Subsidiarity: Early Warning Mechanism (EUC Report)

– in the House of Lords at 5:04 pm on 15th December 2005.

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Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees 5:04 pm, 15th December 2005

rose to move, That this House takes note of the 14th Report of the European Union Committee on the subsidiarity early warning mechanism (14th Report, Session 2004–05, HL Paper 101).

Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees

My Lords, I begin by paying some very well earned tributes. My 17 fellow members of the European Union Select Committee tackled this rather complex question with their customary zeal and impressive expertise. I should say how glad I am that the noble Lord, Lord Kerr, who probably knows more about the early warning mechanism than anyone else in this Parliament or any other Parliament will intervene in the gap. I am grateful to him.

I am grateful to committee members and to our indispensable Clerk, Simon Burton. At the same time, we owe a great debt to our committee specialist, Sarah Price, who marshalled all the evidence and arguments and wove them into a coherent and readable main report. She did a very good job. Perhaps I may seize the moment also to thank Her Majesty's Government for their response, which appears in the follow-up report about which I will have something to say later.

The Select Committee's first report on subsidiarity was published on 5 April. Clearly, since its publication, circumstances surrounding the EU constitutional treaty have significantly changed. However, subsidiarity remains a topic of interest in member states and national parliaments, and it has been the theme of a number of productive conferences during the UK presidency.

So what is subsidiarity and why did we undertake the inquiry on this subject? The principle of subsidiarity, put simply, requires that legislative action be taken at the appropriate level; that is, that the EU should act only if the objectives of the proposed EU action cannot be sufficiently met by member states and can be better achieved by the Union. It is an important principle, because it can both act as a check on the need to take action at Union level and ensure that, where that need is clearly established, the action is taken effectively and adds real value. Monitoring the principle of subsidiarity also helps to create a co-operative relationship between national parliaments and European Union institutions, and between national parliaments themselves, which is an idea to which I am greatly attached.

The principle of subsidiarity made its first formal appearance in the 1992 Maastricht Treaty, which set out important legal principles concerning the existence and exercise of the Community's powers. It was given further emphasis by the Amsterdam Treaty of 1997, which was accompanied by a protocol on the application of the principles of subsidiarity and proportionality. The more recent treaty, establishing a constitution for Europe, was accompanied by a new protocol on the application of these principles. The protocol provided for a mechanism through which national parliaments could seek to influence EU law-making by monitoring the Union's adherence to the principle of subsidiarity and by drawing attention to breaches where necessary.

Our committee decided to conduct an inquiry into what this new protocol would mean for this House. Although this treaty now seems highly unlikely to come into force, the committee's report remains relevant as the House already has a role in monitoring subsidiarity under the existing Amsterdam treaty. The main conclusion of our report was that the principle of subsidiarity needs to be applied more vigorously if it is to be as effective as it might be. We took evidence from, among others, Professor Stephen Weatherill and Professor Derrick Wyatt, who are leading experts in this field at Oxford University. They were both of the opinion that,

"so far subsidiarity has done little to shake existing cultures of lawmaking at EU level".

Both believe that subsidiarity has so far received only token attention from EU institutions and has certainly not served as a restraint on the part of the Community institutions in their law-making activities. We took some evidence that largely refuted this view, notably from the Government and from United Kingdom MEPs, but the committee was of the opinion that the principle of subsidiarity could, and should, still be adhered to more closely. We expressed the hope that the new protocol, if enacted, would provide a vehicle for highlighting and invigorating subsidiarity compliance across the Union. In their response to our report, the Government expressed the same hope and added that they believed that,

"the thorough investigation and research that has gone into the report will prove valuable, whether or not the treaty comes into force", and that strengthening the national parliaments' role in the making of EU legislation should continue to be pursued. We can only say "Amen" to that.

We also took a substantial amount of evidence on what the new protocol could be expected to achieve. We found that expectations varied widely. There were those who saw it as a workable mechanism for the monitoring of subsidiarity and those who believed that it would be no more than a catalyst for better communication between EU institutions and national parliaments. We concluded that, with or without the protocol in force, subsidiarity monitoring can still, and should, be a catalyst for such a desirable opening-up.

Commissioner Margot Wallström, in her capacity as Commissioner for Institutional Relations and Communications, told the committee of her desire,

"to create a culture of co-operation, between the EU institutions and also vis-à-vis the national parliaments—a culture where the European institutions work together".

The committee would greatly welcome such a change in culture and expressed the hope that the protocol would help to turn that intention into reality. We also looked closely into the question of how national parliaments might collaborate and co-ordinate their subsidiarity monitoring. Almost all our witnesses agreed that, if and when national parliaments intended to submit reasoned opinions to the EU institutions, under the provisions of the new protocol, it would be useful to communicate with each other before doing so.

We agreed that an exchange of information between national parliaments would be highly desirable to ensure the effective operation of the protocol, and we felt that, although the Commission might listen to solitary objections to placate the member state involved, co-ordinated objections could reasonably be expected to carry more weight. We also expressed the hope that the new protocol would encourage co-operation between national parliaments for wider informative and constructive purposes. In the absence of the new protocol, that remains our hope. With this aim in mind, we continue to support the development of the so-called IPEX project, which will, when ready for use, create an Internet site devoted to the Union's parliaments for their exchanges of information and opinions.

The committee undertook detailed work on the legal aspects of the protocol. Article 1.11 of the constitutional treaty provides that national parliaments shall ensure compliance with that principle in accordance with the procedure set out in the protocol. The use of the word "shall" in the article led to a wide debate on whether the monitoring of subsidiarity compliance would be voluntary for national parliaments or a treaty obligation. Most of our witnesses took the view that the article implied that national parliaments had a political obligation to monitor the principle but not a legal responsibility. We concluded that the treaty was unclear on this point and that, in practice, it would be up to each parliament to decide the extent to which it would become involved in scrutinising subsidiarity compliance.

Similarly, it would be up to each parliament to decide how to include regional parliaments and assemblies in the monitoring process. Article 6 of the protocol requires that:

"It will be for each national Parliament or each chamber of a national Parliament to consult, where appropriate, regional parliaments with legislative powers".

Our committee recommended that regional parliaments and regional authorities should be made aware of forthcoming legislation at the time of the presentation of the Commission's annual work programme, and we urged the Government to set the necessary mechanisms in place.

Still concentrating on the legal concerns arising from the protocol, the committee considered Article 8 in detail—the article that would provide for actions to be brought before the European Court of Justice challenging European legislative acts on the grounds of infringement of the principle of subsidiarity. The committee's consideration of this article brought to light a number of searching questions, which we put to the Government for clarification.

On the assumption that the Government had answers to these questions before they signed the constitutional treaty, we found their response to this section of our report rather disappointing. The Government offered a general comment on Article 8 which admitted that the article was imprecise and would require further elaboration in further discussions among the member states and EU institutions. Although, understandably, they say in their response that these discussions will now no longer take place following the treaty's rejection by France and the Netherlands, it would help if the Government could now give more precise answers to these legal questions based on the thinking that they must have done before they signed the treaty. Both the Government and Parliament need to be clear on these points in anticipation of any revival in the future of the treaty's proposal to set in place an early warning system endowed with sanctions.

The final chapter of our report looked at the reaction of other national parliaments to the proposed new protocol. We concluded that, whatever their thoughts on the practicability of the early-warning mechanism, parliaments were enthused by the hope that enhanced subsidiarity monitoring would lead to greater involvement of national parliaments in European law-making. The likelihood that clear cases of infringement of the subsidiarity or proportionality principles might be quite rare, given that the Commission is now taking the issue more seriously in its formulation of proposals—at least, that is what it tells us—does not invalidate the desire of national parliaments to show how vigilant they could and should be.

With completion of the treaty ratification process no longer in prospect, the committee was concerned to ensure that the enthusiasm for, and political momentum behind, subsidiarity monitoring should not weaken. We therefore published a short follow-up report in November, which includes the Government's response to our main report and an update for the House on recent developments in the area of subsidiarity and, in particular, the decision of COSAC to conduct a subsidiarity and proportionality check in the coming year.

So where do we go from here? Subsidiarity was a major agenda item at the 9 to 11 October COSAC meeting at Westminster, which I co-chaired with my colleague, Jimmy Hood, MP, the chair of the House of Commons scrutiny committee. At this meeting, COSAC—which I think your Lordships know is the main forum for co-operation between the European Union affairs committees of Europe's parliaments, including the European Parliament—decided that it would not be appropriate, at the present time, to conduct a second pilot project based on the subsidiarity early-warning mechanism as set out in Protocol 2 to the Constitutional Treaty. We had earlier, before the two negative referendums, conducted a pilot project focusing on the Commission's Third Railway Package, which had raised some interesting and significant subsidiarity issues.

COSAC took this decision because it was sensitive to the view that the body should not, at this stage, make assumptions about whether the treaty would be ratified. COSAC also appreciated the concerns of the Commission, which said that it would find it difficult to respond to anything described as a "pilot project" for the mechanism contained in the treaty. In this spirit, COSAC concluded that it would instead conduct a "subsidiarity and proportionality check", which would serve to focus discussion on how scrutiny of subsidiarity by national parliaments might be improved, and would allow those national parliaments who would wish to do so to co-ordinate their scrutiny of subsidiarity among themselves, to heighten its impact.

A few voices critical of this proposal have been heard in a minority of the parliamentary chambers around Europe, and notably from a handful of members of the European Parliament. For most of them, the concern has been that COSAC might be seeking to "cherry pick" from the treaty, or might be trying to introduce the treaty's provision for subsidiarity monitoring into practice through the back door.

Your Lordships' committee in no way shared this concern, and COSAC's conclusions, sent to the EU's institutions, stressed that national parliaments already have a legitimate role to play in scrutinising subsidiarity and proportionality compliance under the Amsterdam Treaty and the protocol on the role of national parliaments annexed to it. By conducting a subsidiarity and proportionality check, national parliaments would not in any way be cherry picking from the treaty, or assuming that the ratification process would be completed. No treaty change is required, either for national parliaments to present their views to the Commission, or for the Commission to respond to those views if it so wished. In addition to this, participation of national parliaments in the process, as I said, would be entirely voluntary. Unlike the provisions in the treaty, there would be no "yellow card" sanctions available to the parliaments.

COSAC agreed that it would be best if participating national parliaments would inform the COSAC presidency of the proposals they would like to see made the subject of the check not more than two weeks after they had examined the Commission's annual work programme for 2006. With that work programme now published, we have invited those chambers wishing to participate to send in their proposals to the COSAC presidency by mid-January of next year. The next step would then be that the presidential troika—that is to say, the last country to hold the COSAC presidency, the current presidency and the successor—will then collate responses and designate the most frequently named proposals to be subject to the check. This list of proposals will then be distributed to the national parliaments, and to the European Parliament.

Participating national parliaments will then complete their scrutiny of the proposals and send any comments they have on subsidiarity or proportionality directly to the Commission, the European Parliament and the Council within six weeks, so that these institutions are at least made aware of our specific concerns. Whether they do anything about it is a matter purely for them, but at least they should listen.

Your Lordships' House will therefore be taking part in this check. The Select Committee and its sub-committees have been closely examining the Commission's list of priority initiatives set out in its annual work programme to identify proposals that ought, in our view—if there are any—to be subject to the check.

In the mean time, I have written to the European and External Relations Committee of the Scottish Parliament and to the equivalent committee in the Welsh Assembly inviting them to alert our Select Committee in Westminster to any proposals, at whatever stage in the policy-making and legislative cycle they occur, where they felt that there were subsidiarity or proportionality issues of which we should be aware. This would then inform the proceedings at Westminster. We have told them that we will keep them updated on the process and outcome of the check in due course. Obviously this arrangement, if agreed, will eventually include, as we hope, the Northern Ireland Assembly. The responses from our Scottish and Welsh colleagues have been very positive.

Subsidiarity was the subject of a United Kingdom/Dutch intergovernmental and interparliamentary conference held in the Hague on 17 November this year, in which I participated as co-chair. As at COSAC, the conference reached a broad consensus that the Parliaments of member states should play a stronger role in ensuring the implementation of the principle of subsidiarity in order to achieve the right balance between regional, national and EU levels and to help connect European citizens to European decision-making. And, as at COSAC, the conference saw the earliest possible access for Parliaments to information on forthcoming legislative proposals as crucial to effective monitoring. A presidency note on the conference is due and will be placed in the Library of the House. Subsidiarity will continue to be an area of great interest in Europe during the Austrian presidency and a further conference on the principle has been organised for the 17 and 18 April in that country.

In conclusion, I am fully persuaded that improved methods of co-operation between Europe's parliamentary committees can, among other benefits, bring about a rise in the quality of scrutiny as we learn from each other, while respecting each other's parliamentary traditions and practices. And that, as the fruits of an experiment on subsidiarity monitoring, will be no mean achievement. That is why we commend to your Lordships these reports on subsidiarity and the monitoring of its application. Bringing national parliaments closer to the European legislative process is one important step in bringing the Union closer to the people. I beg to move.

Moved, That this House takes note of the 14th Report of the European Union Committee on the Subsidiarity Early Warning Mechanism (14th Report, Session 2004–05, HL Paper 101).—(Lord Grenfell.)

Photo of Lord Haskel Lord Haskel Deputy Chairman of Committees, Deputy Speaker (Lords) 5:22 pm, 15th December 2005

My Lords, there are two reasons why I am taking up your Lordships' time this afternoon. First, because I think that the relationship between subsidiarity and the single market is very important; and we can do something about it. Secondly, I am a Europhile and we Europhiles do not make enough of subsidiarity.

Your Lordships' committee published its report on 14 April, and there is quite a lot of discussion about what subsidiarity is, what it is not and whether it has, or has not been effective. The noble Lord, Lord Grenfell, explained it further this afternoon. But, frankly, I found it all rather inward looking and it all tends to deal with process. It sounds as though we are dealing with a bureaucratic steamroller. It certainly does not sound as though we like subsidiarity, which I think we do.

Noble Lords may say that that is not the job of our committees—perhaps. But the French and Dutch referendums which rejected the constitutional treaty warn us that we cannot ignore public opinion in our work. If we do, the public will remove the foundation upon which our work is based. I think that the June European Council recognised that with its call for a period of reflection. I suggest that our attitude towards subsidiarity is an important part of this reflection.

We should start this reflection by being more concerned about voters. Voters care as much about tone and impression as they do about policy and process. For instance, the EU treaty defines subsidiarity as the Union acting only if objectives cannot be achieved by the member states alone. But UNICE, the voice of business in Europe, while accepting this, goes on to say in its definition,

"EU action should not disrupt the delicate balance found at national level, which takes into account national traditions and cultures".

It goes on to call for a principle-based approach rather than a rules-based approach, which would allow a degree of flexibility for organisations to develop whichever model suits them best.

It is wise to look outwards in that way, but that means that there is more risk—risk of upsetting the delicate balance between subsidiarity, state aid and regulation. In theory, in a single market there should be no need for subsidiarity, but if a clear, open market does not exist, rules are needed. Different member nations apply rules differently depending on the structure of the industry in their country. That maintains the all-important relationship between national governments and their citizens to which the noble Lord, Lord Grenfell, referred.

However, as I said, there are risks. Recently, Sub-Committee B, of which I am a member, considered gas supplies in the European Union. We again called for liberalisation of the markets in each member state, but each member state also has its own national tradition and culture in gas supply. Here in Britain, we have a liberalised market where cheap gas prices have been achieved due to some companies buying on the margin when supplies were plentiful and cheap. Other countries have less liberalised markets—some with a single supplier, who bought long-term at higher prices. Now that marginal prices are high, we are suffering from higher prices and, possibly, a shortage. Whether that is a result of subsidiarity, poor regulation, poor enforcement of EU rules or plain gas price speculation gone wrong, I do not know. The fact is that the only way to tidy that up may be closer integration. But the public do not seem to be in favour of that.

Subsidiarity can work, too, by opening up the Union, as the noble Lord, Lord Grenfell, said. Recently, our committee considered the third railway package. Among other things, that package considered the certification of train drivers for cross-border traffic. But here in Britain, 95 per cent of our drivers do not cross borders into other member states, so the committee raised that as a matter of subsidiarity. We got a temporary derogation but, most importantly, the Select Committee drew the attention of other national parliaments to the matter and they, too, are dealing with it in their own way. That is the constructive communication referred to by the noble Lord, Lord Grenfell. At stake are issues affecting the functioning of the single market and the interests of business here and in other member states.

There are two alternatives. There will be either partial integration, in which groups of EU nation states get closer together in different groupings, or a freer meaning of subsidiarity—a subsidiarity that strengthens the role of national parliaments and encourages a kind of localism that presents Europe as a more caring institution that enables member states to develop according to their national traditions and cultures. I believe in the latter. I believe in subsidiarity. That is why I agree with the paper that we should pay more attention to yellow cards and make subsidiarity an essential part of our scrutiny. I believe that we can do that.

As my small example showed, we already have a well developed scrutiny system that subsidiarity monitoring can plug into. I think that the House would expect our EU committees and sub-committees to monitor subsidiarity, rather than to set up a separate mechanism. If necessary, we can involve the whole House on a particular issue through debates or Questions. The House will welcome some can-do spirit from the committee of the noble Lord, Lord Grenfell, regarding subsidiarity monitoring and will welcome the tests about which he has just told us.

I have one last point. I read the House of Lords briefing on scrutinising European legislation and the chairman's handbook for Members. The only mention that I could find of subsidiarity was a reference to it in the context of explanatory memoranda prepared by government departments. I suggest that after the debate, that omission is rectified.

Photo of Lord Bowness Lord Bowness Conservative 5:30 pm, 15th December 2005

My Lords, I thank the noble Lord, Lord Grenfell, not only for introducing these two reports but, as a member of the Select Committee, also for his guidance from the chair of the committee in preparing them. The noble Lord, Lord Grenfell, has given the House a clear explanation of the committee's report and its proposals. I would not seek to better that explanation, or to repeat it.

The role of national parliaments was to have been enhanced under the provisions of the constitutional treaty. Happily, there now seems to be an acceptance of the desirability of subsidiarity and the greater involvement of national parliaments in European affairs. While I regret the loss of the formal and legal process set out in the constitutional treaty, there is no reason that national parliaments should not try to exercise the same role as envisaged in the treaty, even if they must rely on influence rather than a strict treaty provision.

I hope that national parliaments, across the Union, will participate in the COSAC scheme to carry out the check on subsidiarity and proportionality. I certainly hope that opponents of the treaty will not condemn the exercise as an attempt to introduce it through the back door—and, moreover, that treaty supporters will not see it as an attempt to weaken it by cherry-picking a particular provision.

The treaty only gave national parliaments the early warning mechanism, or the "yellow card", in respect of alleged breaches of subsidiarity—although the protocol itself referred to the application of subsidiarity and proportionality. I understand that the COSAC scheme refers to both. That is welcome as I believe that proportionality might, in many instances, prove to be a greater problem in connection with proposals than subsidiarity. Indeed, I have been advised that in a recent analysis of Commission proposals, only 11 out of 600 may have given rise to subsidiarity problems.

We may be in a period of reflection following the French and Dutch rejection of the constitutional treaty but, presumably, that does not mean that we spend our time gazing into the mirror. I suggest that these are not the only elements within the treaty which will, in the fullness of time, need to be addressed. I accept that the treaty itself has little chance of becoming law in the foreseeable future, but we cannot do nothing for the foreseeable future. Changes to the operation of the European Union will have to be made. As national parliamentarians, the area that we are discussing this evening directly affects us and is one on which we can proceed. Yet we cannot reject all such proposals merely because they first saw the light in a treaty that was subsequently not implemented. We must be prepared to use existing treaties to accomplish aims, where a particular proposal is in the interests of the efficient working of the Union and the improvement of the democratic process.

One proposal lost within the treaty was related to the protocol on subsidiarity. It aimed to ensure that decisions were taken at the appropriate level, closest to the people. The protocol referred particularly to the Committee of the Regions. Your Lordships will know that that is the European organisation for local and regional authorities; I had the pleasure of being a member of it for some time. It is consulted on a number of proposals. The draft treaty proposed that the Committee of the Regions would have the right to bring actions in the European Court of Justice against European legislative acts where it considered that they infringed subsidiarity and involved matters where it had to be consulted. From my experience of work on the Committee of the Regions, I do not believe that local and regional authorities are anything other than jealous guardians of subsidiarity and their independence. That is another factor which may cause us to regret that we have not been able to go forward.

Perhaps we should be encouraged by the outcome of the conference held on 17 November in The Hague. The noble Lord, Lord Grenfell, referred to the conclusions. I shall expand on those briefly. The papers state that:

"Member State Parliaments are encouraged . . . to develop their scrutiny role to ensure democratic debate at the EU's multi-annual and annual programmes, consultation documents, road maps . . . to provide the European institutions with an early indication of their perspectives on where Member States should take action; and . . . to participate in the efforts of COSAC".

Perhaps more important:

"The Commission, with the Member States Council and European Parliament, is encouraged . . . to ensure that Member State Parliaments are consulted at an early stage and their views taken into account before bringing forward new legislative proposals or proposals to reduce EU involvement in some areas".

All these are, I believe, a formula for partnership and a recognition by governments and by the European institutions of the legitimate role of national parliaments. It is something in which we as national parliaments can play a positive rather than a carping role in European matters, and ensure that legislation coming from Europe is properly scrutinised.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader, House of Lords, Spokesperson in the Lords, Foreign & Commonwealth Affairs 5:36 pm, 15th December 2005

My Lords, it is an unusual experience to be in debate quite so late on a Thursday evening. I had hoped to be in Saltaire by tonight in order to drop in at the Yorkshire Liberal Democrats' Christmas party in Leeds on the way. Some of these things have to be abandoned. However, this is an important issue for national parliaments. I welcome the report, which is very much of the quality we would expect from a House of Lords committee. It is extremely important that, even without the treaty, we move to strengthen the role of national parliaments.

As someone who has worked on the history of European integration, I recall that when Jean Monnet designed the original European Coal and Steel Community, he did not regard the involvement of a consultative parliamentary assembly, let alone that of national parliaments, as important. He had had enough of the French National Assembly trying to interfere with national planning and hoped that he could get away from that sort of politics, replacing it with rational administration. Happily we have moved on since then, but the weakness of national scrutiny within most parliaments has been marked. The extent to which national parliaments were engaged indirectly through representation in a nominated European parliament left a gap when we moved to the directly elected European Parliament. For several years in many parliaments, including our own House of Commons, there was little prestige in being involved in European scrutiny and certainly very little co-ordination among national parliaments to make sure that careful scrutiny was provided.

In its early years, COSAC was not very effective. My own early experience of it, as the chair of a House of Lords European Union sub-committee, was that we ate extremely well but that our conversations were not always particularly productive. I hope very much that COSAC is now becoming much more effective. The provision of national parliamentary offices in Brussels is also helpful in that it provides the mechanism for easy co-ordination and more rapid communication between Commission proposals, national scrutiny and learning what other parliaments may be doing.

We now have the Declaration of the Protocol of the Treaty of Amsterdam reprinted in the second of these two reports, and we have the text of the unratified constitutional treaty. I strongly agree with the report. This is an area where we should move ahead without ratification. While I regret the non-appearance of the noble Lord, Lord Pearson of Rannoch, who would have told us how wicked this would be, one has to recognise that even if the European Union did not exist, in a global economy with increasing trans-border travel, crime and trans-national corporations, the problem of remote governance above the level of the nation state and how we attempt to keep that accountable would continue to exist. Within the European Union we should attempt to provide accountability as far as we can.

Subsidiarity is a political concept, not a legal one. In any system of multi-level governments, politics revolves around whether or not issues should be handled at one level or another. Look at the United States—the whole history of the United States. When the Scottish Parliament was set up, look at the extent to which the Cardinal Archbishop of Glasgow immediately suggested that some issues such as abortion should be handled immediately by the Scottish Parliament without apparently being aware that the Irish Government had already got a deeply obscure clause into the Amsterdam Treaty to stop abortion law being handled at the European level.

Subsidiarity and multi-level governance are always going to be highly contested issues. I note the quote from Professor Stephen Weatherill, in paragraph 79 of the report, stating that there had always been a centralising tendency in the Commission and the Brussels institutions. As a past member of your Lordships' own European Union Committee, I had found that some noble Lords had not always wished to ask the question: is this something which the European Union should be doing?

The noble Lord, Lord Grenfell, may well remember a sub-committee plunging into discussing the Commission's proposals for the harmonisation of blood alcohol levels at the European Union level, even though some members of the full committee—myself included—wished to say that that was absurd and that the issue should have been left to national governments or even below.

We have to accept that subsidiarity is a two-way street. Those of us who wish to see a more effective European Union think that there are some things that are better done at the European Union level—stronger foreign policy co-operation, stronger co-operation against trans-national crime, closer co-operation in border management. But we need to take Brussels out of detailed regulation on social issues, working time and the like. When I was chair of the sub-committee I conceived a particular disagreement for the social affairs director-general of the Commission who clearly believed that more and more social affairs and regulations should be harmonised and centralised in Brussels because Brussels knew better than national governments. That is part of the Brussels belief against which we have to fight.

Subsidiarity is not just a test that we should use against Brussels. It would be useful if Her Majesty's Government would think about issues of subsidiarity within the United Kingdom, not only about the Scottish Parliament but perhaps about allowing local government to have a little more autonomy than it is currently granted every now and again.

How do we move forward? Here again the report is absolutely right. We should start as early as possible—the six-week period is after all extremely short. We need to monitor proposals as they move through the Brussels institutions to make sure that as proposals change they do not become more centralised. We should accept that this is a special procedure for your Lordships' House, alongside the existing sub-committees which do different but extremely valuable work. As paragraph 95 states,

"the House itself should cast the vote", where necessary.

We should as a Chamber operate autonomously from the House of Commons, although as far as possible in liaison with it. We should have close communication with other parliaments through COSAC and through our commonly sited offices in Brussels and—for this as well as for other reasons—we should develop closer co-operation with British Members of the European Parliament which is something that both Chambers of the British Parliament have been deeply reluctant to do.

Lastly we should, as stated in paragraph 25, move rapidly towards introducing this mechanism. It states that,

"even if the Constitutional Treaty does not enter into force, the provisions relating to national parliaments and to subsidiarity can and should provide a stimulus to greater and more effective scrutiny by all national parliaments in the EU".

Photo of Lord Harrison Lord Harrison Labour 5:45 pm, 15th December 2005

My Lords, I, too, thank the noble Lord, Lord Grenfell, for chairing the committee and presenting the report today. It has many good points. I also thank the noble Lord, Lord Wallace, who has joined the party here. I can see that he is enjoying himself much more than he would in Saltaire.

As to the definition of "subsidiarity", I remind your Lordships that, in the abstract, we read:

"Subsidiarity can both act as a check on the need to take action at Union level and ensure that, where it is needed, effective action is taken at EU level".

In other words, it is not just a yellow card and a red card but, on occasions, a green light. Subsidiarity has that positive effect as well.

The abstract also reminds us that subsidiarity,

"ensures legislative action is taken at the appropriate level in those areas in which competence is shared".

I make that point because too often it is misconstrued as taking it to the lowest level, not to the appropriate level. Indeed, Euro-sceptics have leapt on that element in order to be negative about proposals that come from Brussels by that means, as they have in the aftermath of the two "no" answers in the recent referendums on the constitution. But it would be wrong of us to fail to promote the good ideas that were part of the constitutional changes. I understand that the British Government are now proposing more open councils, which is a good thing, and we should resuscitate or bring into being some form of better scrutiny of subsidiarity.

What is the role of the House of Lords in this? It has a role because of the expertise and experience of its members and its established scrutiny committees on European Union affairs. I agree with the report that such scrutiny should run parallel to, not be mixed in with, the scrutiny of substance that we deal with in the reports we produce from the Select Committee.

However, the report also highlights some of the problems associated with trying to develop some of its ideas. We are told that we will need to have improved communications between all the institutions. Can we rely on this? I am not sure. We are told that there will be a six-week turnaround period. But I tried to calculate today when we had a six-week period in your Lordships' House to accomplish this. There are perhaps as few as eight Mondays when, after receiving something from the Commission, we would then be capable of having a free flow of six weeks for our process of scrutiny. We need, of course, root and branch reform of the way in which we do our work here. But what have we done just recently? We have reappointed the four-month break in your Lordships' House and in Parliament as a whole—and the most recent four months took place during the period of the United Kingdom presidency.

Like the noble Lord, Lord Wallace, I, too, have problems with some of our collaborators. We are asked, for instance, whether the Select Committee would pronounce on questions of subsidiarity or whether it would be a decision of the whole House. The whole House is highly desirable, but elements of conflict lie there for the moment. What do we do in relation to the House of Commons? If the House of Commons says "yes" and we say "no" to a proposal, is it a 1-1 score draw? Who has predominance? I suggest that it should be the House of Commons—our job is to advise—but I am not sure that we have said that in the report. Why do we not think of establishing a Joint Committee? That would make life quicker and more effective. We talk about consulting other nations and regions within the United Kingdom—and I hope that we can do it—but that will provide some real logistical problems.

We also have as collaborators other parliaments of the European Union, but COSAC, as an institution, is flat-footed at the moment. Again, there are enormous logistical problems in consulting with 24 other member states and I do not think we should disguise from ourselves how difficult that will be.

Other problems include the fact that proportionality has been left out as the dual test that should take place, as the noble Lord, Lord Grenfell, mentioned. This is particularly important for small businesses because sometimes their concerns are not taken into account. We also have problems of understanding that subsidiarity is sometimes a moving target, so when something is going through the parliamentary scrutiny process there can be a change from, say, Article 308 as the legal base in terms of requiring unanimity, to Article 95 with qualified majority voting. The parliament, in this process, may not have caught up with the changes that have been made on the hoof in Brussels as we try to arrive at a decision on these sometimes important issues.

I want to dwell on other potential collaborators in the process of subsidiarity, which we have spoken so little of in this report. Like the noble Lord, Lord Wallace, I identify with the fact that all of them are on the spot, in Brussels with their ears to the ground, listening to those who are thinking about future legislation which might be brought forward. Pre-eminent of those is the European Parliament. There is one perfunctory, lukewarm reference to collaborating better with MEPs and I am grateful for that; we say not just British MEPs but those of other nationalities too. But we ought to be talking to our British MEPs on a daily basis about problems of subsidiarity as legislation and proposals flow into us. They are the best early-warning mechanism that we could have: they are British, they are on the spot and they can speak to us.

We neglect the Commission. It is often thought that the British Commissioner is part of a college and has therefore lost his patronymy, but that is not true. It is part of any Commission that it takes an overall view of the Commission's work and should be able to respond to British requests. The Commissioner and his cabinet are often in a prime position to say what is coming along and we in your Lordships' House should be tapping in there. UKREP is another example. I am glad that the noble Lord, Lord Kerr, is going to speak later in this debate because he is a pre-eminent example of those who are looking at very detailed dossiers and are able to give good advice to politicians about questions such as subsidiarity as well as the substance of any proposal.

There are also the business organisations: UNICE, which has been mentioned by the noble Lord, Lord Haskel, UEAPME, ETU and NGOs—which again often have their ear to the ground. The House of Lords should devote more time to those on the spot in order to deal with the question of subsidiarity.

In conclusion, I very much regret some of the comments that we make about the European Court of Justice. Such comments are somewhat jaundiced where we say that the Court will have to take a more critical approach to subsidiarity. Where is the evidence that it has not taken a proper approach to subsidiarity? I am not particularly happy with that remark. It returns to the point that was out most in the debate by the noble Lord, Lord Haskel, which is this. What we have done in this country is to join a single European market. That market has to have rules. It is right that part and parcel of that process is to see how they are appropriately applied in each member state, and that is the role of the national parliament. But we must understand that joining a single market at a European level imposes on us obligations, especially in respect of the 24 other countries in that market, if indeed we are to break down the barriers that impede business in Britain and elsewhere from being successful in producing the jobs and prosperity that we all want.

Photo of Lord Neill of Bladen Lord Neill of Bladen Crossbench 5:55 pm, 15th December 2005

My Lords, I am a member of the Select Committee and of Sub-Committee E, which looks at quite a lot of the incoming legally focused drafts coming from the Commission, sometimes draft directives or framework decisions and at other times the early stages of Green Papers, so I have seen a little of this. I, too, pay tribute to our chairman, the noble Lord, Lord Grenfell, for his work and for the clarity with which he presented the issues today.

I start from the premise of forgetting about the constitutional treaty. I assume that for the time being it has been placed on ice and a process of reflection is taking place, but I agree entirely with all those who say that that is no reason at all for us to sit back, be complacent and not think about subsidiarity as an important topic.

I wish to flag up in particular the evidence that we heard from two professors, Professor Stephen Weatherill and Professor Derrick Wyatt. If noble Lords take the time to read their written evidence and oral testimony, they will be impressed not only by the scholarship and the care with which their views are formulated but by the very depressing picture that they give of the standing of subsidiarity as an effective doctrine in European affairs. I think that nearly everybody agrees that subsidiarity was brought in as a brake on the legislative centralism of Brussels and particularly a brake on the Commission. They point out that it has been largely ineffective.

Professor Weatherill gives three reasons. First, he says, the definition of subsidiarity is badly drafted—I will come back to that in a moment. Secondly, he says, the European institutions—he is thinking particularly of the Commission but of others as well—have not had subsidiarity at the forefront of their mind since Amsterdam or even the earlier stages when it first appeared, as the noble Lord, Lord Grenfell, said. They do not think along those lines. Thirdly, on the basis of knowledge of the jurisprudence of the European Court of Justice, Weatherill, in particular, says that the Court has been no supporter of the principle of subsidiarity. That is traced back to an observation by Lord Mackenzie-Stuart, the first British judge on the European Court of Justice. He took the view, echoed by the noble Lord, Lord Wallace of Saltaire, that subsidiarity was a matter of politics not law. That is a very odd statement, given the new protocol, which specially devises a procedure whereby parliaments, through whatever becomes the right process, can challenge subsidiarity in the ECJ. I venture to suggest that it has distinct legal aspects. I shall give an example later where it is pretty obvious that a subsidiarity issue arises and, to my mind, that the principle has been transgressed, just as in some cases that Sub-Committee E has looked at.

The definition point is interesting; I have never seen it argued so well. I remind noble Lords of the definition, which I quote from the 14th report at page 61. It comes out of the proposed constitutional treaty but is almost exactly the same as the Amsterdam text. It reads as follows:

"Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level".

The Amsterdam protocol assumes that there are two separate limbs to that definition. What Professor Wyatt demonstrates in his written evidence is that those two aspects merge into one. Of the first bit—

"insofar as the objectives of the proposed action cannot be sufficiently achieved"— he says that it will always be part of the Commission's objective to achieve pan-European legislation. The first bit is not satisfied. You cannot say of a pan-European proposal that it could be sufficiently achieved by the member states. In other words—study it for yourselves—the argument goes that there is only one test: is this a job that the centre can do perfectly well?

One of the examples that we have examined in the sub-committee is a current one on European small claims procedure. Most member states have, if they want them, their own procedures for handling very small claims. Here we have a limit of £5,000. A small claim below that limit can be dealt with in a simplified and, it is hoped, much cheaper and quicker manner than the big cases that go through the High Court. Other countries have their own procedures. In Sub-Committee E, we are looking at a proposal for a European small claims procedure that would deal not only with cross-border claims—such as when you go to a hotel in France and you are let down or have a crash in the middle of Paris and some claim arises cross-border—but with small claims in the UK. The sub-committee is likely to reach the conclusion that, internally, it is wholly unnecessary to have a European Union model. We have our own rules, they work perfectly well, and we can amend and adopt them as we want. What is potentially useful as a tool—subject to getting the cost, translations and certain difficulties like that right—is a weapon for attacking the hotel keeper in Bonn or wherever when you have a cross-border claim. It is an example in which the draftsmen who produced it at the centre have, unthinkingly, made it applicable to internal cases as well as cross-border. It reflects an attitude of mind that should not be there; they ought to be more sensitive to the issue.

The other example is the Green Paper on criminal penalties for all manner of crimes. It is an extraordinarily elaborate paper—it runs to 100 pages—examining every aspect of criminal law. It is certainly intended, if followed up and adopted, to enter right into the system of criminal penalties for domestic crime in all member states. We discussed that earlier in the summer, and I think that the feeling on the sub-committee then was that we would look to the Government to take a pretty strong line on it. We have our own criminal law and can take our own view of what is right for rape or armed robbery and so on. Other countries can take different views about those issues; that is for them. It again reflects an attitude of mind that ought not to be there.

I entirely agree with the recommendation that the way forward is to follow the experiment outlined by the noble Lord, Lord Grenfell. We must take a much tougher approach to the notion of subsidiarity and treat it as it was first intended to be: a break on excessive zeal from the centre.

Photo of Lord Kerr of Kinlochard Lord Kerr of Kinlochard Crossbench 6:04 pm, 15th December 2005

My Lords, I am a member of Sub-Committee A but have nothing whatever to do with the excellent report presented by the noble Lord, Lord Grenfell, and I pay tribute to it. I am inadequate as a substitute for the noble Lord, Lord Pearson of Rannoch, and fear that I shall fail in that task.

The subsidiarity mechanism, like transparency in the Council, is one of the many good things included in the constitutional treaty, but one of the few that can be implemented in the absence of the constitutional treaty. Just as there is nothing in the present treaties that requires the Council to legislate behind closed doors, immune from public scrutiny, so there is nothing in the present treaty that bans improved scrutiny by national parliaments. It would take only a simple majority decision in the Council, amending its rules of procedure, to open the doors to permit the press and television to witness the legislative process. It should do that. It would take even less to bring about the practical benefits of better scrutiny of subsidiarity by national parliaments. It is intriguing that everyone who has spoken in the debate so far believes that that is a desirable aim—that is what we should be trying to do. I do not know why we do not just do it.

Nothing in the present treaty bans the Commission from sending its draft proposals directly to national parliaments, and they are now available at the flick of a switch the moment they are produced. Nothing in the treaty bans national parliaments from commencing their scrutiny and discussion before governments do so in the Council. Nothing is more damaging to public understanding of and support for the European Union than the obscurity of the EU legislative process and its separation from national political debate.

The cherry picking argument has been referred to and dismissed—rightly—by the noble Lords, Lord Grenfell and Lord Bowness. I distinguish two kinds of anti-cherry pickers. There are the endearingly idealist and the ruthless realpolitik schools. The endearingly idealist tend to be people who favour the constitutional treaty and fear that there will be no chance of ever getting such a treaty ratified if the best bits are implemented in advance. That is endearing but wrong. Given the weight of hostility to and ignorance of the Union revealed in the referendum campaigns, it is rather urgent to try to ensure a more informed debate in capitals and a more open debate in Council more closely followed in capitals. If, or rather when, the subsidiary mechanism proves popular, making it permanent and giving it legal force by enshrining it in the treaty will also be popular. So much for the endearing idealists—I do not think that there are any speaking today.

I do not know whether we will hear a ruthless realpolitik speaker in a moment. Looking at the noble Lord, Lord Howell, who is legendarily ruthless in his realpolitik, I would say that the argument that as the treaty was not ratified it would be wrong to bring into effect any part of it—even parts like the subsidiarity mechanism that were uncontroversial and probably rather popular—is a difficult argument to sustain. The motives of some who advance that argument can only be that they do not want the EU to work better. They do not want it to be more in touch with public opinion. They do not want it to be better understood. They want to go on denouncing it as obscure, inefficient and incomprehensible, so they are not interested in transparency or subsidiarity. They want it to stay the same. That is what I would call a ruthless realpolitik argument, and I hope that the noble Lord, Lord Howell, will not advance any such argument against what seems to be highly desirable cherry picking.

The most intriguing sentence in the 15th report was a sentence in the Government's reply to the 14th report. The Government say that they are,

"giving active consideration to whether it would be possible, by agreement in the European Council and Commission, to implement the spirit of the Subsidiarity Protocol".

In principle, it ought to be possible to do that, given that all 25 member states represented in the Council, the Commission and the European Parliament supported the measure when it was placed in the constitutional treaty. I hope that the noble Baroness, in reply to the debate, may be able to tell us how that consideration in Government has advanced and what steps have been taken during the UK presidency to bring it to fruition.

Of course, we do not need a decision by the European Council—we could just do it. I favour the COSAC mechanisms, as described the noble Lord, Lord Grenfell, and spelt out in the report, but I also very much agree with the practical points made by the noble Lord, Lord Harrison. It seems to me that to put ourselves in a position to make use of the subsidiarity mechanism informally and to make use of this COSAC co-ordination machinery, we need to look to our own procedures and see if we can improve them.

It would be good if the scrutiny process started the moment that the proposal emerged from the Commission. For example, the excellent Commission communication on a strategy for the simplification of the regulatory environment came out on 25 October. As I understand it, our scrutiny in the House began when we received the Government's Explanatory Memorandum on 21 November. That scrutiny lasted one week, because we thought that the report was very good—it was not my committee—and we were happy to wave it through. But suppose it had been a bad communication; suppose it had been a document that did not fully reflect subsidiarity. We have to put ourselves in a position to act quickly, and I hope that, when he responds to the debate, the noble Lord, Lord Grenfell, may be able to reassure us that he continues to work with the Government on ways to ensure timely receipt and effective scrutiny of EU legislation.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I remind noble Lords that speaking in the gap means four minutes each.

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour 6:12 pm, 15th December 2005

My Lords, I thank my noble friend. I join those who congratulated the noble Lord, Lord Grenfell, the chairman of the Select Committee, on bringing the matter forward for debate and so elegantly introducing it. Like other noble Lords, I agree that proportionality and subsidiarity are almost indivisible. I refer to Professor Weatherill's excellent written evidence and oral evidence, in particular his reply to question 10 in the 14th report, where he deals with this matter.

I would like to enter a note of qualification: the yellow card issue is a bit of a red herring. The European Union is a union of member states. Governments represent member states and act on behalf of national states, not national parliaments. We need to think carefully before we are deluded about this, pursuing something that can never realistically work. I think it inconceivable that a third of the national parliaments—bicameral, in most cases—will disagree on a point of constitutional substance, on subsidiarity, with their government. I accept that constitutions can have something in for the inconceivable, and rightly so, because one never knows.

For me, the question about subsidiarity is whether the relationship between member parliaments and their national governments is robust on subsidiarity. That has two elements. First, in our own House, are we really in a position, in resource terms, expertise and timeliness, to examine rigorously what could lead to a legal challenge in the European Court of Justice on the issue of subsidiarity? The answer may be "Yes" in some sub-committees but not in all. Are we properly structured and resourced to deal with that in a timely manner?

Secondly, are our views, ideas and thoughts sufficiently robust so that we can have a dialogue with the government of the day about the criteria of subsidiarity and whether there is agreement between this Chamber and the government, not only on significant subsidiarity—we are all against sin—but on what that actually means when you come to examine legislation? In other words, as with anything in life, ensuring that things happen is a matter of relationships between key players. The government and parliament of a member state are the key players who can form, for example, a British view.

If we simply did not agree with the Government, we would get nowhere. Quite apart from the Realpolitik , I should say to the noble Lord, Lord Kerr, I cannot imagine, except in a hung parliament, that the House of Commons would vote down the government of the day on such a constitutional issue. The House of Lords would have to think carefully about that kind of thing. The starting point for me is relationships with one's own member state government. We are not robust enough about that, and there is not sufficient working agreement on what it means between our own Government and both Houses of Parliament. That is my position.

The value of this kind of debate is that it reminds the House about the importance of scrutiny. Although subsidiarity, like vires, comes first, scrutiny is about much more than that. It is all the other elements—the conduct of impact assessments, consultation, whether any action is required, whether framework directives are better than detailed directives—that are important issues. It is not a matter for debate today, but the public and certainly the business community and my committee on the single market are concerned about the other scrutiny issues. We have to make more progress with the Government on those issues, as well as on subsidiarity.

Photo of Lord Dykes Lord Dykes Spokesperson in the Lords (Europe), Foreign & Commonwealth Affairs 6:16 pm, 15th December 2005

My Lords, the noble Lord, Lord Woolmer, virtuously kept to the time allowed, while the noble Lord, Lord Kerr, did not. That showed an unusual lack of discipline, which we normally expect from the Foreign Office. I hope the noble Lord will not mind me saying that that was symbolic of the constitutional treaty document, which was over-long, excessively boring and intimidating for those who had the chance to read it thoroughly, and was never properly explained, except in one or two countries, such as France, where excellent documentation was distributed. Maybe, if anything is revived in future, the lessons will be learned and we will have something that is much more user-friendly for the ordinary citizens of the European Union, thanks to the Maastricht Treaty.

These reports taken together are impressive documents indeed, and I echo previous thanks given to the noble Lord, Lord Grenfell, and his colleagues for a really high-quality report, although being a new Peer I have not read that many. The follow-up was high-quality, too, given the difficulty of the surprise disappointments on the constitutional treaty.

One of the great but ironic disappointments of the decline of the projects for the new constitution was the concomitant fading of the radical set of new proposals to deal with the Community's decision some years before, both to strive to do less legislation anyway, but to do it better, and to weed out redundant legislative material at the same time; and also to respond to the growing call for a new subsidiarity preoccupation, even from European enthusiasts. These efforts went side-by-side with the much longer efforts of the various members of COSAC in the member states' parliaments to improve their own scrutiny procedures. I congratulate the noble Lord, Lord Grenfell, personally on his exercise on the COSAC UK presidency, which has been extremely successful.

The unhappy occasions when member governments were deciding new items without their parliaments being properly consulted has already materially declined in more and more national parliaments. That is a good start; and although various scrutiny suggestions made by MPs and Peers in the UK were at the outset often the preserve of Euro-sceptics seeking to sabotage or at least delay intrusive EU legislation, the pro-Europeans quickly realised that effective scrutiny was a wholly legitimate activity and would also reassure thinking public opinion. The nationalism in this country has come from other things, not because of these complicated matters.

The new subsidiarity mechanism was to some extent a brand new concept, much deeper in constitutional and functional terms but, strangely enough, some kind of continuity item from the past stream of efforts described earlier. I feel strongly that the EU Committee needs our profound gratitude for the formulation of some ingenious mechanistic proposals, which are actually more convincing now than they were originally when the constitution looked as though it might be ratified by France and Holland as well as by many others. This has been helped by the subsidiarity mechanism's status as an annex to the treaty as a new protocol. It needs to apply only to those instruments where shared competency arises, as we know. I agree strongly, too, that this new mechanism, if agreed, should be kept separate from the existing scrutiny reserve system, despite the latter often not functioning, frankly, very well.

It is very compelling to prefer a vote by the whole House on the very special step of raising an important subsidiarity objection, but would that be practical, bearing in mind the pressures on parliamentary time in both Chambers?

However, we, as Euro-enthusiasts, particularly in the Liberal Democrat Party, know well that these developments have been adversely affected by the temporary lapsing of the ratification procedures. Although 15 countries have now ratified the treaty, we are quite sure what is going to happen. I suppose that the UK will be one of the last states to ratify it. The treaty is definitely on hold here. Several governments have formally suspended their processes anyway and we have done likewise.

However, page 5 of the follow-up report states that the Government are making enquiries with the other members on whether the spirit of the subsidiarity protocol could be implemented. I ask myself mischievously: does it have to be just the spirit? Could it be the substance? Could there be a small protocol treaty? Bearing in mind that that would need an intergovernmental conference, perhaps the answer would be no, but the stronger the form in which it is revived, the better it would be for all concerned.

I am glad that the Government have agreed with the yellow card system, as far as I understand it anyway. I am not so sure that the six-week period will always work satisfactorily without making our already complicated procedures even more so. The intervals created by the delays in ratification provide the time perhaps to reflect on a more tangible, safer approach. That was acknowledged in the reports.

The question of a second dose of subsidiarity testing is also rather worrying. If a piece of legislation is substantially changed by further ministerial and other negotiations, will that also come back to the relevant parliaments for further consideration? The Government are right to say that that would be impractical.

I welcome the Government's soothing comments on what they would do to try to make the six-week timetable feasible, but, as I said earlier, I still have my doubts. There are other problems and headaches involved in trying to get these complex new procedures right, and it is to the credit of the committee of the noble Lord, Lord Grenfell, that a lot of very interesting and relevant suggestions were made in the original report, HL 101, which, because of its quality, will not be subject to the fate of some of the items that are put into the metal casket on the television programme "Room 101".

I assume that even if the treaty is not fully revived, because circumstances are too problematical, there is a will—indeed, the Government have confirmed it in writing—to formulate some kind of effort. We must wait on events, but the reasonably regular use of the subsidiarity test on important legislative documents launched by the Commission would serve the whole Union well. As the noble Lord, Lord Kerr, said, we can go ahead on these matters anyway.

I shall refer briefly to Article 8 and the ECJ methodology and involvement. They are complicated issues even for clever lawyers, the noble Lord, Lord Neill, included. Box 3 needs constant reappraisal, as do the important sentiments expressed in paragraphs 217 and 218 on page 41 of HL 101. That matter needs to be looked at again.

If subsidiarity arguments have received fairly short shrift, with no examples so far of any measures being overruled or struck down by the court, this poses uncertainties if these proposals are revived in one way or another. Will the Minister therefore confer further with the law officers in due course to ascertain the scope for modernisation of this subject, in the sense of a level field of symmetry between approval and disapproval in the future? If the legal parts of the separation of powers are to be deployed, it can serve the European citizens in all the member states with an objective justiciability which gains confidence as the cases unfold in the long-term future. We will then begin to make substantial progress, because it is a legal as well as a political matter. The court needs to be "neutral" in this deep sense, without neglecting the constitutional obligations of the treaty or treaties.

I was impressed by Professor Wyatt's evidence to the committee. It reminded us, fairly, that in the Union's history so far, the subsidiarity principle has been offered only scant or token attention. I refer to what he said in paragraph 1 on page 3 of the extract of minutes of evidence. Will this not also mean that we should not become over-anxious about these matters? There will be many occasions when the question of subsidiarity will not arise anyway because of the primordial examination of the subject.

Paragraph 2 explains the realpolitik—to use the trendy term of this debate—of how member states have operated in past instances. Professor Weatherill reminded us in his evidence that legal and political subsidiarity are two different animals, but they come together in a practical way. If the system is launched eventually, a formal and informal consultation process between a coterie of member states, as Professor Wyatt suggested, would presumably be the approach that the Government too would see as a natural step forward.

I turn briefly to the evidence offered both orally and in writing. We had the interesting offerings of our own distinguished Liberal Democrat colleague, Mr Andrew Duff MEP, who is an expert on the constitution. He is a well known enthusiast for communitarian common actions. He criticised the six-week timetable—especially with the two Houses here jostling each other for opinion-giving. As we have said, COSAC also felt that that was too short a time. Moreover, Andrew Duff clearly favoured the Commission's own test of subsidiarity rather than have national parliaments deal with these matters. I thought that that was a very disappointing stance to take.

More enthusiasm by citizens for Europe is created in practical terms if there is full involvement by national parliaments. I preferred the approach taken by the noble Lord, Lord Harrison, in question 96, as it better served the will of most members in that report creation. I am thinking of the other place and this Chamber together. However, Andrew Duff was able to reassure some here, I assume, when he described how the arrival of the UK, Denmark, Sweden, and now many of the new countries in the EU 10, would continue to sharpen the sift through which all proposals for legislation must be put.

We are confronted with a number of other complicated problems that I do not have time to go into tonight. This whole field is a practical matter rather than one of saying, "We have done our report and therefore we must stick to everything that is in it"—and by that I mean no discourtesy to the people who wrote it.

Should countries involve themselves at the much earlier White or Green Paper stages through some kind of formal processes? Perhaps mercifully, with the rethinking time that we have now, the system can be considered again. It is a complicated matter and it is better not to rush it. Like the period of reflection on the constitution itself, this rethinking time gives us an opportunity. Local and regional government could be mentioned as well. They need a place in the sun, but I do not have time to refer to that.

I conclude with the noble and sensible words of Article 6 of the Amsterdam Protocol, quoted on page 10 of the follow-up report of 30 November:

"The form of Community action shall be as simple as possible . . . The Community shall legislate only to the extent necessary. Other things being equal, directives should be preferred to regulations and framework directives to detailed measures".

With that in mind, we can engage the citizens of all the member states and the national parliaments fully. We have taken a lead in that with one or two other national parliaments. There is more to be done, but there is a bright future for Europe if everyone gets together.

Photo of Lord Howell of Guildford Lord Howell of Guildford Spokespersons In the Lords, Foreign Affairs, Deputy Leader, House of Lords, Shadow Minister (Foreign and Commonwealth Affairs), Shadow Deputy Leader of the House of Lords 6:26 pm, 15th December 2005

My Lords, we all admire the way in which the noble Lord, Lord Grenfell, chairs and presides over the European Union Committee and its widespread family of sub-committees. It seems to me that this report and the follow-up report are well up to the standard of the reports produced from that network of committees.

I say at the outset from this position in your Lordships' House that we on this side are wholly in favour of substantially more say by national parliaments in the affairs not merely of the Union but of the whole network of international obligations. We are also wholly in favour of greater co-operation. I am happy to have heard about the way in which the COSAC organisation has developed and grown in confidence and strength over the years. Greater co-operation and greater say by national parliaments is a principle to which we would all adhere, and not just in Europe.

As the centre of economic gravity moves eastwards to Asia, the parliaments of other countries are just as close as those of Europe—they are only one click away in terms of electronic communication. We should be very close indeed to the Parliament of Japan and the Lok Sabha in Delhi in an age of globalisation. It is not just a question of more say by national parliaments; I hope that they will also have more power—a proposition that raises questions about relations between parliaments and executives, as the noble Lord, Lord Woolmer, rightly raised.

In an interdependent world, where, more than ever, we are bound by a massive web of obligations, the question of holding our governments to account is more important than ever. That point was raised in the very interesting speech of the noble Lord, Lord Wallace of Saltaire, and—dare I say this without ruining his reputation?—I agreed with what he said a little more than I have done in the past. Am I reading too much into his remarks when he seemed to grasp the realisation that social policy should be as near the shop floor and the citizen as possible and that the whole principle of trying to push it away to remote multinational or supranational institutions is flawed? I like that tone and I hope that we will hear more of it.

It seems to me that our Parliament is better placed than a decade ago to take on the kind of additional functions suggested in the report of the noble Lord, Lord Grenfell. Both Houses are much better equipped. The noble Lord, Lord Woolmer of Leeds, raised the practicality of taking on these functions. I think it is possible for our Parliament, at least, which on the whole works extremely well, with an elected Chamber and a cooling Chamber in which we are now sitting. We are in a position to take on these additional functions in a way that could not have been contemplated 10 or 20 years ago.

This is an extremely useful report for promoting and thinking about this issue. Of course, in a sense, it got overtaken by the constitution fiasco. However, I agree with those who say that, if subsidiarity means seeking ways of bringing national parliaments more into the game, it does not need additional legal force. We always needed to press the case for national parliaments to have more say, a case which gets stronger and stronger in the modern world. That existed before the constitutional treaty attempt, it exists now and it will exist afterwards. I hope I do not disappoint the noble Lord, Lord Kerr of Kinlochard, in saying that I do not think that has got all that much to do with the treaty, which isn't going to happen anyway.

The noble Lord, Lord Grenfell, raised the question of those critics who said "Oh, this is bringing in something by the back door". I think we should have been bringing it in by the front door before the treaty, and should continue to do so. This is the crucial issue of how, in this interdependent world, we maintain contact with citizens and people at a national and sub-national level more effectively than we have in the past; otherwise we lose all popular support and, eventually, the popular mandate. Here we have the central need to challenge centralism through the front door. We should make no apologies for that.

Of course, the question arises of whether the defunct constitutional treaty helped much. I have already indicated that I do not think that it did. Our view, all along, was that the yellow card subsidiarity idea was not nearly effective enough to do the job. I quote two distinguished witnesses to this operation. Professor Wyatt said that subsidiarity is:

"a principle ill-designed to achieve the objective of ensuring that decisions are taken as closely as possible to the citizen".

That seemed pretty damning to me. Then Professor Weatherill came before the committee and said that the principle of subsidiarity had:

"done little to curb an institutional tendency at the EU level to err on the side of centralisation rather than preservation of local autonomy".

The most obvious interpretation of that—and, I think, the right one—is that the principle of subsidiarity is too weak a weapon and concept to do the job that we all know needs to be done, with increasing urgency, which is to challenge the tendency to centralism. That is my opinion.

There are two much more fundamental issues behind the thinking in this report which should perhaps have been addressed, and perhaps now have to be; whether that is best done through more effective operations of committees in this House or in other ways, I do not know. First, should this subsidiarity mechanism of challenging the competences and powers of the Commission and the EU itself—which we want to develop and strengthen—be confined to future activities and legislation? What about the vast, overloaded, verbose, almost unintelligible acquis, with its 98,000 inscrutable pages? Is that to be left? Should that not have the subsidiarity filter, or comb, applied to it with some vigour? Hitherto, such a thought has been dismissed. We have always been told that the acquis is sacred and cannot be unravelled. I think that the Eurocentrists will have to give way on that before too long. At the moment dogma prevents them agreeing with it. But the fact is that the more we look at the enlarged Europe and consider the accession of the new countries, the more obvious it is that the sacredness of the acquis will have to be challenged. The instruments we are talking about today may be the instruments for doing that.

The second fundamental question, which, understandably, is not addressed in the report but is hanging right behind it, is whether, if we are looking at the whole process of law-making and involving national parliaments in that, as paragraph 250 of the report says is the purpose and aim—we all agree—do we leave unchallenged the monopoly power of the Commission to initiate legislation? That is another sacred cow which no one has dared to shoot. But if we are now moving towards a new treaty pattern, given that the constitutional treaty in my view will not fill the need or be revived, should that issue not arise as well?

So, I leave those questions hanging in the air. I realise they are fundamental, but unless we face up to them in due course, we will find that subsidiary is, as the professors remind us, a very weak and inadequate weapon in dealing with this central issue.

I enjoyed, in a curious way, the Government's reply to this report. It is a series of eager assents. It says that it was a matter for the House—that is easy for civil servants to write. Then we suddenly get to an item where it appears that the committee is actually telling the Government to do something, and up come the weasel words. They are in paragraph 10. The Government are busy agreeing with the committee, but, when it comes to even the yellow card, they hastily say, well, of course that is a good idea but they may have to override it, and they agree—big concession—that they will not do so without first explaining to Parliament why they have overridden the committee's views. I do not see governments changing from that view for the time being, but they should continue to be pressed by our Parliaments, because that is our job.

As for Article 8 and the submissions to the European Court of Justice to get a ruling on whether some competences have been exceeded—this is a small point—there seems to be something wrong with the print on page 8 of the follow-up report. As I read it, paragraph 15 is the committee's views and therefore should be in bold, whereas it is the Government's views which are in the normal print. I do not know what has gone wrong there. Anyway, what emerges at the end of paragraph 15 is paragraph 16, which, as the noble Lord, Lord Grenfell, rightly said, is bureaucratic speak for the fact that the Government have no idea about Article 8. They have not done the work. They have given up because the constitution is on hold. And we are all left in mid air about that.

I hope I have indicated some of our approval for the issues being tackled. We believe that we need to go further if we are to get a better and fairer Europe and to design a treaty or pattern of rules for the future that are better than anything that could be offered by the draft constitution, which has now been so vigorously turned down.

What we see from this side is an amazing reluctance by the Government to seize the initiative in these matters. I know it is all called a period of reflection, but there does not seem to be very much reflection going on. The UK presidency, which is now coming to an end, has been, as agreed by all sides, a complete flop. There remains a tendency in looking at these matters—and here I think that the noble Lord, Lord Haskel, spoke with characteristic percipience—to be inward looking and to try and repair bureaucratic problems with bureaucratic repair kits. That is of no interest to the wider public. We should be putting forward new proposals for a better, fairer, more equal Europe suitable for the 21st century. Of that, I see no constructive sign in government circles.

Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Government Whip 6:40 pm, 15th December 2005

Thank you, my Lords. I am grateful to all noble Lords for being here at this late hour rather than merry-making. I pay tribute to the noble Lord, Lord Grenfell, and all members of his excellent committee for its excellent stream of excellent reports.

As your Lordships will recognise, the Government have been a long and consistent advocate of strengthening the role of national parliaments in the European Union. It was therefore with great pleasure that I read the 14th and 15th reports of the European Union Committee and I listened with interest to today's debate on the early warning mechanism and the constitutional treaty. As noble Lords have highlighted, subsidiarity is an important principle. Indeed, it is an essential element of good European governance in the 21st century.

The Government have consistently advocated strengthening the EU principle of subsidiarity. Shortly after we came to power in 1997, we were instrumental in strengthening the protocols on subsidiarity, proportionality and national parliaments in the Treaty of Amsterdam. We continued to support strengthening the role of national parliaments during the process of the Convention on the Future of Europe and subsequently throughout the negotiations on the intergovernmental conference. If ratified, the treaty would introduce revised protocols on subsidiarity and national parliaments—a matter addressed by the report and by many noble Lords today. If applied correctly and rigorously, subsidiarity would ensure an effective balance between legislative action by member states and by the European Union. I do not agree with the noble Lord, Lord Howell, that the principle is too weak. However, I agree that it needs to be properly applied. It must be properly implemented. It would then ensure that the European Union acts only if the objectives of the proposed action cannot be met by member states and can be better achieved by the European Union.

My noble friend Lord Harrison and the noble Lord, Lord Wallace, gave us a clear explanation of what could and should be done at the different layers of European governance—at national and regional level. As my noble friend Lord Haskel pointed out, subsidiarity also has a practical consequence for the functioning of the single market. I fully concur with his view that we need subsidiarity that also encourages the kind of localism that he described.

I agree with the noble Lord, Lord Kerr, that the inclusion of an important principle in the constitutional treaty should not tarnish that principle. I especially welcome the comments of the noble Lord, Lord Howell, today and hope that we can build on what he said and have some sort of cross-party agreement about how to take forward the important principle of subsidiarity and implement it. The Government are giving active consideration to implementing the spirit of the subsidiarity protocol. As my right honourable friend the Foreign Secretary said in the House of Commons on 6 June, subsidiarity is a long-standing concern and one that we will pursue. We also co-hosted the conference in The Hague mentioned by the noble Lord, Lord Grenfell. The presidency conclusions will point the way forward. The Foreign Secretary has written to the Austrian Foreign Minister, encouraging the incoming presidency to take all those issues forward.

I certainly agree with the noble Lord, Lord Bowness, that the excellent initiative taken by COSAC should not be seen as the introduction of the treaty by the back door. It is pure common sense. My noble friend Lord Woolmer advised us of the new challenges that we would have to meet to implement an effective system. We need to discuss those issues much further.

Naturally, the Government welcome the committee report and the debate in your Lordships' House today. The thorough investigation and research that went into the report is invaluable. We certainly share your Lordships' hope that the agreement of the treaty text itself has provided, and will provide, a great stimulus to more effective scrutiny by all national parliaments.

We believe that, whether or not the treaty comes into force, member state parliaments should play a stronger role in ensuring the implementation of the principle of subsidiarity in order to achieve the right balance between action at regional, national and EU levels, and to help connect citizens with European decision making. It is essential to create a culture of co-operation between EU institutions and national parliaments and, as the noble Lord, Lord Grenfell, suggested, clearly desirable to have an exchange of information between national parliaments.

We have repeatedly made clear that we see the treaty as a sensible set of rules for an enlarged EU. But we have been equally clear that, following the French and Dutch "No" votes, it would not be sensible to set aside parliamentary time for a Bill to prepare for a UK referendum. The June European Council called for a period of reflection and for a broad debate. Your Lordships' report makes a thorough and constructive contribution to that debate. Other elements that were included within the draft constitutional treaty must be a part of that debate.

We welcomed the suggestion from COSAC, under the presidency of the noble Lord, Lord Grenfell, that those national parliaments wishing to participate should conduct a subsidiarity and proportionality check on a forthcoming EU legislative proposal, or proposals, on the basis of their role as recognised in the current treaties. The constitutional treaty text recognised that national parliaments may decide to consult regional parliaments with legislative powers. That seems a sensible way forward. As a Welsh Peer who has taken a keen interest in the views of both the Welsh Assembly and the Scottish Parliament, I know that it is particularly important for those bodies and for the people that they represent.

We welcome the initiative of your Lordships' Select Committee on the European Union to invite input from sister committees in the Scottish Parliament and the Welsh Assembly and, in due course, it is to be hoped, from the Northern Ireland Assembly. Yet we appreciate that arrangements for consultation with devolved assemblies should be left to each member state.

In order to stimulate discussion on the scrutiny of subsidiarity the UK presidency co-hosted with the Dutch a "Sharing Power in Europe" conference in The Hague on 17 November. That was a small but important achievement of our presidency, because its consequences are potentially far-reaching. The conference recognised the need for a genuine partnership between the EU institutions, member states and their parliaments to strengthen democratic accountability and transparency while helping to build popular confidence in the way that power is shared in Europe. In response to the noble Lord, Lord Howell of Guildford, we would indeed also like to see a closer relationship between parliaments outside the European Union. However, that relationship would be quite different because we do not share membership of the European Union with those parliaments.

The conference raised a number of ideas for greater partnership within the framework of the current treaties and we are grateful to the noble Lord, Lord Grenfell, for his contribution as its co-chairman. The conference encouraged member state parliaments, first, to develop their scrutiny role to ensure democratic debate at an early stage of the EU's multi-annual and annual programmes, consultation documents, road maps and legislative proposals. It encouraged them, secondly, to provide the European institutions with an early indication of their perspectives on where member states should take action, and where action should be taken at an EU level; and, thirdly, to participate in the efforts of COSAC to support the scrutiny work of national parliaments.

As your Lordships will agree, the democratic life of Europe revolves to a great extent around national and regional parliaments. We believe that the key to improving implementation of subsidiarity will be to get national parliaments and regional bodies more directly involved at an earlier stage.

National governments need to engage with parliaments more closely on European regulation and, in turn, parliaments need to be better equipped to get involved in policy discussions within the European Union. As your Lordships noted, in many cases legislation coming out of the Commission is already well advanced before national parliaments start to examine it. Sir Digby Jones, Director-General of the CBI, drew attention to the importance of national scrutiny of EU legislation in a report in April 2005. He highlighted the potentially significant impact of EU legislation on UK business and suggested that Parliament should engage early and proactively in influencing the development of the thinking of policymakers in Brussels rather than considering formal legislative proposals at a stage when many minds have already been made up and compromises negotiated. This is, I know, an important factor behind current thinking on reform of the scrutiny system.

It is also clear that trades unions and civil society would agree that early and proactive engagement by Parliament is essential. It would mark a welcome step forward if Parliament were to debate the EU's annual and multi-annual work programmes. As an eternal optimist, I believe that this might also assist in stimulating media interest. Currently, our regional and national media pay little attention to the debate on EU legislation until it is too late. This is a matter of shared frustration for many noble Lords taking part in the debate. It leads to ill-informed press coverage of the EU and an ill-informed society. Early debate on European proposals in regional and national parliaments should help to ensure early and informed public debate, generating wider public awareness. This in turn would provide the institutions of the EU with early warning of local or national sensitivities.

I turn to the questions raised on the transmission of documents. We believe that it is important for national parliaments to receive as soon as possible draft legislative proposals and substantive amendments, together with the relevant justifications. In the electronic age, it is difficult to see where the problem lies. I understand that an agreement must be reached between the Commission, the Council and member states about the logistics, but I am sure that any difficulties must be surmounted in the not too distant future.

In respect of the European institutions, the Commission is already strengthening its consideration of subsidiarity and proportionality of legislative initiatives. I note the comments of the noble Lord, Lord Neill. However, there has been a growing understanding of the importance of subsidiarity in the European institutions, despite the examples he cited. This understanding is essential and is being both encouraged and enhanced by the growing interaction between civil servants of national governments and the European civil service. I believe it is also true to say that since the accession of the Nordic countries to the European Union, the principle of subsidiarity is much more widely understood, thanks to the participation of those countries in the European institutions. We hope that the Council and the European Parliament will also examine the subsidiarity and proportionality of legislative initiatives at an early stage. My noble friend Lord Harrison was right to remind us of the role of MEPs, individuals in the Commission and UKRep. I can testify that all these groups and the institutions are much more open than most people either understand or choose to believe. They are also extremely well informed about future policies while they are still in the gestation period.

All partners need to ensure proper implementation of the existing arrangements for applying subsidiarity, including the preparation of justifications for legislative proposals and amendments. I have noted the comments made by the noble Lords, Lord Howell, Lord Grenfell and Lord Dykes, on the Government's response to the section in the report concerned with Article 8. It is difficult to imagine a situation in which the Government would not want actively to take forward a representative request from the UK Parliament. However, I do not want to be sidetracked into a legal discussion when it is important for us to focus instead on what we can do within the current treaties to increase the role of Parliament in implementing the principle of subsidiarity. I note the disquiet expressed by noble Lords and I will see whether I can provide them with a more comprehensive answer in due course.

In conclusion, the Government welcome the committee's 14th and 15th reports on strengthening national parliamentary scrutiny of the EU and this debate. We believe that, irrespective of the future of the constitutional treaty, it is important for national parliaments to be involved in EU legislation more directly and at an earlier stage. As a number of noble Lords have suggested, it is important to get more people involved in the European Union, to stimulate their interest and to engage them in dialogue about the actions necessary at local, regional and national levels. There are a number of things that the Government and Parliament can—and must—do together to make European politics and policies more accessible.

Three things come to mind and we have been actively pursuing them throughout our presidency. First, we need to improve European regulation. Secondly, we need to increase transparency. The Government are working in the Council and its working groups to achieve this at the earliest opportunity. Thirdly, and this is the focus of the debate, we need to implement the principles of subsidiarity and proportionality.

As our enlarging European Union changes and responds to the opportunities and challenges of globalisation, the principle of subsidiarity assumes greater importance. People must have confidence that the principle is being implemented and that decisions are being taken at the appropriate regional, national or European level as close to the citizen as possible. That is common sense. It is also good governance. Proper and effective scrutiny is not only the best means of ensuring subsidiarity, it is a means of increasing transparency and nurturing trust. As has been widely agreed today, national parliaments are key to the scrutiny of subsidiarity and I am confident that the European committee will play a vital role in the further deliberations on this issue, in the COSAC initiative and in the future scrutiny of the implementation of the principle of subsidiarity.

Finally, as the noble Lord, Lord Dykes, noted, there is indeed a bright future if the institutions of the European Union and national parliaments work more closely together.

Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees 6:56 pm, 15th December 2005

My Lords, I would like to thank all those who have participated in this debate for their excellent contributions from both Front and Back Benches. I was much heartened by the degree of consensus that we have displayed in our discussion on this very important topic.

The hour is late. I would love to be able to reply to one or two points, and I shall briefly mention three.

First, the noble Lord, Lord Wallace of Saltaire, urged a much more frequent dialogue with MEPs. We are indeed stepping up the dialogue as best we can but it is a problem of logistics rather than will. If we can solve the logistical problem then it will be even better.

Secondly, the noble Lord, Lord Howell, raised the question of retroactive monitoring of legislation. Commissioner Verheugen, who is in charge of better regulation, is embarking on just such an exercise. The question that remains is the degree to which national parliaments eventually could participate in such retroactive monitoring. When the Select Committee's report on better regulation comes before your Lordships' House for debate we will go into this in more detail.

Finally, the noble Lord, Lord Kerr, at the close of his very helpful intervention urged us to take action now. I would like to assure the noble Lord that we are not letting the grass grow under our feet. The subsidiarity and proportionality check is under way as we speak and we shall pursue it with the utmost vigour.

I thank noble Lords for making this a most worthwhile debate, even though I wish it had taken place in prime time rather than late on a Thursday afternoon.

On Question, Motion agreed to.