Procurement Bill [HL]

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage
Monday 4th July 2022 Grand Committee

[Baroness McIntosh of Pickering (Con)]

I am delighted to follow my noble friend with a few brief remarks. I say at the outset that I regret that I was unable to contribute to Second Reading. I shall limit my remarks today to my arguments probing why Clause 2 and Schedule 2 are part of the Bill. This raises a more general question as to why we actually need the Bill, as I understand that we are already in the GPA. We have had a number of Statements about this and discussions in this regard with the Minister responsible for trade, my noble friend Lord Grimstone. I would be grateful if my noble friend could elaborate on what I am about to put to him.

As I understand it, the purpose of the Bill is twofold: first, to reform the UK’s public procurement regime following our exit from the EU; and, secondly, to create a simpler, more transparent system that better meets the country’s needs rather than being based on transposed EU directives. I understand that we are to have a separate exercise where we go through all the retained EU law, when we come to what is euphemistically known as the Brexit freedoms Bill, to decide which of those retained EU directives we may wish to keep.

My understanding is that much of what is before us today, as my noble friend has explained, is already covered by the World Trade Organization Agreement on Government Procurement—the GPA, as it is called. The aim of that agreement is to mutually open government procurement markets to those party to that agreement. The threshold values are, curiously, almost identical to the thresholds that had to be met through our membership of the European Union, which was roughly €136,000. We are now looking at £138,760 as the threshold for the general agreements for goods; for services, it is the same amount and, for construction, it is £5 million-plus.

As my noble friend Lord Lansley rightly assumed, I am trying to ascertain through this debate the way in which public contracts can be defined. I am assisted in this regard by paragraph 16 of the Explanatory Notes, which sets out that:

“The Public Contracts Regulations 2015 will be repealed and new rules on procurement will be set out in the new regime. Most central government departments, their arms-length bodies and the wider public sector including local government, health authorities and schools will have to follow the procedures set out in the Bill in awarding a contract with a value above set thresholds to suppliers.”


If, for example, there is a public procurement contract for food, for vegetables and meat, for a local school, hospital, prison or some other public body, what is the procedure that will have to be followed after the adoption of the Bill and, more specifically, the regulations that will flow from it?

That is the specific question that I would like my noble friend the Minister to address. How will public procurement for contracts over the threshold be treated? For the purposes of the Act, will they be treated differently from those that already apply under the GPA? How will the contracts apply for those that are under the magic threshold of £138,760? In effect, will the same procedures apply as before we left the European Union? I am particularly interested in food, fruit and vegetables, for the reason that we were all told this was going to be a benefit—a Brexit dividend from leaving the European Union—but I am struggling to see how this dividend will be delivered in this regard. When these contracts are put out for tender, whether they are above or below the threshold, how will that procedure apply? Can those that are under the stated threshold be awarded to local suppliers without being put out for international tender, or could we have Spanish or, indeed, African companies applying to deliver these?

I admit to being confused, because we were told that this was something that would happen after we left the European Union, and I am still struggling to see how these contracts are going to happen. We were told that it would boost local growers in this country to have these contracts put out for tender once we were no longer in the European Union. I look forward, with great anticipation, to my noble friend the Minister’s reply.

[Lord Fox (LD)]

My Lords, up to her final couple of sentences, I was going to recommend that the Minister listen very closely to the advice from the noble Baroness, Lady Noakes. This group of amendments essentially carries on the theme of what is in and what is out, which is the existential theme of almost everything we are debating that is not a government amendment. In that respect again, it is a welcome set of amendments and I think, all joking aside, that the noble Baroness’s points are really important points for the Minister to clear up. I do not understand where we are on this and if the noble Baroness, Lady Noakes, does not then it probably is not understandable.

Professional Qualifications Bill [HL]

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage
Tuesday 22nd June 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I support my noble friend Lady Noakes in her two amendments and the noble Baroness, Lady Hayter, in her Amendments 63 and 68. The first list that I saw was the one produced informally by my noble friend Lady Noakes, which I was delighted to see and took as gospel. Now we have had two or three iterations of it. While that may cause us some confusion and bemusement, one has to look to the professions and the regulators that are required to regulate them. I start from a simple premise: I am a non-practising member of the Faculty of Advocates. I understand what the faculty does, along with the corresponding regulator in England and the Law Society of Scotland—that is, the regulators for their respective professions.

I am delighted that the noble Lord, Lord Purvis, has leapt to the cause that I supported on the question of why pig farmers were chosen for special treatment under the Bill. If I may pause on the completeness of the list, I am not even sure that all the professions listed on pages 20 and 21 of the impact assessment—which I know the noble Lord, Lord Purvis, thinks is no longer entirely up to date—are covered in the new list. It is difficult to see whether

“Chief engineer class I fishing vessel”

and

“Deck officer class II fishing vessel”

have simply been renamed in the list that we received on Sunday afternoon or whether they are the same in the impact assessment and the latest letter. What causes me some concern and confusion, in the light of the comments by the noble Lord, Lord Purvis, is the foot- note to table 4 on page 20 of the impact assessment:

“European Commissions’ Regulated Professions Database. It should be noted that recognition decisions are captured at the generic profession level and not the specific profession level. Some generic professions listed may therefore include specific professions which do have alternate routes and/or which may be likely to be included in the new framework. This table is therefore likely to overstate the recognition decision numbers of the specific professions without alternate routes and which are not likely to be included in the new framework.”


Now I am even more confused than before.

In the light of the forensic work that the noble Lord, Lord Purvis has done in this regard, I am still not entirely convinced as to why pig farmers are included, and producers of chickens for meat production only are included. Does that mean that overseeing egg-producing chickens is not deemed to be a profession and is therefore not regulated for the purposes of the Bill? I go back to what I said when this issue was first raised on the second day of Committee: could my noble friend please state the legal basis for including pig farmers? Has it been correctly identified by the noble Lord, Lord Purvis? I would like to understand, when I meet them at Thirsk auction mart, whether they are included or not. Are egg-producing chickens included or only those for meat production? Perhaps more importantly, on what basis are beef and lamb producers and producers of chickens for other purposes not included? Is that a permanent exclusion or could it be revisited, and might they be included at a later date?

The noble and learned Lord, Lord Hope of Craighead, was being very restrained when he said that this is an unsatisfactory situation. We have to accept that the Bill before us is perhaps not fit for purpose and that we need to do other work on it. I do not think that, hand on heart, we can allow it to go forward to Report and eventually leave the House in this form, because we would not be serving well the professions or indeed their regulators if we did. So I support Amendments 45, 46, 63 and 68 and particularly the call from my noble friend Lady Noakes to pause the legislation at this stage so that we can do the work that, undoubtedly, my noble friend and his department would be delighted to do.

[Lord Fox (LD)]

My Lords, this has been an interesting debate. Before talking about the amendments specifically, I want to respond to the noble Lord, Lord Moynihan. I support his point, but the ski instructors of Great Britain are not alone in having their route to working in the EU cut off. We should look at the overall economic impact of this. Research by Make UK, which represents the UK’s manufacturing industry, shows that 61% of manufacturers regularly send their employees to the EU to follow up their manufacturing work with service work. Almost all of those have qualifications that until now have been recognised in the EU, but that is no longer the case. So this is a huge economic issue, not just for ski instructors and their families but for the entire manufacturing and indeed service sector of this country. The noble Lord has hit on a point, but it is actually a much bigger point overall.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

My Lords, first, it was churlish of me not to thank my noble friend the Minister for his enthusiastic embracing of the idea of a round table in connection with Clause 9; for that I am extremely grateful to him. I am also grateful that he asked us again to refer to the Explanatory Memorandum in relation to Clause 13, in addition to the remarks made by the noble Lord, Lord Hunt, in moving this amendment. The EM states that the powers under Clause 13

“may be used to modify legislation, including, where relevant, Acts of Parliament.”

Again, an Act of Parliament is being amended not by another Act, but simply by regulation.

Every Government like to govern by regulation and every Opposition would prefer things to be on the face of the Bill—that is just a fact of life to which I am becoming accustomed, having only served as a shadow Minister, not the real thing. But I would like to take this opportunity to ask my noble friend the Minister one specific question. Clause 13 as drafted is silent on any requirement to consult on these regulations. What consultation will there be, and at what stage might draft regulations be passed to the regulators as well as the relevant devolved Administrations? It is extremely important that they see them at the earliest possible stage.

Could my noble friend also put my mind at rest regarding an issue that the noble Lord, Lord Hunt, referred to in connection with Clause 9: the potential conflict between regulators of a devolved nation and regulators in another devolved nation or, indeed, the “mothership”—the English regulator? Might that situation arise under Clause 13? How would my noble friend aim to prevent that arising?

[Lord Fox (LD)]

I am grateful for the speeches we have heard so far. I am a cosignatory to this amendment and I would like to associate myself completely with the comments of the noble Lords, Lord Hunt and Lord Patel. However, if they will excuse me, I would like to single out the comments of the noble and learned Lord, Lord Thomas of Cwmgiedd, which were a clear, clarion call as to what we need to do with this clause: take it out. If we do not, we will let a Bill leave your Lordships’ House with so much power vested in the Minister and the department.

We are still struggling with what this Bill is for. If, as the Minister says, the first four clauses are its beating heart, then if things change, these issues can be picked up in primary legislation. Secretary of State Fox was very clear: trade deals will be brought to Parliament and debated as primary legislation. If and when the Government renege on that, perhaps it would be a problem of their own creating, but to leave this Henry VIII clause in the Bill is to pass too much untrammelled power going forward. I am sure that every department wants that ability not to have to worry about what Parliament says when it is making regulations and primary legislation, but your Lordships are here to stand up against things like that. We should remember the words of the noble and learned Lord, Lord Thomas, as we move forward to Report.

Professional Qualifications Bill [HL]

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage
Monday 14th June 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I have two brief points. I would like to speak in support of Clause 4 standing part of the Bill, but I welcome my noble friend explaining, in response to earlier amendments, that this will be regulator-led and is permissive, not prescriptive.

First, I am slightly concerned by subsection (1), as explained in paragraph 39 of the Explanatory Notes, which then go on to say that it seems quite prescriptive. I do not know if that takes away from the permissive nature of the rest of the clause.

Secondly—and, to be honest with my noble friend and the Committee, I could not think of where else to raise this—I accept that they are not regulated bodies, but I understand that the professional drivers and attendants of pig farmers, chicken producers and livestock transporters are covered by the remit of the Bill. It is interesting to see, but I cannot understand why beef and lamb producers are not covered, because it strikes me that they might like the opportunity to make common ground with countries with which we are seeking to do deals. It may be that they are allowed to do so, but if they are, I wonder why they are excluded from the remit of the Bill.

Finally, I assume that the costs will be minor. I would like to place on record the fact that most of the bodies that have contacted me welcome the powers set out in Clause 4. I do not know whether paragraph 66 on page 18 of the impact assessment is relevant here. That refers to frameworks but I presume that also covers regulator recognition agreements. It comes up with a figure, giving a mean of £350,000 as a best estimate. On what basis has that figure been reached?

[Lord Fox (LD)]

My Lords, we are indebted to the noble Lord, Lord Hunt, for opposing that this clause stand part. The way in which he set out the issues around delegated powers was excellent. I have nothing to add, but I would like to associate myself with what he said. His point about the severity of the sanction of a DPRRC report is very well made. I have tried to make in different ways. I think we will all be waiting to see how the Government react in legislative terms.

The term “encouragement” has come up and, clearly, Clause 4 is the encouraging end of a continuum that goes through “recommendation” and ends up in “compulsion”. Here, I come back to the question that my noble friend Lord Purvis asked when we were debating Amendment 30. The Minister confirmed that Clause 4 is voluntary, which we were all grateful for, but omitted to respond to my noble friend’s question about whether Clause 3 has the power to override Clause 4 and move that encouragement further down the continuum towards compulsion. Rather than ask it that way around, let us ask it the other way around. Are there any circumstances in which Clause 3 can be used? In other words, would the Minister rule out that Clause 3 can ever be used to compel regulators to do things as a result of Clause 4?

Professional Qualifications Bill [HL]

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage
Wednesday 9th June 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

I am delighted to support many of the amendments in this group. Those in the name of the noble Lord, Lord Foulkes, are very similar to those in my name. I notice that Amendment 38 extends the proposed consultation to Clause 6. I will limit my remarks to the amendments in the name of the noble Baroness, Lady Hayter, and Amendment 52 in the name of the noble Lord, Lord Palmer of Childs Hill.

The noble Baroness, Lady Hayter, has cleverly married the concept of consultation with specifying the number of bodies that are to be consulted upon. When she comes to move Amendment 27, I would be interested to learn why she picked those specific ones. I am also interested to learn from the Minister why there is no reference in the Bill to any specific professional bodies. What was the thinking behind that?

On Amendment 52 in the name of the noble Lord, Lord Palmer of Childs Hill, obviously, a number of professional people co-operate together in partnership, but many may consider them a small firm, if you like. I see some merit to Amendment 52 in relation to what the Bill’s impact will be on small and medium-sized companies. I look forward to hearing my noble friend’s response to that request.

[Lord Fox (LD)]

My Lords, this group is perhaps the inevitable consequence of trying to reduce a highly complex system and situation, as the Minister has highlighted, into a small one-size-fits-all Bill. In other words, we have a mixed bag of amendments in this group. I will speak initially to Amendments 53 and 54 in my name and to Amendment 52 in the name of my noble friend Lord Palmer of Childs Hill.

I thank the noble Lord, Lord Patel, for his support of Amendment 53. He said that he was disappointed to be speaking before me. I have to say that I am not disappointed to be speaking after him because he gave a much better speech than I could possibly have managed myself. The noble Lord, Lord Lansley, is right, in that the innovation issue is hard to measure, but I think that the point made by the noble Lord, Lord Patel, that this is part of a cumulative effect on innovation is important.

I was hoping to probe the Minister on how the Government have joined the dots between the intention of the Bill and how it will drive the future nature of our economy. To some extent, the criticism of the noble Baroness, Lady Noakes, of these kinds of amendments as a way of trying to shoehorn in something else is true; I make no apology for that.

At the heart of the Bill, there is a central conceit. At Second Reading, the Minister said:

“The Bill will allow action to be taken in the public interest if it is judged that a shortage of professionals has arisen in a profession.”—[Official Report, 25/5/21; col. 908.]


What is a “shortage of professionals”, and what level of omniscience is required from the department in order to identify that particular need in the market for professionals?

Is there a danger that the Bill is in fact solving yesterday’s problems? That is the innovation question—because we need people to create the businesses of the future. Yet we have a Home Office that lets in only people who already have a job, and BEIS, which will measure the current need for people. The noble Lord, Lord Patel, was closer to the mark when he talked about early career researchers—I would add research technicians. Both find it extremely difficult to get Home Office visas because they are paid less than the limit for them to come in.

We are going to have a debate about the availability of people, in the group starting with Amendment 17, and I do not want to pre-empt that, but I want to hear the Minister’s playback on how the department and those drawing up the Bill drew the dots between the Bill and innovation. That is one of my objectives with this amendment.

Amendment 54 looks at a different kind of impact. In fact, in retrospect it should have been grouped with the amendment of the noble Baroness, Lady Noakes, Amendment 9, because in a sense it measures the effect that she has highlighted there. As happenstance will have it, she did not get an answer to her questions the first time around, so this gives us a chance to run through them again.

Minister, there is a strong belief that the regulators will come under great influence from the Government on the level of fees. That will either reduce their income or maintain their income at the expense of those registering. This amendment seeks to give transparency to that problem. If indeed it is not a problem, we will see that clearly. The noble Lord, Lord Lansley, gave it something of a thumbs-up, in that it is measurable—and I assume that it is data that BEIS is already collecting because, of course, it is going to create a model of the entire professional market in order to manage it on behalf of the national economy. I assume that the data is already available. Therefore, publishing it would be very helpful and perhaps give a lie to the fears or expose them, so that the Government can change things to stop them becoming an issue.

Very simply, the point from the noble Baroness, Lady Bennett, about some joined-up reporting is well made. Whether it is the whole hog or just a few key elements—and I would probably prefer the latter to the former—I think that the global south issue can be solved by having a geographic split on where people are coming from, for example, to highlight those issues.

My noble friend Lord Palmer spoke on Amendment 52 about the need for there to be a realisation within organisations of the impact of the Bill, particularly on SMEs. In the past, many SMEs have picked up employees from the European Union without having to give a moment’s thought to the accreditation of their skills. That is now changing, and I absolutely agree with my noble friend that there has been no dawning on the vast majority of Britain’s businesses of that change. I think he has a great point.

The noble Lord, Lord Foulkes, spoke strongly, as usual. I agree with him—I would like the opportunity to intervene and interrupt the noble Lord, although of course I would exercise it with great care. But in the main, I would like the Minister to push back on Amendments 53 and 54 and say how this affects innovation and whether we can see the numbers when it comes to costs and the financial effect on the regulators.

National Security and Investment Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

Report stage
Thursday 15th April 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to speak on Report. I congratulate my noble friend Lord Leigh on raising this persistently and so eloquently at earlier stages of the Bill. I congratulate my noble friend the Minister on listening to and acting on the concerns expressed across the House at that stage by bringing forward the amendments that he has today.

I particularly associate myself with Amendment 8, to Clause 8, in the name of my noble friend Lord Hodgson of Astley Abbotts. I would like to press the case a little further with my noble friend the Minister and ask that we pause for a moment at this stage and ensure that we are not going to scare off potential large investors with an increase in referrals that perhaps could not be managed or see a deterrence to potential investment, therefore possibly damaging the economy.

The way in which I would like to press my noble friend the Minister follows on from what my noble friend Lady Neville-Rolfe said in her opening remarks just now as to what extraneous factors may be taken into account that could damage potential investment in this country. Those further factors that I ask my noble friend to rule out have been put forward at earlier stages by the Law Society of England, which I supported in Committee and repeat in connection with Amendment 8 here.

Can my noble friend clarify and give greater certainty as to what constitutes national security? Will he specifically rule out extraneous factors such as employment effects, reciprocal investment and trading opportunities in other jurisdictions and a desire to protect UK business from international competition as factors that would be taken into account when assessing whether a trigger event would give rise to a national security risk? In terms of Amendment 8 and our earlier discussions, it would give clear guidance to those practitioners at this stage if we could rule out that those extraneous factors would ever constitute a potential national security risk.

[Lord Fox (LD)]

My Lords, we have had a short and interesting debate. Speaking to Amendment 2, the noble Lord, Lord Lansley, has as ever uncovered an incongruity in the way the Bill is drafted. I suggest the Government are wise to listen to his advice. Similarly with Amendment 8, there is a need for clarity for people. Where do they stand on this issue? That is all people deserve when trying to manage their affairs.

We then come to the extraordinary intervention of the noble Baroness, Lady Neville-Rolfe. It is a shame that she was not around to give a Second Reading speech, which perhaps might have guided us through some of our decision-making, and arrived only at this late hour to offer her help. I suspect that, had she involved herself a little earlier, she might have been less concerned with the issues than she is now. For fear of doing the Minister’s work for him, I ask him to confirm that the regime retains the right to call in deals that are less than 25% at any time. The notion that there are deals that the regime may not see is one of the points inferred by the noble Baroness, Lady Neville-Rolfe.

This is the point: the unit has to be sufficiently resourced and efficient in its work to be able to pick these issues up. We shall talk later about where it gets its information and how the security guidance is fed in, because that comes under another group of amendments. However, with all the issues coming through, the point is how well the regime is actually operated; the noble Baroness, Lady Noakes, has mentioned this on many occasions. That will be the rub, in terms of how business will be affected by the Bill. The more the Minister can reassure us that the resources will be there to deliver this, the happier most of us will be.

National Security and Investment Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage & Lords Hansard
Tuesday 2nd March 2021 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, in the spirit first put forward by my noble friend Lord Vaizey, I would like to tease the Minister at this point, if I may. Clause 3 states:

“The Secretary of State may publish a statement for the purposes of this section if the requirements set out in section 4(1) are satisfied”,


and now we have government Amendment 12, which amends Clause 4 to state that responses to the consultation may be required to be pursued through. What is the situation, if one might occur, if the Secretary of State chose not to publish a statement? Does the Bill permit that in this regard, and what would be the circumstances in which the Secretary of State may decide not to publish a statement?

[Lord Fox (LD)]

My Lords, as the noble Lord, Lord Lansley, said, government Amendments 37 and 75 are technical and Amendment 12 covers the ground of Amendment 11, so I will speak to the latter. I am broadly supportive. Clearly, this is an issue about “may”—my noble friend Lady Bowles and the noble Baroness, Lady McIntosh, asked the same question. If “may publish” means “may not publish”, where are we in this process, given that the statement is such an important part of setting out the modus operandi of the whole Bill? This is quite an important area.

I support Amendment 11 but it will be important to listen to the Minister’s response to decide how this might go forward in the next stage. I believe that some degree of accountability should not be left as an option to the Secretary of State; there should be an obligation on the Secretary of State to make that statement and, as the Government have said, to have the ability to remake it.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

My Lords, Amendment 14 in my name came about as a result of my working closely with the Law Society of Scotland. I am very grateful to the society for drawing to my attention the fact that, on the present reading of Clause 6, the Secretary of State may make regulations without any further consultation in that regard. The reason for the amendment is that this consultation provides an additional layer of scrutiny by all interested parties. The requirement on the Secretary of State to consult will help to ensure openness and transparency of the Secretary of State’s actions. Imposing a duty to consult will ensure that any draft statutory instrument is exposed to critical comment from stakeholders, which may improve an instrument and help to avoid difficulties when it comes to progressing through Parliament.

All this assumes that the Government will actually pay attention to consultation and the results. It is felt that the provision as drafted gives the Secretary of State very wide discretion to amend the scope of notifiable acquisitions as per the present drafting of Clause 6(5). This can have far-reaching consequences, not least because, as set out in Clause 6(6), it may be used to extend the scope of notifiable acquisitions to acquisitions of qualifying assets. In particular, I want to put on record that Clause 13 states that where a notifiable acquisition takes place without the approval of the Secretary of State, this transaction will be void, although under Clause 15(2) and (3) the defect can be cured retrospectively.

This amendment addresses a concern that there will be a lacuna in relation to the impact on third parties. In particular, if the qualifying asset in question is land, and if it were to be established that a transaction had been void and that the ownership or other interest in the land had not been properly transferred, questions of liability may arise. This could be the case, for example, in relation to environmental or insurance liabilities. Although it appears that the third party would have an action under Clause 16, we are concerned that this could be both burdensome—that is the Law Society expressing its concern—upon that third party and unnecessarily complicated. There is also concern that it might not resolve all the relevant problems.

I welcome my noble friend to her speaking position, for once, this evening; I hope that this is not just paying lip service to diversity. If the Government are not minded to accept this amendment, can she say what the purpose is of introducing regulations at what would be quite a late stage and without having consulted at all with interested parties or stakeholders?

[Lord Fox (LD)]

My Lords, I fear I might have missed a trick here. I think we have two quite different amendments and I should have been smarter and disaggregated Amendment 94 from Amendment 14. I apologise to the noble Baroness, Lady McIntosh, that I am not going to speak to Amendment 14, although I firmly believe that my noble friend Lord Bruce of Bennachie will speak to it later. I will speak to Amendment 94 in my name and that of my noble friend Lord Clement-Jones.

Under Clause 6 the Secretary of State has great power to make the regulations concerning how this Bill will work. The Secretary of State can specify the description of the qualifying entity for the purpose of identifying a notable acquisition. He or she can amend the circumstances in which a notifiable acquisition takes place or does not take place, exempt acquirers with specified characteristics from the mandatory notification regime and make consequential amendments to other provisions of the Bill. These will be set before Parliament using the affirmative procedure. This was confirmed by one of the other documents that was circulated just before our proceedings began today.

For the commencement of the regime, the Secretary of State intends to make regulations only to specify the sectors subject to mandatory notification—that is, the 17 sectors we have already referred to elsewhere in this debate. This covers the activities of the entities of both sectors which give rise to an elevated national security risk. In the Government’s own words:

“Mandatory notification of certain types of transactions in 17 key sectors will ensure that the Government is informed of potential acquisitions of control or ownership in these particularly sensitive areas”.


As we have heard, using this list they will take action to investigate and mitigate any national security risk. The list is central to the workings of this regime. Therefore, so is the making and updating of it.

For the avoidance of doubt, and possibly to bore the Committee, I want to put on record the length and breadth of this list. It includes advanced materials, advanced robotics, artificial intelligence, civil nuclear, communications, computing hardware, critical suppliers to government, critical suppliers to the emergency services, cryptographic authentication, data infrastructure, defence, energy, engineering biology—which has now been commuted to synthetic biology—military and dual use, quantum technologies, satellite and space technologies, and transport. We heard from the Minister that in fact the Secretary of State can extend beyond this list if he or she feels it appropriate.

The so-called slimline version was published today, as mentioned by the noble Baroness, Lady Hayter, who has just popped out. She referred to the artificial intelligence sector which has been “slimmed down” to the identification of objects, people and events, advanced robotics and cybersecurity. The underlying software for that is going to be machine learning, and therefore that includes all artificial intelligence. While on the face of it this has been narrowed down, the reality is that if a Secretary of State so chose, anything involving machine learning could be dragged into this process. We need to be very wary of this list, which can be expanded and changed over time.

I expect that the Minister will choose to represent the proposed use of the affirmative procedure in the Bill as meaningful parliamentary scrutiny, but in truth the list can be amended by this and any subsequent Government as they please. For one thing, Parliament cannot amend statutory instruments, and for another, this House has voted down affirmative statutory instruments just four times in the past 70 years. That is nearly as long as my noble friend Lord Clement-Jones has been alive. As the Constitution Committee noted in its 2018 report The Legislative Process: The Delegation of Powers:

“Without a genuine risk of defeat, and no amendment possible, Parliament is doing little more than rubber-stamping the Government’s secondary legislation. This is constitutionally unacceptable”.


Affirmative statutory instruments do not constitute meaningful parliamentary scrutiny. This Government, or any subsequent Government, are effectively free to amend that already long list of technologies at will, so we need some sort of genuine democratic process. I am indebted to my noble friend Lord Sharkey; he proposed a very similar amendment to the Medicines and Medical Devices Bill, and I have ruthlessly plundered his thinking as it is just as apposite to this Bill.

As noble Lords know, there is a delegated legislation procedure that allows for significant parliamentary scrutiny. To the Government, it is known as “exceptional procedures”, and to Erskine May, in part 4, chapter 31.14 as the “super-affirmative procedure”. Erskine May characterises it as follows:

“The super-affirmative procedure provides both Houses with opportunities to comment on proposals for secondary legislation and to recommend amendments before orders for affirmative approval are brought forward in their final form … the power to amend the proposed instrument remains with the Minister: the two Houses and their committees can only recommend changes, not make them.”


Amendment 94, in my name and that of my noble friend Lord Clement-Jones, follows this pattern; it is more generally based on the variant of the procedure used by the Government of the day in the Public Bodies Act 2011, so it is not a stranger to government. It refers to the Secretary of State’s regulation-making powers and includes the long list of technologies that I have just read out.

First, the Secretary of State must lay before Parliament a draft of the proposed regulations and a document explaining them; secondly, he or she must request a committee of either House whose remit includes science and technology and business to report on the draft regulations within 30 days; thirdly, in proposing a draft statutory instrument containing the regulations, the Secretary of State must take into account any representations, any resolution of either House and any recommendations of the committee to which the draft was referred. After the expiry of the 30-day period the Secretary of State may lay before Parliament regulations in terms of the original or the revised draft. The Secretary of State must also state what representations, recommendations or resolutions were given in the 30-day period and give details. He or she must also explain any changes made in a revised draft. After that, the normal affirmative process continues.

--- Later in debate ---

[Lord Fox (LD)]

I anticipated the Minister’s answer on the subject of time, and 30 days is 30 days, but the Government have shown that they are relatively adept. If there really was a national security emergency requiring quick action using other means, a statutory instrument with a debate in Parliament would act as a plug. My noble friend Lord Clement-Jones made the point that there is such significance, particularly around this list but also around the other elements of Clause 6, so I hope that the Minister will read Hansard and at least find some way of moving towards the very valid arguments that she has heard today on both amendments.

[Baroness McIntosh of Pickering (Con)]

I thank all those who have spoken on both amendments. The noble Lord, Lord Fox, will recall that we had a lengthy debate about the super-affirmative procedure during the passage of the UK Internal Market Act. I deeply regret that we did not go down the path of that procedure, for reasons that I gave. My noble friend the Minister cares passionately about Wales, and I hope that she will care equally passionately about Scotland and will be prepared to meet with me to bring these matters forward, because I do not accept that it is enough just to have regard to the public law requirements.

The Law Society of Scotland has identified three ways in which these regulations could move the parameters forward which I would like to discuss on a wider basis with her. While an official in the department said that it is not expected at this stage that those three areas will be covered, it is not excluded that that will happen in the future. I want to come back to that, but for the moment, I beg leave to withdraw the amendment.

Trade Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I welcome this group of amendments. I pay tribute to my noble friend and his colleagues, who have successfully engaged the legislative consent from the Scottish Parliament. I say that as someone of Scottish descent, and a non-practising member of the Faculty of Advocates.

I honestly do not believe that we would have got to this pass if it had not been for the intervention of a number of noble Lords, but especially the noble and learned Lord, Lord Hope of Craighead, among others, who intervened at all stages of what is now the United Kingdom Internal Market Act. I hope my noble friend will join me in paying tribute to the ongoing discussions on the framework agreements between the four nations that will be increasingly important as we develop trade, agriculture and environmental policy. But I am sure that there was more than a minor hiccup in engaging with the Scottish Parliament, so I congratulate him and I welcome these amendments in bringing us to that pass. Although he describes them as technical and not significant, I think they are a major step along the path to securing the passing of the Bill as it proceeds to the Commons.

[Lord Fox (LD) [V]]

Following two previous attempts spread over years, the Trade Bill seems finally to be making its way towards the statute book, perhaps by way of ping-pong. These amendments were described by the Minister as essentially technical housekeeping. I agree with him and certainly with the amendments, but perhaps it is appropriate that the final amendments we will discuss focus on inserting the Bill into the devolution settlement, as symbolised by the Scotland Act.

As the noble Baroness, Lady McIntosh, said, the Trade Bill is about setting Westminster’s role for the future, just as the internal market Bill did. I am pleased to hear about the legislative consent from Scotland and Wales, but in the past months these Benches have shown that we disagree with the way the Bill has avoided the effective involvement of Parliaments and Assemblies in the United Kingdom, taking a lot of power for the Executive.

But we have had those debates, and I will use this time to focus on some elements of the application the Trade Bill might enjoy. It is worth pointing out that the UK will be embarking on this so-called independent trade policy when the global trading environment is—how should I put it?—challenging. Even before the massive uncertainty of the global pandemic there were increasing trade tensions and a slowdown in the global economy.

Yet when I listen to the words coming from government mouths, I often hear echoes of British exceptionalism. Phrases such as “sovereign island nation”, when trotted out, seem to hark back to the 19th century. It is this backward view of the world that most disturbs me. I hear overtones that reflect the use of trade deals in a way that European nations did to compete for imperial domination in the 1800s.

At the heart of this is a total lack of understanding of the nature of modern global supply chains. Despite ministerial remonstrations when debating the Bill, it is impossible for me not to take the recent deals as examples of trade policy and how they are being applied. Of course, we could look at the rollover deals, but none of these has delivered anything material that we did not have before, so there is not much material there.

Then we come to the EU and UK deal. Clearly, there are substantial changes here that point to the direction we are travelling in. It is hard. It demonstrates this lack of understanding of how the flow of goods and services is facilitated by supply chains. Such flows are no longer maintained by access to the clipper ships of the East India Company, as this nostalgia seems to reflect, but nurtured by standards, people and data—three areas the EU trade agreement fails to enhance.

The role of shared standards and regulations is becoming only too apparent to our exporters struggling with serious border friction. Meanwhile, the lubricating effect to trade of mobility frameworks and mutual recognition of skills has yet to impinge on the wider public. However, I believe the tone of the Government’s responses to amendments addressing these issues will ultimately be seen as foolish. Finally, there has been no progress on data flows. That problem has just started.

Christmas Eve was not the end of this story; it was one step in a long process of negotiation. There will be protracted and difficult discussions about implementing the provisions covering trade in goods. We are starting to see this. Then there are two key areas outstanding. The first is financial services. Talks on an equivalence deal are taking place over the next three months, but this will exclude core banking services such as lending, payments and deposit-taking. If the EU and the UK fail to secure agreement, the UK will be left with the task of negotiating separately with 27 member states.

Then, as I said, there is data adequacy. The EU Parliament has severe reservations regarding sharing data with the UK. There is great suspicion over the potential onward transfer of data to the USA. Overcoming these fears will require much more than the Prime Minister looking into the eyes of MEPs and saying, “Trust me”.

However these go, the EU and the UK will remain in low-level dispute on all sorts of issues far into the future. Through all this, the UK will have to calculate the impact of whatever is agreed with the EU on its efforts to conclude bilateral trade agreements with other countries.

I question how the Government will use the much-vaunted freedom that they and the Prime Minister parade. As my noble friend Lord Purvis indicated, the UK Government are already looking for opportunities to diverge from the EU to demonstrate the symbolic value of Brexit and perhaps to pursue what they see as an advantage. Yet each change, each extra difference adds new friction to the EU-UK trade border. For every action there stands a possible reaction and a cost. We will see as time goes on whether the UK trade machine has the depth and sophistication to walk these lines. The weekend leaks on the working time directive and the Chancellor’s “big bang 2” speech seem to indicate otherwise.

The Bill sets a framework for trade. The Executive have taken upon themselves such powers that they will have no one else to blame for the results.

United Kingdom Internal Market Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for introducing these two amendments and giving us the opportunity to probe the very heart of the functioning of the OIM in terms of its independence. Can my noble friend the Minister say how the Government will ensure that this body will be independent? My noble friend will be aware of my concerns and those of others that the Government have got into the habit recently of creating such public corporate bodies and then trying to direct how they operate. Recent examples are, as the noble Baroness Jones of Moulsecoomb, just alluded to, the Trade and Agriculture Commission, which falls within the Department for International Trade, which basically does not provide any resources to those who serve on the commission and, even more recently, the Office for Environmental Protection which, apparently, is to be appointed by and subsumed within Defra. So that is my main concern here, and there is much to commend in Amendment 115 as to how the body corporate is to be set up.

Furthermore, the noble Lord, Lord Stevenson, asks in subsection 2(2) of Amendment 131 for consultation with the devolved Administrations. I would prefer it if went further, as the noble Baroness, Lady Hayter, requested: consent for such appointments should be sought from the devolved Administrations. Presumably, if the Government were to adopt the terms of this amendment, it would be the OIM that would ensure the level playing field, which I imagine is the Government’s intention. However, if it was not the OIM, can the Minister explain which body would, as in subsection 3(2),

“rule that any distortive or harmful subsidies are illegal and should be repaid”,

and, as in subsection 3(4),

“recommend to the Secretary of State changes to the test for a harmful subsidy, the scope of exemptions, and time limits on approvals”?

There should be a body to ensure levelling-up, not just of the regions but between the four nations. I hope that the Government are taking a consistent approach here, in their position on the European Union and their position on state aid between the four nations of the United Kingdom internal market. It would not behove the Government to be seen to be parti pris on their position on competition and state aid in this regard.

I share the concerns expressed by the noble Lord, Lord Purvis, and others, in the previous debate, regarding responses not always being published. I am having great difficulty, and perhaps the Minister can point me in the right direction, but rather than a summary of the responses, it would be enormously helpful if the Government published the responses to the consultation regarding this amendment in full, and preferably before the next stage of the Bill. That would enable us to form our own view of who said what in response to the consultation.

With those few remarks, I would like to put the key questions to the Minister: how do the Government intend to ensure the independence of the OIM, and how do they intend to carry the devolved Administrations with them in this regard?

[Lord Fox (LD)]

My Lords, so far there have been four groups of amendments dealing with the CMA and the OIM, and three different Ministers fielding. That perhaps summarises the fragmented nature of this Bill and the unjoined-up nature of what we are seeking to achieve. In those four groups, and this group, amendments have sought, in a sense, to correct and improve this Bill, but there is no point, because this Bill is beyond that stage. Other speakers have sought to probe and get information from the Government, and there has been no point to that either, because the Government have not answered questions. Despite extremely well directed, forensic analysis and questioning, the Government have ducked, dived and shrugged.

In addition to supporting the request made by the noble Baroness, Lady McIntosh of Pickering, for the consultation to be published, I would like this Minister, who is before us for the first time in this debate, to answer the questions on this group, and to undertake, on behalf of the other Ministers, to answer all the questions that the last four groups have presented, because they are all extremely important to understanding what on earth the Government intend to do.

State Aid (EU Exit) Regulations 2019

Debate between Baroness McIntosh of Pickering and Lord Fox

Thursday 14th March 2019 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I welcome the opportunity to discuss these two statutory instruments and I welcome the opportunity of the amendments that have been tabled to press the Government. I shall take each in turn. I remind the House that as a very young person I spent six months working as a stagiaire in DG IV, as it then was—it is now DG COMP—of the European Commission, where we looked at measures to prevent the distortion of competition, such as state aid.

I shall press my noble friend on whether and at what stage the Government will come forward with their policy on state aid post Brexit. We do not yet know what our own destination will be. It is quite possible that we will end up remaining or applying to join the EEA and EFTA, which have a competition regime very similar to that of the European Union. If that were the case and we ended up with a sort of Norway-plus EEA/EFTA-style arrangement, would the House have to revisit the statutory instrument in that regard, and would other changes have to be made?

I cannot remember which Government were in power at the time but it is worthy of note that the United Kingdom was effectively the author of the original Articles 85, 86 and, I think, 92, which relate specifically to state aid. The noble Lord, Lord Stevenson, raised in particular the question of the Irish border. Obviously, that will have an impact, particularly in relation to the block exemption on agriculture but also to any subsidies for other products that may be deemed to be a distortion of trade. A no-deal Brexit is still a potential prospect, so what consideration has been given to the World Trade Organization rules that will apply to subsidies? If the answer is in this rather long SI, perhaps the Minister could refer us to it. That would be immensely helpful.

I now turn to the European structural and investment funds regulations. Yesterday we had a debate on the rural development agricultural fund and a short debate on the maritime and fisheries fund, and this debate on structural funds is not dissimilar. I do not know whether the investment funds cover Horizon 2020. Perhaps the Minister could confirm my understanding that it is the Government’s desire to continue to participate in projects such as Horizon 2020. It would be immensely helpful to know that.

I should like to place on record—I know that the noble Baroness, Lady Crawley, will remember this only too well from her time in the European Parliament— that we have benefited from a European Social Fund programme targeted at new opportunities for women returning to work, and there are other specific projects as well. This is something that for some reason the UK Conservative Government would never embrace: targeting and giving assistance, through funding, to workers in their 50s or older who perhaps need training before they feel confident enough to return to the employment market. I see the noble Baroness, Lady Quin, in her place. She too will remember that great training schemes were made available for youth employment, although obviously they were not that helpful. When one sees the level of youth unemployment in countries such as Spain, it is clear that these projects are never as well funded as they could be.

Therefore, can the Minister say what criteria will be used, what projects and beneficiaries might be identified, and what sums will be made available? My specific question relates to paragraph 7.5 of the Explanatory Memorandum to the structural funds regulations, which says:

“To this end, HM Government funding guarantee ensures that, in the event of a No Deal, HM Treasury will underwrite sums that would have otherwise been received from the European Commission”.


I would like to pin the Minister down. Am I correct in understanding that we will have matched funding replaced by additional government funds, and am I right in assuming that HM Treasury’s largesse will know no limits? That is a very big ask because, if we have been allocated £8.4 billion of funding under structural funds for 2014 to 2020, there will be a remaining period until the end of that time is reached. So I should like clarification that the matched funding will be made good by Her Majesty’s Treasury for the projects that are outstanding for that period.

Finally, I will follow up on a point raised by my noble friend the Minister in his introduction, when he said that this was something to which we might return. The point was highlighted by the House of Lords Secondary Legislation Scrutiny Committee Sub-Committee B, in paragraph 42 of its report. The Government have decided not to replicate the current power granted by the European Council, which the Secretary of State could assume in the right circumstances. Will my noble friend set out the circumstances in which the Government might seek to appropriate those powers? Would it be a statutory instrument that he would intend to assume? Will he explain to the House and satisfy Sub-Committee B that there is sufficient flexibility in the statutory instrument to override any need for the Secretary of State to have the final say?

[Lord Fox (LD)]

My Lords, in the event that the proposition put prior to this debate by the noble Lord, Lord Adonis, comes to pass, and this SI is not needed, my time will not have been wasted: a more cogent seminar on state aid I could not have asked for than the one I have just received from the noble Lord, Lord Stevenson. I am grateful to him for placing these amendments before your Lordships’ House as this is an issue that requires greater clarity; I associate myself with the questions put by the noble Baroness, Lady McIntosh.

My remarks will be less structured than those of the noble Lord, Lord Stevenson. Regarding the question he posed of what qualifies as state aid, I put before your Lordships my experience of working in the United States and where, for example, a company might be looking to establish a new facility. When considering where that facility might be located, the company speaks to the administrations of various states—this is literally state aid. It asks about the tax structure it would receive in that state, the training regimes that universities might deliver, the buildings and planning regulations that might be needed. All these things qualify as aid which may be offered to companies to locate in a particular place.

The United States would talk about not being a country that distorts the market. Yet the local market is heavily distorted by literally billions of dollars that different US states put in to attract businesses to their location. How does this future regime of state aid fit into that pattern? We have unitary authorities. My noble friend Lord Purvis is going to ask about the role of devolved authorities, but we already have a degree of devolution to unitary authorities in England. They are required to deliver local or regional industrial strategies; LEPs are being granted money to deliver them. How does this fit into a structured state aid programme?

We talked recently about Nissan, which received a secret letter from the Government reassuring the company that it should keep one of its models in the north of England—a large sum of money was secretly committed by the Government in that letter. I contend that that was state aid; whether it would be recognised internationally as state aid is another matter. But we have a dichotomy: there is aid that the state—through a central, local or devolved budget—can give to companies or individuals to help them flourish or locate to particular areas, but it may or may not qualify in terms of whatever international agreements we are under. The noble Baroness, Lady McIntosh, is right to say that, whether we are operating under an EEA, WTO or any other regime, this will become an important distinction. What work are the Government doing on distinguishing between these various forms of state aid?

Recognition of Professional Qualifications (Amendment etc.) (EU Exit) Regulations 2018

Debate between Baroness McIntosh of Pickering and Lord Fox

Monday 11th February 2019 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I remind the House of my membership of the board of the General Medical Council. I want to follow the noble Baroness by focusing on doctors in discussing this SI. As far as the GMC is concerned, the SI provides welcome legal clarification and certainty on the supporting framework governing how EEA-qualified doctors will enter the UK medical register if the UK leaves the EU on these terms—in other words, under a no-deal Brexit. We hope it will help to manage any potential disruption to the NHS medical workforce in those circumstances.

However, can the Minister confirm—I think he did so by implication in his opening remarks—that the regulations will be of only limited application to the medical profession? They will apply only in so far as they make transitional provisions for applications made or actions taken before exit day and which have not been fully determined by then.

The Minister will be aware that there is continuing anxiety in the health service about the uncertainties caused by the current state of negotiations. Given the reaction of many EU nationals working in the NHS to the climate of opinion in this country, I think we have to be really concerned about future staffing and the workforce pressures that will come around the corner very quickly.

[Lord Fox (LD)]

My Lords, before going into detail, I acknowledge that the General Medical Council, the Law Society, the Institute of Chartered Accountants in England and Wales and the Engineering Council have welcomed these proposals. I suspect this is more in sorrow than anything else, since this is better than the uncertainty that would exist without them.

My understanding of secondary legislation and its role—I fear I am treading into Adonis country here—is that it should be about technical, non-controversial issues. When you consider that the 2005 directive paves the way for free movement, you realise that this is actually quite a controversial instrument. In essence, it is here to make up for the fact that, outside the EU, we can no longer treat the European Union as a most favoured nation under WTO rules and will have to strike out the movement opportunities of EU 27 citizens. I understand that; that is why I tabled Amendment 66 to the Trade Bill. I know the Minister was not the beneficiary of that debate or speech but, for the sake of completeness, I am sure he would like to consult Hansard from about this time last week. He will see that free movement has important benefits and this SI tries to mitigate their removal. For that reason, I would say that this is not non-controversial and it is not, strictly speaking, just a technical piece of legislation. Therefore, we should probably not be using this instrument to discuss it, but here we are again.

I am sure the Minister has had a chance to look through Hansard for the other place; his colleague Richard Harrington, the Under-Secretary of State, piloted the debate through that House. A number of issues came up, which have already been touched on. One of these was about the Internal Market Information System, or IMI, of which we will no longer be members after exit. This is an important registry of skills and the way they relate to each other. It is not clear what we will replace it with—an Excel spreadsheet, perhaps—or who will hold it and be accountable for its veracity. I suspect it will be the Minister’s department, but this is not clear.

Reciprocity was raised by the noble Baroness, Lady McIntosh. The debate in the other place seems to indicate that there is no guarantee of reciprocity or process by which it is being sought or managed. If that is the case—it seemed to be the view of the Under-Secretary of State—why not? What are the Government doing to protect the interests of British citizens?

[Baroness McIntosh of Pickering]

I am most grateful to the noble Lord. We managed to get it on the record from my noble and learned friend Lord Keen that there is no reciprocity. Reciprocity remains a matter for negotiation. Perhaps the Minister could confirm this, but my understanding is that all those professionals who happen to be British and wish to practise, or continue to practise, in EEA countries and Switzerland will not be subject to reciprocity. This will have to be negotiated at some future date.

--- Later in debate ---

[Baroness McIntosh of Pickering]

My Lords—

[Lord Fox]

My Lords—

Trade Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee: 4th sitting (Hansard): House of Lords
Monday 4th February 2019 Lords Chamber

[Baroness McIntosh of Pickering]

My Lords, I shall speak to Amendment 101A and, without rehearsing the points, I entirely endorse what the noble Baroness, Lady Brown, and the noble Earl, Lord Kinnoull, said in speaking to the amendment. The Minister was kind enough to have a meeting with the team and myself, but I have this awful feeling that she will not support this amendment. I would like to give her a bit of bottle this evening and say why she must adopt the amendments, particularly Amendment 101A. A similar amendment was not carried in the House of Commons but by a very narrow margin and it goes to this point that a number of noble Lords have said this evening—the process must be, and be seen to be, fair in appointing and sustaining members of the TRA, and they must operate independently and impartially. I make this plea to the Minister: the Government must be seen to rein in some of the powers of the Secretary of State, which will be pretty broad if we let the Bill go to its final stages without making these points.

I entirely support what my noble friend Lord Lansley said about why an independent Trade Remedies Authority is required, and I should have declared an interest: I spent a very enjoyable six months in 1978 when I was very young, very keen, and very green, with the EU Commission—DG IV, now known as DG Comp. We did important things, such as read the Financial Times, which was amazing because a number of companies were announcing they were merging without having told the European Commission or the UK home authority, so it is absolutely vital that we have an independent authority such as the Trade Remedies Authority.

To respond to the point made by the noble Lord, Lord Fox, we need to give the businesses in this country the knowledge that there will be a remedy which replicates the remedies that are currently available. I entirely support his point that it will not be EU-wide, but we do need some anti-dumping and retaliatory measures at our disposal in this country.

[Lord Fox]

It will be very hard to do that—I was not suggesting that they should not have that support.

European Union (Definition of Treaties) (Canada Trade Agreement) Order 2018

Debate between Baroness McIntosh of Pickering and Lord Fox

Monday 25th June 2018 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, following on from the remarks of the noble Lord, Lord Whitty, which essentially I support, obviously it is a matter of regret that, if I understand it correctly, the agreement does not include services. That is a major omission. Also, on the Canada-US border, which I realise is not covered by discussions today, there is already tension, in particular over the flow of food and agri-food goods. This was raised at the G7 summit.

My noble friend said—I welcome this most warmly—that there will be proper scrutiny of the agreement. I wonder whether she will be in a position to share with the House this afternoon what form that scrutiny will take, and perhaps give a commitment that scrutiny will take place while the House is sitting—because I gather some procedures are being considered by the Procedure Committee that will allow some of the regulations flowing from the EU withdrawal Bill to be considered while the House is in recess. I do not know about other noble Lords, but it concerns me greatly that we were promised proper scrutiny and have given vast powers to the Executive to bring in regulations. My understanding was that all the regulations and statutory instruments would be considered while the House was sitting—and we have the September sitting, when we could give instruments close consideration.

My noble friend also said that no case in the investment sector against the UK had yet been successfully prosecuted. When we had the little debate last Thursday on the G7 summit, I pressed my noble friend on what the dispute settlement would be—this is in the White Paper—in relation to the free trade agreement that we seek with our current EU partners, and indeed other free trade agreements that might be agreed. In the context of concerns raised, certainly by the Belgian Government, this obviously is a source of concern that may have greater credence the closer we come to reaching an agreement with the EU, or indeed more broadly.

I take some comfort from the reassurance that my noble friend has given the House this afternoon that public services will remain a matter for the UK Government. Perhaps she could give a bit more substance to that commitment, because a lot of scare stories were going around at the time the TTIP agreement was being discussed, and it would be most unfortunate if, in the context of the CETA agreement, such scare stories were to persist.

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Whitty, was right to highlight consumer and voter concerns about such matters—but I should point out that there are also business concerns about the Government’s stature in the trading environment. It is not just the content but the body language that goes with it. At the weekend we saw some appalling body language from senior Ministers about business and some of our most important exporters, so it is good that we can ameliorate that at least in some way with some positive body language here. It is good for us to be discussing this. Perhaps it is churlish of me to point out that the reason why we are discussing it is that we are in the EU, which has worked hard to deliver this treaty.

It is also heartening that we are discussing something that fits within the WTO legislative procedure rather than—sadly, and increasingly—within a worldview that is moving outside the WTO. So it ticks a number of multilateral boxes. As we have heard, Canada is of course an important current trading partner, and one that we hope to make larger. So CETA and its ratification are to be welcomed. It is a good arrangement and, clearly, as the Minister pointed out, the Canadians have made it clear that this is a framework by which a transition in the event of Brexit can be moved into a bilateral agreement between ourselves and Canada.

As the noble Baroness who spoke before me pointed out, it is clear that this does not include services—that is my understanding. I see that the Minister is shaking her head. Perhaps she might indicate which services are in and which are out. My sense is that very few are in. What would be the attitude towards a bilateral agreement on services between our two countries?

The Minister also pointed out that a working party to transition this has already been set up. Perhaps she could give us some sense of how long “swiftly and seamlessly” really means in terms of moving from one to the other. She used some examples; quite a lot of them were agricultural and food products. Clearly, Canada has a very strong agricultural industry. I would be interested to know what impact analysis has been done of the relative flows in both directions of agricultural and food products between our two countries. The Minister talked about growing trade—I think she used the phrase “hundreds of millions” in extra trade. What kinds of targets do the Government have for increasing the flow between the two countries?

It is all good—except the context in which CETA could be transitioned between our two countries really does depend on the nature of the arrangement we have with the European Union. Canada has already made that clear and has expressed unhappiness on, for example, the division of quotas and other such issues. Perhaps the Minister can tell us how these kinds of things feed in to our negotiations with the European Union.

The investment court system—ICS—has already come up. The Minister mentioned it, as did both the previous speakers. This is clearly an area that has raised people’s concerns. There is a perception that large multinationals will have an advantage in such a system. It is easy to understand that perception because this will be a complex and expensive process. How can the Government allay the fears of smaller traders and individuals that this will not be a charter for the larger, deeper-pocketed companies to play the system? Can the Government confirm that the ICS will be rolled over into any bilateral agreement should CETA be transitioned post Brexit?

Finally, the major exports between the two countries are in the engineering sphere, specifically nuclear reactors, boilers, machinery, vehicles and aircraft. I note that all these sectors could suffer severely under Brexit; for example, due to border friction, the restriction of movement of people, and exiting Euratom. There will be pressure on those businesses, so what assurances can the Minister give them? I note the particular importance in the aircraft industry of the Anglo-Canadian relationship at Bombardier in Belfast. Again, what assurances can the Minister give the workers there?

It is good that, instead of attacks on business by the Foreign Secretary or the Health Secretary, we are having a positive debate about business. CETA adds a long-term view to things, in respect of which business is desperately looking for stability. Within the context of those questions, we welcome this statutory instrument.

European Union (Withdrawal) Bill

Debate between Baroness McIntosh of Pickering and Lord Fox

Committee: 8th sitting (Hansard - continued): House of Lords
Monday 19th March 2018 Lords Chamber

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Berkeley, is unable to attend, so I will move Amendment 227BB in his stead. This amendment represents something of a change of scene from what we have been discussing this evening, relating as it does to the future of the recreational boating sector following the UK’s departure from the EU. But this is an important sector for us. It is not just about the estimated 3.5 million people who take part in boating activity in the UK every year. It is also a thriving business sector, with the recreational boating and marine sectors being a success story in the UK. In 2015-16, the marine industry contributed about £1.3 billion to the UK economy, which adds up to around 33,000 full-time employees and more than 4,500 businesses. We should realise also that this is often in areas where alternative employment is not always available, so the sector is very important to the communities in which it exists.

The industry currently enjoys the benefits of free movement of people and the absence of customs borders between the UK and other EU countries. There are then, unsurprisingly, a number of issues arising from Brexit, causing significant uncertainty to both recreational boaters and the marine industry. I know that the Royal Yachting Association, the RYA, and British Marine have been in contact with DExEU and other government departments in relation to these issues. Briefly, and for the benefit of the House, I will set out the key issues.

The first is the ability of recreational craft to retain what is called Union goods status, which allows continuous free navigation around the waters of the EU. The second is the nature of the maritime border control regime between the UK and the EU after Brexit. The third is the ability of UK citizens who have RYA qualifications to travel freely to and from the EU for work that is often seasonal.

The Union goods issue requires a little explanation, so I will go into that detail, if noble Lords will excuse me. Vessels and all the equipment on them, such as computers and electronic gear, that enter the EU from non-EU countries are required to pay customs duties and VAT unless the owner can show that they are entitled to exemption. This is not the case if the equipment has Union goods status, which means that it is treated as duty paid. Pre Brexit, vessels moving between the UK and the rest of the EU are treated as Union goods, provided that VAT and customs duties were paid when the vessel first entered the EU. After Brexit, vessels moving between the EU and the UK, and vice versa, should qualify for a temporary relief from duty—but only if the vessel stays for fewer than 18 months in the country in question. So UK citizens who keep their boats in, say, Greece, would find that they would have to pay all the duties or move completely outside the EU before they could re-enter for another 18 months. The result of this is clearly not good for the Britons who have to keep moving their boats around to avoid paying up to 20% of the boat’s value in duties. It is also not good for countries such as Greece that are hosting this tourist trade. Additionally, when boats are moving in long-term passage within EU waters, there might also be customs duty when moving from one EU country to another EU country. It is not clear how that will unfold.

Noble Lords will appreciate that these issues may not necessarily be front of mind and addressed in the broader negotiations on customs and border controls. Accordingly, this amendment asks the Government to produce a report to Parliament in advance of 29 March 2019. This report would set out the rights and freedoms that recreational boaters currently enjoy and how they would be maintained after the UK’s withdrawal from the EU. It would provide a clear opportunity for the Government to offer much-needed certainty to the thousands of recreational boaters—and of course to the marine businesses as well.

Without that reassurance, there is potential for significant damage. Very briefly, that significant damage comes in terms of costs and the administrative burden faced by boaters and business, with associated significant damage to the resale market for boats. It also causes new maritime border controls, which could be disproportionate and compromise navigational safety—and, as I said before, RYA instructors could find it difficult to do seasonal work elsewhere.

The RYA and British Marine have been in touch, and I know that they are ready to negotiate. None the less, the importance of this sector to communities all around the country should not be overlooked when there is so much else going on. We have talked about the need to negotiate everything in such a short time, and this is just one more thing that the Government need to place on their list. Before the formal departure from the EU it is vital that the Government commit publicly to setting out how they will defend the interests of UK boaters and marine businesses. I will be interested to hear the Minister’s response to this amendment.

[Baroness McIntosh of Pickering (Con)]

My Lords, my name is not associated with this amendment but I am a regular attender of the London Boat Show at the invitation of British Marine. I have a specific question for the Minister to answer when he sums up. The record figures for the export of yachts and recreational craft this year were spectacular. But a source of concern to British Marine once Britain has left the European Union is the extent to which Britain will remain aligned with the legislation. I mention that because we transposed the recreational craft directive onto the statute book. The British Marine Federation was instrumental in making sure that that directive did not cause too much damage to our industry in terms of the standards with which it had to comply. Will the Minister assure the House that we will continue to align ourselves with future legislation to make sure that our main export market for recreational craft will still be there and that we will have some means of ensuring that the concerns of the British marine industry can be made known when future statutory instruments are being negotiated?