1. In June 2003, the Convention on the Future of Europe presented Parts I and II of its work to the European Council at Thessaloniki. Parts III and IV were presented to the Italian Presidency in July. Together, these four parts constitute the draft Constitutional Treaty for the European Union.

2. The draft Treaty was laid before the UK Parliament in August 2003 (Cm 5897). We are aware that many aspects of the draft Treaty have been examined in depth by other committees at Westminster, particularly the House of Commons European Scrutiny Committee and the House of Lords European Union Committee. The European Union Committee has published a large number of reports considering the draft Treaty article by article and is shortly to publish a further, overview report. It is our intention that our report should be read in conjunction with these other reports. We are also conscious that the draft Treaty is only a starting point—the final text has still to be negotiated at the Inter-Governmental Conference which began on 4th October. Any Treaty would then have to be incorporated into UK law by a bill subject to the usual Parliamentary procedures. If such a bill is introduced we will comment further. In view of the wide public interest in the potential implications of the draft Treaty, we considered that we should set out to inform the debate at an early stage, not least to assist those currently negotiating the Treaty on behalf of the UK.

3. The Committee is of the view that the draft Constitutional Treaty will, if implemented in UK law, have a constitutional impact on the United Kingdom. We therefore wrote to the Rt Hon. Peter Hain MP, the Government's representative to the Convention, to ask him to set out the Government's view on how the Treaty would affect the constitution of the United Kingdom (see Appendix 2). We received a reply from the Foreign Secretary, the Rt Hon. Jack Straw MP (see Appendix 3).

5. We first draw attention to some of the most prominent provisions in the Draft Treaty, although such an outline inevitably passes over very many matters of practical importance.

6. Although the avowed purpose of the draft Treaty is to prepare a Constitution for the European Union, the legal status of the document, if and when it is signed and ratified by the member States of the Union, will remain that of a treaty at international law. It is by means of treaties that the structure, composition aims and objects of all international organisations are determined.

7. One aim of the draft Treaty is to re-organise and present in an accessible form the present provisions which in a most complex way, explained by the history of the European Union, govern the activities of the Union. Furthermore, the framers of the draft Treaty have included many provisions which in various ways change the structure of the Union, change the working of the Union organs, and modify the links between the Union and the democracies of Europe.

8. Title I of Part I of the draft Treaty deals with the definition and objectives of the Union. By Article I-5 (relations between the Union and the Member States) the Union shall "respect the national identities of the Member States, inherent in their fundamental structures, political and constitutional" and shall "respect their essential State functions"; the Union and the Member States shall "in full mutual respect, assist each other in carrying out tasks which flow from the Constitution". Article I-6 confers legal personality upon the Union.

9. In Title II of Part 1, Article I-7 requires the Union to recognise the fundamental rights contained in the Charter of Fundamental Rights, which forms Part II of the Constitution. Article I-8 provides that every national of a Member State shall be a citizen of the Union (additional to his or her national citizenship), and sets out the rights which citizens of the Union shall enjoy.

10. In Title III of Part 1, Article I-9(1) provides that "the limits of Union competences are governed by the principle of conferral", and that the use of those competences is governed by the principles of subsidiarity and proportionality. By Article I-9(2), the principle of conferral is explained, namely that the Union shall act within the limits of the powers conferred on it by the Member States: "Competences not conferred upon the Union in the Constitution remain with the Member States". Provision is made by Article I-9(3) and by the Protocol on the Role of the National Parliaments in the European Union for a procedure informing all national parliaments of the Commission's legislative proposals and enabling national parliaments to submit their views on whether a legislative proposal complies with the principle of subsidiarity.

11. In Title III of Part I, by Article I-10, "The Constitution, and law adopted by the Union's institutions in exercising competence conferred on it, shall have primacy over the law of the Member States". Member States are to take all appropriate measures to ensure fulfilment of obligations flowing from the Constitution.

12. Articles I-11-16 deal with the categories of competence that the Constitution contemplates; these include exclusive competence (as to which only the Union may legislate) in respect of establishing the competition rules necessary for the internal market, monetary policy (for those Member States that have adopted the euro), common commercial policy, customs union and the conservation of marine biological resources under the common fisheries policy. Areas of shared competence are specified in Article I-13, and another category of supporting, coordinating or complementary action is set out in Article I-16. Article I-14 deals with the coordination of economic and employment policies. By Article I-15, the Union's competence in matters of common foreign and security policy covers all areas of foreign policy and all questions relating to the Union's security which might lead to a common defence. Article I-17 (Flexibility clause) provides a procedure by which necessary powers additional to those conferred by the Constitution may be obtained by a procedure that requires a unanimous decision by the Council of Ministers.

13. The Union's Institutional Framework is governed by Title IV, chapter 1 of Part 1. That framework comprises the European Parliament, the European Council, the Council of Ministers, the European Commission and the Court of Justice. By Article I-21, the European Council shall by qualified majority elect a President, for a term of two and a half years, renewable once, who may not hold a national mandate and whose office replaces the existing arrangement for a rotating President held for six months. In relation to the European Council and the Council of Ministers, Article I-24(1) provides that voting by qualified majority shall in general require a majority that consists of the majority of Member States, representing at least three fifths of the population of the Union; in certain cases, the required qualified majority shall consist of two thirds of the Member States, representing at least three fifths of the population of the Union. New provision is made for the composition of the European Commission (Articles I-25 and 26), including the new post of Union Minister for Foreign Affairs (Article I-27), who as one of the Vice-Presidents of the Commission would be responsible for handing the Union's external relations.

14. By title V, chapter 1, there is set out a modified hierarchy of legal instruments of the Union, namely "European laws, European framework laws, European regulations, European decisions, recommendations and opinions". Of these, a "European law" would replace the existing category of regulations; a "European framework law" would replace the existing category of directive (with some modification); and the category of "European regulations" would be new. Article I-35 provides for a new category of "Delegated regulations".

15. Title V, chapter 2, makes specific provision for measures implementing the common foreign and security policy (Article I-39), the common security and defence policy (Article I-40), and the area of freedom, security and justice (Article I-41) and also provides for the Union and Member States to "act jointly in a spirit of solidarity" if a Member State is the victim of terrorist attack or natural or man-made disaster.

16. Title VI (The Democratic Life of the Union) contains a group of Articles dealing with principles of representative and participatory democracy, the social partners and social dialogue, the European Ombudsman, the observance of transparency by Union institutions and the protection of personal data.

17. Title IX (Union Membership) provides procedure for the admission of additional Member States that respect the values referred to in Article I-2. Article I-58 establishes means of suspending a State from Union membership rights, when there is a clear risk of a serious breach of those values. Article I-59 makes provision for voluntary withdrawal from the Union by any Member State.

18. Part II of the draft Treaty contains the Charter of Fundamental Rights of the Union, which is to be observed by all Union institutions, bodies and agencies, and by Member States "when they are implementing Union law" (Article II-51(1)). The Charter "does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task of the Union" (Article II-51(2)). It is intended that rights under the Charter which correspond to rights protected by the European Convention on Human Rights shall be interpreted in an equivalent manner (Article II-52(3)).

19. Part III of the Treaty contains more detailed provisions that give effect to the policies and functioning of the Union (for example, the establishment of the internal market by chapter 1, section 1, and the free movement of persons and services by chapter 1, section 2). In respect of economic and monetary policy, chapter II distinguishes where necessary between Member States that have adopted the euro and those that have not.

20. In Chapter IV of Part III, Article III-158(1) provides for the Union to constitute "an area of freedom, security and justice with respect for fundamental rights, taking into account the different legal traditions and systems of the Member States". This Chapter deals with important areas of public policy, including policies on border checks, asylum and immigration (Section 2), judicial co-operation in civil matters (Section 3), judicial co-operation in criminal matters (Section 4) and police co-operation (Section 5).

21. Title V of Part III (The Union's External Action) deals in Chapter II with the Union's common foreign and security policy and in Chapter IV with co-operation with third countries and humanitarian aid.

22. Title VI of Part III (The Functioning of the Union) contains many provisions that are to govern the composition and working of the Union's institutions, including the European Parliament (Articles III-232-243), the Commission (Articles III-250-257), and the jurisdiction and procedures of the Court of Justice (Articles III-258-289).

23. Part IV (General and Final Provisions) provides, among other things, for the repeal of earlier European treaties once the Treaty establishing the Constitution has come into force (Article IV-2), for the geographical scope of the Treaty (Article IV-4) and for a procedure by which provisions of the Treaty may be amended: subject to the convening of a special Convention or a conference: any amendments will require to be ratified by all the Member States (Article IV-7). By Article IV-9, the Treaty establishing the Constitution shall be concluded "for an unlimited period".

24. It is inevitably very difficult in reviewing such a draft document to select matters that will have a particular impact on the operation of the United Kingdom constitution, but the following are among the matters to which the papers submitted to us draw attention. Subject to the work of other Parliamentary Committees, we may give further consideration to these at a later date.