European Union (Withdrawal) Bill

Alex Cunningham Excerpts

Committee: 2nd sitting: House of Commons
Wednesday 15th November 2017 Commons Chamber

[Tom Brake]

I remember that clearly. The right hon. Gentleman and I—and, I am sure, Labour Members—can confirm that there are regulations, such as those relating to the British Government’s role in running the railways in India, that it would be appropriate to get rid of, because frankly they are no longer relevant. I suspect that there are quite a lot of other examples.

I want to focus briefly on the EEA. At the start of the referendum campaign, those involved in the leave campaign advocated the Norway model. As it became clearer to them that that was not what they wanted, they moved on to the Switzerland model, with its 150 or so different agreements. Once they realised that that was quite complex, Peru emerged as the model they wanted to emulate, before they eventually settled on the idea of a bespoke deal. As we heard earlier, no one anywhere is willing to identify how such a bespoke deal would work or, indeed, whether it is even possible to put one together.

As other Members have said, it is clear that membership of the EEA does not in any way, shape or form match the benefits we get from being members of the European Union. It might provide an alternative—a step down from our current position, but without the consequences of our leaving completely—to the no-deal scenario. It is a poor substitute, but it is better than no deal. It would keep us in the single market but out of the customs union, and—this major sticking point was, I think, the reason why the leave campaign moved away from the Norway model—it would probably require a financial contribution. It would allow trade deals to be struck, so there are some advantages to it, which is why we will support new clause 22 if it is pressed to a vote.

I want to finish by focusing on the question of whether leaving the European Union automatically means that we also cut our links with the EEA. Articles 126 and 127 of the EEA agreement have already been mentioned. I have been involved in an interesting exchange of parliamentary written questions and answers about the EEA. When I asked what was required to formally withdraw from the EEA agreement, the parliamentary answer stated:

“As the Secretary of State for Exiting the European Union said when he addressed the House on 7th September, there is agreement that when we leave the EU, the European Economic Area Agreement will no longer operate in respect of the UK.”

I followed that up by seeking to identify who that agreement was with and why that would happen. The response stated:

“It is Government policy that we will not be a member”,

so it seems as though the Government have reached an agreement with themselves that we will automatically be out of the EEA. I would suggest that that is not a particularly high bar. Although article 126 makes it clear that we will leave the EEA, article 127 requires us to give notice in order to do so.

As an aside, if we are leaving the EEA, it would probably be courteous for the UK Government to at least talk to its other members, particularly EFTA members, just so that they are aware that that is what we are doing. As of last week, no contact had been made with at least one of the EFTA members. It might be appropriate for the Government to inform them as a matter of courtesy.

New clause 22 is very good, as it would provide us with an opportunity to keep some of the benefits of our EU membership without crashing out of the EU completely, and without seeking the mythical bespoke deal that I do not think anyone believes can be delivered in the timescales that the Government have to work towards. I look forward to the vote on that new clause.

[Alex Cunningham (Stockton North) (Lab)]

I want to speak to new clause 58 and to cover the key issue of EU pension directives, specifically versions one and two of the institutions for occupational retirement provision directive.

Both versions set out the broad framework for pension fund operation in the EU, concentrating on structures and procedures such as the separation of the fund from the employer, giving strong protection for scheme members, and the establishment of a regulator in each member state. My concerns relate to the effect of IORP II on the running of pension schemes and the Government’s approach to the requirement for legal separation of a pensions institution from the sponsoring employer under article 8 of the directive, and to investment regulations under article 19 that require assets to be invested prudently in the best interest of scheme members, and for any potential conflict of interest to be resolved in the member’s favour.

Principally, I seek an assurance that the Government will introduce legislation for the transposition of IORP II and that they will not seek to opt out of any of the relevant articles but implement them in full. That is particularly important for members of the local government pension scheme, as there remains some confusion in the public domain over whether IORP I was ever applied to it in full.

When IORP I is succeeded by IORP II, the Government could disapply any requirement for separation, as well as any requirement for investment in accordance with a “prudent person” rule. What lies at stake here are the statutory rights of more than 5 million citizens who participate in the UK local government pension scheme. They should not be undermined by virtue of past decisions, or indeed as a result of our leaving the EU. This is made even more important by the proximity of the deadline for IORP II to the date of exit from the EU. I hope that Ministers will confirm that the Government will ensure the necessary measures—articles 8 and 19—are enshrined in UK law.

I now turn to the state pension. As a result of our EU membership, the UK is part of a system to co-ordinate the social security entitlements of people moving within the EU. That system enables periods of insurance to be aggregated, meaning that an individual who has worked in other member states can make one application to the relevant agency in the country of residence. In the UK, that is the International Pension Centre. That relevant agency then notifies details of the claim to all countries in which the person has been insured, and each member state calculates its pro-rata contribution and puts that amount into payment.

The UK state pension is payable overseas, but it is uprated only if the pensioner is in an EEA country, or one with which the UK has a reciprocal agreement for uprating. In September, the Government suggested that reciprocal arrangements would be protected following exit from the European Union, and that is also included in the joint paper on citizen’s rights. Will Ministers confirm that that will continue to be the case, and that the Government will not be seeking to enter individual reciprocal arrangements after our exit from the European Union, but will instead continue to work on the basis of current arrangements?

[Stephen Kinnock]

I would like to speak in favour of new clause 2 and new clause 58, which have been tabled by those on the Labour Front Bench.

There is an idea that we should be giving the Government the benefit of the doubt on these issues. There have, however, been so many statements and acts from those on the Government Benches to undermine employment rights, from the Trade Union Act 2016 to many other measures, that we need to ensure we anchor the rights of our workforce in the Bill.

The Exiting the European Union Committee met Mr Barnier in Brussels last week. One point he made very clearly is that as we move towards a future relationship, the so-called deep and comprehensive free trade agreement will need to be ratified by the Parliaments of the member states, plus a number of regional Parliaments. They will not accept anything that he described as “social dumping”—they will not accept undercutting and they will not accept unfair regulatory practice—so if the Government are serious about getting a deep and comprehensive free trade agreement with the EU they will have to recognise that regulatory equivalence will have to be a critical part of it. This is about not only securing rights in this country, but the economic interests of the country if we are serious about having that future relationship.