European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Report: 2nd sitting (Hansard): House of Lords
Monday 23rd April 2018 Lords Chamber

I was pleased to hear the Minister helpfully say that he is happy to return to these issues at Third Reading. They are complex and the amendments are complex. I hope that before Third Reading the Minister will be prepared to meet noble Lords and noble and learned Lords who have any concerns in relation to this, but I am very grateful to the Minister and the Bill team for the care and attention that has been given to this matter.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, my Amendment 39 is buried among the government amendments in this group. I will speak to it and in doing so elaborate some questions I have concerning the government amendments. I thank the Minister—the amendments sounded better when he explained them than when I read them. I liked that he kept repeating that it will require primary legislation to change what I shall describe in a shorthand way as policy-making legislation, which is what my amendment is about.

My amendment is short and concerns life after Clause 7—life after implementation of the Bill—which is this Parliament’s legislative future. I hope this group of amendments paves the way to ensure that Parliament has a principal role, which is not how I took it when I read them. As the Minister said, my amendment provides that retained EU law enacted in the EU by co-decision—the ordinary legislative procedure—may be modified only by an Act of Parliament. I know that the Minister knows that “the ordinary legislative procedure” is just the new name for co-decision under the Lisbon treaty.

I selected that legislation, which is a subset that I spoke about in Committee, quite simply because the European Parliament had a full scrutiny and amending role in making the legislation and in any amendments to it, and I do not see why in future this Parliament should be in a lesser place than the European Parliament. The Minister has perhaps gone some way towards pointing out that that might be the case, but I will read what he said carefully to make sure. I have covered the full range of matters covered by co-decision. They are things such as company law, financial services and other issues that were not in the sensitive areas that were covered in Amendment 11 which we voted through last Wednesday. My amendment covers directives as well as direct EU regulations. It is important that policy-making legislation is not changed too easily. Again, the Minister may have sown seeds to put my mind at rest on that, but I want to examine what he said more carefully.

Another reason why it is very important for this legislation to come to Parliament to be changed is that, despite the good efforts of the EU committees, there are quite large swathes of legislation about which this Parliament is relatively ignorant. I do not say that disparagingly; it is just the way the law was made. As we go forward, it is very important that this Parliament clearly understands laws that affect major industries, even if subsequently it chooses that some of them are to be delegated to regulators. We have a system of delegation. Sometimes there is regrettably rather too much delegation, but it is very clear that if any of that is going on, it needs to have full scrutiny.

My final point relates to where we are going to use existing legislation to amend retained EU legislation after it has been converted. The legislation that we might use was not made to cover legislation that used to be done in the EU because it was well known that those policy areas were reserved to the EU. Extending the scope of that legislation so that policy-making legislation can be amended by secondary legislation is extending it further than was contemplated, and it may go beyond the reasonable expectations of that legislation. Constitutionally, that gives me a problem. Perhaps some members of the Constitution Committee can mention this. I have circled paragraph 3 of Schedule 8, which refers to powers on subordinate legislation before exit day,

“as being capable of being exercised to modify … any retained direct EU legislation”.

I submit that none of that existing legislation could have been made in contemplation of amending that type of legislation. Unless it was clearly elaborated that that was the case, I am unhappy with that provision as it originally stood and as it now stands. I am a little more unhappy with the amendment to Schedule 8 because it has been stretched to cover the rights that are going to be retained by virtue of Clause 4, which was not in the original paragraph 3 of Schedule 8. I am a little worried about having rights taken away by legislation that was not made in contemplation of taking those rights away. Those are the reservations I still have and I would welcome the opportunity to discuss with the Minister whether we can sort them out and return to this at Third Reading.

[Lord Cormack]

My Lords, I thought the Minister was a little harsh on the noble Baroness, Lady Hayter, and on the amendment which the House passed by a very large majority last week, but let that pass for the moment. I am grateful to my noble friend for making a genuine attempt to understand some of the concerns which can be summarised very briefly. This House is very concerned that taking back control means Parliament taking back control, not the Executive amassing more power to themselves, so he must understand that we will all want to read what he said. Some of it seemed very helpful but we will want to look very carefully at what the Government are actually proposing. It seems a gentle move in the right direction but, just as we have to consider carefully what the Minister has said, I say to him with great respect that he has to reconsider what the House decided last week, because it decided by a very large majority.

A final word of thanks to my noble friend: he has been dismissive of a number of pleas that some matters should be returned to on Third Reading. One understands why, but at least he has been emphatic tonight in realising that we will have to come back to some matters on Third Reading, and for that I thank him.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 6th sitting (Hansard): House of Lords
Monday 12th March 2018 Lords Chamber

That has nothing to do with Brexit—but translate that way of thinking into the tertiary legislation that could arise under this Bill, with the possibility that a body, without any time limitation, could impose fines and criminal offences of up to two years imprisonment with little regulation. Those are the dangers the House is facing.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I am sorry that there are too many speakers from this part of the Chamber, but I should like to point out that, although some advances have been made in the Sanctions and Anti-Money Laundering Bill with regard to the proposals that have already been mentioned, that is in the context of a particular Bill that has already received some scrutiny—and indeed some policy amendments—which make the application of criminal offences a little more palatable. There is, for example, the stipulation in the anti-money laundering part, which is the bit that has two years and is more akin to the instance envisaged within the withdrawal Bill, that there has to be a mental element. I do not see that safety here.

I further wonder why things that were not previously subject to criminal sanctions have to be made into criminal offences. It is a big policy change to say that any administrative or other misdemeanour is henceforth going to be criminalised with a two-year prison sentence. I do not call that “no change”. It has to be looked at in the context of each individual offence and how it may arise, otherwise you are saying that any regulatory breach will henceforth carry two years in prison. Moreover, you do not know the detail of what those regulatory breaches may be—how big or how small, or who may be on the other side of them. This would cover every piece of single market legislation. Some of these things will be quite small, and were not criminal offences before. What has changed through Brexit that suddenly we have to criminalise everybody for everything?

[Baroness Hayter of Kentish Town]

My Lords, because the case was made so clearly by the noble and learned Lord, Lord Judge, with the added detail provided by the noble Lord, Lord Marks, I shall not try to add anything to the substance of the argument. I just want to express my regret at the lack of preparation and forethought that went into the drafting of this power. Indeed, I was alarmed by it on the very day I first read the Bill and started blogging about it back in the summer. I then tabled Questions for Written Answer in October asking the Government what other instances there were of new criminal offences being created by secondary legislation. In the replies I received on 2 and 23 October, the noble and learned Lord, Lord Keen of Elie, was unable to list any.

I went on to ask the then Minister, the noble Baroness, Lady Anelay, the same question. The noble Lord, Lord Callanan, had by then taken over and replied in her stead on 14 November—but again gave no examples. The letter merely noted that “existing” criminal offences “in our law”—those are his words—which relate to the EU might need to be transferred to another body: for example, an offence not to notify an EU institution of something important relating to health. The letter ended by saying that the offence might have to be changed to a failure to notify the equivalent UK body. I understand that, but that is an existing offence, not a new one, and alters only to whom the report should be made. No case was made for, and no example given of, where new offences might be needed as we leave the European Union—much less one with the threat of up to two years in prison on first offence.

Noble Lords will not be surprised that I did not let this drop. I raised the issue again with the lucky noble Lord, Lord Callanan, who had another meeting with me in January—he has all the fun. On Wednesday last, when we anticipated dealing with this group, just before we broke for lunch I received an email from his department in response to my request in January. But again the email failed to answer why any new offences might be needed. It commented only that,

“existing criminal offences may require widening or amending, or new offences may need to be created to fix deficiencies in retained EU law”—

but provided absolutely no examples. The only example given in the email was of an existing offence where a business fails,

“to provide an EU authority with certain information”,

and therefore such an offence may,

“need amending to ensure they continue to operate effectively post exit day, for example by changing references from an EU authority to a UK one”,

and to ensure that businesses are complying with the law. Again, that is a change rather than a new offence. It is true that the email goes on to state:

“Previous case law”—


here I shall look to others to look into the detail of this—

“has created some uncertainty as to whether actions such as these would amount to creating a new offence rather than amending an existing one, and there could be differing legal views on this point”.

As I read the email, it seems that on that basis alone—that there is possibly a legal issue as to whether an amendment to an offence is a new offence—the Government have written themselves powers to create brand new offences that are punishable by up to two years in prison. So I think we are agreed that that will not do and that these powers have to go. Moreover, they have to go more completely than the Government allowed for in the sanctions Bill because, as was said in the debate at the time, anything there would follow an international agreement to which we would be a party as a Government—so there would have been that earlier stage. But these powers will not be part of that, and therefore I hope that, when the Minister responds, he will say that these powers are going to be taken out of the Bill.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Wednesday 7th March 2018 Lords Chamber

Moved by

[Baroness Bowles of Berkhamsted]

57: Clause 6, page 3, line 38, leave out from “decided” to second “so”

[Baroness Bowles of Berkhamsted (LD)]

My Lords, Amendment 57 in my name is to Clause 6(3) which says:

“Any question as to the validity, meaning or effect of any retained EU law is to be decided, so far as that law is unmodified on or after exit day and so far as they are relevant to it … in accordance with any retained case law … general principles … and EU competences”.


My amendment would delete the words,

“so far as that law is unmodified on or after exit day”.

This would mean that retained EU law was continuing to run using EU-derived interpretation, including for the amended parts. This is by no means a perfect amendment, but it is intended to probe the relationship between the wording in subsection (3) and that in subsection (6), which says that modified law can be incorporated as in subsection (3) if it,

“is consistent with the intention of the modifications”.

I want to gain some more clarity on the presumptive path around those two subsections.

The general message that we are being given by Government—the high-level presumptive path, if you like—is that there is not really an intention for policy change via modification. But, there are no absolute commitments to state that on the face of the Bill, perhaps because incidental things may nevertheless count as policy change.

My submission, which applies to other clauses and the schedules as well, is that the need for adaptability does not remove the possibility for a more granular laying out of the presumptive path. That leads me to query what presumption comes from the order of the subsections. I submit that the default presumption should be that EU case law, principles and competences apply unless the Government have specifically explained why that does not work in connection with a particular modification. That seems a clearer and easier way to do things because the modifications are the focus of the attention, presumably with explanation. That will surely then be fed into the scrutiny when we get to the delegated legislation.

However, I also have in mind some of the debate we got into late on Monday night about rights in Schedule 1. The structure of Schedule 1 is somewhat similar in so far as all challenges are first disallowed and then some might be allowed by regulation. I contrast that with the present clause, which disallows interpretation to apply to modifications, and then subsequently says that it does not stop it being as in subsection (3). I note it does not say who is making it clear whether the modifications come under EU law. I wonder whether it will be left to the judges—if it is, they may want better clarity—or will the modifications themselves make it clear when they are put before us?

In the context of Schedule 1, the noble and learned Lord, Lord Keen, referred to the regulation that provides the right to challenge validity as an exceptional power, which I suppose it is by the way it is formulated as an exception to the earlier general exclusion of challenges. I took the noble and learned Lord to mean that the power would be used rarely, rather than, for example, as a list prepared in advance, which was the point probed by my noble friend Lord Beith. If I follow a similar logic on the follow-on positioning of Clause 6, does that mean that the situation envisaged in subsection (6), with the retaining of EU interpretation for some modified parts, will be exceptional, in the rare sense, or will it be normal in the sense of maximising the status quo? We need to know.

Also, again reflecting the Schedule 1 debate, Clause 6(3) refers to a question of validity of retained EU law, so is it correct that retained EU law can be struck down unless we follow the primary legislation suggestion of the Constitution Committee or unless it is already primary legislation, and that it would be struck down by common law, not EU principles or case law, which would just help with interpretation? If that is so, might some EU retained law be struck down in effect because it came under common law plus EU interpretation, whereas it might not have been struck down if it had been under common law alone? That is what I deduced from reading Hansard and the response to the question from the noble Lord, Lord Pannick, on common law. I confess that I did not necessarily hear the response properly at the time. That is nothing against the noble and learned Lord’s diction and more to do with the temporary impairment of my hearing due to my head cold, as well as to my voice today.

The other amendments in the group are of a different nature. They relate to things that can be taken into account in interpretation. My Amendment 59 and Amendment 58 in the name of the noble Lord, Lord Krebs, are similar, referencing recitals and preambles. My amendment is to subsection (3)(b), which relates to EU competences, because I wanted to draw attention to the fact that not only does the content of recitals need to be used for casting light on interpretation, but they are part of the competences architecture and directions relating to what is expected of delegated legislation, just as can be the case with empowerments for regulations in UK legislation. It is part of the definition of EU competences for interpretation purposes.

To make my position clear, Amendment 60 specifically references powers of delegation. Footnote 24 to paragraph 83 of the Explanatory Notes says:

“Recitals will continue to be interpreted as they were prior to the UK’s exit from the EU … casting light on the interpretation … but they will not themselves have the status of a legal rule”,


I do not think that that explanation is necessarily sufficient to encompass what I have just tried to lay out. Given that the role of EU agencies will be taken over by UK bodies, they should also take over the constraints that are written in, at least until Parliament decides otherwise. Therefore, recitals need to have a greater role than previously, or at least that possibility should not be excluded.

As a general point, I mention that there is a symmetry between how EU legislative Acts can be allocated as between those that should require primary legislation to amend and those which can be considered delegated, and the EU architecture of competences: those two are symmetrical. If that mapping is got right, getting returning powers allocated into their proper place in the UK, particularly between Parliament and regulators, then that logic of how interpretation is influenced, not just by EU competences versus member states but also with regard to internal EU levels of competences, will flow naturally into the structure.

There are other important policy points within preambles and recitals and I will leave those for other speakers to elaborate on. I will just say that I agree with all that I am expecting them to say on that point about their importance to policy. I beg to move.

[Lord Krebs (CB)]

My Lords, I shall speak to Amendment 58, in my name and those of the noble Baronesses, Lady Jones of Moulsecoomb and Lady Jones of Whitchurch, and my noble friend Lady Brown of Cambridge. As the noble Baroness, Lady Bowles of Berkhamsted, has already mentioned, her Amendment 59 has a similar intent to Amendment 58 and therefore I support it.

The purpose of this amendment is very simple: it is to ensure that recitals and preambles to EU laws are given a clear legal status by the Bill. Why is that important? The recitals and preambles explain the background to, and objectives of, legislation and are therefore essential to understanding the legislation that follows. While in UK law the purpose of any piece of legislation will be clear as a result of the process leading up to the legislation—for instance, a Green Paper, a White Paper and a parliamentary debate—with EU-derived law there is no equivalent process. Therefore, the recitals and preambles are essential for placing the legislation in context. If they are not given a clear legal status they may be forgotten or ignored by decision-makers and the courts. As has already been mentioned, although the great repeal Bill White Paper, in footnotes 17 and 24, recognised the importance of recitals and preambles, this does not provide the legal certainty that is needed.

--- Later in debate ---

[Baroness Bowles of Berkhamsted]

I thank the noble and learned Lord for his response. I appreciate that some of what I was trying to outline was complicated, and made more so by it no doubt being difficult to listen to. I am not convinced that the point is nailed with regard to the recitals of directives, not least because there is no provision to publish those in Schedule 5. If you are going to rely on them in court, you will have to adduce some other evidence, whereas regulations are going to be published. That lies behind the amendment that I tabled to Schedule 5—it is for advance information, if you like.

I think this is a technical fix—I may be wrong, and I just bring that to noble Lords’ attention. I think I understand what has been said about Clause 6(6) in that, if the modification is trivial then, for that bit of the legislation, nothing changes and another bit in the same legislation would probably remain unaffected. So, within an individual piece of legislation, the impact of the recitals might have been removed from some bits and not from others. I think that is what was being said, and that is where the noble and learned Lord, Lord Goldsmith, was trying to get some clarity. Maybe we can take that offline to get that clarity. I am still not quite sure who makes that decision in Clause 6(6), and whether it will be something that appears when we get the schedule modifications or whether the courts and others will be left trying to decide it for themselves.

This may be something that we have to return to but, with the Committee’s agreement, I beg leave to withdraw my amendment.

Amendment 57 withdrawn.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 5th sitting (Hansard - continued): House of Lords
Wednesday 7th March 2018 Lords Chamber

Moved by

[Baroness Bowles of Berkhamsted]

73A: Clause 7, page 5, line 7, at end insert “but not to the extent that retained EU law is encompassed by section 2(2)(b) to (d), save in respect of deficiencies as defined in subsection (2)(g) of this section”

[Baroness Bowles of Berkhamsted (LD)]

My Lords, when we discussed Clause 2 and the Constitution Committee’s amendments, I said I did not wish to exclude the three paragraphs that the Constitution Committee wanted to exclude; I wish to exclude them instead from amendment under this paragraph. With the discussion we just had about what is necessary rather than just appropriate, to put as much as possible beyond the temptation of amendment by the Government seems to be a good idea. That was the approach I outlined previously. As far as this clause is concerned, it is in line with the Constitution Committee and with the Bingham Centre report, and in view of the state of my voice, I think it is best if I just say that I beg to move.

[Lord Callanan]

My Lords, I am tempted to send some cough sweets to the noble Baroness to help her: she certainly has my sympathy, and I suspect the Prime Minister’s sympathy, for the difficult position she is in. I am grateful to her for the amendment and this debate.

The noble Baroness has proposed to limit the Clause 7(1) power so that it is only possible to correct deficiencies in domestic legislation in two circumstances. The first is where the deficiency is of any type provided for in this Bill and that the legislation was a statutory instrument made under Section 2(2) of, or paragraph 1A of Schedule 2 to, the European Communities Act. The second, for all other EU derived domestic legislation, is that inappropriate EU references are the only type of deficiency which may be corrected.

I understand the noble Baroness’s well-intentioned desire to, where possible, protect from amendment legislation which has already been considered in detail by this House. However, while Section 2(2) of the ECA has been a crucial tool in the Government’s implementation of our EU obligations, it is far from the only way the Government have implemented EU obligations in the 45 years of our EU membership. Indeed, many noble Lords have been vociferous in encouraging Governments past and present to do more under primary legislation and specific powers and less under Section 2(2). Furthermore, whether a deficiency is in primary or secondary legislation is not, I believe, a meaningful indication of the type of deficiencies which might arise in it, or the significance of the correction that needs to be made.

To be ready for exit day a large number of fairly straight-forward changes will need to be made to primary legislation in exactly the same way as in secondary legislation made under the ECA. For example, Section 42(5) of the Employment Relations Act 2004, concerning information and consultation, will require amendment as outlined in the draft regulations the Government have already published. This power relates to the implementation of a directive. This directive has already been implemented in our domestic law and the relevant implementing legislation will be converted to retained EU law by the Bill. Once the UK has withdrawn from the EU, this power will have no practical application. I hope noble Lords will accept that we need to be able to make appropriate corrections to such deficiencies. The power therefore needs to be broad enough to allow for corrections to be made to both primary and secondary legislation for the full range of deficiencies. Textual and technical changes must be made in primary legislation if we are to have a functioning statute book on exit day.

The Government’s contention is that what matters is not the status of the law that is being amended but the purpose of the amendment. Indeed, some provisions of secondary legislation made under Section 2(2) are extremely important, which is why the Government have provided for the sifting committee and affirmative procedure to ensure that all regulations are subject to the appropriate level of scrutiny. For example, much of the vital statutory protections of the rights of workers in this country lies in regulations made under Section 2(2) of the ECA. We have already published details of some of the corrections that will be required here, and I hope they have laid concerns to rest. They are also representative of the type of corrections that will arise throughout the statute book and will need to be corrected to ensure that important areas of law continue to function.

I hope I have persuaded the noble Baroness of the Government’s position that it is the substance of the change, not where it is being made, that matters, and that she therefore feels able—if she can do so—to withdraw her amendment.

[Baroness Bowles of Berkhamsted]

My Lords, I beg leave to withdraw the amendment.

Amendment 73A withdrawn.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

My Lords, I am most grateful to speak to Amendment 81, which for these purposes is joined with Amendments 95, 96, 100, 227C and 244. I see that the noble Lord, Lord Bassam, is not in his place. I would be interested to hear the content of the other amendments, but they seem to make very positive noises that there should be no increase in legislative burdens on individuals in businesses; that we should not exceed what is essential and not impose greater burdens; and that the Government should seek to make only technical changes and not to change policy materially.

I speak specifically to Amendment 81, which relates to deficiencies arising from withdrawal from the EU and considered in this group. The difficulty that I have with the wording as it stands in Clause 7(4) is partly because it contains a double negative and does not seem to be plain English, saying,

“retained EU law is not deficient merely because it does not contain any modification of EU law”—

and so it goes on. So partly the amendment is to express what is clearly meant, to seek greater clarity, but it also goes to the timing of the laws deemed to be deficient.

I think that it was my noble and learned friend Lord Mackay of Clashfern who said earlier that it was for Parliament to veto any statutory instrument put forward by government through the normal procedures of negative or affirmative resolution. Someone else in an earlier debate said that it should be the right of Parliament to be able to scrutinise amendments that fall under this clause—and, I would argue, particularly under Clause 7(4). So the question really to the Minister is to ask, if there is to be this scrutiny, at what stage this scrutiny would take place. My understanding is that the Minister is going to be able to act before Brexit to be able to prevent a deficiency from arising. My question is at what stage that would be and how Parliament will have the opportunity to scrutinise that. Also, if failure of retained EU law is a type of deficiency, and a failure means that the law does not operate effectively, we have already established that deficiency could cover a wider range of cases where it does not function appropriately or sensibly. Guidance as to who will actually decide what the deficiency is and when it will apply will be extremely helpful.

I mentioned at the outset that subsection (4) is not immediately clear. One turns to the Explanatory Notes and particularly paragraph 120, which says:

“Subsection (4) provides that the retained EU law in the UK is not deficient just because the EU subsequently makes changes to the law in the EU after the UK has left, or planned changes come into effect after exit. The law is being preserved and converted as it was immediately before exit day. The EU might go on to make changes to its law but those subsequent changes and the consequent divergence between UK and EU law do not by themselves automatically make the UK law deficient”.


I am not sure that this entirely clarifies the situation, nor does paragraph 116, relating to the earlier subsection (2). I want to probe the Minister to perhaps tease out what is the legislative deficiency, whether there is more than one stage at which it can apply, and who actually decides. If it is the Executive, at what stage can Parliament call them to account to scrutinise that? I hope that, in summing up on Amendment 81, the Minister can clarify, to create greater legal certainty, the legal basis for the functional restriction—where this is contained in a directive and therefore not retained or transposed into domestic law—to be described as a deficiency.

[Baroness Bowles of Berkhamsted]

My Lords, I speak only to Amendment 227C, just to say that this is a sort of “double omnibus” amendment in that it covers the whole Bill and also puts together, in its proposed new paragraphs from (e) onwards, some ideas about how to address in a generic way some of the concerns that other noble Lords have expressed in what I call the “Thou shalt not” clauses. Clearly, we cannot go through the Lobbies 20 times to deal with them all but, if this kind of formulation is adopted, we could achieve something that was both votable and covered a lot of the common ground that there appears to be when looking at other amendments, many of which will be spoken to later. I will limit my comments to that for now.

[Baroness Hayter of Kentish Town]

In the absence of my noble friend Lord Bassam, I just want to encourage the Minister—though I am sure it is already in his notes—to comment on Amendment 244, which appears in this group. It requires that:

“The statement under sub-paragraph (2) must include a certification that the regulation does no more than make technical changes to retained EU law in order for it to work following exit, and that no policy decisions are being made”.


I appreciate that the Minister and other Ministers have said all the way along that this is not about making policy, so it should be an easy certification on this occasion for a Minister to sign. I hope that that might be accepted.

European Union (Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

2nd reading (Hansard - continued): House of Lords
Wednesday 31st January 2018 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, as several noble Lords have mentioned, and as the Constitution Committee report said, lessons can be learned from the Sanctions and Anti-Money Laundering Bill. That is a sectoral Brexit Bill, not saving legislation and not aimed at policy change. It was explained, variously, as a technical bill, as dealing with deficiencies and as not changing policy—just the same vocabulary used to describe the withdrawal Bill and operations within it.

I will elaborate more fully on some of the lessons. First, all creation of new criminal offences by regulation was taken out, not just those over the threshold defined as “relevant” in the withdrawal Bill, which means sentences greater than two years. When voting on this constitutional point for the second time, there was a massive vote to remove from the anti-money laundering part, where sentences were indeed limited to two years, any new criminal offences. If anything, the case is clearer for the withdrawal Bill: why should “saving” legislation create any new offences?

Secondly, in the anti-money laundering part of that Bill, it was frightening to compare the unlimited, policy-free, mechanistic list of delegated powers with the far richer policy context and predictability of the EU money laundering directive that it replaced as the source legislation. Until amended, this proposed primary legislation gave absolutely no substantive foundation against which to test future secondary regulation. It was without constraints or policy now, empowerment for total policy change by regulation later. I call that a constitutional-level policy change. We have a similar wolf in sheep’s clothing prowling parts of the withdrawal Bill.

Thirdly, with its amendments, the anti-money laundering part is much improved. Nevertheless, businesses are in a more uncertain place because the Bill is no longer set in the richer EU format. Uncertainty is not a good direction of travel for our home-made laws and we should not be inured to it—we can do something about it.

The good news is that the withdrawal Bill aims, so we are told, to save policy context—the idea is right. The bad news is that the legal status is confused; it certainly cannot be case-by-case at ministerial convenience. There are “panic button” clauses giving delegated powers without objective definition and stretchy schedules that expand, sometimes for ever, what you thought had been limited in clauses. The Explanatory Notes say the law is not deficient merely because a Minister considers that EU law was flawed. Such clarification must surely be in the Bill; so must objective qualification of the much overused “appropriate”—that is definitely an alpha wolf, not a sheep.

Businesses have been promised policy continuity. So, in considering amendments around status, legal clarity and interpretation, my test is that, however legislation is saved, it should not mean sacrificing policy. Policy continuity means keeping all relevant factors to assist interpretation or challenge; keeping them after modification, because that has been stated as being only to clean up language; and keeping them for EU-derived legislation, such as directives, under Clause 2. Just as Ministers quote rules and precedents to justify their words in legislation, similar happens when negotiating directives. A great deal is contained in recitals, which are relevant for interpretation by the EU court and regulatory authorities, even though they are not transposed and their content is needed.

In that context, my final point is to ask how EU constraints on delegation of power will be retained. My goodness, we need to get some constraints from somewhere. This has relevance to financial services, where the European supervisory authorities are bound by the Meroni principle. Will the FCA and the PRA be so bound when taking over—and if not, why not? At present, it is the EU that implements international standards, such as Basel rules, via co-decision and providing policy guidance for tertiary legislation. Where will the implementation and policy guidance come from in future against which to measure secondary and tertiary legislation? Will this Parliament have any role, or will the UK be run by delegation and deference—delegation to regulators and deference to the same regulators sitting in international regulatory bodies? Will this Parliament be given comparable time and opportunity for consultation and scrutiny of regulatory proposals? I say to the noble Lord opposite that I should like an opportunity to do here one fraction of what I did in the European Parliament.

European Union (Notification of Withdrawal) Bill

Baroness Bowles of Berkhamsted Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 1st March 2017 Lords Chamber

[Lord Wigley]

My Lords, I support Amendment 11, moved by the noble Lord, Lord Teverson. Amendment 23, to which I added my name, is grouped with it. I shall be brief because we have heard many experts who know much more about the subject than I do. In any case, I think we are all on the same side in this particular debate.

Both these amendments address the concern within the nuclear industry and within the communities in which they are located at the possible, perhaps unintended, consequences for the nuclear industry arising from Brexit. My own interest arises not so much from the fact that my physics degree at Manchester University many moons ago had a large element of nuclear physics in it. Fusion, incidentally, was around at that time as well. The ZETA project was the bright new hope that we are still waiting for. My interest more directly arises from the fact that my home county of Gwynedd has two nuclear installations at Trawsfynydd, the decommissioning of which is still in progress 20 years on, and at Wylfa, which is awaiting the go-ahead for new reactors. Indeed, Trawsfynydd has also been identified as a possible location for a new generation of mini-reactors if these are given the go-ahead. I hope that the uncertainty arising out of the Euratom question does not in any way undermine those projects.

Many associated with these plants are very anxious to know that the co-operation across Europe from which they benefit, and sometimes on which they actually depend, will not be undermined in any way by Brexit. They and the whole industry have a right to know exactly where they stand, and I hope that the Government will be in a position to tell us.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I am in favour of this group of amendments. Amendment 39, in my name, follows the position that I suggested at Second Reading. The Euratom treaty is a separate treaty and can be separately amended. It provides options for Euratom other than being part of an all-in-one main deal. There is no doubt in my mind—and I have had reason to look at quite a lot of the EU treaties—that Article 106a, which imports various aspects from the main EU treaties, nevertheless restricts it again in the second paragraph by saying that wherever the EU is mentioned it means Euratom and wherever it mentions treaties it means the Euratom treaty. So I believe that they stand alone. My point also deals later on with some of the entanglements, but some of them go in the sense that the two treaties stand alone. If we were left with any parts of the institutions, again, it would be in a very narrow focus, as has already been explained.

My amendment would not stop this Bill giving the Government the power to trigger Article 50 by way of Article 106a, if that power exists in the Bill, but would delay triggering it at least until the Government lay their final draft of the arrangements for leaving the EU before Parliament. By that stage, I hope that the Government would have settled the institutional arrangements for managing the new partnership with the EU.

It may be that at that stage Euratom could slot conveniently into those arrangements and that Euratom would be part of the deal. It could also be that a suitable transition arrangement would be to stay in Euratom a bit longer at least until the UK had substituted all its arrangements at international level. Or it could even be that a UK position outside the EU but inside Euratom could be an agreed way forward in the longer term, with a Euratom treaty change—and there are good reasons for changing that treaty, given international developments.

Noble Lords could ask why some special arrangement should be made for Euratom when there are many other compelling industry problems. One reason is simply that we have the opportunity because there is the separate treaty. The second and compelling reason already alluded to by other noble Lords is that while loss of trading arrangements in other sectors is economically damaging, it will still be possible to buy things—at a price. But outside Euratom, without a replacement agreement, international trade in fissile material and various other products would be illegal. So exiting Euratom and following up with a subsequent free trade agreement is not a viable option. Nor is crashing out without an agreement.

Presently, there are some 13 EU countries in the UK supply chain of fissile materials, and a similar number in other third countries. As we have heard, some of those will be for medical use and cancer treatments, and others for nuclear reactors with some 20% of our electricity generation being from nuclear. Then there is a whole industry of nuclear components, repairs and auxiliary products, and other more remote industries such as automobile, aeronautics, mining and petroleum, that would be affected. Euratom is a key player in research, including fusion. It is the vehicle for the UK’s participation. Keeping some kind of “same as in” arrangement is important for research both at our atomic energy establishments and at our universities.

Modification of institutional arrangements and Commission permissions will be needed whether we are in or out of Euratom because all EU countries will have to have permission in order to trade with us. Nothing should be dismissed prematurely. Euratom operates on a far more intergovernmental arrangement than the EU, which therefore makes looking for an intergovernmental solution conceivable. The role of the Parliament is smaller—for example, seeking opinion rather than requiring consent—and there are provisions for consulting national parliaments. That could provide openings for negotiating new arrangements.

Finally, not many cases have gone to the European Court on Euratom issues. I found a 2011 post-doctoral paper in the German Law Journal that had managed to unearth only 30 cases that had ever gone to the ECJ, compared with around 700 cases annually for the court. Of those 30, only 15 were Commission versus member-state cases. Most notably, in contrast to the EU treaties, expansion of competence and cross-sectoral applications have not happened under the Euratom treaty to any great extent. For example, when the Commission tried to apply civil rules to the decommissioning of UK submarine nuclear reactors and submarine repair, the court found in favour of the UK on the basis that the matter came under security and defence. The court resisted extending the judgment to civilian aspects, although they clearly existed.

We will never escape the effects of some jurisprudence that comes from the European Court because it governs interpretations that the EU will apply to our new relationship. But Euratom is one area where the court is hardly interfering and could be tolerated for longer, at least in transition. So I urge the Government to think seriously about the additional flexibility that the separate Euratom treaty offers. It would be not only the UK that wished to get some kind of regularisation of the arrangements—but in this we can give ourselves, as of right and under our control, more time, more options and more security.

[Lord Liddle (Lab)]

My Lords, I support these amendments. As a member of Cumbria County Council I have an obvious interest in the prosperity of the nuclear industry in our part of the world. I will ask the Minister a number of questions that I hope he will be able to answer.

First, what is the Government’s justification for this policy? All that I have heard so far is something like, “Well, the European Court of Justice has some jurisdiction and we therefore have to come out of Euratom”. Frankly, that is facile. The idea that one would be so ideological as to endanger a major British industry for that reason is extraordinary. What actually is the reason?

Secondly, I would like to see a strategy paper on how the Government propose to manage the new relationship if we are to withdraw from Euratom? How does it fit with the great prominence given to nuclear questions and the priority for the nuclear industry in the Government’s excellent industrial strategy paper? Where is the consistency between this destructive proposal and the priority for the nuclear industry that the Government claim is top of their concerns and work?