European Union (Withdrawal) Bill - Committee (3rd Day) (Continued)

– in the House of Lords at 7:50 pm on 28th February 2018.

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Amendment 23

Moved by Lord Foulkes of Cumnock

23: After Clause 3, insert the following new Clause—“Strategy for economic and social cohesion principles derived from Article 174 of TFEU(1) The Secretary of State must, before 31 December 2018, lay before Parliament a strategy for developing principles for economic and social cohesion derived from Article 174 of the Treaty on the Functioning of the European Union (TFEU).(2) The strategy laid under subsection (1) must state the principles derived from Article 174 of TFEU.(3) The principles under subsection (2) form part of domestic law on and after exit day.(4) The aims of the strategy under subsection (1) are—(a) to reduce inequalities between communities, and(b) to reduce disparities between the levels of development of regions of the United Kingdom, with particular regard to—(i) regions with increased levels of deprivation,(ii) rural and island areas,(iii) areas affected by industrial transition, and(iv) regions which suffer from severe and permanent natural or demographic handicaps.(5) A Minister of the Crown may by regulations make provision for programmes to implement the strategy.(6) Programmes under subsection (5) shall run for a minimum of 10 years and shall be independently monitored.”

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, it is a great pleasure to move this amendment and I am glad that we have got to it at last. It is tabled in the names of my noble friends Lady Royall of Blaisdon and Lord Judd as well as mine. I am pleased to see my noble friend Lord Judd in his place. My noble friend Lady Royall has asked me to pass on her sincere apologies for not being able to be present for the debate, but in no way is that a reflection on her enthusiasm for the amendment—quite the reverse.

The amendment proposes a new clause be inserted into the Bill to incorporate Article 174, Title XVIII of the Treaty on the Functioning of the European Union into domestic law. This would require the Secretary of State to lay before Parliament, before the end of December 2018, a strategy for the future provision of funding and other support to achieve economic and social cohesion across the regions and nations of the United Kingdom. All noble Lords will know that the European Union cohesion policy has been very effective in ensuring that the less developed and transition regions have access to operational programmes and funding to support economic growth across the whole of the European Union, and thus have been able to develop.

Once the United Kingdom leaves the European Union—in my context, I should say if the UK leaves the EU—this proposed new clause will be necessary. However—I will never give up—I sincerely hope that the clause, and indeed the Bill, will be unnecessary, but since we are moving in a particular direction we need to make sure that safeguards are in place. This amendment would ensure that the principles of social and economic cohesion which the UK regions would have qualified for under the EU cohesion programme, along with the funding after the date of exit, are continued and that the Government will go on with the aim of strengthening and rebalancing the entirety of the union, including the regions of England as well as the devolved nations.

I hope that when the Minister comes to reply—she is my good friend and she had a good birthday celebration yesterday—which I am pleased to say makes it an even more interesting and enjoyable debate, she will be able to give us a clear assurance on this. Some vague promises have been made. It has been suggested, or perhaps hinted, that the block grant might be adjusted to take account of the money that will be lost through the non-availability of these cohesion funds. As far as Scotland, Wales and Northern Ireland are concerned in terms of the block grant, it is never guaranteed to include everything that it is supposed to include. We would never be able to check that the grant was going to be that much greater than it would have been otherwise, if the cohesion fund had not been included. Anyway, what about the parts of England that have been benefiting from the fund? They do not get a block grant, so will the adjustments to local authorities be changed? Local authority incomes are being cut and they are not getting any extra money, so it will be even more difficult for them. This amendment would guarantee that the funds would be available.

Let us take a closer look at the regions that have qualified for cohesion funding. Those which receive assistance are described as either less developed or transition regions. Of course, once a less developed region gets assistance and develops, it then becomes a transition region. It will still qualify for cohesion funding, but to a lesser extent. A region is less developed if its per capita GDP is less than 75% of the European Union average. In the 2014 to 2020 period, the less developed regions of the United Kingdom have been allocated £2.6 billion. Those are Cornwall and the Isles of Scilly, and West Wales and the Valleys. A region is in transition if the per capita GDP is more than 75% but less than 90% of the European Union average. In the 2014 to 2020 period, £2.5 billion was allocated to those regions, which are Northern Ireland, the Highlands and Islands of Scotland, Cumbria, Tees Valley and Durham, Lancashire, South Yorkshire, East Yorkshire, Lincolnshire, Shropshire, Staffordshire and Devon. It is also worth noting that the majority of these qualifying regions could be described as rural, coastal or peripheral parts of the United Kingdom and are therefore in great need of this kind of assistance.

I want to give some examples of the kind of money that will be lost and the kind of projects that will be affected. I shall first mention Cornwall and then Scotland. I refer to Cornwall because I was inspired to table this amendment by Clare Moody, the Member of the European Parliament who represents Cornwall and other parts of the south-west of England. I am grateful to her for her assistance in this. My first example is something called Launchpad, which received almost £10 million worth of European Regional Development Fund money. Launchpad is a graduate start-up programme run by Falmouth University that aims to give participants the skills to develop a project from inception to a sustainable, high-growth potential company in just two years. It will support graduates to develop new products and processes in response to market demand, focusing on the digital games and interactive technology sectors. These sectors are rapidly developing. That money would continue to be available right up until the end of the period if we were still in the European Union, but if we go out there is no guarantee that it will continue and Falmouth University will not be able to continue the programme. We need some kind of guarantee from the Minister and the Government that such projects will continue to be supported.

Another example from Cornwall is CETO Wave Energy, which gets £9.5 million from the ERDF. This project aims to build a wave energy converter device at the Wave Hub off the north coast of Cornwall, near Hayle. By developing a 1 megawatt device connected to the national grid, the project will advance wave energy technology and demonstrate its commercial viability. That is good not just for that area but for the country as a whole, and for trying to mitigate the effects of climate change as we develop wave technology. It is a very important area that is being funded.

Those are two projects from the ERDF. I will take one from Cornwall funded by the ESF, the stability fund. Some £1.3 million has been allocated to Skills for Young People. This project will provide skills development for young people not in education, employment or training—sometimes described as NEETs—or who are at risk of becoming part of that group. Managed by Careers South West and delivered by a range of partners, it brings young people closer to work and further learning. Again, it is a very important project in an underdeveloped area, Cornwall.

I will mention Scotland for reasons that I am sure Members will understand, particularly the noble and learned Lord, Lord Hope, and my other colleagues from Scotland. I am grateful to the Law Society of Scotland for the information concerning Scotland. My good friend Michael Clancy helped me with this. He has been helping a lot of Members of this House with amendments. He managed to get some information from Tamasin Dorosti in the Law Societies’ Brussels office—the Law Society of Scotland, along with the Law Society in Wales and the Law Society of Northern Ireland, have a combined office in Brussels, which is very useful indeed. She gave me information about money from the European Regional Development Fund going to Scotland, which again will be jeopardised if we come out of the European Union if the amendment is not passed or there is no clear guarantee that the money will be replicated.

Out of the European Regional Development Fund, which is €196 billion, in total Scotland secured a total investment of €941 million, split across the ERDF and the European Social Fund. The ERDF allocation was €476 million and the ESF allocation €464 million. That provides the following strategic interventions: business competitiveness; developing Scotland’s workforce; green infrastructure; innovation; the low-carbon infrastructure transition fund; low-carbon travel and transport; a resource-efficient circular economy; smart cities; social inclusion and poverty reduction; and youth employment initiatives. They are all positive go-ahead areas that need continuing support. They will again be in jeopardy if the Government do not come up with the equivalent resources directly to these kinds of projects. That means contacting them, not just at arm’s length, and indicating that they will get the same kind of support.

Then there is the European Agricultural Fund for Rural Development, which in total is €96 billion. Some €1.68 billion has been allocated to Scotland for the seven-year period from 2014 to 2020. A central priority of the Scottish RDP, which is funded through the European Agricultural Fund for Rural Development, is restoring, preserving and enhancing ecosystems relating to agriculture and forestry. Approximately 80% of the total funding is allocated to this priority, targeting more than 6 million hectares of agricultural and forestry areas through environmental land management targeted to specific biodiversity, water management and soil erosion objectives. Anyone who understands the countryside in Scotland in particular will know how important that is. Specifically, for each of the three focus areas, around 20% of agricultural land and almost 40% of forest areas will be put under contract, contributing to increased biodiversity and better water management, and preventing soil erosion. In addition, restructuring and modernisation plans, covering roughly 16% of Scottish agricultural holdings, will be available with a view to boosting the productivity of farming and forestry, thereby creating economic growth and more jobs. Support for this LEADER campaign is expected to create more than 550 jobs in the rural areas of Scotland—a large number in rural areas—and almost 13,000 training places will be created to foster innovation, knowledge transfer, co-operation, more sustainable farming practices and stronger rural businesses.

Finally on Scotland, there is the European Maritime and Fisheries Fund, of which Scotland has been allocated €107.7 million. These projects include 180 fishing vessel modernisation projects and other schemes to help with marketing, research and to help to develop ports. The EMFF helps fishermen in the transition to sustainable fishing, which again is a very important transition. It supports coastal communities to diversify their economies when fishing is no longer able to sustain them. It finances projects that create new jobs and improve quality of life across European coasts, and it makes it easier for applicants to access financing. If Members would like more information about the EMFF, they can find it on the European Union website. It would then become clear to Members, even to members of the Government, that the European Regional Development Fund, the stabilisation fund, the fund for rural development and the maritime and fisheries fund are vital in providing assistance. The noble Lord, Lord Callanan, is shaking his head.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

That is the constant refrain from the leavers. We heard it all through the referendum campaign: “It’s our money”. It is money from all the European countries that comes in according to their ability to pay and goes out to different parts of the European Union according to their needs, and rural areas, transition areas and less developed areas are those which get it. But that is not the argument here; we have had that argument. It has been made and we can have it in another place.

Wherever it comes from, that money is within the European Union budget at the moment and is then allocated to these projects in different parts of the United Kingdom. We are asking for an assurance—we need a guarantee—that, if we leave the European Union, this money will go to the same projects and be funded by the United Kingdom Government. I hope that the Minister will be able to give us that guarantee; such projects will otherwise have an uncertain future. People’s livelihoods depend on them; people who have put their lives into developing them are now faced with uncertainty. The only way in which they can be given some certainty is if the Government accept my amendment or something like it, and make sure that the money that they currently get from those European Union funds will come in future from Her Majesty’s Government.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat

My Lords, I apologise that I missed the first minute of the noble Lord’s speech. I want to stress, first, that the history of Article 174 is one of British leadership. The regional development fund was set up by one of the first British Commissioners, George Thomson, and was designed to help poorer regions in Britain and Ireland in particular cope with the impact of joining the European Union—it is very good that two of Lord Thomson’s sons-in-law are in this House and taking part in this Committee, although I do not see either of them in their place. I recall clearly how he carried that through the European Community, as it then was, in the early 1970s.

The article as we now have it was inserted into the Single European Act by the British Government as one of its flanking elements, but it was then transformed by Margaret Thatcher because she committed herself to eastern enlargement—one remembers the Bruges speech and the point she made about bringing Prague, Budapest and Warsaw back into Europe. The regional development fund within the European Union became very much part of how we have helped to spread prosperity, and therefore stability, democracy and security, into those new member countries. It is worth noting that Norway contributes to the European Regional Development Fund and that in any conceivable deal which we strike with the European Union after we leave—if we end up leaving—it is likely that we will be asked to contribute in the same way. The noble Baroness, Lady Deech, might say that this is dreadful because the European Union spreads conflict, but I think that the rest of us will agree that the European Union has helped to stabilise the former socialist countries of eastern Europe. One has only to move from Poland to Belarus to see how much difference it has made.

Now that we appear to be leaving, the question of what happens to this country and what reassurance the Government can give us about the future of regional development in it is important. The Prime Minister said when she came into office that she wanted to bring the country back together and to reunite this very polarised public we have had since the referendum, but let us remember that England has the deepest regional disparities of any country in Europe—the United Kingdom even more so—and that the areas which qualify for and benefit most from the European development fund in Britain are Yorkshire, the south-west, parts of Wales, the north-east and parts of Cumbria and Lancashire. Recent studies have suggested that Yorkshire and the north-east are the two regions which will suffer most from Brexit because our trade is most clearly across the North Sea, from Hull and Newcastle, and the damage will be severe. Can the Minister begin to give us some reassurance that the Government are alive to this issue and that, as they attempt to bring the country back together, as we hope they do, they will have an active regional policy to cope with the impact of Brexit?

I read the Yorkshire Post—published by a company that used to be called Yorkshire Conservative Newspapers—and the image one gets of views in Yorkshire from our media and gossip are: that we are now governed by a very Home Counties, southern-English Government; that the north is forgotten; that the northern powerhouse is a placard without much behind it; and that the spending in the north on infra- structure, innovation, schools in rural areas and elsewhere falls well behind what is given to government. I should have thought that might leave the Conservative Party very worried. In replying, can the Minister give us some assurance—and feed this back into the Government—that, as we move towards an apparently inevitable Brexit, the Conservative Government are thinking actively about the regional disparities we already have, are taking into account that poorer regions will suffer disproportionately from a loss of European regional funds and realise that compensatory action needs to be taken by the British Government to prevent that?

Photo of Lord Judd Lord Judd Labour 8:15 pm, 28th February 2018

My Lords, I warmly thank my noble friend for having put this amendment before the Committee. I should explain that I live in Cumbria and I understand very directly some of the things that have been said in this debate. It always gives me great heart when I see the European sign on tangible projects in an otherwise not too prosperous county, as an indication of European solidarity and a determination that people should stand together in making sure that a decent life is available to everyone. I do not think that, historically, we can overestimate the significance, the sadness, of what we are losing in that concept of European solidarity.

The other point I will make is that there have been references to reassurances and so on. Forgive me, I do not mean to be critical of those who have used the word, but I do not think that is enough. Possibilities have been created through our membership of the European Union. I believe that we have to have very firm guarantees from the Government that nothing is going to be lost in the context of what may be about to happen and that they will ensure that any work already in train, and any expectations already generated, will be fulfilled.

There really is a growing sense of injustice and unfairness in many parts of the country. The south-west is one example, and certainly the north is another example, not least Cumbria. There is a deep frustration—and in some instances it is not an exaggeration to say “anger”—about the disparities between what is available in the south and the south-east and what is not. I agree most warmly with the point made earlier in the debate that there is a feeling that our Government is a Government of the south-east and not a Government of the totality of British life. In that context, for Wales, Northern Ireland, Scotland, and indeed for English regions, we need those guarantees from the Government tonight.

Photo of Lord Wigley Lord Wigley Plaid Cymru

My Lords, I am delighted to support Amendment 23, moved by my noble friend Lord Foulkes, and I concur without reservation with everything he said. The amendment addresses many crucial matters for Wales, as well as for Scotland and indeed for many parts of England. Article 174 of the Treaty on the Functioning of the European Union aims to reduce disparities in terms of economic and social development between the various regions of Europe. The central plank of this is to reduce inequality. I fear that the same thing cannot be said of the policy of the present UK Government. The objective of their policy is in no way a concerted drive to attack the disparities that exist within these islands. The income per head of an area such as Kensington and Chelsea is 10 times that of the area of west Wales and the valleys, the Anglesey area or the Gwent area. We surely cannot accept a tenfold disparity in a civilised society.

Europe has been a bulwark for us over the past 15 years in Wales—the last 18 years, in fact—since we started getting the Objective 1 money in 2000. That money has come through as additional funding for Wales, after a bit of a fight, which I will talk about on another occasion, but we have not had the success that Liverpool and Merseyside, certainly, have had, and South Yorkshire has had to a lesser extent—and we still have a lot of work to do.

The reality is that, when we look at the matters of industrial infrastructure investment that are in Westminster’s hands, we see that Wales is the only country in western Europe that does not have a single mile of electrified railway line. What happened to the plans that were already drawn up to electrify to Swansea? They have been dropped—and the proposals to electrify from Crewe to Holyhead are somewhere in the clouds. Yet we in Wales are asked to pay our contribution towards HS2. The reality is that we get greater assistance with our economic needs from the European Union than from Westminster. That is one reason why it hurts so much that we are about to leave the European Union, unless something can be done about it. Another example of where the Westminster regime is not sensitive to the crying economic need of Wales is the Swansea Bay lagoon, which has been confirmed as being a viable project, with a former Conservative Member of Parliament driving it forward, yet the Government refuse to come off the fence on it.

Then there is the disparity in another important aspect of economic infrastructure: broadband connectivity. The UK Government have recently directed significant sums to improve broadband in three of the four countries of the UK. They found £20 million for ultrafast broadband in Northern Ireland and £10 million for full-fibre broadband in six trial areas of England and Scotland. We are missing out on important things such as this and we cannot rely on Westminster to look after our needs. The Government’s justification for their broadband investment was that it will trigger the most effective short-term economic growth. Therein lies the central weakness of the Westminster approach: its short-termism and its links to political returns, as we have seen in the context of Northern Ireland.

The EU has been a major source of assistance to Wales, not least in terms of our economic infrastructure. The ERDF and the European Social Fund have been mentioned. Areas of England such as Merseyside, South Yorkshire and Cornwall have certainly benefited greatly from the EU as well. We will miss out all round when we turn our backs on Europe.

In the context of the amendment, we have a right to know how the Government intend to sustain the EU objectives of Article 174 after Brexit—if indeed they do. We are told that there will be a shared prosperity fund, but we have no details of its size or remit, nor how it will work with devolved government. In particular, given our experience in Wales with the Barnett formula, which has been such a travesty—and has been recognised by this House as a travesty—we have enormous reservations about leaving it to the Treasury in Whitehall to be the adjudicator in the distribution of such resources. It is for these reasons that I support the amendment, and I am certain that we shall have to return to these critical issues later in the Bill’s passage.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

My Lords, I declare my interest as a vice-chair of the Local Government Association. I support the amendment moved by the noble Lord, Lord Foulkes, because over the past two years I have been attending two inquiries led by the All-Party Parliamentary Group for Children: the first into children’s social care services and the second into different thresholds for access to those services.

It has become clear from the evidence I have heard that local authority funding has been cut by 30% to 40%. Local authorities are delivering their statutory services and safeguarding children as best they can, but all the peripheral services—the family support services and the charities—are really struggling to meet the need and therefore more and more children are being taken into care. As I said earlier, Lord Justice Munby, President of the Family Court, in his statement last year highlighted that more and more children were being taken into care and the courts were finding it difficult to process the numbers of children being taken into care.

What needs to happen is what has happened to adult social care: additional funding needs to be given to local authorities so that they can meet the needs of their children and family services and we can stop taking children away from families whom, if they had had additional support early on, they could have stayed with. It is relevant to this debate because we have heard in the inquiries that it is often the poorest local authorities, with the most deprived families, which have both the greatest demand on their services and the fewest resources to meet those needs. So in what the noble Lord, Lord Foulkes, proposes I see a way of reducing deprivation and improving the wealth of those communities so that there is more resource available to local authorities to meet local need, and reducing the need of families to turn to those kinds of services. I look forward to a response from the Minister to the principles that the noble Lord, Lord Wallace, has just set out.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Labour

My Lords, I add my support to Amendment 23, moved by the noble Lord, Lord Foulkes, from an environmental perspective. These funds have been hugely beneficial in helping bring environmental progress, together with economic and social progress, to these very deprived areas.

The ERDF is big and it is substantial—you can see it from the moon. Four of its 11 thematic objectives are environmental: climate change mitigation, climate change adaptation, wider environmental protection and sustainable transport. The thematic approach has really helped mainstream environmental considerations into development in these areas and encouraged more sustainable development strategies and schemes that provide local employment and economic activity, often in areas that have absolutely nothing but their natural resources to rely on. That has been a hugely valuable process.

I particularly commend the Interreg process as part of the EDRF. This focuses on cross-border environmental protection projects and has provided for projects that have struggled to get funding elsewhere because they span administrative and governmental boundaries. It is quite telling, as the noble Lord, Lord Wallace, said, that Norway participates in Interreg, and I encourage the Government to consider remaining in the Interreg process. It is hugely innovative and facilitates cross-border work which simply will not be done by a “Britain going it alone” process, as is the case with many of the issues that we will face in the future outside the European Union. This is particularly important in environmental areas because, of course, the environment does not recognise governmental or administrative boundaries.

I therefore ask the Minister whether she would consider how a strategy could be brought forward to fill the gap post-Brexit. It needs two elements. First, it needs to recognise that these funds are absolutely crucial and that that level of funding needs to be continued, because so many other sources of funding for these sorts of projects are diminishing. Local authority money is going, lottery money is going, the Government themselves are broke and the charities are not too well-off either.

Secondly, there is the whole issue of stability. If the funds are reshaped along Barnett formula lines—and if they are simply locked into the block grant and not ring-fenced—key areas of high need will lose out. Currently, these funds are allocated on the basis of need and merit proposals, and we would not see a degree of stability going forward if they were simply dealt with on a pre-existing formula. I therefore hope the Government will come forward with a strategy; this is a splendid proposition.

Photo of Lord Adonis Lord Adonis Labour

My Lords, we are still formally on Clause 3, and I had the benefit over the short dinner break of speaking to the noble and learned Lord, Lord Keen, about the issue we were debating before the break in relation to Schedule 8. May I put a specific request to the Minister, to which I hope the noble and learned Lord will be able to respond? It will be crucial to our discussing this matter further on Report. Will he write to us to clarify a specific point that arises from what the noble Lord, Lord Pannick, said earlier? Does Schedule 8 give the Government the power to use subordinate legislation to modify primary legislation whose primary purpose is to implement EU directives? I wonder whether the Minister might write to Members of the Committee on that specific point.

Photo of Lord Pannick Lord Pannick Crossbench

I can tell the noble Lord and, indeed, the Minister that there will be a probing amendment on paragraphs 3 and 5 of Schedule 8. It has been tabled today and will be on the next Marshalled List.

Photo of Lord Keen of Elie Lord Keen of Elie The Advocate-General for Scotland, Lords Spokesperson (Ministry of Justice)

The group that we are dealing with is not actually mine but, with the leave of the Committee, I will respond to the inquiry. In light of the reference to the probing amendment, the appropriate step would be for us to consider that amendment and determine what response we shall make to it. If I am in a position, in light of that amendment, to write to the noble Lord ahead of Report and elaborate on our position, rather than responding by way of a government amendment or something of that kind, I will do so.

Photo of Lord Adonis Lord Adonis Labour 8:30 pm, 28th February 2018

I am very grateful for that response; I think that might help us in our further discussions.

In response to the amendment of the noble Lord, Lord Wigley, I will make two points. First, in the debate about regional assistance, one of the arguments is that we are simply getting our money back. The crucial point about the European Regional Development Fund and the other cohesion funds of the European Union, however, is that they are long-term development funds. The reason that they are so valued in the regions is not just because of the investment, but because they enable long-term planning to take place in the regions, which does not happen in response to Treasury funds because our own funding for these projects is so short-term. One of the big struggles that we have had in government—and this spans all three parties that have been in government in the last 20 years —is that we have had a huge difficulty in fixing and delivering long-term investment priorities because of the short-term attitude of the Treasury, which is not prepared to make those commitments.

When I became Secretary of State for Transport in 2009, the forward investment strategy for the railways in the United Kingdom was for five years, until 2014; so—surprise, surprise—there were no plans for high speed rail at all and no electrification programme. It is not just that it did not go to Swansea: it did not go anywhere. Wales is the only country in the entire continent of Europe besides Albania that does not have one mile of electrified railway. This is because of a consistent absence of long-term infrastructure planning over the last generation. Thanks to decisions that we took in 2009, electrification is at long last going to reach Wales, but the plans that were in place for it to go to Swansea have been cut back to Cardiff; it was supposed to go to Bristol but it is now going only to Bristol Parkway, not to Bristol Temple Meads.

I do not wish to bore the Committee with the details, but the fundamental underlying point here is the absence of long-term infrastructure planning. We look to the Government for a commitment not just to have significant funds for regional assistance—because clearly funds are going to be required unless we are going to see the divides between different parts of the country becoming even wider over the coming years—but we need a long-term approach. The current European Regional Development Fund has a six-year planning horizon and we need to see at least that length of planning in respect of new funds and policies that the Government put in place. Otherwise, we will see a short-term scramble for short-term projects that do not begin to be able to deliver huge benefits such as new railway lines—HS2 and HS3 that we need linking the northern cities—and significant investment in Wales. The noble Lord, Lord Wigley, referred to tidal lagoons and the investment that could be made there. That, again, is an investment that would deliver economic and energy benefits over the next 80 years, and it needs to be long-term.

My second point, which is linked to the points made by my noble friend Lord Foulkes, is about the European Investment Bank. One of the most worrying things in relation to the funding of infrastructure projects, particularly in less developed regions of the country, over the period since the Brexit decision has been the collapse in lending to the United Kingdom for projects supported by the European Investment Bank. An article in the Financial Times last month gave quite scary statistics: new contracts in the UK financed by the EIB are down from £5.5 billion in 2016 to just £1.9 billion last year in 2017. Of that £1.9 billion, only £377 million was spent in the nine months after Article 50 was triggered. The president of European Investment Bank, Werner Hoyer, was very clear that a key factor in this was,

“extra legal work the bank now had to do to ensure its assets in Britain would be protected after the UK left the EU”,

and uncertainty on the part of investors. This is leading to a significant problem in investment in infrastructure projects, in particular. Speaking as a former chairman of the National Infrastructure Commission, I can tell the Government that they will not get a commitment to long-term infrastructure projects unless they can put together the funding packages that are required. They need to span the public and private sectors, and for many of these projects which span a 10, 15 or 20-year horizon, the public sector is looking for guarantees, and if those guarantees have to come exclusively from the Treasury in future, we will see significantly less infrastructure investment than we have in the past.

Although the European Union is not the be all and end all—

Photo of Lord Wigley Lord Wigley Plaid Cymru

Before the noble Lord leaves the issue of the European Investment Bank, I raised a question in the debate on Monday evening about the ongoing eligibility of higher education institutions, such as Swansea University, which has had £60 million out of the EIB. Will the noble Lord confirm my understanding that the UK will have an ongoing entitlement to help from the EIB? As he says, it is a question of the level of help and the confidence that is there and not that we will not be eligible.

Photo of Lord Adonis Lord Adonis Labour

My Lords, I am afraid we again get into the Alice in Wonderland world here, as we were in the debates on Erasmus and Euratom. My understanding from discussions with the European Investment Bank when I was chair of the National Infrastructure Commission is that if the Government were to wish to stay a member of the European Investment Bank, that might be possible. There are lots of legal issues which would need to be addressed, but it might be possible. However, it is the Government’s policy, as a matter of principle, that we will withdraw from the European Investment Bank because it is seen as a European institution and apparently the instruction from the British people two years ago was that we must withdraw from it for exactly the same reason that we must withdraw from Euratom: it is seen as a European institution and we are supposed be withdrawing from all of them or else Brexit does not mean Brexit.

We are engaging in self-inflicted harm purely for an ideological purpose by choosing not to be part of an institution which has “Europe” in the title. What has concerned the Committee so much in our debates is that sector by sector, area by area, we are committing to policies that are going to make the country worse off bit by bit. The cumulative effect of all this is going to be immensely serious. Where it is possible to not engage in that self-inflicted harm, it seems to me to be just a matter of common sense not to do so. I would be very grateful if the Minister could tell the Committee the Government’s policy in respect of lending currently made by the European Investment Bank and whether it might still be open.

I am constantly encouraging, and we have the more emollient face of the Government responding to the debate in the noble Baroness. I always have very high hopes of her because she sounds so reasonable when she replies. It may just be that she is so practised at doing these things, but I very much hope that she might give us a commitment that the Government will consider remaining a part of the European Investment Bank and not putting this essential investment in the future infrastructure of the country at risk, as appears to be happening at the moment.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Exiting the European Union), Shadow Deputy Leader of the House of Lords

My Lords, I do not like to start by contradicting my noble friend, but I have not heard the Government ask that we leave the Eurovision Song Contest, so there is one thing they are content with despite the name containing “Euro”.

This amendment is important not simply for the amount of money being spoken about but what it is used for. I think I heard the noble Lord, Lord Callanan, say from a sedentary position “It is our money”, somewhat missing the point of the amendment, which is about having regard to the principles of social and economic cohesion which we signed up to, welcomed and have benefited from. In fact, it is particularly important given the drive to equality whether in this country, Europe or both. The noble Lord, Lord Wallace of Saltaire, reminded us that England has the deepest regional disparities of any country in Europe. That is why it is not just the money, although I will come on to that, but what we want to use it for and how, and the need for a long-term aspect, as my noble friend Lord Adonis said.

This article enables funds to be used in a way that particularly led to our disadvantaged regions benefiting enormously from the Cohesion Fund, the European Regional Development Fund and the European Social Fund. In the period 2014 to 2020, they will have brought £12 billion our way, and it is not simply the money but the way it is aimed to reduce disparities and concentrates on what the EU calls less developed, transition or other regions. These are significant amounts, but it is the aims and objective that are important. They help create jobs, with start-up businesses, and with research and development. They have had a particular impact in Cornwall, west Wales and the valleys—some of us have to declare an interest there. We have heard of particular cases which have already benefited from this sort of money, including through the environmental impact of some of them, as mentioned by my noble friend Lady Young.

The important thing now is to look forward. As we have heard, the Government, in preparing for our departure from the EU, committed themselves to what they call a,

“UK Shared Prosperity Fund … using money returning to the UK from European structural fund”— if it has not already gone to the NHS or anywhere else. The idea, as laid out in the Conservative manifesto, is to use that same amount of money. The Exchequer Secretary, Robert Jenrick, promised,

“to consult widely ahead of its launch”.

However, he did not commit to matching ERDF funding after Brexit, so the consultation would presumably be about its use. We have been told:

“The design … is currently being considered, including its funding arrangements, and further details will be set out in due course”.

Although he is not replying to this amendment, the Minister often reminds me that in a year and a month today, we are due to leave. That is not much time for getting these details, even in draft form, let alone for consultation or beginning to think about how people might use these funds. There is undoubtedly some urgency.

I hope that we could maybe have that detail from the noble Baroness as well as the basis on which the Government are planning to allocate the money. Will it be, as we heard suggested, under the Barnett formula, which is on a per head rather than per need basis? Will it be long term? What will the other attributes be? Will it be whoever wants matching funding or something else? Will it be concentrated in the same sort of areas as before? These are important questions, as I am sure she appreciates. It is a matter of funding, otherwise we might lose £8.4 billion from the sort of work that has been done to reduce inequalities. We need to know not just the amount but that it will be targeted towards achieving the same sort of ends as Article 174

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

My Lords, first, I thank your Lordships for a genuinely interesting and very helpful and useful debate. I particularly thank the noble Lords, Lord Foulkes, Lord Judd and Lord Wigley, for the amendment to which they put their names. I again thank the noble Lord, Lord Adonis, of course for his kind remarks, although I fear he will dismiss me as a huge disappointment when he listens to my observations. I will try to deal with the points raised, because the amendment raises a very important issue, around which numerous very legitimate questions arise. I do not dispute that for one moment. Although I will not be able to answer every point raised in detail, I will do my best to try and give a helpful—I hope—indication of the direction of travel.

I know the amendment is well intentioned, but I shall endeavour to argue that, with the existing proposals which the Government have put in place, it is unnecessary. I will explain that in greater detail and expand on that proposition. The Government have an industrial strategy that covers many of the areas of cohesion policy and, as numerous noble Lords mentioned, are developing a new UK shared prosperity fund, which will replace EU structural funds. Furthermore, existing legal powers in place in this country in our domestic law already cover some of these issues, and I shall expand upon that.

To reassure the noble Lords, Lord Foulkes, Lord Wallace of Saltaire and Lord Judd, who all referred to this, I say that the Government have a manifesto commitment to replace cohesion policy funding with a new UK shared prosperity fund. It will reduce inequalities and raise productivity across our four nations, and we shall engage extensively with the devolved Administrations on that fund later this year.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 8:45 pm, 28th February 2018

The Minister said that the Government would consult about the shared prosperity fund later this year. We are already 21 months past the referendum and, as my noble friend Lady Hayter said, have just over a year to go. When are we going to get the proposals? When are the people hoping to benefit from this actually going to see it? When is the consultation going to start? I hope the Minister will not say “shortly” but will give us some clear indication because, as my noble friend said, people are desperate to see it and to know the details.

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I shall come on to that and endeavour to address the points that the noble Lord has raised. I was merely going to observe to the noble Lord, Lord Wallace of Saltaire, who was concerned about what he saw as a sort of Home Counties-centric Administration, that, looking at this Front Bench, there is not much Home Counties representation here, with the honourable exception of the bicycling baronet. Across this Front Bench there is a genuine understanding of all parts of the UK—including, to be fair, the Home Counties—and that is very important. The Government are very anxious to reflect the pan-UK need and relevance in conceiving and constructing policy to address the issues that are the subject of the amendment.

As I understand it, the noble Lord’s amendment seeks to transfer the provisions of Article 174 of the Lisbon treaty, which provides the legal basis for EU cohesion policy, into UK law. Indeed, that policy is one of the key policies of the EU, as the noble Lords, Lord Foulkes and Lord Wigley, recognised. It recognises the importance of reducing inequalities between communities and reducing disparities across the EU. At the same time, leaving the EU allows the UK to begin to take its own decisions on the future of regional development. Arguably, perhaps, it will be better placed to ensure that those are better tailored to UK priorities rather than the priorities of the EU.

The noble Earl, Lord Listowel, raised important points, to which I listened with care. I think they are more a matter for the Ministry of Housing, Communities and Local Government and the revenue support grant, but I am informed that the local government financial settlement has allowed additional flexibility in meeting costs for adult social care, which I understand has been widely welcomed.

Photo of The Earl of Listowel The Earl of Listowel Crossbench

I thank the Minister for saying what she has said. That is true about adult social care, but we need the same arrangement for children’s services. That is my concern; I do not think it has come in. If she could say during the passage of the Bill that that will indeed be made available for children’s services, that would go a long way towards assuaging my concerns in this area.

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I assure the noble Earl that I am listening to what he says.

The noble Lord, Lord Adonis, specifically raised the issue, which I will deal with here, of UK access to the European Investment Bank. The UK wishes to explore options for maintaining a relationship with the EIB in the second phase of negotiations. To avoid doubt, I say that the UK will leave the EIB when it ceases to be an EU member state, but that is all I am able to tell him at the moment. I think that will be an important feature of the second phase of negotiations. He rightly identified that the bank has been an important source of investment finance.

The noble Lord, Lord Foulkes, rightly wants to know the shape of all this and what the Government are actually doing. If your Lordships will permit me, I shall try to outline the situation. The Government have already set out their long-term strategy in many areas covered by the noble Lord’s amendment. In November, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy launched the Government’s industrial strategy, which sets out the long-term plan to boost the productivity and earning power of the UK. It sets out how we will help businesses to create better, higher-paying jobs in every part of the UK with investment in the skills, industries and infrastructure of the future.

The strategy will boost productivity and earning power across the country by focusing on five foundations of productivity. It is worth repeating them: ideas, people, infrastructure—in that connection, let me say that I listened with interest to what the noble Lord, Lord Adonis, said about the value of long-term strategic thinking; he made a number of important points, which the Government will want to bear in mind—business environment, and places.

All these foundations have links to cohesion policy, but it is perhaps that final foundation which is most relevant: places. This recognises that every region of the UK has a role to play in boosting the national economy, including North Yorkshire, to which the noble Lord, Lord Wallace of Saltaire, referred. The UK has a rich heritage, with world-leading businesses located around our country. Yet—and this is disappointing —many areas are not fulfilling their potential, and that despite receiving cohesion policy funding. The UK still has greater disparities in regional productivity than other European countries.

The challenges and opportunities facing us are shared across the union. We recognise that the devolved Administrations are acting to identify and deliver their own priorities, and we respect the devolution settlement. But devolution has never meant that the Westminster Government should stop delivering for people, businesses and places in the devolved nations.

As part of the industrial strategy, we will agree local industrial strategies that build on local strengths and deliver economic opportunities. We want to work with all relevant bodies in England and partners in the devolved nations to consider how local strategies can deliver for places in Scotland, Wales, Northern Ireland and, of course, England. I hope that that to some extent reassures the noble Baroness, Lady Hayter, who asked how all this would flow out across the UK. We are also introducing a new £115 million strength in places fund to build excellence in research, development and innovation across the UK.

We are already seeing the opportunities and benefits of a focus on places. In the year that we launched the northern powerhouse project, we saw productivity in the north rise at a faster rate than London and the UK average. We have also seen further exciting developments outside England. Our city deal programme demonstrates how the UK Government can work hand in hand with our partners in the devolved Administration Governments and local authorities to deliver co-ordinated, locally led interventions that have a real impact on local economies. As confirmed by the Chancellor in the Budget, we are currently working with regional representatives from Stirling and Clackmannanshire, the Tay cities, Belfast, north Wales and the border lands between Scotland and England to negotiate new city deals.

Meanwhile, under the people foundation, we also want to tackle regional disparities in education and skill levels so that we build on local strengths and deliver opportunities for people wherever they live. The industrial strategy will do this through a major programme of reform to ensure that our technical education system can stand alongside our world-class higher education system and rival the best in the world. There will also be investment of an additional £406 million in maths, digital and technical education, helping to address the shortage of STEM skills.

The industrial strategy recognises the importance of ensuring that all areas in all parts of the United Kingdom can meet their full potential. The strategy recognises that every region of the UK has a role to play in boosting the national economy, but the noble Lord’s amendment refers to a number of specific types of region in particular, including regions which suffer from what he described as demographic handicaps, and rural areas. These are very important matters. In responding to the challenges of demographic handicaps, the industrial strategy recognises these. The ageing society grant challenge aims to bring an innovation, productivity and growth lens to the challenges and opportunities of our ageing population.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

With respect, these are fine words beautifully delivered, but the word “guarantee”, which my noble friend Lord Judd mentioned, has not appeared so far. Will all those projects, three or four of which I described, and which reasonably expected funding right up to 2020, be guaranteed funding under the strategy described by the noble Baroness?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

The noble Lord would not expect me to be able to deliver specific information on figures. That would be unreasonable, but he knows that the Government fought an election on a manifesto commitment to replace the cohesion policy. I am outlining the structures on which the Government propose to base replacing that cohesion policy. I am trying to outline how that strategy has been constructed to have regard to the whole of the United Kingdom and to deal with the issues about which the noble Lord has expressed concern in his amendment.

Photo of Lord Judd Lord Judd Labour

The noble Baroness says it is unreasonable to expect figures, and there is a certain amount of sympathy with her on that. However, is she really telling us that she cannot guarantee that any projects in train, those planned on the basis of agreements, or any undertakings will be fulfilled?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I heard what the noble Lord said and I am coming to that; I hope what I am about to say will reassure him. I am explaining what the new proposals and structures are in order to give some context to my response to what is a very important amendment. The amendment also refers to rural areas. The Committee will be aware that my noble friend Lord Gardiner is the Government’s rural ambassador. He is working to ensure that government policy is addressing the challenges faced by rural areas. The House will recall that the noble Lord, Lord Cameron of Dillington, carried out a review in 2015 on the effectiveness of the Government’s rural proofing policy, to which the Government responded. They have taken action based on his recommendations. That now includes practical guidance published by Defra to ensure that government departments make rural issues a routine policy consideration.

Looking beyond England, the devolved Administrations obviously have responsibility for rural policy, and I know that Scottish and Welsh Ministers will be thinking about how to ensure that their own policies and initiatives reflect the needs of rural communities. The Government’s industrial strategy and other existing policy initiatives therefore already cover the areas covered by the EU cohesion policy, which the noble Lord’s amendment seeks to preserve.

Photo of Lord Wigley Lord Wigley Plaid Cymru

One of the core principles of the EU cohesion funds is the element of additionality. In previous UK regional policies, before we went into the EU structural funds from 2000 on, there was not that element of additionality, and initially the UK Government refused to recognise the need for additionality for European funding. Can the Minister therefore give an undertaking that the funds that will replace the money now coming from Europe will be additional, over and above existing regional policy?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

What I can say to the noble Lord is that we are in new territory. We are leaving the EU and having to construct successor policies and funding streams to deal with what we were accustomed to as a member of the EU. I have tried to explain what the principal strategy underpinning that would be, but as the noble Lord is aware, there are other funding sources. There is the United Kingdom shared prosperity fund, which will be a very important source of the funding streams to which I think he alludes. Before I come on to that, I shall deal with matters raised by the noble Lord, Lord Judd, because they are important.

In the joint report agreed with the EU and UK negotiators in December last year, we agreed a fair financial settlement with the EU, enabling us to move to the next stage of negotiations. The UK is a significant net contributor to many areas of the EU budget, including the structural funds. We will honour our share of commitments made during our membership but will see the end of very significant sums of money going to the EU every year.

I specifically reassure the noble Lord, Lord Foulkes, that we will continue to benefit from EU programmes under that budget plan. I think that the noble Lord raised specific issues about Cornwall funding. Cornwall and the Isles of Scilly are among the UK’s less developed regions, which benefit from greater levels of structural funds. The Government have guaranteed EU structural fund projects granted before we leave the EU, where they are in line with domestic priorities and offer value for money. The phase 1 Brexit financial settlement, once agreed in the withdrawal treaty, will see the UK continue to receive structural funds until the current programmes close.

I want to make it clear to the noble Lord, Lord Judd, that no UK region will lose out in EU budget funding and anyone who gets European funding can continue to bid for and receive funding until the end of their projects, including for structural fund programmes. That financial settlement, once agreed as part of the withdrawal treaty, will supersede the requirement for the domestic guarantee announced by the Government last year. However, the guarantees already made will stand in the unlikely event of a no-deal scenario. The Government have guaranteed all structural fund projects signed before the 2016 Autumn Statement; they have also guaranteed structural fund projects signed after the 2016 Autumn Statement and before we leave the EU. So long as they are good value for money and in line with domestic strategies priorities, their funding is assured.

The noble Baroness, Lady Young of Old Scone, raised the future of Interreg funding. The next set of Interreg programmes have not yet been designed, but we will take decisions on participation in future programmes in due course, as proposals are developed. As the Prime Minister said in Florence, the UK is keen to continue to participate in programmes that can benefit both the UK and the EU. I am conscious of time and do not want to dwell on this needlessly but, equally, I want to try to make sure that I provide the information that noble Lords require.

Post leaving the EU, we have an opportunity, and leaving the EU will allow us to develop policy in the funding programmes with the flexibility and innovation required truly to meet the needs of the UK and support our industrial strategy. That brings me to the United Kingdom’s shared prosperity fund, which has been specifically designed to raise productivity and reduce inequalities between communities across our four nations. Unlike structural funds, the shared prosperity fund will be cheaper to administer and much less burdened by bureaucracy. I know that the noble Lord, Lord Foulkes, is impatient to hear more about this, but we have already committed to consult on the precise design and priorities later this year. We will consult widely on the design of the fund and discuss with the devolved Administrations, local authorities, businesses and public bodies how the fund might work. That will give all interested parties the opportunity to contribute their views directly to the Government. As we look at where we can improve on current investment programmes, the devolved Administrations will have valuable lessons they can share with the Government.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat 9:00 pm, 28th February 2018

Can I ask an additional question? Interreg is very much about cross-border schemes and co-operations. As we all now understand, there is one very important cross-border relationship, which we have somehow to maintain, between the United Kingdom and Ireland. Will the Government’s devolution of these funds back to national level include a specific Irish co-operation dimension?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

It will in as much as, post Brexit, the United Kingdom will work within each of its component parts, which obviously includes Northern Ireland. I anticipate that discussions would principally rest in that respect on the subject of the question that the noble Lord has raised.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat

Not necessarily with southern Ireland?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I think that, in the first instance, as we look at how we will fund different parts of the United Kingdom, the primary discussions will be with those parts of the United Kingdom—they would have to be. That is without prejudice to the Executive in Northern Ireland, which I hope will be established. We will want to pay proper respect to that Executive when it is constituted and consider what it wants to do. I would be very surprised if there were not a desire to have constructive discussions with the Republic of Ireland in the interests of trying to determine how best to address these needs, if there is a relationship. The Republic of Ireland, at that point, will be an international country separate from the United Kingdom, as it will be in the EU and the United Kingdom will not. We have to respect these new relationships and new boundaries.

Photo of Lord Wigley Lord Wigley Plaid Cymru

This will be the last time I trouble the noble Baroness. On the Interreg question, one area that has benefited greatly has been the western Wales coast, particularly the seaports with their connections with southern Ireland. Given the pressure that there will be on Holyhead and other ports arising from Irish trade coming through the UK, surely this is an area where a version of Interreg has a very significant role to play. Can the Minister keep that in mind as the thinking on these issues develops?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I thank the noble Lord; I think he raised an important point. The Government, as my noble and learned friend Lord Keen said, are very keen to listen. One benefit of debates like this is that points arise which merit careful consideration, so I thank him for raising that point.

The amendment strayed on to a more technical area. It would create provision for a Minister of the Crown to make provisions for programmes to implement cohesion policy domestically. I argue, however, that these powers are unnecessary. For example, under Section 126 of the Housing Grants, Construction and Regeneration Act 1996, the Government already possess power to provide financial assistance for the areas currently supported by EU cohesion policy and European structural funds. It allows the Secretary of State to give financial assistance in activities that contribute to the regeneration or development of an area, which include contributing to or encouraging economic development, providing employment for local people and providing or improving training services for local people. These activities cover much of the support provided under current European structural funds.

I have tried to set out why I think the noble Lord’s amendment is not required. The Government already have an industrial strategy which covers many of the areas of the amendment. There are also existing powers in place that make the amendment unnecessary. I have endeavoured to outline our plans for new funding to replace cohesion policy programmes—I appreciate that it has not perhaps been with the detail that the noble Lord might be seeking, but I hope I can reassure him that there is a plan to provide successor mechanisms to the European funding sources. I hope I have tackled his concerns and I urge him to withdraw his amendment.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, this debate has ranged rather more widely than I had expected, and the noble Baroness has given us a very comprehensive answer, for which I am grateful. I was particularly intrigued by the reference by the noble Lord, Lord Wallace of Saltaire, to George Thomson, who I remember very well. I see that the noble Lord, Lord Steel, is here; he will remember George Thomson, who represented Dundee before he became a Commissioner and was responsible for this major development within the European Community that we are talking about today.

He once told me that he was very excited at being selected as the candidate for the Member of Parliament for Dundee. He was employed by DC Thomson at the time and went to tell his employer that he had been selected as the prospective parliamentary candidate. He thought that his employer would be delighted. Instead, his employer said, “You realise if you’d stayed with us you could have gone on to be the editor of the Beano”. So instead of being editor of the Beano, he went on, thankfully, to do a very good job in the European Community.

Photo of Lord Newby Lord Newby Liberal Democrat Leader in the House of Lords

I am sorry to interrupt the noble Lord but as a representative of the sons-in-law of Lord Thomson of Monifieth, I should tell him that he was the editor of the Beano before he went on to a more serious job.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

How can I contradict a son-in-law? Without my noble friend Lord Liddle being present to advise me, I am not able to do so. I thought that my original story was quite funny; I wish it had been true. To return to the serious matter, because this is a serious matter, George Thomson left us a great legacy.

The noble Baroness has covered a lot of the issues. She has gone two-thirds of the way towards answering the points that I raised. She has given a very detailed and careful outline of the Government’s strategy, for which we are grateful, and has indicated that projects in the pipeline will be supported to the end of the current funding period, but it is beyond that that we are concerned about. We are concerned about continuity. That is something we need to pursue.

The noble Baroness also helped us a little on the UK shared prosperity fund and said that the Government would engage with that issue later this year. That could take us almost to the exit date, which will be a few months beyond that, so we need to be told about that soon. I hope that through a Written Answer or further discussion we might get a clearer indication of the timescale, otherwise, there will be a vacuum and hiatus there.

I will talk with my noble friend Lady Hayter outwith the Committee but we need to look at the Minister’s very comprehensive reply in detail and consider whether it would be appropriate to table an amendment along these lines on Report. I will withdraw my amendment but this is yet another example of the many dozens, if not hundreds, of examples that we are discussing in this Chamber and outwith it where it would be an awful lot better if we just stayed in the European Union. Why are we having to deal with all these difficulties and problems all around the country, and in this case in the poorest areas of the country, when it could be completely unnecessary? In the next year and a bit, we may have the opportunity to give the British people a chance to re-examine whether we should continue to be members of the European Union. That point is not irrelevant to this amendment, but I beg leave to withdraw it.

Amendment 23 withdrawn.

Amendment 23A not moved.

Clause 4: Saving for rights etc. under section 2(1) of the ECA

Amendments 24 and 25 not moved.

Amendment 26

Moved by Lord Pannick

26: Clause 4, page 3, line 4, leave out paragraph (b)

Photo of Lord Pannick Lord Pannick Crossbench

Amendment 26 is another amendment arising from the report of the Constitution Committee and stands in my name and those of three other members of that committee: our chairman, the noble Baroness, Lady Taylor, and the noble Lords, Lord Norton of Louth and Lord Beith.

This amendment focuses on Clause 4(2)(b), which excludes from Clause 4, and therefore excludes from the scope of retained EU law, as defined in Clause 6(7), rights and obligations which arise under an EU directive but which,

“are not of a kind recognised by the European Court or any court or tribunal in the United Kingdom in a case decided before exit day (whether or not as an essential part of the decision in the case)”.

The problem with that was summarised in paragraph 38 of the Constitution Committee’s report. We said that this involves,

“ambiguities in the interpretation and effect of clause 4”,


“will inevitably cause legal uncertainty about a fundamental provision of the Bill”.

The fundamental uncertainty is the meaning of the words “of a kind”. We discussed this briefly earlier this afternoon. I understood the Minister, the noble and learned Lord, Lord Keen, to say in response to a question from the noble and learned Lord, Lord Falconer of Thoroton, that in this context “of a kind” means that prior to exit date there must have been a court case, either domestic or in Luxembourg, on the specific provision of the relevant directive, and that it is not good enough to say that the principles decided in other cases show that this directive confers rights in domestic law.

The Minister will, I hope, clarify the Government’s position but I, for my part, have difficulty in seeing how that type of narrow approach follows from the language of Clause 4(2)(b). The words “of a kind” suggest to me that it must suffice to rely on the principles stated by the Court of Justice, or a domestic court in other cases. Indeed, I would be very concerned if the general approach were not the applicable approach under this legislation; otherwise, that would conflict with the Bill’s purpose—to read across, as we have discussed, a snapshot of the EU law obligations into domestic law as at exit day.

Surely, if I can show that I have on or before exit day directly effective rights under a directive applicable to the EU which has not been properly implemented in domestic law, then I must, after exit day, be entitled to rely on those rights, even if there has been no court case relating to that specific directive, either in Luxembourg or in the courts of this country, but I can show that, had such a case been brought before exit day, I would have succeeded under the principles established in other cases in domestic courts or in the Court of Justice.

Therefore, the Constitution Committee would very much welcome some guidance from the Minister on what the Government intend in this area. The committee concluded in paragraph 38 of our report that the ambiguities in Clause 4(2)(b),

“will undermine one of the Government’s main objectives in bringing forward this Bill. The ambiguities need to be resolved”.

I suggest to the Minister that, because of the ambiguities inherent in the phrase “of a kind”, it would be very helpful if the Government could bring forward on Report an amendment that clarifies exactly what they mean so that there is no doubt. I beg to move.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Liberal Democrat 9:15 pm, 28th February 2018

My Lords, when I was a young barrister doing cases in strange places such as Caernarfon Crown Court, nobody at that time thought of bringing charges under the Justices of the Peace Act 1361, but some time in the 1970s somebody had that bright idea. The Justices of the Peace Act 1361 applies to certain public order issues. Suddenly, charges of affray started appearing before those courts, and nobody questioned the efficacy or applicability of the Justices of the Peace Act 1361 in that context. Noble Lords may well be thinking: it is bedtime and that is a good story, but what on earth has it got to do with this amendment? I venture that it has something to do with it.

I am not a member of the Constitution Committee but I admire everything it has done and I support what my noble friend Lord Pannick has just said. This is about the clarity of the law. Normally, if we in this Parliament enact a law and nobody questions its efficacy for years—such as, for example, the Justices of the Peace Act 1361—we tend to pat ourselves on the back and say, “For once we’ve got something right. It’s not troubling their Lordships and Ladyships in the Court of Appeal or the Supreme Court, so we can be well satisfied with our legislative process”. What seems to be being said here, at least to the ordinary reader, I suspect, is that if a particular provision, though it exists, has not been tested and questioned before a court, in some circumstances it should not apply. But if it has given rise to difficulty and has had to be tested in court, that is a kind of imprimatur of quality. I just do not understand it. I hope that your Lordships, at least at 9.20 pm, tend not to understand it either.

Whichever version of this particular law we have—which has, I say to the Minister, the commendable virtue of retaining existing rights and allowing us to presume that we can act on our retained rights—please may we have clarity on what is intended and, if necessary, an explanation of why the Government wish to disapply certain rights that exist?

Photo of Lord Krebs Lord Krebs Crossbench

My Lords, I will speak to Amendment 28, in my name and that of the noble Baroness, Lady Jones of Whitchurch, and my noble friend Lady Brown of Cambridge. This amendment, which seeks to replace Clause 4 with a new clause, includes the same intent as that of Amendment 26 but goes further. It aims to preserve, more comprehensively than the existing Clause 4, the rights, powers, liabilities, obligations, restrictions, remedies and procedures derived from EU law and incorporated into domestic law via the European Communities Act 1972. Where such rights, powers, liabilities, obligations and so on are incorrectly or incompletely transferred, it also imposes a duty to make regulations to remedy the deficiency.

The Government’s ambition for the withdrawal Bill is for the same rules and laws to apply after the UK leaves the EU as they did before. This ambition has been repeatedly stated, including in the Government’s great repeal Bill White Paper. As the noble Lord, Lord Pannick, reminded us in Monday’s debate,

“the Prime Minister said that this Bill is not an occasion for changing the law, it is an occasion for ensuring that on exit day we have a workable, certain, continuing system of law”.—[Official Report, 26/2/18; col. 550.]

However, the Bill as drafted fails to retain all EU law and therefore does not meet this objective which has been set by the Prime Minister.

I am approaching this from the point of view of environmental protection. The problem is not exclusive to environmental law, but because 80% of environmental law stems from the EU it is particularly important in this area. I would expect the Government to welcome this amendment as it will help to support their ambitions for protecting the natural environment. As the Secretary of State for Environment, Food and Rural Affairs reaffirmed recently:

“It is this Government’s ambition to leave our environment in a better state than we found it”.

It is widely accepted that, over recent decades, the state of our environment has improved in many respects, due primarily to the introduction of EU laws. Amendment 28 will therefore support the Government’s ambition to go further in protecting and enhancing our environment by addressing four problems with the current Clause 4.

The first problem is the one identified by the noble Lord, Lord Pannick, in his Amendment 26. As the Explanatory Notes explicitly state,

“any directly effective provisions of directives that have not been recognised”— that is, by a court—

“prior to exit day … will not be converted”.

I do not propose to say more about this because the noble Lord has explained, in better terms than I could, the ambiguity created by this clause.

Secondly, the proposed new clause in Amendment 28 imposes a duty on the Government to make regulations that will remedy any cases in which there have in the past been an incorrect or incomplete transfer of EU law. If the Minister considers this to be unnecessary, perhaps we could understand why. The powers to do so are contained in Clause 7(2)(f) but, surely, she would agree that there is a significant difference between a power to do something and a duty to use that power.

The third point that the amendment aims to rectify is that a number of provisions of directives are relied on directly, rather than via transposition into UK legislation. The status of these provisions is unclear as the Bill stands. An example is the Government’s current environmental reporting obligations. Can the Minister confirm that these will be put on a domestic footing as a result of the Bill?

The fourth point, on which I do not intend to elaborate because it is dealt with in Amendment 58, is that the current Clause 4 does not include the preambles to EU directives, which are important in interpreting existing EU legislation. I shall not say more about that today.

Without the amendment to Clause 4, which I am proposing with others, the Bill puts at risk EU law provisions such as the requirements to review and report on the adequacy and implementation of laws such as those in the marine strategy framework directive, the air quality directive and the habitats directive. It does not place obligations on the Government to report and send information to the European Commission —not surprisingly—which is then able to aggregate this information and use it in its consideration of the appropriateness of laws and their implementation.

Without Amendment 28, the Bill omits the aim and purpose of directives, such as the habitats directive specifying that its aim is to contribute towards biodiversity conservation, while some obligations incumbent on member states that have not been transposed into UK law will be lost—for example, the water framework directive’s requirement that water-pricing policies provide adequate incentives for users to use water efficiently. Without Amendment 28, the requirement for regional co-operation in transboundary environmental matters—for example, in article 6 of the marine strategy framework directive—would be lost.

As I have already mentioned, these problems will not only be felt in the field of environmental law. There are other examples of where directives have been incompletely or incorrectly transposed, and which would therefore be lost because of the current drafting of the Bill. These include article 15 of the e-commerce directive and article 4 of the employment equality directive, to name but two.

Finally, I would like to give one practical example of why Amendment 28 is needed. Article 6 of the energy efficiency directive requires member states to ensure that central governments,

“purchase only products, services and buildings with high energy-efficiency performance, insofar as that is consistent with cost-effectiveness, economical feasibility, wider sustainability, technical suitability, as well as sufficient competition”.

This obligation is currently implemented through a procurement policy note. The legal basis for such guidance is article 6 of the directive. No statutory obligation exists in UK domestic law. This means that the article 6 obligation on the Government to purchase highly energy-efficient products, services and buildings will disappear from our law after exit day. The procurement policy note has no legislative status and could be revoked by a Government at any time, without any form of parliamentary scrutiny.

I hope that the Minister will address my points in her response and, if she is not prepared to accept Amendment 28, will explain what additional steps the Government intend to take to ensure that the environment is protected by law and that this Bill ensures that we will have a workable, certain and continuing system of law on exit day.

Photo of Baroness Brown of Cambridge Baroness Brown of Cambridge Crossbench 9:30 pm, 28th February 2018

My Lords, I support Amendment 28, tabled in the name of my noble friend Lord Krebs and the noble Baroness, Lady Jones of Whitchurch, and to which I have also added my name. My noble friend Lord Krebs has already described very eloquently the purpose of the amendment. During Committee in the other place, the then Minister of State for Courts and Justice described this clause in nice, simple, visual terms. I found them slightly easier than all the legal language that we have been dealing with. He called it a sort of broom: a sweeper provision that,

“picks up the other obligations, rights and remedies that would currently have the force of UK law under section 2 of the European Communities Act”.—[Official Report, Commons, 15/11/17; col. 498.]

Such a broom seems a jolly useful idea, but as it stands it is missing a few bristles.

My noble friend Lord Krebs mentioned the air quality directive. I believe that Clause 4, as it stands, could fail to sweep into UK law the requirement on the Government to review and adjust the airborne particulate PM2.5 targets in line with scientific information from the World Health Organization. The current clause could also fail to sweep, as he mentioned, details such as the aims and purposes of directives. For example, the environmental liability directive includes the really important principle of “the polluter pays”. I am not quite sure whether I am addressing the noble Baroness the Minister or the noble and learned Lord the Minister, but I would ask one of them to please let us have a broom with denser bristles.

Photo of Lord Beith Lord Beith Liberal Democrat

My Lords, Clause 4 contains many ambiguities, some of which have been helpfully pointed out by the noble Lord, Lord Krebs, and the noble Baroness, Lady Brown. The clause domesticates all directly effective treaty provisions whether or not they will be capable of meaningful application following exit. Several problems arise from that which the Government are aware of and say they will address. However, I am not entirely comfortable with the sort of formula the helpful Solicitor-General brought to the committee when he came to see us. He said:

“‘The Government will consider how these rights can be given effect to in the context of our exit from the EU on a case-by-case basis ahead of exit day’”.

There is an awful lot of work to be done before exit day and I look forward to receiving this case-by-case analysis at some point.

The Constitution Committee suggested amendments to deal with some of the ambiguities, but it could not deal with all of them for the reason we set out in paragraph 37. Reciprocal rights are,

“inextricably linked to the legal relationship between the UK and the EU post-exit. The full impact of Brexit upon reciprocal rights will not be known until the UK’s future relationship with the EU is determined. This highlights a broader issue that the uncertain environment in which the Bill is being considered makes it difficult fully to assess its likely consequences, including its constitutional implications, at the time of its passage”.

That is putting it gently, but that is the difficult situation in which we are operating.

I turn specifically to the effect of Amendment 26. I remain puzzled by not just the ambiguity but the conflicting language used in the clause. The noble Lord, Lord Pannick, elucidated this at the start of this short debate by citing the phrase,

“not of a kind recognised by the European Court or any court or tribunal in the UK in a case decided before exit day”.

The committee responded by saying:

“It is unclear whether this means that there must be a judgment on the specific provision of the particular directive, holding that it has direct effect, or whether it simply requires that the provision in question satisfies the criteria that would be applied if the matter were to be judicially considered”.

That is a pretty hypothetical basis on which to defend a right. We said:

“The language of clause 4 supports the latter interpretation, but the explanatory notes appear to endorse the former”.

A great deal of paper is being shuffled around at the moment because it may be that the ambiguity is being resolved as I speak, although I suspect that what is really being looked at is how far we can get tonight in the course of these proceedings. However, we need some help in getting the Government’s view on this, but that might not be sufficient because we also need to ensure that the Bill is tightened up in this respect.

Photo of The Duke of Montrose The Duke of Montrose Conservative

My Lords, we have spent a lot of time today trying to define what is a snapshot and what could give clarity in the transposition of the legislation. We are now poking around as to where the fuzzy edges are, and some of this is very much more than just fuzzy edges. In fact, it is very good that the noble Lord, Lord Krebs, outlined areas that this measure would solidify and imply. My worry about Amendment 28 concerns subsection (3), which deals with law that,

“incorrectly or incompletely gives effect”.

It is hard to say what that will apply to. It is obviously drawn up that way because we do not know what it will apply to. In some ways, it seems we are now trying to include laws in the snapshot when we do not know what they are or what they might be.

My main gripe is that the amendment says that,

“a Minister of the Crown must make regulations for the purpose”.

This is one of the things for which we might say that a Minister of the Crown “may” make regulations, because we wish to leave some power to the UK Government to intervene to construct the type of law we would like to see.

Photo of Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn Conservative

My Lords, in welcoming Amendment 28 I note that it supplements Clause 4 in a way that can be considered constructive. Among other things, it would strengthen the position of archaeology and cultural heritage, which are often associated with environmental issues. A new policy statement has been promised, but that would surely be weaker than a statutory approach, which this amendment follows. It takes a more comprehensive approach in what I consider to be a constructive way.

As drafted, the Bill does not fully transpose the environmental principles set out in the European Communities Act 1972 into United Kingdom law. The amendment would therefore impose a duty to make regulations to remedy this deficiency. It is fair to say that we do not want our rich body of archaeological remains to be put at risk by deficiencies that might remain in the legislation following our withdrawal from the European Union. The amendment is supported by the Council for British Archaeology and the Chartered Institute for Archaeologists. It offers an important safeguard and I am very happy to support it.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, I added my name to Amendment 28, although my colleagues the noble Lord, Lord Krebs, and the noble Baroness, Lady Brown, have made the case for it very eloquently. We have rehearsed many times before in this Chamber that 80% of UK environmental law derives from the EU, so we have a particular interest in ensuring that those same environmental protections are fully transposed and are not weakened by either omission or design in the transposition. Our concern is that the current wording of Clause 4 does not give us that guarantee. The tablers of Amendment 26 attempted to address that ambiguity in one way and we have attempted to address it in a different way, but I think we are aiming to achieve the same outcome.

Crucially, the amendment concerns the issue of whether the rights, powers, obligations et cetera derived from EU law are incorrectly or incompletely transposed, and the duty to remedy that deficiency. The noble Lord, Lord Krebs, gave some examples of that. For example, under current directives there is an expectation of reporting obligations, which will cease on Brexit day and are not part of the provisions that will be transposed. Although the Government have promised to create a UK body to oversee future standards and reporting obligations, we have not seen the detail of that, so we are being asked to make a decision blind. We need a substitute for that current arrangement to be spelled out.

Equally, the principles and preambles that underpin EU environmental legislation have an important but amorphous status that needs to be underwritten with guarantees as we transfer. Such provisions set out, for example, the aims and purposes of directives. They include Article 1 of the environmental liability directive, which refers to the “polluter pays” principle, and Article 1 of the habitats directive, which sets out the aim to contribute to biodiversity conservation. These things are important; they are not about to be transposed automatically, and we need extra provision to make sure that they can be followed through, which we believe our amendment does.

Finally, I agree with the noble Lord, Lord Pannick, who described matters not having been being dealt with by the courts as a rather odd way of defining what should and should not be transposed. He made the case much better than I could, but he is spot on and I hope that the Minister is able to answer those points.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

My Lords, I shall speak very briefly, first, because it is already past my bedtime and, secondly, because noble Lords have already outlined some of the problems. It was a pleasure to hear the noble Lord, Lord Renfrew, speak on this matter in relation to archaeology. I started a speech about 15 years ago, when he was in the audience, by saying that when I was a trainee archaeologist he was such an icon that I thought he was already dead. I am therefore absolutely thrilled to see that he is still not dead; it is always a pleasure to hear him.

I want to put my comments in simple terms so that Members of your Lordships’ House on the other Benches understand exactly what the problem is with the EU withdrawal Bill on this issue. Amendment 28 —and, by implication, Amendment 26—is designed to make sure that we do not miss out on important parts of EU law; namely, directives. EU directives place obligations on our Government to act in particular ways, such as bringing forward particular legislation. Examples include the working time directive, a social measure, and the habitats directive, an environmental measure. These directives cover a wide span of issues. The wording of the Bill leaves huge gaps that these important directives could fall through. The amendments would plug those gaps and make sure that they are all brought over into UK law. They would also allow or require Ministers to make sure that these directives are properly implemented so that we receive whatever benefits, rights and remedies were intended. As has been said several times, the big problem with the approach set out in Clause 4 is that it will exclude legal rights simply because they have not been litigated on. I do not see the sense in that. I am sure the Government will see that it needs a little bit of fixing and that we will see some positive compromises come forward.

Photo of Lord Brown of Eaton-under-Heywood Lord Brown of Eaton-under-Heywood Chair, Sub-Committee on Lords' Conduct

I rise to seek clarification on the precise objective of Clause 4(2)(b) in this whole pattern of legislation, and therefore on the effect of the attempt made by the noble Lord, Lord Pannick, to get shot of it. As I understand it, Clause 4(1) faithfully reproduces Section 2(1) of the 1972 Act. On the face of it, these directly effective provisions are to continue to apply. Of course, it is not always easy to decide what is a directly effective provision that comes within the ambit of Section 2(1) of the 1972 Act, which is here given effect to. As I see it, though I may be quite wrong—I should like the Minister to confirm or reject this—subsection (2)(b) is there basically to say: “Look, if it’s one of those doubtful provisions as to whether it is indeed a directly effective provision under the EU legislation, whether it is completely unclear—there isn’t a case on it—and nobody has specifically suggested that it is, it is not to be argued henceforth that it is”. In other words, the certainty and clarity that this legislation overall is designed to achieve is supposed to be advanced by getting rid, in Clause 4(2)(b), of cases where the past jurisprudence simply leaves the thing high up in the air with no proper guidance.

Photo of The Duke of Montrose The Duke of Montrose Conservative 9:45 pm, 28th February 2018

My Lords, the reason I dare to intervene at all is that I have always had a great interest in conservation, as a farmer, and in looking after nature reserves and various such things. Will the Minister make something clear? It seems to me that the habitats directive and the water directives are already part of our law; I do not quite see how they would fall through in the absence of some of these clauses, but we do want to tighten up the legislation.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Justice), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing)

My Lords, I start by affirming that we on these Benches—or what is left of us—support the thrust of Amendments 26 and 28, which deal with significant issues raised in Clause 4. As the Constitution Committee avers, as drafted,

Clause 4 will … domesticate all directly effective treaty provisions, whether or not they will be capable of meaningful application”.

What is the point of such an outcome? What is the point of creating a situation under which in the case of domesticated provisions which have,

“no practical application, or makes provision for reciprocal arrangements or rights which no longer exist or are no longer appropriate once the UK has left the EU, statutory instruments can be brought forward to repeal or amend the provisions”?

More substantively, what is the Government’s response to the damning conclusions of the committee in paragraphs 37 and 38 of its report? These describe the implications of the Bill for reciprocal rights as “uncertain” and state:

“The full impact of Brexit on reciprocal rights will not be known until the UK’s future relationship with the EU is determined”.

What is the Government’s position on this issue?

Given the concerns of the committee, what, if any, estimate have the Government made of the consequences of the Bill’s impact in this area, and what is their response to the committee’s observation that:

“The ambiguities in the interpretation and effect of clause 4 will inevitably cause legal uncertainty about a fundamental provision of the Bill. This will undermine one of the Government’s main objectives in bringing forward this Bill”?

The committee concludes its observations on this part of the Bill by stating starkly:

“The ambiguities need to be resolved”.

Does the Minister agree that there are ambiguities? If so, how and when will the Government address the problem?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

My Lords, I rise to respond to these amendments with one very clear thought in my mind: I wish my noble and learned friend Lord Keen were standing at this Dispatch Box. We are dealing with issues that are clearly perplexing much greater intellects than mine, but I shall do my best. These amendments, tabled by the noble Lords, Lord Krebs and Lord Pannick, concern the operation of Clause 4 and I am grateful for the opportunity to further explain and discuss the Bill’s approach to directly effective provisions arising from EU directives, one of the issues raised by these amendments.

As the Committee is aware, one part of EU law that the Bill is not converting into our domestic law is EU directives. The reason for this is clear: as they are not a part of our domestic law now, they should not be after we leave the EU. Indeed, my noble and learned friend Lord Mackay of Clashfern made this point very succinctly in the earlier debate. Instead, the Bill is saving the domestic measures that implement the directives under Clause 2, so it is not necessary to convert the directives themselves. My noble and learned friend Lord Keen clarified that in the earlier debate. This is not only a pragmatic approach but one that reflects the reality of our departure from the EU. As an EU member state, we were obligated to implement those directives. When we leave the EU, those obligations will cease and it makes no sense to retain the direct effect of this category of law within our domestic law.

However, the Bill recognises one important exception to this approach: where, in a case decided or commenced before exit day, a domestic or European court has recognised a particular right, power, liability, obligation, restriction, remedy or procedure provided for in a directive as having direct effect in domestic law, Clause 4 will provide for that right, power, et cetera, to continue to have effect in domestic law.

The debate seemed to centre around the nub of phrasing in Clause 4(2)(b). In the earlier debate the noble Baroness, Lady Ludford, raised the interesting question of what “kind” means in the phrase “of a kind”. That question was repeated by the noble Lord, Lord Pannick. In Clause 4(2)(b) “of a kind” is to be read in the context of a right recognised in a decided case. Rights recognised in particular cases are often described in specific terms particular to that case and to the individual who has brought the action. The phrase “of a kind” is designed to ensure that comparable rights particular to other cases and individuals are also retained by Clause 4 but in respect only of decisions pertaining to that same directive. It is the opinion of the Government that this strikes the right balance, ensuring in respect of directives that individuals and businesses will still be able to rely on directly effective rights that are available to them in UK law before exit day, while also providing clarity and certainty in our statute book about what will be retained in UK law at the point of exit. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, encapsulated that point very neatly.

The amendment of the noble Lord, Lord Krebs, which is similar to the one tabled by Lord Pannick, would instead remove this balance. These amendments could have the effect that pre-exit directives would give rise to a directly effective right that has not previously been identified, for an unspecified period after our exit. Such rights would therefore become part of our law. The Government have always conscientiously implemented EU legislation, in accordance with our obligations as a member state, but once we are no longer in the EU, we should have no enduring obligations in relation to the implementation of EU directives. To accept these amendments would be to undermine the certainty that this Bill seeks to achieve. Businesses and individuals will be placed in the difficult position of not knowing when their rights might change, and our courts could face practical difficulties.

The amendment of the noble Lord, Lord Krebs, goes even further. It would place Ministers under a continuing duty and obligation to make regulations where there has been incorrect implementation of any of the EU law that is retained through Clause 4. I would argue that this provision is harmful for several reasons, and it would not be consistent with the principle that we are separating our domestic statute book from that of the EU.

First, binding Ministers to legislate to give effect to any incomplete or incorrect directly effective EU law retained through Clause 4 would effectively require the UK to act on obligations of implementation relative to the EU framework that it was no longer under—a situation that would be simply inappropriate following exit day. Such an approach would impact on the certainty that the Bill aims to provide in our domestic statute book. By potentially allowing developments in the EU to continue to flow into UK law past the point of exit day, the clear snapshot—I know some Members do not care for the term but I think it is the best term we can come up with—taken by the Bill will be distorted, giving rise to confusion about what our law actually is and where it comes from.

Photo of Lord Krebs Lord Krebs Crossbench

The Minister has just said that it would be inappropriate to rectify omissions or incorrect translations. But if the overall aim of the Bill is to move what is currently governed by the EU into UK law and, as it happens, maybe by accident or some other reason, we have made a mistake in the past, surely it would be right within the overall aims of the Bill to rectify errors in the translation, rather than to say, “We made a mistake in the past so we will persist with the mistake”. I just do not understand the logic of not wanting to rectify mistakes.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat Lords Spokesperson (Exiting the European Union)

Can I repeat something that I have raised in the Chamber before and about which I had correspondence with a Minister? The European Investigation Order, one of the directives cited by the Prime Minister in her Munich speech that she wants us to stay part of, was transposed at the end of last year into UK law, but incorrectly. It is like a European arrest warrant, but for evidence. Instead of saying that it could be opposed on the grounds that it breaches the European Charter of Fundamental Rights, which is what the directive says—I know, because I was one of the MEPs who battled to get that in—it says that it could be refused if it breaches the European Convention on Human Rights, which is not an EU measure. That has therefore not been transposed correctly. What is the status after exit day? Can someone challenge an EIO on the grounds that it breaches the charter, or only on the grounds that it breaches the convention?

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

In response to the noble Lord, Lord Krebs, and the noble Baroness, Lady Ludford, we must go back to the fundamental principle of this Bill, which is that we have to have a cut-off point and beyond that point, law-making will revert to the United Kingdom. If there are corrections or incompletions or other matters that we are required to address, we can do that through domestic legislation. That is what any Government of any complexion would want to do. The matters referred to by the noble Lord, Lord Krebs, might take years to emerge. Therefore, it would be essential for Governments to pay attention to whatever was emerging, some of which might be de minimis. We do not know, but my argument is that this would confuse and cause difficulty about understanding what our law is and certainly where it is coming from.

I was going on to say in relation to the amendment of the noble Lord, Lord Krebs, that there is a lack of clarity regarding when exactly Ministers would have the duty to make such regulations under this amendment. Is it intended that all the instruments that currently give effect to EU directives should be reviewed so that such regulations could be repaired? Such a review would have considerable resource implications for both the Government and Parliament, and that should not be underestimated. Furthermore, it would be unnecessary: as I have already mentioned, while the UK has been a member of the EU, we have sought fully to meet our obligations and give effect to EU law in accordance with them. In the case of implementing directives, we have conscientiously discharged our obligations. To require potentially a proactive review exercise, as the noble Lord’s amendment could require, is, in my submission, pointless.

I have tried to address the concerns and issues raised; I believe the effect of these amendments would be profound, undermining the Government’s clear and coherent position on retained EU law. I hope I have explained in sufficient detail why the current design of Clause 4 is right and appropriate, and I would therefore ask both noble Lords not to press their amendments.

Photo of Lord Pannick Lord Pannick Crossbench

I thank all those who have spoken in this debate, and in particular the noble Lord, Lord Krebs, whose amendment I support. I said in opening this debate that I, and the Constitution Committee, found Clause 4(2)(b) very difficult to understand. I am reassured that even the noble Lord, Lord Carlile, with his experience dating back to 1361, with the Justices of the Peace Act, finds it puzzling.

The position is this: there is no dispute—it is well established in the case law of the Court of Justice—that an unimplemented directive does have direct effect and confers individual rights in national courts where it is clear and precise and unconditional. I understood the Minister to say that Clause 4(2)(b) is intended to exclude reliance on such a directive after exit day unless there has been a court case before exit day, either in Luxembourg or in this country on that specific directive. I find that a very odd approach—it certainly is not consistent with the language of Clause 4(2)(b) of a kind. It does not suggest that you are concerned with a court case on that specific directive.

It is also a very odd approach because it means that the rights that are enjoyed after exit day in this area—and they are very important rights as the noble Lord, Lord Krebs, and others have indicated—depend on the accident of litigation. Has there been a court case? There may not have been a court case because it is very clear that this particular directive confers individual rights. To rely on the accident of litigation is to my mind a very odd approach.

The approach that the Minister indicates is also fundamentally inconsistent with the snapshot approach which she commended in her speech as the right one—and I accept it is the right one—under this Bill because the Government’s approach will mean that rights will be lost, even though they were enjoyed in this country before exit day. After exit day, they are lost, and the reason they are lost is because nobody has previously brought a court case. I find this very puzzling indeed.

I very much hope that the Government will think again about this. I have the feeling that there is concern around the Committee about the approach that the Government are adopting. I hope they will look at this again. It is a difficult issue, but I do not think they are adopting the right approach. Their approach is inconsistent with their objectives for the Bill. We may well have to return to this on Report, but I hope the Government will bring forward an amendment. For the time being, I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendment 27

Moved by Lord Pannick

27: Clause 4, page 3, line 7, at end insert—“( ) are the subject of an enactment.”

Photo of Lord Pannick Lord Pannick Crossbench

My Lords, this is another amendment that comes from the Constitution Committee. It suggests that we should exclude from the scope of Clause 4 any EU law rights derived from the 1972 Act which are already the subject of an enactment—in other words, where Parliament has already dealt with the subject. The Constitution Committee explained its concern at paragraph 35 of its report.

The concern is this. Clause 4 as drafted would include, within retained EU law, rights and obligations under EU law irrespective of whether they have already been implemented in domestic law by primary or secondary legislation. The problem to which this gives rise is that, as a result of Clause 4, there may be, as part of our law after exit day, two conflicting sets of legal rights on the same subject: the ones already implemented by Parliament and the greater rights which a litigant will say are derived from retained EU law. The question is: how is the court supposed to deal with that conflict? It has two retained EU law rights on the same subject. The Constitution Committee heard evidence from the noble and learned Lord, Lord Neuberger of Abbotsbury, the former President of the Supreme Court. As set out in the report, he told the committee that this problem needs to be addressed by the Bill.

Paragraph 36 of the report mentions that the committee heard evidence from the Department for Exiting the European Union that suggested that the problem that I have sought to explain is no different from the situation under the current law where there may be a statute which has sought to implement an EU law obligation that is found by a court judgment not fully to have implemented the EU law obligation, so the EU law obligation takes priority over the inadequate domestic implementation. The problem is that under the Bill, both the domestic enactment and the EU law obligation —see Clauses 2 and 4 respectively—are treated as retained EU law, so the supremacy principle under Clause 5, to which we will come, applies to both of them, and the question remains: which of them takes priority? I look forward to hearing the answer from the Minister to this difficulty. I beg to move.

Photo of Lord Beecham Lord Beecham Shadow Spokesperson (Justice), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing)

My Lords, at this late hour, I am more than content to rely on the amendment moved by the noble Lord, Lord Pannick, and the questions he has raised.

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

My Lords, this will be brief, because my soulmate and prop has deserted me. With this amendment, the noble Lord, Lord Pannick, has raised what he sees as the potential conflict between the EU law retained under Clause 4 and the domestic legislation preserved under Clause 2. His amendment seeks to ensure that rights, powers, obligations et cetera provided for in EU directives which have been implemented into EU-derived domestic law—and therefore are already subject to an enactment—will not need to have their directly effective provisions domesticated through Clause 4.

The Government consider this amendment unnecessary. To the extent that there is any potential overlap between Clause 4 and Clause 2, this is no different from the situation at present in relation to EU law and how we see it given effect in UK law. A judgment may establish direct effect, and domestic legislation to implement that finding may follow. But this does not cause any practical difficulties now—indeed one process complements the other—so we simply do not agree that there will be practical difficulties under this Bill as phrased.

I am of course grateful for the suggestion made by the noble Lord, Lord Pannick, but the Bill’s position is clear and consistent with existing practice, and his amendment is unnecessary. In these circumstances, I ask him to withdraw it.

Photo of Lord Beith Lord Beith Liberal Democrat

The noble Baroness is bringing out an explanation which the committee has already considered and was not satisfied by. As the noble Lord, Lord Pannick, explained, there is a remaining ambiguity. Can I suggest to her that she composes a note to her very good friend, the noble and learned Lord, Lord Keen of Elie, saying she was given a very difficult time over this and that the Government really have to look at it again? If she is agreeable to doing that, we will not spend much time making a fuss about it.

Photo of Baroness Goldie Baroness Goldie Lord in Waiting (HM Household) (Whip)

I thank the noble Lord very much indeed. I am sure my noble and learned friend Lord Keen does not even need the note. He will know that I have had a very difficult time.

Photo of Lord Pannick Lord Pannick Crossbench

I am very grateful to the noble Baroness. The problem is, as I sought to explain, that under existing law we know which takes priority: it is EU law. The problem under the Bill is that the EU obligation, which is retained EU law, and the existing domestic implementation, which is also retained EU law, because Clause 2 says so, are in conflict, and the Bill does not provide any order of priority between them. I had assumed that the noble and learned Lord, Lord Keen, had gone off because he wants to sit in the Library and think about the answer to this problem. I very much hope that before Report he will come up with the answer and that this can be resolved. I beg leave to withdraw the amendment.

Amendment 27 withdrawn.

Amendment 28 not moved.

Clause 4 agreed.

House resumed.

House adjourned at 10.09 pm.