EU Exit Negotiations

David Jones Excerpts

Monday 13th November 2017 Commons Chamber

[Mr Davis]

It is not for me to tell the Irish Government what they should do, but I would say that they share with us a determination to maintain no hard border. They obviously have an economic interest in the outcome because we are their biggest trading partner. They must have a very strong interest in a similar outcome to the one that we are seeking, and I hope they will reflect that in their conversations with the Commission.

[Mr David Jones (Clwyd West) (Con)]

I commend my right hon. Friend for his announcement that the implementation of the withdrawal agreement will be the subject of specific primary legislation. Does this not negate the accusation that the Government are intent on bypassing Parliament, and does it not underline the fact that the Government are intent on restoring our parliamentary sovereignty, which is, after all, the whole purpose of Brexit?

[Mr Davis]

My right hon. Friend is exactly right. By my count, if we include Bills already passed and Bills in prospect, we are looking at 10 pieces of primary legislation that Parliament can vote on, amend and, of course, comment on as a result of Brexit and in delivering Brexit.

European Economic Area: UK Membership

David Jones Excerpts

Monday 6th November 2017 Commons Chamber

[Stephen Kinnock]

I thank the hon. Gentleman for his intervention, but I am afraid he has misinterpreted how the EEA functions. The EEA joint committee sits with Commission officials, and officials of the European Parliament and the European Council in comitology, which provides the EEA joint committee with the ability to shape EU legislation, regulations and directives. I will come on to this later in my speech, but the idea that the EEA means rule-taker rather than rule-maker is incorrect.

As an EEA member, the UK could unilaterally suspend the free movement of labour by triggering article 112 of the EEA agreement, which allows for an emergency brake on any of the four freedoms on the basis of economic, environmental or societal difficulties. There is legal precedent for this. Upon entering the EEA in 1993, Liechtenstein triggered articles 112 and 113 of the EEA agreement, thus suspending the free movement of labour and ultimately agreeing a protocol that enabled the introduction of a quota-based immigration system.

The manner and form of economic or societal difficulties facing the UK would of course be different, but the fact is that the legal precedent has been set so there is no reason why the UK should not be allowed to follow suit. Having pulled that emergency brake, we would then, as per article 113, enter into deliberations with other contracting parties through the EEA joint committee to negotiate a lasting solution. In the case of Liechtenstein, this took the form of industry-by-industry quotas.

[Mr David Jones (Clwyd West) (Con)]

Is the hon. Gentleman really comparing Liechtenstein, a small mountain state in central Europe, which, frankly, could get full up rather quickly, with the United Kingdom, which is a much larger state and in which there is already a significant problem of migration?

[Stephen Kinnock]

It is patently ridiculous to make that sort of comparison. This is not about comparisons, but legal precedent. I would also argue that the United Kingdom has significantly more political and diplomatic clout than such a state, so the logic of the right hon. Gentleman’s argument does not follow.

--- Later in debate ---

[Stephen Kinnock]

There are a variety of views on this. Carl Baudenbacher, the head of the EFTA arbitration court, has said that he would favour a docking system and an interim arrangement that puts British judges on the EFTA arbitration court in preparation for finalising a deal—in a sense, a bridging into EFTA. I would advocate joining EFTA as part of moving into the EEA.

[Mr David Jones]

Will the hon. Gentleman give way?

[Stephen Kinnock]

I will make some progress.

Carolyn Fairbairn of the CBI said only yesterday:

“We remain extremely worried and the clock carries on ticking down”.

As a result, she said, more

“and more firms are triggering their contingency plans to move jobs or change investment plans.”

Reality has finally bitten, even in the minds of some of the most deluded Brexiteers, that it was always a fantasy to think it would be possible to complete the divorce and the final trade deals in parallel. A solid cross-party consensus on the need for a transition deal has therefore emerged, as was made clear in the Prime Minister’s Florence speech. All parties in the House also agree that we must leave the EU by walking over a bridge rather than by jumping off a cliff, and the EU has welcomed the fact that the Government have finally started to show some signs that they understand the realpolitik of the negotiations.

Given that an off-the-shelf transition deal is inevitable, it is clear to me that EEA-EFTA is the only viable option. The EEA and EFTA are well-established and well-understood arrangements that offer the clarity, stability and predictability that the British economy so desperately needs in these turbulent times. Transferring from the EU to the EEA and EFTA would allow us to balance sovereignty and market access. Crucially, such a transition deal would buy us time for negotiate the final comprehensive trade and strategic partnership deal that will shape the terms of the UK’s relationship with the EU for decades to come, while also allowing us to enter into independent trade negotiations with third countries because we would be outside the customs union.

--- Later in debate ---

[Mr David Jones (Clwyd West) (Con)]

It is a great pleasure to follow the hon. Member for Aberavon (Stephen Kinnock), who has raised some important and interesting constitutional issues.

The motion before the House today asks us to conclude that

“for the UK to withdraw from the European Economic Area (EEA) it will have to trigger Article 127 of the EEA Agreement”.

It is certainly the case that article 127 provides that every contracting party to the agreement may withdraw from it, provided that it gives at least 12 months’ notice in writing to the other contracting parties. The question is whether that formality actually needs to be adopted. The EEA agreement is an arrangement that has been concluded among the member states of the European Union, the European Union itself and three of the four European Free Trade Association states—namely, Iceland, Norway and Liechtenstein. There is no doubt, as the hon. Gentleman has said, that the United Kingdom is a contracting party to that agreement in its own right. Indeed, it has no option but to be so, because article 128 of the EEA agreement provides that every European state must, on applying to become a member of the EU, apply for EEA membership. In other words, Britain’s membership of the EEA is a consequence of its membership of the European Union.

The UK has given notice of its intention to withdraw from the European Union, and by application of the provisions of article 50 that notice will become effective no later than midnight on 30 March 2019, at which point the EU treaties will cease to apply to the United Kingdom. The UK’s departure from the European Union will indeed have an impact on its membership of the EEA. Article 126 of the EEA agreement provides that it shall apply to the territories to which the treaty establishing the European Economic Community, now the European Union, is applied, as well as to the three signatory EFTA member states. Given that the EU treaties will no longer apply to the UK at the moment of its departure, pursuant to article 50, and that the UK is not one of the three EFTA signatories, it necessarily follows that at that moment, on the stroke of midnight on 30 March 2019, it will also cease to be subject to the provisions of the EEA agreement. In other words, for all practical purposes, British membership of the EEA will fall at that point. It will remain a contracting party to the agreement, but under the terms of the EEA agreement, the agreement will cease to apply to it.

There has been a great deal of academic discussion as to whether that is indeed the case, but a view supporting the proposition that Britain will effectively cease to be a member of the EEA on leaving the EU has been given by no less a figure than Professor Baudenbacher, to whom the hon. Gentleman has referred. The professor has said:

“A state can only be an EEA Contracting Party either qua EU membership or qua EFTA membership. That follows from the two pillar structure of the EEA agreement. You are either in the EU pillar or in the EFTA pillar but you cannot be floating around freely.”

The hon. Gentleman has mentioned the desirability of the United Kingdom becoming a member of EFTA. It may or may not be desirable—I personally would oppose it—but it has to be recognised that if we are not a member of either EFTA or of the EU, we cannot be a member of the EEA.

[Sir Edward Leigh]

My right hon. Friend is giving a most learned disquisition. Will he tell us what the practical effects would be if it were legally possible to become a member of the EEA? For instance, would it be possible to control our own borders? It seems to me that the reason so many people voted to leave was that they wanted to control their own borders.

[Mr Jones]

My hon. Friend makes an excellent point. The fact is that we would be left with EU-lite. We would still be subject to the four freedoms, including the freedom of movement of persons. That would mean we would not be able to control our own borders, despite the Liechtenstein precedent.

[Michael Tomlinson]

I am following my right hon. Friend’s argument carefully. Does he agree with my earlier point that, in that situation, we would effectively be rule takers without having the opportunity to make the rules or to contribute in the way that we do at the moment?

[Mr Jones]

My hon. Friend is entirely right on that score, too.

The hon. Member for Aberavon mentioned EFTA quite frequently in his speech, but the motion does not suggest that the UK should apply to become a member. Indeed, the implication of the motion is that upon the UK ceasing to be a member of the European Union, it could remain a member of the EEA, as Professor Baudenbacher put it, “floating around freely”. That does not provide the certainty that the British electorate requires and certainly not the certainty that British business requires. I am unsure whether the hon. Gentleman is suggesting that Britain should now be applying for membership of EFTA, but if he is, as a matter of law Britain would do so from a position of having ceased to be a member of the EEA. Therefore, upon becoming a member of EFTA, it would have to make its own decision as to whether it should rejoin the EEA. Again, that is not reflected in the motion.

The fact is that what we see today is a last-gasp attempt from those who regret and bitterly resent the departure of Britain from the European Union. It is an attempt to keep us in a halfway house—a kind of European limbo—and as a matter of law and as a matter of politics, this motion should be rejected by the House today.

--- Later in debate ---

[Matthew Pennycook]

The Labour party’s position is very clear: we want to seek a deal that retains the benefits of the single market and the customs union. We think we should be a member of the single market for the transitional period. Whether the EEA option is the only viable one for doing so during the transition is a question for another day. The wording of the motion on article 127 and continued membership of the EEA is very specific.

In short, the situation is entirely unclear. In the opinion of the House of Commons Library, the majority legal view is that under the present wording of the EEA agreement, it is impossible to be a party to that agreement without being a member of the EU or EFTA. That view has been put forward by a number of experts, including, most prominently, Professor Baudenbacher, the President of the EFTA court. He has argued that there is no scope within the EEA agreement for a third type of a contracting party that is neither an EU nor an EFTA member. The argument has not yet been tested in court.

[Mr David Jones]

Will the hon. Gentleman tell us whether the Labour party agrees with Professor Baudenbacher?

[Matthew Pennycook]

As I have said, this legal opinion has not been tested. Interpretations differ, but I would say that the majority legal view supports Professor Baudenbacher’s assertion that there is currently no way to become a third type of contracting party to the agreement.

The argument has not been tested in court, as I have said. As the House will know, in February 2017 the High Court was asked whether the Government required the explicit consent of Parliament to enable them to leave the EEA, but the application was rejected on the grounds that it was premature since the Government had not then made a final decision on their EEA withdrawal mechanism. As things stand, in the absence of greater clarity, the door is clearly open for future legal challenges against the Government on this issue.

Greater clarity is required, and I have no doubt that the Government are aware of that. I assume their position on this matter is under review. That position has certainly evolved over time. In a response in December 2016 to a written question submitted by my hon. Friend the Member for Nottingham East (Mr Leslie), the Government were clearly interpreting subsection 1 of article 126 of the agreement to mean that the UK is a member of the EEA only in its capacity as an EU member state. As such, we will automatically exit and secede from the agreement when we leave the EU.

However, the Government since appear to have shifted away from that position. According to reports of court proceedings taken from a judicial review application to the divisional court in February, the Government accepted that article 126 did not

“give rise to termination of the EEA Agreement ipso jure [in law]”.

More recently, in responding to a question posed by my hon. Friend the Member for Aberavon on 7 September, the Secretary of State argued that although article 127 does not need to be triggered for the agreement to cease to have effect,

“we are looking at it just to make sure, for clarity purposes, that we meet its requirements.”—[Official Report, 7 September 2017; Vol. 628, c. 285.]

Is the Minister able to tell the House today what progress has been made in that regard? The Government’s latest position appears to be that even if our EU exit does not automatically terminate the EEA agreement in law, any continued signature to the agreement would not equate to functional single market membership.

As my hon. Friend the Member for Lewisham East said in her powerful speech, whatever one’s opinion about whether the UK should be in the EEA, out of it, in it for a few years or in it for decades, it is crucial that we have greater clarity on this matter. I hope that in his summing up, the Minister will shed more light on the Government’s position before we come to the Committee stage of the European Union (Withdrawal) Bill.

Oral Answers to Questions

David Jones Excerpts

Thursday 2nd November 2017 Commons Chamber

[Mr Baker]

The hon. Gentleman mentions “true facts”, but there seems to be some misunderstanding about what the sectoral analysis is. It is not a series of 50-plus quantitative forecasts and, even if it were, forecasts could not be said to represent true facts. We have made our position clear and we will continue as we have set out.

[Mr David Jones (Clwyd West) (Con)]

The EU’s refusal to discuss the future relationship is clearly founded on the belief, which no doubt the assessments will show to be mistaken, that it may thereby panic the United Kingdom into handing over large sums to avoid what the EU perceives to be the horrors of no agreement. Will the Secretary of State and his colleagues assure the EU that although the UK is clearly anxious to have a free trade agreement, it is also entirely happy to trade with the EU on a WTO basis?

[Mr Baker]

I am grateful for my right hon. Friend’s question—he is of course an expert in these matters. I assure the House that President Tusk has said

“we are all working actively on a deal,”

and that Mr Barnier has said the EU wants to build an “ambitious, long-lasting partnership” with the United Kingdom. Of course we all want to deliver that partnership, but my right hon. Friend’s point is well made.

Leaving the EU: Parliamentary Vote

David Jones Excerpts

Thursday 26th October 2017 Commons Chamber

[Mr Davis]

What I was saying was exactly in answer to the question; it was what was given as an undertaking by the Minister in the article 50 debate.

[Mr David Jones (Clwyd West) (Con)]

Will my right hon. Friend confirm that it remains his intention and that of the Prime Minister to make regular reports to this House on the progress of the negotiations with the European Union? Does he agree that it is always open to this House to subject those negotiations to the minutest possible scrutiny, as this urgent question amply demonstrates?

[Mr Davis]

My right hon. Friend is, of course, right. He knows this subject rather better than most, given that I have been quoting him throughout my contributions today. During the course of the article 50 Bill, I made the point a number of times to the House that there will be many votes on many aspects of the deal—on the Bills before the House now such as the European Union (Withdrawal) Bill and the Nuclear Safeguards Bill, and on a number of other pieces of primary legislation. In addition, the undertakings to this Chamber were given over and above the Constitutional Reform and Governance Act 2010. I remind the House that that means that any treaty—there may well be a number, as the Chair of the Select Committee said—is subject to being denied ratification by a vote of this House. That point should not be forgotten.

EU Exit Negotiations

David Jones Excerpts

Tuesday 17th October 2017 Commons Chamber

[Mr Davis]

As the Prime Minister said in her Florence speech, we start by identifying the regulatory position, and the question is then how we manage divergence. Britain will bring the control of such matters back within its own shores, and we will then have a procedure between us by which we manage divergence.

[Mr David Jones (Clwyd West) (Con)]

I commend my right hon. Friend on the patience and good humour with which he conducts the negotiations. At what time does he think he will be obliged to inform the EU that that patience is not infinite and that if it continues to refuse to discuss the future relationship, which is after all prescribed by article 50 and which is something we want to do, we will assume that it is not serious about doing so and therefore consider other options?

[Mr Davis]

I think I learned patience and good humour from standing at the Dispatch Box and dealing with that lot on the Opposition Benches. The simple answer to my right hon. Friend is that I expect the EU to do what is in its own best interests. That is what normally happens in a negotiation and that is what will happen in this one. As my right hon. Friend the Member for North Shropshire (Mr Paterson) stated earlier, there are massive interests for the EU in getting a deal, and that is what will happen.

European Union (Withdrawal) Bill

David Jones Excerpts

Thursday 7th September 2017 Commons Chamber

[Mr David Jones (Clwyd West) (Con)]

As my hon. Friend the Member for Stone (Sir William Cash) pointed out, this is an historic Bill by any standards. In fact, it is hard to think of a clause 1 of any Bill more momentous than:

“The European Communities Act 1972 is repealed on exit day.”

But beyond that, it is possibly not such a dramatic piece of legislation.

I was quite pleased when the original working title of the “great repeal Bill” was abandoned because it is not, beyond clause 1, a repeal Bill. In fact, it is the great preservation Bill. It carries out a workaday, almost prosaic function but, nevertheless, an important one: to preserve in United Kingdom law the European law we have absorbed over the past 44 years to ensure that there will be a working statute book in this country on the day of exit, which will very probably be the stroke of midnight on 30 March 2019, Brussels time. This should not be a contentious matter. All Members of this honourable House should be anxious that we have that certainty for business and the citizens of the country when we leave the European Union. I am surprised, therefore, that the Opposition have decided to table a reasoned amendment in which they make it quite clear that they intend to wreck the Bill.

I really wonder whether the Opposition have given any consideration to the impact that their decision may well have on the interests of business and commerce in this country. We have to ensure that the statute book works on the day of exit. Frankly, the only way that we can achieve that in the timescale by which we are constrained, and which is set out in article 50, is to have a flexible and pragmatic system such as the one laid out in the Bill. That does not mean that the Opposition supinely have to accept everything without possibly considering amendment, but it really is quite reprehensible simply to go along a course of trying to wreck the Bill.

We certainly have to consider the mechanisms that are to be employed. Listening to the speeches of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) and other Opposition Members, the overall impression I get is that the concern is not so much about the methodology of ensuring continuity of legislation. It is rather the issue of scrutiny of the measures that will have to be brought forward under secondary legislation. Some measures will certainly be prosaic and straightforward. For example, I cannot think that anyone would object to a measure that would replace a European institution with a British institution as needing anything more than a piece of secondary legislation under the negative procedure. Other measures will certainly be of greater moment.

The right hon. and learned Member for Holborn and St Pancras mentioned today’s report by the House of Lords Constitution Committee. An earlier report of that Committee in March this year came up with certain sensible suggestions for scrutiny. One example was setting up a Joint Committee of both Houses, an idea that my right hon. Friend the Member for Broxtowe (Anna Soubry) also touched on. I would have thought that, rather than seeking to destroy the Bill—with all the adverse consequences that would have on the national interest—Opposition Members should possibly give consideration in Committee to putting forward some enhanced form of scrutiny of the sort that was contemplated by the Constitution Committee in its report. That is the proper way forward.

Simply to seek to destroy and wreck the Bill does nothing for the reputation of this House, and we have heard so many speeches this afternoon about preserving that reputation. I, for one, am happy to support the Bill on Second Reading and I urge other hon. Members to vote for it.

Oral Answers to Questions

David Jones Excerpts

Thursday 7th September 2017 Commons Chamber

[Mr Davis]

The right hon. Gentleman makes a good point and I suspect it would have been in his question earlier if he had had the chance to ask it. The simple truth is, as I have said, that we are starting from the aim of maintaining as much continuity as is necessary to anything that might change in the final settlement. So we will do that. Because we are not in the European Union at that point—legally, we will not be—we will not be formally members of the single market and the customs union. We may well seek a customs agreement for that period and a similar arrangement on the single market provisions, but we cannot make that decision ourselves; there is a negotiation to be carried out with the EU.

[Mr David Jones (Clwyd West) (Con)]

T6. Does the Minister agree that the system of secondary legislation contemplated by the Bill that we will be debating later today provides the best and most flexible means of ensuring that the United Kingdom is left with a coherent statute book when we leave the European Union? Does he not also agree that there will be general bemusement in this country that the Opposition are seeking to oppose that Bill?

[Mr Baker]

May I begin by paying tribute to my right hon. Friend for all the work he has done in the Department? The quality of the work I inherited is a testament to the leadership he provided in the Department. I am most grateful to him. He makes a good point: secondary legislation is a long-standing mechanism for making detailed changes to the law, with the scrutiny procedure for each instrument agreed by Parliament. Since their introduction, every Government have used statutory instruments and every Parliament has debated and approved statutory instruments.

EU Exit Negotiations

David Jones Excerpts

Tuesday 5th September 2017 Commons Chamber

[Mr Davis]

My advice is almost the opposite. The simple truth is that if 3 million people applied for leave to remain the Home Office might have the odd glitch along the way. That is part of the point of saying that there will be a two-year grace period after departure in 2019 in which people can make that application. Between now and then a great deal of resource will be put in to ensure that that process is streamlined. The right hon. Gentleman will remember because of his previous eminent role that the original application document was something like 85 pages long. We got it down to 16 and now six. It will be streamlined to a very, very simple process by the time that we get to that two-year grace period.

[Mr David Jones (Clwyd West) (Con)]

Article 50 provides in terms that the negotiations in which my right hon. Friend is engaged should take into account the framework for the future relationship between the departing member state and the European Union, but, as we have heard, the EU refuses to address that question. When he next sits down with Michel Barnier, would my right hon. Friend draw to his attention the fact that he is in dereliction of his duties under the treaty and that his stubborn refusal to discuss that future relationship is as contrary to the interests of the European Union as it is to those of the United Kingdom?

[Mr Davis]

My right hon. and dear Friend, who used to be in my Department not very long ago, knows full well that I have made those points more than once to Michel and other members of the Union negotiating team. This is not within the normal perspective as laid out by article 50, but we have gone along with it simply to get citizens’ rights under way. That is what we have done, but now we are getting to the point at which we will think very hard about what the next stage is.