Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Lord Tyler Excerpts

Monday 14th January 2019 Grand Committee

[Lord Henley]

My Lords, no communications have come to me to the effect that the noble Lord wished to take these three regulations separately. My understanding was that we would take them together, and I thought that it would be convenient to the Committee. I have now amended what I am going to say and, if the noble Lord is happy with this, I will go back to what I said originally and move and speak to the first one, and if the noble Lord and his noble friend, the noble Lord, Lord Stevenson, will bear with me, we will take all three separately. I have a number of speeches, and I can use whichever the noble Lord prefers to have first. However, he would probably prefer to have the first one, concerning the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations, which were laid before the House on 27 November.

This draft instrument ensures that the United Kingdom’s domestic rules for the exhaustion of intellectual property rights will continue to function in a predictable manner in a scenario where there is no negotiated agreement on the terms of the UK’s exit from the EU. The UK is recognised for its strong intellectual property regime—

[Lord Tyler (LD)]

My Lords, can the Minister expand for a moment on what he has just said? Am I to understand that these regulations, like the SIs we had in Grand Committee last Wednesday, are a government contingency planning proposal for the very exceptional circumstances of a no-deal exit from the EU on 29 March? If so, can he consider the contribution from his noble friend Lord Deben during our sitting last Wednesday? He and many others pointed out that, since the Prime Minister is now making it clear that the no-deal outcome is not her Government’s preference—she said that it is both undesirable and unlikely—what we are doing this afternoon concerns the very speculative situation which the Government themselves are opposed to. Can the Minister confirm that?

[Lord Henley]

My Lords, what we are doing concerns the event the noble Lord is addressing—that is, if there is no deal. If there is no deal, we will need these regulations; if there is a deal, they are irrelevant. It is as simple as that.

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[Lord Henley]

My Lords, I thought that we were debating the first set of regulations at this stage. We will get on to second set in due course as the noble Lord wishes.

As the noble Baroness, Lady Kingsmill, and I know, there will obviously be changes for businesses as a result of Brexit. There will be different changes for businesses if there is a no-deal Brexit. These regulations are about dealing with the no-deal scenario. The noble Baroness, the noble Lord and all noble Lords would think we were wrong if we did nothing about the possibility of a no-deal Brexit. That is why we are moving a number of regulations at this stage and why we published various technical notices and made them available to industry. That is why the original drafts of the technical notices led to various improvements.

At this stage, we know that business wants, in the main, to have the status quo in the event of a no-deal Brexit, and we hope that it will also have the status quo if there is a deal. We want to see what the deal is first and get that dealt with. However, in the event that it happens, we also have to make provision for there being—

[Lord Tyler]

My Lords—

[Lord Henley]

I will give way to the noble Lord in a minute, when I have finished. I can only answer points if I am allowed to complete them as they come up. We will try to get the no-deal provision set up in the manner which is best for business, to the extent that we can deal with no deal. If there is no deal, there will obviously be changes that we have no control of. The noble Baroness and I know that; everyone does. If there is a deal, as I hope, then everything is fine. I doubt that the noble Lord, Lord Adonis, would be happy but then he probably never will.

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[Lord Adonis]

But it would make me very happy.

[Lord Tyler]

I am grateful to the Minister, who has been generous in his advice to the Grand Committee, but I have a specific question on the point he has just made. The implication of what he has just said is that his department is already preparing, in parallel, the secondary legislation that will be required if the Prime Minister’s deal does go through. Or is he saying that, if the Prime Minister’s preferred outcome does get the support of Parliament, there will be no necessity for any secondary legislation? This is a very important distinction. If it is necessary to introduce secondary legislation to implement the specific responsibilities of government under the deal that the Prime Minister now prefers, then your Lordships’ House—which is going to have to consider it in due course—should know. On the one hand, we have this set of proposals, which is speculative, but there is something that might conceivably be more advantageous, both for the Government’s business and for the proper consideration of secondary legislation by this House. Is a parallel exercise going on for what the Prime Minister herself says is her preferred and more likely outcome?

--- Later in debate ---

I would like also to make another point which follows on from what the noble Lord, Lord Tyler, said, and his remarks to the Grand Committee last time. There continues to be in respect of these regulations, the other regulations we are considering later this afternoon and all the regulations the House will consider tomorrow, a fundamental issue of legitimacy. We are being asked, and the Minister is inviting us today, to agree to regulations which will make provisions in respect of there being no deal at the end of March. The question we have a right to ask is: what is the legal and moral basis for that preparation taking place? It is not good enough for the Minister to say that the serving of Article 50 and the passage of the European Union (Withdrawal) Act are sufficient, because it was firmly understood by the House when that notice was served and when the European Union (Withdrawal) Act was under consideration by your Lordships that we would not be going into a no-deal situation.

[Lord Tyler]

I wonder whether the noble Lord has been paying particular attention to Part 2 of the Explanatory Memorandum, which refers to a number of statements made by the then Minister of State for Universities, Science, Research and Innovation, Sam Gyimah. These statements are intended to reassure the Grand Committee and your Lordships’ House in precisely the sort of terms that the Minister is now referring to. I wonder whether the present Minister takes the same view as the previous Minister, or indeed whether the previous Minister has changed his view. To make the statement at paragraph 2.1:

“In my view there are good reasons for the provisions in this instrument, and I have concluded they are a reasonable course of action”,


may well now be out of date, since we all know that that former Minister takes the view that the proposal that a no-deal solution could in any way be appropriate for our country is absolutely absurd. Should there not have been an updating of this note so that the Grand Committee could at least be informed about the current view of the current Minister? I suspect that the previous Minister now takes a different view.

[Lord Adonis]

The noble Lord makes an extremely important point, and not just in respect of paragraph 2.1. I have before me the whole of Part 2, which has a whole series of statements made by the Minister of State for Universities, Science, Research and Innovation, Sam Gyimah, to the effect that in his view,

“the Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018 does no more than is appropriate”.

But, as the noble Lord says, that Minister is no longer in office, so it would be appropriate for the noble Lord, Lord Henley, to tell us whether the new Minister for Universities, Science, Research and Innovation also subscribes to those statements. I should also point out to the Grand Committee that Sam Gyimah is no longer the Minister of State for Universities, Science, Research and Innovation precisely because he resigned in protest at both the Prime Minister’s existing deal and the possibility of the Government contemplating no deal.

Not only has there been no consultation on these regulations; the Minister is not even able to tell us whom the Intellectual Property Office spoke to. At the moment, the only person we know the office has spoken to so far is my noble friend Lord Warner—because he phoned it. The Minister was not able to tell us of anyone else who had been spoken to. He told us that, in an inversion of all the established practices, the consultation on these regulations will take place after they have been approved by the House, not before. The Minister who said that these regulations are proportionate and appropriate has resigned. He resigned specifically because he is not prepared to proceed with Brexit or contemplate no deal. There has been no formal consultation with any other partners. The Government cannot tell the Committee who has been informally approached.

We have no statement from the existing Minister of State for Universities, Science, Research and Innovation that these regulations continue to meet the requirements of the EU withdrawal Act. I would be perfectly happy for the Committee to adjourn while we ask Sam Gyimah whether it is still his opinion that these regulations are proportionate and appropriate. I suspect that it is not, given the statements he has made in the media over the last 24 hours about the huge risks, dangers and costs to the country of Brexit, and a no-deal Brexit in particular. It is a no-deal Brexit that the Government are asking the Committee to approve this afternoon.

The other vital point is that, not only do we have good reason to believe that the business community is worried about these regulations and concerned about the costs, but the relevant Ministers no longer even subscribe to the views they gave when the regulations were being drafted. However, we do now have the benefit of the view of the House of Commons on no deal. Last Tuesday, before we considered these regulations, the House of Commons, for the first time, specifically debated and voted on the issue of no deal. In its amendment to the Finance (No. 3) Bill, it rejected the contemplation of no deal by 303 votes to 296. That is not only a majority of seven against no deal; it was one of the largest votes the House of Commons has conducted on Brexit in any respect. The Grand Committee has good reason to believe that these regulations are being brought forward in defiance of the will of the House of Commons, because that House has said that it is not prepared to contemplate no deal.

In the briefing for her speech today, the Prime Minister said that she now thinks that no Brexit is a bigger risk than no deal. I am perfectly prepared to take that risk; some of us think it is well worth taking. Indeed, we are trying to encourage the Government to enter the supremely risky and dangerous territory of no Brexit. We know how risky it is; we do not need to conduct impact assessments because we are in it at the moment and it is a perfectly tolerable state of affairs. The Government describe it as a risk but, in the last 24 hours, the Prime Minister told us that the risk of no deal is declining. That is the Prime Minister’s judgment, and the House of Commons voted only six days ago, by 302 votes to 296, not to have no deal. We have had no consultation whatsoever on these regulations. In the debate on the no-deal proposition last week, the Exchequer Secretary to the Treasury, Robert Jenrick, said:

“As I made clear, the Government do not want or expect a no-deal scenario”.—[Official Report, Commons, 8/1/19; col. 269.]


If the Government do not want or expect a no-deal scenario, it is wholly within their power to rule one out. The Minister, who is an extremely distinguished and effective member of the Government, could make a contribution to that cause today by withdrawing these regulations in response to what appears to be the overwhelming opinion of the Grand Committee.