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European Union Act 2011

Restrictions relating to amendments of TEU or TFEU

Section 2: Treaties amending or replacing TEU or TFEU

40.This section requires certain conditions to be met before any future treaty that would amend or replace TEU or TFEU can be approved by the UK. The conditions are: (a) that a Minister has laid a statement before Parliament setting out whether a referendum is required or not, in accordance with section 5; (b) that the proposed treaty has been approved by an Act of Parliament; and (c) that either the ‘referendum condition’ or the ‘exemption condition’ has been met in each case. These conditions are only relevant where the Government has agreed to the proposed treaty at an Inter-Governmental Conference, at which point the conditions would need to be satisfied before the UK could approve, or ‘ratify’, the future treaty.

41.The referendum condition is set out in subsection (2). The Act of Parliament that is needed to approve the treaty must include provision for a referendum to be held to determine whether the public support the approval of that treaty. The Act of Parliament would need to specify the treaty to be agreed, and the detailed provisions required to allow a referendum to take place, including the question for the ballot paper and the date of the referendum. The referendum would then be held in accordance with the provisions set out in that Act, and only if a majority of the people who voted in the referendum were in favour of the proposal would the UK be able to ratify the treaty. The provisions of the Act approving the treaty would not come into force until the result of the referendum was known and unless a majority of voters had voted in favour of the change.

42.The exemption condition is set out in subsection (3) and would apply if the proposed treaty did not do anything which is set out in section 4 (see below) and the Act providing for Parliamentary approval of the decision specified that this was the case. In other words, if there would be no transfer of competence or power from the UK to the EU (as set out in subsections (1) to (3) of section 4), then the treaty would be exempt from the requirement for a referendum.

43.Subsection (2)(a) provides that where the Government considers that any of the provisions of the proposed treaty would affect Gibraltar, then any referendum would need to be held throughout the UK and Gibraltar. Gibraltar is bound by a number of provisions in the Treaties, and while it is not possible to predict whether Gibraltar would be affected by any future treaties, in the event that Gibraltar would be affected, the people of Gibraltar would be entitled to vote in the relevant referendum.

Section 3: Amendment of TFEU under simplified revision procedure

44.This section requires certain conditions to be met before any Article 48(6) decision can be approved by the UK. An Article 48(6) decision can amend any aspect of Part Three of TFEU (see paragraph 22 above). The conditions are almost identical to those set out in section 2 in respect of proposed treaties, namely that: (a) a Minister has, in accordance with section 5, laid a statement before Parliament as to whether or not a referendum is required; (b) the decision to be approved by the UK has been approved by an Act of Parliament; and (c) either the ‘referendum condition’, the ‘exemption condition’ or the ‘significance condition’ has been met in each case.

45.The requirements of this section differ from those of section 2 in that they include the ‘significance condition’ provided for by subsection (4). Some Article 48(6) decisions may be proposed which seek to confer on an EU institution or body a new or extended power to require Member States to act in a specified way in accordance with the EU’s existing competence; or to confer on an EU institution or body a new or extended power to impose sanctions on Member States for their failure to act in a specified way already provided for by the Treaties. Such a move would not, in itself, transfer competence (the ability for the EU to act in a given area) from the Member States to the EU – instead, such a proposal would allow an institution or body of the EU to use the competence conferred on it already by the Member States in a different way. These two ‘transfers of power’ from the UK to the EU would be caught by section 4(1)(i) or (j), and a future proposal to do either of these things would generally require a referendum to be held under section 3.

46.However, there may be instances in the future where the Simplified Revision Procedure might be used to give a new power to a body in an area which is not significant to the UK. In these cases, the Minister’s statement under section 5, and the Act of Parliament required by this section, may state that the proposed Article 48(6) decision would confer on an EU institution or body a new or extended power to require Member States to act in a specified way; or to confer on an EU institution or body a new or extended power to impose sanctions on Member States for their failure to act in a specified way already provided for by the Treaties. This would be a transfer of power from the UK to the EU falling within section 4 of this Act, but the Minister would be able to specify that the proposed changes were not significant, give reasons why this is the case, and therefore decide that a referendum would not be required.

47.The inclusion in this section of the ‘significance condition’ minimises the risk that a referendum will be required in relation to the transfer of a power considered to be insignificant. As with all Ministerial decisions, it would be possible for a member of the public to challenge the decisions of the Minister in such a statement. Even when the ‘significance condition’ is met, the proposed Article 48(6) decision would still require Parliamentary approval by Act before the UK could approve the Article 48(6) decision which gave rise to the change, and during the passage of that Bill the question of significance could be considered.

48.This ‘significance condition’ only relates to any changes which would fall under the criteria in section 4(1)(i) or (j) and only in those cases where the Minister judges that the proposed transfer of power is not significant to the UK. If any Article 48(6) decision also satisfied another criterion in section 4, a referendum would then be required in accordance with the provisions of this section and section 4.

Section 4: Cases where treaty or Article 48(6) decision attracts a referendum

49.Section 4 makes provision for the criteria against which a treaty seeking to amend or replace TEU or TFEU, or an Article 48(6) decision seeking to amend an aspect of Part Three of TFEU, would be assessed in order to determine whether a referendum should be held. Section 4(1) lists the changes that the Government regards as representing a transfer of power or competence from the UK to the EU (see paragraph 19 for further explanation of the different types of competence), and a treaty which would fulfil one or more of the criteria would require a referendum.

50.Subsection (1)(a) provides that a treaty or Article 48(6) decision would require a referendum if it would extend the objectives of the European Union, which are listed in Article 3 TEU. Both an extension of an existing objective and the creation of an entirely new objective would be caught by this criterion. The objectives of the EU include the promotion of peace and well-being; the principle of free movement of persons within an area of freedom, security and justice; the establishment of the internal market and economic and monetary union; and upholding and promoting the values of the EU in the wider world. As Article 352 TFEU can be used as a legal base for legislative proposals to achieve the objectives of the EU where there is no more relevant Treaty article to use, an extension of the EU’s existing objectives could also be used to transfer further competence from the UK to the EU. This is why both an addition of a new objective, and the extension of an existing objective, would require a referendum to be held.

51.Subsection (1)(b) and (c) provides that a treaty or an Article 48(6) decision which would create either a new exclusive competence, or extend an existing exclusive competence for the EU, would require a referendum to be held before the UK could ratify that treaty or Article 48(6) decision.

52.Subsection (1)(d) and (e) provides that a treaty or Article 48(6) decision which would incorporate either a new competence shared between the EU and its Member States, or the extension of an existing competence shared between the EU and its Member States, would require a referendum to be held before the UK can ratify that treaty or Article 48(6) decision.

53.Subsection (1)(f) stipulates that a referendum would be required before the UK can approve the extension of any competence of the EU relating to: (i) the co-ordination of economic and employment policies; or (ii) the EU’s common foreign and security policy.

54.Subsection (1)(g) and (1)(h) provides that a referendum would be required before the UK could agree to the addition of any new, or the extension of existing supporting competence respectively under Article 6 TFEU, where the EU can support, co-ordinate or supplement Member States’ approaches. Further detail on supporting competence is provided in paragraph 25 of these Notes.

55.Subsection (1)(i) and (j) specifies that approval for proposals to increase the powers of the EU institutions and bodies to impose requirements, obligations or sanctions on the UK would require a referendum, as would proposals to remove any existing limitations on the institutions. It is these two criteria which could be subject to the ‘significance condition’ in section 3.

56.Subsection (1)(k) provides that any proposal to remove the UK’s veto over the use of any of the Treaty Articles listed in Schedule 1 (which includes any relevant Articles in Chapter 2 of Title V TEU (Specific Provisions on the Common Foreign and Security Policy)) would require a referendum. It should be emphasised that this means that a referendum is needed only before the UK can agree to any proposed treaty change or Article 48(6) decision which would remove the UK veto in any of these cases. Agreement to any legislative acts made under these Treaty articles would not require a referendum.

57.Subsection (1)(l) and (m) provides that any proposal to remove an ‘emergency brake’ provision in the Treaties would require a referendum before the UK could agree to the removal of such a brake. The emergency brake provision in Article 31(2) TEU, covered by subsection (1)(l), allows a Member State to stop the agreement of a decision by qualified majority voting under the common foreign and security policy by citing ‘vital and stated reasons of national policy’. The High Representative of the EU for Foreign Affairs and Security Policy would then attempt to mediate with the Member State who has used the brake provision, but if they cannot come to an acceptable solution for the Member State concerned, the Council can then decide by qualified majority to refer the matter to the European Council for decision by unanimity. If the Council does not vote to refer the matter to the European Council, then the Member State’s objection shall prevail. Subsection (1)(l) provides that any amendment to this mechanism would require a referendum before the UK can agree to any such amendment.

58.Subsections (1)(m) and (3) similarly provide that the other emergency brake provisions in TFEU, where a Member State can suspend the ordinary legislative procedure in relation to a specified legislative act for reasons set out in the Treaties, cannot be amended without a referendum being held first and a majority of voters agreeing to any such amendment. Article 48 TFEU concerns those social security measures that permit the free movement of workers within the EU. A Member State can suspend the ordinary legislative procedure and refer the proposal to the European Council if it felt that the proposal might affect ‘important aspects of its social security system, including its scope, cost or financial structure, or would affect the financial balance of that system’. In such an eventuality, within four months the European Council has to resolve the issue by unanimity and ask the Council to continue with the negotiation of the legislative act in question, or has to reject the act and ask the European Commission to publish a new proposal.

59.Article 82(3) TFEU concerns rules on the mutual recognition of judicial decisions and police cooperation on cross-border criminal matters and provides for a Member State to use the emergency brake mechanism if a proposed act ‘would affect fundamental aspects of [the Member State’s] criminal justice system’. Article 83(3) TFEU concerns proposals on serious cross-border crime, and similarly allows a Member State to refer a draft decision to the European Council where an act may ‘affect fundamental aspects of its criminal justice system’.

60.Subsection (2) stipulates that the removal from the existing Treaties of a limitation on the EU’s ability to act in a given area is, for the purposes of this Act, equivalent to an extension of the EU’s competence in that area – and would therefore require a referendum to be held and a majority of votes cast in that referendum to be in support of the removal of that limitation. An example here would be the Protocol on the Position of the UK and Ireland in the Area of Freedom, Security and Justice (referred to in section 9 and in these Notes as the ‘AFSJ Protocol’). As any attempt to repeal that Protocol could be argued to be a removal of a limitation on the EU’s ability to act in this area with respect to the UK, this subsection stipulates that such a move would be subject to a referendum.

61.Subsection (4) provides that certain Treaties or Article 48(6) decisions would not require a referendum merely because they fall within one of the following circumstances: where they codify EU practice under TEU or TFEU in relation to the previous exercise of an existing competence; or they create any provision in the Treaties which does not apply to the UK; or where a treaty has the sole purpose of providing for the accession of a new Member State to the EU.

62.Subsection (4)(a) provides that the codification of practice under TEU or TFEU in relation to the previous exercise of a competence not already covered explicitly by the Treaties would not, in itself, be subject to a referendum so long as the codification goes no further than to make explicit in the Treaty that part of the competence which has actually been exercised, and does not seek to codify the potential full extent of that competence. For example, action may be taken under Article 352 TFEU to achieve the objectives of the EU but where a measure is required for which there is no specific legal base. If a future treaty change then introduces a specific legal base for that action, and that new legal base does no more than codify the existing use, then no referendum would be required. There would be no point in having a referendum on such a codification, because the competence has already been transferred and the EU has already acted in that way. However, if the new legal base does more than codify the existing use, and the UK wants to support that new legal base, then a referendum would need to be held before the UK could ratify that treaty change.

63.Subsection (4)(b) provides that a referendum is not required where a treaty or an Article 48(6) decision makes provision that applies only to Member States other than the UK.  A treaty or an Article 48(6) decision does not apply to the UK merely because it may have consequences for individuals or organisations within the UK, such as UK businesses. Nor does it apply to the UK merely because the amendment imposes new responsibilities on EU institutions in which the UK participates and which the UK helps to fund.

64.The effect of subsection (4)(c) is that an Accession Treaty, agreed in accordance with Article 49 TEU, would not require a referendum if the only changes made by the Accession Treaty would be those necessary for and resulting from the accession, for example by amending the number of Members of the European Parliament to accommodate a delegation from the new Member State. However, the Act provides that Accession Treaties agreed under Article 49 TEU would require an assessment as to whether a referendum should be held in accordance with the provisions of Part 1 (see section 1(4)). This is because it is in theory possible that Article 49 might be used to do more than allow for the accession of a Member State, and therefore this eventuality would be covered by the provisions of this Act.

Section 5: Statement to be laid before Parliament

65.This section makes provision about how the first condition in sections 2(1)(a) and 3(1)(a) is to be met. A Minister of the Crown would need to lay a statement before Parliament within two months of either the agreement of a treaty at an Inter-Governmental Conference, or the agreement of an Article 48(6) decision at a European Council. In either case, the required statement would need to set out the Minister’s assessment as to whether the proposed treaty or Article 48(6) decision would fall within section 4 of this Act, namely whether the proposal would transfer power or competence from the UK to the EU. The assessment should set out the Minister’s reasoning for this judgement.

66.Subsection (4) of this section refers to the ‘significance condition’ set out in section 3(4), in respect of an Article 48(6) decision where the Minister of the Crown judges that the Article 48(6) decision would fall within section 4(1)(i) or 4(1)(j), but where the Minister views such a move as not being significant. As set out above, the Minister would in this case judge that a transfer of power would take place between the UK and the EU. Subsection (4) provides that in this case, the Minister would need to lay before Parliament a statement making clear that a transfer of power would take place, but that he/she judges that this proposed transfer of power would not be significant, and the reasons for this judgement.

67.As with all Ministerial decisions, it would be possible for a member of the public to be able to seek to challenge in the Courts the judgement of the Minister as provided in the statement required under section 5.

68.The December 2010 European Council agreed in principle to amend Article 136 of TFEU, by means of an Article 48(6) decision, to allow for a permanent mechanism to replace the European Financial Stabilisation Mechanism and the larger European Financial Stability Facility. The Article 48(6) decision itself was agreed at the Spring European Council in March 2011. The Government made clear that it intended that the provisions of this Act should apply in full to this Article 48(6) decision, which requires approval by all Member States of the EU, even though the decision was adopted by the European Council before the Act comes into force.

69.Subsection (6) would enable this Article 48(6) decision to be considered in accordance with the provisions of this Act by providing that the statement required by this section should be laid no later than two months after the commencement date rather than two months after the decision at EU level.

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