European Union (Withdrawal) Bill

Earl of Kinnoull Excerpts

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

[Baroness Neville-Rolfe (Con)]

I rise to speak to Amendments 249, 250 and 251. Several noble Lords will know of my lifelong concern for good-quality regulation. The Bill will, by its very nature, lead to the creation of a vast number of SIs of exceptional importance, so proper scrutiny is more important than ever, as the noble Lord, Lord Lisvane, just said.

I am concerned about content, scheduling, consultation and time for debate. On content, I want the Government to follow the good practice of the Nuclear Safeguards Bill, where making the draft implementing regulations available has helped to reassure people and made its passage easier. I have suggested five areas where specimen regulations might be made available: agriculture, customs, financial services, immigration and intellectual property. My amendment says that specimen regulations should be made available within a month of Royal Assent—which is what the Public Bill Office felt able to approve—but my suggestion to the Minister is to make specimen SIs available for our consideration before Report.

I understand and fully support the objective of putting extant EU laws onto the UK statute book from day one; anything else would lead to the utmost confusion. However, there is still much to ponder and much scope for mistakes. All these problems will be lessened by allowing all interests to see and comment on what is envisaged, as has been said. We need to know which enforcement body will take over what are now EU duties, as we discussed at length in relation to the new environment body. For example, in financial services it could be the FCA, the PRA or even the Treasury. In agriculture, the situation is equally complicated, not least because of the extra dimension of devolution. We need to know the criminal and civil penalty regime for each area and, as debated earlier, the approach to fees and charges—especially for SMEs, which I know will be a concern in relation to intellectual property and immigration. We need to understand the future arrangements for standard setting and the sharing of intelligence. Exemplar SIs could—and probably would—cast reassuring light on all of this.

On scheduling and consultation, I start by thanking the Minister, as he kindly arranged for me to meet one of his officials and those responsible in the Treasury for the SI work on financial services. This was very reassuring. The numbers on financial services are fewer than I feared—80 to 100 SIs—and I understand that they will take account of existing UK regulations. Hopefully, this will mean that practitioners will be able to find their way round the law more easily than they can do now. I believe there is some sympathy for my suggestion that it would be wise to publish SIs for consultation, which is the subject of my amendment and of others. The process of SI sifting and review in Parliament will, unfortunately, only allow an SI to be debated and agreed or rejected by either House. There is no scope for amendment so SIs need to be right first time. Will the Minister provide some commitment to publication of and/or consultation on draft SIs, at least in the five areas I have identified?

In practice, if—as I hope—a transition period is agreed, and thus for relevant purposes we effectively remain in the EU during transition, there is a fair amount of time to do this properly. But if the negotiations go badly and we have to rush for the line, it may be as well to have done as much consultation as possible early. Finally, and Amendment 251 relates to this, we need time to debate the more important SIs in a planned way. There is a substantial issue here which has not yet been fully acknowledged by the Government. One solution could be to group related SIs and to set aside significant time—perhaps one day a week—when they could be considered on the Floor of the House. These SIs will be mini-Bills, important future statutes as we leave the EU, and our existing arrangements for EU scrutiny are inadequate if this new need is to be met satisfactorily.

I believe that all noble Lords will want to know, before they agree to the significant delegated powers in the Bill, that the scrutiny system envisaged can meet the needs of the moment and hence attract confidence across the House.

[The Earl of Kinnoull (CB)]

Noble Lords will be glad to hear that I will be brief. The European Union Select Committee and EU Justice Sub-Committee have been given estimates of the number of SIs concerned. Our estimate was 5,000; I was interested to hear the noble Baroness, Lady Young, say that it was only 1,000. My point is the same either way. In my language, the Bill essentially amounts to a gigantic pink ticket where we are asked to trust the Government. In the commercial world, one tries to trust and verify. You give out your trust, but you retain the ability to verify it, so that if something goes wrong you can sort it out later on.

This group of amendments tries to deal with three problems. The first is the mistakes, as the noble Baroness pointed out. The second is wrongnesses. We had a good example of these from the noble Lord, Lord Patel, earlier on. If we carried through a particular piece of EU legislation without thinking then a wrongness would be done. Third is the necessity for the scrutiny of Parliament; the verification process that follows on from the trust. As I look at the three sets of proposals on how to deal with these three problems, I have some sympathy for the noble Lord, Lord Lisvane, who said that there is not really time to do the consultation suggested by the noble Baroness, Lady Hamwee. I regret that, but there certainly is not time, whether it is 5,000 or 1,000. The ever-canny and thoughtful noble Baroness, Lady Neville-Rolfe, has come up with an ingenious way of trying to cater for that. Turning to the noble Viscount’s idea of a two-year life span, I am only concerned that if we are going to have to do 1,000 pieces of legislation then two years is probably not enough. The number I wrote down was five. However, that is a very useful way of doing it and my favourite route tonight would be the one he has taken.

All that being said, what is important in parliamentary terms is a mechanism for trusting and verifying. We will have failed if we do not get some kind of verification procedure in there. I look forward to the Minister’s comments.

[Baroness Smith of Basildon (Lab)]

When I speak at this time of night, I often recall the words of a friend who said to me shortly after I became a Member of the House of Lords, “You’re in the House of Lords now—you must be semi-retired”. As we are debating issues at almost half-past midnight, I do not feel semi-retired at all.

This is a very useful group of amendments for the Minister and the Government. As my noble friend Lady Young of Old Scone said, they are designed to be helpful, and I think their content makes that clear. It is only in your Lordships’ House that technical issues around SIs cause any excitement or great interest for noble Lords who have expertise in them. I hope that when the Minister responds she will accept these amendments or take them away and come back with something similar as a way forward on the Bill.

First, I wish to make some general comments. Issues around SIs and accuracy have been foremost in my mind since we first heard about the number of SIs that would flow from this Bill. Indeed, when I, the noble Lord, Lord Newby, and the noble and learned Lord, Lord Hope, gave evidence to the Commons Select Committee and to our Constitution Committee, we specifically raised the issue of accuracy and the number of SIs we would have. The noble Baroness the Leader of the House can confirm that I discussed these issues with her. I welcome the fact that so far eight draft statutory instruments have been published on the Government’s website—perhaps the sample to which the Minister referred in his letter to my noble friend Lady Young. However, I am not sure what the purpose of a sample is other than to show how we can look at SIs and the issues that can be addressed in so doing. I think the noble Lord, Lord Lisvane, and the noble Baronesses, Lady Hamwee and Lady Neville-Rolfe, said that we need guidance on accuracy and getting SIs right. As my noble friend Lady Young said, we have one opportunity to get these measures right. They cannot be amended and making a mistake could have serious consequences. As more SIs appear on the website in draft, as I hope they will, I suggest to the Government that there should be a separate link and some kind of classification process as we want stakeholders and others with expertise and interest in this area to be able to identify them and find them instantly without first having to search through pages and pages to get to them.

On that basis, I welcome the agreement the Procedure Committee has reached with regard to the sifting and consideration of statutory instruments, as we have seen in this legislation. As in the House of Commons, we have 10 days in which to conduct a sifting process on the Bill and in which the committee will consider whether there should be an affirmative Motion, and then, in the normal way we conduct business in your Lordships’ House, we consider the merits of the order. We should be under no illusions: this is a huge task to be undertaken. Even the setting up of in effect a separate committee by having two sub-committees will not mean that all the work is undertaken that it is necessary to do. Given the scale of the work ahead, I welcome the suggestions we have had today on how we can draw on the experience and expertise of stakeholders, as the noble Baroness, Lady Hamwee, said, to deal with the issue of accuracy. It is not an issue of policy or change but of accuracy.

As the noble Baroness, Lady Neville-Rolfe, said, we have one opportunity to get this right. Given the nature of the consultation, it is a good idea to provide an explanatory document. That is extremely important. The principle of her amendments is sound. My only disagreement is that I do not think they go far enough in that she selects certain areas to be addressed. I am sure she understands the need to have the opportunity to debate all the SIs. I think the noble Lord, Lord Lisvane, made the point in a slightly different way but if there is a draft of all SIs and consultations on all of them, the formal consideration can be speeded up at that point rather than have problems arise later.

The amendment of my noble friend Lady Young is important. I raised it in the Procedure Committee as her amendment rightly goes beyond the Bill to address Brexit-related orders from other legislation. Our committees would be able to examine any secondary legislation, whether related to Brexit or not—most will be although that is difficult to define—but the sifting power currently applies only to the withdrawal Bill. Negative SIs relating to other legislation will not be included in that process. That point was made by our Constitution Committee in its report on the road haulage Bill.

The amendments in the name of the noble Baroness, Lady Hamwee, reflect the concern that has featured in other debates: for example, the issues around what is “appropriate” or “necessary”, and ministerial discretion. Therefore, given the avalanche of orders we may face, it will be helpful to consult on all SIs, not just leave it to the discretion of Ministers.

European Union (Withdrawal) Bill

Earl of Kinnoull Excerpts

Committee: 9th sitting (Hansard - continued): House of Lords
Wednesday 21st March 2018 Lords Chamber

[Lord Purvis of Tweed (LD)]

My Lords, I know the Committee wants to move on but I will make just a couple of brief points—in support of the Government moving on this issue; on the contributions made by the noble and learned Lord, Lord Mackay of Clashfern, and my noble and learned friend Lord Wallace of Tankerness; and on the anxiety that perhaps yet again we will be making constitutional measures on a temporary basis late in the day as a result of decisions by two Executives. While we have to take the Government at their word that these will be temporary measures, many procedures in this House and many elements of our constitution started off as temporary measures but have become almost permanent features of our constitution. In the absence of some changes which will provide a sunset element, we may well be in a similar situation.

Two years ago I brought a Bill to this House for a British constitutional convention, as a result of the Scottish referendum, to try to proactively discuss some of these issues. But, as the noble Lord, Lord Lang of Monkton, said, we are where we are now with this Bill so we have to address what may be constructive ways forward. I think the contributions made so far are good suggestions for what is a very complex situation because we are extracting ourselves from a single market at the same time as seeking to create one with the powers that will be coming back from the European Union. By definition, many of those powers are designed to be cross-border.

Many elements of European legislation are as a result of international agreements that the EU itself has made to implement global agreements, such as on climate change or safety in aviation. These are complex. Interestingly, as the Government’s own framework paper shows, most of that legislation has come into place since devolution. The evolution of the markets within the European Union does not entirely predate 1999. Whether on animal welfare, safety or aviation, many have developed not only since we established devolution in the UK but since the single market has developed. These are going to be very important for our future trading relationships, not only between us and the EU but in our arrangements with third countries.

Most of those areas concern non-tariff barriers, regulations and legislation in domestic law. These are going to be relevant for every single trade agreement that the UK will negotiate and will be at the heart of our relationship with the European Union. Although I have a degree of sympathy with the Government on a temporary basis, we will have to come back not only to the legislation for the implementation period but to that for the new relationship with the European Union. That adds even more weight to the fact that the discussions taking place now will have to be time-limited.

We are also discussing blind how we would expect a framework or a common market to operate within the UK. In many respects, you would argue that we do not have that at the moment. If you drive from where I live in the Borders to London and if you are selling cigarettes or bringing animals, you will be operating under three different road traffic systems. If it was cigarettes, you might have a different packaging system in Scotland. Certainly in Scotland, not only the language of road signs but road traffic speeds are legislated for differently. We operate within many barriers. The question is how damaging those barriers would be to the functioning of the United Kingdom.

That leads on to my second point. This is not simply going to be a relationship based in law; it is also about how the different component parts of the United Kingdom will operate. Since 1999, as noble Lords have said, there have been major changes to that legislation—changes that previous UK Governments said should not be made because they would be counter to the effective operation of the United Kingdom—and Governments have changed their position, usually as a result of consensus and cross-party negotiations.

Where I did slightly disagree with the comments of the noble Lord, Lord Lang, is that there have been now more than 150 LCMs in the Scottish context, and in many respects devolution has been working extremely well when you take away the rhetoric of the wider nationalistic argument. But it does show that there needs to be a degree of flexibility within this set of arrangements. That flexibility will have to come not just with a government-to-government relationship but also with the other elements that are necessary to determine how effectively a common market operates. Who provides the statistics? What is the dispute resolution mechanism? Who provides the data? We saw this in all the discussions that the noble Lord, Lord Dunlop, had during negotiations on the fiscal framework between the UK Government and the Scottish Government. In the end, many of the discussions were not about the legislative element but about the non-legislative element, such as who provided the information, whether there was an independent source of data on fiscal revenue and who did the forecasting going into the future. These are all going to be very important.

Noble Lords perhaps thought I was making a glib comment in the previous discussion when I intervened on the Minister and spoke about managed divergence, but that is part of the parlance in our discussions with the European Union. We have that within the UK, and the question is how divergent we can be in the UK for that common market to operate effectively. Part of this discussion will have to be about the existing offices that consider the markets within the UK—our office for energy, our office for communications, the Competition and Markets Authority—which are now going to have to be covered.

That leads me to my final point, which in a way is to address the point made by the noble Lord, Lord Forsyth. The choices that we have made about our relationships within the UK—whether nations were consulted and whether or not consent was provided—have been addressed by our European colleagues in different ways. The noble Lord referred to consent in the German federal structure, under which the Bundesrat provides, under the constitution, a decisive opinion when the federal Government bring forward measures that would impact the interests of the Land parliaments. This House is not a federal House; the House of Commons is not a federal Chamber. We will have to have some forms of institutions which bring this together.

In the first instance, however, I strongly support this legislation and the temporary measures being time limited. We will need a schedule of the specific areas which are, in effect, reservations, because we will have to make sure that those areas are resolved before we go over to the next stage. We will be in a kingdom of divergence and will need new institutions. It is not just about frameworks, but a new relationship across them. As many noble Lords have said, including the noble and learned Lord, Lord Hope, in his Second Reading speech, all of this will have to be underpinned by trust. It is the non-legislative relationships which in many respects will be more important than the legislative relationships in this Bill, in the next Bill, in the final agreement Bill and in all the different measures that come subsequent to it.

[The Earl of Kinnoull (CB)]

My Lords, I will speak very briefly indeed, in strong support of the government amendments, to make one observation and one point.

My observation follows on from something that the noble Lord, Lord Dunlop, said in his speech concerning the memorandum of understanding. The current memorandum of understanding, which is dated October 2013, is only a draft—it was never finally signed off. Since that date, of course, we have had the Scottish referendum and very serious Bills in this House that have given more and more powers to the devolved Administrations. I have said before in this House, as others have, that it is frankly not fit for the purpose of acting as the constitutional glue that the structure it controls should be. A well-functioning memorandum of understanding would breed a healthy atmosphere and the ability for the differing nations of the United Kingdom to talk together. Instead of the C words that we have been discussing today, “consult” and “consent”, there may even emerge—from my experience of international companies, where quite often you have the French arguing with the Germans or whatever—a third C word, “consensus”, which would be enormously helpful in this situation. My observation is that this situation is much to be regretted, and I hope the Government are going to put a lot of weight behind getting it resolved and getting a proper memorandum of understanding structure sorted out so that we are not in the position that we are in today where we have a fractious and pretty horrible discussion going on about these issues.

--- Later in debate ---

[Lord Foulkes of Cumnock]

The noble Earl may know that the Scottish Parliament rejected my suggestion that it should have a house of lairds.

[The Earl of Kinnoull]

I did. I will send my job application in.

I feel that we must have regard to that issue. I have been through the document pretty carefully, and I feel—this is why my support for the government amendments is so strong—that a good balance has been struck in those amendments regarding the point that I have just made. There is a chance that the devolved assemblies can exercise those powers properly, but if we tip too many in then I feel we will be letting down the citizens of Wales and Scotland.

[Lord Campbell of Pittenweem]

Before the noble Earl sits down, I would like to pick up the point that was made to him at lunch. He will be aware that when the Scottish Parliament was established, a great deal of store was set by the form of the committee system, which it was hoped would be independent and would provide the kind of scrutiny that a second Chamber would afford. I do not think it is challengeable that the committee system has unfortunately become very political, to the extent that it is very difficult for Members on the committee to strike the kind of independence that we sometimes see in Select Committees in the other place and here. A consequence is that an effort to introduce a principle of “holding to account” has not been maintained in the way that it was in the beginning. If that continues, it makes the case for a second revising opportunity—I do not describe it as a Chamber—overwhelming.

[The Earl of Kinnoull]

I am very grateful to the noble Lord for making a jolly good point very well. At the lunch, that was hinted at, with rather less force. I wholly accept his reasoning and agree with what he said.

[Lord Stevenson of Balmacara]

I join many noble Lords in congratulating the Government on the way they have handled this issue and reinforce what was said by the noble Lord, Lord Forsyth: I have not seen any such movement from any Government in my time here in terms of trying to reach out to the points being made and accommodate them. That is terrific; long may it last. The test will be whether the noble and learned Lord in fact withdraws his amendment before the end of tonight—but I trust him in this case.

I also think that the idea of a probing government amendment is pretty good. It is nice to know that there is an open mind on the other side, and no better way of showing it than saying: “We haven’t got the faintest idea here, but here’s something you might want to consider and discuss and we will listen hard and take away the best bits”. It is good in the sense that it builds trust and engages debate. We have had a terrific debate—possibly a little overlong, but it has been very interesting—and I am sure that many points will take us forward. I recognise that the idea of probing your own ideas may not work unless we can actually come up with some ideas, so it behoves us all to think very hard about the advice that we want to give to the noble and learned Lord and his colleagues.

What do we want? There are five things that I would like to see in revised amendments. We should be looking for an agreed amendment among the various interests around the House as much as possible. There has been enough evidence about where the central points are—we may differ on the nuances, but there is enough there. It would be really good if we could have some informal discussions and meetings before Report—and Third Reading, if it goes that far. By that stage, I hope that we will have a firmer view of what we are going to do in Northern Ireland. I agree that the situation is beyond the power of this House to do anything about, but it is a real gap when we are trying to address our longer-term constitutional position. If we have nothing to say, that says more about us than about the situation in Northern Ireland. I hope that that will be taken into account.

My first point is a negative. The Bill has raised debates, ideas and thoughts that are really important, but they are far too time-rich and need more discussion before they go into the Bill. The Bill is at heart limited to ensuring that we have a legal framework if and when we leave the EU—as the noble and learned Lord said, a fully functioning statute book. We are wrong to try to overload it with too much. I hope that, in offering our advice either privately or in meetings, we will focus on the minimum necessary to get the Bill on the statute book in a way that will be effective and efficient, and will achieve what we are trying to do.

On the other hand, the debate should not be curtailed by the question of what is and what is not in the Bill. We must accept—some noble Lords were ahead of me on this point—that transfers of this amount of responsibility to admittedly mature Parliaments and Assemblies will start a new chapter in the devolution story, and it would be remiss of this House if we did not think through some of the implications of that.

I have no particular remedies here, but it is inconceivable that the current arrangements, under which we determine through a Board of Trade how we conduct trade policy, can accommodate the new arrangements. They will have to be expanded and thought through again. We will have to think about how we deal with treaties and how our ongoing relationship with the EU and its regulatory and other official operations will continue in a devolved situation where trade responsibility and policy is at a level other than national. There may well be a set of rules that will accommodate that. They will not fit into this Bill, but they need to be considered as we go forward.

We have to think also much wider—certainly much wider than this idea that somehow this paves the way to independence for any or all of the parts of the United Kingdom. We have to think about the opportunities that will exist as these things are devolved in terms of such matters as what happens to state aid rules when they are changed. This will raise a lot of concern and interest much more widely than in this House. We will do ourselves a disservice if we do not take that into account as we think this through. For the moment, though, let us think very narrowly about this Bill.

At the heart of it, we want an agreement that, on the face of the Bill, the underlying principle in play is that everything is devolved unless it is reserved. We also want a clear understanding of why certain things are reserved. The noble and learned Lord, Lord Mackay of Clashfern, gave a very good example of one way into this argument by saying that it was a question of when powers were in consideration which applied in more than one geographical area; however, I put it to him and to the Ministers who are working on this that this is not quite the full story. If you look at the note on the common frameworks that accompanied the full list of them, it goes much deeper than that. These are principles, as I understand it and as I think the noble and learned Lord confirmed, that were agreed by the UK, Scottish and Welsh Governments at a meeting of the Joint Ministerial Committee in October 2017, so they are not in dispute. The principles make clear that,

“common frameworks will be established where they are necessary in order to: … enable the functioning of the UK internal market, while acknowledging policy divergence;”

—the coda about “acknowledging policy divergence” is really important, and we need to know more about that—

“ensure compliance with international obligations;”

—I think that is fairly clear—

“ensure the UK can negotiate, enter into and implement new trade agreements and international treaties;”

—I have already said I do not know whether that will necessarily be the only way into that debate—

“enable the management of common resources;”

and then two rather important issues that we have not touched on but that surely have to lie at the heart of this:

“administer and provide access to justice in cases with a cross-border element;”

and,

“safeguard the security of the UK”.

It has always been the case that national security is the primary concern of all governments, but surely that plus the geographical “bite”, as indicated by the noble and learned Lord, give us—together with the other points I have raised—a much richer context within which the decision to reserve an item can be placed. It is important that this is on the face of the Bill. That is the key issue. There must not be a sense that something has been hidden or held back. We have to be open and trust those who are concerned about this that this will be the way forward. I hope that when the Minister comes to respond, he will be able to confirm that this is an issue that he might look at with some sympathy, because I think it will be the key to it.

I also think, as suggested by the noble and learned Lord, Lord Wallace of Tankerness, and others, that we should see the 24 policy areas included as a Schedule to the Bill. The point made by my noble friend Lord McConnell of Glenscorrodale is very important: we are talking about those things that will have to be reserved for a reason. We should list them, and we should also understand the reasons why they are reserved.

There are two smaller points—in the sense that they are less full of implications; they are still very important—that I will tag on to the end of this. The noble and learned Lord, Lord Hope, raised a number of points that will need to be picked up and that we must not forget, because the change to the existing Clause 11 will affect other aspects of the area. He made that point well. There have also been calls from all around the House for a sunset clause, which I absolutely support. That is the right thing to do. If that all comes together, however—and I think we are confident that it is possible—what we are signing up to is an agreement to agree on process, but that agreement will be able to get the consent of the devolved Administrations. That combination is vital to the way forward, and I recommend it very strongly to the Ministers.

Finally, if we are going to avoid the veto problem, which I think is a real issue that we have not really bottomed out, we are going to need a dispute resolution mechanism. There is no doubt about that. You cannot just go into this hoping that it will somehow be all right on the night. We need to know what happens when one area, for whatever reason—whether it is a political reason or truly an issue of conscience—wants to put down a veto and hold out. I do not think there has been any dispute, but we have not said it enough: at the end of the day the UK Parliament has to have a backstop power to legislate in cases that meet the criteria for why things are reserved. I think we should keep saying that until it has become part of the fabric of our lives. It is not said enough, as the noble Lord, Lord Lang of Monkton, mentioned.

But we also need to achieve the consent that is necessary to establish the agreements that will underpin trust and support for this in the long run. I absolutely think that the amendment proposed by the noble and learned Lord, Lord Mackay, has something in that regard. I am grateful that the Minister has said that he will take this away; we need to workshop it—what we should have is a hackathon—in order to work out together where we might go with it.