Wednesday 2nd November 2022
(2 years, 1 month ago)
Lords ChamberNorthern Ireland Protocol Bill 2022-23 View all Northern Ireland Protocol Bill 2022-23 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 52-III Third marshalled list for Committee - (31 Oct 2022)
Baroness Chapman of Darlington (Lab)
My Lords, it is certainly my understanding that the negotiations are being undertaken in good faith on both sides, and it would be useful to have that confirmed by Ministers when they reply.
There are a few issues here, but I say first that it is very helpful to have the noble Lord, Lord Dodds, make his contribution on his concerns about chapter 10 of the protocol, because sometimes our discussions can get a little philosophical—that may be the wrong word—and it is very helpful to have them grounded in reality. His view is that he does not want a scheme that is any different to that which exists in the rest of the United Kingdom. That is understood and we know why he thinks that. We may not feel that it is realistic in the circumstances that we find ourselves in after Brexit, but there are most certainly good prospects to negotiate, come to agreement and perhaps find exemptions that would give him close enough to what he needs to be able to move us forward and give clarity and certainty to businesses in Northern Ireland, which is surely what we all want to see.
I am worried about the potential for retaliatory measures should Clause 12 of the Bill come into force. We know that this is something the EU is deeply concerned about. That does not mean that we cannot negotiate a much better position for ourselves, but there is the prospect of some form of retaliatory measure being forthcoming from the EU. I would like to know from the Minister what assessment has been made of the potential for this—although I am not quite sure which Minister to address my gaze to on this.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
It should be to me.
Baroness Chapman of Darlington (Lab)
That is helpful, thank you. What kind of measures do we anticipate, and what would be their impact? It is all very well to play hardball and say, “This is what we will do”, but that will always have a consequence and we need to understand what that might be. Not to do so would be deeply irresponsible.
Then there is the issue of powers. A lot has been said and I agree with pretty much all of it. Clause 12(3), which the noble and learned Lord, Lord Judge, referred to, says
“may, by regulations, make any provision which the Minister considers appropriate in connection with any provision of the … Protocol to which this section relates.”
That is incredibly broad and we ask whether it is necessary for it to be so broad. If I have understood the amendment tabled by the noble Lord, Lord Leigh, correctly, he seeks to put some sort of frame around it. We are all very concerned about where those powers might lead us.
The problem is that we have to look at this in conjunction with the Subsidy Control Act, which is itself very broad, has powers for Ministers and lacks clarity about what the UK Government intend for Great Britain’s subsidy regime. We are compounding one unknown with another. That is quite a lot for noble Lords to swallow. We have been asked to show a lot of faith in Ministers when really what we need, and what the noble Lord, Lord Dodds, has signalled he would like too, is some more information and draft regulations. We want to know where we are going with all this so that we can assess whether it will be the right approach to benefit businesses in Northern Ireland and answer the challenge made by the DUP. At the moment, I can see a set of circumstances in which it would not.
It is right that these issues are resolvable only by negotiation; we all know that. We have to start accepting that and asking ourselves whether the Bill’s approach will assist those negotiations in reaching a positive outcome. My noble friend Lady Ritchie said that this is something where we want the voice of the Northern Ireland Assembly. We want to know what MLAs from all communities have to say. It really matters that we hear from all sides, because this is about solving problems, not making things worse. The Bill really does risk making things worse.
The only other thing I would add is that there is now a different subsidy control regime in Great Britain, but where are this interventionist Conservative Government, who are making use of their new powers up and down the country? Speaking as somebody from the north-east of England, we see lots of tinkering and plenty of things that we could have done whether we were in or outside the EU. I do not particularly see that there will be the massive difference that warrants the kind of tension this is leading to. I suggest that the amendments tabled by the noble Lord, Lord Purvis, and my own are designed to be helpful. These are issues that we will not make progress on through this Bill.
Lord Ahmad of Wimbledon (Con)
My Lords, I thank all noble Lords who have taken part in this debate and fully acknowledge that there are issues that noble Lords have raised before. In particular, I refer to the noble and learned Lord, Lord Judge, who once again, in his usual forensic and specific way, highlighted with great brevity the main issue of concern. I acknowledge that this has been raised by noble Lords during the passage of the Bill. However, I will revert to the specific amendments and seek to provide answers to some of the questions raised. I caveat that by saying that we will review some of the specific technical questions relating to previous debates—and, indeed, to previous Bills and treaties—and ensure that we provide a comprehensive response.
I thank the noble Lord, Lord Purvis, for acknowledging the letter. I hope that having three Ministers on the Front Bench is better than one. It underlines the importance that we attach to your Lordships’ House on the Bill. I also want to say from the outset, on the issue that the noble Lord, Lord Purvis, raised about the extent of the EU mandate, that we shall ask it to change from its earlier negotiating position.
My noble friends Lord Dodds, Lord Lilley and Lord Hannan alluded to the essence of why the Bill is necessary. Of course these things are negotiated. Every contract and treaty is made in good faith. The noble Baroness, Lady Chapman, was right to gaze in my direction. We are of course negotiating in good faith. If we were not, it would be a non-starter—it is as simple as that. I mentioned that I was in the last call that we had with the European Commission. We want to pursue a negotiated settlement because we believe it is in the interests of all parties and, in particular, it takes forward the concerns to which my noble friend Lord Dodds alluded. I agree with the noble Baroness, Lady Chapman, that it is important that we hear a broad debate about all the concerns that exist, particularly among all the communities in Northern Ireland.
Turning to Amendment 16 in the name of the noble Lord, Lord Purvis of Tweed, the power in Clause 12(3), also referred to by the noble and learned Lord, Lord Judge, is in line with those contained elsewhere in the Bill, but it ensures the proper implementation of the regime set out elsewhere in Clause 12, including taking account of any developments that could arise as a result of changes to the subsidy control landscape.
My noble friend Lady McIntosh raised the issue of agriculture. To respond to her, my understanding is that Clause 12 applies to agricultural subsidies. The purpose of Article 10(2) was to provide the flexibility needed to avoid Northern Ireland businesses losing out from leaving the common agricultural and fisheries policies. Clause 12 achieves flexibility by disapplying EU state aid law, rendering the carve-outs unnecessary. Agriculture and fisheries will be dealt with under the domestic regime. The new domestic regime provides a single coherent framework for all sectors. The inclusion of agriculture and fisheries will protect competition and investment in these areas across all parts of the UK, as it does for other sectors.
My noble friend Lord Dodds also talked about the detail of the regulations. Of course, I accept the importance of the need for the regulations. There will be opportunities to look at the regulations and for them to be scrutinised through normal parliamentary procedures. However, I note the points that have been made by my noble friends and other Peers in this respect. As I indicated earlier in respect of the information that we will seek to provide—
Viscount Hailsham (Con)
I intervene on a narrow point. Why is my noble friend against the test of necessity being included on the face of the Bill?
Lord Ahmad of Wimbledon (Con)
I believe that my noble friend is talking about the ministerial powers that exist here. We have had this debate before as well. We believe that a broader nature is necessary, and that is why “appropriate” is being used: to allow the maximum level of flexibility that the Government believe will be required. Of course, I accept there are differing opinions and views on this. Indeed, in conversations I have had, including with the noble Lord, Lord Pannick, to which I have alluded previously, there have been various Bills that have gone through your Lordships’ House where this discussion about “appropriate” and “necessary” has taken place, particularly with regard to the powers of Ministers and how those might be exercised. Of course, I note the point my noble friend is making.
The issue raised by the noble Lord, Lord Purvis, on TCA structures and state aid continues. TCA structures allow disputes to be raised, and the withdrawal agreement also provides structures for consultations as well. That very much remains the case. The noble Lord, Lord Purvis, also asked why the Government concluded that they had to remove state aid requirements from the protocol. The Government have been clear about the problems caused in practice by Article 10 of the protocol. This was first raised in our Command Paper in July 2021.
The noble Baroness, Lady Crawley, talked about a trigger point. Partly, this has been a culmination of the evidence and the practical experience, as was articulated by my noble friend Lord Dodds. The current system of operating two subsidy control systems within one country has created complexity and uncertainty, which is impacting policy across the UK. Irrespective of how noble Lords are approaching this Bill, either in support of or against what the Government are proposing, we all recognise that what needs to be resolved is the situation in Northern Ireland. Article 10 has also placed considerable administrative and legal burdens on businesses; for example, facing detailed questions about their operations from authorities to establish whether subsidies could be in scope of the protocol itself.
I have already referred to the powers. Noble Lords have been very articulate in making their concerns about the powers known but, again, I have underlined the importance of the necessity of these powers. To demonstrate in detail, in the previous day in Committee, we alluded to what this would require if everything was put into primary legislation.
Turning to Amendments 17 and 19, tabled by my noble friend Lord Leigh of Hurley, I am grateful for my noble friend’s contribution and for his reaching out to officials before this debate. My noble friend has powerfully illustrated the problems arising from Article 10 of the protocol and how they can arise in unexpected places across the United Kingdom and our economy. Article 10 can lead to uncertainty and delays in the delivery of subsidy schemes in Northern Ireland in comparison with Great Britain. They are exactly the sorts of problems that Clause 12 is seeking and intending to resolve, including to unleash further investment, to which my noble friend alluded, across the whole of the United Kingdom. The concurrent operation of two subsidy control regimes is a fundamental challenge for public authorities and beneficiaries across the UK. The solution put forward in the Bill truly addresses the challenges the Government believe exist, and will provide certainty across the UK.
Baroness Chapman of Darlington (Lab)
Can I take from what the Minister said that the intention is that there would be one UK-wide scheme? If that is the case, that surely could go in the Bill.
Lord Ahmad of Wimbledon (Con)
I acknowledge what the noble Baroness has said. As I said, what we are looking to do in the basis of the Bill is to provide clarity and simplification in the current procedures.
Lord Ahmad of Wimbledon (Con)
No, I think we are. That is exactly what we are seeking to do. It is clear that the noble Baroness remains unconvinced.
Turning back to the amendments themselves—
Lord Kerr of Kinlochard (CB)
I do not think it is clear; I do not understand. If the wish of the Government is to apply UK state aid laws in Northern Ireland—and that would be the wish of the noble Lord, Lord Dodds —why does the Bill not say that? Why, instead, does it import this uncertainty, which would be continuing far into the future, because the regulations applying in Northern Ireland would depend on the whim of the Minister, as the noble and learned Lord, Lord Judge, pointed out?
Lord Ahmad of Wimbledon (Con)
I have listened again to the noble Lord and, if I may, just for clarity, I will ensure that I get a full response to this. I will check with my officials again and provide the added clarity that the noble Baroness and the noble Lord are seeking. If that needs to be followed up in writing, I will, of course, do so as well. Ultimately, I stand by what I said earlier, that what we are seeking to do here is to address the specific issues that there are in practical terms.
My noble friend’s concerns about the scope of the Bill’s delegated powers were raised by other noble Lords. I hope that I can reassure my noble friend that the power may already be exercised only to make appropriate provision in connection with the exclusion of Article 10 of the protocol and the domestic provision that Clause 12 places on it. This provides a clear and limited framework for what the power can do; providing further constraints would provide additional uncertainty to businesses and consumers. In this case, it would put off, and potentially circumscribe, the ability to facilitate an effective domestic subsidy control regime that applies to the whole of the UK, leaving Northern Ireland being treated unfairly compared with the rest of the UK.
The Government are aware that regulations with retrospective effect are exceptional. However, it is clear that the continuing application of the state aid acquis in Northern Ireland has led to a sense of disconnection for many people, particularly the unionist parties, and puts the re-establishment of power-sharing arrangements at risk. As the EU state aid acquis is removed, it may be necessary to ensure that actions granted under the regime are appropriately reconciled with the UK regime. Removing Ministers’ ability to make retrospective provision, which was mentioned by several noble Lords, could undermine the Government’s ability to ensure a single, coherent, domestic subsidy control programme throughout the UK. It would also, in the Government’s view, create further uncertainty for businesses in Northern Ireland and across the UK. Any such regulations would already be subject to the higher level of scrutiny in the House. I know that my noble friend is concerned about creating uncertainty for investors, to which he alluded in his contribution. I hope he is reassured by what I have said: that the Government’s intention in this case is only to provide certainty. There will be time to examine any subsequent regulations.
The amendment also seeks to ensure that the power can make incidental and transitory provision. I am happy to be able to inform my noble friend that this is already the case by virtue of the operation of Clause 22(2)(e). The amendment also seeks to make necessary regulations subject to annulment by Parliament. We will, of course, debate this further when we reach Clause 22, but the Government’s proposition is that this is appropriate when regulations are making retrospective provision or amending an Act of Parliament, but that it would not be the appropriate level of scrutiny for other instruments making what are likely to be smaller or more technical free-standing provisions. I hope, for these reasons, that my noble friend will be minded to not move his amendment.
Lord Ponsonby of Shulbrede (Lab)
My Lords, this group of amendments brings us to the role of the European Court of Justice, with Clause 13 classifying any provision of the protocol or withdrawal agreement that confers jurisdiction on the ECJ as “excluded provision”. When the Government negotiated and signed the withdrawal agreement, they agreed to a limited role for the ECJ in certain cases. This clause ends ECJ jurisdiction, even when it does not directly relate to excluded provision, and there is a question mark about whether the Government are acting in bad faith on this matter.
Subsections (4) and (5) have been included, according to the Explanatory Notes, to allow Ministers to make arrangements for the sharing of relevant information with the EU. Can the Minister say more about this? To our knowledge, the UK has still not given the EU access to real-time customs data, as required under the withdrawal agreement.
The scope of the power in Clause 13 is very wide. The DPRRC said:
“Parliament has no knowledge of the Government’s plan but is meanwhile expected to rubberstamp all the regulation-making arrangements.”
This point has been made by a number of noble Lords, not least the noble and learned Lord, Lord Judge.
Amendments 21B to 23C, tabled by my noble friend Lord Hain and the noble Baroness, Lady Ritchie, on the potential consequences for the operation of the single electricity market, are very important. I hope the Minister will be able to clarify the legal position. I also hope he will rise to the challenge put to him that the UK Government have every intention of maintaining an all-Ireland electricity market. I look forward to the Minister’s response.
Lord Ahmad of Wimbledon (Con)
My Lords, I thank again all noble Lords who have spoken on this issue. I will approach the question on the single market in electricity, and I am grateful to the noble Lord, Lord Hain, for tabling his amendments in this respect. I will start with Amendment 20, in the name of the noble Lord, Lord Tweed of Purvis.
Lord Ahmad of Wimbledon (Con)
Did I say “Lord Tweed of Purvis”? It is written in my notes as “Tweed of Purvis”. It is getting late. I am picking up on the noble Lord, Lord Campbell—it is catching. Maybe there is a suggestion in there—I would be the noble Lord, Lord Wimbledon of Ahmad. My apologies to the noble Lord.
The Government have references to the potential use of powers in Clause 13(4), which several noble Lords mentioned. In short, these would ensure an effective assurance and enforcement regime that could give confidence in the protection of the UK and EU markets. This includes fulfilling our ongoing commitment to provide data to, and to co-operate with, the EU, an intrinsic part of the overall model. The noble Lord, Lord Ponsonby, also raised the issue of data sharing and I will come to that in a moment.
The noble Lord, Lord Purvis, rightly raised the protection of Article 2. I assure the noble Lord—I believe I said this on one of the previous Committee days and my noble friend Lord Caine also answered on this—that my noble friend Lady Altmann and I have discussed this, and we have made sure that the response is fully integrated. The UK is committed to ensuring that rights and equality protections continue to be upheld in Northern Ireland, in line with the provisions of Article 2 of the protocol. That is why Article 2, as my noble friend Lord Caine also made clear, is explicitly protected from being made an excluded provision in Clause 15. My noble friend discussed this with and responded to the noble Baroness, Lady Ritchie, and I know from exchanges between the two departments that we will respond in writing to the noble Baroness, as promised. We will share that with noble Lords, placing a copy in the Library. I assure noble Lords that this point is not lost. As I have said, where further clarity can be provided during the passage of the Bill, my colleagues and I will seek to provide it.
Lord Pannick (CB)
The noble Lord said that the Government take the view that it is inappropriate for the court of justice to retain jurisdiction, but why is it necessary—that is the test in international law—to exclude its jurisdiction?
Lord Ahmad of Wimbledon (Con)
I have given the Government’s position, and I am going to totally digress at this point from my speaking notes. I am reminded of something my noble friend Lord Howard, who is not in his place, said to me during my introduction back in 2011, regard people’s various insights. This also relates to the point made by the noble Lord, Lord Kerr. I remember a debate on the withdrawal Bill, taken by my noble friend Lord Callanan, during which certain specific issues were discussed and we talked about the case against the Government at that time. I remember the interventions that were made as I sat next to my noble friend. One was in reference to the actual case. The noble Lord, Lord Pannick, corrected the Minister, saying that, actually, as lead counsel on the case, perhaps he could provide an insight. As my noble friend fought the defence of Article 50, the noble Lord, Lord Kerr, stood up and suggested, “What would I know? After all, I only wrote Article 50”. So, on this issue, where I am testing a principle of law, I repeat what the Government’s position is but I take note of what the noble Lord has said in this respect.
Lord Ahmad of Wimbledon (Con)
I am glad to be of service to the noble Lord.
Lord Hain (Lab)
The Minister has been very generous and kind in saying that he was grateful that I raised the single electricity market, but he has not addressed any of the issues I put to him. If he is not going to do so in his closing speech, could he write to me and say in what way, apart from seeking not to jeopardise the single electricity market, which nobody wants to do, obviously, he is going to prevent it being jeopardised, for the reasons I enunciated?
Lord Ahmad of Wimbledon (Con)
I do not know if I disappoint or please by saying that there are several more pages in my speaking notes which may address in part what the noble Lord, Lord Hain, said, and this relates also to his amendments on the issue of assessments on non-excluded provisions. To make a general point, whether it is the perspective of the Government in introducing the Bill or the sentiments we have heard from our noble friends, including those within the DUP, and the noble Baroness, Lady Hoey, I think we are all coming at this with the end objective of ensuring that the benefits there have been from the market should be protected. I am quite happy to discuss the specifics with the noble Lord, together with officials, after the debate to see if there is a specific insight we perhaps have not picked up on in respect of these amendments, and how we can have a further discussion in this respect. I fully accept the key principle—I think we all do—regarding the protections that have been afforded and the gains that have been made. Of course, no one wants any lights going off anywhere.
It is the Government’s view that Amendments 21C and 23B, in the name of the noble Lord, Lord Hain, would prevent any regulation being made under the powers in Clauses 13 and 14 before an impact assessment had been carried out with regard to the regulation’s effect on non-excluded provisions of the protocol. Regulations under Clauses 13 and 14 should not be presumed to have any impact on non-excluded provisions of the protocol. They are not excluded and will continue to apply—indeed, they will continue to attract the benefit of the EU law principle of supremacy.
However, if the noble Lord is simply after a more general economic impact assessment—this is where I am saying that a discussion may be helpful—I am not sure that these amendments are required either. Regulations under the specified clauses could be highly technical, with little economic impact. For example, Clause 13(5) specifies that regulations under Clause 13(4) may make provision about arrangements with the EU relating to the operation of the Northern Ireland protocol, including information sharing. As such, the Government could be forced to provide an impact assessment on, for example, a data-sharing system between two competent authorities, which has little or no impact on wider parts of the protocol or economic operators—or, indeed, any impact outside of government at all.
I assure noble Lords that the House will have the opportunity to scrutinise any regulations in the usual fashion, and that the Government will provide all the usual accompanying material under the normal parliamentary procedures, including economic impacts where relevant. However, it is the Government’s view that mandating by statute that impact assessments must be provided for every single regulation under Clauses 13 and 14 would be overburdensome, and it does not tally with the standard principles for impact assessments. To add to the point I made earlier, on the specifics that have not been covered in my concluding remarks, I will write to the noble Lord, Lord Hain. As I said, I believe that there is a common cause to be had here, so if time allows, I am quite happy for us to schedule a discussion on this as well.
Clause 13 outlines the exclusions that seek to redress the feeling that a democratic deficit is created by the arrangements for the implementation and enforcement of the protocol. First, via subsection (1), it provides that any provision of the protocol which confers jurisdiction on the CJEU over the arrangements in Northern Ireland is an excluded provision. This means that CJEU decisions, including infractions, will no longer have effect in domestic law across the entire protocol. Secondly, via subsections (2) and (3), it assists in restoring the Government’s sole oversight of arrangements on the ground in Northern Ireland, providing that the provisions relating to the powers and presence of EU representatives are excluded. Finally, to address the point raised by the noble Lord, Lord Ponsonby, via subsections (4) and (5) it allows for the establishment of replacement arrangements, which provide the ability to put in place new supervisory and data-sharing arrangements with the European Union. This will support assurance processes to protect both the UK and EU markets and facilitate co-operation between UK and EU authorities. That is why we believe that the clause should stand part of the Bill.
Again, I am grateful for the discussions and debate on this group. While I am not suggesting that all noble Lords will have been fully satisfied by my response, I hope that they will be minded not to press their amendments at this time.
Lord Purvis of Tweed (LD)
My Lords, I am grateful for the Minister’s response. I reassure him that I am not precious either about my name or my title. My former constituency was Tweeddale, Ettrick and Lauderdale, and I was once introduced to the Massachusetts state assembly by the Speaker as, “Jimmy Purve from Twiddle, Ettick and Louder”. He managed to get every single word wrong, and then he kept asking, “So, where is Twiddle, Jimmy?”
I am grateful to all noble Lords who have taken part in this debate and for the Minister’s remarks on Article 2 rights. The point stressed by the Northern Ireland Human Rights Commission was that the rights are only ongoing rights if they can be both interpretive and dynamic. If you remove the court of justice’s ability to do that, they stop being rights. We are obliged to make sure that they are “ongoing interpretive”, but the power in the Bill puts that at risk. It would be quite straightforward to simply say that that can carry on.