Membership of the European Union (EU) has greater significance for the UK than membership of any other international organisation. Participation in the European Union brings together domestic and external policies in the UK to such an extent that at times they become indistinguishable. While the Foreign and Commonwealth Office (FCO) has the overall lead on EU issues, every government department has an interest in EU due to its substantial influence on domestic legislation in the UK.

If the British Parliament is fully to carry out its responsibilities to the British electorate, it needs to exercise scrutiny and supervision not only in the domestic sphere, but in the European arena as well.

The UK joined what is now generally known as the EU in 1973 by acceding to the Treaty of Rome. Though negotiations leading to and ratification of this agreement were conducted under the Royal Prerogative, as is customary, Parliament took part in the process through passing the European Communities Act 1972, which incorporated into British law the consequences of the Treaty. The decision to join was confirmed by three votes of principle in Parliament beforehand. Later on, in 1975, this decision was confirmed by a referendum. There exists a current political consensus that, if Britain is to join the single European currency, this decision must be subject to approval in a further referendum.

Though the UK does not fully participate in all aspects of the EU, such as the single currency, it has pooled significant parts of its sovereignty with other member states. Britain jointly decides with the other member states the rules and regulations governing not only the single market but also other areas of cooperation at the European level, such as judicial affairs or foreign and security policy. Trade policy is conducted at the European level and as a member of the customs union Britain cannot negotiate its own bilateral tariff agreements.

The Council of Ministers is the principal European legislative and policy-making body. The Council is composed of ministerial representatives of the 25 member states, the exact composition being dependent on the subject under discussion. It meets in different formations of specialised ministers, such as the Environmental or Agricultural Council, where ministers for the environment or agriculture meet. 

Heads of state or government meet two or three times a year as the European Council (or summit) to discuss broad areas of policy.  The European Council has no powers to adopt European legislation.

The European Commission is the European executive organ and the custodian of its treaties; it implements agreed policies and acts as a negotiator on behalf of the EU - including for trade agreements with third parties. The Commission proposes and drafts legislative texts and is responsible for enforcing agreements.

The European Parliament is directly elected by voters in all member states every five years (the next elections are due in 2009). It has joint decision-making powers in many areas of European legislation and has a role in the budgetary process; it approves appointments to the Commission and by a vote of censure can require the resignation of the Commission as a whole. Presently of 732 members of the European Parliament 78 are elected by the UK on a system of proportional representation (with a different variant for Northern Ireland).

The European Court of Justice is the final arbiter of all legal issues under European treaties. It hears disputes between member states and European institutions, and between institutions and firms, individuals or European officials.

European legislation can take two forms. A directive requires member states to ensure that their national legal frameworks comply with its aims. This does not necessarily lead to changes in domestic legislation - the directive's requirements may already be part of domestic legislation, or changes may be incorporated into legislation the government was planning to put forward in any case.

A regulation, in contrast, is directly applicable in all member states and is more likely to have a direct impact on relevant domestic legislation.

Decisions on legislation are taken by the Council of Ministers sometimes in a co-decision with the European Parliament, which can and frequently does amend proposals. Once adopted legislation is binding upon member states, who cannot opt out of legislation at their own discretion.

The EU has its own arrangements for parliamentary scrutiny by the European Parliament. The UK Parliament acts indirectly to influence and monitor decisions which are made in the EU.   Its appropriate role is one of examining and holding to account the actions of its own national government when negotiating and taking decisions in the Council of Ministers. Parliament must cover both legislative proposals emanating from the EU and the negotiating positions taken by the government when dealing with predominantly non-legislative issues, such as the EU Common Foreign and Security Policy.

At the centre of pre-legislative scrutiny of EU documents is the European Scrutiny Committee(ESC). This select committee sifts all documents emanating from the EU institutions. It considers the political and legal importance of each document and refers important documents either to one of the three European standing committees or for debate on the floor of the House. The European Scrutiny Committee possesses the usual powers of select committees, such as calling for written evidence and examining witnesses. It also has the unique power to seek an opinion from any other departmental select committee - but in practice rarely makes use of it.   The standing committees cover different policy areas and shadow the relevant government departments. They have no power to conduct inquiries or to call for evidence and examine witnesses. Each standing committee has 13 members, excluding the chair; any MP may attend and speak but not vote.

The 16 members of the European Scrutiny Committee have to consider and report on a vast and diverse range of EU documents - over 1,000 annually. The committee meets in private and  has to decide for each document whether it is 'of political or legal importance'. If it is not, it is immediately cleared. If it is of importance the committee can: clear it anyway; recommend it for debate in one of three standing committees or on the floor of the House; or request further information from the government. After any subsequent debate which takes place another vote (but no debate) takes place in the House, completing the scrutiny process. The document may then be enacted as part of UK law under secondary legislation provided for by the European Communities Act 1972 .

There is a restraint upon the government known as the Scrutiny Reserve Resolution. This aims to prevent ministers from agreeing to proposals before they have been agreed to by Parliament. It can be overridden only in exceptional circumstances, such as a pressing timetable.

There are direct links also with ministers. The European Scrutiny Committee generally takes evidence two or three times a year from the Foreign Secretary or the Minister for Europe in person, often in relation to a meeting of the European Council.  The ESC  regularly receives reports on developments in the policy-specific sectoral meetings of member-state ministers and these reports are published in Hansard.  The Commons Foreign Affairs Committee (FAC) also takes from the Foreign Secretary or Minister for Europe before each council. No mandating takes place and there are no other procedures for routinely and systematically scrutinising ministers' actions in the various policy formations of the council.

There is a further notable gap in the scrutiny of EU business in the Commons. The European Scrutiny Committee sometimes conducts longer inquiries on issues it considers significant, but these inquiries are rare; and the FAC does not generally conduct inquiries into EU issues, despite the FCO being the lead department and EU affairs falling clearly within its remit. Its "ongoing inquiry into developments in the European Union mainly consists of the above-mentioned evidence from the Foreign Secretary twice or three times a year and has only led to one report since 2001, on the last UK Presidency of the EU.

All European documents are also deposited by the FCO with the House of Lords EU Committee and the Scrutiny Reserve Resolution also applies here. In contrast to the House of Commons, EU scrutiny in the House of Lords concentrates more on substantial inquiries into specific documents or broader issues than on commenting on each individual document. Unlike its Commons equivalent the House of Lords EU Committee considers the substantive merits of documents and not just whether they should be deemed politically and/or legally important.

The EU Committee's seven sub-committees specialise in different policy areas: A: Economic and Financial Affairs; B: Internal Market; C: Foreign Affairs, Defence and Development Policy; D: Environment and Agriculture; E: Law and Institutions; F: Home Affairs; G: Social Policy and Consumer Affairs. As well as considering European documents they carry out substantial inquiries into specific issues. About 70 peers are involved in scrutiny of European business.

While the work of the Commons Scrutiny Committee is comprehensive members are required to scrutinise too much material; and have little time for general analysis and reflection on broader European questions. The FAC has in addition to its EU responsibilities a heavy workload of non-EU business. There is no committee in the House of Commons which regularly dedicates time to inquiries into broader or cross-cutting EU topics, such as the European budget or EU enlargement. There is no mechanism in the Commons for systematic pre- or post-Council scrutiny; with no evidence of cooperation between the Scrutiny Committee and FAC. This is symptomatic of a broader lack of coordination - even tension or a "turf war" - between the two. Nor is there clear planning of work between the relevant Commons and Lords committees.

While ministers taking part in meetings of the Council of Ministers respond to written parliamentary questions by the chair of the Scrutiny Committee the answers to these questions often leave much to be desired in terms of detail. Generally the Commons treats EU business as a separate and discrete concern - despite it affecting every conceivable policy area. EU matters are not always properly engaged with by the specialist select committees, even where they raise important issues which should be considered within their remits. The Commons European standing committees are dominated by the government of the day and are subject to the whip; they regularly seem to act mainly as "rubber stamps". They lack the required expertise to engage with subjects on the part of their members.

The Lords too, may be slightly overwhelmed by the volume of business; and committees there arguably devote too much attention to prestigious reports generated by long-term inquiries (although it should be noted that these reports often have an impact well beyond the shores of the UK and are widely respected across Europe). Parliamentary discussion of European issues in general is prone to degenerating either into partisan point-scoring (a familiar parliamentary problem) or the rehearsal of well-known debates between those who have strong opinions about whether or not the UK should participate in the EU at all, rather than a particular issue at hand.

1.  It is a fallacy to consider European issues as separate from domestic policy. Just as they are intertwined in their implementation so too should be the scrutiny. Therefore we recommend that each departmental select committee should actively "mainstream" all European policy-making, alongside domestic concerns and its current agenda. By "mainstreaming" European issues, the most appropriate MPs  - those with the specialist knowledge of the subject area - would consider the policy and its impact. This arrangement would, in fact, far better reflect reality since although the FCO is the lead department for the EU as a whole, each government department is responsible for negotiations in its own policy area.

Each subject committee would then be able to cover the full spectrum of its policy area, considering domestic, European and international policy as one coherent whole. This would ensure that there was parliamentary oversight of all areas of policy, rather than, as is currently the case, the occasional inquiry the FAC is able to conduct amongst the rest of its heavy workload.

2.  In addition to mainstreaming, departmental select committees should also start actively engaging the relevant department during the formulation of policy and any European negotiations.  This "soft mandating" should include regular hearings by the committees before and after relevant Council of Ministers sessions to discuss the position taken by the UK.