Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Amendment 35

European Union (Withdrawal Agreement) Bill - Committee (2nd Day) (Continued) – in the House of Lords at 9:30 pm on 15th January 2020.

Alert me about debates like this

Lord Fox:

Moved by Lord Fox

35: After Clause 37, insert the following new Clause—“Implementation period negotiating objectives: level playing-field (1) It is an objective of Her Majesty’s Government within the framework of the future relationship of the United Kingdom and the EU to secure agreements that achieve the following outcomes—(a) close alignment with the EU single market, underpinned by shared institutions and obligations, with clear arrangements for dispute resolution; (b) dynamic alignment on rights and protections for workers, consumers and the environment so that UK standards at least keep pace with evolving standards across the EU as a minimum; and(c) participation in EU agencies and funding programmes, including for the environment, education, science and industrial regulation.(2) A Minister of the Crown must lay before each House of Parliament a progress report on each of the outcomes listed in subsection (1)(a) to (c) within 4 months of this Act being passed, and subsequently at intervals of no more than 2 months.”Member’s explanatory statementThis new Clause would require the Government to seek close alignment with the EU single market on key level playing-field provisions such as workers’ rights and environmental and consumer standards and protections as part of its negotiations for the future relationship with the EU.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

Oh dear, it’s that man again. Amendment 35 concerns the level playing field. We have heard a lot about standards and regulation over the last day and a half. This is not about going through all those standards and regulations and whether they are being regressed or otherwise. It is about the overall effect that the playing field, as we have called it—we will talk about that—will have on the negotiation stance. This is very much a probing amendment to try to find out how the Government will deal with what seem to me a number of conflicting circumstances in their positions.

We have heard a lot about regression but we are not going to talk about the individual issues here. Amendment 35 seeks to require the Government—those words again—to seek alignment of their regulations, institutions and objectives for the future FTA with the EU. My noble friend Lord Newby talked about whether we are talking about unfettered or frictionless access. A key element to access to the single market will be the level playing field, which is why this is a really important element. I am keen to hear the Government’s intellectual thoughts here. For the avoidance of doubt, we are talking about workers’ rights, environmental regulations, state aid, food and product safety, data rules and the whole framework by which people do business and live their lives. It is not a small issue. Picking out just one of those—employment regulation—I note with surprise that the Prime Minister is quoted in the Financial Times as describing employment regulation as “back-breaking”. I come from an agricultural background and it was the absence of employment regulation that caused backs to break. The point I am trying to make is that regulation is often seen as harmful and terrible, but it has had a beneficial effect on many people’s lives. You have only to ask agricultural workers alive today to see how employment regulation has improved their lives. That is just one small example.

These rules matter to people, the environment, business and many other things. But they will also matter to the EU trade negotiation; in fact, they will make or break it. The non-binding political declaration on the future EU-UK relationship makes it clear that there is a direct link between Britain’s regulatory regime and market access; we know that to be true. That is picked up in the wonderful report from the European Union Select Committee, which I have already referred to. It talks about where there has been a substantial rewrite, which we have heard about in other cases. The report says that the declaration, in adding the issue of the

“geographic proximity and economic independence of the parties,” adds more doubt about how this will go forward.

In the event that the EU eventually agrees to a UK-wide customs union, which it may, member states will require the UK to sign up to level playing field provisions. What is a level playing field? Most people who talk about them are usually trying to tip one in their direction at the same time; that is of course the subject of the negotiation, and I would not dream of seeking to tie the hands of the Government on that. By the definition of the negotiation, a level playing field is the price of any zero-tariff, quota-free and rules-of-origin-free access to that very important market for the United Kingdom. Anything less will create friction, or perhaps fetter access to that market. That is what our major industries fear. If noble Lords talk to major industries, as I am sure they are doing, they will hear that the issue of data, which we heard about two amendments ago, is frightening the fintech industry to death. Questions about rules of origin are frightening the food industry. Chemical and pharmaceutical companies fear, among other things, how the chemical regulations will pan out. Aerospace and automotive are famously concerned about how their industries will survive in this remit.

There are many other examples of when the Government and Ministers have said the right things—I praise them for that. The Government have worked with the words and talked about balance and regulatory alignment. However, the noble Baroness, Lady Jones of Whitchurch, talked about the pressures on the Government that will come. There are also examples of the Government painting a picture of a much more freewheeling approach. We have heard people worrying in other debates about regression of rules and regulations and there are those quotes from different Ministers in different places, particularly the Prime Minister, who sometimes chooses to set out a Britain on the edge of Europe, with lighter regulations. Before the election, DExEU signalled an openness to “significant divergence”. This all adds to people’s distrust of the Government’s intentions.

In Johnson’s case, his ambivalence seems determined by his proximity to the United States: the nearer he is to President Trump, the more free market he is in what he says. We should note that talk of the US trade deal really makes the level playing field issue with respect to the European Union very difficult. We talked on a previous amendment about some of the food security issues which the United States could create, so there is a big challenge here. These mixed messages from Government could be constructive ambivalence before we go into a negotiating period, or there could be splits or confusion. Perhaps the Minister can define quite why all these different messages are coming forward.

From the EU’s perspective, there is no such thing as a little bit of a level playing field. From its perspective, it is level or not level. I think a lot of the talk has been about having some levelness, but not all of it. I think that is to misunderstand the approach that the European Union will take when it comes to negotiations. Theresa May’s deal agreed a relatively generous level of provisions around taxation, labour and social standards and environmental protection. We are now in a different place, so I think we need some delineation from the Minister of which areas will be the focus for negotiations because I am sure that those Theresa May provisions will be, at the very least, a starting point from the European Union’s perspective.

We do not have time, but there is the whole issue of dynamic alignment. As Ministers have set out, we start off in the same place—it is pretty easy. But the day after tomorrow, something changes. How do we change and maintain dynamic alignment with those standards? This is a particular issue when we come to the island of Ireland and Northern Ireland. Under the deal, as I understand it, legally binding level playing field provisions apply in the exit treaty focused on Northern Ireland. How the UK maintains alignment in the British part and the Northern Irish part of those regulations to maintain its access to the all-Irish market, and therefore the European Union, is beyond my ability to understand. I am happy and humble if the Minister can explain how it will happen. It will be crucial to the negotiation. Things coming out of Brussels indicate that the role of British businesses with Northern Irish subsidiaries will also be dragged into negotiations, something I had not heard anything about until yesterday. That adds further complications to it.

This amendment also seeks to maintain UK access to participation in major funding programmes and the like, which I will not go into. The amendment sets out what we think is important around the level playing field issue. It maintains a beneficial framework—a framework jointly developed by the United Kingdom with the European Union; it was not foisted on us—and it helps to send the right messages to important businesses and sectors about how they can face the future. This discussion is a chance for Her Majesty’s Government to set out their approach because, at the moment, the messages have been confused, confusing or both, so we look forward to comments from the Minister.

Photo of Viscount Trenchard Viscount Trenchard Conservative 9:45 pm, 15th January 2020

My Lords, the noble Lord, Lord Fox, has talked at great length about a level playing field. The level playing field he refers to is the EU level playing field. It is not any other level playing field, such as the House of Lords level playing field, which seems to suit the Liberal Democrats, who are overrepresented in your Lordships’ House by 67% on the basis of the proportion of votes cast at the last general election.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

I congratulate the Member opposite on embracing proportional representation.

Photo of Viscount Trenchard Viscount Trenchard Conservative

That is my pleasure. Proportional representation has its place but it may not be applicable everywhere.

I am very surprised that the noble Lord has sought to require the Government to adopt his amendment seeking a level playing field with the EU on workers’ rights and environmental and consumer standards. Is he not aware that it was a manifesto commitment of the Conservative Party, to which all Conservative candidates signed up, that the Government would get a proper Brexit done and that we would leave the customs union and the single market? It is essential that we do that to have the flexibility we need to develop and maintain our own independent trade policy, and to negotiate free trade agreements with third countries.

The noble Lord’s amendment requires close alignment with the EU single market, underpinned by shared institutions and obligations. “Shared institutions” sounds to me as though we could still be regulated by EU regulators even after we had left. The EU will seek to export its regulatory framework and standards to us in return for providing market access. Dynamic alignment on workers’ and consumers’ rights would completely subjugate us to the EU, ruling us out as a potential trade partner for others and denying us the benefits and upside of Brexit. We know that the noble Lord does not want to leave the EU but surely he understands that, given that Brexit is going to happen anyway, we should make sure that we can play on a level playing field at the global level. That means freeing ourselves from EU strictures, such as the noble Lord’s amendment would make worse.

Photo of Lord Warner Lord Warner Labour

I am sorry to interrupt the noble Viscount’s flow but I cannot resist asking him, even at this time of night, whether the Prime Minister’s new best friends in constituencies in the north of England and the Midlands will welcome his robust approach to workers’ rights at the next election.

Photo of Viscount Trenchard Viscount Trenchard Conservative

I believe that the policy which my right honourable friend the Prime Minister used to persuade his new supporters in the north of England and elsewhere to support is one that will produce more prosperity for the United Kingdom and a brighter future for all, and that those who voted for him in the north of England will see that it is in their interests to continue to vote for him and his successors, because his policy will have so clearly worked. Furthermore, since we will be free of the cash drain and the regulatory strictures of the EU, which have progressively stunted the United Kingdom’s voice in global fora—I speak as someone who has spent a large proportion of his working life outside the UK, looking in—the new supporters of the Conservative Party in the north will, I hope and trust, wish to continue to support it.

The noble Lord, Lord Fox, talked a lot about regression and standards. He is always trying to bind the Government not to resile or retreat from the high standards set by the EU. But standards are not about high and low; they are about what is proportionate, what properly balances the interests of the innovator with those of the consumer, and what sufficiently but properly protects the consumer against risk. EU regulation in many fields relies so much on the precautionary principle that it has a very negative effect on innovation. That places at risk the UK’s position as the best country in the world in which to conduct medical and scientific innovation, so for all those reasons I would resist the noble Lord’s amendment.

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

Before the noble Viscount sits down, can I point out that the reputation he just mentioned, as the greatest country in the world in which to develop medical and other research, has been acquired while we have been in the European Union?

Photo of Viscount Trenchard Viscount Trenchard Conservative

The noble Baroness is quite right—it is in spite of our being in the European Union. This precautionary principle regulation increasingly affects international pharmaceutical companies, which have said to me that it is important that we should not allow much more of that or we will be a less friendly place for innovation.

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

My Lords, I do not know about this talk of workers’ rights, but I started at 11 this morning, it is now nearly 10 pm and we are starting again at 11 tomorrow morning—sadly not being paid to be here; I am not a worker, so I cannot use the EU regulations. But that is rather beside the point. I am looking forward to the Minister’s “intellectual thoughts” as the noble Lord, Lord Fox, asked of him.

The Government’s aim is for a free trade agreement—“unfettered” trade—which, if we are not to undercut our competitors across the EU, is bound to involve a level playing field of regulations and state aid rules, as the noble Lord, Lord Fox, said. Michel Barnier has repeatedly stated that Boris Johnson’s ambition of a tariff-free, quota-free deal hinges on accepting this, and EU leaders suggest that level-playing-field commitments will be a precondition for the EU to conclude a free trade agreement. Emmanuel Macron has stated that

“the more ambitious the agreement, the more substantial the regulatory alignment”.

That does not mean all the same rules and institutions—we do not go along with that—but this is about the rules by which we can trade with the EU. Macron also said that a level playing field will make the negotiations “go pretty quickly”.

As we know, the Prime Minister keeps saying “Get Brexit done”, but this also means getting an FTA before the end of the year. If we do not uphold workers’, consumers’ and environmental rights, this will not help the Prime Minister to get his Brexit done. Appearing willing to undermine EU standards—and the Government are seen as undermining them—will immediately indicate to the EU that its companies may face unfair competition from ours. The Government’s deletion of the clauses upholding existing rights has already alarmed the EU and companies there, let alone our own workers and consumers.

Amendment 35 inserts the aims already set out in the political declaration—though of course they are not enforceable in that—where the Government agreed to

“maintain environmental, social and employment standards at the current high levels provided by the existing common standards.”

We are asking for this, from the political declaration, to be included in the Bill.

We have had 45 years of progressive integration of our employment rights and other standards alongside the EU. These regulations are good in themselves for the workers and consumers concerned and for the environment, but they are crucial for an open, fair and competitive continental market on whose growth and resilience all our well-being depends. Furthermore, as has been suggested, any future trade deal must incorporate these high levels of alignment and a level playing field with the EU in order to prevent an alternative vision—the deregulatory US deal—taking primacy over the EU deal. It sounds as though that it is something the noble Viscount, Lord Trenchard, would like, but we on this side of the House would not. Let us keep to the high standards that we have.

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

My Lords, I first thank the noble Lord, Lord Fox, for so ably moving his amendment on the issue of close and dynamic alignment on single market rules. I have a sense of déjà vu, because we have of course discussed this subject many times, both during the passage of the previous EU withdrawal Bill and in many debates and Questions in this House. I will probably not surprise him with my answer but I will nevertheless plough ahead with it anyway.

It will, I am sure, not come as a shock to the noble Lord to find that the Government cannot support his proposed new clause in Amendment 35, for the reasons that I will set out. I will say, before that, that we want an ambitious future economic partnership with the EU, one that allows us to be in control of our own laws and benefit from trade with other countries around the world. Adopting his amendment would prevent that. We do not believe that dynamic alignment with future EU rules is in the best interests of this country. It is here in this Parliament, not in Brussels, where decisions should be taken over the laws that govern our country. That is the very essence of taking back control. This view is supported by many of the leading experts in the field, including the Governor of the Bank of England, who recently said in the Financial Times:

“It is not desirable at all to align our approaches, to tie our hands and to outsource regulation and effectively supervision of the world’s leading complex financial system to another jurisdiction.”

This Government remain committed to upholding high standards for workers, consumers and the environment. As I have said on many occasions, we do not have to follow EU rules in order to achieve this. It has become something of an obsession for Labour and the Liberal Democrats that somehow we want to undermine EU standards. Let me again say, as I have said many times in this House before, that in most of these areas we already exceed EU minimum standards. I will give the same examples that I have given to the House many times before.

On environmental protections, the UK’s world-leading ban on single-use plastic items will come into force in April 2020, a year ahead of the EU’s timetable set out in the single-use plastics directive. On workers’ rights, the UK’s maternity system is one of the most generous in the world. Most mothers can take up to 39 weeks of guaranteed paid leave. This is nearly three times the EU minimum requirement of 14 weeks. On consumer rights, in England and Wales and Northern Ireland, consumers always have a six-year guarantee—five years in Scotland—that repair or replacement will be free of charge if a product is faulty or not as advertised. This, as in the other standards, goes well beyond the EU minimum requirement of a two-year legal guarantee. I am intrigued to find out why the Liberal Democrats and the Labour Party are so obsessed with aligning with EU standards that are much lower than our own in this country.

We are also committed, as we set out, to introducing legislation that will further enhance many of these high standards. In the field of workers’ rights, I am sure the Labour Party will be very interested to know that this will result in the creation of a single enforcement body to crack down on breaches of employment law. This is on top of the implementation of the Good Work Plan, which is the largest upgrade to workers’ rights in a generation. For the environment, we are introducing the landmark environment Bill, which will establish an independent office for environmental protection and will embed the UK’s ambition to build on our high levels of environmental protection.

The other subject raised by the noble Lord, Lord Fox, is participation in EU funding programmes. The political declaration, in paragraphs 11 to 12, clearly envisages close co-operation across a range of areas, including science, innovation and education. It already provides for the possibility of UK participation in specific EU programmes, including the negotiations of terms and conditions. If it is in the UK’s interests, we will seek to participate in EU programmes such as those related to science, research and innovation as a third country. However, this will be a matter for the upcoming negotiations, because these funding programmes have not yet been finalised. They are part of the EU’s 2020 MFF negotiations taking place at the moment. The Opposition are asking us to commit to programmes the details of which we do not yet know. But we are not ruling it out. We will take a long, hard look when the programmes are finalised and, if it is in the UK’s interests, we will seek to participate. For agencies, the political declaration sets out, in paragraph 23, that

The Parties will also explore the possibility of cooperation of United Kingdom authorities with Union agencies”.

Again, the nature of this co-operation will be subject to the ongoing negotiations.

We have been through these issues many times before, so I hope the noble Lord will forgive me for setting them out yet again. In the light of this and the information I have given him that the UK already exceeds EU minimum standards in virtually all these areas, I hope that he will feel able to withdraw his amendment.

Photo of Lord Fox Lord Fox Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy) 10:00 pm, 15th January 2020

I thank the Minister for his response and noble Lords for their contributions. Whenever I have a feeling of self-doubt, I have only to listen to the noble Viscount, Lord Trenchard, to cure it and I feel a lot better afterwards.

The Minister talks brilliantly on the Government’s regulatory approach, saying that we do not need to follow EU rules to achieve this. That would be true had the Government not done the deal they did on Northern Ireland. That is the point I am making about the internal tension within the regulatory scene in that negotiation. That is his problem and we will be following it very closely. I will read the Minister’s response in Hansard and inwardly digest it, but in the meantime, I beg leave to withdraw the amendment.

Amendment 35 withdrawn.