House of Lords
European External Action Service
Lord Balfe
To ask Her Majesty's Government how many British nationals are currently employed in the European External Action Service (1) directly, and (2) on secondment from Her Majesty’s Government; and what is their assessment of the impact on the effectiveness of the Government's diplomatic efforts when those staff leave that Service.
Baroness Stedman-Scott (Con)
My Lords, I thank my noble friend for his Question. Ninety-six British nationals are employed by the European External Action Service, with 15 on secondment from Her Majesty’s Government. The Government believe that it is in the UK’s and the EU’s interests to agree a future secondment programme to EU institutions. The Government’s Foreign Policy, Defence and Development paper made it clear that the UK sees value in negotiating a reciprocal exchange of foreign and security policy experts and military personnel. This will be a matter for negotiation.
Lord Balfe (Con)
I thank the Minister for her reply. The External Action Service was set up under the very distinguished commissionership of the noble Baroness, Lady Ashton, and the British Foreign Office served and shaped much of it. We now appear to be throwing that away. Do I gather from what the Minister said that active negotiations are proceeding with the European External Action Service, as opposed to other parts of the Commission, for our staff to remain within the External Action Service, helping to shape European policy?
Baroness Stedman-Scott
I thank my noble friend for his question. Upon leaving the EU, the UK will pursue an independent foreign policy. However, the interests that we will seek to project and defend will continue to be rooted in UK and EU shared values. We therefore wish to continue our co-operation. We should have a means to consult each other regularly and to work together where our interests align. We hope to be able to continue a constructive secondment programme in areas of mutual interest.
Lord Grocott (Lab)
My Lords, given the very high reputation that British diplomats and diplomacy have throughout the world, despite pressure on resources—a reputation which, I might say, is independent of our membership of, and in fact predates, the European Union—should the British diplomats who, as the noble Baroness said, currently work for the External Action Service become redundant for any reason, would it not be sensible for their services to be transferred to the Foreign and Commonwealth Office?
Baroness Stedman-Scott
I thank the noble Lord for his question. I believe that he makes a very good point. It is way above my pay grade to make a commitment on that front, but I shall make sure that his idea is passed on to officials.
Baroness Northover (LD)
My Lords, our embassies work very closely overseas with others from the EU, including the External Action Service. How is the United Kingdom seeking to replicate the influence that that creates? Does the noble Baroness agree that our embassies would need to be strengthened if we left the EU, and have the Government estimated the cost of that?
Baroness Stedman-Scott
The noble Baroness asked a number of questions, and I will try to answer her properly. I am thrilled that we have upgraded seven ambassador roles to the highest level, that an additional 50 diplomats will be posted to embassies across Europe, that we have created more than 100 roles in London and Europe, and that there will be an increase in spend. I hope the noble Baroness will allow me to write to her with the technical details of the exact spend.
Lord Collins of Highbury (Lab)
My Lords, that is precisely the point that noble Lords have raised concerns about in this House. Brexit will mean that we will have to shift Foreign Office resources into the EU to cover for that sort of lack of expertise. Where are we moving those resources from—from understanding the threats globally or the risks that Russia may now pose? What will the cost of Brexit be if we are going to shift resources away from these important areas, particularly in Africa too?
Baroness Stedman-Scott
The noble Lord’s point about budget has been raised on other matters here today. I will make sure that that information is given and given accurately. As to how personnel will be deployed, I have already made the point that there will be additional diplomats for embassies and increased roles and responsibilities for ambassadors. I have no doubt that, during the planning phase for our leaving the European Union, these things will be properly considered.
Lord Ricketts (CB)
My Lords, it is always a pleasure as a former Permanent Secretary of the Foreign Office to hear warm words about British diplomats, and I entirely agree with the need to deploy more British diplomats to EU capitals and to Brussels to carry out old-fashioned diplomacy, probably from the outside, to influence the EU. Perhaps what noble Lords are saying is that the Foreign Office needs an overall increase in its budget in order to be able to deploy more diplomats everywhere.
Baroness Stedman-Scott
I thank the noble Lord for his comment. I can tell noble Lords with utter confidence that the Foreign and Commonwealth Office budget will rise from £1.2 billion in 2017-18 to £1.24 billion in 2019-20.
Lord Anderson of Swansea (Lab)
My Lords, presumably the secondees will be guaranteed reinstatement in the Foreign Office with all due emoluments and so on. For those directly employed in the EU, are there any precedents, as the noble Baroness seemed to indicate, for the EU to employ non-EU nationals within its external service?
Baroness Stedman-Scott
Secondments provide a platform to demonstrate the UK’s expertise and to foster and develop positive UK-EU working relations. Any organisation, whether that is in government or a corporate company, would want to keep the expertise of people it will need. I cannot give the noble Lord that assurance here and now, but I will certainly go away and find out in order that I can respond to him.
Lord Tomlinson (Lab)
Does the noble Baroness have any view on which scenario the Russians might be more frightened of: that of our being a country by itself pursing an independent foreign policy, which she referred to, or that of our being a member of the European External Action Service, where we can use all our diplomatic skills together with the established skills of the European Union to send a clear message to the Russian leadership?
Baroness Stedman-Scott
Whether it is independently on our own or through the service we have been talking about, if we do the job properly then I am nobody to talk about the Russians being frightened but I hope we will keep them on their toes.
Immigration Statistics
(6 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Neville-Rolfe
To ask Her Majesty's Government whether it is their objective to maintain authoritative immigration statistics to allow the development of sound policies and plans for the future.
Lord Young of Cookham (Con)
My Lords, the Government are fully committed to complete and authoritative migration statistics. These are produced by the independent Office for National Statistics following best international practice and are overseen by the UK Statistics Authority. The ONS has embarked on an ambitious programme of work to improve migration statistics and the Government are supporting this programme, including by providing the ONS with access to data held by government departments.
Baroness Neville-Rolfe (Con)
My Lords, it is good to hear that the Government are trying to improve matters but does the Minister agree that, as the Brexit vote showed, the public do not have confidence in UK immigration policy? If this is to change, we need more reliable statistics, not least to inform the need for investment in housing, schools, medical infrastructure and even benefits. Can the Minister confirm that the forthcoming White Paper will address this issue and include honest forecasts?
Lord Young of Cookham
I agree that the public should have confidence in the statistics produced by the ONS, particularly on migration. These are an important input to policies on housing, health, education and other public services. The ONS will use powers in the Digital Economy Act, which has recently passed into legislation, to access data from other government departments. This will complement the information it already has from the IPS. By accessing not only exit data from the Home Office but information from HMRC, from the DfE on school rolls and from GPs on GP lists, it will be able to strengthen and enrich—the word it has used—the statistics on migration, and in turn this will enhance confidence. The Government do not make forecasts on migration but the ONS produces what it calls estimates.
Lord Faulkner of Worcester (Lab)
Is there any serious member of Her Majesty’s Government—with the possible exception of the Prime Minister—who does not believe that overseas students should not be included in immigration statistics? Is it not time that this change was made and a message of hope given to our universities?
Lord Young of Cookham
The noble Lord will recall that this issue was debated extensively by your Lordships when the then Higher Education and Research Bill went through this House. When the Bill left this House an amendment was carried to delete overseas students from the migration figures. When that legislation hit the statute book, that bit was omitted. In the meantime, the ONS will continue to follow the UN standard, which is to count anyone who is here for more than a year as a long-term migrant. That practice is followed by the USA, New Zealand, Canada and Australia. There is an impact on services if people stay here for longer than a year, and the ONS, which is independent, has decided to continue to use the United Nations definition.
Lord Hannay of Chiswick (CB)
Does the Minister recognise that his description of the Bill that left this House was not entirely accurate? It required the Government to change not the statistics but the policy; and to stop treating students as economic migrants, not to stop counting them. Would he further recognise that defective statistical methods have been used to count students leaving after the end of their student visas—one of the false reasons the Government have used to justify their policy?
Lord Young of Cookham
It is not the case that the Government’s policy has deterred international students from coming to this country. According to the latest figures, study-related visas were up by 8% in 2017 to more than 220,000. The Government have made it absolutely clear that there is no cap on the number of genuine international students coming to this country—they are welcome. We are the second most popular destination after the United States for such students and roughly 40% of our overseas students now come from China, in a competitive market.
Lord Reid of Cardowan (Lab)
Does the Minister recognise that for more than 25 years immigration statistics have been neither authoritative nor accurate either in their generality or in their specifics? When will the Government finally recognise that only an accurate system of counting people in and out will give us such authoritative and accurate statistics, and the only way to do that is through biometric ID cards and visas?
Lord Young of Cookham
The point made by the noble Lord was also made by the Home Affairs Select Committee in another place. One of the recommendations echoes what he just said:
“We also recommend that the Home Office examine how all entries and exits from major ports in the UK, including for non-visa travellers, can be recorded and that all entry and exit information is then used to aid the analysis of migration flow and to better inform policy decisions”.
The Government will respond to that recommendation before Easter and I am sure that they will take on board the support expressed for that policy by the noble Lord and indeed by others.
Baroness Hamwee (LD)
My Lords, I am sure that the noble Lord will agree that statistics do not exist in a vacuum and that it is important to work on them to show a clear picture both of the contribution made by immigrants and of the competition, if that is what it is, that they may present to UK nationals in the labour market. The noble Lord mentioned information from HMRC. Does he agree that it would be useful to be clear about how much tax immigrants working in this country pay towards our society?
Lord Young of Cookham
I am sure that the noble Baroness is right. Speaking from memory, I think that tax revenue from the cohort that she mentioned exceeds the amount of benefits paid to those people. I do not have the exact statistics in front of me, but I am sure that one can make available the net contribution of migrants to this country to the labour market.
Lord Leigh of Hurley (Con)
My Lords, does my noble friend agree that reliance on the International Passenger Survey is totally inadequate? The chairman of the public administration committee said recently that the immigration figures are little better than a best guess, while the Royal Geographical Society has said that they are not fit for purpose. Asking less than 0.6% of people who arrive in this country about their intentions without any corroboration or follow-up is surely a wholly inadequate way to measure these statistics.
Lord Young of Cookham
The IPS interviews 800,000 people per year, which is quite a broad base for a sample. When I asked the ONS about this, it confirmed that the IPS survey continues to be the best source of information to measure long-term international migration. However, as I said in response to my noble friend, it will strengthen that information by accessing data from other government sources which it could not access before. That will enhance the credibility of these figures, and the ONS plans to use the system I have just outlined by the end of 2019 with regular updates. As I have said, this will produce a richer set of statistics.
Digital Forensic Services
(6 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Beecham
To ask Her Majesty’s Government whether they propose to take any action in relation to the outsourcing by police forces of digital forensic investigation work to unaccredited private laboratories.
Lord Young of Cookham (Con)
My Lords, individual police forces decide which providers they use to carry out digital forensic science services. The Government have been clear that accreditation should be an important factor when procuring these types of services, and continue to support the police to develop and share best practice in this area. The Government welcome the introduction of the Forensic Science Regulator Bill, which will put the regulator on a statutory footing.
Lord Beecham (Lab)
My Lords, at least 15 police forces have outsourced digital forensic work to unaccredited private companies, some of which are subject to no regulatory oversight. One with accreditation had it withdrawn law year but continued to perform work for the prosecution, while another serving 30 forces collapsed in January, costing those forces millions of pounds. Only 15 out of 43 forces achieved minimum standards in their in-house laboratories by the deadline of last October. Given the importance of forensic evidence in the justice system, what steps will the Government take to ensure that the quality of the work is improved and that concerns about the failure to disclose key digital evidence cited by the head of the criminal Bar, the Justice Committee and a joint report by the police and the Crown Prosecution Service are met?
Lord Young of Cookham
I agree entirely with the noble Lord that police forces should use accredited service providers when they outsource digital forensic services. I mentioned a moment ago that the Forensic Science Regulator Bill, which was introduced last week, will give the forensic science regulator the statutory powers that she needs in order to enforce high standards in this area. In the meantime, I have looked at the report of the forensic service regulator. She referred specifically to some of the problems mentioned by the noble Lord and went on to say:
“Although the impact of these issues has been large, they arose from the actions of a very small number of individuals and should not be taken as a reflection on forensic scientists more widely … the vast majority of forensic science practitioners, whether working within commercial organisations, government-funded organisations (including policing) or elsewhere, are committed to providing high-quality scientific work to support the Criminal Justice System”.
The Government are also sponsoring research in order to drive up standards in this area.
Lord Paddick (LD)
My Lords, noble Lords will be aware of the issues surrounding disclosure of evidence, particularly to the defence in criminal prosecutions, because of the sheer volume of digital information in many cases. Will the Minister say whether setting in law a police bail limit of 28 days—as has been done recently, against the unanimous advice of academics and practitioners—and the relentless reduction of police officer numbers because of a real-terms cut in central government funding, leaving police officer numbers at a 30-year low, is likely to make that crisis better or worse?
Lord Young of Cookham
On the specific issue of disclosure, which is important, the noble Lord will know that the Attorney-General has instituted a review, which will examine existing codes of practice, protocols, guidelines and legislation, as well as case management initiatives and capabilities across the whole criminal justice system, including how digital technology is used. Alongside that, the CPS and police forces are looking at any current cases to see that no cases go forward where there is a doubt about the disclosure process. The Government continue to monitor progress to ensure the police and the CPS deliver on the actions they have committed to undertake on the important issue of disclosure.
Lord Morris of Aberavon (Lab)
My Lords, have any doubts been raised or thrown against the findings of any one of these laboratories? Will the Attorney-General consult the Criminal Cases Review Commission, whose job it is to investigate miscarriages of justice, so that assurances can be given that no one has been wrongly convicted on the basis of evidence of this kind?
Lord Young of Cookham
The noble and learned Lord raises a very important issue. Where a laboratory is suspected of having fallen short of standards, procedures will be under way to ensure that retesting takes place. I understand that that is happening as we speak. I will draw to the attention of the Attorney-General the suggestion the noble and learned Lord just made.
Baroness Kennedy of The Shaws (Lab)
My Lords, it is probably not something that many in the House know, but the vast majority of cases coming before the criminal courts involve looking at social media for the assistance it gives in prosecutions and, indeed, in defence. It is often a signifier of the nature of relationships and often shows the extent of contact. Sometimes it shows that there is contact with certain people immediately before the commission of a crime. The quality of that assessment is very serious. It is clearly the position that there are just not enough people with the technical know-how being recruited to resource and to do this work to assist the prosecuting and defence authorities. We are talking about a serious piece of work being done in our universities and so on to create forensic skills for this purpose. As we now know, technology is widely used. Will the Minister tell us what efforts are being made to find recruits for this purpose?
Lord Young of Cookham
The review I referred to, asked for by the Attorney-General, will identify solutions to some of the problems that the noble Baroness just referred to. It is the case that in recent years there has been an explosion in the use of social media in court cases. This has put enormous pressure on the digital forensic services. The regulator is aware of these issues. I hope that the review I have outlined, which is looking at these very issues, will come up with proposals and solutions that the Government can then take forward. I entirely agree that no one should be convicted because inadequate research has been done into relevant email and social media sources.
Lord Harris of Haringey (Lab)
My Lords, more than 20 police forces have had to bail out key forensic science services because of the decision of the Government in 2012 to close the highly regarded national Forensic Science Service. Will those police forces be compensated, and precisely what benefits have accrued from the decision to break up the national Forensic Science Service?
Lord Young of Cookham
The Forensic Science Service was closed in 2012. It was losing £2 million a month. Although this was not the reason for closure, there were real issues about the quality of some of its work, with multiple requests for case reviews and retesting. Increasingly, police forces that did not have their own in-house capacity were going to alternative service providers other than the FSS. It is not the case that the closure of the FSS has led to some of the issues that we have been discussing today.
Cannabis
(6 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Meacher
To ask Her Majesty's Government whether they have plans to revisit the inclusion of cannabis in Schedule 2 to the Misuse of Drugs Act 1971, in the light of claims regarding its medicinal significance.
Lord Young of Cookham
This is a bit like “Mastermind”, but on somebody else’s specialist subjects.
The World Health Organization’s Expert Committee on Drug Dependence has committed to reviewing the scheduling of cannabis under the United Nations 1961 convention. This is due to consider the therapeutic use as well as dependence and the potential to abuse constituent parts of cannabis. This will be a key report to inform the Government’s position on this issue, which, as with any government policy, we will keep under review.
Baroness Meacher (CB)
My Lords, when most of the western world recognises that cannabis has significant medicinal value, and when Germany recently legalised cannabis for no fewer than 57 indications, in the UK, which remains miles behind everybody else, we have cannabis in Schedule 1 and therefore defined as a dangerous drug with no—I underline no—medicinal value. Will the Minister work with his colleagues to bring this issue forward as a matter of urgency rather than waiting years for the WHO report—I know the WHO somewhat and it takes a little time? That would save the incredible suffering—I have met so many people suffering deeply—of tens of thousands, if not hundreds of thousands, of people up and down the country.
Lord Young of Cookham
The noble Baroness is a long-standing campaigner for drugs reform. I listened to her exchange a few days ago with my noble friend Lady Williams on this very subject. When I saw officials last week, I pressed them hard on the medical advice. The professional advice of medical experts in this country is that cannabis in its raw form has no medicinal value, which is why it is a Schedule 1 drug and subject to strict controls. I am very reluctant as a layman to second-guess those officials. However, the noble Baroness referred last time to the moving case of Alfie Dingley. The Home Office will do all it can within the framework of the current legislation to ensure that Alfie gets the treatment he needs
Lord Winston (Lab)
My Lords, some 15 years ago, the Science and Technology Select Committee of which I was chairman at the time had a six-month inquiry on the medicinal uses of cannabis. We found and reported overwhelming evidence of the value of cannabis, that people taking cannabis did not get high on these drugs and that they were not dependent on the drug but it eased their symptoms, particularly with neurological conditions. As a result, we got at least one drug licensed for market. I absolutely agree with the noble Baroness that there is great urgency. It is 15 years, and it is about time the Government did something about this.
Lord Young of Cookham
I will report back to the Home Office the strong views expressed by two noble Lords—I gather they are impatient and not anxious to wait for the outcome of the WHO review, which I think will be completed in 2019. Any decision will be evidence based. On the general use of cannabis, I note that the Advisory Council on the Misuse of Drugs said in its last report that,
“cannabis is a significant public health issue. Cannabis can unquestionably cause harm to individuals and society”.
Baroness Walmsley (LD)
My Lords, I welcome the Minister’s acceptance that perhaps it should be a Health Minister standing at the Dispatch Box. Even so, is he aware that doctors in the UK are allowed to prescribe heroin to addicts in certain circumstances? How does he square that with the fact that they are not permitted to prescribe most effective cannabis medicines to patients in pain, even though these are available legally in many other countries? Is it not time that we stopped criminalising patients?
Lord Young of Cookham
On the specific issue the noble Baroness raises, the Home Office would consider issuing a licence to enable trials of any new medicines, including cannabis, subject to appropriate ethical approvals. There is the possibility of a specific licence in the case that the noble Baroness raised and if necessary the normal 12 to 16-week timetable could be expedited.
Lord Howarth of Newport (Lab)
My Lords, will the Minister encourage his ministerial colleagues in the Home Office to review the present policy of the department in relation to patients who have been prescribed dronabinol, the active ingredient in various pharmaceutical cannabinoid preparations, which requires that they travel abroad to obtain it, even though dronabinol is in Schedule 2 and is internationally recognised as having medicinal value? Why do the Government not allow these patients, who if they do not have their cannabis-based medication suffer chronic and severe pain, to collect their prescription from a local pharmacy instead of forcing them to make this exhausting and costly journey every three months?
Lord Young of Cookham
I am very happy to respond to the noble Lord’s opening question, namely to pass his request on. We are guided in this country by the MHRA, the authority that advises government on whether medicines should have a licence.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, we have a vast number of drugs that are strictly controlled and regulated here in the UK. I have no wish to change the law in respect of the general use of cannabis but I think the noble Lord has heard from around the House that the Government should surely move on it with a bit more speed and look at whether there is a genuine case for the medical use of this drug. I have no idea what the answer is; I will listen to the medical professionals on that matter.
Lord Young of Cookham
I agree with the noble Lord’s last sentence, that he will listen to the medical evidence. I say to noble Lords that I have listened to the exchanges over the last seven minutes and there is a clear view that we should try to make progress, not on legalising cannabis but on making it easier to prescribe cannabis in certain circumstances where it may have some therapeutic or beneficial value. I am very happy to take that message back to the Home Office and I hope that, next time, somebody more qualified than myself will be able to answer these questions.
European Union (Withdrawal) Bill
Monday 12th March 2018
(6 years, 1 month ago)
Lords ChamberRead Full debate European Union (Withdrawal) Act 2018 View all European Union (Withdrawal) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 79-VII Seventh marshalled list for Committee (PDF, 331KB) - (12 Mar 2018)
Lord Patel
“( ) No regulations may be made under this section which make changes to EU-derived domestic legislation concerning the regulation of clinical trials until the Secretary of State has laid a report before both Houses of Parliament assessing the costs and benefits of adopting EU Regulation 536/2014.”
Lord Patel (CB)
My Lords, Amendment 84 in my name and those of the noble Baronesses, Lady Thornton and Lady Jolly, and the noble Viscount, Lord Ridley, is a very simple amendment that seeks clarification about how the Government intend to deal with the clinical trials regulation when it comes into force. The amendment is not designed to be political, or to interfere with the aims of the Bill. It has been tabled to bring to the Government’s attention a very specific issue with the forthcoming clinical trials regulation as the UK withdraws from the EU and the implication that will have on clinical trials.
The CTR is a significant improvement on the existing regulations governing clinical trials that it will replace, the clinical trials directive. It has the potential to benefit both patients and the research environment in the UK, yet it is also in a somewhat unusual position with regard to the Bill. It will reform the governance of clinical trials across the European Union. The UK was central to its development, with both the MHRA—the Medicines and Healthcare products Regulatory Agency—and individual researchers contributing their expertise. It was adopted in 2014, with the UK’s full support. However, due to a minor technical delay with the set-up of the data-sharing portal it will not come into effect until late 2019, rather than this year as planned. As such, it will come into effect after exit day and will not be covered by Clause 3 and what it converts into UK law. It will be the existing clinical trials directive that is covered by the current Bill.
If we do not take steps to adopt the CTR, we will fall out of alignment when it comes into effect and our ability to undertake collaborative clinical trials with our EU partners will cease. To reduce the uncertainty that is of concern to the research community and pharma, the Government should commit to aligning with the CTR when it comes into effect, and provide details of how they will seek to do this.
The CTR is a major improvement upon the current clinical trials directive, harmonising the approach to conducting clinical trials across the EU. It will include a co-ordinated, centralised approval process and a portal which decreases the administrative burden for clinical trials and support. It is transparent and, since it is a regulation, it will immediately come into law across member states, ensuring clinical trials governance across the EU. The current divergence in how the clinical trials directive is applied in member states results in substantial delays in opening trials involving more than one country.
The CTR allows for a more risk-proportionate approach to trials and authorisation, extending them to investigational medicinal products and enabling the optimised use of medicines that already have marketing authorisation. Other benefits include quicker trial set-up, ambitious timelines for review, flexibility and the simple reporting of adverse reactions leading to improved patient safety. Patients also benefit from being involved in clinical studies, which are the gold standard for developing evidence to see whether a new intervention is suitable to become standard practice. They also provide patients with opportunities to access innovations at an early stage in their development. Through enhanced collaboration, the CTR would provide increased opportunities for UK patients to access clinical trials. Collaboration is particularly important on rare diseases, where patient pools are smaller. Streamlined co-operation on trials looking at these diseases is crucial in making progress in research and improving outcomes.
The CTR also has implications for UK science and innovation. The Prime Minister said in her Statement last week that,
“our partnership will need to cover agreements in other areas, including … a far-reaching science and innovation pact”.—[Official Report, Commons, 5/3/18; col. 28.]
The UK’s life sciences are strong and the UK is a world leader in medical research. Looking at existing medicine, for instance, around 25% of the world’s top 100 prescription medicines were discovered and developed in the UK, while three of the five top-selling drugs to treat rheumatoid arthritis and other inflammatory conditions globally are innovations based on UK science. Unfortunately, we did not commercialise them so we do not get the billions with which they now benefit pharma.
The Government’s recent Life Sciences Industrial Strategy sets out the UK’s ambition to strengthen the environment for clinical trials. The strategy mentions opportunities to improve translational science and attract more clinical trials from industry. Alignment with the CTR will facilitate this ambition to come to fruition sooner.
Lord Sharkey (LD)
My Lords, my noble friend Lady Jolly has added her name to this amendment, but unfortunately she cannot be in her place today. She has asked me to speak in her stead, and I am delighted to do that. I declare an interest as chair of the Association of Medical Research Charities and of the Specialised Healthcare Alliance, which campaigns on behalf of people with rare diseases. Both these organisations have a direct interest in this amendment.
As the noble Lord, Lord Patel, made clear, the UK has a tremendous record in medical research, in both basic blue-sky research and in translation into treatments. We live in a golden age for medical research, and this golden age is driven very largely by the UK, by efforts in our universities and in our hospitals. There are many reasons for this pre-eminence: world-class university research, world-class medical institutions, the unique NHS system and a funding structure unlike anywhere else in the world, where medical research charities contribute £1.6 billion each year to research, sitting alongside public and private funding.
All this makes our medical research achievement one of the undoubted successes of the United Kingdom. This success has a simple and direct consequence: it produces very significant improvements in health and well-being and very significant improvements in our ability to cure and to treat disease. The chief mechanism by which research turns into cures or treatments is the mechanism of clinical trials.
The UK has long been, and remains, attractive to the pharmaceutical industry, for example, because of the NHS’s ability to run extensive clinical trials. The UK has been able to recruit the very best researchers—again partly because of the NHS. Another reason why clinical trials in the UK are important to researchers, as the noble Lord, Lord Patel, made clear, is our alignment with the other 27 EU states under the existing EU clinical trials directive of 2004.
This alignment is absolutely critical. It allows wide and varied datasets, it creates standard procedures and protocols, and it makes research into rare diseases possible. This last point is of huge importance. Some diseases, very often serious diseases, are so rare that there is not available in any one country a sufficient number of patients for research to take place. But because we are aligned across the EU by the 2004 directive, we can and do find sufficient numbers across 28 countries to carry out effective research.
Pancreatic cancer is a case in point. This is one of the hardest cancers to treat and has an appallingly low survival rate. Just 1% of people diagnosed with pancreatic cancer in England and Wales survive for 10 years or more. The European Study Group for Pancreatic Cancer recruited more than 700 patients from the UK, Germany, Sweden and France to a large-scale clinical trial. The results showed that an extra 13% of the patients on the trial lived for five years when given the tested combinations of chemotherapy and drugs. This is a huge result for patients and for the future of pancreatic cancer treatment, all made possible by, and only because of, the ability to run trials across 28 countries under a common regime. I should add here that the European Study Group for Pancreatic Cancer is led by an outstanding team at Liverpool University.
The 2004 clinical trials directive has proved invaluable. But it has also proved to have many deep and fairly obvious flaws, which we in the UK have been instrumental in trying to correct. After the introduction of the directive, the number of applications for clinical trials fell by 25% between 2007 and 2011, administration costs rose by 98% and delays in actually launching a clinical trial rose by 98%. All this was recognised in 2012 when, with a great deal of UK lobbying, work began on a revision to the directive.
This revision became, in 2014, the new EU clinical trials regulation, referred to in the amendment before us. As the noble Lord, Lord Patel, said, the benefits of the new regulation are straightforward: it speeds up the process for launching new clinical trials; it establishes a more proportionate regulatory regime, with much less red tape; it recognises the concept of co-sponsorship of trials; it simplifies the rules for critical multicountry trials; and it streamlines reporting requirements. This means faster and cheaper trials, faster results and faster delivery of any benefits to patients. All these are of course very good things.
Although the new regulation was agreed in 2014, it was estimated that it would apply only from 2017-18. That was to allow time to get in place the mechanisms needed to make it work properly. But this application date, as has been mentioned, has been delayed yet again, and the EU now says that the regulation will come into force in the second half of 2019. This presents the problem that the amendment addresses. The Bill assumes that we will have left the EU on 29 March 2019, so the new regulation will not be incorporated by this Bill into UK law. Without the amendment, though, the old directive will be, or could be, incorporated. Either way, that means we will not be aligned to the new regulation when it comes into force in the second half of 2019. We will not be part of a group of 28 member states when it comes to conducting clinical trials; we will be a group of one outside a group of 27. The consequences of that for clinical trials in the UK would be disastrous, as they would for UK medical research, for research in the NHS and for our attraction as a research base for pharmaceutical companies.
The amendment of the noble Lord, Lord Patel, takes no political stance and no view about the merits or otherwise of Brexit. It simply says that the Government must not incorporate the old, defective clinical-trials-directive-derived legislation into UK law before the Government have reported to both Houses about the costs and benefits of adopting the new EU clinical trials regulation.
I entirely support the amendment and believe it to be necessary, but I also believe it does not go far enough in ensuring that we are compliant with the new regulation from the day that it applies. That is what we need, not just to protect existing trials but to make certain that we are part of the new regime, which after all we were instrumental in creating. I very much hope that the Minister will take the amendment as the beginnings of a conversation about how to adopt or realign with the new regulation on day one of applicability, and I hope that he will be able—on Report if not today—to make a firm commitment to aligning the UK with the new regulation from the day that it becomes applicable.
Viscount Ridley (Con)
My Lords, I have added my name to this amendment. Unlike many amendments to the Bill, this one really is intended to be helpful to the Government and the Bill. Unlike many, it has a genuine point to make and is not merely an excuse to filibuster. Unlike some speeches in support of the amendments, when I say I shall be brief I shall mean it.
As the noble Lord, Lord Patel, says, the Prime Minister’s speech 10 days ago removed the need for lots of amendments to the Bill. In saying that we intend to join or align with the European Medicines Agency if possible, I think she has effectively indicated that the amendment is welcome. However, it is worth pressing the point briefly to get clarity. The background, as the noble Lord, Lord Sharkey, has said, is that the EU passed a disastrous clinical trials directive in 2004, destroying much of a thriving British clinical trial industry almost overnight—a crown jewel of our world-leading biomedical sector. It was not one of Brussels’ finest hours. None the less, the UK remains the leader in Europe and one of the leaders in the world in discovering, developing and testing new treatments for diseases, thanks to our strong pharmaceutical industry and our superb academic sector.
The UK’s MHRA—I shall not spell it out; we know what it stands for—in particular has been instrumental in designing and delivering a robust regulatory environment across the EU, providing an attractive and harmonised framework for clinical trials. It is the senior agency relating to the EMA. This includes reviewing the shortfalls of the clinical trials directive and putting its considerable expertise towards drafting the new clinical trials regulation that is coming along to undo some of the harm done by the 2004 directive.
We have already agreed to the CTR in full but, as the noble Lord, Lord Patel, says, due to a minor delay we risk not only failing to adopt its vastly improved principles in data sharing and expedience but, in the process, losing alignment with our European partners on vital shared research. The CTR will be applied in late 2019, as opposed to this year as originally planned. It will therefore not be covered by the EU withdrawal Bill as it stands. The resulting uncertainty is already having an effect. Clinical trials can run over many years and require significant planning. Uncertainty is already having consequences.
The Government have sent out strong signals that the UK should be a leading centre for the life sciences through the life sciences industrial strategy and associated sector deal. Aligning with the CTR and allowing collaboration to continue to underpin the UK’s thriving research sector will help the Government to achieve that ambition. I and many others are rightly concerned about new regulations that could come in during the implementation period that the UK will have no say in. The clinical trials regulation is categorically not one of those. It was devised with enormous input from British research expertise, was fully agreed to by British representatives in the EU and is regarded as a significant step forward for the governance of cross-national clinical trials. So I hope the Minister will be able to reassure us and the vital biomedical sector in this country by clarifying that we will align with the CTR, as implied by the Prime Minister 10 days ago.
Lord Kakkar (CB)
My Lords, I support the noble Lord, Lord Patel, on his amendment. As we have heard, the proposed revision to the clinical trials directive, the agreed clinical trials regulation, is vital. Despite many positive aspects of the directive, which was applied in the United Kingdom in 2004, it is regrettable that our contribution to clinical trials globally in the period from 2000 to 2010 diminished from 6% of all patients who went into clinical trials in 2000 to just 1.4% in 2010. That was why clinical researchers from not only the United Kingdom but throughout the European Union came together to undertake a thorough revision which resulted in the 2014 clinical trials regulation.
The regulation is quite complicated. It has two attendant regulations: one, 2017/556, deals with the regimen that will be applied to inspection of clinical trials in the European Union after the regulation comes into force; the other, 2017/1569, deals with the manufacturing standards that need to be applied to interventional products that are being assessed in clinical trials. Those two regulations also need to be considered along with the 2014 regulation.
The real concern, from looking at information available about the regulation, is that for non-member states of the European Union, there is an obligation to continue to apply the 2004 clinical trials directive, also recognising elements of the new regulations once they come into force across the European Union. How do Her Majesty’s Government intend to deal with the broader issue? The amendment is designed to ensure that once the regulation is fully adopted across the European Union in late 2019, so it will be applied in the United Kingdom. There are other considerations about being a non-member of the European Union with regard to what is stated about the standards that need to be applied to clinical trials. What approach do Her Majesty’s Government propose to take there?
It seems counterintuitive that, as things stand, if no action is taken, our country will be left with a clinical trials directive that was considered throughout the European Union to be in need of revision. That revision has been undertaken in such a way that it will make the performance of clinical trials more effective, efficient and responsive to the different nature of trials being undertaken and provide an appropriate level of bureaucratic intervention for individual trials to ensure the protection of patients. It would seem completely wrong, having led the revision of the clinical trials regulation, for our country to be left behind with a directive on its statute book that continued to make clinical research more difficult.
These are vital matters, because often when designing a clinical trial there is a long lag period. One takes one or two years beforehand to develop a protocol, identify participating sites and determine what regulatory framework the trial is to be conducted under. Therefore, early reassurance in these matters is critical. A failure to provide that early reassurance may lead for some years to a diminution of the contribution that our country can make to clinical research. As we have heard, that would be detrimental to our entire life sciences industry.
Lord Warner (CB)
My Lords, as a former pharmaceutical and life sciences Minister, I rise to support the modest amendment moved by the noble Lord, Lord Patel. I have done my time in the salt mines of trying to streamline the processes for undertaking clinical trials in this country. Despite what the noble Viscount, Lord Ridley, said, it was not just the 2004 directive that caused problems for clinical trials in this country; it was sometimes the sheer bureaucracy of securing agreement to undertaking them, which has contributed to the departure of clinical trials and sometimes investment by big pharma in this country. It is all very convenient at present in some quarters to lay the blame at the door of the EU, but there are historical facts that support a more balanced view of the 2004 clinical trials directive.
From my experience, I know how critical it is for securing a flourishing pharmaceutical and life sciences industry in the UK, and the investment and jobs that that brings. For a decade or so, we have struggled to maintain the level of clinical trials undertaken in this country, and the pharmaceutical industry’s investment in the UK has been dropping. A number of people have made that point time and again in this House in debates with the Government on this issue. The new EU clinical trials regulation will have an incredible impact on the system for conducting clinical trials across Europe with its new single data portal. That point has been made very clearly by the noble Lords, Lord Patel and Lord Kakkar. We have to be a part of this future development if we are to protect our position on clinical trials and life sciences inward investment. That is why it is so important to have an amendment of this kind in the Bill.
I do not think it is fair to say that the Prime Minister’s speech of a fortnight ago is sufficient guarantee that everything will be all right on the night. We have had a number of those speeches on a number of subjects, which tend to show that it will not necessarily be all right on the night. The show may go on but UK participation in the show may be sadly absent in some areas that are critical to this country, as this particular sector of industry is. That is why we have to look a little more carefully at what sort of guarantees we want and that the spirit and meaning of the noble Lord’s amendment is guaranteed in the future.
I do not think we can just rest on ministerial assurances. It has been a convention in this House—I have been in it for nearly 20 years—that we accept ministerial assurances. However, on Brexit, ministerial assurances, while well-intentioned, are not always good enough to ensure that British interests will be guaranteed after we have left the European Union. That is why we need more than simply ministerial assurances. I would like to hear the Minister’s explanations of what the Government’s policies are and what they will do. I for one want to see an amendment of this kind to the Bill before it leaves this House. This issue is too important for a major sector of our economy. It is one of life’s great ironies that we, who have been a moving force in improving clinical trials with proposals for such trials in the EU could, by one of the strange fates of history, be unable to benefit from those improvements if we are not very careful. I hope the Minister will give us an explanation, but it will need just a bit more than warm words to give us guarantees on this issue before the Bill leaves this House.
Baroness McIntosh of Pickering (Con)
My Lords, I am not an expert in clinical trials but there are remarkable similarities between the discussion on this Amendment 84, moved by the noble Lord, Lord Patel, and words expressed by the noble Lord, Lord Kakkar, at Second Reading on that group of directives and regulations that will have been adopted but not implemented at the time of Brexit. We had a full discussion, which I will not repeat at this time, but which was spoken to very eloquently by the noble Lords, Lord Wigley, Lord Judd, Lord Liddle, and, I think, the noble Baroness, Lady Young of Old Scone. The noble Lord, Lord Wigley, mentioned 23 directives identified by the House of Commons Library that fall potentially into this category. This is too important an area for us to risk being out of kilter, whether in clinical trials, the circular economy—as identified by the noble Baroness, Lady Young—or a number of environmental directives, to which I referred. This is too important an area—where Britain has been at the forefront of and party to all discussions at earlier stages—for us no longer to be aligned at the point of Brexit.
Lord Ribeiro (Con)
My Lords, I support the amendment because I think it is very important after all the points that have been made by previous speakers.
In my Second Reading speech, I referred to something slightly different: a loss of some £32 million to nuclear research, which would have gone to 25 university institutions, as a consequence of leaving Euratom and the Horizon 2020 project. The key benefits of the CTR are the improvement in collaboration, information sharing and decision-making between member states, as well as maintaining high safety standards for all participants in EU clinical trials. Withdrawing from these arrangements will have a negative effect on UK research and clinical trials.
The PM’s speech has been mentioned. It is worth reading because this is perhaps about holding her to account. She said:
“We will … explore … terms on which the UK could remain part of EU agencies such as those that are critical for the chemicals, medicines and aerospace industries”.
There is an opportunity here to hold her to account because it sounds as if the decision that was made early on to withdraw from Euratom was rather hasty and the consequences of it are only now beginning to dawn. The amendment is essential to re-establishing the research collaboration that we need with the EU, which has benefited us greatly in the past.
Baroness Finlay of Llandaff (CB)
My Lords, much has been said in support of the amendment. I do not see how the Government can argue against us going along with the flow of modernising regulation.
I hope that in responding the Minister might consider what we will lose if we do not go down this route. Quite apart from losing the ability to attract pharma here and so on, it is important to record that many research groups that currently collaborate with European researchers know that their only future to pursue research—and want to do so under the new, better framework—means that they will effectively have to move, either to Dublin or Amsterdam. Those are the two main university hubs currently being looked at, although others in other parts of Europe are too. It becomes very easy for very high-powered researchers to move into different academic units, yet if we do not have biological and life sciences research here as new discoveries are made, we will not reap any economic rewards from those discoveries—quite apart from then not having the industries to produce whatever has been discovered.
I hope the Minister will consider very carefully that the amendment is absolutely essential going forward. Irrespective of what we think of Brexit, we need to be part of this group. If we are not, we will massively become a loser.
Lord Mackay of Clashfern (Con)
My Lords, I entirely support the main thrust of the amendment in the sense of seeking, if at all possible, to secure the benefits of the agreement already entered into—but not yet implemented—to which the noble Lord, Lord Patel, referred. This is not the only one that we have come across in the course of our discussions to date. The amendment does not actually produce anything except a sort of stop, so I wonder whether it would be possible, indeed acceptable, to Her Majesty’s Government to amend the Bill to allow discretion to use EU proposals to which we have already agreed and, in some cases, initiated and worked out in great detail—this is certainly a very important one, but there are others; that is, an amendment that would move, in a sense, the centre of the Bill. Of course, the Bill is a snapshot of what happens on Brexit day, but unfortunately some of the good things may escape because they are not yet implemented in time for Brexit. I therefore wonder whether it would be feasible to introduce an amendment to the Bill to give the Government a discretion to put into effect, in our law, agreements already made which are judged to be of use to this country after Brexit.
Lord Winston (Lab)
I will add a brief note of agreement with the amendment, for the obvious reason that this country’s pharmaceutical industry is our most important and must be involved in drug trials. I have seen this myself, having been involved with various clinical trials in the past. These have been of benefit to British patients and, subsequently, to our economy.
Lord Spicer (Con)
My Lords, I have a tentative question. If it is true that we do not trust our own legal environment with medical research in which, as has been said, we have great expertise, why should we trust ourselves with anything else? Across the whole of the Bill, responsibility is being transferred to this country. Why should we not be able to do that for medical research as much as for anything else?
Baroness Thornton (Lab)
This benefits all patient populations, and is particularly important for paediatric and rare cancers—diseases which, precisely because they are uncommon, are among the hardest to research and treat. You therefore need a larger pool than the 66 million people who live in this country: Europe has a combined population of 510 million to draw on. That is nothing to do with trust; it is to do with how clinical trials need to be carried out. You need a larger pool of patients to test these drugs.
I was pleased to add my name to the amendment in the name of the noble Lord, Lord Patel. I raised this issue in my speech at Second Reading and will mention only one additional matter, which is to do with rare paediatric illness; tumour types which affect relatively few people; and rare cancers which translate to over 20% of all cancer diagnoses across the world. If the UK is to make progress on therapies for paediatric and rare cancer, it is vital that we can work closely with EU nations on clinical trials. Cross-border collaboration is crucial to paediatric and rare cancer clinical trials. Some 75% of clinical trials in the EU involve cross-national collaboration, rising to 86% for rare disease trials. As noble Lords have remarked, that is because of the patient population across Europe. We will be doing a huge disservice to our children, and to the cancers which threaten a few of them, if we fall out of this system. It is as simple as that.
The BEACON clinical trial system is an example of how cross-national collaboration is fighting back against rare paediatric cancers. Neuroblastoma is a form of cancer that affects around 100 children, mostly under the age of five, every year in the UK. More than half the children with aggressive forms of the cancer will see it return and, for these children, there are few treatment options left. In 2013, Cancer Research UK scientists and paediatric cancer specialists launched the BEACON-neuroblastoma trial to find the best chemotherapy treatment for children and young adults with recurring neuroblastoma. To do this, it is bringing together clinicians and scientists from 10 European countries and two international consortia, with funding from Cancer Research UK and European partners. It is a fantastic example of successful European collaboration. The rarity of this neuroblastoma and the low number of patients means that trials could not have happened in a single European country. It is vital that this type of cancer trial—
Baroness Kramer (LD)
Given the noble Baroness’s expertise on this issue, I wish to ask her a question. As I understand it, medicine is becoming more and more personalised and customised. Therefore, by definition, the pool for a far wider suite of diseases is becoming smaller and smaller because of that much narrower customisation and personalisation. Therefore, the situation with rare diseases today is about to become the norm across a very wide range of diseases. Does the noble Baroness read it that way?
Baroness Thornton
I absolutely agree with the noble Baroness. In fact, several noble Lords who are much more expert on this have already mentioned that aspect. The noble Baroness is absolutely right. I do not think I need to say anything more. I think this amendment is the remedy. I hope that the Government will respond positively to it. The case is unanswerable.
Baroness Ludford (LD)
My Lords, when she replies, will the Minister comment on the remarks of her noble and learned friend Lord Keen of Elie on 28 February, when we discussed this issue in the context of directives whose implementation date was beyond exit day? The noble and learned Lord addressed this issue, partly because the noble Baroness, Lady Hayter, mentioned regulations. In his reply, he said something rather interesting: namely:
“There are examples of regulations … where we accept that the regulation has come into domestic law but its actual operation is deferred, perhaps until 2020”.
I think that date was given just as an example. The noble and learned Lord continued:
“That regulation … will form part of our domestic law at the exit date, even though the operative provisions come into force only after the exit date”.—[Official Report, 28/2/18; col. 690.]
Will the Minister clarify whether she believes that the clinical trials regulation falls into the category envisaged by the noble and learned Lord, Lord Keen of Elie? If not, why not?
Baroness Goldie (Con)
My Lords, I am very grateful to the noble Lord, Lord Patel, for raising this extremely important issue, and to all your Lordships who have contributed so authoritatively to the discussion on this amendment. It provides me with the opportunity to set out the Government’s position on the regulation of clinical trials and the introduction of the new EU clinical trials regulation.
As I am sure the noble Lord is aware, the MHRA is working towards the implementation of the new clinical trials regulation. The new regulation, agreed in 2014, is a major step forward as it will enable a streamlined application process, harmonised assessment procedure, single portal for all EU clinical trials and simplified reporting procedures, including for multi-member state trials. This has been widely welcomed by the industry.
A key priority for the Government throughout the negotiations is to ensure that the UK remains one of the best places in the world for science and innovation. Noble Lords will be aware that the life sciences sector in the UK is world-leading, a point emphasised by my noble friend Lord Ridley. It generates turnover of over £63.5 billion per annum and the UK ranks top in major European economies for life sciences foreign direct investment. There are over 5,000 life sciences companies in the UK, with nearly 235,000 employees, and the Government are determined to build on this success as we leave the EU.
But it is not just UK industry that benefits from a thriving life sciences sector. More importantly, UK patients benefit from having access to the most innovative and cost-effective treatment available. That is why the Secretary of State for Health and Social Care committed to a post-exit regulatory system underpinned by three key principles: first, patients would not be disadvantaged; secondly, innovators should be able to get their products to market in the UK as quickly and simply as possible; and, thirdly, the UK should continue to play a leading role in promoting public health.
The UK has a strong history of collaborating with European partners through EU, pan-European and other multilateral and bilateral initiatives. I entirely agree with your Lordships that it is in the interest of patients and the life sciences industry across Europe for the UK and the EU to find a way to continue co-operation in the field of clinical trials, and for continued sharing of data and information, even if our precise relationship with the EU will by necessity change.
As the Prime Minister outlined in her Mansion House speech on 2 March, the UK is keen to explore with the EU the terms on which the UK could remain part of EU agencies such as the European Medicines Agency. Membership of the European Medicines Agency would mean investment in new, innovative medicines continuing in the UK, and it would mean these medicines getting to patients faster as firms prioritise larger markets when they start the lengthy process of seeking authorisations. But it would also be good for the EU, because the UK regulator assesses more new medicines than any other member state. These matters are all key components of the negotiations.
Lord Warner
Can I ask for clarification on the subject which we discuss fairly frequently in this House: the jurisdiction of the European Court of Justice? Is it the Minister’s understanding that any disputes under this new regulation, when it is in operation, would be settled under that jurisdiction whether or not the UK was in the EU? Would she therefore accept that there is a risk that we might not always be able to benefit from the advantages in this set of regulations?
Baroness Goldie
I thank the noble Lord for his intervention. This is an area where a dispute resolution procedure will have to be agreed, and that is currently part of the negotiations.
I will continue with the point I was making; there were many frankly authoritative contributions to this debate. I cannot pre-empt the negotiations, nor can I disadvantage the UK’s position in these negotiations by giving premature guarantees at this time.
Lord Hannay of Chiswick (CB)
Could the noble Baroness answer the question that was posed by the noble Baroness, Lady Ludford, and the noble and learned Lord, Lord Mackay of Clashfern? She seems to think that this will be a matter for negotiation. However, if the Government were to rule that we would bring within the scope of the Bill European laws which had been adopted but whose date of entry into effect fell after the exit date, you would not need to negotiate at all. Have not the Government enough things to negotiate about?
Baroness Goldie
With respect, I am not sure that I entirely agree with the noble Lord. I am coming to the points raised by the noble Baroness, Lady Ludford, and my noble and learned friend Lord Mackay of Clashfern.
I assure noble Lords that the Government will continue to seek the best possible deal for the UK and that the Government continue to undertake a huge amount of preparatory work relating to the UK’s exit from the EU under all scenarios. This includes correcting any deficiencies that could arise from withdrawal in relation to the regulation of clinical trials where the UK’s exit from the EU would result in the retained EU law which governs the regimes being deficient or not operating effectively. The application date of this regulation is linked to a new EU portal and database being in place. As a number of your Lordships have observed, this has been delayed on multiple occasions, and the latest intelligence suggests that it will apply from March 2020. Perhaps I may clarify for the noble Baroness, Lady Ludford, that, for that reason, it is almost certain that this regulation will not be caught by Clause 3 of the Bill. The existing UK legislation, based on the current EU clinical trials directive, will be corrected using the—
Baroness Thornton
Will the Government therefore consider amending the Bill to allow that to happen?
Baroness Goldie
At this point, we are not entirely in control of matters regarding the future. I know that it is frustrating for many of your Lordships, but that is where we have to deal with the negotiations.
Lord Forsyth of Drumlean (Con)
I am not an expert in any of these matters, but it is a bit of a puzzle. Why would we want to bring into our legislation regulations which everyone accepts are not fit for purpose, and not bring into effect immediately—
Lord Forsyth of Drumlean
I am referring there to the old regulations. The new regulations would provide for a better regime and—this is the most important point, which I hope my noble friend will deal with—enable people to plan ahead for their clinical trials in the future. They need to know which regulatory regime will apply.
Baroness Goldie
I thank my noble friend for his intervention. I was about to say that the existing UK legislation based on the current clinical trials directive will be corrected using the powers in this Bill so that that regime continues to function properly when the UK is no longer a member of the EU. This will mean that there is no interruption in UK clinical trials approval. Perhaps I may deal with the point raised by the noble Lord, Lord Kakkar.
Baroness Ludford
I thank the Minister for letting me ask her a question. First, how will that operate if we continue to apply the directive and the other member states apply the updated regulation? There is a rather peculiar situation in justice and home affairs where that is envisaged, although I have never been sure how it is supposed to operate. Perhaps she can tell us how it will operate for clinical trials and how we will avoid a bumpy playing field. Secondly, can she explain what the noble and learned Lord, Lord Keen of Elie, meant? What category of regulations was he talking about if he was not talking about the clinical trials regulation?
Baroness Goldie
Taking the last point first, I will need to check that out in Hansard because I do not recall in detail the point to which the noble Baroness is referring. I say to my noble friend Lord Forsyth that the practical difficulty we have is that we have something that we all agree is very good but is not yet functioning EU law. Of course, this Bill is concerned with a snapshot—making sure that we do not go down a large legislative hole with gaps in our body of law. The Bill means that we have to bring over what is there at the point that we leave. One consequence of being in charge of our own legislative functions after Brexit is that we are free to make such changes as we wish. Perhaps I may try to deal with the point—
Baroness Goldie
With all respect to the noble Lord, Lord Warner, I will come back to him but I am trying to deal with a point that has been raised. I think that two issues are getting conflated. My noble and learned friend Lord Mackay raised an interesting point about alignment of our law post Brexit. As I have just been trying to explain, to that extent matters lie in our own hands, and obviously any Government would legislate in the best interests of the UK. However, my noble friend’s question also embraces matters which, under the new clinical trials regulation, will reach into the EU. They will concern EU agencies and regimes, and these will be capable of being embraced by the UK only if we can negotiate that.
Lord Warner
I think the noble Baroness might want to have a conversation with the noble Lord sitting on her left. As a former pharmaceuticals and life sciences Minister, I know only too well that the pharmaceutical industry, including the biotech industry, makes decisions on planning its clinical trials quite a long way ahead. It would be a pretty strange company that, knowing there were going to be a new set of rules for 27 countries in the EU, which it would be of much greater benefit to participate in, entered into clinical trials with the one country that was not in that set of arrangements and which was using the 2004 clinical trials directive. Can the Minister explain how she expects big pharma and biotech companies to make sensible investment decisions on the basis of the sorts of assurances she has given the House in this debate?
Baroness Goldie
I think these businesses understand the very real and practical challenges that confront the Government in the unprecedented complexity of a process to leave the EU: that is, when we leave, we will not be part of the body of EU member states nor its regimes, agencies and institutions. However, there is no reason to imagine that in the UK post Brexit we will not continue to be at the forefront of the life sciences or that we will not have the most excellent regime of clinical trials regulatory structures. These will fall within our control.
Lord Winston
I am increasingly puzzled by this conversation. If you are doing a clinical trial, you have to harmonise all the arms of that trial for it to be randomly and properly assessed and for its statistics to be valid. Is the noble Baroness suggesting that we do our own small trials, irrespective of what is going on in a much larger pool of people? Does she not understand that, given the genetic diversity of the European population, the more people who are involved in the same trial, the more relevant the answers to the trial are, particularly in cases such as cancer, where they are all under the same rules?
Baroness Goldie
I am not in any way diminishing the important point that the noble Lord makes. I am pointing out that there are many types of clinical trials—for example, at the moment we are engaged in partnerships with non-EU countries. However, the Prime Minister has made it clear that we desire to have the closest possible relationship with the EU. We think that the systems we have been engaged in around clinical trials have been very strong, good and important.
Lord Patel
My Lords, it was not my intention to intervene. I am sorry to do so but it has been forced upon me. I think there is a fundamental failure of understanding here. Clinical trials are planned over a long time: it takes at least six to eight months to plan a clinical trial; it takes a lot of collaboration to find out whether we will be able to recruit the same category of patients; and we are required to understand whether the people who volunteer to join the trial have the necessary patience to do so. Because of this time lag, my amendment seeks to raise a very simple question. We had agreed to a regulation—the new clinical trials regulation—and we believed that it would come into force this year and therefore would be incorporated into the current European Union (Withdrawal) Bill. By a quirk of fate, that will not happen. But we have already agreed to have it in the Bill, so, as the noble Lord, Lord Forsyth, said, what is the problem with incorporating it in the Bill?
Baroness Goldie
The problem is that the Bill is intended to transfer a body of law from A to B. At the moment, this regulation is incomplete: it has not been enacted and it is not currently in the body of EU law. That is why there is a risk that it will not be covered under this Bill.
Lord Kakkar
I wonder whether the noble Baroness will take this slightly different point. If, as is argued, the clinical trials regulation will not form part of the applied European law at the time of exit, clinical trials will still have to be conducted under some form of law in our country, and that will be the 2004 directive that currently applies. If that goes forward, what ultimately will happen is that everything we know that is wrong with that directive, and which has been corrected by the new regulations, will apply in our own country. Even if we continue to be active participants in clinical research, we will be so under the less satisfactory situation of the current 2004 directive unless the Government decide to modify that directive. As there must be a legal basis for undertaking clinical research, does it not seem logical simply to apply what we have already agreed is a sensible approach rather than having to reinvent a new basis for legal provision to undertake clinical trials in our country?
Baroness Goldie
I partly agree with what the noble Lord is saying because if this regulation has not become law before we leave, we can use Clause 7 of the Bill to attend to deficiencies, amend or correct, and that is what we will do to keep our own regime of law up to date. However, at this point it is impossible for the Government to go further than that and embrace matters which are potentially directly enactable under this new regulation and involve the EU, which implies that you have to be a member of the EU and a part of the agency. We have a strong desire to see that kind of partnership continue, but it can only continue if it is successfully negotiated.
Lord Kakkar
Does not the Minister consider there to be a substantial risk? As I understand it, non-member states of the European Union are obliged to be fully compliant with the 2004 clinical trials directive. If we become non-members of the European Union and do not have an agreement in this area prior to leaving, will we not be forced to continue under the 2004 directive if we wish to participate in the data and information generated from clinical research being applicable more broadly for those who wish to take their arguments for adoption of those findings, and authorisation of new medicinal products as a result of those findings, in the European Union?
Baroness Goldie
My noble friend Lord O’Shaughnessy, who is advising me, says that once there is a new regime in Europe, all non-member states will have to make a decision about whether or not to be compliant with that. We hope that in our Brexit negotiations we have made clear—the Prime Minister has emphasised this—the huge importance we attach to these issues. They are massively important and we want to get a positive outcome in the negotiations, but it would be premature at this stage to incorporate into this Bill the anticipated enactment of the new regulation because it might be inert law.
Baroness Thornton
I have already written to the Minister asking for a meeting to discuss this issue and have copied the letter to many noble Lords. It is important that we have the meeting before the next stage of the Bill.
Baroness Goldie
I am happy, as are my colleagues, to engage in and attend meetings and to listen to the views expressed.
I was going to make an observation about the amendment of the noble Lord, Lord Patel. The noble Lord, Lord Kakkar, made an important point about how we deal with whatever law we will have if this new regulation has not become law when we leave. It is important that we have the flexibility in the Bill to deal with such matters but, under the amendment of the noble Lord, Lord Patel—I am sure it is not intentional—there could inadvertently be a delay in dealing with them as we leave because his amendment stipulates that Clause 7 powers could not make regulations until a report had been laid before both Houses assessing the costs and benefits of adopting the new EU regulation. We do not know when that is coming through. We think it might be March 2020—we do not know—but in the meantime we could be in limbo in trying to do the very things that noble Lords want us to be able to do in respect of the existing law. For these reasons, I urge the noble Lord to withdraw his amendment.
Lord Carlile of Berriew (CB)
Can the noble Baroness clarify her constant references to Clause 7? As I understand the clause, it is intended to allow Ministers for a period of two years to introduce regulations to remedy deficiencies that come to light during that two-year period. But if we know patently, as has been illustrated in this debate, that there is a severe deficiency that we know about before Brexit, Clause 7 is not designed for that at all and the noble Baroness should not be relying on it. She should instead accept an amendment of this general kind.
Baroness Goldie
Clause 7 is designed to address identified deficiencies post Brexit where our existing clinical trials regime may include references to EU bodies and institutions, but those would no longer be correct or competent and an amendment would be necessary. In response to the point made by the noble Lord, Lord Carlile, it goes back to what may be, and I hope will be, a very positive outcome to the negotiations. In that case, many of these fears will be assuaged, but I cannot second guess the negotiations and I cannot give premature guarantees that might be completely inappropriate.
Lord Lawson of Blaby (Con)
My Lords, I do not think that I am the only Member of the Committee who is listening with increasing bewilderment to my noble friend’s reply to this amendment, particularly her constant references to negotiations. This is not an issue for negotiation, this is an issue where we have agreed to the new directive and there is nothing to negotiate; rather, we will implement it in the best and most effective way we can. Is she suggesting that if we say we wish to implement the directive, the European Union will come back to us and say, “No, you can’t”?
Baroness Goldie
With the greatest respect to my noble friend, it is a matter for the negotiations. We cannot remain part of the European Medicines Agency unless that is agreed in the negotiations. The other aspects of the regulations, if they are subsequently enacted, will require us to adjust and adapt our UK law to be consistent with whatever the regulation provides.
Lord Wallace of Saltaire (LD)
My Lords, perhaps I may make what I hope is a helpful suggestion. This is not a unique regulation. There is a class of regulations and directives, some of which have now been agreed but not implemented and others that, as the noble Lord, Lord Wigley, and others have observed, are currently moving through the policy-making process and may or may not have been agreed by March 2019. The Government must have a list of all of these and must have a clear idea of which ones they think we automatically ought to accept, others that we would prefer not to accept and those about which they are not entirely decided. Since we are all concerned about giving business as much certainty as far ahead as possible, will the Government commit to publishing that list so that we can see where we are and come back on a more informed basis to discuss which of these directives and regulations that have been passed but not yet implemented automatically ought to go into British law and which of those going through are or are not thought to be in the national interest?
Baroness Ludford
Perhaps I may draw the noble Baroness’s attention to Clause 3(3)(a):
“For the purposes of this Act, any direct EU legislation is operative immediately before exit day if—
(a) in the case of anything which comes into force at a particular time”.
The regulation came into force in June 2014, 20 days after its publication in the Official Journal and is stated to apply from a later date—that is, 2020 when the EMA certifies that the portal and the database are ready,
“it is in force and applies immediately before exit day”.
This regulation is not only in force, but it applies before exit day according to the Government’s own proposed legislation. Have I misread Clause 3(3)(a)?
Baroness Goldie
I am looking at the provision and my understanding is that technically, the character of the regulation that we are discussing is that it is not currently in force.
Baroness Ludford
Forgive me, but according to Article 90-something of the regulation, it came into force 20 days after it was published in the Official Journal. That was in May 2014. Therefore, it was in force some time in June. It applies from a date to be specified once the EMA has done its homework.
Baroness Goldie
I am certainly interested in the point that the noble Baroness raises. I suspect that we have probably exhausted all possible aspects of this discussion, but I undertake to look at that point. As I said, I do not have technical information available, but I will certainly have that point clarified.
Baroness McIntosh of Pickering
We have established in this debate and in the earlier debates on Amendments 18 and 81 that precisely what the Government may wish to do, and what this amendment and Amendment 18 try to do, to which my noble and learned friend Lord Mackay has given a very elegant solution, are not permitted by the Bill. There is no legal basis. Will my noble friend come forward with a form of words to cover the 23 eventualities in the form of directives identified by the Library and other situations in the directive that apply to regulations, such as this, to give a legal basis to permit the Government to have the discretion where they choose to do so to implement the content of those directives and regulations at that time?
Lord Judge (CB)
If Clause 3(3) will not do the trick, will the Minister please take advice about whether we need to add EU regulation 536/2014 to the group of matters raised in Clause 2(2)?
Lord Judge
I ask the Minister merely to consider it; that way, we might have a solution.
Baroness Goldie
I must apologise to the noble and learned Lord; the Chief Whip sat down and bumped into me, so I was distracted from hearing what he had to say. I certainly offer to come back to that point.
Lord Patel
My Lords, it is difficult for me to sum up. The message is quite clear to me, although that might merely be perception, that my friend, the noble Baroness, Lady Goldie, is in some difficulty. It is quite clear to all those who understand the amendment—and, more importantly, the European trials regulation and the law as specified in the Bill—that there is no reason why we cannot incorporate this into the Bill.
The noble Lord, Lord Warner, suggested that we might need to bring another amendment; I suppose he means with the view to having a vote. That was not my intention when I tabled the amendment. It was merely to clarify the Government’s position on importing the European trials regulation into the Bill as we are the prime movers of the regulation and we are formulating it. The solution identified by the noble and learned Lord, Lord Mackay of Clashfern, seems to be the answer to cover all such regulations that we might have agreed to and might come into force. This is not the first time that he has come to my rescue. He has done so twice before, on admixed embryos and on mental health having equal esteem. Both times they were put to the vote and the votes were won—so that is a warning.
I hope the Minister might agree that more work needs to be done on this by Ministers. I am glad to understand that the noble Lord, Lord Callanan, is to meet with Cancer Research UK and others at some stage in March, I assume to discuss this and other science issues. I hope he will agree that there might be a place for the Ministers to meet and see whether there is a solution. Otherwise, I fear that either there will be an amendment in the form suggested by the noble and learned Lord, Lord Mackay, or, if it is not me, somebody else will table an amendment. We can tell from the support this amendment received even from strong Brexiteers such as the noble Lords, Lord Lawson and Lord Forsyth, and the noble Viscount, Lord Ridley, that such an amendment might be carried.
Viscount Ridley
As a result of this debate, could the noble Lord consider the possibility that he, I and the other supporters of the amendment have been doing so on false pretences—that is, on the assumption that some action is needed to make it come into law—whereas, if the noble Baroness, Lady Ludford, and the noble and learned Lord, Lord Judge, are right, perhaps it automatically does? That might explain the problems that we have got into today, and we would have wasted an hour and a quarter on something that might not matter.
Lord Patel
I thank the noble Lord. That is why I hope the meeting will help the noble and learned Lord, Lord Judge, and others to clarify that the amendment was not necessary, in which case we are saying that any such regulation that we have agreed to stands. On that basis, I beg leave to withdraw the amendment.
Baroness Hayter of Kentish Town (Lab)
My Lords, I shall speak sparingly to this amendment and others in this group given the expertise and experience of those others whose names are on them. Of course, it is traditionally not for this House to decide anything on the raising of taxes, but we have a role in considering the powers to raise fees or charges. This is the nub.
Without having spelled out why they consider that such powers need to be created and to whom they might be given, Ministers have decided that they should by mere secondary legislation be able to levy funds from—we assume—business and individuals. I shall leave it to those whose names are on the amendments to spell out rather more than I will their disquiet over such powers. I will then listen with great interest to what excuses the Minister is able to dream up to explain this particularly extraordinary Henry VIII power. I beg to move.
Lord Turnbull (CB)
My Lords, I regret that I was unable to attend all of Wednesday’s Committee stage, thereby missing a number of important speeches, but I have the opportunity now to speak on behalf of the noble Lord, Lord O’Donnell. I hope that your Lordships will accept that one Treasury ex-Permanent Secretary is a fair swap for another.
I particularly admired the speech of my immediate predecessor, the noble Lord, Lord Wilson of Dinton, who set out the proliferation of players and organisations who could have the right to make secondary legislation out of this Bill and the low hurdle they have to get over. These amendments raise important issues on the scope of secondary legislation, some of which has important constitutional implications.
The report of the Delegated Powers and Regulatory Reform Committee has pointed out that it is a long-standing principle—of some 330 years—that the introduction of taxation or its increase should not be permitted simply by secondary legislation. Amendments to Clauses 7, 8 and 9 rightly insist that levying of taxes and increasing them should not be covered by these powers. They also point out that some fees and charges are equivalent to taxation and should be subject to the same constraints.
One can break down taxes, fees and charges into different categories. There are those that simply cover the costs incurred in administering a particular service—for example, passports. One can test this principle by looking at the annual trading account that an organisation produces to ensure that no surplus is generated. Secondary legislation may be appropriate for fees or charges which satisfy this condition.
Viscount Hailsham (Con)
Will the noble Lord help this Committee as to the distinction in law between a fee and a charge? At the moment, I am rather puzzled.
Lord Turnbull
I am about to get to that. There are other fees and charges which, as a matter of policy, raise more than enough to cover costs and these should be treated as taxes. I think that in the national accounts, even if the words “fee” or “charge” or “levy” are used, statisticians look at the facts of the case. If there is this surplus generated beyond the simple covering of costs, then it would be classified as a tax.
Lord Turnbull
If something generates a surplus, it is equivalent to a tax and should be covered by the same legislative understandings about taxes.
There is a third category, where a conscious policy relates the fee not according to how much it costs to administer that piece of service to a business or a household but to something like wealth or income. The most egregious example of this was the recently introduced change in the schedule of probate charges, where larger estates are being asked to pay not what it costs to administer the probate but according to the size of the estate, producing charges many times greater than the pure costs. We need to decide in this amendment whether all fees and charges should be treated as taxes—that would be the simplest thing—or whether it is possible to make a distinction between those fees which are purely covering costs and those which go beyond, either in the total or in their social distribution. I hope that the Minister will agree to come back to this House with amendments which make that distinction.
The issue will resurface when we get to Amendments 348 and 349, which deal with Schedule 4, where we have the possibility that secondary legislation could be used to introduce fees and charges by a body that was itself created by secondary legislation. I should say that that would put us not just in double jeopardy but jeopardy squared. We are going to have to deal with the problem of these two points in our work on the Bill.
Baroness Kramer
My Lords, I have put my name to Amendments 86 and 127. I will be very brief because the noble Lord, Lord Turnbull, has described the problem we have over fees, charges and legislation. I remember that, when I was on the board of Transport for London and we brought in the congestion charge, it was the alliterative nature of the word “charge” that led us to use it, rather than any legal definition. So my answer to the noble Viscount, Lord Hailsham, is that there may well be legal definitions but I think they are now observed in the breach on many an occasion.
Baroness Kramer
The noble Viscount gives a superb example. We can think of parking charges and a whole wide variety. That is why it is really important that there is clarity over when a statutory instrument is the appropriate mechanism and when, frankly, it is not. The Bill as it stands does not give that clarity.
I also put my name to these amendments for another reason. Most in this Committee will remember the time of the tax credit debacle, a major policy change that most of us regarded as a change that should have been introduced as part of a welfare Act. The Government sought to accomplish that through a statutory instrument attached to a Finance Bill. Because of the nature of charges and money-type instruments, it is very possible to use them to affect very broad policy issues and not just the narrow issue of revenue raising. That is why Amendment 127, for example, is an important amendment, as are others in this category. We are all concerned about the inappropriate use of Henry VIII powers, since this Government have actually tried to use these to achieve those much broader policy ends in the past. We have to be sure that we are not leaving a mechanism by which that could be repeated, because that really would be a coach and horses through many of the concerns and issues that have been raised.
Lord Lisvane (CB)
My Lords, I support the amendments in the name of the noble Baroness, Lady Hayter of Kentish Town, and I shall speak to Amendment 126, which is in my name and those of my noble and learned friend Lord Judge, my noble friend Lord Pannick and the noble Lord, Lord Tyler. Amendment 126 would bring Clause 8 into line with Clauses 7 and 9.
Taxation matters can be dealt with by statutory instrument. For example, they can restrict relief from Customs and Excise duties or VAT under the Customs and Excise Duties (General Reliefs) Act 1979. But taxation, as it is normally and properly understood, is undoubtedly a matter for primary legislation. What is troubling here is the potential width of these powers and the lack of indication of how the Government intend to use them.
The Delegated Powers Committee’s 12th report says:
“At committee stage in the House of Commons, the Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker) indicated that the power to tax by statutory instrument in clause 8 was needed because the power was not available under clause 7”—
that is true enough. It continued by saying that,
“furthermore, taxation might be needed to ‘comply with international arrangements’”.
The committee then pointed out, and I entirely endorse what it said:
“The question which remains unanswered is why taxation by Ministers in statutory instruments is an acceptable alternative to taxation”,
approved by Parliament, with the normal rigour of the process, in primary legislation.
The Minister will need to give your Lordships some very hard examples of why a statutory instrument would be used and not primary legislation. If that is not known at this stage, the withdrawal and implementation Bill we are promised might well be the vehicle for making those changes in primary legislation, if the precise requirements are known at that stage. But this potentially wide power to tax by statutory instrument is, as I say, more than troubling. I am not suggesting that indications of how a power is expected to be used will in themselves suffice, although they should give your Lordships a clue to why the power is required, which is perhaps a more important question to address. What matters, of course, is what ends up in the Act. The use of the power then will not be trammelled by reassuring indications of how, at this stage, it is expected to be used.
Perhaps I may finish by enlarging on my noble friend Lord Turnbull’s masterly catalogue of fees and charges and their various characteristics, to add another category. In the financial procedure of the House of Commons, a fee that is levied and then applied for the good of the industry as a whole is not treated as a tax, so it does not require ways and means cover. As I say, that is merely a footnote to my noble friend’s excellent speech.
Lord Tyler (LD)
My Lords, I am a co-signatory to Amendment 126, as the noble Lord, Lord Lisvane, said. I want to underline a couple of the points he has made. This amendment derives, as he said, from the work of the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, which, I remind the House, is cross-party and non-party. It is entirely devoted to advising the House on important issues relating to the way we handle secondary legislation.
The noble Lord, Lord Lisvane, has been characteristically modest in not quoting the committee’s specific comment, which is very powerful. It said at paragraph 20(c):
“The Government should demonstrate a convincing case (if one exists) before the supremacy of the House of Commons in financial matters gives way to taxation by statutory instrument”.
This may be only a minor incident, but it is part of a much bigger pattern. I worry—I am getting old, I think—that Ministers and civil servants do not seem to have spent quite so much time with their history books as I used to when I took a degree in that subject. The power of Parliament to hold the Executive to account in matters of taxation goes back beyond even the 300 years to which the noble Lord, Lord Turnbull, referred. It could be said to go back to Magna Carta or Simon de Montfort’s Parliament, or indeed to the decision of our colonial cousins to declare independence: “No taxation without representation”.
This is very sensitive territory. We are surely entitled to demand a full explanation of why the regulations under Clause 8, unlike those under Clauses 7 and 9, may impose new taxation or increase taxation, allowing the supremacy of the House of Commons in financial matters to give way to taxation by secondary legislation.
The noble Lord, Lord Lisvane, referred to some discussions that took place in the other place on 13 December, when the Minister, Robin Walker, sought to explain why the provisions of Clause 7 could not apply and why Clause 8 was necessary. I shall quote him in detail because I think it is important:
“In addition, there are restrictions on the use of clause 7 relating to, for example, taxation that might, in some circumstances, prevent important changes to comply with international arrangements from being made. We need this power because we need to be prepared for all eventualities”.—[Official Report, Commons, 13/12/17; col. 557.]
There are three triggers there: “taxation”, “important changes”—this is not just trivial stuff—and “all eventualities”. Throughout discussion on the Bill, we have constantly been told that Ministers require a great deal of room for manoeuvre and flexibility; they need to be able to move fast. In this case, they have made the case themselves for proper discussion and consideration. Matters relating to taxation in these circumstances require the most composite and careful care. We should be seeking comprehensive scrutiny, not the usual approval of SIs.
If any noble Lords on the Conservative Benches think these are trivial issues, I invite them to consider how a future Government of a distinctly different colour might choose to use these unprecedented powers in relation to taxation. The very important role of Parliament is here before your Lordships’ House today. I know we will be told of the need for speed, flexibility, expediency et cetera, and that all the usual excuses for slipshod legislation will be trotted out, but this is an issue of considerable principle and of considerable responsibility for your Lordships’ House and the other place, and we must do what we can to assist it to fulfil that responsibility. Whether or not Brexit actually happens, these amendments to this clause are of huge long-term importance. We could be establishing a precedent for taxation being treated as a secondary issue, rather than as a matter that should always come in the form of primary legislation.
I was disappointed not to have been able to be here last Wednesday for the Committee, but I noted with admiration the range of expertise from all over the House and the eloquence with which it was deployed. This is not an area we can simply wave through as though it were just some small technical question. This goes to the very heart of the balance between government and Parliament. I think it was the noble Lord, Lord Cormack, who last week quoted the late Lord Hailsham warning of a slide towards “elective dictatorship”. We are back there again this afternoon, and I say amen to that.
Baroness Whitaker (Lab)
With some timidity, may I offer a cruder and less specialised perspective, somewhat along the lines of the noble Lord, Lord Tyler? Taxation and mandatory fees and charges are surely, in principle, cardinal to the social contract and the liberty of the subject—that is, the subject cedes liberty as part of a democratic deal. In the past when monarchs have attempted to impose taxes, Parliament has continually rebelled. It is Parliament’s job to decide taxation, fees and charges, through primary legislation. I deeply support these amendments.
Viscount Hailsham
My Lords, I support the amendments in this group, most notably Amendment 86, the lead amendment. The first thing to perhaps acknowledge is how wide the power is in Clause 7. I acknowledge that the Minister will make this point. The power proposed under Amendment 86 would be governed by the overarching provisions of Clause 7, but it is also fair to point out that Clause 7 has a very wide scope. If one looks at Clause 7(3), one sees that the Minister has a power to enlarge the interpretation of the legislation in question.
The second point is that if one looks at paragraph 2 of Schedule 7, one finds that a fee—an important word in this context—imposed by a public authority can be created only by the affirmative procedure. What the Committee needs to address, however, is the distinction between a fee and a charge. The noble Lord, Lord Turnbull, suggested a difference, which I think was that a charge involves a surplus, so that perhaps it should be treated as taxation. But I am not sure that definition is recognised by law.
Lord Turnbull
I do not think I was making a distinction between fees and charges—they are just words. They broadly mean the same thing and both suffer from the same defect.
Viscount Hailsham
I am very grateful to the noble Lord and I am sorry if I misunderstood him, but I understood that he sought to suggest that a charge that creates a surplus in effect amounts to a tax. However, I am bound to say that if he is right and these things are essentially the same, that creates a very major problem. Paragraph 2 of Schedule 7 says that an instrument that allows the imposition of a fee by a public authority can be created only by affirmative resolution. But then, I ask rhetorically, what about a charge? If the fee is governed by the affirmative resolution procedure and a charge is not, we are in an extremely difficult situation. What is a charge? Incidentally, I am not sure this really helps the noble Lord, Lord Turnbull, but if one goes to paragraph 6 of Schedule 4, one finds the phrase “fees or other charges”, which rather suggests to me that there is a distinction between a fee and a charge.
I have a number of specific questions for my noble friend the Minister. First, what is the difference between a fee and a charge? Secondly, related to that, does the provision of paragraph 2 of Schedule 7, which insists that a fee can be imposed only after the creation of a power by an affirmative resolution, also apply to a charge? If it does not, we have a wonderful situation whereby the fee can be imposed only if the power is created by a statutory instrument of the affirmative kind but that is not true of the charge.
Lord Carlile of Berriew
May I throw another word into this taxation Scrabble? What about the word “contribution”? Most of us in this House have paid national insurance contributions for most of our lives. Is that a tax, a charge, a fee or a contribution?
Viscount Hailsham
The point is a very sound one, although of course most of us no longer pay national insurance contributions. There is of course another word that one could use, which is “imposition”, as in a financial imposition. The real truth is that we are entitled to a proper definition.
Having focused on some specific narrow points, I would just like to look at one or two general ones. The first is the point that I made on Wednesday, and I shall keep a firm grip on it: any power given to Ministers and officials will be abused. That is an absolute cardinal rule of politics. Secondly, the degree of ministerial and parliamentary control on any statutory instrument is minimal. I speak as one who has considerable authority for saying that: for 10 years I was a Minister and I do not know how many scores of statutory instruments I signed off, but it must have been a very large number.
Viscount Hailsham
My noble friend Lord Forsyth was also guilty, I hasten to say; we were the same in that respect.
The third point is that statutory instruments are not amendable by either the negative or the affirmative procedure. Moreover, and this is the point that we dealt with on Wednesday, the regulation-making power is triggered if the Minister thinks it appropriate. I remember very clearly the way that my noble friend Lord Callanan dealt with the argument that we should delete “appropriate” and insert “necessary”. He did not like it, but he is left with this: if a Minister, by affirmative or negative resolution, thinks it appropriate to levy an imposition—a charge, a contribution, a fee—on a citizen, he can do that. I regard that as a very unhappy state of affairs and, should this come to Report, I will not be supporting it.
Lord Deben (Con)
My Lords, I was once estimably advised by the noble Lord, Lord Turnbull. I want to look at this amendment from the point of view not of the civil servant but of the Minister. I think your Lordships’ House has already understood how difficult it would be for a Minister to understand what he could or could not do under this part of the Bill. First of all, he would have to turn to the modern equivalent of the noble Lord, Lord Turnbull, to ask him what the distinction between a fee and a charge was, and I am not sure that the noble Lord’s equivalent could be entirely precise as to what that distinction was because it is almost impossible to tell.
The noble Lord sitting next to the noble Lord, Lord Turnbull, got up and pointed out the word “contribution”. Of course when talked of in terms of national insurance a contribution is manifestly a tax, but it does not cover the cost of the service to which it is actually appended. It must therefore be possible to have a fee that does not cover the cost but is in fact a tax. That suggests that this part of the Bill—I do not speak of any other part—has not been entirely well thought through.
Lord Forsyth of Drumlean
I do not wish to prolong this but I have been reflecting on the definition by the noble Lord, Lord Turnbull, of a tax. He said that it was if you made a surplus. Does that mean that if a charge were being made for a service and the body concerned cut its costs so that it was making a surplus, it would then turn into a tax?
Lord Deben
It seems to me that almost any circumstance does not fit this part of the Bill; indeed, I find it difficult to find a single circumstance that does. I hesitate to put this to my noble friend because on the last occasion when I tried to be helpful he found me more unhelpful than usual, so I shall be very careful, but I ask him to imagine that this particular clause was being proposed by a monarch who simply said, “I want to have the powers to decide what kind of word I am going to use for taking money out of your pocket without proper parliamentary control”. I think I know what our forefathers would have said to that monarch. He might indeed have been in fear of his life, for this is precisely what Parliament is about.
We ought not to deal with this merely in the reasonably light-hearted way in which we have pointed out that this is an ill-conceived, utterly ill-thought-through and entirely indefensible bit of the Bill. We should take it one stage further and say that it is fundamentally unacceptable in a democracy that any mechanism can give Ministers the power to decide on taxation without representation. This is what we are here for. This is what Parliament is here for.
It is no good my noble friend reading out, as he will, the carefully phrased answers, because the people who have written the answers have caused the problem in the first place. They are the ones who have not understood that taking back control does not mean giving it to my noble friend. It means, if it is necessary—I do not think it is, but if it is—giving it to Parliament. This is part of the Bill which does not so do. The amendments attempt to put right what is, in the immortal words of some Members of the House, a dog’s breakfast, which is rude to dogs.
This is entirely unacceptable, but there is one bit that I find more unacceptable than any other. If this is necessary in order to carry through our international obligations, which is an argument that has been used, it is a peculiar addition to a Bill which is removing us from international obligations. The one place where this should not be is in the withdrawal Bill. We are withdrawing from international obligations on the basis that we do not want to have them, but writing in an ability to assert international obligations by secondary legislation.
My noble friend Lord Forsyth, who has followed me so far, did not like my little comment about the EU, but I am sure he agrees that we should not be using secondary legislation to impose taxation as a result of international obligations. That is not what it is about.
My last point is very simple. I have always found the word “expediency”, when used by Ministers, a red flag. Ministers always say that something is necessary because it is expedient. Expediency is always the excuse for doing something which you cannot do properly but which you get through on the basis that this is an emergency, it is urgent, or it has something to do with terrorism—we can find some reason or other that means we cannot wait for the proper process.
I was a Minister for 16 years. We are three former Ministers. None of us thinks that this power should have been given to us, so just think how little we believe it should be given to people with a different political view. I say to the Minister, who is well to a different part of the Conservative Party from me, that he should be the last person to give these powers to Ministers.
Baroness Butler-Sloss (CB)
My Lords, I make two short suggestions. One is that all the words that we have heard today should be treated exactly the same. The second is that Parliament should deal with all of them.
Lord Cormack (Con)
My Lords, my noble friend Lord Deben, in his scintillating speech, referred to the power of arbitrary monarchs. I do not need to remind him—or anyone else in your Lordships’ House—that 369 years ago something happened to a monarch who had sought to exert those powers absolutely. The ultimate end of ship money was outside Banqueting House in Whitehall on 30 January 1649. I do not want to make too many historical diversions, but I was grateful to the noble Lord, Lord Tyler, whom we missed last week when we really began these debates on Wednesday, for referring to what I had sought to say then. This is the specific consequence of the generality that we abhorred last week—giving to Ministers, effectively, arbitrary power.
Lord Forsyth of Drumlean
My noble friend mentioned VAT. Is that not an example of where Parliament no longer has the power to reduce the rate of VAT below 5% because we have given that to the European Union? Is not our leaving the European Union an example of restoring the authority of Parliament to impose taxes?
Lord Cormack
Our leaving the European Union is an exceptionally unfortunate measure that will do great damage to this country, in my opinion. But the answer to my noble friend’s specific question is that it was enacted by Parliament—a Parliament of which he was not a Member but of which my noble friend Lord Deben and I were—and that, knowing the consequences, we voted for it because we believed that it was in the general interest of our country. We were behaving as Members of the House of Commons should behave. It was properly debated, thoroughly approved and it came on to the statute books as other things have done.
I go back to what I was saying when my noble friend interrupted me. We have a duty to protect and to urge the other place not to abdicate the central power of an elected House—to deal with taxation. I hope that when my noble friend replies we will have a slightly more satisfactory and understanding reply than we had last Wednesday. I hope, too, that he will ensure, if not today, that we have a glossary of all these terms, including charges, fees, taxes, contributions and levies. At the end of the day they all mean something very similar: imposing an obligation to pay. People should never fall under that obligation unless it is imposed by their representatives in Parliament. We have a duty, as the second Chamber—the unelected Chamber—to say to our colleagues at the other end of the Corridor, “Please do not abdicate; please flex your muscles; please do not give to Ministers—the 109 whom we talked about the other night—or to other bodies or authority a power that is only rightly yours”.
Lord Judge
My Lords, my name is to Amendment 126. I do not want to say very much. I can think of another word to add to that great list and I could give my view of the history of how taxation became the weapon for democracy, ultimately. Taxation is the ultimate control that the Commons has over the Executive. Just reflect on the set-to in the United States of America a few weeks ago: Senate and President at odds over money. These issues must be resolved at parliamentary level and House of Commons level—not by regulation.
Lord Mackay of Clashfern
The general principle referred to by the noble Lord, Lord Turnbull, which has been very clearly enunciated by the courts, is that no public authority, including local authorities, has the power or statutory authority to exact money that exceeds the amount that the local authority—or other person making the imposition—sets. The charge the person is required to pay must be just equal to the amount that will be needed to carry out the service, or other thing. If it does exceed it, it is taxation and that covers all forms; it does not matter whether it is a payment, charge, fee or anything else. That is a general principle. Therefore, the provision in Clause 7(7), preventing the regulations imposing or increasing taxation, prevents any local authority or other power having the power to make any such imposition.
On the amendment proposed by the noble Lord, Lord Lisvane, I wonder whether the first part of the clause —Clause 8(1), I think—is the subject of Amendment 126. My noble friend Lord Deben wondered why we were talking about this in a withdrawal Bill, but the clause says that we may have an international obligation that is breached by withdrawal; it therefore seems reasonable to deal with that in the withdrawal Bill because it is a consequence of withdrawal. That amendment implies that this power cannot be used to make any financial settlement that would cause a cost to the United Kingdom because, if it did, it would inevitably require taxation—presumably, whoever makes the settlement does not intend to defray the cost out of his or her own pocket. It is a fundamental restriction on the way in which these matters of international obligation may be resolved. I think I am right in that, but no doubt the noble Lord will tell us its effect on the amendment in due course.
The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)
My Lords, Amendments 86, 126, 127 and 155—in the name of the noble Baronesses, Lady Hayter and Lady Kramer, and the noble Lords, Lord Turnbull, Lord Lisvane and Lord Higgins—concern Clauses 7, 8 and 9 and the ability to provide for taxation or fees and charges under those powers.
Let me start by saying that the Government are aware of the concerns of many noble Lords about the raising of fees under these powers. On Report, we will look closely at how we can resolve those concerns. Let me explain the various issues, beginning with Clauses 7 and 9. I am glad to be able to reassure noble Lords that the restrictions in Clause 7(7)(a) and Clause 9(3)(a) already prevent Ministers establishing charges of a type that would involve any element of taxation or tax-like provision under these powers. Beyond that specific issue, I want to set out the Government’s intentions with regard to those fees and charges.
Viscount Hailsham
Will my noble friend tell the Committee what, in his view, is the essential difference between a fee, a charge and a tax? The Committee must understand the expressly defined difference.
Lord Callanan
If my noble friend will stay with me, I will come on to that. Beyond that specific issue, I will set out the Government’s intention with regard to fees and charges. We have included the powers in Schedule 4 to provide for fees and charges in order to be clear and transparent. It is, however, necessary for the powers in Clauses 7 and 9 to interact with existing regimes to correct deficiencies within them, and to properly modify them to reflect the withdrawal agreement. Without prejudice to our negotiations, an example of such a correction might be modifying a fee in relation to the authorisation of a credit rating agency so that the fee becomes payable to the UK financial regulators rather than the European Securities and Markets Authority. That might be argued to amount to the imposition of a new fee.
The requirements to pay new fees and charges established under Schedule 4, and the ability to modify existing regimes, will depend on deficiencies being properly corrected and on functions being transferred. Clauses 7 and 9 are not primarily aimed at imposing fees, and they cannot impose other kinds of charges, but sometimes that will be part and parcel of the correction. In answer to the questions about fees and charges from the noble Viscount, Lord Hailsham, the noble Lord, Lord Deben, and the other poachers turned gamekeepers—if I may refer to them as that—on the Privy Council Bench, a fee is a payment only for a service received. By a charge, in paragraph 6(2) of Schedule 7, we mean anything which goes beyond cost recovery. Clause 7 cannot create a charge. In addition, creating either a fee or a charge is subject to the affirmative procedure.
The argument against a tax restriction—
Lord Deben
There is a large number of fees that are paid to, for example, the Environment Agency, to carry out certain services. We have no idea whether those fees are equalled by the amount of work that is done. The Environment Agency says: “We want this amount of money because we need it”. There is no proof. If one were to prove that the agency spent less money than the fee, does it then become a charge or a tax? There is a real issue here. My noble and learned friend Lord Mackay points to the fact that one may define it like this but how does one prove it, and how does the House deal with it? Is it not better to not have this distinction at all?
Lord Lisvane
Before the Minister responds to that point, could he also answer my question? He has sought to make a distinction between a fee and a charge. Could he explain why, at page 761 of the latest edition of Erskine May, there is no distinction made between fees, charges, impositions, contributions or anything else of that sort? The test which is set out there, and is reflected in the current practice note from the Office of the Parliamentary Counsel—available on its website—is whether or not those payments are,
“akin to taxation in their effect and characteristics”.
I suggest that an additional test needs to be applied to the template which the Minister has offered.
Viscount Hailsham
I am sorry for my noble friend, but he did say that both the fees and the charges were subject to the affirmative procedure. I know that the fees are, but I am not sure where in the Bill I find the provision that charges are subject to the affirmative procedure. Will he tell the Committee?
Lord Callanan
I do not have the specific clause in front of me, but I am sure that is the case and I will write to the noble Viscount about it. I am not an expert on Erskine May and the precise legal definitions, but I will have a look at the matter towards which the noble Lord, Lord Lisvane, has pointed me.
The argument against a tax restriction on Clause 8, made by the noble Lord, Lord Lisvane, is altogether different. The Clause 8 power is predicated on the fact that when we leave the EU, without further action we may inadvertently end up in breach of certain international obligations which have been affected by our EU membership, as a number of noble Lords have pointed out was said in the other place by my honourable friend Robin Walker. It is possible that some of these obligations may be in the field of tariffs, although it is, of course, impossible to know the full picture until our future relationship with the EU has been negotiated. If Clause 8 had a tax restriction as the other main powers do, we may not have the capability to remedy these breaches in all circumstances. As I hope noble Lords will appreciate, we are committed to international relationships and a key part of that is ensuring that we are fully compliant with our international obligations.
Lord Wallace of Saltaire
That is a very interesting point. Would that be remediable if we were to stay within the European Economic Area, which would classify us as part nevertheless of a regional economic arrangement? Is that one of the things that perhaps we and the Government should take into account in considering this transition?
Lord Callanan
If we were part of the European Economic Area, I assume that we would not need to do that. However, as we are not going to be part of the European Economic Area, it may perhaps be necessary. I hope that the noble Lord will listen to my next point.
In the light of our successful phase 1 agreement, we are increasingly confident that we will secure a deal with the EU and that the prospect of leaving negotiations with no deal has reduced significantly. It is in both the UK’s and the EU’s interests to secure a good deal for both sides. However, as a responsible Government, we have a duty to plan for the unlikely scenario in which no mutually satisfactory agreement can be reached. I hope noble Lords agree that that is common sense. If we do not have this power, and in exiting the EU we are unable to correct a breach of the MFN principle, another WTO member could bring a dispute against the UK in the WTO. That is a situation that we want to avoid, and which could result in a loss of trade for UK business through retaliatory measures by other WTO members or claims for compensation against the UK.
Lord Adonis (Lab)
The noble Lord makes some very good points about how we might need to levy charges or fees, or whatever he wishes to call them, but he has not made any case as to why this should be done by secondary legislation as opposed to primary legislation.
Lord Callanan
Because in such circumstances we will need to react quickly in the light of the events as they happen, depending on—
Lord Callanan
I did not want to use the word “expedient”, as it had been referred to.
Lord Callanan
It would be totally appropriate and, indeed, necessary to do so in the circumstances. We are in a difficult position in that we are trying to plan for all eventualities. It is one of those powers that we hope we will never use because, of course, we want, and seek, a good agreement with the EU.
Lord Hannay of Chiswick
There is a different eventuality using the same example that the noble Lord gave—namely, the eventuality of the Government’s proposal for what I think is called an implementation phase; most of us call it a transition or standstill phase—lasting about two years. Is he suggesting that we might be in breach of our WTO obligations if we reach an agreement with the European Union on that basis, because it is about to be reached, is it not?
Lord Callanan
No, I am not suggesting that we might be in breach of our international obligations. However, as the noble Lord knows, we are currently negotiating for the implementation period, and as soon as we have an agreement—I hope within the next few weeks—we will be sure to report back to the noble Lord and others.
For those reasons, which I set out earlier, the Government therefore cannot accept these amendments to Clause 8. The power can be used only for the specific purpose of ensuring continuing compliance with international obligations to which this House has already consented and which would be affected by the UK’s withdrawal from the EU. It is available only for a limited period of time, and any further restriction risks increasing the primary legislative burden on this House and weakening the UK’s promise to the rest of the world that we are ready and able to honour our commitments.
However, having said all that, I repeat the point I made at the start of this debate: that we are listening carefully to what noble Lords have said, that we will look closely at how we can resolve many of the concerns that have been raised by noble Lords throughout this debate, and that we will come back to the issue on Report. In the light of those assurances, I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Adonis
My Lords, will the Minister take the message from this House that we are very happy to have this burden imposed on us? Although we appreciate his concern at the weight of business which we might have to undertake if we had to pay attention to primary legislation in respect of fees and charges, we will be very happy to assume that heavy burden.
Lord Callanan
I take on board the sincere nature of the noble Lord’s assurances on this matter.
Lord Forsyth of Drumlean
Might my noble friend point out to the noble Lord that, if it is about taxation, that burden would not be placed on this Chamber anyway?
Lord Wallace of Saltaire
My Lords, since we are discovering the enormous complexity of all this, on the previous amendment I asked the Government whether they would be willing to share with us their own calculations on the process of policy-making for directives and regulations, some of which are in force but not implemented, and others of which are about to come into force but will not be implemented until after March 2019. What view have the Government formed on those? That would be helpful to us and others in understanding how the Government are coping with this complex process.
Lord Callanan
The noble Lord makes a good point. I was speaking to my noble friend Lady Goldie about the matter when he asked her the question earlier. I will have a look at this for him. I think it is fair to say that most of our negotiating positions on the existing directives and regulations are already public. We share our positions, the issues that are being discussed are transparently available on both our website and the EU’s website, and many of the issues that will come to fruition over the next year or two are already in early formative phases. I therefore genuinely do not think that there is much about this process that is secretive, but I will certainly have a look at the issue for the noble Lord.
Baroness Hayter of Kentish Town
My Lords, I think it will be obvious why I spoke so briefly at the beginning of this debate, as I have now heard far better speeches on this group than I would ever have made. I am sorry that the noble Lord, Lord O’Donnell, who “salivated”—his word at Second Reading—at the thought of being able to raise money by SIs, was not here. However, he and the other “guilty men”, as they were called, who used these in the past, have made the case well that this would be quite a move from our traditional way of raising money. Whatever the name of the charge—the noble Lord, Lord Deben, said that it was basically “taking money out of your pocket”, and the noble Lord, Lord Cormack, called it an “obligation to pay”—we know what we are looking at.
The noble Lord, Lord Deben, said that this had, “not been entirely well thought through”. I hope that that, rather than anything more untoward, is why this power has crept in there. As everyone has said, it is for Parliament to decide whether to raise funds—whether to pay for some WTO obligation or for anything else. The example of the American situation is very valid: it is how, ultimately, you stop Governments doing what you do not want them to do.
Earlier in this debate the noble Lord, Lord Lisvane, said that we need some hard examples. I do not think that the WTO example is the hard example to justify these powers. I think that his second point was that, if we do not get those hard examples to convince the House, surely it is much better that we leave this to the withdrawal (No. 2) Bill, by which stage we will know exactly what in the withdrawal agreement had led to the need to raise a particular fee, charge, imposition or whatever. That seems more appropriate.
Speaking about the WTO, I think that the Minister said that he thought the Government might be in a difficult position. I have to advise him that I think the Government are in a difficult position now on this power in the Bill. I hope that the Government will bring forward their own amendment on Report. That would be a way of taking matters forward. I am sure that there are far more expert noble Lords in the House than me who might meet the Minister to see whether we can find some such amendment. I hope that we do not have to repeat this debate on Report and that the Minister will bring something back because, if he does not, I can assure him that we will. For the moment, I beg leave to withdraw the amendment.
Lord Judge
Lord Judge
My Lords, the amendments in this group go to a simple but crucial issue. The Bill proposes to give the Minister the power to create criminal offences by regulations. The proposal is slightly obfuscated by language, with the Bill saying that the regulations may not,
“create a relevant criminal offence”,
but the intention is that they will and the words are good enough to do so.
I know that your Lordships have kindly listened to me on this subject on a number of occasions and I will not go on about it more than I have to, but there is a simple principle: it is wrong for a criminal offence to be created without proper—not notional and not theoretical—parliamentary scrutiny. The fact that it has happened before, which it has, merely signifies—I am sorry to say this—that Parliament, including this House, was not sufficiently alert to the deviation from constitutional principles.
My objection is to the lack of scrutiny. Very recently during debate on the Sanctions and Anti-Money Laundering Bill, your Lordships gave a very strong indication to the Government that this was a concern that occupied the attention of all sides of the House. The result is now a significant government amendment to the original proposal. In the subsequent debate in the Public Bill Committee in the other place last week, on 6 March, the Minister, Sir Alan Duncan, acknowledged that the Government accepted,
“that the powers of the Executive to create criminal offences and regulations should be subject to appropriate parliamentary scrutiny”.—[Official Report, Commons, Sanctions and Anti-Money Laundering Bill Committee, 6/3/18; col. 119.]
Although he did not say so, the Government must have implicitly accepted that the theoretical arrangements for parliamentary scrutiny were inadequate, because the Minister then went on to reflect on possible options for improving the processes. It was this that culminated in the government proposal that, if offences were to be created by regulations, there must be “good reasons” for their creation and, once the Government had concluded that there were indeed good reasons, they then had to be justified by a detailed explanatory and open report to Parliament.
I leave open the argument that “good reasons” should give way to “necessary” but that is for another occasion. However, I acknowledge that, in the context of that Bill, this was a significant advance that would greatly increase the opportunity for genuine scrutiny by Parliament and therefore diminished Executive control. Today, I shall not set out the details of the proposed amendments to the Sanctions and Anti-Money Laundering Bill because they are government amendments, but it would make a great start for the Minister if he would indicate that, at the very least, the government proposals in the sanctions Bill will be carried into this one. I beg to move.
Lord Callanan
My Lords, I had intended to stand up before the noble and learned Lord sat down to respond to his kind invitation. Perhaps it would be to the benefit of the House if I note that, as the noble and learned Lord has pointed out, this issue has been debated previously in the debate on the sanctions Bill. As with the issue we debated last Wednesday—the appropriate test for the use of delegated powers—the solutions found in the sanctions Bill are at the forefront of our minds in this regard and we intend to meet noble Lords to discuss the issue over the coming weeks. I will set out the Government’s views at the conclusion of the debate on this group of amendments. I very much look forward to hearing what noble Lords have to say but I thought it would be helpful to say this at the start.
Viscount Hailsham
My Lords, in view of what my noble friend has said, I can be very brief. I support the first four amendments in this group, to which I have set my name, and have ventured to put forward a sort of default position in my Amendment 340. As the Committee will appreciate, the purpose of the first four amendments is to ensure that the regulatory power now under discussion cannot be used to create a criminal offence, and the noble and learned Lord, Lord Judge, has set out very clearly the reasons for this. Amendment 340, which stands in my name, is the default position, so that if by any evil chance this Committee or your Lordships’ House decided that it was right to create a criminal offence, it should be one that does not attract a custodial sentence.
We need to be quite plain about what we are talking about. The Bill as presently drafted enables the Minister, if he deems it appropriate and subject to the affirmative resolution, to create a criminal offence that attracts a custodial sentence of up to two years. Two years is not an insignificant period, and it is very important that one reminds oneself that the test is whether the Minister thinks it is appropriate. Furthermore, we must go on reminding ourselves that the procedure—that is the affirmative resolution procedure—is simply not subject to amendment. So this is, in effect, the power to introduce a criminal offence which attracts a custodial sentence by fiat or declaration. I find that profoundly unattractive.
As a former Minister who signed an awful lot of statutory instruments, I know that the degree of ministerial oversight is extremely limited. As I said, if this Committee decides that a criminal offence should be creatable in this way, then surely it should not attract a custodial sentence of any kind.
Lord McNally (LD)
My Lords, my name has been added to a number of the amendments in this group and I appreciate the Minister’s intervention, which should make this debate fairly short. I want to take up an earlier point made by the noble Viscount, Lord Ridley: he said that he thought some of the speeches were too long and bordering on filibustering. That set a little alarm bell ringing in my mind. I have sat in on some of the debates and I have read others, and I think that this Bill is being handled by this House in the appropriate way that it deserves. Some of the speeches, from all the Benches, have been among the best I have heard in parliamentary debate.
The Minister, in referring to his Privy Council Bench, said that they were poachers turned gamekeepers. I say, en passant, that I look on them as sinners turned penitents, but that is a matter of taste really.
As I say, there have been some magnificent debates, but I worry where we are going on this. Sometimes I wonder whether the Ministers are adopting the tactics of the great boxing champion Muhammad Ali. His “rope a dope” strategy was to take all the punishment in the early stages and then have his own way in the later stages of the fight.
I hear what many noble Lords have said—the noble Lord, Lord Cormack, among them—that of course the House of Lords can go only so far with its opposition in the face of the Commons. The contribution from the father of the noble Viscount, Lord Hailsham, who warned of an elected dictatorship, comes into play here. So too does something I have mentioned on a number of occasions over the past 20 years that I have sat in this House: this House has the right to say no. We must ask ourselves why successive Governments, some with very large majorities in the House of Commons and some who have reformed this House from time to time, have left it with the right to say no. The reason is that unless we retain the right to say no, we would become a debating Chamber and the Government could simply use their Commons majority to force things through willy-nilly, regardless of whether or not we oppose them. I realise that, in some areas, we bow to the wishes of the elected House, even when we do not want certain things to go through.
As happened in the past two sittings of this Committee, we have discussed in great detail two very important constitutional issues: the right to impose taxation and, now, with this group of amendments, the right to create criminal offences. The proposals go to the very heart of our constitutional settlement and, in my opinion, to the very heart of the responsibilities of this House. Therefore, although I appreciate that a considerable promise was made at the opening of this debate, I say this to Ministers and to colleagues who have made outstanding speeches: regarding our red lines about the right to impose taxation and to create criminal offences, somewhere down the line, if what the Government come up with is not satisfactory, in our responsibility to defend the constitution this House must reserve the right to say no.
Lord Carlile of Berriew
My Lords, I want to add one short point to what has been said about sentences of imprisonment. It is likely that if the Government think it necessary to introduce new criminal offences, they are not going to be offences of assault or anything of that kind, but offences that relate to the conduct of business between the United Kingdom and the European Union. What we are talking about here are possibly mainly regulatory offences, for which sentences of imprisonment may not be necessary at all. However, such offences may affect severely the conduct of companies and the relationships between them, the conduct of local authorities and so on. Therefore, I ask that included in the scrutiny that the Minister has very helpfully promised is a slightly more sophisticated test that bears in mind the effect of potential new offences on the business community and the economy.
Lord Cormack
My Lords, I support what the noble Lord, Lord Carlile, has just said and ever so slightly disagree with my noble friend Lord Hailsham. Whatever the nature of the offence, it is wrong that it should be created in this way. I agree with the noble Lord, Lord Carlile, that custodial sentences are highly unlikely, but that is not the point. To create any sort of offence in this way is fundamentally wrong and we should not have anything to do with it.
Lord Marks of Henley-on-Thames (LD)
My Lords, I agree with what the noble Lord, Lord Cormack, has just said. As the noble and learned Lord, Lord Judge, the noble Viscount, Lord Hailsham, and my noble friend Lord McNally explained, the Bill as drafted would permit Ministers, when they consider it “appropriate”—a point made by the noble Viscount and a word discussed at length last Wednesday—to create by regulations new criminal offences carrying up to two years’ imprisonment for wide and diffuse purposes. As discussed last week, regulations could also be used to make any provision that could be made by Act of Parliament. The Henry VIII powers are as all-embracing as could be imagined. This is all the more shocking in the context of the creation of new criminal offences. These may concern individual liberty, certainly; reputation, always; and the conduct of business, as the noble Lord, Lord Carlile, has pointed out.
The report of the Delegated Powers and Regulatory Reform Committee—on which I sat for a number of years—described the powers as “wider than we have ever seen”. It described Clause 7 as notable for its width, novelty and uncertainty, and the same can be said of all three of the clauses in question. The principle is simple: it is in general not acceptable for the Government to have the power to create new criminal offences by regulation without an Act of Parliament. That principle was treated as cardinal when I was on the Delegated Powers Committee.
In 2014 the committee produced a document headed Guidance for Departments, directed principally at memorandums for the departments. However, on the question of criminal offences it was considered so out of order that new criminal offences would be created by regulation that the guidance did not even address that possibility. The committee said:
“Where a Bill creates a criminal offence with provision for the penalty to be set by delegated legislation”—
that is, the Bill creates the offence—
“the committee would expect, save in exceptional circumstances, a maximum penalty on conviction to be included on the face of the bill. Therefore, where this is not the case, the memorandum should explain why not, and at the very least the Committee would expect the instrument to be subject to affirmative procedure. Similarly, where the ingredients of a criminal offence are to be set by delegated legislation, the Committee would expect a compelling justification”.
However, this Bill potentially permits the creation of a new range of criminal offences. Both the Bill and the Explanatory Notes are silent about everything to do with such offences as might be created except for the broad statement of their purpose in the three clauses, in the most general terms, and with no indication of what offences are envisaged, except that the maximum penalty must not exceed two years imprisonment—which, as the noble Viscount, Lord Hailsham, pointed out, is a not insubstantial period.
The basic principle was enshrined in Article 39 of Magna Carta: that no one should be imprisoned or stripped of his rights or possessions or deprived of his standing in any way except by the lawful judgment of his equals or by the law of the land. These are constitutional principles as old as this Parliament, and we should be very careful in dealing with the issue of allowing the right of Parliament to insist on a say over criminal offences being created by the diktat of Ministers.
Lord Thomas of Gresford (LD)
My Lords, in this context, I draw attention to the paragraphs in the Delegated Powers and Regulatory Reform Committee report which deal with tertiary legislation because it is important that this aspect should be understood. The Bill confers powers on Ministers to make law by regulations, and the secondary legislation can do anything that Parliament can do. This would allow people, bodies or Ministers to make further subordinate legislation—tertiary legislation—without any parliamentary procedure or any requirement for it to be made by statutory instrument. Where tertiary legislation is not made by statutory instrument it evades the publication and laying requirements of the Statutory Instruments Act 1946 but it is still the law.
Nothing in the Bill limits the power of creating tertiary legislation. It can be used for any purpose—for example, to create new bodies with wide powers, which could introduce criminal offences in many of the areas currently governed by EU law, including aviation, banking, investment services, chemicals, agriculture, fisheries and medicines. They may only provide the skeleton provisions in relation to a particular activity, leaving the detailed regime to be set out in tertiary legislation made not by Parliament or Ministers but by one of the new bodies so created.
Baroness Bowles of Berkhamsted (LD)
My Lords, I am sorry that there are too many speakers from this part of the Chamber, but I should like to point out that, although some advances have been made in the Sanctions and Anti-Money Laundering Bill with regard to the proposals that have already been mentioned, that is in the context of a particular Bill that has already received some scrutiny—and indeed some policy amendments—which make the application of criminal offences a little more palatable. There is, for example, the stipulation in the anti-money laundering part, which is the bit that has two years and is more akin to the instance envisaged within the withdrawal Bill, that there has to be a mental element. I do not see that safety here.
I further wonder why things that were not previously subject to criminal sanctions have to be made into criminal offences. It is a big policy change to say that any administrative or other misdemeanour is henceforth going to be criminalised with a two-year prison sentence. I do not call that “no change”. It has to be looked at in the context of each individual offence and how it may arise, otherwise you are saying that any regulatory breach will henceforth carry two years in prison. Moreover, you do not know the detail of what those regulatory breaches may be—how big or how small, or who may be on the other side of them. This would cover every piece of single market legislation. Some of these things will be quite small, and were not criminal offences before. What has changed through Brexit that suddenly we have to criminalise everybody for everything?
Baroness Hayter of Kentish Town
My Lords, because the case was made so clearly by the noble and learned Lord, Lord Judge, with the added detail provided by the noble Lord, Lord Marks, I shall not try to add anything to the substance of the argument. I just want to express my regret at the lack of preparation and forethought that went into the drafting of this power. Indeed, I was alarmed by it on the very day I first read the Bill and started blogging about it back in the summer. I then tabled Questions for Written Answer in October asking the Government what other instances there were of new criminal offences being created by secondary legislation. In the replies I received on 2 and 23 October, the noble and learned Lord, Lord Keen of Elie, was unable to list any.
I went on to ask the then Minister, the noble Baroness, Lady Anelay, the same question. The noble Lord, Lord Callanan, had by then taken over and replied in her stead on 14 November—but again gave no examples. The letter merely noted that “existing” criminal offences “in our law”—those are his words—which relate to the EU might need to be transferred to another body: for example, an offence not to notify an EU institution of something important relating to health. The letter ended by saying that the offence might have to be changed to a failure to notify the equivalent UK body. I understand that, but that is an existing offence, not a new one, and alters only to whom the report should be made. No case was made for, and no example given of, where new offences might be needed as we leave the European Union—much less one with the threat of up to two years in prison on first offence.
Noble Lords will not be surprised that I did not let this drop. I raised the issue again with the lucky noble Lord, Lord Callanan, who had another meeting with me in January—he has all the fun. On Wednesday last, when we anticipated dealing with this group, just before we broke for lunch I received an email from his department in response to my request in January. But again the email failed to answer why any new offences might be needed. It commented only that,
“existing criminal offences may require widening or amending, or new offences may need to be created to fix deficiencies in retained EU law”—
but provided absolutely no examples. The only example given in the email was of an existing offence where a business fails,
“to provide an EU authority with certain information”,
and therefore such an offence may,
“need amending to ensure they continue to operate effectively post exit day, for example by changing references from an EU authority to a UK one”,
and to ensure that businesses are complying with the law. Again, that is a change rather than a new offence. It is true that the email goes on to state:
“Previous case law”—
here I shall look to others to look into the detail of this—
“has created some uncertainty as to whether actions such as these would amount to creating a new offence rather than amending an existing one, and there could be differing legal views on this point”.
As I read the email, it seems that on that basis alone—that there is possibly a legal issue as to whether an amendment to an offence is a new offence—the Government have written themselves powers to create brand new offences that are punishable by up to two years in prison. So I think we are agreed that that will not do and that these powers have to go. Moreover, they have to go more completely than the Government allowed for in the sanctions Bill because, as was said in the debate at the time, anything there would follow an international agreement to which we would be a party as a Government—so there would have been that earlier stage. But these powers will not be part of that, and therefore I hope that, when the Minister responds, he will say that these powers are going to be taken out of the Bill.
Lord Callanan
First, I thank the noble and learned Lord, Lord Judge, and my noble friend Lord Hailsham for bringing the matter of creating criminal offences under the powers in Clauses 7(1), 8 and 9 to the attention of the Committee through their Amendments 87, 128, 156, 339 and 340, which seek to amend the relevant provisions in the Bill. As I said, I understand that similar concerns were raised during the debates on the Sanctions and Anti-Money Laundering Bill, but that a mutually agreeable outcome has since been reached, with the Government bringing forward a requirement on Ministers to make additional statements alongside their statutory instruments. Of course, the offences envisaged under that Bill were different and carried considerably greater sentences. I hope that I can satisfy the concerns that noble Lords have expressed during this debate. However, the Government are still looking very closely at how the powers in the Bill are drawn and how they will be exercised—and, as I say, we are open to discussion on finding similar solutions in this Bill.
I shall start with the reassurance that the three main powers in the Bill are explicitly restricted from creating a “relevant criminal offence”, which is defined in the Bill as an offence for which an individual who has reached the age of 18, or in relation to Scotland or Northern Ireland the age of 21, is capable of being sentenced to imprisonment for a term of more than two years. A vital part in achieving continuity and consistency for businesses and individuals as we leave the EU is to ensure that criminal offences continue to operate effectively after exit. As such, the Clauses 7(1), 8 and 9 powers can create criminal offences punishable by imprisonment for two years or less. In applying this two-year limit, the Government have sought a balance between appropriately limiting the three main powers and providing a functioning statute book on exit day.
The amendments would see that no criminal offences—or no criminal offences punishable by any term of imprisonment at all—could be created under the three main powers in the Bill. However, it is important that these powers are able to create certain criminal offences, as I shall come on to explain. For example, criminal offences provide an essential function of ensuring compliance with regulatory regimes which provide crucial protections for businesses and individuals. Some of the regimes criminalise particular conduct relating to the EU and some offences may no longer operate as intended after exit day if they are not corrected, particularly where functions transfer to a UK authority. For example, it could be an offence for a business to fail to provide an EU authority with certain information, but after exit day the authority collecting that information might be a UK one instead. Continuity would seem to demand penalties remaining in place—
Lord Beith (LD)
I wonder if the Minister could help us. He seems to be arguing what might be a coherent case for some offences needing to be redefined to have the same effect as they would have had before exit day. Surely it cannot be part of what he is describing to create offences that did not exist simply to ensure that the statute book after exit day has the same effect, in terms of the criminality that people would face, as it had beforehand. Does that not need him to approach this differently and try to find a way of defining the process so that it is not about the creation of new criminal offences?
Lord Callanan
I understand the noble Lord’s concern, which comes on to the same point made by the noble Baroness, Lady Hayter. I will come on to deal with what constitutes a new offence and what does not in a second.
Continuity would seem to demand penalties remaining in place for what would substantively be the same misconduct. Currently, certain types of financial services firms are regulated at an EU level. Depending on negotiation outcomes, we may need to bring such firms into the UK regulatory regime. Under these circumstances, we would want the UK regulators to be able to regulate such firms in a way consistent with their current regulatory framework, in line with their statutory objectives. Where appropriate, this may include bringing firms within the scope of existing criminal offences to which UK financial services firms are already subject.
To give another example, Her Majesty’s Treasury is considering amending the existing offence in Section 398 of the Financial Services and Markets Act 2000 of “knowingly or recklessly” giving a regulator,
“information which is false or misleading”.
This would make it an offence, as a consequence of transferring functions from the European Securities and Markets Authority, for third country central counterparties to mislead the Bank of England in connection with recognition applications. In direct response to the noble Baroness, Lady Hayter, and the noble Lord, Lord Beith, a view could be taken that this creates a new offence as it will be a new function for the Bank of England and extends this offence to central counterparties established in third countries to whom it did not apply before. Her Majesty’s Treasury is also considering making similar provision for the FCA—as a consequence of transferring functions from the European Securities and Markets Authority relating to trade repositories—and similar considerations apply. We therefore need the power in its current shape to provide certainty that we can make such statutory instruments.
As an alternative example, marketing authorisations for medicinal products are currently granted at both EU and UK level. Post exit—again, depending on negotiation outcomes—it is possible that the best way to provide continuity for businesses marketing medicines in the UK will be to convert EU marketing authorisations into UK ones. Under Regulation 95 of the Human Medicines Regulations 2012, it is currently an offence to provide false or misleading information in connection with applications for marketing authorisations as this information is key to assessing the safety, quality and efficacy of medicines. The offence is punishable with a fine or imprisonment for a term not exceeding two years. It is vital that, if we need to, we are able to amend the existing offence or create a comparable one. I think we can all agree that it remains important that false or misleading information is not supplied in connection with the process of converting EU marketing authorisations into new ones, and that the public’s health is protected.
Noble Lords will see from the examples that the intent here is largely to ensure that the same types of conduct carry criminal penalties as before, or that we can create criminal offences to deal with the post-exit world. Previous case law has, though, created some uncertainty as to whether widening an existing offence would amount to creating a new offence, and there could be differing legal views on this point.
Baroness Hayter of Kentish Town
The noble Lord just used a different word—“widening”—but I think his earlier example was making a notification to a different organisation. “Widening” suggests that the scope of what might be a crime would be extended. Is that what he meant?
Lord Callanan
No, that is not what I meant.
It is therefore vital that the Bill can provide for “creating” criminal offences to ensure that no offences that are needed fall away as we leave the EU, and that businesses and individuals continue to comply with the law.
Any statutory instruments made under Clauses 7(1), 8 and 9 which create or widen the scope of a criminal offence will automatically be subject to the affirmative procedure so that they will be subject to a debate and vote in this House and in the other place. The Government accept that this level of scrutiny is important here and, as I said at the beginning of my remarks, I hope we can consider further safeguards. Therefore, I hope that with those assurances I have demonstrated why we think this element of the power must remain part of the Bill and that noble Lords will feel able not to press their amendments.
Lord Judge
My Lords, I am troubled by just one observation made by the Minister. I think someone has been advising him incorrectly. Speaking for myself, I have never come to a mutually agreeable arrangement relating to the Sanctions and Anti-Money Laundering Bill. I have certainly welcomed an advance by the Government relating to these issues, but, as I said at the beginning, I leave open the argument that “good reasons”, which are proposed, should give way to “necessary” and I have added that there is an advance.
Beyond that, I am very grateful to all noble Lords who have taken part in this debate. We really must not return—can we make up our minds now not to?—to the constitutional aberration of unexplained, and effectively unscrutinised, regulations creating criminal offences. That is the constitutional principle. In view of the observations made by the Minister, however, I beg leave to withdraw the amendment.
“( ) amend, repeal or revoke the General Data Protection Regulation, the Data Protection Act 2018 or any subordinate legislation made under that Act,”
Lord Stevenson of Balmacara (Lab)
My Lords, in moving Amendment 88, which is in my name and those of the noble Lords, Lord Warner and Lord Clement-Jones, I will speak to the related Amendments 129, 157 and 338. These amendments are probing in nature, and I look forward to hearing the Minister’s response. Their purpose is to add a prohibition to the Bill equivalent to the one found on page 6, line 19, for the Human Rights Act so that it is not possible for Ministers to amend or revoke the GDPR, the Data Protection Bill when it comes into force, or subordinate secondary legislation arising from it. In that sense, it follows the discussions that we have been having in Committee on recent amendments.
One of the first Brexit Bills to reach Parliament was the Data Protection Bill, which completed its Lords stages earlier this year and has just had its Second Reading in the other place. It is a Brexit Bill in two senses: it brings in the legislation needed to give effect to the EU’s general data protection regulation, the GDPR, which will be in force here before and after Brexit; and it aspires to ensure that the rules governing personal data in the UK will satisfy the European Commission that our legislative framework gives a level of protection of fundamental rights and freedoms that is essentially equivalent to that guaranteed in the EU, or the Union, as it is called. This is what is called an adequacy agreement.
The importance of getting an adequacy agreement from the European Commission cannot be overstated. Without it, it would be illegal to continue to exchange personal data with other EU countries after we leave. As well as being worried about whether the DP Bill will be enacted in time before 25 May 2018, this is the biggest issue raised by the industry—investment, location of its businesses and future growth are intimately tied into what happens to our EU adequacy agreement.
To be clear on the timing issue, as an EU regulation, the GDPR will be directly applicable in the UK without the need for an Act of Parliament from 25 May 2018, but how we transition into the post-Brexit world is key to the question of adequacy. One of the judgments we will face is the extent to which our data protection regime has varied from the EU since 25 May 2018. As things stand, this can be done by secondary legislation under the powers outlined in the Bill. To the extent that this is foreshadowed within the Data Protection Bill there can be no objection, provided that these changes are within the scope of the Bill once it is given Royal Assent. Clearly, it is crucial that the powers exist to correct any deficiencies that arise as a result of the current text being retained post exit, since much of it relates to EU structures and organisations that have to be translated. It is also right that there is a power to replace specific articles of the GDPR and, dare I also mention, the recitals that would be deficient and possibly confusing in a UK-only context. But corrections and adjustments in a Bill that has been approved by Parliament are not the same as wholesale changes made by Ministers, which, although there are safeguards, are not prevented under Clause 7 of the Bill before us.
My first argument is that, as with the Human Rights Act, the Data Protection Bill, dealing as it does with important rights of individuals over their personal data, should be protected against changes to that regime made through secondary legislation. It might be argued that similar kinds of changes will need to be made to a wide range of EU-derived legislation to ensure a smooth exit and that there is nothing particularly special about data protection in this regard. But is that right?
I want secondly to argue that there is something special, something extra, about data protection which warrants it being given the additional treatment outlined in the amendments. Remarkable though it may seem, I believe that I have the support of the Prime Minister on this. In her statement on our future economic partnership, she said,
“I am proposing the broadest and deepest possible future economic partnership, covering more sectors and involving fuller co-operation than any previous free trade agreement. There are five foundations that must underpin our trading relationship”—
the fourth of which was—
“an arrangement for data protection that goes beyond an adequacy agreement”.—[Official Report, Commons, 5/3/18; col. 26.]
There is not much detail on what she means by going beyond an adequacy agreement, other than when she said in her Mansion House speech that she wanted to see,
“an appropriate ongoing role for the UK’s Information Commissioner’s Office. This will ensure UK businesses are effectively represented under the EU’s new ‘one stop shop’ mechanism for resolving data protection disputes”—
a modest, though not unimportant, request.
It is not hard to see why data protection is being treated as a special case. Forty-three per cent of EU tech companies are based in the UK and 75% of the UK’s data transfers are with the EU member states. They need us as much as we need them, and everybody wants early certainty. It is an important part of our economy and it would be mad not to do whatever it takes to allow those companies to thrive and grow within the United Kingdom.
However, we now know that the EU takes a fundamentally different stance. In the draft negotiating guidelines circulated only last week, the text reads:
“In the light of the importance of data flows in several components of the future relationship, personal data protection should be governed by Union rules on adequacy with a view to ensuring a level of protection essentially equivalent to that of the Union”.
Like the words of the Prime Minister that I quoted earlier, this is obviously preparatory to a negotiation and it may be possible in time to reach a satisfactory compromise, but that passage reads to me like a setback to the UK position. We are being told that there has to be an adequacy agreement of the type offered to any and every third country—as we will become—which is all that is on offer. Surely the sting is in the final section, where the message is: EU rules apply. Of course, initially they will apply because of the GDPR as implemented on 25 May 2018, but, as time goes on, there will be changes not just in the text but through court judgments and other mechanisms.
An EU adequacy agreement is in effect the granting of a general permission to move data across national borders where the Commission has recognised the data protection standards of the third country as being adequate, but it is by all accounts quite a formidable exercise and it takes time. At the end of the process, there is no graduation. If you pass, there are no distinctions, merits or first-class honours; it is just pass or fail, and you are judged adequate or not adequate. Not adequate means the end of any UK-based data processing industry—financial services comes to mind—as far as intercountry personal data transfers are concerned.
We also know that an adequacy assessment of the UK by the EU will not only evaluate our data protection and privacy laws but examine the totality of UK domestic law, including UK security law and the UK’s international commitments, to determine whether there is a level of protection of fundamental rights and freedoms that is “essentially equivalent” to that guaranteed within the EU. This does not require identical law but laws which offer substantially the same level of protection. Despite the welcome changes made in the Bill, we know that there will be some issues of concern in the area of national security and defence.
The Prime Minister says that she wants an arrangement for data protection that goes “beyond an adequacy agreement”. So what could we do to help here? What would “adequacy-plus” look like? In some senses, the solution is not adequacy agreements but a treaty—however, we can only guess, given where we are in the process. Given that the DP Bill will contain substantial amounts of EU retained law, it surely follows that the regime that it establishes needs to be properly safeguarded and not subject to vicarious amendment if we are to be able to trade data as at present.
If we want to be helpful to the Prime Minister, and I am sure that the noble Baroness, Lady Goldie, would want that, we should make sure that the Government accept these modest amendments. After all, what would strengthen more our chances of an adequacy-plus ruling or provide a basis for a treaty that reassures all those working in this area than ensuring that the DP Bill when it is an Act can be amended only by primary legislation after full scrutiny by Parliament? I beg to move.
Lord Warner
My Lords, I have added my name to the amendments and agree entirely with what the noble Lord, Lord Stevenson, said. I do not intend to traverse the same ground as him and may not be quite as helpful to the Prime Minister as he has been.
I want to add a dimension on data protection from the perspective of someone who has been a Minister and a senior civil servant. It is very easy for even the most well-intentioned Minister to overlook the importance of data protection and privacy to some of our fellow citizens when we are trying to push through what is seen as a measure of great collective benefit. We have seen how easy it is for free-speech arguments to trump individual privacy considerations. In the rush to secure medical advances through research, it is easy to see people who are nervous of giving their medical history to a researcher they do not know as Luddites to be overruled. That is why the Data Protection Act 1998 was a landmark Act. It calls on bureaucracies to stop and think and to become more thoughtful about citizens’ rights to privacy and individual data protection. Since that Act, case law has extended those protections in many cases. We do not want any backsliding, and there are plenty of powerful interests who would backslide if these legal protections were diminished. It is for similar reasons that the successor to the 1998 Act needs to be fully protected following our departure from the EU, and that protection needs to be set out clearly in this Bill. This is even more the case given that the Government have set their face against protecting the transfer into UK law of the Charter of Fundamental Rights, which contains privacy provisions.
As I said on an earlier amendment on clinical trials, we need overtly to protect existing rights and provisions important to our fellow citizens from casual vandalism later. That means being sceptical about assurances from Ministers, even the Prime Minister, in relation to this Bill and relying on future actions to preserve safeguards. We have to put more guarantees in the Bill before it leaves this House, as I said on Amendment 84. I want before I sit down to draw the attention of those who were not present for the debate on that earlier amendment to two important points made respectively by the noble and learned Lords, Lord Judge and Lord Mackay. My noble and learned friend Lord Judge, as I understood him, ventured the view that the new EU regulations of concern under Amendment 84 could be added to Clause 7(7). That seems to give support to this amendment. If we went down that route, we would be doing exactly the same for data protection issues as for clinical trials. That suggests that there is scope in the Bill for specific EU regulations to be given particular protection where it is considered of such importance to the rights and safeguards of citizens.
Similarly, on the same amendment—I would need to read Hansard to check that I understood it correctly—the noble and learned Lord, Lord Mackay of Clashfern, made a contribution that was extremely helpful to the Minister, who, if I may put it delicately, was in a little trouble over that amendment. He suggested that, where there were new provisions and some ambiguity about whether the full protections would be safeguarded, it would be open to this House and the Government to consider putting a list of regulations requiring special protection in some form in this Bill.
If that course of action commended itself to the Government before Report, I would respectfully suggest that data protection should be on that list as something that will be given particular protection. I think there is a very strong case, as the noble Lord, Lord Stevenson, has argued very convincingly, to give some special protections in the Bill to data protection. Regardless of whether this amendment is precisely the right wording, or whether there is another way of doing it, I think that the noble Lord has made the case, just as I think that we made the case earlier this afternoon on clinical trials regulations. I think the Government need to think, in the way that the noble and learned Lord, Lord Mackay of Clashfern, was saying, about the kinds of issues that merit that kind of protection if we are to safeguard well-earned citizens’ rights and protections that have built up over time.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Warner, and speak to Amendment 88 and the other amendments in this group. I very much support the words and the very comprehensive introduction that was given by the noble Lord, Lord Stevenson. It is vital to many key sectors—manufacturing, retail, health, information technology and financial services in particular—that the free flow of data between ourselves and the EU continues post Brexit with minimum disruption. With an increasingly digital economy, this is critical for international trade. TechUK, TheCityUK, the ABI, our own European Affairs Sub-Committee and the UK Information Commissioner herself have all persuasively argued that we need to ensure that our data protection legislation is treated as adequate for the purpose of permitting cross-border data flow into and out of the EU, post Brexit.
Fears were expressed in Committee and eventually the Data Protection Bill was amended on Report and at Third Reading to show that some principles, at least, were incorporated in the Bill, despite the fact that the European Charter of Fundamental Rights will not become part of UK law as part of the replication process in this Bill. The noble Lord, Lord Stevenson, quoted the Prime Minister’s recent Mansion House speech, a speech that I am sure will be quoted many times, when she said that,
“we will need an arrangement for data protection. I made this point in Munich in relation to our security relationship. But the free flow of data is also critical for both sides in any modern trading relationship too. The UK has exceptionally high standards of data protection. And we want to secure an agreement with the EU that provides the stability and confidence for EU and UK business and individuals to achieve our aims in maintaining and developing the UK’s strong trading and economic links with the EU. That is why”—
this is exactly what the noble Lord, Lord Stevenson, said—
“we will be seeking more than just an adequacy arrangement and want to see an appropriate ongoing role for the UK’s Information Commissioner’s Office”.
Whether or not something more than adequacy will be available—the noble Lord, Lord Stevenson, also dealt with this—depends on the EU, which states quite clearly, in paragraph 11 of its recent draft negotiating guidelines:
“In the light of the importance of data flows in several components of the future relationships, personal data protection should be governed by Union rules on adequacy with a view to ensuring a level of protection essentially equivalent to that of the Union”.
I have slightly more extensively quoted paragraph 11 of the recent guidelines, but the difference between those two statements is notable. Both the statements recognise the fact, as many of us emphasised in this House during the passage of the Data Protection Bill, that the alignment of our data protection with the EU is an intensely important issue. There will be a spotlight on the question of whether we meet an adequacy assessment by the European Commission, which I think we all agree is necessary and essential.
As I said on Report and at Third Reading of the Data Protection Bill, the Government added a new clause designed to meet the adequacy test in future, yet this Bill also gives Ministers power to make secondary legislation to amend any retained EU law, which would include laws governing data protection rights. So the Government could give with one hand and take away with the other. This amendment, as the noble Lord, Lord Stevenson, emphasised, is exactly designed to avoid a situation where our data protection law does not meet the adequacy test, to the great disadvantage of our digital economy and other sectors. Set against this danger, it cannot be necessary or desirable to exercise any of the powers in Clauses 7, 8 and 9 to repeal any part of our data protection legislation, which we have so carefully crafted and adopted. These are probing amendments but I certainly hope the Minister can give us the necessary assurance to make sure that such amendments do not reappear on Report.
Baroness Goldie
My Lords, I thank the noble Lord, Lord Stevenson, for bringing before us what are undoubtedly very important issues. I am grateful to the noble Lords, Lord Warner and Lord Clement-Jones, for their contributions. I say by way of preface that the general data protection regulation comes into force on 25 May this year. Noble Lords will be aware that there is, as the noble Lord, Lord Stevenson, referred to, a Data Protection Bill currently before Parliament which fully implements the current EU framework, including the GDPR. We would not have chosen to legislate in this way if we were not committed to that EU framework. To be fair, the noble Lord, Lord Stevenson, was gracious enough to acknowledge that. I also say that to seek to reassure the noble Lord, Lord Warner. Let me try to help a little further.
As the Prime Minister has set out, the Data Protection Bill will ensure that we are aligned with the EU framework, but we want to go further than that and further than the typical adequacy agreement—I think that this was the concern of the noble Lord, Lord Stevenson. We want to seek a bespoke arrangement to reflect the UK’s exceptionally high standards of data protection. To reassure the noble Lord, Lord Clement-Jones, this would include an ongoing role for the UK’s Information Commissioner’s Office and effective representation for UK businesses under the EU’s new one-stop shop mechanism for resolving data protection disputes.
Even with that background and that backdrop it is nevertheless crucial that we have powers to correct any deficiencies that arise as a result of the current text of the GDPR being retained in the UK, post exit, word for word. For example, at its simplest we will need to replace references to “Union law” and “member states” with references to “UK law” and “the UK” respectively. We will also need to replace specific articles that do not make sense in a UK-only context; for example, article 3 on territorial scope. These are, of course, exactly the same kinds of changes that will need to be made to a wide range of EU-derived legislation to ensure a smooth exit. Where I slightly differ from the noble Lord, Lord Stevenson, is that while data protection is extremely important, there is nothing particularly special about data protection in this regard.
The difficulty about the amendments tabled—we have to be quite clear about this—is that they would remove the powers that allow the Government to remedy these deficiencies or make any other adjustments to the GDPR to ensure we have complied with our international obligations or implemented the withdrawal agreement. Alarmingly, this would damage the integrity of our regime and put at risk the data flows between the UK and the EU, which are crucial, I think we all agree, for our shared economic prosperity and wider co-operation, including on law enforcement. It is essential that we have the powers to ensure that the UK legislation framework remains functional after our exit. Of course, I accept that exactly how the powers in Clauses 7 to 9 will be used in relation to data protection depends on the outcome of negotiations, but I hope it is helpful to noble Lords to have the illustrative examples I have provided on the record.
I hope I have reassured noble Lords of our commitment to both data protection and the flow of data between the UK and the EU and in these circumstances I urge them not to press their amendments.
Lord Clement-Jones
My Lords, since we are in Committee I have a question for the Minister. She has said that there may be some need to slightly alter data protection legislation, but this is very broad. Surely, there is scope for a much narrower formulation, so that those adjustments could be made without any radical changes to our current data protection law.
Baroness Goldie
I say to the noble Lord that a phrase I used last week was that we need the powers to be broad enough to be useful and to let us cope with what will arise, but not so narrow as to restrict us in doing what we have to do. The difficulty is trying to quantify exactly what may require adjustment and tweaking once we leave; that is a genuinely challenging logistical problem.
Lord Warner
Could the Minister say something about the points I made in drawing on the debate we had earlier today on Amendment 84? Will the Government consider the rather thoughtful interventions of the noble and learned Lords, Lord Judge and Lord Mackay of Clashfern, about issues similar to the issue of data protection which might be given special protection in the Bill?
Baroness Goldie
I say to the noble Lord that I am still recovering from the debate on Amendment 84. I listened very carefully to it, as I know my colleagues did—my noble friends Lord O’Shaughnessy and Lord Callanan, the Minister on the Bill—and as did the officials. We will certainly look at the suggestion that my noble and learned friend Lord Mackay made.
Lord Stevenson of Balmacara
My Lords, I thank the noble Lords, Lord Warner and Lord Clement-Jones, for their contributions. The interesting exchange we have had here went a bit wider than we perhaps needed to do on this Bill. But I am afraid that it reflects our concern on two, or perhaps now three, sides of the House that we may have missed something quite important in relation to the Data Protection Bill and its assurance of the fundamental rights involved in it.
The Minister said that she felt that the Government had fully implemented the GDPR through the Data Protection Act—but I do not think that is right. This is for another time, but the amendment to Clause 2 that was made on Report, which we welcomed and signed up to, flagged up that the Government had not quite yet got to the bottom of the argument. The rights deficit that arises with the failure to ensure that Article 8 of the Charter of Fundamental Rights is in place as a back-stop or underfloor element to the Data Protection Act means that there may be dangers going forward. That was the starting point for this amendment. If it is possible to see it more fully worked in the way that was suggested creatively by the noble Lord, Lord Warner, building on an earlier suggestion from the noble and learned Lord, Lord Mackay, with the Bill picking out high-risk areas in our public life which need to be given extra protection, that might be a solution to one of the issues raised.
Lord Faulks (Con)
I know that the noble Lord is coming back to an issue which was much discussed during the course of the Data Protection Bill. The charter, in particular, was raised in that context. But one of the difficulties pointed out during those debates was that the charter is expressed in generalities, as opposed to the Data Protection Act we now have, which is far more specific. The noble Lord once again invokes the charter. He will not have forgotten that the Human Rights Act and Article 8 are expressly preserved by Clause 7(7). Does he not agree that we are trying to have as clear a position as possible? The Minister explained that Clause 7 is of a limited but important purpose: to enable that clarity to be achieved.
Lord Stevenson of Balmacara
I am grateful to the noble Lord for his intervention, because it allows me to refer back to the recently received JCHR report, Legislative Scrutiny: The EU (Withdrawal) Bill: A Right by Right Analysis. I am sure he is familiar with it. It says, if I can find the paragraph—I will talk quickly until I do—that there is still some doubt as to whether the treatment accorded to Article 8 of the Charter of Fundamental Rights is covered in the Data Protection Act. The report says:
“The Government … relies heavily in its analysis”,
on the GDPR,
“as a means of incorporating Article 8 of the Charter into domestic law. The GDPR and the Data Protection Bill contain numerous rights for data subjects. However, the Bill does not explicitly incorporate Article 8 … Given the vast number of exemptions and derogations from these rights provided for in the Bill, there is a question as to whether the Bill offers protection that is equivalent to Article 8 of the Charter”.
I put it to the noble Lord that this is an open question.
I know that I am straying into territory that we do not need to, but I started doing that because I was aware that my noble friend the Leader of the Opposition had not yet arrived to take the Statement. I have now been caught going a bit further than I should have, and I apologise to your Lordships’ House. I will sum up quickly. I accept the good intentions from the Minister. May I suggest to her that it might be worth one further discussion on this issue before we finalise our consideration of this Bill and the Data Protection Act? With that, I beg leave to withdraw the amendment.
Salisbury Incident Update
(6 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, with the leave of the House I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:
“With permission, Mr Speaker, I would like to update the House on the incident in Salisbury, and the steps we are taking to investigate what happened and to respond to this reckless and despicable act.
Last week, my right honourable friends the Foreign and Home Secretaries set out the details of events as they unfolded on Sunday 4 March. I am sure the whole House will want to once again pay tribute to the bravery and professionalism of our emergency services and Armed Forces in responding to this incident, as well as to the doctors and nurses who are now treating those affected. Our thoughts, in particular, are with Detective Sergeant Nick Bailey, who remains in a serious but stable condition. In responding to this incident, he exemplified the duty and courage that define our emergency services and in which our whole nation takes the greatest pride.
I want to pay tribute to the fortitude and calmness with which people in Salisbury have responded to these events, and to thank all those who have come forward to assist the police with their investigation. This incident has, of course, caused considerable concern across the community. Following the discovery of traces of nerve agent in the Zizzi restaurant and the Mill pub, the Chief Medical Officer issued further precautionary advice. But as Public Health England has made clear, the risk to public health is low.
I share the impatience of this House and the country at large to bring those responsible to justice, and to take the full range of appropriate responses against those who would act against our country in this way. But as a nation that believes in justice and the rule of law, it is essential that we proceed in the right way, led not by speculation but by the evidence. That is why we have given the police the space and time to carry out their investigation properly. Hundreds of officers have been working around the clock, together with experts from our Armed Forces, to sift and assess all the available evidence, identify crime scenes and decontamination sites, and follow every possible lead to find those responsible. That investigation continues and we must allow the police to continue with their work.
This morning, I chaired a meeting of the National Security Council in which we considered the information so far available. As is normal, the council was updated on the assessment and intelligence picture, as well as the state of the investigation. It is now clear that Mr Skripal and his daughter were poisoned with a military-grade nerve agent of a type developed by Russia. This is part of a group of nerve agents known as Novichok. Based on the positive identification of this chemical agent by world-leading experts at the Defence Science and Technology Laboratory at Porton Down, our knowledge that Russia has previously produced this agent and would still be capable of doing so, Russia’s record of conducting state-sponsored assassinations, and our assessment that Russia views some defectors as legitimate targets for assassinations, the Government have concluded that it is highly likely that Russia was responsible for the act against Sergei and Yulia Skripal.
There are therefore only two plausible explanations for what happened in Salisbury on 4 March: either this was a direct act by the Russian state against our country, or the Russian Government lost control of this potentially catastrophically damaging nerve agent and allowed it to get into the hands of others. This afternoon, my right honourable friend the Foreign Secretary has summoned the Russian ambassador to the Foreign and Commonwealth Office. He asked him to explain which of these two possibilities it is, and therefore to account for how this Russian-produced nerve agent could have been deployed in Salisbury against Mr Skripal and his daughter. My right honourable friend has stated to the ambassador that the Russian Federation must immediately provide full and complete disclosure of the Novichok programme to the Organisation for the Prohibition of Chemical Weapons, and he has requested the Russian Government’s response by the end of tomorrow.
This action has happened against a backdrop of a well-established pattern of Russian state aggression. Russia’s illegal annexation of Crimea was the first time since the Second World War that one sovereign nation had forcibly taken territory from another in Europe. Russia has fomented conflict in the Donbass, repeatedly violated the national airspace of several European countries and mounted a sustained campaign of cyber espionage and disruption. This has included meddling in elections and hacking the Danish ministry of defence and the Bundestag, among many others.
During his recent state of the union address, President Putin showed video graphics of missile launches, flight trajectories and explosions, including the modelling of attacks on the United States with a series of warheads impacting in Florida, while the extrajudicial killing of terrorists and dissidents outside Russia was given legal sanction by the Russian Parliament in 2006 and, of course, Russia used radiological substances in its barbaric assault on Mr Litvinenko. We saw promises to assist the investigation then, but they resulted in denial and obfuscation and the stifling of due process and the rule of law.
Following Mr Litvinenko’s death we expelled Russian diplomats, suspended security co-operation, broke off bilateral plans on visas, froze the assets of the suspects and put them on international extradition lists, and these measures remain in place. Furthermore, our commitment to collective defence and security through NATO remains as strong as ever in the face of Russian behaviour. Indeed, our Armed Forces have a leading role in NATO’s enhanced forward presence, with British troops leading a multinational battlegroup in Estonia. We have led the way in securing tough sanctions against the Russian economy; we have at all stages worked closely with our allies and we will continue to do so.
We must now stand ready to take much more extensive measures. On Wednesday, we will consider in detail the response from the Russian state. Should there be no credible response, we will conclude that this action amounts to an unlawful use of force by the Russian state against the United Kingdom, and I will come back to this House and set out the full range of measures that we will take in response.
This attempted murder using a weapons-grade nerve agent in a British town was not just a crime against the Skripals; it was an indiscriminate and reckless act against the United Kingdom, putting the lives of innocent civilians at risk, and we will not tolerate such a brazen attempt to murder innocent civilians on our soil. I commend this Statement to the House”.
Baroness Smith of Basildon (Lab)
My Lords, I thank the noble Baroness for repeating the Statement and I join her and, I am sure, the whole House, in paying tribute to the dedication and bravery of our emergency services and Armed Forces who are responding to this incident. Our thoughts remain with Detective Sergeant Nick Bailey and his family at a stressful and worrying time for them, and we wish him a full recovery. This is a deeply shocking attack which we agree was reckless in its disregard for the lives of UK citizens, as well as a direct attack on Sergei and Yulia Skripal. We commend members of the public in Salisbury who have assisted the investigation. We have to understand the emotional impact on the residents of Salisbury.
The noble Baroness is right that this investigation must be led by evidence, not by speculation. However, she has now been clear about the facts known so far and the evidence that links this attack to Russia, whether government or rogue. I am grateful for the details of the Government’s follow-up engagement with the Russian embassy in the UK, and I welcome the Minister’s agreement to update Parliament on the Russian ambassador’s response as a matter of urgency after he has responded by tomorrow evening. Can she give the House an assurance that this will be discussed in Cabinet and that the response will be formulated before it is brought to your Lordships’ House? We welcome the assurance that a full range of measures will be brought to your Lordships’ House.
The implications of this attack are international and national but they are also very local. Are the Government confident that members of the public have been given all the information they need to cope with this incident in a timely manner? Have all the relevant authorities responded quickly enough in offering help and advice to people in the area? Following the incident, the Chief Medical Officer told the community in Salisbury that there was a low risk to the public. It was not until a week after the attack, on Sunday 11 March, that possibly affected members of the public were told that, although the risk remained low, there were actions they should take for their own safety. They include washing clothes as normal in a washing machine. However, clothes that cannot be washed are apparently safe to handle but must be covered and sealed inside two plastic bags and safely stored. For other personal items, such as mobile phones, the instructions say that a wipe down with a baby wipe is adequate. At the moment at which reassurance is needed, the information that is reaching the public has been delayed and, at times, contradictory. We are told that staff working in the Zizzi restaurant on the date of the attack were told to destroy any clothes they were wearing and visit their doctor for a health check. Can the noble Baroness tell the House when staff were informed that that should be their course of action? Why were they told to do that when members of the public in the same restaurant and bar were not told at the same time? We also know that the table at which Mr Skripal and his daughter ate has been destroyed. Are the investigators aware of whether any other members of the public sat at the table in the hours immediately afterwards? If so, have they been identified and contacted?
The Public Health England guidance for those who visited either the restaurant or The Mill pub states:
“You do not need to seek advice from a health professional unless you are experiencing symptoms”,
but it does not give any information on the symptoms to look out for. Would they be respiratory symptoms or a skin rash? A little more information might be helpful for members of the public who are concerned and do not know whether they have symptoms.
The former Chief Medical Officer, Sir Liam Donaldson, has today said there has been quite a long delay, and his experience led him to state that health chiefs should have set up an emergency health centre and a helpline. The public are entitled to more open, specific information rather than general reassurances. Although the risk remains low, members of the public need to be confident that they have all the information they need and know exactly what they are required to do to be safe. Do the Government have any plans to set up a public helpline as the investigation continues?
The former commander of the Joint Chemical, Biological, Radiological and Nuclear Regiment—the CBRN regiment—which specialised in detecting chemical weapons, has said that it is important to be more open about what the city is facing. Taking a step back and looking further into the future regarding our response to this deeply disturbing attack, he has also raised the point that the CBRN regiment was disbanded in 2011 as part of a cost-cutting defence review. Will the noble Baroness consider whether that decision should be revisited? Can she update the House on what plans the Government have to ensure our Armed Forces are properly resourced and prepared for such attacks?
It is important that the emergency services work together and are fully briefed, trained and equipped. The fire and rescue service is responsible for decontamination. When was the guidance for dealing with CBRN last updated? I could not find anything on the government website since 2012, and issues have changed since then. Can the noble Baroness say whether the funding has kept pace with the threat, and whether it has increased or decreased since 2010? I am happy for her to write to me on those points.
Finally, the sanctions Bill that passed through your Lordships’ House with some amendments is now in the House of Commons, which has the opportunity to support the amendments on the Magnitsky clause. It targets sanctions against individuals who abuse human rights. Will the Government reconsider their opposition to that clause as it may well be appropriate when we are dealing with issues such as these?
Lord Newby (LD)
My Lords, I join the noble Baroness, Lady Smith, in echoing the views of the Prime Minister about the bravery of the emergency services. Like her, our thoughts are also with Detective Sergeant Nick Bailey, and we wish him a speedy recovery.
Although the emergency services are well rehearsed in dealing with chemical, biological, radiological and nuclear incidents, that is primarily aimed at dealing with terrorist attacks, such as happened on the Tube. This is a very different sort of case and I wonder whether the Government will now consider giving revised guidance to first responders who might find themselves, out of the blue, dealing with a case like this, which at first sight is not necessarily a terrorist attack. In this case the effect on the first responder has clearly been very significant.
The Prime Minister says that there are hundreds of detectives working on the case. Given that police numbers are at their lowest for 30 years, could the Minister explain where these hundreds of detectives have come from? Are she and the Government satisfied that in drawing hundreds of detectives from elsewhere, they have not left unacceptable gaps in those parts from which they have come? When my noble friend Lord Paddick, commenting on this incident last week, asked the Home Office Minister about police resourcing, he was told that the police had the numbers “and more” to do the job they have to do. This flies in the face of the National Police Chiefs Council statement in December that the Budget settlement,
“does not fully meet the level of investment that we identified as necessary”.
I know there is not long to go, but can the Minister have a word with her friend the Chancellor of the Exchequer and suggest that, when he makes his Statement this week, he reassures the House and the country that he is making available the level of resource required for the police numbers to be there to do the job they are absolutely required to do.
The Statement explains the steps that were taken after Mr Litvinenko’s death to prevent repetition of such an event. It is very tempting to say simply that they have not been very effective in this case. What is slightly more worrying, however, is that there have been suggestions from US intelligence sources and elsewhere that the UK Government have not been particularly rigorous in implementing those measures because of the levels of investment by Russians in London and elsewhere. I hope the Leader of the House can reassure me that that is not the case.
The Statement goes on to talk about international collaboration against Russian expansionism and unsatisfactory behaviour of various sorts via NATO. Yet the kind of sanctions that we are talking about here are nothing to do with NATO. We are not talking about putting up tanks against the Russian border; we are talking about targeted sanctions against individuals and companies. The way we co-ordinate that is through the EU. That is what we have been discussing with the recent Sanctions and Anti-Money Laundering Bill: how on earth we manage to have proper co-ordination going forward. It is rather typical of the attitude of this Government that they talk about NATO, which is almost entirely irrelevant to this incident, but fail to mention at all the EU, which is absolutely germane if we are to get a co-ordinated European response.
The Government say that we must now stand ready to take more extensive measures. I am sure they will have the support of the whole House if they come forward with credible measures to respond to this outrage and potential future threats. But we will be looking very carefully to ensure that any such measures are properly resourced and carried forward with a degree of energy and commitment that has not always and obviously been the case in the past.
Baroness Evans of Bowes Park
My Lords, I am grateful to the noble Baroness and the noble Lord for their comments. The noble Baroness, rightly, raised the important issue of public safety. I can reassure her that all those who have been in contact with the patients have been contacted by Public Health England, and questions asked about their health status. The latest information was received only on Saturday, and a website was prepared to give the public access to all the relevant information. An announcement was then made early on Sunday. The CMO was confident that nobody who was in the pub or restaurant has come to any immediate harm, and the advice on Sunday does not indicate a change to the existing advice that the risk of harm to the general public is low. However, following new evidence of traces of the substance at the restaurant and pub, and as part of the continuous risk assessment, it was decided to issue additional, highly precautionary advice to a small number of people whose clothes or possessions may have residual traces of the substance, to eliminate future risk.
I will take back the noble Baroness’s suggestion about a helpline, as I do not have an answer on that. I will also write to her in response to her questions about CBRN, as I do not have that information to hand. On defence, I can certainly say that, through the Modernising Defence programme, the Ministry of Defence is assessing the threats to UK security and prosperity, including increasing Russian hostility to the West, and ensuring that our Armed Forces have the right capabilities to deter and respond to these threats.
The noble Baroness also asked about Magnitsky. We already have a range of powers, similar to those in the US Magnitsky Act, which we regularly deploy to protect national security and our financial system. As the Prime Minister herself said in the other place, conversations will continue to see whether there is any further need for legislation.
The noble Lord, Lord Newby, asked about front-line responders. I can assure him that the Home Office, working with ether government departments, the devolved Administrations and the emergency services, has co-ordinated the delivery of training to more than 150,000 front-line responders. He also asked about resources. More than 250 counterterrorism police from eight of our 11 counterterror units are now working on this incident. We have the best expertise available in this very difficult situation.
I can also assure the noble Lord that we recognise that some of the factors which make the UK attractive for legitimate business also expose us to the risk of illicit financial flows. Recognising these risks, we have taken a leading role in the global fight against illicit finance. We have robust legal and regulatory frameworks that enable effective investigation and prosecution of money laundering and the recovery of illicit assets. Indeed, this Government have recovered more criminal assets than ever before: £1.4 billion was taken from offenders between April 2010 and March 2017, with many hundreds of millions more frozen.
Lord Warner (CB)
As the Health Minister who was responsible in COBRA for the first set of responses to Litvinenko’s assassination, may I ask the Minister what action the Government have taken to learn lessons from that episode, particularly in terms of informing the public within 24 hours, and then on a daily basis, what elements should be of concern to them and how they might deal with them? Those public reassurances were an integral part of that Government’s response to the attack on Litvinenko.
Baroness Evans of Bowes Park
I can certainly assure the noble Lord that lessons have been learned. As I hope I set out in my response to the noble Baroness, public safety has been our number one priority. Public Health England has done a lot, and continues to do what it can, to ensure the public are kept abreast of issues and, as developments arise, of any further information they need to know.
Lord King of Bridgwater (Con)
I strongly welcome this Statement. The Prime Minister has been under considerable criticism in recent days for not coming out much earlier with condemnation and an accusation of where this offence has come from. She is absolutely right to say that it must be fully investigated, and this Statement today makes clear the amount of work that has been done to establish what the origin of this incident probably is.
As we go forward in what is now a very dangerous situation, depending on what the response from Russia may be, I hope this whole House will speak with one voice. I have to say to the noble Lord, Lord Newby, how disappointed I was that he appeared to turn this into an attack on government expenditure policy when there are far bigger issues at stake. I hope very much that we will now stand together in facing this serious threat and the consequences that may flow from it.
Baroness Evans of Bowes Park
I thank my noble friend for his comments. This is of course an extremely serious situation. As the Prime Minister made clear, and as I did in repeating her Statement, we will return to the House as soon as further conversations have been had to make sure that the House is fully updated on these extremely important matters. We need to come together and make sure that we take action to defend this country and keep our citizens safe.
Baroness Kennedy of The Shaws (Lab)
My Lords, I welcome the Prime Minister’s Statement and the strong language that she has used in deploring what has taken place. I know she must be basing that on intelligence and information she has received in the last days, which point towards it being “highly likely”—a high standard of proof—that Russia was responsible for these poisonings. We know that, even if this was not the work of Russian agents, there is evidence that Russia frequently outsources some of this kind of activity. Having watched closely the developments around Litvinenko, my concern is that we did not learn the lessons then and put in place a Magnitsky law. I want to challenge the idea that the pieces of law that we have managed to put together from different legislation that has gone through this House in recent years fill all the gaps; it is my suggestion that they do not. We had to fight very hard—
The Countess of Mar (CB)
My Lords, I am sorry to interrupt the noble Baroness but is she aware that this is the time for Back-Bench questions, not for statements or discussion?
Baroness Kennedy of The Shaws
I just wanted to put it to the House and the Minister that the Magnitsky law has not been fulfilled. For example, opposition is still being made to the Bill on visas that I put before the House just before Christmas. We are not seeing visas being refused to government officials travelling here from Russia. We know who many of them are—they own properties in Belgravia and apartments all over London—but we are not refusing them visas. The likelihood is that Putin would take really seriously our measures to prevent them coming here and taking part in activities here with impunity.
Baroness Evans of Bowes Park
As I said in response to the noble Baroness, Lady Smith, we have a range of powers. For instance, we have a power to exclude from the UK non-EEA individuals whose presence is not conducive to the public good; EEA nationals may be excluded on the grounds of public policy or public security; and a person may be excluded for a range of reasons, including national security, criminality, involvement in war crimes, crimes against humanity, corruption and unacceptable behaviour. As the Prime Minister made clear in response to questions in the other place, we will continue to keep these matters in mind and, if we feel further action needs to be taken, we will consider doing so.
Lord Campbell of Pittenweem (LD)
My Lords, may we have an assurance from the Minister that economic or financial considerations will not stand in the way of a proper response to these outrageous events?
Lord Ricketts (CB)
My Lords, I commend the Statement by the Prime Minister as strong, clear and measured, but the story that it tells is a chilling one: it is highly likely that a fellow permanent member of the United Nations has used a military-grade nerve agent in an English country town. As a former ambassador to NATO and national security adviser, I hope the noble Lord, Lord Newby, will allow me to take polite exception to his comment that this is not a matter for NATO. When the Prime Minister states that, if the Russians cannot produce an explanation this would amount to unlawful use of force by the Russian state against the UK, I ask the Minister whether she agrees that there is a strong case for consulting our NATO allies on what is a very grave national security threat.
Baroness Evans of Bowes Park
I assure the noble Lord that we will be raising this matter with our allies in a number of forums, including the UN. There can be no return to business as usual with Russia, and this incident proves that our actions over the last decade have been justified. We have taken the lead against Russia’s foreign aggression and abuse of the international rules-based system.
Lord Tugendhat (Con)
My Lords, I welcome the thoroughness with which the Government have reacted to this terrible incident and the fact that they have not jumped to conclusions prematurely or made statements on the basis of inadequate evidence. Now that the facts are becoming clearer, the robustness of the Prime Minister’s response is wholly adequate to the situation. Looking ahead, however, in the light of what has been said about this being an attack on the United Kingdom, as it certainly is, it will be very important to ensure that we have sufficient allied support—support from our European allies and from the US. It is going to be a great test of the Government’s diplomacy to ensure that we present a united front to Russia at this critical time.
Baroness Evans of Bowes Park
I thank my noble friend, and I entirely agree. Indeed, the action that we have taken on sanctions, for instance, has presented a clear united western position to Russia. We will be discussing this with our allies and working out what action needs to be taken, both in the UK and internationally.
Lord Harris of Haringey (Lab)
My Lords, when I did a review two years ago into London’s preparedness for a major terrorist incident, I was informed that the number of emergency service staff, particularly in the ambulance service, trained and equipped to deal with CBRN incidents had reduced substantially in recent years, partly because of a change in the assessment of the intelligence of the risk of such an attack but also because of new ways of dealing with such incidents. Are the Government satisfied with the number of staff who are equipped with the appropriate suits to deal with such incidents in the event of something occurring in future?
Baroness Evans of Bowes Park
Once again, I pay tribute to all those involved. We believe that there are resources. Obviously, we have pulled in experts from all different areas and different parts of the emergency services, and we feel that we are managing to respond to this adequately. However, we will also always be mindful and learn lessons from this going forward.
Lord Paddick (LD)
My Lords, what risk assessments have been carried out on Russian nationals living in the UK who may be a target for the Putin regime? What steps have the police and security services taken to minimise the risk to them and, more importantly, the risk to UK citizens and members of the emergency services who might come into contact with them?
Baroness Evans of Bowes Park
Knowing his previous profession, I am sure the noble Lord will understand that I cannot comment on individual cases.
Lord Elystan-Morgan (CB)
My Lords, in the case of Litvinenko a public inquiry was set up nine years after the event, when the trail had gone very cold. Will Her Majesty’s Government arrange for a public inquiry to be ordered immediately, as there is every prospect that it can cast a flood of light on this matter?
Baroness Evans of Bowes Park
As the Statement made clear, we have asked the Russian ambassador to respond within 24 hours to the questions that we have put to him, and I do not think it is right for me to prejudge any of the responses. I have made clear that we will be returning to the House once those conversations have been had and a decision is made as to how to proceed on the basis of the information received.
Lord Mackay of Clashfern (Con)
My Lords, I read recently that the Russians complained that they had not been shown the evidence in relation to Litvinenko’s case. I hope it is possible to show them evidence this time that should convince them of the rightness of our conclusion, although that is of course subject to other aspects that I am not aware of. But I think we ought to do our best to convince them, if they are open to being convinced, that this is true.
Baroness Evans of Bowes Park
As the Statement set out, we have spoken to the Russian ambassador and set out, on the basis of the evidence that we have, what we believe the two possible explanations are for what happened in Salisbury, and we are waiting to hear their response.
Lord Campbell-Savours (Lab)
My Lords, what Mr Putin will fear more than anything else is transparency and exposure of the excesses of his regime. What are we doing to promote alternative media sources being transmitted into Russia? They transmit Russia Today to us. What do we do in reciprocation? Are we pressing them to accept any of our media?
Baroness Evans of Bowes Park
I will have to write to the noble Lord, as I do not have an answer to that question.
Lord Selkirk of Douglas (Con)
Can my noble friend give an estimate of how many could have been adversely affected by this attack in Salisbury?
Baroness Evans of Bowes Park
I do not have figures to hand but, as I said, all those who were in contact with the patients have been contacted by Public Health England and questions asked about their health status. Public Health England does not expect any further patients to present as a result of the event but, if anyone who was in the area is concerned or feels unwell, they should dial 111 or 999, depending on the severity of their symptoms.
Lord Adonis (Lab)
My Lords, does the Leader of the House think it is appropriate that there is a Russian propaganda channel on our television screens here in Britain? Will the Prime Minister consider withdrawing the licence from RT if it appears that the Russian state is behind the appalling events in Salisbury?
Baroness Evans of Bowes Park
As the noble Lord will be aware, revoking Russia Today’s broadcasting licence is a matter for Ofcom, which has stringent rules to ensure that news, in whatever form, is reported accurately and with impartiality. Ofcom has a duty to ensure that all broadcast licensees are fit and proper.
The Countess of Mar
My Lords, the noble Baroness the Leader of the Opposition wished the police officer involved a full recovery. I know from experience, as do hundreds of farmers, that any exposure to organo-phosphates is permanent and irreversible. Will the Minister ensure that anyone exposed is looked at for psychoneurological and autonomic nervous system problems, because that seems to be where it strikes most?
Baroness Evans of Bowes Park
I thank the noble Baroness for her comments, and I am sure that our fantastic health services are doing all they can to support those who have been in contact with this agent. Once again, we wish Detective Sergeant Bailey all the best for a speedy recovery.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister say just a word more about the Chemical Weapons Convention? Is it a fact that the possession of this substance by the Russian state would be a breach of its obligations under that convention? Presumably, if the answer to that is yes, its use would be an even greater breach. Could she say something about that and whether the Government are considering making a case before the Organisation for the Prohibition of Chemical Weapons?
Baroness Evans of Bowes Park
We believe that this most certainly does go against the spirit of that treaty. We will be discussing that but, as I said, we have spoken to the Russian ambassador, we have set out our two explanations for this incident and I do not want to prejudge what may follow. We should wait, and decisions can be made on the basis of that response.
Lord Faulks (Con)
My Lords, the noble Lord, Lord Newby, suggested that the Americans may think that our response to these things is not sufficiently robust because we do not want to discourage investment into this country. Perhaps my noble friend the Leader of the House can confirm that, by introducing unexplained wealth orders and agreeing to set up a register identifying the beneficial owners of property, we are in fact ahead of the game and leading the world in trying to stamp out this sort of behaviour.
Baroness Evans of Bowes Park
I can most certainly confirm that. In fact, the first unexplained wealth orders have already been issued by the courts.
Lord Whitty (Lab)
My Lords, I would not like us to leave the subject without mentioning the more particular situation. I happen to have spent several hours in Salisbury this weekend, and the calm—perhaps slightly depressed, but nevertheless calm—-and normal way in which individuals and businesses carried out their work in Salisbury despite the dramatic news on the media was incredible. You would not really have known that there was anything worse than the bad weather to keep people away from the centre of the city. Does that not underline the need to ensure that any further statements about the possible danger to individuals who were in the city are handled with great care and are given in due time, not adding to the anxieties of the population?
Baroness Evans of Bowes Park
I entirely agree with the noble Lord and echo his tribute to the people of Salisbury. We are all thinking of them; they are at the forefront of our minds, as is their safety.
Lord Judd (Lab)
My Lords, for some years at the turn of the century I was rapporteur to the Council of Europe on the conflict in Chechnya. May I say that what has happened here is all too characteristic of the ruthless techniques of the Russian authorities? Does the noble Baroness agree that it has become very clear that one of their methods of control is to create fear and anxiety? In that context, is there not a very strong case for re-examining other happenings of the same kind in this country in recent years?
Baroness Evans of Bowes Park
The noble Lord will know that of course the Government and the police are aware of other allegations, but I am afraid I cannot be drawn into them. The police obviously have operational independence to investigate criminal activity, and we do not direct police investigations. It is up to the police to decide whether to investigate, but I think that all of us believe that at the moment the focus should be on the events in Salisbury and making sure that we get to the bottom of that. We want to make sure that we deal with those who have carried out this appalling crime and that they are held to account.
Lord Hain (Lab)
My Lords, in associating myself particularly with the contribution of the noble Lord, Lord Ricketts, can I ask the noble Baroness to agree that robust language from the Prime Minister has not always been followed by robust action, and that it is better to have calibrated and effective action which genuinely deters President Putin than to seek tomorrow’s headlines?
Baroness Evans of Bowes Park
I certainly agree with that. I would say that we have responded robustly and proportionately to Russian provocations over the last decade, from the murdering of Mr Litvinenko to pursuing illegal wars in Ukraine and Syria and constant aggression on the internet. At every stage, we have taken the appropriate actions and encouraged international partners to do the same.
Viscount Waverley (CB)
My Lords, I welcome the Prime Minister’s distinction of the need for evidence over speculation. Is it recognised that a response from the Russian state might be enhanced if there was a working relationship between our agencies and the FSB, which is currently held hostage? Is it not the essence of diplomacy, which safeguards the interests of the state and its citizenry, to ensure constructive dialogue at all levels? Does the noble Baroness have a view on whether we need to ramp up on the resilience of the people at large in this country?
Baroness Evans of Bowes Park
As I said in a previous answer, there can be no return to business as usual with Russia, but having said that, we do not want to be in a perpetual state of confrontation. We have sought to engage where possible, but it is for Russia to make the first move and demonstrate that its behaviour will change.
European Union (Withdrawal) Bill
Monday 12th March 2018
(6 years, 1 month ago)
Lords ChamberRead Full debate European Union (Withdrawal) Act 2018 View all European Union (Withdrawal) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 79-VII Seventh marshalled list for Committee (PDF, 331KB) - (12 Mar 2018)
Lord Hope of Craighead
“( ) modify the Scotland Act 1998 without the consent of the Scottish Parliament, or( ) modify the Government of Wales Act 2006 without the consent of the National Assembly for Wales.”
Lord Hope of Craighead (CB)
My Lords, three amendments in this group are in my name: Amendment 90, which relates to Clause 7; Amendment 130, which relates to Clause 8; and Amendment 148, which relates to Clause 9. They all raise the same point about the extent of the delegated powers given to Ministers of the Crown by these three clauses. The context is the way in which exercise of these powers may affect the devolution settlements for Scotland, under the Scotland Act 1998, and for Wales, under the Government of Wales Act 2006 and the Wales Act 2017. I am obliged to the noble Baroness, Lady Suttie, for her amendments introducing the position of Northern Ireland in exactly the same terms as my amendments.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
Before the noble and learned Lord, Lord Hope, proceeds, it may be of benefit to the House if I now confirm that the Government will bring forward amendments on Report to apply the same protection for the Scotland Act and the Government of Wales Act to the Clause 7 correcting power that applies to the Northern Ireland Act. I will speak about that more at the end of the debate. It may also benefit the House to note that the Government have tabled an amendment to Clause 11 —as I am sure noble Lords are aware—that reflects the significant offer we have made on that issue to ensure that the House can debate the offer when we reach that clause, just as we promised to do in the other place.
Lord Adonis (Lab)
Since he has started speaking, would it not be better for the noble and learned Lord, Lord Hope, to speak fully now and tell us what he was going to say? That would give us much more to respond to and might indeed shorten the debate.
Lord Bourne of Aberystwyth
The noble and learned Lord, Lord Hope, has not yet moved the amendment so he needs to do that first.
Lord Hope of Craighead
I am very grateful to the Minister for his intervention and for the indication that he has given. My amendments extend to Clauses 8 and 9; what he has said is an indication of the way the Government are minded to go on Clause 7, but I must introduce my amendments in relation to Clauses 8 and 9 as well.
The provision relating to Northern Ireland, to which the Minister referred, is what we find in Clause 7(7)(f), which indicates that,
“regulations under subsection (1) may not … amend or repeal the Northern Ireland Act 1998”.
That provision is then substantially qualified in a way one can only understand by reading through the schedules. I am not clear whether the Minister is proposing that the Scotland Act and the Government of Wales Act should be qualified in the same way, but if he intends to qualify them, my amendments are unqualified. It is therefore appropriate for me to explain why my amendments are in the terms they are. Perhaps the noble Lord, Lord Adonis, will appreciate why I need to set this matter out in a little bit of detail and explain why I have brought the amendments forward.
As we have seen, these three clauses confer a very wide power on a Minister of the Crown to make provisions by regulations. That includes a provision to which attention has not been drawn until now, but which is certainly relevant to the amendments in this group: a Minister of the Crown may make a regulation of the same kind that could be made by an Act of Parliament. We find that in Clause 7(5), Clause 8(2) and Clause 9(2). I need not go over what these clauses deal with but, broadly speaking, in Clause 7 the power is to enable a Minister to deal with,
“any other deficiency in retained EU law, arising from the withdrawal of the United Kingdom from the EU”.
In Clause 8, the power is to enable a Minister to,
“prevent or remedy any breach, arising from the withdrawal of the United Kingdom from the EU, of the international obligations of the United Kingdom”.
In Clause 9, it is a wider power to enable the Minister to,
“make such provision as the Minister considers appropriate for the purposes of implementing the withdrawal agreement if the Minister considers that such provision should be in force on or before exit day”.
Each of these clauses is limited in some respects by saying that regulations made under them may not do certain things. The Committee has heard about that in earlier debates today, such as in relation to sentencing, the creation of criminal offences and so on. These amendments seek to add two further limitations. One is that the power under these three clauses may not be used to modify the Scotland Acts and the government of Wales Acts without the consent of the Scottish Parliament or the National Assembly for Wales, as the case may be. As I mentioned earlier, the noble Baroness, Lady Suttie, is seeking to make similar provision in relation to Northern Ireland. Amendment 148 goes a little further than that: it builds in an additional provision relating to the Ministers of the devolved institutions. These are the subject of the group after next, which we will come to later this evening. I will not develop that aspect until we get to that group.
The scale of the transfer of legislative competence to Ministers of the Crown, provided for by these clauses, raises concerns of a fundamental nature. This is not only about the balance of power between Parliament and the Executive, as the Constitution Committee pointed out in paragraph 158 of its report, it also raises concerns about the balance of power within the union and the future of the devolution settlements themselves, referred to in the same report at paragraph 243. Some of what I will be saying in a moment will be directed only to the Scotland Act, but it should be understood as applying equally to the Government of Wales Act and the Wales Act, which are referred to in my amendments.
As I understand the wording of these clauses, if they are left as they are the powers could be used to change the constitutional balance of powers between the UK Government and the devolved institutions which the relevant devolution statutes set out. An aspect worth stressing is the width given to the meaning of the word “deficiencies” in Clause 7. We see it set out at length in subsection (2), supplemented by subsection (3). It is extremely wide and can be widened still, as we can see, given the power in subsection (3). The provisions in Clause 7(6) are about the transfer of functions from EU entities or public authorities in member states to public authorities in the United Kingdom, which would, of course, include public authorities in the devolved areas of Scotland and Wales.
The Committee needs to bear in mind the points made by the noble Lord, Lord Wilson of Dinton, in his speech last Wednesday morning about the width of Clause 7; the meaning to be given to the expression “Minister of the Crown”; and the numbers of people who could be embraced by that expression. The point which was of particular concern to me in the amendments in this group is that the power includes a power to make any provision that can be made by an Act of Parliament. I appreciate that the provision in Clause 7 is time limited. This is also true in the case of Clause 8. In Clause 9, the power is not exercisable after exit day. Nevertheless, as these clauses stand, and while they continue to have effect, it would be open to a Minister of the Crown to modify the Scotland Acts and government of Wales Acts in a way that, as I mentioned earlier, could shift the constitutional balance, and to do so without even consulting the Scottish Parliament and the National Assembly for Wales, let alone obtaining their consent.
A particular part of the Scotland Act which is quite vulnerable to an inadvertent amendment without that process of obtaining consent is the detailed wording of Schedule 5. I was involved, as was the noble and learned Lord, Lord Mackay of Clashfern, in considering the Bill which gave rise to the Scotland Act 1998. We sat until late in the night—indeed, early in the morning—dealing with that Bill and went over Schedule 5 in some detail. It has survived very well over the years since devolution, but it contains considerable detail which could be adjusted a little. That would alter the balance between the UK Government and the Scottish Government in a way that should not be done without the consent of the Scottish Government.
I appreciate that Ministers may say that it is not their intention to modify the Acts in this way, but it is well known that there is a high degree of mistrust between the devolved institutions and the UK Government about where this legislation is going. Personally, I regret that but, from a Scottish point of view, the reason is not hard to find. As one reads through these clauses, and looks at them from the approach of a Scottish Minister, or the Scottish Parliament or, indeed, a lawyer who has dealt with the devolution system since it first came in, it is striking that—apart from Northern Ireland—there is simply no mention in these three clauses of the fact that there are devolved Governments in Wales and Scotland that need to be considered. That aspect causes one some alarm as soon as one begins to read through the Act. It would be desirable to do something about it, if one possibly can. That is why I welcome what the Minister said when I began my speech.
Baroness Suttie
“( ) modify the Northern Ireland Act 1998 without the consent of the Northern Ireland Assembly.”
Baroness Suttie (LD)
My Lords, in moving Amendment 91, I shall speak to Amendments 131 and 149 in my name. The noble and learned Lord, Lord Hope, has set out in great detail what his Amendments 90, 130 and 148 in this group seek to do, so I shall be extremely brief. My Amendments 91, 131 and 149 seek to achieve the same aims as those amendments but for Northern Ireland.
Sadly, despite several false dawns, well over a year has now passed since there was a functioning power-sharing Executive in place in Northern Ireland. This means that it is now well over a year since the formal mechanisms have been in place to ensure that the voice of the Northern Irish people is heard through the Executive and the Assembly. It should be recalled that the majority of people in Northern Ireland did not vote the same way in the referendum as the Government’s partners in the DUP. Whereas the Scottish and Welsh Governments have been able to make clear their very deep concerns about the EU (Withdrawal) Bill, there has been no joint position on matters relating to Brexit since the joint letter from Arlene Foster and Martin McGuinness back in August 2016.
If the Minister agrees with the proposition from the noble and learned Lord, Lord Hope, that it is inappropriate for regulations under Clauses 7, 8 and 9 to make changes to the Scotland Act 1998 or the Government of Wales Act 2006 without the consent of the Scottish Parliament and the Welsh Assembly, he must also agree that it would be inappropriate to make changes to the Northern Ireland Act 1998 without the consent of the Northern Irish Assembly. Does the Minister acknowledge the principle that Ministers in Westminster must not encroach on the devolution settlements without the consent of the appropriate devolved Parliament or Assembly? In previous debates, the noble Lord, Lord Duncan, has made much of “not ruling anything out”. There are elected Members in the Northern Ireland Assembly and in the continued absence of an Executive, is thought now being given to how these MLAs might be effectively involved in this process?
Finally, can the Minister say how the Government intend to deal with Northern Ireland in the context of the Bill, in the possible continued absence of an Executive and Assembly, how they would make the Bill fit for purpose were an Executive to be formed, and how they would ensure that the powers provided for in the Bill are appropriate for the very specific circumstances in Northern Ireland? I beg to move.
Lord Adonis
My Lords, the Minister unusually intervened at the beginning of the speech of the noble and learned Lord, Lord Hope, to say that he had some significant announcements to make in respect of Scotland and Wales and Clause 7. I assume he also meant Clause 8, but it was not clear. Given that this debate will be precisely on what the terms of Clauses 7 and 8 should be in respect of the devolution settlements, may I suggest that it would be fitting if the Minister made his announcements on the Government’s intentions now, and then noble Lords can respond afterwards? He has already told us that he intends to make such announcements and it would be ridiculous to have a big debate only for us to learn of the Government’s intentions after we have spoken.
Lord Bourne of Aberystwyth
My Lords, I am most grateful to the noble Lord for giving way. I thought I was explicit that my remarks concerned only Clause 7, but I thought that was still significant because, clearly, that is a large part of the debate. I wanted to make it clear at this stage that we have moved significantly on Clause 7, but there is still an issue to be addressed in relation to Clause 8, and, I believe, Clause 9.
Lord Adonis
My Lords, what does the noble Lord mean by “moved significantly”? For those of us not initiated into the intricacies of this, what does he intend to do?
Lord Bourne of Aberystwyth
I seek to indicate that I can confirm that the Government will bring forward amendments on Report to apply the same protection to the Northern Ireland Act as to the Scotland Act and the Government of Wales Act. This means that all the changes we are proposing—bar one, I think, in relation to technical standards, but even that we will be able to spell out in relation to the Bill—and all the powers in relation to corrections will be in the legislation when we get to Report. We will table amendments on Report so that the correction power in Clause 7 will not be necessary. It will be in relation only to international obligations in Clause 8 and complying with the exit in relation to Clause 9.
Lord Judd (Lab)
On that point, could the noble Lord confirm that the amendments to be brought forward by the Government will make absolutely sacrosanct the principle of the preservation of the Good Friday agreement?
Lord Bourne of Aberystwyth
My Lords, I certainly can confirm that but I was going to confirm it, as it were, right at the end of the debate. Clearly, this is fundamental. We are very much wedded to it, as was indicated in December, when there was a meeting with the EU on this issue and as we have stated again and again. I appreciate the point the noble Lord makes. It is important and I can confirm that we will do that.
Lord Wigley (PC)
My Lords, I wish to speak to Amendments 92 and 93 standing in the name of the noble Lord, Lord Foulkes, and myself. I am sorry that he cannot be here to speak to these amendments, but I understand that it is in order for me to do so.
These amendments would restrict Ministers of the Crown from being able to amend or repeal the Wales Act 2017 and the corresponding Scotland Act using regulatory powers. The fact that these amendments are necessary underlines a perceived disregard the UK Government have for the sovereignty of the two devolved parliaments. If the Northern Ireland parliament were in existence, I am sure there would be feelings along similar lines.
The Bill gives sweeping powers to Ministers of the Crown, with which they can do what they like, including amending and/or repealing the devolution settlements. This was exemplified last Friday 9 March, when, despite no agreement being reached at the JMC (EN) meeting on the status of powers being repatriated from Brussels, the UK Government pushed ahead and published their framework analysis. This was essentially a list of devolved areas of policy that the UK Government will take over themselves—I will not list them or go into that, because they will mainly come under Clause 8, as the noble Lord, Lord Bourne, mentioned a moment ago.
Lord Morris of Aberavon (Lab)
My Lords, I support the amendments in the name of the noble and learned Lord, Lord Hope, and I am grateful to him for the careful way in which he has gone through each of them. I do not propose to do that myself, but I will address the broad issue that the Bill as it stands alters the balance on devolution.
Once granted, devolution cannot be taken away. We had a royal commission and two Acts, and for more than 30 years I played a small part in ensuring that eventually we got there. We have got there, and there is no going back. However, the Bill alters the balance, and finance is involved as well. I mention that in passing. The Barnett formula now is based on population. The grants that agriculture and the environment get from Brussels are based not on population but on need, so that will be the fundamental change if the Bill stands unamended. It goes to the very heart of the matter. I was grateful to the noble Lord, Lord Bourne, for indicating to me today that he was minded to bring forward some amendments, but are they of very great importance? We cannot say until we have seen them. However, something more important is at issue.
There have been conversations between the Westminster Minister—the Chancellor of the Duchy of Lancaster, as I understand it—the Welsh Assembly and the Scottish Parliament. There has been no agreement. I understand that they are getting closer to each other, but this should have been done a long time ago. The promise was made in the other place—the Scottish Secretary made a commitment on behalf of the Government that it would be amended by Report in the Commons. We are now almost on Report in the Lords, but still we have had no agreement from either of the devolved Governments or any indication of what kind of amendment will be forthcoming.
I dealt with the issue of legislative consent in some detail in my short speech on Second Reading. Legislative consent had to be dragged out of the Government. The Whitehall departments have yet to take devolution seriously. I still have the bruises of many years’ campaigning to persuade each one of them that devolution, following the royal commission, was inevitable. Eventually, after a long time, we won. However, I still believe that there is an inherent objection in the Westminster departments to devolution at all. We had an indication from Stephen Crabb MP, the former Welsh Secretary, when he addressed the Welsh Conservative Party conference, saying that,
“we still have to get the cabinet secretary to put pressure on departmental permanent secretaries to take devolution seriously”.
That is why there has been this foot-dragging, why there has not been an agreement, and why there has been this resistance to bringing forward a proposal that would ensure to all of us that we will not go back on devolution.
On 21 June last year, on the issue of legislative consent, the Prime Minister said: “There is a possibility” —those were her words—that,
“a legislative consent motion may be required by the Scottish Parliament”.—[Official Report, Commons, 21/6/17; col. 62.]
The next day, the Leader of the Commons kicked it into touch, and a few days later, the noble Lord, Lord Bourne, kindly affirmed in this House that they would seek legislative consent. That is an indication of the way in which the Westminster departments have not been able to take devolution seriously. That is why the joint letter from the two First Ministers of the Assembly and of the Parliament says that they would not give legislative consent to the Bill in its present form. That is an alarming position, and we are still not clear whether legislative consent, which is now politically necessary, will be given at all.
On 14 September, the Minister, Mr Skidmore, wrote to the noble Lord, Lord Boswell, of this House:
“We will continue to engage the devolved administrations as we seek to deliver an EU Exit approach that takes proper account”,
of the devolved and interested parties. We still await that agreement. It had not been reached last Thursday, when I discussed the matter with the counsel for the Assembly, or this morning, when I discussed it with the person I speak to in the Welsh Assembly in Cardiff. We still await it—although there is more confidence now that there is hope on the horizon.
Perhaps I may set out briefly my objections to the present proposals in the Bill. First, it freezes existing law at the point of exit, and only UK Ministers appear to be allowed to unfreeze it, even in areas clearly within the competence of the Assemblies and the Parliament, such as agriculture and the environment. I hark back to what I said earlier about the Barnett formula and the finances. Is that the reason?
Secondly, UK Ministers will be able to amend legislation within the competence of the Assembly without being answerable to the Assembly, explaining what they are doing and why. That does not seem democratic to me.
Thirdly, the clauses would allow Ministers of the Crown to amend legislation within the legislative competence of the Assembly and Parliament and to amend legislation in respect of which Welsh Ministers may also exercise functions under Schedule 2 or under existing powers. This could extend to amending legislation passed by the Assembly. That is the legal position which has not been faced. It is what this Committee should now consider and get some kind of response on from the Minister. I know that there were many speeches to be answered at Second Reading but there was no response at all to some of the fears that I expressed then and repeat now. I hope that at the end of this debate there will be an answer to each of these points.
Any regulations made by a Minister of the Crown would be scrutinised by the UK Parliament rather than by the Welsh Assembly, even if the law in question contained provisions relating to devolved subjects. That is a horrific scenario and goes well back on the devolution settlement.
One specific piece of advice that I received astonished me and I hope it is wrong. If it is not, I enjoin the Minister to correct it. I am told that these powers could also be used to amend the Government of Wales Act without any requirement for the Assembly’s consent. If my advice is right and that is correct, we are certainly going back on the settlement. We are going back on 30 or 40 years of campaigning; we are going back on the recommendations of the royal commission; and we are going back on what was agreed in two Acts of Parliament—one in 1998 and one in 2006—and by referenda in each country.
Therefore, I hope that on this occasion, unlike at Second Reading, we will have some reply and some indication of where we are going, and that the balance of devolution, which many of us have fought for all our lives, will not be reversed.
Baroness Finlay of Llandaff (CB)
My Lords, I have added my name to Amendments 90, 130 and 148. I am most grateful to my noble and learned friend Lord Hope for introducing the amendments in meticulous detail.
I heard the Minister speak about a correcting power in relation to Clause 9 but unfortunately I did not hear the words “legislative consent”. In the Government of Wales Act there is a principle of legislative consent from the Assembly, and that is important when powers change and when legislation comes from Westminster with a direct effect on Wales. I am no lawyer and I hesitate to speak following two such knowledgeable lawyers as my noble and learned friend Lord Hope and the noble and learned Lord, Lord Morris, and the very informed opinion of the noble Lord, Lord Wigley, but I believe that the volume of amendments tabled on this issue and the strength of feeling show both the deficiencies in the Bill as drafted and the deep unease that the Government’s efforts to appease the concerns appear to have been left until the 11th hour. That is a tremendous shame for the operation of the whole of the UK going forward.
As it stands, it seems that the passing of this Bill could mean that Brexit becomes a conduit through which legislative competence is repatriated slowly— as the thaw occurs, after time—from the devolved Governments in Wales and Scotland back to Westminster. In the words of the First Minister of Wales and the First Minister of Scotland, this Bill appears to be a “naked power grab”. It does not return powers from the EU back to the devolved Administrations, as promised; it returns them solely to the Government and Parliament, and freezes them, and it imposes new restrictions on the Scottish Parliament and the National Assembly for Wales.
Baroness McIntosh of Pickering (Con)
My Lords, I support Amendment 130, to which I have added my name, and will satisfy the Committee’s curiosity as to why I have done so. I am a non-practising member of the Faculty of Advocates and have the lesser distinction than the noble and learned Lord of serving as a Bar apprentice with the firm of Simpson & Marwick as part of my training. I also made my maiden speech in the other place on the Scotland Bill as it was going through its various stages. I simply want to support everything that the noble and learned Lord, Lord Hope, has said in speaking to this amendment. This is of course a cause of great concern to the Scottish Parliament, which I understand debated this very issue with a number of practitioners, including a leading practitioner from the Law Society of Scotland, and a number of academics last Wednesday in its Finance and Constitution Committee.
I listened very carefully to what my noble friend the Minister said in seeking to satisfy the Committee this evening that we should desist from supporting this little group of amendments because the Government are coming forward with an amendment at Report. If that is the case, I urge my noble friend the Minister to share with the Committee this evening the full contents of that amendment. The noble and learned Lord, Lord Hope, has accurately identified the issues at stake, and anything that might jeopardise the fine balance achieved under the devolution agreement and the Scotland Act—I wish to speak only to Amendment 130 —would be regrettable.
Lord Wigley
My understanding is that the government amendment to Clause 11, which we will come to in due course and which was promised for Report stage, has in fact been tabled today and is public property. It is a nine-page amendment—I have seen a copy of it. Therefore, I think the Committee should have that information available to it.
Baroness McIntosh of Pickering
I am most grateful to the noble Lord. Perhaps it is my fault but I have not been able to access a copy of the amendment; as we conclude this debate, it would be very helpful to have the contents of it. For now, I support the amendment standing in the name of the noble and learned Lord, Lord Hope, and others. I hope that the Committee will persist with this little group of amendments.
Baroness Randerson (LD)
My Lords, this Bill gives UK Ministers powers to make statutory instruments that would include the power to amend the founding Acts of devolution without requiring the consent of the Welsh Assembly, the Northern Ireland Assembly or the Scottish Parliament. These powers could be used in relation to policy areas, as noble Lords have said, that are the responsibility already of Welsh Ministers, Northern Ireland Ministers and Scottish Ministers. The assumption is that the UK Parliament would legislate to alter their powers. Obviously, there may be times when this is pragmatically acceptable, but what is not acceptable or reasonable is that, under the provision as drafted, the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly are not required to give their consent.
I wish to speak simply and briefly, referring specifically to my experience as a Wales Office Minister, as a Member of the Welsh Assembly for 12 years, as a Minister in Wales and as a Minister for Northern Ireland in this House. It is safe to say that I have seen it from both ends of the telescope. It has been unthinkable from the start of devolution that UK Ministers would progress in these circumstances without the consent of the devolved Assemblies and Parliament. It has been an early-established principle of devolution that that did not happen. There has on occasion been sabre-rattling but it has not happened because that principle was established.
I am pleased to see the amendments of my noble friend Lady Suttie in relation to Northern Ireland because we are in danger of behaving as if the phase of devolution in Northern Ireland has passed. It is important that the Bill caters for the resumption of devolution in Northern Ireland.
I am pleased to hear from the Minister that the Government are planning changes. However, I know that he has too much respect for devolution to be happy with the situation in which he finds himself today. It is a muddle, a mess, and almost provocative. I certainly would not for one second lay this at the Minister’s door, but it is almost provocative to leave it to the last minute so that, effectively, the opportunity for government amendments in Committee has been lost. I am sad that we are in this situation because it is becoming increasingly negative, when we could go forward in a positive manner. I have tremendous respect for the Minister, his experience and his belief in devolution; I hope his replies will reassure us.
Viscount Hailsham (Con)
My Lords, my intervention will be extremely brief. I was entirely persuaded by what the noble and learned Lord, Lord Hope, said. To allow the Westminster Parliament to interfere with the constitutional settlements already agreed without the consent of those constitutional Parliaments or Assemblies is a recipe for disaster. It will stir up nationalist opinion in a way that we would be very well advised to avoid.
The only other point I will make is that the mechanisms for making these changes are unamendable. The Scots Nats in the House of Commons would be active in arguing that it was profoundly wrong to have a regulation before the House—if it was ever before the House, and that is extremely questionable, as we know well— which they could not amend. I can think of few things more calculated to fracture consent and fragment the union.
Lord Empey (UUP)
My Lords, before we whip ourselves into a lather of outrage at the prospect of doing something without the consent of the devolved Administrations, perhaps I may remind the House that we have a short memory. The devolution settlement in Northern Ireland represented by the 1998 Act was butchered—a term I used some weeks ago—by this Parliament without a by your leave, without the consent of the Northern Ireland Assembly and without the consent of the parties that negotiated the agreement. That was done in the Northern Ireland (St Andrews Agreement) Act 2006, where dramatic changes were made to the methods we had negotiated with the noble Lord, Lord Trimble, and others over many years. So this Parliament can do what it likes, when it likes. That is the nature of having a devolved institution versus a sovereign Parliament. There is a hierarchy.
The Good Friday agreement, for which the noble Lord, Lord Judd—who is not in his place—and others indicated strong support, which I welcome, was dramatically changed without a by your leave. It was done as a result of a back-stairs deal and this Parliament implemented it. There was no requirement for the Northern Ireland Assembly to agree—it was just done. So let us look back at the actions that have already been taken.
In these challenging circumstances, and from what was said by the noble and learned Lord, Lord Hope of Craighead, among others, in his forensic examination of the amendments that he introduced, I understand that there is genuine reason to be concerned. But we have to keep this in proportion. When powers are repatriated to the United Kingdom, the European Union deals with the member state—that is the way in which it works—so the only place it can come to is the member state. The question then is: what happens when it gets there? That is of significant concern to Members. But I am not as concerned as some because I believe that it is perfectly possible to arrive at an appropriate accommodation.
The word “balance” has been used, and that is an important point. But let us look at legislative consent. I have to say to noble Lords that we have got to be extremely careful about what we are doing here. If there is a Northern Ireland Assembly, do we know what legislative consent means? It means that Sinn Fein will decide whether there is legislative consent. If we build that into an Act of this Parliament dealing with such an important matter as the consequences of the EU decision, we will be handing a veto to that single party. Under our devolution settlement, it will be about Sinn Fein’s consent as a party. Whether it has a majority or a minority in the Assembly is irrelevant; it has sufficient power to block consent. What are we doing in considering that?
Lord Hope of Craighead
I am most grateful to the noble Lord. In Clause 7(7), which deals with Northern Ireland, there is no mention of the need for consent at all. It states simply that the power to amend or repeal the Northern Ireland Act by statutory instrument is excluded. I can see the sense in that. Does the noble Lord agree that that is a sensible way of dealing with the matter, and that perhaps the same provision should be made for Scotland and Wales?
Lord Empey
I think that we have to be careful because this is complicated. It is obvious that the devolution settlements are not uniform; they are at different levels. My concern with the whole point of having consent is that, while it is obviously highly desirable to have it, although we are talking about the institutions, in practice we are talking about the people who at any point in time are controlling those institutions. In our particular case, there is a veto. I take the point made by the noble and learned Lord, but in the Scottish case a similar situation arises because there is a political party which has a particular objective in mind. It is not simply about the institutions but about those who are controlling them at a point in time when these matters come forward. In fact the noble and learned Lord, Lord Morris, said in his passionate contribution—I know that he is a lifelong devolutionary —that devolution, once granted, cannot be taken away. That is a contradiction in terms, because by definition devolution is something that is given—and of course our experience is that what has been given can be taken away. That is the danger in all of this.
Obviously we are waiting to see what the Government’s proposals will be. I do not believe that what the Minister indicated at the start of this debate will be the only contribution they will be making on these clauses, because it is clear that other matters need to be dealt with in Clauses 8 and 9, and I am sure that we will hear more from the Government. But I would urge colleagues to be careful about what this may mean in practice—because it is not as straightforward as it seems.
Lord Adonis
We will be debating Northern Ireland at greater length later. The Minister said in response to my noble friend Lord Judd that the Government would be bringing forward on Report amendments in respect of the Good Friday agreement—or at least that is what I took him to be saying; no doubt he will clarify his remarks when he rises to speak. Will he tell the Committee more about what those amendments will contain?
Lord Wallace of Tankerness (LD)
My Lords, I speak in support of the amendments tabled by the noble and learned Lord, Lord Hope of Craighead, to which I have added my name. I shall try to confine myself to the actual amendments to Clauses 7, 8 and 9. Like the noble Baroness, Lady McIntosh of Pickering, I have not yet had an opportunity to see the amendments to Clause 11 which were laid today, but I suspect that we will consider them in great detail before we come to debate them in Committee next week. Suffice it to say that it is helpful that some information has been forthcoming. I may not necessarily agree with it all but it will shed a helpful light by giving us an indication of the frameworks where the UK Government at least think that there should be a United Kingdom dimension, and hopefully some polish from outside stakeholders may help to inform our discussions when we come to them.
On the amendments moved by the noble and learned Lord, Lord Hope, to Clauses 7, 8 and 9, I shall certainly consider with care what the Minister said at the outset of the debate and then again in response to the noble Lord, Lord Adonis. I thought that perhaps he went slightly further when he responded to the noble Lord, but I shall read carefully what he has said just to see whether this particular part concession has substance. That is because, as the noble and learned Lord, Lord Hope, pointed out, the position with regard to Northern Ireland in Clause 7(7) is not absolute. There are qualifications to it and it will be interesting to see whether there are similar qualifications with regard to Scotland and Wales.
The noble and learned Lord, Lord Hope, also intervened on the noble Lord, Lord Empey, and said that the difference between what is there as regards Northern Ireland in Clause 7(7) as it stands and what we have proposed in our amendment is that Clause 7(7) does not make any provision for the consent of the relevant Scottish, Welsh—or in the case of my noble friend’s amendment—or Northern Irish devolved Assemblies or Parliaments. I do not know enough, and I know that it is dangerous to go into Northern Ireland politics without deep knowledge. However, I will say why our amendment, which gives the opportunity for consent, would be preferable, certainly with regard to Scotland and Wales. Ministers talk generally, and one of the concerns we have is with the breadth of the powers given to Ministers under these clauses, but we do not know whether there might be a genuine cause or reason for an amendment to be made to these founding pieces of legislation. It would therefore be helpful if there was a provision for consent so that it is not done unilaterally.
It might also be helpful looking forward. The noble and learned Lord, Lord Hope, mentioned distrust. That cuts two ways. There is distrust among the Scottish and Welsh Governments as to what United Kingdom Ministers might get up to in using these very broad powers, and there is distrust—I can speak only for Scotland—among UK Ministers that the Scottish Government might well seek to veto something that they might otherwise think is perfectly reasonable. That is holding back quite a lot of the development of a pragmatic and reasonable solution to a lot of these issues. It might be that there will be something akin to the so-called Edinburgh agreement, which paved the way for the amendments to the Scotland Act that allowed the EU and independence referendums to take place, so that we can get some understanding between the Governments that consent would not unreasonably be withheld where a compelling case could be made for it.
The problem we have at the moment is that there is no scope for that at all. It is imposition. It could be a unilateral imposition in a change to the Scotland Act or the government of Wales Acts without any form of consultation or consent at all. As the noble and learned Lord pointed out, Clause 8, certainly in terms of Scotland, and Schedule 5 allow some limited powers for the Scottish Parliament relating to international obligations. Again, we think some provision should be made in Clause 9 for putting a brake on any amendment to, or modification of, the Scotland Act or the Government of Wales Act unless there is the consent of the Scottish Parliament or the Welsh Assembly.
Lord Empey
Will the noble and learned Lord elaborate on his suggestion for how a middle way could be established? We would all want to see consent if that is achievable, but the problem is that it is very difficult to design a situation in the legislation to say we will seek consent but we do not really need it. The second problem that we have in Northern Ireland is the absence of the Assembly. That creates an even more dramatic situation.
Lord Wallace of Tankerness
My Lords, taking that second point, as I indicated earlier, the absence of the Northern Ireland Assembly raises far more questions than those specific to these amendments. My noble friend Lady Suttie touched on that when she moved her amendment. It goes far further than these particular amendments.
I will say more about consent. If it is, in fact, fear that consent will be unreasonably withheld, surely it is not beyond the wit of those negotiating to come up with some kind of agreement that the various parties can sign up to, indicating that that consent would not be unreasonably withheld. I accept that the downside is that they could go back on their agreement. There would be a political consequence to that. Ultimately, we are dealing with issues that have a practical effect on people’s livelihoods and businesses. It is far more important to get some practical solution based on good faith, if it can be restored, rather than standing in corners, not wishing to engage.
If the Government accepted these amendments it might well be a step forward to trying to establish some of that atmosphere where trust can be created. What we currently have would not, as has already been said, trigger a legislative consent Motion in circumstances where, if it was primary legislation, it would have a legislative consent Motion.
Lord Forsyth of Drumlean (Con)
On the subject of trust, the noble and learned Lord mentioned the Edinburgh agreement, which the Scottish nationalists signed up to. No sooner was the ink dry on the paper than they were repudiating it. Does he remember the assertion that it would be a “once in a generation” referendum on independence? Surely we are dealing in Scotland with a nationalist Government determined to destroy the United Kingdom. Why on earth would one want to give them a veto over decisions taken by the United Kingdom Parliament?
Lord Wallace of Tankerness
My Lords, I accept that, with regard to “once in a generation”, the Scottish National Party is guilty of not living up to what it said, but it is not right to say that, once the ink was dry on the paper, it totally forgot it. What was in that agreement informed both the Section 30 order that was passed and the legislation then passed by the Scottish Parliament in conformity with the agreement. A substantial part of that agreement was carried through in good faith by both parties.
The detailed wording of Schedule 5 to the Scotland Act was important in getting the right balance in the devolution settlement. If in the normal course of events that were to change, it would require an order under Section 30 of the Scotland Act, which requires an affirmative vote not only by both Houses of this Parliament but by the Scottish Parliament. What we are proposing is consistent with what would happen in the normal course of events when the balance of the devolution settlement was changed. That is why I strongly encourage the Minister at least to show willingness to think about this matter and reassure us that the Government are sensitive to it. That could go some way towards establishing a better basis for trust as we look forward to our debates on Clause 11.
Lord Mackay of Clashfern (Con)
My Lords, the amendments introduced by the noble and learned Lord, Lord Hope, might be perfectly okay from the point of view of the UK Government. The only change likely under Clause 7 is to something where it says “EU law”; it would have to be changed to something else. The powers in Clause 7 are intended to enable the knitting together of existing UK law and existing EU law which is not already part of it. That is a difficult job. These descriptions are meant to cater for that. I do not see it as likely that much will be required in relation to Scotland in that respect.
The main question is what happens under Clause 11. The Government promised that it would be brought before the House of Commons and hoped that it would be agreed. Your Lordships may or may not remember that I was keen at Second Reading to stress the need for agreement, because it is the only answer. Intense negotiations have gone on at official level over the last while. It now appears sadly possible—I do not make it any stronger than that—that the Governments may not be able to reach agreement. Therefore, it is important before anything further happens that your Lordships get a chance to apply your great experience to the problems separating the two parties. I greatly regret that there is no proper representation for Northern Ireland. I had the responsibility of being a Minister in Northern Ireland for 10 years; I feel very sad that the present situation has been reached and only wish that it could be resolved. From what I hear, I fear that it may not be very easy until after Brexit. In any case, agreement is essential if it is possible. I do not want to say or do anything that would impede the reaching of such agreement.
As for Clause 7, to retain a power to amend the Scotland Act seems unimportant in this situation, although I think the number of amendments generated by a proposal of this kind would be very small and the Government may feel it worth while to forgo such a power in the interest of making peace and progress.
The Clause 11 procedure is much more difficult. It is important to bear in mind that the Scotland Act—this goes for the Wales Act as well—was set up and legislated within the European Union. Therefore, the only powers that were dealt with were the powers that existed in the Parliament of the United Kingdom when these Bills became law. That did not involve the powers that the EU had and therefore I think it is not determinative of how these powers should be distributed on return to look at what was decided in the original Acts setting up the devolved Administrations, because the powers are now wider. It is therefore very much a matter of trying to resolve the issues between the parties by agreement. If we can help in that respect, so be it: I very much hope that we can. Certainly, I hope we do not do anything to hinder it. So far as I am concerned, I am prepared to trust all the parties to do their best to reach an amicable solution.
Lord Elystan-Morgan (CB)
The contributions already made make it perfectly clear how fragile and in many respects how insubstantial is the basis of devolution as we know it. The sovereign Parliament of Westminster has created a sub-Parliament in respect of Scotland and Wales. The sovereign authority that created that Parliament can undo that Parliament any day that it wishes to do so. If it did so I have no doubt that the noble Lord, Lord Wigley, would agree with me that it would be the best recruiting sergeant that Plaid Cymru ever had. Be that as it may, the power is there to do exactly that. It is, of course, utterly understandable that nobody expects that power to be used. In fact, in Clause 1 of both the Scotland Act and the Wales Act of last year there is written in what is intended to guarantee the permanence of the Scottish Parliament and the Welsh Assembly. In terms of law, it has no restriction whatever; it is purely cosmetic but well intentioned. I do not think that, in so far as any legal interpretation is concerned, there is a different view held, but I will be corrected on that point.
Nevertheless, those two Parliaments exist at the mercy, as it were, of this sovereign Parliament. I do not know whether one can change the situation, because the concept of sovereignty means that it can be withdrawn at any time. Unless, of course, one has some self-abnegative discipline—for example, to say that there is a convention. In the Miller case that came before the Supreme Court some time ago, the argument was raised that there was a basic authority that related to each of the Parliaments. No, said the Supreme Court, it is a convention. However, nobody had defined a convention. If Parliament went out of its way to define a convention and said, “In this context a convention means a, b, c and d”, that might get us somewhere. It is a suggestion.
Lord Forsyth of Drumlean
The noble Lord may recall that during the passage of the last Scotland Act there was great debate on Clause 2 about whether the convention of seeking legislative consent could be enshrined in law. We ended up with a rather unsatisfactory clause that said that this Parliament,
“will not normally legislate with regard to devolved matters”.
As some of us argued at the time, what on earth does “normally” mean? It came from trying to enshrine the convention in statute. On the subject of people respecting conventions, the noble Lord may not be aware that the Scottish Parliament wishes to charge on with its own legislation on the basis that there is no legislative consent Motion agreed to this legislation, despite the fact that the Presiding Officer has declared that legislation illegal. If we are to have a Parliament acting illegally, led by nationalists who wish to break up the United Kingdom, I think that, as the noble Lord, Lord Empey, has suggested, we should go cannily.
Lord Elystan-Morgan
One is greatly tempted to look at this situation beyond the Tweed, as it were—but I will abjure that temptation now and, I hope, for ever. I have scars on my back already in relation to what has happened in Wales over the last few decades.
I believe that in relation to these situations, one can draw a distinction between a convention and something else. A convention can be defined by Parliament in such a way as to have a semi-sovereign authority. That is my point. It is not the same thing as saying that it is regarded as the ordinary way of doing things—that is a totally different argument. In that way, it seems that one might achieve a reasonable and honourable settlement.
Lord Griffiths of Burry Port (Lab)
My Lords, I am at a loss to know quite how we have got where we have. The labyrinthine discussions we have been involved in have not helped me to clarify any sense of where I am, either.
The noble Lord, Lord Forsyth, has just talked about a Bill proposed in Scotland that has been judged by the Presiding Officer to be illegal; I think he said it was beyond competence. The law will no doubt run its course and somebody will make a judgment as to whether it is legal or illegal at that stage. For all that, in Wales it has been judged to be competent and it is well under way. So the concern in both cases, however we define the words, is that when all is said and done we will be left with a mess—and continuity has to be guaranteed because that is the basis on which this debate and the Bill are posited. We simply must have a snapshot moment on that date so that continuity in law can continue.
If we are not to reach the agreements that the noble and learned Lord, Lord Mackay, is so desirous of—indeed, who can be for anything else?— there has to be some modus agendi to take us through the impasse, because it will be an impasse. Why could we not have thought of adding the words of the amendment about exempting the need to modify the Scotland and Wales Acts? Why could we not have put in, understood, assumed or intuited that consulting the devolved Governments was a natural, normal, everyday breathing kind of thing to do? I cannot really understand why we are in this mess. You cannot judge for two devolved Governments without having agreements or consents from them.
I have made the case already in debate, and the last thing I am going to do is add to the time taken to resolve this matter this evening, but what worries me are the parallel narratives coming out of the discussions that have taken place so far. The press has been full of articles suggesting that the Chancellor of the Duchy of Lancaster has pulled off some kind of a coup—that there have been magnificent and radical developments. But just this morning I got an email from Wales, from people who have been discussing the amendments. It says quite clearly that the basis on which such amendments have been prepared, “while representing a move in the right direction”—we rejoice at that—“was not sufficient to secure our support”. They made suggestions as to alternative ways that their outstanding concerns could be addressed. The conclusion of the communication I am looking at is: “We must keep on talking”. They say that the Government gave a promise that they would not press to a vote the amendments that are to be put before them—in other words, the amendments will be available for discussion. I hope that the Minister will be prepared this evening to repeat the assertion contained here, which was given to the parties in the discussions with the devolved Governments.
Lord Bourne of Aberystwyth
My Lords, I am very grateful to noble Lords who have participated in this very wide-ranging debate, particularly to the noble and learned Lord, Lord Hope, for moving his amendment and the noble Baroness, Lady Suttie, for moving her amendment to the amendment. I shall first try to deal with a couple of very basic points before turning to the substance of the debate and I shall then try to pick up some of the points made by noble Lords. I gently say to the noble Lord, Lord Griffiths, that if my aim was to cut short this debate, I failed fairly spectacularly. I regret that. I had sought to clarify where we were—but I will go through the basic principles again.
I shall deal with a couple of very basic points. First, I do not know where the idea came from that there is some possibility of the Government fundamentally amending or repealing the Government of Wales Act without consent. That is not remotely on our agenda. It is certainly not something that I would tolerate. I suppose it is just about within the scope of Austinian sovereignty, but I do not know where the idea came from that that is a possibility—so let me put that to bed absolutely right away. We are totally committed to devolution—the Government of Wales Act, the Scotland Act and the Northern Ireland Act—and I think that noble Lords will appreciate that point.
Secondly, I think that there has been some confusion. We are not principally dealing with Clause 11 today. There might be some confusion because we have just published the amendments in relation to Clause 11, following an undertaking we gave in another place—but that will be the subject of much broader discussion later. No doubt we will go through that in some substance, so I do not intend to deal with it and pre-empt what is going to happen later in our consideration of the Bill.
I thank noble Lords for this valuable debate. We will consider the main clauses relating to devolution in coming days, but the question of how the powers conferred by the Bill interact with our devolution settlements and the responsibilities of our devolved institutions is no less important and deserves no less robust scrutiny. I shall first speak to the protection for the devolution statutes in relation to the Clause 7(1) correcting power and by extension its Schedule 2 counterpart. There are many amendments in Schedule 3 for those who want some idea of what will be brought forward on Report. It is not a question of them coming forward now. My noble friend Lady McIntosh raised this, but we are not in a position to come up with all the amendments that may be necessary. They will be debated on Report. We are talking about every correction that is necessary being brought forward on Report for Scotland, Northern Ireland and Wales. It is as simple as that. I hope that clarifies what I hoped to clarify right at the start.
I must start by emphasising that the Government recognise the importance of our devolution settlements and the Acts through which they have effect. I think noble Lords who know my history will know that that is my starting point. That is why we have sought to make as many corrections to the Acts as possible in the Bill already. Those, as I say, can be found in Part 2 of Schedule 3. We want to be open and transparent in demonstrating that these are, as noble Lords will discover when they look at them, simply technical fixes to remedy deficiencies created by leaving the EU. For instance, much like in other pieces of legislation, we must remove or replace redundant references to member states or EU institutions.
The noble Baroness, Lady Suttie, is absolutely right to raise the unique importance of the Northern Ireland Act as the statutory manifestation of the Belfast agreement. In response to the noble Lord, Lord Adonis—I hope the record will show this—I do not think I said that we were bringing forward amendments in relation to the Good Friday agreement on Report. What we are doing is bringing forward some amendments in relation to Northern Ireland to make sure that all the amendments that relate to Northern Ireland are in the Bill. I cannot stress often enough or strongly enough our total, steadfast commitment to the Belfast agreement. That is precisely why we have, in this Bill, already generally restricted the correcting power from making corrections to the Northern Ireland Act. As I am sure the noble Baroness, Lady Suttie, is aware, references to Northern Ireland amendments are minimal, and we will seek to make sure that all of those are on the face of the Bill when it comes back on Report.
Noble Lords must recognise that there remain outstanding corrections to the Acts that must be made in order to ensure that they function properly on exit day. Corrections to the Scotland Act and the Government of Wales Act are being discussed with the Scottish and Welsh Governments, and progress is being made. It is a mistake to think that people are at daggers drawn. This is not how things are operating, as many noble Lords are well aware. Day to day, negotiations go on very constructively and effectively—that is what is happening. We have not made all of the corrections on the face of the Bill so far, as we must rightly agree the forms of the corrections to those Acts with the Scottish and Welsh Governments. Indeed, some fall within devolved competence to address. In some cases, alternative mechanisms may exist to deal with them.
I can provide further reassurance, because these are not matters of substantive policy. This is about correcting provisions that will not function correctly once we have left the EU. For example, there is provision in the Government of Wales Act requiring the Auditor-General for Wales to make certain arrangements for bodies established by the European Union. This will need to be updated so that the provision continues to work in a post-exit world. There is one correction that must be made to the Northern Ireland Act, as I have referred to, which relates to technical standards—the quality of goods and safety marks. This, again, is fairly routine and will be brought forward on Report.
It would be irresponsible for us to place these limits on the correcting power if we could not also provide the answers to the questions—which I am now providing —and the assurance that we will deal with these issues on Report. I can confirm that we will bring forward amendments on Report to apply the same protection for the Scotland Act and the Government of Wales Act as for the Northern Ireland Act, so that all the necessary amendments will appear on the face of the Bill on Report. Contrary to what some noble Lords seem to think, we have made substantial progress in discussions, but we were not in a position to remedy the remaining deficiencies for consideration in Committee. I regret that, but I am very pleased that we have made the progress we have.
Lord Forsyth of Drumlean
I do not know whether my noble friend reads the Scottish papers. If he does, he will have seen that there has been headline after headline about the Scottish Government claiming that this is a great power grab by Westminster—attacking the Government and attacking the whole concept of leaving the European Union with scare stories about the impact of it. I am a little puzzled that he can say that there is a gentlemanly discussion going on when that is the perception north of the border.
Lord Bourne of Aberystwyth
My Lords, I do not recognise the power-grab allegation as being anywhere near reality. We are making progress. Of course there are differences, but I think in fairness all parties concerned have indicated, as the noble Lord, Lord Griffiths, did, that progress is being made. These are complex issues and it is a great mistake to see this, in some Animal Farm way as all black and white. It is not like that. Progress is being made. There is still territory to cover and progress to be made, but we are making that progress.
Lord Wigley
Before the Minister moves on, we are aware of his good intentions in this, his experience and his wish to get a coming together of minds. However, if the Government’s intention is always to get agreement for the changes—and, from the tone of what he has said, that is their objective—why should they be building provisions into the clause now under discussion to have a veto for Westminster that overrules either Cardiff or Edinburgh?
Lord Bourne of Aberystwyth
My Lords, I am grateful to the noble Lord. It certainly is my view that we want to get agreement—I have no doubt about that—but I shy away from his idea that one party should have a veto on things where there is no substantive reason why it should do so. I shall come to this, but if something relates to a devolved area, of course we will need the relevant consent of the devolved Administration. However, we are not seeking to add powers in this legislation that do not already exist to give bodies vetoes over Westminster legislation.
Baroness Randerson
It is my understanding that the concept behind the phrase “Westminster will not normally legislate without the consent of the devolved Administrations” depends on what you mean by “normally”. It was explained to me that it meant there was a recognition that very occasionally one would need emergency legislation, perhaps in a situation of terrorism, where it was impossible, possibly because the other body was in recess, to get agreement in a reasonable timescale—that sort of exceptional situation. That is how the meaning of “normally” was explained to me from a legal perspective. Is that accurate? Is that the Government’s understanding of what that word means? If so, would it be possible to reach an agreement with the devolved Administrations on that definition?
Lord Bourne of Aberystwyth
My Lords, the noble Baroness, with her normal quicksilver mind, has darted ahead to the bit of the speech that I have not yet got to, relating to where we are on Clauses 8 and 9. She makes a fair point and I intend to deal with it. I hope I have reassured noble Lords over the correction power, and I thank noble Lords who contributed to that part of the debate.
Amendments 130, 131, 132, 148, 149 and 159, tabled by the noble and learned Lord, Lord Hope, the noble Baroness, Lady Suttie, and the noble Lord, Lord Adonis, seek to extend such a restriction to the international obligations and withdrawal agreement powers. I have listened carefully to what has been said. To avoid any shadow of a doubt, I am very happy to sit down with the noble Lord on what he says about the points raised on international agreements to look at the point on international obligations; I think it related to Schedule 5 to the Scotland Act. I am happy to look at that point with officials. However, I think he must accept, as noble Lords would, that the overriding ability in relation to international agreements must rest with the UK Government as the member state and the body able to conclude international treaties. I do not think there can be any question about that. However, I am happy to look at the valid issue he has raised on that point.
The position on international obligations and the withdrawal agreement powers must necessarily be more nuanced because we do not yet know what changes may be required, as we are not yet sure what the precise shape of the withdrawal agreement will be. However, I can confirm that this power will not be used to unpick the devolution settlements, nor to undermine or amend the Belfast agreement. As I have indicated, we are adhered to both the devolution settlements that we have and to the Belfast agreement that was reached in April 1998 and must be protected in all its parts.
Lord Beith (LD)
The Minister speaks as though the Clause 8 and Clause 9 powers are basically the same. They are not, of course. The Clause 9 powers can be exercised only if a further piece of legislation, a withdrawal Bill, is passed. It is not clear to me why the Minister is letting himself be cornered over this when the powers do not need to be in the Bill at all.
Lord Bourne of Aberystwyth
My Lords, I accept that they are not the same thing. Perhaps by definition, Clause 9 relates to the withdrawal agreement, but that will be made by the United Kingdom Government. As the member state, it will be the United Kingdom Government who will sign the withdrawal agreement. There may—indeed, I am sure there will—be issues about ensuring that our law is compliant with the withdrawal agreement in all parts of the United Kingdom, in both the Westminster Parliament and the devolved Administrations. That is why we need it.
Noble Lords will be aware that it is quite normal to use delegated powers in such ways, including Section 2(2) of the European Communities Act 1972, which amends the devolution statutes to ensure that our legislation reflects the most accurate position in law and ultimately to ensure that we fulfil our international obligations. To give an example, the Treaty of Lisbon (Changes in Terminology) Order 2011 was made under Section 2(2) of the European Communities Act. It amended the Scotland Act, the Northern Ireland Act and the Government of Wales Act to give effect to new terminology relating to the EU. This is not the stuff of power grabs, believe me; it is the stuff of ensuring that day-to-day business can continue. Leaving the EU requires changes of a similar technical nature across the settlements, and we will need the flexibility to ensure that these important Acts operate effectively once we have left the EU. That is precisely what these powers enable.
Amendments 148 and 149 also speak to the concurrent powers for United Kingdom Ministers and would apply a requirement for devolved Ministers to consent to their use. We will consider this matter fully in the next group, but I am very willing to engage with noble Lords on the subject that the noble Baroness, Lady Randerson, raised when she talked about the use of the word “normally”. “Normally” is not subject to definition by government, it is subject to definition in law, but of course we would normally expect the consent of devolved Administrations in conducting discussions on these matters. A lot of this, believe me, is down to ensuring good housekeeping and common sense. If we have the prospect, by agreement, of dealing with this just once in one United Kingdom Parliament rather than repeating it in all the different legislatures of the country, that makes sense.
I shall try to deal quickly with the points raised by noble Lords, I hope in more or less the order in which they were raised. Forgive me if I miss points; I will try to pick them up by letter and will place a copy in the Library for those who did not participate in the debate.
First, I restate my thanks to the noble and learned Lord, Lord Hope, for tabling the amendment and ably and cogently setting out what it was about. I followed precisely what he said and sympathise with a lot of it. I suspect we may disagree on some of the detail and emphasis, but I am certainly willing to engage with the issues he has raised. I also thank the noble Baroness, Lady Suttie, for bringing forward the Northern Ireland dimension. She asked who we will engage with. Sadly, we cannot engage with an Executive at the moment, but we continue to put all our energies into ensuring that we have an Executive in place to engage with. Whatever our differences with them will be, that is far a more desirable form of government and governance of Northern Ireland.
I think the noble Lord, Lord Wigley, spoke next, and spoke also on behalf of the noble Lord, Lord Foulkes. As I said, we will look at Clause 11 later. If I am not mistaken, we sought and obtained agreement from both Scotland and Wales to publish that. There are deep dives, as the parlance has it, going on in all framework areas—I think we are now down to 24 from 27. Full and active engagement on that is the way forward, and significant work is being done.
The noble and learned Lord, Lord Morris, spoke next. He has massive experience and knowledge of this area, so I listened very carefully to what he was saying. I appreciated our earlier chat. I can confirm that these framework areas are frozen, as it were, until we can get down to the substance in the deep dives of the things that need to be devolved and the things that need to be held in the centre. I think there is common agreement, including in Scotland, on the principle that some things will have to be retained in the centre. If we are seeking to pull something back—I do not see that that will happen, but if we were, through some of these other Acts—of course we would need LCMs just as we are seeking an LCM on this legislation. That is, again, a reassurance that I am able to give.
I thank the noble Baroness, Lady Finlay, for the engagement that we have had on this. I can confirm that we are seeking an LCM, as I believe she knows, on this legislation in both Scotland and Wales, and on the other legislation—on agriculture and so on—insofar as this involves potentially encroaching on devolved areas. Of course, once again we would seek to have long and deep discussions, as we are doing. If it were to impinge on devolved areas, we would fairly clearly need that LCM.
I hope I have answered on deficiencies; all of those will be covered in the Bill. An example of an international obligation would be something perhaps not mundane, but, for example, complying with a new law of the sea if there was a new law of the sea convention. That may be something we would seek to amend. It would be that sort of issue.
My noble friend Lady McIntosh asked for full details of the amendments. She will see that we have published the Clause 11 amendments. The amendments to Clause 7 will be tabled on Report. I have given that undertaking. They are not yet ready for reasons I have sought to explain but they will be there for Report stage. I hope she will take some comfort from that.
The noble Baroness, Lady Randerson, spoke with great experience of the devolved areas, and I thank her for her contribution about how things have moved and how there are still rough edges. I share some of the frustration of the noble Baroness, Lady Finlay, because we tried to solve some of this together on asbestos. This is not a power grab. Nobody knows where that power lies. Indeed, there is perhaps a little bit of, “You do it”, “No, you do it”. It is just lack of clarity rather than a power grab, but I hope we will be able to solve and settle it before too long.
I think I have dealt with the point made by the noble Lord, Lord Adonis, who is not in his place at the moment, on the Good Friday agreement. It will not involve any amendments in relation to that agreement, to which we are totally wedded, but there will be some amendments on Report in relation to Northern Ireland and some of the deficiencies that need correcting, in just the same way as in relation to Scotland and Wales. I thank the noble and learned Lord, Lord Wallace, once again for the clarity of what he said. I agree that we should look, perhaps through conversation and discussion, to move this forward. Like my noble friend Lord Forsyth, I have grave doubts. We will not be moving to a position of consent but I would certainly like to see us talking and consulting, and I am very happy to engage with that. To move to a position of consent in non-devolved areas would be dangerous to the union.
I thank my noble and learned friend Lord Mackay of Clashfern once again for what he said. I totally agree: if we think this is difficult, just wait until we get to Clause 11. I think this is relatively straightforward and I can see a way through this where we would have broad agreement. As the noble Lord, Lord Griffiths, indicated, Clause 11 will be a much more difficult area.
The noble Lord, Lord Elystan-Morgan, knows so much about this area, through both his political and legal experience. I agree with him that it is important to move to a position where, for things related to devolved areas, there is a convention that has grown up and is widely accepted about consent. I thank the noble Lord, Lord Griffiths, for his clarity. I agree with him about the importance of transparency and coming up with some common sense; I think that is essentially what he was saying and I do not disagree at all.
We have probably reached agreement on Clause 7. In relation to Clauses 8 and 9, I am very happy to look at the points that were made and discuss them further ahead of Report stage. In the meantime, I ask the noble and learned Lord and the noble Baroness to withdraw their amendments.
Lord Tunnicliffe (Lab)
I believe the amendment under debate is that of the noble Baroness, Lady Suttie.
Baroness Suttie
I thank the Minister for his characteristically detailed and courteous response. We look forward to examining these amendments in greater detail ahead of Report stage, when we will probably have many longer discussions about them. In the meantime, I beg leave to withdraw the amendment.
Lord Hope of Craighead
My Lords, I moved my amendment some time ago—at least I believe I did. I am very grateful to all noble Lords who have spoken in the debate and to the Minister for his very constructive response.
To sum up briefly, it seems that a theme ran through various contributions, which I want to bring to a point. I picked up from the noble Lord, Lord Wigley, the point that the Government have not really carried the people with them in the way they have responded to devolution, at least in Wales. Then, the noble and learned Lord, Lord Morris of Aberavon, said that devolution had yet to be taken seriously. Then, the noble Baroness, Lady Randerson, said that the atmosphere is becoming increasingly negative. These are very unfortunate phrases to be using in a situation where we seek agreement. However, the noble and learned Lord, Lord Wallace of Tankerness, said that accepting these amendments would be a step forward and the noble and learned Lord, Lord Mackay of Clashfern, said—if I understood him correctly—that accepting the amendments would not cause the Government much trouble, given what they have been saying about their intentions for the use of the powers that will be given to Ministers of State by these three clauses.
If the Minister searches his conscience very thoroughly, it does not look as though the Government have much to lose, if anything, in accepting these amendments. At the same time, there is a lot to be gained because they would help to change the atmosphere, which is so negative at the moment. He has made a step forward in Clause 7, which I appreciate, but he has done so because he says that he does not need to bother with the Scotland Act because he will have it all there on Report. I applaud that, but surely he might take the same step with Clauses 8 and 9. He may say that there is no question of amending the Scotland Act or the Government of Wales Act under those clauses—if so, why not just say so? Why not put these measures in the Bill and get this all over with, as a background to when we come to the real difficulty of Clause 11? There is that to take away from the debate.
I want to mention one other point. If we put a provision of this kind in Clause 7, people will look at Clauses 8 and 9 and say, “Oh, it’s not there. The situation is different as far as Clauses 8 and 9 are concerned”. There is a Latin phrase for this: inclusio unius est exclusio alterius, which means that putting one thing in excludes the other. We need to look rather carefully at the wisdom of adding a very sensible amendment to Clause 7 but not reproducing it in Clauses 8 and 9 as well.
I hope we can take these thoughts into the discussions which I would like to have with the Minister if we can find time. I look forward to Report when he will bring forward his other amendments. That is as far as we can take the matter this evening. We will come back to it on Report, but for the time being I beg leave to withdraw the amendment.
Lord Hope of Craighead
“( ) The consent of the Scottish Ministers is required before any provision is made in regulations under this section so far as the provision would be within the devolved competence of the Scottish Ministers within the meaning given to those words by paragraph 18 of Schedule 2.( ) The consent of the Welsh Ministers is required before any provision is made in regulations under this section so far as the provision would be within the devolved competence of the Welsh Ministers within the meaning given to those words by paragraph 19 of Schedule 2.”
Lord Hope of Craighead
My Lords, I am afraid that I have to introduce this group, and I hope to be able to do so fairly concisely. There are two amendments in this group in my name. Amendment 102 relates to Clause 7 and Amendment 124 to Clause 8. They seek to qualify the extent of the power given to Ministers of the Crown to make provision by regulations to deal with the matters to which these clauses refer, asking that these powers be not exercised without the consent of the Scottish or Welsh Ministers, so far as the provision that is sought to be made would be within “devolved competence” within the meaning given to that expression in paragraph 18 of Schedule 2.
Once again, at the heart of these amendments is the need to respect the constitutional importance and integrity of the devolution settlements. How the areas of government within devolved competence should be administered is seen—certainly in Cardiff and Edinburgh—as the responsibility of the devolved authorities. They have that responsibility by virtue of the democratic vote under which Members of these legislatures were elected. Their quite correct position is that it should not be for UK Ministers to enter into the area that is devolved to them without their consent, especially in the exercise of the power, to which I referred in the previous group, to make any provision under these two clauses that could be made by an Act of Parliament. I mention the Sewel convention in that connection. In practice, the Sewel principle has been operated for a considerable time in the way that the devolution system has been working since the two fundamental statutes were passed in 1998. The problem is that these clauses fail to give effect to that practice, and that needs to be corrected.
To set this point in its statutory context, so far as Ministers are concerned, Section 53(1) of the Scotland Act 1998 sets out the basic rule that, in so far as they are exercisable within devolved competence, they are to be exercisable by the Scottish Ministers instead of by a Minister of the Crown. That section expresses the devolutionary principle, but the rule is qualified by Section 57(1) in the case of functions in relation to observing and implementing obligations under EU law. A member of the Scottish Government has no power to make any subordinate legislation, or to do any other act, which is incompatible with EU law. Section 57(1) provides that any function of a Minister of the Crown in relation to such matters shall continue to be exercisable by him in relation to Scotland for the purposes set out in Section 2(2) of the European Communities Act 1972. No mention is made in the statute of any need to consult with, or obtain consent from, the Scottish Ministers before that power is exercised in relation to EU law.
Coming on to the way that the matter is worked out in practice, these provisions are operated in practice under successive memoranda of understanding on devolution between the UK Government and the devolved Administrations. I think they have operated almost since the start of devolution. One must recall that, to begin with, the Government in Edinburgh and the Government in Westminster were of the same persuasion: Labour Government here, Labour Government there. That, of course, assisted very much in the setting up of memoranda and a common understanding of how these matters were to be operated. The latest of these memoranda was published in October 2013. In a concordat on the co-ordination of EU policy issues, the memorandum states that the UK Government wishes to involve the devolved Administrations,
“as directly and fully as possible in decision making on EU matters which touch on devolved areas”.
It then sets out a series of underlying principles with which I think all those who are responsible for implementing EU obligations in devolved areas will be familiar. Among other things, they state that,
“it is for the devolved administrations to consider, in … consultation with the lead Whitehall Department”,
how the EU obligations should be implemented and enforced, including whether they should be implemented by the devolved Administrations themselves separately or by the UK in UK legislation. As I understand it from those I have spoken to, ever since devolution, this has been a matter of routine intergovernmental working between Scotland and Whitehall ever since the institutions were set up. This is important as it enables the Scottish Government to fulfil the responsibilities that have been devolved to them without their being cut across by measures taken in Whitehall without their agreement. That is where we are now. It is important to say that this system has worked remarkably well, with co-operation particularly between the civil servants on both sides of the border and, initially at least, with political agreement, as I indicated, on both sides of the border too.
The context in which the powers are given to a Minister of the Crown by Clauses 7 and 8 are, of course, different because we are leaving the EU behind, and this Bill is all about the withdrawal process. In the Bill as it stands, Section 57(1) of the Scotland Act is to be omitted: that is the provision that deals with UK Ministers dealing with EU obligations. Section 57(2) is to be amended by removing the reference to EU law and putting in provisions which are to be found in paragraph 1 of Schedule 3. Their effect is that the power of the Scottish Ministers will be under a restriction in relation to retained EU law which is similar to that in relation to EU law at present. However, when we look at Clauses 7, 8 and 9, we see that the Ministers of the Crown will have power under those provisions to modify retained EU law in areas of policy which are within devolved competence without any prior notice to the devolved Governments, let alone their consent. Therefore, the amendments I am putting forward in this group seek to deal with a problem which runs right through the Bill.
Provisions in Schedules 2, 3 and 8 to the Bill provide that retained EU law is to be treated in the same way as EU law as regards devolved competence, and I have later amendments which seek to deal with that. However, the problem is that they fail to recognise that much of what will become retained EU law will relate to matters within the devolved competence of the Scottish and Welsh Governments. To deprive them of their primacy, which is established under the memoranda of understanding to which I referred, would be very unfortunate and would create a situation which in both Cardiff and Holyrood is regarded as quite unacceptable. It would mean that while policy areas within devolved competence which raise no issues of retained EU law at all would be for the devolved Administrations to deal with themselves under the ordinary rule, you have policy areas within the same devolved areas which are subject to the provisions in the Bill without the need to obtain the consent of the devolved Governments.
The point I am really trying to make, as briefly as I can, is that there is here a recipe for confusion and mismanagement which would be in nobody’s best interests, and which we should, if possible, try to avoid. The remarks I have been making are directed largely to the Clause 7 situation, about which the Minister may wish to say something more, but they apply also to Clause 8, without elaborating further on the point I drew out of Schedule 5 to the Scotland Act and paragraph 7. My point is therefore common to these two clauses, and seeks to try to avoid the risk of confusion and mismanagement, which at present is avoided by the common understanding in the memoranda, which works so well.
I hope that the Minister might be willing to accept these amendments. I think the noble and learned Lord, Lord Mackay of Clashfern, is seeking to intervene. So that we can get into discussion, I beg to move.
Amendment 103 (to Amendment 102)
Baroness Suttie
“( ) The consent of the Northern Ireland Ministers is required before any provision is made in regulations under this section so far as the provision would be within the devolved competence of the Northern Ireland Ministers within the meaning given to those words by paragraph 20 of Schedule 2.”
Baroness Suttie
My Lords, I will speak to Amendments 103 and 125, which are tabled in my name. I shall be extremely brief, because many of the arguments have already been rehearsed in the previous group of amendments. Again, these amendments raise issues of fundamental importance. Their aim is to amend the amendments in the name of the noble and learned Lord, Lord Hope, to include Northern Ireland.
The initial devolution settlement in Northern Ireland was carefully constructed and delicately balanced. The settlement gave the Assembly real power to make decisions in the best interests of the people of Northern Ireland. Since 1998, the powers have been enhanced, most notably with the transfer of policing and justice powers in 2010 to the Assembly, and with an Act going through this Parliament in 2015 to allow for the devolution of corporation tax to the Assembly at a future date.
Given the delicate and careful negotiations that took place over many years to reach the settlement, and the particular nature of identity politics in Northern Ireland, I hope the Minister agrees that it is only right that Northern Ireland Ministers—once there is, as we all hope, an Executive back in place—should have to give their consent to any move to make regulations under Clauses 7 and 8 which would encroach on the devolved competences of the Northern Ireland Assembly. I beg to move.
Lord Mackay of Clashfern
Does the noble and learned Lord, Lord Hope, think that it would be possible to deal with his point by amending the memorandum of understanding so that it meets a new situation?
Lord Hope of Craighead
My Lords, I can see the force of that, but I do not know whether that option is available in the present climate. As regards reassuring the parties in Cardiff and Edinburgh, something in the Bill is looked for. Again, it is a matter of trying to find a way to soften the atmosphere, which is highly unfortunate at the moment. I deliberately have not discussed Clause 11, because that is quite a different debate. However, the more we can do to clear the air by getting these points out of the way before we get into Clause 11, the better, and that is the basis on which I have moved this amendment.
Lord Thomas of Gresford (LD)
My Lords, late at night on 21 July 1998, I was sitting where the noble and learned Lord, Lord Morris of Aberavon, is sitting at the moment, when Lord Sewel responded to an amendment moved by Lord Mackay of Drumadoon to this effect during the passage of the Scotland Act:
“This Act does not affect the power of the Parliament of the United Kingdom to make laws for Scotland, which may not be amended or repealed by the Scottish parliament”.
In resisting that amendment, Lord Sewel said:
“Clause 27 makes it clear that the devolution of legislative competence to the Scottish parliament does not affect the ability of Westminster to legislate for Scotland even in relation to devolved matters. Indeed, as paragraph 4.4 of the White Paper explained, we envisage that there could be instances where it would be more convenient for legislation on devolved matters to be passed by the United Kingdom Parliament. However, as happened in Northern Ireland earlier in the century, we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament.
If problems do arise the solution is for the Scottish executive and the United Kingdom Government to resolve the matter through political dialogue. That is what differences between mature parliaments and executives will be concerned with. That is what happens in other political systems. I cannot believe that it is beyond our wit to develop such a convention”.—[Official Report, 21/9/98; cols. 790-91.]
So the use of the word “normally” was off the cuff, and I imagine that Lord Sewel would be as surprised as I am to find that it has become subject to such intense examination in subsequent years.
Lord Forsyth of Drumlean
The word “normally” was certainly not off the cuff. If the noble Lord looks back at the lengthy debates we had during the passage of the last Scotland Bill, he will find that there was considerable debate about the use of the word “normally” and the wisdom of including in statute what Lord Sewel said was a convention.
Lord Thomas of Gresford
I think that the noble Lord misses the point. I am saying that that was where the word “normally” first originated in 1998. No doubt it has received considerable debate since, and indeed I have listened to debates on that topic.
The problem is a lack of trust—as has been mentioned by a number of noble Lords today and as has been illustrated by the noble Lord, Lord Forsyth, in a number of interventions—between the United Kingdom Government and the Scottish Government, and no doubt a lack of trust between the Labour Government in Wales and the Government in Westminster. It seems to me that it derives from the suggestion that there should be an imposition by the Westminster Government on areas currently devolved to the Parliament and the Assembly.
I looked at the leave campaign’s open letter of 14 June 2016, a week before the referendum. It said:
“There is more than enough money to ensure that those who now get funding from the EU—including universities, scientists, family farmers, regional funds, cultural organisations and others—will continue to do so while also ensuring that we save money that can be spent on our priorities”.
That letter was signed by Mr Johnson, Mr Gove, Ms Priti Patel, Mr Grayling, Mr Duncan Smith and many others. The leader of the Conservatives in Wales, Mr Andrew Davies, said:
“Today’s announcement is hugely welcome and is further evidence that Wales would be better off out of the European Union ... we now know that funding for each and every part of the UK, including Wales, would be safe if we vote to leave”.
Carwyn Jones, the First Minister of Wales, said:
“Those who signed this letter have no more power to deliver on it than my children’s pet cat”.
However, the referendum was won by the leave faction, and there was a proposal in the 2017 Conservative manifesto to set up a UK shared prosperity fund. The manifesto said:
“We will use the structural fund money that comes back to the UK following Brexit to create a United Kingdom Shared Prosperity Fund, specifically designed to reduce inequalities between communities across our four nations ... We will consult widely on the design of the fund, including with the devolved administrations, local authorities, businesses and public bodies”.
The word used in that manifesto was “consult”, not “agree”. Certainly, there was no suggestion that they would look for consent. Similarly, the paper published in June 2017 on the agreement with the DUP, UK Government Financial Support for Northern Ireland, said that Northern Ireland’s needs would be “properly reflected” in the fund,
“which will benefit all parts of the UK”.
So it seems that the intention, as expressed in that manifesto, was for the United Kingdom Government at Westminster to hold the money bags—the structural funds—and dole out the money as they thought fit without any requirement for agreement. The mistrust probably began before then, but that is where it was intensified.
The position is this. The noble and learned Lord, Lord Morris of Aberavon, mentioned earlier the Barnett formula. If, in taking over the rules and regulations relating to regional development, the money were to be distributed under the Barnett formula, Wales would be significantly worse off. The Bevan Foundation, in its report published in conjunction with the Welsh Local Government Association last October, said that using the Barnett formula the estimated allocation of funds for Wales between 2014 and 2020 would be not the actual €2.2 billion but just €562 million. In other words, if the Barnett formula was applied to the structural funds, Wales would get one-quarter of what it was promised up until 2020. And we really do not know what will happen after that: no commitments have been made.
If this clause remains unamended, the United Kingdom Government will have the power to take over all the rules and regulations relating to regional development, agriculture, fisheries and many other areas and to change them and develop other structures as they think fit. Maybe that is a good thing, but only provided that the devolved Administrations consent to it. I cannot understand why the Government resist the concept of consent and agreement—surely, that is the way forward. I think the only reason they resist it is that they do not trust the people they are negotiating with. But they are negotiating with members of a unionist party in the United Kingdom: it does not say much for a United Kingdom if you cannot trust the other partners to that kingdom to reach a sensible agreement. That is what the fuss is about and why I support these amendments.
Lord Forsyth of Drumlean
My Lords, I want to follow on from what the noble Lord said. I am not going to talk about Wales, but one of the arguments often put forward by Scottish nationalists is that we must not leave the European Union because we are so dependent on the single market that is the European Union. I think we should focus tonight on the single market that is the United Kingdom. I listened to the noble Lord and I take his point about the Barnett formula. He is absolutely right that it is extremely generous to Scotland and very unfair to Wales. In my opinion, resources should be distributed according to need and not on the basis of a formula that has been amended according to population. But if it is to be the case that the Welsh Assembly and the Scottish Parliament are to have a veto on these matters, what is the prospect of Wales being able to get a fairer share without that being vetoed by Scotland? It is a matter for the United Kingdom Government to decide for the United Kingdom as a whole, and for the single market that is the United Kingdom as a whole.
I have to say that I think the amendments from the noble and learned Lord, Lord Hope, are naive. We are faced with an Administration in Scotland who are absolutely determined to break up the United Kingdom —that is their purpose. We can have all the talks we want with the political Administration, until the crack of doom, but hey ho, we will find that they are saying something completely different from the civil servants. The civil servants will take exactly the kind of sensible, pragmatic, legalistic approach that the noble and learned Lord, Lord Hope, has. But the politicians have another agenda—an agenda which has been set back by the courage of the Prime Minister—which is to destroy the United Kingdom. As a unionist, I have an agenda to make sure that every part of the United Kingdom is treated fairly and that there is no veto for any part of it. We have four parliaments in the United Kingdom, but we have only one United Kingdom Parliament, and that is this.
When Lord Sewel produced his convention, it was greeted with great enthusiasm by the Scottish Parliament. If the noble and learned Lord looks at the record, he will find that this Parliament has legislated for the Scottish Parliament to a very considerable degree—mainly because, until recently, it sat for only one and a half days a week on legislation and so did not have enough time. Now we are in the absurd position where, when a perfectly sensible accommodation has been offered to them by the United Kingdom Parliament, the posturing of Ministers in the Scottish Government—which is about trying to create division and turn everything into a constitutional crisis—is against the interests of having a single market, which they say is essential to the Scottish economy in the case of Europe. Their position is that they do not want any of these powers to come to Wales, Scotland or the United Kingdom; they wish them to remain in Brussels. It is an utterly hypocritical stance. They would rather these matters were decided in Brussels, where even the Scottish Nationals elected as Members of Parliament down the Corridor would have no say. It is political gamesmanship and we would be foolish to accede to it.
We should proceed with the Bill, unamended, and ensure that the United Kingdom Government can work with the Parliaments of the various parts of the United Kingdom to preserve that single market—which, incidentally, is worth four times as much to the people of Scotland in income, jobs and everything else than the single market they purport to defend, which is that of the European Union.
This is a great deal of heat and waffle perpetrated by people who do not like the result of the referendum. They are terribly keen on referenda but find it difficult to accept the results. They argue that we have to have another referendum on independence and we have to have another referendum on Europe. I say to the noble Lord, who is normally very courteous, that to describe in such pejorative terms the 17.4 million people in the United Kingdom who voted to leave—400,000 of whom were Scottish nationalists—is following the course of his leader, who used disgraceful language to insult the 17.4 million people only this week.
I hope that the House will reject these amendments so we can get on with the task of making a success of the United Kingdom, which at last has the powers and authority to ensure that all parts of our country benefit from being able to determine our own affairs.
Baroness McIntosh of Pickering
My noble friend has given an interesting speech but it does not appear to bear any relation to the amendments before the House this evening. The amendments go to the heart of obtaining the consent of the Scottish people as expressed through the Scottish Parliament. He is a democrat, I am a democrat. Does he not agree that the amendments go to the heart of devolution and that that is what we are trying to maintain, particularly in the amendments that the noble and learned Lord, Lord Hope, introduced this evening?
Lord Forsyth of Drumlean
If the noble Baroness would like me to repeat my speech when she is listening, I will happily do so. However, I do not think the House would like me to. Perhaps she will read what I have said. She says that this goes to the heart of democracy: well, these are matters for the United Kingdom Parliament. There is no veto for any of the devolved Administrations. We have debated this endlessly. This amendment would give a veto; it would mean that the tail was wagging the dog; it would mean that the Scottish Parliament could prevent what was in the interests of the rest of the United Kingdom. That is not democracy.
The noble Baroness needs to address the words on the Order Paper—the words of the amendment—and listen to the arguments, instead of pursuing her ideological determination to reverse the decision of the British people.
Lord Wigley
My Lords, I hope that the speech made by the noble Lord, Lord Forsyth, will be reported loudly and clearly in Scotland, because I have no doubt that only one set of winners will be coming from that. The whole of the previous debate and this debate have centred on the question of trust. I am not sure whether the comments we have just heard will help create that trust in future.
The noble Lord, Lord Forsyth, said that my friends in Scotland were ignoring the English single market while building up the European single market—but the European single market includes the UK single market. It is one single market—a bigger one. Those who are looking to that single market are looking outward, not inward and restricting their boundaries to around the coasts of these islands.
Lord Forsyth of Drumlean
I said no such thing. I said that the single market, which is the European market, is a quarter of the size of the single market that is the United Kingdom for Scotland.
Lord Wigley
It may well be, but the European single market includes England at this point in time. In other words, they are not losing anything.
The main point I want to come back to is that made by the noble Lord, Lord Thomas of Gresford, with regard to resources. If we are being asked to trust giving a veto to Westminster and to the UK Government —that is essentially is what is coming through in a number of these clauses, whether or not that veto will be used in any way—that a power to impose policies in areas that have been devolved. That is clearly going to rankle with people who have become used to using those powers.
We have had experience of this. The noble Lord mentioned regional policy. The noble Baroness, Lady Randerson, will remember the problems we had in the early days of the National Assembly for Wales. There were problems in getting Westminster and Whitehall to pass over money that was for Wales and not holding it in the Treasury in London. That was what was happening, and it was not until Mr Barnier intervened with the then Chancellor, Gordon Brown, that £442 million was passed over to Wales. It was being held back by Whitehall and the Treasury. That is the background to the lack of trust we have. If we are to build up a future of trust, which is what I want to see between the nations of these islands, it has to be recognised that in some areas the leadership is coming from the devolved regimes. In other areas such as international affairs and defence, it is fair enough that the responsibility should lie here, and there will be grey areas. However, we have to make sure that we have a mechanism whereby we respect each other to sort out the grey areas, but attention has not been paid to that side of the argument. We should concentrate on that, and the amendment moved by the noble and learned Lord, Lord Hope, is a step in that direction.
If the Minister will consider the request made by the noble and learned Lord, Lord Hope, and respond to his proposals in this context as a way of showing good will towards reaching some understanding in the other contexts we shall come to, perhaps we will then start to make progress. May I ask the Minister to consider inviting those interested in these matters to meet to try to agree on a proposal from here that would go at least some way towards answering the problems being felt in Cardiff and Edinburgh? This is not insoluble, but it needs good will. However, good will is not always in evidence here.
Baroness Finlay of Llandaff
My Lords, I am a signatory to two of the amendments in the name of my noble and learned friend Lord Hope of Craighead. I should declare first that I am a member of the Bevan commission, which has been quoted, and I should also say that funding for Wales has indeed been a concern over time.
To return to these amendments and the core issue of trust, a wise saying comes to mind: trust arrives on foot and leaves on horseback. It seems as if we have had a few galloping horses through the Chamber this evening, but we have to move forwards. In the new world we will face after Brexit, which will not be easy—no one is now pretending that it will be—we need to be a United Kingdom and we need to pull together. Given the Minister’s remarks in response to the previous group of amendments—he indicated that he sincerely wants to bring the parties together to restore trust and find a resolution that helps us to move forward—I hope he will be able to work with others to achieve that, and that he will give serious consideration to these amendments. They have not been tabled to divide; rather they seek to establish a degree of reconciliation, restore trust and find a working way forward.
Lord Deben (Con)
I wonder if I can be my usual emollient self at this point. I admit to being of Welsh extraction with a Welsh-speaking father. My noble friend Lord Forsyth spoke entirely from the point of view of someone who has been bruised—I would be on his side in this—by the activities, and sometimes more than that, of the Scottish nationalists. But the debate here is not about vetoes, although the amendment would confer them; rather it is a debate about trust. My noble friend says we can all work it out: this Government, the coalition Government and the Labour Government continued the utterly unfair system of the Barnett formula, which has done such damage to Wales, and, as the noble Lord, Lord Wigley, said, the Labour Government retained large sums of money, rather than pass it on in the system we previously had.
My noble friend knows very well that I believe in a single market. I do not have a view that narrows that single market to the United Kingdom. I look to a single market that continues through the whole of Europe, which is, of course, of great benefit to all of us and I am sad that he should try to remove us from it. But I do not think that it helps in this debate not to face the very considerable lack of trust in both Scotland and Wales, where there is a history of not getting a fair share except almost by force.
Scotland has managed to get itself into what many of us feel is the opposite position. That is how the Barnett formula works. It would be good for the Government of Scotland occasionally to recognise into what a favourable position history has put it. However, I should not like the Committee to fail to recognise, because of the way these amendments are drawn and have been put together, the specific position of Wales, not least because of the special position in which the north of Ireland has managed to get itself, for political reasons, and the historical position Scotland has been in. This is not to sow discord between the parts of the United Kingdom; it is merely to say to my noble friend the Minister, for whom I have enormous respect—his last speech summing up was an exemplary one to show how the Government can deal with issues in a way that at least makes the Committee feel that it is listened to; I thank him for that, because it was a very different touch—that there is a real feeling among people in Wales that the history does not help people believe that the United Kingdom Government will be entirely even-handed on this issue. Therefore, if, in the withdrawal Bill, Wales has its membership of the European Union, from which it has benefited very significantly, taken away, is there a way the Government can at least give greater confidence to Wales? If they do not, I fear the ability to come to a compromise will be made very considerably more difficult.
I feel my noble friend Lord Forsyth was partisan in the way he concentrated only on Scotland. He was kind enough to say that he did not know about Wales, but I do, so in these circumstances, will the Minister please give us a little more confidence? I should very much like my noble friend, whose own name reminds us of Aberystwyth, to give us a feeling that Government will, in some way, find a manner to give confidence in the Bill, since this is not appropriate.
Lord Wallace of Tankerness
My Lords, as a co-signatory to the amendment, I shall briefly make three points. My first is to correct something said by the noble and learned Lord, Lord Hope of Craighead. He said that the smooth running of the early years of devolution was because we had a Labour Government in Westminster and a Labour Government in the Scottish Parliament. In fact, it was a Labour-Liberal Democrat coalition in the Scottish Parliament. That is an important difference.
Secondly, I endorse what the noble and learned Lord said when he gave the example of orders under the European Communities Act 1972 and the memorandum of understanding between the Scottish Government and United Kingdom Government on consultation, and how these might be taken forward. My experience in the Scottish Executive at the time was that it worked. I can say that because I cannot remember an issue over which there was any major dispute. It is also fair to say that I cannot think of any major dispute on that kind of area, some of which was very technical, while the Scottish National Party was in either minority government after 2007 or majority government after 2011. It is possible on a whole range of technical issues to get some common- sense agreement. That is why we should persevere.
Thirdly, the noble Baroness, Lady Finlay, said that underlying the amendments is an effort to have building blocks for trust. I shall not repeat the arguments I made in the previous debate other than to say to the noble Lord, Lord Bourne, that, like the noble Lord, Lord Deben, I appreciated his comprehensive response to it. He seemed to suggest that I had spoken about allowing a veto over areas that were non-devolved. Given that the previous amendments were about modifications to the Scotland Act, I do not think anything I said could have given that implication. Here, where we are talking explicitly about matters within the devolved competence of Scottish Ministers, that cannot be said either. I think there is something we can build on there.
Lord Kerr of Kinlochard (CB)
I share the admiration of the noble Lord, Lord Deben, for the way in which the Minister summed up the previous debate. He was a rather brilliant performer of the work of the fire extinguisher. Foam was spread over all of us and calm ensued. It was a brilliant performance.
I am sorry that, this time, the Minister has to deal with pyrotechnics from a pyromaniac, in his colleague, the noble Lord, Lord Forsyth of Drumlean. It is rather a pity that the attacks of the noble Lord, Lord Forsyth, on the party now governing in Scotland are responded to only by a Welshman, the noble Lord, Lord Wigley. He responds very well, but, as a Scotsman who does not support the Scottish National Party, it seems to me rather an easy trick to score pyrotechnical victories against an opponent who is not in the room.
Trust is what this is all about. I can see nothing wrong with this amendment; I cannot see any reason why Ministers should not buy it now. If they cannot, a discussion needs to start. It does not help to insult the party in office in Edinburgh by implying motives. It may well have such motives, but they were not those it explained when it published a perfectly reasonable economic analysis at the end of last year which established clearly the damage that will accrue to Scotland from leaving the single market. The scale of the damage was almost exactly the same as what we have now seen in the Treasury analysis for the United Kingdom as a whole—eight, five, two: the same numbers pop up in both studies. The Scots are not being unreasonable or necessarily malicious when they say that they would prefer to remain in the single market. Of course, the market of the United Kingdom is more important to Scotland than the market of the rest of Europe, but that is not the point; they do not want to have to choose. That seems a perfectly reasonable position to adopt. It does not help establish trust to insult them.
Baroness McIntosh of Pickering
My Lords, I had no intention to speak, but having added my name to Amendment 124, I want entirely to endorse what was said by the noble and learned Lord, Lord Hope of Craighead, in introducing it. I want also to refute any allegation that I am an ideologue; I have always considered myself a pragmatist. It is unfair to impute a position to a party that is not represented in this House and cannot answer back to any of the allegations made previously.
I believe that this amendment goes to the heart of the consent and trust that has been debated here at great length. I declare a vested interest in that I am doing some work and I visited the offices that my noble friend Lord Forsyth opened: the Water Industry Commission for Scotland is doing some great work across the European Union, as indeed is Scottish Water, providing technical assistance. Obviously, one hopes that that work will continue after Brexit day. I do not see this amendment, spoken to by the noble and learned Lord, Lord Hope, or the amendment of the noble Baroness, Lady Suttie, as the tail wagging the dog: this is simply an effort to bring the Scottish, the Welsh and the Northern Irish people with the Government of the day.
Lord Bourne of Aberystwyth
I thank noble Lords who have participated in the debate on this group of amendments, particularly the noble and learned Lord, Lord Hope, and the noble Baroness, Lady Suttie, for tabling their amendments. I will seek to deal with the substance and then very briefly pick up some of the points that were made in debate. Amendments 102, 124, 103 and 125 seek to place a requirement on UK Ministers to have the consent of devolved Ministers when using Clause 7(1)—I think that issue will not arise now but I am happy to discuss it further; however, I think we will have exhausted that by bringing proposals forward on Report—Clause 8 and Clause 9, where it is appropriate, in areas of devolved competence.
I stress that the concurrent powers in this Bill do not in any way undermine the devolution settlements. Rather, they give the UK Government and the devolved Administrations the tools required to respond to what is a shared challenge of ensuring the functioning of our statute book in a pragmatic and collaborative manner which reflects current practice, and I stress has been the norm for some time. I made this point on the last group of amendments and an example can be found in new Schedule 3A to the Government of Wales Act 2006, which lists no fewer than 34 laws containing concurrent functions for United Kingdom and Welsh Ministers, including powers to make subordinate legislation.
I also highlight Section 2(2) of the European Communities Act 1972 itself, which is concurrent and has routinely been used to make a single set of regulations to implement directives relating to devolved matters. Take, for example, the Marine Works (Environmental Impact Assessments) Regulations 2007—enacted, therefore, under the last Labour Government. If a deficiency arises within that statutory instrument and we all agree on the best way to correct it, it makes little sense for four Administrations to make four sets of regulations to make the same amendment. This is of course compounded by the volume of legislation that will be needed in this House and in the devolved legislatures to ensure the proper functioning of our laws after exit day.
Our approach in this Bill is to mirror that effect: to continue working collaboratively with devolved Administrations, which is certainly the norm, to ensure that our statute book is fully functioning on exit. This has not been a cause of conflict in the past—there have certainly been differences but they have been few and far between—and we do not believe that it should be a cause of conflict in the future. We cannot compromise the flexibility provided for by the concurrent power that allows us and the devolved Administrations to benefit from shared working. This is crucial for us to meet the considerable task that lies ahead in order to have a complete, functioning statute book on exit day. I remind noble Lords of the clear commitment the Government have made that we will not normally use the powers in this way without the agreement of the devolved Administrations. I am happy to restate that: it is there in black and white in the delegated powers memorandum and in written evidence to the Constitution Committee. It was stated in the other place and I have repeated it here today.
However, I take very serious note of what my noble and learned friend Lord Mackay suggested about the possibility of a memorandum of understanding. I shall take that away and look at it. Noble Lords have asked why such a commitment is not included in the Bill and I would be happy to look at this with them and to hear their views, taking seriously what my noble and learned friend has said. There can be no doubt about the commitment this Government have made to “normally” seek the agreement of the devolved Administrations on these matters. I hope that that offers some reassurance.
Let me pick up some points made by noble Lords during the debate, first thanking the noble and learned Lord, Lord Hope, for the constructive way he has introduced this set of amendments: I am very happy to talk about this further, ahead of research, as I have suggested. I also thank the noble Baroness, Lady Suttie, and quite understand her seeking the best interests of Northern Ireland, which must be treated in precisely the same way. As I have indicated, I am grateful to my noble and learned friend Lord Mackay of Clashfern for his suggestion about a memorandum of understanding, which I would like to take away and look at further.
The noble Lord, Lord Thomas of Gresford, made far-reaching points on Barnett. We certainly made some headway on that when I was in the Assembly—not because I was in the Assembly, but I remember some headway being made on it. That issue is of course still there but it is far beyond the Bill, let alone this amendment. He made a point, as did others, about the importance of trust, which I take very seriously. I thank the noble Baroness, Lady Finlay, very much; trust is important and we need to build it.
My noble friend Lord Deben is at his most deadly when he seeks to praise me. He was being so constructive that I am bound to agree with him, and I thank him very much for his kind comments. I know that he speaks with authority and understanding, particularly on Wales, and once again on the importance of trust. Again, I take the point made by the noble Lord, Lord Kerr, on the importance of that in our discussions. We can of course discuss this further. I thank the noble and learned Lord, Lord Wallace, for clarifying the point and I am sorry if I misrepresented him. It was certainly unintended so I take that point, too.
My noble friend Lord Forsyth made some serious points about the dangers of the unintended consequences of legislation. We have to be careful of that and I take his point but that said, there is the serious and important issue of building up trust, as my noble friend Lady McIntosh reminded us. She also reminded us of how we all have interests in different parts of the country; it is not as if we are talking about a union that does not mean something. When we all have relations, friends and interests in different parts of our country, we have a shared interest in getting this right.
On the suggestion about engaging made by the noble Lord, Lord Wigley, I am very happy between now and Report to meet with officials to see whether we might move in the direction of a memorandum of understanding. My noble and learned friend Lord Mackay, who has vast experience not just of Scottish issues but of legal issues, made a very valid point as to how we might achieve that. In the meantime, I ask the noble and learned Lord and the noble Baroness if they could perhaps withdraw their amendments.
Baroness Suttie
My Lords, I join in the general compliments to the Minister and thank him very much for his courteous and detailed replies this evening, and for his commitment to engage further with noble Lords before Report. We will no doubt return to many of these issues on Clause 11 in Committee, and again during Report. But in the meantime, I beg leave to withdraw my amendment.
Lord Hope of Craighead
My Lords, since that amendment has been withdrawn I am now in a position to withdraw Amendment 102 but I wish to make a few remarks. First, I must thank all noble Lords who have spoken in this rather briefer debate, and particularly the Minister for his helpful response to it.
I have to apologise to the noble and learned Lord, Lord Wallace of Tankerness, for my lapse of memory as to the nature of the Government at the beginning of devolution. He was of course absolutely right on that. I reject the criticism of the noble Lord, Lord Forsyth, that I am being naïve. I believe that my amendment had cross-party support in Edinburgh and, as the noble Lord, Lord Deben, said, it is really all about a question of trust.
If I understood the Minister correctly, we are really in the same position on Clause 7 as we were on the previous group. In effect, he will say that the Clause 7 problem is going to be exhausted. There is therefore nothing to be lost by putting in the same thing that he is prepared to put in about the Parliament; he might as well put in something about the Ministers, too. There is a serious issue with Clause 8, which would benefit from further discussion, but perhaps that is for another day. On the basis that we can still talk about it, the proper thing for me to do is to withdraw the amendment.
Lord Berkeley
“( ) No regulations affecting or amending the frontier control procedures for freight transport at borders between the United Kingdom and the EU may be made unless a Minister of the Crown has laid before both Houses of Parliament a report demonstrating that the new or amended procedures will not increase delays to freight transport.”
Lord Berkeley (Lab)
My Lords, I shall speak also to Amendment 231. This group of amendments is completely different from the previous one. It is about frontier controls between the UK and the EU after Brexit. The amendment would require Ministers to report to Parliament on how any new procedures can be implemented without increasing delays and cost. This is a very serious issue. I regret that there is no separate Bill, so far, on this. We have already been discussing the Haulage Permits and Trailer Registration Bill, which has been a very useful forum, but we are tonight discussing this issue.
Ministers have stated time and again that there will be no border control between the Republic of Ireland and Northern Ireland. They might rightly say that but they have also told the Commission that they do not want to remain in the single market and the Commission has taken that into account in its draft withdrawal agreement dated 28 February. To a simple mind like mine, since the Republic will stay in the EU and the UK will not, and since the Government insist we cannot remain in the single market, there has to be some kind of frontier between the Republic and the United Kingdom. Whether it is between the north and the south of Ireland or down the Irish Sea, we have debated many times, but I cannot see how it can be fudged or cherry-picked.
The volume of traffic between the UK and the EU is huge. In 2016, about 67 million tonnes of unitised freight were imported or exported, of which 14 million tonnes were temperature controlled. In 2015, there were 55 million UK customs declarations, and that number is due to multiply by five after Brexit. They have all got to be checked and controlled somewhere. Can that be done electronically at frontiers? The British Ports Association has said that one of the biggest challenges the ports face is accommodating the new environmental health standards inspections at the borders, which will obviously cost a lot of money and time if they go wrong. It is estimated that 3,000 trucks a day carrying temperature-controlled traffic might need checking for environmental health standards.
I have a couple of interesting examples which have come from the Irish Exporters Association, which seems to be more open with its ideas than people on this side of the frontier. A lot of people have talked about the benefits of the EU-Canada free trade agreement. An issue found there was the need to check the compliance of pallets used to carry the product within the container with the ISCN standard. If a load is found to have one non-certified pallet or one non-certified repair to a pallet, the whole lot is sent back to the sender. That will cause chaos. One has to question what proportion of trucks would need checking. The UK will not say. I have not heard any information from the Government, but the Irish News states that 6% to 8% would need their paperwork checked and some visual inspections at the frontier, which looks to me like roughly 1,000 trucks a day in addition to the temperature-controlled traffic, and the Government say there will be no queues. They have to do something about this.
There is a real problem. If the UK is not in the single market, and the Republic is, there have to be some controls somewhere. It is a great shame that we do not have a representative of Sinn Féin in your Lordships’ House to give a wider view of the problems in Northern Ireland. The noble Baroness, Lady McIntosh, regretted the lack of SNP members here to have a good debate about it.
What are the Government doing about this in terms of IT systems? The tax commentator Richard Murphy reports that there are 85 IT systems at UK borders, of which 30 will need to be replaced or changed. I do not think I need to go into the disasters of some previous UK IT systems, but there is little evidence that the Home Office or Customs will be able to have a system up and running for when we need it. It may take many years.
Lord Bradshaw (LD)
My Lords, the logistics industry permeates all our lives. It dominates retailing and allows most sophisticated industries, such as the motor industry, to organise themselves on a multisite basis. When we buy something in most shops, we start a process which means that our purchase will trigger the order for a replacement, stretching back to the manufacturer or supplier. This arrangement has become very much more sophisticated since we joined the EU 44 years ago. Supplies of parts flow through a network as complicated as a spider’s web, throughout the community and beyond. This is what makes your orange appear at breakfast or your new car come off the production line.
We are told in ever shriller tones by the logistics industry and its customers that the survival of that system depends upon frictionless trade: no stops at borders, no need to provide documentation and no tariffs—they are the words of the Freight Transport Association. The industry was lured into a state of complacency by the assurances of Ministers that this “frictionless” trade would continue after March 2019, which is less than a year away. However, that complacency is swiftly turning to panic as it becomes evident that the assurances offered concerning frictionless trade are becoming less likely to be realised. Trade deals, even if these could be negotiated, seem a very distant prospect. Your orange at breakfast has to come from Spain, and the parts to make and deliver your Mini need to arrive at Cowley every 20 minutes or the production line stops. The prospect of empty shelves in the shops, as witnessed recently due to the weather, becomes almost a certainty.
If there is any interruption at ports or similar points of entry and exit, I suggest that people’s anger with those politicians who have sold them a false prospectus will be deep and severe. If people are unable to obtain the supplies of groceries to which they have become accustomed, or workers in factories that cannot get a time-critical supply of spare parts are laid off, there will be trouble. The chance of protests in the streets as these shortages become apparent should be taken far more seriously than the suggestion of a popular uprising if the concept of Brexit is eventually frustrated. The mantra “Europe needs us more than we need them” is perhaps best not put to the test, as there will be those doing business here who decide to seek the certainty of closer union with the EU by moving their operations within its borders. The future of the aircraft construction industry is an example.
The logistics problem is very serious in respect of Ireland, to which the noble Lord, Lord Berkeley, has referred. A very large amount of perishable material has to transit via Great Britain on its way to and from Europe. If any border checks are necessary to secure passage at either Holyhead and Dover—probably both, as things stand—there will be serious implications for that trade, and it will surely lead to the establishment of direct ferry links between the Republic and Europe to avoid using those at Dover or other crossing points. At this moment the Government of the Republic are giving serious consideration to that possibility.
Maybe those in the logistics industries—notably the ports industry, the Freight Transport Association and the Road Haulage Association—have kept quiet until now because they have always trusted and supported the party opposite and have trusted the assurances of David Davis and Liam Fox. That misplaced loyalty is about to be tested, possibly to the point where these businesses suffer permanent damage. The purpose of the amendments is to seek from the Government, at this late stage, the humility to accept that the promises about frictionless trade cannot be delivered and to bring back on Report a plan to keep Britain working and supplied in the present just-in-time way, or they face a defeat in this House on Report. As the Freight Transport Association said, the trailer registration Bill, to which the noble Lord, Lord Berkeley, referred, which is coming back to your Lordships’ House in Committee, is not a viable solution.
As the Prime Minister said only last week, we need certainty. I submit to your Lordships that we are as far from that as ever.
Lord Bilimoria (CB)
My Lords, I put my name to both the amendments and I would like to build on what the noble Lords, Lord Berkeley and Lord Bradshaw, said. Some 70% of the UK’s food imports by value are from the EU, and 60% to 65% of the UK’s agricultural exports are to other member states. Any risk of delays would put a strain on our supply chains and would probably raise food prices.
The Channel Tunnel illustrates how important timing is: 1.4 million trucks and 2,900 rail freight trains went through in 2014, transporting approaching £100 billion-worth of goods between the UK and the continent, including almost £200 million-worth of iron, steel and metal products from Yorkshire and the Humber. The time saved by using the Channel Tunnel was equivalent to 120,000 days in 2014, saving a lot of money on each crossing. So any delays and any more customs checks would up-end such financial projections and have downstream consequences.
One whole aspect of Brexit is the huge complexity caused. The amendments highlight the impact that it will have not just on our freight industry but on as us a public. The list of border operations includes revenue collection, safety and security, environment and health, consumer protection and trade policy. Modern customs systems have to balance providing security with facilitating the free flow of goods. Some 37 million tonnes of trade a year pass through Southampton alone, including more than 1 million containers. How could you possibly inspect every container? It would just create delays and blockages.
Of the freight transport that goes in and out of the UK, 69% of that going to the EU is lorry traffic, whereas 99% of non-EU is containers. Of the EU share, between 75% and 100% of lorry traffic goes through Dover, the Channel Tunnel, Harwich and Holyhead. We cannot possibly have any delays that will make life more difficult for our businesses. I just mentioned the requirement for food products. Ireland and the British land bridge have also been mentioned. We will be talking about air transport later, and rail in more detail.
The UK will not be deemed a third country until the end of any transition period, if one exists. Even if the UK were to remain in the customs union with the EU, it would still be a third country and goods would be subject to checks. Freight using the UK land bridge will effectively be subject to non-tariff barriers—people always miss the non-tariff barriers.
Brexit will cause one disaster after another in this area. Customs’ rule of thumb is that 2% of cargo coming from third countries is subject to physical exam, while 4% to 6% of such cargo is subject to documentary checks. However, the Department of Agriculture is obliged to check up to 50% of food and other products that contain an element of food, such as cosmetics, pharma or medical devices. There is a 100% check on animals, including pets. This is how complicated this whole area is. Revenue will prepare a list of approved customs courses for use by traders. Traders should apply for customs registration numbers. This will be absolutely disastrous; I do not think people have comprehended how difficult it will be.
As the noble Lord, Lord Bradshaw, mentioned, 50% of FTA members operate more than 200,000 lorries: almost half the UK fleet. FTA members represent 90% of freight moved by rail. FTA members consign 70% of UK visible exports by sea and 70% of UK visible exports by air. They speak for this industry. If we do not listen to them, we are not listening to the people who do this. How UK companies get goods to and from the continent in the future will be a matter for EU negotiations, but the changes to border controls and customs will impact our transport efficiency. There is no denying that. At the moment there is frictionless movement of goods to and from the UK. Unless a solution can be agreed as a free-trade agreement when the UK moves outside the single market and the customs union, that will change.
Lord Bilimoria
If noble Lords do not like facing reality, they can cheer, but I am talking about this reality as a businessman who imports from and exports to Europe. I will be affected, my consumers will be affected and our citizens will be affected. Noble Lords can laugh as much as they want, but this is the reality.
Aidan Flynn wanted the prospect of a deal. This is the quote:
“We’re all looking for transition, in terms of whatever changes are going to be required … but effectively, if there’s no likelihood of a plan by October 2018 in terms of UK-EU negotiations you’re going to be without a doubt going into … a cliff-edge situation”.
Lord Robathan (Con)
My Lords, the noble Lord, Lord Berkeley, raised a very important point about freight transport crossing the border between the Republic of Ireland and Northern Ireland. It is a very legitimate issue to raise and I hope the Government will listen. He also identified that, of course, this can be solved with modern IT.
I want to bring the House’s attention to the reality of the border in Northern Ireland. I was working in the Northern Ireland Office just over three years ago. I said to my office, “I’d like to go to South Armagh”. They said, “Well, Minister, that’s a frightfully bad thing to do”, but I went. Noble Lords may know that South Armagh used to be referred to as “bandit country”. Let me tell you, three and a half years ago, it certainly still was. I was with a lot of police, with a helicopter going overhead; the police still fear for their lives there because there are booby traps and things laid for them.
I particularly want to focus on smuggling. We followed a lorry on one of the little lanes from the Republic into the north. We did not stop, but the police said, “That’ll be smuggling”. We saw the impact of smuggling diesel, because there are different duties in the south and the north; huge amounts of diesel are imported from the south to the north, including a lot of red diesel that is then cleaned—sorry, has the red taken out of it—and has a huge environmental impact. There are still different subsidies there. Cattle get smuggled back and forth across the border because a lot of money can be made through smuggling across the border. There are two different customs so, of course, there are customs officers on the border; not sitting in posts, as they used to be, but still down there. They do not do much, it has to be said; there is less to do because we are part of a single market. There are, I believe, 275 different crossing points between the south and the north of Ireland, on a border of some 305 miles. Between 1922 and 1972, it was never possible to police everyone. During the Troubles—I served out there for a bit—it was not possible to stop terrorists crossing the border. We used to put concrete blocks and everything at the border, but it did not work; people came across the border.
I also remind noble Lords that there are different currency units: Ireland uses the euro but we use the pound. People manage to get past this quite easily and they will manage to do so in future as well. People say that the border in Ireland is a huge problem; it will only be a problem when we leave the European Union if people wish it to be so. It does not have to be so; good will and common sense on both sides will show that it is not beyond the wit of man for Northern Ireland and the Republic of Ireland to co-exist quite happily and trade with each other—as they did before 1922, between 1922 and 1972, and since.
Lord Campbell-Savours (Lab)
I have not spoken on this Bill at all yet. I have made a point of not speaking because I understand the pressure on the Government, but I want to raise one issue—trusted trader status. The Government have told us that they intend to establish such a system on the border of Northern Ireland and southern Ireland. We are told that an exemption will apply to small and medium-sized enterprises involved in cross-border trade. The Government say that it is possible to manage the allegation that there will be substantial fraud under such a system. First, where can we find a definition of what constitutes a small or medium-sized enterprise? It is very important that we know that in advance. Secondly, do we know what percentage of trade will fall under that description? Thirdly, when they talk about “managing” a system, what kind of management arrangements do they intend to set in place to ensure that fraud does not take place? Finally, what will happen when it comes to customs entries for those firms that are not covered by trusted trader status? Will the clearance and entry arrangements for their goods going over actually be on the border posts? I presume that if some businesses are exempt then there must be some actual control on the border itself. These issues need to be answered at a very early stage in the procedure. I have truncated much of what I wanted to say, but I want to get this on the record this evening.
Viscount Hailsham
My intervention at this stage will be extraordinarily brief. What I say about Amendment 104 also applies to Amendments 105 and 106, which are in the two subsequent groups. There is a great deal of merit in requiring these reports, but there is no reason at all why they should be linked to the initiation of the regulations: that is slightly misconceived. The noble Lords, and my noble friend, who put their names to the amendments are lacking ambition. They should require these reports to be published, in any event, before Brexit day. As the Committee knows, later on in this debate we will come to the issue of parliamentary control. Parliament can only exercise full control if it is in possession of facts, and the facts will be furnished by these reports. Those noble Lords, and my noble friend, are right, thus far, in linking it to the institution of regulations, but they should be ambitious and, on Report, require these reports before Brexit day. If my noble friend does that she will find me with her.
Baroness Altmann (Con)
My Lords, given transport’s essential role in supporting the UK economy, transport issues should be given high priority by the Government in this Bill and other legislation relating to Brexit. It does not seem to have had that level of importance attached to it. Amendment 104 requires that no regulations should be laid that would amend UK-EU border transport procedures unless Ministers can demonstrate that the new procedures will not increase delays to freight transport. I appreciate the sentiments of my noble friend Lord Hailsham. I will take his comments under advisement on Report because, as he said, this is such an important issue.
The time sensitivity in modern logistics and UK supply chains means that retaining a seamless supply-chain process is of significant economic importance. Customs clearance, as well as passenger entry mechanisms to the UK from the EU, including on the island of Ireland, should be as seamless as possible. If the UK leaves the EU, the current system whereby all trucks can operate through the EU on the basis of a one-page document, and without requiring specific permits, may well not continue. UK-based road haulage businesses have benefited considerably from the EU principles of free movement, which has meant that UK lorries and their drivers can cross borders and operate within other parts of the EU. The Government’s own statistics suggest that 85% of the lorries operating between Britain and the other 27 EU countries are owned by businesses in the other EU 27 countries rather than the UK. In order for these international commercial arrangements to continue if we leave the EU, specific arrangements will be required that have not yet been negotiated. As far as I am aware, this cannot be achieved through our domestic legal system. It is a separate issue from the customs union and depends on access in some form to the single market. If we leave the EU without proper agreements in place or if we fail to maintain full regulatory alignment, road haulage, especially from the UK and Northern Ireland to Ireland, will face barriers. This does not fit with the aim of frictionless trade and our commitments under the Good Friday agreement, notwithstanding the comments of my noble friend Lord Robathan.
Lord Robathan
I am grateful to my noble friend for mentioning me, but why do they have to face barriers?
Baroness Altmann
If we are not in the single market as well as the customs union, there must be checks at the border between Northern Ireland and Ireland. It is not good enough for us to somehow assume that some magical solution will appear. There is no IT solution that will work for the border. The Smart Border 2.0 paper that was released does not solve the issue. If you read it carefully, you will see that it is not a solution. There is no solution, so either both sides need to turn a blind eye to the fact that there is no checking at the border even though there is supposed to be, or there has to be some checking.
In the last year, 4.4 million driver-accompanied freight vehicles moved between the UK and continental Europe. Four million of these movements took place on ferries through Dover or on the shuttle through the Channel Tunnel; around 99% of these required no customs clearance processes at the ports. As road movement is free of customs controls now, it has allowed UK industry to build up the fully integrated supply chains that we are in danger of losing. If we were to remain in the EEA or EFTA and elements of the single market, such problems could be minimised. I am very disappointed that the current red lines have ruled this out. It is hard to see how traffic and goods can flow freely and without further delays on the island of Ireland without regulatory alignment that mirrors the single market and customs union arrangements we have now.
This amendment aims to ensure that Ministers do not jeopardise the UK’s economic activity, industrial success and the arrangements for the Irish border. We should perhaps demand that this provision be included in the Bill rather than just in future regulations. Can my noble friend the Minister explain how the Government can contemplate introducing a Bill that could cause such significant damage to our country without providing adequate safeguards? I support these amendments.
Lord Liddle (Lab)
My Lords, I had not intended to speak in this debate and I have sat patiently all day listening to excellent discussions, but what brought me to my feet was when noble Lords opposite started laughing at the noble Lord, Lord Bilimoria. The issue that he raises is extremely serious and it does not justify the Chief Whip, who I think is an excellent chap, laughing at him.
Lord Taylor of Holbeach (Con)
My Lords, I take debates in this House seriously. I felt that the arguments presented by the noble Lord, Lord Bilimoria, were duplications of arguments that had been admirably presented by the noble Lord, Lord Berkeley, and I felt that he should not have indulged in the way he did by speaking for 11 minutes and repeating arguments that had already been stated.
Lord Liddle
I understand the noble Lord’s explanation, and I will not speak for 11 minutes. However, I will say something and ask the Minister serious questions. The facts have been explained by the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Altmann, and the Government are perfectly well aware of these facts. They produced a paper on customs arrangements, I think last July or August. What work has been done on developing the proposals in those papers? If the Government were serious about developing what the noble Lord, Lord Robathan, wants, they would have presented a proposal to Brussels in the last couple of months. In December, in the agreement that the Prime Minister is so proud of—I was delighted that it occurred —it was said that joint work would be done on the Irish border and the other issues to draw up a draft withdrawal agreement in the coming months. What work has happened? How many meetings were there between British and Commission officials before the Commission produced its draft withdrawal agreement? If the Government had a clear view of how the problems set out by the noble Lord, Lord Bilimoria, could be addressed, they would have come forward with a compelling alternative proposal to what the Commission has come forward with. Can we therefore please have a balanced, sensible explanation of what the Government are doing and why they refuse to face facts and produce objective reports on how they will deal with very serious economic issues?
Lord Tunnicliffe
My Lords, it may be convenient for the Committee for me to set out the Opposition’s view—
Lord Tunnicliffe
The noble Lord may speak after me, and as many times as he likes, but—
Lord Wigley
Not on this amendment, because these points have not been covered. This is Committee, and we have a right to put our points.
Lord Tunnicliffe
Those who are familiar with the rules will know that as many Lords as they like can speak after me. They cannot speak after the Minister.
I think it will be useful if I simply set out the position of the Opposition. The seriousness of the situation, as described by a number of speakers, is entirely accepted. Those of us who have slogged through the road haulage and trailers Bill know that the extant law that a no-deal would fall back on is totally unfit for purpose and would give us perhaps only 4% of the capacity we need. I think there is a consensus on that. The fear of customs friction, which, once again, we raised at Second Reading, is acknowledged. It was neatly summed up by the chief executive of the Road Haulage Association:
“Simply using current customs practices and applying them to UK/EU traffic risks delays of biblical proportions which would strangle growth and hurt the entire economy”.
Basically, these amendments say, “Sort this mess out before you start executing change through Clause 7”, and, “Don’t misuse the regulations to do it”. We broadly agree, and we hope everybody agrees. We hope everybody recognises that we need these problems solved in road haulage—I will not repeat myself later; it is the same in railways and in aviation—before we can contemplate leaving the Union. They are not related to soft or hard Brexit, although each means different problems; they are related to transport problems. No deal means no transport, and that has to be sorted out.
Are these amendments the best way of doing that? I am not sure. At the moment we have an open mind on that. Perhaps this is an opportunity for the Government to propose a series of meetings for interested Peers off the Floor of the House with senior Ministers—no doubt with the noble Baroness, and perhaps the Secretary of State should intervene because this is so important—so that we can get to the bottom of the progress that the Government are making and find out how they propose to tackle what is a real problem. We have a common interest in it being tackled, and the Government have a duty to put a lot of effort into convincing sceptical Peers. They should tell us what they plan to do, respond to ideas and come back with amendments to assure the House that we are not going to drift into a disaster of biblical proportions.
Baroness Randerson
I have spoken for a total of three minutes on this Bill. I think we have a right to be heard.
Lord Wigley
The point I wish to make, if I may, is that Amendment 104 is very significant for Wales because of the implications that it has for the ports of Holyhead, Fishguard and Pembroke Dock—an angle that has not yet been covered in this debate. These are vital trading links between Wales and the Republic of Ireland. Holyhead is the UK’s second-largest port. In excess of 400,000 trucks pass through it each year, and a hard maritime border between Wales and the Republic of Ireland will inevitably hit it hard.
I ask noble Lords to read the excellent article by Professor Richard Wyn Jones in the Irish Times on the specific issues facing Holyhead and his native Ynys Môn, or Anglesey. Almost 80% of the Irish-registered HGVs heading for the continent pass through these Welsh ports, the vast majority via Holyhead. There is simply no space in or around the port for the kind of infrastructure that will be required to process the number of lorries and trailers that currently pass through it. A hard border in Holyhead will yield only chaos, and the same problems apply to Pembroke Dock and Fishguard on a lesser level.
The inevitable consequence of physical constraints in and around the ports is that freight will need to find ways to bypass Holyhead and Wales, especially if there is a soft border between the British state and the European Union in Northern Ireland. Without trade arrangements that mirror the outcome of what we already have, Welsh ports will be in danger of becoming uncompetitive. In practice, the border for freight at the Welsh ports must be as frictionless as it will be between the north and south of Ireland. That is why I support the amendment.
Baroness Randerson
My Lords, these amendments are designed to concentrate the Government’s mind and to get some answers. I share the concerns of the noble Lord, Lord Wigley, about Holyhead. The situation is very similar to that at Dover. When the Government try to close down the debate, I remind them that the areas expressing extreme concern to us about the lack of preparedness are the ones that have loyally voted Conservative over a long period, and they will be particularly worried that their concerns are not being heard with due seriousness in this Chamber.
The sort of Brexit that we get will of course have a major impact on our ports. They might have to change the way that they process goods twice: once possibly for the transition period and once for the end game, whatever that is.
Lord Rooker (Lab)
Before the Minister responds, I want to spend a couple of minutes on a highly relevant issue that has not been raised on this Bill at all.
Following the BSE crisis, which was very damaging to the economy, an all-island animal feed arrangement was created in Ireland. It is not generally appreciated that there are a disproportionate number of animals for food production on the island of Ireland, hence its exports to the rest of the world: 15% of the world’s infant formula market is controlled by the dairy industry on the island of Ireland. The animal feed situation, which is crucial, is controlled by the ports around the island of Ireland. After Brexit, the EU will be ultra-sensitive—do not forget that we are the country that gave the world BSE—about the imports of animal feed. Given that there already exists an all-Ireland animal feed arrangement, and all-Ireland control mechanisms at the ports and the mills, how will this work after Brexit for the transport between the north and the south from the feed mills and ports? It simply will not be possible to drive a lorry full of feed across the border into Europe without it being checked. I cannot understand why this issue never gets raised. A third of what we grow feeds animals—it is a huge amount of business. We are what we eat, of course, and the animals are produced that way. What will happen in the island of Ireland to the existing animal feed arrangements? It is highly relevant to this debate.
Lord Callanan
I thank the noble Lord, Lord Berkeley, for this debate on Amendments 104 and 231, which raise the important matter of frontier control procedures and freight transport in relation to the Clause 7(1) power. I am particularly grateful to the noble Lord for his helpful technical and operational suggestions. I would have passed them on to my colleagues in the Department for Transport but my noble friend Lady Sugg has already taken careful note of them and I am sure she would like to take them forward with him personally.
I am pleased to reassure the noble Lord that discussions in this field continue with all those involved in the running of our roads and railways and the freight services that use them. How these services and the procedures involved continue to operate after our exit is, however, a matter to be negotiated with the EU. In the event that there is no negotiated outcome, Her Majesty’s Revenue and Customs will treat EU trade as it currently treats third country trade, which means that businesses trading with the EU will need to comply with additional customs requirements. The Government recognise that this represents a change to how UK businesses currently trade with EU firms and so we will model new customs processes and procedures on the existing Union customs code.
The noble Lord’s amendment would prevent the making of regulations in certain scenarios but it does not, and cannot, do anything to prevent those scenarios arising. This will be determined purely by what happens in the negotiations. All it would do in the unhappy situation that we did not secure a satisfactory agreement with the EU is to leave us unable to reflect that situation in domestic law, which of course would only make the position worse. Furthermore, any report that was carried out before the outcome of the negotiations would necessarily be speculative and so would lack a certain utility.
Happily, I can tell the noble Lord that the transport of goods is incredibly important to both the UK and the EU, as many noble Lords have pointed out, and there is a strong mutual interest in reaching an ambitious agreement which maximises the benefits for all businesses and individuals. As such, the Government aim to negotiate for the most tariff and barrier-free trade with our European neighbours, as the Prime Minister said in her speech last week. The Government will ensure that appropriate measures are taken when implementing whatever may be agreed. It will be done in a phased process, thereby providing businesses with enough time to plan and prepare for the new arrangements, minimising disruption.
Whatever the outcome of the negotiations, the Government believe that it is in the interests of both the UK and the EU to have efficient and effective frontier control procedures to achieve one of the strategic objectives of ensuring that UK-EU trade is as frictionless as possible. We will continue to meet our commitment to keeping Parliament fully informed on these negotiations and allow for proper scrutiny, including through regular statements and in our support for the work of committees in this House and the other place. I hope I have reassured the noble Lord that the Government will work hard on securing an agreement with the EU that works well for all in the road and rail freight sectors and I therefore ask that he will withdraw his amendment.
Lord Campbell-Savours
I asked four questions on trusted trader status. When will I get my answers?
Lord Callanan
I will read Hansard and respond to the noble Lord in writing.
Lord Liddle
The Minister did not answer any of the points that I made about what level of contact the Government have had in Brussels discussing these issues, and why in the interval between the September agreement and March, when the Commission produced its own proposals, Britain appears to have done nothing. Will he please tell us what is going on?
Lord Callanan
We are having extensive discussions with our partners in Europe. We are also having extensive discussions with representatives of the rail freight industry and other players in the sector, but as the noble Lord well knows, the arrangements are a matter for negotiation.
Lord Liddle
If Brussels can produce a proposal, why cannot the British Government produce an alternative proposal?
Lord Callanan
As the noble Lord pointed out, we did produce a customs paper last year. In her speech last week, the Prime Minister referred to two alternative customs arrangements and those matters are being taken forward in the discussions. If the noble Lord reads the Prime Minister’s speech of last Friday, he will see that she referred to them specifically.
Lord Liddle
Of course I have read the Prime Minister’s speech. What do you take me for? I follow these things very closely, but the Minister still has not explained how it is that the Prime Minister simply referred to the principles that were put out last summer. This is a situation of real urgency for the economic actors, so why are the Government not producing proposals? Would the Minister be willing to write to me on this point?
Lord Berkeley
My Lords, I am grateful to all noble Lords who have spoken in this interesting debate. It has been really well informed and I am amazed that the Government have nothing better to respond with other than answers that I think I heard six months ago. As my noble friend has said, time is running out. This is a probing amendment and I am grateful to the noble Viscount, Lord Hailsham, for suggesting that we should have gone harder, and indeed the noble Baroness, Lady Altmann, said the same thing. We have time to have discussions before Report, but it is a sad reflection for all of industry, not only the transport sector. The noble Baroness referred to the manufacturing sector and said that we are no further on. The Commission has produced papers but we just get motherhood and apple pie. I do not think I can take this any further tonight, so I beg leave to withdraw the amendment.
Lord Berkeley
“( ) No regulations altering the roles and responsibilities of the European Union Agency for Rail relating to rail transport and the application of legislation relating to it may come into force until a Minister of the Crown has laid before both Houses of Parliament a report setting out the benefits and costs of any such alteration for the passenger and freight rail sectors and the impact of the alterations on rail infrastructure managers in the United Kingdom in terms of capital and operation costs.”
Lord Berkeley
My Lords, I shall be brief on this amendment because the Minister has almost answered some of the questions. However, it is worth reminding the Committee that the Prime Minister has talked about how she is keen that the various agencies should continue to exist after Brexit. I have not seen anything about the European Union Agency for Railways, as it is now called. It is vital that we have this agency.
We have only one link across the Channel at the moment. Last week DG MOVE at the Commission produced a paper which goes into great detail about what we cannot have after we have left. It is a pity that we do not have a response to it. That includes our UK-registered train drivers who will not able to operate in France or anywhere else unless they pass the test in France. The same applies to approvals for equipment that is manufactured over here if it is not produced to the same standard. This could be a complete disaster, and it will be a great shame if we cannot maintain our involvement with the European railways agency because some of us have spent the past 10 years trying to have one technical agency that covers all the railways in Europe rather than having 25 different ones, which is what we had before.
I hope that when the noble Lord comes to respond, he will be able to give us some warm words about how we can retain our involvement with the European railways agency and sort out all the different issues around standards, drivers’ approvals, rolling stock approvals and everything else. I declare an interest as the chairman of the Rail Freight Group, and we do want to see rail freight and Eurostar continuing their services after March next year. I beg to move.
Lord Bilimoria
My Lords, I added my name to the amendment to note that rail contributes £85 billion of extra economic benefit to the British economy. About 41,000 of the 240,000 people who work in the rail industry are EU nationals. To make this point, the amendments basically say that we have to adhere to the European Union Agency for Railways, which has EU-wide responsibility for implementing the technical aspects of railway legislation. This cannot be under- estimated because it encompasses safety, specifications of interoperability—TSIs—and a common verification process for infrastructure and rolling stock. Most railway industry manufacturers have standard products designed for supply across the whole of the EU, in line with these requirements.
Lord Callanan
My Lords, I am again grateful to the noble Lord, Lord Berkeley, for bringing this important matter before the Committee. The Government are considering carefully all the potential implications arising from the UK’s exit from the EU, including the implications for the UK’s future relationship with the European Union Agency for Railways. The UK’s continued participation in the agency as a third country and its continued co-operation in the fields of rail safety and standards, as well as the implications for the UK’s technical standards regime, is, of course, a matter for the negotiations.
Our domestic railway and the cross-border services that link us with the EU serve an incredibly important function in the transport of goods and people across the UK and between the UK and the EU. In 2016, there were some 1.7 billion passenger journeys facilitated by rail in the UK, while the rail freight industry transports goods that would otherwise require 7.6 million more lorry journeys each year. Equally, the Channel Tunnel was responsible for 25% by value of all trade in goods between the UK and continental Europe in 2014, facilitating an estimated £91.4 billion of trade in total. Passenger services through the tunnel, including Eurostar and Le Shuttle, and international rail freight services, transported an estimated 20.8 million passengers and 22.5 million tonnes of goods in 2016.
As the Prime Minister made clear in her Mansion House speech last week, we want to maintain the continuity of rail services that link us with the EU, which provide important economic benefits to both the UK and the EU. However, our participation in the European Union Agency for Railways is not something that the Bill can legislate for. For decades, we have worked closely with our European partners to develop a regime in the field of rail safety and standards that reflects UK practice. We strongly believe it is in both our and the EU’s interests to ensure continued productive co-operation on safety and standards in the future, regardless of the outcome of negotiations. As I have said, this will be a matter for negotiations. In considering all relevant factors relating to the future rail safety and standards framework, the Government remain committed to our railways continuing to have the highest standards and remaining steadfastly amongst the safest in the EU.
We will continue to take on board the views of industry. The Government have a number of established mechanisms for engaging regularly with the rail sector. These include, for example, the Rail Delivery Group and the Rail Supply Group, whose members include the supply chain, passenger and freight operators, and Network Rail. As we prepare for the UK’s withdrawal from the EU, the Government will continue this engagement with a wide range of stakeholders from across the UK’s rail industry to seek views, which the UK has taken, and will continue to take, into consideration.
In the light of that, I hope I have satisfied the noble Lord that we understand the importance of maintaining the continuity of our important EU rail links, as well as maintaining a safe and effective railway. This will continue to be an important factor as we approach the negotiations. I therefore hope he feels able to withdraw his amendment.
Lord Berkeley
I am grateful to the Minister for that reply. It is not news to me, because, obviously, I am aware of what is going on. Could he possibly write to me quite soon about some information that I have which states that the Department for Transport is looking at which regulations from Europe could be torn up as soon as we leave? It is apparently highly confidential, which probably means that we will end up retaining a mishmash of half European and half British regulations, with a divergence which will be incredibly bad for both our manufacturing industry and operators.
Lord Callanan
My noble friend Lady Sugg will be happy to discuss that with the noble Lord.
Lord Berkeley
I am grateful to the Minister. I beg leave to withdraw the amendment.
Lord Berkeley
“( ) No regulations may be made under this section altering the roles and responsibilities of the European Aviation Safety Agency until a Minister of the Crown has laid before both Houses of Parliament a report setting out the benefits and costs of any such alteration to the United Kingdom’s aviation sector, including airlines, airports, aircraft manufacturers, aircraft maintenance and air navigation services providers, in terms of capital costs, operational costs and the impact on market access and safety.”
Lord Berkeley
My Lords, this the last of my three amendments and it is to do with aviation. Aviation has so far come out better from the various statements from the Prime Minister and others because of the noise from the aviation industry, be it airlines, which were rightly frightened about being unable to fly one day after Brexit day unless some changes were made, or the manufacturing industry, which is reliant on a massive amount of approvals for all components. Some 2 million components manufactured in this country go into an Airbus. They are all approved centrally by the European agency. If we do not retain membership of this agency, those approvals will be null and void and we will not be able to carry on.
There are many other consumer interests as well. The airline sector benefits dramatically from being part of a European group of airlines. Leaving EADS and having to negotiate directly with goodness knows how many other member states for particular routes does not bear thinking about. The noise from the airlines has been great; I hope it continues and that Ministers take notice of it. Let us not forget the manufacturing industry. It is not just aircraft wings for Airbus, which I think are made in north Wales, but many other components. We need a thriving industry and we need to stay part of it. I hope that the Minister will be able to give us some comfort on that. I beg to move.
Baroness Randerson
My Lords, I first raised this issue in the autumn of 2016 and have done so repeatedly since then, even in a Private Member’s Bill on the Single European Sky. It is important because there is no fallback position for aviation; there are no WTO rules that we can rely on. If things do not go right, there is simply a blank in which planes will be grounded. Along with them will be the passengers and very high-value freight which goes by air.
I do not mention these concerns on my own initiative; they have been put to me by people in the aviation industry from across the world, because our whole economy stands on the shoulders of our air transport industry.
All along, the Government have expressed confidence that this will all work out fine on the night, but there has not been any official commitment either to remaining in EASA or the Single European Sky. Despite the commitment made by the Prime Minister last week there has been no official commitment, so these amendments give the opportunity to provide that. With the best of intentions, we could find ourselves at an impasse, and this is not just a little local difficulty between the UK and the EU; it is also very much about the US. We rely on the EU/US open skies agreement as a member of the EU, and we will cease to be a member of it when we cease to be a member of the EU. It cannot just slot into place later because airlines sell tickets a year in advance. Indeed, they are already selling tickets for a period of time when they cannot be absolutely sure that the planes are going to fly. There will be an awful lot of airline tickets on sale from next month for a year hence—some have already been sold, as I say.
There are already stories—for example, in the Financial Times last week—that early talks have not gone well. The Minister denied that and I am very pleased to hear those words, but in the past the United States has not been easy to make aviation agreements with. Opening up US aviation to both EU and UK flights has been a problem in the past. There are potential issues over the continuation of anti-trust exemptions, which allow airline alliances to set fares and share revenue. Any new deal has to allow for the pattern of ownership of our own major airlines, which have very big foreign shareholdings, especially IAG, of course. In the short term it is important that we remain in the open skies agreement during transition, or at least that we are treated as if we are within that agreement. In the longer term it is clearly best if this continues beyond transition.
Briefly on EASA, at any one time half the aircraft in the skies above Britain are not UK registered, so we need to remain the dominant influence over aviation security and safety in the EU and beyond. We have been a major force so the Prime Minister’s words, as I said earlier, were welcome last week. We need full, official government commitment here in legislation: not just to being associate members of the EASA or observers, but to being full members because there is consensus in the sector that it makes no sense to create a national regulator. It is essential that we remain fully integrated with EU rules and systems. The EU has brought huge benefits to passengers—lower fares, more destinations and greater passenger rights and compensation. We must remain part of that scheme. We must also maintain the environmental benefits it has brought.
Lord Balfe (Con)
My Lords, I shall make a brief intervention and ask a couple of questions. I realise that it is the Minister for DExEU replying to the debate rather than the Minister for Aviation and I declare my interest as vice-president of BALPA, the pilots’ union. There is a lot of concern and it is felt that it would be helpful if we could have a clear commitment to retain membership of the single sky agreement and the aviation safety agency. I ask the Minister, possibly through his colleague, to write to those of us who are taking part in this debate to tell us whether it is government policy to continue with this membership. If it is, what steps have they taken up to now and can they arrange some way of keeping those of us who are interested abreast of the issue, other than by intervening on Bills? I know that this issue moves ahead. We have had very good relations with the Minister. This is in no way a criticism but rather a request for dialogue to be opened, possibly in writing and possibly with the letters to be deposited in the Library for anyone else who is interested.
Lord Bilimoria
My Lords, I have put my name to these amendments. It should be emphasised that the European common aviation area, or what we refer to as the single European sky, should not be taken for granted. Any British airline can fly anywhere it likes in the EU—not just to but within another member state—and sell tickets to anyone in the 28 member states, without restriction. The aviation industry contributes £52 billion to our economy and, as we have heard from the noble Baroness, Lady Randerson, it leads to cheaper fares, better consumer protection and compensation, and a greater variety of destinations. There is of course the environmental aspect as well.
Does the Minister accept that, if we retain access to the single skies, it would require accepting the jurisdiction of the European Court of Justice, which is one of the Government’s red lines? Does he also realise that there is no fallback on the WTO in the aviation sector? In fact, Tim Alderslade, the chief executive of Airlines UK, has said:
“The Government is fully aware that aviation sits outside”,
the WTO system. He continued:
“The principle of ‘no deal is better than a bad deal’ does not apply to us”.
So whatever happens, the airline industry needs a deal. It cannot have any limits to capacity. Already, easyJet has said that it has applied for a licence in Austria to set up easyJet Europe. As we have also heard, airlines plan their schedules up to a year in advance. Can you imagine if the situation with Ryanair was happening today? How will we cope with that across the sector if we do not come to an agreement?
This whole aspect really keeps us connected to these countries; the administration and infrastructure run like clockwork. However, I have looked at a table of the Brexit impacts under different scenarios. It lists eight scenarios, five of which would not be allowed any more. An EEA airline flying from a third EEA country to the UK, for example Air France flying from Berlin to London, would no longer be allowed. A non-UK airline flying from the UK to a third EEA country, such as Ryanair flying to France, would no longer be allowed, and nor would a UK airline flying between two EEA countries. A UK airline flying within an EEA country or an EEA airline flying within the UK, such as Ryanair flying from London to Glasgow, would no longer be allowed; nor would a US or EEA airline using the UK as a hub to fly from Europe to the USA, such as American Airlines flying from New York to Heathrow and continuing on to Rome. We take this all completely for granted but it will no longer be available to us.
According to Ministers, 35 separate pieces of EU legislation work together to make the EU’s aviation single market. This is separate from the single market in goods and services and continued membership for the UK, or alternative arrangements, will be needed. What can we do? As a result of its membership, UK airlines benefit from 42 air services agreements entered into by the EU with countries outside the European Union, including the United States and China. This is what open skies is all about: it has allowed European majority-owned airlines to fly between places within any EU country, not only between the home country and another EU country.
We have also heard about the common regulator, the European Aviation Safety Agency. The UK has been a really proactive member of that organisation. It has been a leading member of it because it has brought benefits to the UK and to Europe. Security is also going to be really important and difficult—as will future border and visa arrangements.
In the longer term, unhindered access to EU aviation is absolutely essential. Benefits have been derived from open skies and a more restricted market would be disastrous. The transport regulations are most comprehensive. They provide for compensation, reimbursement and protection from overbooking. A large part of this is European Court of Justice law. Passengers are protected when they take off from an EU airport or land at one, provided that the carrier is an EU carrier. These are all issues that we take for granted, but if we do not look at these amendments it will be another way in which the whole economy and all our citizens and businesses will be damaged.
I shall conclude by quoting Andrew Haines, chief executive of the UK Civil Aviation Authority:
“Let’s just imagine the UK was to withdraw from EASA altogether and adopt our own framework–although I’m yet to meet anyone of substance that supports that approach. It is, of course, theoretically possible and let’s just suppose we established the best aviation safety regimes in the world. It would mean a major increase in UK regulatory regime, potentially represent a major barrier to track increased costs and yet we would also risk becoming a backwater in terms of wider impact”.
A backwater—that is where we are heading.
Lord Liddle
I congratulate the noble Lord, Lord Bilimoria, once again on an excellent speech raising many serious issues which we have to deal with. I shall draw particular attention to Amendment 233, which asks that any amendments to the roles and responsibilities of the European Aviation Safety Agency should be subject to the affirmative procedure. I would like a response from the Minister. I see no reason why the Government cannot just agree to that now to assure the Committee that there will be full accountability on these questions. Why not just say, “Yes, we agree to that”?
Lord Whitty (Lab)
My Lords, I shall make a brief broader point. For all the reasons we heard from the noble Baroness, Lady Randerson, and the noble Lord, Lord Bilimoria, I strongly support the objectives of these amendments. So, apparently, does the Prime Minister, judging from her speech last week. Is the reality not that it is also in the interests of all the airlines, the aerospace industry and the airfreight industry across the whole of Europe to retain the present situation? Was that not obvious from day one of Brexit discussions? Why did the Government’s negotiating strategy not recognise that this was one deal which we could have done very quickly and very clearly which would not have interfered with any of the rest of the negotiations and one which almost the rest of Europe would have greatly welcomed? There would have been no cries of “kein Rosinenpickerei”—“no cherry-picking” —from Europe on this one. A bit of common sense at the beginning of these negotiations would have parked aviation. We would have agreed aviation.
Lord Hamilton of Epsom (Con)
Was it not the EU that said that nothing was agreed until everything was agreed?
Lord Whitty
It was both the EU and Mr Davis and they were both wrong because in all negotiations whenever you enter negotiations you agree some things and you then park them. We could have agreed this. It is ridiculous that airlines are now faced with selling tickets in three weeks’ time not knowing whether they can deliver on them. I just make that more general point because the Minister keeps saying it is all down to the negotiations, but the negotiations went wrong from day one, and this is one example where we could have delivered something, albeit it would need to be part of a total package at the end of the day.
Lord Tunnicliffe (Lab)
My Lords, I shall be brief. I spent 22 years in the airline industry from the mid-1960s onwards as everything from co-pilot to number two in the marketing department. I learned two things from that. One was that aeroplanes are very dangerous. When I first joined the industry, we would crash a jet aircraft about every two years in the United Kingdom, and it has been a long, hard slog. That slog has not been all UK—it was the UK, the US, Canada and France, working together through international co-operation, producing the safety we take for granted today. It is crucial that those mechanisms stay in place to achieve that.
The other thing I remember is what air services agreements are. They are treaties, and if you are not part of one of these more modern situations, such as the European one, there are country-by-country treaties between pairs of countries—all of which would have to be renegotiated. Falling out of the present situation would create enormous problems. I am very sorry that the Minister did not like my suggestion of contact between interested Peers and senior transport people on these three groups. I hope that perhaps that could be reconsidered—I am glad they are nodding now on the Front Bench, but the Minister said nothing in either of his two speeches to suggest that. Obviously in all parts of the House there is a genuine concern that progress is not being made in these very important areas. I do not want to have that concern; I want to share the Government’s optimism. At the moment, given the responses we have had, I do not.
Baroness Altmann
I rise briefly to explain why I have added my name to these important amendments. One thing that has not been mentioned in Committee so far is the idea that the arrangements we have with Europe also protect the safety, maintenance and repair facilities around our country for our aviation and aerospace industries. We must maintain alignment of regulation. We have 100 airports and 172 maintenance and repair facilities, and if we jeopardise the standards of safety, if we are not in the open skies agreement and not in EASA, then the US apparently is already planning to send its own inspectors to make sure that our standards are up to scratch. If we cannot reassure people that we will maintain those standards, we will not have a functioning aerospace and aviation industry.
Another important element that must not be forgotten is that if we do not maintain our membership of the open skies agreement and EASA, the flights taken by ordinary citizens will increase in price. One estimate from the consultancy Oxera is that if all flights operated by third country airlines were removed, air fares for UK passengers would rise by between 15% and 30%—a Brexit surcharge which people were never told to expect to pay when they voted to leave the EU. These restrictions cannot be overcome simply by airlines setting up subsidiaries in Europe, because ownership restrictions do not allow non-EU investors to own a controlling interest in EU airlines.
I urge my noble friend the Minister to make a commitment to the Committee that we intend to maintain membership of EASA and the open skies agreement, notwithstanding the jurisdiction of the European Court of Justice.
Lord Callanan
My Lords, to start with, I apologise to the noble Lord, Lord Tunnicliffe, as we are more than happy engage in discussions with interested parties. Before I had this job, I was Aviation Minister and had regular meetings with all the concerned parties in the industry, and my noble friend Lady Sugg has told me she is very happy to continue those discussions. I am sorry if I did not make that clear to him earlier. We are of course carefully considering all the potential implications arising from the UK’s exit from the EU, including the implications for the UK’s future relationship with the European Aviation Safety Agency and the Single European Sky agreement. I thank the noble Lords, Lord Berkeley and Lord Adonis—surprisingly, I see that the latter is not in his place—for their amendment.
Lord Bilimoria
I thank the Minister for giving way. I just want to clarify that he is accepting that by remaining in EASA we will have to submit to the European Court of Justice, and therefore the red line does not exist any more.
Lord Callanan
I will repeat the words that I used, for the noble Lord’s benefit:
“The Prime Minister … acknowledged that an appropriate financial contribution would be necessary and that there will be a role for the Court of Justice of the European Union”.
As I was saying, the precise form and nature of the UK’s future relationship with EASA, as well as continued co-operation with the EU in the field of aviation safety more generally, will of course be a matter for the negotiations. The UK’s geographical position means that, with Ireland, the UK services over 80% of traffic entering or leaving EU airspace from the North Atlantic. Given that, the level of interaction between the UK and the EU demands close co-operation. The Government recognise the need for UK air traffic management arrangements to remain interoperable with the rest of Europe once the UK has left the EU. Safe and efficient air traffic management is a priority for us. The UK’s air traffic management system will remain closely bound to that of our European partners. We seek a close and collaborative relationship in this area, just as in many others. However, NATS will continue to provide the same high-quality service to airspace users that it does today.
The Government also want to avoid disadvantaging industry by imposing additional regulatory burdens. The Bill is part of that: it allows the Government to be clear that we are committed to maintaining a harmonised safety system that benefits both the UK and EU aviation networks and maintains the high safety standards that we all wish to see. I hope what I have said has been reassuring for noble Lords and that they feel able to withdraw the amendment.
Lord Liddle
My Lords, what about the point about the affirmative procedure?
Lord Callanan
I took on board the noble Lord’s question but I am unable to give him those reassurances at the moment.
Lord Berkeley
I am grateful to the Minister for his reply and to all noble Lords who have spoken in this excellent debate. The Prime Minister has made more progress here than in the logistics, customs and railway sectors. My final question to the Minister is: has the European Union agreed this? Until it is agreed, it is not a lot of good. We need to revisit this and, we hope, have regular updates. I hope the Government will push very hard for it to be a priority—as my noble friend Lord Whitty said, to have this signed, sealed and delivered at as early a stage as possible. On that basis, I beg leave to withdraw the amendment.
Viscount Hailsham
Viscount Hailsham
My Lords, I shall speak briefly to the three amendments in my name, Amendments 109, 134 and 188. These are intended as sunset clauses but, as I do not want them to be sunrise clauses, I intend to be extraordinarily brief.
Those of your Lordships who have been in Committee during debates on Clauses 7 to 9 will know that I am very unhappy about the process those clauses attract. For example, the powers within those clauses are very widely drawn, the scope is considerable, the regulations are made by secondary legislation with very limited scrutiny, both parliamentary and ministerial, and they are triggered by a test—the test of appropriateness—which I regard as wholly unsatisfactory. For all those reasons, my view is that the regulations made under the regulation-making powers should die two years after Brexit and should, if necessary, be replaced by primary legislation. That is my suggestion to the Committee, and I hope it commends itself to your Lordships. I beg to move.
Baroness Hamwee (LD)
My Lords, I have Amendments 111, 137 and 192 in this group and share the unhappiness that has just been described. Mine is a narrow but, I think, important point.
The thrust of most of the amendments in the group —not the noble Viscount’s—is about consultation and transparency. You do not have to spend long working in Parliament to realise that scrutiny very much depends on the input of stakeholders—I hate the term but I cannot think of a better one at this time of night. They assist us to understand how things work in practice, both with technicalities and wider issues. That is not to say that I do not have great admiration for parliamentary counsel and the lawyers working in the departments, who are most concerned with statutory instruments, but my amendments would require consultation on the regulations provided for by Clauses 7 to 9. This should all be a co-operative venture, with stakeholders contributing at an early stage, not least for the reason that the regulations are statutory instruments and not open to amendment, so you have to get it right from the very start.
I was a member for some time of the Secondary Legislation Scrutiny Committee, which received a lot of very valuable representations—lobbying, if you like. I suspect we will not hear comments in support of Amendment 228 in the name of the noble Lord, Lord Adonis, about the Cabinet Office code, but I support the application of the code to the regulations. We may well be told that of course the code will apply. I have to say that in my time on the committee, we undertook quite a lot of work on the application of the code in practice and were quite critical of the responses we received from the Cabinet Office. One of our criticisms was that when consultation was undertaken—which it was not always—on the statutory instruments we were considering, the Government did not publish the responses to the consultation before they published the statutory instrument, so the work was not as helpful as it should have been.
Other amendments in this group are more detailed. Mine is not very elegant. I am not proprietorial about it but I wanted to raise the subject because some provision is necessary and, if I may say so, appropriate. It is a step that is very easy to miss out and I hope we will not be told that all the regulations in question are simply about technicalities and that stakeholders would have nothing to add to the exercise. Practitioners in almost every area may see what is workable in proposals being put forward, as well as substantive points.
Baroness Young of Old Scone (Lab)
My Lords, I shall speak to Amendment 227A in my name, which is also supported by the noble Lords, Lord Lisvane, Lord Tyler and Lord Judd. The amendment is intended to be helpful to the Minister, although it is unlikely that he will regard anything as helpful at this time of night. Nevertheless, it is intended in the spirit of helpfulness to ensure that the statutory instruments that the Government are proposing turn out to be correct and effective. Many of the changes made by the statutory instruments will be technical and potentially uncontroversial but some will involve policy choices. The aim of my amendment is to ensure wider consultation on statutory instruments before they are formally laid.
The nature of the challenge is quite severe. There will be an awful lot of them—potentially 1,000. I have been looking primarily in the last year at the number that will be required in Defra alone—over 100—on environmental issues. They will need to come thick and fast, and in many cases they are being dealt with in departments by staff who have only recently been recruited. Having seen these departments shrink in times of austerity, lots of people are now being recruited, some of whom are old faithfuls but some of whom are rather new and probably not as well acquainted with the policy area as we would like.
So there is a risk of two things: one is cock-up, if noble Lords will pardon the unparliamentary language—things just going wrong because of the sheer volume and pace; and the other is conspiracy. A large number of the Defra SIs will be roll-ups of a whole variety of issues. I am being ignoble in suggesting that the Government might hide under a pile of harmless stuff the odd thing with a slight curveball in it, but increased transparency and consultation would help reassure people that no fast ones were being tried.
The noble Baroness, Lady Hamwee, pointed out—and it is inalienable—that the process of both the affirmative and the negative procedures means that once measures are formally laid there is very little room for manoeuvre, so it is important that this consultation happens in advance. I thank the noble Lord, Lord Callanan, for his letter of 20 February, following Second Reading. It provided more information but offered only that the Government would make efforts to publish a sample of statutory instruments in draft where appropriate. That rather misses the point, which is to let loose on these drafts expert eyes from across a variety of sectors of stakeholders to help the Government with that checking process to make sure that nothing has been missed, there has not been a cock-up and the policy intentions have not been perverted in any way. I hope the Minister will consider this and see it as a genuinely helpful proposal.
Lord Lisvane (CB)
My Lords, I am delighted to follow the noble Baroness, Lady Young, whose name stands at the head of Amendment 227A. I will add just two points in addition to endorsing the unhappiness of the noble Viscount, Lord Hailsham, partly conveyed through his lead amendment and other amendments in this group.
So far, the practicalities of Brexit have been a conversation primarily between government and Parliament. If the use of the sweeping ministerial powers in the Bill will carry credibility with our fellow citizens, that conversation needs to be joined by the huge army of those who will be directly affected. However—and I think we could all draft the reply of the Minister, just after the headnote that says, “resist”—the possibility of consultation throws into sharp relief the extraordinary pressures of time under which the EU-related parts of the statute book will have to be repatriated and adjusted. Even if there is a two-year period of transition—or implementation; I do not think the two are the same, by any means—a three-month consultation period would be luxurious indeed. Yet effective consultation—that is, beyond the usual suspects—cannot be done quickly.
My second point relates to the relationship between the Lords and the Commons. I cannot help but remark that if Ministers agreed to be bound by the test of necessity rather than appropriateness, their problems in this area might be very much fewer. It seems pretty clear that there will be heavyweight regulations—probably quite a lot of them—for both Houses to consider. As the Bill is drafted at present, there may be too many that are subject to the negative procedure and not enough that are subject to the affirmative procedure, but in any event we will have to focus minds on what will happen if the two Houses disagree.
So far as affirmatives are concerned, I have put my name to an amendment in the name of the noble Lord, Lord Sharkey—Amendment 239A—which explores a possible dispute resolution procedure. However, if major regulations come forward on which there manifestly has been insufficient consultation, the possibility of disagreement between Lords and Commons would increase. Given the inevitable degree of political contention and unyielding pressures on time, this might become a matter of serious concern. I suggest that systematic consultation offers a possible way of reducing that hazard.
Baroness Neville-Rolfe (Con)
I rise to speak to Amendments 249, 250 and 251. Several noble Lords will know of my lifelong concern for good-quality regulation. The Bill will, by its very nature, lead to the creation of a vast number of SIs of exceptional importance, so proper scrutiny is more important than ever, as the noble Lord, Lord Lisvane, just said.
I am concerned about content, scheduling, consultation and time for debate. On content, I want the Government to follow the good practice of the Nuclear Safeguards Bill, where making the draft implementing regulations available has helped to reassure people and made its passage easier. I have suggested five areas where specimen regulations might be made available: agriculture, customs, financial services, immigration and intellectual property. My amendment says that specimen regulations should be made available within a month of Royal Assent—which is what the Public Bill Office felt able to approve—but my suggestion to the Minister is to make specimen SIs available for our consideration before Report.
I understand and fully support the objective of putting extant EU laws onto the UK statute book from day one; anything else would lead to the utmost confusion. However, there is still much to ponder and much scope for mistakes. All these problems will be lessened by allowing all interests to see and comment on what is envisaged, as has been said. We need to know which enforcement body will take over what are now EU duties, as we discussed at length in relation to the new environment body. For example, in financial services it could be the FCA, the PRA or even the Treasury. In agriculture, the situation is equally complicated, not least because of the extra dimension of devolution. We need to know the criminal and civil penalty regime for each area and, as debated earlier, the approach to fees and charges—especially for SMEs, which I know will be a concern in relation to intellectual property and immigration. We need to understand the future arrangements for standard setting and the sharing of intelligence. Exemplar SIs could—and probably would—cast reassuring light on all of this.
On scheduling and consultation, I start by thanking the Minister, as he kindly arranged for me to meet one of his officials and those responsible in the Treasury for the SI work on financial services. This was very reassuring. The numbers on financial services are fewer than I feared—80 to 100 SIs—and I understand that they will take account of existing UK regulations. Hopefully, this will mean that practitioners will be able to find their way round the law more easily than they can do now. I believe there is some sympathy for my suggestion that it would be wise to publish SIs for consultation, which is the subject of my amendment and of others. The process of SI sifting and review in Parliament will, unfortunately, only allow an SI to be debated and agreed or rejected by either House. There is no scope for amendment so SIs need to be right first time. Will the Minister provide some commitment to publication of and/or consultation on draft SIs, at least in the five areas I have identified?
In practice, if—as I hope—a transition period is agreed, and thus for relevant purposes we effectively remain in the EU during transition, there is a fair amount of time to do this properly. But if the negotiations go badly and we have to rush for the line, it may be as well to have done as much consultation as possible early. Finally, and Amendment 251 relates to this, we need time to debate the more important SIs in a planned way. There is a substantial issue here which has not yet been fully acknowledged by the Government. One solution could be to group related SIs and to set aside significant time—perhaps one day a week—when they could be considered on the Floor of the House. These SIs will be mini-Bills, important future statutes as we leave the EU, and our existing arrangements for EU scrutiny are inadequate if this new need is to be met satisfactorily.
I believe that all noble Lords will want to know, before they agree to the significant delegated powers in the Bill, that the scrutiny system envisaged can meet the needs of the moment and hence attract confidence across the House.
The Earl of Kinnoull (CB)
Noble Lords will be glad to hear that I will be brief. The European Union Select Committee and EU Justice Sub-Committee have been given estimates of the number of SIs concerned. Our estimate was 5,000; I was interested to hear the noble Baroness, Lady Young, say that it was only 1,000. My point is the same either way. In my language, the Bill essentially amounts to a gigantic pink ticket where we are asked to trust the Government. In the commercial world, one tries to trust and verify. You give out your trust, but you retain the ability to verify it, so that if something goes wrong you can sort it out later on.
This group of amendments tries to deal with three problems. The first is the mistakes, as the noble Baroness pointed out. The second is wrongnesses. We had a good example of these from the noble Lord, Lord Patel, earlier on. If we carried through a particular piece of EU legislation without thinking then a wrongness would be done. Third is the necessity for the scrutiny of Parliament; the verification process that follows on from the trust. As I look at the three sets of proposals on how to deal with these three problems, I have some sympathy for the noble Lord, Lord Lisvane, who said that there is not really time to do the consultation suggested by the noble Baroness, Lady Hamwee. I regret that, but there certainly is not time, whether it is 5,000 or 1,000. The ever-canny and thoughtful noble Baroness, Lady Neville-Rolfe, has come up with an ingenious way of trying to cater for that. Turning to the noble Viscount’s idea of a two-year life span, I am only concerned that if we are going to have to do 1,000 pieces of legislation then two years is probably not enough. The number I wrote down was five. However, that is a very useful way of doing it and my favourite route tonight would be the one he has taken.
All that being said, what is important in parliamentary terms is a mechanism for trusting and verifying. We will have failed if we do not get some kind of verification procedure in there. I look forward to the Minister’s comments.
Baroness Smith of Basildon (Lab)
When I speak at this time of night, I often recall the words of a friend who said to me shortly after I became a Member of the House of Lords, “You’re in the House of Lords now—you must be semi-retired”. As we are debating issues at almost half-past midnight, I do not feel semi-retired at all.
This is a very useful group of amendments for the Minister and the Government. As my noble friend Lady Young of Old Scone said, they are designed to be helpful, and I think their content makes that clear. It is only in your Lordships’ House that technical issues around SIs cause any excitement or great interest for noble Lords who have expertise in them. I hope that when the Minister responds she will accept these amendments or take them away and come back with something similar as a way forward on the Bill.
First, I wish to make some general comments. Issues around SIs and accuracy have been foremost in my mind since we first heard about the number of SIs that would flow from this Bill. Indeed, when I, the noble Lord, Lord Newby, and the noble and learned Lord, Lord Hope, gave evidence to the Commons Select Committee and to our Constitution Committee, we specifically raised the issue of accuracy and the number of SIs we would have. The noble Baroness the Leader of the House can confirm that I discussed these issues with her. I welcome the fact that so far eight draft statutory instruments have been published on the Government’s website—perhaps the sample to which the Minister referred in his letter to my noble friend Lady Young. However, I am not sure what the purpose of a sample is other than to show how we can look at SIs and the issues that can be addressed in so doing. I think the noble Lord, Lord Lisvane, and the noble Baronesses, Lady Hamwee and Lady Neville-Rolfe, said that we need guidance on accuracy and getting SIs right. As my noble friend Lady Young said, we have one opportunity to get these measures right. They cannot be amended and making a mistake could have serious consequences. As more SIs appear on the website in draft, as I hope they will, I suggest to the Government that there should be a separate link and some kind of classification process as we want stakeholders and others with expertise and interest in this area to be able to identify them and find them instantly without first having to search through pages and pages to get to them.
On that basis, I welcome the agreement the Procedure Committee has reached with regard to the sifting and consideration of statutory instruments, as we have seen in this legislation. As in the House of Commons, we have 10 days in which to conduct a sifting process on the Bill and in which the committee will consider whether there should be an affirmative Motion, and then, in the normal way we conduct business in your Lordships’ House, we consider the merits of the order. We should be under no illusions: this is a huge task to be undertaken. Even the setting up of in effect a separate committee by having two sub-committees will not mean that all the work is undertaken that it is necessary to do. Given the scale of the work ahead, I welcome the suggestions we have had today on how we can draw on the experience and expertise of stakeholders, as the noble Baroness, Lady Hamwee, said, to deal with the issue of accuracy. It is not an issue of policy or change but of accuracy.
As the noble Baroness, Lady Neville-Rolfe, said, we have one opportunity to get this right. Given the nature of the consultation, it is a good idea to provide an explanatory document. That is extremely important. The principle of her amendments is sound. My only disagreement is that I do not think they go far enough in that she selects certain areas to be addressed. I am sure she understands the need to have the opportunity to debate all the SIs. I think the noble Lord, Lord Lisvane, made the point in a slightly different way but if there is a draft of all SIs and consultations on all of them, the formal consideration can be speeded up at that point rather than have problems arise later.
The amendment of my noble friend Lady Young is important. I raised it in the Procedure Committee as her amendment rightly goes beyond the Bill to address Brexit-related orders from other legislation. Our committees would be able to examine any secondary legislation, whether related to Brexit or not—most will be although that is difficult to define—but the sifting power currently applies only to the withdrawal Bill. Negative SIs relating to other legislation will not be included in that process. That point was made by our Constitution Committee in its report on the road haulage Bill.
The amendments in the name of the noble Baroness, Lady Hamwee, reflect the concern that has featured in other debates: for example, the issues around what is “appropriate” or “necessary”, and ministerial discretion. Therefore, given the avalanche of orders we may face, it will be helpful to consult on all SIs, not just leave it to the discretion of Ministers.
Baroness Goldie
My Lords, this is a wide-ranging group of amendments. I will begin with my noble friend Lord Hailsham’s Amendments 109, 134 and 188 on the effect of regulations made under the main powers of the Bill. My noble friend was commendably brief and very clear—very blunt—about what he seeks. My difficulty is that these amendments would end up running counter to the fundamental aims of the Bill. We have heard from my noble friend himself that these amendments are intended to cause any regulations made under Clauses 7, 8 and 9 to lapse two years after exit day. Quite simply, this would prescribe a rigid legislative timeframe for the Government to replace them and would risk unnecessary disruption. If we could not find an alternative vehicle to write these regulations into law by the two-year deadline, it would create holes in the statute book. However, it is surely illogical to force the Government to make these regulations again in an identical form when they have already legitimately made them once.
The powers themselves, quite rightly, already have their own sunsets: for Clauses 7 and 8 it is two years after exit day, and for Clause 9 it is exit day itself. That is a sensible way in which the Executive have constrained these delegated powers to avoid their being available in perpetuity. But surely the regulations made under these powers should not necessarily be so transient. They will, of course, be doing vital work to ensure that we have a fully functioning statute book for when we leave the EU. We do not want our functioning statute book, or bits of it, to lapse after two years. I sympathise with the intention behind the amendments, but it is too rigid a fetter on the Government and Parliament’s ability to manage legislative priorities and workload between now and 2021, and it certainly would exacerbate the very uncertainty that the Bill is seeking to reduce.
Amendments 111, 137 and 192, all tabled by the noble Baroness, Lady Hamwee, deal with stakeholder consultation. It is my pleasure to tell the Committee that departments are very keen to engage with stakeholders on current matters and progress of the negotiations, and will continue to do so where this is possible and does not negatively impact the negotiations in any way.
Baroness Young of Old Scone
I am not sure that the evidence stacks up on that. I have been seeking clarification from Defra for over a year now on just a simple list of the issues that might be subject to statutory instrument, and I have been unable to get that from the department. Perhaps the Minister might like to prod departments to reflect the terms she just stated.
Baroness Hamwee
My Lords, I too asked for a list of necessary statutory instruments from the Home Office, and the Parliamentary Answer was that the work had not been done to calculate the number.
Baroness Goldie
I say to the noble Baroness, Lady Young of Old Scone, that it is a pleasure to be asked to do the prodding rather than be the recipient of the prodding, which has certainly been my sensory experience standing at this Dispatch Box. I understand her concerns and will certainly relay them to my noble friend Lord Gardiner.
Similarly, I will refer the point raised by the noble Baroness, Lady Hamwee, to my noble friend Lady Williams. I understand the concerns; there must be a degree of frustration. It may of course simply underpin the enormity of the challenge confronting departments, in that at this stage it is extremely difficult to try to map exactly what lies ahead. Some of it might be predictable but some of it is unknown and will depend on the negotiations. However, I undertake to do what I can to seek some assistance.
The requirement in the amendment of the noble Baroness, Lady Hamwee, for relevant stakeholders to be consulted on all the provisions contained within all statutory instruments made under Clauses 7, 8 and 9 goes, I believe, beyond what is reasonable in this instance and belies the nature of those instruments. I appreciate the concerns that we have heard throughout this debate about the potential breadth of the power—something that clearly concerns my noble friend Lord Hailsham—but I hope that the Committee will accept at the least that a great many instruments will be technical and minor, and will merely ensure flexibility, swiftness in dealing with identified defects and, of course, continuity of our legal framework.
A specific legal requirement to consult could also impact on our negotiations with the EU. It could inadvertently expose our position at an inappropriate moment if we were engaged in sensitive discussions about particular issues. Compulsory consultations would also impact on the tight timeline for Parliament to scrutinise instruments. The consultation process requires resources and time from government and stakeholders, and we want to focus the energies of those inside and outside government on the most important measures rather than have them occluded by the sheer volume of consultations on what might, at the end of the day, be very minor technical matters. That is the challenge that could arise under these amendments. I hope that the noble Baroness understands why the Government cannot accept her amendment, and I urge her not to press it.
Baroness Hamwee
Before the noble Baroness moves on to the other amendments, is she able to expand a little on the point about upsetting negotiations? We are talking about moving existing legislation over the break point into the future. I am quite puzzled by that part of her response.
Baroness Goldie
That may be part of what is involved but the other part might, as emerged in earlier discussions today, impact on subsequent matters that are germane to the negotiations and will therefore have to be taken into account in whatever legislative framework is proposed. It is not just a simple question of the bridge; there may be other aspects to be considered.
Baroness Smith of Basildon
Can the noble Baroness give us an example of where that might conflict with the negotiations? Some of us are struggling to understand the rationale behind that.
Baroness Goldie
Given the breadth of activity already referred to by both the noble Baronesses, Lady Young of Old Scone and Lady Hamwee—a huge breadth of activity involving a multiplicity of issues—it is inevitable that some of these matters will be caught up in the negotiations. I cannot be drawn on specific examples because we may be talking about generic issues. However, the Government are very anxious to avoid in any way hog-tying their freedom to conduct the negotiations with a degree of confidentiality and privacy.
Baroness Young of Old Scone
I share my noble friend’s perplexity. We are talking about a government commitment, in my field of expertise, to take existing European environment law and bring it safely across to preserve the same standards. It will not be a great surprise to the European Union and those with whom we are negotiating if what we propose is exactly the same in intent as what currently exists—if the Government are indeed genuinely committed to making sure that we enjoy the same standards post Brexit as we did previously. Therefore, I find it difficult to believe—I have not been able to think of an example—that there will be something monumentally important as regards the negotiating process.
Baroness Goldie
I merely observe that the breadth of activity implicit within the negotiations could anticipate issues arising that we are unable at this moment to specify. The Government have been sensible in retaining the flexibility in the negotiations to deal with these if they do arise. It is important in that event—
Lord Newby (LD)
My Lords, the whole House is perplexed. Maybe we are perplexed because we are very tired, but might I suggest that the noble Baroness write to noble Lords with at least one or two examples of the problem she is describing? It is clearly the case that, for most of us, it sounds like a Sir Humphrey excuse and not a substantive point.
Baroness Goldie
It is not meant to be a Sir Humphrey excuse; it is meant to be an attempt to anticipate what is for most of us a very challenging scenario. However, I will of course take back the noble Lord’s suggestion and I will be very happy to try to produce some examples.
I shall return, if I may, to the amendment in the name of the noble Baroness, Lady Young of Old Scone. I hope I am pronouncing her title correctly; those who come from Basildon may be interested to learn the pronunciation.
Baroness Goldie
We do not do “scohnes” in Scotland.
The difficulty with the noble Baroness’s amendment is that the scope of future legislation that is caught by it has the potential to be enormous. I have no doubt that the amendment is well intended—that is beyond question—but it is not necessarily as helpful as the noble Baroness thought it might be. The additional scrutiny provisions of this amendment are not confined to the powers in this Bill but, as drafted, would apply to any regulations which replicate EU legislation, with or without modification, or any regulations which amend or modify legislation that was made to implement our EU obligations.
To add an additional scrutiny provision to such a large body of future legislation is simply not feasible. The parameters set out in this amendment are so vast that this would not only represent a significant burden of additional procedure for government departments now but could also mean that Governments decades into the future would be bound to this three-month consultation period for every single amendment made to retained EU law. This is very undesirable, given that many of these regulations are likely to be uncontroversial and technical in nature. Indeed, there are times when it is widely agreed that speed is of the essence.
The noble Baroness is rightly concerned about a range of important issues, so let me try to reassure her. Her amendment focuses particularly on environmental and social issues, so I will repeat what the Government have said on this. We were elected on a pledge to be the first generation to leave the environment of England in a better state than we inherited it.
On social issues, I am proud to say that the UK has a long-standing tradition of ensuring that our rights and liberties are protected domestically and of fulfilling our international rights obligations. The decision to leave the European Union does not change this. Indeed, the Government have made clear their firm commitment to protecting these rights throughout our exit. Additionally, of course, Clause 9 is already explicitly prohibited, like Clauses 7(1) and 8, from being used to amend, repeal or revoke the Human Rights Act or any subordinate legislation made under it.
On employment issues, also of concern to the noble Baroness, we have made a clear commitment to protect workers’ rights and to ensure that they keep pace with the changing labour market. We do not need to be part of the EU to have strong protections for workers, and in many areas the UK goes beyond the minimum standards set by the EU. For example, the rights of workers to annual leave, paid maternity leave and parental leave all go beyond the EU standards.
This amendment, like several others that have sought to protect environmental protections and social matters, fails to refer to specific rights and protections. As there are a vast number of laws on our statute book that relate to these matters in some way, the risk of judicial review of any statutory instrument made under this amendment would be inappropriately high.
The noble Lord, Lord Adonis, is not in his place, but the noble Baroness, Lady Hamwee, raised the issue of public consultation. I do not know whether she was embracing the issues raised in the noble Lord’s amendment, but let me say briefly that the Cabinet Office code of practice which the noble Lord suggests must be followed has already been in use by all departments for some years. Indeed, departments are already held to account by the Secondary Legislation Scrutiny Committee.
Baroness Hamwee
My Lords, on the code of practice that is the subject of the amendment of the noble Lord, Lord Adonis, my experience from the Secondary Legislation Scrutiny Committee is that it is honoured in the breach as well as in the observance.
Baroness Goldie
There was a universal welcome for the Government adopting as their principles much of what was proposed by the Secondary Legislation Scrutiny Committee. The committee has a locus if it considers that consultation has been inadequate.
I turn to the amendments tabled by my noble friend Lady Neville-Rolfe, starting with Amendment 249. She has an exceptional, perhaps encyclopaedic, understanding of the statutory instrument processes and is clearly aware of the historical issues that led to concerns regarding the quality of documents laid as part of this procedure. While I understand the concern that underpins her request to place in statute the responsibility to provide sample statutory instruments before both Houses, the Government do not believe that such a responsibility is proportionate. Wherever possible, and where negotiations will not be affected, we would hope to provide details of draft SIs from all sectors.
The noble Baroness’s proposed new paragraph in Amendment 250 seeks to address the procedures for conducting consultations. She makes a number of sensible suggestions as to what should be considered and included when conducting consultations—in fact, many of these are already being conducted or are currently being incorporated—but to require that a draft instrument should be published not less than 60 days before it is laid would place an undeliverable duty on departments, given the limited timeframe that is available and the need at times not to reveal expectations as to the outcome of negotiations while they are ongoing.
Similarly, Amendment 251 would place an impossible burden on the House and its time and does not allow for flexibility in the management of business. The new proposals for laying draft negative SIs with a sifting committee would mean that the Minister would not be able to give any indication as to when it was expected that the instrument would be debated. In these cases, if, as I hope, the Committee accepts the recommendation of the Government that the negative procedure is proportionate, the SI would proceed as a negative statutory instrument. This House has a well-established process for considering affirmative and, where desired, negative SIs, and we want to see this continue.
None of this is to refute that my noble friend has set out some very good suggestions for practice, but practice should not be placed in the Bill. Indeed, the noble Baroness, Lady Smith, had an interesting suggestion about listing SIs once known.
Baroness Smith of Basildon
I suggested listing the drafts for consultation.
Baroness Goldie
People are bellowing “End!” in my right ear and I know which side my bread is buttered on.
I have spoken at length but I hope I have addressed noble Lords’ concerns. I urge the noble Viscount to withdraw his amendment.
Viscount Hailsham
My Lords, this group of amendments has enabled the Committee to identify matters of considerable importance. I think that the Committee will say to my noble friend that she has tried to be helpful. We do not always agree with her but we are grateful to her for the way in which she has responded. Important issues have been raised with regard to statutory instruments and consultation with stakeholders. These matters will be addressed later on in future sessions of this Committee. The hour is late and, with the consent of the House, I would like to withdraw my amendment.
Lord Lisvane
“( ) Where regulations under subsection (1) confer power to legislate by subordinate instrument, the instrument is subject to the same parliamentary control and the same time limit in subsection (8) as are the regulations.”
Lord Lisvane
My Lords, in moving Amendment 110 I shall speak also to Amendment 135, both of which are also tabled in the names of my noble and learned friend Lord Judge, my noble friend Lord Pannick and the noble Lord, Lord Tyler, who like me is a member of the Delegated Powers Committee. The amendments seek to place controls upon the use of sub-delegation and the creation of tertiary legislation. We have had something of a preview to this in the debate on Amendment 71 held last Wednesday, and earlier today the horror story about the Bar Standards Board told by the noble Lord, Lord Thomas of Gresford, which I think would have greatly alarmed my nervous maiden aunts.
I was extremely grateful to my noble friend Lord Wilson of Dinton for moving Amendment 71 last Wednesday and to the Committee for its understanding of why I could not do so myself. My noble friend made a magisterial and compelling speech in which he pointed out that the powers in Clauses 7, 8 and 9 could be used to sub-delegate. Indeed, so compelling was his speech that the only person who disagreed with him in the debate was the Minister. That reminded me of the story of Benjamin Jowett: when he was the Master of Balliol and was outvoted 20 to one at a college meeting, he said, “Gentlemen, we appear to have reached deadlock”.
This Bill is riddled with provisions which have serious constitutional implications, and the unrestricted power of sub-delegation is one of them. It allows Ministers to authorise bodies and even individual persons to make law without the approval of Parliament. As the Delegated Powers Committee pointed out, there is no requirement for this legislation to be made by statutory instrument. If it is not made by SI, the Statutory Instruments Act 1946 does not apply to it and the legislation does not have to be laid before Parliament or even published. The possibility that law which the citizen must obey might not be published offends against the first of the late Lord Bingham’s eight principles of the rule of the law: that the law must be accessible as well as clear and predictable.
The Government memorandum submitted to the Delegated Powers Committee suggested that the power to make tertiary legislation is intended to be used sparingly. Once again we come back to the fact that what matters is what is on the face of the Act. If the power of sub-delegation is there, you can bet that it will be used whenever convenient to the Government of the day. Moreover, it will go on being used. In addition to these amendments, I have tabled Amendment 365 to paragraph 28 of Schedule 8 which would complete the removal of the exemption for tertiary legislation from the two-year sunset provision for secondary legislation-making powers. Slightly oddly, it has not been grouped with these amendments, but when we reach it, it will provide us with a further opportunity to consider the Government’s response to the amendments in this group.
As the Delegated Powers Committee points out, the power to make tertiary legislation could be given to new bodies to control and regulate, by legislation and without any parliamentary control, areas that are currently governed by EU law. These include aviation, banking, investment services, chemicals, agriculture, fisheries and medicines. They would all become in effect judges in their own cause. Amendments 110 and 135 would subject sub-delegation to the same parliamentary control and time limits as regulations in the first tier of delegation. I beg to move.
Lord Judge (CB)
My Lords, if we reflect on the words used by my noble friend Lord Lisvane, it is really rather chilling. There will be power in a Minister to create laws by giving him or her a blank sheet of paper so that he or she can write out whatever he or she thinks is appropriate. It will be uncontrolled and unscrutinised.
Baroness Hayter of Kentish Town (Lab)
My Lords, I have little to add but I have tabled Amendments 350 and 351 in this group. I should like to mention the importance of ensuring parliamentary scrutiny, in particular of tertiary legislation which was mentioned by the noble Lord, Lord Lisvane. We will deal with that issue later in a different group. The issue he raises is covered in paragraph 15 of the report of the Delegated Powers Committee. There is to be no time limit on the ability to pass tertiary legislation.
As has been made clear both last Wednesday and today, in seeking to bring into UK law the provisions that are currently effected in the UK by virtue of the 1972 Act and our EU membership, the Government have simply slipped into a belief that they should take control of all of this and have drafted for themselves powers and possibilities that rightly belong in Parliament, not with the Executive. As has been said, these amendments are to ensure that use of the powers will be properly scrutinised, and that they will be used by Parliament, rather than Ministers. I hope that the Minister has heard this often and strongly enough to be able to indicate, even at this late hour of the night, that it should be the Government who bring forward amendments on this on Report, because the arguments have been so well made. We should expect them to take the next step.
Lord Callanan
My Lords, I know that concerns regarding the delegation of legislative power, particularly where that delegation permits sub-delegation or allows for tertiary legislation, are shared by many in the Committee. I know that this debate has been brief because the hour is late, but I am aware of the concerns. I say up front in response to the noble Baroness, Lady Hayter, that the Government understand these concerns. We have listened carefully to this debate and to other representations that we have received, so for Report we will look to see how we can provide additional reassurances and transparency around sub-delegation and additional scrutiny of any fees and charges made under Schedule 4.
I will go into this in a little more detail, if noble Lords will forgive me. I know that it is late, but these are serious amendments on an aspect of the Bill that is of legitimate concern, unlike some of the amendments we discussed earlier. I hope I can do something to put some concerns to rest. I shall first take a moment to clarify that, where a legislative function is being sub-delegated under Clause 7 or any of the other powers in the Bill, that power will also be constrained by the policy restrictions that apply to the delegating power. In the case of Clause 7(1), that includes all the restrictions in Clause 7(7).
Although, beyond Ministers, there are indeed a great number of public authorities in the UK, there are only a very small number to which it would be appropriate for Ministers to sub-delegate legislative functions as an appropriate correction for a deficiency in retained EU law. Again, these will all be subject to the affirmative procedure.
I also restate that any SI providing for legislative sub-delegation will be subject to the affirmative scrutiny procedure and will have to set out what conditions apply to the exercise of that power. Whether scrutinising the sub-delegation of any of the powers in this Bill, the creation of a new, specific and targeted legislative function, or the transfer of any legislative power from the EU, I would expect this House in particular to take a keen interest in these instruments and to have vigorous debates on the appropriateness of the conditions proposed for the exercise of the power before voting on the instrument.
While the Government are listening to the Committee’s concerns about the form that this sub-delegation will take, they believe that conferring powers on public authorities, including Ministers, to allow them to make provisions of a legislative character or other legislation can be an appropriate course of action, either to make corrections to retained EU law or to maintain a regime in the future. This is particularly true where there is a need for specialised, technical rules to be developed, introduced and maintained by a body that has the necessary dedicated resource and expertise.
I will give noble Lords an example. The EU binding technical standards—the detailed technical rules developed by EU regulators for financial services—demonstrate where it might be appropriate to sub-delegate the responsibility for correcting. These standards, which run to almost 10,000 pages, fill out the detail of how firms need to comply with requirements of policy set in higher legislation. The PRA and FCA have already been given the responsibility by Parliament of developing and making the domestic detailed rules needed to ensure that financial services firms are stable, well managed and meet the needs of consumers. These UK public bodies have played a leading role in the EU to develop these standards, so they already have the necessary resources and expertise to review and correct them to operate effectively in the UK from day one of exit.
Baroness Kramer (LD)
Perhaps the Minister could help me with a clarification. As I understand it, the FCA and others have the powers he just described as a consequence of a cascade that comes, as he said, from higher levels of legislation that originated in a democratic process. They therefore have safeguards, frameworks, constraints, mitigations and appeals processes—all kinds of characteristics sitting around them. How do the powers of sub-delegation which the Minister described relate to any of those structures of cascade or framework, since we are supposedly leaving the EU?
Lord Callanan
I am not sure that the powers originated in a democratic framework; a lot of them came from EU legislation introduced by regulation which takes automatic effect through the European Communities Act. We could have an argument about whether that is a democratic framework, but perhaps now is not the time.
Lord Callanan
Let me make some further progress and see whether it responds to the noble Baroness’s questions.
Some of the powers to make legislation that will be transferred under the powers in the Bill are integral parts of regimes currently managed at the EU level; for example, where the European Commission currently legislates to add to or remove active compounds from lists of biocidal products. Where sub-delegated or transferred legislative powers are crucial to the functioning of a regime, it would not be appropriate for those powers to be subject to a sunset. That would only postpone rather than remove the requirement in the limited time available before exit for either a regular flow of primary legislation to keep regimes up to date or a suite of primary legislation to design equivalent powers to those which the Government intend to transfer under this Bill.
Perhaps I may address the three elements of Amendments 350 and 351 tabled by the noble Baroness, Lady Hayter. First, I turn to the scrutiny of the exercise of the powers by Ministers of the Crown in Schedule 4. We have laid out in Schedule 7, which I know we will debate at length another day, provisions for the scrutiny of those powers. Our position is that the powers should indeed be subject to the affirmative procedure where Ministers are creating new fees and charges regimes, or where we seek to grant an authority the power to set its own fees and charges. It is the sort of framework being established in which this House rightly takes a great interest. All this is of course possible under Schedule 4 only in relation to new functions that we are transferring from the EU or setting up on exit under the powers in the Bill. We have not provided for the adjustment of these, or for existing fees or charges, to be subject to the affirmative procedure. In years to come, there will be many such adjustments as technology cuts costs and inflation raises them. This ebb and flow can make a real difference to businesses, but does not normally represent a matter requiring debate and division within this House.
Nevertheless, I accept the point made by the Delegated Powers and Regulatory Reform Committee that the raising of a fee not by 1% or 2% but by, let us say, 13,000% would be a substantial matter. I trust, however, in the expertise of the Secondary Legislation Scrutiny Committee and the Joint Committee on Statutory Instruments to draw this House’s attention to such matters. I remind noble Lords that the negative procedure for statutory instruments does not mean no scrutiny at all, nor does it prevent debate. Nevertheless, if I have not addressed sufficiently the noble Baroness’s concerns on this point, I would be more than happy to discuss further how we might do so. As I said at the start, we are looking closely at this issue and expect to come back to it on Report.
Secondly, these powers are vested also in the devolved Ministers—we do not have the noble Lord, Lord Wigley, with us to make his regular point about devolved matters. While the scrutiny of the powers is important and, as I have just set out, the Government have tried to ensure that the most important of the regulations made under them will be affirmative, it is not for this House to dictate scrutiny to the devolved legislatures. The Bill contains a starting base of procedures for the devolved exercise of powers. While the devolved Administrations are competent to change these following Royal Assent, discussions continue with them about any alterations they may think it appropriate to make in the Bill. It would also not be appropriate for us to require the devolved Ministers to seek our approval for their statutory instruments—I am sure the noble Baroness did not intend this to happen.
My third point regards the sub-delegation of the power to provide for fees and charges. It bears repeating that any instrument providing for this will have to be affirmative, can delegate this power only to a body being given a new function under this Bill, and will have to set out the conditions for the exercise of that power.
Baroness Hayter of Kentish Town
It sounds as though what the Minster is reading out dates from before today’s debate on fees and charges. I had hoped that, in light of that, this continued idea of setting these by secondary legislation had gone from his mind.
Lord Callanan
We said that we would return to this matter on Report, but we are now talking about the sub-delegation of those fees and charges.
Moving on to Amendment 352 in the name of my noble friend Lord Hailsham, I am in total agreement with the principle that the Government should not raise fees or charges from the public, whether businesses or individuals, without considering the impact on those who will pay or the impact on both the payers and the wider economy. I may be wrong but I doubt that many in this Committee, other than the noble Lord, Lord Macpherson, who is sadly not in his place and is of course intimately familiar with it, will have read Managing Public Money. This weighty tome is easily available online and serves as the sacred text of Her Majesty’s Treasury regarding many things, including the setting of new fees and charges. It sets out that charges on the public must be subject to the general practices on consultation and economic and financial analysis. Without this, the consent of Her Majesty’s Treasury to establishing a new fee or charge, required by paragraph 3 of Schedule 4 for all new fees or charges under the Bill, cannot be obtained.
I hope that this long explanation, for which I apologise at this late hour, and my other points have gone some way to reassuring noble Lords. I am happy to continue discussing these important issues, but in the meantime I hope noble Lords will not press their amendments today.
Lord Lisvane
My Lords, I am extremely grateful to the Minister for the detail he went into in his reply, particularly at this late hour. I also pay tribute to him for his customary generosity in being prepared to discuss these matters outside the Chamber. He recommended one weighty tome with which, as a former accounting officer, I am moderately familiar. Perhaps I may recommend to him another weighty tome, Craies On Legislation, edited in masterly fashion by Daniel Greenberg, former parliamentary counsel. I think it is at chapter 3.5.1 that he will find a very good treatment of the dos and don’ts of sub-delegation. That might be something we discuss before we come back to these matters on Report.
Of course, he is absolutely right to say that the consigning of these powers to a body or a person will require the affirmative procedure, and that is fine up to a point, but the exercise of the powers, once sub-delegated, will be free of the trammels of the accepted processes, so it becomes even more important that, in the consigning of the powers, the constraints on how they can be used by the consignee, if I can use that rather unlegislative term, are made absolutely clear. That is something, perhaps, on which we can have further conversations between now and Report. On that basis, I beg leave to withdraw Amendment 110.
Lord Whitty
“Chemicals
(1) The Secretary of State must ensure that the standards established by and under the Regulation for the Registration, Evaluation, Authorisation and Restriction of Chemicals (EC 2006/1907) ('REACH') continue to apply on and after exit day.(2) The standards referred to in this section include, but are not limited to, the restriction of chemical substances and the identification and control of substances of very high concern.(3) The Secretary of State must by regulations establish a procedure for the registration of chemical substances with a domestic agency previously registered under REACH, with particular attention paid to companies whose market is limited to the territory of the United Kingdom.(4) Chemical substances that have not been registered by under REACH before exit day or under domestic legislation procedure established pursuant to subsection (3) must not have access to the United Kingdom market after exit day.(5) The Secretary of State must by regulations establish a procedure for issuing authorisations for the use of substances of very high concern.(6) The procedures referred to in subsections (3) and (5) must retain as far as possible the rules applied, principles underlying and processes followed under REACH.(7) The Secretary of the State must, within one month of the passing of this Act, produce and publish a review analysing the options for the regulation of chemical substances in the United Kingdom after exit day and this review must consider at least the following—(a) the potential for future participation in REACH processes;(b) the functions currently exercised by the European Chemicals Agency or shared with other member States that are not currently carried out by an equivalent UK body;(c) the compatibility of new chemicals regulations with achieving a high level of environmental protection;(d) the future validity of registrations of United Kingdom chemical companies in the EU; and(e) access to the REACH database.”
Lord Whitty
My Lords, in moving Amendment 115 I will also support Amendment 172, which is about the European Chemicals Agency. Noble Lords may have noticed that, although I normally speak to amendments as a Back-Bencher, I am also representing the Front Bench tonight. I hope the noble Lord, Lord Taylor, the Chief Whip, will recognise that this reduces the number of speeches by one—and possibly two if the Minister agrees with me.
Amendment 115 sets out in some detail a fallback position to deal with the important issue of the management of chemicals. Essentially, it is also a probing amendment in that it asks the Government to clarify their future relationship with REACH, the regime for registering, authorising and controlling the use of chemicals in industry and in everyday life. I note that, since we tabled this amendment, the Prime Minister is at least in part in support of its objective, in that she wishes to maintain some degree of UK participation in the European Chemicals Agency—which I applaud.
This is a very important area of protection for workers, consumers and the environment, and for ensuring that there is a level playing field in the trade in chemicals across Europe. It deals with more than 20,000 chemicals in an industry which, in British terms, exports 60% of its export produce to the EU, while 75% of our own imports are also from the EU. Having equivalent arrangements is therefore very important: for the industry and the trade; for the protection of people as workers, consumers and the general public; and for the environment and the associated ecosystems of air, water and soil.
The REACH system goes well beyond the point which the Prime Minister made in relation to the agency. It is a very complex interrelationship between regulating the way that companies operate and market, and the way in which products are handled, traded and transported. It is dependent on a lot of highly intricate, multiple interactions between UK actors and actors within the EU at various levels, and between the institutions of the EU. It is essentially based on a precautionary principle and is a backstop to prevent dangerous chemicals entering the UK. This is a further backstop, were no agreement to be reached along the lines which I hope the Prime Minister is moving towards—in other words, to maintain the present system. Clearly, maintaining the present system is the preferable option. It is one which the chemical industry itself and environmentalists are advocating, and which those who have to deal with the chemicals trade, its products and their incorporation within other products also strongly support.
The Government have been looking at various options and it is right that they should do so. We are given to understand that Michael Gove, or rather the Permanent Secretary of his department, has suggested that we should be paying £6 million at the moment to create the capability to enable registration on a UK basis. Amendment 115 attempts to move on from that and to ensure that we have a clear legislative basis for the UK to operate on, which would come as close as possible to maintaining engagement with the REACH process.
We would, however, much prefer it if the REACH process were incorporated in the UK and that we effectively continued in the status quo. If we do not do so, it will not only engage the Government in considerable expenditure but disadvantage UK industry. It will also potentially disadvantage the UK public, in that they will not have the same protections as they had within the EU because we will not have access to the complex database on which the REACH procedure is based.
Incidentally—but to many people quite importantly—it would also increase the number of testing arrangements that would have to be made within the UK, which would be expensive and complex, and would also, among other things, increase the number of animal tests. Therefore, the issue of animal suffering and opposition to animal testing would be duplicated between the EU and the UK.
Lord Fox (LD)
Just when noble Lords thought it could not get any better, they have double chemistry to look forward to. I shall speak to Amendment 115, which bears my name, and in support of Amendment 171. I 100% endorse the words of the noble Lord, Lord Whitty, so I will try not to repeat them and earn the ire of the Government Chief Whip.
As the noble Lord set out, REACH is a very complex system and not just chemical companies are affected by it. All manner of manufacturing employs chemicals, and those chemicals currently fall under the REACH process. That REACH process came through the co-operation and participation of many of those companies. I know from experience that companies have put a lot of time and effort into committees working to create this system. I know very well that they do not want to have to repeat that process. Above all, maintaining REACH or something as parallel as possible is a priority in this process.
The noble Lord, Lord Whitty, mentioned that the Prime Minister seemed to endorse that process. When the noble Lord, Lord Callanan, was speaking to Amendment 66, I thought I heard him endorse continued involvement in REACH, and that was heartening. This amendment seeks to achieve some sense of how the Government feel that is going to happen and unfold. It is not straightforward. Once we have left the European Union, how does the system continue to remain in parallel, or do the Government intend that we remain at the heart of REACH? If so, how do they expect to negotiate that process? Is it through associate membership, full membership or some other way? We need to understand not just how we remain at the point of exit but how we remain on a continuing basis, because this is a living thing. As new chemicals come into use and the ways of using them change, so REACH changes. Even by staying close to REACH, if the United Kingdom does not have full access to all the data, it is going to come up against legal problems if it starts to try to rule on chemicals without all the data behind it.
There is one issue I am very interested in which the noble Lord, Lord Whitty, did not mention. Recently, the Cabinet Office Minister David Lidington was talking about the possible necessity for Westminster to take back responsibility in previously devolved areas—this perhaps reflects on some of the debates we had earlier—in order to maintain,
“the integrity of the United Kingdom market”.
These are David Lidington’s words, not mine. In my words, he would be seeking to “undevolve” some issues. He took a specific example, saying that,
“if you’re a paint manufacturer in Wales you’ve got to stick to some chemical standards … but you want those to be the same as the paint standards in Scotland or Northern Ireland”.
He said it “makes sense” to have unity within a single market, by which he meant the United Kingdom. There is an element of irony in that. I was surprised by that, so perhaps the Minister can help us understand whether David Lidington was off piste on that occasion. It would be very helpful it the Minister could rule that out.
However, strangely enough, the point he was making about the need for a single set of rules within the United Kingdom is of course the whole point of REACH in the first place. The reason the REACH system was created is that manufacturing spans the whole of Europe. We need a chemicals management system that spans Europe, and we want to hear from the Government how that will happen.
Baroness Young of Old Scone
My Lords, I will speak briefly to support the amendments. As chief executive of the Environment Agency, I lived through the process of designing and delivering REACH, and it was a joy to work as closely as we did with British industry and industry across Europe in devising a system that was shared between government, regulators and business. It is a bit of an object lesson in how to go about it, and much admired globally. I welcome the Prime Minister’s expression of support, but would just take issue with one thing the noble Lord, Lord Fox, said. I do not think we should be aiming at a parallel system in any way—we should be a full and absolute member of the REACH process. It works, it is elegant and I hope we can get an assurance from the Minister tonight that we will move rapidly to find a way to give industry clarity about how the REACH process will operate post Brexit.
Baroness Goldie
My Lords, I thank the noble Lord, Lord Whitty, and, in his absence, the noble Lord, Lord Adonis, for their amendments concerning the very significant issue of chemicals regulation.
The Bill will incorporate current EU law into domestic law and allow it to be corrected in order to operate properly, giving consumers and businesses as much certainty as possible. This includes regulations relating to chemicals. The Bill will convert the REACH regulation into domestic law, meaning that the obligations on duty holders and the environmental standards and principles that underpin REACH will continue to apply in the UK, including in the devolved areas. These include the specific measures included in the amendment in the name of the noble Lord, Lord Whitty.
We are working to ensure that we have a functioning chemicals regulatory and enforcement system in the UK for day one. For example, the Environment Secretary has given the go-ahead for the development of six new systems, including one for chemicals. Work has started on delivering the new IT system that will enable registrations and the regulation of chemical substances placed on the UK market. This will provide continuity for businesses after EU exit.
Let me be clear: our priorities are to maintain the effective and safe management of chemicals to safeguard human health and the environment, to respond to emerging risks and to allow trade with the EU that is as frictionless as possible. We have been engaging with a range of stakeholders to understand the detailed impacts of Brexit and are grateful for the pragmatic approach that the chemicals industry is taking to Brexit and for its positive approach to working with the Government to understand the impacts and deliver the best possible outcome for the industry after exit. We are committed to continuing this engagement throughout the process.
With regard to chemicals, REACH is underpinned—this is explicit in Article 1—by the precautionary principle. So, once REACH is translated into UK law through the withdrawal Bill, the precautionary principle will continue to exist directly in UK law in relation to REACH. The precautionary principle is also embedded in international conventions relevant to the regulation of chemicals, such as the Stockholm convention on persistent organic pollutants, and the UK is and will continue to be a signatory to the convention in its own right.
Further, our 25-year environment plan sets out our intention to publish a chemicals strategy that will set out our approach as we leave the EU. It will set out our priorities for action and detail how we will achieve our goals, building on existing regulatory approaches and tackling chemicals of national concern. The Government will discuss with the EU as part of the exit negotiations how best to continue co-operation on chemicals regulation in the interests of both the UK and the EU. As the noble Lord, Lord Whitty, acknowledged, in her Mansion House speech the Prime Minister said we want to explore with the EU the terms on which we could continue to co-operate with the European Chemicals Agency and participate in certain processes, the point that the noble Lord, Lord Fox, sought clarification on. As for the specifics, I think your Lordships will understand that I cannot go into more detail because this is the subject of live negotiation in the negotiation process.
Lord Fox
That is very clear, and I thank the Minister for what she has said so far. What is not clear to me is whether the overall idea is to avoid divergence from EU REACH. It does not sound as if the UK is inside REACH in the way that the noble Baroness, Lady Young, pointed out; it sounds as if the aim is to run a parallel system. Have I misunderstood?
Baroness Goldie
I can only repeat the Prime Minister’s stated intention in her speech, and that is specifically to explore with the EU the terms on which we would continue to co-operate with ECHA and participate in certain processes. I say to the noble Lord, Lord Fox, that clearly, EU REACH is an EU organisation and to be a member of it you have to be an EU member state. After Brexit we shall not be that, but it is in the interests of the UK and certainly of industry that we work, in so far as we possibly can, in tandem with what is happening within the EU. That is certainly what the Government’s objective will be. The precise detail of that will be the subject of the negotiations.
The UK is strongly committed to the effective and safe management of chemicals and pesticides, and that will not change when we leave the EU. I hope this provides the noble Lords with sufficient reassurance that they will not pursue their amendments.
Lord Whitty
I thank the Minister for that reply, and I thank my noble friend Lady Young and the noble Lord, Lord Fox, for supporting the amendments. I am afraid the Minister’s speech was not as forthcoming as I was hoping due to the way that I had been led, in my usual spirit of optimism, to interpret the Prime Minister’s speech. I am therefore going to have to say slightly more than I promised the Chief Whip.
It seems that the Minister is saying that we will be outside the REACH process but will develop our own parallel process and might, if we can negotiate it, still in some way be party to the agency. I had hoped that being party to the agency as part of the Prime Minister’s aim meant that she had been convinced by the industry and others that it would be sensible to be part of the process. The Minister’s reply today narrows that hope somewhat.
Lord Carrington of Fulham
“Market access for financial services
(1) Before exit day, a Minister of the Crown must lay before Parliament a report setting out how access to markets by persons carrying on business in financial services in the EU and the United Kingdom will be maintained after exit day.(2) The report must include—(a) the method of assessing the degree of alignment necessary between the regulatory provisions applying to persons carrying on business in financial services in the EU and the United Kingdom;(b) the arrangements to be made to enable continuing alignment between those provisions;(c) the process to be followed to provide continuing co-operation between the bodies responsible for supervising the application of those provisions;(d) the legal framework required to enable co-ordination of supervision of persons carrying on business in financial services by the bodies responsible for supervising those persons;(e) proposals for the establishment of a forum for regulatory alignment in respect of financial services in the EU and the United Kingdom.(3) The forum referred to in subsection (2)(e) is to exercise the following functions—(a) to encourage continuing alignment through information sharing and co-operation in the development of provisions applying to persons carrying on business in financial services;(b) to assess the extent of divergence between such provisions as they apply in the EU and the United Kingdom and to make recommendations in respect of it;(c) to promote co-operation in respect of the general principles applicable to supervision and enforcement.(4) In this section “business in financial services” means business which—(a) if carried on in the United Kingdom, is a regulated activity within the meaning of section 22 of the Financial Services and Markets Act 2000; or(b) if carried on in the EU, is an activity which, if it were carried on in the United Kingdom, would be an activity to which that section would apply.”
Lord Carrington of Fulham (Con)
My Lords, I am conscious of the hour and shall try to be as brief as I can with what I am sorry to tell your Lordships is a rather technical proposed new clause. Therefore, what I have to say may be slightly tedious, but the new clause is intended to be helpful to the Government.
The new clause suggests a way in which the UK and the EU 27 working together—however improbable that may appear at times—could resolve some of the issues around the provision of financial services from the UK to the EU 27 and, perhaps as importantly, from the EU 27 into the UK. It is not a fully worked out scheme and could not be at this stage. To be capable of adoption, it would require agreement in the Brexit negotiations. It is, however, pretty much in line with the Prime Minister’s proposals in her speech at Mansion House on 2 March and the Chancellor’s in his speech on 7 March, so it might just be an acceptable way forward.
The importance of the financial services sector to the UK economy and the significance of the Brexit process to the sector are well understood by your Lordships. What is often called the City is not just London, with its leading position as a financial centre; it is important to the UK as a whole. Of the 2.2 million people who work in financial and related professional services in the UK, 1.5 million work outside London.
My new clause proposes a mechanism by which this very important sector might operate to best advantage in the UK and in the EU 27 after the UK’s withdrawal from the EU. I would like to be able to claim that this proposal is all my own work but, in reality, it is based on work undertaken by the International Regulatory Strategy Group, a practitioner-led group drawn from across the UK-based financial services sector, co-sponsored by the City of London Corporation and TheCityUK.
The new clause is based on the principle of mutual market access rather than the EU’s third country equivalence regime. To quote the Chancellor in his speech last Wednesday,
“that regime would be wholly inadequate for the scale and complexity of UK-EU financial services trade”.
The basis of the proposed new clause is the requirement to produce a report on market access set out in subsection (1). Currently, cross-border access for firms is given by passporting, as it is known, under the single market directives. A supplier of financial services obtains authorisation in the form of a licence from the regulator in its home country and that will then allow it to operate in any other member state without needing to obtain a separate licence from the regulator in that state.
Inevitably, passporting will disappear when the UK leaves the EU. The proposed new clause requires a report to be produced detailing the arrangement which might take its place, to enable trade to continue without the need for local licensing. Essentially, the arrangement seeks to confer mutual market access between the EU 27 and the UK without local licensing based on the terms of a free trade agreement.
This is, admittedly, ambitious, but needs to be seen in the context of the current arrangement of complete alignment and passporting. If a licence-free arrangement cannot be fully agreed, the requirement for a licence for international trading should be applied only where strictly necessary. The overarching objective to allow this arrangement to work would be, to quote the Prime Minister’s Mansion House speech, based on,
“the ability to access each other’s markets, based on … maintaining the same regulatory outcomes over time”.
Proposed subsection (2) sets out what needs to be achieved to make this aspiration reality.
I should make it clear that these paragraphs do not require that the regulatory requirements are the same. Rather, the objective is to frame the criteria for mutual market access as being that the UK’s and EU 27’s requirements are sufficiently aligned to enable the desired regulatory outcomes to be achieved. Of course, the financial regulations in both the UK and the EU 27 will change over time—and at times, quite dramatically. Resolving this problem is covered in subsection (2)(e), which covers the need to set up a forum for regulatory alignment, a joint UK-EU 27 body whose functions are set out in subsection (3). This forum would have a big role in sorting out the problems arising from regulatory divergence. The joint UK-EU 27 forum would facilitate proactive and co-operative engagement between the UK and EU 27 to resolve the problems.
I could expand further on the detail and, of course, I have not attempted to cover in this proposed new clause the consequential issues, such as arbitration and enforcement mechanisms. That alone is a subject on its own and bears on the arrangements for the independent institutional structure which replaces the ECJ’s oversight. I hope, however, that what I have set out would provide a collaborative, objective framework that is reciprocal and mutually agreed, and could be relied on by business. Indeed, it may be a framework which could also be adapted to business sectors beyond financial services. I beg to move.
Baroness Falkner of Margravine (LD)
My Lords, my name is attached to the amendment but I will, indeed, be brief. The noble Lord, Lord Carrington of Fulham, said that he tabled the proposed new clause to be helpful to the Government. That may well be his motivation; it is not entirely mine. I attached my name to the amendment to bring severely needed clarity to a few of the really important aspects of financial services regulation and supervision that we need now, rather than waiting until the end of the transition period.
In doing so, I declare that I chair the EU Financial Affairs Sub-Committee. I am also a member of the EU Select Committee, though I speak in a personal capacity. My committee recently wrote a report on financial regulation and supervision. It came home to us, in a very stark fashion, how little of the architecture of financial regulation and supervision will be clear to enable firms and businesses to do the planning they need to do. This essentially touches on two or three areas. The first is the continuity of the legal position of contracts and the legal position that affects businesses in terms of laws passed during the transition period, when the UK would be in full regulatory alignment with EU law.
Another aspect of concern to us was the extent of supervisory co-operation between the EU and the UK. The noble Lord, Lord Carrington, said he believes that the proposed new clause will reflect the views of the Prime Minister and the Chancellor in his recent HSBC speech. I agree that it will probably reflect those views, but I do not think it recognises that, in the European Commission’s draft negotiating guidelines or the European Parliament’s new paper, the idea of having provisions for financial services is dealt with either extremely skimpily or not at all. The amendment is perhaps somewhat optimistic, but nevertheless I want to hear from the Government; in that sense, my attachment of my name to the amendment is just to probe them.
Coming back to continuity of contracts, our inquiry was told by Stephen Jones from UK Finance that there were approximately,
“10,000 pages of EU originated financial services rules”.
The City of London Corporation told us that it sought, as a matter of urgency “clarity, stability and certainty”. I notice that the Chancellor raised those issues and said that he thought we could get that. However, the challenge of the technical detail of EU regulation has not been addressed by what the Government have told us as yet. One example of that is the Lamfalussy framework, which we looked at. We were told by the then Minister, Stephen Barclay—it is a sign of some concern that we do not get a Treasury Minister who deals with financial services in post long enough to have any continuity in the relationship; Mr Barclay is now gone and I think Mr Glen, who has other things going on at the moment with Salisbury and so on, has replaced him—that it would by a straightforward process. Levels 1 and 2 would be dealt with by primary legislation and levels 3 and 4 would be handed over to the regulators as part as the rulebook.
However, as we looked into this more closely, we did not think that it reflected what will happen in reality. I quote Simon Gleeson of Clifford Chance; he did not see even level 1 as straightforward. In our report, he said:
“When we translate that into UK law, if we simply copy Europe … we will be moving into our primary legislation stuff that properly belongs in regulators’ rulebooks … If we take a bunch of regulatory material that, almost by its nature, should be reasonably dynamic, and hard-bake it into statutory instruments, we are creating a monstrous procedural problem for ourselves in how we regulate the market”.
Inoperables are another issue. One of those is “in-flight” legislation, which I just referred to and is partly transposed—let us assume—during the transition period. However, much of EU financial services regulation takes four or five years to come into effect. Noble Lords may recall that MiFID II started in 2012 but came into effect only in January 2018. It seemed clear to us that we needed guidance and further direction on how the remaining parts of that in-flight legislation would come into EU law once we had actually left. My final example of that concerns the position of EU businesses in the UK. The Chancellor has said again that the Government will bring forward legislation to enable EEA firms and firms in the UK to obtain temporary permission, for a limited period. We need greater clarity on that.
It is a late hour so I will not labour this point, but there is a great deal of uncertainty on how the legal application of financial services regulations would work. On a recent visit to Brussels, the European Union Select Committee had the privilege of a discussion with Mr Barnier and Mr Verhofstadt. I notice that there is a great deal of emphasis in this clause on the IRSG’s proposals for a joint EU-UK alignment in respect of financial services that would take the form of a forum. I probed both of those people about the level of regulatory co-operation we could expect in the future, post withdrawal. We were not encouraged by their response, which was rather lukewarm. I do not think this proposal will get very far, but that does not mean that the Government can avoid setting out their intentions and how they envisage the strong regulatory alignment that they seek playing out in practice.
In his recent speech, the Chancellor acknowledged concerns about the legal framework for the regulation and supervision of financial services. The Commission’s draft guidelines on the withdrawal agreement foresee a large and continuing role for the European Court of Justice in adjudicating, in some cases for the whole of the foreseeable future. Although this may just be an opening shot in the negotiation, the defining of the EU positions makes it even more important that we force the Government’s rather reluctant hand, to make them spell out their thoughts on the conduct of business for financial services at the time of exit and beyond.
Viscount Trenchard (Con)
My Lords, I listened with interest to the amendment proposed by my noble friend Lord Carrington of Fulham and supported by the noble Baroness, Lady Falkner. I accept that my noble friend is trying to be helpful to the Government, but for various reasons I nevertheless feel unable to fully support his amendment. I understand well that the amendment reflects the proposals put forward by the IRSG in its paper published last September, prepared in collaboration with Hogan Lovells. That report has been endorsed by TheCityUK and the City of London Corporation, which support IRSG.
The reasons why I cannot support the amendment are, first, that it is not appropriate or helpful to put into legislation, at this stage, the detail of any future regulatory collaboration with the EU, let alone on financial services. Secondly, the report which the amendment would require the Government to prepare, like other reports which other amendments discussed today have called for, would be quite onerous and time-consuming. Thirdly, it is not helpful for our negotiators if we argue against ourselves, and especially unhelpful to incorporate amendments into law which appear to accept that it is desirable, even necessary, to treat continuing alignment with EU regulations as being a greater priority than aligning our regulations with those of the SEC in the United States, the FSA in Japan, or other regulators in other countries with significant financial markets. Fourthly, the Government have already stated their intention to negotiate an implementation period following exit day when things would be largely the same, including, as I understand it, for the financial services sector. This amendment appears to assume that everything changes on exit day.
In his excellent recent speech at the Mansion House, the Chancellor referred to a framework to supervise,
“separate evolution of rules to deliver the same results”,
and to resolve disputes. I believe there is a danger that this would place too much pressure on UK regulators to continue to align completely the UK’s rule book with that of the EU 27. This would make it more difficult to agree any kind of mutual recognition of standards with other financial regulatory regimes around the world. For example, the City Corporation and Tokyo Metropolitan Government have recently entered into a memorandum of understanding to collaborate more closely on financial services, and this could be developed in future to include some kind of mutual regulatory recognition of standards.
Of course, the City will survive if there is not a deal which covers financial services. The EU regulators have forced upon us Solvency II, AIFMD and MiFID II, to name but three directives which have cost the City dear in terms of higher costs, fewer jobs and fewer revenues than would otherwise have been the case. We should not agree to align more closely to EU rules than to US rules, Japanese rules or the rules of any other major financial centre in the world. Once our regulators recover their independence from the EU regulators, their influence in shaping best practice rules at the global level will be enhanced, not diminished. Of course, while the inclusion of financial services in our FTA would be better than its exclusion, our negotiators need to be very aware of the significant upside for the City in recovering our regulatory independence.
The amendment, in proposed new subsection (2)(a), refers to the degree of alignment “necessary” between the regulatory provisions of the EU and UK. I submit that this is a rather subjective concept. What is important is that our regulators will establish the best regulatory regime for our markets, retaining the highest standards for which London is rightly held in high regard and participating fully in discussions with regulators of the other major financial markets, within IOSCO and other bodies, with a voice commensurate with the size and scope of our markets.
As my noble friend Lord Hill of Oareford said in his interesting speech at Second Reading, our withdrawal from the EU is allowing Europe already to move in directions that we have traditionally resisted, whether that is a financial transactions tax, more screening of overseas investment or more centralisation of supervision of financial services. As we now have to choose between effectively remaining in the single market and being free to make our own rules where we want to, we must surely place a greater priority on being able to shape our own future than on preserving the status quo.
Mark Hoban, chairman of IRSG, has proposed a forum for regulatory alignment, referred to by my noble friend, whereby the UK and the EU can work together to implement new global and international standards. That is fair enough, although I do not think it is in the City’s interests to do this with the EU exclusively. Furthermore, my noble friend’s amendment is silent on the proposed forum’s relevance to new global and international standards and relates only to a perceived need to maintain regulatory alignment with the EU alone. If I were a banker in the EU 27 or the finance director of a major EU 27 company wishing to raise money in the capital markets, I would certainly not want the EU to impede my access to the UK’s financial markets, but I have not yet heard of any proposed EU regulation or directive requiring the Commission to continue to align closely to UK regulations.
My noble friend’s amendment indicates a frame of mind which I believe casts us too much in the role of supplicant, where we do not need to be. Does the Minister recognise that the City would worry less about the downside and show more confidence in the upside of Brexit if the Government showed more leadership and enthusiasm for the City’s role as the leading international financial centre, unfettered by the EU’s cumbersome and somewhat dirigiste regulatory framework, while maintaining the high standards and proportionate regulations that provide the necessary protections and financial stability for investors and borrowers, but without burdening market participants with unnecessary costs or with measures that inhibit the innovation that has helped to make London the great success it is?
Baroness Kramer
My Lords, the noble Viscount, Lord Trenchard, speaks a commonly held Brexiteer view. I take a very different view—that if we were to follow the course he just recommended, in 10 years’ time the UK would no longer be the premier centre for financial services in Europe, and certainly not for those generated within the EU, which is one of the largest economic and trading blocs in the world, and perhaps the most important as regards feeding financial services.
I understand the amendment in the name of the noble Lord, Lord Carrington, but I cannot support it because, as I think he would say, it is quite limited. Financial services depend not just on passporting: for the asset managers it is delegation, for the fintechs it is the e-commerce directive, and for the insurance and trading world it is the mutual recognition of contracts. There are so many complex features at so many different levels that create the ecosystem that has enabled London to thrive, essentially on the basis that it has sitting behind it the resource of a 28-country 510 million population who turn to it as their primary financial centre. However, the way in which the Government respond to Lord Carrington will be critical. It is a matter of timing.
The industry, as the Minister well knows, has been in some despair to try to persuade the Government that how they structure the relationship, should Brexit take place, is absolutely critical. The large companies in the industry have been going ahead with contingency planning that, so far, has been in a relatively preliminary phase. They have identified new real estate, taken out leases, and negotiated licences and other authorisations that they need to be able to expand either their field of business or to be able to expand business. However, almost every one of them has said, I think to many noble Lords in this House, that by the end of March—we are now talking about a matter of days—they will have to push the button on the next phase. That is the fitting out and purchasing of the very extensive and expensive equipment that has to go in, and the setting up of the recruitment process to staff out those new operations. From that there is no return. We therefore reach a point of no return for a significant portion of financial services which will be transferred to continental Europe with, frankly, no possibility of reversal, in a very brief period of time.
The industry has coalesced around the idea of mutual recognition as the one possible route. If we leave the single market—that is key; if we stay in the single market, it is not an issue, although the Government say that we will not—mutual recognition is the only possible route to limit the damage. It is nowhere near equivalent to the access that we have today, but it could perhaps be negotiated so that the damage is to some degree limited. Every major company I have talked to says that it does not understand how this new form of mutual recognition will work. It seems highly problematic. I have said in this House before that when the EU first began to bring together and create aspects of the single market in financial services, it began by using mutual recognition. However, it turned out to be completely inadequate to deal with the complexity of so many different kinds of issues, so much competition, so much size and so much depth.
So mutual recognition is seen not as a successful strategy but as the failed strategy for these arrangements that is now being revived in a new form. Because the industry is listening, it is important that we get from the Government something that provides some meat and bone on how this mutual recognition could function. If we do not hear that today, we will in many ways be accepting that we will not have any kind of significant arrangement around financial services, and the consequences for this country, which is essentially a service economy in which financial services are the most significant part and the largest exporter, will be highly significant. We need to understand today whether we are looking at something that is real and has the prospect of achieving success or whether we are simply tossing around an idea that has PR attractions but, frankly, offers no meaningful route to keeping access to the European market for our financial services industry.
Lord Hunt of Wirral (Con)
My Lords, we are very grateful to my noble friend for raising a very important issue. I know that the hour is late but I declare my interests as a partner in the law firm DAC Beachcroft in the financial services industry and as chairman of the British Insurance Brokers’ Association, known as BIBA. In the light of those interests, it will come as no surprise to the Committee to know that I spend a great deal of time talking to insurers and brokers, and many of them share the anxieties that have prompted my noble friend and the noble Baroness to put forward this amendment.
I think that all those who have spoken have welcomed the speech made by the excellent Chancellor of the Exchequer, with his determination to ensure that financial services lie at the heart of any new free trade deal with the European Union post Brexit. However, as the noble Baroness has just pointed out, some of the larger insurers have already begun to make provision for Brexit by relocating elements of their activities out of the UK to ensure that they remain in the jurisdiction of the EU—although I am still finding a strong desire and commitment to continuing the remarkable success story of the insurance sector in the UK post Brexit.
I have no time at all but I urge the Minister to give us assurances that committed engagement and genuine consultation with those affected will take place in a timely, orderly and constructive fashion. Insurers and their customers will be looking for reassurances that their legitimate interests will be protected during any changes in policy that are made or even considered during the transposition process. Obviously there is much more to say, particularly about the role of regulators, as my noble friend Lord Trenchard mentioned, but these are very important issues and I hope that the Minister will respond in a very positive way.
Baroness Hayter of Kentish Town
My Lords, I do not think that anyone who has read the excellent December 2016 report Brexit: Financial Services from our EU Committee chaired by the noble Baroness, Lady Falkner, will be under any illusion about the challenge that Brexit poses to this economically crucial sector of our economy. This evening we have heard of the needs both of those in the financial sector and of those who depend on it, and we have heard of one possible way forward, but the most important point is that something is needed urgently.
The British Insurance Brokers’ Association, to which we have just heard reference, the Alternative Investment Management Association, the ABI and TheCityUK have all come to me, and I am sure to other Members of this House, to raise their concerns about Brexit and particularly the wider implications for the legal sector and the insolvency sector and what that means for investors as well as for the more traditional City firms. Along the lines outlined by the noble Lord, Lord Carrington, TheCityUK has called for a bespoke market access agreement based on mutual recognition, regulatory supervision and co-operation, with, as we have heard, particular emphasis on mutual recognition and the enforcement of judgments.
In long-term contracts, legal continuity and certainty are vital for business, as we have heard, but also for consumers, as the ABI has stressed. Retired British citizens in nice warm areas such as the south of Spain need to know whether their annuities and pensions from London-based providers will continue after March next year, and indeed after December 2020.
The AIMA wants to see regulatory frameworks that enable managers to deal with any type of fund vehicle or account, as they now do, as they manage the savings and investments of pension funds and insurance companies. The British Insurance Brokers’ Association—100,000 people are employed in that industry, and they arrange 70% of all general insurance—says that it is “critical” to reach a transition agreement quickly and, following that, a mutual free-trade agreement.
The one word that I want to leave the Minister with is “urgency”, because insurance renewals are already being issued for annual policies renewable on 30 March next year, a date that I know is uppermost in his mind. Any policies running after 30 March next year would result in uncertainty over the legitimacy of that part of the policy that is effective after we leave. So we need these brokers to be able to ensure that there are no interruptions in customers’ cover, and that extends to whether we can be insured when we travel and when we drive our cars abroad, and to travel insurance if the EHIC ends—these are real things that people rely on day by day.
As we know, the UK is the world’s largest exporter of financial services to the EU, which is where I have to disagree with the noble Viscount, Lord Trenchard. He thinks that there is great hope somewhere else, but actually, for us to earn money in the EU and maintain all the customers we serve there, we must first prioritise establishing that we can continue with what we do so well there. Shoring up that business certainty through a formal agreement on regulatory equivalence or something similar is becoming ever more urgent.
We first started debating this report in the House in December 2016. We are now in March 2018, and I fear we are no clearer in knowing what the Government are doing. I hope that at this late hour, not just of the clock but of the calendar in moving towards when we leave, the Government will be able to provide a little more assurance than they have done thus far.
Lord Callanan
My Lords, I first thank my noble friend Lord Carrington for his amendment, which has enabled us to have this excellent short discussion. I also thank the noble Baroness, Lady Falkner, for her contribution. Of course, I know the report of her committee extremely well, as I was a member of the committee when it was produced and I participated in many of the discussions to which she referred, and which she very ably chaired. I thank my noble friend Lord Trenchard for his comments. He made some excellent points and pointed out the global nature of many of the financial services regulations that we are talking about.
The noble Lord, Lord Hunt, made some good points about the insurance industry. I can assure him that we will continue the work that we are doing in consultation and discussions with the industry as we take the negotiations forward.
However, although I thanked the noble Lord, Lord Carrington, for his amendment, I am afraid that we cannot accept it for reasons that I will explain. It would not be practical given that the negotiations on the UK’s future relationship and the eventual arrangements for market access in financial services post Brexit have yet to begin. It will be important that in entering negotiations the UK retains a degree of flexibility as to what the precise arrangements for market access for financial services firms may be. It is imperative that both sides come to the negotiating table with a constructive mind set. That was the essence of the Chancellor’s contribution last week. Agreeing now to set out a report according to the specific and detailed criteria set out in the proposed new clause would prejudge a great deal of the substance that has yet to be discussed by both ourselves and the EU.
I emphasise that the Government share the aims of the noble Lord’s amendment. We are seeking an ambitious relationship that takes account of the fact that the UK and the EU start from a position of total alignment, with unprecedented experience in working with one another’s regulators and institutions. As the Chancellor outlined last week, the UK is a global financial services hub—an engine that powers the real economy and the UK—and it is a real asset for Europe too.
In his speech—this refers to the point made by the noble Baroness, Lady Kramer—the Chancellor set out three key elements for a possible approach to a future partnership: a binding dialogue for establishing regulatory requirements for cross-border trade; supervisory co-operation arrangements that are reciprocal, reliable and prioritise financial stability; and an independent arbitration mechanism that has the confidence of both parties to provide durable dispute resolution. We hope that we would agree that the UK cannot be a rule taker in financial services but, by working together as the Government have proposed, the UK and the EU can preserve market access and strengthen stability and prosperity in the UK as well as the rest of Europe.
Underpinning this is our commitment to upholding the robust standards which are, as the noble Viscount, Lord Trenchard, pointed out, often based on international standards that we have developed since the financial crisis. These aims have consistently been emphasised in government messaging—more recently by the Secretary of State for Exiting the European Union and by the Chancellor. These align with what we have been hearing from the financial services sector in terms of a desirable end state deal. However, the details have to be worked through via the negotiations and the process will require imagination on both sides. This proposed new clause would set out a prescriptive template for the Government to follow. Negotiations are by their nature fluid and we cannot agree to provide a report based on a set of potential end state arrangements, which are predefined and outlined specifically here, that prejudges the outcome of negotiations before those talks have even started.
These issues are extremely important and I hope that the Government’s conduct in negotiations, as well as the clear public stance of Ministers on the significance of financial services to our future relationship, will help to provide reassurance over our commitment to securing agreement on these issues. Once the negotiations conclude, the Government will need to make clear the substance of what has been agreed. This is particularly so in order to enable the industry to understand the provisions for market access and how they sit within the UK’s agreed relationship with the EU on financial services going forward. We will of course, as always, be happy to update Parliament when the appropriate time comes. However, in light of the need to preserve UK flexibility in the negotiations, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Carrington of Fulham
My Lords, I am most grateful to all noble Lords who have participated in this debate. We have had an interesting short debate which has highlighted some of the problems which the City of London is going to face. I will pick up on one point. I rather agree with my noble friend Lord Trenchard that the City will survive whatever happens and that there are workarounds for most of the problems that the City will face when operating inside Europe. What we are actually talking about is how to make those problems less difficult to resolve rather than attempting to find a solution to an intractable problem.
Having said that, I am grateful to my noble friend the Minister for his comments. He understands fully the issues that the City will face and I look forward to him having successful negotiations with the EU Commission. If its representatives have any sense at all, they will accept that they have as much to gain from a successful result to these negotiations as does the UK. On that note, I shall withdraw the amendment.
Baroness Falkner of Margravine
Before we dispense with the amendment I have a brief question for the Minister. If I have understood him correctly, he has just said that when the negotiations are complete, the Government would set out and clarify their position. Can he tell me what he means by “when the negotiations are complete”? Is he talking about the negotiations on the withdrawal agreement—in other words, by the end of this year—or the agreement on the FTA, in which case we will not know the parameters of the Government’s thinking until very much later when we are into the transition agreement itself? There I would have to agree with my noble friend Lady Kramer that essentially, businesses will have made up their mind and taken the necessary actions, not least because the regulators require them to carry out their contingency planning.
Lord Callanan
I think I mean both. We will update the House on the position at the end of the negotiations on the withdrawal agreement, on the agreement on the future FTA, and if I can add a third criterion to that, of course on the negotiations for the implementation period, for which we hope to be able to provide an update in the very near future. All those factors are important in the provision of financial services. If we get the implementation period agreed in the near future, which we hope and expect, that will provide a slightly longer period for businesses to establish the appropriate stability, but it is hoped that as we get to the end of the year we will have the withdrawal agreement. We expect that to provide the details of the framework for future co-operation. I will be very happy to update noble Lords at all of these stages.
Lord Collins of Highbury
(1A) Within one month of the passing of this Act, a Minister of the Crown must publish an assessment of each of the international treaties, agreements and obligations that will require amendment or renegotiation as a result of the withdrawal of the United Kingdom from the EU. (1B) The report required under subsection (1A) must include an assessment of how the powers under this section may need to be used.(1C) A Minister of the Crown must lay the report under subsection (1A) before both Houses of Parliament.”
Lord Collins of Highbury (Lab)
My Lords, I start by thanking the Chief Whip for ensuring that so many noble Lords are in their places to hear my contribution. At one point I was slightly anxious that I would be speaking to an empty Chamber, so it cheers me up to see so many noble Lords here at this time. I am not worried about my own side; it is noble Lords opposite whom I want to hear and understand the issues.
I was going to say that I will be very brief, but I will not do so because I need to apologise for not speaking at Second Reading. However, this is not the first Brexit Bill. The Sanctions and Anti-Money Laundering Bill, which has passed through this House and is now in its Commons Committee stage, was the first, and it was that Bill which prompted me to consider this amendment to the European Union (Withdrawal) Bill. What we have heard in previous groups is that we are potentially seeing, rather than enhanced parliamentary sovereignty, what appears to be the biggest Executive power grab since the days of Henry VIII. That is why so many noble Lords are very concerned about the powers suggested to deal with the difficulties that Brexit will bring about.
The sanctions Bill was very important because most of its powers related to the 1972 Act. It was important that we ensured that we had a domestic legal framework in place to meet very important international obligations, particularly as a member of the United Nations. We made a number of improvements to that Bill, which are being considered by the other place. The noble and learned Lord, Lord Judge, described the sanctions Bill as a “bonanza of regulations”. While acknowledging that some of this was justifiable—I acknowledge that even in this Bill the regulations are required—it places on us an important obligation to ensure that there are sufficient safeguards and adequate parliamentary scrutiny to make the delegated powers constitutionally acceptable.
That is why I have tabled this amendment to Clause 8, which gives Ministers extensive delegated powers to introduce regulations that they consider appropriate to prevent, remedy or mitigate any breach of the UK’s international obligations as a result of Brexit. But that power is not restricted to modifying retained EU law, as it would not require Ministers to demonstrate why any changes are necessary. This is the important element of my amendment: while we heard from the noble Viscount, Lord Hailsham, that his amendments deal directly with delegated powers, mine focuses on the need for increased transparency on treaties and international obligations that may require changing post Brexit. When using such powers, Ministers should proceed with the fullest parliamentary scrutiny. We must be able to do our job effectively, and with proper transparency on the Government’s part we can ensure that this can be done.
I hope the Minister will not offer up the suggestion that the requirements and measures I am proposing will somehow be a barrier to negotiations. Of course they will not. They are about helping us do our job of scrutinising. They do not affect the negotiations; they affect how we do our job in our House.
In his group of amendments, the noble Viscount, Lord Hailsham, mentioned the risks of some of these powers being used. I recall in the sanctions Bill my noble and learned friend Lord Falconer saying that we would have to be extremely careful because, whatever Ministers tell us now, in either the Commons or the Lords, ultimately the Executive always reach for the Act of Parliament and see what that Act of Parliament allows—what is on the face of the Bill. That is why this added element of transparency will ensure that, in the future, we can do the job of scrutiny well and properly. I beg to move.
Baroness Randerson
My Lords, Amendment 138 is in my name. I will concentrate simply on the international treaties and agreements that relate to transport as an illustration of the complexity of the situation that we face. We are party to many hundreds of agreements as members of the EU that we will have to renegotiate as part of leaving the EU. There are other agreements that we will have to join because we cannot rely on EU arrangements.
To illustrate the complexity of the situation, in the field of transport it is estimated that the UK will have to renegotiate and replace 65 international transport agreements following Brexit. The Government’s preparedness for this is perhaps rather doubtful—the signs are not good so far. I give as an illustration the last-minute appearance of the Haulage Permits and Trailer Registration Bill, which was not in the Queen’s Speech as an EU Bill, which was sprung on us at very short notice and which is being rushed through with great speed because the Government have discovered that, in future, we will have to rely on the 1968 Vienna convention to transport goods abroad and to take trailers abroad. We will have to rely also on the 1949 Geneva convention to get international driving permits.
We are going back a very long time in history, so it is not surprising that it took the Government a while to wake up to this situation. As a result of the rush in which we are having to deal with this issue—we signed the Vienna convention but never ratified it; we have to give a year’s notice of ratification and are running out of time to do that—we are faced with a Bill which is not so much skeletal as almost a ghost. It is so insubstantial that it fades in front of our eyes. There is perhaps a slight chill surrounding it as well, because the Government give no indication of what they want to do with powers which they admit they would rather not have to seek—and all of this is in preparation for the possibility of a no deal Brexit.
This is no way to make legislation. However well prepared the Government are, there will be dozens of agreements to reconsider. I have raised in this House many times the issue of the single European sky, which was mentioned earlier this evening. It is not just an EU issue; it is crucial to our arrangements with the US as well. Transport-related agreements are only one corner of the problem and are simply an illustration of the complexity that the Government face.
Lord Mackay of Clashfern
My Lords, it is quite important that the number of occasions on which this power will be used will be considerably lower than the number of adjustments for EU law. Therefore, it would probably be easier to make adjustments to what is required in the way of precautions when these powers are exercised than is the case with the huge number required in the other field. One thing I feel strongly about is that we want to find a way of doing it that is practical in the time and with the number of these other regulations that require to be put in place. This one is easier from that point of view, which perhaps makes it more suitable for the Government to consider further precautions.
Baroness Goldie
My Lords, I thank the noble Lord, Lord Collins, and the noble Baroness, Lady Randerson, for their amendments, which are effectively seeking transparency. The Department for Exiting the European Union is leading cross-government work, including with the Foreign and Commonwealth Office treaty section, to assess and act on the international agreements for which, as a result of the UK’s withdrawal from the EU, there will need to be arrangements to ensure continuity for business and individuals. Alongside this, we are also working with our international partners—the EU 27, the Commission and third countries—to identify the full range of agreements which may be impacted by our exit from the EU, and we will be taking their views into account.
I might observe to your Lordships that it is not common practice to publish assessments on treaties that have expired, ended or been superseded. However, I assure noble Lords that any treaties which require new or amended implementing legislation and/or parliamentary scrutiny before ratification will go through the appropriate well-established procedures. Where the powers in subsection (1) are used, these will be subject to the scrutiny procedures set out in this Bill. To set all this in context, my noble and learned friend Lord Mackay of Clashfern rightly identified that the instances where these provisions may be used are not likely to be plentiful. As I have explained, given that the Government’s approach to international agreements is to achieve continuity, I believe this renders unnecessary the impact assessment that the amendment would require.
I can confirm that we will, of course, continue publishing impact assessments to accompany legislation, in line with existing practice. I take this opportunity to remind the Committee of the Government’s overarching policy approach to international agreements after we leave the EU. As set out in the technical note recently published on this issue, we are seeking to ensure that our existing international agreements continue to apply to the UK during the proposed time-limited implementation period. Our officials are working with the Commission on the precise mechanics of this. The focus, both during the implementation period and beyond, is on seeking, wherever possible, to continue our current arrangements with third countries and international organisations. We recognise the need to promote stability for businesses and individuals and we will aim to transition agreements as seamlessly as possible to ensure an orderly withdrawal.
I hope that that background and this explanation provide the necessary clarity and with this insight, I respectfully ask the noble Lord to withdraw his amendment.
Lord Collins of Highbury
I thank the Minister for that explanation, but I fear that we will need to return to this issue. The noble and learned Lord may be right that there is limited scope, although I think we have heard in the debate that there are lots of examples. There are lots of conventions and agreements that, since our membership of the EU, we have had exemptions from because we are complying with EU law. But when we are outside the EU, we will find that we will need to ensure that we have the mechanism, so that those agreements and conventions are properly implemented. That is the issue.
Regarding the process we are going through on the Bill, at the end of the day—I hear what the noble Baroness, Lady Randerson, says—I do not really think that the people of this country understand exactly what will be required to ensure that Brexit is effective, or the sorts of agreements and international conventions that might affect them. I hope that the issue of transparency will be one not just of implementation but of ensuring that we all know and understand better the full implications of the decision that has been made. But in the light of the comments made, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Andrews)
I cannot call Amendment 125, as it is an amendment to Amendment 124.
The Deputy Chairman of Committees
I cannot call Amendment 131, as it is an amendment to Amendment 130.