European Union (Withdrawal) Bill

Debate between Iain Duncan Smith and Wera Hobhouse

Committee: 1st sitting: House of Commons
Tuesday 14th November 2017 Commons Chamber

[Mr Duncan Smith]

I have not tabled any amendments, but I will briefly comment on one set of amendments before making a point about the drafting of clause 6. For me and many of my colleagues, that is the most important clause because the clear definition of being in or out of the European Union ultimately comes down to the Court of Justice’s ability to change the United Kingdom’s laws by direct reference as a result of a clash with European law.

Twenty-five years ago, I stood in almost the same place, during the House’s consideration of the Maastricht treaty, to make the point that the Court of Justice is more political than courts in the UK, even by its appointments and by the nature of its judgments. Judicial activism is a process that came directly from the Court of Justice, and it eventually percolated, to a much lesser extent, into the UK courts.

It is through those judgments that the Court of Justice has widened the concept of where the Commission is able to rule. A good example is that, through Court reference, whole areas of social security that were never in the original treaties were widened dramatically. Rulings have been made on the application of social security payments to individuals from countries that were never referenced in the original treaties, which is a good point about the Court’s power.

This is so critical because, after the referendum, the Centre for Social Justice, the Legatum Institute and others came together to do a lot of polling asking the public why they supported the vote to leave the European Union. The single most powerful reason—more than money and more than migration—was to take back control of our laws. I was slightly surprised because I thought it was an esoteric point for most members of the public, but they said it was their most powerful reason for voting. Some people said that, even if it meant they would be worse off for a period, it was still the overriding principle behind their vote to take back control and leave the European Union.

With that as the key, the Government are right to drive this policy. It is absolutely right for them to make it clear that, on the day we leave, the European Court of Justice will cease to have direct effect in the United Kingdom. I will return to the drafting on how long some of the other principles will continue.

The hon. Member for Nottingham East (Mr Leslie) is not here at the moment but, in line with the earlier statement by the Minister, my hon. Friend the Member for Esher and Walton (Dominic Raab), it would be wrong to support new clause 14 and amendment 278. There is a simple principle behind the Bill, and the Government have now accepted that there will be primary legislation on the agreement, or lack of agreement, as we leave the European Union with regard to our trade and other arrangements. The new clause and the amendment are wrong because they would seek to bind the hand of the Government as they sought to negotiate, and that is not the purpose of this.

Let me give an example. Not so long ago, the Secretary of State for Exiting the European Union said clearly that his view was that during the implementation period—at the beginning, we hope—we would want to have those elements of the eventual agreement in place. One of those would be a process of arbitration between the UK and the EU. If that was agreed and was part of the process, and then became part of the implementation period, the new clause and the amendment would prevent our being able to make that arrangement—they would be bound into law and we would not be allowed to go into the implementation period with these arrangements. That would immediately knock out any opportunity we have to accelerate the process of where we would eventually be by getting into the implementation period and applying an arbitration process agreed between the EU and the UK for those areas of disagreement on areas of law and other interpretations. That is why these proposals are wrong and would damage the prospects of the negotiations that are likely to take place.

[Wera Hobhouse]

I asked a couple of days ago about this idea of an arbitration court. Now that the right hon. Gentleman is here, will he clarify how it would be different for ordinary people in the street in comparison with what the ECJ is currently doing?

[Mr Duncan Smith]

The whole process of arbitration is a natural one in all trade arrangements between two different groups: they agree to an arbitration process when there are clashes of interpretation about what they have agreed. That is standard practice; it has been in pretty much every free trade arrangement.

If we seek a free trade arrangement, the way to have that governed is through such an arbitration process, where differences—when things cannot be agreed between the two—are taken for a final process of examination and some kind of judgment about the matter. That would not be done by the Court of Justice sitting in the European Union, or by a UK court; it would be outwith both of those, but in the agreement.

The point I am making is that if such an arrangement was agreed in a free trade arrangement, we would want to start it as soon as possible, because if there is an implementation period, we would want to start implementing what we have agreed as soon as possible. The hon. Lady needs to look up most of the other trade arrangements to see what I am saying. We want to give the greatest flexibility to the Government. It is crucial that as we leave, we leave the Court of Justice in that sense.

I want now to deal with some of the arrangements in clause 6. I say to Ministers that there is a certain amount of confusion over where the courts are meant to reference the ECJ, including in respect of its previous judgments. As has been mentioned by some of my colleagues, including my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve), there remains a confusion as to where the courts will reference judgments from the ECJ, both past and existing. I come back to the point of clause 6(2), where they are told not to have regard to anything. However, the Bill later goes on to modify that quite a lot. I am particularly concerned—this has been raised elsewhere—by the definition that

“’retained EU case law’ means any principles laid down by, and any decisions of, the European Court, as they have effect in EU law immediately before exit day and so far as they”.

The Bill goes on to reference exactly how that will work.

My point is that those principles will themselves be modified by the European Court of Justice as it goes forward. My question really is: as they are modified, at what point will UK courts consider those principles to be no longer relevant to their judgments as they refer to them? I do not expect an answer right now, but I hope to get one as we go forward. Lord Neuberger has made the point that it is unclear to the courts how strong their reference should be—whether they should reference the principles or not. The point about the principles is the more powerful point, because I have no idea when the cut-off comes or whether it ever comes—whether we will ever break free, as it were, from continuing judgments and changes to the European Court principles.