(3 years, 5 months ago)
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Lord Grimstone of Boscobel
That the Grand Committee do consider the Common Rules for Exports (EU Exit) Regulations 2020.
Relevant document: 29th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)
My Lords, I hope that the Committee may be unanimous in support of these regulations and their objective. The regulations were laid before the House on 21 September and were approved by a Committee of the House of Commons on 14 October. They are made under powers in the European Union (Withdrawal) Act 2018, which I will refer to as “the Act” from now on. The Committee will be aware that, given the context, these powers are limited. All that they allow is the correction of technical deficiencies in existing EU legislation that, by the operation of the Act, is to be retained in United Kingdom domestic law following withdrawal from the European Union. The amendments made by these regulations correct those deficiencies by, for example, replacing references to the European Union, its institutions and legislation with the appropriate United Kingdom references.
The retained EU regulation, as amended by these regulations, lays down the basic principle that exports from Great Britain will not be subject to quantitative restrictions unless the restrictions are applied in conformity with the retained EU regulation. The new legal regime makes it clear what the purpose of any export restriction should be. In general, export restrictions may be used only where there is a risk of a critical situation arising on account of a shortage of essential products or to remedy such a situation, or where such a measure is needed to fulfil international undertakings entered into by the United Kingdom.
I start by drawing the Committee’s attention to the fact that these regulations amend the retained EU regulation only as it applies in respect of Great Britain. This is consistent with the Northern Ireland protocol, which preserves the ability of the European Commission to exercise these powers in Northern Ireland. However, as is also set out in Article 6 of the Northern Ireland protocol, nothing may fetter the movement of goods from Northern Ireland to Great Britain, other than to fulfil an international obligation. The EU regulation is not used to fulfil international obligations and so does not fetter the movement of goods within the United Kingdom.
Through the course of the year, we have seen the use of export restrictions on medical goods grow around the world in response to shortages arising during the fight against Covid-19. Indeed, the European Commission used the EU regulation in March in response to shortages of personal protective equipment—PPE. Under this EU regulation, the United Kingdom was required to temporarily authorise any exports of PPE, following a review of licence applications from exporters. In the vast majority of cases, the United Kingdom authorised these exports.
While export restrictions can be appropriate in dealing with critical situations in the short term, the restrictions we have seen build up around the world have disrupted the normal flow of trade and exacerbated the efforts of many countries to combat the global pandemic.
The Government have been clear that countries should limit their use of export restrictions as far as possible. In May, the United Kingdom joined calls for the use of export restrictions to be restricted and to be applied only where deemed completely necessary and in a targeted, proportionate, transparent and time-limited way. By applying strict conditions to the use of any export restriction, this legal regime sends a clear signal to our trade partners around the world that, despite the pandemic, the United Kingdom remains open for business.
I underline for the benefit of the Committee that the Government do not need to implement export restrictions pursuant to the United Kingdom’s international obligations by making regulations under the retained EU regulation as amended by this SI. Other, more specific legislation provides the appropriate powers with which to do this. For example, restrictions that apply to the export of arms are provided for under the well-established statutory regime under the Export Control Act 2002. In addition, Article 10 of the retained EU regulation does not preclude the use of export restrictions where this is required for the purposes of public policy.
I also point to the role that Parliament will play in overseeing any measures that are put into effect under the retained EU regulation as amended by these regulations. This is clearly set out in Article 7A. It explains that any such measures must be contained within a statutory instrument and describes the nature of parliamentary involvement, where Parliament can annul measures in some circumstances and can vote on the regulations in others.
This statutory instrument is subject to the affirmative resolution procedure because it transfers to the Secretary of State a power to legislate that currently sits with the European Commission. That is a power to put export restrictions into effect in Great Britain in certain circumstances. I commend the regulations to the Committee.
Lord Liddle (Lab) [V]
My Lords, I do not believe that I have yet spoken in a debate being replied to on behalf of the Government by the noble Lord, Lord Grimstone. I welcome him to his role—although he has been there for some time. I see him as a very capable and grown-up figure. I wish that could be said of the rest of the Government in which he serves.
I am speaking in this debate because I am a member of the Secondary Legislation Scrutiny Committee and this measure came before us a couple of weeks ago. In terms of Great Britain, it seems a perfectly sensible amendment of retained EU law. There is however some uncertainty, which is why I am speaking today, about its implications for Northern Ireland.
Perhaps I may quote from the 29th report of your Lordships’ Secondary Legislation Scrutiny Committee. Paragraph 7 states:
“While we note the Department’s explanation that the Commission could impose export controls or restrictions on Northern Ireland only in very limited circumstances, such as in relation to the movement of endangered species, it is not clear what other circumstances may allow the Commission to exercise its powers. These are issues that the House may wish to explore further, given the sensitivities around future trade between Northern Ireland and the rest of the UK.”
That is why we drew the regulations to the special attention of the House.
We have already had a rather shameful episode, in my view, where the Government signed up to the Northern Ireland protocol and then, when they considered it in more detail, decided that they did not like its terms. As a result, they attempted something which, as we saw in the Divisions last night, this House regarded as a gross breach of international law to change provisions of the protocol which they did not like. What I am seeking today is an assurance as to what exactly are the circumstances in which this bit of EU law will apply in Northern Ireland, and whether the Government will give an absolute undertaking that they will not seek in any future piece of legislation to override these provisions. Given what we have seen in the last year, I think that is a perfectly reasonable request.
The Minister rightly drew our attention to article 6 of the protocol—I have it open in front of me. He quoted point 1 of article 6, which says:
“Nothing … shall prevent the UK from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”
It goes on to say that any measures which
“restrict the exportation of goods shall only be applied to trade between Northern Ireland and other parts of the United Kingdom to the extent strictly required by any international obligations”—
Lord Parkinson of Whitley Bay (Con)
I am sorry to interrupt the noble Lord but the time limit for speeches in this debate is three minutes.
Lord Liddle (Lab)
That is even given the very few speakers in the debate, which I do not understand. I will sum up in a moment. So, the protocol speaks of
“the extent strictly required by any international obligations of the Union”,
but it goes on to say that, despite Northern Ireland’s integral place in the United Kingdom, the applicable EU legislation would apply in Northern Ireland. What would that mean?
Lord Parkinson of Whitley Bay (Con)
I am sorry to interrupt the noble Lord once again but we are very tight on time. I am afraid the noble Lord will have to conclude his remarks.
Lord Liddle (Lab)
I conclude my remarks, but I hope that we do not get into legal problems similar to those we have seen already.
Lord Wallace of Saltaire (LD) [V]
My Lords, after hearing Conservatives and Ukippers preach year after year about the unnecessary bureaucracy of European regulations, it is sad that we now have a Government hurrying to transpose European regulations into domestic law as necessary and useful elements in diverse aspects of government and in managing our economy. That is a sad irony.
My first question to the Minister is to ask whether he can tell us yet how many more SIs are still to come before the House from his department before transposition and replacement are complete. We will be very busy between now and the new year with continuing legislation to clarify our future external trade policy and our relations with the EU and others. How many more SIs are still to come? Secondly, has preparation for this transposition been accompanied by any contingency planning in Whitehall about products not easily available in Britain that could be critical in an emergency?
I understand that constraints on exports of specific foodstuffs might be rational and necessary in an emergency. I am aware that the UK produces a range of pharmaceuticals to which this SI might apply. However, we have learned during the current Covid-19 emergency that there are a number of medicines that we do not produce in quantity, and a wide range of other medical supplies of which we have lacked domestic stocks—and which the Government had failed to ensure were available in usable forms in stockpiles.
Now that the UK is abandoning its guaranteed access to its largest market from which to source many essential products, have the Government embarked on any discussions with the EU and its member Governments about future co-operation in any shared or global emergency? Do they have plans to increase domestic production or expand domestic stockpiles?
I shall leave the Irish dimension to others, beyond noting that the growing prosperity of the Irish economy means that Ireland has also become a significant source of medical and related products used within the UK. Instead, I wish to inquire what the officials who gave evidence to our Secondary Legislation Scrutiny Committee meant when they said that our pursuit of national priorities and constraint of exports would be limited by the need “to meet international obligations”. What international obligations would limit government sovereignty under such circumstances? Which states or international organisations could impose such obligations on us?
I understood from the Brexiteers that the UK was asserting its sovereignty from international obligations by leaving the EU. Were those officials saying that there are nevertheless unavoidable limits on UK sovereignty? Are they saying that it is not only the European Union that cramps our freedom, but that, even after we have escaped from European domination, we will be held down by other foreign commands?
Lastly, is there any prospect of being able to use the powers set out in this SI in early 2021? The NAO report, published last week, put it bluntly, saying that
“preparations to manage the border at the end of the transition period remain very challenging”.
Does this SI set out an aspiration, rather than a deliverable set of proposals?
Lord Loomba (CB) [V]
My Lords, I will make two points about these regulations. As I have said before, a multitude of retained EU law is coming through Parliament. Some legislation may better serve its purpose if, instead of amending existing EU law with multiple statutory instruments—meaning the original instrument has to be consulted as well—we had one completely new instrument. It would make the law much less complex and possibly less confusing, especially with regard to this instrument and its implications for the Northern Ireland protocol.
Secondly, the pandemic has thrown a light on the difficulties that can be faced in accessing goods from other countries, when goods are in high demand and stocks are low, such as with PPE. Even Brexit itself and the end of the transition period may cause some shortages, especially if there is no deal. What if there were a shortage of some vital product and the UK Government put quantitative restrictions on it to ensure adequate supplies within the UK? There is no fetter on the movement of goods between Northern Ireland and Great Britain, as per Article 6 of the Northern Ireland protocol. Those goods are sent across to Northern Ireland where they are needed.
In this situation, the EU does not have any quantitative restrictions on goods, as it does not have a problem with supplies. In such a scenario, can the Minister tell us what precautions are in place to stop a company selling their goods on to the EU without having to follow the same restrictions as in the rest of the UK, and thus gaining a competitive edge over other companies within the UK?
Lord Moynihan (Con)
My Lords, these regulations are presented to the Grand Committee as no more than a correction of technical deficiencies in existing EU law that are to be retained on 1 January, irrespective of the outcome of current negotiations. Specifically, as the Minister confirmed, the regulations address the basic principle that exports from Great Britain will not be subject to any quantitative restrictions unless the restrictions are applied in conformity with the retained EU regulation.
It is to the first point made by the noble Lord, Lord Liddle, and the work of the Secondary Legislation Scrutiny Committee to whom we should be grateful for the level of interest shown in these Committee proceedings. As has been noted, the purpose of these regulations is specifically focused on the retention of retained EU law on common rules for exports to operate effectively in Great Britain after the end of the implementation period. This provides the Secretary of State with the powers to impose export control or restrictions where this is necessary to prevent a critical situation arising due to a shortage of essential products or to meet international obligations. Vaccines would fall into the former, CITES into the latter. However, these are the only two examples which have been given to Parliament, although I note in the EC note of 17 August that cultural goods are mentioned in this context.
Clearly, under the precise wording of these regulations, their potential application could be wider, and the wider they are, the greater the potential divide between Great Britain and Northern Ireland in trade. Therefore, I ask the Minister to clarify the breadth of their application and the circumstances surrounding it.
One issue of concern is that it is unclear whether proposed export restrictions are specifically to be used where there is a critical situation arising on account of a shortage of essential products. For example, on the definition given by the Minister today, and picking up comments made by the noble Lord, Lord Loomba, is it envisaged that the Oxford AstraZeneca vaccine will be subject to these regulations? If so—assuming that that vaccine will come into use after 1 January— will the only recourse Parliament would have to the recommendations of government be to negate the regulations placed before the House, possibly after the date of their implementation, if the Covid-19 regulations are a suitable precedent?
What is lacking is clarity over exactly the circumstances in which the Government could invoke these regulations and, equally important, what reciprocal action could be taken by the EU in the context of export controls or restrictions as applicable to Northern Ireland as opposed to the rest of Great Britain. How broad is the definition of public policy, since Article 10 of the retained EU regulation does not preclude the use of export restrictions where that is required for the purposes of “public policy”?
Greater clarity on these powers, an understanding of under what circumstances they can be undertaken and clarity on their true scope would be helpful. I regret very much that we do not have the opportunity to debate this critically important subject, particularly in the context of the debate on the Floor of the House yesterday.
Lord Empey (UUP) [V]
My Lords, in his opening address to the Committee, the Minister said that the European Commission will “exercise these powers in Northern Ireland”. Will the Minister explain to the Committee how it is possible for the status of Northern Ireland not to be changed after 1 January if a foreign power, which the EU Commission will become on that date, exercises power within what is supposed to be an integral part of the United Kingdom? How are the two things consistent? If it came to a dispute in so far as products coming from Northern Ireland to Great Britain were deemed by the European Union to be better retained within the EU rather than sent to Great Britain, who would pull the lever and take a decision on that matter?
There has been a consistent refusal by the Government to accept the realities of their proposals to the European Commission, dated 2 October last year, in which they put forward an alternative to the then withdrawal proposals. They have created a border in the Irish Sea but consistently denied it. I ask the Minister again: how is it consistent with the integrity of the United Kingdom if a foreign power has the ability to exercise powers within a part of the kingdom, even though the people living there will have no say whatever in the decisions that the Commission might make? The Minister owes the Committee an explanation for that.
I thank the noble Lord, Lord Liddle, and other committee members who have looked at this. It is interesting that everyone who has spoken so far has zeroed in on this issue. The inconsistency is so obvious. How can you take back control if, where I live, those who I had the pleasure and privilege to represent for many years are effectively abandoned to a foreign power? Does the Minister not realise the implications of this? I hope that, when he comes to sum up, he will be able to give the Committee an explanation.
Viscount Trenchard (Con)
My Lords, the Minister has helpfully explained the purpose of the regulations, and I understand why it is necessary to amend them to replace references to European institutions with references to British ones. It is also welcome that there has been some simplification of the procedure contained in the new legislation. There is no longer a requirement to provide market trends and statistical analysis to the EU and its member states before deciding whether to act on a product shortage. That power now lies with the UK Government, which should lead to swifter intervention when the UK’s interests are affected by product shortages. Could the Minister tell the Committee whether the nature of the market trends and statistical analysis which the Government will require before deciding whether to act will be the same or simpler than that presently required by the Commission?
I understand that export restrictions were placed on PPE exports in spring this year, when shortages first appeared. Could the Minister confirm that the introduction of those restrictions in respect of the UK was triggered by the Commission rather than by the British Government? Could they alternatively have been triggered by a member state Government? Could he also tell us how many times this regulation has been used in respect of British exports since its adoption in 2015?
In researching this measure, I wondered whether my understanding is correct that this SI amends EU regulation 2015/479, which is itself also retained in UK law. The Explanatory Memorandum says that the SI makes “technical amendments” to the retained UK version of the EU regulation. However, the Lexology website states that the SI will “replace” the EU regulation. The two statements are not the same, and I would be grateful if the Minister could say which is correct. I am sure that the same question applies to very many transpositions of EU regulations into UK law, as the noble Lord, Lord Loomba, already referred to.
Of course, the new measures apply only to Great Britain, as the EU regulation will continue to apply in Northern Ireland. Could the Minister confirm that that will be the case whether we enter into a free trade agreement with the EU or not? It is inevitable that UK law and EU law will diverge; if we were to slavishly follow and replicate every change in EU law, there would be no point in our leaving the EU. That is, of course, a wider question, but could the Minister tell the Committee how exports from England which are partly or wholly composed of products manufactured in Northern Ireland will be treated? Can he confirm that the new measures, as they will apply in all parts of the UK, are compatible with the common frameworks proposals? The noble Lord, Lord Empey, has already referred to this subject, and I look forward to hearing the Minister’s reply.
Lord Blencathra (Con) [V]
My Lords, I support these regulations in their entirety. They are eminently sensible at any time, whether or not there is Chinese coronavirus on the go. However, I have two queries for my noble friend the Minister.
First, why are the SIs under Article 5 negative but those under Article 6 affirmative? Secondly, and of more substance to me, can my noble friend update the Committee on Project Defend? We have discussed previously the Henry Jackson Society’s report on the vital and strategic infrastructure goods and services for which we are far too heavily reliant on China. Now that China has emerged as a major threat to world peace and security, how is Project Defend getting on?
I see that the International Trade Committee, in a report published in July, cites evidence given by the Trade Secretary, Liz Truss, suggesting that onshoring supply chains “is not being proposed” as part of the scheme. Why ever not? I accept that it is vital to have diverse supply chains and the height of folly, as we have just seen with PPE, to have everything coming from one country, whether a ruthless regime such as communist China or a democracy such as Germany or Taiwan, but surely making more things at home has a part to play. I am not suggesting that we try to manufacture everything vital that we get from China at the moment, nor even half of it in the short term, but if my right honourable friend the Trade Secretary says that some onshoring is not being proposed, then she is utterly wrong and naive. It is contrary to what the British people want. We will lose millions of jobs because of this Chinese disease and our people will not forgive us if we continue to export more jobs to China.
We must not accept the greedy demands of big business that so long as we can get vital supplies from, say, three or four different countries in the world, then we should not worry our pretty little heads about reshoring things back to the UK where it is possible to do so. I hope that my noble friend the Minister can give me some reassurance on Project Defend.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I thank the Minister for his explanation of these regulations. I see a direct read-across to the United Kingdom Internal Market Bill, even if it was unintentional. My interest lies in the fact that these regulations are made under Section 8C(1) of the withdrawal Act to implement the protocol on Ireland/Northern Ireland to the EU withdrawal agreement. In that respect, I have some questions for the Minister to build on what the noble Lord, Lord Empey, said.
I recognise that the protocol is required to prevent a hard border on the island of Ireland and to protect the Belfast agreement. However, there is a problem with the border that will be created in the Irish Sea, a border which the Government insisted for quite some time would not exist. The bottom line is that we in Northern Ireland do not want borders anywhere, whether on the island of Ireland or in the Irish Sea, because both types of border would act as impediments to business development.
Therefore, I ask the Minister: what steps will be taken to ensure that there will be unfettered access between Britain and Northern Ireland in respect of goods? We know that the First Minister and Deputy First Minister have written to the European Commission about the need for checks and controls on food products entering Northern Ireland from Great Britain and how that might impact on the supply of food to supermarket chains. They are concerned about material price increases or reduced supply lines, because that would not be good for Northern Ireland. That issue has already been raised in recent weeks by the Northern Ireland Retail Consortium. What solutions have been considered by the joint committee to resolve this issue? Businesses need clarity.
The Minister will recall that I and the noble Lord, Lord Hain, were signatories to an amendment to the Trade Bill, tabled in Committee, on the trader support service that is to be set up to facilitate GB-NI trade. We need it to be permanent, not just for two years, and that should be put in the Bill. Will the Government bring forward amendments on Report, and what steps will be taken to ensure that Northern Ireland goods that are produced in accordance with EU rules under the Northern Ireland protocol will not be discriminated against in the operation of the UK internal market? In my view, the regulations before us today are intertwined with the Trade Bill, the United Kingdom Internal Market Bill and the Northern Ireland protocol. On behalf of all those operating businesses in Northern Ireland and wider consumers, we need answers to these vital questions.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to follow the noble Baroness, Lady Ritchie, and I echo many of the points that she and other noble Lords, including the noble Lord, Lord Empey, have made. The fact is that after 1 January 2021 there will, effectively, be a border in the Irish Sea, and these regulations reflects the consequences of that. Two separate regimes will apply, one to Great Britain and one to Northern Ireland. It is an indisputable fact and I regret that.
I want to take this opportunity to thank my noble friend the Minister for bringing forward these regulations and giving us a chance to put questions. In that regard, can he clarify paragraph (2) of the regulations, which refers to fulfilling international obligations relating to “primary products” that are defined, for greater clarity, to
“include unprocessed agricultural products and raw materials”?
The noble Baroness, Lady Ritchie, referred to the implications for agri-food. It is extremely important to have a degree of certainty before we reach the end of the transition period. Will my noble friend take this opportunity to further clarify the position?
Equally, can the Minister comment on the questions arising and the conclusions reached from the evidence given by his department for the 29th report of the Secondary Legislation Scrutiny Committee? On pages 3 and 4, it states:
“‘we will ensure that the necessary procedures apply only to very minimal volumes of relevant trade necessary to comply with those obligations. For goods affected, the processes put in place in these very specific cases will have negligible implications for trade as a whole.’”
Surely, the issue here is that that is for the EU Commission to decide, not the Westminster Government. I am sure the Minister will wish to clarify that he and other Ministers of the Crown in Westminster have no control over that whatsoever.
Like other noble Lords speaking in this debate, I would like a number of clarifications. Certain circumstances are as yet unclear. May I ask my noble friend directly: under what circumstances will the Commission be allowed to exercise this power? Can we have further clarification and a better understanding of the implications? These regulations prove that there are going to be enormously difficult issues, particularly agri-foods going into and out of Northern Ireland and Great Britain after 1 January.
Lord Purvis of Tweed (LD)
My Lords, this short debate has flagged up a number of critical areas. I have a degree of sympathy with what the noble Lord, Lord Liddle, said about the time that we have; nevertheless, within this short period, all noble Lords have raised appropriate questions and issues.
I want to use most of the time that I have to address points that have already been raised by noble Lords, but I want to close on the wider issue of border preparedness, because we are now a matter of weeks and days from operating an international border outside the European Union and it is valid to raise more recent concerns.
On the valid points already raised, it seems that a lot of the consideration has been about how the UK and the European Union will agree or come to a working relationship on how international obligations are defined for exports from Northern Ireland to GB.
We support this measure as the corrective that it is meant to be, but the concerns that have been raised about the impact on Northern Ireland are valid. Let me ask first about notification. We are replicating a cascading process under the original European regulation whereby the Commission was notified of potential areas of market concern about the shortage of certain goods. That notification would then go to the Council and the European Parliament. As has been asked in this debate, what is the equivalent of notification to Parliament under these elements? Why is there a difference in Regulations 5 and 6 so far as the procedures are concerned?
Given that we are replicating the potential acknowledgement that certain geographical areas could have shortages compared to others, there is nothing in this measure which would allow for consultation of devolved Administrations. The Government have used the example of medical equipment for PPE because it is the most recent, but it could be very broad so far as the potentials are concerned; for example, raw agricultural products or, as the noble Viscount, Lord Trenchard, mentioned, components as part of intermediate trade. That can have a differential effect, whether it is in the north-east of Scotland or the south-west of Wales, but there is no element of consultation. Before the Government bring forward orders, can the Minister commit that there would be consultation with devolved Administrations, because certain areas may need certain protections?
This brings me on to the position of the Government with regard to the continuing authority of the European Commission in Northern Ireland. It was very interesting before coming to this Committee to read the report of the European Scrutiny Committee in the House of Commons and that of the European Union Committee in this House. The latter was interesting in that it highlighted the Government’s view—repeated by the Minister—that the continuing authority of the Commission to bring Northern Ireland under the existing EU regulation is strictly limited to a number of procedures relating to specific international obligations binding on the UK and the EU under the Northern Ireland protocol. Can the Minister state where these are outlined? The committee rightly asked for further information about how the Government define these “limited number of procedures”. It cited CITES and those regarding endangered species, but this is not necessarily the position of the European Union. As referred to by the noble Lord, Lord Liddle, the European Union’s position as set out in its technical note is that
“all goods leaving Northern Ireland to either a third country or Great Britain are subject to prohibitions and restrictions applicable to exports under relevant Union law, without prejudice to Article 6(1) of the Protocol”.
The definition that the European Union is using is different from that used by the UK, which could bring about certain interesting tensions and is likely to be very difficult.
The House of Commons European Scrutiny Committee report asked for further clarification with regards to ongoing regulations and Northern Ireland. Not only do we have the successor regulations; the House of Commons committee report asked the Government for further information about “ongoing” changes that the European Union would make in regard to the specific regulation that we are inheriting. There is nothing in the mechanism that indicates that there should be an ongoing working relationship if the European Union changes its definitions. Under one interpretation, the European Union could consider its obligations under the WTO in that light.
In the final few seconds, I will refer to the National Audit Office report. It is a sobering independent analysis of the major problems that businesses will face on 1 January. I hope that the Minister can provide greater reassurance that the issues raised in that NAO report will be considerably addressed. They have not been, so far. The clock is ticking. Businesses are waiting for clarity. So far, they have not got it and they desperately need it.
Lord Bassam of Brighton (Lab) [V]
My Lords, these regulations transfer from the EU to the Secretary of State the power to impose export controls or restrictions after the end of the transition period, as noble Lords have observed. In Northern Ireland, as has been seen, the relevant EU regulations will continue to apply directly under the EU (Withdrawal) Act 2018 and the Northern Ireland protocol. We should be grateful to the Secondary Legislation Scrutiny Committee for drawing attention to this SI, because we require more clarity. Throughout this year, we have seen export controls being used to help deal with the pandemic and shortages in medicines, paracetamol and PPE, around the world. The use of export controls should not be exercised lightly, as they have serious consequences and, as we know, can invite retaliation, if not prompt other countries to take a view of us that is not in our interests.
The UK Trade Policy Observatory said that it is important that we acknowledge the role of reciprocal trade in our own fortunes, and acknowledged how important it is that we have strong bilateral arrangements and relationships. Therefore, it would be helpful to hear from the Minister today about what the Secretary of State will take into consideration when they decide to use their powers. Will there be consultation, and with whom? What assessment will be made? Will it be published? Will there be proper parliamentary scrutiny? How much warning will be given before controls are introduced?
After the votes yesterday on the removal of Part 5 of the United Kingdom Internal Market Bill, I was intrigued to see the Government’s response to the SLSC on trade between Northern Ireland and Great Britain. The Government said that, despite the EU regulations still applying in Northern Ireland, Article 6.1 of the protocol on Ireland/Northern Ireland makes clear that
“Nothing in this Protocol shall prevent”
Northern Ireland businesses from enjoying
“unfettered market access for goods moving … to other parts of the United Kingdom’s internal market.”
To me, this demonstrates not only the lack of cross-government understanding of the protocol, but how Clauses 42 to 47 of the internal market Bill were not needed to, as the Government said, stop any EU blockade.
I hope the Government do not try to reinstate these clauses. The committee said that
“the Commission could impose export controls or restrictions on Northern Ireland only in very limited circumstances, such as in relation to the movement of endangered species”.
Does the Minister recognise this limited power and will he now clarify, as noble Lords from all sides asked in Grand Committee, exactly when these regulations will be used? It is not clear to us how and when they will be operable and in what circumstances they will become effective.
The Minister has done a good job trying to explain the regulations, but he also said that they represent a small technical change. We are not convinced that is the case. I think that we, in this Committee, see that such changes could have profound implications and consequences on implementation. I am grateful to the Minister for his observations and I am sure other Members of the Committee are too, but we need greater clarity if we are to better understand how to operate these regulations in the post-transition period.
Lord Grimstone of Boscobel (Con)
My Lords, I thank Members for their contributions and will respond as fully as I can in the time available. I am conscious that I will not be able to do full justice to the many points that have been raised which, as always, show the great expertise of your Lordships. If I may, I will write to those noble Lords whose questions I am not able to do justice to during my closing statement.
As I have set out in my opening remarks, the SI makes technical amendments to the retained domestic version of the EU common rules for exports regulations. This will ensure that the retained EU regulation can apply effectively at the end of the implementation period. Many of the complexities to which noble Lords have referred are not as a consequence of this SI, which in a sense has quite a simple purpose; they relate to the complexity of the underlying regulations of the EU. I repeat that the purpose of this SI is to make technical changes to those regulations to bring them into line with our leaving the European Union.
This is a debate about the application of the retained EU regulation as amended in relation to Great Britain. I completely understand the many and varied points that noble Lords have made about Northern Ireland, but for those who want additional information about Northern Ireland, I direct colleagues to the Government’s Command Paper, The UK’s Approach to the Northern Ireland Protocol. This sets out that any procedures that are necessary to comply with any international obligations provided for under Article 6(1) will apply only to—and I stress this—minimal volumes of relevant trade. I take this opportunity to make absolutely clear that any such processes put in place in these very specific cases will have negligible implications for trade as a whole. An important point is that they will be administered by UK authorities, which will, of course, retain operational responsibility. I assure noble Lords that these authorities are able to, and will, exercise their discretion as appropriate.
To make it clear to noble Lords, I repeat that, as I set out in my opening remarks, Article 6(1) of the Northern Ireland protocol makes it clear that nothing—I repeat, nothing—shall fetter the movement of goods from Northern Ireland to Great Britain, except in order to fulfil an international obligation. The EU regulation is not used to fulfil international obligations, and therefore will not fetter the movement of goods from Northern Ireland to Great Britain. The noble Lord, Lord Wallace, asked where on earth these international obligations come from. They come about if the UK agrees to enter into any such international obligation and agrees to be bound by them.
Since the regime in Northern Ireland will be unchanged after the end of the implementation period, the United Kingdom Government will still be able to implement export restrictions in Northern Ireland in circumstances permitted by Article 10 of the EU regulation; that is where they are required on grounds of public policy, or for the protection of health and life for humans. These restrictions under Article 10 are very specific in this effect, and noble Lords can see those in the original regulation.
I ought to again make it clear that this SI is compatible with the United Kingdom Internal Market Bill. The objective of the United Kingdom Internal Market Bill is to protect the highly integrated market across the United Kingdom, guaranteeing that, as EU law falls away at the end of the year, companies will be able to continue to trade unhindered in every part of the United Kingdom. This SI will ensure that the retained EU regulations on the common rules for exports will operate effectively in Great Britain from the end of the implementation period. As I have described, in no way will trade be fettered between Northern Ireland and Great Britain, except in circumstances not covered by these regulations, and therefore perhaps not appropriate for us to debate in great detail today.
A number of noble Lords, including the noble Lords, Lord Blencathra and Lord Purvis of Tweed, asked how the role of Parliament operates and, in particular, about the differences between Articles 5 and 6. As I said earlier, the role of Parliament is as set out in Article 7A in the regulations. The difference between why that article is subject to the negative resolution procedures and Article 6 is subject to the affirmative procedure relates directly to the urgency of the situation in front of us.
Let me explain further. If the Secretary of State implements a measure under Article 5 of the retained EU-authorised regulation as amended, that export authorisation can only be implemented for up to six weeks to prevent a critical situation arising on account of a shortage of essential products or to remedy such a situation. That seems appropriate if the urgency is such that this has to be brought forward quickly and last for only six weeks. A negative resolution SI, which can be annulled in either House of Parliament, is therefore appropriate. If the Secretary of State implements measures under Article 6 of the retained EU regulation as amended, they can take a wider range of forms and are not time-limited. In those circumstances, because of the greater scan, scope and longevity of such regulations, they would be set out in a “made affirmative” SI, which must be voted on within 40 days of being made.
The noble Lord, Lord Purvis, asked about the information that would be available at that time and drew a contrast with the Commission report under the EU regulation. In both cases, further information would be provided to the Houses of Parliament as part of an Explanatory Memorandum. I can assure noble Lords, particularly the noble Lord, Lord Wallace of Saltaire, that in coming to their conclusions about the necessity for the use of regulations, the Government would take account of the whole UK and, if necessary, any views expressed by the devolved Administrations.
I should stress that we are not rushing or looking to find ways in which to use these powers. The Government have been clear throughout the Covid-19 pandemic that the use of export restrictions around the world should as far as possible be limited. No one would be happier than us if we found that we never had the need to use these powers. The Prime Minister underlined that view recently in a speech to the United Nations, in which he urged countries to lift export controls on Covid-critical products wherever possible. The Government have no plans at present to bring forward further export restrictions under this retained UK regulation.
The Government do not apply any restrictions on medicines under these regulations and do not intend to do so. I can reassure the noble Lord, Lord Wallace of Saltaire, on those points. The UK applies certain limited restrictions on the export of medicines designed for UK patients on the UK market where there is a risk of a shortage in the UK, but those restrictions are made pursuant to the Human Medicines Regulations 2012, which require wholesalers to ensure, as far as possible, that the needs of patients in the UK are met.
In conclusion, my noble friend Lord Blencathra asked about Project Defend, as it is commonly known. The coronavirus pandemic has demonstrated the importance of resilient supply chains to ensure the continued flow of critical goods and to keep global trade moving. We are working closely across the Government to analyse UK supply chains for a range of critical goods, excluding food, and to help define strategies to ensure that the UK has resilient and diverse critical supply chains.
My noble friend Lord Trenchard asked about how this SI would technically operate in conjunction with the retained EU regulation. It amends the retained EU regulation, which then passes into UK law in this amended form if noble Lords agree to these regulations today.
I have my eye on the clock and am conscious that I have not done full justice to the detailed points raised by noble Lords. As I said at the beginning of my wind-up, I will write to them and place a copy of my reply in the Library. On that basis, I commend these regulations to the Committee.
Motion agreed.
The Deputy Chairman of Committees (Baroness Barker) (LD)
The Grand Committee stands adjourned until 6.15 pm. I remind noble Lords to sanitise their desks and chairs when leaving the Room.