European Union (Withdrawal) Bill

Robert Neill Excerpts

Committee: 6th sitting: House of Commons
Tuesday 12th December 2017 Commons Chamber

[Mr Baker]

Well, I am extremely grateful to my right hon. and learned Friend, who I am very happy to see does remain my friend, as well as my constituency neighbour. I cannot tell him how happy I am to discover that that is the case.

Earlier, my right hon. and learned Friend asked me why Government could not accept additional protections requirements in amendment 13, given that that appears in other legislation. A similar test does appear in the Legislative and Regulatory Reform Act 2006, but the powers in that Act are rarely used, in part because of its complicated requirements. Moreover, the detail of that Act and its powers justify such a test as it is about deregulation. We consider that the existing restrictions in clause 9 are the right ones.

I move forward to amendments 131, 269 to 271, and 359 on restriction of the powers relating to EU citizens’ rights. Since those amendments were tabled, we have secured much-needed agreement on citizens’ rights through our negotiations. I hope Members will be glad that we have now made sufficient progress, subject to the European Council meeting, and that we will be able to move forwards.

The final agreement with the European Union on citizens’ rights is still subject to our negotiations with the EU. However, of course, we expect to give effect to those in the withdrawal agreement and implementation Bill. The House will therefore have both a meaningful vote on the agreement and on its debates on the primary legislation necessary to implement it. I therefore invite hon. Members to withdraw their amendments.

[Robert Neill (Bromley and Chislehurst) (Con)]

On amendment 359, we seek clarity on the current wording in relation to deficiency by means of a loss of reciprocity. We want to clarify that the Government do not intend to use it in a broad sense—in theory, it could be used in a very wide sense. In fact, it is intended to be narrow, so that major changes to policy, such as citizens’ rights to work or to come to this country, will be effected by primary regulation, not by regulation under clause 7.

[Mr Baker]

I understand my hon. Friend’s point. Just to reassure him: it is our firm intention to carry through the agreement, which he can read in the joint report of the negotiators, into legislation so that citizens can rely on it in the United Kingdom through that withdrawal agreement and implementation Bill, which I hope we can put before the House in due course.

Amendments 31, 32 and 57 seek to remove so-called Henry VIII powers. I can confirm that amendment 32 is not necessary because the power in clause 7 cannot be used to amend the Act itself. It would be outside the scope of the power—ultra vires. Neither can the power in clause 8 be used for this purpose. Let me be clear: only the power in clause 9 states that it can amend the Bill. None of the other powers in the Bill make that statement. As I said earlier in an intervention, in the event that the use of a clause 9 power is proposed to amend the Act, it would be subject to the affirmative procedure.

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[Mr Baker]

I am extremely grateful to my hon. Friend.

Let me return to my notes in order that I might give the Committee an accurate presentation of these measures. Where this type of specialist legislative function exists at EU level, we will need to ensure that the responsibility is transferred to the appropriate UK body so that the UK has a fully functioning regulatory regime in time for day one of EU exit. This might be the case where, for example, it is more appropriate for the Health and Safety Executive in the UK to update lists of regulated chemicals than the Secretary of State, or where it would make sense for the Prudential Regulation Authority to take on responsibility for updating monthly the detailed methodology that insurance firms must use to prudently assess their liabilities. Both these legislative functions are currently carried out at EU level and will need to be taken on by the appropriate UK regulator after exit.

To reply to the point made by my right hon. and learned Friend the Member for Beaconsfield, any SIs made under clause 7 that transfer a legislative function or create or amend any power to legislate will be subject to the affirmative procedure. This is provided for in schedule 7. Therefore, Parliament will be able to debate any transfer of powers and consider the proposed scope of such powers and the scrutiny proposed for their future exercise, which will be set out in any instrument conveying that power. Recognising that some of the existing EU regulation that will be incorporated into UK law will be of a specialised and technical nature, clause 7 allows the power to fix deficiencies to be sub-delegated to the UK body that is best placed to perform the task. EU binding technical standards—the detailed technical rules developed by EU regulators for financial services—are a good example of where we might sub-delegate the clause 7 power. These standards, which run to almost 10,000 pages, do not make policy choices but fill out the detail of how firms need to comply with requirements set in higher legislation. The PRA and the FCA have played a leading role in the EU to develop these standards, and so they already have the necessary resource and expertise to review and correct these standards so that they operate effectively in the UK from day one of exit. I appreciate the concerns of my right hon. and learned Friend and the hon. Member for Nottingham East, but I hope I have demonstrated why we cannot accept these amendments.

Amendments 17, 360 and new clause 35 require additional information. As I have said, we have tabled amendment 391, which will require the explanatory memorandums alongside each statutory instrument to include a number of specific statements aimed at ensuring the transparency of the SIs that are to come and acting as an aid to the most effective scrutiny that this House can provide.

I would like to take a particularly special moment to reassure my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), in whose name amendment 360 is tabled, that we have laid in the Library draft SIs that will help everyone to understand the sorts of changes that we might need to make under clause 7. I would like to reassure him that the Treasury has been engaging with the financial services industry extensively since the EU referendum on the range of issues affecting the sector as we withdraw from the EU. That engagement continues and it includes regular official and ministerial discussion with industry and trade associations and bodies such as the International Regulatory and Strategy Group. That includes discussions on our approach to the domestication of EU financial services regulation through this Bill. That will continue and grow throughout 2018. The Treasury is also working closely with the Bank of England and the FCA to ensure the UK’s smooth and orderly withdrawal from the European Union.

By supporting a close working partnership between industry, regulators and Government, the Government will ensure that their approach to domesticating EU financial services regulation is well understood and based on input from stakeholders. Consistent with the objectives of this Bill, the approach in financial services is to provide certainty and continuity for firms after exit with the UK maintaining high regulatory standards. Financial services is one of the areas where a bold and ambitious free trade agreement could be sought. We are ambitious for that deal and we would do nothing in clause 7 to undermine it.

[Robert Neill]

I am grateful to the Minister for devoting that portion of his speech to the detail on financial services. That is important for the City, as he knows, and the proposal to publish draft statutory instruments is a well-tested and welcome route.

[Mr Baker]

I thank my hon. Friend.

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[Helen Goodman]

The hon. Gentleman is displaying his usual charm in trying to make hon. Members feel that the Standing Orders put forward by the Leader of the House are peerless. I suspect that hon. Members will want to come back and debate the make-up and terms of reference at the time. I would also be grateful if Ministers could relay to the Leader of the House that we are disappointed that neither she nor her deputy have been present at any point in this debate, when we have been discussing something that concerns the role of the House. We hope very much that they will also be flexible if, when we have that debate, there is a consensus for changing the draft Standing Orders just published.

[Robert Neill]

It is a pleasure to follow the hon. Member for Bishop Auckland (Helen Goodman) and to participate in this debate. This, of course, is what Parliament is about at the end of the day. The amendments, including the two that stand in my name and that of my hon. Friend the Member for Wimbledon (Stephen Hammond), which have been debated at length, are all about improving the Bill. I noticed in the world of Twitter and spin merchants this afternoon the suggestion that amendments to the Bill on key issues, if carried, might somehow weaken the Government’s position with our European counterparts and undermine the confidence of our European partners in our ability to deliver. Shall we just park that as the tosh and nonsense that it is? Anyone who spins that out, on whoever’s behalf, should be ashamed of themselves.

I know that the two Ministers certainly would not take that view. The spirit in which they have approached the debate is welcome. This is about improving the Bill to ensure the right outcomes at the end of the day. That is why the points made by my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) were so important and why I endorse every word he said. It is also why I warmly welcome the work of the Procedure Committee and my hon. Friend the Member for Broxbourne (Mr Walker) in finding a means to a better level of triaging, in effect, of these very significant statutory instruments and regulations.

The point has been well made by both my right hon. and learned Friend and my hon. Friend that the broader picture here is how we scrutinise secondary legislation in this place. I think that everybody concedes that it is woefully inadequate and does not bear comparison with many other Parliaments. It is an example of how being the mother of Parliaments does not necessarily mean we are the best. We need to improve our work, but I think we are taking a workmanlike and sensible approach, which I appreciate. There will, no doubt, come a point when we shall need to look at the way in which we deliver the deal—and I am delighted that we are now able to move on to phase 2. I look forward to the time when the House is given a proper vote on that, or, indeed, on the lack of any such deal.