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

Debate between Stephen Doughty and Chris Skidmore

Monday 21st January 2019 General Committees

[Stephen Doughty]

Does the Minister appreciate that there are genuine concerns, particularly among self-employed musicians—I draw attention to my entry in the Register of Members’ Financial Interests—and small creative companies and games companies? They are deeply concerned not only about the impact of Brexit, but about what this chaos will cost them, whether or not there is a deal, in getting such legal advice, which those in what are often low-pay industries could do without.

[Chris Skidmore]

Passing this SI today will provide the maximum possible certainty by creating the national exhaustion regime, allowing companies and creators to have that security by keeping the status quo. That is what this SI is about. We are not having a wider debate about Brexit today; this is about ensuring that, when it comes to changing this technical apparatus in law, the regime continues as it has done previously. The SI simply ensures that we can continue to tick on as we have done in the past. Its implementation is essential to ensuring that the current arrangements continue. Failing to pass this legislation before we exit would leave a period of legal uncertainty, during which businesses could incur significant litigation risks. The SI maintains arrangements that continue to support the movement of goods to the UK. For example, this could help with NHS resilience in the supply of medicines at a cheaper cost.

The hon. Member for Sefton Central also talked about the potential consequences of an international exhaustion regime. I have already stated that this is about extending the legal framework to ensure that we protect the current regional exhaustion regime. When it comes to any further alternatives, the legal and economic arguments for various options are complex, which is why the Government are conducting research on the best exhaustion regime for the UK. Were there to be a change, the Government would introduce it only following evidence gathering and analysis, alongside engagement with a wide cross-section of stakeholders. The Government are conducting a feasibility study that will look into the levels of parallel trade between the UK and the EU. That study is ongoing and the evidence from the report will form part of the next steps in the Government’s decision-making process. I believe it will be published by Ernst and Young in 2019. Obviously, the response to the report and any further policy measures will take time. There is no compelling reason to rush to an alternative system until we have seen the evidence and listened to businesses and consumers.

The hon. Gentleman mentioned public consultation. Since the referendum result, the Intellectual Property Office has engaged with businesses in several sectors about the implications of exit. I visited the IPO’s offices in Newport on Friday and found an excellent organisation whose workforce have high morale and are determined to deliver maximum possible certainty as we approach the EU withdrawal day of 29 March. I have seen the charts and I reassure the hon. Gentleman that the IPO is doing all it can to engage with stakeholders.

The usual wide engagement with businesses and individuals was not possible on a draft no-deal instrument when the Government were in the middle of sensitive negotiations on the withdrawal agreement. Public consultation on no deal would also have risked prejudicing the ongoing discussion with the EU about our future membership. However, as I said, the IPO engaged with stakeholders across a wide range of sectors, including rights holders. That was consistent with the approach to no-deal legislation across Government, as I mentioned last week in our previous discussion on statutory instruments.

European Union (Withdrawal) Bill

Debate between Stephen Doughty and Chris Skidmore

Committee: 4th sitting: House of Commons
Monday 4th December 2017 Commons Chamber

[Chris Skidmore]

I will set out the Government’s position in due course during my speech. [Interruption.] The hon. Gentleman intervened within 30 seconds of the beginning of my speech, and he is not accepting the answer that I have barely been able to give. I hope he will appreciate that I have a speech about the amendments to get through. When it comes to the clause itself, however, we are interested in the views of all Members and all devolved Administrations, and, above all, we are seeking a legislative consent motion. We are determined to approach the clause with a view to consensus.

As I was saying, the current devolution settlements provide that devolved institutions cannot act or legislate in a way that is incompatible with EU law. That has provided common, overarching laws and approaches throughout the UK while we have been in the EU. Those common approaches and laws have meant that businesses, regardless of where they are based in the United Kingdom, can trade with each other in the knowledge that they share agreed standards.

[Stephen Doughty]

The Minister is making an important point about businesses being able to trade. Given the amendments that we have been discussing and the importance of consultation with the devolved Administrations, will the Minister tell me whether the proposals that were put forward in Brussels today on the Northern Ireland-Irish border were discussed with the First Ministers of Wales, Scotland or, indeed, Northern Ireland?

[Chris Skidmore]

It is not for me to comment, during a Committee stage, on the process of European negotiations. There is a time and a place for that. I am not going to get into a discussion with the hon. Gentleman about the process of EU negotiations. We must ensure that the Prime Minister has the opportunity to reach out to Brussels, but I am here to discuss clause 11 and schedule 3 and the amendments, and I hope that the hon. Gentleman will allow me to continue to do so.

I was talking about the common approaches that enable us to trade with each other in the knowledge that we share agreed standards. We have agreed approaches on how to manage our common resources, and the UK can enter into international agreements knowing that we, as a country, can meet our obligations. As we leave the EU, the simple question is about where we need to retain the common approaches in EU law and where we do not. In the immediate term, clause 11 and part 1 of schedule 3 create a mechanism for those common approaches to continue to apply throughout the UK after exit.

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[Stephen Doughty]

I thank the Minister for what he is saying, but it is clear that the Welsh Government and the Scottish Government, and Members of this House working with them, have proposed clear and specific amendments that are not about blocking the Bill or undoing Brexit; they are about retaining a stable constitutional settlement in these islands. Will he accept those amendments, as his colleague the Secretary of State for Scotland said he might?

[Chris Skidmore]

I am discussing whether the clause should stand part of the Bill and I am about to turn to the hon. Gentleman’s amendments. I hope that he can wait in eager anticipation for my remarks and that he will not be disappointed, although he may be.

I reiterate that I welcome scrutiny by the House on the approach that the Government have taken. As I said, I also welcome the vital contributions the Scottish Government, Welsh Government and devolved legislatures have made in this debate by publishing their views on how devolution aspects of the Bill might be improved. This Government are clear that we want to consider all those views and make improvements to the Bill where we can, but I also emphasise that it is right that we provide certainty across the UK, as this clause seeks to do, and do not take any action to undermine the integrity of our United Kingdom.

I will also take a moment to reflect on the insightful contribution made by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), informed by the evidence to and input from the members of the Public Administration and Constitutional Affairs Committee. He made a number of pertinent points and I will turn to those now. He is right to say that leaving the EU is that opportunity to revisit some key constitutional questions. As I have set out today, the Government’s aim in introducing clause 11 is to do precisely that: to give us time to give these important issues the consideration they deserve.

We welcome the views of experts such as my hon. Friend and his Committee on these issues of intergovernmental institutional relationships. The Government are ensuring that we engage with other external experts such as leading academics on these questions. What we are focused on today is how we provide that certainty and continuity we need in the law on exit day and how we give ourselves time to consider the issues properly and reach the right answers. I welcome my hon. Friend’s continued contributions to this discussion.

New clause 64, which relates to the creation of common frameworks, comprise three subsections and I will take each in turn. First, the new clause would require the Government to lay their proposals for the replacement of European frameworks with UK ones before each House of Parliament. It is not the position of the UK Government, or of the devolved Administrations, that the existing UK frameworks will be replaced by our own common frameworks in every instance. Instead, we expect more power to sit directly with the devolved Administrations as a result of our leaving the EU.

As I mentioned earlier, we are working closely with the devolved Administrations to determine where future frameworks, whether legislative or non-legislative, will be required in each of the policy areas in question. Although joint conclusions have not been drawn at this point—as I have stated, I do not want to prejudice the outcome of the discussions with the devolved Administrations—we believe that the majority of policy areas will not require legislative frameworks.

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[Chris Skidmore]

I have already stated that the Government are prepared to listen to all those who seek to improve the Bill. We will use this opportunity to reflect on all the speeches made by hon. Members in Committee; that is what Committee is for. I have stated a commitment to ensuring that the content of today’s debate is shared with all members of the JMC (EN) on 12 December. There is a process to look at the establishment of common frameworks, and the careful analysis needs to take place with the consent of or working with the devolved Administrations and their officials. I am pleased that we have made good progress on this with the agreement at JMC (EN) with the Scottish and Welsh Governments on the principles that will guide our future framework discussions.

[Stephen Doughty]

The Minister is being generous in giving way. My name is on a number of these amendments. Will he be absolutely clear on one point? The Welsh Government and the Scottish Government have tabled amendments in good faith that are aimed at being constructive and making the Bill more sensible, with the support of many Members across the Committee. Indeed, Members of the Minister’s own party have pointed out problems with the Bill. Am I correct that, despite those points, he is not going to accept any of the amendments?

[Chris Skidmore]

We have always made it clear that we stand ready to listen to those who offer improvements to the Bill. Engagement at all levels of government—[Interruption.] The hon. Gentleman does not want to listen to what I have to say. He wants me to accept an amendment; I have given way several times, yet he is not prepared to listen to what the Minister has to say. Engagement at all levels of government is a usual part of the process, and this engagement must be at all levels of discussion, not just that which takes place in this Chamber. We want to work with the devolved Administrations, and we have been clear that we would like all parts of the UK to come together in support of this legislation, which is crucial for delivering the outcome of the referendum.

We continue to believe that the provisions in clause 11 are vital to providing the necessary immediate certainty to people and businesses while we discuss where common frameworks are and are not needed. We recognise that the Scottish and Welsh Governments have taken different positions from our approach, and we welcome the contribution to the debate. We remain open to suggestions and thoughts about how to ensure that the Bill works to deliver a functioning statute book for all parts of the UK. However, we cannot accept changes that would undermine the UK’s internal market or increase difficulties for people and businesses.

We are also clear how this process must happen. As I have said, we need the analyses to take place. We are clear that we will make progress with the JMC (EN), and that we will ensure that our final analysis indicates that legislative frameworks will be unnecessary for a majority of those policy areas. Following the agreement of the principles of the JMC (EN), we have already commenced work with the devolved Administrations, building on the work that is taking place at both ministerial and official level to make quick progress on the potential role for frameworks in some specific policies areas including agriculture, justice, home affairs and public health, where deep dives have taken place with officials from all Administrations. This work is allowing us to explore the different form the frameworks could take.

I should say that a legislative framework is by no means the only method. Indeed, as I said, legislative frameworks are likely to be used in a limited number of areas. There is far more use for non-legislative frameworks, including memorandums of understanding, concordats and informal collaborative working arrangements, as already happens.

In removing clause 11, these amendments fail to recognise the importance and value of our internal market and of having consistent rules for individuals and companies. They pre-empt the vital work we are undertaking with the devolved Administrations, and prejudge the outcome of our negotiations with the EU. Until we know the outcome of those negotiations, we cannot have certainty over how these powers, in places, will relate to our future relationship with the EU or, therefore, at what level they should be exercised in the future.

I note that Members have referred to evidence given to various Committees. I have heard their points, but it is important to come back to the motivation and need for the Bill: to provide certainty and control.

Sir Stephen Laws, formerly first parliamentary counsel, has pointed out that the devolution settlements were agreed in the context of our EU membership. That is why we are focusing through our discussions on common frameworks with the devolved Administrations on what our constitutional arrangements should be outside the context of our EU membership. That is what the provisions in the Bill give us the space to do, by maintaining the parameters of devolved competence.

I stress again that the mechanism here is not an end; it is an important first step in the process of returning these powers from the EU to the UK, enabling us to do the necessary work to determine where further powers can be released to the devolved Administrations.

I must reiterate that I understand the intention behind the amendments—that powers sit at the right level once we have left the EU. I am clear that the process we are going through does not change our unshakeable commitment to ensure that devolution in the UK is even further strengthened so that we may have more devolution and more union across the UK.

I turn now to amendment 165, which I will take with consequential amendments 180, 182 to 191, 194 and 195, tabled by the hon. Member for Edinburgh South (Ian Murray). Amendment 165 would allow the Scottish and Welsh Governments to make secondary legislation to change retained EU law in the areas that are currently subject to EU law. Taken together with other provisions of the Bill, part 1 of schedule 3 is intended to maintain the common frameworks across the UK that have been created by EU law. In particular, that will ensure that no new barriers to people living and doing business across the UK are created after we leave the EU.

As I have made clear, the Bill guarantees that the current decision-making powers of the devolved Administrations are respected. Anything the devolved Administrations could do before exit day they will be able to do after exit day. Our priority must now be to prepare our statute book for exit, and we want to work closely with the devolved Administrations to do that.

It is through the work on the common frameworks and the discussions with the devolved Administrations that we can make progress on specific areas and seize the opportunities to improve policy in the UK. As I mentioned earlier, the next JMC (EN) is scheduled to take place on 12 December, and it will continue that accelerated process of assessing where frameworks are needed and where they are not. We will prioritise those areas of greatest interest and significance.

We very much hope to see further steps forward, but it is right that we do these things in discussion and collaboratively with all Governments across the UK. Once it has been agreed through ongoing engagement, which this Government are committed to, where common frameworks are not required, we can use the Order in Council power to release decision-making powers to devolved Administrations. For that reason, the amendment is unnecessary, and we would urge the hon. Gentleman not to press it.

Let me turn now to amendment 72, tabled by the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), which would enshrine a requirement for the Government to seek a legislative consent motion from the devolved legislatures. As the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester, said on day one of Committee stage, we want to make a positive case in favour of legislative consent for this vital piece of legislation and to work closely with the devolved Administrations and legislatures to achieve that. As I have mentioned, there has been an extensive programme of engagement with the Scottish and Welsh Governments and legislatures. In the absence of the Executive in Northern Ireland, official level engagement also continues with the Northern Ireland civil service.

We do not recognise the need for this amendment. The Government have already explicitly recognised the role of the Sewel convention in the Wales Act 2017 and the Scotland Act 2016. I ask hon. Members to look at our track record: we are committed to the devolution settlements and the conventions that we have established.

We continue to believe in the importance of the Bill, which is in the national interest, and we will work to deliver it with the devolved Administrations. The question of ensuring certainty both for our statute book and our internal market when we leave the EU is of great significance to all parts of the UK. We would like all parts of the UK to come together in support of this legislation, which is vital to the securing of a smooth and orderly exit. I urge the hon. Member for Darlington (Jenny Chapman) to withdraw the motion.