Exiting the European Union (Consumer Protection)

Kevin Foster Excerpts

Tuesday 2nd April 2019 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I thank the Minister for her opening remarks. She set out exactly what the existing regulations do and, to be entirely honest, what she is proposing in the case of no deal makes perfect sense. The regulations before us revoke the existing regulations that prevent undue discrimination across the European Union by the blocking of consumers in one country from accessing websites in another member state or by redirection to the member state of the consumer.

A number of questions arise from the Minister’s remarks and from at least one of the interventions she took. She spoke about the fact that these regulations are relevant only in the event of no deal. When she responds to the debate, will the Minister confirm that, if a deal is agreed, the Government have no intention of revoking these or similar regulations? She is engaged in a conversation at the moment, so I hope she heard that question.

My hon. Friend the Member for Coventry South (Mr Cunningham), who is no longer in his place, asked the Minister a very good question about how UK consumers will be protected in the event of no deal. His question highlighted just how important it is that we do everything in our power, particularly in these next 10 days, to avoid the disaster of crashing out with no deal. That is the best way in which to avoid having to revoke the regulation.

[Kevin Foster (Torbay) (Con)]

The shadow Minister has said that we need to do everything in our power to avoid the UK crashing out. Does he agree that voting for the withdrawal agreement would be the best way of doing that?

[Bill Esterson]

I think the hon. Gentleman is wandering a little from the issue under discussion.

--- Later in debate ---

[Kevin Foster (Torbay) (Con)]

It is a great pleasure to follow the hon. Member for Sefton Central (Bill Esterson). I want to reflect his comments about the necessity of this statutory instrument, based on whether we have a no-deal outcome. This is effectively a no-deal prep piece of legislation. He is right that we want to avoid no deal. That is the preferred outcome of virtually no one in this House. Some hon. Members might be prepared to accept it if necessary. We cannot go into a negotiation saying, “I’m going to stay here until you finally force me to accept something.” That will never be a successful strategy.

There is an easy way for no deal to come off the table: to agree a withdrawal agreement. One of the ironies of last night’s debate is that there are only two outcomes that we could have without the withdrawal agreement, and the European Union has made its views clear. The first is no deal, and the second is no Brexit—the revocation of article 50. To be fair to Scottish National party Members, with whom I often exchange opinions across the Chamber, their view is that they will not vote for the withdrawal agreement because they would prefer to go for one of the options that does not require a withdrawal agreement—in other words, the revocation of article 50. It is therefore slightly strange to get a lecture from people saying that the deal will never go through but who last night voted predominantly for two options that are based on the withdrawal agreement going through as the divorce from the EU. They are arguing about what the future relationship should be, but the withdrawal agreement is the gateway to the future relationship.

[Julian Knight (Solihull) (Con)]

My hon. Friend is absolutely correct. There is bemusement in Brussels about why we are dealing with something that is downstream—the political declaration—rather than the withdrawal agreement itself. As he said, it is either no Brexit or the withdrawal agreement. Take your pick.

[Kevin Foster]

Absolutely. Members who do not want no deal and keep coming to the Chamber and telling us, “No to no deal”—a great soundbite, but not a solution—need the withdrawal agreement to go through, unless they are prepared to stand up and say, “I would revoke article 50.” That is not the position that I will take, because I do not think it is right—the referendum settled that matter—and I am sure it is not my hon. Friend’s position. We therefore need to look at how we get the withdrawal agreement through.

I very much welcome the constructive approach to looking for compromise taken by the hon. Members for Stoke-on-Trent Central (Gareth Snell) and for Wigan (Lisa Nandy). Sadly, their amendment was not selected, but hopefully it will be incorporated into the Government Bill. I note the Prime Minister’s comments on that. That would ensure parliamentary scrutiny, and it would ensure that Parliament is not unhappy with what comes out in the future relationship. [Interruption.] I see that you want me to relate my comments to this statutory instrument, Madam Deputy Speaker. Putting the withdrawal agreement in place would mean that we would not have to enact this type of statutory instrument. This is a no-deal—in other words, a no-divorce-deal—statutory instrument, not just a no-future-relationship statutory instrument.

[Julian Knight]

Will my hon. Friend give way?

[Kevin Foster]

I will give way briefly, but I am conscious of time.

[Julian Knight]

My hon. Friend is being very generous in giving way. He is always conscious of the clock.

Does my hon. Friend agree that paragraph 2.4 of the explanatory memorandum emphasises how disadvantaged we could be by a no-deal Brexit in terms of consumer rights? It says:

“if we did not revoke the Geo-Blocking Regulation, UK traders would continue to have obligations to EU customers under the Regulation while UK customers are unlikely to receive any of its benefits.”

That seems like an absolutely ridiculous position to be in.

[Kevin Foster]

I have always been clear that 63% of my constituents voted for us to leave in the referendum, and ultimately we have to have no deal as a fall-back if all else fails. If Opposition Members are desperate to avoid that situation—if that is their absolute priority—they had an opportunity to do that on Friday, and I hope they will get another one in the near future. That is not ideal; having a transition period during which businesses can adapt is the right way forward.

If we do not pass something like this statutory instrument, we will end up in the rather unenviable position in which UK businesses will be required to follow a piece of legislation, yet businesses in the other 27 member states of the EU are not. In effect, they could have rules blocking access to their websites and portals based on the fact that we would no longer be part of the EU. Meanwhile, our law would say that—

[Julian Knight]

rose—

[Kevin Foster]

If my hon. Friend just gives me a moment, I will finish responding to his previous intervention before I take another one. We would still have to keep that access, and that is why we need to look at revocation of these measures. I will briefly take my hon. Friend’s intervention, but I am conscious that I need to move on to the main body of my argument in a minute.

[Julian Knight]

I thank my hon. Friend again for giving way. Does this not also emphasise the fact that there are also downstream consequences? I am not talking just about the one that I emphasised from paragraph 2.4 of the explanatory memorandum. Paragraph 2.3 also states:

“UK civil and commercial judgments would no longer be automatically enforced in EU member”

states. Does my hon. Friend agree that would have downstream consequences for the premier position of UK legal services as well?

[Kevin Foster]

I am conscious that I could probably expand this debate widely into legal services and the impact potentially from the recognition of judgments between different jurisdictions. A lot of people forget that the EU is not a sovereign state—I do not want it to be and nor does my hon. Friend. It is a creature of treaty, and its actions and rules are therefore effective only through the structures of member states—that is, recognition of court judgments that enforce EU law between different jurisdictions. He is right that if we go out under a no-deal scenario, from Brexit day plus one, that level of co-operation and recognition is unlikely. That is why this SI is needed. Bizarrely, the enforcement of these EU regulations could be pursued in courts across the EU, or even in our own courts, and meanwhile, a judgment looking to enforce to the benefit of a British company would not be recognised at all. It would basically be a bit of paper someone would get.

We keep coming back to the fact that if people do not want this type of outcome, they have two choices. There is the Scottish National party’s choice, which is to revoke article 50—[Interruption.] We can hear the cheers coming from SNP Members. Or we can put through the withdrawal agreement. That is where we are. We can talk about whether we should be in a particular type of customs arrangement, what we would like on security and defence, and whatever. At the end of the day, the withdrawal agreement is the gateway to every relationship with the EU, other than revocation or no deal.

[David Linden (Glasgow East) (SNP)]

rose—

[Kevin Foster]

I will happily give way to my friend, the hon. Gentleman.

[David Linden]

I am grateful to the hon. Gentleman for giving way. Are we not facing a Hobson’s choice? The hon. Gentleman says that we need to support the deal that is before us, but one of the things that I am struck by sitting in this debate is that we were meant to leave the European Union on Friday, yet we are dealing with a statutory instrument on the subsequent Tuesday. Is not the issue that the Government have forced us into this position because the Prime Minister, through her intransigence, set her red lines—like these red lines on the floor that have kept us on this side in this House—and said, “We do not want to listen”? That is why three or four days after we were meant to leave the EU, we now find ourselves being rammed into this position by Her Majesty’s Government.

[Kevin Foster]

Let us be candid: we are here because there are those in this House who do not want Brexit to go ahead, who voted against the withdrawal agreement—to be fair, that is a principled position from the SNP. This is combined with those who see it as a chance to score some political points, and there are some Government Members who think—perhaps wrongly—that there might be a different type of Brexit if they resist the withdrawal agreement. I am afraid that they might find themselves with an outcome that is more pleasing to the hon. Gentleman than it is to them, if their position continues.

Let us be clear: the Scottish National party and the Government in Scotland suggested after the referendum that basically, as long as we only left the fisheries policy, they would be happy with Brexit. In terms of staying in the single market and the customs union, it would be debatable whether we would even come out of the common fisheries policy—

[David Linden]

rose—

[Kevin Foster]

I will give way again in a moment. I am sure that the hon. Gentleman wants to offer a point of clarification.

That outcome would not really be about delivering any real benefits from the referendum. To be fair, I note that the SNP’s position is firmly that it wants to stay in the EU. That is a respectable point. I accept that we do not need the withdrawal agreement for that, but the nonsense comes when people say, “I want one of the outcomes where I have to have the withdrawal agreement, but I am now going to vote against the withdrawal agreement.”

[David Linden]

I am very grateful to the hon. Gentleman for giving way; he is one of my genuine friends in this place. He is right that in 2016, the Scottish Government said, “We campaigned for remain. We did not want to leave the European Union,” but we realised very early on that because of the democratic deficit that exists in this House, we had to compromise. That is why “Scotland’s Place in Europe” looked at membership of the single market and the customs union. We compromised in 2016 when it was very, very unpopular to do so. There has been a process of evolution: we have gone from that compromise to what I accept is a very hard-nosed reality, where the only thing that we can do to protect our economy is to revoke article 50. Does he not agree, however, that it might just have helped things in 2016 if that spirit of compromise had evolved a bit sooner in this place and that we might not have found ourselves, three or four days after the scheduled exit, debating a statutory instrument that could have profound consequences, depending on what happens over the next few days?

[Kevin Foster]

I thank the hon. Gentleman for his comments. We can all look back over the past three years and suggest that there were things that we might have done differently or changed.

“If? What? Could?” is great fun to play—hindsight has 20/20 vision—but the other 27 member states have their own red lines. The idea that if I or the hon. Gentleman had walked in as the UK Prime Minister, everyone would have said, “Ah, it’s you! What can we do for you? Let’s offer you a great deal” is for the birds. The other member states would still have had their own red lines.

As I said, the only things for which a negotiated deal is not necessary are a complete no deal and revoking and remaining—the latter for obvious reasons—but if we want a negotiated deal, we need the prism of a withdrawal agreement. There is a strong argument for saying that even if we did go down the no-deal route, we would find at some stage that if we wanted a free trade agreement, the first three items on the EU’s agenda would be: clarifying citizens’ rights, which is not particularly controversial across the House; a financial settlement—that might be where a debate comes in; and arrangements to keep the land border in Northern Ireland open. Whether under a withdrawal agreement now or a free trade agreement in the future, those three issues will almost certainly be the basis of any agreement, no matter which of the panoply of Brexit ideas we have been treated to over the last year or two the House, and ultimately the country, decides upon. Once the divorce process is complete, the second phase of negotiations and decision making in the House remain.

Great though it would be to settle Brexit this afternoon, it is time that I return to the substance of the SI: the geo-blocking regulation. [Interruption.] I hear shouts of joy from the shadow Front Bench. Geo-blocking sounds like something to do with a map—a rambler might find their geo-signal being blocked—but it is actually one part of making sure we have a single market online as we do for physical goods. Those of us who grew up in the late 1980s—I am not sure if my hon. Friend the Member for Solihull (Julian Knight) is old enough, and I am certain the Minister is not—will remember the debate about how much a particular CD or tape cost in the UK, the United States, Canada, Germany and other countries. Nine times out of 10 a CD produced in the same factory, with the same copyright and by the same company would be more expensive in certain countries—that excludes differing VAT rates, of course, because that could change the price in the shop; I am talking about the base cost excluding taxes.

The regulation tried to prevent different prices in different markets arising from differing charging and supply. Those of us who studied European law will know that the Commission tried to eliminate this grey market idea of trying to restrict or increase prices in particular markets across the EU single market—a single market that we will remain a part of during the implementation period, if the withdrawal agreement goes through. The regulation was about making sure the consumers had the full opportunities. Such regulations make a difference. It is eminently sensible that we revoke the regulation—I agree with the Minister’s reasoning, and, as I have said, it would be bizarre if British businesses were under an obligation that EU businesses were not but which EU businesses could enforce against us under our law—but having in place some other appropriate measure would make a difference.

I hope therefore that we could consider that in future trade agreements—and not just with the EU. I have just given the example of the US. With increasing online commerce and trading, we should look to open up to other jurisdictions that use the English language and have similar commercial standards, consumer protections and quality standards. Under future trade agreements, we should look to ensure that businesses large and small that are buying stuff in across our borders can benefit from free trade arrangements.

[Simon Hoare (North Dorset) (Con)]

rose—

[Kevin Foster]

I will give way in a moment.

We want to be able to benefit from a single market online, given that it does not matter if someone buys from Tewkesbury or Texas—or North Dorset, for that matter—if they are sitting at their computer, and as long as the delivery charges are there. It is about that principle of giving consumers access to be best prices possible.

[Simon Hoare]

My hon. Friend mentioned the English language. Does he share my concern that we often forget that it is a key part of our armoury? It is the international language. It is the language of the internet and the language of the skies, and it is now the lingua franca of the world. We should never forget that it is one of our great tools of soft power.

[Kevin Foster]

I hope that my hon. Friend will forgive me for turning my back on him while responding to his intervention. I need to address the House, rather than face him directly.

The English language is indeed one of our great tools. When we look at any regulations relating to online businesses, we should bear in mind that the base code of computers is effectively English, because of the history of computer developments between us and the United States. The first computer, as such, was of course developed here, following the amazing theoretical work done by Alan Turing, who, sadly, was treated abysmally by this nation after the second world war in connection with matters that were never a crime. He came up with the revolutionary 01, and set the philosophical basis that would result in the very trading systems that these regulations seek to address.

This is one of our key goals. It is important that we have an effective and competent system of law relating to online transactions, because if we do not we will lose one of our biggest opportunities. My hon. Friend touched on that. Many people go online and happily access information, services and opportunities. They are able to compare prices in a way that would not have been possible before the internet era, because English is pretty much common currency on many internet platforms—although, given that the regulations relate to online shopping opportunities, it is worth noting that people can now interact with the vast majority of online retailers in the language of their choice. There are also the well-known providers’ translation services that we can now use. I used to have a bit of fun when a former Wales Minister texted to ask if I was here: I would reply in Welsh, courtesy of Google Translate.

I will move on, because I know that other Members wish to speak, and that the debate is time-limited. Some other issues on which the Minister may wish to reflect when she sums up relate to Ireland. We have had a great many discussions about the backstop and how we can keep the Northern Ireland land border open, but in these unique circumstances, someone purchasing online in, for example, County Fermanagh can be only a couple of miles away from the online business—or the business behind the online entity—which is based in, for example, County Donegal. There would of course be a different boundary, particularly in the no-deal scenario for which this measure is intended, and I should like to know how we can ensure that some sort of interaction remains. I think it is safe to say that it would be rather controversial if we did not give clear access to Irish websites.

That, in fact, makes eminent sense. There are businesses, cultural links, and supply chains and delivery networks that work across the border. One road crosses the border 15 times in two miles. If something that I had ordered online was being delivered using that road, the farmhouse involved might be in the United Kingdom and the hay barn in the Irish Republic. We need regulations that could deal with the unique situation near the Irish land border.

The Minister rightly referred to the consent of the Scottish Parliament and the Welsh Assembly, but Northern Ireland is beset by the fact its Assembly is not up and running and doing what those elected by the people of Northern Ireland should be doing. Although it is right that we are moving to ensure that Northern Ireland’s statute book is in order for a no-deal Brexit, it would be interesting to know what thought has been given to this aspect, given that the Northern Ireland Assembly is not working and that, sadly, it is unlikely to be up and running in the next couple of months, when we may see a no-deal exit. What thought is being given at Westminster to ensuring that there is appropriate legislation to cover online shopping and, bluntly, to ensure that legislation requires fairness between websites and fairness in online shopping between the Irish Republic and Northern Ireland?

[Julian Knight]

It is really interesting to focus on Northern Ireland in this. Does my hon. Friend agree that it would be perverse if there were such barriers in the way, given that many of the major internet retailers are domiciled in the Republic of Ireland for tax reasons?

[Kevin Foster]

I thank my hon. Friend for his, as always, thoughtful intervention. I suspect many of us would not particularly want to rush to help them, shall we say, pay a lower rate of tax in the Irish Republic. During my time on the Public Accounts Committee, I had the joy of discovering that a “double Irish” was nothing to do with a whiskey order and a “Dutch sandwich” was not something I would eat with it—in terms of tax avoidance work.

For me, this is a question of how we can sensibly reflect in legislation the unique position on the island of Ireland. The current geo-blocking regulation provides protection, and there is reciprocity between the two jurisdictions, to ensure that each side’s shopping outlets and businesses may trade without discrimination. The purpose of the new regulations is to prevent the establishment of an operation that charges a different price—as in my CD example—or that blocks a customer living in a particular country from buying, or applies different terms and conditions to their transaction. It is worth noting, however, that there are some exemptions around items that are not permitted for sale. For example, in Germany and Austria there are strict denazification laws to prevent the sale of certain historical items. In addition, an item such as a toy train set from the era, if sold to the German or Austrian market, must not carry certain symbols from the disastrous Nazi regime that devastated those countries in the 1940s, along with most of western Europe. So there are some tweaks that rightly reflect the law in those nations, but in general the purpose of the regulations is to prevent unfairness.

I return to the point I was making earlier. For me, the regulations are about ensuring that the system in Ireland allows trade across the whole island of Ireland, where we would want to see that type of system in place, not just for sensible economic reasons but in view of the ongoing peace process—ensuring that the single market online across the whole of Ireland may continue. It would be bizarre if we agreed a workable set of alternative arrangements that released the backstop in years to come, but put a barrier around the sale of goods online.

In services, we may well look to move on—change our position to exploit our huge advantage, particularly in financial services, across the world, with trade deals. I am particularly excited at the prospect of a trade deal with the parties to the requests for a comprehensive agreement, the Trans-Pacific Partnership; there is very strong demand there. Given that we are revoking the current arrangement with the European Union on the basis of a potential no deal, I hope the Minister is considering how, if we do not have no deal, we could look at the type of regulation that might be of benefit and might allow insurance products and so on to be continued.

I am conscious that I have been speaking for a little while. I reassure hon. Members that I do not intend to break one of my records for length of contribution. I recognise that the Scottish National party spokesperson, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), wants to speak; I have no intention of talking him out.

There are a few reasons why we need to look at approving the regulations today. I am very much a fan of free trade. It brings prosperity. It brings down barriers, interlocking economies. Let us be candid—the reason that the European Coal and Steel Community was established was to interlink economies, and the geo-blocking regulations are part of doing online just what we did with coal and steel back in the 1950s. The idea then was that if the German steelworks were dependent on French coal, there would obviously be an issue if a conflict broke out. The theory was that creating a single market and having these types of regulations would ensure that that continued online and that consumers would benefit. They could buy from the best source in the cheapest and most efficient way, or perhaps in the way that provided the best quality, rather than finding themselves blocked out because of price differentials in the markets. In many ways, that might be a slightly unfair practice. I have used the example of CDs. Why should a CD cost more than others produced in the same factory—taking out distribution costs that are very similar—just because it happens to be sold in a different place? It often becomes clear that this is being done to milk consumers where choices are more limited.

This statutory instrument is necessary, but it is sad that it is necessary. Those who keep saying that they do not want no deal also seem not to want many of the deals that are on offer, or seem to want to propose a deal that is reliant on something that they keep voting against. That is not a logical position, but this statutory instrument represents a logical position. It would be absolute nonsense to impose a burden on British companies that is not shared by the other countries in the European Union. It would be bizarre, for example, if I had to comply with legislation ensuring that my website and online shopping offer were open across 27 countries when businesses in those countries were no longer obliged to do that.

It is right that we should pass this measure today and ensure that it becomes law, so that we have an orderly statute book, but there is a better option. Rather than saying, “I don’t like no-deal SIs because I don’t like no deal”, people should come up with a clear alternative that does not require the withdrawal agreement—[Interruption.] I hear the usual cheer from the Scottish National party Benches. SNP Members would like to revoke article 50 because they see that as the way round this, and they are correct in the sense that we would not need the withdrawal agreement. Members can be consistent in voting against the withdrawal agreement while saying that they do not want no deal if the outcome would be no Brexit, but they cannot keep turning up in the Chamber each day for a groundhog day debate and saying that the Prime Minister should do everything in her power to avoid no deal if they will not do the one thing in their power to prevent no deal, which is to walk through the Aye Lobby the next time the withdrawal agreement is put to the vote.

I will support this statutory instrument because in the end I would be prepared to accept no deal rather than no Brexit. However, I hope that in the very near future we will get an agreement through the House that provides the basis for a future relationship that makes sense and can be taken forward.