The claim

“The Prime Minister has always been clear, if there are substantial changes that affect Britain’s position, then he would go for a referendum because that’s what we said to the British public we would do”
Work and Pensions Secretary Iain Duncan Smith, Sky News, 5 December 2011

“I don’t think there needs to be a referendum on Europe”
Deputy Prime Minister Nick Clegg, speaking on the BBC’s Andrew Marr show, 4 December 2011

The background

German Chancellor Angela Merkel and French President Nicolas Sarkozy are calling for a new European Union treaty to safeguard against another European debt crisis.

They want all 27 members of the EU agree to the treaty, but the clock is ticking – any country could reject it in parliament or in a referendum – so the pair have signalled they’d also accept a treaty among the 17 countries that use the euro.

“Merkozy” will formally propose their plan to the European Council on Friday. But under what circumstances could any treaty changes to the European Union trigger a UK referendum?  FactCheck investigates.

The analysis

The coalition agreed that they’d put a “referendum lock” on any treaty changes that transferred UK powers to the EU, and promised to check out the case for a United Kingdom sovereignty bill to “make it clear that ultimate authority remains with parliament”.

They stuck to the plan, and this summer the European Union Act – which covers both points – was passed.

What counts as a “transfer of power” to the EU?

As far as the EU act is concerned, there’s a whole list of obvious things that would kick off a referendum – such as signing up to the euro or giving up our national border controls.

Elsewhere, the transfer of power could be could be anything that gives new power to EU bodies to impose sanctions or obligations on the UK. Or it could be a treaty change that would involve us giving up a veto in a significant area – because that would mean the UK loses the ability to block a measure made under that article.

Who decides?

All European treaty changes are now subject to a vote in parliament, and any that constitute a transfer of our powers will be subject to a referendum – this is the “referendum lock” mentioned previously.

The changes will initially be assessed by the Foreign Office – usually by the European Minister David Lidington. He’ll decide if the decision transfers powers to Brussels.

If it does then a referendum will automatically be held. If it is decided that it doesn’t, then there won’t be a referendum, but the treaty change will still have to be approved by an act of parliament.

However, if anyone opposes Mr Lidington’s decision, they can apply for a judicial review.

A number of other countries have similar referendum locks in place, including Denmark, France, Ireland and Slovakia.

In practice

The EU act came into play for the first time in October, when the Foreign Office assessed the “European Stability Mechanism”, which aimed to secure economic stability in the eurozone countries. Their team decided that it only affected the 17 countries in the eurozone, and not the UK itself.

Mr Lidington said at the time: “Economic stability in the eurozone is of course in the UK’s interest, as over 40 per cent of our exports go to eurozone countries. Prolonged economic instability in the eurozone would be bad for British prosperity and growth, which is why we support the introduction of the ESM.”

The Foreign Office told FactCheck that no one has applied for a judicial review to stop the ESM.

The verdict

Any treaty changes that France and Germany propose will not necessarily trigger a referendum in the UK. It all comes down to how the changes affect the UK.

So Mr Duncan Smith perhaps should have qualified his comment further – yes there could be a referendum, but only if it is decided that the changes would see the UK’s powers transferred to Brussels.

Sarkozy and Merkel have until Friday to present their plan to the European Council – which they are keen for all 27 EU countries to approve. It’s likely to involve a treaty change, and if it is between the 27 then it will require the UK’s approval.

David Cameron insisted today that no “significant transfers of power” were being discussed, and if he’s right, Nick Clegg will be on the money: there’ll be no need for a referendum.

Furthermore, if the 27 countries can’t reach an agreement, and the 17 euro countries pull together a separate fiscal deal, then the UK will have no say on it at all and therefore no referendum – because as a separate international deal it will be outside the EU and outside the UK’s jurisdiction.

For now then, FactCheck has to give both MPs the middle needle because it all hinges on Merkozy’s plan – which has yet to prove them right.

By Emma Thelwell