European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) Regulations 2019 - Motion to Approve

– in the House of Lords at 4:53 pm on 27th March 2019.

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Moved by Lord Callanan

That the draft Regulations laid before the House on 25 March be approved.

Relevant documents: 54th Report from the Joint Committee on Statutory Instruments, 46th Report from the Secondary Legislation Scrutiny Committee

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

My Lords, first, I express my gratitude to the House for agreeing to suspend Standing Order 72 so that we can debate this statutory instrument today. I am also thankful to the Secondary Legislation Scrutiny Committee for its report, produced yesterday. In addition, I express special thanks to the other excellent committee, the JCSI, which met only this afternoon but has very helpfully released its view on the instrument and has not found any reason to draw it to the special attention of the House.

There was an important discussion yesterday about why the Government had asked the House to agree to take the debate without having a guaranteed report from the JCSI. Taking that decision was, in my view, the right thing to do and we should all be grateful to the JCSI for being prepared to do its work so quickly and thoroughly. I am sure that that has been of great assistance to the House.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Chair, Economic Affairs Committee, Chair, Economic Affairs Committee, Chair, Finance Bill Sub-Committee, Chair, Finance Bill Sub-Committee

I am most grateful to my noble friend but, given that this has happened, surely it was not necessary to suspend our Standing Order.

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

Maybe not, but we did not know when the committee would be considering the report. It made special arrangements to sit—but I take my noble friend’s point.

Although the Motion approved by the other place on 14 March to seek an extension is not legally binding, the Government made it clear in that debate that we would seek an extension if that was what the House voted for. The other place then voted to approve a Motion to seek to extend the Article 50 period. An extension has therefore been agreed with the EU and the Government are now committed to implementing that extension in domestic law.

This is a vitally important instrument with a simple but crucial purpose. It will make sure that our domestic statute book reflects the extension of Article 50 that was agreed with the EU on Friday 22 March. As the House will be aware, the decision adopted by the European Council and agreed to by the UK provides for two possible durations. Should the other place approve the negotiated withdrawal agreement this week, the extension will last until 22 May. If it does not approve the withdrawal agreement this week, the extension will last until 12 April.

These regulations, laid under the European Union (Withdrawal) Act 2018, therefore cater for an extension in either scenario by redefining exit day to ensure that the day and time specified in that definition is 11 pm on 22 May or 11 pm on 12 April, depending on whether the other place approves the withdrawal agreement.

I note of course that the noble Baroness, Lady Hayter, has tabled an amendment to today’s Motion which I am sure she will speak to in a moment. As ever, my noble and learned friend Lord Keen stands ready to respond to that in his closing speech.

I take this opportunity to respond directly to a question put yesterday to my noble friend the Leader of the House by the noble Lord, Lord Pannick. I assure the House that the Government have considered carefully the vires under Section 20(4) of the 2018 Act and are satisfied that they have the power to make these regulations under that section. Section 20(4) provides that regulations may be made to,

“amend the definition of ‘exit day’ … to ensure that the day and time specified in the definition are the day and time that the Treaties are to cease to apply to the United Kingdom”.

That power applies only where the day and time specified in the definition of exit day differ from that when the treaties will cease to apply.

Following agreement with the European Council last Friday, the day and time that the treaties cease to apply do now differ from that contained in the definition of exit day. However, the European Council decision identified two possible dates when the EU treaties will cease to apply. Consequently, the amendment to exit day reflects those two dates, applying the same condition, and, in doing so, ensures that the day and time specified in the definition are the day and time that the treaties cease to apply to the United Kingdom. Only one day and time will apply at any given time.

It would be contrary to a natural reading of the words in subsection (4) to suggest that the power may not be exercised in this way to reflect the conditionality in the extension agreed with the EU. I would also draw attention to paragraph 21 of Schedule 7 to the Act, which puts beyond doubt that the powers in the Act may be used to deal with supplementary matters.

The effects of the instrument will apply across the domestic statute book, so it is important that I set out the details of what it will do and why. Currently, major changes to the domestic statute book reflecting our exit from the EU are due to take effect on exit day, which is defined in the European Union (Withdrawal) Act 2018 as 11 pm on 29 March 2019, despite the extension terms that have now been agreed at the international level. These changes apply across a huge number of policy areas, from emissions trading to Europol. All the changes are designed so that our statute book works when we leave the EU. However, because in many cases they amend EU regulations they are inconsistent with the situation in which we remain a member of the EU for a couple more weeks or months.

All the changes are due to take place on exit day, and this definition has effect across the statute book by Schedule 1 to the Interpretation Act 1978, Schedule 1 to the Interpretation and Legislative Reform (Scotland) Act 2010 and Section 44A of the Interpretation Act (Northern Ireland) 1954, with which I am sure all noble Lords are familiar. Now that an extension to Article 50 has been agreed in EU and international law, we need to amend the date to reflect the new point at which the EU treaties will cease to apply to the UK, and to ensure the correct functioning of our domestic statute book. The instrument has therefore been laid under the European Union (Withdrawal) Act to do just that.

It is critical that the House approves the instrument for the simple reason that the extension of Article 50 has been agreed with the EU and is therefore legally binding in EU and international law. Owing to the agreement between the UK and the EU to extend Article 50, the UK will remain a member state of the EU until at least 11 pm on 12 April as a matter of EU and international law. If this instrument did not pass, that would lead to confusion across our statute book from 29 March—this Friday. A large volume of EU exit legislation preparing the statute book for the moment when EU law ceases to apply is due to enter into force automatically on exit day. Without this instrument being put in place, there would be a clash in our domestic law whereby contradictory provisions applied to both EU rules and new UK rules simultaneously, and in some cases new UK rules would replace EU rules prematurely.

We estimate that tens of thousands of amendments to our domestic legislation will be made in the light of EU exit. These include: changes that relate to the sharing of information; reporting requirements placed on businesses and public institutions; and the role of the European Commission in issuing licences and certificates. For example, let us take the statutory instrument relating to the rights of lawyers to practise in the UK, which may be of some interest to noble Lords. If these regulations come into force on 29 March, EU lawyers who are not “registered European lawyers” immediately before exit day are at risk of committing a criminal offence if they continue to provide particular legal services in the UK. Other examples include UK operators being unable to comply with the EU Emissions Trading Scheme and having to surrender their emissions allowances early, and the risk that firms stop trading to avoid legal breaches, given their uncertainty about when new customs, excise and VAT regimes will kick in. There are other examples from across the statute book, but what is clear is that without this instrument there will be significant confusion and uncertainty for businesses and individuals on Friday 29 March.

Photo of Lord Wigley Lord Wigley Plaid Cymru 5:00 pm, 27th March 2019

Can the Minister confirm that, in the event of the vote in the other place on Monday leading to proposals for a different form of agreement, there is nothing in this order preventing another order from coming forward to further amend the date of exit if any changes that arise from the debate in the other place have to be negotiated with the EU?

Photo of Lord Callanan Lord Callanan Minister of State (Department for Exiting the European Union)

No, there is nothing in this instrument that would conflict with that. What they are debating in the other place are effectively changes to the political declaration, not to the legally binding withdrawal agreement.

To avoid a conflict between UK and EU law, it is therefore essential that the instrument being debated today is made before 11 pm on 29 March so that it may come into force ahead of that time. This will align exit day with the new date and time on which the EU treaties cease to apply to the UK in EU and international law.

I am acutely aware of the huge amount of work undertaken by Members of both Houses to scrutinise the nearly 550 statutory instruments brought forward to prepare for exit. If this instrument did not pass, that work would be put under threat. I therefore hope that this House can agree on the necessity of this instrument and approve it so that, with the approval of the other place also, it can come into force and avoid serious confusion and uncertainty for businesses and individuals. I beg to move.

While I am on my feet, I want to take the opportunity to correct something that I said during exchanges with the noble Baroness, Lady Quin, at Oral Questions yesterday. The noble Baroness was in fact not a member of the Blair Government during the time of the Iraq war demonstrations, and indeed did not vote in favour of the Government’s decision to go to war. I have of course apologised to the noble Baroness, and I would like to take this opportunity to correct the record.