You may recall from the last Congress for Democracy that historically the Congress has positioned itself against the introduction of the euro but has not had a collective policy of campaigning on other aspects of developments in the European Union because of the wide range of interests that are represented on this Congress. However it does seem that the question of the euro, important and vital as it is, is perhaps moving somewhat onto the back burner at the moment. Whilst that is on the back burner the proceedings of the Convention on the Future of Europe have come to the front and are assuming a vital importance and the task that we were given by the previous Congress was to examine what the Convention on the Future of Europe was up to, to report back to you and to make recommendations as to the posture that this Congress should adopt in relation to that Convention.

The Working Party has produced a report on the Convention and on the draft Constitution. It is quite a short document considering that the draft Constitution itself is a lever arch file full of paper and is supported by several more lever arch files of working party reports and more detailed papers. I would like to thank my colleagues on the Working Party for the work they put in in condensing down some of the key points of this Constitution and embodying them in the report to you today.

I think the first point is to recall what the Convention on the Future of Europe is supposed to be doing. It was established by the summit meeting at Laeken in December 2001, which adopted the Laeken Declaration. That recognised that the European Union "needs to become more democratic, more transparent and more efficient" and for this purpose it established the Convention on the Future of Europe. It stated that "it will be the task of that Convention to consider the key issues arising for the Union's future development and try to identify the various possible responses."

Despite the limited and open nature of this mandate, under the chairmanship of Valéry Giscard d’Estaing the Convention has proceeded headlong down a single road and that is the road of drafting a complete new Constitution for the European Union which, as you have already heard, is a massive task involving the replacement of all the existing treaties with a new document and has ignored any of the other possible responses to the task that it was set. It also seems to me that in the course of drafting the Constitution the need to make the Union more democratic, more transparent and more efficient appears to have been lost sight of.

The Convention itself operates according to undemocratic procedures and reflects the essentially top-down nature of the whole European Union. The President of the Convention has a small Presidium Committee and that in turn dominates the Convention. The Presidium formulates and publishes draft treaty Articles without prior consideration by the whole Convention. Contrary views of members of the Convention, particularly those in common with David Heathcoat-Amory, who are in favour of a genuinely more open Europe with less centralisation, are simply marginalised.

According to its present timetable, the Convention is due to finish drafting the Constitutional Treaty in time for submission to the summit meeting at Thessaloniki on 20 and 21 June. So it is quite close and the latest indications are that there may be some doubt whether it can achieve that timetable, with the possibility of it slipping back into July, before the Convention presents its report and its draft Constitution to the European Summit Meeting. The reason for most of the problems is not any significant dispute within the Convention about whether or not there should be a Constitution and whether or not there should be an accretion of powers to the European Union but rather more arcane disputes relating to sharing out the spoils between different institutions, between the Council and the new President of the Council, the Commission and the European Parliament and the balance between small and large states.

I think one development is also of interest. You may recall that at the Treaty of Nice the justification put forward for that Treaty was that it was there in order to pave the way for the enlargement of the European Union to up to 25 member states. For that reason the Treaty contains detailed provisions under which the balance of votes and the voting mechanisms by which Qualified Majority Voting is achieved as extra states join the Union is laid down. It also contains substantial expansion of the scope of Qualified Majority Voting in order to override dissenting states amongst the 25 members of the union. This was the justification for the Treaty of Nice. The people of Ireland were told they were acting very irresponsibly in voting against ratifying it because that would block the expansion. It was necessary, it was what was needed to allow expansion to go ahead. But now we find it being said it is not enough. Before the expansion has happened, hardly after the Treaty of Nice has come into force, before any experience of its operation has been gained, we are told it is not enough, we must have this whole new Constitution.

We have gone through and in condensed form put in our report some of the key features of the draft Constitution. Articles 1 to 16 are the most important because they set the framework of the whole thing. I think a very fundamental first point needs to be made, and that is to talk about the distinction between a constitution and a treaty, because Mr Straw seems to think that the word "constitution" does not mean anything - a golf club can have one - but a constitution does differ fundamentally from a mere treaty. If we look across the Atlantic to the federal constitution, it allocates certain governmental powers to the federal institutions, the executive, the legislature and the judicial powers and although that constitution originally arose out of and was established by an agreement between the states that make up the United States, once adopted it became something more than a treaty between the states. It became a fundamental, independent source of legal authority which empowers the federal authorities to take action and in the most extreme case, during the American Civil War, to take action by making war on the states themselves. So that is the point of a constitution, it is itself a fundamental legal document from which legal powers are drawn and which confers directly powers to act on different institutions.

The Convention’s Draft Treaty calls itself a Treaty establishing a Constitution for Europe. I think this implies – and it is an accurate title – that although it is a Treaty, once it comes into force it will have established something more: a Constitution. Article 1 says that this Constitution establishes the Union – which, by the way, and yet to be decided, may be called the United States of Europe, or United Europe or the European Union. My strong suspicion is that the more emotive titles will be stripped out and we will not have United States of Europe in there, or references to federal powers. The word "federal" will be removed but without changing the underlying reality of the Constitution that is there.

Article 9(1) states that "The Constitution, and law adopted by the Union Institutions in exercising competences conferred on it by the Constitution, shall have primacy over the laws of the member states."

This doctrine of primacy is a doctrine developed by the European Court of Justice, which is actually not accepted by the majority of those Courts of member states that have been involved in this issue. For example, the German Constitutional Court made it quite clear in the Manfred Brunner case that within the zone of German sovereignty European laws could only be applied to the extent that they were consistent with the fundamental provisions of the German Constitution and that the German Constitutional Court would strike them down within the zones of German sovereignty if they contravened its provisions. But what this Constitution would do is to take a controversial and implicit legal doctrine formulated by the European Court and place it as a primary explicit clause in the Constitution, placing that Constitution at a level above that of all national laws, including national constitutions.

The Constitution itself establishes the Union, in contrast to the existing treaties where the European Union and the European Community are established by "the High Contracting Parties" (that is, by the member states) who "establish amongst themselves" these institutions. It is clear that the draft as it stands aims to supplant the member states and their own constitutions as the supreme source of legal authority and elevate the new Constitution to that status in the same way as in the United States, and in other federal states where the federal constitution is supreme. If it succeeds in this aim, it would destroy the ultimate sovereignty of the United Kingdom Parliament which still exists despite the present European Treaties.

This process of subordination of the member states occurs throughout the drafting of the Constitution. Far from being simply a measure to clarify the existing position, as is claimed by the British government – I think alone amongst anyone in Europe – by parcelling out and dividing powers, not in any clear way (if there is any clarity it is in the broad and sweeping nature of the powers that are conferred on them by the Union) and by defining and limiting powers, it defines the powers of the member states. The Constitution gives to the Union exclusive competence in relation to free movement of persons, goods, services and capital in the internal market, on competition rules, customs union and common commercial policy, and, indeed, fisheries, but there is a very significant, new and vastly wide exclusive competence which is in the conclusion of international agreements where the agreement "affects an internal Union act". Given the enormously wide scope of the policy areas where European law already prevails and the even wider areas which the Constitution will permit or provide for the European Union to take action, this provision would have the effect of banning member states from concluding international agreements across a wide range of subject areas. Indeed, it is difficult to try and think of any significant areas of international agreement that would not be affected by this and as an area of exclusive competence of the European Union, it means member states are prohibited from concluding treaties in their own rights. I think the future if this Constitution if adopted, coupled with the conferment of legal personality on the European Union, is that the vast majority of international agreements to which this country is a party in the future would be concluded by the European Union in its own name, not by Her Majesty the Queen in the name of this country.

In addition to these exclusive competences, the Constitution confers on the Union a vast range of so-called "shared" competences. The word "shared" is an interesting word, or at least it is used in an interesting way. Normally when one talks about things being shared, it involves some form of relationship of equality between the parties who are sharing things between them. The Constitution uses the word "shared" in a grossly misleading way because what it actually says is that in areas of shared competence, member states "shall exercise their competence only if and to the extent that the Union has not exercised its competence". This is not sharing of competence in any meaningful sense: the competence of the member states is residual, it’s on sufferance and in vast areas the competence of the member states will simply be progressively taken away as more and more Union measures are made. The vast areas involved are all matters related to the internal market, apart from those already covered by exclusive competence, judicial co-operation, agriculture, transport, energy, social policy, environment, public health and consumer protection.

Even beyond the areas of exclusive and "shared" competences, the Union is given further competences to take "co-ordinating, complementary or supporting action". The powers of the member states will become an ever shrinking residue, and even in exercising whatever powers they have left the members states will be under a duty of "loyal co-operation" towards the Union.

The European Union’s Charter of Fundamental Rights, under the present text of the Constitution, would be given legal force, and indeed an elevated legal force, as part of the Constitution itself. This vague and wide reaching document, as interpreted, embroidered upon and expanded no doubt by the European Court, would be given the status of supreme law, yet further expanding the scope of that Court to interfere in the internal affairs of member states.

Certain important changes, both of terminology and of procedure are proposed in relation to the way in which the European Union would make law. What at present are regulations, which are made and have direct effect in member states, would be renamed and would become "European laws".

This change of name reflects the wider range of subject matter over which such laws would be passed. The voting mechanisms are under discussion but would involve wider use of majority voting and, a highly technical matter but the existing Third Pillar matters – that is judicial co-operation and the common foreign and security policy would become First Pillar matters – they would be brought fully within the supranational mechanism of the Union and under the aegis of the European Court.

A lot of the controversy that is going on at the moment between small and large states is over the current proposal for a new post of a permanent President of the European Council who would be created, and he would be assisted by a new Minister of Foreign Affairs who has a rather odd function of reporting both to the Council of Ministers and also being a member of the Commission.

The Constitution also makes provision for flexibility but this is not a flexible Europe as one would use the term. This is flexibility to expand powers even further. If European Union objectives cannot be achieved under the already ample powers in the Constitution, the Commission can initiate change by making a proposal to the Council so that the Council, acting unanimously and with the assent of the European Parliament, can "take appropriate measures." That is, measures beyond any specific treaty basis laid down in the Constitution already. This would bypass the ability of national parliaments or national electorates to review expansion of powers through their own mechanisms or through referendums under their own constitutional procedures. So it represents a transfer of powers, as indeed the whole European project does, from national parliaments and from national electorates to a small group of government ministers who at the centre are able to pass and enact things without external review.

It is quite extraordinary when we come to the subject of democracy and the role of national parliaments that our Mr Hain has been making noises about the enhanced role of national parliaments that this Constitution will provide. That consists of two things. One, they have to be sent the papers. You can go to the European Commission and get their proposals; in fact, you can subscribe to the Official Journal of the European Communities in which they all appear, so national parliaments will be put on a par with any subscriber to the Official Journal of the European Communities in receiving Commission proposals. Perhaps some of them don’ t have a subscription to it in their library already, who knows.

Secondly there is a specific role for national parliaments when it comes to the concept of subsidiarity. I don’t want to branch out into a criticism of subsidiarity but in fact it is a very narrow and limited doctrine to begin with under the Treaty. It is all to do with in limited areas the question of whether national or Union measures should be taken to achieve Union objectives. There is no right under the doctrine of subsidiarity to question the Union objectives as such. If national parliaments jib under the principle of subsidiarity, if a third of them get together and send in a "reasoned opinion", well, what happens? The European institutions are then obliged to "take account" of their opinion but can proceed regardless. And, indeed, the Commission is obliged to "review" its proposal after which it can maintain it, amend it or withdraw it.

Another important area of this Constitution is that there is a lengthy chapter on criminal and civil justice under the Orwellian title of "Freedom, Justice and Security". That contains, amongst other things, provisions for the creation of the European Public Prosecutor, who would appear in national courts on cases involving the financial interests of the Union or criminal matters which affect more than one member state, such as cross-border crime, an expanded role for Europol, provisions for the harmonisation of civil and criminal procedures, meaning that one can foresee increasingly a framework under which minimum and maximum punishments are set for various offences. The definitions of offences are harmonised and increasingly civil and criminal court procedure is harmonised. There is also an interesting use of words. We know about the free movement of persons, services, goods and capital. There is a new concept in here in the text of the Constitution called the "free movement of judgements". This means that a judgement from a Greek Court, say sending you to jail for spying on their airfields, could freely move into this country and provide for your arrest and carting off to a Greek prison in order to serve your sentence.

I think what one can only say about this particular area is of course that the European Economic Community started off primarily as an economic matter where it made laws which primarily affected businesses and the farming community. They were not general laws affecting the citizen. Of course it has expanded and this of course represents a further massive expansion, the creation of a federal system of criminal and civil justice which would progressively give the European Union full attributes of the state.

The last aspect we looked at in our report is an interesting question. What happens if this country refuses to ratify? And can we be forced to stay in the Union if we want to leave?

Both Mr Giscard and the European Commission have been worried about what would happen if one or more electorates of member states prove reluctant to ratify their brand new Constitution. What would happen then? What they have been trying to do is to achieve a mechanism by which reluctant states, or the electorates of them, could be threatened or bamboozled or forced out of the European Union, or at least the prospect held over them, as an alternative to going along with this. Those mechanisms, although there have been papers issued by the Commission with attempts to create a "solemn political declaration" and so forth, I am happy to say are entirely without any legal basis whatever.

The legal position is quite clear. In order to revoke and replace the existing Treaties of Rome and Maastricht, the unanimous consent, the unanimous ratification of all existing member states is required and of course once the accession treaties have come in the unanimous ratification and assent of all of the now candidate but then new member states also would be required. Any member state has the power to block the adoption of this new Constitution for the whole of Europe. The only way they could get round that, I suppose, is that you could have France and Germany and a group of states creating mechanisms outside the structure of the European Union to go further as between themselves. But they cannot force other states into a dilemma between leaving or signing up to the new Constitution. I think that is a very important point because in a way it echoes what Nigel Smith said this morning in regard to the euro referendum and the subject of what is the alternative to saying No to the euro and the danger of being in the position where it is presented by the other side that the alternative to agreeing to it is to be out of Europe. I know there are many views and many of them represented heavily in this hall that that is the best alternative. However it is not the alternative which is dictated by saying No to ratification of this Constitution. It remains to be seen what would happen if this country were to refuse ratification. One option after that is simply to continue with the status quo, with being within the European Union according to the existing treaties. Another alternative possibility, and it might be a very happy one, is that this country would then be in a very good position to negotiate suitable terms on which it could continue to be related to the European Union and its internal market whilst permitting an inner core to go ahead and adopt a Constitution between themselves if that is their own destiny or their own wish and the destination they wish to reach.

Finally it is worth noticing that there is one clause in the draft Constitution, at least as it stands at present, which would be of some help and that is an explicit clause providing for the negotiation of arrangements for withdrawal of members states from the Union. The reason, I think, for putting it in is political, to enhance the attractiveness of joining the European Union to the new candidate states. It does as at present drafted give a member state an unfettered right to give notice as a result of which after two years they would cease to be a member of the European Union. The federalists don’t like this clause. They think member states shouldn’t be allowed to leave unless everyone agrees and they are able to impose the terms that they wish.

The present EC and EU Treaties contain no withdrawal clauses, but in practice a state, particularly a state the size of the United Kingdom, could if necessary repudiate those treaties. We have the power under our own law to do that and could leave. The danger we face, of course, is that the existing draft of Article 46 will be amended in such a way that it is worse than having no mention of a withdrawal clause at all - in other words, amended in such a way that states require the agreement or consent of other members of the Union in order to withdraw.

That is a very brief summary of the salient features of a very long and involved constitutional document. What we have also put before you at this meeting is a draft resolution for your consideration as a result of the remit that was given to us at the last Congress. What we propose in this resolution is first of all to recall some principles which this Congress expressed at a previous meeting - and it has previously expressed the view at its Fifth Congress that the electorate must agree by referendum any further transfer of power to the European Union. What we have to report to you as a working party is that the proposed Constitution undoubtedly constitutes a major further transfer of powers to the European Union and we therefore recommend to you that you as a Congress should adopt the position that it will take all steps open to it to explain and publicise the true nature and effects of the constitutional treaty and will press for a referendum on its ratification. I would like to formally propose that resolution on behalf of myself and my colleagues on the working party.

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