European Union (Withdrawal) Bill

Kerry McCarthy Excerpts

Committee: 2nd sitting: House of Commons
Wednesday 15th November 2017 Commons Chamber

[Robert Neill]

I need to make some progress, so I hope the hon. Lady will forgive me. I have not much more to say.

Let me explain how this procedure will work. The proposed use of the affirmative procedure takes account of the fact that this amendment addresses only EU legislation that is in train, but not wholly in effect. These pieces of legislation have been subject to policy input and scrutiny processes, so they are very limited in number.

Support for this approach comes from two practitioner-based groups in the City: the International Regulatory Strategy Group, which I referred to in debate yesterday, and the Financial Markets Law Committee. The strategy group includes most of the key players in the London financial world. The law committee is an independent body drawn from leading practitioners in City firms and institutions and from members of the judiciary—in fact, it is chaired by Lord Thomas of Cwmgiedd, who recently retired as Lord Chief Justice. Their imprimatur is likely to indicate that this modest proposal has a pretty strong parentage in terms of its expertise and application.

The two bodies identify potential sources of legal uncertainty affecting the wholesale financial markets. Let me give two examples. First, there is the situation regarding the second payment services directive. The directive will apply from next year and will be domesticated, but important regulatory technical standards that will underpin the operation of the directive are not expected to be finalised by the European Banking Authority until after Brexit. At the moment, the Bill will not allow us to adopt those standards into UK law. The amendment would give us a streamlined means to deal with that.

Some of the provisions of the prospectus regulation came into force over the summer, and some important elements are due to take effect in the months after Brexit. Do we have to go through full primary legislation to incorporate that, or do we deal with it through a streamlined procedure? The City institutions and practitioners think it would be much more sensible to have the procedure I propose, so that they have certainty that they will not have delays in the primary legislative process. They can then have the regulation in place, and they are already prepared for it.

That is the nub of the amendment. I am grateful, again, to the Remembrancer’s Office of the City of London for its assistance with the drafting. I am sure the Minister will want to find the means to achieve what is set out in the amendment. I hope that he will be able to respond and find a means of taking this forward.

[Kerry McCarthy (Bristol East) (Lab)]

I rise to speak to my new clause 25, which has cross-party support. The Minister has already praised me from the Dispatch Box for the clarity with which I have spoken to it, but I can reassure him that now this really is me doing so. I also support new clauses 55 and 58. All these new clauses relate to retaining enhanced protections after exit day. As will be evident from other measures I have tabled, including new clause 28, which is in today’s second group, my main concern is retaining the valuable environmental protections that flow from our EU membership. However, of course, employment rights, equalities, and health and safety standards, as set out in new clause 58, which was tabled by Labour Front Benchers, are also vital, and the same arguments apply to them.

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[Sir Oliver Letwin]

May I explain what I have in mind? I am more than willing to give way to the hon. Gentleman again if he does not agree as I go along.

The first point about a better structure is that it does indeed need to have a statutory base, but that need not be in this Bill. In fact, I think it is much better that it should be an environment Bill, because an environment Bill gives the scope and opportunity to determine these things in much more detail and much more carefully, and gives the House, rather than what we have now—two and a half hours, not all of which will be spent on this topic—days and weeks of consideration in both Houses. That is the right way to do long-term environmental legislation.

[Kerry McCarthy]

The Environmental Audit Committee recommended, after its inquiry into the future of the natural environment post Brexit, that the Government bring forward an environmental protection Bill in order to do just what the right hon. Gentleman says, but there is no sign that the Government are prepared to do so. In the absence of such legislation, does he not think that the second-best option would be to protect the environment by supporting new clauses 60, 67 and 28, which are on the table today?

[Sir Oliver Letwin]

Well, we must leave it to Ministers to speak for themselves, but I have to say that the discussions that I and others had with the Secretary of State, who, as people have remarked in this debate, is of a very different cast of mind from some previous Secretaries of State, suggest to me that actually there will be an environmental protection Bill coming forward. I think that is—[Interruption.] Ah! Maestro! With perfect timing my right hon. Friend the Secretary of State comes into the Chamber, at just the right moment for him to signify with a nod, if nothing more, that the possibility of proper environmental legislation in the form of a new statute is on his mind.

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I have worked hard with the Secretary of State and others. I am working with green groups and I feel that this is the best route to follow. I am grateful to the Minister for coming here today to set that out. We have a lot of work to do not only during our consideration of the Bill, but in the coming weeks and months, to make this new body and its remit, and a future national policy statement, absolutely rock solid. That is the way to proceed because it is the best thing for the environment.

[Kerry McCarthy]

It is a pleasure to follow the right hon. Member for Newbury (Richard Benyon), who is very committed to protecting the environment and did an excellent job as a Minister. On a future day, we might consider a new clause tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) that specifically deals with the governance gap. I hope that when we debate it we hear more from the Government about exactly how this agency will work, because at the moment it is only a vague proposition. It looks to be heading in the right direction, but I have a lot of questions about how it will work.

I shall speak to amendments 93, 94 and 95, and new clause 28, which stand in my name. The new clause covers similar ground to new clauses 60 and 67, on environmental principles, but I want first to speak to the amendments.

I am grateful to the Minister for thoroughly demolishing my arguments in advance of my having the chance to make them. It is not my intention to press the amendments to the vote, and I will reflect on what he said and consult with the lawyers I have been working with on the amendments, but I will outline my understanding of what the Bill means and what the amendments would improve.

The White Paper assured us that the Bill means that the whole body of existing EU environmental law will continue to have effect in UK law, and the Prime Minister promised us that the same rules and laws will apply on the day after exit as on the day before, but that is simply not the case, because the Bill does not properly capture and convert all EU environmental law into stand-alone domestic law.

There are legal obligations that will not be retained because they can be found only in EU directives and not in the domestic legislation that transposed those directives. Sometimes, that is because the directives have been incorrectly or incompletely transposed. There is also an issue in that the preambles to directives, which can be important in setting out their purpose and linking them with overarching legal principles and international obligations, will not have been transposed into UK law either, so they will not come over with the conversion.

Clause 4 may appear to deal with transposition but, as has been said, because of the inexplicable and unnecessary restrictions in subsection (1)(a) and (b), important aspects of environmental law would be lost. I was reassured to hear that the right hon. and learned Member for Beaconsfield was struggling to get his head round some of the language in clause 4. He is a far more distinguished lawyer than I ever was, and I hope that between us all we can perhaps bring some clarity to it by the end of this process. I am sure that if we do not succeed in doing so here, those in the other place will have something to say.

The aspects of environmental law that could be lost include reporting and reviewing obligations that are crucial in ensuring that the law is complied with and up to date. Without reported data, for example, ClientEarth would not have been able to hold the Government to account on air pollution. We would also lose obligations on the Government to meet various energy performance targets.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Does my hon. Friend not agree that the action that ClientEarth brought on expansion of Heathrow could not have been pursued, had the law been as the Government propose to amend it?

[Kerry McCarthy]

There are various different aspects to what right we will have to pursue court cases and judicial review once this law comes into effect. We discussed some of those when we talked about the role of the European Court of Justice, the governance gap and the fact that if breaches of the law are not enforced, monitored and measured, it can be very difficult to bring court cases as well.

There is real concern about how the Government are restricting legal aid for environmental judicial review cases. Community groups really rely on this law—it is not just for groups such as ClientEarth, which is well supported and has been able to take the Government to court on air pollution three times and has instigated other proceedings. There is also a real issue about what this means for local people who want to challenge the Government—we may cover that in a different debate.

[Mary Creagh]

We heard in the Environmental Audit Committee session with the Ministry of Justice officials that the number of cases brought since the cap on costs was removed has fallen from 16 to 11 cases a month. The change is happening before we have even left the EU.

[Kerry McCarthy]

My hon. Friend is quite right. It is about the removal of the cap on costs as well, and the fact that local people bringing these cases might find themselves liable to a huge financial burden if they are not successful.

Amendment 93 removes clause 4(1)(b), which restricts rights in clause 4 to those which are

“enforced, allowed and followed accordingly”.

Amendment 94 removes clause 4(2)(b), which excludes rights arising under EU directives that have not been adjudicated by the courts before exit day. There is no explanation as to why only rights that have been litigated on or enforced are carried over. The Minister may dispute this, but my interpretation is that the result will be that contentious aspects of law will be retained, but those that have never been litigated, perhaps because they are really obvious and incontrovertible and no one has seen the need to challenge them—the ones that everyone accepts—will be the ones at risk, which seems a little bizarre.

[Sir Oliver Letwin]

I have a great deal of sympathy with the hon. Lady’s amendment 93. I hope she would agree that it would be helpful if the Minister responded to her amendment and the points that my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) made by explaining what would be lost if paragraph (b), which is as clear as mud to many of us, were left out and paragraph (a), which is blissfully clear, were in place.

[Kerry McCarthy]

I can only invite the Minister to intervene on me at some point before I finish this speech and give a bit more clarity. I am glad that another superior intellect is as baffled as I was by that provision.

Amendment 95 adds wording that attempts to deal with the poor transposition of EU law, so that if retained law is found to have been incorrectly or incompletely transposed, there would be a statutory obligation on Ministers to make the necessary modifications to correct that. It says that until that piece of EU law is fully and correctly transposed, the EU directive itself can still be relied on. There are some clear examples of where we have not correctly transposed EU directives. For example, the Royal Society for the Protection of Birds points to article 10 of the birds directive in relation to the marine environment, which requires Governments to carry out research and other works to inform our efforts to protect wild birds. That goes back to what I was saying earlier—that it is not possible to enforce environmental protections properly without monitoring to ascertain the scale of the problem. The requirement to carry out research has not been transposed into domestic legislation, which means that, for instance, a new seabird census is long overdue. The Royal Society for the Protection of Birds was able to take that as a complaint to the European Commission, but there will clearly be a different scenario after Brexit.

New clause 28 concerns the enshrining of domestic principles in domestic law, which was referred to by my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) and with which I am sure my hon. Friend the Member for Wakefield (Mary Creagh) will deal shortly.

When the Government say that the Bill will ensure that the whole body of existing environmental law continues to have effect, that should mean not just specific substantive obligations but the broad and comprehensive framework in which those obligations are embedded, including the principles that underpin and aid the interpretation of environmental laws—such as the “polluter pays” principle, which states that those responsible for damaging our environment must pay, and the precautionary principle, which states that if there is a suspected risk that a policy could cause severe harm to public health or the environment, we should not proceed with it. Those principles are currently part of the body of EU environmental law in the treaty on the functioning of the European Union, and are also contained in a wide range of legal agreements to which the UK is party. They guide decision making, and provide a basis for legal challenge in court. Richard Benwell of the Wildfowl & Wetlands Trust has said:

“Take out principles like precaution and polluter pays and you rip the heart out of environmental law.”

NC28 would ensure that public authorities carrying out their duties must have regard to environmental principles that are currently enshrined in EU law. Schedule 1 states—the Minister touched on this—that

“There is no right of action in domestic law”

post-exit

“based on a failure to comply with”

EU “general principles”, other than those that have been litigated on by the European Court. That creates a problem. I should be grateful if the Minister could clarify another issue that was mentioned earlier by the hon. Member for North Down (Lady Hermon). “General principles” seem to specifically exclude environmental principles.

When the Environment Secretary gave evidence to the Environmental Audit Committee last week, he said that the principles could best be enshrined in UK law through guidance. Although we know that, in some cases, the precautionary principle has been enforced in the UK courts in relation to planning issues, that does not mean that it would apply more broadly than it does now. What we currently have is not simply guidance. For the principles to have equivalence on exit day, they must be placed in domestic legislation. Laws are binding, but guidance is only guidance. Public authorities must take it into account, but they need not follow it if it conflicts with other priorities.

[Suella Fernandes (Fareham) (Con)]

Will the hon. Lady give way?

[Kerry McCarthy]

I am about to finish my speech.

Guidance is much easier to change at the whim of the Government or, indeed, the Secretary of State. The courts are much less likely to uphold guidance. There is much more deference from the courts to the authority or organisation whose decision is brought under review. It is difficult to see how guidance would enhance observance of the principles above EU standard. We do not see our domestic courts doing that at present. The Environment Secretary talks of an ambition to raise standards rather than sticking to those that we currently have, and I should be grateful for clarity in that regard.

The purpose of new clause 28 is to transfer vital principles into domestic law, from the need to promote sustainable development in the UK and overseas to the “polluter pays” principle and the precautionary principle. I believe that only by enshrining those principles in UK law can we give the public confidence that they will be upheld.