Patents (Amendment) (EU Exit) Regulations 2018

Baroness Kingsmill Excerpts

Monday 14th January 2019 Grand Committee

[Lord Henley]

My Lords, I quite understand that the noble Lord was in the Chamber and therefore not able to be there at the end. I merely made a statement of fact that he was not there and that therefore I was not able to respond to him. I similarly make the quite straightforward statement that I have spoken on this, for which I hope the noble Lord is grateful, and I will respond in due course to the points made. I hope the noble Lord will understand that the wide-scale engagement he would like, as we discussed on the earlier amendment, was not possible on a draft no-deal regulation of this sort. I can give the assurance, as I gave on the previous order—this is the important thing—that there will be a proper consultation in the future. The noble Lord should bear in mind that at the moment we are making sure there is a degree of certainty for businesses in the eventuality that there is no deal.

[Baroness Kingsmill (Lab)]

My Lords—

[Lord Warner (CB)]

My Lords—

[Lord Henley]

No; there is no need for noble Lords to get up. I will sit down and give way to the noble Baroness or the noble Lord when I am ready, but I am entitled to speak and give way as I wish.

We will consult as appropriate on whatever the future regime might be, deal or no deal. We are trying to get things right in the eventuality of there being no deal. It is quite right—

[Baroness Kingsmill]

My Lords—

[Lord Henley]

Can the noble Baroness wait just a moment? I am still speaking. It is quite right that we make appropriate contingency plans. I now give way to the noble Baroness, then I will no doubt give way to the noble Lord, Lord Warner, who is itching to get to his feet.

[Baroness Kingsmill]

I was actually trying to be a little helpful. In the notes on this matter, there is a little more detail about the consultation than on the previous one. They say a consultation was taken with “informal discussions”—informal is always questionable—

“with a small group of selected individuals with expertise in the relevant areas, or in patent law generally”.

I read that to suggest that the consultation was with lawyers, as opposed to people directly affected by this. I wonder if the Minister could make that clear. If it is with lawyers, they will be looking at it on the basis of the law as opposed to the impact on businesses. Once the Minister has clarified who and what it was, I could then understand the impact. In paragraph 12, the Government assert that there is,

“no, or no significant, impact on business”.

If there has been a proper consultation, that is fine and perhaps one has to accept that impact. But at present an informal discussion,

“with a small group of selected individuals”,

does not sound to me like the kind of consultation that is going to give anybody the possibility of saying there is,

“no, or no significant, impact on business”.

Perhaps the Minister would care to clarify.

[Lord Warner]

May I intervene to be helpful to the Minister? He might wish to consider withholding his remarks about consultation until he has heard what I have to say a little later about the consultation process—if we may venerate it with such a description. I think he might want to hear those before he commits himself too far on what consultation has taken place.

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[Baroness Kingsmill]

I take the noble Lord’s point entirely. However, having pointed out the inadequacy of the consultation programme, it also throws into complete disrepute the idea that there was no, or no significant, impact on business or the public sector and they have therefore not bothered to make an impact assessment. When the consultation process has been so manifestly inadequate, it is impossible to say that there has been no impact.

[Lord Deben]

The noble Baroness makes an important point. I want to follow this line because if the consultation itself does not cover the industry, and those others whom you would expect to be covered, it is not likely that the Grand Committee can reasonably expect to accept the concept that there is no effect or problem. We can only do that if we are sure that the consultation has been widespread, properly chosen and the rest. Will my noble friend explain who was consulted with, why some people who are obviously necessary consultees were not consulted, on what basis that choice was made and why these were informal discussions? This is surely a very important SI and there should have been formal discussions.

Secondly, there is a problem in all these SIs which we have to remind the Minister of each time. It is suggested that we can allow these SIs to go through because they are very unlikely actually to be used, because they are based on the principle of a no-deal exit from the European Union. That may be true, but it does not excuse us from ensuring that the SIs are as good as they could be. They might be used, unless the Minister is going to say that they are not going to be. At the moment, they could be used and we have to apply the same intellectual rigour to these as we would to any other SIs.

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[Lord Deben]

I do not think that I ought to follow the noble Lord down that road because otherwise there will be a complaint that one is somehow not keeping to the fact, but of course what he says is entirely true and I agree with him. However, the point is that we as a Grand Committee must not take any less notice of these SIs on the basis that they might not have to be implemented or indeed even that they probably will not have to be implemented. There are two reasons for that. One is that they could be implemented because that is what we are doing; we are making law. The second reason is the point made by the noble Lord, Lord Warner. In future, even if they were not implemented, in other contexts the fact that we had agreed to them would be used as a mechanism for suggesting that whatever is then being presented is perfectly all right because the Grand Committee of the House of Lords had been through them and they are only repeating them. That is the same kind of argument which says, “We are not actually changing anything”.

That leads me to my third point, which is simply this. If we are unhappy about the nature of the people who were consulted and if we also feel that we ought to know who they were and the circumstances in which the consultation took place, it is also true that we need to question the outcome. It is clear that those who know about it think that this particular SI changes the situation very significantly, but the suggestion is that there are no new obligations or burdens on private, public or third sector bodies and it does not require refamiliarisation—a word which I am fascinated to discover and would ask the Minister to explain what it means in order that I get a measure of it. However, if you get the consultation wrong you then get the outcome wrong and therefore you cannot say that there is no need for an impact assessment. The section on impact assessment is thus also very serious.

I direct the Grand Committee to paragraph 12.2:

“There is no, or no significant, impact on the public sector”.


The fact is that if there is no deal and this has to be implemented, there would be a huge impact on the public sector and that impact would be very expensive.

This is another point that I want to raise with my noble friend. There are no costs in this document. We are not told how much it is going to cost. The way to get around that is to say that it is not going to cost very much so, “we do not have to tell you”. However, one of the falsehoods of the whole Brexit argument is the suggestion that we are somehow going to make money out of it, whereas every time you look at any of these things, you see that the United Kingdom is setting up a system to do what historically has been done effectively on a Europe-wide basis. That all costs money and I want to know, as a Member of this House, how much it will cost. It is not acceptable that because we may not have to do it, we do not have to be told how much it will cost.

[Baroness Kingsmill]

Perhaps I may further the point that the noble Lord is making. We have now established pretty well that the consultation process was at best flawed but much more likely so limited as not to be taken seriously. From that has come the idea that there is no significant impact, which in turn has led to it being said that no specific action is being proposed to minimise regulatory burdens on small businesses. The weakness of the consultation process at the very beginning has worked its way through to saying, “Bad luck for small businesses”, and indeed, I might say, large businesses.

[Lord Deben]

That is absolutely true. It all adds up to my last point, which I feel is the most important point of all. The Government keep on talking about no impact, but of course in this SI they cover up the fundamental impact, which is that the benefit that used to be enjoyed by those to whom this applies because we were part of the European Union will be removed. That is a huge impact. When the Government talk about no impact, they are really saying that, as long as you confine your activities to the United Kingdom, there will be a little arrangement which will, roughly speaking, be the same as the arrangement that we had in the United Kingdom when we were part of the European Union. That is what we are saying.

That is an entirely different situation, because it means that we do not have the advantages which we had before. I know that that is an integral part of Brexit, and it is one of the reasons why I oppose Brexit so strongly. It is unacceptable not to measure those impacts. It is unacceptable to produce an SI which suggests that there are no impacts when you are saying that if we exclude the biggest impact of all, there are no impacts. That is, at the very best, misleading.

I say to my noble friend that anyone in this country who reads this impenetrable stuff as carefully as we have all tried to will realise that there are two hidden falsehoods in the whole activity. The first is: let us pass it because it will never be used. The second is: when we talk about impacts, we will refuse to talk about the impacts which really matter, which are the impacts which disadvantage British people and make us less able to handle competitive situations, deal with our patients and work in the way in which we can at the moment. We, the Government, are not prepared to measure that because then the public might say, “My goodness, this does not sound a very good idea”. So they do not tell them the figures, the costs or the disadvantages, because it would undermine their position.

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[Lord Adonis]

My Lords, in my now quite long experience of the House I have found that on most occasions when policies are being tested and explained, amendments are being considered and so on, the difference narrows as debate advances. That difference can be eliminated entirely, sometimes because the explanations given by the Government turn out to meet the concerns, sometimes because the Government themselves move to meet the concerns and sometimes because the concerns are misunderstood. That is the general course. Because our job is to scrutinise there may still be resulting differences, but those differences are narrowed, not expanded.

However, a pattern is now emerging in the consideration by the Grand Committee of these no-deal regulations. In almost every case now, as the debate continues the difference widens, for three reasons. The first is precisely the point that the noble Lord, Lord Deben, has made so eloquently, which is that you are expected to believe, in the words of the White Queen in Alice in Wonderland, six impossible things before breakfast before you even consider these regulations. The first suspension of total disbelief that we are expected to entertain is that, all other things being equal in no deal, these regulations will simply make technical changes to govern the fact that we have left the EU with no deal. The problem is that all other things are not equal. The whole ground has shifted underneath the very activities, and the national interest and the companies, that are at stake.

That could not have been clearer than in the remarks of my noble friend—as I continue to call him; I know he now sits on the Cross Benches but he and I were Ministers together for many years so he will always be my noble friend—Lord Warner. I dare say that my noble friend, whom I hold in extremely high regard, knows this sector better than anyone in the House except possibly my noble friend Lord Darzi. He has huge, detailed knowledge from a long period of time as a Health Minister. My noble friend has reported to the House two issues of extraordinary import. The first is that the impact of the actual changes in these regulations will be profound for the industries concerned and for those who need to use their services. The second is that most of those directly concerned were not consulted at all.

That leads to the second big issue that has now arisen time and again in the Grand Committee: the consultation has been exiguous or non-existent despite the fact that the issues concerned are hugely important. The noble Lord, Lord Deben, who is one of the most forensic debaters in the House, noted to brilliant effect the use of the weasel words in respect of consultation in the Explanatory Memorandum regarding the,

“selected individuals with expertise in the relevant areas”,

who the Intellectual Property Office chose to consult.

[Baroness Kingsmill]

The lawyers.

[Lord Adonis]

They turn out to be lawyers. I have nothing against lawyers; my noble friend Lady Kingsmill is a distinguished lawyer. It is fine that lawyers should be consulted, but others should be consulted as well. I do not think it is for the Government to select who should be consulted. We are a democracy where everyone should have that right. Indeed, the Cabinet Office rules on consultation were long laboured over by successive Governments: there should be 12 weeks of consultation on regulations that should be published, and so on. We are told that that cannot happen in the case of these regulations because we do not have 12 weeks. Well, we would if the Government were not engaging in this ludicrous no-deal planning that means that there are not 12 weeks to start with. That argument is entirely circular.

The Explanatory Memorandum looks to me to be worse than my noble friend and the noble Lord have said, on top of these informal discussions with a small group of selected individuals. Incidentally, I may say that the Minister was unable to tell us at the beginning who were they were; he said he was going to tell us when he wound up, so we are still awaiting the names of those selected individuals. They do not appear to have included any of the significant companies and experts that my noble friend Lord Warner knows.

I will repeat this fact because it is of great importance to the Grand Committee: the only person who we know with certainty has been consulted by, and has spoken to, the Intellectual Property Office so far is my noble friend Lord Warner, because he tells us that he phoned them up and gave them his views. There has been no information from the noble Lord, Lord Henley, or from anyone else as to who the others were. We have now a lengthening list of those who were not consulted, but we do not know who was. That is an extraordinary state of affairs for the Committee.

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[Lord Adonis]

My Lords, a situation has arisen where there is a serious difference of view, to put it mildly—

[Baroness Kingsmill]

A difference of fact.

[Lord Adonis]

A difference of fact, as my noble friend has just said, between the Minister and my noble friend Lord Warner, who has just pointed out to me that paragraphs 1 and 2 of Regulation 55 specifically concern exclusivity. This is the precise issue which he said should have been consulted on and on which the companies and trade associations concerned say they were not consulted. I simply note that, but this issue needs to be explored more fully before these regulations go to the House itself, as the situation at the moment is clearly unsatisfactory. The Minister, who is deeply honourable in these matters, would not wish this dispute of facts to be unresolved.

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[Lord Henley]

My Lords, I am always kind and polite to the noble Lord. I know he is a delicate flower and does not want me to be too hard on him.

I appreciate there are a lot of no-deal regulations and that we are asking a lot of the Joint Committee on Statutory Instruments. The noble Lord has served on that wonderful committee, as have we all, and it does a very good job, as do the other committees that have this duty. We are satisfied that they have enough time and resources. I think the House feels that it too has enough time. This can be discussed by the usual channels. We are having a very useful debate this evening and I am looking forward to continuing that process. It is difficult, but equally it would be much more irresponsible not to be moving regulations or producing them for the eventuality that there was a no deal, because the noble Lord will be aware that as a result of Article 50 and various other Acts of Parliament that have been through both Houses, if we do not reach an agreement by 29 March, we leave the EU without a deal. This order, the previous order and other orders are designed to provide that certainty businesses need, and we will continue to move the appropriate orders.

[Baroness Kingsmill]

My Lords—

[Lord Henley]

Will the noble Baroness let me finish? I will then give way. She must not be quite so enthusiastic.

As is right and proper, we will then move them so that we can be in that prime position.

[Baroness Kingsmill]

My Lords, it surprises me that the Minister is not concerned by the extent of the statutory instruments still to be debated, because the question must be asked: why on earth are we rushing through them at this late stage? There have been two years in which we could have been prepared; there were two years when the possibility of a no-deal outcome was on the cards. Why on earth are we and the noble Lord’s civil servants being expected to race through with inadequate research and consultation now at such a late stage when there have been two years when these things could have been prepared?

[Lord Henley]

My Lords, I simply do not accept that point. The fact is that we are doing them now and giving them proper scrutiny, as the noble Baroness, her noble friend and other noble Lords would accept. There will be other opportunities to debate this and other regulations.

[Baroness Kingsmill]

One more point very briefly—

[Lord Henley]

My Lords, I am on my feet, and I will give way to the noble Baroness when I wish. I will now give way.

[Baroness Kingsmill]

May I just say that we have been at this for getting on for four hours? If we proceed at this pace with the number of statutory instruments that we have still to debate, we will never get through them and there will be a vote before long to say that there will be no no deal. So what is the point of all this? I referred earlier to Alice in Wonderland; it seems even more peculiar.

[Lord Henley]

My Lords, the noble Baroness is getting on to wider questions. I cannot remember whether it is in Alice in Wonderland or Through the Looking Glass, but I am a mere pawn on the chessboard of life. I believe that we are having appropriate discussion on the order and I think that it is right and proper that, since we have started, we should continue. I look forward so to doing and, as I said, there will possibly be other opportunities as well. I think we should continue with that. Others, who may be the kings, queens and bishops, will then discuss what is the proper procedure, but at the moment, we are considering the Patents (Amendment) (EU Exit) Regulations, which relate only to no deal. We do not want to broaden it out to other things; others can discuss that issue.

Let me return to the debate and the consultation. As I made clear earlier, the IPO sought the views of a group of individual stakeholders—I shall not go into the slightly different words that my noble friend cited from different letters—and consulted them in their personal capacity to identify any issues with the drafting and raise any concerns with the approach. As I made clear, legal experts—there is nothing wrong with lawyers; the noble Baroness, Lady Kingsmill, is one of them, as am I—and business representatives were present. It was a helpful and constructive review of the draft and it was understood that the regs were designed to maintain continuity. I repeat for the sake of the record that at that meeting, as I understand it, there were representatives from the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry. If I can add to that list and give further details, I will certainly include that in any letter I write to noble Lords.

On letters, I believe—I am open to correction—that in advance of these regulations I wrote to the noble Lord, Lord Stevenson, and to the noble Lord, Lord Fox, from the Liberal Democrat Benches. I do not know whether I should have taken that wider and written to others. I will consider that with each order I deal with, as appropriate. I also make clear, on the lack of consultation, that we were not preoccupied with the deal. The IPO had sufficient resources to take both deal and no deal in parallel. It was necessary across Government to treat no-deal preparations sensitively when we were in the middle of negotiating a proper deal. From the perspective of business, retaining the regulations means that both the process for applying for an SPC and the scope of the right for which it is granted would be the same after exit as before.

I turn to the post-exit concerns of the noble Lord, Lord Warner. I appreciate that after exit day there may be new drivers for policy change. I think it was the noble Lord who talked about the possible time it may take to get a UK authorisation compared to now and the potential effects. I hear the noble Lord’s concerns, but we should understand the issues when the time comes then properly consider the right policy solution at that point. As I have already said, I would expect that to involve the more usual open and constructive discussions with stakeholders and interests in this area that the IPA usually enjoys. I can assure the noble Lord and others that our intention would be to fully engage with the BIA, the IP Federation and other similar bodies.