European Union (Withdrawal) Bill

Debate between Baroness Chapman of Darlington and Oliver Letwin

Committee: 5th sitting: House of Commons
Wednesday 6th December 2017 Commons Chamber

[Sir Oliver Letwin]

I do not think there is the slightest chance that a withdrawal agreement will be put before the House that does not specify, or enable one to calculate, an amount of money, because there is no indication that the EU would accept such a thing. Whether or not we should be paying such an amount is a separate matter. In any event, as my right hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald) just said from a sedentary position, if that is a deficiency of a forthcoming money resolution, it is a deficiency shared by new clause 17, which also does not stipulate anything about an amount. One way or the other, I fear that the new clause is otiose. It has given an admirable opportunity for the hon. Gentleman to make an interesting speech, but that is its only virtue. The House should have nothing further to do with it.

[Jenny Chapman]

It is a real pleasure to be called to contribute. I wish to speak to new clause 80 and amendments 339 and 340 in my name and the names of my right hon. and hon. Friends.

New clause 80 would require a vote in the House on the financial settlement that the Government agree with the European Union. Further, it would require the House to be informed in its decision on that matter by reports from the Office for Budget Responsibility and the National Audit Office. Amendments 339 and 340 would prevent tax or fee-raising powers from being established via tertiary legislation and limit any fees that are levied by public bodies to the cost of the service that the fee is intended to cover.

I should start by referring Members to the third report of the House of Lords Delegated Powers and Regulatory Reform Committee from September, which examined the Bill before us today. The report draws our intention to the fact that the delegated powers memorandum notes that those powers would enable

“the creation of tax-like charges, which go beyond recovering the direct cost of the provision of a service to a specific firm or individual, including to allow for potential cross-subsidisation or to cover the wider functions and running costs of a public body.”

The report alerts Parliament to the danger of allowing organisations full-cost recovery of their services without parliamentary scrutiny as it could allow them to gold-plate the services that they offer. As the report says:

“A tax-like charge means a tax.”

And it

“should not be allowed in subordinate legislation. They are matters for Parliament, a principle central to the Bill of Rights 1688. Regulations under clauses 7 and 9 cannot impose or increase taxation.33 But regulations under Schedule 4 may.”

The report goes on to make the point that that means that Ministers can tax. They can

“confer powers on public authorities to tax and they can do so in tertiary legislation that has no parliamentary scrutiny whatsoever.”

New clause 80 also addresses this issue of a lack of parliamentary oversight. As we all know, the Government are in the process of attempting to conclude the first phase of negotiations with the European Union. Part of that process is agreeing a financial settlement, which reflects the obligations that the United Kingdom has incurred as a result of its membership of the European Union. Labour has always been clear that Britain should meet its obligations. We cannot seriously hope to make new agreements on the international stage if we are seen to go back on what we have already agreed. Britain is a far better, fairer and more reliable ally than that.

As the Chancellor said when he attended the Treasury Committee today:

“I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation.”

He continued:

“That is just not a credible scenario. That’s not the kind of country we are and frankly it would not make us a credible partner for future international agreements.”

On that, we are agreed. But we have also been clear that the deal must be fair to the taxpayer. Already the Government are attempting to bypass the scrutiny that should take place in this Chamber. This money belongs to the UK taxpayer and they have a right to know how much, and for what they are paying. It is true that the public interest in discovering more about the financial settlements that the Government intend to make with the EU is great, and that there will inevitably and rightly be extensive media coverage. The details, some certain and some speculative, will be pored over by commentators. Estimates will be made and objections proffered on the basis—sometimes, I venture to say—of inaccurate or incomplete information. That is not a satisfactory way to proceed. The House must get a grip of this process and demand the ability to scrutinise and take a view on the deals reached.

Our new clause argues that this House should have a vote, and also that the vote should be properly informed. Being properly informed means that independent analysis by the OBR and the NAO must be provided to assist this House in its consideration of the deal. We are going to need that, because the financial settlement will not be straightforward, and unvarnished truths will be hard to come by. Crudely speaking, the Government will try to make the amount look as reasonable as possible and the EU will try to show that it has everything that it thinks it is due.

The Government will want to highlight estimates that show how payments will be less than half the €100 billion liability, once UK projects have been taken into account. As Alex Barker in the Financial Times put it last week:

“Ministers are banking on Treasury budget wizards making the exit price look as small as possible.”

The two sides in the negotiation could look at the same agreement and come up with net estimates that are quite different.