European Union (Withdrawal) Bill

Lord Hunt of Wirral Excerpts

2nd reading (Hansard - continued): House of Lords
Wednesday 31st January 2018 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interests as set out in the register, in particular as a partner in the global commercial law firm DAC Beachcroft and as chair of the British Insurance Brokers’ Association.

As we all know, the purpose of a debate at Second Reading is to discuss the principles underlying a piece of proposed legislation. Rarely in my experience as a parliamentarian has it been more important for us to be clear in our minds about what a Bill is and what a Bill is not. This Bill is not designed to initiate Brexit, as my noble friend Lord Ridley so forcefully pointed out yesterday. It is a vehicle for dealing with the consequences of Brexit, and for maximising the opportunities we derive, while minimising the risks and potential collateral damage. As my noble friend Lord Hill of Oareford said:

“In some ways, it is quite a boring Bill”.—[Official Report, 30/1/18; col. 1388.]


But as my noble friend the Leader of the House stressed at the start of this debate:

“It is vital to a smooth and orderly exit from the EU… to honour the referendum result”.—[Official Report, 30/1/18; col. 1373.]


In the absence of the Bill, legal rights would inevitably be affected overnight, in a disorderly fashion, which would critically undermine the rule of law and almost certainly overwhelm our courts. Of course, much so-called EU law does not need the assistance of the Bill to remain in force. It has been passed in primary or secondary domestic legislation and does not, or does not exclusively, derive force from the EU treaties or the European Communities Act 1972.

I commend to the House last week’s report by the Constitution Committee, of which I have the privilege to be a member, and welcome the comments that have been made at various stages of this lengthy debate about our recommendations. In contrast to the hyperbole attendant on the release of our report, the possibly less exciting reality is that it provides helpful and positive suggestions to ensure the Bill does the job for which it is intended: helping to ensure Brexit can be made as smooth and painless as possible. It also potentially creates the basis for a consensus on how to make the best of Brexit. My noble friend Lord Strathclyde was right to advise:

“If the Bill is to be amended, then let it be done with co-operation and consultation between Back-Benchers and Ministers”.—[Official Report, 30/1/18; col. 1408.]


Such a consensus would greatly enhance our negotiating position.

In dealing with retained EU law, this Bill is necessarily origin-focused and content blind, which could have arbitrary, unforeseeable and, sometimes, undesirable effects. There must be a significant body of EU-derived law which the UK would have adopted in any event, in the same or very similar form. Obvious examples that have been mentioned are to be found in the equalities field and financial services regulation. The practical need for at least some so-called retained EU law post-Brexit does not, of itself, justify creating an executive correction power, still less prescribe the precise scope or form of any such power. We must ensure that any correction power is compatible with the vital principle that the Executive must be genuinely accountable to the legislature.

Many fear that one unintended consequence of Brexit could be the emasculation of the UK financial services sector. It is vital that the UK, in negotiating a new free trade agreement with the EU, ensures the unbroken maintenance of mutual market access for financial services, ensuring continuity of cover and protection. A suitable transition period will be vital, and so too will mutual recognition of prudential regulatory regimes. Both motor and travel insurance require special attention too. I hope we shall maintain a free circulation zone without reintroducing an onerous green card requirement. Like the noble Lord, Lord Crisp, I also very much hope this Bill will help enable the UK to maintain a reciprocal emergency health agreement with our friends in the European Union.

This Bill is but one part of a testing and complex process—a vital part, but one of many. The road ahead is uncertain and it will be challenging to us all. I believe, however, that our debates here in the next few weeks will show this House at its serious, erudite and constructive best.

European Union (Withdrawal) Bill

Lord Hunt of Wirral Excerpts

Committee: 6th sitting (Hansard - continued): House of Lords
Monday 12th March 2018 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, we are very grateful to my noble friend for raising a very important issue. I know that the hour is late but I declare my interests as a partner in the law firm DAC Beachcroft in the financial services industry and as chairman of the British Insurance Brokers’ Association, known as BIBA. In the light of those interests, it will come as no surprise to the Committee to know that I spend a great deal of time talking to insurers and brokers, and many of them share the anxieties that have prompted my noble friend and the noble Baroness to put forward this amendment.

I think that all those who have spoken have welcomed the speech made by the excellent Chancellor of the Exchequer, with his determination to ensure that financial services lie at the heart of any new free trade deal with the European Union post Brexit. However, as the noble Baroness has just pointed out, some of the larger insurers have already begun to make provision for Brexit by relocating elements of their activities out of the UK to ensure that they remain in the jurisdiction of the EU—although I am still finding a strong desire and commitment to continuing the remarkable success story of the insurance sector in the UK post Brexit.

I have no time at all but I urge the Minister to give us assurances that committed engagement and genuine consultation with those affected will take place in a timely, orderly and constructive fashion. Insurers and their customers will be looking for reassurances that their legitimate interests will be protected during any changes in policy that are made or even considered during the transposition process. Obviously there is much more to say, particularly about the role of regulators, as my noble friend Lord Trenchard mentioned, but these are very important issues and I hope that the Minister will respond in a very positive way.

[Baroness Hayter of Kentish Town]

My Lords, I do not think that anyone who has read the excellent December 2016 report Brexit: Financial Services from our EU Committee chaired by the noble Baroness, Lady Falkner, will be under any illusion about the challenge that Brexit poses to this economically crucial sector of our economy. This evening we have heard of the needs both of those in the financial sector and of those who depend on it, and we have heard of one possible way forward, but the most important point is that something is needed urgently.

The British Insurance Brokers’ Association, to which we have just heard reference, the Alternative Investment Management Association, the ABI and TheCityUK have all come to me, and I am sure to other Members of this House, to raise their concerns about Brexit and particularly the wider implications for the legal sector and the insolvency sector and what that means for investors as well as for the more traditional City firms. Along the lines outlined by the noble Lord, Lord Carrington, TheCityUK has called for a bespoke market access agreement based on mutual recognition, regulatory supervision and co-operation, with, as we have heard, particular emphasis on mutual recognition and the enforcement of judgments.

In long-term contracts, legal continuity and certainty are vital for business, as we have heard, but also for consumers, as the ABI has stressed. Retired British citizens in nice warm areas such as the south of Spain need to know whether their annuities and pensions from London-based providers will continue after March next year, and indeed after December 2020.

The AIMA wants to see regulatory frameworks that enable managers to deal with any type of fund vehicle or account, as they now do, as they manage the savings and investments of pension funds and insurance companies. The British Insurance Brokers’ Association—100,000 people are employed in that industry, and they arrange 70% of all general insurance—says that it is “critical” to reach a transition agreement quickly and, following that, a mutual free-trade agreement.

The one word that I want to leave the Minister with is “urgency”, because insurance renewals are already being issued for annual policies renewable on 30 March next year, a date that I know is uppermost in his mind. Any policies running after 30 March next year would result in uncertainty over the legitimacy of that part of the policy that is effective after we leave. So we need these brokers to be able to ensure that there are no interruptions in customers’ cover, and that extends to whether we can be insured when we travel and when we drive our cars abroad, and to travel insurance if the EHIC ends—these are real things that people rely on day by day.

As we know, the UK is the world’s largest exporter of financial services to the EU, which is where I have to disagree with the noble Viscount, Lord Trenchard. He thinks that there is great hope somewhere else, but actually, for us to earn money in the EU and maintain all the customers we serve there, we must first prioritise establishing that we can continue with what we do so well there. Shoring up that business certainty through a formal agreement on regulatory equivalence or something similar is becoming ever more urgent.

We first started debating this report in the House in December 2016. We are now in March 2018, and I fear we are no clearer in knowing what the Government are doing. I hope that at this late hour, not just of the clock but of the calendar in moving towards when we leave, the Government will be able to provide a little more assurance than they have done thus far.