European Union (Withdrawal Agreement) Bill

Lord Callanan Excerpts

Committee: 3rd sitting (Hansard continued) & Committee stage & Committee: 3rd sitting (Hansard continued): House of Lords
Thursday 16th January 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the EEA relationship has been, and, indeed still is, one that suits its member states exceedingly well. It enables certain non-EU member states to take full advantage of their geographical proximity and their historical trading and cultural relations with the EU to the benefits of both sides of the various borders. It is a model, as we have heard, that our negotiators would do well to follow, not necessarily on the exact detail, which is, after all, tailor-made for the various parties, but in its aim: to retain the alignments that foster trade, and to build on our different natural resources, strengths, patterns of exchange, labour needs, service expertise and investment potential. The negotiations should build on those strengths, just as the EEA has managed to achieve. That, we think, would be to the benefit of the EU as well as ourselves.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, I thank all noble Lords who took part in the debate, but we have been very clear in the political declaration, and indeed in our election manifesto, on our vision for the UK’s future relationship with the EU, which is based on an ambitious free trade agreement.

As I always do, I enjoyed the contribution of the noble Baroness, Lady Quin. We share an interest in the north-east of England. She is an experienced former Minister, doing some aspects of the job that I do now, and I always listen very carefully to what she has to say because she speaks a great deal of sense. She asked about the impact on the north-east of England, something I am of course very interested in. The answer will depend on the future trading arrangements that we negotiate, so I say: come back and ask me again at the end of this year. We have been very clear that we want an ambitious free trade agreement. We want trade to be as free as possible and we will be negotiating hard to bring that happy state of affairs about.

The election has clearly shown, in my view, that the public support the vision that we put forward. It was extensively debated in the election campaign and we won our majority on that basis. To answer the question of the noble Lord, Lord Lea, directly, I say that it is only by leaving the single market that the UK will be able to obtain an ambitious free trade agreement and to strike new trade deals with new and existing global partners. Attempts to remain in the EEA agreement beyond exit is by no means a simple as many noble Lords would have us believe. The EEA is an arrangement that exists at the moment between the EU and a number of EFTA countries—

[Lord Lea of Crondall]

I emphasise for the third time that this amendment is not about rejoining or staying in: it is, as my noble friend Lady Quin said, about alignment. Indeed, it is, if I may use the phrase, shadowing some of the rules that we have at the moment. Will the Minister comment on the fact that he has said many times that we are beginning from alignment? Why leave alignment, as a theological requirement?

[Lord Callanan]

I do not think that I said that. However, the noble Lord is right—although I did not say it on this occasion—that of course we are starting from a position of alignment. I do not have his amendment in front of me, but I think it refers to the EEA: it is the purpose of the amendment he has tabled, which is why I was exploring the issue.

The point I was going to go on to make is that the EEA is an agreement between the European Union member states and a number of EFTA states, and it is not open to the UK just to be able to join that agreement. We will leave it when we leave the EU part of that agreement, but the EU would almost certainly want to renegotiate it, because it was never designed for a country the size of the UK. That is if we did want to join it, but as I will shortly set out, I do not think it is desirable that we should. It is not a simple case, even if we wanted to, of happily trotting off and joining the EEA agreement: there are a number of other countries which are in at the moment that would no doubt have some observations on that.

My point is that attempts to remain in the EEA agreement beyond exit would not deliver control of our borders or our laws—two of the main three pillars of our argument for why we need to leave the EU. On borders, it would mean having to continue to accept all four freedoms of the single market—I take the point made by the noble Lord, Lord Lea, that we could perhaps pick and choose which ones we wanted to abide by or align with, but I suspect that the EU might have something to say about that. However, we would of course have to accept free movement of people. On laws, it would mean that we would have to implement all new EU legislation—as the noble Baroness, Lady Quin, said, we would be rule-takers. The noble Baroness was not in her place last night, but I quoted Mark Carney, the Governor of the Bank of England, who said how dangerous it would be, as we seek to manage one of the largest and most complex financial markets in the world, to turn ourselves into rule-takers, whereby the rules were set by another jurisdiction. Despite Mark Carney’s views on EU exit, which are well known, he made it clear that he thinks that it would be an unacceptable state of affairs for us to proceed with. It would mean that the UK would have to implement all new EU legislation for the whole of the economy, including services, digital and financial services.

We do not believe that that would deliver on the British people’s desire as expressed in the referendum to have more direct control over decisions that affect their daily lives. Rules would be set in the EU that we would then have to abide by. The public want the Government to get on with negotiating this future relationship, which was set out in the political declaration, without any further unnecessary hurdles, and that is what the Government will do.

[Baroness Quin]

I am listening carefully to what the Minister says, but he is responding to something that the amendment does not say. It does not say “rejoin” or “join” EFTA or the EEA but simply that we should have a look at what is happening in that process and look at areas where we would want to align with it.

[Lord Callanan]

The amendment refers to the EEA, and the noble Lord, Lord Lea, indicated earlier that he would be in favour of joining it, so I was making the arguments against that. However, we have also explored the arguments on alignment at different times in the past, and it may well be as a result of the negotiations that there are some areas of EU legislation that we may wish to align with or put in place an equivalence procedure. That is all for the future negotiations.

As we have said on many other amendments, we do not believe that it is a sensible tactic to set out our negotiating objectives in statute, or that setting a negotiating objective along the lines of that advocated in the amendment would be what the public voted for in the general election or in the original EU referendum. Our manifesto at the election was explicit about the Government’s intention and determination to keep the UK out of the single market. On that basis, although I suspect that I have probably not satisfied the noble Lord, I hope that he will feel able to withdraw his amendment.

[Lord Lea of Crondall]

I thank the Minister for that reply, although I think that whoever wrote his speech had not read the terms of the amendment. Over the course of the next four years, even if the Government do not want to set out a blueprint—

[Lord Callanan]

I have a copy of the amendment and it says:

“aligns as closely as possible with EEA member status”.

[Lord Lea of Crondall]

To align is something that we can do unilaterally or with agreement, but the amendment does not say “join”. I am sorry—I am not trying to be pedantic; we both know where we are, but that is what the amendment says.

To conclude, I hope that the Minister and the Government will generally reflect on the fact that, if they want to get Brexit real rather than just saying “Get Brexit done” as a slogan, they will have to see how a framework can be approached which will have certain common principles that will then be understood by the President of the European Commission. At the moment, she is baffled about whether the Government know what they are doing when they say that we can get all these things done one by one—scores of them all done and dusted by the end of this year. I beg leave to withdraw the amendment.

--- Later in debate ---

I hope the Minister will say, “Actually, we could look at this again.” We have not heard that phrase often in the last few days, but I plead with the Government. This is such a silly thing to do and flies in the face of all protestations of the importance of the role of Parliament in this regard.

[Lord Callanan]

I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Tyler, for their opening statements on the amendments in this group. Of course, I well remember the many debates that we had during the passage of the 2018 Act on the extremely important subject of delegated powers. It is of great interest to us. I do not think the other place took as much interest in it, but it is nevertheless an important subject and I am grateful to both the noble Baroness and the noble Lord for raising it.

I will say at the start that the Government have read with care the reports of the Delegated Powers and Regulatory Reform Committee and, of course, the Constitution Committee, which were referred to. I am also grateful, as I said in my opening at Second Reading, for their contribution to the exit process to date.

I will speak first to the amendments of the noble Baroness, Lady Hayter. I note that they are co-signed by the noble Lord, Lord Blencathra, who is not in his place. He is a signatory to these amendments and an extremely distinguished chair of the committee. A number of Members here are, of course, veterans of the debate that we had during the passage of the EU withdrawal Act about the introduction of a sifting mechanism into the Act. I agree that the sifting mechanism introduced then was a contribution to the unique set of circumstances in which we found ourselves as a consequence of that Act. I will argue today that the circumstances in which we find ourselves now are very different from those of the 2018 Act.

The first point, of course, is that the volume of statutory instruments that we will make under this Bill will be significantly less than those made under the 2018 Act. I suspect that this comes as a significant relief to many noble Lords. Secondly, the powers themselves are much narrower and more specific in nature. The DPRRC report itself acknowledged that:

“The scope of each power is … naturally constrained by the scope of the … matter contained in the Agreements that it is intended to address.”


Even more importantly, we have set out the procedure to be used when exercising the powers in this Bill. Ministers do not have the discretion that was afforded to them in the 2018 Act regarding the procedure attached to the use of the powers in this Bill. The argument then was that we needed a sifting mechanism because of the wide discretion given to Ministers to select the appropriate procedure. We do not have that procedure in the way this is drafted. As Members have observed, the general approach that we have taken is that the affirmative procedure will apply when the powers in the Bill are exercised so as to modify primary legislation—the so-called Henry VIII power—or retained direct principal EU legislation; the affirmative procedure will always apply in those circumstances.

Where the negative procedure applies, Members of the House may scrutinise the regulations and may, of course, pray against them should they wish to do so, as is usual for regulations of this kind. The sifting mechanism that was inserted in the 2018 Act worked very well. It was a unique response to a unique Bill. There were always going to be a huge amount of SIs introduced. There was much less certainty at the time about how they would be used, and a considerable amount of ministerial discretion on the procedure to be used. I submit to the House that none of those conditions applies to this withdrawal agreement Bill. I hope I have explained why the procedures for the powers in this Bill are of a different nature to those in the withdrawal Act and why the Government therefore cannot accept these amendments.

I turn to Amendment 66A, tabled in the name of the noble Lord, Lord Tope. As noble Lords are aware, consequential powers are standard provisions in legislation—even legislation of great constitutional importance, such as the Constitutional Reform Act or the devolution statutes. The Bill already includes many consequential amendments at Schedule 5, but we also need to take a power to make further consequential provisions to the statute book. Again, this power is limited to making amendments consequential to the contents of the Act itself and. like consequential powers in other primary legislation, this power will be construed strictly by the courts. It is in everyone’s interest that the statute book functions effectively.

[Lord Tyler]

Is the Minister really saying that Clause 41(1) is so limited in that way? Perhaps I may read it to him again:

“A Minister of the Crown may by regulations make such provision as the Minister considers appropriate in consequence of this Act.”


That is very widely drawn. If, as he said just now, there are fewer orders in prospect, that makes it all the more important that, with something as important as this, the recommendations of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee be taken into account. I cannot see that his argument stands up.

[Lord Callanan]

The clause that the noble Lord quoted comes under the consequential provisions. As I just said, the consequential power is construed strictly by the courts. I am advised by departmental lawyers that there is an extremely narrow focus; they are amendments that can be made only as a direct consequence of the Bill when it is enacted. I do not think that it in any way provides leeway for a Minister to make things up on the spur of the moment and amend primary legislation. The powers are very strictly constrained to consequential amendments, and this is not an unusual provision. It exists in many other Acts, including those I quoted earlier. We believe that moving the consequential provision to the affirmative procedure would frustrate the ability of departments to make consequential changes before exit day.

As I said also on the other amendments, I am sure that the noble Lord will agree that the use of the negative procedure does not prevent parliamentary scrutiny taking place. Members will still have the opportunity to pray against regulations should they consider it appropriate—and, as I said, there are the restrictions on the use of that power that I mentioned earlier.

I hope that, with the reassurances I have given noble Lords and a fuller explanation of the powers we propose to take, the noble Baroness will feel able to withdraw her amendment.

[Baroness Hayter of Kentish Town]

Let it never be said that we think the Minister would make up something on the spur of the moment.

I have only two things to say. First, I am sure that both our Delegated Powers and Regulatory Reform Committee and our Constitution Committee considered the points that the Minister has just made and nevertheless recommended a sifting procedure, but be that as it may. Secondly—this does not actually affect these particular amendments, because we are talking about the negative procedure here—the Minister said that there would be fewer SIs under this Bill. He also said that it has “narrower powers.” I do not think our noble and learned Members who spoke the other day would see the power it gave, albeit of the affirmative, to Ministers to alter the way ECJ rulings are heard as a “narrow power.” But that, as I say, is not covered by this, although some of the powers in the Bill are rather large.

However, the point the Minister makes about the ability to pray against negative draft orders is significant. I beg leave to withdraw the amendment.