European Affairs

Debate between Anna Soubry and Robert Neill

Thursday 15th March 2018 Commons Chamber

[Robert Neill (Bromley and Chislehurst) (Con)]

I have a lot of sympathy with what has been said by the hon. Member for Bridgend (Mrs Moon) and my right hon. Friend the Member for Broxtowe (Anna Soubry). I will put my case slightly differently and, perhaps, a little more succinctly.

I take the view that this country made an error. It was a democratic error, but it was an error. And because we are democrats, we have to live with the consequence of the error until such time as I hope may one day be the case, when the future generation reverses that error in some way. However, I am also a realist and know that that is not likely to happen any time soon. Therefore, we must ensure that we respect the outcome of the referendum—like it or not—but that we do so in a way that mitigates, to the greatest extent possible, the damage that will inevitably flow from it. The Prime Minister at her Mansion House speech was frank and honest, as I have always found her to be, about the fact that there is damage and that we must therefore mitigate the risk.

I do not do my politics in belief and faith; that is appropriate for the confessional, but not government and litigation. I do my politics in hard-headed reality, which is why I want to talk about services. Financial services underpin the economy of this country. We are a service economy or we are nothing. The position on services is worrying. My constituents are dependent on services, as 36% of them work in the financial and professional services sector—the 16th highest proportion in the country. Other hon. Members have already set out the massive contribution that the financial services make to our economy, beyond any other.

Anything that damages financial services damages the economy, the tax take, our public services, and the lives of every man and woman in this country. It directly damages the lives of my constituents. I will not support anything that materially damages the lives, the wellbeing and the services of my constituents. I want to help the Prime Minister to avoid that happening. To do that, I want to give her flexibility. As soon as she expresses realism, seeks flexibility and recognises that there must be compromise, some of my hon. Friends promptly appear with another pot of red paint. They are the ones who make her life harder, not those of us who support her in the realism and honesty that she set out in her Mansion House speech.

Let us then look specifically at what needs to be done to achieve the result that we need for financial services. First, we have to find for the City of London, if possible—it is a big if, and whether it will be achieved I know not, but let us set it out very clearly—a means, where mechanisms exist, to enable maximum access for financial services firms and for the legal services firms that underpin them: the two go together. There has to be an early transitional arrangement, or implementation—what’s in a name?—to ensure day-one continuity.

Secondly, there has to be—I want to hear from Ministers how we take this forward and a reassurance that it is central to their view—mutual market access built on the existing position of regulatory convergence. Moving away from that would damage market access; it is not in this country’s interest. That should be based on a commitment—frankly, an ongoing commitment—to mutual recognition and regulatory co-operation, with a joint UK-EU mechanism to ensure that regulation and principles of supervision are monitored as they evolve over time.

There would have to be a dispute resolution mechanism. We can call it a court or a tribunal—I do not much mind. We ought to think about the costs of a plethora of arbitration tribunals, although perhaps remaining within EFTA, or the EEA, will give us a ready-made dispute reconciliation mechanism through the EFTA court. It might be unwise to rule that out.

[Anna Soubry]

Is my hon. Friend concerned about the cost of all the provisions that will have to be made to govern all these various sectors and to manage all these new arrangements? Would he like the Government to produce, before any final meaningful vote in this place, the actual costs of delivering the Brexit deal?

[Robert Neill]

My right hon. Friend makes an entirely fair point. We should do that, because there is going to be an administrative cost that will ultimately be borne by consumers and taxpayers.

The industry itself has done analysis of the costs in some areas of financial services. For example, the wholesale banking industry estimates that if there is regulatory fragmentation, it is likely that $30 billion to $40 billion of extra capital will need to be raised. The London Stock Exchange Group calculates that changing the location of clearing houses—we must try to retain euro clearing, which is critical for the sector—will have a potential cost of some $25 billion, not just to us but to the EU27. It is in our mutual interest, on both sides, to get an agreement. No analysis of costs has been done: we should be honest about that and do so. We have to get these agreements.

We must ensure, too, that there is the ability to hire talent across the board and to move it seamlessly. It has to be possible that people can move staff from an office in Brussels, Paris or Frankfurt to London without any hold-up or delay—not even the need for the slightest bit of paperwork. That has to be achieved sensibly. Again, it is in our interest because otherwise we damage the ecosystem of the global financial hub that London is. As the Chancellor rightly acknowledged in his speech last week, the depth of the London capital markets frees not only businesses but sovereign debt for the EU27 nations. Too much rigidity from either side makes that difficult and puts it at risk.

The other thing that underpins this is the legal structure that goes with the professional services. Our legal services are second to none. We are the venue of choice for international litigation and dispute arbitration. That itself is a great gainer of income for this country. The legal services sector was worth £26 billion to the economy in 2015-16—1.5% of GDP—and is responsible for about £4 billion of exports, about 55% of which goes to the EU.

Fly-in fly-out arrangements are critical to that. We need an arrangement whereby, post the establishment directive, lawyers can have their qualifications mutually recognised in the EU27 states, can move seamlessly from one office to another, have the professional standing to advise their clients in EU27 countries and—this is very important but not often mentioned—have their client legal privilege recognised and protected, which can happen only where a lawyer’s qualification is recognised. Without a deal on that, British lawyers will not be able to advise clients or firms in EU27 countries—because professional privilege will not apply—appear in their courts or have the right to arrive in those countries and be present for negotiations with clients in important commercial contracts. It is critical, therefore, that we do not forget the need to get the legal services sector absolutely squared off in our future arrangements.

We must ensure the recognition and enforcement of judgments. A derivative contract—something we lead the world in—is worth while only so long as it can be enforced. We must ensure that they and all other commercial contracts have certainty of enforcement, not only over the transition period, but going forward, as they are typically written for three to five years. At the moment, we do that with one simple EU directive. It would be most unfortunate if we had to replicate that with each country plus those with which the EU has reciprocal arrangements. We can mitigate that by immediate action to join the Hague convention, but that is a back-up, not an ideal situation; we have to go further. I ask the Minister to detail what meetings he and his departmental officials have had with the Bar Council, the Law Society and, where appropriate, the senior judiciary to discuss the practical steps we need to take to safeguard the position of Britain’s legal services sector going forward and how it underpins the broader financial and professional services sector.

Green Belt (Broxtowe)

Debate between Anna Soubry and Robert Neill

Friday 13th July 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

I congratulate my hon. Friend the Member for Broxtowe (Anna Soubry) on securing this debate, and on the typically thoughtful way in which she made the case on behalf of her constituents. I understand the concern that she, her constituents and many other people have about potential threats, general or specific, to the green belt. Like me, my hon. Friend is a lawyer, and she will know that in planning matters, there is a legal process that is gone through, both in the plan-making process and in the consideration of individual applications. Planning authorities, the Planning Inspectorate—although it acts in the Secretary of State’s name, it has operational independence—Ministers and the Secretary of State, who has a role, potentially, in appeals processes, all play a part in that quasi-judicial process, so propriety means that we are not in a position to comment on individual applications; I know that she will understand that. The plan-making process has to go through a specific set of legal processes and tests; that is the important thing to bear in mind.

My hon. Friend raises a concern which was made worse by the previous Government’s policy of regional spatial strategies, which were seen as a top-down removal of green belt. Across the country there were some 30 instances where regional strategies proposed to remove land from green-belt protection. The Government have made clear their intention to remove those regional strategies, although we must act lawfully and give consideration to the environmental impact doing so. That is the legal process that we have to go through. The House made clear its view by voting in the Localism Act 2011 to remove the legal basis for any future regional strategies.

The core strategy, which has become known as the local plan under our new system, can be a single document for one authority or can, as in this case, be a joint document for a number of authorities. The strategy has to go through a process whereby, having been consulted on, it is submitted to the inspectorate for examination and to be tested as to whether it is sound. That is the important legal test to bear in mind, and it includes the opportunity for an examination in public in which not only must the council defend its proposals, but there is the opportunity for my hon. Friend, her constituents or other interested persons with a legitimate nexus who appear before the examination in public to make their case that what is proposed is not sound. I cannot prejudge that, and neither can the inspectorate.

With reference to some of the comments that might have been made or are purported to have been made to my hon. Friend, I can assure her that the Broxtowe plan has not yet been submitted to the planning inspectorate for examination. Although there may well have been some correspondence about preliminaries, no inspector is considering proposals yet. I want to emphasise that. When they are considered, the inspector will have to consider whether the proposals in the plan—the core strategy—are sound, in the sense that they are consistent with national planning policy, and whether they are based on sound and robust evidence.

In relation to green-belt matters, national policy is clearly set out in the national planning policy framework. That commits strongly to protecting the green belt. It says that inappropriate development is by definition harmful to the green belt and should not be approved, except in very special circumstances. It sets out, as my hon. Friend rightly pointed out, that existing green-belt boundaries should be altered only in exceptional circumstances through the local plan process, which involves public consultation and a public examination by an independent inspector. As I understand it, the proposal that Broxtowe puts forward will purport to amend green-belt boundaries. It will have to be considered against that test.

The relevance of the regional spatial strategy in this case is that there are housing numbers that the council seeks to rely on. The council, like any local authority, is entitled to do that. Now that we have abolished the top-down system that we inherited, I cannot recreate a top-down system which says what my hon. Friend cannot rely on, any more than what she should rely on. Those have to be tested and found to be reliable. I am sure my hon. Friend and those who share her concerns will want to use the process to make sure that that testing takes place. That will be for the inspector, not for me, to decide.

In that context, while the regional strategies remain part of the present development plan prior to their abolition, the fact that they are proposed to be abolished is a matter which the inspector can take into account, as the council could have done. The weight given to the proposed abolition of those strategies and the numbers that go with them is again a matter which can be taken into account and could have been taken into account by the council when drawing up its proposals. It chose not to do so. The inspector will have to be the judge of that.

I understand that the east midland strategy was published in 2009, so the housing figures are pre-2009. It will be for the inspector in a public inquiry to look at the most up-to-date and reliable evidence put forward, so I will be careful about not prejudging that, but my hon. Friend will understand that where the issues properly arise that might be a matter for debate.

Within the process there are proper routes to challenge what is perceived to be a needless or inappropriate removal of land from the green belt if it is not based on evidence that meets robustly the very special circumstances test. My hon. Friend and her constituents might want to consider that as their way forward, but I cannot say more than that. That is the process. The Government cannot interfere and would not seek to do so, for reasons I know she will understand. Equally, because it is a joint strategy, where green-belt land straddles local boundaries, as housing markets can, local authorities of course must demonstrate to the inspector that they have actively met the duty to co-operate, which is also part of the NPPF.

[Anna Soubry]

I understand what the Minister is saying, but does that mean that a local authority such as Broxtowe borough council is duty bound to be part of a much larger housing market, because at one time this crossed into five councils? Is that what co-operation is about, or is it not about one council saying to another, “Well, we’ve got a bit here. What have you got? How can we perhaps take some of our need and you could soak it up?” Are they duty bound to be part of a very large single housing market, or should they be setting their own needs and their own target?

[Robert Neill]

No local authority is duty bound to follow a particular model for dealing with the duty to co-operate, which is why it is deliberately not defined in the NPPF. What amounts to genuine co-operation will vary from case to case and will depend on each authority’s circumstances, so it will be assessed by the inspector and the decision based upon the evidence put before him or her. In the same way, it is perfectly possible for local authorities to choose to collaborate if they so wish. As I understand the history my hon. Friend has related, one local authority has chosen to leave the joint strategy, which is its right, just as it is the right of another authority to stay in. That is their call; it is not for the Secretary of State to prescribe one way or the other. Similarly, the NPPF does not seek deliberately to define the very special circumstances because that issue has to be assessed by the inspector on the evidence base and then applied to the national policy.

I note that, now that the NPPF is in place, only today there have come to my attention two decisions—they are not green-belt issues, but the general approach adopted is significant—in which the planning inspectors have specifically said that they gave great weight to the NPPF, so these things are taken on board by the Planning Inspectorate. The Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), meets from time to time with Sir Michael Pitt, the chairman of the Planning Inspectorate, not to interfere in individual cases—we cannot do that or set up meetings along those lines—but to ensure consistency, and Sir Michael is aware of the importance of a consistent approach.

That is why I cannot do everything my hon. Friend has asked me to do, because that would breach the constraints relating to the quasi-judicial nature of the process, but I hope that I have made clear to her the criteria that have to be met to remove land from the green belt. It is a clear test and a high one, but it is not for me to judge whether it is met in any given case, and there are means of that being challenged and tested through the public examination process, which will come along shortly.

My hon. Friend mentioned minerals extraction. Again, I cannot talk about specific applications, for obvious reasons, but the NPPF makes specific reference to the test that is to be applied in relation to minerals in the green belt. It is slightly convoluted because it can only work in some circumstances, but it does restate strong green-belt protections around development of that kind.

Question put and agreed to.