European Union (Withdrawal) Bill

Stephen Kinnock Excerpts

Committee: 2nd sitting: House of Commons
Wednesday 15th November 2017 Commons Chamber

[The Solicitor General]

Yes, indeed.

I shall now move on to new clauses 9, 22, 23 and 29, which is linked to amendment 128, new clause 45 and amendment 217, which is linked to amendment 64. They all in various ways deal with the question of the EEA. As we have said on several occasions, this is not about the UK pursuing an off the shelf arrangement; it is the UK seeking a bespoke arrangement that works for us. In the Florence speech of 22 September—which happens to be my birthday, although I am sure there was no coincidence in that—the Prime Minister set out a vision for the new economic partnership: a new partnership that will empower us to work together in continuing to bring shared prosperity for the generations to come.

[Stephen Kinnock (Aberavon) (Lab)]

I accept of course that we should have on the table the option of creating a bespoke deal for our future relationship, but surely we would want to have a range of options and models on the table as we shape that deep and comprehensive partnership? Why would we want to take one of those potential models off the table now, as it could be the building block of something different coming further down the line?

[The Solicitor General]

I always listen to what the hon. Gentleman says with a great deal of interest, but I say in the context of the Bill—although mindful of the constraints of Committee debate—that the thrust of these amendments will not achieve what their movers seek, which is to keep this country in the EEA. That is because all the amendments are based on a mistaken understanding of the UK’s relationship with the EEA. The UK is a party to the EEA agreement in its capacity as an EU member state, so once we leave the EU, the EEA arrangement will no longer be relevant. It does not have a practical effect at international level, and domestic legislation cannot change that.

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[Jonathan Edwards]

That point was also made by the First Minister of Wales when he was against this position, before he changed to agreeing with Plaid Cymru. Surely we should be endeavouring to achieve what was promised by Brexiteers such as Daniel Hannan prior to the referendum. He said that the Norway solution would be the most applicable and best solution for the UK.

[Stephen Kinnock]

I will try to assist the hon. Gentleman. The United Kingdom signed the EEA agreement in 1993 as a sovereign country. The United Kingdom is a single and separate contracting party. The body of legal opinion is very divided on this issue. Eminent experts such as Charles Marquand and George Yarrow have made it clear that they believe that to leave the EEA, the United Kingdom must trigger article 127 of the EEA agreement. Given that legal opinion is divided, this is surely a political issue that needs to be brought to this sovereign House so that we can take back control and have a proper debate and a vote.

[Jonathan Edwards]

I am always grateful for the hon. Gentleman’s assistance. He also speaks with great authority on these issues.

From where I approach these negotiations, it seems that the British Government’s decision to be outside the single market and customs union has created huge friction in the negotiations with the European Union. If we were to say that we wanted to stay inside the single market and customs union, I hazard a guess that the negotiations would proceed at a far greater pace and would reach a far more amicable destination.

Amendment 87 would alter the definition of EU retained law so as to include only reserved areas of legislation, which would allow the National Assembly for Wales and other devolved Administrations to legislate for themselves on areas of EU-derived law that fall under devolved competency.

After two referendums and hundreds of thousands of votes cast, the people of Wales chose to create a primary law-making Parliament in Cardiff that decides on the policies that matter most to the people of Wales in their day-to-day lives, such as education, health and the environment, to name but a few. The latest round of devolution saw the creation of the reserved powers model, stripping away the unnecessary jargon and constitutional complexity, which in effect means that the National Assembly for Wales has control over everything that is not explicitly listed as a matter kept by Westminster. It was meant to simplify matters and create clarity. In fact, the current Secretary of State for Wales went as far as saying that the change would settle the constitutional question in Wales for a generation. We can only assume that he was talking in terms of fruit flies, as before April 2018, when the newest devolution settlement comes into full force, we face nothing short of a constitutional crisis.

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[Alex Cunningham (Stockton North) (Lab)]

I want to speak to new clause 58 and to cover the key issue of EU pension directives, specifically versions one and two of the institutions for occupational retirement provision directive.

Both versions set out the broad framework for pension fund operation in the EU, concentrating on structures and procedures such as the separation of the fund from the employer, giving strong protection for scheme members, and the establishment of a regulator in each member state. My concerns relate to the effect of IORP II on the running of pension schemes and the Government’s approach to the requirement for legal separation of a pensions institution from the sponsoring employer under article 8 of the directive, and to investment regulations under article 19 that require assets to be invested prudently in the best interest of scheme members, and for any potential conflict of interest to be resolved in the member’s favour.

Principally, I seek an assurance that the Government will introduce legislation for the transposition of IORP II and that they will not seek to opt out of any of the relevant articles but implement them in full. That is particularly important for members of the local government pension scheme, as there remains some confusion in the public domain over whether IORP I was ever applied to it in full.

When IORP I is succeeded by IORP II, the Government could disapply any requirement for separation, as well as any requirement for investment in accordance with a “prudent person” rule. What lies at stake here are the statutory rights of more than 5 million citizens who participate in the UK local government pension scheme. They should not be undermined by virtue of past decisions, or indeed as a result of our leaving the EU. This is made even more important by the proximity of the deadline for IORP II to the date of exit from the EU. I hope that Ministers will confirm that the Government will ensure the necessary measures—articles 8 and 19—are enshrined in UK law.

I now turn to the state pension. As a result of our EU membership, the UK is part of a system to co-ordinate the social security entitlements of people moving within the EU. That system enables periods of insurance to be aggregated, meaning that an individual who has worked in other member states can make one application to the relevant agency in the country of residence. In the UK, that is the International Pension Centre. That relevant agency then notifies details of the claim to all countries in which the person has been insured, and each member state calculates its pro-rata contribution and puts that amount into payment.

The UK state pension is payable overseas, but it is uprated only if the pensioner is in an EEA country, or one with which the UK has a reciprocal agreement for uprating. In September, the Government suggested that reciprocal arrangements would be protected following exit from the European Union, and that is also included in the joint paper on citizen’s rights. Will Ministers confirm that that will continue to be the case, and that the Government will not be seeking to enter individual reciprocal arrangements after our exit from the European Union, but will instead continue to work on the basis of current arrangements?

[Stephen Kinnock]

I would like to speak in favour of new clause 2 and new clause 58, which have been tabled by those on the Labour Front Bench.

There is an idea that we should be giving the Government the benefit of the doubt on these issues. There have, however, been so many statements and acts from those on the Government Benches to undermine employment rights, from the Trade Union Act 2016 to many other measures, that we need to ensure we anchor the rights of our workforce in the Bill.

The Exiting the European Union Committee met Mr Barnier in Brussels last week. One point he made very clearly is that as we move towards a future relationship, the so-called deep and comprehensive free trade agreement will need to be ratified by the Parliaments of the member states, plus a number of regional Parliaments. They will not accept anything that he described as “social dumping”—they will not accept undercutting and they will not accept unfair regulatory practice—so if the Government are serious about getting a deep and comprehensive free trade agreement with the EU they will have to recognise that regulatory equivalence will have to be a critical part of it. This is about not only securing rights in this country, but the economic interests of the country if we are serious about having that future relationship.

[Mr Kenneth Clarke]

I entirely endorse what the hon. Gentleman says about a free trade agreement with the European Union requiring regulatory equivalence. Actually, this is not a uniquely European thing or a malicious Brussels proposal. Modern trade agreements in a globalised economy all depend, more than anything else, on mutual recognition or regulatory convergence in the sectors where free trade is going to be allowed.

[Stephen Kinnock]

The right hon. and learned Gentleman is, as always, absolutely correct. We need to recognise the umbilical cord connecting the regulatory playing fields to the trade agreements because of the nature of unfair competition and unfair practice. None of the EU member states will accept such agreements without that. What was particularly interesting about what Mr Barnier said was that the comprehensive trade discussions will be on the basis of article 218 of the treaty, which requires ratification by 27 member state Parliaments and eight regional Parliaments. The level of scrutiny, therefore, will be even greater under the future relationship than under the transitional relationship, which we know will be a carbon copy of the status quo, including on ECJ jurisdiction. I think the Government have accepted that, although there seems to be an attempt to wriggle out of some aspects. The fact remains, however, that a transition deal will be a carbon copy of the status quo.

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[Sir William Cash]

I would be grateful if the hon. Gentleman could explain how often, and in what circumstances, the arbitration court has departed from the decision making and precedence of the ECJ.

[Stephen Kinnock]

This is a clear case of a “before and after” conversation. The court would be substantially altered were the UK to have judges on it. It would be a category shift in the role of the court. It would require negotiation, of course, but I am offering an opportunity to square the circle in terms of the many contrasts, conflicts and competing agendas around the delivery of a Brexit that works for the whole country and delivers for the millions of people who voted in the referendum and who are not ideologues on one side or the other. They want this Parliament to get on with the job and to deliver a Brexit that works for the whole country, and indeed helps to reunite our country. In that spirit, new clause 22 is so important and offers so much.

There is much conversation about models. The Canada model does not include services, while the Ukraine model is new and untested. The EEA-EFTA model is well established and well understood. It would give our business community and our economy the certainty that they so desperately need.

[Sir Desmond Swayne (New Forest West) (Con)]

Will the hon. Gentleman give way?

[Stephen Kinnock]

I will not, as so many Members want to speak. I am afraid that I must make progress.

I want to close my remarks by saying that we are in a hiatus that is deeply damaging to the British economy. We are drifting and rudderless. We are floating in a mist of ambiguity and indecision on the part of the Government, because they refuse to set out the road map to our future relationship. We know that there is not time to do that bespoke deal and that we need a well established and well understood deal off the shelf. We also know that it is necessary to trigger article 127 of the EEA agreement to leave the EEA, because we signed up to that agreement as a single and sovereign contracting party.

Legal opinion is divided on the issue. Therefore, it becomes political. It is time for the House to show some leadership, have the debate about our future relationship with the single market and take back control in this sovereign Parliament. I therefore commend new clause 22 to the Committee.

[Caroline Lucas]

I rise to welcome and support a number of proposals in this group, in particular new clause 2, new clause 25, the amendments on the EEA and new clause 22.

I shall be brief because many others wish to speak. First, new clause 22 seems to me to be eminently reasonable and, in a sense, asks no more from Ministers than they have already pledged verbally. Call me suspicious, but I would like to see that locked down legally as well, but it goes no further than what they have already said.

Indeed, the new clause reflects repeated statements by Ministers, not least the Secretary of State for Exiting the European Union, that the UK’s withdrawal from the EU will not lead to a weakening or a dilution of workers’ rights in particular. In October 2016, the Prime Minister herself said that

“existing workers’ legal rights will continue to be guaranteed in law”.

The same month, the Secretary of State for Exiting the European Union said this:

“To those who are trying to frighten British workers, saying ‘When we leave, employment rights will be eroded’, I say firmly and unequivocally ‘no they won’t’… this… government will not roll back those rights in the workplace.”

The Secretary of State for Environment, Food and Rural Affairs has said that he wants not just to maintain environmental laws, but to enhance them. It is puzzling why there is still resistance to translating all that rhetoric into legal certainty. That is all we seek this afternoon.

Those and other more recent statements are welcome, because in June 2016 electors were not voting to jettison hard-won rights and legal protections. On the contrary, they were assured by the leave campaign that taking back control would mean improvements to their rights and legal protections, denied them, apparently, by the evil bureaucrats of the EU. However, the Bill risks retained EU law being vulnerable to chipping away through secondary legislation. That is a real concern and those are important protections. Furthermore, if we are to have that deep and special relationship with the EU27, in particular in trade, we will have to abide by those regulations in any case, so why not lock them down with certainty here and now in this debate?

New clause 25, which was tabled by the hon. Member for Bristol East (Kerry McCarthy), again asks little of Ministers. I hope it will be accepted. It would simply ensure that the quite extraordinary delegated powers that the Bill grants be used only in pursuit of the Bill’s stated purpose—namely, to allow retained EU law to operate effectively after withdrawal.

As the Bill stands, it will allow Ministers to use those delegated powers to modify what are currently EU regulations. That simply does not provide a good enough guarantee that those delegated powers will not be used to water down EU-derived standards on key environmental safeguards—for example, on chemical and timber regulation—without proper parliamentary and public scrutiny. New clause 25 would address that weakness by establishing a new process for modifying retained EU law after Brexit—one that I believe strikes a better balance of powers—and it acknowledges that it is sometimes necessary to amend technical provisions using secondary legislation. It allows for that, but it would also ensure that more substantive modifications to retained EU law can only be made by an Act of Parliament.

I want to say a few words about the amendments on the EEA. I simply want to reinforce what other hon. Members have said—that while the EEA might not be the most ideal port for a ship seeking shelter from the worst of the Brexit storm, because by almost any standard EEA membership is clearly inferior to full membership of the EU, when the storm is bad sailors can nevertheless be glad to find shelter in any available port, and with the sand now running fast out of the article 50 hourglass, one would have thought that any strong and stable Government worthy of the name would want to keep their options open.

Membership of the EEA would at least allow the UK to retain access to the EU single market. That means that British citizens would still be able to live and work in EU member states. British businesses would have the certainty of being able to trade freely with countries in the EU single market and access that market’s more than 500 million consumers. It would mean as well that the NHS would not be facing the crisis that it is currently facing, with so many nurses and health workers now being put off from coming to work in our NHS because they are no longer welcome. It means that we would not have the crisis in agriculture, where we literally have crops rotting in the fields because we do not have workers here to actually do the work in those fields. Crucially, it would also mean that those EU citizens who have made their lives here in good faith, and who have paid their taxes and worked here alongside us as our family, our friends and so on, would not feel unwelcome in a country that has been their home, in some cases for decades and decades.