European Union (Withdrawal) Bill

Lord Wigley Excerpts

Report: 1st sitting: House of Lords
Wednesday 18th April 2018 Lords Chamber

[The Countess of Mar]

My Lords, I hope that noble Lords will forgive my confusion about a technical matter. The amendment states:

“Page 1, line 2, at end insert”.


However, line 2 on page 1 comes immediately after,

“The European Communities Act 1972 is repealed on exit day”.


Can noble Lords make clear what exactly we are debating? The amendment states:

“Subsection (2) applies if, and only if”.


The amendment does not seem to fit the Bill.

[Lord Wigley (PC)]

My Lords, I support Amendment 1, moved so persuasively by the noble Lord, Lord Kerr, and Amendment 4. I want to speak briefly to Amendments 2 and 5 in my name, which are coupled with them and essentially seek the same goal.

Noble Lords may remember that in Committee I moved the very first amendment on the issue of maintaining a customs union with the EU after our membership ceases. We had an excellent debate at that stage so I will not repeat the detailed arguments, save to remind the House of one central point: having tariff-free trade in goods with the European Union and the 56 countries with which the European Union has an agreement is fundamentally important—not only to Wales but throughout the UK—to our manufacturers and farmers. It also opens the door to resolving the Irish border question, as has been said.

I accept—reluctantly—that we are leaving the European Union. That is not the issue in this debate. The question is how we leave without weakening or severing our vital trade links. By passing either of these amendments, we give MPs an opportunity to return to this central issue. Without such an amendment, they will be unable to do so. They need such a facility because so much has changed in the time that has elapsed since they passed this Bill last year. We must enable them to fine-tune the Bill to meet the requirements of exporters, manufacturers and farmers. MPs will have the last word, and rightly so, but by passing either amendment we give them the opportunity to endorse a better Bill that is fit for purpose and more acceptable to those whom it affects. I urge colleagues on all sides to unite in passing such an amendment and I urge the Government to accept the outcome.

[Lord Lamont of Lerwick (Con)]

My Lords, both the noble Lord, Lord Kerr, and my noble friend Lord Patten made extremely powerful speeches. Both of them referred to trade with the EU representing 50% of our exports. I think that the figure is actually a little lower than that, nearer 45%; I make that point not to argue over the absolute figure but the direction of travel.

One of the points that was not made in either speech is how the pattern of our trade has been changing and a much higher proportion of our trade was with the EU 10 or 15 years ago. This is because Asian markets and other countries—I agree that they are all small markets at the moment—have cumulatively been growing as a share of our trade. The question in considering the amendment is, which is better for the future trend of our trade: remaining in the customs union or the Government’s alternative—which the noble Lord, Lord Kerr, did not really put forward—of a free trade agreement with the EU? We are talking not just about the customs union, but the customs union while being outside the EU—that is, being in the customs union but not an EU member—which is a very different matter, for reasons that I will come on to.

We have to be clear in our minds about the difference between a customs union and a free trade area. A customs union has free trade between its members but an external tariff and rules against non-members. A free trade area has reduced or zero tariffs between its members but allows individual members to have differing external tariffs and non-tariff controls on imports from non-members. The noble Lord, Lord Patten, referred to the question of rules of origin—that is, goods that come from outside the free trade area but which have to qualify to go into other countries by having a certain percentage of the content being made locally. The EU is a customs union but has free trade relations with European states outside the EU, such as Norway, Iceland and Lichtenstein. This means that, despite being inside the single market, they have control over external tariffs and the administrative costs are greatly reduced by modern customs procedures, such as electronic pre-clearance and trusted trader arrangements.

In his speech on the customs union, the noble Lord, Lord Kerr, concentrated just on what happens at the border. I would argue that a customs union is not just about tariffs; it has implications for the single market. It is related to the whole issue of the rules and definitions that make up the single market. This is made very clear on the European Commission’s website, which defines the customs union like this:

“The Customs Union is a foundation of the European Union and an essential element in the functioning of the single market. The single market can only function properly when there is a common application of common rules at its external borders … These common rules … go beyond the Customs Union as such—with its common tariff—and extend to all aspects of trade policy, such as preferential trade, health and environmental controls”,


agriculture and fisheries,

“the protection of our economic interests by non-tariff instruments and external relations policy measures”.

--- Later in debate ---

[Baroness Smith of Newnham (LD)]

My Lords, I too have added my name to the amendment. It has been suggested that some amendments may be attempts to subvert the will of the people. For example, the noble Lord, Lord Forsyth, suggested that to discuss a customs union was somehow to go outside the purpose of the Bill. Amendment 8, however, speaks to the heart of the Bill, which, as I understand it, is intended to do two things. It will repeal the European Communities Act 1972, and it will ensure that on the day we leave, the United Kingdom has a full statute book and there is full regulatory alignment with the European Union.

There are clauses that deal with regulations, retained law and directives, and a clause to deal with regulations that currently have direct effect. But there is an anomaly in relation to directives that have been adopted but not yet implemented. There are two particularly important points in the title of the new clause in the amendment. The first is the fact that the directives have been adopted. In Committee, the noble Lord, Lord Pannick, suggested that things could change. But if the directives have been adopted they are already EU legislation—legislation in which the United Kingdom has participated. It seems somewhat strange that directives that we have been part of, and which we have implemented and enshrined in UK law, should continue to be part of our law, but that we are not transposing, nor looking for any way of transposing, other directives that we have agreed to, and which will be important as part of regulatory alignment when we leave.

The second important point in the title of the new clause is the idea that the directives will have been adopted before exit day. Exit day will, we believe, be 29 March 2019, unless subsequent amendments change it. We assume that there then will be a transition period to the end of 2020. During that time the United Kingdom will not be in the EU institutions and will not be party to any further directives. It therefore makes sense that we would not be party to directives adopted after exit date, during the transition period. For those that have already been adopted, however, there appears to be a period of limbo.

I would be grateful if the noble and learned Lord, Lord Keen, could explain how the Government intend to deal with these 23 directives. Are we simply saying that they do not matter—that somehow, directives agreed before the referendum are fine but we are not quite sure about those agreed later? What sort of certainty does that give to business? If the aim of the Bill is to give legal certainty, we have at least 23 directives, plus others that the noble Baroness, Lady McIntosh, mentioned, on which there is no certainty. This is an important amendment, and I shall be grateful if the Minister can explain what the Government plan to do with the directives to ensure that, on the day when we leave the European Union, there is certainty. Surely taking back control should include all areas from the point when we leave, following full regulatory alignment on exit day—and surely that needs to include these directives.

[Lord Wigley]

My Lords, I intervene briefly to support Amendment 8, moved by the noble Baroness, Lady McIntosh of Pickering, and supported by the noble Baroness, Lady Smith of Newnham, which also stands in my name. I spoke on this matter in Committee so I shall not repeat the points I made then. We were seeking greater clarity at that stage—and as far as I can see we still need that from the Minister—on the status of EU directives adopted but not implemented before exit day. I seek an assurance from the Minister that if an amendment of this kind is not accepted for inclusion in the Bill, the loose ends that will undoubtedly exist will be tied up by some other process later, whether in the implementation and withdrawal Bill or by some other device. Clearly some very valid issues have been raised by the noble Baroness, Lady McIntosh, and we need to be sure that they have been looked after in the legislative process.

[Baroness Hayter of Kentish Town]

My Lords, as has been said, this is an issue for which the Government simply have to produce a solution. For once I am quite glad that I am at the Dispatch Box on this side of the Chamber so it is not my problem—but I do know that it is a problem that the Government absolutely must solve. Let us consider some of the subjects covered by the list in the amendment: safeguards for child suspects in criminal proceedings; the recognition of professional qualifications, which will be extraordinarily important for business; health and safety; and the trademarks directive. We cannot afford to have gaps, particularly with something such as trademarks. This list covers issues that are already our policy and have been adopted with our consent, so we need to find a way of getting them into our legislation. How that can be done, I hope the Minister will now tell us.