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Will the Government Lose its European Union Bill?

Last Updated: Friday, January 7th, 2011

The Government’s European Union Bill returns to the floor of the Commons next week for two days in Committee.  The Sunday Telegraph recently speculated that it could lose the bill entirely, with Conservative Euro-rebels joining the Labour front bench in an unholy alliance to bring it down.  This wouldn’t destroy the Government, but it would weaken it, and mark its first serious defeat.  How likely is such an outcome?

To answer the question, one must first get a sense of what the bill doesn’t do, as well as it what it does.  It doesn’t seek to repatriate powers from the EU.  Nor does it prevent the transfer of further powers to the EU under the provisions of the Lisbon Treaty.  For this reason, Tory Euro-rebels who believe either that Britain is “better off out”, or who vigorously seek the repatriation of powers, will be inclined to vote against it on principle.

However, a significant proportion of Conservative backbenchers are neither unyielding rebels nor committed loyalists.  They’re moderate Euro-sceptics who liked the Party’s manifesto commitment to the repatriation of three sets of powers.  The Tory-led Government is not, of course, bound by that manifesto – which also promised a UK Sovereignty Bill to “make it clear that ultimate authority stays in this country, in our Parliament”.

The Coalition Agreement – which replaces the Conservative manifesto, so to speak, as the document against which the Government can be held accountable – said merely that Ministers would “examine the case” for such a bill.  This form of words usually means that the measure concerned will be kicked into the long grass.  The pro-EU Liberal Democrats certainly didn’t like the flavour of such a bill – hence the agreement’s tentative wording.

However, William Hague, the Foreign Secretary, and David Lidington, the Europe Minister, won the internal coalition argument about whether to proceed with such a bill.  They believed that something had to be done to placate the backbenchers who I referred to above – the group that is closest to the Party’s centre of gravity on the EU issue.  So the question really is whether such MPs are likely to bring down the EU Bill – which is, in effect, the Conservative Sovereignty Bill.

There are several specific arguments against the bill which are more narrowly drawn than its failure to seek to repatriate powers.  One is that were a future Labour Government to repeal such a bill, Parliament could be read by the courts to have sent a signal that it doesn’t wish to maintain sovereignty in relation to the EU.  Better therefore, the argument runs, not to proceed with such a bill at all.

Another is that the Bill, which puts in place a “referendum lock” on future major transfers of competences – as opposed to the powers already granted under Lisbon – doesn’t do so on all such transfers.  Yet another is that the Government is willing to allow the courts ultimately to rule which powers are major and which aren’t: some backbenchers argue that elected MPs, not unelected judges, should take such decisions.

The Sunday Telegraph referred to the 38 Conservative MPs who voted against recent increases to the EU budget, and my fellow Conservative Intelligence writer, Jonathan Isaby, has pointed out that a minimum of 43 rebels are required to defeat the Government.  The Sunday Telegraph was probably right to claim that Labour will vote against the bill’s third reading, having tabled a reasoned amendment at second.

However, Jonathan also noted that no Conservative MP voted with Labour on that occasion, and that only 14 failed to support the Government.  It’s unlikely that this number will convert to over 40 votes against the bill at third reading.  It’s possible that this number of MPs, or more, may unite to support a “wrecking amendment” in committee, but the Foreign Office can’t see one coming as I write.

Ultimately, the decisive factor will be those moderate Euro-sceptics.  The commitment to a Sovereignty Bill was in a manifesto they campaigned on.  Some of them will have cheered when William Hague announced it at the Party’s last pre-election conference.  They may well be swayed by the Government’s argument that, had such a bill been in force at the time, every EU treaty from Maastricht to Lisbon, including both, would have required a referendum.

The probability is that the Government won’t be defeated at third reading – and that those moderate Euro-sceptics will find the main arguments against the bill abstruse.  None the less, the danger for the Government is that the EU Bill becomes part of a volatile cocktail of backbench grievances about Coalition concessions to the Liberal Democrats, Number 10’s supposed plans for an electoral pact with them and, above all, unhappiness about MPs pay and rations.  The Whips will be watching their backbenchers closely.

Paul Goodman

 

HIGHLIGHTS FROM THE LAST WEEK ON CONSERVATIVEHOME

  

CCHQ beefs up its attack operation: “A standing committee of rottweiler MPs from the 2010 intake was recently assembled by the Chief Whip to help prosecute this team’s work.” More via http://j.mp/fJt0mJ

The weaknesses of the Coalition’s growth agenda: “Early modernisation of inadequate trade union laws has been ruled out by Francis Maude. Christopher Booker continues to document the enormous cost of measures designed to combat climate change but which will handicap business. During the big freeze when we needed more heat and energy the wind turbines stopped turning, generating less than a third of normal capacity. Another worrying area is tax policy. The economy is being burdened by higher VAT, higher capital gains tax and higher tax on top earners. There has been no great shift of taxation from taxing good things to taxing bad things (something which many US Republicans are prioritising). Finally there is the attitude to the City. Lord Heseltine was correct last week to warn against crucifying Britain’s most important generator of wealth. Extra taxes on banks and the new EU regulatory regime must be reviewed if London starts losing business to other financial centres.” More via http://j.mp/gd9WiF

The importance of small business: “Small business – SMEs – are businesses with less than 250 employees. Delving into the figures published by the Department for Business shows that SMEs account for 6 out of 10 private sector workers. 13.6m people work for SMEs, while 9.2m work for big businesses… Since 1994 SMEs have become increasingly important in the employment arena, while big business employment numbers, having risen up to 2001-2002, have since fallen back towards 9m.” More via http://j.mp/hKDeTF

Changing the way we fund charities: “If we want a diverse, innovative charity sector we need a sector that looks to individuals and communities for more and more of its income. Over ten years we should look to replace most direct grant funding of the sector with mechanisms that achieve this change of focus. Voucherisation and matched funding mechanisms where taxpayers’ money follows the choice of citizens are two of the most important ways of achieving this. All new money that goes to the sector – through, for example, the new Big Society Bank – should not come directly from the state.” More via http://j.mp/eQH95N

Inflation and debt worries: “The Bank of England missed the opportunity it should have taken in early November to join the international second phase of quantitative easing (QE).  Perhaps it will try again in February, if the data allow it.  One route would be to combine additional QE with modest interest rate rises, taking rates to around 1.5-2%.  Recent surveys indicate that much more than 2% rises in mortgage rates would leave around three million households in financial distress, so the consumer is a long way from yet being able to tolerate interest rates high enough to prevent inflation from accelerating.” More via http://j.mp/hDVkRf

The explosive issue of votes for prisoners: “Clegg is fairly and squarely in charge of prisoners and voting: he is, after all, responsible for political and constitutional reform.  But Downing Street’s relations with its own backbenchers would be further soured were the Deputy Prime Minister to take the lead on the issue.  It would look as though Clegg was pushing one his party’s pet projects down unwilling Tory throats – as well as exposing the already becalmed Deputy Prime Minister to more assault by tabloid.” More via http://j.mp/eh45D8

Attitudes towards the banks: “Up until now there have been few defenders of the City’s importance to the UK economy. Mark Field MP has been an honourable exception. Lord Heseltine’s intervention coincides with the publication of a new report from The TaxPayers’ Alliance and the Legatum Institute. In a joint piece for the Wall Street Journal Europe (£) Matt Sinclair (TPA) and Dalibor Rohac (Legatum) warn that the post-crisis approach to regulating the banks could precipitate the next crisis.” More via http://j.mp/hnZlpH

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