European Union (Approvals) Bill

William Cash 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 Liddell-Grainger]

rose—

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[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.

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[Sir William Cash (Stone) (Con)]

As has been mentioned, the European Scrutiny Committee, of which I was Chairman for six years, has actually cleared these decisions. We did have some reservations about one aspect, however: we wanted to know how all this would work out during the Brexit negotiations and after we have left the European Union.

Basically, there is a necessity for this Bill because, as the Minister pointed out, although we are leaving the EU, under sections 2 and 3 of the European Communities Act 1972 we are still within the framework of the requirements to comply with EU rights and obligations until Brexit takes effect. There are some who hope that all this will somehow be kicked into the long grass, that we will have arrangements that take us into a world of never-never land, and that it will all disappear. There are some in the House of Lords who certainly take that view and there may even be some in the House of Commons. I was extremely glad to note, however, that on certain matters, in particular the single market and the customs union, the decision that was taken on the Queen’s Speech made it clear—subsequent events seem to have confirmed it—that the Opposition have actually begun to become extremely realistic about the single market and all that goes with it. These sort of arrangements are implicit in the Brexit negotiations and in the outcome of Brexit.

The Bill has to provide parliamentary approval of the decisions on Albania and Serbia, and the European Scrutiny Committee had no reservation or concern after we heard from the relevant Minister—the same Minister who wrote me the letter last year. The important issue here is that Albania and Serbia are not by definition countries that are likely to become candidates for EU membership during the period of our negotiation process and exit. Mr Juncker himself said that he does not think there will be any enlargement until after we have left the EU, so such decisions will not impinge upon us. We do not have to take a specific position on the candidatures of Albania and Serbia.

The Bill’s briefing paper contains many references to the Fundamental Rights Agency, and one thing that has not yet been mentioned in this debate is the charter of fundamental rights, which is embedded in the Lisbon treaty arrangements and is a matter of law. I strongly resisted our being drawn into the charter, and we held a European Scrutiny Committee inquiry into how Lord Goldsmith and his negotiations had failed so dramatically. We thought that we were not going to be a member of the charter, but we ended up within that framework. The Fundamental Rights Agency, which promotes dialogue with civil society in order to raise public awareness of fundamental rights, things which would be part and parcel of the functions that would be carried through by virtue of the Bill in respect of Serbia and Albania, contains something of a vacuum because we will not be part of the charter of fundamental rights after we have left the EU, but we are part of it for the time being, so to that extent there is a problem. I will not invite the Minister to enlarge on that—I hope she is glad about that—but I want to put it on the record that the charter of fundamental rights should never have applied to us in the first place. It was a botched job by the then Labour Government, and we are now saddled with the fact that we are in it. Fortunately, however, we will be coming out of it as a result of Brexit.

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[Michael Tomlinson]

I declare an interest as someone who served on that Committee in the previous Parliament. Has my hon. Friend received any assurances about when the Committee will be reconstituted? Does he agree that that is a matter of urgency?

[Sir William Cash]

I am glad to respond, because I have been very much engaged on that subject. In fact, one of the last things I did on the day of Dissolution was to write to the Chief Whip asking him to ensure that our Committee was reconstituted immediately after the election, because in 2015 the whole process went on until November, by which time we had a monument of documents. In the meantime, many things are being decided in the European institutions, many of which are directly relevant to the Brexit negotiations. It is therefore incredibly important that this House has an opportunity to assess the sorts of things that are being decided, subject to the Committee clearing the documents.

As hon. Members may know, if the European Scrutiny Committee imposes scrutiny reserve on a document because we think it is so important that it has to be debated, the Council of Ministers cannot conclude its consideration of those matters, and the Government cannot make a decision to carry the matter through, unless and until that debate has taken place. When we have a pile of documents—I understand there are some 200 documents in the pipeline—and a pile of explanatory memoranda explaining the Government’s position on them, the position the Government adopt on the documents in the negotiations will be highly interesting.

My hon. Friend the Member for Mid Dorset and North Poole rightly raises the question of getting on with the job, and I am given to understand, without committing anybody to anything, that the Government are taking steps to accelerate the process because it is so important. Of course, we will discuss the other Select Committees later this afternoon. Their schedules and the allocation of chairmanships to each party will be decided, and I understand that that has been discussed through the usual channels, so I do not expect it to be terribly controversial, but for all the reasons I have set out, it is important for the European Scrutiny Committee to get going.

I entirely endorse what the Minister said about the Canada agreement, which again was discussed by the European Scrutiny Committee. We agreed that we would let it go ahead, but the explanatory notes on the Bill indicate some implications for United Kingdom companies operating in the EU after Brexit, which is the bit we should be most concerned about at the moment:

“Following the UK’s exit from the European Union, UK companies operating in the EU will still be subject to the jurisdiction of the European Commission in antitrust investigations and, where the thresholds are met, in merger investigations in the same way as for other non-EU companies operating in the EU. Information relating to UK companies based in the EU would therefore still be transferable under the new Agreement.”

That is becoming a bit of a hot potato. I made a representation to the Prime Minister the other day on the question of citizens’ rights, and we hear a lot about the question of City regulation, and here it is coming up again.

Some people are making too much of it. An enormous amount is emerging from the commentariat and on programmes we sometimes find ourselves listening to but that we perhaps ought to switch off. They are trying to make out that, somehow or other, the real problem is that we have to stay in the European Court of Justice, which is complete rubbish. We do not have to stay in the European Court of Justice and, far more than that, we are not going to stay in the European Court of Justice, because we will be repealing sections 2 and 3 of the European Communities Act 1972. The Labour party has made it clear that we will not stay in the single market or the customs union, which raises some of the biggest issues relating to the ECJ. Frankly, as I told the House the other day, we have to come up with a sensible arrangement that does not prejudice the regaining of our judicial sovereignty. At the same time, we must agree some form of tribunal that enables us, through a parallel bilateral “source of law” agreement, to have a decision-making process that does not and cannot keep us in the European Court of Justice. That is not a matter of opinion or of wishful thinking; staying in the ECJ is fantasy land.

[Vicky Ford (Chelmsford) (Con)]

At the moment, under our current competition agreement with the EU, a British company can seek direct redress if it believes a European company is anti-competitive. Under the agreement between the EU, the UK and Canada, although we will have competition co-operation if we pass the Bill, there will be no direct redress for a British company that is concerned about the anti-competitive activities of a Canadian company. Therefore, although I completely understand my hon. Friend’s concerns about the European Court of Justice, we want enforcement that means British companies can seek direct redress from our largest trading partner, when needed. Does he think that the European economic area or the European Free Trade Association court models might be of interest?

[Sir William Cash]

I am not at all convinced by the EEA route. I do not want to get into all that now, except to say that the EEA involves the EU.

[Vicky Ford]

The EFTA court?

[Sir William Cash]

EFTA is a different story, and I specifically raised it with the Prime Minister only a few days ago because I have been having fruitful discussions with the president of the EFTA court and his advisers. He has been over here to talk to the Foreign Office, to me as the then Chair of the European Scrutiny Committee and to others.

It is an interesting proposition. I am not saying that we will do exactly the same in resolving those jurisdictional questions as happens at the moment with EFTA, but the great advantage of the EFTA model is that it is completely independent of the EU yet follows the decisions of the European Court of Justice for the most part, although not always—that is important. I am glad that my hon. Friend the Member for Chelmsford (Vicky Ford) noticed that, because not many people have. It is important that we have a constructive discussion about the best way of being cousins rather than brothers and sisters, as I said in my earlier intervention. We all have a mutual interest in ensuring that we have a proper jurisdictional answer to these questions.

I will not attempt to design a model here and now, but it might be something along the lines of a retired European Court of Justice judge—I do not want to be held to this, but it is a thought—together with a retired member of our Supreme Court and an independent judge, so that we get the benefit of listening to arguments that bridge the two jurisdictions. We will retain our sovereignty, judicial and legislative, but we are interested, for the sake of the companies to which my hon. Friend referred, in ensuring that we give them the answers they need. Her general point raises an important practical question, and we need to ensure that we end up with something that works, without prejudicing our legislative and judicial sovereignty, while providing an answer to the people in our constituencies and throughout the United Kingdom whom we serve as Members of Parliament.

Mr Deputy Speaker, many congratulations to you on the fact that I am seeing you here yet again. As you may have noticed, I am still here as well. So for practical purposes, let me draw my speech to a conclusion by saying that I do not in any way want to interfere with the process before us, because it is not going to affect this country in the longer term, and it is important that we act sensibly and responsibly to make sure that we do not rock the boat in the meantime.

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[Jack Dromey (Birmingham, Erdington) (Lab)]

Mr Deputy Speaker, may I join the long queue of those paying tribute to you on your re-election and on the outstanding role you play in this House?

As my hon. Friend the Member for Sefton Central (Bill Esterson) said right at the start, the Opposition support the European Union (Approvals) Bill. More generally, the UK is leaving the European Union, and, in that process, the Opposition will fight to put jobs and the economy first. We will also not accept the watering-down of rights and standards, and I say to the hon. Member for North Antrim (Ian Paisley) that we are right to be concerned about that. To give one example from my past, I took the case of the Eastbourne dustmen all the way to the European Court of Justice 15 years ago. For 10 years, rights on the transfer of undertakings were denied to workers being privatised in Britain. Had it not been for those European mechanisms, we would never have seen those rights enforced in this country. We will be leaving the European Union, but I stress again that we will not accept anything that waters down rights and standards.

[Sir William Cash]

I think the hon. Gentleman is aware that, under the proposed repeal Bill, there would be a transposition of European law into UK law under Westminster jurisdiction. That would include the very rights to which he refers, and I think that is understood on the Opposition Front Bench, is it not?

[Jack Dromey]

The rights under TUPE and the acquired rights directive are now guaranteed in British law. What is crucial—this is not a debate for today—is what happens after leaving the European Union in terms of the continuation of guaranteed certainty for workers and their rights, as well as the enforcement mechanisms that exist in the event of a dispute.

The Opposition strongly believe in the importance of a collaborative relationship with the European Union. We will no longer be members, but it is essential that we are partners. The hon. Member for Stone (Sir William Cash) referred to the notion of cousins, but, given the way some in the Government are conducting these debates, I sometimes think we are more akin to an estranged couple in a difficult divorce. However, at the next stage, partnership will be essential, and that is one of the principles enshrined in the Bill—a more general partnership that benefits Britain, particularly on key issues such as cross-border security or, as in this case, cross-border trade.

As we leave the European Union, it is essential that we put in place new and sensible arrangements. The Opposition support the Bill because it is right and also—I agree with the right hon. Member for Chelmsford (Vicky Ford) on this, although I think I have just promoted the hon. Lady—because it would, to use my words, although they amount to the same as hers, be wrong to nit-pick on a measure of this kind. This measure makes good sense, so it should be supported.

On the substantive issues—the participation of Albania and Serbia in the work of the Fundamental Rights Agency—we have heard powerful contributions, including from the hon. Member for Henley (John Howell), as to the origins of the FRA and why it is so important. That is not least because it was born out of trauma and war in continental Europe and because of the role it has played over many years in advising on fundamental rights, discrimination, access to justice, racism, xenophobia, and victims’ and children’s rights. It is absolutely right that we should have such an agency promoting those principles, rights and values throughout Europe, and that is all the more important now.

It is deeply welcome that we will have Serbia and Albania locked into that process at the next stages. In the not-too-distant past, Serbia was wracked by war, and Albania was under a totalitarian regime for many years. Both are now candidates for European Union membership, and that will be for the European Union to decide. Both will contribute to and participate in the FRA. The proposal has been cleared by the European Scrutiny Committee and the Lords European Union Committee, so we strongly support it.

Let me move on briefly to the EU-Canada competition agreement. The hon. Member for Chelmsford was right that if we have global free trade, it is important that we also have effective mechanisms to combat anti-competitive behaviour. That has to be in the best interests of consumers and companies. Crucially, however, it needs to be effectively enforced. The hon. Member for Brigg and Goole (Andrew Percy) was right when he referred to the historic relationship we have with Canada. Looking to the future, we need, in his words, to have the economic good sense to develop that relationship.

As far as the substantive proposal is concerned, we already have arrangements in place. It is being proposed to extend the powers to allow both sides to exchange evidence and information in the course of investigations. To make the obvious point, the absence of such a power can be an impediment to effective enforcement. We therefore believe that what is proposed is right, and similar arrangements are in place, as the Minister said, with countries outwith the European Union, such as Switzerland. On that substantive issue as well, we support what is contained in the Bill.

I have two questions over and above those posed by my hon. Friend the Member for Sefton Central. First, what will be the transitional arrangements? Crucially, as we stand now, UK companies operating in the European Union are still subject to the same anti-trust and merger rules. In future, the European Union will share information about UK companies with Canada but will not share the information it receives from Canada about the UK with the UK. That poses a very big question about what happens post Brexit in terms of transitional arrangements and how this then works in future.

Secondly, will the Minister clarify what will be the ongoing relationship with the Fundamental Rights Agency? For all the reasons that I have spelled out, it is critical that we are part of a pan-European mechanism that is about human rights and combating racism and xenophobia—never more important in the current climate than it has been in the past.