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Clause 38 is welcome. I pay tribute to my hon. Friend Sir William Cash for being one of the co-authors of that excellent piece of Government-proposed legislation. I also support the Minister in opposing various new clauses and amendments before us.
It seems to come down to the question, “What is sovereignty?” and I think the public understand it so much better than many Opposition MPs seem to. The public fully understand that our constitution should be based on the proposition that the public decide who should represent them in the House of Commons and then the House of Commons decides what laws are appropriate, what taxes to raise and how to spend that money, and at the end of four or five years—or sometimes a shorter period—the public get to judge whether we collectively made a good job of it or not, or whether there is some new configuration of Members of Parliament that can make it better. So the public are ultimately sovereign but they trust us, their elected Members, with their sovereignty for a period of up to five years to exercise the powers of government.
When we first joined the European Economic Community, the country was assured that that sovereignty —that set of powers—would not be damaged in any way. To underwrite that promise the Government said, correctly then, that there would be no matter decided in the European Economic Community that could be forced on the United Kingdom against its will; we always had a veto so that if it proposed a law, a charge or a tax that we did not like, we could use the veto. Over our years of membership, we have seen those vetoes gradually reduced—those powers taken away—so that today, although we are still a full member of what is now the European Union, there are huge swathes of policy areas where we are not free to legislate where we wish, or in some cases not free to legislate at all, because it is entirely occupied territory under the Community acquis.
The ultimate sovereign power in the United Kingdom today is the European Court of Justice; that is the ultimate appeal of any legal issue, and it can overrule what the two Houses of Parliament decide, it can overrule a statute, and it can strike down a law passed in this place. It is that which a majority of the British people decided they thought was unsatisfactory. When they had voted many years ago to support our continued membership of the European Economic Community it was called a Common Market and misrepresented as a free trade area, which of course is rather different from a customs union with complex rules, and they were given an assurance that their Parliament would still be able to choose their taxes, spend their money and pass their laws in the traditional way. That turned out not to be true.
The loss of those freedoms was progressive under the Single European Act, under the Maastricht treaty, under the Amsterdam treaty, the Nice treaty and, above all, the Lisbon treaty. The Lisbon treaty was the culmination of that journey towards a very strong European Government that was superior to the United Kingdom Government, and the implied substantial strengthening of the wide-ranging powers of the European Court of Justice, because every directive and every regulation that was passed—and there were thousands of them—not only produced a more directly acting legal power over our country that we could not modify or change, but also gave so much more extensive powers to the European Court of Justice because it is the ultimate arbitrator of that body of law.
It is that body of law which this legislation today is seeking to put under United Kingdom control. We have been arguing over this for three and a half years now. The public thought it was a very simple matter and told us to get on with it. We had a fractious and unhelpful Parliament until recently, which did all in its power to thwart the putting into law of the wishes of the United Kingdom electors.
I hope today, after a second general election and after a referendum where the British people made it clear that they wished their sovereignty to rest again with them and be delegated to their Parliament, that the Opposition might have understood that, and might have understood that currently, contrary to what we have been told by the Labour Front Bench, there are a very large number of areas where we cannot do as we please.
Let us start with the money. Yes, we wish to take back control of the money. This Parliament cannot decide to reduce the amount of money it pays to the European Union. They decide that: they determine the bill and they enforce the bill. I hope that Ministers can reassure me that after December, at the end of the implementation period, that will cease and we will only pay when there is an agreement between us and the European Union that we accept for services or joint policies that we wish to undertake as a sovereign nation. We cannot go on accepting their hand in our pocket, taking our money under their legal powers.
I personally think it is a great pity that we have had such a delay to exit, because I resent the net £1 billion or more a month we are paying in. That will continue, I am afraid, throughout this year. I would like that money for priorities in Wokingham and in the constituencies of other colleagues here in the House of Commons. I find it very odd that so many MPs are so dismissive of the significance of the money, given the quite important role it seemed to play in the referendum campaign and given how colleagues are normally very keen to see increases in expenditure on public services in our country. They do not make the connection that if we carry on paying very large sums to the European Union, it limits our scope to make the increases they would like.
It also means we do not control our own taxes, so our country cannot choose the power to tax any of our sales; that is determined for us. It has to be the VAT tax system. We had to introduce that when we joined the European Union. There are arguments for continuing with some kind of VAT system, but surely we want to decide what rate it is levied at and what items it is levied on. There are quite a number of items that I think it should not be levied on, where I think I would find agreement across the Committee. However, we are not allowed today to remove VAT from green products, for example, because that is against European Union rules. I therefore look forward to our opportunity to shape our own taxation system as soon as we are properly out.
There is then the issue of when we actually have control over our law. What I hope clause 38 will achieve is that if the European Union decides during the implementation period to pass laws that are particularly penal on the United Kingdom or are damaging to our commercial and economic interests, we can use that reassertion of parliamentary sovereignty before the expiry of the implementation period to ensure that that particular law does not apply to the United Kingdom. Otherwise, there is an invitation to anyone of bad will in the European Union to think of schemes that would be disadvantageous to the United Kingdom during the implementation period.
On borders, where again those on the Labour Front Bench seem surprisingly dismissive of a very important question that has been in our debate throughout the referendum and in subsequent general elections, I think there is a general view in the country, which goes well beyond Conservative voters, that there should be a fair system of entry between EU and non-EU people. At the moment, the EU gets preference. I think a lot of people feel that there should be some overall limitation on the numbers of people coming in seeking low-paid work or speculatively seeking work. They favour some kind of a work permit system, which is quite common in many other advanced civilised countries. Because we wish people who join us to be welcomed, because we want them to live to a decent standard and because we accept the commitment to pay them benefits and find them subsidised housing if that is their requirement, surely it should be in our power to decide how many people we welcome in this way, and to decide that that should be related to our capacity to offer them something worth while, and to our economic needs. I give way to my right hon. Friend, who has done so much in this area.