European Union (Withdrawal) Bill

(Limited Text - Ministerial Extracts only)

Committee: 10th sitting (Hansard): House of Lords
Monday 26th March 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I rise only to make it clear that the unanimity comes also from the Front Bench. My noble friend Lord Morgan may not be on the Front Bench but on this occasion we are absolutely as one with him.

It would perhaps be helpful if the Minister feeds back what he has heard from the devolved Administrations in his discussions with them on these amendments.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank noble Lords who participated in the discussion on these amendments. In opening, let me say that I fully understand the absence of my noble friend Lord Blencathra. I am very grateful for his careful consideration of the Bill and that of the Delegated Powers and Regulatory Reform Committee, which he chairs.

I apologise to the noble Lord, Lord Tyler. I knew that my noble friend Lord Blencathra was not going to be here and I tried in vain to find out who would be his substitute so that I could have had a word with them earlier. However, I am very happy to meet the noble Lord afterwards at any convenient juncture to discuss this. In fact, I had heard at a previous stage that the substitute would be the noble Lord, Lord Thomas of Gresford, so I encourage him to ignore the several messages he has received from me.

I will respond first to the general points made and then pick up some of the specifics. I want to make it clear that the amendment that the Government have tabled to change how the Bill deals with devolved competence would, as part of that change, remove the Order in Council procedure from Clause 11 and Schedule 3. In the light of this, my noble friend’s amendments would no longer be necessary on that specific point. However, I will address the substantive point that my noble friend Lord Blencathra sought to make, and which has been made by the noble Lord, Lord Tyler, in his stead, on the modification of the devolution statutes—namely, the Scotland Act 1998, the Northern Ireland Act 1998 and the Government of Wales Act 2006—by secondary legislation.

I understand the point made by the noble Lord, Lord Tyler: that the Order in Council powers contained in Clause 11 and Schedule 3 are unsatisfactory substitutes of those contained in Section 30 of the Scotland Act and Section 109 of the Government of Wales Act. I accept that there is merit in my noble friend’s argument that there may be a difference in the function of these powers and that we may wish to consider the need for a different procedure. As I said, I am very happy to discuss that point with my noble friend Lord Blencathra, the noble Lord, Lord Tyler, and others.

I do not agree that it necessarily follows that secondary legislation can never be used to modify devolved competence or the devolution statutes more widely, and that this should only ever be achieved through primary legislation. For example, we used the procedure in 2013 to amend the Scotland Act 1998, and we used an order in 2007 to amend the Government of Wales Act 2006. There are previous examples and, more recently, we saw the Treaty of Lisbon (Changes in Terminology) Order made under Section 2(2) of the European Communities Act. It has sometimes been a convenient way to proceed, by consent of the devolved Administrations.

I am grateful to the noble Baroness, Lady Hayter, for raising the point that she did. We have been discussing these issues with the devolved Administrations and continue to do so in a perfectly constructive way. I have to say that there is no agreement yet, but we are looking at how this should be used going forward.

I will pick up some of the particular points made. I appreciate that the noble Lord, Lord Tyler, was making general points, but, as I say, the specific issue mentioned will not arise in the light of the amendments we have put down. However, I appreciate that it was, as he said, the unanimous view of the Delegated Powers and Regulatory Reform Committee. I thank the committee for its third report and constructive and dispassionate work on these issues. I served on that committee for a time and I know it looks at these issues constructively.

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[Baroness Hayter of Kentish Town]

My Lords, I wish to add a couple of points. First, are discussions progressing on the possible inclusion in the Bill of a schedule detailing these areas of concern? Secondly, the noble and learned Lord, Lord Wallace of Tankerness, said that a solution should be agreed, not imposed. We should heed those words. I again ask the Minister: as regards reaching agreement on these issues, to what extent does he have in mind involving the legislatures rather than just the devolved Governments?

The Minister has had notice of my next point. I would like to correct something that the noble and learned Lord, Lord Keen, said in the House last week. He said that there were,

“about 153 areas in which, upon our leaving the EU, competences will return and touch upon areas of devolved competence. These are areas that the devolved parliaments and assemblies previously had no engagement with because they lay in Brussels”.—[Official Report, 21/3/18; col. 334.]

I have since written to him because that it not completely the case. As it works, the memorandum of understanding provides that, in matters of devolved competence, the UK Government consult the devolved Administrations to agree a common UK position on matters before the Council of Ministers, and then defend that position in the Council. Indeed, as we just heard, occasionally devolved Ministers will do that and represent the UK. However, whether it is a UK Minister or a devolved Minister there, they speak in this case for an agreed UK position, not just a UK government position. It may therefore be helpful if the Minister confirms that understanding, which is undoubtedly how the devolved Governments see it. What has been said is right: the spirit to reach accord is there. However, perhaps for clarity, it would be good if that could be confirmed.

[The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)]

Perhaps noble Lords will forgive me for a moment or two while I stretch my back, which is just a little bit tight. Now I am fighting fit. I point out to the noble Lord, Lord Adonis, that it is because I am carrying the heavy weight of Brexit on my shoulders.

I thank the noble and learned Lord, Lord Hope, for bringing forward this amendment, and all noble Lords who have introduced some interesting debate into the discussions today. It will be useful for us to begin by looking at the deep-dive process itself, whereby the devolved Administrations together with the UK Government have pored over the various 150 or so areas to which my noble and learned friend Lord Keen referred. They have been guided, as the noble and learned Lord, Lord Wallace, noted, by a suite of agreed principles, which indeed from time to time make reference to such concepts as the UK market itself, trade and various other obligations. I understand that each of your Lordships should have had in their postbox or email in-tray a series of emails from my noble friend Lord Bourne which set out the principles themselves and the areas in which they intersect with the policy matters.

It may be useful if I give a flavour of that. It struck me, as I was discussing with various officials in my department and others, that we have perhaps not done that before to give your Lordships a sense of the sheer scale and magnitude of the engagement thus far undertaken. There is a certain sense sometimes that we are quite dismissive of the devolved Administrations, when nothing could be further from the truth. To give your Lordships just a flavour of that, in the area of fisheries there have been six full days of discussions between the devolved Administrations and the UK Government—17, 18, 23 and 24 January, and 6 and 7 February. On environmental quality, to take another example, there was a whole-day discussion on ozone-depleting substances and fluorine gases on 31 January, and two full days at the end of January were spent examining chemicals and pesticides. It is useful to recognise that this approach is unprecedented. Its purpose is, again, one of respect. I can see that the noble and learned Lord, Lord Wallace, is ready to jump up. He is welcome to do so—it will give me a chance to sit down.

[Lord Wallace of Tankerness]

What the Minister is saying is encouraging. For the sake of argument, let us take fishing. Have any of these meetings between UK officials and officials from the devolved Administrations involved members of the Scottish Fishermen’s Federation? Stakeholders obviously have a practical view on where some common arrangements are useful and where they are not.

[Lord Duncan of Springbank]

I wish I could answer that question in the affirmative, but the answer is no. Before each meeting the devolved Administrations, with the UK Government, have engaged in direct consultation with stakeholders. However, the stakeholders have not been inside the room. None the less, what they bring to the table is very much understood. I develop upon these parts because, as the noble Lord, Lord Wigley, pointed out, it is important that when we consider the question of agriculture there is no suggestion that, although agriculture itself is one of the headings, everything in agriculture will remain part of that. To some degree, what noble Lords had in their in-boxes, which was simply entitled “Agricultural funding”, was a little unhelpful. Underneath that rests each of the areas where there is expected to be a necessary common framework, and indeed a whole range of areas where there would not need to be a common framework because it would be fully devolved from the get-go. To some degree, there can be a result of some misunderstanding contained in that approach. Again, that is why it is imperative that we examine every single aspect when we have these deep dives, which are ongoing; they have not finished yet.

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[Baroness McIntosh of Pickering]

Can my noble friend confirm that it is the Government’s intention that this should happen by primary legislation?

[Lord Duncan of Springbank]

Yes, that is the intention. We will move forward with this through primary legislation in each of the common framework areas. On that basis, I hope that the noble and learned Lord, Lord Hope, will feel able to withdraw his amendment.

[Lord Hope of Craighead]

My Lords, I am extremely grateful to all noble Lords who have contributed to the debate and to the Minister for his few words in his response. Of course, legislation may contain enabling powers but we do not know yet what the legislation he is promising will look like. If it is simply a Bill with a lot of Henry VIII powers in the area concerned, it will not advance the argument at all.

I am grateful to the noble and learned Lord, Lord Mackay of Clashfern, for enlarging on the points he made last week. I am glad that my amendment has given him the opportunity to emphasise again the points he has made and his valuable contribution to our debate. He said that if his approach is correct then my amendment ceases to have any purpose. Of course, he is right, because my amendment does not look at primary legislation; it looks at the procedure that would be followed if the mechanism to be used is to be by delegated legislation, in which case we are talking about the consent not of the legislatures but of the Administrations—that is, of Ministers. At the moment, we have in the amendment that was before us last week—the amended form of Clause 11—a promise of consultation. Many noble Lords who have spoken in support of my amendment have emphasised the importance of consent, which is the crucial matter. As the noble Lord, Lord Liddle, said after his careful analysis of what we are really talking about: consent is fundamental. That is the background to what I am submitting.

There are one or two scattered points which I might mention. On the contribution of the noble Lord, Lord Kerr of Kinlochard, the noble and learned Lord, Lord Wallace of Tankerness, was absolutely right. Proposed subsection (2) of my amendment is based on an agreement reached in October last year at the Joint Ministerial Committee on EU Negotiations. The wording is exactly as it was framed in the agreements, and that is the point from which we are moving forward. One could debate the language, but I think that the time for doing so has passed.

I thought that the contribution of the noble Lord, Lord Wigley, about the attitude of the sheep farmers was very helpful, and we have heard similar remarks about the position as regards fishing. I do not think that the position of the hill farmer in Scotland is very different from that which was described by the noble Lord. However, there could well be differences in the way that sheep are managed in England and the way that they are bred and moved south in Scotland and east in Wales—they are moved across the United Kingdom before being exported somewhere else. I can see, therefore, that there could be detailed disputes about what the Welsh, Scots and English would want in framing a UK-wide market for the handling of sheep stock. To attempt to create uniformity in areas as sensitive as this may be a mistake, and it may be that that is where the sticking points are in the discussions. I hope very much that one can get to the point where these matters can be agreed without resorting to dispute resolution.

As the noble Lord, Lord Wigley, also pointed out, in a few years’ time, when we move beyond the Clause 11 procedure and the time limit has disappeared, we do not want to have to start these arguments all over again. We want to resolve this at the beginning in the creation of the market.

It is difficult to take the point further because we do not really know the detail of the disagreements before us. However, I suggest to the Minister that it would be a great help if, before Report, a letter could be passed to those who have taken part in the debate explaining the procedure that the Government intend to use in the creation of these frameworks. I would be very pleased if they were to adopt what the noble and learned Lord, Lord Mackay, has suggested, and it would be very helpful to know that that is what they propose before we start looking at this again on Report. If they do not propose to do that, we need to know what the alternative is and how consent is to be built into it. In the light of the very helpful response from the Minister, and of what I have said so far, I will leave the matter there for the time being. I beg leave to withdraw the amendment.

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[Lord Collins of Highbury]

To be clear, the Opposition believe—as do I personally, as someone who has worked in Gibraltar over the years—that the position of Gibraltar should be a matter for the Gibraltarians. There should be no doubt about that, and we are committed to it. They have had a referendum and we will completely stick to that.

I was about to come on to my comments relating to what the noble Lord, Lord Luce, said. At the end of the day, we want to ensure that we make economic relationships and economic development a high priority. I do not think we should restrict this to comments about the viability of Gibraltar; we should be focused on how we can support a friendly country in developing an economy in the south that has been so difficult to establish over many years. British tourism has been very important to that, but it is also in terms of new industries and finance sectors that could be expanded and developed. I like the proposal by the noble Lord, Lord Luce, that we should be talking positively about economic development in relation to Gibraltar and to how important that is.

To be frank, we cannot rely on Madrid. We should understand the nature of the Spanish psyche here: no matter what the terms of the Treaty of Utrecht were, there is a claim by the Spanish nation over sovereignty and, whichever political party is in power in Spain, socialist or conservative, this issue unites them across the political spectrum. I do not think we are going to resolve that—we cannot tell the Spanish what their views should be—but we can give very clear commitments to Gibraltar and its people, and we should maintain those commitments. What we need to hear from the Minister today is that it is not simply about commitments regarding Gibraltar’s relationships with the UK but that the Government are committed to ensuring that Gibraltar can have a positive economic relationship with the rest of the EU, and that in any final appendix or agreement to the transitional period Gibraltar’s needs are properly considered and there is a positive case. Not only would closing the border be a disaster for Gibraltar but, as people have said in this debate, it would be an incredible cost to this country as well.

In the 1960s we had a very big MoD base in Gibraltar and there was employment. That is not the case any more. It is a different sort of industry and employment that we have to address.

Will the Minister answer the question of the noble Lord, Lord Hannay, about what is next under the transitional agreement? What will Gibraltar’s relationship economically be with the rest of the EU? To take up the point made by the noble Lord, Lord Luce, what commitments will we give for a positive relationship with Spain to ensure the economic future of Gibraltar and its people, and the people of Andalusia?

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

Let me first agree with the noble Lord, Lord Collins: it has indeed been an excellent debate on an extremely important topic. I also thank the noble and learned Baroness, Lady Butler-Sloss, for raising the issues, but we do not believe that the new clause is necessary. It posits the need to protect the rights of persons and businesses either from or established in Gibraltar operating in the UK, but none is directly affected by the Bill.

As I begin, I say that we are steadfast in our support for Gibraltar, its people and its economy. Let me directly address the issue put to me by the noble Lords, Lord Hannay and Lord Luce, and by the noble Baroness, Lady Northover, about the implementation period.

The territorial scope of the draft withdrawal agreement, including for the implementation period, explicitly includes Gibraltar. That is right, and consistent with our view that we are negotiating on behalf of the whole UK family. We want to get a deal that works for all, including for Gibraltarians. The noble Lord, Lord Hannay, asked me to be specific, and it is in Article 3, section 1, paragraph (b) of the draft agreement.

In legislating for the United Kingdom, the Bill seeks to maintain, wherever practicable, the rights and responsibilities that exist in our law at the moment of leaving the EU, and the rights in the UK of those established in Gibraltar are no exception to that. We respect Gibraltar’s own legislative competence and the fact that Gibraltar has its own degree of autonomy and responsibilities. For example, Gibraltar has its own repeal Bill.

We are committed to fully involving Gibraltar as we prepare for negotiations to leave to ensure that its priorities are taken properly into account. As has been mentioned, we are working closely with Gibraltar, including through the dedicated Joint Ministerial Council on Gibraltar EU Negotiations.

The Bill, however, is not the place for legislation about Gibraltar. The Bill does not extend to Gibraltar, except in two very minor ways: that, by virtue of Clause 18(3), the powers in Clauses 7 and 17 can be used to amend the European parliamentary elections legislation, which of course covers Gibraltar; and the Bill repeals some UK legislation that extends to Gibraltar.

However, we understand the concerns being expressed through the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss. In response to those concerns, I hope that I can reassure the Committee that access to the UK market for Gibraltar is already protected by law, and my ministerial colleague at the Department for Exiting the EU, Robin Walker, agreed a package of measures at the last Gibraltar JMC on 8 March that will maintain, strengthen and indeed deepen UK-Gibraltar ties.

In financial services, where UK-Gibraltar trade is deepest, this is granted by the Financial Services and Markets Act 2000 (Gibraltar) Order 2001 on the basis of Gibraltar’s participation in EU structures. We have agreed that the UK will guarantee Gibraltar financial services firms’ access to UK markets as now until 2020, even in the unlikely event of no deal being reached. We will design a replacement framework to endure beyond 2020 based on shared high standards of regulation and enforcement and underpinned by modern arrangements for information-sharing, transparency and regulatory co-operation.

Obviously, I always hate to disappoint the noble Lord, Lord Foulkes, but when it comes to online gambling, the UK has provided assurance that gambling operators based in Gibraltar will continue to access the UK market after we leave the EU in the same way as they do now, and we are working towards agreement of a memorandum of understanding which will enable closer working and collaboration between gambling regulators in Gibraltar and the UK. This work is already under way, so we consider that the amendment is unnecessary.

In this way, we will deliver on our assurances that Gibraltar will enjoy continued access to the UK market for Gibraltar business, based on the Gibraltar authorities having already agreed to maintain full regulatory alignment with the UK.

We will of course keep Parliament informed of progress. Gibraltar is regularly discussed in Questions and in debate: for example, in Oral Questions on 30 January and on Second Reading of this Bill on 31 January.

I hope that I have addressed the noble and learned Baroness’s concerns, and I urge her to withdraw the amendment.

[Lord Cormack]

Before my noble friend ends, could he assure the Committee that it will be an absolute aim of negotiations to ensure that Gibraltar continues to enjoy commercial intercourse with the rest of the European Union?

[Lord Callanan]

I am very happy to assure the Committee of that. As I said, we are working closely with the Government and people of Gibraltar. They are at the forefront of our consideration; they are our fellow citizens and our allies. We are working with them, we are co-operating with them and of course, alongside the rest of the negotiations, that will be one of our priorities.

[Lord Foulkes of Cumnock]

Perhaps the Minister will give way. He mentioned online gambling and financial markets, perhaps looking after the interests of people who are already quite well off. What about the workers who travel across from Spain to Gibraltar and vice versa? What about the tourists? What about ordinary people? There seem to be no guarantees. It all seems to have been done to look after the financial interests of the gamblers and the financial markets.

[Lord Callanan]

I am sorry that the noble Lord has a retrograde opinion on these matters. It may shock him to know that many ordinary people take part in online gambling and indulge in financial services. In fact, many of the workers that he refers to work in those areas, so perhaps he should not apply to everyone else the same prejudices that he has. They are successful industries that employ a lot of people. They are perfectly legal and people have a right to engage in them.

[Lord Foulkes of Cumnock]

I do not know whether the noble Lord sits in on any of our debates other than those on the Bill. I have been sitting in at Question Time and other debates—it is good to see three Bishops here today—where concerns have been expressed about online gambling and the effect that it has on ordinary people who get caught up in and become addicted to it. If the noble Lord does not understand concerns about that, he is missing an awful lot of the debates that go on in this House.

[Lord Callanan]

Of course I understand those concerns and why the industry needs to be properly regulated. That is being done and we are working with Gibraltar to ensure consistent regulation across the two territories. But of course that is not a matter for the Bill, I am pleased to say.

I hope that, with those reassurances, I have addressed the noble and learned Baroness’s concerns—

[Lord Hannay of Chiswick]

I am most grateful to the noble Lord for giving way, but he has left us—and, through us, the Gibraltarians—in a degree of uncertainty. I imagine he will have difficulty replying to this, but presumably he does not think we can negotiate better terms for Gibraltar’s access to the EU 27 than we negotiate for ourselves. That would be a pretty startling victory for the Government, which might just be beyond their powers. If that is so, and as the Prime Minister admits that our access to the European Union 27’s market will be less good after the end of the transitional period than it has been while we are a member, presumably Gibraltar will have to take a hit too.

The second question, which the Minister has not addressed at all, concerns the movement of people across the border between Gibraltar and Andalusia. What does he envisage for that? Presumably, the immigration Bill, which may one day cease to be a mirage floating out there, always several months away from us but never quite attained, will one day be sitting on our Order Paper and will have to regulate how Gibraltar treats migrants or other people crossing that border who currently and during the transitional period are covered by free movement. What are the Government’s plans for that?

[Lord Callanan]

I will give the noble Lord the answer that I have given when he has asked similar questions previously. This is a matter for the immigration Bill. Of course, we will need to discuss the matter of the frontier between Gibraltar and Spain with the Spanish authorities, which we will do in full consultation with the people of Gibraltar. We will be sure to let the noble Lord know when we have an outcome to those negotiations. I hope that the noble Baroness will feel free to withdraw her amendment.

[Lord Elystan-Morgan]

Have Her Majesty’s Government given any consideration to a matter that I understand was raised about 15 years ago—granting dominion status to Gibraltar? Dominion status is so supple, varied and wide that it could legitimately and properly encompass the constitutional aspirations of Spain, the United Kingdom and the Gibraltarians themselves.

[Lord Callanan]

I am not an expert on the legal ramifications of dominion status, so if the noble Lord will forgive me, perhaps I may write to him on that.

[Baroness Butler-Sloss]

My Lords, I thank all those who have taken part in this debate and the Minister for his partial reply. I recognise that nothing is decided until everything is decided. I concentrated on the business arrangements between the UK and Gibraltar because they are one of the major concerns. Of course, there are many other major concerns for Gibraltar, which is stuck in a very difficult position, but the one thing it has is good trade relations with the United Kingdom and a lot of business. That needed to be in at least the first stage of what would be done. It is not just gambling; it is also education, tourism and the other things that the noble Lord, Lord Luce, set out in his speech today.

It is good that, at least as between the United Kingdom and Gibraltar, there are clear guidelines and Gibraltar has protection. We know—I am very grateful to other speakers for having raised these issues—that the position of Gibraltar is extremely precarious vis-à-vis the EU. In relation to migrants, I understand that Gibraltar wants as many as come across the border daily, mainly from La Línea, to work. It is up to Spain whether it lets them come through. It is not up to the Gibraltar Government, who welcome them. As has been said, I think by the noble Lord, Lord Luce, 13,000 people a day go through, 10,000 of whom are from Andalusia and are Spanish workers. It is very much to the detriment of Spain if it does not allow them through. It was, of course, La Línea and the southern part of Andalusia that really suffered when Spain closed the border for some 15 years.

So, there are reasons why Spain might be sensible. One hopes that the positive discussions that go on may have a good effect. However, as the noble Lord, Lord Luce, and I have said, there are dangers of the threat to Spain. All of us enjoy Spanish holidays and many of us have Spanish relationships, as the noble Lord, Lord Collins, has, so we want to be fair to Gibraltar. Gibraltar is part of us but we want to continue to have good relations with Spain. I very much hope that, having got to the first stage—business relations, education and other relationships between Gibraltar and the United Kingdom—we will continue to battle on behalf of the whole of the United Kingdom, including Gibraltar, in whatever arrangements happen during Brexit. Having said that, I beg leave to withdraw the amendment.