Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018

Lord Warner Excerpts

Monday 14th January 2019 Grand Committee

[Baroness Kingsmill]

My Lords, this is not the most sensible way to proceed. Distinct legal issues arise in each of these statutory instruments and it would be much more sensible if they were debated separately. Having sat on this Committee in which these instruments are put forward, I recognise that it is sometimes easier in terms of efficiency to take them all together. However, these instruments give rise to serious, distinct and important issues, and they really ought to be debated separately.

[Lord Warner (CB)]

Can I be clear on what the noble Lord is saying? Is he saying that he will move these three regulations en bloc and make his speech on all three, but he expects the rest of us to wait until he formally moves the individual regulations before we speak to them? That does seem to be a slightly “Fred Karno” way of proceeding.

[Lord Henley]

My Lords, obviously I am in the hands of the Committee and I am quite happy to do whatever the Committee finds most convenient. I did not say that I would move all three en bloc; I said that I would move the first one and then speak to all three. That is very different, if the noble Lord follows me. The only point I was making is that there is an understanding that certain things are agreed by the usual channels and that these instruments would be spoken to together. One of the usual courtesies of the Committee, but obviously the noble Lord does not wish to follow that, is that one would have a word with the usual channels, or at least the noble Lord’s noble friend.

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[Baroness Kingsmill]

My Lords, we are trying to do our job here. The Minister has confirmed that the regulations potentially put British businesses at a disadvantage, because there will a number of situations where they will not be able to export the goods they currently export. In those circumstances, we need to think carefully about these regulations. Some of the results of the consultation should be made available to us. I know that none of the businesses with which I am concerned has been consulted, including small and large. I would be grateful for some tangible evidence of the results of the consultation. This is important to us; British business will be placed at a significant disadvantage.

[Lord Warner]

I may be able to help the Minister because I spoke to the IPO this morning about the second set of regulations. It is clear that there was no formal consultation with the trade body representing the companies affected by those regulations. If I were being a little unkind, it sounded as though officials got hold whoever they could to have a chat. To be fair to the IPO, it never made any claim that it had had a formal consultation. I give the Committee that information in relation to the second set of regulations because it may have been the pattern applied to all these regulations. Perhaps the Minister could clarify that.

[Lord Henley]

My Lords, I thought that we were debating the first set of regulations at this stage. We will get on to second set in due course as the noble Lord wishes.

As the noble Baroness, Lady Kingsmill, and I know, there will obviously be changes for businesses as a result of Brexit. There will be different changes for businesses if there is a no-deal Brexit. These regulations are about dealing with the no-deal scenario. The noble Baroness, the noble Lord and all noble Lords would think we were wrong if we did nothing about the possibility of a no-deal Brexit. That is why we are moving a number of regulations at this stage and why we published various technical notices and made them available to industry. That is why the original drafts of the technical notices led to various improvements.

At this stage, we know that business wants, in the main, to have the status quo in the event of a no-deal Brexit, and we hope that it will also have the status quo if there is a deal. We want to see what the deal is first and get that dealt with. However, in the event that it happens, we also have to make provision for there being—

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[Lord Adonis]

My Lords, before the noble Lord sits down, the question that is coming up time and again in the Grand Committee is: why was formal consultation not conducted before rather than after these regulations were made? With respect, the Minister has not given us a satisfactory answer. He said that consultation is taking place on arrangements concerning the deal, but the Government are telling the House that we may have to enter into a no-deal situation in two months’ time, so how can he say that it is more important to consult on arrangements concerning the deal than on no deal? How can he regard that as a satisfactory point to make to the Grand Committee, when we are being asked this afternoon to consider arrangements for no deal? It leads me and other noble Lords to think that we are not in a position to scrutinise these regulations at all if there has been no consultation nor the ability by the noble Lord to tell us who has been informally consulted by the Intellectual Property Office.

[Lord Warner]

Before the Minister rises to answer that, I want to put a proposition to him. He gave me a rollicking earlier for talking about my conversation with the Intellectual Property Office in relation to the second lot of regulations, but what it said is relevant to the point made by the noble Lord, Lord Adonis, which is that there was so much security around these “consultations” or discussions—no doubt the concerns about security came from a political direction—that it was difficult for civil servants to have a formal consultation on these regulations. Can the Minister own up to whether that is true?

[Lord Henley]

Again and with all due respect, I think that the noble Lord is possibly misinterpreting what I said.

[Lord Warner]

I did not say you said it; I said the IPO said it.

[Lord Henley]

What I am trying to deal with is the question about how we get a no deal. If there is to be no deal, we want businesses to be in as similar a position to their present one as is possible. I can speak only for the orders that I am dealing with today and tomorrow, but I imagine this will be true of a whole raft of orders coming from other departments. What we are trying to do is put those businesses in a position whereby they can cope as far as is possible with no deal. Meanwhile, as part of the ongoing, sensitive negotiations over the withdrawal agreement—and on this I can assure all noble Lords there will be consultation until the cows come home—we will try to make sure that all these matters can be dealt with. I give an assurance that the IPO has engaged with legal and business stakeholders as far as possible on the drafting of this statutory instrument and what it achieves, and will continue to do so on anything that is needed in the event of a deal—because in the event of a deal, I imagine we will be here again. I look forward to debating these matters with the noble Lords, Lord Warner and Lord Adonis, the noble Baroness, Lady Kingsmill, and others so that we can get it right.

These regulations relate to the no-deal option. We are trying to ensure that in the event of no deal, as with the technical notices we have put out, businesses know what the position will be. Obviously it will be slightly different from where we are at present. That is the inevitable result of no deal. But no deal is still on the table, and until we know that my right honourable friend’s deal has been accepted by another place, I am not in a position to go any further: that is why we want to prepare for the no deal.

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[Lord Henley]

My Lords, I repeat what I said: this is designed, as an exit SI, to deal with leaving without a deal. We want to maintain the status quo and therefore anticipate the impact on business to be relatively small. I will complete what I am going to say before I take interventions.

[Lord Warner]

My Lords—

[Lord Henley]

I am not giving way to the noble Lord until I have finished my point. I have a right to make this speech in my own manner. I will then give way to the noble Lord and to the noble Lord, Lord Stevenson.

I accept that there could be some impact on parallel trade from the UK to the EEA. That will depend on the actions of the EU rights holders and, more broadly, on what the EU chooses to do on the issue of exhaustion. Those decisions are not within the scope of this instrument, so it is not possible accurately to reflect those impacts in the assessment. I now give way to the noble Lord, Lord Warner.

[Lord Warner]

I am grateful to the Minister. I have listened to this for about an hour and he keeps using the same arguments. We are going to come to these issues again on the second SI. If I give him some notice, he may be able to think of some better arguments than those he has used so far. I find it almost impossible to understand what he is saying. If there has been no proper consultation with the industry, how can he say that this has minimal impact on it? That seems to be a contradiction in terms. What is the basis of the Minister’s impact assessment if there has been no formal consultation?

I come back to the point I raised earlier: were not the hands of the civil servants tied, in terms of their ability to talk to people about these issues, before this SI was formulated—a straight yes or no? Were they constrained in their discussions with the affected industries before these SIs were drawn up?

[Lord Henley]

My Lords, I reject any suggestion that officials have been constrained in what they can do. The point I was trying to make is that we are talking about two things. We are talking about what happens in the event of us leaving without a deal. If we do, we need to set certain things in place, which is what these regulations do. Meanwhile, we will continue to negotiate as part of the whole withdrawal process to get the right deal. We will then get the right things in place. At that point, further instruments will no doubt come before the House—I look forward to debating them—and those will follow full, frank and proper consultation with all concerned. There has been a degree of consultation on these regulations, but they deal purely with a no-deal situation.

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[Lord Adonis]

Not content.

[Lord Warner]

Not content.

[Baroness Kingsmill]

Not content.