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Amendment 2

European Union (Withdrawal Agreement) Bill - Report (1st Day) – in the House of Lords at 4:35 pm on 20th January 2020.

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Lord Hutton of Furness:

Moved by Lord Hutton of Furness

2: Clause 15, page 18, line 21, at end insert “, comprising a majority of non-executive members”

Photo of Lord Hutton of Furness Lord Hutton of Furness Labour

My Lords, in moving Amendment 2, I shall speak also to Amendments 22 to 28. The withdrawal agreement requires the United Kingdom to establish a new independent body to monitor the implementation of the citizens’ rights provisions contained in the agreement once the implementation period has elapsed. As noble Lords will be aware, there are over 3 million EU and EFTA nationals living in the United Kingdom today. The independent monitoring authority to be set up under this Bill will therefore have an essential role in helping the United Kingdom to meet its international obligations. It goes right to the heart of our standing as a nation governed by the rule of law and on respect for human rights and individual liberties, so this is a very important part of the Bill. My main concern with Schedule 2 as it stands —this is why I have tabled these amendments—is that it appears to place administrative convenience ahead of the proper enforcement of citizens’ rights. This is unacceptable; my amendments are designed to address this imbalance.

Amendments 2 and 22 relate to the composition of the independent monitoring authority. It must surely be a matter of principle that a body such as this, charged with the important responsibilities that we are about to give it, should comprise a majority of non-executive members. That is consistent with every principle of good, corporate governance. These amendments will make that clear. At the moment, it is not clear—in fact, quite the opposite. Under Schedule 2, it is possible for the body to be properly constituted and make decisions even without a majority of non-executive members. If we allow that position to go unchallenged, there is a risk—small perhaps, but not a risk we should be prepared to run—of executive capture. We should not let that happen.

Amendment 23 deals with the balance of the non-executive members. The Bill does not require the non-executive members to reflect properly the nations of the United Kingdom. The words “so far as possible” are inadequate in this context and should be removed. There can be no excuse not to ensure a proper reflection of the nations in the membership of the IMA.

Amendment 24 deals with defective appointments and vacancies. Given the importance of the work of the IMA, it should surely be possible to ensure a full complement of non-executive members. In the case of defective appointments, I do not think that decisions taken by people who have not been properly appointed should be treated in the same way as the decisions of people who have been properly appointed. Otherwise, what on earth is the point of our requiring the Secretary of State to follow a particular appointment process?

I turn now to Amendment 25. Under the schedule as currently drafted, the IMA could delegate to any official of the authority all or any of its decision-making powers other than the production of its annual report. I do not think that that can be right either. Surely the powers to investigate and reach decisions on individual cases or complaints brought to the IMA must be the sole preserve of the members of the IMA itself. My amendment would ensure that that is the case.

Amendment 26 also deals with quite an important issue of principle. In my view, sub-paragraph (4) as it is currently drafted is completely at odds with sub-paragraph (3). If the IMA is satisfied that the UK has failed to comply with its international obligations under the agreement or it is satisfied that a public authority has acted in contravention of the agreement—that is what this part of the schedule is dealing with—then surely it would be astonishing if the IMA could simply ignore this and decide not to take any action at all.

When the composition of the IMA was first revealed and the Department for Exiting the European Union published its document explaining the remit and mandate of the authority, it said:

“The IMA will be established to monitor the UK’s application of the citizens’ rights parts of the Agreements and identify any breaches.”

However, sub-paragraph (4) allows the authority to completely ignore any evidence of a breach of the UK’s international obligations; it allows it not to pursue an inquiry even though it is satisfied that such a breach has occurred. So it might decide to investigate some breaches of our commitments under the agreement but not all, and I do not think that is right. My amendment would therefore delete that provision from the schedule altogether.

Amendment 27, which I have tabled, also deals with a fundamental question of procedure. Sub-paragraph (3) in this part of the schedule seems to me to drive a coach and horses through the whole concept of an effective monitoring body. It is hard to imagine that many of the complaints we can envisage being made to the IMA will not involve at least the potential for an issue to be resolved or referred to the courts. This sub-paragraph gives the IMA a carte-blanche power to simply refuse to make any inquiries even if there is evidence that such a breach has taken place or that it believes that the proper redress is for an individual action in the courts. I do not believe there can be a justification for such a carte-blanche power, and certainly not one that is as widely drafted as this is.

On Amendment 28, many noble Lords have focused on the powers granted under the schedule for the Secretary of State to transfer the functions of the IMA to another body at some point in the future. Here I definitely can see why the Secretary of State might want to do this at some point in the future, but we should insist as a minimum threshold that any new body that might discharge these important statutory powers has the same constitutional safeguards—regarding independence and regional representation, for example—as the IMA. That is how we are setting it up under the schedule so surely any new body should reflect those essential provisions. I therefore do not think this amendment is asking for very much. It would simply require the Secretary of State to satisfy himself that any such body that these functions are transferred to is constituted in the same way as the IMA.

Lastly, on the point about dissolving the IMA, perhaps the Minister, whose response I am looking forward to, could confirm that under Article 159(3) of the withdrawal agreement the joint committee would have to agree the abolition of the IMA anyway, so the UK has already ceded authority—to use that argument—over the continued existence or otherwise of the IMA. I beg to move.

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

My Lords, I thank the noble Lord for his amendments. Given his long experience of government, he will understand that we have designed the IMA’s constitution as set out in Schedule 2 in line with the best practice for the establishment of new public bodies. I fear that the amendments he has tabled risk undermining that approach.

As noble Lords will be aware, we have introduced a number of requirements relating to the membership of the IMA’s board in line with the well-established procedures relating to the governance of public bodies. An important principle of this is that the board of public bodies must contain more non-executive than executive members. That is why we have required the Secretary of State to ensure that, as far as possible, the number of non-executive IMA members exceeds the number of executive members. It is also why the Bill sets out that an IMA board meeting is quorate only if there is a majority of non-executive members present. Because these restrictions exist elsewhere in the Bill, Amendment 2 is unnecessary.

Although I understand the concerns that motivated the noble Lord to table Amendments 22 and 23, I can assure him that the current drafting approach is appropriate in ensuring that the requirements relating to the IMA’s board are met. It is common practice for legislation to require a Secretary of State to meet a duty “so far as possible”. Without this caveat, the Secretary of State could be in breach of the law, even if they had done everything in their power to ensure that the IMA’s membership requirements had been met. For example, the Secretary of State would be breaking the law if a non-executive member had to vacate their post for reasons entirely outside of the Secretary of State’s control, such as illness. We do not believe that that can be right. The drafting approach we have taken in these paragraphs is entirely normal and is designed to prevent counterintuitive situations like the one I just described. I therefore hope that the noble Lord will not press Amendments 22 and 23.

We have also taken a precedented and proportionate approach to the drafting around a defective IMA appointment. Removing this provision would risk invalidating the proceedings of the IMA unnecessarily, or halting them while a vacancy is filled, which could have unintended negative consequences for EEA and EU citizens in the UK. I therefore hope that the noble Lord will not press Amendment 24.

I can reassure the noble Lord that the way in which we have given effect to the IMA’s functions as required by the withdrawal agreement will ensure they are exercised effectively, in a manner consistent with the IMA’s status as an independent body. Therefore, I hope he will not press Amendments 25 and 26. Amendment 25 would result in an inappropriate number of operational decisions being escalated to the IMA’s board, in a way that would be inconsistent with its role of setting the body’s strategic direction. It would also require the IMA’s board to conduct all inquiries, without any delegation. We believe that that would prove unworkable in practice.

On Amendment 26, there are many good reasons why the IMA could decide not to carry out an inquiry after the necessary conditions in sub-paragraph 25(3) have been met. For example, it may decide that the public authority has indicated that it is committed to remedying the failure; it could decide that it would be more appropriate to bring legal action against the public authority in question, rather than conduct an inquiry; or another public body or regulator may already be seized of the issue. In all these scenarios, it should be for the IMA, as an independent body, to decide the best course of action. That is appropriate in the circumstances. Amendment 26 would undermine the IMA’s operational independence by indicating that it should conduct an inquiry in every instance that the necessary conditions are met, even if this runs contrary to its own judgment.

In establishing the IMA, it has been the Government’s intention to avoid, as far as possible, the duplication of existing processes and structures around citizens’ rights which individuals can already access. Amendment 27 would run contrary to this approach, by removing the requirement that the IMA considers whether other routes would be more appropriate for a given complaint. Doing so would risk the IMA duplicating the functions of existing structures, in a manner unhelpful for the citizens whose rights it is designed to protect. I therefore hope the noble Lord will not press Amendment 27.

I have previously sought to reassure the House about the Government’s intentions behind the power to transfer the IMA’s functions. We had debates on this in Committee. As the House is already aware, in any transfer of the IMA’s functions the Government can make changes to the constitution of the transferee that the Secretary of State considers appropriate. This has been included so that, for example, the important role of the devolved Administrations and Gibraltar in the IMA can be retained. Constraining the power so that the IMA’s constitution must be replicated in its exact current form could force us to amend the transferee’s constitution inappropriately. For example, if the transferee has a wider remit than that of the IMA, it may require more board members or different expertise compared to that of the IMA. What is important, in our view, is that the transferee should be given the powers to fulfil the functions of the IMA and comply with the UK’s international obligations under the withdrawal agreement and EEA EFTA Separation Agreement; that is already allowed for in the legislation in its unamended form. Amendment 28 is therefore impractical and unnecessary, and I hope that the noble Lord will not press it.

I hope that I have provided the noble Lord, Lord Hutton, with adequate reassurances to address the concerns that have motivated his amendments. As set out in their unamended form, Clause 15 and Schedule 2 establish the IMA in line with well-established principles for the governance and operation of new public bodies, and any amendments to this drafting would be a departure from such principles. Lastly, to address his question about whether the joint committee would need to agree to abolish the IMA the answer is yes, it would. In the light of the reassurances I have been able to give, I therefore hope that the noble Lord will withdraw Amendment 2.

Photo of Lord Hutton of Furness Lord Hutton of Furness Labour 4:45 pm, 20th January 2020

My Lords, I am grateful to the Minister for his reassurances. He has, however, confirmed my suspicion that what matters most to Ministers is the administrative convenience of this new body, rather than its effective operation as a monitoring authority. I am certainly prepared not to press my amendments. I do not intend to test the opinion of the House; that was never my purpose in tabling them. However, I suspect that we will return to this issue in the months and years ahead. I fear that we are setting up a body in a way that is not consistent with its purpose. Its purpose is clear under the withdrawal agreement; time will tell whether the Minister is right or I am right. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 21: Main power in connection with Ireland/Northern Ireland Protocol