The European Scrutiny Committee published last Friday its report “The EU Bill: Restrictions on Treaties and Decisions relating to the EU.

The European Scrutiny Committee reached the following conclusions on the referendum issues under the EU Bill, with the aim of informing the consideration of the Bill in Committee.

1. It is unlikely therefore that clause 2 of the Bill will come into play in the near future, except possibly in the case of an accession Treaty under Article 49 TEU which incorporates additional transfers of competence or power.

2. However, the referendum lock is more likely to be considered as a consequence of the use of the simplified revision procedure under Article 48(6) TEU—the quickest and simplest way for the EU to gain power in a particular field.

3. It is also possible that the general passerelle clause under Article 48(7) TEU, or the individual passerelle clauses to which the referendum lock attaches, may be invoked by a group of Member States frustrated that the requirement for unanimity in the Council is blocking the development of an EU policy. But we question how likely it is that the Government of the day will want to give up its veto right if it objects to a policy.

4. So notwithstanding the Government’s statement that there will not be a transfer of competence or power, and therefore a referendum, in the course of this Parliament, we conclude that: . it is in reality unlikely that most of the Treaty provisions which attract a referendum under the Bill will ever successfully be invoked; but . if one is, one of the exceptions below may be applicable.  

5. Where transfers of power pursuant to these provisions are, in a Minister’s opinion, insignificant, it is not necessary to hold a referendum (clause 3(4)). We seek clarification from Government on what circumstances the imposition of new obligations or sanctions would be considered insignificant.

6. We think the possibility for successful judicial review of a ministerial decision whether a transfer of power under clause 4(1)(i) and (j) is significant will, in practice, be limited.

7. The scope of the “exemption condition” is similarly unclear. Clauses 2(3) and 3(3) simply state: “[t]he exemption condition is that the Act providing for the approval of the treaty states that the treaty does not fall within section 4”. Clause 4(4) appears to give examples of Treaty amendments that would be exempt, although it does not refer to the “exemption condition." In our opinion, this exception is significant: it would cover the practice of EU institutions pushing at the boundaries of their competence (competence creep), sometimes supported by judgments of the ECJ, and subsequently codified in a revision of the Treaties.

(b) “any provision that applies only to other Member States”. This we presume is designed to cover the European Council Decision to establish the European Stability Mechanism, and any future Treaties or Decisions that apply to the eurozone or another forum of Member States excluding the UK. This subsection is not qualified at all, for example by a requirement to consider the impact of the provision on the UK, and so could cover Treaties or European Council decisions which have a profound effect on the UK even though they are expressed not to apply to the UK.

(c) accession Treaties, which we think is anomalous given the effect of the accession of new Member States both on UK relations with the EU and on the voting power in the Council. 

8. We had assumed from the way the referendum lock has been presented, with emphasis on the consent of the people being required for EU decisions that affect them, that provisions which have “consequences for individuals and organisations in the UK, such as UK business” would be the type to trigger a referendum, even if such provisions were addressed to a group of Member States other than the UK, such as the eurozone. Giving “new responsibilities” to EU institutions “which the UK helps to fund” similarly implies to us a transfer of power; but neither is this caught by the referendum lock. Nor would it appear that any future integration process which applied to other Member States but fundamentally affected the UK’s relations with one or several of those Member States, or the EU itself, is caught by the referendum lock.

9. The exemption condition applies to all transfers of power and competence whether as a result of the full-scale ordinary revision procedure (Article 48(2)-(5) TEU) or the simplified revision procedure (Article 48(6) TEU). So it has a far wider application than the significance decision, which is limited to two types of transfer of power (clause 4(1)(i) and (j)) agreed by an Article 48(6) Decision. 

10. We conclude that the exemption condition, read together with clause 4(4) and the relevant paragraphs of the Explanatory Notes, is sufficiently broad and open-ended to allow a Minister wide discretion to consider a provision exempt.

11. On four occasions the Explanatory Notes mention the possibility of judicial review of Government decisions.119 We question the appropriateness of this. So we conclude that recourse to judicial review is a more illusory safeguard than the Explanatory Notes imply.

12. We conclude that the exceptions above have been drafted to allow the Government to support certain EU policies, such as strengthening of the eurozone, including through harmonisation of economic, fiscal and social measures if necessary, or enlargement, without triggering the referendum lock.

13. two of the three decisions in clause 9, subsections (2)(b) and (c), concern clear extensions of EU competence in the field of criminal procedural law and substantive criminal law:

(b) the provision of Article 82(2)(d) of TFEU (criminal procedure) that permits the identification of further specific aspects of criminal procedure to which directives adopted under the ordinary legislative procedure may relate;

(c) the provision of Article 83(1) of TFEU (particularly serious crime with a cross-border dimension) that permits the identification of further areas of crime to which directives adopted under the ordinary legislative procedure may relate.

14. Both are areas of mixed competence under Article 4(1)(j) TFEU. To be consistent with extension of shared competence under clause 4(1)(e), the application of both of these provisions should be premised on a referendum and Act of Parliament, as in clause 6; not an affirmative vote before the Government’s opt-in decision and an Act of Parliament before it agrees to the adoption of the legislation.

15. Clause 9(2)(a) —“the provision of Article 81(3) of TFEU (family law) that permits the application of the ordinary legislative procedure in place of a special legislative procedure”— is in our view of similar if not greater importance to social or environmental policy and ought to come within clause 6, triggering a referendum as well as an Act.

16. The reasons given by the Minister for Title V TFEU opt-in decisions not being included in the Bill are contradicted by clause 9, which attaches as a pre-requisite Parliamentary approval by motion without amendment before three opt-in decisions can be taken by the Government and an Act of Parliament before the final legislation can be adopted (see clause 9(2)(a)-(c)). It would seem to us consistent with the aim of Part 1 of the Bill for all opt-in decisions to be subject to formal Parliamentary approval.

17. We recommend that a decision by the UK to enter enhanced cooperation where the voting procedure has been changed from unanimity to QMV be subject to a referendum lock.

18. We recommend that the Minister consider an amendment to the European Communities Act to avoid inadvertent breaches of the provisions contained in Part 1 of the Bill being automatically incorporated into national law.

19. The purpose of the flexibility clause, Article 352 TFEU, formerly Article 308 EC, is to provide a residual “power”, when none is available elsewhere in the Treaties, for the institutions to attain any of the objectives set out in the Treaty. We welcome the default control mechanism of an Act of Parliament which clause 8 introduces before Article 352 TFEU can be used as a legal base, but recommend that the exceptions to the requirement for an Act of Parliament in clause 8, subsections (4)-(6), be carefully considered in Committee.

20. Since 1973, nine referendums have been held in the UK, one of which has been nationwide.131 A further nationwide referendum on the alternative vote system for the election of Members of Parliament is planned for this year. By contrast, this Bill introduces 56 Treaty provisions which, if ever invoked, would trigger a referendum. The majority of them does not concern major issues of national policy, such as changing the currency of the UK, but a change in the voting system in the Council from unanimity to QMV.

21 … It is not clear to us that the Government has considered the potentially profound constitutional implications of the referendum lock provisions for the principles of Parliamentary democracy and direct democracy in the UK.

22. It seems clear that whatever the reason for the Bill, strengthening the UK’s bargaining position is not its primary purpose. Nevertheless, is hard not to conclude that the Bill is intended to send a signal, even if it is not as strong as to “accentuate British exceptionalism”

23. …The whole question of excluding the accession Treaties implies that one major item of constitutional change in the EU has been left out of the Bill because it suits the Government to do so, and we regard this as anomalous.

24. EU affairs are reserved matters for the UK Government. Neither the Explanatory Notes to the Bill nor the FCO’s evidence make reference to the devolved administrations. The submission from the European and External Relations Committee of the Scottish Parliament points out that given the nature of devolution, the powers or competences to be transferred from the UK to the European Union could be ones that have been devolved under the Scotland Act 1998. The impact of the transfer of such powers or competencies might be quite different in Scotland (or other devolved areas) to the UK as a whole. It is not clear that the Government has considered the implications of this and we trust the matter will be addressed by Ministers during the Bill’s consideration in Committee. Please read the report here.

Bill Cash was quoted by the Daily Express saying “The referendum lock proposals fail key tests.” The Telegraph notes that “The revolt over the Bill is not just a matter of party management” and quoted Bill Cash saying it is “a matter of national interest, not party politics”.