Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2019

Baroness Smith of Newnham Excerpts

Monday 4th February 2019 Grand Committee

[Baroness Smith of Newnham (LD)]

My Lords, this is the first statutory instrument related to Brexit that I have had the joy, or misfortune, to be involved with. In that sense I am quite glad that it has two purposes, one of which is valid regardless of whether there is a no-deal Brexit. However, one does wonder, given that the relevant legislation was repealed in 2011, why it has taken Her Majesty’s Government quite so long to bring this to our attention in the SI.

On the other aspect of the SI, many of the questions I have noted are very similar to the questions raised by noble Lords on the previous SI. According to the statutory instrument, Regulations 3 and 4 come into effect on exit day. Will the Minister explain what would happen in a transition period? Exit day would still presumably be 29 March, but at that point we would stop using the Official Journal to advertise things. Will we be in a situation where, somehow, the statutory instrument does not come into effect? Is it like the previous SI and will come into effect not on exit day, but only after some transitional period? Otherwise there would seem to be a bit of a gap. The UK would not quite be at a cliff edge, but the situation would be somewhat unclear because we would not have the situation I envisaged would be the case during the transition period.

I will ask various questions that go beyond the nitty-gritty of the regulations. Will the Minister explain what Her Majesty’s Government envisage by the statutory instrument in terms of access to UK markets? There is already a whole set of questions about overspends and the Public Accounts Committee has asked questions about defence procurement. If we are in a new world where EU defence contractors are treated like third-country defence contractors, have the Government modelled the impact this is likely to have on defence procurement? Will it mean that the UK will spend more on defence procurement than was the case when it was a member of the European Union? Similarly, what work have Her Majesty’s Government done on evaluating the impact on our arms export industry of not being part of the single market? If we are treating the EU 27 as third countries, presumably they will not exercise the reciprocity of access to their defence industry and defence exports that we have enjoyed. There are some wider questions on the impact the Government think we will see from Brexit if we are not part of the single market for defence exports.

I have various technical questions. Like other noble Lords, I have spent quite a long time reading the Explanatory Memorandum. I am intrigued to note that the Minister can confirm that it meets the required standard. What counts as the required standard, and what can we expect to see in an EM? Are there things that we might find even more useful for understanding what is going on? The memorandum is certainly rather easier to follow than the SI as it is drafted.