European Union (Approvals) Bill

Margot James Excerpts

2nd reading: House of Commons
Tuesday 4th July 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill is to approve four draft decisions of the Council of the European Union. All four draft decisions rely on article 352 of the Treaty on the functioning of the European Union, which allows the EU to take action to attain the objectives set out in the EU treaties, for which there is no specific power given. That can be done only with the approval of the European Parliament and the unanimous support of all member states. Before the UK can agree those draft decisions at the Council, Parliament must first give its approval. Section 8 of the European Union Act 2011 provides that a Minister may vote in favour of an article 352 decision only where the draft decision is approved by an Act of Parliament. I am pleased that Members of both Houses will have the opportunity to scrutinise and decide whether to approve such measures.

The UK is leaving the EU. Until that process has concluded, the UK remains a full member of the EU, and all the rights and obligations of EU membership remain in force. That includes exercising the UK’s vote in the Council of the European Union on these four draft decisions. Whether or not those EU decisions involve the UK directly, they may make a difference to the context of the negotiations. While we are leaving the EU and its institutions, we will continue to maintain a resolute friendship and alliance with all the European countries. We have been working in peaceful partnership with EU member states for decades to build a prosperous and stable Europe.

[Sir William Cash (Stone) (Con)]

Will the Minister give way?

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

Will my hon. Friend give way?

[Margot James]

Yes, I will give way.

[Sir William Cash]

rose—

[Mr Speaker]

Order. It is quite important to be clear to whom the Minister is giving way. The hon. Member for Stone (Sir William Cash) was perfectly convinced that it was he that she had in mind, but the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) looks similarly confident that it was he. Take us out of our misery, Minister.

[Margot James]

I apologise for the confusion. I was referring to my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger).

[Mr Liddell-Grainger]

Thank you very much for that clarification, Mr Speaker.

My hon. Friend is fully aware that I am the president of the European Conservatives in the Council of Europe. We have had support from the Government and from colleagues in both Houses, and I am sure she would like to make it clear that the Council of Europe is still an important part of what we do here. It was set up by the British in 1948 under Sir Winston Churchill and continues to play an important part through the European Court of Human Rights. I hope she will confirm that it will continue to play that important role.

[Margot James]

I commend my hon. Friend for all his work within the Council of Europe, and confirm that that will continue long after we have successfully concluded our Brexit negotiations.

The Prime Minister set out a bold and ambitious vision for the UK. She outlined our key negotiating objectives as we move to establish a comprehensive new partnership with the EU.

[Sir William Cash]

rose—

[Margot James]

I will make a little progress and then give way.

That vision for a partnership in the best interests of the United Kingdom means that we will also continue to work with the EU on tackling areas of common interest.

[Sir William Cash]

I am much encouraged not only by the fact that the Minister is giving way but by what my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) said. It may be that we are no longer brothers and sisters in Europe, but we are cousins. Therefore to that extent we will continue to seek to maintain good relations with the EU, despite the fact that we are absolutely going to leave.

[Margot James]

I heartily agree with my hon. Friend that we will continue to foster good relations with our EU friends long after we leave the European Union. Keeping that in mind, we are content that all four decisions that the Bill addresses are reasonable, proportionate and in keeping with our best interests, and will not result in any additional financial burdens on the UK.

As I have said, article 352 decisions must be agreed by all EU member states unanimously. When all member states are in a position to vote on the decision, the European Council will schedule a meeting of the Council of the European Union. If all member states vote to approve the draft decisions at that meeting, the European Parliament will be asked in turn to approve the draft decisions. If it does so, the decisions are adopted into EU law. All member states apart from the UK have agreed the EU-Canada decisions, and all member states except the UK and Germany have agreed the Fundamental Rights Agency decisions. We do not believe that any of the draft decisions should be considered contentious in any way.

[Mike Wood (Dudley South) (Con)]

It has been suggested that, as we negotiate our exit from the European Union, the United Kingdom should abstain in decisions in the Council. Will the Minister explain what the impact of a British abstention would be on those decisions?

[Margot James]

I assure my hon. Friend that, were we not to pass the Bill this afternoon, the draft decisions would not proceed. We are still full members of the European Union and therefore our consent is required for the draft decisions to take effect.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

The Minister is being generous with her time. She indicated one other country that has yet to ratify or vote on this—namely, Germany. Does she have, or has she been given, an indication as to when support may come from Germany?

[Margot James]

Any such comment from me would be speculation, which I intend to avoid, but I point out that Germany, like the United Kingdom, needs the consent of its national Parliament before its Ministers can vote on such draft decisions.

As I said, all member states apart from Germany and ourselves have agreed the Fundamental Rights Agency decisions, and we do not believe that any of the draft decisions are contentious. The Government are committed to being constructive in the UK’s ongoing engagement with the EU. Holding up progress on business that is simple and uncontroversial would undermine that approach and the principle of sincere co-operation that lies behind it. It is therefore clearly in the UK’s interests to approve these draft decisions. Delaying the decisions could have a negative impact on the UK’s exit negotiations with the EU, including discussion on any future framework. There will, of course, be further opportunities to examine more fundamental aspects of the work of the EU in other debates. However, I am sure hon. Members will recognise that, whatever their views on EU exit, it is in the UK’s interests to approve these draft decisions.

[Andrew Percy (Brigg and Goole) (Con)]

Will the Minister confirm that, as part of our ongoing relationship with the European Union until we achieve our freedom, the provisions of the trade agreement secured with Canada will be implemented fully in the United Kingdom, and that we will continue to play a proactive role within the EU and beyond in encouraging further free trade with Canada?

[Margot James]

I welcome my hon. Friend’s intervention. I remember his excellent work when he was a trade representative to Canada and I assure him that the Comprehensive Economic and Trade Agreement negotiations, completed between the EU and Canada, will cover the United Kingdom for as long as we are members of the EU. After that point, it will be up to us to decide the terms of any future trading relationship with Canada, bearing in mind the—I won’t go any further on that.

[John Redwood (Wokingham) (Con)]

Will the Minister give way?

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Will the Minister give way?

[Margot James]

I will make a bit of progress. I am concluding my remarks on Canada and trade. I will give way to my right hon. Friend the Member for Wokingham (John Redwood) when I have made further progress.

It is therefore clearly in the UK’s interests to approve the draft decisions. Delaying the decisions could have a negative impact on the UK’s exit negotiations, including discussions on any future framework. There will, of course, be further opportunities to examine more fundamental aspects.

[John Redwood]

Surely the Minister would confirm that the Canadian trade agreement, along with all the others the EU will have in place when we leave, will novate to us, assuming that both we and Canada wish it to do so? That will clearly be the case, so it will carry on.

[Margot James]

I accept the first part of what my right hon. Friend says, but I do not wish to predict what the UK and Canada may find it important to discuss in their trade relationship in the years to come.

[Jonathan Edwards]

Will the Minister give way?

[Margot James]

I will make a bit more progress and then I will give way.

The first two decisions will enable two countries, the Republic of Albania and the Republic of Serbia, to be granted observer status in the EU’s Fundamental Rights Agency. Before I go any further on that point, I will give way to the hon. Gentleman.

[Jonathan Edwards]

I am grateful to the Minister for giving way. I was not going to raise a point on CETA this afternoon, but as it has been raised by her colleagues I just wondered what estimate the UK Government have given to renegotiating a CETA-type Canada deal following Brexit.

[Margot James]

I thank the hon. Gentleman for his intervention, but I remind him of the scope of the Bill. It does not include much detailed discussion about our future trade relationship with Canada. For the avoidance of doubt, the Canadian decisions are about competition law, not trade.

The Fundamental Rights Agency was set up to support EU institutions and EU member states by improving the knowledge and awareness of fundamental rights issues in the EU, with a view to ensuring respect for fundamental rights. The agency does this through the collection and analysis of information and data. It can also formulate opinions on specific topics, either on its own initiative or at the request of EU institutions. It also has a role in communicating and raising awareness of fundamental rights, but it cannot hear individual complaints. EU accession candidate countries can be given observer status at the agency. This allows the agency to collect and analyse fundamental rights data from those countries, but it does not allow them the right to vote in decisions as part of the agency’s management board.

[John Howell (Henley) (Con)]

How does the agency differ from the Council of Europe? The Council of Europe looks after democracy and the rule of law within Europe, and it carries out exactly the same activities as the agency.

[Margot James]

The goal of the agency is to provide expertise on fundamental rights to EU institutions, member states and countries seeking accession when implementing EU law. The specific tasks of the agency are: to analyse and share information on fundamental rights in the European Union; to carry out scientific research and surveys on fundamental rights issues; to formulate opinions on specific topics, either on its own initiative or as requested by EU institutions; and to increase awareness on fundamental rights in the EU.

Albania was granted EU candidate status in June 2014. The UK supported the awarding of EU candidate status on the condition that Albania redoubled its reform efforts, with particular focus on justice and home affairs, especially tackling organised crime, corruption and illegal migration. The UK welcomed Albania’s progress in adopting legislation towards a judicial reform package in July 2016. Albania must now fully implement the judicial reform package as soon as possible, so that it can underpin other reforms.

Serbia was granted EU candidate status in 2012 and accession negotiations were launched in January 2014, with the first four negotiating chapters opened during 2016. The UK continues to support Serbia on its reform path, including through funding projects in Serbia.

[James Cartlidge (South Suffolk) (Con)]

Will the Minister comment on whether Serbia’s membership of the agency would have any impact on the pursuit of war crimes in Serbia, as part of its effort to increase human rights?

[Margot James]

I cannot comment specifically on the likely impact on the treatment of war crimes in Serbia, a subject about which the Foreign Office is extremely concerned—as, I presume, is my hon. Friend—but I think it can only be a mark of progress for Serbia to be admitted in the way that this decision enables it to be.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Minister says that this is a mark of progress, but I cannot accept that. This sounds like motherhood-and-apple-pie Eurospeak. Exactly the same words were used during the accession of Croatia, but has Croatia handed over its war criminals and does it have the rule of law yet? Both were promised. It has one of the longest borders in the EU, which is used for sex trafficking and human trafficking. We heard exactly the same then, but there have been no improvements. Why does the Minister believe there will be improvements with Albania and Serbia?

[Margot James]

To correct the hon. Gentleman, I do not think I said that I thought there would be improvements; I said that I thought it would be a mark of progress. I was trying to limit my enthusiasm to that degree, mindful of what he says about Croatia. However, I would say that it is early days and we can only go down the path of progress. The UK continues to support Serbia on its reform path, including through funding projects in Serbia.

Serbia has more work to do on anti-discrimination policies, improving the situation for vulnerable people and ensuring freedom of expression. Observer status at the Fundamental Rights Agency should help Albania and Serbia to reform in the areas we are discussing. Albania and Serbia should also be allowed to benefit from instances of good practice and evidence from other EU member states in relation to human rights. The Government are therefore satisfied of the need to support these two decisions.

The third and fourth decisions are necessary to implement a co-operation agreement between the EU and Canada on competition enforcement. The decisions will allow the agreement to be signed and allow conclusion of the agreement after it has been approved by the European Parliament. This competition co-operation agreement will replace an existing agreement that has been in place since 1999. It replicates and builds on the provisions in the earlier agreement by allowing the European Commission and the Canadian Competition Bureau to exchange evidence obtained during investigations, including confidential information and personal data.

The existing co-operation agreement with Canada dates from June 1999, and at that time the exchange of evidence between the parties was not regarded as needed. In the meantime, the bilateral co-operation between the European Commission and the Canadian Competition Bureau has become more frequent and deeper in terms of substance.

[Jonathan Edwards]

The Government have already told the Exiting the European Union Committee, on which I served during the last Parliament, that following our withdrawal from the EU we will no longer benefit from, for instance, the information exchange agreements between our competition regulator and the Canadian Competition Bureau. That renders much of the Bill rather pointless, does it not? Can the Minister explain how pulling us out of global deals such as the one that we are discussing will be helpful?

[Margot James]

I have explained that the purpose of the decision is primarily to support our role as a continuing member of the EU until the negotiations are complete, in two years’ time. Until then we will be covered by it, but after that date we shall have to see what has been agreed during the negotiations. The existing competition agreement with Canada does not allow the sharing of confidential information, but the new one does. I shall return to that point in a few minutes.

The absence of the possibility of exchanging information with the Canadian Competition Bureau is regarded as a major impediment to effective co-operation. The proposed changes in the existing agreement will allow the European Commission and the Competition Bureau to exchange evidence that both sides have obtained in their investigations. That will be particularly useful in all cases in which the alleged anti-competitive behaviour affects transatlantic or world markets. Many worldwide or transatlantic cartels include Canada and, via Canada, the Commission will gain a good opportunity to have access to additional information concerning those cartels.

Co-operation with third-country competition authorities is now standard practice in international competition investigations. In addition to the agreement with Canada, the EU has concluded dedicated co-operation agreements with the United States, Japan, Korea and Switzerland.

I now return to the intervention by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I omitted to say that even after the Brexit negotiations have been completed, the competition agreement with Canada will continue to apply to British companies if they are trading with the single market of the European Union.

The most advanced agreement is the one with Switzerland, which already contains provisions on the exchange of evidence, and the proposed update would bring the agreement with Canada to the same level as the one concluded with Switzerland.

I am sure Members will agree that the ability to share information is increasingly important for effective and efficient international competition enforcement. Access to information from other jurisdictions can be important to the reaching of a robust enforcement decision. Co-operation and information sharing between jurisdictions can help to ensure that enforcement bodies do not reach different decisions based on different sets of information.

The agreement contains general safeguards for the transfer of information, and additional safeguards for the transfer of personal data. Personal data can be shared only with the express written consent of the person or company to whom they relate. In the absence of consent, such data can be shared only when both competition authorities are investigating the same related conduct or transaction. Furthermore, the transfer of the data will be subject to independent oversight. The agreement also contains safeguards for information provided by a company under the EU cartel immunity or leniency programme. Such information cannot be shared without the express written consent of the individual or company that provided it.

As I have noted, the decisions will have no financial implications for the UK. I confirm that I do not consider that any of the Bill’s provisions interfere with the rights set out in the European convention on human rights, so no issues arise in connection with its compatibility with those rights.

[John Redwood]

I wonder why there is no cost. Surely, if there is to be an added layer of complexity in the sharing of information—which may be a good thing—there must be a cost in respect of the time of the officials involved.

[Margot James]

I am assured that no costs are associated with these decisions, other than those that arise in the normal course of Government business.

It is intended that the Bill will come into force on the day of Royal Assent. For the reasons that I have outlined, I commend it to the House.

--- Later in debate ---

[Margot James]

With the leave of the House, Mr Speaker, I am grateful to have the opportunity to respond to the debate.

The Bill will approve four draft European Council decisions. The first concerns the participation of the Republic of Albania and the Republic of Serbia as observers in the work of the Fundamental Rights Agency. The Republic of Albania and the Republic of Serbia both want to become members of the European Union. This measure does not extend the competency of the Fundamental Rights Agency. Albania and Serbia should be supported to increase their human rights awareness and promote fundamental rights within their countries, and I was pleased by the support that the House gave to that position.

I will deal with a few questions raised by hon. Members on this decision. My hon. Friends the Members for South Suffolk (James Cartlidge) and for Stone (Sir William Cash), to whom I express my appreciation for his work in chairing the European Scrutiny Committee, asked about the impact on Serbia’s war crimes record. The decision will allow Serbia to have access to the expertise of the agency and allow data on human rights in Serbia to be gathered and shared, providing steps to improve Serbia’s human rights protections. The UK continues to urge Serbia to meet its obligations to co-operate fully with the International Criminal Tribunal.

The hon. Member for Sefton Central (Bill Esterson) asked whether the UK could remain part of the Fundamental Rights Agency post Brexit. The Government are looking at the UK’s relationship with all EU bodies, including the FRA, as part of the exit negotiations. My hon. Friend the Member for Cheltenham (Alex Chalk) pointed out that the FRA is completely distinct from the European convention on human rights, and our membership of that convention continues post Brexit.

My hon. Friend the Member for Henley (John Howell) spoke with considerable authority on the work of the Council of Europe, of which he is a member, and the overlap between that body and the FRA. I share his hope and belief that the valuable work of the Council of Europe will continue long after Brexit.

On the co-operation agreement between the EU and Canada on competition enforcement, the UK has a large number of companies that are well placed to compete internationally in a system of genuine free and open competition. The agreement will help to ensure free and open competition by facilitating enforcement against international cartels. There are a number of questions in this area. The hon. Members for Birmingham, Erdington (Jack Dromey) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) asked about UK companies continuing to be subject to EU anti-trust jurisdiction. The EU has jurisdiction over competition effects within the EU single market. That will continue after we leave the EU, and UK companies will have to comply with EU competition law when they operate within the EU single market, just as US, Japanese and Canadian companies do. The key point about the Council of Europe concerns the setting of standards and the overseeing of these matters. We welcome greater co- operation on international competition enforcement.

The hon. Member for Sefton Central asked whether, after EU exit, we will have to continue to share with the EU information received from Canada. The UK Government will be free to enter into their own arrangements to share information with Canada directly, and the UK and Canada will need to negotiate any such agreement. He also asked about international agreements after the UK leaves the EU, and whether this agreement provides a model. The UK will be free to enter into international agreements on competition, and we believe that this agreement is a good model.

We have had a good debate on co-operation on international competition enforcement, which will ensure that British businesses continue to compete on a level playing field. I think I have answered most of the points that hon. Members raised during the debate, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

European Union (Approvals) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the European Union (Approvals) Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee of the whole House, on Consideration and up to and including Third Reading

(2) Proceedings in Committee of the whole House, any proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.

(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.

Programming committee

(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to other proceedings up to and including Third Reading.

Other proceedings

(5) Any other proceedings on the Bill may be programmed.—(Nigel Adams.)

Question agreed to.

Business of the House (Select Committees)

Ordered,

That, at this day’s sitting, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Andrea Leadsom relating to Standing Orders etc. (Committee on Exiting the European Union) and Women and Equalities Committee and the Motion in the name of the Prime Minister relating to Select Committees (Allocation of Chairs) not later than two hours after the commencement of proceedings on the Motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Michael Ellis.)