Trade Bill

Lord Bates Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Wednesday 30th January 2019 Lords Chamber

[Lord Marks of Henley-on-Thames (LD)]

My Lords, Amendment 37 in my name and that of the noble Lord, Lord McNicol of West Kilbride, would make it the objective of an appropriate authority to secure a bilateral system of civil judicial co-operation between the UK and the European Union, to include arrangements for the choice of jurisdiction, the choice of law and the bilateral enforcement and recognition of judgments.

The amendment is relevant to the Bill in at least three ways: first, to new free trade agreements with third countries that currently enjoy FTAs with the EU, and therefore with us through the EU; secondly, to bilateral FTAs with third countries that might enter such agreements with us in the expectation of further trade through the UK with the EU member states; and, thirdly, in the event of no deal, when, as the noble Lord, Lord Hannay, pointed out earlier, the Bill—which will then be an Act—after exit day will be the only legislation bearing upon the arrangement of future FTAs.

In moving the amendment, we have every reason to believe that we are pushing at an open door. In debate after debate since the 2016 referendum, mine has been just one of many voices arguing that if we leave the EU we must maintain the whole gamut of the arrangements for cross-border judicial co-operation that we presently enjoy as a member of the EU. Every time, the Government have responded that they recognise and will maintain the benefits of these arrangements for the United Kingdom. Only yesterday we considered SIs laid by the Government on this topic. The noble and learned Lord, Lord Keen, was very clear that the SIs were laid only against the undesirable possibility of a no-deal Brexit, and accepted that should that occur we would be losing a significant benefit; I refer to columns GC 231 and GC 233 in yesterday’s Hansard. We would be forced to fall back on less effective, more costly, extremely inconvenient and altogether inferior alternative arrangements.

Whatever outcome emerges from the current impasse, we should do all we can to replicate all the arrangements for civil and commercial cases that we currently enjoy. These stem largely from the Brussels regime and its provision for the determination of jurisdiction and for the mutual recognition and enforcement of judgments. The Brussels regime principally comprises the Brussels Ia EU regulation and is supplemented by the 2007 Lugano Convention, which provides similar arrangements for Norway, Switzerland, Iceland and Denmark. Choice of law in contract cases, which make up the vast bulk of commercial litigation, is governed largely by the Rome I regulation, and Rome I applies throughout the EU except in Denmark, which has an opt-out for judicial co-operation.

If we failed to replicate the arrangements of the Brussels regime, what we would lose is well summed up in two bullet points in the Explanatory Memorandum to yesterday’s SI on civil jurisdiction and judgments. The first refers to,

“a system of uniform jurisdictional rules to identify the appropriate court in which to bring a civil or commercial claim”.

The second refers to,

“a simplified mechanism to recognise and enforce the judgments of EU Member State/EFTA state courts in civil and commercial cases, with a view to reducing costs for litigants and increasing efficiency. The possibility for such simplified and almost automatic treatment of the judgment of one such state in another is based on the ‘mutual trust’ that each state will have applied the uniform rules of jurisdiction”.

These arrangements have been built up over decades and British lawyers, jurists and judges have played a major part in their development. The European Judicial Network in civil and commercial matters, established in 2001 by the European Council, is an important forum for cross-border co-operation between courts across the EU. It seems to me that there is no significant reason why we should not be able to negotiate some continued access to the European Judicial Network after we leave the EU.

Throughout the European Union, citizens and businesses now know where cross-border disputes are to be determined. They know what law is to be applied. Crucially, they can be confident that court orders obtained in one member state will be recognised and enforced without fuss, delay or extra proceedings throughout the Union. This system has been of incalculable benefit not just to those who use our legal system but to our economy as a whole, because it is widely understood that all member states respect the arrangements and decisions of courts in other member states.

It often seems to me—I hope I can say this as a lawyer without special pleading—to be largely overlooked that our legal system has contributed significantly to Britain’s commercial success during the decades of our EU membership. One reason the United Kingdom has been so successful in attracting both inward investment from outside the EU and trade from elsewhere within the EU has been the fact we have not just excellent financial services and a sophisticated financial architecture—another plus is sometimes said to be political stability but I somehow doubt that at the moment—to add to the benefits of the English language and a convenient time zone, but a well-respected commercial legal system, one that functions without undue delays and at cost levels that are reasonably competitive in the international market, and which produces outcomes that are relatively predictable and generally accepted.

A very important component of that success is that our legal system functions internationally in supporting cross-border trade and international commerce. If we lose that, however frictionless we may make our trading arrangements, we will have compromised our future both as a destination for international investment, attracted to the United Kingdom as a gateway to the European Union, and as a trading partner for member states of the EU and the EEA. Put shortly, at a time of major upheaval, we will have needlessly thrown away a significant competitive advantage. That is something we cannot afford to do and it would be folly indeed. I beg to move.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

I thank the noble Lord, Lord Marks, for moving this amendment and raising this very important issue. He is right to highlight the contribution which UK law has made to the commercial contract area and the success of trade and financial services.

We have long made clear our intention to negotiate a new relationship with the EU which covers civil judicial co-operation. The political declaration provides a positive means for discussion on this. It makes it clear that the UK and EU have agreed to explore a bilateral arrangement on matrimonial and parental responsibility and other related matters. This goes further than the arrangements that the EU currently has with any other third country to date.

The UK also remains committed to future co-operation on civil and commercial matters with the EU—recognising that this is in both our interests, for the reasons the noble Lord, Lord Marks, set out—and to similar co-operation with other international partners. In this area, the UK will, as a minimum, continue to prioritise joining Hague 2005 in our own right and seek also to accede to the Lugano Convention. The UK will engage with EU partners to ensure that these important issues, which provide vital protections for citizens, are the focus of detailed negotiations with the EU.

On the specific issues which the noble Lord referred to, co-operation in this area makes clear that the UK and EU have agreed to explore a bilateral arrangement on aspects of law. This goes further than any arrangements that the EU currently has with a third country. The UK also remains committed to international co-operation in future.

The noble Lord asked what would happen in the event of no deal. As a responsible Government, we are preparing for all outcomes, hence the statutory instruments debated in Grand Committee yesterday. We have published a dedicated technical notice for civil judicial co-operation, detailing how the rules would change in the event that we cannot reach a deal. This is not our preferred outcome—we remain focused on getting a deal that works for the UK and the EU. The rules on civil judicial co-operation rely on reciprocity. After exit, even if the UK were to apply these rules unilaterally, there would be no requirement on EU member states to apply the same rules in the UK. Without the guarantee of reciprocity, our broad approach is to repeal existing EU instruments and revert to applying the rules which the UK currently applies in relation to non-EU matters.

I am grateful to the noble Lord for raising this important matter, and I hope that I have provided as much reassurance as I am able to at this stage.

[Lord Marks of Henley-on-Thames]

My Lords, I am grateful to the Minister for his response, and I will be withdrawing the amendment, with your Lordships’ leave. The plain fact is that the arrangements the Government have in mind in the event of no deal are what I described yesterday as “thin gruel indeed” compared with what we have. They are inferior, bitty and involve a great deal of scope for satellite litigation where parties are having to litigate on issues such as enforcement and jurisdiction in different jurisdictions. This is so important because it highlights an area which has had far too little attention in the event of no deal. It is a significant danger for us—no deal will deprive us of the competitive advantage we enjoy as a member of the EU.

I share the Minister’s confidence that, in the event that we secure an agreement, we will also secure an agreement on judicial co-operation during a transitional period, because it is in the EU’s interests as well as ours. The danger is that people float into no deal by accident, and cost us everything involved in losing judicial co-operation. It is a significant feature that ought to weigh heavily in the minds of all the policymakers involved. With that warning, I beg leave to withdraw the amendment.

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[Lord Stevenson of Balmacara (Lab)]

My Lords, I have to say a few words because my noble friend Lord Grantchester, who would have spoken to a couple of amendments which have not been touched on, unfortunately is unable to be with us this evening as he has a family illness which he had to attend to. I am sure your Lordships will want to send best wishes to him.

The two amendments which have not been referred to are Amendments 47 and 49. One is on time-sensitive goods and the worries here concern the arrangements, particularly around the Channel Tunnel, for goods that are required for immediate delivery. The question underlying the amendment, which the noble Baroness, Lady Neville-Rolfe, also put her name to, was whether the Government had any further information about developments, since if the current arrangement is not going to work, other arrangements will need to be brought into place, as time-sensitive goods are what they say on the tin.

Other noble Lords have spoken about medical isotopes. On behalf of my noble friend Lord Grantchester, I wanted to mention the time-sensitivity of these, not only in the general sense but particularly with air travel, which is often used to transport them. We have experience of problems which have occurred, particularly in Northern Ireland, because the route for radioisotopes required in Northern Ireland is through Coventry Airport, and even under existing arrangements, we have had delays which caused problems for patients, including the cancellation of treatments. Again, any comments from the Minister would be helpful.

On Amendment 49, the pet travel scheme has raised interest among those who travel to Europe with pets, particularly dogs and ferrets, which are the two main groups carried. The existing scheme is thought not to be very effective, and there is a chance to revisit it when it collapses after Brexit. Are Ministers aware that the BVA has set out 16 recommendations on changes to pet travel rules after Brexit? Many of these are sensible and needed, and this would be an opportunity to give the Committee an update on where they are on this matter.

[Lord Bates]

My Lords, I thank noble Lords who have taken part in this debate. The noble Lord, Lord Stevenson, referred to the pet travel scheme. The noble Lord, Lord McNicol, started the debate by talking about transport. The noble Lord, Lord Fox, referred to arrangements for UK-EU chemicals through REACH in particular. My noble friends Lady McIntosh and Lady Hooper talked about legal services. My noble friend Lord Risby talked about horseracing and the tripartite agreement. The noble Baroness, Lady Randerson, talked about transport. My noble friend Lord Lansley talked about authorised economic operators. My noble friend Lord Trenchard talked about horseracing and financial services. The noble Baroness, Lady Kramer, focused very much on financial services. The noble Lord, Lord Foster, talked about telecoms and broadcasting.

That is a flavour of the catch-all that we have here, with 17 amendments. I am looking at the representatives of the usual channels: I am not sure how the grouping of these amendments happened, but they cover a very wide range of agreements. We have heard 12 excellent speakers. They have ranged extensively and generated some 24 questions, to which it falls to me to respond. I am conscious of the time. I will bring my best endeavours to this, but I have the feeling that rather a lengthy letter will be winding its way to noble Lords.

[Lord McAvoy (Lab)]

I expect a full reply.

[Lord Bates]

Yes, of course. I will probably miraculously sit down sometime around 10.39 pm. I think that is the convention. Let me go through as much as I can. I apologise to Members of the Committee and to the reporters of our proceedings for the pace at which I am going.

The noble Lord, Lord McNicol, and my noble friend Lord Lansley referred to the common transit area. As my noble friend hinted, this is an area where we have some good news, because the UK has agreed the common transit convention with the secretariat. Letters were received on 19 December 2018. That is taking shape.

The noble Baroness, Lady Kramer, talked about financial services. The Government are seeking a close future relationship on financial services with the EU that reflects our uniquely integrated markets and respects UK and EU autonomy. The political declaration includes commitments to close and structured co-operation on regulatory and supervisory matters, grounded in the future economic partnership. There will be a certain Groundhog Day feeling to the answers to a lot of these questions, because I will simply say that they are a matter for the future economic relationship, which we hope will be deep and extensive across all these headings. Of course, that is for another piece, or other pieces, of legislation.

The noble Baroness, Lady Randerson, spoke to her amendments. On haulage, the Government have been clear that we want to maintain the existing levels of access for UK and EU hauliers. A mutually beneficial road freight agreement with the EU will support the objective of frictionless trade. I very much take the point that the noble Baroness made about us often talking about Dover in the context of roll-on, roll-off, but there is strategic importance, particularly on the island of Ireland, for Holyhead and movements through there. However, we understand that we need the reassurance that we will have in place the arrangements needed to maintain continued access. On that basis, we welcome the contingency proposals being made by the European Commission on the basis that the Government are seeking a very close partnership based on reciprocal and binding agreements that protect the rights of road hauliers to access EU markets and vice versa.

The noble Lord, Lord McNicol, also talked about rail services, which are mentioned in Amendment 40. The Government are carefully considering the potential implications of leaving the EU, including implications for the continuation of cross-border rail. The noble Lord, Lord Fox, also referred to this through the Channel Tunnel and on the island of Ireland. I assure noble Lords that we understand the importance of maintaining the continuity of these important cross-border rail services, and we will continue to negotiate with our European partners to secure the best possible outcome.

In addressing Amendment 43, the noble Lord, Lord Fox, talked about open and fair competition. The Government recognise that commitments to open and fair competition are fundamental to all trading relationships; continuing the control of anti-competitive subsidies and creating a UK-wide subsidy control framework are crucially important. To support the desire for a future relationship, we propose rule alignment on state aid to be enforced by the Competition and Markets Authority, which already has a strong reputation in the UK. We also have strong proposals in other areas, including non-regression provisions for the environment, social issues and employment to ensure that we maintain the highest of standards, as my noble friend Lord Lansley requested.

Turning to Amendment 62, my noble friend Lord Lansley and the noble Lord, Lord Stevenson, said that it raised important issues for the future relationship with the EU, by providing that the patients should not be disadvantaged. We have given commitments that patients should not be disadvantaged; industry should be able to get its products into the UK market as quickly as possible, and we continue to play a leading role in promoting public health. The Government have already set out their aim to secure participation in the European Medicines Agency. The political declaration sets out the mutual commitment of the UK and the EU to explore working together in future medicines regulation and negotiating the UK’s ongoing co-operation.

[Lord Purvis of Tweed (LD)]

Will the Minister clarify what he said about seeking to participate in the European Medicines Agency? The noble Baroness, Lady Fairhead, in an earlier grouping, said it was the intention to remove Clause 6 from the Bill, or at least bring forward different language about what that participation means. It is pertinent to the point my noble friend Lord Fox made. If it is the Government’s intention to participate in many of these institutions, what do they envisage that participation mechanism to be? If the Government are seeking to change Clause 6, they have to be clear about how they intend that participation to operate.

[Lord Bates]

My noble friend Lady Fairhead made very clear our hesitation in the other place when this amendment was proposed, but it is now in the Bill. We see the commitment to all necessary steps in relation to the European Medicines Agency. We have been very clear that we do not wish to see that extended to other agencies, but it is there in the Bill at present.

[Lord Purvis of Tweed]

Just so that we know what might be coming on Report, is it the Government’s intention to bring forward amendments, as the noble Baroness, Lady Fairhead, said, to remove this?

[Lord Bates]

Our position is simply that we are committed to as close a relationship as possible with the European Medicines Agency. We see its value, we are committed to it, and it is in the Bill. We have made our positions clear on that, in terms of how we would view it if similar amendments were proposed for other agencies.

Amendment 39, on mutual recognition of professional qualifications, was spoken to by my noble friends Lady Hooper and Lady McIntosh and by the noble Lords, Lord McNicol and Lord Fox. The Government have clearly set out their objectives for mutual recognition of professional qualifications in the future relationship with the EU. We recognise the importance of mutual recognition for many sectors of our economy and the public sector. It offers all individuals working in regulated professions a means of having their qualifications recognised so that they can continue to provide valuable services. However, Her Majesty’s Government must be in a position to negotiate the best possible outcome. I note the risk that this amendment could undermine that objective and compel Her Majesty’s Government to reject highly beneficial agreements on mutual recognition simply because an agreement delivered its possible outcome in a way that differed from the detailed requirement set out in this amendment.

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[Lord Taylor of Holbeach (Con)]

Keep it going.

[Lord Bates]

I reassure my noble friend the Chief Whip that I have no problem in keeping it going for as long as he indicates is necessary—such has been the quality of the debate.

I have had a note passed to me which might be important. On Amendment 39, on mutual recognition of professional qualifications, I may have said “Ireland” but I meant to say “Iceland”. I thank the officials for being so attentive.

[Lord Fox]

The Ireland/Iceland point is actually very important. The noble Lord, Lord Hain, made a point earlier about cross-border activity—of midwives who live in the north of Ireland and practise in the Republic, for example—which is now in jeopardy. I am less excited about Iceland, with all due respect, given that the island of Ireland’s economy is driven on the ability to have the mutual recognition of all these skills. I enjoin the Government to work quickly on that one.

[Lord Bates]

The Government are very happy to give that undertaking.

On legal services, raised by the noble Baronesses, Lady McIntosh and Lady Hooper, the outcome of the negotiations of course lies ahead of us, but I assure noble Lords that the Government will push very much for a strong relationship in this area. As EU and EFTA lawyers will be subject to domestic rules in the UK, UK lawyers in the EU and EFTA will be subject to the national rules and regulations of individual EU and EFTA member states, if the UK leaves the EU without a deal. This will vary between member states and within member states, where there will be multiple regulators.

The noble Baroness, Lady McIntosh, asked specifically about close participation in the European Medicines Agency. I think I have already dealt with that one and I do not want to tempt further interventions at this point. However, I am pleased that the Government have been clear that we want to remain part of the EMA, which will include remaining part of the falsified medicines directive.

Let me turn to horses—galloping into the final straight with Amendment 48. I am grateful to the noble Baroness, Lady Hooper, who spoke particularly about polo, and the noble Baroness, Lady McIntosh. I also thank the noble Lord, Lord Risby, who talked about his connections with Newmarket, and the noble Lord, Lord McNicol, who asked about this as well. Amendment 48 dealt with the tripartite agreement on the movement of horses. As part of our ongoing preparations for EU exit, the Government aim to ensure that the movement of horses will continue with minimal delay and bureaucracy, while safeguarding biosecurity and animal welfare. Let me reassure noble Lords that we are already working closely with the equine industry to retain the benefits of the tripartite agreement after the UK leaves the EU. The Government actively support a long-term industry-led proposal to allow horses of high health status from third countries to travel to the EU under the TPA arrangements.

I had a note on the pet travel service. As part of the ongoing preparations for EU exit, the Government aim to ensure that the movement of pets will continue with minimal inconvenience to pet owners while safeguarding the UK’s biosecurity and the welfare of travelling animals. We are already working closely with stakeholders in the veterinary and pet travel industries to ensure that the benefits of the EU pet travel scheme are retained after the UK leaves the EU. The Government will submit their application for listed status within the EU pet travel scheme imminently. The UK is seeking technical discussions with the European Commission on its application. Should the UK become a part 1 listed country, there would be little change to current pet travel arrangements. Only minor changes to documentation would be needed.

I hope that noble Lords will feel that in the time available I have dealt with as many issues as possible, and that the noble Lord will therefore consider withdrawing his amendment at this stage.

[Lord McNicol of West Kilbride]

I have a good 20-minute speech here—no, I am joking. I thank the Minister for his response and all noble Lords and Baronesses for their input to this rather large group of amendments. As I said in my introduction, there is widespread support not just across the House but outside, from organisations, businesses, trade unions and relevant bodies. My takeaway from nearly all the contributions is the mutual benefit that organisations and businesses inside the UK would get from the adoption and inclusion of the amendments. The other word which came from the Government Bench was that their adoption would lead to continuity—a word that has been used many times in the previous two days. With that, I beg leave to withdraw the amendment.