SOVEREIGNTY AND THE E.U.

William Hague, the British coalition Government's Conservative Foreign Secretary, announced at his party's annual conference this week that a "sovereignty clause" would be introduced into an E.U. bill later this year. According to Mr. Hague, such a clause would "place on the statute book this eternal truth: what a sovereign parliament can do, a sovereign parliament can also undo". This would thereby underline that ultimate sovereignty over E.U. law rests with the British Parliament.

Standing under a huge conference banner which read "together in the national interest", this proposal got thunderous applause. The Conservative Party has always been big on sovereignty, despite the fact that it was Ted Heath who took Britain into the E.U., Margaret Thatcher who signed the Single European Act, and John Major who oversaw the Maastricht Treaty. Yet applause from the party faithful is one thing; what will Mr Hague's proposed sovereignty clause really mean in practice?

In any overlapping political-legal system, there must be clear rules about which part of the system takes precedence when there is a conflict. The European Court of Justice, the legal guardian of the E.U. system, has long been clear in its own mind about what should prevail. Ever since the famous case of Costa v. ENEL in 1964, it has consistently held that E.U. law should have supremacy over the national laws of the Member States. Various national constitutional courts, notably Germany's, have not always accepted this principle in theory; in the so-called Solange ("as long as") rulings, the German constitutional court said that it would only accept E.U. supremacy as long as the E.U. in its turn accepted the principles behind the German constitution. But since the E.U. does accept those principles, the practical effect is that E.U. law does take precedence over German domestic law.

What about the U.K., which has no formal written constitution and no constitutional court to interpret one? Unlike in some other countries, the signing of a treaty by the Government has no legal effect; so when Britain joined what later became the E.U., Parliament had to enact the European Communities Act 1972 in order to give effect to the Treaty of Rome and other E.U. legislation. Given its potential effect, the 1972 Act is a remarkably short document, with only two real sections. S.2 incorporates the E.U. treaties and other stuff lock, stock and barrel into U.K. law; while S.3 makes it clear that ultimate interpretation of the legal effect of them rests with the ECJ and its case law (including Costa v. Enel). In particular, unless a legal issue involving E.U. law is absolutely clearcut (a so-called "acte clair"), a lower court may, and a domestic court of final appeal must, refer the matter to the ECJ for a preliminary ruling. Taken together, all that gave E.U. law precedence over domestic law.

British judges were quick to work this out. But British politicians and the British public were not. There were various mutterings and raised eyebrows during the next 15 years; but it was not until the celebrated Factortame case reached the House of Lords in 1989 that the sovereignty issue fully exploded.

Spain and Portugal joined the E.U. in 1986. At the time, Spain had the community's largest fishing fleet, and Spaniards felt constrained by the reduced fishing quotas that had been enacted in order to preserve fish stocks. So they started establishing companies in the U.K. (of which Factortame Ltd was one of many), which owned and operated fishing vessels that could take advantage of the U.K. quota. Under the old merchant shipping act, a fishing vessel was British if it was owned by a British company (which Factortame and the others were). However, after complaints from British fishermen, Parliament passed the Merchant Shipping Act 1988, which defined a fishing vessel as British only if the British company that owned it was itself owned at least 75% by British citizens. Factortame and the other companies went to court to get this new law set aside, on the grounds that it breached the community principle that people could set up companies and businesses wherever they liked.

The High Court said that this was a matter of E.U. law, and so asked the ECJ for a ruling. However, since this would take about 2 years, Factortame also asked the court for an injunction against the Government to have the new rules temporarily set aside (on the grounds that if they could not fish for two years, then they would go bust). The Divisional Court granted the injunction, and it was this decision that was eventually appealed to the House of Lords in what became known as Factortame 1.

Factortame 1 is one of the great British constitutional law cases, and should be required reading for anyone with an interest in Britain and its relationship with the E.U. (i.e. every voter). In the unanimously agreed single speech, Lord Bridge had to answer the question whether an English court of law could issue an injunction setting aside a validly passed Act of Parliament. He said two things. Under English law, no. Secondly, however, since 1972 the U.K. had also operated under E.U. law. The injunction involved a matter of E.U. law; and under the terms of E.U. law, the House of Lords being a domestic court of final appeal, he was bound to hand the question over to the ECJ for a preliminary ruling. The ECJ duly held that E.U. law must be upheld, even if that meant overturning long-cherished notions and principles of domestic law. The House of Lords went on to uphold that decision (and the injunction) in Factortame 2. Put shortly, E.U. law prevailed.

(That was by no means the end of the Factortame saga. There was then the question whether the Government should compensate the companies involved for their losses, and that also went to the House of Lords and ECJ; the answer was yes. Adding on various subsidiary issues, the litigation dragged on for over a decade.)

Back to Mr. Hague and his sovereignty clause. In the same conference speech, he also said that the clause "will not alter the existing order in relation to EU law". But if it doesn't alter the existing order, what does it do? The only plausible thing a sovereign British Parliament could "undo" without altering the existing order would be to repeal the European Communities Act 1972, and take Britain out of the E.U. That is indeed theoretically possible; but is the only thing in this whole debate that ain't going to happen. And if it ain't going to happen, where is the real sovereignty? Mr. Hague is simply playing to the gallery of the Tory faithful.

That view is reinforced by the other measure he announced. The E.U. bill will also include a supposed "referendum lock", meaning that there has to be a referendum before any further treaties are signed transfering powers from Westminster to Brussels. However, unlike the E.U. issue, that measure is something that can simply be reversed by a future British Parliament without a problem. It's a lock that remains locked only as long as Parliament wishes to keep it locked.

In his brilliant book "This Blessed Plot", former columnist Hugo Young castigated British Governments of all complexions for not being honest with their electorates about what the E.U. project represented, and how it worked in practice. I am sure he will be chuckling in his grave at Mr. Hague's new antics.

Walter Blotscher