The European Journal

Bill Cash: Hidden costs of selling out to a failed EU is hitting Britain hard

Bill Cash in the Yorkshire Post writes: "ALTHOUGH I was appalled and astonished to hear that Treasury figures indicate that the cost of Britain's membership in the European Union have risen from £53 per UK household in 2004 to £260 from next year, the real truth is that the costs to the UK are much higher.

"They certainly outweigh any benefits. The real cost of EU membership for British taxpayers is 10 times higher – costing every person in the United Kingdom about £2,000 per year, according to the TaxPayers' Alliance. That is before we can even begin to assess the predicted 60 per cent rise next year.

"Every British voter pays, in food prices, consumer goods or services, a minimum of £2,000 per year – which makes the Treasury's £260 estimated cost of EU membership sound as pie in the sky as every other Government statistic that I have read recently.

"Do the Treasury figures, for example, include in their assessment the financial costs of damage done to small businesses every year by business regulation?

"The British electorate has been paying – as taxpayers – for our direct contributions to the EU.

"It has also been paying – as consumers – for the high prices and costs endured by UK business in complying with and administering EU regulations, EU administration costs and also higher food prices, which have resulted from implementation of the Common Agricultural Policy and Common Fisheries Policy. The great European con-trick has to end.

"So, I see great political opportunity for the Labour Government. Given that on the Government's own terms EU membership costs will now rise from £4.1bn to £6.4bn next year, equating to a rise of almost 60 per cent, they should now come clean.

"The Cabinet must sit down at the table with the Treasury report on its agenda and say – we do not want to be part of this failed, uneconomic debt-ridden European political body, which has, with the passing of each European Treaty, taken almost complete legislative control over Westminster. Instead, we want a new deal.

"Of course, that is dependent on whether the Conservative Party decides to step up to the mark.

"It is a time for a new deal, beginning with a referendum which would first lead to the withdrawal of the instruments of ratification of the Lisbon Treaty.

"In light of the Treasury's figures, coupled with attempts by the European Commission to force a re-run of the Irish referendum – on October 2 (through active meddling and propaganda), along with the false claims made by the Foreign Office, via Baroness Kinnock, that the Irish already have "legal guarantees" guaranteed by the UK Parliament – then there is good reason for renegotiation of the Treaties and our EU relationship.

"As I have written many times previously, a referendum is required on the Government's own terms, because the Treaty itself is a "merger" involving all the main European Treaties (from Rome to Nice) to create a Union with an over-arching single legal personality and a self-amending text.

"This always amounted to "substantial constitutional change", even "fundamental change" – so, on the Government's own political and legal terms, and now based on the Government's own financial assessment, it is compelled to re-examine our European relationship and seek a referendum in line with the wishes of the British electorate.

"A statement issued by a spokesman for the Treasury on the news that a 60 per cent increase in the costs of EU membership had been fully and openly discussed in Parliament, was simply wrong and false on every count. We had not discussed this in Parliament.

"In the Treasury statement, the Prime Minister also supposedly insists that it is right for us to share the burden of membership of the European Union with the new accession countries, but Gordon Brown must surely realise the European Union is a failed economic and political bloc.

"Britain and most of the member states have continued to burden themselves with deep problems of the new accession and pre-accession countries, without realising the consequences – as I said in the House of Commons, on June 16 – by supporting illiberal régimes in Croatia, Albania, Bosnia, Herzegovina, Montenegro, Serbia and Kosovo, Turkey, Croatia and Macedonia.

"Why should Britain pay more than £10bn in huge pre-accession fees before joining, and then massive uncountable subsidies once they are in, in order to support Eastern Europe's trade in cocaine and the sex trafficking of children and prostitutes?

"It is a scandal, but the national newspapers hardly mention it. It helps to explain the Treasury figures.

"Gordon Brown has sold out the country in the exceedingly short time he has been Prime Minister, so it will fall to a Conservative Government to deliver a new deal."

Bill Cash MP says Treasury’s cost of EU membership point to “a new deal”

Following the Treasury announcement on the cost of EU membership, the leading Eurosceptic MP in the House of Commons, Bill Cash MP said:

“I expect that although the appalling Treasury figures now say that the cost of being in the European Union has risen from £53 per UK household in 2004 to £260 from next year, the truth is that the costs are much higher.

“Do the Treasury figures, for example include in their assessment the financial costs of damage done to small businesses every year by business regulation? I would be very surprised if they did.

“However, given that on the Government’s own terms, EU membership costs will now rise to £6.4bn from £4.1bn next year, equating to a rise of almost 60 per cent, should they now come clean. Now is the time to sit down at the Treasury and say – we do not want to be part of this failed, uneconomic debt-ridden European political body, which has now taken almost complete legislative control over Westminster and instead, we want a new deal.”

“It is a time for a new deal, beginning with the withdrawal of the instruments of ratification of the Lisbon Treaty, and ending with a Europe consisting of a democratic association of nation states, far removed from our existing binds within the European superstate.”

“Following the statement by a spokesman for the Treasury that the increase had been fully and openly discussed in Parliament, that is simply wrong.

"As for the Prime Minister insisting that it is right for us to share the burden of membership of the European Union with the new accession countries, I believe he is as alone in making that decision as he is with every decision he has made in recent months."

Why the EU should cut its budgets

There has been widespread media coverage reporting that the cost of the UK membership of the European Union will rise next year to £6.4bn from £4.1bn in 2009. The UK's net contribution to the EU will rise by almost 60%.

John Redwood MP writes on his blog: "The truth is we cannot afford the large increase in our net contributions, and need to be pressing for a lower gross contribution. It is not just the money we do not get back that should worry us, but some of the money we do get back where the EU decides what we should spend it on. We need to be masters of our own budget, and capable of weeding out cost and needless expenditure where it rests. Quite a lot of those two categories can be found in EU budgets." Read the post here.

"Commission under fire in Irish Lisbon treaty campaign"

The EUOBSERVER reports: "The European Commission's delegation in Ireland has stirred complaints by publishing a statement about the Lisbon treaty in the midst of the referendum campaign."

The delegation wrote, on its website, a response to the "Farmers for No" statement on the impact of the Lisbon Treaty.

Anthony Coughlan, the director of the anti-Lisbon treaty National Platform EU Research and Information Centre said "The Commission's use of its web-site in this fashion is an interference with Ireland's referendum process (...)." Read the article here.

Brussels set to regulate transfer of criminal proceedings between EU Member States

A proposal for a Council Framework Decision on the transfer of proceedings in criminal matters was recently presented by 16 Member States, (Belgium, Bulgaria, the Czech Republic, Denmark, Estonia, Greece, Spain, France, Lithuania, Latvia, Hungary, the Netherlands, Romania, Slovenia, Slovakia, and Sweden). According to the Council Explanatory Report “there are several legal instruments on transfer and coordination of proceedings applicable in relations between the Member States” but “There is (…) no common legal framework on the procedure of transfer of proceedings (…).”

There is the 1972 Council of Europe Convention on the Transfer of Proceedings in criminal matters ratified by 13 EU Member States. The UK has not ratified this Convention. In 1990, the EU Member States signed an agreement on the transfer of proceedings in criminal matters but it has never entered into force as it has not been ratified by all Member States. But all EU Member States are parties to Convention on Mutual Assistance in Criminal Matters since 2000. There are also bilateral agreements or informal cooperation between Member States.

The Explanatory Report pointed out that “The Member States of the European Union are increasingly confronted with situations where two or more Member States have jurisdiction to investigate and bring to trial the same or related criminal offences.” However, it fails to demonstrate the need for EU legislation on the transfer of criminal proceedings. There are already several instruments that govern cooperation in the area of transfer of proceedings. One could say that it would have been better continue to apply the abovementioned Conventions as well as the bi-lateral agreements.

Moreover, it is important to recall that last April the Council agreed on a general approach for a draft framework decision on prevention and settlement of conflicts of jurisdiction in criminal proceedings. The draft Framework Decision is intending to prevent situations where the same person is subject to parallel criminal proceedings in different Member States as regards the same facts. Member State’s competent authorities would be obliged to exchange information on these situations. Under the proposal where it is confirmed that parallel criminal proceedings are being conducted in two or more Member States in respect of the same facts involving the same person(s) the requesting State and the requested State competent authorities are required to enter into direct consultations in order to reach agreement. Such consultations may lead to the concentration of the criminal proceedings in one Member State. Hence, this Framework Decision would also provide a mechanism for transfer of proceedings. The European Scrutiny Committee has pointed out that there will be “different consultation procedures between Member States in these two Framework Decisions.”

The aim of the proposed Framework Decision is to “increase efficiency in criminal proceedings and to improve the proper administration.” It provides for common rules to regulate the conditions under which criminal proceedings initiated in one Member State may be transferred to another Member State.

The Parliamentary Under-Secretary of State at the Ministry of Justice, Lord Bach, has explained to the ESC that the UK has no formal mechanism for transferring criminal proceedings to other Member States consequently the draft Framework Decision would have far-reaching consequences to the UK. The UK would have to change the way it deals with transferring proceedings as well as it would widen the UK's principle of territorial jurisdiction. Hence, the Government has not co-sponsored this Framework Decision.

According to the European Voice Jodie Blackstock of Justice, believes that the proposal might “lead to member states transferring cases to reduce costs on their justice systems.”

The scope of the Framework Decision is far from clear as the proposal provides for several definitions but "transfer of proceedings.” The proposal does not specify what stages in the proceedings the framework decision would apply.

The EU Member States would be required to designate judicial authorities to act, under this Framework Decision, as competent authorities. "Transferring authority" is defined as the authority which is competent to request transfer of proceedings and "receiving authority" is defined as the authority which is competent to receive a request for transfer of proceedings. However, Member States may designate non-judicial authorities as competent authorities for requesting and accepting a transfer of proceedings provided that they have competence for taking similar decisions under their national law.

Under the draft framework decision a Member State, which is competent to prosecute an offence, would have the right to ask another Member State to institute proceedings against a person who is suspected of having committed an offence, if that Member State has jurisdiction under its national law or pursuant Article 5 of the draft Framework Decision.

The issue of competence to prosecute when proceedings are transferred between Member States is dealt in Article 5 which states “For the purpose of applying this Framework Decision, any Member State shall have competence to prosecute, under its national law, any offence to which the law of another Member State is applicable.” This provision provides, therefore, for the applicability of each Member State criminal law to any offence to which another Member State criminal law is applicable.

The draft framework decision would confer competence on the Member State of the receiving authority in cases where that Member State would not otherwise have competence and if this is required to improve the efficient and proper administration of justice. Thus, this provision would have the effect of conferring competence on Member States if they receive requests for transfer of proceedings.

The Member States would have competence solely for the purposes of applying the Framework Decision and its exercise is limited to cases where there is a request for proceedings from the transferring authority of another Member State. This provision would not apply to cases where the national law already provides the Member States with the necessary jurisdiction.

This draft framework decision would confer, therefore, a subsidiary jurisdiction which may only be exercised if the Member State which has original jurisdiction waives the proceedings against a suspected person, allowing the transfer of proceedings concerning that offence to another Member State.

According to the Council Explanatory Report competence is conferred to the Member State of the receiving authority “by giving a request for proceedings an automatic effect of making the criminal law of the Member State of the receiving authority applicable.”

Lord Bach has said to the ESC that the Government is concerned about the automatic transfer of jurisdiction under Article 5 "as UK jurisdiction is generally based on where the offence was committed (territorial jurisdiction) and the exercise of extra territorial jurisdiction by the UK is more limited than by many other Member States." Consequently, this provision may conflict with UK’s national law and its jurisdiction approach.

According to the ESC this provision “gives national courts competence to try a criminal offence that is not prescribed by UK law. (…) Instead, jurisdiction comes from the EU Member State that is transferring the proceedings.” The draft framework decision provides for the double criminality requirement and requires the application of the national law of the receiving Member State. However, the ESC has doubts about Article 5 consistency with the requirement for double criminality envisaged in the draft Framework Decision. Hence, the ESC believes that the proposal would not "improve the efficient and proper administration of justice."

Article 7 establishes the criteria for requesting transfer of proceedings. This provision requires that such request may only be done if “transferring proceedings would lead to an improvement of an efficient and proper administration of justice.” Hence, the transferring authority of the requesting member state must show that the abovementioned requirement is fulfilled as well as one of the provided criteria is met. The provision provides an exhaustive list of alternative criteria under which a request for transfer may be made, such as the offence took place in the territory of the other Member State, the residence of the suspected person in the other Member State as well as the existence of evidence.

According to Lord Bach such criteria are too broad. The Government is likely to call for stronger reasons for requesting a transfer.

The draft framework decision provides for the suspected person to be informed of the intended transfer however it confers on the transferring authority discretion to decide whether or not is appropriate and in accordance with national law, to inform the offender. Consequently, there is no obligation to inform the suspect of the proposed transfer of proceedings. Article 8 states “If the suspected person presents an opinion on the transfer, the transferring authority shall inform the receiving authority thereof.” However, it is not clear which effect such opinion would have. It seems that this provision is in contradiction with Recital 14 which provides that “Nothing in this Framework Decision should be interpreted as affecting any right of individuals to argue that they should be prosecuted in their own or in another jurisdiction if such a right exists under national law.”

The proposal also sets out the procedure for requesting transfer of proceedings. It provides for the Member States’ competent authorities to consult about the likelihood of transferring proceedings. However, no timeframe is provided for such consultations. The transferring authority would be required to provide information about the proceedings available to the receiving authority.

Under the draft proposal, the transferring authority would be required to use the standard form annexed to the Framework Decision which must be accompanied by the indicated documents such as “copy of the criminal file”, “relevant documents” and “relevant legislation.” However, such terms are not clear. The Minister has pointed out to the ESC that “the UK does not have a criminal file in the same sense as some other Member States.” Moreover, according to Justice “t is equally unclear whether the ‘relevant legislation’ will extend to details of the procedures that were followed by the practical application in the particular case, since rules are not always wholly adhered to.”

The reasons for which a transfer may be refused are also set out in the draft framework decision. For instances, a Member State receiving authority may refuse transfer of proceedings if the act does not constitute an offence under its national law. Moreover, the receiving authority would be allowed to refuse the transfer if it considers the reasons given by the transferring authority to justify its request for transfer do not comply with the framework decision criteria. Consequently, if the competence of the receiving Member State is exclusively based on Article 5 it may refuse the transfer if it is not deemed to improve the efficient and proper administration of justice.

Lord Bach has stressed that the scope of the listed reasons is too narrow. According to the Government the proposed criteria for refusal does not ensure Member States adequate control over the cases they accept. The minister has said to the ESC that "Grounds for refusal are important in ensuring this Framework Decision is used appropriately and only in cases where it would improve the efficient and proper administration of justice."

The receiving authority is required to decide “without undue delay” whether a transfer of proceedings will be accepted or not. If it decides to accept the transfer it shall comply with the request taking all necessary measures under its national law. The draft framework decision provides therefore that the proceedings transferred must be governed by the law of the Member State to which the proceedings have been transferred. Hence, that Member State may apply any procedural measures allowed under its national law upon acceptance of a transfer.

Any act of the Member State of the transferring authority for the purpose of proceedings or preparatory inquiries as well as any act interrupting or suspending the period of limitation have the same validity in the Member State of the receiving authority provided that they are compatible with the law of the latter Member State.

Under the draft framework decision, the proceedings in the Member State of the transferring authority related to the facts provided in the request for transfer must be suspended or discontinued upon the receiving authority notification of its decision to accept transfer. Nevertheless, the Member State of the transferring authority may carry out investigations in order to provide judicial assistance to the receiving authority.

The transferring authority would retain the right of prosecution if it decides to withdraw the request before the receiving authority notification of acceptance of the transfer of proceedings. If the receiving authority decides not to proceed with the proceedings related to the facts provided in the request, the transferring authority may also open or reopen proceedings. In the other hand, the transferring authority would preclude any right to instigate proceedings by a decision delivered in Member State of the receiving authority at the end of the proceedings provided that such decision has a precluding effect on further proceedings under its national law.

Private prosecutions are excluded from the scope of the Framework Decision. However, if both member states require a complaint to be lodged to initiate proceedings, the complaint brought in the Member State of the transferring authority must has the same validity as a lawful complaint in the Member State to which the proceedings have been transferred. In the other hand, if proceedings are dependent on a complaint in the Member State of the receiving authority, the formalities for filing the complaint would be governed by the law of that Member State. The provision provides that the time limit shall start running upon acceptance of a request.

The draft framework decision also provides that the sanction applicable to the offence must be determined by the law of the Member State to which the proceedings have been transferred unless its law provides otherwise. However, if the Member State’s competence is not grounded on its national law but on Article 5 the pronounced sanction must not be more severe than that provided for in the law of the other Member State. In this case, the Member State to which the proceedings have been transferred exercises a “subsidiary jurisdiction” consequently, under the draft framework decision, it shall not impose a more severe sanction than that provided for in the law of the Member State which made the request for transfer.

The transferring authority would be obliged to provide a translation of the form used to transfer proceedings as well as the relevant parts of the criminal file into the official language of the receiving Member State. However, it is not clear who will bear the costs of the translation.

The proposal has been submitted to the European Parliament for consultation. Unanimity is required in the Council. The Presidency is planning to reach political agreement on the proposal at the Justice and Home Affairs Council in November. It remains to be seen what will come out from the negotiations.

The Great Lisbon Denial: deceit prevents re-ratification

Here, we report the exchanges between Bill Cash and the Foreign Secretary and other parliamentarians in the European Scrutiny Committee debate on 2 July, which considered the legal “guarantees” for Ireland in relation to the Lisbon Treaty.

Mr Cash: Only because you mentioned the fact that I was shaking my head, Foreign Secretary, could I simply say that I have been in favour of enlargement of a European Community that would actually work. The problem is that, for a variety of reasons – and I do not have time to go into them today – and as I have argued in Standing Committees and on the floor of the House for decades, I just do not believe that the model that is currently on offer is going to work, and I think there is plenty of evidence of that. My concern is that we should have an association of nation states cooperating in trade and also politically but not European government. We may differ about what that word means but I would simply like to put on record the fact that there is nothing negative about my view. I do not think it is anti-European to be pro democracy, and I do think it is extremely unwise to bring in countries which, I am afraid to say, however much we may want to respect them, have a record of a lack of democracy and, as my hon friend here was saying in terms of human trafficking, cocaine trade, et cetera, will weaken any political cooperation in Europe rather than the other way round. That is the problem. You are bringing upon the United Kingdom, in my opinion, a system which is liable to and will implode.

Chairman: I think that is one of these “Do you agree with me?” questions but I would ask you to limit your answer.

David Miliband: Can I say seriously that I actually respect Bill Cash for the way that he has prosecuted his view over the last decades, as he says, on this issue. To be fair to him, he has been very consistent about that. I think, decades on from when the argument started, there are some facts that we can bring to bear about this. We can point to former dictatorships which are actually now thriving democracies and the strength of their democracy I think is in part explained by the way they have engaged in the European Union. So it is a good argument, it is one where Mr Cash has a very consistent position, but I do think, the point of what I said before, that I am in a stronger position to make my case now because of some enlargement that has happened. Mr Cash thinks he is in a stronger position because he thinks he can point to the negative aspects and that is politics in a way but we do have a different view of that. I think when he looks at the record he may want to think whether or not he does want to refer to former dictatorships in the way that he did because, the Spains, the Portugals, the Greeces of this world are easy to dismiss in that sort of formulation, and those were countries which were until very recently dictatorships and now they are very strong democracies. In Eastern Europe – I was in Poland last week – people still talk in civil society and in politics about Poland as a recently captive nation. That is the phrase that is used, and it can bring you up short in a way because, in a 24-hour media world, one is taught to believe that anything more than five years ago is ancient history but actually 1989 is not that long ago; 1991 and the crushing of Solidarity by General Jaruzelski is not that long ago and those are former dictatorships, in the phrase you have used.

Mr Cash: But now we have the rise of the far right, as I predicted 15 years ago. That is part of the problem. Perhaps we have to leave it at that.

. . . .

Chairman: Knowing you as I do, Secretary of State, I am sure you will have prepared meticulously for both sections of the business and will not be surprised by anything we do ask you. Clearly, as I said when you interrupted me with your glowing smile, we do have very warm feelings towards our Irish colleagues and do understand the context in which people hold referenda which are not always asked about the questions of relevance to the country. There are often other things that are put forward but clearly, in the case of Ireland, there have been some deeply embedded concerns with the Lisbon Treaty as it stands, and they have sought to get some reassurance that, if they go to a further referendum, the concerns will be placated, because we as a Committee have some concerns that what is being touted around as “the Irish guarantees” are not guarantees, and that they are not something that can be done by the Council without calling for a second look at the Lisbon Treaty itself, in this country and in other countries. So the question I have to start this off is, if the decisions amount to an international agreement, which you have said, between EU member states that is legally binding, which I think is the word that was used, why not give it national effect by subjecting it to ratification processes in EU member states now? Would that not give a more immediate assurance to Ireland? We did it in this country for the Lisbon Treaty. We see this as in fact going to be guarantees that are legally binding. Surely, the only way they can be legally binding is if they are in fact ratified as an addition to the Lisbon Treaty at this time?

David Miliband: You asked two things there, Chairman: one, would it give more succour or assurance to Ireland? That is surely a matter for Ireland to decide, not for me to decide, and at no stage did Ireland propose that this should be done immediately. They proposed that there should be a decision of the European Council and subsequently, as was finally agreed, at the time of the next accession an agreement appended as a protocol. The second question you asked was: can this be legally binding? I think the best way of starting out what I am confident is going to be an extremely tortuous discussion on this legal question is to quote...

Chairman: I hope it is also illuminating. Tortuous often loses the audience. Let us keep it illuminating. David Miliband: I wait in the eager anticipation to see if our legal friends who are gathered here make it illuminating or not. This is what John Major said in December 1992.

Mr Cash: Edinburgh.

David Miliband: Post Edinburgh actually, after the European Council, and he said it in the House of Commons. He was referring to the previous decision that is the best preparatory example for what has happened. If you will allow me, Chairman, I will read it out. He said, “We agreed a solution to the issues raised by the Danish Government following their referendum. The solution is binding in international law. It does not in any way change the Maastricht Treaty or require a new round of ratification in member states. It provides an interpretation of the Treaty which Prime Minister Schlueter believes will enable him to hold a second referendum in Denmark in the Spring. It has been welcomed by all seven parties that drafted the original Danish document.” I think that binding international law, legally binding, as I described it to the FAC in the meeting we had there, is right because this is an agreement between the states, it will be lodged at the UN in the way that international treaties are, and that is the sense in which it is legally binding. It does not change the Lisbon Treaty as it affects the UK. It does not require ratification to have legal effect, and that is the reason that I think the Irish proposed that we proceed in this way, first of all to a decision and then to an appending of it to the protocol. I think that is the legal explanation. I am confident however that is not the last word on the matter because I know that there are others on this Committee who have a lot of interest in this.

Chairman: There will, Foreign Secretary, be others but can I just say to you that the statement of the Council’s conclusions was that the decision gave legal guarantees that meet the Irish concerns and, quote, “is legally binding from the date the Lisbon Treaty enters into force” and I believe you have repeated that. My understanding is that under section 1 subsection 2 of the European Communities Act 1972 it cannot have legal effect until it is incorporated by national legislation. My understanding and my recall is that the Danish protocol became a protocol, and in fact, I quote Baroness Kinnock of Holyhead...

David Miliband: A renowned legal authority.

Chairman: ... of 1 July 2009 saying that it becomes binding in international law when the guarantees are translated into a protocol at the time of the next accession, not when the Lisbon Treaty is ratified. So we have a contradiction here.

David Miliband: No, no, I am sorry, Chairman, there is not a contradiction. It is legally binding because of the decision that was taken. A decision is legally binding in international law. It is an agreement between states. There is no argument about that. It is deposited at the UN. It can be adduced by international courts as they try to seek interpretation of the Lisbon Treaty. The decision does not change the Lisbon Treaty; it provides clarification, which we had already provided to our own satisfaction in this Parliament but which the Irish wanted further clarification about. The Danish example: the decision remained legally binding as a decision for seven years before it was appended to the 1999 Treaty. The quotation from the European Communities Act does not obviate or negate the fact that a decision of the European Council is legally binding in international law.

Mr Clappison: I think that is in accord with the advice which we have been given. It is in accord with international law but, of course, international law is not the same as EU law and it leaves open the question of the justiciability of the decision. I think you agree, do you not, Secretary of State, that this decision is justiciable in the EU under EU law and by the European Court of Justice?

David Miliband: I think there is a discussion about the European Court of Justice. There is also the International Court in The Hague, which may eventually have...

Mr Clappison: No, let us just stick with the European Court of Justice.

David Miliband: I want to give you a full answer because it would be wrong to mislead. In respect of the European Court of Justice, if there were a case concerning, for example, abortion in front of the European Court of Justice and the European Court of Justice was in any doubt at all about whether or not the Lisbon Treaty interfered with Irish rules and law on abortion, they could happily turn to this decision for further legally binding clarification, and underlining 12 times, that Irish laws on abortion are Irish laws on abortion and are not interfered with by the Lisbon Treaty. That is the extent to which this might be of use to the ECJ.

Mr Clappison: There are a number of things jumbled up there, if I may say, Secretary of State. You spoke of interpretation of it being legally binding. It is the decision of the European Court of Justice which is legally binding. The decision is not legally binding on the European Court of Justice, is it? It may look at it for interpretation but it is not legally binding upon it. That is the reason why you are going to have a protocol later on, at some uncertain time.

David Miliband: I do not accept the second half of what you said because the job of the ECJ is to interpret the treaties. That is the point. It is not the question that the ECJ is somehow legally binding. The ECJ is there to interpret the law, and European law is set in ways that you know extremely well. In our view, the Treaty of Lisbon is absolutely clear on matters of tax and defence and abortion/right to life. The decision gives further legal force in that respect without changing the Lisbon Treaty one jot that came through the British Parliament, and I think you would agree this is a decision of the European Council – a decision as opposed to simply a conclusion – and a decision of the European Council is an agreement between states and is therefore legally binding.

Mr Cash: Foreign Secretary, just to clarify one point, you quite rightly of course pointed out that this was the European Council statement. It is odd that your Minister for Europe refers to it as a meeting of the Council of Ministers but I have the references here. That is a bit odd but let us just pass over that for the moment. Far more important, however, is the fact that, in the light of an exchange I had, as it happens, with the Prime Minister on 23 June on the European Council statement, the fact is that this decision, which was taken at Edinburgh, was a matter which at that time, in 1992 – and I do remember it really quite well as I was leading the rebellion at that time. I think you will find this very important – at least, I hope you will. At that time the House of Commons was in a position to deal with the question which arose during the passage of the Maastricht Bill – in other words, a completely different situation, because this is emphatically not the case now. So how on earth could you not agree that the European Council decision of 18 June must now be re-ratified and then implemented in Parliament with a new Bill? They are completely different circumstances from what you described.

David Miliband: For a very simple reason: paragraph 5 of the presidency conclusion says as follows. “…the Heads of State or Government have declared that: (i) this Decision gives legal guarantee that certain matters of concern to the Irish people will be unaffected by the entry into force of the Treaty of Lisbon; (ii) its content is fully compatible with the Treaty of Lisbon and will not necessitate any re-ratification of that Treaty; (iii) the Decision is legally binding and will take effect on the date of entry into force of the Treaty of Lisbon; (iv) they will, at the time of the conclusion of the next accession Treaty, set out the provisions of the annexed Decision in a Protocol to be attached, in accordance with their respective constitutional requirements… (v) the Protocol will in no way alter the relationship between the EU and its member states. The sole purpose of the protocol...

Mr Cash: That is their assertion.

David Miliband: Hang on. Let me finish before we get on to your assertion. “The sole purpose of the Protocol will be to give full treaty status to the clarification set out in the decision to meet the concerns of the Irish people. Its status will be no different to the similar clarifications in protocols obtained by other member states. The Protocol will clarify but not change either the content or the application of the treaty.” Then when you turn to the text of the decision itself, which of course takes a different place in the conclusions; it is not included in the main conclusions, precisely to draw attention to the fact that a decision is different from a conclusion; it is in annex one...

Chairman: Before Mr Cash comes back, can I ask you a question that most people looking at this process will be asking. If in fact this is a legally binding decision without the need for ratification, because you have said it does not need ratifying, why do you want to incorporate it into a protocol? Why would you want to do that at some unknown date in the future? To people looking at it, this sounds like a stitch-up to get round the fact that if we do not give Ireland something that is not in the Lisbon Treaty at this moment, which we ratified – it was not there when this Parliament discussed and ratified it, and I supported that ratification and spoke a number of times on that basis – if it is not in that treaty, why do we have to have a protocol? Is it because this is basically a political stitch-up...

 David Miliband: No, I reject that.

Chairman: ... to get round the Irish people’s concerns that those things are not in the Lisbon Treaty that we were asked to ratify as a Parliament? Can you not see why people are suspicious? David Miliband: No, I cannot. They can only be suspicious if they do not have the facts about what has happened, because the allegation one from you – not necessarily that you believe but that you are putting on behalf of those who might believe it – is that this is to get round the Irish decision, but the Irish are going to have a referendum. There is no getting round the Irish decision. The Irish Government have decided to put to the Irish people a further question on the Lisbon Treaty. So no-one can get round the Irish people, and it is important to say that because when I came back to the House after the Irish referendum vote last year, people said, “Aha! You are going to find a way to ratify the Lisbon Treaty without the Irish people agreeing to it.” There is no obfuscation and no going through the back door – nothing like that. The Irish people will have to do it. That is point one. Point two: the Irish Government asked for this to be in a protocol and, as we described in the pre-Council discussions we had, there were two ways of giving legal force to the legal guarantees that had been asked for in the December European Council, and they asked for it and we did not object to it once the text of the protocol decision had become clear. Then, thirdly, and critically, this decision and this protocol in no way in terms change one jot of the Lisbon Treaty as it affects Britain and as was passed by this Parliament. There are quotes in all of the areas from Ministers as this went through the House explaining why tax was not affected, why defence was not affected either and the rights of neutral and other countries would be respected, and non-NATO countries; I remember those debates and therefore it is very important to have on the record that the Lisbon Treaty that was passed by this Parliament as it affects the UK in the range of ways that we have discussed is unaffected by this decision. What is more, the heads of state of 27 European countries have said the same, and they are absolutely clear that no re-ratification is necessitated

. . . .

Chairman: It seems a fair point. It requires it requires unanimity of all countries for a protocol.

David Miliband: It is a good point but that is why it is important that the decision has legal force. That is why the fact that this is a decision, not a conclusion, is important, because the Taoiseach can go to the people of Ireland say, “We have got a decision which is legally binding in international law. It is an agreement between states.”

Mr Cash: You have made some very significant remarks. I may disagree with them but they are significant and they are on the record. I believe, frankly, Foreign Secretary, this whole operation for a long time has, as the Chairman has suggested, had the characteristic of stitch-up and cover-up but I would rather get down to the actual nitty-gritty here because it affects all the member states. What I would simply like to refer you to is what the Minister for Europe in the House of Lords, in the other place, stated yesterday at column 219. I have it here in case you would like me to hand it to you. I have it marked up because I think it is important that you should have a look at this. It has a ring round it and it has a couple of crosses. (Same handed) The Minister said yesterday, and I am quoting exactly what she said, “Everything in the guarantees has been agreed by the Parliament of this country” – she means the Irish guarantees – I repeat, “Everything in the guarantees has been agreed by the Parliament of this country.” Does the Foreign Secretary agree with her or will he admit that this simply is not true?

David Miliband: I would like to know why you think it is not true.

Mr Cash: For the simple reason that we certainly have not agreed in this Parliament to the Irish guarantees.

David Miliband: No, Bill, really. You read out a quote which said, “I am surprised that some Members are not aware that everything in the guarantees has been agreed” and then you said, “Aha! Tell me that we agreed the guarantees.” Of course, the point that Glenys Kinnock made, which you dropped from your second quotation, was everything in the guarantees. The guarantees are about tax, defence and abortion.

Mr Cash: You know perfectly well, Foreign Secretary, that the Irish protocol of 1992 has been, as I said to the Prime Minister...

David Miliband: Danish you mean?

Mr Cash: No, I am talking about the Irish protocol – has been greatly extended. There is a whole sheet of things that have been added in and that affects all the member states, so we are dealing… It seems to me that perhaps you have not been given a briefing on this point.

David Miliband: No. Let us be absolutely clear. The allegation you made is that somehow...

Mr Cash: It is a greatly extended Irish protocol which affects all the member states, therefore there is a need for ratification of this treaty, implementation by a new Bill in this House. How can you deny that?

David Miliband: For the very simple reason that every European country agrees that this decision does not change the Lisbon Treaty. Secondly, if you go through the debates that we had in this House on the Lisbon Treaty and look at what was said about tax and about defence and about abortion – I stand to be corrected but I have a feeling that you challenged me at various points to say “Isn’t this just a ramp to the end of British sovereignty over our taxation policies?” and I said, “No,” and that is what has been reconfirmed by the Irish decision.

Mr Cash: I am sorry to have to say, Foreign Secretary, I think that you are in a very serious muddle over the legal situation here, and I am afraid to say I would have to add – finally, because I think we have to leave it at this point because you cannot answer my questions – that there seems to be no limit – and I am not making personal accusations – to the general deceit which has covered this, and I believe we have to have a referendum as the only means, as 88% of the British people want one.

Chairman: I do not think “deceit” is an appropriate word.

Mr Cash: I shall withdraw the word “deceit”. Shall I call it chicanery?

David Miliband: Can I say, Chairman, that Mr Cash made a series of allegations but ended up repeating his political view, which is sincerely held...

Mr Cash: My legal and political view.

David Miliband: I listened to you so you should listen to me, with respect. He made an allegation that somehow something had been said in the other place last night that was not true. That is not true.

Mr Cash: It is true.

David Miliband: No, I am sorry. It is not true. What you first of all alleged related to the substance of the guarantees, and then you tried to corner this into the question of whether or not the guarantees had been previously discussed in the Parliament.

Mr Cash: “Agreed.”

David Miliband: Secondly, you then went on to a series of allegations relating to the possibility that this decision, and subsequently the protocol, would be a ramp for all sorts of new powers with some parallel that you drew with 1992. There is absolutely no evidence of that. Then when you had been beaten back on both of those two things, you resorted to personal/governmental abuse that restated your position that the European Union is a deceit on the people of Europe, which is your view but the fact that it is your view does not make it correct.

Mr Cash: The manner in which this has been conducted...

Chairman: Mr Cash, Mr Cash.

Mr Clappison: Just briefly to follow on from that, you mentioned the defence debate on the Treaty of Lisbon, which I took part in, as you may remember, or attempted to take part in. We had very little time in those debates to debate defence. Defence was hardly reached because of the way in which the Government organised the debate. I put that as a preamble. The question I want to ask you is the same question on this. When is it that we will have the opportunity to have a debate and a vote in this House on the Irish guarantees?

David Miliband: I do not know how many times I have repeated it here, and I do not know how many times it has been read by people, but there is absolutely no doubt about it: at the time of the next accession treaty the protocol will be appended.

© Parliamentary copyright

Time to re-ratify that Treaty, Mr. Miliband

Bill Cash explains why now is the time to demand a re-ratification for the Treaty and a new Bill to implement that re-ratification, irrespective of the outcome of the Irish referendum.

Following my cross-examination of David Miliband, though I wanted the Foreign Office legal adviser to appear before the European Scrutiny Committee, David Milband refused – but I have prompted this letter on 20 July, which appears here and shows that David Miliband and the Foreign Office are in direct conflict with the European Scrutiny Committee and its eminent legal advisers. The implication of this is that going back to my original challenge to the Prime Minister which I re-enclose and my subsequent crossexamination of Miliband himself at the European Scrutiny Committee session on 2 July, we are now in a position – depending on Miliband’s reply which we believe it will be impossible to do satisfactorily – to demand a re-ratification for the Treaty and a new Bill to implement that re-ratification, irrespective of the outcome of the Irish referendum. The situation is therefore political as well as legal but depends upon his reply which we must ensure arrives before the 2nd October and the Irish vote.

A new Bill for the passing of the Lisbon Treaty

On 23 June, Bill Cash put the following question to the Prime Minister:

Mr. William Cash: Will the Prime Minister understand, contrary to what he has just stated, that the Irish arrangements amend the Lisbon treaty and fundamentally and greatly extend the Irish treaty protocol of 1992 so that these arrangements affect all Member States and therefore require reratification now and must be enacted by a Bill in this Parliament, in Ireland and in all the member states?

The Prime Minister: I know that, whatever was decided at the European Council, the hon. Gentleman would be calling for exactly that. Let me just read to him what was said: “The protocol will in no way alter the relationship between the EU and its Member States”. That was stated by the Council, including the Irish. The sole purpose of the protocol will be to give full treaty status to the clarification set out in the decision to meet the concerns of the Irish—

Mr. William Cash: You’re just parroting!

One small step for Mr. Osborne – one big step for Tories

At last, it seems that the Shadow Cabinet has finally got the message that banking and insurance sector regulation and control should be put back where it belongs – back in the safe hands of the Bank of England. So, given that they actually win the next election, it will be a big if you have done, thanks for coming bye-bye to the Financial Services Authority in its present form – assuming of course that the Tories are as good as their word. Instead they actually propose to turn Gordon Brown’s leviathan FSA creation of all consuming power into a meaningful consumer protection unit taking away some previous duties and responsibilities of the Office of Fair Trading in the process. So far, so good but what a pity that while Shadow Chancellor Osborne has listened to sound advise on banking regulation and control and seemingly responded accordingly he remains obsessed to the ridiculous notion that the biggest of our banks might need to be broken up on the basis that consumer are losing out. OH dear, what are we to do! I am almost lost for words that for some reason it seems that Mr. Osborne and his colleagues actually believe that there should be an optimum size for a bank…….

True, Mr. Osborne is playing to a wide gallery of voter concern stirred up by the press and while seeking to play the good guy is seeing the matter of bank size purely in the eyes of the British consumer. This totally ignores the fact that most bank income and thus the benefit to the wider UK economy and exchequer comes from other sources. To play in international markets, to compete in wider markets and to bring in the sort of income that Britain will soon be crying out for requires that our banks need to be large. Of course, it is right that consumers needs to be protected and it may well also be right to look at whether the size of some banks means that the consumer is losing out. Have another inquiry by all means but my best guess is that it will probably confirm that the consumer has actually benefited from having wider competition and choice by allowing banks to function in a free and uninterrupted market process. Please though don’t do a Gordon Brown attempting to blame all the problems that we have seen on the banks themselves failing to accept that government got it wrong too big time and that if banking regulation had been left where it was the mess that is now being swept up may have filled a lot less bins.

Critics have been quick to shoot down the Osborne plan before it had even been formally announced. Of course, some of those putting their heads in the ring such as Lord Myners have already been discredited so we won’t too much worry about them. Others such as Lib-Dem Treasury spokesman Vince Cable appear to have finally gone off the rails if it really is true that they are blaming the last eighteen months mess purely on the size of banks as opposed to the failure of those charged with regulation within the Tripartite agreement from correctly doing their job. Overall I for one welcome the Osborne plan though I would wish that he had gone very much further – kicking away any idea once and for all that the European Union should become the primary regulatory authority for all banks. No thank you – Westminster may be far from perfect but it should in my view retain total authority over all matters of regulation and control of British based banks whether they are domestically or foreign owned. So, come on Mr. Osborne, please stick your head over the parapet and say that any attempt to allow the EU to influence UK bank regulation and that might destroy the huge competitive advantage that British banks have earned will be shot down in flames.

As a final thought I might add the remark that changing course, following eleven years of Tripartite Agreement operation, would not be as easy as it sounds. For example, when the Tripartite Agreement first came into operation in 1998/9 it is my understanding that the many of those empowered with commercial bank regulation responsibility at the Bank of England then moved over to the FSA. What happened to them after that is anyone’s guess. True also that while there are two sides to every story it might well be right to say that the Bank of England record on regulation up until 1998 was not exactly covered in glory. I am thinking here about the Bank of Credit & Commerce International (BCCI) even though I fully recognise that the BoE was not responsible for the manner in which BCCI was suddenly closed down. My point though is that to effect a sound and responsible regulatory policy will require a lot more than the just a simple handover and the BoE poaching a few hands back from the FSA. I am of course a great supporter of the Bank of England and particularly the Governor though I also recognise that the BoE missed more than the odd trick on Northern Rock over the years. So, to ensure that such failures do not occur again in our lifetimes again requires a back to the drawing board approach by the BoE – a complete new strategy that is designed for a very different and far more international banking and insurance sector than the one that existed back in 1998.

Explaining the growth of the far right in the Euro-Elections

Bernadette Mill reports: Many extremist parties across Europe made substantial electoral gains in the recent polls for the European Parliament. They have improved upon 2004’s result by gaining an extra eight seats. The British National Party gained two seats in the North West and Yorskhire and the Humber regions respectively. The Party first made electoral progress when it gained three local council seats in Burnley. Its policies include paying non-white citizens to return to their countries of ethnic origin and full British withdrawal from the EU. In Holland, Geert Wilders’ Party for Freedom won four seats and came second in the polls. The Party is in favour of mass deportation of immigrants from the Netherlands, their leader has likened the Koran to Mein Kampf and his film, ‘Fitna’, which depicts Islam as a movement of terrorism and violence, has attracted widespread condemnation. In Austria, the Freedom Party, who formed coalition governments with the centre-right People’s Party in both 2000 and 2003, won 13.1 per cent of the vote with the Alliance for the Future of Austria gaining just under 5 per cent. Italy’s Northern League, who are part of the ruling coalition government, gained 9.5 per cent of the vote. The Hungarian Jobbik Party, led by Dr Krisztina Morvai and who also have a paramilitary wing, gained three seats. The party bears more than a passing resemblance to Hungary’s World War Two militia, the Arrow Cross, which caused the deaths of thousands of Hungarian Jews. They ran their campaign on a pledge to fight ‘Gypsy Crime’ and are overtly opposed to the Roma. The Nationalist Greater Romania Party gained two seats and the anti-immigration Danish People’s Party, who came third in the 2001 general elections, won 14.4 per cent of the votes which gave them two seats. The anti-gypsy Slovak National Party gained one seat whilst the Latvian electorate voted for the pro-Soviet Union candidate, Albert Rubiks. In Finland, the True Finns gained one seat whilst the Greek Popular Orthodox Rally won two seats. However, there were losses for extremist parties in France, Poland, Belgium, Bulgaria and Latvia.

It is arguable that the massive gains made by the Dutch far right were to be expected. In 2002, the party of the late Pim Fortuyn, Lijst Fortuyn came second in the general elections winning 26 seats. He formed the Party after being sacked from the Dutch far-right Liveable Netherlands Party for his unwavering stance on immigration.

There is a proven link between low-income and individuals with basic education and extreme voting practices. Workingclass voters have historically viewed immigrants as competition for jobs and social services, which explains why extremist parties have successfully played upon these insecurities. Societies with high unemployment and high levels of immigration are thought to be the most susceptible to rises in extremist voting patterns. The lower strata of society are most likely to perceive immigrants to be a threat and are most likely to scapegoat them for society’s ills by voting for an extremist party. Individuals who are not integrated into society are often in need of a substitute intermediary group – which far-right parties claim to fulfil through their nationalist agendas. The success of the far-right in Europe can be attributed to the current economic malaise. The Spanish Premier, Jose Zapatero’s party paid the price for the recession and the astronomical rate of unemployment in Spain. The farright electoral success amongst middle-class and affluent voters in Austria, Italy and the Netherlands, however, could be due to the fear inherent in this group of losing the prosperity they gained during more favourable economic times. Another reason for far-right success is that these parties have been led by charismatic leaders – Jorg Haider and Pim Fortuyn were able to attract voters who would not usually subscribe to their extremist policies. Their legacies have ensured the success of far-right parties in their respective countries.

There was surprise in Germany as Merkel’s Christian Democrats/Christian Socialists won 38 per cent of the vote despite an unfavourable economic forecast which could result in the nation emerging as the sick man of Europe. This result shows a display of confidence by the German electorate that Merkel is the best person to get them through the recession.

Politically dissatisfied individuals are more likely to reflect their disapproval by casting a vote against the mainstream parties. Far-right groups position themselves as protest parties thus attracting disgruntled members of the electorate. This was arguably the case in Britain where the British National Party was able to capitalise on the public condemnation of the recent MP’s expenses fiasco. It can also be inferred that people are less likely to vote for a party that seems to be poorly organised and overtly inflammatory – the BNP worked on changing its image to that of a more presentable party by ditching their army attire and opting for suits.

The success of parties who ran their campaigns on largely anti-immigration agendas must not be written off simply as a consequence of the perilous economic climate. It can be argued that their success is attributable to the European Union’s policy of free movement of people. The Schengen Convention which creates a bloc without borders, came into force when the Amsterdam Treaty was ratified in 1999. The United Kingdom and Ireland opted out of Schengen however, that only restricts citizens from Iceland and Norway from entering these nations without a visa – all other full EU members have no limitations. This could explain the Party for Freedom’s success in the Netherlands – not only are they part of Schengen; they also have one of the highest levels of immigration from EU and non-EU states per capita. Geert Wilders’ rhetoric exposes a rabid dislike of immigration – he advocated the removal of Romania and Bulgaria from the Union and is vociferously opposed to Turkish membership of the EU. His anti-Romanian sentiment could rest with the fact that the Romanian President has pledged to give approximately one million Romanian passports to Moldovan citizens who have Romanian heritage. The success of extremist parties across the Union must be addressed. The governments of the European Union countries now have the task of finding pragmatic solutions to the rise of nationalist support which threatens to destroy the bridges built since 1957.

Future financial and banking market regulation – defending national interest & the ultimate power of Westminster

Howard Wheeldon writes: Oh to live in the US where defending the national interest will always be the highest priority in the land! Not so in Britain though as day by day our hapless government appears content to cede more Westminster control to the EU and to completely ignore the words national interest.

First things first though – a quick take on events at the Mansion House. Quite rightly, in challenging the view of Alistair Darling the Bank of England governor Mervyn King has significantly raised the stakes on the overall debate of bank regulation. Rare though it is for a BoE governor to seriously clash with government policy quite so publicly – if that is what you can call the scatterbrain policy approach of the incumbent government – in this case it is to be welcomed. However, whilst most will generally support the King view that the failed tripartite agreement lies at the heart of the UK regulatory problem, they may not necessarily agree with the governor that forcing banks to make a choice between consumer/retail banking and everything else is the right way to go. Amongst some other interesting remarks from the lips of the highly respected BoE governor was one that implied that if a commercial bank thinks it is too big to fail it is actually means it probably already too big and must be slimmed down! Many would take issue with this questioning who is to decide whether a bank is too big or for that matter, perhaps even too small? Meanwhile it seems that the tripartite strategy for UK regulation will regrettably live on with extraordinary powers to regulate banks left for now in the hands of the Financial Services Authority – as opposed to where they should be, in the hands of the Bank of England. Even so, one may hope that when the government presents its final plans to the Commons there will be significant improvements in lines of responsibility given to both the Bank and FSA in the new legislation that the government will shortly propose.

Arguing about who should control UK banking and financial sector regulation internally is one thing but giving away powers to the European Union quite another. Earlier, the House of Lords European Union Committee rightly in my view lambasted government failure to stand up for UK interests. The report they issued coincided with the likely reappointment of Jose Manuel Barroso as European Commission president for a second term and it exposes a timely reminder of the determination of Barossa to push forward plans for an EU wide financial and supervisory system in which EU members would in affect cede control of regulatory policy to the EU. Not surprisingly this appears to have the backing of France and Germany. But sadly, to all intents and purposes, it also appears to have the support of the UK government. At that point internal regulatory authorities would, it seems, become agents of the EU in which they would then be required to police the system domestically and to provide early warning of problems. Assuming Barosso manages to force ill considered reactionary legislation through Brussels the UK would be placed in a difficult predicament of automatically losing powers over domestic regulation of its banks and foreign banks that operate in the UK unless of course it decided to opt out. Ahead of signing up to the Lisbon Treaty the UK does still have powers to opt out of planned EU regulatory legislation, should it choose, but if my understanding is correct, if for instance Ireland votes to accept the Lisbon Treaty shortly as seems increasingly likely given the concessions it has won, Britain may then be faced with a difficult dilemma of either holding a referendum on the Treaty or automatically signing up. If the process stretches out and we assume a Conservative win at the next election, that could also mean that David Cameron could be faced with the possibility of holding a referendum very early on.

Meanwhile it seems that the British government is, apart from pushing forward immediate proposals for domestic regulatory reform from FSA chief, Lord Adair Turner and that have gone down like a hole in the head, content to wash its hands on future banking market regulatory policy and control preferring to hand the ultimate problem over to the EU. In doing so and in the certain knowledge that he has less than a year left at Number Ten the Prime Minister, a master of political disguise and past master of a say what you mean but never mean what you say politics appears determined that regulatory control of the City of London will eventually be ceded to Brussels. In itself this is appalling and probably irreversible. Even so, the fear of Brussels control is made all the worse by seeing little if any concern expressed by David Cameron. Clearly we all accept the need for improvements in cross border supervision and control of financial institutions in Europe and indeed, across the world. It is right that we also need better cross border supervision, more co-operation and some necessary enforcement but when it comes to the workings of the City of London we in Britain must ensure that Westminster retains overall regulatory control. Fail to halt the EU momentum now and we in Britain will end up not only with an over zealous regulatory regime but also the potential loss of the competitive base that has made the City of London the dominant global financial market powerhouse it is and rightly deserves to be. Fail now, cede further Westminster control to ill thought out proposals that create a further restrictive EU based legislative structure and we may as well bury what’s left of any remaining national sovereignty.

Before I move on to discuss concerns that the Tory Party has as yet failed to get its act together on the necessity of retaining Westminster supremacy on matters of financial and banking markets regulation let me just remind what it is that EU President Barroso is attempting to push through to create EU based regulatory legislation. Essentially this comprises the creation of three pan European watchdogs that will act to ensure that all EU nations implement whatever new base regulatory legislation appears on banks and banking market supervision. Yes, that means the creation of yet another EU board – this one to be called the European Systematic Risk Board. There are also plans for a European System of Financial Supervisors that would engulf or encapsulate existing national regulatory bodies such as the FSA. As I see it the Barroso proposals would mean that EU regulators would have the ability to veto and overrule all matters of national regulation and, as is the case now, the final authority for disputes to be resolved would be the European Court of Justice.

Back in November 2005 in a speech to the Centre for Policy Studies Tory leader David Cameron said that we must draw back powers – repatriate them – to govern market legislation, employment legislation and so on. He also said that it was imperative to regain competitiveness for the UK and that to achieve this required repatriation of powers [from the EU]. However, whilst I am reasonably assured that Tory Shadow Chancellor Osborne is opposed to passing over regulatory control of banks to the EU it seems that the Shadow Business Secretary, Ken Clarke, takes quite the opposite view playing for further discussion that essentially hides from an opinion that regulatory control should be ceded to the EU. Indeed, until I am hopefully proved wrong, I will continue to believe that Mr. Clarke’s view of discussion is merely playing for time on a probable belief that the longer the issue is discussed the more likely that Britain will be powerless to prevent ‘City of London’ regulation passing to the EU. Clearly, any forced ratification of Lisbon will play into Clarke’s hands. Clearly it is time for the Tories to come totally clean on the issue. Right now the line that HM’s Opposition Party is taking is not only confusing but it appears to be speaking with forked tongue.

With Mr. Brown having done little so far to provide any confidence that he will put the UK national interest first, protect the essence of Parliament by ensuring that the indisputable supremacy of Westminster is retained above that of the EU it seems that the government risks throwing the future of the City of London to the wolves by the back door. To do this risks the very future competitiveness of an industry that is so important to the UK economy that we just cannot allow regulatory control to be ceded to the EU. Meanwhile we must keep constantly reminding ourselves of just what we are potentially throwing away by potentially allowing French and German financial institutions such an easy ride. Failing to recognise the importance of this industry – of what it is now and of what it can probably soon again be in the future – a competitive and brilliant industry that can carry the flag of Britain around the financial market world whilst at the same time providing excellent returns for the British exchequer – is a message that somehow we must get through to our hapless politicians.