European Union (Withdrawal) Bill

Lord Keen of Elie Excerpts

Committee: 9th sitting (Hansard - continued): House of Lords
Wednesday 21st March 2018 Lords Chamber

Moved by

[Lord Keen of Elie]

302A: Clause 11, page 7, line 25, leave out subsections (1) to (3) and insert—
“(1) In section 29(2)(d) of the Scotland Act 1998 (no competence for the Scottish Parliament to legislate incompatibly with EU law) for “with EU law” substitute “in breach of the restriction in section 30A(1)”.(2) After section 30 of that Act (legislative competence: supplementary) insert—“30A Legislative competence: restriction relating to retained EU law(1) An Act of the Scottish Parliament cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown.(2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the legislative competence of the Scottish Parliament.(3) In addition—(a) a Minister of the Crown must (unless the regulations only relate to a revocation of a specification) consult the Scottish Ministers before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, and(b) see paragraph 6 of Schedule 7 (duty to make explanatory statement about regulations under this section).”(3) In section 108A(2)(e) of the Government of Wales Act 2006 (no competence for the National Assembly for Wales to legislate incompatibly with EU law) for “with EU law” substitute “in breach of the restriction in section 109A(1)”.(3A) After section 109 of that Act (legislative competence: supplementary) insert—“109A Legislative competence: restriction relating to retained EU law(1) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown. (2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the Assembly’s legislative competence.(3) In addition—(a) a Minister of the Crown must (unless the regulations only relate to a revocation of a specification) consult the Welsh Ministers before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, and(b) see section 157ZA (duty to make explanatory statement about regulations under this section). (4) No regulations are to be made under this section unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.”(3B) In section 6(2)(d) of the Northern Ireland Act 1998 (no competence for the Northern Ireland Assembly to legislate incompatibly with EU law) for “incompatible with EU law” substitute “in breach of the restriction in section 6A(1)”.(3C) After section 6 of that Act (legislative competence) insert—“6A Restriction relating to retained EU law(1) An Act of the Assembly cannot modify, or confer power by subordinate legislation to modify, retained EU law so far as the modification is of a description specified in regulations made by a Minister of the Crown.(2) But subsection (1) does not apply to any modification so far as it would, immediately before exit day, have been within the legislative competence of the Assembly.(3) In addition—(a) a Minister of the Crown must (unless the regulations only relate to a revocation of a specification) consult the relevant Northern Ireland department before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, and(b) see section 96A (duty to make explanatory statement about regulations under this section).(4) In subsection (3)(a) “relevant Northern Ireland department” means such Northern Ireland department as the Minister concerned considers appropriate.(5) Regulations under this section may include such supplementary, incidental, consequential, transitional, transitory or saving provision as the Minister making them considers appropriate.””

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I shall speak also to the other government amendments in this group. We have put forward these amendments to facilitate scrutiny of the Government’s current position on Clause 11. They reflect the status of our discussions with the devolved Administrations, and noble Lords will be aware that our discussions with the Scottish and Welsh Governments are continuing. We remain convinced that this Bill is the right vehicle for providing legal certainty across the UK and that we should reach agreement with the Scottish and Welsh Governments. As such, the Government do not seek a vote on these amendments today and we will withdraw or not move them at the conclusion of the debate, but we will reflect seriously on the points made and incorporate them into our discussions.

The Government have been clear that the Bill is about continuity, certainty and control. That applies equally and without exception to people and businesses across all parts of the United Kingdom. Our approach has always been guided by two principal aims; namely, that we have a fully functioning statute book on exit, and that there are no new barriers to people living and doing business across the United Kingdom. These amendments have been tabled, in line with our commitment made in the other place, to address the concerns raised regarding the current Clause 11. They represent a substantial movement from our original position and reflect the sincerity of our commitment to finding a mutually agreeable position.

We have had lengthy discussions on this issue at official and ministerial level, including at the Joint Ministerial Committee. Noble Lords will well know that the Scottish and Welsh Governments have not yet agreed these amendments, but we will continue to work with them to try to find a way through. I am confident that all parties to this discussion are invested in trying to reach that agreement, as was demonstrated by the constructive tone set at the JMC by the Prime Minister and the First Ministers. This is a crucial piece of legislation in the national interest. It must work for all parts of the United Kingdom and we are sincere in our hope that we will find a way for us all to come together in support of it.

Noble Lords spoke at length at Second Reading and in previous debates of the importance of the “presumption of devolution” and have debated the principle that if there is not a good reason for a matter to be held in common, it should be devolved. That is what these amendments aim to deliver. They would take the existing Clause 11 and effectively turn it on its head. Their effect is that by default on exit day any decision-making powers currently held by the EU in areas that are otherwise devolved would pass directly to our devolved institutions without first being diverted through Westminster. The amendments then give UK Ministers powers to apply targeted and temporary limitations on competence to modify retained EU law, which would in essence have the effect of maintaining existing UK frameworks. We envisage that they will be used in those specific areas where we have identified that a future framework for the United Kingdom may be needed. That would ensure that in those areas the current common approaches established by EU law will continue to apply until we—the United Kingdom Government and the devolved Administrations—can together determine the form that the new bespoke UK framework will take, if one is ultimately required for the benefit of both our communities and our businesses.

I should be clear that the limits that would be applied by these powers are not new limits or constraints. They would merely preserve existing competence in relation to EU law after exit as it stood in relation to EU law immediately prior to exit. Therefore any decision that the devolved institutions could take before exit day will continue to be a decision that they can take after exit day in areas where they have exercised their powers. There is no encroachment into existing devolved areas, and of course in areas where we have not exercised these powers there will be an immediate and significant increase in the decision-making powers of the devolved institutions upon exit. I should also be clear that these limits apply to an area only to the extent it is covered by EU law and not to the entire subject matter. They will not limit competence to make any provision in relation to a subject matter where this does not involve the modification of retained EU law. I urge noble Lords to refer to the Government’s frameworks analysis, published on 9 March, to see the kind of areas where we envisage that the temporary powers may need to be exercised.

Noble Lords will also want to be aware of the additional limits placed on the exercise of these powers. Not only would the powers be subject to the affirmative procedure but the amendments also apply a reporting duty, a duty to consult the devolved Administrations and a duty to produce explanatory statements.

Ministers will be under a duty to report at regular intervals on the steps taken to implement future frameworks; the way in which the framework principles that underpin that work are applied; steps taken to apply or remove restrictions on devolved competence under the powers; the progress towards removing restrictions and repealing those powers altogether once they have served their purpose; and any other information they deem relevant. All this serves to demonstrate that this mechanism is a temporary means to achieve our end state on frameworks.

Before laying an instrument under these powers, UK Ministers will also be required to consult the relevant devolved Administrations and make a statement on the effect of the instrument and any representations made by the devolved Administrations in response to consultation. Further, since these limits are but a temporary means to preserve existing EU frameworks until they are replaced by a UK framework, the amendments also provide a power to repeal the constraining powers so that they will not be retained for longer than is necessary. Ministers would be under a duty to consider periodically whether it is appropriate to repeal the powers. In doing so, they would be required to have regard to the intended temporary nature of these arrangements and to any progress in putting lasting arrangements in place.

Through this, we have sought to emphasise that these powers and restrictions are not to exist in perpetuity or as a permanent feature of the devolution arrangements. Rather, they provide a short-term fix for our longer, more detailed work on the development of long-term future common arrangements. I note in relation to this the amendments in the name of the noble and learned Lord, Lord Wallace, which would subject the current Clause 11 and any regulations made under the new Clause 11 power relating to Scottish legislative competence to a sunset limit. I understand why that suggestion has been put forward; we have of course been clear that these are temporary arrangements and I am interested to hear the debate on this point.

I must be clear that the temporary nature of the constraints is not the same as proceeding to a fixed timetable. We need to ensure that these complex matters are given due consideration, and there is a risk that the creation of a sunset merely prolongs the cliff edge.

[Noble Lords]

Oh!

[Lord Beith (LD)]

Might noble Lords be referring to the mixed metaphor they have just heard?

[Lord Keen of Elie]

May I proceed to split an infinitive?

The new arrangements must be achieved in partnership with the devolved Administrations. Crucially, that takes time to work through.

We must proceed with caution in considering any form of sunset which would change the purpose of our discussions from designing and implementing frameworks that are fit for purpose to ones that can be achieved in the time allowed. Our priority must be to continue to provide legal certainty on how these laws will work in that interim, but this could risk uncertainty where the provisions may lift before their replacement is known.

This is a substantial and significant amendment to Clause 11. It reflects the progress that we and the devolved Administrations have made on frameworks and in our discussions on Clause 11. It strikes the right balance, delivering for the devolved Administrations and for businesses and people across the United Kingdom. I am grateful for the consideration that this House will provide on this offer as we continue to refine and consider the policy in coming weeks.

The amendments in the names of the noble Lords, Lord Stevenson, Lord Griffiths and Lord Thomas, would amend elements of the amendments that we have put forward. We have heard much on the question of the consent of the devolved institutions for the use of the proposed new Clause 11 powers that would “freeze” existing UK frameworks. As I indicated earlier, I wish to be clear on two fundamental points. The first is that this will be a collaborative process. There is no suggestion or intention that we want to cut our devolved institutions out of these decisions. We have put in place a set of shared principles that the Scottish and Welsh Governments have agreed and which guide our work on frameworks—I referred earlier to the statement following the Joint Ministerial Committee in October last year that sets out those principles in detail. Departments across Administrations are now working together to consider frameworks. Devolved and UK Ministers continue to discuss these matters regularly at Joint Ministerial Committee meetings. The limits on the powers make it clear that the views of the devolved Ministers must be heard and the United Kingdom Government in exercising the power must set out what those views are for Parliament’s consideration. That is not a power grab. As we have heard today, this Parliament will rightly hold us to account on how the Government act on devolution policy. The second point is that we must be clear about the implications and outcomes of this work. These decisions affect every part of the United Kingdom. It is the United Kingdom Government and the United Kingdom Parliament that are responsible for matters that affect the whole of the United Kingdom.

We must therefore be very careful about the impact of a hard-edged legal requirement, not because we do not want the Scottish Government and the Welsh Government and, once restored, the Northern Ireland Executive to be part of these decisions but because it cannot be for an Administration in one devolved nation to exercise what amounts to a veto over something that would be in the interest of the other nations of the United Kingdom as a whole. That is not and never was the purpose of the devolution settlement.

I thank my noble and learned friend Lord Mackay and the noble Lords, Lord Foulkes and Lord Wigley, for their proposals to bring the United Kingdom Government and devolved Administrations together. These are constructive suggestions for a middle way that deserve serious thought. I am encouraged by the effort being made to reach agreement.

At present, we believe that the JMC will be the right forum for engagement, working under the principles agreed for the work on frameworks in October last year, but I would like to take away the ideas that have been brought to the table here today by way of the further proposed amendments and consider how these matters might be incorporated into our policy thinking, while continuing to meet our two stated objectives on legal certainty and respect for the devolved settlements.

I thank my noble and learned friend Lord Mackay of Clashfern for his amendment, which seeks to find a way forward in the context of Clause 11 and the frameworks. Again, it is an attempt to ensure engagement between all the interested Administrations to achieve consensus at the end of the day. My noble and learned friend’s amendment highlights the importance of clarity as we develop frameworks. As we have discussed during earlier debates, the work on frameworks will have to be a collaborative effort designed to ensure maintenance of a single internal market for the United Kingdom after we leave the EU. Our intention remains to reach agreement with the devolved Administrations. However we approach it, we have that as a goal.

The approach that we have put forward for Clause 11 in these amendments is, I venture, an entirely reasonable proposition. By default, and unless further action is taken, the returning EU powers in the 153 areas identified will become devolved matters. We should perhaps take pause to remind ourselves that these are entirely new powers for the Scottish Parliament and National Assembly for Wales, expanding devolved competence into areas previously held and exercised by the EU and, prior to that, by the United Kingdom Parliament.

We believe that what we propose addresses the points raised by the Scottish and Welsh Governments in their legislative consent memorandums. I hope that noble Lords will recognise that we have moved a considerable way on this, but that we continue to see the importance of providing as much certainty as early as possible for businesses across the UK in order that we can avoid, or indeed manage, divergence between the individual nations of the United Kingdom. While we have not yet reached agreement with the devolved Administrations, discussions will continue and we are extremely keen to maintain our engagement with them. But we consider that it is right that noble Lords have the chance to consider these amendments—the Government committed to that on Report and we brought them forward for consideration by this Committee. I hope noble Lords whose amendments are in this group will feel able to withdraw them at this stage; we, as I indicated earlier, will do similarly with the government amendments at the end of this debate. I beg to move.

Amendment 302B (to Amendment 302A)

Moved by

--- Later in debate ---

[Lord Keen of Elie]

My Lords, are you sure? I do not think there is any need to rush this. We have covered a lot of ground and we have a lot more ground to cover now.

This amendment was put forward as a catalyst, and there has been a reaction. I leave others to judge whether it was contained or uncontained. As the noble Lord, Lord Stevenson, just observed, this is not the vehicle for major constitutional change in the United Kingdom. If we attempt to bolt that on to this Bill, it will sink without trace. Some may prefer that that should happen; nevertheless, that is not a sensible way forward. I am obliged to all those who have contributed to this debate, because it was our intention in putting forward this amendment to judge the mood of the Committee with regard to the quite radical change and approach that we have taken with this proposed amendment. It may be that I approach the matter with an open mind; it may be that I approach it with an empty mind; but at the end of the day we will have to make a decision that works for the whole of the United Kingdom.

I will take up one or two points. There is an appreciation—it may not be universal, but it is almost universal—of recognising the benefits of maintaining a single market in the United Kingdom. We already enjoy that single market by virtue of our membership of the EU, and it is something we want to retain after we leave the EU. In order to do that, there has to be agreement in principle as to the areas that underpin such a single market. The noble Lord, Lord Stevenson, alluded to the principles set out in the Joint Ministerial Committee minute of 16 October 2017. That is essentially what underpins our seeking agreement; there was consensus. That is what we need to do.

Ultimately, if we are to have a single market for the United Kingdom, we require a body to have jurisdiction over that single market. Again, as the noble Lord, Lord Stevenson, and others have acknowledged, that ultimately has to be the Parliament of the United Kingdom. There is no other way of addressing that issue. If we look to the issue of consent, rather than consultation, let us be clear that it is not a question of trust but of constitutional propriety. If we have a black and white, sharp-edged consent mechanism for the devolved Administrations, then we have the basis for what has been termed the veto problem. We have the situation in which, beyond the existing devolved competence, any one of these Assemblies could—it is at that level that it must be judged; not would, but could—proceed to legislate within its devolved competence in a manner that impacted upon those in another country within the United Kingdom, whether it be England, Wales, Scotland or Northern Ireland. We cannot go down that road. That would be a fundamental change in the devolved competence that we created in, and have indeed developed since, 1998.

It appears that we have, at times, merged two issues. The noble Lord, Lord Griffiths, apart from criticising Ministers for not getting on and doing any work on this, pointed out that there had to be a breathing space. Indeed, that point was developed by the noble Lord, Lord Hain, when he quoted the letter from my right honourable friend the Secretary of State for Wales. Just to put that into context—and if I may briefly go back to a point I made in an earlier part of the debate—the first stage of this process is to identify those competences coming back from the EU that will be required to operate a single market in the United Kingdom and to effectively ring-fence them on a temporary basis; thus the breathing space that the noble Lord, Lord Griffiths, referred to.

That is all that is involved in the first stage. That process has carried on in great detail since the principles were established last October. It has been the work of officials not only in Whitehall but in Edinburgh, Cardiff and Belfast. They have all come together to do what is termed in Civil Service-speak as “deep dives” into these matters. The product has now been published. It is the table that identifies 24 areas where it is considered there will have to be some temporary ring-fencing so that we can establish the next stage of the process for the single market—the framework agreements that will then form the basis for that single market.

Let us be clear: that is a separate stage. The ring-fencing is merely to hold those competences for the time required to put the framework agreements in place. We have agreed the principles on which the competences can be identified, and we have now carried out a process that identifies those competences. There is an element of disagreement about that, but only in two or three areas, so far as the Scottish Government are concerned. State aid is one of them. We regard it, for reasons I find fairly obvious, as a reserved competence, but they say it touches on a devolved competence. We will therefore have to address that, and potentially have a framework agreement in those areas as well. That is why there are a further 12 areas of competence that we are confident are in reserved areas, but which may be open to debate. None the less, there is a very substantial element of agreement on the ring- fencing.

Now let me go to the next stage. We then require the framework agreements. To the extent that those agreements will be implemented by primary legislation—it is anticipated that in many of the areas that will be the case—the primary legislation will be carried on in accordance with the constitutional conventions that we already have, and with the respect for the devolved settlement that we have always shown in the past. That includes the Sewel convention as now expressed in the Scotland Act 2016, which amended the Scotland Act 1998. It also includes those areas where, pursuant to DGN 10, such matters will touch upon the competence of Scottish Ministers.

That is where we seek the true element of consent—but ultimately, of course, if we cannot get agreement, we have the Sewel convention. Normally we proceed with the consent of the devolved assemblies, and that remains the position. That is the political understanding that underpins the devolved settlement, and has done for a very long time.

Can we just remove that dichotomy of consultation or consent? I know that within some Administrations, for reasons we do not have to explore, there is a determination to push for consent. Consent, as such, is constitutionally very difficult; I indulge in understatement when I say that. But there is still room for agreement, and the process overall should result in what somebody termed consensus—that is, a belief that we are all doing the same thing for the same reasons, with an expectation of the same result. That involves an understanding of what these frameworks are.

It has been suggested that the 24 areas of competence that require to be ring-fenced on a temporary basis should be expressed in a schedule to the Bill. I hear what is said about that, but whether it can practically be done in the context of the Bill may be another matter. As was observed, I believe by the noble Lord, Lord Stevenson, that may have to be expressed elsewhere. We can look at that, but in the first instance we have to understand what needs to be ring-fenced for the purposes of the framework agreements.

A sunset clause has been suggested, and I have already expressed a view about that. Clearly, we are listening to the idea that a sunset clause might run for five years. But the more we have gone on about this, the more we realise that what it all comes down to is two questions. One: can we have an appropriate forum in which to negotiate agreement with the devolved legislatures? Yes; that has been carried on in the joint ministerial committees. They have been criticised, but they have been successful, as can be seen by the agreement in principle in respect of these matters. Can we achieve that? The answer is yes.

Secondly, can we then express, in a manner that will satisfy the devolved Administrations, what the framework agreements will be? The answer to that is again yes because we will follow the normal and usual constitutional principles that involve embracing the Sewel convention in cases where primary legislation is required.

I hope that goes some way to reassure noble Lords that we are making progress here because underneath the concern about consent versus consultation there has been considerable movement. We not only have the principles that we will apply to the ring-fencing of competences but we will also have the means to bring forward framework agreements in a manner that will satisfy the devolved competence, as I say. It may be that it will go beyond the 24 areas already identified but work can continue on that matter. What is ultimately of importance is that we retain the means for uniformity of regulation in those critical areas that touch on the principles enunciated in October 2017. That is what has to be achieved. There may be more than one road but ultimately they all lead to Rome, and that is where we want to be at the end of the day, so with that—

[Lord Newby (LD)]

They go to Brussels.

--- Later in debate ---

[Lord Keen of Elie]

I reassure the noble Lord, Lord Newby, that the roads do not go to Brussels any more. However, he is welcome to go and hack a path there, if he wishes. With that, I seek to withdraw the government amendment.

Amendment 302B (to Amendment 302A) withdrawn.