Draft Electricity and Gas etc. (Amendment Etc.) (EU Exit) Regulations 2019 Draft Electricity network codes and guidelines (Markets and trading) (Amendment) (EU Exit) Regulations 2019 Draft Electricity and gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019 Draft Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 Draft Electricity Network Codes and Guidelines (System Operation and Connection) (Amendment Etc.) (EU Exit) Regulations 2019

Debate between John Baron and Claire Perry

Tuesday 26th February 2019 General Committees

[Claire Perry]

It is a real pleasure to serve under your chairmanship on this sunny day, Sir Graham.

The instruments are all made under the European Union (Withdrawal) Act 2018 and were laid before the House on 30 January. I apologise to the Committee for the fact that they have been bundled together, but I commend my parliamentary team, the drafters and the scrutiny Committees for doing a very efficient job of preparing these necessary instruments to assist in our preparation for a no-deal Brexit, in what I hope the Committee agrees was a timely and efficient manner.

I assure the Committee that my Department is working to ensure that our energy legislation continues to function effectively after exit day, regardless of whether there is a deal or what form it takes, so that consumers continue to benefit from reliable, affordable and clean electricity and gas. A significant part of the legislation that underpins our energy market takes the form of direct EU legislation. The instruments will transpose that legislation directly into domestic law after our departure as retained law under the terms of the 2018 Act, as we have done with so many pieces of EU legislation.

As in many other instruments considered by Committees like this one, we have had to make certain minor amendments to the legislation to ensure that it continues to function when transposed into UK law. Following the continuity principle that we have set out for our legislation from day one after exit day, we are maintaining continuity where appropriate but making the necessary tweaks to ensure that the legislation remains effective.

The instruments address a range of highly technical issues, from cross-border trade to the energy market objectives of regulators. In the event that we leave the EU without a deal, they will remove inoperabilities in retained EU law, such as references to the EU or EU institutions that would make no sense following EU exit. They will ensure that in the event of no deal, we will retain the regulatory functions and frameworks that we need to keep Great Britain and Northern Ireland’s electricity and gas markets working effectively, facilitating continuity. We have prepared them extensively to minimise disruption and uncertainty.

The instruments will make similar—although not always identical—amendments to legislation applying to Northern Ireland and to Great Britain. One of our aims is to ensure continuity in the retained EU legislation that applies right across the UK, while recognising the unique nature of the single electricity market on the island of Ireland, which is constituted as an integrated market north and south of the border. I want it to be absolutely clear that although the instruments will not provide insurance against all the risks that we would run in a no-deal exit that would undermine the legal basis of the single electricity market, they will facilitate the necessary steps to ensure that such a situation is not prolonged. I reassure the Committee that we have worked closely with Ofgem in England, Wales and Scotland, and with the Department for the Economy and the Utility Regulator in Northern Ireland.

As the European Statutory Instruments Committee recognises, the instruments are

“technically modest”

and

“the changes are necessary to prepare the statute book for the possibility of a no-deal”.

Let me focus on the most significant changes that they will deliver.

[Mr John Baron (Basildon and Billericay) (Con)]

Is the Minister basically confirming that should there be no deal, we will be fully prepared—at least from the point of view of her Department’s responsibilities—for such an outcome?

[Claire Perry]

I assure my hon. Friend that my Department has been at the forefront of preparation across Whitehall for the event of a no-deal Brexit. We have introduced a number of legislative instruments, some of which I have taken through the House myself, and we have done lots of work with third parties and stakeholders. The inescapable fact is that we do not have an agreement about an ongoing legal basis on which the single electricity market in the island of Ireland will operate, and that is a real concern. We can take legislative powers to mitigate the worst impacts of that, but they will not be taken before exit day because other even more urgent things are ahead of them in the queue. So to the extent of our ability, I agree that we are as prepared as we can be, quite rightly, for a no-deal Brexit.

--- Later in debate ---

[Claire Perry]

The hon. Gentleman states very succinctly why there are

many uncertainties associated with a disorderly Brexit, only some of which the Government can mitigate with legislation such as that before the Committee. That is the reason for my strong view that the best way to avoid such consequences is to avoid a no-deal Brexit. I have said before and will say again that it is therefore incumbent on us all to vote for the deal before us, so that we can leave with a deal on 29 March, as we promised to those we represent. That offer remains on the table.

[Mr Baron]

The Minister talks of a disorderly Brexit if there is no deal, but she has been part of a Government who for two years have made the promise that preparations for no deal are ongoing and will be met on time. Is she now saying that there is a problem with that, and that the assurances we have received at the Dispatch Box have been false?

[Claire Perry]

I am happy to assure my hon. Friend that the Government’s policy has always been to leave with a deal on 29 March, and that the Government, and indeed the civil service, have busted every sinew to ensure that dozens of pieces of legislation have been brought forward, and dozens of contingency planning meetings have happened. However, he will know that the unpicking of 40 years of legislation and co-operative economic relationships after the triggering of article 50, with a two-year ticking clock, would test the resolve of any Government. It is extremely unfair of him to suggest that no-deal preparation has not been done effectively. What has been done effectively is mitigation against the worst impact of a disorderly Brexit.

[Mr Baron]

Will the Minister give way?

[Claire Perry]

No, I will not give way. I encourage my hon. Friend to read what has been published today in response to a request from the House of Commons about the economic impacts of a no-deal Brexit, to see how very damaging a disorderly Brexit would be. Of course, as I say to him and all Members, the way to avoid a no-deal Brexit is to vote for the deal and deliver the Brexit that so many people voted for—as it has been Government policy to honour the referendum—so we can leave with a deal on 29 March.

[Mr Baron]

I am sure that the Minister did not mean to, but she inadvertently put words into my mouth. I was not suggesting that efforts had not been put into making sure we did not leave in a disorderly way. I just referred her to the fact that Minister upon Minister—and indeed the Prime Minister—assured us that we had two years of no-deal preparation and would be prepared on 29 March for no deal, should that be the logical conclusion of triggering article 50. I hope that the Minister is not going against the Prime Minister and suggesting that we will not now be ready.

[Claire Perry]

I fear that we are splitting hairs about definitions of readiness. Of course what we are doing today, as we have done on many other occasions, is ensuring that we have the necessary regulations and preparations in place to mitigate the worst impacts of a no-deal Brexit. Unfortunately there are some aspects of a no-deal Brexit that we simply cannot resolve, despite the efforts of the Government, or efforts in this House. I refer my hon. Friend again to my comment that the best way to avoid having to face any of the impacts of a disorderly no-deal Brexit, prepared or not, is to vote for the deal. I am assured by many colleagues that sensible people like him understand that prospect, and that we face a disorderly Brexit or no deal, which would be an absolute derogation of our parliamentary duty. I look forward to voting on the deal with him in due course.

With that, I feel, if you will forgive me, Sir Graham, that we are well outside the boundaries of the debate, and on that basis I shall conclude.

[Mr Baron]

On a point of order, Sir Graham. I have to put it on record that the Minister suggested that I would support the withdrawal agreement with her in the Lobby, and that I will support it as she suggested, provided that we sort the backstop out, as has been my position and that of many of my hon. Friends for some time—with your help, of course.