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legislation is void for inconsistency with EU laws. In this respect, it is unlike the Supreme Court of the USA.

The seeking of clarification by the Court of Justice may lead to a consistent interpretation of EU law throughout the Union.

The Effect on Case Law

The importance of EU law in relation to existing case law was considered by Lord Denning MR in Bulmer v. Bollinger (1974). He observed:

"The Treaty does not touch any of the matters which concern solely England and the people in it. They are not affected by the Treaty. But when we come to matters with a European element, the Treaty is like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back. Parliament has decreed that the Treaty is henceforward to be part of our law. It is equal in force to any statute."

It is thus likely that if a particular law of the EU is contrary to a binding precedent of English law, a court lower in the English court hierarchy may ignore it and base its decision on the EU law.

Parliamentary Sovereignty and the European Union

A White Paper published in 1967 on the subject of EU law and parliamentary sovereignty stated that Parliament, in acceding to the Treaty, would be bound to refrain from enacting legislation inconsistent with EU law. However, parliamentary sovereignty is still important, since properly enacted legislation via Queen, Lords and Commons is binding, and any repeal of the 1972 Act could be effected in this way. The courts have always presumed that Parliament does not intend to derogate from international treaties and conventions, and if any inconsistency arises, the judges would presume that it is Parliament's intention that EU law should prevail. However, Lord Denning had this to say about instances where there is a clear inconsistency:

"Thus far I have assumed that our Parliament, whenever it passes legislation, intends to fulfil its obligations under the Treaty. If the time should come when our Parliament deliberately passes an Act with the intention of repudiating the Treaty, or any provision in it, or intentionally of acting inconsistently with it and says so in express terms, then I should have thought that it would be the duty of our courts to follow the statute of our Parliament."

Academic opinion leans to the view that the 1972 Act is entrenched and fundamental like the Act of Union 1707 or the Bill of Rights 1689, and it has even been suggested that the EU is a new legislative organ additional to the organ of Parliament.

Section 3, European Communities Act 1972, binds the UK to accept the rulings of the European Court which has stated several times (see above) that the Parliament of member states may not legislate inconsistently with EU law. This seems inevitably to involve a rejection of the doctrine of parliamentary sovereignty and curtailment of the legislative powers of Parliament, both antecedent and subsequent. Thus, in addition to existing domestic law being inconsistent, Parliament cannot pass new laws on a matter already dealt with by the EU except to implement its details. In Costa v. ENEL (1964) the Court said:

"The member states, albeit within limited spheres, have restricted their sovereign rights ... no appeal to provisions of internal law of any kind whatever can prevail".

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Single European Act 1986

Five New Policy Initiatives

The European Council agreed at its meeting in Luxembourg in 1985 to adopt five new policy initiatives, which became embodied in the Single European Act 1986 (SEA) following its ratification by the national parliaments of all the member states. This ratification was completed by 1 July 1997, the date the Act came into force.

The five new policy initiatives were:

The Internal Market

Monetary Capacity

Social Policy

Economic and Social Cohesion

Research and Technological Development

The Internal Market

One of the most important of the objectives is the establishment of the Internal Market. What, then, is the Internal Market? Its characteristics are defined under the Act as "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaty of Rome".

The member states declared in an annexe to the SEA their firm political will to take the necessary decisions to complete the Internal Market before 1 January 1993. A further declaration annexed to the Act, however, also indicated that member states could derogate from their obligations under the Treaty of Rome in certain policy areas. These policy areas are:

(a)Controlling immigration from third countries;

(b)Combating terrorism, crime and trafficking in drugs;

(c)Illicit trading in works of art and antiques.

It is the view of some critics of the SEA that the extension of the power of the member states so declared derogates from their obligations beyond those found in the original Treaty.

In specific terms, the aim of the SEA 1986 is to complete the process of economic integration by removing the technical barriers which required goods to be checked at the frontiers between the member states so as to ensure they conform to certain technical and safety standards. Each member state has the responsibility of ensuring that goods produced within its territory and intended for export satisfy the standards agreed for the whole of the European Union, thus avoiding the necessity of further boundary checking when they are conveyed into another member state. It also specifically proposed that private individuals could purchase goods in any European Union country and take them home without paying any customs duties, provided these goods were for their own private use – this aim was realised on the establishment of the Single Market on 1 January 1993.

Some limitations to economic integration still remain, mostly attributable to member states having retained separate excise duties and individual imposition of different rates of VAT, a form of indirect taxation.

Decision-making

The SEA 1986 also heralded two major changes in the EU's decision-making processes which were designed to accelerate the voting procedure in the Council of Ministers and to give increased powers to the European Parliament.

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(a)The Council's voting rules under the Act provide for simple majorities (principally for procedural matters), qualified majorities (for infilling existing policies) and unanimity (for new policies, or if the Council wishes to change a Commission proposition against the wishes of the latter). A qualified majority is comprised of 74% of the votes of the member states, weighted by size. Unanimity can be secured with abstentions, except that in relation to qualified voting, abstentions have the same effect as votes cast against.

(b)The SEA 1986 gave the European Parliament the power to consider proposals brought forward by the Commission and agreed in principle by the Council of Ministers. Proposals in certain policy areas were declared to require the approval of an absolute majority of members of the European Parliament before becoming law – these areas include treaties between the EU and "third countries" and the accession of new member states into the EU.

The SEA 1986 devised a "co-operation procedure" mainly to facilitate the introduction and implementation of measures aimed at creating the Internal Market. Initiation and promotion of such EU legislation was retained by the European Commission, followed by consideration by the Council of Ministers. The European Parliament was also granted the facility to give an opinion on the Commission's proposals, and the Commission could, but was not obliged to, modify its proposals according to any such opinion expressed.

Other Matters

The SEA 1986 also dealt with the following matters:

Open tendering for public works contracts

Codification of the mutual recognition of qualifications awarded by member states

Reduction of state aid to individual industries

The Treaty on European Union 1992 (The Maastricht Treaty)

At their meeting on 11 December 1991 in Maastricht, the then 12 member states of the European Union agreed and published the text of a Treaty on European Union which was subject to ratification through national referenda. It emphasised the "three pillars" on which European unification is to be based – the European Community in the form it had developed by 1991, the progression towards a common foreign and security policy, and co-operation on justice and interior affairs.

Amongst the specific proposals contained within the Treaty, the following were of special note:

A common European currency by 1999

A charter of rights for "European Union citizens"

Increased powers for the European Parliament

The introduction of a common foreign and security policy

New powers for the European Union

A Common European Currency by 1999

In the development of the Internal Market which was set in motion by the Single European Act 1986, businesses operating within the EU were canvassing for an end to uncertain and fluctuating exchange rates, which imposed continuing and increasing problems in relation to the free movement of goods and services within the EU. Payment of commission and losses on the differing selling and buying rates compounded the problems of business. A potential solution to such problems was a move towards European Monetary Union, with a single

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currency, the Euro (€), which could be used freely throughout the EU. This finally came into operation on 1 January 1999.

Monetary union as conceived by the Treaty is governed by the European Central Bank (ECB) which, through and in conjunction with a European system of central banks and the national central banks, operates the system. The ECB is completely independent of the views of governments, the Commission or the European Parliament, and six full-time executives direct the affairs of the ECB through the common accord of the heads of state and governments of the member states.

The primary objective of the system is price stability, and strict discipline is imposed on public finance, prohibiting excessive national government deficits and imposing penalties on member states who offend.

A key question concerns membership of the monetary union, which is divorced from membership of the economic union to which member states already belong. To be eligible for membership of the final stage of monetary union, a member state must have satisfied the convergence criteria contained in a protocol to Article 121(1) of the Treaty. Amongst these criteria are:

(a)The member state's average rate of inflation must not be more than 1.5 points worse than the average of the best three member states.

(b)The ratio of government debt to gross domestic product must not be more than 60%.

(c)The ratio of its deficit to gross domestic product must not be more than 3%.

(d)The national currency must be in the narrow band of allowable deviation of 2.25% and must not have been devalued in the preceding two years.

These stringent conditions of entry were designed to protect the single currency from potential weaknesses in the performance of a participating member state and necessitate strict fiscal policies by national governments.

The United Kingdom did not join the European Monetary Union on 1 January 1999, as it negotiated the option of not participating until it specifically declares it wishes to do so, (as did Denmark). Whether the United Kingdom does eventually participate has yet to be decided, and may well be the result of a national referendum. All the other member states which met the convergence criteria on 1 January 1999 are now obliged to implement monetary union.

Rights of European Union Citizens

Article 17, as consolidated by the Citizens’ Rights Directive 2006, deals with European Union citizenship, which is mandatory for nationals of member states, since no opting-out is allowed.

As citizens of the EU, nationals of the member states will have the right to move and reside freely within the EU. They will also be granted the right to vote and stand as a candidate in local and European Parliament elections in whichever member state they reside.

The European Parliament is required to appoint an Ombudsman to deal with complaints from any citizen of the EU relating to maladministration in the functioning of the Union institutions, with the exception of the EU courts.

Increased Powers for the European Parliament

The co-operation procedure introduced by the Single European Act 1986 was amended by the Maastricht Treaty, which introduced a new procedure called co-decision.

The European Parliament is granted the power to prevent legislation being adopted for the first time. The veto can, however, only be exercised after the convening of a Conciliation Committee, comprising members of the Council of Ministers or their representatives and an

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equal number of representatives of the European Parliament. The Committee must approve a joint-text within six weeks, which is followed by a further period of six weeks during which the Council and the Parliament have to adopt the proposal – if they do not, it fails. The timescale can be extended by common agreement of the Council and Parliament for a further two-week period.

If the Conciliation Committee fails to agree, the Council is entitled to issue its formal Opinion within six weeks. The European Parliament is then empowered to reject the Opinion by an absolute majority of its Members to prevent the proposal being finally adopted.

The Treaty also provides the Parliament with the power of veto in relation to the accession of new member states.

A Common Foreign and Security Policy (CFSP)

The Maastricht Treaty agreed to establish a CFSP which was not to be part of the EU system per se (by itself), not subject to the same decision-making procedures and not subject to judicial review by the European Court of Justice.

The objectives of the policy were to safeguard the common values, interests and independence of the EU, to strengthen security and promote international co-operation so as to reinforce democratic principles. Greater links with NATO were envisaged.

New Powers for the European Union

A more proactive role for the European Union was programmed in relation to the following:

(a)Consumer protection, public health and visa policy

(b)The establishment of trans-European transport, telecommunications and energy networks

(c)Co-operation in the areas of justice and home affairs

(d)Treaty provision for development co-operation, industrial policy, education and culture

(e)Environmental protection

(f)An increase in research and development

(g)Further progress on social policy (with the exception of the United Kingdom)

In relation to the development of the last power – social policy – mention should particularly be made of the Social Chapter. The articles published by the Treaty relating to the Social Chapter aim to offer rights and advantages to all workers concerning:

Freedom of movement

Equal treatment for men and women

Increased opportunities for vocational training

Improved working conditions and better health protection in the workplace

Rights of the elderly and the disabled

Increased worker consultation and better protection for children and adolescents

The right of association and collective bargaining

The Treaty does not impose a minimum wage, which is a feature of national economic policy in France, Germany and the United Kingdom. It leaves the member states the freedom to decide on the best way to ensure that shareholders and workers alike benefit from the increased prosperity which it is envisaged the Internal Market, organised on otherwise strictly capitalist lines, will achieve.

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The Social Chapter is to be distinguished from the Social Charter which was introduced by the Council of Europe, an organisation which is entirely separate from the European Union. Both the Social Chapter and the Social Charter aim to improve the working conditions and status of workers, but the Social Charter is a completely voluntary code with no provision for countries who have subscribed to it to enforce it. The Social Chapter, on the other hand, was given a legal foundation in the Maastricht Treaty (with only the United Kingdom securing an opt-out allowing it not to enforce the provisions at that time).

Other Features

Two other features of the Treaty on European Union (Maastricht Treaty) 1992 deserve special mention:

The European Court of Auditors – An Enhanced Role

The Court of Auditors, whose headquarters is in Luxembourg, has existed since 1977 and is the EU institution whose brief is to monitor the Union’s financial probity and regularity. It consists of 27 members whose appointments are made by the European Council following consideration by the European Parliament, and is headed by a President.

The Court's staff audit the accounts of the Union institutions and general and special reports are issued in the name of the Court. The general report is debated in the European Parliament to oversee the Commission's accounting system and special reports examine particular aspects of individual institutional expenditure. The Court of Auditors gave early warning of a developing financial crisis during the early 1980s and in 1989 it identified cases of large-scale fraud in a number of member states and published several searching special reports. More recently, in March 1999 the European Commission's entire 20-member executive resigned after a report accused the Commission itself of widespread fraud, nepotism and mismanagement.

Article 4 of the Maastricht Treaty has upgraded the status of the Court of Auditors, increasing its influence so as to coincide with the completion of the Internal Market. The aim is to exert additional pressure on combating fraud and financial irregularity in the deployment of EU funds.

The Principle of Subsidiarity

In the evolution of the European Union since the original Treaty of Rome in 1957, a trend had developed which a number of member states had identified as federalism, looking towards a European federal state. Concern had also been expressed relating to the over-centralisation of authority in the European Commission in Brussels. These trends were especially repugnant to the United Kingdom, which voiced its concern at the Maastricht meeting.

The principle of subsidiarity was accordingly platformed at the meeting and the text of Article 3(b) of the Maastricht Treaty was agreed as follows:

"In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the member states and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community".

Evidence of the adoption of the principle of subsidiarity by the Treaty is also recorded in its preamble, which defines the objective of the European Union as "taking decisions as closely as possible to the citizen in accordance with the principle of subsidiarity".

Historically, the doctrine of subsidiarity characterised the social philosophy of the Vatican State and states that citizens should be closely involved in the decisions which affect them and that the bodies that take such decisions should be close to them. At

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the same time, it is not an easy doctrine to apply, because considerable controversy can exist concerning the level of decision-making which will secure the best result for such people.

Article 3(b) and the preamble to the Treaty have taken steps to resolve this controversy to some degree by giving certain power back to the member state and inhibiting the growth of centralised power characteristic of federalism. It would now appear that it is for the European Commission to justify its chosen action when contemplating a proposal, i.e. why it is not leaving the action to be taken at member state level. Subsidiarity reacts against over-centralisation and these parts of the Treaty are an attempt to keep the EU out of matters which a member state can deal with better and more effectively.

Henceforth, the validity of a proposed EU measure may accordingly be successfully challenged on the basis that it contravenes and offends against the principle of subsidiarity. Since Article 230 of the Treaty of Rome 1957 continues to authorise the European Court of Justice to consider actions for annulment, it remains to be seen whether the Court will be called upon to adjudicate upon a potentially repugnant measure in the future.

It also merits noting that according to the Maastricht Treaty notion of the principle of subsidiarity, decentralisation ends at the level of the member state in its inhibiting influence on the growth of central power and does not devolve to regional or local authorities, despite the view that such authorities are "close to the citizen". How the role and authority of the national assemblies set up in Scotland, Wales and Northern Ireland will be reconciled with this scenario is also an issue for the future.

European Communities (Amendment) Act 1998

This Act incorporates the Treaty of Amsterdam of 1997 into UK law. The Social Protocol (or Social Chapter) was incorporated into the main body of the Treaty of Amsterdam and this ended the UK's opt-out from the Social Protocol at Maastricht. The 1998 Act gave the UK government the necessary authority to implement the Parental Leave Directive and the Working Time Directive.

Note to Students

The word "community" specifically refers to the three bodies, European Coal and Steel Community (ECSC) founded in 1951, the European Economic Community (EEC) formed in 1957 and the European Atomic Energy Community (Euratom) formed in 1958. The EEC later became known as the European Community (EC). The growth in the number of countries in the EC to 12 in 1986 led in due course to the Maastricht Treaty being signed in 1992 where all the countries decided to adopt the new title European Union (EU). This latter term is now used to refer to all European matters.

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(Continued over)

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24 Common Law, Equity and Statute Law

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