European Union (Withdrawal) (No. 5) Bill

Lord Pannick Excerpts

Committee: 1st sitting (Hansard): House of Lords
Monday 8th April 2019 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 4 seeks to insert a restriction on the date referred to in line 10:

“which must not be later than the end of the 2019/20 financial year”.

This may in practice be a variation on the provision proposed by my noble friend Lady Noakes in her amendment, but, as I explained at Second Reading, it is born out of frustration at not being able to table specific amendments on financial impact.

I want to draw attention to the fact that this Bill—agreed by all to be a constitutional innovation—is not the subject of a money resolution, as the Speaker decided in the other place. Equally pertinently, it has no impact assessment, and yet it could bring about a delay in Brexit without end or resolution, which could be extremely costly to this country.

Whatever one’s views on Brexit, it must surely be common ground that altering the date of the event will have financial consequences. I accept that some of the costs will be negative and some will be positive, but the longer Brexit drags on, the more the cost of uncertainty for all economic players and the extra cost to the Treasury in payments to Brussels will weigh against the benefits of avoiding no deal.

Although we cannot persuade the Speaker of the House of Commons to change his mind on a money resolution, I believe that the promoters of the Bill should work up an impact assessment, which would cover some of the same ground. I also believe that adding a date gives the Government an incentive finally to resolve matters. Alternatively, if the promoters will not produce an assessment today, one should be required when the Government use the power to define the length of an extension in their statutory Motion.

Let us look at some of the costs of the new approach, as the costs of no deal, now threatened for 12 April, have been well articulated already and are well understood. As a businesswoman, I know that they are real worries and that they are especially acute in farming, the motor industry and industries such as food which depend on just-in-time supply chains and mutual recognition of labelling. But there is also a huge cost to uncertainty. There are literally billions of pounds which business is waiting to invest once, but only once, the Brexit uncertainty disappears. This could be a great driver of growth and productivity, because the combination of low capital investment and cheap, flexible labour from the EU is a key reason why productivity is flatlining, despite an increase in infrastructure, digital and R&D investment by this Government.

In other sectors such as financial services, which now represent a very large percentage of GDP, the critical thing is to turn the political declaration into a free trade agreement with the EU 27. Unfortunately, the Bill as drafted could allow the EU 27 to delay negotiations to the point where the resulting uncertainty has allowed it to steal more and more of our market. The beauty parade to attract investment which would have taken place in the UK to go to Paris or Milan is very energetic. We heard in the EU Financial Affairs Sub-Committee last week how jobs and work are moving, never to return, to Frankfurt, Dublin, Amsterdam, Brussels and elsewhere, even if we stay in the EU.

I feel that the Brexit process has lacked transparency from day one. If there was a fuller and more honest discussion of the complexities of what is planned when and of the likely implications, more dynamic analysis, objective pros and cons, both economic and political, and less of Project Fear, the country would be less divided and perhaps less critical of what we in Parliament have achieved.

There is another reason why a system of financial assessment and timetable constraints is desirable. We will have let the genie out of the bottle if this rushed, defective and uncosted Bill is passed. I fear very much that it will act as a precedent for future Private Members’ Bills even more financially damaging, such as on the regulation of utilities or whatever. This is a constitutional revolution and, as I said last week, there will be no way to hold Back-Bench sponsors to account if the mechanism in such a Bill causes damage.

As my noble friend the Leader of the House just said, it is important not to set a precedent. The Bill is about stopping a premature no deal, for which I have some sympathy, but for the reasons I have stated the Bill needs amendment. I would be glad to hear from someone among the opposition promoters—although I am not sure who; perhaps the Deputy Leader of the Opposition the noble Baroness, Lady Hayter, who has always supported impact assessments, or another of her colleagues—on how we might meet some of these concerns about proper assessment. My noble friend the Brexit Minister may also be able to think of a way to do so.

Given our often tedious scrutiny role—I am afraid that this is a technical point, and some may feel it is tedious—it was cheering to hear the Secretary of State for Exiting the European Union express the expectation that this House would correct the flaws in the Bill. That is what we need to do today. I beg to move.

[Lord Pannick (CB)]

My Lords, I oppose the amendment. It would frustrate the very purpose of the Bill, which is to leave it to the House of Commons to identify what it thinks is the appropriate date.

[Baroness Noakes (Con)]

My Lords, I support my noble friend’s amendment for two reasons. First, this remains a wretched Bill, taking power away from the Government and their ability to use the royal prerogative. Therefore, I would support any restriction on that measure being put into the Bill. Secondly, I support the points made by my noble friend in respect of the financial impact of different variants of a delay in leaving the EU. The fact that the Bill was not treated as a money Bill in the other place is beyond my comprehension, as is the fact that my noble friend was unable to table an amendment explicitly calling for an impact assessment or something else—but the ways of the Public Bill Office are strange on occasion. I support my noble friend.

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[Lord Pannick]

My Lords, may I respectfully remind the noble Viscount that we are debating Amendment 4?

[Viscount Trenchard]

I am well aware, and I thank the noble Lord for his advice.

However, I congratulate my noble friend Lord Blencathra on the report from his committee and on the fact that he so quickly responded.

The amendment moved by my noble friend Lady Neville-Rolfe is much needed. In her speech at Second Reading and again today, she has made the very good point that the Bill has profound financial implications. My noble friend Lord Cathcart also made this point most clearly in his powerful speech. It is reasonable to say that the terms of withdrawal should require the UK to honour its commitments during the current EU spending round, provided of course that the UK is not disadvantaged by its decision to leave the EU in terms of the amounts that UK projects and companies would otherwise have received from EU programmes.

Besides that, any extension beyond 22 May would require us to participate in the European Parliament elections, and that requirement would of course have financial implications. It is therefore strange that the Speaker has ruled that this is not a money Bill, but it is not surprising given his increasing willingness to allow his own political views and prejudices—

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[Baroness Deech (CB)]

My Lords, I tabled Amendment 6.

[Lord Pannick]

It is not grouped with this one.

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[Lord Forsyth of Drumlean]

No, it is not for the Minister to answer them, as it is not a Government Bill. I do not know whether the noble Lord, Lord Robertson, is going to deal with these points, because we have the Opposition criticising the Bill, and seeking to amend it as we go along in Committee. To my mind—I am blessed with not being a lawyer—the noble and learned Lord, Lord Goldsmith, is riding two horses at once. On the one hand, he is saying that it is important that we retain the royal prerogative, because the Prime Minister has to be able to deal with the situation as it arises, and on the other hand, he says that we need this Bill in order to prevent the Prime Minister doing what she thinks is appropriate. If the noble Lord, Lord Robertson, is the sponsor of this Bill, perhaps he could enlighten us and deal with the important points which the noble Baroness, Lady Deech, has just made.

[Lord Pannick]

My Lords, the noble Baroness, Lady Deech, accepted that Amendments 5 and 7 remove the concern that she otherwise had—that is what she told the House.

I support Amendment 5 in the name of the noble and learned Lord, and I also want to speak to Amendment 7, which has, as I understand it, now been grouped with Amendment 5.

[A noble Lord]

Has it?

[Lord Pannick]

It is not on the list, but as I understand it, there have been suggestions that it would be helpful to the House if it debated Amendment 7 together with Amendment 5; that was what we were told by the Table Office. In any event, the noble and learned Lord, Lord Goldsmith, has referred to Amendment 7, and it may be helpful if I make my remarks as the person who has tabled Amendment 7.

[A noble Lord]

They are not grouped.

[Lord Pannick]

They are not grouped on the Marshalled List, but I was informed that the Table Office had been invited to list Amendment 7 with Amendment 5. I am entirely in your Lordships’ hands as to what is of most assistance.

[Lord Robathan]

Does this not reveal the chaos of the current procedure?

[Lord Pannick]

My Lords, I will do whatever the Chief Whip thinks is most appropriate in these circumstances, as I always do.

[Lord Taylor of Holbeach]

I thank the noble Lord. The papers for today were prepared when, at a rather late hour, someone arrived to suggest that these two amendments be taken together. I have no comment to make on that matter—it is for the House to decide. If the House decides that they should be taken together, they can be.

[Lord Robertson of Port Ellen]

As the sponsor of the Bill, I suggest that they are taken together.

[Lord Pannick]

My Lords, I can sense the mood of the House, and I am grateful to all noble Lords, particularly the Chief Whip.

The noble and learned Lord has already mentioned Amendment 7, which goes with Amendment 5. It addresses a practical concern that may arise at the European Council meeting on Wednesday night. The problem is that Clause 1 envisages that, if the Prime Minister is mandated by the House of Commons to seek an extension to a specified date, and the European Council then makes a counteroffer of a different date, the Prime Minister would have no power under Clause 1 to agree to that counteroffer. She would have to say to our European partners that she is required to return to the House of Commons on Thursday to seek its approval. She would have to say that notwithstanding the fact that the European Council is not going to remain in session—they are all going to go home. There is therefore a risk that, contrary to the aims of the promoters of this Bill, the restrictions on the Prime Minister’s powers contained in this Bill may cause a no-deal exit on Friday at 11pm. Therefore, Amendment 7 makes it clear that nothing in this Bill prevents the Prime Minister seeking or agreeing on Wednesday night in Brussels an extension of the Article 50 period, provided it is not to a date earlier than 22 May.

[Viscount Hailsham]

I entirely understand the point about the Prime Minister agreeing to a proposal coming from the European Union. I am a little less certain about the desirability of enabling her to seek a date without prior parliamentary approval.

[Lord Pannick]

This is a negotiation. It would be very odd to say that she can agree a date but she cannot seek one. There has to be give and take. I think that there is general agreement around the House that the Bill, whether noble Lords are in favour of it or not, ought not to constrain the Prime Minister’s powers when she is conducting an international negotiation.

The noble Lord, Lord Faulks, asked whether this was really necessary: unless an Act of Parliament expressly takes away the Prime Minister’s prerogative powers, surely they remain. My answer is that there is a danger that it might be said that the Bill, by necessary implication by reason of its contents, takes away the Prime Minister’s prerogative powers. I think we would all agree that the worst of all possible worlds would be if the noble Lord, Lord Faulks, on Thursday morning was to be instructed by a client to go to court to obtain a declaration that the Prime Minister has acted in breach of her powers, given the Bill’s contents.

[Lord Goldsmith]

If I may assist, Clause 1(4) would require the Prime Minister to seek an extension of the period required by the House of Commons. We are then dealing with what happens after that.

[Lord Pannick]

I entirely accept that.

It is necessary to have legal certainty on the retention of the Prime Minister’s powers on such an important matter. That is why the noble and learned Lords, Lord Judge and Lord Goldsmith, the noble Baroness, Lady Ludford, and I have all put our names to Amendment 7.

[Lord Howard of Lympne]

My Lords, I have listened with care to the speeches of the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Pannick, and the intervention from my noble friend Lord Hailsham. I do not have my noble friend Lord Forsyth’s advantage because I have the misfortune of having trained and practised as a lawyer, so I am in that difficult circumstance. I am confused by the exchanges that have taken place. I draw only one inference from them: this appalling piece of legislation is totally misconceived. It seeks on the one hand indubitably to constrain the exercise of the royal prerogative by the Prime Minister. That is its main purpose. Now we have amendment after amendment that seek to persuade us that it is only in some circumstances that the royal prerogative should be constrained and that in others it is absolutely necessary because, as the noble Lord just said, the Prime Minister must be able to make use of the royal prerogative when she is involved in negotiations of this kind. It is negotiations of this kind that the Bill is all about.

The fact is that the Prime Minister will be involved in negotiations about the date on which we exit the European Union, the conditions in which we do so and any terms that might be sought by the European Council to limit the extent to which we might be able to act in accordance with the result of the referendum. The Prime Minister will be engaged in negotiations of that kind. She ought to be able to exercise the royal prerogative when she engages in those negotiations, as the noble Lord said a moment ago. This ludicrous Bill, which seeks in part to restrain the royal prerogative and then to subtract from the extent to which it constrains it, is wholly misconceived and should never reach the statute book.

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Moved by

[Lord Pannick]

7: Clause 1, page 2, line 3, at end insert—
“(8) Nothing in this section prevents a Minister of the Crown from seeking, or agreeing to, an extension of the period specified in Article 50(3) of the Treaty on European Union otherwise than in accordance with this section provided that the extension cannot end earlier than 22 May 2019.(9) In deciding for the purposes of subsection (8) whether an extension cannot end earlier than 22 May 2019, the earlier ending of the extension as a result of the entry into force of the withdrawal agreement (as provided for in Article 50(3) of the Treaty on European Union) is to be ignored.”

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[Lord Goldsmith]

The noble Lord should know that on any amendment or Bill in this House, the Government and the official Opposition will have a view, and we seek to help noble Lords by providing that view. That is exactly what is happening here.

[Lord Pannick]

I am not responsible for the Bill, but I offer a further argument in favour of retaining Clause 2. The practical reality is that, on Wednesday night, the Prime Minister will be offered a deal by the European Council. She will either accept it or not. The overwhelming probability is that she will come to some agreement with the European Council.

If the matter comes back on an affirmative resolution before the House of Commons and this House on Thursday or Friday, there will be only two choices: either we accept the date that has been agreed or we leave on Friday at 11 pm. The House of Commons has overwhelmingly voted that it does not wish to leave with no deal, and the view of this House is perfectly clear that it does not want to leave with no deal. Therefore, it seems to me that, in the extraordinary circumstances in which we now find ourselves, Clause 2 is entirely acceptable.

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[Viscount Trenchard]

My Lords, I support my noble friend Lady Noakes on this amendment. As she explained so clearly on Thursday and in her speech today, the curtailment of prerogative powers envisaged in this Bill is significant. I agree with her that the powers available to the Government to negotiate international treaties are important and should not be curtailed.

My noble friend Lord Norton of Louth, who is acknowledged across your Lordships’ House as the most knowledgeable constitutional expert, explained that the changes sought by the Bill, and the practices by which it was passed in another place, are not small but highly significant. I consider it unfortunate that your Lordships’ House is likely to pass this Bill, but at least it would be better if its destructive elements could be made temporary. Surely even noble Lords who support the Bill would agree that, against the background of the views of the noble Lord, Lord Norton, on the matter, the restrictions on prerogative powers should be temporary. It would be unfortunate for the House to agree to a precedent created by such a rushed and controversial piece of legislation.

[Lord Pannick]

My Lords, this amendment is not needed to ensure that the provisions in the Bill are temporary. They are temporary in any event because the Bill is concerned with only the period for negotiations for withdrawing. Once we withdraw, the Bill has no effect whatever.

[Lord Forsyth of Drumlean]

My Lords, if that is the case, there is no reason at all why we should not accept this amendment. The Prime Minister sent her letter asking for an extension on Friday, so I have spent most of the weekend trying to work out what the point of this Bill was in the first place. Given that we have amended it in respect of the prerogative powers, it is just a very bad piece of legislation. My noble friend Lady Noakes is offering the House the opportunity to get rid of a very embarrassing relative. The Bill and its genesis are not something of which this House or the other place can be particularly proud. It is a very bad Bill, conceived for all the wrong reasons. It has ridden roughshod over our procedures. Having a sunset clause, which is what this amendment offers, would be a very good thing indeed. I very much support my noble friend.