Draft Competition (Amendment etc.) (EU Exit) Regulations 2020
(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move,
That the Committee has considered the draft Competition (Amendment etc.) (EU Exit) Regulations 2020.
It is a pleasure to serve under your chairmanship, Mr Gray. The purpose of the regulations is to implement competition law provisions in the withdrawal agreement and ensure that the UK’s competition regime functions as Parliament intended at the end of the transition period.
While the UK was a member of the European Union, its competition regime was integrated with the EU’s competition system. That remains the case during the transition period. As part of the UK’s preparations to withdraw from the EU, Parliament approved regulations in 2019 that created a separate and sovereign UK competition regime. They will come into force at the end of the transition period and require amendment to reflect the position set out in the withdrawal agreement.
Part three of the withdrawal agreement contains provisions on competition law. The regulations that the Committee is considering today amend the Competition Act 1998, the Enterprise Act 2002 and other domestic law containing competition provisions in order to implement fully the provisions in part three of the withdrawal agreement. The Government have consulted stakeholders, including the Competition and Markets Authority, competition lawyers and the Competition Appeal Tribunal in developing the regulations. An impact assessment was not undertaken because the impact of the regulations on businesses and the Exchequer is expected to be minimal.
I will briefly explain which of the withdrawal agreement’s provisions on competition law require further implementation and how the regulations achieve that. The effect on anti-competitive behaviour in mergers as they impact on the UK market after 1 January 2021 will be considered by the UK competition authorities under UK law. However, there will be a limited set of EU competition and merger cases that relate to the UK, which were opened, but not completed before the end of the transition period. Article 92 of the withdrawal agreement deals with those cases. I shall refer to them as live EU cases in the rest of my speech. The withdrawal agreement brings live EU cases to an orderly conclusion by giving the European Commission competence to complete them. Live EU cases will be completed under the law that applied when they opened. That approach provides certainty and legal clarity to the UK’s businesses, regulatory authorities and courts.
The regulations address three broad topics: live EU anti-trust cases; live EU merger cases; and EU commitments and remedies. First, with respect to the European Commission’s investigations of live EU anti-trust cases, the regulations amend transitional arrangements made in 2019 to reflect the European Commission’s jurisdiction over those cases. The amendments ensure that the CMA can assist the European Commission in those investigations in the way that currently happens under the Competition Act 1998. To implement fully the legal effect of the withdrawal agreement, the regulations restrict the CMA from investigating the UK aspects of a live EU anti-trust case until it has concluded. That reproduces an effect similar to that which currently arises under EU law. The CMA will of course be free to investigate the UK aspects of any anti-competitive behaviour that occurs after the end of the transition period.
Decisions of the European Commission and the Court of Justice of the European Union on live EU anti-trust cases will be binding in the UK for the purposes of private claims seeking follow-on damages for a breach of competition law. The regulations ensure that UK authorities must take into account any relevant penalty issued by an EU body in a live EU anti-trust case when deciding the amount of the penalty to be issued under UK law.
Secondly, the European Commission will continue to have exclusive competence over live EU merger cases, including in relation to any UK elements of the case. The regulations give the CMA the power to investigate a merger that is being re-examined by the European Commission following a successful appeal, if the Commission is not considering UK aspects of the merger in its re-examination. That will prevent any enforcement gap from emerging in the UK. The regulations amend the Enterprise Act 2002 and transitional arrangements made in 2019 to reflect the European Commission’s jurisdiction over live EU merger cases.
Thirdly, the withdrawal agreement states that the European Commission will remain responsible for monitoring and enforcing the UK aspects of commitments accepted and remedies imposed in connection with EU competition cases. Those commitments and remedies often relate to multiple EU member states, and the European Commission would normally be best placed to secure their continued compliance. However, the withdrawal agreement allows, by mutual agreement, the monitoring and enforcement of the UK aspects of such commitments and remedies to be transferred to the UK’s competition authorities. The regulations therefore give the CMA monitoring and enforcement powers to secure compliance with commitments and directions if it is agreed that the responsibility to monitor and enforce them will be transferred to the UK.
Those powers are modelled on the CMA’s existing powers to monitor and enforce domestic commitments and remedies. They will also apply to certain sector regulators that enforce competition law concurrently with the CMA.
In addition to those three categories of amendment, the 2019 regulations are amended to make appropriate reference to the end of the transition period. Consistent with the approach that the 2019 regulations took, the draft regulations will revoke a recent EU regulation on investment screening, which will have no practical effect on the UK beyond the end of the transition period.
The provisions on competition law in the withdrawal agreement mean that the UK will move smoothly to a separate and sovereign competition regime. The regulations will provide legal certainty for UK businesses, the CMA and UK courts. They make only those changes that are necessary to effect the withdrawal agreement provisions and to ensure that the UK’s competition regime functions as intended by the regulations that Parliament approved in 2019. I therefore commend them to the Committee.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Gray.
I thank the Minister for his opening remarks and emphasise that the Opposition believe that open and competitive markets promote consumer welfare, that healthy competition is a fundamental part of a prosperous economy, and that effective competition law is an absolute prerequisite of achieving that. Well-balanced legislation in this area can bring down prices, encourage product innovation and lead to better quality service delivery.
As a member of the European Union, the UK has benefited from harmonised competition standards across the single market for decades. Those rules have protected UK businesses and consumers from the negative effects of so-called abusive practices from large corporations based elsewhere. They have been developed at EU level by UK representatives in our own national interest. I am sure that the Minister agrees that European competition law was primarily instigated and driven by UK competitive ideas, practices and regulators. To a certain extent, we have left the EU with our competition law framework. Unfortunately, we are not so clear how the sovereign competition framework that the Minister mentioned will look and where it is going. Perhaps he can provide greater clarity on that.
It is certain that the weight of 600 million consumers that the European Union brings to the table has given it great clout on the international stage. The EU’s robust competition framework has been used to take on tech giants, curb unhealthy market dominance and push for consumers to be able to migrate their personal data from platform to platform. So even though the UK has technically left the European Union, in reality we continue to benefit from EU rules now.
Today’s instrument is being laid partly to amend legislation to reflect the fact that the UK will be covered by EU protections right up until the end of the transition period, as the Minister said. It formalises the European Commission’s ability to carry out its agreed functions under Title X of part three of the withdrawal agreement in the UK during the transition. As the Minister set out, that includes the European Commission continuing to have the jurisdiction it needs to make final decisions on merger referrals made to it before the end of the transition period. Of course, the retention of those rules during the transition period makes absolute sense. It limits disruption at an already difficult time and keeps our markets functioning harmoniously with our nearest neighbours.
We will not oppose the instrument, although we have some concerns. The transition period comes to an end at the end of this year, in less than two months. Businesses with a base in the UK will continue to be subject to European Union frameworks insofar as any of their actions affect competition within the European Union, even after the transition period ends, but the UK will no longer be able to have a say in drawing up the rules. We will effectively be a rule taker rather than a rule maker. In fact, the UK courts will no longer have the facility to refer questions of interpretation of European Union law to the European Court of Justice after Brexit, which could see damaging divergences between UK and European Union competition rules that may leave businesses confused and over-burdened.
Business leaders continue to warn that we could see more red tape, not less, after the transition period because, as I have suggested, businesses operating in both the UK and the European Union—this applies to many businesses operating across Europe—will be required to deal with both the CMA and the European Union competition authorities simultaneously on mergers and competition investigations. Will the Minister confirm that that will be the case and that they will have to have regard to those authorities’ regulations? Can he offer any assurances that UK businesses will not be burdened with red tape, and will he outline how the CMA will keep that in mind?
Finally, I hope the Minister will use this opportunity to lay out how he and his Government will make sure that businesses and the public will continue to be safeguarded against unscrupulous competition practices in future. As I have suggested, the European Union has used its competition powers, and looks to do so even more in the future to address the lack of competition in data, digital and platform markets. Although we see the European Union making progress in that area, we have had no indication from the competition Minister as to whether the UK will also address the unhealthy lack of competition in platform, data and digital markets.
Paul Scully
I thank the hon. Member for her considered comments and for agreeing that these regulations are the way forward. As I have said, they are needed to give effect to the provisions that we have already agreed in the withdrawal agreement, so they very much relate to a specific set of cases. I will try to cover the areas that the hon. Lady talked about. We have the Penrose review into the competition regime in the UK. As soon as that comes back, we will consider it and come up with the changes and improvements that we need. We both agree that healthy markets need to function well together to ensure a fair deal for other competitors, and consumers as well. It is really important that consumers are at the heart of what we do.
Chi Onwurah
Will the Minister indicate when the Penrose review will be completed?
Paul Scully
The review is working at pace. I cannot give a timescale at the moment, but as soon as the review comes back we will consider it quickly, because we want to make sure that we have the best competition regime. As the hon. Lady stated at the beginning of her speech, UK competition specialists were at the heart of the EU regime. We are leaving the regime, but we are leaving with our competition experts, so they will be at the heart of what we do. We have made it clear in our published proposal for the comprehensive free trade agreement with the EU that we intend to maintain international co-operation on competition enforcement. The EU has expressed a desire to maintain UK-EU co-operation on competition law matters in its own proposals as well. We want to make sure that the CMA continues to participate in multilateral networks such as the international competition network and the OECD.
Without the regulations the UK would fail to implement its obligations in competition law under the withdrawal agreement. Inconsistencies between the withdrawal agreement and competition law would cause significant uncertainty for UK businesses, the CMA and UK courts. The changes that I have described today are required to complete the process of preparing the UK statute book for the transition. I hope the Committee approves the regulations.
Question put and agreed to.
Draft Reciprocal and Cross-Border Healthcare (Amendment etc.) (EU Exit) Regulations 2020
(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
I beg to move,
That the Committee has considered the draft Reciprocal and Cross-Border Healthcare (Amendment etc.) (EU Exit) Regulations 2020.
It is a pleasure to see you in the Chair, Mrs Miller, and to serve under you. My right hon. Friend the Secretary of State for Health and Social Care has laid before the House this statutory instrument, which concerns reciprocal and cross-border healthcare. In summary, it is a technical instrument that updates the 2019 legislation, taking into account the withdrawal agreement, which was not in place when the legislation was made in 2019 and offers significant healthcare protections for those relying on reciprocal healthcare arrangements in the EU. The aim is to ensure that the statute book is ready for the end of the transition period.
The Government are introducing the statutory instrument under section 8 of the European Union (Withdrawal) Act 2018 and under the Healthcare (European Economic Area and Switzerland Arrangements) Act 2019. On 31 December 2020, the transition period will end and the EU withdrawal Act will automatically retain the relevant EU law, and the domestic implementing legislation, in UK law. If we did not legislate further, the retained law would be incoherent and unworkable. There would also be uncertainty and a lack of clarity about patients’ rights to have UK-funded healthcare in EEA countries and Switzerland.
In April 2019, the Government made three statutory instruments to correct the deficiencies in retained EU law relating to reciprocal healthcare, as part of the UK’s preparations for leaving the EU without a deal. The UK has since agreed with the EU reciprocal healthcare arrangements under the withdrawal Act and entered a transition period. The purpose of this instrument is basically to fix this issue—first, to reflect the transition period and the withdrawal agreement by making consequential and technical amendments to four EU exit instruments, which will come into force on 31 December. Those are the Social Security Coordination (Reciprocal Healthcare) (Amendment etc) (EU Exit) Regulations 2019, the National Health Service (Cross-Border Healthcare and Miscellaneous Amendments etc.) (EU) Exit) Regulations 2019, the Healthcare (European Economic Area and Switzerland Arrangements) (EU Exit) Regulations 2019 and the Health Services (Cross-Border Health Care and Miscellaneous Amendments) (Northern Ireland) (EU Exit) Regulations 2019. I will refer to those, for ease, as the 2019 EU exit regulations.
The purpose of this instrument is, secondly, to update references in NHS legislation to EU forms, to entitlements under EU treaties and to concepts such as “EU rights” that will no longer be appropriate after the end of the year; and, thirdly, to set out clearly the rights of patients in a transitional situation who will access pre-authorised or ongoing treatment in the EEA under the cross-border healthcare directive following the end of the transition period. This instrument will allow the Government to complete the funding of those patients who are in the middle of treatment at the end of the year, or if they have already applied for authorisation.
As the instrument is quite technical, I am sure that members of the Committee will welcome a summary of the 2019 EU exit regulations. As Committee members all know, those regulations were made in preparation for our exit from the EU and will come into force at the end of the transition period. They revoked the EU reciprocal healthcare legislation and social security co-ordination regulations, as well as the domestic legislation implementing the cross-border healthcare directive, in relation to England, Wales and Northern Ireland. As the arrangements are inherently reciprocal, it would not be possible to operate them without reciprocity from the member states.
The regulations enabled the continuation of reciprocal healthcare arrangements until 31 December 2020, to the extent that that was agreed with member states through bilateral reciprocal healthcare arrangements. They made provision for the UK to protect patients in a transitional situation accessing reciprocal healthcare on exit day in the event that the UK left the EU without a deal, in so far as that was possible unilaterally. The regulations conferred functions on the NHS Business Services Authority and on health bodies—that is, NHS England and devolved Administrations’ health boards—to implement aspects of reciprocal healthcare arrangements. That includes the administering of healthcare payments.
In addition, in March 2019 the House passed primary legislation—the Healthcare (European Economic Area and Switzerland Arrangements) Act 2019— providing the legal basis for funding and implementing future reciprocal healthcare arrangements.
I will now outline the reciprocal healthcare arrangements that have been agreed with the EU under the withdrawal agreement since the 2019 EU exit regulations were made. In practice, the agreement that we have reached with the EU means that there are no changes to the reciprocal healthcare access for state pensioners, workers, students, tourists and other visitors, the European healthcare insurance card scheme, or planned treatment before 31 December 2020.
From 1 January 2021, reciprocal healthcare arrangements will not change for those individuals who are in scope of the withdrawal agreement. This means that, regardless of any future healthcare arrangements, state pensioners and workers who have moved to the UK or the EU and are resident there before 31 December 2020 will continue to have lifelong reciprocal healthcare rights for as long as they live in that country and are covered by the agreement.
The agreement also protects UK and EU nationals who find themselves in a cross-border situation over the end of the transition period. For example, somebody whose holiday begins before 31 December 2020 but ends afterwards can continue to use their EHIC to access any treatment they need until they leave that country by travelling to another EU member state or returning to the UK.
A student who habitually resides in the UK but is studying in the EEA or Switzerland before 31 December 2020 can continue to use their EHIC to access immediate and necessary healthcare in the country of study for the duration of their course. People receiving planned medical treatment in the UK or through the EU S2 route will be able to commence or complete their treatment, provided that authorisation was requested by 31 December 2020. This provides certainty to patients, as it guarantees that they will be able to complete their course of treatment.
I will now address the amendments made by the instrument and the reasons for making the changes now. As I have just set out, the withdrawal agreement protections mean that several transitional measures under the 2019 EU exit regulations have now been superseded by the withdrawal agreement protections. Therefore, they are being revoked through this instrument.
One element, namely cross-border healthcare under the cross-border healthcare directive, was not included in the withdrawal agreement. It will no longer apply as a matter of EU law from 31 December 2020. The cross-border healthcare directive is separate from the reciprocal healthcare rights under the social security co-ordination regulations, for example for pensioners, students, tourists and workers, which relate to the free movement of people. The directive is linked with the single market and the free movement of services, which is ending with the UK’s departure from the EU. The directive facilitated patients’ rights to travel to another EEA country and to receive qualifying healthcare and reimbursement, capped at the cost of state-provided treatment in their own country.
As the cross-border directive is ending, this instrument will ensure that the Government can finish funding those who have received or applied for treatment through this route, and those who are in the middle of treatment at the end of the year. This will provide reassurance for patients, as people will not face an abrupt change in their access to healthcare at the end of the year, and it ensures that their reimbursement rights are protected.
The withdrawal agreement also means that the 2019 provisions that allowed the UK to maintain current reciprocal healthcare arrangements until the end of 2020 are no longer required. These provisions were subject to bilateral agreements with EEA countries and Switzerland. The withdrawal agreement automatically continued current agreements with those countries during the transition period and therefore the 2019 provisions are being revoked as redundant.
As many hon. Members will know, the Healthcare (European Economic Area and Switzerland Arrangements) Act 2019 provides powers to give effect to healthcare arrangements, including those that may be comprehensive, bespoke or different from the current arrangements provided by the EU framework. The Act also provides the legislative framework to implement long-term complex reciprocal healthcare arrangements with the EU.
Finally, other technical amendments made by the instrument include updating EU references that will no longer be appropriate following the end of the transition period. The devolved Administrations have been consulted in the drafting of this instrument at every stage and they have provided consent for the Government to proceed. The instrument also makes provision in relation to and on behalf of Northern Ireland and Wales.
I am grateful for the continued collaborative approach in this area. Indeed, the Department and the devolved Administrations have had excellent engagement and clear arrangements in place to ensure the implementation of reciprocal healthcare arrangements after the end of the transition period. I am pleased to say we have worked openly and collaboratively with operational partners in NHS England, NHS Improvement and the NHS Business Services Authority, ensuring that reciprocal healthcare arrangements will be successfully implemented.
Looking to the future, reciprocal healthcare arrangements with the EU are subject to ongoing negotiations. The UK has been clear that it wishes to establish arrangements that provide healthcare cover for tourists, short-term business visitors and service providers.
I am also pleased to report good progress with Ireland on agreeing a specific healthcare arrangement between the UK and Ireland, under the auspices of the common travel area. That will seek to ensure that the residents of the UK and Ireland continue to be able to access necessary healthcare when visiting the other country, as well as benefiting from co-operation between UK and Irish healthcare providers, regardless of the outcome of negotiations with the EU.
Finally, as this instrument proposes no significant changes to the current regulatory regime, we estimate there will be no significant impact on industry or the public sector. As this instrument makes technical amendments, and does not introduce new policy, we have not conducted an impact assessment.
In summary, the overarching aim of the instrument is to ensure that the UK statute book is functional, reflecting the withdrawal agreement and EU exit. It also ensures that reimbursement rights are provided for people accessing healthcare at the end of the transition.
Liz Kendall (Leicester West) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Miller. We will not vote against the regulations because they provide some certainty for some citizens in terms of cross-border healthcare arrangements after 31 December, as set out in the withdrawal agreement.
I want to put on record the concerns of Opposition Members and a range of patient groups and healthcare organisations that the regulations do not go anywhere near far enough in protecting rights to healthcare for British citizens who travel to the EU. They could leave some people with underlying health conditions not completely covered and cause real problems for the NHS, at precisely the time when it needs to be totally focused on dealing with covid-19 and the backlog of health problems that has caused. It is important that the Government secure agreement with the EU and do not end up with no deal.
As the Minister has explained, the regulations update existing regulations, so they reflect reciprocal healthcare arrangements as set out in the withdrawal agreement. United Kingdom nationals who live and work in EU and European Free Trade Association countries on or before 31 December will continue to be entitled to healthcare in that member state, under that member state’s rules, and have access to an EHIC issued by that member state. That is good.
European Union and EFTA nationals registered in the UK on or before 31 December will continue to be entitled to NHS services and a UK-issued EHIC, which is also good. S1 holders, essentially UK state pensioners who live in EU or EFTA countries on or before 31 December will continue to be entitled to UK-funded healthcare as well. That is also good.
Can the Minister confirm who and what is not covered by the regulations and therefore will not be covered if we end up in the disastrous situation of no deal? Can she confirm that after 31 December, if the UK Government fail to reach agreement with the EU, UK citizens who are normally resident in an EU member state will not be entitled to free NHS care when visiting the UK, unless and until any bilateral arrangement is reached with that individual member state?
Can the Minister confirm that UK citizens who go on holiday, or a business trip in an EU member state, will no longer be able to use their EHIC card and therefore have to buy travel insurance to make sure they are covered? Can she confirm that if someone falls sick in France or Italy, they may get immediate emergency treatment but could then be required to pay for it afterwards, as well as for any follow-up care? Will she spell out the estimated additional cost of buying this travel insurance for the 50 million people a year who go on holiday or on business trips to the EU—or at least did, before covid-19? Will she also set out the Government’s estimate of the number of people who may be unable to get insurance because of an underlying health condition?
For example, we know from Kidney Care UK that the 30,000 people on dialysis can currently travel throughout Europe and receive their dialysis free of charge because of the EHIC. Even though dialysis is a life-sustaining treatment for kidney failure, it is not covered by travel insurance, and without reciprocal healthcare arrangements, it will cost up to £1,000 per week. How many more thousands of people with pre-existing health conditions will not be able to get insurance and could be put in the same situation if the Government fail to reach a deal? Have the Minister or the Government made any estimate of how many people this could affect?
Will the Minister also spell out the cost to the NHS, in terms of time and red tape, of trying to get reimbursement for EU citizens having to use healthcare here? Each of the four nations of our great United Kingdom manage their own recovery costs, and within each nation, individual trusts or health boards are responsible for directly charging patients for the costs of their care. The Minister will know how difficult it has been for trusts to reclaim costs from patients from outside the EU. What is her estimate of the cost to the NHS, in the event of no deal, or of no individual bilateral arrangements, of hospitals in this country having to reclaim costs from every single EU person who comes here and ends up needing healthcare?
The Brexit Health Alliance—a group of organisations that want to ensure that the views of healthcare users and providers are reflected in the Brexit negotiations, including the Academy of Medical Royal Colleges, NHS Providers, the Richmond Group of Charities and the Association of the British Pharmaceutical Industry—says:
“The current arrangements involve minimal bureaucracy for patients and healthcare providers, underpinned by well-established systems for reimbursement between member states. The NHS will face unwelcome increased resourcing burdens, if it is required to handle new, more complex administrative and funding procedures when providing care to EU citizens in future.”
I am sure that every hon. Member agrees that that is the very last thing the NHS needs when it is facing the biggest health crisis of its life, with a huge backlog of untreated conditions because of covid-19. I also ask the Minister, if there is any dispute between the UK and an EU member state about a cross-border healthcare arrangement, who would have jurisdiction? Would it be the European Court of Justice? I think people would like to know the answer.
As I said at the beginning of my comments, we will not oppose the draft regulations, because they at least provide some security and certainty for some groups of people. However, the Minister will know that there are huge gaps that must be filled. The British Medical Association says that failure to reach a deal would
“lead to significant disruption to…individuals’ healthcare arrangements, an increase in costs of insurance, and uncertainty regarding accessing healthcare abroad. Moreover, the NHS would face a drastic increase in demand for services, which could dramatically increase its costs and place greater pressure on doctors and clinical staff.”
The Government say that, if they cannot reach agreement with the EU as a whole on these issues, they will negotiate individual bilateral deals with individual EU member states, but when? How long will that take? What will happen to patients and NHS staff meanwhile?
The Prime Minister spent the last general election saying that he had an “oven-ready deal”, but on healthcare arrangements, as in so many other areas, that deal is, so far, nowhere to be seen. Holidaymakers, businesspeople, patient groups, healthcare professionals and NHS organisations urgently need clarity. The Government must deliver.
Jo Churchill
There was quite a lot there, and I will try to canter through what I can. As the hon. Lady knows, my door is always open. The majority of what she alluded to is the subject of ongoing negotiations, which are currently being handled with the Foreign, Commonwealth and Development Office. We are working hard to ensure that people can enjoy the travel that they have enjoyed thus far.
I fully recognise that it is challenging for those with pre-existing conditions. I know how difficult it is to secure travel insurance in the current environment when travelling outside the EU. However, the Money Advice Service has recently launched an insurance directory for people with serious medical conditions, which brings together specialist firms with the aim of making it easier to find travel insurance that provides the right health cover. Working with the FCDO, the DHSC stands ready to support UK nationals who might find themselves in difficulty.
On cost recovery, identified income from NHS costs for overseas visitors has increased significantly over the past five years, rising to £760 million in 2019-20. NHS Improvement is working closely with NHS trusts to improve cost recovery. As I said, we have been most grateful for the work that the NHS Business Services Authority has done with us to enable that work to go forward. As the hon. Lady well knows, many of these things will become clearer in the next few weeks, but there have already been good conversations with some member countries. It is hoped that we will shortly be able to have more clarity on the matter.
I want to assure members of the Committee that the overarching aim of the SI is to ensure that the UK’s statute book is functional by reflecting the withdrawal agreement and EU exit, and to ensure that reimbursement rights are provided for people accessing healthcare at the end of the transition period, when the directive will no longer apply to the UK. The withdrawal agreement provides a robust framework for reciprocal healthcare, which includes significant transitional and longer-term protections, as the hon. Lady mentioned. To support people in understanding their entitlements, the Government have published guidance on people’s rights under the withdrawal agreement on gov.uk, and we are keeping the information updated regularly so that people are clear about the reciprocal health rights, their rights and the actions they might need to take as they prepare for the end of the year.
Looking ahead, reciprocal healthcare arrangements with the EU are subject to ongoing negotiations, as I said earlier. Finally, I thank again the devolved Administrations and our operational partners in the NHS, who are working extremely hard. Their collaborative and constructive engagement means that we have clear arrangements in place and assurance for patients’ healthcare at the end of the year. I commend the regulations to the Committee.
Question put and agreed to.
Draft Timber and Timber Products and FLEGT (Amendment) (EU Exit) Regulations 2020
(3 years, 8 months ago)
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The Lord Commissioner of Her Majesty’s Treasury (James Morris)
I beg to move,
That the Committee has considered the draft Timber and Timber Products and FLEGT (Amendment) (EU Exit) Regulations 2020.
The regulations were laid before the House on 5 October and amend the Timber and Timber Products and FLEGT (EU Exit) Regulations 2018, on the trade in timber and timber products. The technical amendments in the statutory instrument address deficiencies that have arisen since the 2018 exit regulations were made. They relate, in addition, to the implementation of the Northern Ireland protocol. The minor amendments in the statutory instrument will ensure that the regulations for the trade in legally harvested timber will operate effectively in the United Kingdom.
I should make it clear that all the amendments made by the statutory instrument are technical operability amendments and do not introduce any policy changes. The policy is considered to be reserved, and we have worked with the devolved Administrations on the regulations.
The licensing regulations address the issues of illegally harvested timber through two measures. On the supply side, the FLEGT regulations provide for a licensing regime with countries that have entered into a partnership agreement, allowing them to issue licences that prove legality of harvest. On the demand side, the timber regulation prohibits the placing on the market of illegally harvested timber and requires businesses to exercise due diligence on timber to ensure its legality.
Illegal logging is a significant driver of deforestation, which is a major contributor to climate change and leads to the loss of biodiversity and critically important ecosystem services. It directly affects rural communities that rely on forests for livelihoods, and results in revenue loss for Governments and legitimate businesses. The timber regulation and FLEGT licensing system are therefore vital tools in preventing the illegal trade in timber and the associated economic, environmental and social costs.
The main purpose of the statutory instrument is to make amendments to the 2018 exit regulations, to facilitate operability within the context of the Northern Ireland protocol. That is achieved by substituting, in several instances, “Great Britain” for “the Community” and “the United Kingdom”. There are several instances in which references to the United Kingdom are retained from the 2018 regulations. That is to do three things: first, the definition of a “partnership agreement” in the UK FLEGT regulations will continue to refer to an agreement with the UK. The UK reference is necessary because a partnership agreement is a treaty, and only the UK may enter into treaties with other states.
Secondly, for the purposes of the UK timber regulation, reference to the UK defines the market on which timber is placed in the United Kingdom. If that market were to be defined as Great Britain, it would have the effect of imposing the obligation to exercise due diligence on businesses importing timber from Northern Ireland to England, Scotland or Wales. That would represent a new check on goods moving from Northern Ireland to Great Britain, so the definition “the United Kingdom” is retained.
The third retention of “the United Kingdom” is in relation to monitoring organisations. Those are approved businesses that are able to offer access to their due diligence systems to those placing timber on the market. The regulations set out requirements in relation to where businesses must be legally established if they are to apply to be a monitoring organisation. If this area were to be defined as Great Britain, it would preclude businesses in Northern Ireland from being able to apply to be a monitoring organisation under the UK regulations. As such, the definition “the United Kingdom” has been retained.
This instrument also amends the dates on which the first reports on the UK timber and FLEGT regulations are required. This is to ensure an appropriate amount of time between the implementation of the regulations and the first report being produced. Without that amendment, the first report would be due just three months after the regulations came into force.
The regulations also correct a typographical error in the 2018 exit regulations by changing “in” to “by” in relation to sanctions imposed by the United Kingdom on timber imports or exports.
This instrument also amends the reporting period for the FLEGT regulation to the calendar rather than financial year, to bring it in line with other reporting schedules. This amendment was necessary to deal with an amendment to the EU regulations made after our 2018 exit statutory instrument.
Finally, the instrument substitutes “IP completion”—for the implementation period—for “exit” in the context of the date at which existing monitoring organisations established in the UK will retain recognition. This change is simply to correct a deficiency that has arisen since the 2018 exit regulations.
This instrument has always been intended for the affirmative procedure. Both the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee have formally considered the instrument without comment. The instrument was not subject to consultation as it does not alter existing policy.
In line with published guidance, there is no need to conduct an impact assessment for this instrument, as no, or no significant, impact on the private or voluntary sectors is foreseen. The instrument relates to the maintenance of existing regulatory standards, and the cost of any direct impact from the instrument falls under £5 million. The territorial extent of this instrument is the United Kingdom. This is considered a reserved policy; devolved Administrations were engaged in the development of the instrument and are content.
The office for product safety and standards—part of the Department for Business, Energy and Industrial Strategy—is the delivery body for the regulations and will continue in that role for both Northern Ireland and Great Britain. It has been involved in the development of the instrument and has no concerns relating to implementation or resources. Its expertise in the enforcement of the regulations, and its history of working with businesses to understand and meet their obligations, will ensure a consistent and transparent transition.
The UK has a long and proud history of work in this area, and the Government’s 25-year environment plan has made clear our commitment to support and protect international forests. These regulations will ensure that we can continue to protect valuable global resources, safeguard the livelihoods of some of the world’s most vulnerable people, and contribute to tackling climate change. I commend the draft regulations to the Committee.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to under your chairmanship, Mr Pritchard, and it is very good to see the Minister in his place. I commend him on his very full introduction and I pass my good wishes to his colleague, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane (Rebecca Pow), who we look forward to seeing tomorrow to continue discussions.
This all sounds very straightforward, as of course we are all in favour of reducing illegal logging. It is perhaps worth starting with the European Timber Regulations 995/2010, which the UK was at the forefront of helping to create. It says in its introduction:
“Illegal logging is a pervasive problem of major international concern. It poses a significant threat to forests as it contributes to the process of deforestation and forest degradation, which is responsible for about 20 % of global CO2 emissions, threatens biodiversity, and undermines sustainable forest management and development including the commercial viability of operators acting in accordance with applicable legislation. It also contributes to desertification and soil erosion and can exacerbate extreme weather events and flooding. In addition, it has social, political and economic implications, often undermining progress towards good governance and threatening the livelihood of local forest-dependent communities, and it can be linked to armed conflicts.”
This is a big, important issue, although it may seem at first sight to be a fairly dry one. We also commend the Government for taking further steps to tackle illegal logging abroad by consulting on due diligence on forest risk commodities. Although the Government may be doing well on that, I gently point out that they are not doing quite so well at home, either on meeting the tree planting targets or on environmental protections, which are being decimated by the Environment Bill.
Once again, we are noticing errors and deficiencies in these SIs. I have huge sympathy for those who draft them, because they are very complicated, but it would be useful to know whether the Department is tracking the number of errors that we have to deal with. I should point out that I do not expect the Minister to have all the answers to my questions this afternoon—I quite understand the situation.
I take issue slightly with some of the points about there being no need for consultations because the instrument does not alter existing policy and has no impact on business. We hear those points in a succession—if we track back, the same was said for the previous instrument, which this one amends—and frankly, out in the real world, that seems absolutely laughable. For those involved in the trade, everything to do with this whole area has led to more bureaucracy, more duplication, more complexity and inevitably more cost.
David Hopkins, chief executive of the Timber Trade Federation, told me that he supports the introduction of UK timber regulation:
“However this will increase bureaucracy for members (on top of many other layers of increased bureaucracy). At present, any goods originating from or being imported into the EU are subject to due diligence by the “First placer”, i.e the company that first places the goods on the market. The goods can then be traded freely among the other members of the Single Market.”
He provided an example:
“If hardwood from West Africa is imported to a warehouse in Belgium, the Belgian importer would conduct due diligence for this. That Belgian company could then sell it to a UK importer without the UK importer having to conduct further due diligence. This is because the EUTR sees the whole of Europe as having “one” (or the same) risk profile.
Now, under the UKTR, we will no longer be able to trade freely. This will mean having to conduct due diligence on ALL imports from Europe where currently there is none. Secondly, it will mean treating different countries as having different risk profiles (e.g. rather than seeing Sweden and Poland as both being “part of Europe” we will have to separately evaluate the risks inherent in each. It is another layer of bureaucracy most business could do without! It is also a doubling up of efforts which have already been conducted within the EU and now repeated in the UK on the same goods.”
Minister, please, let us have some real-world analysis of the harm that these changes do; just saying “there is no impact” is not good enough.
Sadly, that is not the end of the harm being done, because the voluntary partnership agreement negotiated by the European Union with tropical countries, particularly in the Congo basin, has been crucial to forest preservation. Again, the Timber Trade Federation has said:
“We are very saddened and angry that the UK will lose its decision making voice within the EU about this important area of climate and forest protection. The UK was a leading advocate and really pioneered this ground-breaking approach. Right now, the UK should be showing leadership, not walking away from the table where decisions are made.”
The changes do not just mean more bureaucracy and more cost, they mean no influence. Will the Minister tell us just how the UK plans to work with those VPAs? Are we to set up parallel agreements? How much will that cost? Will we need duplicate monitoring systems, and again, at what cost? What will we do through the UN Food and Agriculture Organisation to regain lost ground?
The Northern Ireland issue is a detail that the SI tries to address. The Timber Trade Federation described the situation as “an enormous headache”, as Northern Ireland businesses will face having to do due diligence on goods coming in from Great Britain, opening up a potential weak spot for smuggling, and because there will be widespread confusion about goods that used to be marked with the longstanding CE designation will have to be marked UKCA—UK conformity assessed. Who knew that this would be so complicated?
I do not expect the Minister to have all the answers, but the regulations were discussed the other day in the House of Lords, where some questions were raised, so let us try some of those. The Liberal Democrat spokesperson queried whether NI companies could use only monitoring organisations on the approved EU list. The rather elliptical reply from the Minister in the other place was:
“officials are not yet able to provide a forensic answer”—[Official Report, House of Lords, 27 October 2020; Vol. 807, c. 180.]
I love that. I ask, one week on, whether the officials any closer? In fact, a July 2020 note from the European Commissioner throws some light on that issue, and I am grateful to Clotilde Henriot of ClientEarth for drawing my attention to it.
My Labour colleague in the Lords pressed the Minster there on the voluntary partnership agreements, and I echo her questions, including on the key matter of divergence. If the EU makes new or improved agreements, will we mirror them, do we follow them, do we have any influence on them, and what are the follow-on impacts on Northern Ireland? The Minister in the Lords revealed that a further instrument will be introduced in January 2021, relating to the FLEGT scheme in Indonesia. My understanding is that the UK already has a VPA with Indonesia that dates from April 2019. If the regulations need amending because of Brexit, what happens between 1 January and the date that the instrument takes effect?
What of the other VPAs that the EU already has in place with Cameroon, the Central African Republic, Ghana, Indonesia, Liberia, the Democratic Republic of Congo and Vietnam, as well as those that have already been initiated with Guyana and Honduras, and those under negotiation with Côte d’Ivoire, Gabon, Laos, Malaysia and Thailand? When my colleague queried the impact on Northern Ireland if the UK and EU diverge on VPAs, the Minister in the Lords cheerily admitted:
“There are questions that remain unanswered”.—[Official Report, House of Lords, 27 October 2020; Vol. 807, c. 181.]
Frankly, that really is not good enough, some three or four weeks out.
In his opening statement, the Minister gave us some explanation of how some of this might be resolved. Paragraph 7.3 of the explanatory memorandum states:
“In order to ensure unfettered market access between Northern Ireland and GB, through the avoidance of new checks, the definition of the internal market has been retained as the United Kingdom.”
When I read the detail of the instrument, I was not entirely sure how that was put into effect. I have read those lines many times. It seems that the Government are saying that, for those purposes, the GB-NI divide that has been created is somehow wished away and we are treated as one. I am not quite sure how that will be achieved, and although I recognise that the Minister might not have an immediate answer, I would be grateful for a written explanation, not least because the matter is one of the major conundrums that we face, and it cannot just be wished away.
James Morris
I thank the shadow Minister for his characteristically detailed contribution. He asked how the UK intends to work with voluntary partnership agreements. I will write to him on that. He also raised a number of issues to do with the Northern Ireland protocol. Again, I will write to him with an explanation of how the instrument operates with the protocol, if that is satisfactory to him.
James Morris
The instrument would make no change to the existing policy to tackle the trade in illegally harvested timber. The Government’s 25-year environment plan sets out our continued commitment to protecting and restoring the world’s forests and to supporting sustainable agriculture. The instrument would ensure that we have the operable regulations that we need to address that.
As I have outlined, all the changes that the instrument would introduce are technical operability amendments to ensure that we can continue to operate the regulations and protect global forest resources after the end of the transition period. I commend the regulations to the Committee.
Question put and agreed to.
Draft Education (Exemption From School and Further Education Institutions Inspections) (England) (Amendment) Regulations 2020
(3 years, 8 months ago)
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The Minister for School Standards (Nick Gibb)
I beg to move,
That the Committee has considered the draft Education (Exemption From School and Further Education Institutions Inspections) (England) (Amendment) Regulations 2020.
It is a pleasure to serve under your chairmanship, Ms Fovargue, for the first time. It is good to be here.
In the light of the coronavirus pandemic, Ofsted’s routine inspections are currently suspended. We have always said that we would keep the resumption of routine inspections under review, and the Prime Minister’s announcement on Saturday about further national restrictions over the next four weeks means that, more than ever, we will need to continue to do that, in collaboration with schools and colleges. We are working through the implications with those affected, and we will have more to say on that. When the time is right, we believe that every category of school and college should be inspected routinely, and that that will contribute to our wider reforms to raise standards.
Inspection is a vital part of our system, and Ofsted was founded on the principle of universal inspection. It was right in 2012 to introduce the exemption, as there was a need to increase the autonomy and freedom of our best schools and colleges, and it meant that Ofsted could focus on excellence and concentrate on where inspection was needed most—to drive up standards in underperforming schools. Standards have risen: 86% of schools are now rated “good” or “outstanding”, compared with 68% in 2010.
Autonomy and trust in our best schools and colleges are important principles that remain relevant, but that must be balanced against the need to ensure that inspection arrangements offer an appropriate level of assurance to parents, students, employers, schools, colleges and the public more generally. Many exempt schools and colleges were judged outstanding under previous Ofsted inspection frameworks, which placed different expectations on them, which is starting to lead to a loss of confidence in the outstanding grade.
Last autumn, following extensive consultation, Ofsted introduced a new education inspection framework. This is a real step forward. It strengthens the focus on having a carefully considered and sequenced curriculum and makes improvements to judgments on leadership, personal development and behaviour. All schools and colleges should benefit from an independent assessment under Ofsted’s new framework and an up-to-date, rounded picture of quality and performance. That is why we should lift the exemption.
I take this opportunity to thank the external organisations, teachers and individuals who took the time to respond to our public consultation at the start of this year. We received strong support: around 90% of respondents agreed with the removal of the “outstanding” exemption for schools and colleges, and around 80% agreed with our proposed approach to doing that.
The draft regulations revoke the current set of regulations that provide for the exemption, meaning that all outstanding schools and colleges will once again be subject to routine inspection. They also introduce requirements on when routine inspections of formerly exempt schools must take place. Specifically, the chief inspector will be required to carry out an initial inspection of all these schools before 1 August 2026, and in some cases, where the initial inspection shows that outstanding performance may not have been maintained, there will be a follow-up inspection before 1 August 2027. Thereafter, subsequent inspections must take place within the five-year window that applies to other schools. The timescales for college inspections are not prescribed in regulations, but as a matter of policy will follow a similar approach to schools.
If hon. Friends and hon. Members look at the explanatory memorandum that accompanies the draft regulations, they will see the policy behind the timing of new inspections of those outstanding schools. There is a difference in approach between schools that were last inspected before September 2015 and those that have been inspected and found to be outstanding more recently than September 2015. Our intention is that the resumption of routine inspections for formerly exempt schools and colleges will align with a planned general restarting of Ofsted’s routine inspections. The regulations do not signal that resumption, but they enable it at the appropriate time. So that all schools and colleges can benefit from having an up-to-date picture of their performance, we must now lift the exemption. I propose that the regulations be approved.
Wes Streeting (Ilford North) (Lab)
It is a pleasure for me, too, to serve under your chairmanship this afternoon, Ms Fovargue. I know the result everyone is waiting for today is to find out whether this Committee will agree the regulations, which have already been agreed in the other place. We do not want to detain anyone for too long.
It will come as no surprise to the Minister that we support the regulations, not least because they reverse the legislation that was incorporated in the Education Act 2011, which we opposed at the time. We agree with the case set out by the Minister: schools can change rapidly due to a wide range of factors, which makes another inspection necessary. As we have just heard from the Minister, the Ofsted framework has changed significantly, particularly in relation to, for example, greater emphasis on the importance of pupils’ emotional and social development and relationships within schools. It is right that that element is inspected in order to give the public confidence in the judgments that are applied to the school by Her Majesty’s inspectors.
As we saw from the consultation, the changes are widely supported by the people who responded. On stakeholder views, we absolutely agree with Geoff Barton from the Association of School and College Leaders, who said:
“We support plans to remove the current exemption from inspection of schools that are rated as outstanding by Ofsted. The exemption has resulted in parents going too long without the assurance provided by an inspection, and this situation is untenable.”
That view was shared by Nick Brook from the National Association of Head Teachers. He made a broader point that we would also endorse:
“To boost educational standards the government needs to rebalance holding schools to account with helping to improve.”
Over successive decades, there have been significant advances in educational standards in our country, and it is right that we are working with all schools to raise those standards even further and to get the very best out of those who are responsible for educating children and young people in our schools and adults in further education settings. That view is shared by the chief inspector of Ofsted, who has also called for the exemption to be lifted. We agree with all of that.
As we are here this afternoon, and without wishing to detain the Committee for too long, it seems like a good opportunity to probe the Minister on the Department’s view on the resumption of routine inspections in January 2021. We can all see the circumstances in the country at large. The fact that we are going into a new national lockdown tomorrow reinforces in everyone’s minds the challenging circumstances that the pandemic continues to place on all of us.
It seems highly unrealistic to believe that Ofsted inspections will resume as normal from January. We have to go back to first principles and ask ourselves what the purpose of inspection is. What is it that we expect inspectors to find? How do we ensure that the inspection provides a judgment that is fair to the school and the staff within the school, and which is informative to parents and others who use inspection reports? These are not normal circumstances. The idea that normal inspections would take place as usual from January seems not just highly improbable but undesirable. I wonder what thinking the Department is doing on that subject and whether it has any plans to make any changes.
What consideration is the Minister giving to how we might best use Ofsted during this period? Ofsted thematic reviews have been widely accepted and respected as valuable, right across the education profession. Might we better use the considerable resources and expertise of Ofsted to conduct thematic reviews during this period, particularly looking at issues such as remote learning? That is obviously at the forefront of our minds, given the challenges facing schools and families where children are isolating at home.
I am thinking particularly about the way in which, in the current climate, schools are having to rethink the curriculum they provide. The Government have also commissioned a wide range of providers for catch-up learning for pupils. Conducting a thematic review of those catch-up programmes would be a good use of Ofsted resources, to identify weaknesses and, more importantly, best practice. I fear that, as a result of the considerable disruption experienced by children and young people in their education this year, we are going to be talking about catch-up for many years to come.
Nick Gibb
I welcome the hon. Gentleman’s support for these regulations. That is not surprising, given comments made in the other place this week. I agree with the comments of the NAHT that we have to balance accountability and support. As I have said, we have gone from 68% of schools being graded good or outstanding in 2010 to 86% today, but we are not satisfied with that and are focusing on that 14%. We want every local school to be good or better, so that parents can be confident about sending their children there. We have a range of support measures for schools, that require improvement, particularly those that have had two or more gradings of “requires improvement”. A whole range of measures are available if a school is put into special measures following an Ofsted inspection.
The hon. Gentleman spoke about deploying Ofsted staff. Ofsted has been deployed in local authorities during the period of suspended routine inspections, providing important professional support to those authorities in dealing with the consequences of the pandemic at a local level. He also referred to the catch-up programme, and said that Ofsted should focus on monitoring and reporting on that. These are things that will come out of any routine inspection, including how successful a school has been in helping children to catch up.
It is a huge priority for us as a Government to help young people catch up with any education lost due to the pandemic. We have secured £1 billion to help children to catch up; £650 million of that will be distributed to schools on a per pupil basis—£80 per pupil—and £350 million specifically targets the most disadvantaged pupils, through the national tutoring programme organised by the Education Endowment Foundation and the academic mentoring programme organised by Teach First.
These are important programmes, and we share the hon. Gentleman’s objective of ensuring that all our young people can catch up. No young person, no child, should have their long-term prospects blighted as a consequence of this pandemic. That is our overwhelming objective in the year ahead. On that note, I propose that we agree that the regulations have been considered.
Question put and agreed to.