3 Lord Davies of Brixton debates involving the Department for Energy Security & Net Zero

Paying Polluters: UN Report

Lord Davies of Brixton Excerpts
Monday 22nd April 2024

(2 months, 3 weeks ago)

Lords Chamber
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Lord Callanan Portrait Lord Callanan (Con)
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As I said, ISDS clauses work both ways. They also seek to protect the interests of UK companies investing in other overseas economies. Any state that wishes to regulate against the interest has to prove that it is being transparent and fair, not discriminating against foreign investors, et cetera. All these criteria are used to make judgments about whether cases will proceed.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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We discussed ISDS arrangements in the context of the CPTPP Bill recently, and a number of noble Members expressed concern about the impact on environmental standards. The response from the Government Front Bench was, “Not to worry; it won’t be used in this way”. That is clearly not the case with Colombia. It has faced at least 21 cases under the ISDS process, mainly for mining companies and mainly questioning the effect on the country’s environmental standards. Given the pressure that Colombia is under in its transition to full democracy and peace, would the money that it inevitably has to spend on defending these cases, and in some instances paying damages, be better spent on maintaining the peace process?

Lord Callanan Portrait Lord Callanan (Con)
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I am sure it would, but we are responsible for what clauses we agree to in the UK. We always protect our right to regulate, and we seek not to take actions that are arbitrary or discriminatory against foreign companies. Ultimately, it is a question of what clauses Colombia agrees to, what criteria it uses and how it will be arbitrated, so it is a difficult question to answer.

Retained EU Law (Revocation and Reform) Bill

Lord Davies of Brixton Excerpts
Lord Benyon Portrait Lord Benyon (Con)
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We have got the resources that we need to carry out this work.

Lord Benyon Portrait Lord Benyon (Con)
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Can I just finish this point? Where there are more complicated issues that may require us to spend longer dealing with them, the extension mechanism is there to achieve that. That should be a reassurance that we will not risk, with this challenging timetable, making the wrong decision. If necessary, we can apply the extension mechanism.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, while I am impressed by the resources being put into this effectively useless power, what more productive use could those resources be put to?

Lord Benyon Portrait Lord Benyon (Con)
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Having laboured through many of the details of this, I can assure the noble Lord that it is a good thing for a Government to be doing. We are tackling some areas of law that have no relation to this whatever. They are about fishing arrangements between Denmark and Norway in Svalbard or export policy in olives. There are many areas that we can get rid of, but there are other areas of regulation—this point was made very well earlier—that we would be updating even if we were in the EU. So it is a good thing for the Government to make sure that we have proper regulation that is up to date and tied into our ambitions in the 25-year environment plan, the Environment Act and the environment improvement plan.

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Baroness Bloomfield of Hinton Waldrist Portrait Baroness Bloomfield of Hinton Waldrist (Con)
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The Minister must be allowed to speak.

Lord Callanan Portrait Lord Callanan (Con)
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I will start by speaking to government Amendments 31, 41, 45, 52, 138 and 144. Amendments 31, 41 and 144 remove relevant subsections from the Bill as they are now included in the new clause. These are purely for drafting clarity and therefore do not change the policy intent or effect of this Bill in any way.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I am being denied my right to speak.

Lord Callanan Portrait Lord Callanan (Con)
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The proposed new clause tabled in Amendment 45 sets out clearly and in one place all the exceptions to the sunset in Clause 1. It includes exceptions that were previously located elsewhere in this Bill.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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This is outrageous.

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Lord Callanan Portrait Lord Callanan (Con)
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They are not short remarks. They are nothing to do with the amendments in question. The noble Lord, Lord Hendy, has just spoken for about 10 minutes on issues that are totally unrelated to the subject in question. On group 1, we discussed all the labour law provisions at great length. They are raising irrelevant points.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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On the previous day in Committee, I raised the issue and the Minister said explicitly that we could debate it at a later stage on this clause. He is now breaking his word. He explicitly said that we could discuss the issue that I wished to raise.

Lord Callanan Portrait Lord Callanan (Con)
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Okay, let the noble Lord raise his point.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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I wish to address subsection (1)(a) of the new clause. It is about process rather than the issues. I support the issues that have been raised by my noble friends, but the issue of process is important and comes up under this section.

I was unable to be present at Second Reading because I was taking part in Committee of the Financial Services and Markets Bill, which is directly relevant to this clause, as the Minister well knows, because the clause excludes the European regulations covered by that other Bill. I asked in Committee on that Bill why there was a difference in treatment. Why do we have one Bill for these regulations and another for the other regulations? In that debate, the Minister, the noble Baroness, Lady Penn, said that unlike the approach taken with this Bill, that Bill repeals retained EU law in financial services. She continued:

“The Government will continue to repeal and replace the contents of Schedule 1 until we have an established a comprehensive FSMA model of regulation.”—[Official Report, 25/1/23; col. GC 71.]


The important point is that the Financial Services and Markets Bill had an extensive two-year period of consultation, on the principal legislation and on the regulations. There were two formal consultations; the Bill had 346 pages; there was a Public Bill Committee session of nine meetings, eight oral witnesses, 54 items of written evidence, an Explanatory Memorandum, and extensive debate and discussion.

At Second Reading of this Bill, the Minister said:

“Without the sunset as a default for retained EU law, we risk unsuitable or obsolete EU laws still being on our statute book in 10, 15 or even 20 years’ time.”—[Official Report, 6/2/23; col. 1080.]


What is the difference between the rules under the two Bills? It is not a simple technical issue; it goes to the heart. It is the process being adopted. I want a satisfactory answer from the Minister on what the difference is between the two Bills. The crucial difference is that in the financial services Bill, there is no sunset clause. I could go on at length. In view of the time, I simply ask that question.

Lord Callanan Portrait Lord Callanan (Con)
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I will address the noble Lord’s point at the end of my remarks, after I have moved the government amendments.

I think I had got to the new clause tabled as Amendment 45. The new clause sets out clearly and in one place all the exceptions to the sunset in Clause 1. I will explain the financial services issue at the end.

It includes exceptions that were previously located elsewhere in the Bill but have now been consolidated into the proposed new clause, such as exceptions for instruments specified in regulations—the preservation power—and for relevant financial services law. It also contains a number of amendments that will help departments deliver our ambitious EU law reform programme. The first of these is to ensure that, when a decision is taken to preserve retained EU law, any legislation that is made or has effect under it will also be preserved alongside the parent legislation, without it having to be individually specified in regulations. The parent legislation establishing a regime, for example, would still be reviewed under the programme but, once a decision to keep such a regime is made, it will not be necessary to reassess every single licence, for instance, or decision issued under that regime.

The second of these amendments allows for the preservation of a description of minor instruments, without the requirement to individually identify and specify them. This includes where these instruments are made directly under primary legislation that is not in scope of the sunset. This and the previous amendment remove the need to individually list large numbers of what might not be traditionally considered legislative instruments in order to preserve them.

A third minor amendment would remove any existing “transitional, transitory or saving” provisions from the scope of the sunset. In a number of areas we have already reformed retained EU law and, in some cases, we have made “transitional, transitory or saving” provisions, whereby some aspects of the previous legislation were saved to support implementation of or transition to the new regime. The aim of the Bill is not to undo or revoke retained EU law reform that has already been made. Thus, this amendment will ensure the continued legal operation of retained EU law that has been identified as necessary to serve a particular purpose, often for a time-limited period.

Finally, this proposed new clause introduces new wording to ensure that references to instruments or provisions in preservation SIs apply only so far as the provisions would otherwise sunset. Consequently, this puts beyond doubt that, where an SI references instruments that contain provisions that are not in scope of the sunset, the instrument is still lawfully made within the power.

Ultimately, this new clause provides drafting clarity. It will make the exemptions to the sunset much clearer, gathering them all in one place. It also introduces four minor and technical amendments that I have just explained in detail but that do not change the overall policy. They facilitate departments to preserve legislation more easily, where they deem it appropriate to do so, and respond to many of the points made in the debates on previous groups.

Amendment 138 is also minor and technical, and serves merely to change the reference to Clause 1 in Part 3 of Schedule 4 to a reference to the new clause created by Amendment 45.

Amendment 52 will update the drafting of the new clause, but in Clause 2. It will insert the wording “so far” after “section 1”. In effect, this will ensure that references to specified instruments or provisions in extension SIs apply only to those provisions so far as they are in scope of the sunset, and do not relate to any provisions not in scope of the sunset.

These amendments are all minor drafting clarifications or changes and do not change the scope of the sunset or the policy of the Bill. I hope noble Lords will look at Hansard if they want the details of them.

There are a large number of other amendments that seek to limit the ambitions of the sunset or to insert additional complex processes into the operation of the sunset clause. It is our belief that none of these is appropriate for this Bill and that they are likely only to hamper efforts to realise the opportunities that the Bill presents.

To start with, Amendments 46 and 47 tabled by the noble Baroness, Lady Young, aim to amend government Amendment 45, which I have already discussed. To reiterate, the exceptions within Amendment 45 are only sector-specific in the case of financial services, where the retained EU law in question will be reviewed via the separate legislation to which the noble Lord, Lord Davies, already referred, which is already being planned and implemented. The legislation put forward by the noble Baroness would not be appropriate to remove from the scope of the sunset. We just had a very long debate on the issues with exempting specific environmental legislation from the scope of the sunset, and I hope noble Lords accept that we do not need to repeat that on this group.

I turn to Amendments 26 and 48, tabled by the noble Lord, Lord Fox. The consulting and reporting requirements introduced by these amendments would limit the sunset as a key driver of reform and would therefore narrow the ambition.

A significant minority of retained EU law is also legally inoperable. Removing it from the statute book swiftly is good democratic governance. Requiring the Government to undergo complex and unnecessary parliamentary processes to remove legally inoperable retained EU law that is unnecessary and no longer fit for purpose is not good governance.

Where reforms are being made to retained EU law, the normal processes of consultation will of course be followed where appropriate and the relevant reforming legislation scrutinised as usual. It is not necessary to add additional complexity to the existing legislative process.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, I was unable to be present at the Second Reading of this Bill because I was at the fourth day of the Committee stage of the Financial Services and Markets Bill. There is an interaction between that Bill and this Bill, which we can discuss in more detail when we get to the Government’s Amendment 45. But, in the context of this debate and the suggestion made by the noble Lord, Lord Hamilton of Epsom, that the sunset clause is essential, he should read the justification for the Government’s Amendment 45. It says:

“This new clause contains new exceptions to the clause 1 sunset”.


So even the Government do not believe that the sunset clause is essential; there are groups or parts of European legislation without the sunset clause and so, if special rules can be made for financial services, why does he think that we cannot have special rules for other areas of legislation?

Lord Hamilton of Epsom Portrait Lord Hamilton of Epsom (Con)
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I am very grateful to the noble Lord for letting me in. Does he not accept, though, that, when this Bill was printed with the sunset clauses in it, that was the only point at which all this legislation started to appear? They had done nothing up until that time to actually dig it out.

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Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
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My Lords, perhaps the Minister will take on board that, when he says there is no need for carve-outs, his own Amendment 45 creates a carve-out for financial services. We can have a substantial debate on that issue when we get to that amendment, but the idea that you do not have carve-outs is clearly wrong; the Government’s own amendment creates one.

Lord Callanan Portrait Lord Callanan (Con)
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We will get to that debate on those technical amendments later.