European Union (Withdrawal Agreement) Bill

Lord Keen of Elie Excerpts

Committee: 1st sitting (Hansard) & Committee stage & Committee: 1st sitting (Hansard): House of Lords
Tuesday 14th January 2020 Lords Chamber

[Lord McNicol of West Kilbride]

No, it is. The noble Lord is correct.

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

I should correct the noble Lord. Amendment 59 is part of this group, and therefore if he wishes to speak to it, he should do so.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I confess my inexperience in this court of Parliament in knowing whether it is the right opportunity to raise Amendment 59. I will do so. This may seem a very small point, but it goes to two points that underlie the amendments to which we will turn in due course. The first is the need to ensure that the Bill respects our constitution as regards devolution and that the devolution statutes that form part of our constitution are altered in a proper and constitutional manner. Secondly, going forward with our life outside the European Union, we achieve a stronger union by making sure that there is the closest possible working together of the devolved Governments, Assemblies and Parliaments with the Government at Westminster.

Although the amendment is addressed to deal with the position in Scotland, Northern Ireland and Wales together—logically it has to be—I approach this from the standpoint of Wales, for two reasons. First of all, my own experience of that devolution settlement is much clearer than my experience of the others. Secondly, I really think it of importance that in this House we try to do all we can to make sure that Wales, the Welsh Government and the Welsh Assembly understand that the union will work for the future as envisaged in the devolution statutes.

It may seem that devolution is not that important at this time in the context of this Bill, and I can well understand that view. But it is important to reflect for the future and to realise that much will need to be done to the way in which devolution operates when we are outside the European Union and with our own internal market. Those are the general points that underline my seeking to make this amendment.

The purpose of the amendment is to ensure that the principles agreed in respect of the IMA’s composition, as set out in the schedule, are carried forward in the event that a new body is created pursuant to the powers that have been added to the Bill. As regards the obligation to appoint the non-executive members of the IMA, provision is made in the Bill that the Secretary of State will appoint those with experience in relation to Scotland, in relation to Wales and in relation to Northern Ireland, who understand how the systems there work. This is plainly a proper and right provision as, over the past 20 years, as any examination of the detailed operation of devolution will show, things have changed. I find it sometimes regrettable that those who occupy the ministries in Whitehall do not realise the extent of that change. I therefore appreciate what the Government have done through this provision and the further discussions they have had of the role of the Welsh Administration and Welsh Ministers in the selection of the appropriate person. However, the provision is not carried forward if the functions of the IMA are transferred to a new body.

I accept that it is a small point, but small points can go a long way to ensure that the spirit of devolution and the constitution is respected. Of course the Government can say that there will be no change, no statement made and no clarification, but would that be wise? With the utmost respect, I suggest that it would not be wise because it would point out that even a small change that can capture the spirit of the way forward is something that the Government will not contemplate. On the other hand, if some assurance were given about any future transfer to a new body, is not that the first step in showing that the spirit of a post- devolution UK will be respected by this Government?

--- Later in debate ---

[Lord McNicol of West Kilbride]

My Lords, I rise to speak to Amendments 58 and 60. The noble Lord, Lord Greaves, has touched on many of his probing amendments, and there has been much debate about Amendment 59, so I do not need to cover that.

The establishment of the independent monitoring authority is an important step in implementing the UK’s obligations to EU citizens under the withdrawal agreement. However, the Government’s approach to the IMA leaves a number of important questions unanswered, hence the large number of probing amendments in this and other groups. There are concerns regarding the delegated powers, allowing Ministers to transfer the IMA’s functions—or even wind the organisation up—by statutory instrument, hence the amendment in my name.

At ministerial briefings, the Minister has explained that, later in the withdrawal process, it may make sense for the IMA’s functions to sit elsewhere. Can the Minister give an example of where those functions may be moved to, and why this would be preferable to maintaining an independent body? Can he also confirm that in the event of such transfers there will be no practical impact on citizens? Finally, can he provide assurances that, in the spirit of co-operation, the Joint Committee will be fully briefed regarding any changes to the IMA or the exercise of its functions? To touch very briefly on Amendment 59, in the name of the noble and learned Lord, Lord Thomas, again many important issues are raised regarding the transfer of functions, aiming to ensure that the new executors of such functions would need specific knowledge of UK nations and the regions.

[Lord Keen of Elie]

I am obliged to all noble Lords who have contributed. Like many noble Lords who have already spoken, I am conscious of the sensitivities that surround the devolved settlement that could impinge upon its success in the future.

Let us be clear: Clause 15 is essential to implement our international legal obligation under the withdrawal agreement and under the EEA-EFTA separation agreement, which requires that we establish an independent monitoring authority. I hope that it also demonstrates our commitment to protecting the rights of those citizens covered by the agreements. Therefore, it is necessary for Clause 15 to stand part of the Bill.

Of course, the IMA will offer an important layer of additional protection over and above the wide range of complaint and appeal routes that already exist for EU citizens in the United Kingdom. However, expanding the IMA scope through Amendment 57—as proposed by the noble Lord, Lord Greaves—would, I fear, divert the body’s resources from its important role monitoring citizens’ rights and obligations. Therefore, I would resist such an amendment. It also risks creating unhelpful duplication, with all the confusion and wasted resources that could accompany that, so I invite the noble Lord, Lord Greaves, to withdraw that amendment.

The withdrawal agreement requires that the IMA be established by the end of the implementation period; that is the goal. The appointment of an interim chief executive to the IMA—a point raised by the noble Lord, Lord Greaves—is considered vital to meeting that deadline, as it will be essential from the point of view of staffing and procurement decisions that will need to be taken in advance of that date. Indeed, there have been other examples of interim chief executives being appointed to such bodies in order that suitable preparation can be made for them to be up and running at the appropriate time. Removing that provision through Amendment 47 would jeopardise the timely establishment of the IMA, and risk putting us in breach of our international law obligations. I hope that I have explained the rationale for that approach.

In order to give full and proper effect to our obligations in international law, we have designed the IMA to be robust and independent, in line with the best practice for the establishment of new public bodies. While I understand the intention behind a number of the amendments in the name of the noble Lord, Lord Greaves, which he perceives as strengthening the independence and robustness of the IMA, I hope I can assure him that they are unnecessary. I appreciate that they are essentially probing amendments in order that we can explain the position.

[Lord Kerr of Kinlochard]

Perhaps I may probe a little further. The independence of this authority is important—important because we have agreed to introduce an independent authority and important to those whose affairs it will be keeping an eye on.

When I was a Permanent Secretary, I would have had no difficulty in coming to the conclusion that a number of non-departmental bodies could be abolished and their functions transferred elsewhere because it would be more efficient, effective and economical to do so. The test in paragraph 39(2) of Schedule 2 is not hard for the Executive to meet. Does the Minister think that the body is more likely to be independent, feel independent and be seen as independent if it is continually under the threat of the sentence of death in paragraph 39(1), which says that its powers can be transferred? I agree that it is a habit for quangos to survive long beyond their natural useful lives, but what is the rationale for this power transfer by regulation? Is the Minister convinced that the test of efficiency, effectiveness and economy does not slightly conflict with the requirement for independence?

[Lord Keen of Elie]

My Lords, the noble Lord perhaps anticipates what I shall come to in the course of my reply—how prescient he is in that regard.

The body is not under a sentence of death and the rationale for the ability to transfer was hinted at by the noble Lord when he talked about bodies that had long outlived their usefulness. I will elaborate on this point in a moment, but I certainly do not consider that the provisions of paragraph 39 impinge on the effective independence of the IMA. I would add—I will elaborate upon this—that we must have regard not only to the intentions of the Executive but to the joint committee and, therefore, to the interests of the other party to the international agreement that has given birth to the IMA.

Let me continue with the point I was about to raise on some of the further amendments spoken to by the noble Lord, Lord Greaves. First, on Amendments 52 and 53, which seek to remove certain standard provisions for remuneration in respect of public bodies, he alluded to the term “gratuity”. There are circumstances in which public servants are brought into a body but, for one reason or another, their position is terminated early or prematurely and consideration has to be given to the question of gratuities. Where public servants are already employed in a position where they can be remunerated and there is a provision for gratuities to attract suitable employees into bodies such as the IMA, one must generally have regard to equivalence of terms and conditions. Therefore, because that appears in the context of other public bodies, it is repeated in the context of this legislation.

Amendment 54 would remove provisions that provide a proportionate and sensible way of approaching potential conflicts of interest for IMA members. At all times those members will be expected to adhere to the Cabinet Office Code of Conduct for Board Members of Public Bodies, and the approach set out in this paragraph in its unamended form is consistent with the code. For example, an individual member may make a subjective decision that they should disclose a conflict of interest but the board may determine objectively that it is not a pertinent conflict of interest and that they can therefore continue. That is why the matter is expressed in those terms.

The Government also expect the IMA to follow best practice in relation to its own transparency. Therefore, we regard Amendments 55 and 56 as unnecessary. Indeed, amending the Bill in the way proposed by the noble Lord, Lord Greaves, would take decisions around its transparency away from the IMA and thus, essentially, undermine its status as an independent body. We regard the IMA as essentially an independent body but, while enjoying the status of an independent body, it must be able to discharge certain functions as it sees appropriate, albeit while having regard to the relevant codes.

There is also a reference to not charging for the body’s functions in Amendment 61. That is unnecessary because this body will not charge for its functions. They are essentially systemic—as the noble Lord, Lord Greaves, appreciated, it is not a case of individual applications and individual disposals—and there is no room for any form of charging. Again, we feel it is unnecessary to consider that amendment.

On the point raised by the noble Lord, Lord Kerr of Kinlochard, important though the IMA will be in providing additional assurances that citizens’ rights will be protected, we do not expect its functions to be required in perpetuity. Indeed, the withdrawal agreement recognises that reality. Years from now, it might be more appropriate and effective to protect these rights differently. It is for this reason that we have included two powers in Schedule 2: one to transfer the IMA’s functions to another body under paragraph 39 and the other to remove or abolish the IMA’s functions under paragraph 40, but only following a decision by the relevant joint committees to do so.

As noble Lords have appreciated, the first power is about future-proofing to make sure that citizens’ rights obligations are monitored as effectively and efficiently as possible in the future. Indeed, years from now, the type of oversight needed for the UK’s citizens’ rights obligations and the wider UK regulatory landscape may have changed materially from what it is today, and in such new circumstances it may be more appropriate and effective for another public body to perform the IMA’s role. Removing that power, as would be required by Amendment 58, spoken to by the noble Lord, Lord McNicol, would make us less capable of ensuring that we are in a position to provide an efficient and effective monitoring of citizens’ rights and obligations.

In any event, we would be sure to keep the EU and the EEA EFTA states appropriately informed of any decision to transfer the IMA’s functions. Again, that would be by way of the joint committee and would not involve some unilateral executive action by the UK Government. Indeed, if this power were ever used, we have ensured that it would not affect the independence and effectiveness of how citizens’ rights obligations are monitored. The Secretary of State must have regard to the need for the transferee to possess the necessary independence and resources to provide effective oversight of citizens’ rights obligations.

Let me reassure the House that the commitments we have made to the devolved Administrations about their role in the Independent Monitoring Authority will be upheld in the event that its functions are transferred to another public body. We have designed this power so that the Secretary of State can make any modifications that he considers appropriate to the constitutional arrangements of the transferee. This will ensure that an equivalent to the important role of the devolved Administrations in the IMA is replicated for the transferee. I hope that reassures the noble and learned Lord, Lord Thomas of Cwmgiedd—I apologise if I have mispronounced the Welsh—and other noble Lords that, in these circumstances, Amendment 59 is unnecessary.

As I indicated, we have included a second power to abolish the IMA, which can be exercised only following a decision by mutual consent through the relevant joint committees, comprising representatives of the UK on the one hand and the EU and EFTA states on the other. This power can do no more than give effect to a decision at the international level. It cannot be exercised following a unilateral decision by the Secretary of State or the Executive. We would give extremely serious consideration to any decision to agree to abolish the IMA and I am confident that the EU and EFTA states would do likewise.

[Lord Wigley]

Will the Minister also confirm that if we were to find ourselves wanting to propose such a change to our former European colleagues there would have been consultation with the devolved authorities before that stage?

[Lord Keen of Elie]

My Lords, it is of the nature of the IMA’s function that it involves consideration of the views of the devolved Administrations and Gibraltar. It also involves consideration of the interests of those in England. We have to have regard not only to Wales, Northern Ireland and Scotland but, in this context, England and Gibraltar. It would be appropriate to consider all their interests if we were to put forward a proposal for the abolition of the IMA. Indeed, I find it difficult to conceive of a situation in which we could put forward a proposal for the abolition of the IMA at the joint committee without having consulted the devolved Administrations. It strikes me as so improbable that one should not give much weight to it.

[Baroness Finlay of Llandaff]

I hope the Minister will forgive me interrupting. I was wondering whether I would wait until the end of his remarks, but this follows on from the question asked by the noble Lord, Lord Wigley. In the event of the transfer to another body and a view that the IMA could be slimmed down, can the Minister provide assurance that the required consultation of the devolved Administrations would happen—with the devolved Administrations having a say rather than it being tokenistic consulting; I am not asking for a veto—and that there would be no possibility of them then being charged in any way or being requested to provide financial support for having as a member somebody who had particular knowledge of their area, whether it is Wales, Scotland, Gibraltar or Northern Ireland?

Can the Minister explain to me—this is my ignorance —why paragraph 39(1)(b) of Schedule 2 is in italics and the other parts of the Bill are not? Is there some significance to it being in italics?

[Lord Keen of Elie]

My Lords, I am not immediately aware of the significance of the italics, but no doubt someone will pass me a piece of paper in a moment that explains them—or not, as the case may be.

We have not yet determined the cost—this also responds to a point made by the noble Lord, Lord Greaves—or budget requirements for the IMA. I therefore cannot comment further on that. The obligation to ensure that it is fully and properly funded lies on the Secretary of State and therefore on the UK Government. What further or future negotiation there might be about cost sharing is a matter beyond the terms of the Bill. I would imagine that if we start with an obligation that lies with the Secretary of State and the UK Government it will not easily be transferred in any form to the devolved Administrations. Perhaps one day we will have a reverse Barnett formula, but we do not have one at present.

In the circumstances I have set out I hope it will be appreciated by the noble Lord, Lord McNicol, that Amendments 58 and 60 are not required in this context. The approach that we take to exercising the powers with regard to the IMA will be proportionate and appropriate and it would therefore not be necessary or appropriate that the procedures in the Public Bodies Act 2011 should apply. The bodies to which that procedure usually applies are those established on the basis of domestic policy. It will be appreciated that this is a rather different body which is the product of an international agreement and therefore it has to comply with the obligations we have entered into at the level of international law and it should not be tied to domestic legislation.

On the noble Baroness’s observations about the italics that appear in the Bill, it may well be that she alighted upon an issue that may arise later in the day, but I am advised very clearly that it is a misprint. Apparently, the entire Bill should have been in italics.

I have sought to reassure noble Lords about the concerns that have been raised and which have motivated these amendments. We have sought to design the IMA to provide robust, effective and fully independent oversight of citizens’ rights and our commitment to citizens’ rights. It is necessary to bear in mind that we are implementing international law obligations that we have incurred by entering into the withdrawal agreement. The clause and the schedule in their present form meet those international obligations and the demand for robust, effective and fully independent oversight of citizens’ rights and obligations. I hope that noble Lords will not press their amendments.

[Lord Greaves]

My Lords, I am very grateful to the Minister for the time and effort he has taken to go through all the points raised and, I think, to give us a certain amount of new information or extra information about how the IMA will work and about the Government’s thinking on it. This debate has been valuable. I am grateful to everybody who has taken part, and particularly for the snapshot we have had of the devolutionary thinking among Welsh Members of the House. I found it very interesting and useful.

The only question the Minister did not answer was about whether the IMA is going to be based in the north of England. Perhaps that is beyond his pay grade —I think he agrees with that.