European Union (Withdrawal) Bill

Baroness Burt of Solihull Excerpts

Monday 19th March 2018 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, Amendment 220 seeks to draw the Minister’s attention to what we risk losing if the Government fail to negotiate the reciprocal arrangements we currently have in place by virtue of the EU insolvency regulation and the recast Brussels regulation. They provide a speedy and efficient procedure that determines which member state has jurisdiction to open insolvency proceedings as well as ensuring appropriate recognition of proceedings within the Union. Of course, I am referring to our long-term relationship with the EU, not just the transition period. However, I welcome today’s progress in that, in particular the realistic replacement at last of implementation with transition. I am also grateful for article, clause or paragraph 63 in the report released today—I do not yet know which it is—because it provides for the regulations to continue to apply to insolvency proceedings where these commence before the end of the transition period, but that is not enough. We are looking to the future.

The current rules allow for judgments made in the UK to be enforced across other member states. This recognition, whether of appointments or judgments, is key to investors, pensioners, employees, consumers, creditors and businesses. Without the rules, a liquidator or receiver here could lose the ability to freeze and ultimately return to the UK assets that have been squirrelled away across the EU but which rightfully belong to the bankrupt firm’s creditors, be they the staff, consumers who have paid for yet undelivered goods, investors, a pension scheme, landlords or even our blessed HMRC.

The UK has a renowned insolvency regime with one of the highest rates of return to creditors in the world. It gives confidence to investors and traders that their money will not disappear offshore because it enables a receiver to rapidly get hold of that Lamborghini, hidden away in an Italian garage, houses in sunny European climes, bank accounts in Frankfurt or even paintings in Paris, if they are rightly due to creditors here.

There are many examples; I will not go into detail. The purpose of the amendment is to ensure that the Government prioritise this in negotiating our long-term relationship with the EU. The Minister is well aware of my concerns; I set them out last year in writing to the then Minister, the noble Baroness, Lady Anelay. She replied to me on 26 October last year, offering a meeting with the BEIS Minister, Margot James. However, I got a letter from Margot James on 9 January saying that she could not meet me, but Insolvency Service officials could. The problem is, I know that various bodies, such as R3 or the City of London Law Society, who feel that the Government are not taking this seriously enough, have met with the IS and feel that they are not getting traction in the Brexit negotiations. Hence, I would argue the need for a political meeting.

My ask today is a very easy one: will the Government agree to meet me and representatives from the field—perhaps the noble Baroness, Lady Burt, as well—so that we do not have to bring this back on Report but can make progress? I beg to move.

[Baroness Burt of Solihull (LD)]

My Lords, I support the amendment of the noble Baroness, Lady Hayter, from these Benches. I would very much appreciate it if such a meeting could be arranged; I would love to be included.

I want to emphasise the importance of the UK’s insolvency framework to British trade and investment, especially where cross-border insolvencies between the UK and EU are concerned. We need to ensure that the benefits of our existing arrangements can continue, post Brexit, and we need an agreement in place before we exit the EU. We have a strong insolvency framework in the UK, as the noble Baroness, Lady Hayter, mentioned, and some good reforms to corporate insolvency in the pipeline. They would make our rules fit for purpose for both domestic and international markets, as well as underpin the UK’s attractiveness as a place to do business by supporting trade, investment, lending, productivity and entrepreneurship.

Brexit risks creating barriers to resolving cross-border insolvencies between the UK and the EU. We cannot allow that to happen. We need to ensure automatic reciprocal recognition for insolvency judgments and appointments, post Brexit. Unfortunately, we have slipped down the World Bank rankings in resolving insolvency from 13th to 14th; frankly, now is the worst time to be heading in the wrong direction. Life will be tough enough, post Brexit, so let us not risk losing out on the international investment our robust insolvency framework currently attracts. The amendment’s reporting requirements would ensure that no one is allowed to take their eye off the ball.

[Baroness Kramer (LD)]

My Lords, does the Minister agree that this particular set of issues is absolutely crucial to small businesses? He will know that many small businesses are happy to export to the European Union because they have protection in case of insolvency; it is as solid as if there were an insolvency from a customer or supplier literally round the corner or down the street.

There are many reasons why those companies choose not to export to many of the markets where we so often hear there are such extraordinary opportunities. It is because—especially for small businesses, I am afraid—there are long histories of non-payment. Large businesses can afford to retain international lawyers in different locations across the globe and across borders. Large companies—especially multinationals—frequently have contacts in governments, at the appropriate level, to make sure that their interests are protected, but that very rarely applies to small businesses, so this protection is crucial.

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[Baroness Lister of Burtersett (Lab)]

My Lords, I support both amendments but my brief remarks will mainly concern Amendment 224. There is great concern among civil society groups about the future of EU funding that currently supports those working to support survivors of violence against women and girls. As my noble friend Lady Kennedy has said, the Government have given an assurance that they will honour some European structural fund commitments up to 2020, but so long as they represent value for money and align with “domestic priorities”. What criteria will be used to decide whether projects meet these conditions? Will the Minister give an assurance about the Rights, Equality and Citizenship Programme, to which my noble friend referred, which supports progress on equality and human rights, including through front-line services for people experiencing domestic abuse?

I have just read the Government’s very welcome consultation document on their proposed strategy on transforming the response to domestic abuse, but I did not spot anything on this matter—on neither EU co-operation post Brexit nor funding. It is possible that I missed it—I would be very glad if the Minister drew my attention to where it was—but, as far as I can see, there is a disconnect between our deliberations today and this very important new strategy that the Government have brought forward. If the Minister is not willing to accept two very modest amendments that simply ask for reporting, it can only reinforce anxieties among civil society groups which are doing so much to make a reality of the Government’s own aspirations to transform the response to domestic abuse.

[Baroness Burt of Solihull]

I support these two amendments. As the noble Baroness, Lady Kennedy, pointed out, after exit day, European protection orders, plus other measures which give victims of violence equivalent protections across the EU, will be lost to UK citizens. But violence against women and girls has not featured in any Brexit-related papers. Can the Minister please tell us what provisions are being made to continue co-operation and data sharing on known and suspected perpetrators of human trafficking, FGM and sexual exploitation of children, and the whole host of benefits which cross-EU co-operation has brought us until now?

As has been said, Amendment 224 talks about the funding we have received hitherto and the value of the support we have enjoyed by virtue of being a member of the EU. If the Government are serious about ensuring that we continue to give vulnerable women and children the protections they have enjoyed so far, they know that this has to be properly funded. According to the Fawcett Society, many millions of pounds’ worth of funding—for research and service delivery support—are potentially at stake, as the noble Baroness, Lady Kennedy, said. Will the Minister commit to sustaining this funding post Brexit?

[Baroness Butler-Sloss (CB)]

My Lords, I support the amendment moved by the noble Baroness, Lady Kennedy. I am concerned about a number of matters, particularly the European protection order and the European arrest warrant, both of which are important weapons in relation to domestic violence.

I work with IKWRO, which the noble Baroness, Lady Kennedy, referred to: the Iranian-Kurdish organisation that does a great deal of good. It has really substantial funding from the EU and requires continued funding for the very valuable work it does in this country. I also ask the Minister to bear in mind that domestic violence includes forced marriage. Many women in forced marriage situations also suffer domestic violence. I declare that I am chairman of the National Commission on Forced Marriage.

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[Baroness Kennedy of The Shaws]

My Lords, Amendment 223 is about the enforcement arrangements, which rely on reciprocity, whereby a woman who has a child maintenance claim against an ex-partner can apply for an enforcement order in a court in the United Kingdom, which can then be enforced in another court in the European Union. An example which I have given a number of times in this House is a woman married to an Italian who shoves off, returns to Italy and does not pay maintenance for his children. Women being able to apply for an order which can be enforced across national borders saves time, money and stress and, ultimately, benefits mother and child. As I keep saying, if you have this problem and you are married to an American you have to get the money, go off to an American court and see what you can do over there. It is not easy, whereas it is very simple across the European Union.

This issue has not been commented on by the Government, so we can only infer that it is not yet on the agenda for any negotiations. We need to know what the Government plan to do on issues, like this one, where reciprocity is required and where mutuality makes it all work.

[Baroness Burt of Solihull]

My Lords, I support the amendment. Anyone who has been an MP in the other place will know from their caseload that child maintenance is a huge, complex and emotive issue. When I was in the other place I learned about this and the challenges for parents with care. Chasing recalcitrant dads, or mums, across national borders without co-operative and reciprocal—that word again—arrangements would be nigh on impossible. Will the Minister commit to ensuring that parents with care are not left high and dry post Brexit, and that we have arrangements in place before we actually leave?

[Baroness Butler-Sloss]

My Lords, from bitter experience as a family judge, I am aware how difficult it is for the mother of children—and occasionally the father; it is not always one-way—to get an effective maintenance order. I am not talking about Brexit at all, but one of the current benefits of the EU is the ability to follow an order made in an English court in another EU country, and the equal ability of the other 26 countries to follow an order into an English court. This is the absolute ultimate of good reciprocity. That is at enormous risk as we leave the EU. It is one issue that the Government must address alongside the reciprocity on divorce and other issues that we discussed earlier, and see that the good of this very good interchange between the 27 countries of the EU is not lost post Brexit.