European Union (Withdrawal) Bill

Lord Leigh of Hurley Excerpts

2nd reading (Hansard): House of Lords
Wednesday 31st January 2018 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, it is a privilege to speak in what has been described as a historic debate on a technical Bill. In the time I have, I will constrain myself to addressing just a few points.

The first concerns the referendum vote. I noted with interest the passage of the Bill in the other place and the remarks by the shadow Brexit Secretary, repeating demands for a meaningful vote on the Brexit deal. I simply draw attention to the meaningful vote we had already in June 2016. It is now the job of Parliament to scrutinise, not to oppose this necessary legislation. Whether one voted to leave or remain, reconciling the result with a position that leaves the UK not in control of its borders, courts and fiscal contributions to the EU would feel very jarring. This applies as much to Parliament seeking to thwart Brexit by voting down the European Union (Withdrawal) Bill, as it does to those siren voices now calling for a second referendum. As my noble friend Lord Astor said, the people have spoken and it is the job of this House and the other place to make it work as smoothly as possible. If the shadow Brexit Secretary wishes to continue his search for meaning, then he should look no further than improving this Bill.



I commend some of what the chairman of the Brexit committee has to say, particularly as he reminds us that this legislation is necessary. We must pay heed to the Constitution Committee, which describes the Bill as deeply flawed. We must seek to improve it to the committee’s satisfaction where we can.



As this is a technical Bill, I offer some technical observations. In the other place, MPs raised the uncomfortable question of pre-exit disputes, many of which arose several years ago and which may now not go to the ECJ. In my opinion, they clearly ought to, as they arose under the old regime. The Francovich principle, which has been raised in this House before, has been removed from the Bill. I hope my noble friend the Minister will reconsider this. I am aware of instances where it would lead to a very unfair result and deprive genuine claimants of going to the EU court. I am happy to brief the Minister on this if required.

I turn to a particular area of interest of mine—financial services. In the other place much of the debate was about the use, or overuse, of delegated powers—the so-called Henry VIII clause. I must take issue with much of what was said. Lamenting the use of delegated powers is a common tool in all opposition toolboxes. When they have run out of points of principle, they resort to points of process. Leaving that aside, much of the criticism was largely fallacious. As the EU committee set out, in financial services in particular, EU laws follow the Lamfalussy framework. Reading the debate in the other place, it is almost as if many want even the lowest level of content included in UK primary legislation. Yet, as the Investment Association has pointed out, in financial services, at least, much of EU law is better handled here by the regulator, not to circumvent democracy but for reasons of efficacy and practicality. It is simply about appropriate levels of detail. As the renowned EU legal expert Simon Gleeson pointed out to the EU Committee,

“the Bill will perpetuate one of the main defects of the current EU position, namely that too much detail is in legislation and is difficult to update”.

There may well be much to be improved in this Bill, but cramming it full of regulatory issues better handled in secondary legislation and regulatory guidance and enforcement should not be part of that process.

I add my voice to those who have warned against a second referendum. I appreciate that its advocates are saying “not now” but they are pushing us down a very dangerous road. If the EU detected that there would be a second referendum, can your Lordships imagine its negotiating position? It would make an agreement that much harder. Is that the agenda of those calling for a second referendum? I hope not, and that those who might be talking down our negotiating position recognise that. There is no real prospect of holding a referendum without causing huge anguish and pain all over again between friends, parties and even families up and down the country in what would inevitably be a difficult campaign full of bias and hate. As Brenda of Bristol famously said: “What? Not another one!”.

European Union (Withdrawal) Bill

Lord Leigh of Hurley Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Monday 5th March 2018 Lords Chamber

[Lord Lucas (Con)]

My Lords, it seems to me that if the Government break the law, they should be judged on the basis of the law at the time that they break it and that this is not a Bill in which the Government should seek to advantage themselves by averting that principle.

[Lord Leigh of Hurley (Con)]

My Lords, I spoke on this subject at Second Reading in respect of the disputes that arose under the old regime which seem to me to deserve fair treatment. I am aware of instances, in particular relating to small businesses, where it could lead to a very unfair result and deprive genuine claimants of going to the EU courts. The noble Lord, Lord Foster of Bath, mentioned the note by James Segan, and it raises a question which perhaps my noble and learned friend can answer about whether as it currently stands with paragraph 27 of Schedule 8, which was mentioned, and Section 16 of the Interpretation Act 1978, there could be action under the Human Rights Act. It would be politically unacceptable, apart from anything else, to see claimants pursuing their claims if there were that interpretation.

[Lord Goldsmith]

My Lords, I look forward to the answers that the Minister will give to the questions asked by the noble Lord, Lord Pannick. I have Amendment 44 which deals with the timing of the Francovich claim. I can be brief. My noble friend Lord Davies of Stamford set out very well what we are talking about. The noble Lord, Lord Carlile, indicated the problems to which the Government’s approach gives rise. One can look at it this way: at the moment the Bill appears to say that if the Government were to commit an act that was unlawful—a breach of Union law, for example—before exit day, the Francovich claim could not be brought, except in circumstances where the claim had been brought before exit day. I do not see the justification for that. That amounts to whitewashing an unlawful act and, as has been said—and it seems to me to be absolutely right—it is quite inconsistent with the promise that has been made that we will have the same rights the day after exit day as the day before.

I look forward to the answers to those questions. Even if any change does not go as far as my noble friend Lord Davies of Stamford, said, it must at least apply, as the noble Lord, Lord Carlile, put it, to accrued rights, so that any act which is committed before exit day which gives rise to a Francovich claim should continue to do so.

European Union (Withdrawal) Bill

Lord Leigh of Hurley Excerpts

Committee: 7th sitting (Hansard - continued): House of Lords
Wednesday 14th March 2018 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I added my name to Amendment 187, which specifically refers to the European Investment Bank. I did so because, almost invisibly, the EIB has made a major contribution to investment in UK infrastructure. The advantage of the EIB, of course, is low interest rates, but it also offers commercial expertise and very highly prized advice.

I just want to illustrate the importance of the bank to our economy with some statistics. For example, in the field of transport, in 2016 over €2.5 billion was loaned to various projects in the UK. That included loans to Merseyrail for rolling stock, to the Port of Dover and to Aberdeen harbour, and over €1.75 billion for social housing. For energy projects, €3 billion was loaned, and for education projects, €0.75 billion. In my own country of Wales, in 2016 Swansea University borrowed €71 million for a splendid and wonderful new campus. It is so large that it is almost the size of a small town and it is very highly regarded. Bangor University borrowed €10 million for a new campus. Here in London, Transport for London is, in Britain, just about the biggest borrower from the EIB and has relied on it very heavily. Since 2002, there have been loans to London Underground for the Northern line extension, for Crossrail rolling stock, for Stratford International station, for the East London line and for the DLR Woolwich Arsenal extension, and that is in addition to seven other Underground schemes.

Noble Lords will see immediately the importance of this borrowing to some fundamental sectors of our economy: energy, transport, education—particularly universities—and urban regeneration and housing. In 2015, in total the UK received over €16.5 billion. In 2016, that went down to €9 billion, and in 2017 it was around only €3 billion. There was an immediate drop-off in the number of projects funded, and new lending by the EIB to the UK fell by almost two-thirds last year.

The Welsh Government had been hoping to use the bank to fund the South Wales Metro project and the M4 relief road. Already in Wales, providers of social housing have had to look elsewhere for funds, and that of course costs more. An increase of 200 basis points in the cost of capital would lead to an increase of around £1.5 million per annum for each £100 million borrowed.

There may not be an official moratorium on lending to the UK by the EIB but clearly the bank is already concerned about the future basis for repayment. It has been suggested that we should set up our own development bank, although so far the Government have not expressed interest in this. Can the Minister clarify the position of the UK Government on setting up our own investment bank? However, even if the Government were keen to do that, it would take years for a new bank to gain scale and expertise. There could also be uncertainty about its status. There could be a problem with the classification of its funding, as it could be classified as providing state aid, and we know that the Prime Minister has already said that she wants to observe international rules on state aid. The recent experience of setting up the British Business Bank and the Green Investment Bank indicates that it can be a complex and lengthy process. As a minimum, I believe that the UK Government should make it clear that they wish to negotiate a specific mandate for continued bank lending by the EIB to the UK as part of our future arrangements.

On the speech of the noble Lord, Lord Adonis, 90% of EIB lending is to EU member states. However, it also lends to EFTA states and to others preparing to join the EU. It therefore would not stretch the imagination too much that it might be possible for it to lend to those preparing to leave the EU. The rules and conditions of the EU guarantee for the EIB’s external lending are decided by the European Parliament and the Council of Ministers, and those rules were most recently decided in 2014. The Government need to negotiate an amendment to that decision. Do the Government intend to do so?

I hope I have illustrated that the amendment does not refer to a hypothetical situation. This is not a prediction that doom might come but a factual statement of the situation with the European Investment Bank as it is now: it has stopped lending. This has had a serious impact on our infrastructure, which is already showing signs of strain as a result. The lending could dry up altogether and projects will have to find an alternative source, but that source will be more expensive and less reliable. I urge noble Lords to take an interest in this issue, which is fundamental to the development of our infrastructure in this country.

[Lord Leigh of Hurley (Con)]

I shall speak briefly to Amendment 183. I am aware of the EIF because of its investment in the UK venture capital industry, in which I serve on a professional basis from time to time. I understand that the Chancellor has committed an extra £2.5 billion to the BBB specifically to make up for the loss of future investment from the EIF into venture capital funds in the UK, which would negate the need for this. There is a problem in that the EIF, from Article 50 being triggered, has announced that it is looking only at funds where two-thirds of the investment will be in the EU and at least 50% in continental Europe. So organisations that contribute enormously to our economy—for example, social impact investment companies such as Bridges, which is 100% investing in UK companies—have, from the moment of Article 50 being triggered, had the decision-making process frozen by the EIF. This has been damaging to them. I suggest—the Minister might care to comment—that the problem is not here and then after we exit the EU but in the transition period. For some unknown reason, the EIF is freezing the money rightfully due to UK investments.

[Lord Tunnicliffe (Lab)]

My Lords, I can at least discuss the EIB with the qualification of someone who nearly borrowed money from it. I commend the comments of the noble Baroness, Lady Randerson, because it was EIB expertise that helped me to persuade the Government to fund the Jubilee line extension. We were then able to have even cheaper money called government grants, so it was all right in the end.

This group of amendments illustrates that in the whole Brexit debate there are unintended consequences that were clearly not thought through at the time of the referendum. We discussed some on Monday, such as haulage, airlines and so on. What we need to hear from the Government tonight is either that they intend to pursue this course and try to produce appropriate associate agreements—or whatever the right term is—with these institutions, or that they will set out how they will provide the money and expertise that make sure that they do not put a serious dent in the already inadequate investment programmes in the United Kingdom.