear oh dear"; when the noble Lord and I were colleagues in the Conservative Party a generation ago, we would have both been arguing against state aids on the basis that they were always distortionary, and the European Union was a wonderful way of getting away from the completely self-destructive bidding war that all nations are inclined to get into, in terms of providing some sort of subsidy or other for their industries on whatever political or other grounds or the fashionable economic doctrines that might be in vogue at the time.

However, I repeat my main point that we do not need to get into a discussion on the theory of state aids or their substantive costs or risks, because the assumption has always been-and the way that the issue has always worked has been-that European Union member states have held robust discussions between them on these matters. We have never signed up to anything that we did not agree to. All that I and Members on this side of the House want to achieve is for us to continue to be able, when we think that it is in the national interest, to go along with some agreement for new, extended or slightly modified powers. That is all. There is no suggestion that in advance we would necessarily agree to anything of that kind-that would be utterly unrealistic-but we need to maintain flexibility. The noble Lord is a very considerable and successful businessman, and in the conduct of his own business he would not adopt the policy he is now suggesting for the nation. You must never exclude the need to be able to respond to new problems as they arise. That is all we are asking for.

Lord Flight (Conservative)

I am sure that all noble Lords would agree with the basic reason for opposing state aid, as the noble Lord and I did some time ago. My point is simply that the state aid rules have already ended up being interpreted in a fashion that is manifestly not economically sensible. They are damaging the economic interests of this country and, not surprisingly, I would very much like there to be a check on the ability of state aid rules to be yet further misapplied.

Baroness Falkner of Margravine (Liberal Democrat)

My Lords, perhaps I may stick to the substance of the amendment. As I have not been privy to the debates in the usual channels, I ask why amendments that are similar in terms of the arguments employed have been de-grouped for sequential consideration. It has resulted in the debate being all over the place and we are spending far longer on it than might have been the case. I know that the Minister will not deal with that issue, but I hope that the usual channels will go away, contemplate whether we can make slightly speedier progress on these matters and perhaps have a debate that is more valuable to the rest of us who sit here and listen attentively.

I should say to the opposition Front Bench that I have considerable sympathy with the noble Lord, Lord Liddle, on these amendments; and I say to the noble Lord, Lord Davies, that he is right that a consensus has prevailed in this country over the single market, competition policy, and so on. I pay tribute to the Conservative Party for having taken us there, but today no party here can say that it is a champion of that consensus to a greater degree than any other party. These are valuable probing amendments.

At this late hour, in order not to detain the House longer, I want the Minister to answer the question that he did not answer on the previous amendment. I believe that any treaty changes made to enhance the ability of the Commission, the European Court of Justice and other bodies to enforce EU rules would fall under the significance condition. My understanding is that where a treaty change merely confers additional powers on an EU body or institution to impose new requirements, obligations or sanctions on member states, and when this change is deemed not be significant for the UK, a referendum would not be required. In which case, do we really need to have the amendment? If the Minister gave us an answer as to where the significance test would apply-we debated that at length several hours ago-we would know which side of this amendment to be on. It would be most helpful if we could get some clarification on that.

Lord Liddle (Labour)

The point of these amendments is the reverse of the significance test. We are saying that securing change in these areas-very important changes on the single market or the effectiveness of the European Court of Justice or whatever-could be highly significant, not insignificant, for the UK. However, we would not want to stop British Ministers agreeing to them on the basis that they would fall foul of the referendum test. That is the point.

Baroness Falkner of Margravine (Liberal Democrat)

Perhaps I may ask for the patience of the Committee for a moment so that I may respond on that very valuable clarification. If it were in the UK's national interest to pursue the options of the changes proposed, would we not, in the event that there had to be a referendum, expect the British Government to fully support the referendum?

Lord Waddington (Conservative)

Surely we are entitled to ask the noble Lord for an explanation as to why the Opposition sought an arrangement whereby the last two amendments were debated separately. The noble Lord has used exactly the same arguments for both amendments and therefore he has wasted a great deal of time. I think that there should be some explanation as to why, when the original grouping put together Amendments 20ZA and 20ZB, we have ended up debating them separately and precisely the same arguments have been advanced by the noble Lord on both amendments.

Lord Risby (Conservative)

My Lords, essentially the amendments deal with the removal of a referendum provision in three areas which are in our vital national interest-something on which we all agree-namely, the single market, EU competition and state aid. Of course, these are areas where the EU should concentrate, particularly the single market, which is indeed in our national interest. However, this is all possible under the existing treaties and, if sensible actions are taken under the existing treaties, there can be no possible objection to this, and the Bill does not prevent this happening. That is the essential difference and I think that there is some misunderstanding. The Bill does not prevent EU action where the treaties allow it. It is only in areas where a judgment would impact on us seriously that a treaty change might be required, and in those circumstances we would come back to the issue of whether or not to have a referendum. In this House we all agree about the importance of the single market. If, for example, there was a proposal concerning the labour market that could have an impact on this country by undoing much of the trade union and employment law reform, that would have an enormous impact not only on this country but on the entire European Union. In those circumstances, it would be absolutely legitimate to consider the possibility of a referendum.

Finally, in a very interesting speech, the noble Lord, Lord Mandelson-and I am sorry that he is not here-made the point that so far as he could make out the coalition Government were being entirely pragmatic. All the discussions that I have had with others have indicated that our member state friends-officials and politicians-would agree with that. Quite frankly, it is in the context of trying to defuse the difficulty in this country towards the European Union that this proposal is made. In that context, it is important in very specific circumstances affecting our national interest, including the single market, that an option is available for a referendum, although it does not necessarily have to be used because it is covered under the existing treaties.

Lord Pearson of Rannoch (UKIP)

My Lords-

Lord Wallace of Saltaire (Liberal Democrat)

My Lords, I fear that we have been following a number of hypothetical will o' the wisps around here. We have heard, "It's possible, it might be the case, we can't think of an example but at some point perhaps the powers might prove not to be adequate. We haven't used many of the powers and competences yet; nevertheless we might not have enough". I remind the noble Lord, Lord Liddle-perhaps he even wrote it-of an article in the Telegraph in which David Miliband, our previous Foreign Secretary, said:

"One of the greatest blessings of the Lisbon Treaty is that it brings to an end institutional navel gazing ... the EU [will have] 10 years to prove itself",

without further treaty change. That is where we are now. The noble Lord is insisting on standing improperly. Although I did not wish to give way, I shall give way to him once.

Lord Pearson of Rannoch (UKIP)

My Lords, I could speak to this amendment before the noble Lord sits down, but if he is going to reply to the debate, it might be convenient if he hears what I have to say on this amendment. I think that that is in order.

I oppose this amendment, and I am afraid that I have to go further and say that I am not among those who think that the single market has been an undiluted success for this country. I shall be speaking in much greater detail to that fact under Amendment 41, so I will not detain your Lordships long this evening.

I am also aware that there are dying embers in the Conservative Party-shared by the noble Lord, Lord Davies, no doubt from his time on those Benches-which hold that the single market is one of the Conservative Party's greatest achievements. I can deal with a few facts briefly to show that the single market has been a disaster for this country. You only have to take the report of the Treasury, Global Europe: full employment Europe, signed by Mr Gordon Brown himself, which estimated that EU overregulation, which comes to us entirely thanks to the single market, costs us some 6 per cent of GDP per annum, or £84 billion a year. It handicaps our exporters, and what we are about to see hitting the City of London from the new supervision bodies coming from Brussels under the single market will clearly be disastrous.

Then there is the very simple point that only 9 per cent of our GDP goes in trade with clients in the European Union; 11 per cent goes to the rest of the world and 80 per cent stays here in the domestic economy. Yet, 91 per cent-everything in the domestic economy that is exported overseas-is controlled by the single market.

Lord Wallace of Saltaire (Liberal Democrat)

My Lords, I gave way to what I understood was an intervention from the noble Lord. He previously gave no indication that he wished to speak to this amendment. I had certainly not seen him and I was looking directly at him. I think that he is being discourteous.

Lord Pearson of Rannoch (UKIP)

I did not stand up because I was waiting for my turn. I moved to speak on several occasions. Obviously I am in the hands of your Lordships, but I understand that we are entitled to speak to these amendments in their order on the Marshalled List, and I have rather different points from those of the noble Lord, Lord Waddington, as I regard the single market's disadvantages as rather different.

Baroness Anelay of St Johns (Conservative)

My Lords, I wonder whether the noble Lord will take his seat. We are not on a deadline tonight but are seeking to carry out the proper debating role of this House. As the noble Lord will know more than most, in Committee he may speak after the Minister, unlike on Report. Therefore, it might be courteous, since the Minister had started to speak, to allow him to continue to give his response. Of course, the noble Lord, Lord Pearson, may speak after that. My noble friend indicated that he did look around. Indeed, I was at the door of the Chamber at that point, so he was not intending any discourtesy. Perhaps the noble Lord might allow the Minister to complete his speech, because he gave way only on the basis that it was an intervention, and he had not finished speaking himself. Perhaps that is the way to proceed. The noble Lord, Lord Pearson, will have a full opportunity to speak, as he has on other occasions.

Lord Pearson of Rannoch (UKIP)

I merely wish to say that I wanted to speak to this amendment from the start. It is not my fault if the noble Lord, Lord Wallace, did not catch my eye before he stood up. I am always a very well behaved boy in your Lordships' House, and with the extreme charm with which the Chief Whip has put her request, I shall not continue with my remarks now. But they are important because they prove that the single market has been a disaster for this country. I shall come back to that under Amendment 41, if I may. In the mean time, the Minister can feel free to carry on. I did not realise that we were on a close deadline.

Lord Wallace of Saltaire (Liberal Democrat)

We are not necessarily on a very tight deadline, but it is customary to move towards a close. However, I was speaking. I thought that the noble Lord was trying to intervene and gave way to him as an intervention. We clearly misunderstood where we were.

I was saying that, speaking in another place, David Miliband also said in November 2009:

"The Lisbon Treaty provides the Union with a stable and lasting institutional framework. We expect no change in the foreseeable future, so that the Union will be able to fully concentrate on addressing the concrete challenges ahead".-[Official Report, Commons, 23/11/09; col. 273.]

I agree with those pragmatic, practical sentences. We all recognise that there are differences of view within all parties about European matters. The noble Lord, Lord Davies of Stamford, has moved from one party with a very wide range of views on European integration to another, as he well knows. I shall not respond further to his slightly hobnail-booted references to relations within the current coalition.

Lord Davies of Stamford (Labour)

The great joy for me is that, for the first time in many, many years, I find myself in agreement with those on my Front Bench. I assure noble Lords that that makes a great deal of difference.

Lord Wallace of Saltaire (Liberal Democrat)

I return to where we were on the amendment, as on some of the others that follow. Here we have a Government who are playing a positive and practical part within the EU within its existing, but considerably expanded, competences. I have looked at Articles 102 to 106 and Articles 114 and 116. I totally failed to find the relevance of Article 308, which, in my copy of the treaty, is about the European Investment Bank, but perhaps when we get to debate on Article 41, the noble Lord, Lord Pearson of Rannoch, will tell us what that is all about.

Lord Pearson of Rannoch (UKIP)

I was referring to Article 308 as it was under the Nice treaty. Before that it was Article 257 in the original treaty of Rome.

Lord Wallace of Saltaire (Liberal Democrat)

I will not pursue that further.

The question is: does the Bill tie the hands of the British Government against British national interests? That is the fear which the noble Lord appears to have; I have to say that it is an irrational fear. There is a great deal that the British Government can do to pursue our national interests within the European Union within its present competences, and we are doing so.

The noble Baroness, Lady Symons, gave us an early version of her speech on the question of enhanced co-operation before dinner. As it happens, the United Kingdom Government are leading in early enhanced co-operation. The Franco-British treaty puts us very much in the lead on European defence co-operation. It is not what some other members of the European Union would have liked to put in the treaty, which was a commitment to have a European army, but of course they did not know what they meant by having a European army: it is much more practical co-operation on military affairs. That is the way forward, it seems to us.

On the following amendments from the noble Lord, I see nothing in the Bill which cramps the British Government in pursuing practical and effective British interests within the European Union in strengthening the single market. We now know that the single market has not been fully implemented. Some of what was happening in Greece was appalling; I have just been to southern Italy and it was quite easy to see parts of the single market which are not enforced there, but the powers are there. The single market needs to be more effectively enforced. There are clauses in the Lisbon treaty which talk about expanding the single market into services. There are some very tough clauses on state aids and competition law. We have those powers, and we do not need to spend more time chasing constitutional change before we begin effectively to make the European Union work better.

Lord Liddle (Labour)

My Lords, the noble Lord, Lord Wallace, has tried to make a very powerful case for the Government, but actually he is unwittingly misleading the House when he quotes David Miliband as saying that there is no need for any further institutional navel-gazing on the basis of the Lisbon treaty. I would agree with that, although obviously the euro crisis has created a new situation in economic affairs. Broadly speaking, given where he stood in 2009, that is absolutely right, but David Miliband was talking about the Lisbon treaty that contained the simplified revision procedure under Article 48(6) and the passerelles under Article 48(7). He was talking about the package that gave the Union powers but also contained limited flexibility to change those powers in the light of circumstances precisely in order to obviate the need for further major treaty change for a long period ahead.

What this Government are now doing and what this coalition has agreed to do is basically to hamstring the flexibility that the Lisbon treaty contains. That is why the Opposition are urging the Government to think again, because this is where all the requirements for 56 referenda come from. If only you would look at the issue of how to allow more flexibility within the Lisbon treaty, many of us on this side of the House would be satisfied. I shall withdraw the amendment for the moment in the hope that the Government will consider these issues further.

Amendment 20ZB withdrawn.

House resumed.