House of Lords
Wednesday 6 February 2019
Prayers—read by the Lord Bishop of Lincoln.
Migrant Crossings: Naval Assets
My Lords, the deployment of the Royal Navy vessel is an interim measure while the two Border Force cutters currently redeployed from overseas make their way back to UK waters. To date, this has cost £700,000. The deployment is funded by the Home Office and will be kept under constant review.
I thank the Minister for her Answer. This operation has been a complete and utter shambles. That is a real worry because, as we move towards Brexit, the need to patrol our territorial seas and enforce our laws both there and in our exclusive economic zone is going to become greater. Who on earth is co-ordinating this? In the Navy we have a nice tradition where occasionally we shoot a senior officer to encourage the others. This might be a perfect candidate for the case. We have in place a joint maritime operations centre, which has all the departments there. Why can we not fully fund it and put a person in charge—a naval officer or whoever, I do not care—who can co-ordinate our shortage of assets to do the things we need to do? This is only going to cost a couple of million, which is not that much in the big order of things.
The noble Lord is absolutely right to point out that as we approach Brexit we should be mindful of some of the events that might happen around it. We will shortly have a director in post at JMOCC, which I hope gives him some comfort. The nature of a crisis would determine the co-ordination response.
My Lords, the Minister will have seen a report in the Sunday Times that the Government have reduced a promised £22 million towards a public health approach to tackling knife crime to £17 million. Is that where the Home Office found the money to pay the Ministry of Defence? If so, can she explain why the Government see keeping desperate refugees out of the UK a priority over saving the lives of British youngsters on our streets?
My Lords, when I saw the article in the Sunday Times, I realised it was wrong. The noble Lord is absolutely right to state that £22 million was committed. It still is committed; £17 million of it has already been allocated. That is not to say that the additional £5 million will not be forthcoming, because it will. In terms of desperate refugees, I think he might be referring to the PNQ that he is about to ask, but these are serious criminals.
My Lords, the nature of the event was such that the two cutters to which the noble Lord, Lord West of Spithead, referred were undergoing maintenance at the time. Yes, there has been a temporary deployment of a Navy ship. It is not cheap—I agree with my noble friend on that—but the two cutters will soon be back in action.
My Lords, can the Minister assure the House that the Home Secretary’s decision has not left us vulnerable elsewhere in the world? What is being done to break up the operations of these criminals and catch the people smugglers, whose reckless actions are putting people’s lives at risk?
My Lords, an awful lot of work is going on to stop the movement of people across the water—recently it has been in the channel, where the waters are very dangerous indeed. The noble Lord might like to know that as recently as the last couple of weeks, the Home Secretary met Minister Castaner to discuss bilateral co-operation on maintaining our waters and keeping people safe when they make those terrible journeys across the channel.
My Lords, is the Minister aware that most of these refugees crossing the channel are from Iran, and that their chance of staying in the UK, whether permission is granted or not, is 97%? Would it not therefore be better to have a really effective way of differentiating between genuine refugees and economic migrants, and making sure that the latter are returned?
My Lords, will the Minister reconsider the Written Answer she gave me last week about some of the Iranians who have fled their own country because of persecution, or even because they were facing execution for reasons such as religious belief or coming from particularly at-risk minorities? She said that it would be impossible to carry out a manual count of those who have come across the channel and look at the reasons why they have come, to identify whether they are economic migrants or genuine refugees fleeing persecution.
Social Media: Online Anonymity
My Lords, online anonymity is an important part of a free and open internet—but being anonymous online does not give anyone the right to abuse others. The Government have made it clear that more needs to be done to tackle all kinds of online abuse. We will publish a joint DCMS-Home Office White Paper this winter, setting out a range of legislative and non-legislative measures and establishing clear standards for tech companies to help keep UK citizens safe.
My Lords, does the Minister accept and understand the huge concern of law-abiding citizens that people are hiding behind anonymous accounts and making threats to kill, to rape, to assault and to bully, using racist, anti-Semitic and Islamophobic language? The platforms that host these people have done nowhere near enough to deal with this problem. If they will not get their own house in order, the Government must make them, through legislation. Will the Minister impress on his colleagues in government that the forthcoming White Paper must make that clear to them?
I am happy to be able to agree with the noble Lord. Let us be clear: when abuse exceeds the threshold and moves into criminality, in most cases so-called anonymous perpetrators are actually traceable, so they can be prosecuted according to the law. I recognise the public disquiet about this, and, as the noble Lord said, we are considering what more can be done, by non-legislative means but also, when required, by legislation—and there will be legislation. We will consider what to do about anonymous abuse specifically, and we will address that in the online harms White Paper, which, as I said, is due out this winter.
My Lords, does my noble friend recall that we got a dramatic improvement in attitudes towards health and safety when we made the directors of the company personally liable for it? Should we not do the same for internet service providers?
One of the things we are considering is a duty of care. That might include holding directors personally responsible. We have not decided that yet, but it is certainly an idea worth considering. As it is a White Paper that is coming out this winter, there will be a consultation on it, so we welcome views from my noble friend.
My Lords, the Law Commission, in its scoping report last November into abusive and online communications, said that one of the key barriers to the pursuit of online defenders was,
“tracing and proving the identity of perpetrators, and the cost of doing so”.
I heard what the Minister said about the White Paper’s contents, but will the Government include a provision allowing the stripping of anonymity in circumstances of online crime? Have the Government had any discussions with the police or other enforcement agencies to understand the issues they face in tracking these perpetrators and bringing them to justice?
It is certainly something worth considering in the White Paper, but as far as dealing with the police is concerned, the Home Office is working with policing to identify ways to tackle this when it goes over the threshold into criminality. These are relatively new crimes; the police will have to evolve methods to deal with them. We have also worked with the office of the Director of Public Prosecutions. There is a digital intelligence investigation programme, aiming to ensure policing has the ability to investigate the digital elements of all crime types. Also, the Home Office is working with the College of Policing to drive improvements in overall police capability to investigate and prosecute online offences.
I said “if”—we do not think only about this country. That is one example. If you are a 15 year-old girl who is being abused, being able to go on to the internet to ask for health advice or let people know about it is an example of where anonymity can sometimes help.
My Lords, our children grow up in a world that is under huge pressure from social media. They never get a day, or, indeed, a night off. This is a world where no one seems to take accountability or responsibility for what is said at all. While we all argue among ourselves about what to do, I urge the Minister and those drawing up the White Paper to start with the simple but powerful principle of transparency. We should not allow people to hide behind the veil of anonymity.
As I said, sometimes anonymity is the right thing, but I take on board what my noble friend says. We definitely believe that tech and social media companies need to take more responsibility. We have said that. The Secretary of State plans to visit them to outline some of the measures we propose to take. There is absolutely no doubt that there is general feeling in the public that something needs to be done to control these large social media companies. People have to take responsibility. We will make sure that that happens, with legislation if necessary.
As I said earlier, this is a White Paper and we are having a consultation. We certainly welcome views from everyone. I will make sure that the letter is looked at in the department—I probably will not even have to tell them to do that. However, we are trying to build a consensus. We have to take into account libertarian views, the need to preserve innovation for tech companies—which is so useful to our economy—and to protect vulnerable people, especially children.
My Lords, could we return to the issue of policing resources, which was alluded to earlier? There are two areas which have serious concerns for the police and also, therefore, perhaps for the Government. One is the recovery of digital evidence, which has already proved challenging in rape cases and other sexual offences where mobile phones have to be examined in great detail. The second point is that this is a people process as well as a hardware process. Both require lots of people, and at the moment, this explosion of criminal offences means that it is demanding an awful lot of people and cost at a time when police numbers are dropping. It is something that the Government have to consider seriously.
Regarding the first part of the noble Lord’s question, we are supporting the Digital Public Contact, which will deliver a single online home for policing and provide a secure digital channel for the public to upload evidential material in a digital format. I have explained what we are doing with the College of Policing.
As for the second part of the noble Lord’s question, my noble friend the Home Office Minister is sitting next to me and I am sure has listened to his point.
My Lords, are the Government really prepared to take these companies on? I pray in aid the Government’s approach to getting them to pay proper tax in this country. Despite the huffing and puffing we have heard from the Chancellor, no action has been taken. Can the Minister assure me that the Government are prepared to take them on?
In the area that we are responsible for, regarding online harms and safety, we are. As far as tax is concerned, that is a different matter and I do not have the responsibility for it. However, I am sure that the Chancellor will listen to the noble Lord’s views.
My Lords, Network Rail has worked to develop long-term solutions to make the railway at Dawlish and Teignmouth more resilient to extreme weather, engaging an expert team of tunnel, cliff and railway engineers. This is part of a £15 million investment provided by the Government. The first phase of work to protect the sea wall began in November, with essential repairs now completed to four breakwaters. Following engagement with local stakeholders in autumn last year, Network Rail has now submitted plans for a new, stronger sea wall at Dawlish.
I am grateful to the Minister for that reply, and am sure the House will wish to congratulate Network Rail on the way it recovered from that terrible accident five years ago where the track was waving in the air with nothing underneath it. However, is the Minister aware that already this winter services have been disrupted on 10 occasions—sometimes because the tide is just over the tracks and the tracks are buried? One solution might be for the Secretary of State to play King Canute, but I am sure he would not want to do that. The alternative is to encourage Network Rail with some funding to go ahead with the issues that the Minister mentioned. Also, will she start looking at the process of reopening the Okehampton-Tavistock line, to provide a better service to Plymouth and Cornwall for when the line by the sea is disrupted?
I join the noble Lord in congratulating Network Rail and the orange army who did such a great job of recovery after the storms more than five years ago. We have been clear that ongoing investment in the south-west transport infrastructure is a key priority, and we remain determined to find a permanent solution for Dawlish. As I said, £15 million of funding has been made available, and world-leading engineers have been carrying out detailed assessments. Network Rail is making good progress on its plans, and we are considering them carefully.
On the noble Lord’s point about the regular Okehampton service, we are working closely with the local councils on that. We responded to the future of the Great Western franchise consultation last August, and are looking into what scope of work will be needed to reinstate regular services on that route.
My Lords, does the Minister agree that it is not just the track that has been a problem, but the trains? Does she agree that the wretched Voyager trains used on this stretch of line are completely unsuitable for the journeys they undertake daily? Cancellations and short running take place every week, and as the 40 year-old British Rail-built high-speed trains are now coming off lease, why do the Government not modernise them and replace the Voyagers with properly built trains that would be far more comfortable for travel between Aberdeen and Penzance than the toy trains there are at present?
My Lords, the noble Lord is right to point to the issues we have had on that track: when there are high waves and sea spray close to the track the Voyager trains cannot run, as they have brake resistors on top. CrossCountry is working to assess whether there might be engineering solutions that would enable the Voyager class to operate through Dawlish in those challenging conditions. We are also looking into providing further additional rolling stock, but the Government and franchise operators are investing heavily in new, improved trains.
My Lords, the economies of west Devon, Plymouth and Cornwall rely very much on this line. Last autumn a six-foot hole appeared under the track in the Dawlish area, so this is far from solved. Yet, despite Devon and Cornwall—regrettably—being stuffed with Tory MPs there seems to be no real action at all. Can the Minister give us a date when the fundamental structure, whether it is the line that the noble Lord, Lord Berkeley, refers to or the sea wall, will be completed? When will something be done?
My Lords, this train line has been a long-standing problem ever since it was opened in 1846—that year trains failed to run along it. We are working closely on that and although I am not able to give the noble Lord a date, we are making significant progress. Network Rail has submitted a plan that we are looking at carefully and we hope to make an announcement on it very shortly.
First, in very bad weather, as has been said, the Voyager trains used by the CrossCountry franchise are often unable to operate west of Exeter, as electrics on the roofs of the trains are adversely affected by salt water coming over the sea wall in the Dawlish area. Will the new Hitachi trains being introduced on the line also be adversely affected by salt water coming over the sea wall? Secondly, Network Rail’s plan for preventing sea damage is, as has been said, to build a new, higher sea wall, in respect of which it has made a planning submission to the relevant local authority, with the knowledge of the Secretary of State. We know the problem is only going to get worse as sea levels rise, so what happens if that planning application is declined? What is plan B? Or is there no plan B?
The noble Lord is right to point to the issues we have with CrossCountry trains. The new intercity express trains on GWR were also affected by weather along the Devon coast last week, so we are working very closely with Hitachi to find a solution. As the noble Lord pointed out, there is a planning submission in play and, as I said, we are absolutely determined to come up with a long-term solution to this problem.
My Lords, will the Minister clarify whether she thinks the only long-term solution is to have an alternative line from Exeter to Plymouth? Otherwise, we are perpetually trying to put right something that she acknowledges has been inappropriate since 1848.
Since 1846. The case for reopening the former route between Exeter and Plymouth via Okehampton and Tavistock was assessed by Network Rail in 2014. It found that there was not then a case for reopening this route in its entirety. We are doing work on that: Great Western Railway has been asked to develop proposals to reintroduce regular services between Exeter and Okehampton; and Devon County Council is progressing work to develop the case for reinstating the railway between Bere Alston and Tavistock. Delivery of these schemes may enable the full reopening of the former route in the future, subject to a viable business case being demonstrated.
Brexit: Outstanding Commitments
My Lords, the Government are committed to getting a good deal for the UK, and have agreed a fair financial settlement with the EU. Even if the UK leaves without a deal, the Government have always been clear that the UK has obligations to the EU—and that the EU has obligations to the UK—that will survive its withdrawal, and that these obligations would need to be resolved.
My Lords, I am sure everyone in the House will agree that we—be it as individuals or as a nation—should pay our debts. But I suspect that most of us would also agree that we should not pay bills when we have received nothing in exchange. I hear that the European Commission is demanding that, whatever happens—should we leave without a deal—it would expect £39 billion from us. This probably has more to do with the hole it will have in its budget when we leave, rather than anything else. Could my noble friend reassure me that we will definitely renegotiate any financial deal should we—regrettably—leave without a deal on 29 March?
The position on the financial settlement was that it went alongside the withdrawal agreement. It is, if you like, looking at our obligations to the EU as a result of our membership. It is not connected to the future economic partnership that we hope to negotiate with our European friends and partners. Were we not to honour that financial settlement, which is part of the withdrawal agreement, that would probably have a significant bearing on our ability to get a good deal for the UK in the future.
My Lords, I thoroughly agree with everything the Minister just said: if we do not honour an obligation that we signed up to, we will have difficulty negotiating a sensible deal with the EU. Does he also recognise that the way we handle this is being watched around the globe? If we are seen as people who do not meet obligations—trying to find some technical angle or way to weasel out of a commitment that we have made—we will have no chance of getting future trade agreements of any value.
The noble Baroness is right. We need to remember that our net contribution, because of the way it is calculated, is made up not just of what the UK sends to the European Commission but of what the European Commission sends to the UK. Therefore, there are two parties to this; both are making contributions, and both need to honour their obligations. We believe that the financial settlement does just that.
My Lords, would the Minister not confirm that the £39 billion was entered into in good faith by the Prime Minister and the Government in December 2017, and simply represents what the two sides—the Commission and the British Government—believe is owing in respect of various commitments over many years? If that is so, the suggestion that we do not owe this money if we leave without a deal has no basis.
In that sense, that is correct. The range of the figure in the financial settlement is between £35 billion and £39 billion. The OBR has put it at the top end of that range. When we went into that negotiation, one thing the European Commission wanted to do was discount the rebate, which is a significant element of our contributions and benefits the UK. That was included in the final calculations, so I believe it represents a good settlement, alongside the withdrawal agreement, and should command support on all sides of the House.
My Lords, is it not right for us to assume that the majority of British people who voted to leave the European Union did so because they had a different perspective on the future of the United Kingdom—particularly on control over decisions? The idea that the country is full of animosity towards the European Union—when, after all, the initiative to leave was taken by us—is false. Therefore, the people expect us to meet the obligations that we entered into as far as the European Union is concerned.
I am very happy to agree with that sentiment. We want a deep, ongoing relationship with our European friends; part of that means honouring what we signed up to. This was what we signed up to at the Council meeting back in November, and we should support it.
My Lords, was not the £39 billion made up of our annual contributions for the two years of the implementation stage? I cannot see how we would owe that if we were to leave with no deal. Did a committee of your Lordships’ House not say that we would not owe the EU anything with no deal?
That position, which was taken by the House of Lords committee, was looked at by the Government, who took a different view, believing that there were obligations. They observed that there was no existing legal mechanism to enforce them, but they said that the European Union would be entitled to pursue litigation through courts to recover payments. As I say, the best way to resolve all these issues is through a deal, and through the deal that is on the table.
My Lords, the Minister has been extraordinarily helpful to the House today. Maybe he could just confirm something for someone like me, who sometimes finds it very difficult to follow these arguments. Is he saying to people who say that there is some way in which we can just wave aside this £39 billion commitment, that that is bogus and misleading the British public? Can he also confirm that the British Government believe that when they have international obligations, they should meet them?
I agree with all of that. We certainly agree with my noble friend Lord Hamilton, who made the good point that part of the £35 billion to £39 billion covers the implementation period, which is the two years of ongoing contributions to the European Union. He is also therefore correct to point out that if we left without a deal, there would not be an implementation period, so that money would not be paid. However, there would need to be some mechanism to reach a negotiated settlement, or it would be as a result of a legal challenge in some court.
All these figures went into the financial settlement; that is how we arrived at those numbers. As regards our future relationship, that is a matter for the future economic framework, which, once we get the withdrawal agreement through your Lordships’ House and on to the statute book, we can look forward to negotiating with our European friends.
Private Notice Question
My Lords, it would not be appropriate to comment on individual cases, particularly those subject to ongoing legal proceedings. It may be helpful to know that a number of factors impact on a person’s planned removal from the UK. This does not mean that the original decision to remove the individual was incorrect. If barriers to their removal are resolved and they are not granted a form of leave, the person remains subject to deportation as required under the UK Borders Act 2007.
My Lords, I am grateful to the Minister. Yet, lawyers representing some of those due to be deported say that the reprieve is permanent. Yesterday, I asked the Minister how the Government could be sure that those they intended to deport as foreign national offenders were actually foreign nationals, bearing in mind the mistakes that had been made with the Windrush generation. The Minister said that she had been assured that all those being deported were foreign nationals. Yesterday, in the other place, the Home Secretary said that the law required him to deport foreign nationals convicted of serious offences and that if he did not deport them, he would be breaking the law. As I say, overnight it has been reported that five of those due to be deported are no longer going to be deported. Can the Minister explain: did the Government mislead the House, or has the Home Secretary broken the law?
I have not misled the House, nor has the Home Secretary broken the law. I thought I had made clear in my original Answer that the original decision to remove an individual is not incorrect, but there may be factors that need to be resolved, such as fresh asylum claims and other reasons why a fresh appeal might be lodged, which might mean that someone is not deported but might ultimately be deported. Therefore, neither is true.
My Lords, while I accept that deportation must remain an option for the Government, some of the decisions to deport people that I have seen reported look extremely harsh. How can we be confident that the Home Office is being just in its application of the deportation policy generally?
My Lords, I have to say that it was under a Labour Government that the UK Borders Act 2007 was brought in. A deportation order must be made in respect of a foreign criminal sentenced to a period of more than 12 months, and we will not resile from that—I am sure the noble Lord would not expect us to do so. This was what my right honourable friend the Home Secretary was referring to when he made his comment yesterday about not wanting to break the law.
My Lords, the implication of what the Minister said, a bit like what the Home Secretary said yesterday, is, “Oh, this is a law that Labour brought in. We are being forced to do it, because Labour did it”. If you do not agree with that law, why have you not got rid of it? Why use petty party points on a serious issue like this?
My Lords, within the last few days I met a man who has lived in the UK for 41 years, since the age of four. He was due to be deported to Jamaica, but then his deportation was cancelled, which is obviously good news. Does the Minister think this is a just way for this country to conduct its deportation policies? How many more people are in the pipeline to be deported day after day, and which we are only hearing about in the newspapers? Somehow the Government are in denial that they have any responsibility to take care of these people.
My Lords, the noble Baroness will understand that I will not comment on an individual case. She is absolutely right that deportations go on all the time. Although this flight has come to the fore in the media this week, it is nothing unusual. I cannot comment on whether this deportation has been cancelled or not.
Does the Minister agree that one of the weaknesses in the Government’s position over the Windrush scandal was that it demonstrated evidence of a “Gotcha!” culture in the immigration service and in the Home Office? Achieving a deportation was chalked up as a victory by the staff concerned. Can she reassure us that that culture has now gone and that some of the worst aspects of the Windrush problem will not recur?
The noble Lord is right to make this point. When the Home Secretary first took up his post, he made it a central priority that that culture of a hostile environment—which had grown up over the years, if we are to be honest—would be far more attuned towards talking about a compliant environment and that the culture in the Home Office would be changed to be far more humane. That was demonstrated in the aftermath of what happened to the Windrush people. I hope this continues towards those who genuinely have a right to be in this country.
My Lords, while it is welcome that the new Home Secretary has made this a central plank, there is continuing concern as these cases continue to bubble up. Can the Minister assure us that the Home Secretary is having a series of meetings not just with the high commissioners of these various Caribbean islands, but also with community representatives? May I remind my noble friend that a considerable proportion of these people, particularly of this generation, are involved in faith communities? Maybe reaching out to these leaders would help resolve some of these cases more swiftly.
My noble friend makes a good point. The Home Secretary has been in touch with the high commissioners. Of course, local—particularly Caribbean—communities are best placed to know where people who need help can seek it and where cases can be dealt with. We have reached out to all these Caribbean communities and beyond in order to encourage people to come forward to get the help which they might need to resolve their status.
My Lords, there is a real need to have cultural understanding of individuals who are being investigated. There needs to be public confidence that people are being treated fairly. How many BAME people are Home Office officials working on these cases to give the public the confidence they need?
My Lords, just for clarification, will the Minister explain that, when a foreign national is convicted of a criminal offence and receives a sentence of, I think, more than two years, they then qualify for deportation? It is probably a matter for the judge to make a recommendation and then the Home Office takes over to see whether there are any mitigating circumstances. Is that correct?
It is actually a sentence of more than 12 months, but certainly Article 8 considerations are taken into consideration before someone is deported. The provision exists under the UK Borders Act to deport people who have been sentenced to 12 months’ or more imprisonment.
My Lords, I wonder whether the noble Baroness will return to her previous answer on the subject of the hostile environment, which I think she described as having grown up over many years. My recollection—on which I am sure she will correct me if I am wrong—is that in fact the policy may have had a number of aspects, but it was named and prosecuted under the previous Government, and the Home Secretary at the time was the current Prime Minister.
We could have a debate about this, but I understand that the phrase was actually coined by Alan Johnson, but I shall not start on party-political exchanges because, the phrase having been coined, the culture of hostility grew up over a number of years. We could argue the semantics of it, but it grew up over a number of years. Compliance on immigration matters is far more important than a hostile culture within the Home Office or anywhere else.
My Lords, it is certainly my experience from business that it takes several years to change a culture in a company. Can the Minister explain to the House what is practically been done—I do not want to use the phrase re-education—in terms of training? Are programmes under way, or is this just Ministers telling people not to enforce the policy any longer?
The noble Lord will know from his experience that the person who sets the culture in an organisation is the leadership, and I think the Home Secretary made it abundantly clear when he came into post that the hostile environment was no longer to be, but the noble Lord is right: it takes time for these things to change.
Financial Services (Implementation of Legislation) Bill [HL]
A privilege amendment was made.
My Lords, very briefly, I should like to ask the Minister a question to do with the in-flight EU prospectus regulation, which has passed all its legislative stages but has not yet been gazetted, as I understand it, and so cannot be treated as settled legislation and is therefore treated in the Bill under the amendment provisions in Clause 1(2)(b). If the legislation is gazetted while the Bill is in the Commons, do the Government intend to move it into the category of settled legislation, governed by Clause 1(2)(a)? What happens if the legislation is gazetted after the Bill has left the Commons but before 29 March? How will the Government make sure that the power to make adjustments is not applied to the now settled piece of legislation?
My Lords, that is a good question. We had hoped that it would be gazetted before then, in which case we could then have made the amendment that we talked about. I was grateful for the noble Lord’s suggestion on that. I cannot say that we have had an explicit conversation about this aspect, but it is going to arrive. Providing that it passes your Lordships’ House, it will be heard in the Commons I think on Monday next week. The same principle would apply—that if it is gazetted we will put it in there. That was certainly the spirit of what we agreed. I will make absolutely sure that the Economic Secretary and the Financial Secretary, who are dealing with this in the other place, are apprised of the commitment that I gave and which we will seek to honour.
My Lords, I am grateful for that answer, which shows that the Government are on top of the issue—against a background where we must all recognise that time is somewhat short with regard to this legislation. The SI relates to a service industry that is a crucial part of our economy. We could not afford any situation in which a gap occurred; I am sure that the Minister is seized of that fact.
We are all aware of the fact that there are not many days left to the point where we are due to leave the European Community, yet there is still a very large number of SIs to be considered. Slips such as this, which are minor, can be remedied reasonably quickly by appropriate action, as the Minister indicated. But slips such as this could be costly if we are right up against the wire with regard to the legislation we are seeking to pass. We must all be conscious of the fact that the Government’s programme between now and the end of March is pretty demanding, to put it mildly. So, although I accept entirely what the Minister said and am reassured by the promptness of the Government’s response, this is an indication that there is many a slip between cup and lip, and the Government do not have much time for a monumental programme.
My Lords, when the Minister spoke on 4 December at Second Reading, he said that the Bill was part of a package of measures and statutory instruments to ensure that the financial services industry would be covered in the event of no deal. He said specifically:
“That stability and continuity is being delivered by the 60 or so statutory instruments that Her Majesty’s Treasury is introducing under the European Union (Withdrawal) Act 2018”.—[Official Report, 4/12/18; col. 934.]
Will the Minister tell us how many of those 60 or so statutory instruments have been laid before Parliament, and would he be in a position to write to me to tell me what the timetable is for laying those that have not yet been laid before Parliament before 29 March?
My Lords, before the Minister answers those questions, may I ask one of my own in relation to the report of the Delegated Powers and Regulatory Reform Committee? Will the Minister tell the House whether and how the recommendations in paragraphs 8, 16 and 19 of that report have been dealt with?
My Lords, before the Minister responds, will he give me some assurances about how these regulations and this legislation, when it becomes legislation, are going to have any particular impact on online financial institutions? I think that they are the ones where the future is going to lie. I declare an interest as a former chairman of Monzo, an online bank. It is important that the Minister gives some reassurance about the particular impact that this could have on a completely different form of financial institution.
I thank the noble Lord, Lord Davies, for his comments. As he has set out, the schedule that we are up against here is pretty demanding. All of us on the Front Benches are in solidarity in recognising the demands of the work going on. It is also demanding on some of the committees of your Lordships’ House, which are having to do an incredible amount of work. I am thinking of the Secondary Legislation Scrutiny Committee and its sub-committees, under my noble friend Lord Trefgarne and the noble Lord, Lord Cunningham of Felling, which is doing a tremendous amount of work.
The noble Lord, Lord Adonis, asked about the progress being made. We have agreed that we will provide regular updates. We have approximately 60 pieces of secondary legislation that need to come through. Around 45 are subject to the affirmative procedure and, of those, 22 or 23 have made their journey through the House, with some benefiting from the scrutiny of the noble Lord himself. That is basically where we are: about half way. We have some 31 sitting days before Brexit, so it is a pressurised and demanding situation.
I turn to the point made by the noble Lord, Lord Foulkes, about the Delegated Powers and Regulatory Reform Committee. I thank that committee in particular because it has done an excellent piece of work. In fact, we almost took the committee’s script to express concerns about the extent of the Henry VIII powers, some of the wording and some of the files that were in flight and which we have just been talking about. I am pretty sure we have addressed all those concerns. If that is not the case, I will write, but from recollection we wanted to address all the points.
The noble Baroness raised the online community. Of course a number of pieces of legislation relate to online financial regulation. I cannot be specific about which ones are relevant but it is a crucial point. We have had many long discussions in Grand Committee in the Moses Room about statutory instruments that have a strong online financial services element to them and make a significant contribution to the success of UK financial services. We want that to continue once we leave the European Union.
My Lords, perhaps I may say a word or two to put this discussion into perspective. This side hates the idea of a no-deal exit and so on, but the Bill is an outstanding example of co-operation by the Government. The Bill has changed massively from the one introduced at Second Reading. The Government facilitated discussions with the Minister and officials. It is now a much better Bill and, given its task, which we abhor, it is nevertheless a good Bill.
My Lords, I remind the House of my interests as set out in the register. I also express my thanks to the Minister and his officials, along with other noble Lords who tabled amendments. We have a more than satisfactory outcome. We now have much greater transparency, some new procedures under which the Government will report on what is going to happen and tables to show us where things have gone. I hope this will perhaps lay the ground for how some other things, in what may be more fortunate circumstances than Brexit, could continue in the future. On behalf of these Benches, I thank the noble Lord and the officials.
I will ask a supplementary question to follow up the excellent contribution of my noble friend Lord Tunnicliffe about perspective and co-operation. The Bill, with the excellent co-operation of the opposition parties, has taken a number of weeks to get through this House, as the Minister knows. We are now dealing with the Trade Bill, the Healthcare (International Arrangements) Bill, the Agriculture Bill, the Fisheries Bill, the immigration Bill and the withdrawal Bill. Could the Minister, for whom I have great respect because he has a lot of experience here and in the other place—perhaps he has more wisdom than the previous people of whom I have asked this question—give me some indication of how these Bills, of which there are at least six, can be dealt with between now and 29 March?
The noble Lord knows, having stood where I stand, that the Motion before the House is that this Bill do now pass. To be frank, most of us on the Front Bench are taking it one Bill and one SI at a time, so I will sidestep that question. I am sure my noble friend Lord Young, who has provided excellent assistance throughout on this, and is a member of the Government Whips’ Office, will have heard the remarks. I also thank the noble Baroness, Lady Bowles—
If my noble friend Lord Young were so inclined, he would probably want to give me a kick from the side and suggest that I keep moving on.
I turn to the point made by the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Bowles, because it was a good one: there is a great deal of expertise in this House, which could be brought to bear. We even had some free legal advice from the noble and learned Lord, Lord Judge, to help us on our way. When we work constructively and recognise that the Government have a right to make progress with legislation, we can do some good work. Certainly, we can ensure that this legislation leaves your Lordships’ House much more fit for purpose and in better shape as it moves to the other place. That will, we hope, assist in expediting it through its procedures. I beg to move that the Bill do now pass.
Bill passed and sent to the Commons.
Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2018
Motion to Approve
My Lords, the Grand Committee debate we had on this instrument on 14 January was extensive and wide-ranging; I am grateful to all noble Lords who took part so rigorously. Following that debate, I wrote a letter to noble Lords who participated, providing details on specific matters raised, which I placed in the Library.
The EU-derived law which provides for the current EEA regional exhaustion regime needs amending to ensure that it continues to function appropriately after exit as retained EU law. This instrument, therefore, provides a temporary solution if we leave the EU without a deal. If Parliament does not agree to this SI, it would expose businesses to considerable uncertainty and the risk of litigation. During the Grand Committee debate, noble Lords asked whether UK businesses and rights holders were put at a disadvantage. This arrangement should not disadvantage UK businesses compared to EU businesses. UK and EU businesses exporting secondary market goods from the UK to the EU may be more restricted, but that restriction would apply equally to all businesses, whether they are based in Brussels or Birmingham, and it depends on where rights are held and which direction the goods are travelling, not on nationality.
At this point, I would like to mention correspondence I received from the Publishers Association. Publishing is a key contributor to the UK economy and the sector considers that this instrument is,
“of immense importance to the UK’s publishing industry, and it is vital that it proceeds into law”,
“helps avoid a potential regulatory cliff-edge for books, offering interim certainty to the industry, while the longer-term exhaustion framework is consulted upon”.
For the benefit of the House, I wanted to expand on some key matters raised in Grand Committee.
I am not going to give way. I think it would be more convenient if I made my speech, allowing the House to listen to it, and then took questions. I will continue.
In Grand Committee, noble Lords asked about the approach taken to consultation on the drafting of this no-deal instrument. The legislative approach for exhaustion of IP rights in a no-deal scenario was being developed at a time of considerable sensitivity over the ongoing withdrawal agreement negotiations and the shape of the future relationship. This meant that the usual formal consultation on the legislative instrument was not appropriate. The level of consultation was consistent with the approach being taken with respect to no-deal legislation across government. My officials have engaged with businesses across many sectors since the referendum. They have spoken to rights holders, distribution companies, academics and trade associations. This engagement helped establish support for the legislative approach taken on this instrument. It is ongoing engagement that will continue as the work progresses, not just on exhaustion but more widely too.
While this instrument is intended to provide a temporary fix if the UK exits the EU without a deal, the Government are already considering options for what exhaustion regime is best for the UK in the future. Such an important decision on the UK’s future exhaustion regime is not to be rushed. It is not sensible to put a sunset clause on this instrument. We intend to take the necessary time to build a robust evidence base and to consult with businesses and consumers before any major decision is made on the UK’s future exhaustion regime.
I appreciate that noble Lords have asked about the process for assessing the impact of the adjustments made by this instrument to retained EU law, as they have asked about other such instruments. I believe I have addressed this matter in my letter to noble Lords, and I hope that the explanation was helpful.
Finally, on a specific point, noble Lords in Grand Committee raised a question as to whether the law relating to exhaustion of rights would be interpreted in accordance with pre-exit EU case law, most notably the Silhouette case. The answer is yes, it will, in accordance with the provisions of the withdrawal Act. In addition, Regulation 2 of this instrument makes it clear that the effect of domestic retained EU law under Section 4 of the withdrawal Act relating to exhaustion of rights does not change after exit, despite the UK not being an EU member state. Whatever effect it had in the UK before exit will be the same after exit.
To summarise, this instrument is important to support the movement of parallel goods, including essential commodities such as medicines. It is a necessary technical fix for UK laws to prepare for our exit from the EU and to provide legal certainty in a no-deal situation. I understand that stakeholders remain very interested in the Government’s future plans on this matter, and I know that my officials at the Intellectual Property Office are keen to have continued constructive engagement with them. The Government value their input in helping them better understand the views of businesses and consumers. I beg to move.
My Lords, I merely want to tell the Minister that I too have been advised by the publishing industry. It is with some reluctance that it has agreed that this is necessary legislation, because of the uncertainty that it would otherwise suffer.
The British publishing industry exports more books than any other country. This piece of legislation is vital for it. While it recognises the importance of this SI going through as a temporary fix, it is nevertheless typical of the kind of rushed legislation that has been necessary because of Brexit. This is another example of a gold-standard industry being put at risk because of the pressure to rush that we are all under.
I emphasise that the correspondence that I have had with the publishing industry has suggested that it is extremely unclear about what will happen and that the uncertainty around the long-term provisions for these particular and very important rights causes it considerable concern. For the record, can the Minister clarify this point?
My Lords, whatever the merits of these SIs, I am pleased that we are now debating them on the Floor of the House. I referred in Committee to what my noble friend Lord Tyler said about the critical importance of effective and timely scrutiny of Brexit-related secondary legislation. We have to do this properly. I noticed that the tag in front of this business is “Business expected to be brief”, but we do still have a few loose ends, even after the Minister’s opening statement.
The problem throughout has been inadequate public consultation and the lack of any sunsetting on these statutory instruments. In his letter of 21 January, the Minister defends the lack of proper public consultation as not being meaningful when,
“no wider policy changes were being taken forward”,
and because it,
“would have risked removing the EU’s incentive to agree to an ambitious future relationship on intellectual property”.
I fail to see the substance of the first point, as these SIs are more than technical, and the logic of the second, as, in my experience, contingency plans do not prejudice negotiations.
As we have discussed, we are unilaterally allowing EU 27 goods already placed on the market there to be exported to the UK, which is good news for parallel importers but not as good for parallel exporters from the UK. It is clear from the Government’s small print that these exporters may well need to seek permission to gain entry into the EU. That remains the case.
The Minister did not respond about what the Government are doing to mitigate their situation, by advice or otherwise. I was pleased that he confirmed that the ruling in the Silhouette case and those that followed will apply post Brexit to this modified exhaustion regime. In his letter and in Regulation 2(2), the Minister prays this in aid. It could still have been dealt with expressly in the language of the statutory instrument.
In his responses, the Minister also failed to totally clarify the work being conducted by the IPO into a future exhaustion regime. I very much agree with the noble Baroness, Lady Kingsmill, about how we know about the Government’s current thinking emerging from the review and research, and about organisations such as the Publishers Association asking for the Government’s assurance that they will avoid an international copyright exhaustion regime being implemented in the longer term. Indeed, they are asking for an effective national exhaustion regime so that the UK’s outstanding creative industries, including the publishing industry, will be properly supported. Is that the intention of a future exhaustion regime?
I do not know whether the noble Lord, Lord Adonis, will speak on this SI, but there are a number of aspects that have not yet been covered on the subject of intellectual property rights—the geographical indications, for instance. I see that there is now a draft statutory instrument on what will happen to design rights in the event of a no-deal Brexit. I look forward to that debate. Then there is the very important aspect of rights of representation by IP advisers, trademark attorneys and the like. I do not recall the Minister talking about that either when he addressed us in Committee.
Finally, I express bafflement at the fate of the draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations, which the sifting committee and our own Secondary Legislation Scrutiny Committee considered should be dealt with by the affirmative procedure. I do not think the Minister answered that question. When will the draft SI come before us? There are some loose ends and I hope that in the course of the debate the Minister will be able to tidy them up.
My Lords, I am happy to follow the noble Lord. He has made some detailed comments and posed some questions which I hope the Minister will be able to respond to. Having said that, I accept that the Minister’s letter of 21 January—running to eight pages and covering a lot of detail—as well as subsequent meetings have done a lot to clarify some of the issues that were before us when this was first considered in Committee. But good scrutiny leads to further debate and discussion, so it is not inappropriate that we should come back and point out areas that are not as good as perhaps they should be as we pass this important, time-limited piece of legislation. I also agree that the clarification about the Silhouette case, which was a confusing passage of discussion in Committee, has made things much clearer and will be helpful to those involved in that issue.
The Government should take away from this process three main things. First, if there is an SI of the sort of significance represented by the three intellectual property regulations before us today, the fact that consultation need not be carried out is not sufficient to assuage the concerns of those who have had to respond, even as late as yesterday, to these issues. There is a lesson to be learned here about the need for more engagement and a more considered approach to the context of these amendments. I accept the pressure of time and the difficulty of fitting everything in, but the consequence of not consulting according to the style and process that people have become accustomed to, just because this is a special case, has meant that we have not had the best advice that would have been available to us in ordinary circumstances.
Related to that, the question of whether one needs an impact assessment is also important. There is of course a de minimis figure, which was in the Cabinet Office rules. But when one thinks about the impact that these new regulations will have, even for a time-limited period, the Government should be prepared at the very least to bring forward for consideration evidence that the de minimis figure has been met. At the moment, all we get is an assertion; we are left to guess whether the figures that might be construed will work. That is not satisfactory in terms of general process.
Thirdly—this does not apply to the SI before us at the moment but applies to the other two—considerable variations in approach have been taken by the different departments on the EU exit SIs. There should be some overall consideration of this when the time comes to review how, in some areas, the limited licence available to ensure that the statute book is in good order as we leave the EU, if we do, on a no-deal basis, has been interpreted differently in different departments. We heard even today that the Treasury has a completely different approach from that of others on the issues of consultation and preparation of estimates that I have been talking about. The public interest would be better served by a slightly different approach.
My Lords, first, I thank the Minister for his extensive letter to noble Lords responding to the debate in Grand Committee. I have a specific question and will then make some comments on the wider issue of consultation which has bedevilled all our proceedings on these no-deal statutory instruments, because the consultation has been so haphazard and unsatisfactory. My question is in response to the Minister’s opening remarks, when he said that it was “not sensible” to put a sunset clause on the current exhaustion regime. That is a judgment which the Government have made but, since this is clearly a matter of extreme importance to the industry, can he tell us what the view was of stakeholders who were consulted on the issue of the sunset clause? I understand that that issue has bedevilled these proceedings throughout.
On consultation, the Minister’s letter was significant; it accepted that the consultation which had taken place had been in confidence. Having secret consultations which are not open to all relevant people, or all those who wish to take part, particularly from the industries consulted, is contrary to almost all of the principles of public consultation. The Minister’s letter has an extremely convoluted paragraph about how this secret consultation was conducted. It says that the Intellectual Property Office, or IPO,
“identified the relevant representative organisations or businesses it would usually engage with, and who would give a range of views. Because of the confidential nature of the review”—
which was entirely self-imposed by the Government; this did not need to be confidential but could have been an open, public review—
“the IPO then identified and invited 12 individual experts who had previously liaised with the IPO in a role within one (or more) of those relevant organisations”.
The letter then lists the organisations. It continues:
“I believe this is consistent with what I said in my … clarifying remarks about this process during my closing speech; the IPO’s understanding was that these individuals were ‘from’ those organisations but they were, as I clearly said, ‘a group of individual stakeholders’ and the IPO ‘consulted them in their personal capacity’. I therefore also agree with Lord Warner that the organisations themselves were not consulted in the way that would usually happen”.
Reading that twice, one realises the truly extraordinary nature of the consultation which has taken place. The Government have arbitrarily and secretly selected 12 individuals because—to cut to the chase—officials happened to know them and had dealt with them previously. They then chose to consult them, telling Parliament that the consultation process was adequate. However, when pressed, it is clear that these people do not in any respect represent the organisations from which they have come. We are not told who the individuals are and they are not in any way accountable for their advice. We are told that the advice was given individually, but we are not told what it was. When it comes to disputes on major aspects of policy embedded in these regulations, the Government blandly assure us that the decisions they have taken are sensible. In my experience, Governments always think that their decisions are sensible; I have not yet met a Treasury Minister who said that their decisions were not sensible. However, the Government will not even tell us whether the “sensible” decisions they have made reflect the secret consultation that took place before the preparation of the statutory instruments.
Because of the unsatisfactory nature of this whole procedure, we will have to approve this regulation. However, in any normal circumstances, we would not approve a regulation on the basis of a secret consultation with 12 individuals—selected secretly by the Government, whose names we do not know and who are not in any way accountable—when there should be a public consultation. I raise this point not only to highlight the unsatisfactory nature of this, which goes to the heart of all this no-deal planning, but because of the cascade of regulations still to come. Every time your Lordships meet, a plethora of regulations appears before us. In the health Bill, which we debated yesterday —I did not participate, but I read the Bill during the proceedings—there was provision for a whole slew of further regulations, with procedures as yet undecided.
I invite the Minister to respond on this, as I think it is important to get this on the record. Can he give some undertakings that consultation on future regulations laid before your Lordships will be done in an open, transparent way, so that we are not faced again with consultations with secretly selected individuals? As noble Lords will recall, when we were debating one of the instruments, we were told that the individuals were “selected and trusted” respondents—presumably on the grounds that a general public consultation with people who were willing to share their views would not engender trust.
This is not good government. In any circumstances other than this national emergency, I am confident that your Lordships would not agree to process, let alone consent to, regulations on this basis. We need some assurance that, in the time remaining, consultations will be conducted in a proper manner, rather than in the secret, cloak and dagger, totally unaccountable fashion that we have seen in respect to this instrument.
I want to follow up that point. I remind the Minister that after our rigorous series of exchanges in Grand Committee on these regulations, I took the liberty of submitting a Written Question, which was answered extremely helpfully on behalf of the Cabinet Office by the noble Lord, Lord Young of Cookham. I wanted to check that my memory was correct about the Cabinet Office rules on consultation. Not only do they require 12 weeks—during which people can comment in what is often a helpful way for the Government of the day—but the twin leg to this is that the Government have to publish those responses to their consultation. Not only have the Government, as the noble Lord, Lord Adonis, said, cut out the middleman in their approach to consultation, but by doing it that way they have avoided the commitment to publish the responses to that consultation. So there is a twin problem with the Government’s approach to many of these SIs. I suspect it is going to continue in relation to the Healthcare (International Arrangements) Bill, which contains Henry VIII powers for the Government to produce a lot of SIs. If the Government go on behaving on these SIs in the way that they have behaved on those we are discussing today, they will drive a coach and horses through their own Cabinet Office rules on the way we go in for consultation on legislation.
My Lords, I have waited in vain for some Conservative Members to contribute to this debate. When I moved here from the other place, a number of people, including the noble Lord, Lord Strathclyde, who I am glad to see here, told me that the great thing about the House of Lords is its careful scrutiny, the work that it does scrutinising detailed legislation using all its expertise, knowledge and background. That is why I am surprised. We are dealing with a statutory instrument on intellectual property, which a lot of Conservative Members, in particular, must have expertise in. I see the noble Lord, Lord Faulks, who has probably been involved with this in his work in the legal profession. There are others who no doubt could contribute. We have 12 statutory instruments here. I have been at a number of meetings of the Grand Committee, and with the notable, standout exception of the noble Lord, Lord Deben, there have not been any Conservative Members contributing. What has happened to this great scrutiny of the House of Lords? We have had wonderful and important contributions from some of my noble friends, including my noble friends Lady Kingsmill, with her experience in the law, and Lord Winston, when we were discussing the transfer of embryos and other matters. We have heard from the noble Lord, Lord Warner, from the Cross Benches, but no Conservatives. Yet today we have 12 statutory instruments—
We have 11.
We have 11. The noble Lord has made my argument much better, actually. On the Order Paper there are 180 statutory instruments waiting to be discussed by the Grand Committee and by this House, on planning procedures, plant protection, ozone depletion, plant health, equine records—I could go on. I will not, your Lordships will be glad to hear. But I could go on and on, because there are 180 of them—and some are on really important matters.
If the Lord Speaker is still running the visits to schools that we have been involved in, how can I honestly go to schools and say, “I am a Member of this great House of Lords, and we scrutinise. We are there to scrutinise legislation line by line”? This is a dereliction of duty. We are going to pass these statutory instruments, which could have unforeseen consequences —yet we are rushing them through. It is an appalling situation.
I know I am going a bit beyond intellectual property and making a general point—but we will see this again and again. It will go on all day today, all next week and the week after that. We shall certainly not have got through even the 180 on today’s Order Paper by the end of March. Can we really go before pupils—or, indeed, anyone—and say, “The House of Lords has done a really good job of scrutinising all these statutory instruments”? This is not to mention the six Bills that we still have to deal with—the Trade Bill, which is currently under way; the one on healthcare, which we discussed yesterday; the ones on agriculture and fisheries—and a whole range of other things that we still have to do.
This is an astonishing situation. It is only the Liberal Democrats, the Cross Benches and the Labour Party who are doing as much as possible within the time available to scrutinise these documents. The Conservatives—where are they? Perhaps the noble Lord, Lord Strathclyde, can tell me where the great people in the House of Lords who would scrutinise this legislation are, and what an important job we have done. I am very disappointed.
My Lords, I crave the indulgence of the House for a moment. I was not here at the start of the debate but since the noble Lord, Lord Foulkes, has mentioned me twice, it is only fair that I should defend myself. His proposition is stuff and nonsense. Of course the House of Lords offers great scrutiny of all kinds of legislation, including secondary legislation of this kind. But the noble Lord ought to assume that the fact that noble Lords do not speak is because they are entirely satisfied with the opening speech of my noble friend Lord Henley, the Minister, who has used his skill, judgment and expertise, built up over many years, and gives great comfort to the House when he stands at the Dispatch Box.
My Lords, I rise briefly just to make a point to the noble Lord, Lord Strathclyde. On intellectual property, the Minister did not say one single word about the changing technologies that greatly affect the way in which intellectual property is seen. I have not read, or even picked up, a book for the last two years—because I read on a Kindle. What about that sort of change?
My Lords, some of us still read books, and some of us still read letters. I shall not follow up the Scottish exchanges that have just taken place; I shall start with the letter referred to by the noble Lord, Lord Stevenson—the letter that I sent, I think, on 21 January. The noble Lord, Lord Adonis, described it as “extensive”; the noble Lord, Lord Stevenson, said that it was eight pages long. What I have in front of me is six and a half pages long, so I just want to be clear that we are all talking about the same letter. I see that the noble Lord, Lord Adonis, and I are going to count.
I think that deals with the point about modern technology—but I deal in letters, and mine is six and half pages of A4. I hope we are all talking about the same letter, which I sent on 21 January. I think, and hope, that it dealt with a great many of the points that have been raised.
I shall go through some of the points that came up in the debate. The principal one referred to by the noble Lords, Lord Adonis, Lord Stevenson and Lord Foulkes, is that there has been a failure of consultation—it just has not been good enough. I believe it has been consistent with the approach taken on no-deal legislation across government. The Government’s consultation principles are clear. Consultations should have a purpose. The statutory instruments in question make only those corrections to retained EU law that are necessary to give the UK a functioning statute book in what we have all made clear is the unlikely event of a no-deal exit, and maintain as far as possible the existing domestic position. A consultation on policy change would not have been meaningful as that is not what these instruments do. Again, I set that out in my letter.
I make it clear that there will be full and proper consultation on further changes. All those who have had dealings with the Intellectual Property Office will accept that it has a good record in this respect. It consults properly and will take into account the concerns of all those who have an interest. I give an assurance that the IPO will do that: it will consult and make sure—
Before the Minister sits down, could he address the second leg of the Cabinet Office guidance? Even if we accept that there is a truncated and specialised consultation process, what about publishing the findings of the process, which is a key part of the Cabinet Office rules? Do he and his colleagues accept that if we are to have special arrangements, they should also publish findings of that consultation process?
If there are findings that it is necessary to publish I give an assurance those will be published. If the noble Lord will bear with me, I want to talk about the future and make it clear that the IPO will consult and publish the findings properly so that the noble Lord and others with an interest will know what is going on.
I turn to some of the other points I want to address—I was not about to sit down, because there are other points to be dealt with. The noble Baroness, Lady Kingsmill, asked about long-term certainty for publishers and referred to the letter from the Publishers Association. I repeat what I said in my remarks: the Publishers Association made it very clear that it saw it as vital that these regulations should be on the statute book in the event of no deal.
The Publishers Association also made it clear that this was not entirely satisfactory, but that it was an essential interim position that needs to be taken. As it said in the letter, this is not ideal, but something forced on publishers. My point really was that this wonderful industry, which is gold standard, as we all know, has been forced to accept unsatisfactory legislation because it is a last-minute attempt to put a finger in the dyke of the possibility of a no-deal Brexit. The publishers again made it clear in the letter that they need some clarity about the future. That is the point I want the Minister to cover in his answer.
I do not accept the noble Baroness’s metaphors, but I repeat what was said, and the noble Baroness is quite right to repeat the other parts of the message from the Publishers Association.
I come to the point I was about to deal with: the long-term certainty that the Publishers Association and the noble Baroness are looking for. The regional exhaustion regime currently in place supports frictionless trade in goods within the EEA and is considered to provide the optimal balance between the interests of rights holders and consumers. Consumers in the UK will continue to have access to a wide range of products at more competitive prices. Maintaining the current arrangements avoids the uncertainty of cost for UK businesses and consumers associated with a change of exhaustion regime, while the UK considers the impact of a future change to the regime. The SIs, we have made clear, essentially preserve that status quo, but that allows us time to consider evidence and consult on any future change.
I shall move on to the sunset clause, raised by the noble Lord, Lord Clement-Jones. Again, I believe I dealt with this in my opening remarks, but the instrument is intended to be a temporary measure. The Government are considering options for the future. As I made clear, that will continue with extensive stakeholder engagement and consultation, and we must make sure that we have robust evidence. Until we have dealt with that, we will need this in place in the event of no deal. Therefore it is not necessary to have the sunset clause referred to by the noble Lord and the noble Lord, Lord Adonis. Planned research removes the purpose of the sunset clause and the consultation will, in the end, provide the appropriate solution for the future.
I turn to the noble Lord’s further question, on mitigation for exporters. I make it clear that the arrangement will not disadvantage UK businesses, as opposed to EU businesses, as the effect depends on where businesses hold rights, and not on which country they are based in. A continuation of the status quo will minimise any negative economic impact. For example, it will allow existing import arrangements into the UK to continue, including for businesses that rely on secondary market goods. Businesses wishing to continue to parallel export goods from the UK to the EU will need to check with owners of rights in the EU—which may be UK businesses themselves—whether they need permission to do so. For example, UK businesses owning trademarks in the UK and EEA may choose to limit how their goods are parallel exported from the UK to the EEA, if they wish to exploit market conditions such as consumer preferences and labelling regulations.
My Lords, I am sorry to interrupt the Minister. That is precisely the detriment that I was talking about—that they will need to seek permission if they are going to export in those circumstances. Therefore, the question is: what assistance and advice will they be getting directly from the Government?
They will have advice, as is appropriate, from the Government, and the IPO will offer that. However, we cannot force the EU to take a more favourable position to mitigate this effect. Again, this will, we hope, be dealt with in any deal; we are dealing with a no-deal situation in these regulations.
Finally, the noble Lord, Lord Clement-Jones, wanted the Silhouette case expressed more clearly. The withdrawal Act makes clear that EU case law before exit will continue to apply to the interpretation of EU-derived domestic law after exit. Furthermore, Regulation 2 makes clear that the effect of domestic retained EU law under Section 4, relating to exhaustion of rights, does not change after exit, despite the UK not being a member state. Whatever effect it had in the UK before exit will be the same after exit, as I hope I made clear in my opening remarks. I believe that deals with the questions that have been put to me.
Patents (Amendment) (EU Exit) Regulations 2018
Motion to Approve
My Lords, as with the previous instrument, this was the subject of a wide-ranging debate in Grand Committee on 14 January. Again, I wrote to noble Lords who spoke in that debate to respond to the points raised, and also placed a copy of my six and a half-page letter in the Library. Since the Grand Committee debate, I have held further helpful and constructive meetings with the BioIndustry Association and the ABPI. Let me make it clear that I value those regular contacts and the insight that they bring on behalf of this important industry. I will continue to have discussions with representatives from industry and hear their perspectives as we move forward. As Life Sciences Minister within the department, my door is always open.
In my discussions with the life sciences sector, it has made clear the value and importance of supplementary protection certificates—SPCs—to the industry, and its concerns about the potential for those valuable IP rights to be affected by a no-deal exit. I hear and understand that. The only intention of this instrument is to fix what would break and to do so in a way that preserves the current operation of the law. We are considered to have one of the strongest IP systems in the world and the Government remain fully committed to maintaining that position. That is why we are preserving the status quo so far as possible in a no-deal exit. It is right that we continue to prepare for a no-deal scenario as long as that remains a possible outcome.
One issue raised in Grand Committee, and addressed in my letter, dealt with the approach taken to consultation on this instrument. In my meetings with industry bodies, we had discussions on this point and on why the usual wide engagement by the IPO was not possible on this occasion. The withdrawal Act established the policy direction which this instrument follows: to preserve the existing law at the point of exit and maintain the status quo as far as possible, ensuring a smooth transition for business. As the Government’s consultation principles make clear, a consultation on a policy which is not changing would not be of benefit. Nevertheless, the IPO wanted to ensure that the drafting of the instrument achieved its aims, by getting external views. Therefore, it was decided, consistent with the constraints in place, to carry out a confidential technical review of the drafting. In addition to providing valuable feedback on the drafting, the participants also raised wider concerns, including on the issue of the SPC term.
The recent engagement with industry bodies also touched on this issue, which was raised in Grand Committee by the noble Lord, Lord Warner. As I reassured them in those discussions, the sole objective of this instrument is to fix parts of the retained law that would otherwise break upon exit. Therefore, the changes being made simply ensure that an SPC which is granted the day after exit would be given exactly the same term of protection as it would if granted the day before exit. Without such intervention, term would have to be calculated without any reference to authorisations granted in the UK. Innovators have expressed the view that this intervention should be to rely solely on a granted UK authorisation to calculate term. This would give a longer period of protection if the product comes to the UK later than the EEA. As I set out in my letter, this has the potential to tip the balance between the interests in this area at a time when maintaining the status quo is critical.
I fully understand that innovators have concerns about wider potential effects of a no-deal exit on the regulatory environment; that has come through strongly in my recent discussions. These are legitimate concerns which must be carefully explored, and it is entirely correct that they are raised. Pharmaceutical innovation is a vital part of the UK economy; the companies which research and develop new drugs are some of our most important and valuable, and we benefit greatly from their work. If we end up in a no-deal situation, I am keen to start immediately exploring these issues with innovators and all other interests, and to make progress as early as possible after a no-deal exit.
In conclusion, by preserving the status quo as far as possible in a no-deal exit, I hope that the Government’s aim is clear—to maintain the UK’s highly regarded IP framework and the important protection that it provides. I beg to move.
My Lords, I raised several concerns about this SI in Grand Committee, as the Minister recognised. As he knows, these were the result of briefings from the BIA and the ABPI, with which I am glad to say he has had further meetings. However, since his meetings both these organisations have provided me with further briefing about their continuing concerns.
Before turning to these concerns, I will briefly place them in the wider context of the damage done by Brexit—and the Government’s conduct of it—to our highly successful life sciences industry. This damage could make Nissan and Sunderland look like small beer if we are not careful. From the Prime Minister down, the Government have shown a poor appreciation of the damage being done to this sector: the loss of the EU medicines regulator from the UK; the loss of investment opportunities in the UK; the missed opportunities for collaborative international joint research, development projects and clinical trials; the drain from the UK of talented overseas scientists; and the likely loss of a growing amount of our own homegrown scientific talent.
To this litany of casual vandalism the Government have now added a statutory instrument which, if it were used in the case of our exiting the EU with no deal, would reduce the protection of exclusive intellectual property. The problem is caused by the SI’s approach to supplementary protection certificates—SPCs—which are a key part of the intellectual property protection framework for pharmaceutical research. SPCs are intended to give a period of exclusivity from inherent risks in the development of new pharmaceutical products. But the industry’s trade bodies—both the BIA and the ABPI—are convinced that, in the real world that they occupy, the SPCs as structured in this SI are fundamentally flawed.
In their view—the exact opposite of the Minister’s—this flaw reduces the period of exclusivity for drugs authorised in the UK, because the start of the period for exclusivity in the UK is backdated to a drug’s earlier authorisation in the EU. They are losing a bit of their exclusivity period. The chief executive of the ABPI put this extremely well:
“Britain is internationally renowned for its strong IP framework and this has made it an attractive home for investment from all industrial sectors, including pharmaceuticals. We’re concerned that these measures are a step backwards and seriously undermine the strong life sciences sector that we’ve worked so hard to build over the past 70 years”.
These views are shared by the BIA.
The problem has arisen in large part from the Government’s failure to consult properly on these regulations at the outset—as has been shown to be the case in other no-deal SIs, as we have already discussed. I drew the Minister’s attention in Grand Committee to the inadequacies of that consultation process, and I am pleased to see that he seems to have accepted some of that and tried to rectify matters through proper discussion with the ABPI and the BIA. I congratulate him on taking that particular initiative.
I think that the Minister will be pleased to know that I do not intend to bang on further about past misdemeanours. Instead, I ask him to give the industry two clear-cut assurances about the future conduct of the Government. First, I would like to hear it from him, on the record, that the Government recommit to the UK’s status as a world leader in safeguarding intellectual property and commit to make no further erosions of the UK intellectual property framework; and, secondly, that the Government commit to a specific review of the intellectual property legislation being introduced through statutory instruments as part of the no-deal Brexit planning. The reason for that second one is, frankly, that the industry is very sceptical about whether the Government will just drop these proposals if there is a deal. Ministers in the Government need to understand that they have lost a lot of the confidence of this sector. The time has come for them to start to rebuild that confidence in an industry which is vital for this country’s future.
My Lords, the noble Lord, Lord Warner, has expressed the impact on the life sciences industry extremely effectively and eloquently, and I do not wish to repeat anything of what he said. Quite apart from the damning quote from the chief executive, Mike Thompson, the key sentence that I saw in the ABPI’s briefing was:
“The signal the Government has sent to global pharmaceutical companies large and small is that the UK will be less committed to IP protection after Brexit than it has been to date”.
For a major industry to consider that seems extremely damning.
As the noble Lord, Lord Warner, pointed out, the Minister said that it is correct to raise these issues and he is keen to start exploring them, so there is some intention now to have some consultation post the SI rather than proper consultation before it. I think we are looking forward to hearing a bit more of a concrete proposal from the Minister with regard to what precisely is planned.
The Minister’s six and a half-page letter, as we must now call it, dealt with the question of participation in the unified patent court, as set out in the White Paper last autumn. I made the point in Committee that if the UP convention is ratified by Germany and comes into force ahead of our exit date, the UK will need to work out how to remain a member of the UPC or withdraw from the systems, which could have significant impacts on business. In that context, I questioned in Committee whether the UK will have to acknowledge the supremacy of EU law and the ECJ as part of the signing up process. In his letter, the Minister advises that,
“when ruling on domestic cases, UK courts will not be bound to follow decisions of the UPC, or rulings of the European Court of Justice applied by the UPC”.
The last time we discussed this SI, I brandished a 39-page opinion on the subject, so I am rather baffled by the advice that the IPO and the Minister have received in those circumstances, if we have signed up to the unified patent court agreement. I would very much like to hear a bit more clarification on that subject from the Minister.
My Lords, this is another good debate on these issues. I will not fall out with the Minister about the length of his letter—we can brag about size elsewhere if we wish to—but it came out of my printer at eight pages. I leave that curious intellectual puzzle to him to sort out. Maybe there were other issues that had to be added in.
The Minister could well have dealt with other matters, including various aspects of whether the Silhouette case would apply in this area of the law; one of the points raised in the correspondence was the question of whether Silhouette, which applies to one aspect of our intellectual property, in fact has resonance through its relationship to the other aspects of the IP world and will also be applied. However, that may be for the future.
The noble Lord, Lord Clement-Jones, is right to raise questions about the unified patent court, which could change the game here. If the Minister is minded to confirm any of the points raised by the noble Lord, can he also confirm that premises for the unified patent court have been acquired in London? Are they fully available and ready to be moved into? We are expecting the courts to be operational very shortly, but it would be useful to have confirmation that this is still the case.
The issues have been well rehearsed. I am grateful to the noble Lord, Lord Warner, for continuing to press as to exactly what issues were raised by the consultation that did not happen, by the people who were not consulted and by the organisations which should have been consulted in order for us to have a better understanding of how this would play when the SI is made. It again raises the question of how consultation is done when there is a significant change in the law.
This is the first of the two intellectual property SIs over which the Government have exercised their judgment to try to assist future negotiations and debates by finding an asymmetric solution. I will come back to this in the next SI. We should not take at face value the view that this would roll forward the exact situation that existed prior to our leaving on a no-deal arrangement. There are changes being made. They may be good and sensible, but they have not been subject to the sort of consultation and debate nor to the costings that would have been appropriate were this an ordinary situation.
My Lords, I want to follow the remarks of the noble Lord, Lord Warner. It is deeply unsatisfactory that the only way we can know the interests of those most intimately affected is if an individual Member of your Lordships’ House relates conversations that they have had to this House. In Grand Committee, the noble Lord, Lord Warner, told us about conversations that he had had but which had not been published because there had been no formal consultation.
The Minister said that he has met relevant stakeholders. We are grateful for that. I hope that, in his reply, he will clarify the issue about the duration of SPCs, particularly for the benefit of those of us who do not follow the detail of what is at stake. I take the noble Lord, Lord Warner, to be saying that a substantive change in the duration of SPCs will take place as a result of these regulations and that this will have a major impact on the industry concerned because of the protection of intellectual property. So this is not, as we have been told all along, a technical issue about rolling over existing regulations. It is a substantive change. This has never been clearly brought out in our proceedings.
Just to be clear, the industry is saying that, because of the way in which the Government have drafted this SI, the period of exclusivity will be less than it would have been in the past. So there is a material change in the financial benefit through the period of protection that was previously given. The industry is worried not just about that aspect but about the signal it gives about whether the Government are going to move away from a gold-standard intellectual property framework. They are worried that this is the first step in this particular direction.
I understand the significant point that the noble Lord makes.
None of this came out in the Explanatory Memorandum’s summary of the non-existent consultation and secret discussions that took place. The only reason this has come before your Lordships is because of the successive conversations which the noble Lord, Lord Warner, has had with the industry. His point seems entirely reasonable. The industry is concerned as to what this means for the wider protection of intellectual property and the big impact it might have on investment in a crucial national industry. This is not a technical issue; it is fundamental. We were not alerted—in any part of the process leading to these regulations coming before the House—about any of these issues.
The Minister said that, since the Grand Committee debate, he has conducted discussions with industry representatives. We should be grateful that, by calling attention to the lack of consultation, this encouraged the Government to engage in more formal consultation after the instrument was laid. In my day, good government involved consulting about instruments before they were laid, not afterwards. The noble Lord, Lord Warner, and I were in the ancien régime when there was Cabinet Office guidance on 12 weeks’ consultation and publication of consultation results to which the Government gave reasonable responses. In this national emergency, all this no longer applies.
I should be grateful if the Minister could bring out precisely—because it is important that we have it in Hansard—what is the substantive change in respect of SPCs and what is in fact at stake in terms of the lesser protection that will be available for crucial intellectual property in the industry. It is still not clear to me from the remarks of the noble Lord, Lord Warner, but since he is doing such a good job of responding to the debate, he may be able to tell us the scale of the impact that this is likely to have. Are we talking about minor changes, because it is calculating differences in dates at which patents were granted, as I understand it, and whether European and UK patents are granted at different times under the new regime? I should be grateful if the Minister could say more and clarify more.
The other significant point about the regulations is that the consultation was not just secret, in the way I set out in my earlier remarks, but in his introductory remarks the Minister did not address the point made by the noble Lord, Lord Warner: that there is still profound dissatisfaction in the industry. All the Minister told us in his rather—if he will forgive me for saying so—bland opening remarks was that he had met industry representatives. He did not say anything about the content of those discussions or what representations were made to him. We only know about the content of those representations because of the remarks of the noble Lord, Lord Warner. I deduced from his remarks that those representatives are profoundly dissatisfied, think that this will be a diminution of the protection of intellectual property in the industry, are worried about the cavalier way in which this has been done and think it might have a big impact on future investment. These are substantial matters. As I said, in the normal course of events, they would lead us seriously to question what is effectively a proposed change in the law.
If we had a proper legislative process, we would be moving amendments and might require formal consultation to take place. It is deeply unsatisfactory that these big concerns are dribbling out only because of the activity of a few noble Lords independently consulting industry stakeholders and pressing the Government to give us some indication of what they have said, while the Government shield behind a claim that these are technical changes, which is denied by the industry. For the Government to say that the consultations that have taken place are necessarily secret is totally unsatisfactory for such changes.
My Lords, first, I repeat that we do not want to move away from the gold standard of IP that we have. Secondly, I make it quite clear that I regularly meet the two organisations referred to, the BIA and the Association of the British Pharmaceutical Industry. The chief executives of both those organisations sit on our Life Sciences Industrial Strategy Implementation Board, so I see them both regularly. I hope that we have a very good relationship and that full and frank discussion is always possible between me and them and between them and the department more generally.
I just want to be clear to the Minister. What representatives of the industry are telling me in the letters and briefings they have sent is that they have interpreted the Government’s behaviour as meaning that they think that the Government is signalling that we are moving away from a gold standard of intellectual property protection.
The reason they say that is that, in this particular case, we will now have two regulators—when we come out of the EMEA, we will have a UK and an EU regulator for pharmaceutical products. I cannot put it any more clearly than this. They are saying that, if you apply for authorisation of a drug under the UK regulator, the period of exclusivity should start from the date of authorisation; it should start not from any authorisation that may have been given by the EU regulator at an earlier date for the drug to be introduced in the EU but from the authorisation when the drug is authorised in the UK. I do not think that I can be clearer than that. There is clearly a fundamental difference of view between the industry and the Government on this issue. No amount of fine words from the Minister is going to conceal that.
My Lords, if the noble Lord, Lord Warner, will allow me, I was trying to say that, first, I want to continue discussions with them and we will do that. I do not believe that we are as far apart as the noble Lord is suggesting; nor do I believe that we are undermining the gold standard in IP that we wish it to achieve.
We do not want to do anything to undermine our large and successful pharmaceutical industry. It is one of the jewels in the crown, and has a turnover of £41.8 billion. I remind the noble Lord that it has seen a large amount of investment in research, particularly since 2016, and considerable new investment from abroad—again, since 2016. This is an industry that is flourishing and will continue to flourish. We believe that the level of investment within that industry that is supported by the SPC system, which ensures that British businesses are compensated for the period of patent loss protection while requesting market authorisation, is very important. Making sure that our law continues to work is therefore important.
The noble Lord, Lord Warner, says that there is a flaw in the SI: he says that there is a policy change. There was considerable debate on the issue in Committee. As I said previously, I do not share the view that there is a policy change here. This instrument keeps in place the existing calculation of SPC duration. At present, it is calculated from the first market authorisation in the EEA, which includes the UK. The instrument ensures that the exact position remains in place after exit and the calculation is the same. It is precisely this kind of deficiency that the withdrawal Act gave Ministers powers to affect.
The noble Lords, Lord Warner and Lord Adonis, then talked about the industry and said that it wants something different. The BIA and the other organisations representing pharmaceutical innovators would prefer the legislation to be changed so that the term of an SPC would be calculated based on only a UK market authorisation. They argue that the exit may lead to industry launching new pharmaceutical products later in the UK and that they may receive later market authorisation than in the rest of the EEA. That would give a period of SPC exclusivity for a longer period than under current laws. I can see why they argue that point: it is perfectly legitimate that they should do so. However, it would be a significant policy change, affecting the whole of the pharmaceutical industry and the NHS. I do not believe that it would meet the Government’s commitment to avoid a cliff edge for businesses by maintaining the status quo, which is what we are seeking to do, on exit day.
I turn now to the commitment that the noble Lord, Lord Warner, sought from me about whether we would commit to a review within two years. As I have already said, I am keen that we immediately start to consult with all those bodies concerned, and more widely—indeed, with everyone that noble Lords can think of—and explore the landscape after a no-deal exit, and also to look at what happens in other events, to make progress on the issues that concern them. As part of those discussions, I am very happy to talk about the timing and scope of any review of the SPC term. The Government have said that they will review the data and market exclusivity arrangements within two years of a no-deal exit—should there be such an exit, and again we have made it clear that we neither expect nor want a no-deal exit—in order to make sure that we remain competitive. I am sure that we can discuss with stakeholders how any review of SPCs would fit in with that work.
The noble Lord, Lord Clement-Jones, asked about unified patent court judgments in the UK. I can tell him that the UPC is an international court and is not part of the UK judicial system. Its judgments are therefore not binding but can be considered, as is the case with any other foreign judgments. That is obviously a matter for the courts.
The noble Lord, Lord Stevenson, also asked about the unified patent court. I can tell him that the unified patent court and the new British patent will commence shortly after Germany ratifies the UPC agreement, although obviously we have no control over what goes on in Germany. Germany’s ratification is currently on hold pending the outcome of a complaint against the UPC to its constitutional court. Finally, I can tell the noble Lord that the London building is indeed ready.
Trade Marks (Amendment etc.) (EU Exit) Regulations 2018
Motion to Approve
My Lords, as with earlier instruments on exhaustion and patents, this was debated on 14 January in Grand Committee, where noble Lords raised questions about the consultation and impact assessment process. Noble Lords also put some questions on technical points specific to this SI, seeking clarification on ongoing proceedings, costs and priority dates of pending applications. I repeat my thanks to all noble Lords who shared their time and expertise with the Committee on those matters. I addressed many of the points raised in my letter of 21 January to Members of the Committee. I hope that my answers were helpful and have met the expectations of noble Lords who took part.
The Government have laid these regulations to ensure continued protection in the UK for EU trademarks, thereby providing businesses with maximum security, clarity and certainty. Under current law, businesses can obtain an EU trademark, which, as a unitary right, provides protection across the whole of the EU. When we leave the EU, that protection will no longer extend to the UK. To address this, the Government will create a comparable UK trademark for every EU right that is registered on and before exit day. These comparable trademarks will inherit earlier filing and priority dates recorded against the corresponding EU trademarks and will be fully independent UK rights that can be challenged, assigned, licensed or renewed separately from the original EU trademark. Each comparable trademark will be created automatically and free of charge, meaning that a minimum administrative burden will be placed on rights holders. Those not seeking to hold comparable UK trademarks will be able to opt out by notifying the IPO. The instrument also sets out the Government’s approach for accommodating the 85,000 trademark applications which are pending before the EU Intellectual Property Office on exit day.
A number of technical issues were raised both during and after Grand Committee. Given my answers in my letter to noble Lords, I shall focus on those outstanding concerns which were raised subsequent to my letter. The noble Baroness, Lady Bowles, inquired in Grand Committee about the effect of priority dates on pending applications and compatibility with the Paris convention. I was pleased to have a meeting with the noble Baroness and trademark legal professionals to discuss these and other matters that she raised. At that meeting I clarified that we believe the instrument is compatible with the UK’s obligations under the provisions of the Paris Convention for the Protection of Industrial Property, which contain rules on claiming international priority.
I remain confident that the chosen approach provides the most practical means for preserving the rights of pending EU trademark applications. In respect of issues identified with the conversion of EU trademarks, I have also confirmed to the noble Baroness that such rights will be preserved via provisions contained in the Interpretation Act 1978. A copy of my letter, which addresses the noble Baroness’s concerns on both the Paris convention and conversion rights, will be placed in the Libraries of both Houses. I found our discussions on these two issues most helpful, and was grateful to the noble Baroness for her valuable insight as a trademark and patent attorney. Building on those discussions, I will ensure that her points are reflected in business guidance to be published by the IPO closer to exit day.
In conclusion, these regulations are vital to ensure that businesses do not lose their trademark protection in the UK, and to ensure the continued effectiveness of our domestic trademark system if we do not secure a deal with the EU. I hope noble Lords will support the draft regulations, which I believe provide businesses with clarity and certainty regarding their intellectual property. I beg to move.
My Lords, first, I declare my interests. I am a retired European patent and trademark attorney, but, if I were to un-retire, I would find myself among those unfortunates who, going forward, would no longer be able to practise before the EUIPO in respect of trademarks and designs. This matter—that a part of professionals’ representation is cut off—is not one we have discussed before. My noble friend Lord Clement-Jones was interested to hear what the Minister had to say on the issue, and to confirm my interpretation that current UK representatives will no longer be representatives is correct.
This SI largely replicates the provision in the withdrawal agreement, so it is not really a no-deal SI; it is the shape of the SI that will happen in due course—if there is a deal—possibly with some minor changes to dates and other things, but I could not see anything that differed from what one would expect under the withdrawal agreement.
As the noble Lord, Lord Henley, has explained, I had a long meeting with him and officials from the department and the IPO; I thank them very much for their time and for listening to my views and those of some representatives. I apologise to the noble Lord, Lord Adonis, but I did a little secret consultation myself, just to make sure that, being retired, I had not lost the plot. What I wanted was a statement that there would be continuity of rights at the point of Brexit so that, although the SI was internally consistent under UK law—it gave clear instructions as to what our courts would decide—it would also neatly fit within the usual conventions. That required only an assertion, which we have effectively had, that the rights continue—rather than dying and, in some way, being resurrected.
The letter that the noble Lord, Lord Henley, has now placed in the Library, and which was addressed to me on 4 February, is interesting. First, he deals with the priority rights that I discussed in the Moses Room in Grand Committee. The second issue I raised was about an EU trademark application that was refused before Brexit but, under the rules, it can be converted to a national application by applying at the EU end for three months. There was concern that there is no mention of what happened to those applications and to that conversion right. Was is lost or was it not? Some representatives thought that it was lost.
The letter refers to the Interpretation Act, and it is worth pointing out what that Act says. It confirms that an Act that repeals an enactment does not affect,
“any right, privilege, obligation or liability acquired, accrued or incurred under that enactment”.
The letter goes on to say that the EU trademark regulation will constitute EU retained law for the purposes of the European Union (Withdrawal) Act 2018; and that pursuant to the power in that Act, it is repealed and replaced by the UK regulation. This solves the problem. There is a definite assertion here that the right to convert will be retained but the conversion will be done entirely before the UK IPO, instead of starting it off in the EU. This general application of the Interpretation Act would apply to any regulations, not just these; it might be applied to those on patents that we have just discussed. That is one reason why I asked that the letter be put in the Library. It is possible that we contemplated this when we were going round the loop of the withdrawal Act, but I had misplaced it in my mind, and that might be the case for other noble Lords.
I am satisfied that it is “job done” on the confirmation of continuity and the issues I sought reassurance on. I am also grateful to the Minister for explaining that the Government will take into account the various other measures we raised, which are much more to do with practice.
The salient point here is that some 60% of trademark applications are made by individuals for their own businesses, without professional assistance. So it is quite important that the advice the IPO is able to give keeps them up to speed with changes that they might not be aware of, such as that they still have the conversion right and for how long.
There is still a matter to be dealt with: for nine months, there are latent rights hanging about. If you file a trademark application, it might look like the way is clear and then, all of a sudden, it is not, because people want to continue with the one they have under the EU. The question is how the IPO is to deal with notification, so that an applicant knows the full picture before making decisions that might be otherwise prejudicial to their rights when deciding whether to go ahead and have notice sent to people or to withdraw their application. My proposal was that they have to have the right to be able to suspend until that nine-month period is over, if it looks as though there is something in their way. Obviously, this is not a matter for this statutory instrument, but it will turn out to be a matter of concern if a significant number of those 85,000 applications are continued with. From what I can gather, it is likely that more than half will be, so intervening applicants will have a difficult nine months to navigate.
My Lords, we discussed this SI in some detail in Grand Committee and so there is very little more to be said. The Minister, in his letter of six and a half pages—or is it eight?—covered a number of points also. We have since then had another letter—I have printed it out on my own machine and have it in front of me and so can measure it; it is a page and a half, if he wishes to know the detail—which has added a considerable amount, including the rather interesting extemporary view that the UK Interpretation Act 1978 confirms different powers about these regulations, and which might be of more relevance in some other areas of work that we still have to consider.
We are very lucky to have the expertise of the noble Baroness, Lady Bowles, available to us on this issue. She has been able to keep us right on a number of points. My point follows from hers in that this SI is moving away from simply trying to establish what continuity would mean in the context of a no-deal exit by offering something valuable to those who hold trademarks in the EU and wish to continue business in the UK after Brexit.
It could be argued—I am not saying that it should be—that it is right to apply what will apply in the EU to this issue: in a no-deal exit, the UK would register those who wished to register UK trademarks here and leave aside the question of what rights trademarks registered in the EU would have here. That is not what the Government have decided. I believe they have agreed that rights registered in the EU will be recognised within the UK. I will not ignore the clear benefit there for consumers, but it must be detrimental to current and future UK holders of trademarks who will not be able to register them in the same way as they would had we stayed in the EU.
I do not think that there is a right or wrong answer to that—it is probably where we would want to get to at some point—but it implies a reciprocal activity on behalf of the EU which is still not present. It is foreshadowed in the withdrawal agreement and may well come to pass. If there is a deal, we would probably expect to have a parallel process. If we will continue to operate on intellectual property on all fours, particularly in relation to data protection, this is exactly where we will have to go. That may be right in policy terms, but it marks out this statutory instrument as different from the others. I do not think that the Minister needs to give us too much of a response, because it is a fact, rather than an issue. If he confirms that this is the situation, it would be helpful to have it on the record.
My Lords, this was the famous statutory instrument which referred to consultation with,
“a small group of trusted individuals”.
We had a long discussion in Grand Committee about who should or should not be trusted at the Government’s discretion. This was not satisfactorily resolved. However, the noble Baroness, Lady Bowles, has continued those conversations; I am sure that her discussions were with wholly trusted individuals and that her further discussions with the Minister have led to improvements in the regime that will follow from the statutory instrument.
I would like the Minister to clarify the issue of renewal fees so that I and the people reading our proceedings fully understand it. This was raised in Grand Committee, and the noble Lord referred to it in his six and a half page letter. As I understand it, the key passage is about what happens when people need to hold two sets of trademarks, rather than one, after renewal. I want to be clear that I have understood this correctly: the letter from the noble Lord, Lord Henley, says that around 10% of trademarks which are renewed each year,
“are held by UK businesses, and so we estimate that 60% of the 1.3 million newly-created comparable UK trade marks will be renewed at an annual cost to UK business of around £2.5 million in additional renewal fees”.
Are those wholly additional fees that businesses and individuals will have to pay, over and above what they would pay at the moment? Have I correctly understood that they need to pay those fees because they are very likely to need to hold two sets of trademarks—for the EU and the UK—in parallel? This has come out only through our consideration of this instrument and was not clear in the initial consultation or the Explanatory Memorandum. I am not in this industry, but this would seem to be a significant additional burden. People need to be aware. Case by case, we are seeing all of these additional burdens as a result of a no-deal Brexit. It is deplorable that we are imposing additional costs on businesses and individuals in this cavalier way.
My Lords, I am very grateful to all those who have spoken. I was particularly grateful to hear the noble Baroness say—I think I have this right—the words, “job done”. I hope we can get this order on the statute book. Although the noble Baroness brings great expertise to this matter, there are others—I dare say the noble Lord, Lord Stevenson, would agree—who do not have that same degree of expertise. There is to some extent the sense of cold towels wrapped around our heads and strong black coffee as we consider these difficult and technical matters. We are grateful for that expertise. Even if the noble Baroness has now retired from this area, we will continue to discuss these issues with her and other trusted individuals, with the noble Lord, Lord Adonis, and with anyone else—trusted, untrusted or otherwise—who has a relevant concern in these matters; it is very important to do so. As the noble Lord, Lord Stevenson, put it—so well, as always—there are benefits to the owners of trademarks and benefits to consumers; it is therefore appropriate that we strike the right balance between those two groups. Dealing with conflicting rights is one of the difficult things that those in government have to do.
The noble Baroness asked about representation at the EU Intellectual Property Office. The EU trademark regulation mandates that a representative must be based in an EU member state in order to represent clients before the EU Intellectual Property Office. Officials in the IPO and in the Ministry of Justice are aware of this issue and have held many discussions with representative groups. As we turn to the future economic partnership, we will seek a comprehensive arrangement on trade and services, including professional and business services.
I want to make it quite clear, as I did in Grand Committee, that we believe it important that the guidance we offer to business is targeted and clear, particularly as the noble Baroness stressed the number of unrepresented businesses. Although the sensible thing would be to take advice from the noble Baroness’s profession, clearly many people prefer to avoid those in the legal and other professions. We will ensure that the right guidance is offered and highlight the importance of searching the EU register. I am grateful to her for raising those issues again.
The noble Lord, Lord Adonis, raised the subject of renewal fees and costs and referred to some remarks from my letter. Analysis of existing UK rights shows that the average cost of renewing a comparable right will be approximately £300, due every 10 years. If rights owners do not wish to renew their UK trademark, for example because they have no interest in preserving UK protection, they do not have to pay the fee. But, as the letter makes clear, businesses will incur additional costs should they want to enforce their UK-compatible rights or defend them against a challenge. That cost will vary depending on the length of proceedings and the amount of evidence considered. However, as the letter says, the IPO estimates that the total cost to UK businesses would be around £330,000 per year. The noble Lord, Lord Adonis, can make use of that information as he wishes in any discussion of the merits or otherwise of Brexit.
On his last point, the noble Lord, Lord Stevenson, will appreciate that it is only possible for us to pass legislation affecting the UK. The withdrawal agreement will provide for reciprocal measures with the EU, when and if that is agreed. I believe I have answered all the questions put to me.
Broadcasting (Amendment) (EU Exit) Regulations 2019
Motion to Approve
My Lords, now that we have disposed of the business expected to be brief, I am glad that we can get on to the main business.
These instruments are being made under the European Union (Withdrawal) Act 2018. They make appropriate amendments to correct deficiencies in domestic broadcasting law in a no-deal EU exit scenario. I think we can all agree that, no matter what our respective views on EU exit are, we need to ensure that television services available in the UK are regulated properly and that the public continue to be effectively protected from harmful content after we leave the EU. We also need to make sure that the same laws and rules that are currently in place in the UK continue to apply, providing continuity and certainty.
I have to stress that these draft regulations address only the necessary technical amendments to ensure that the law is operative on exit day, rather than introducing sweeping new powers into law. The Delegated Legislation Committee has been content with these draft regulations and Her Majesty’s Opposition in the other place agreed that,
“this is a necessary measure that has to be taken”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 29/1/19; col. 5.]
As noble Lords may know, the European Union’s Audiovisual Media Services Directive currently underpins several pieces of UK primary legislation, including the Communications Act 2003. We are therefore using Section 8 powers from the European Union (Withdrawal) Act 2018 to fix deficiencies in primary legislation to ensure that Ofcom continues to have jurisdiction over services that are available to UK audiences, or are established in the UK.
Let me summarise the main provisions of the draft regulations and why they are important. If we leave the EU without an agreement in place, the Audiovisual Media Services Directive will no longer apply. The directive—“AVMSD” as it is commonly known—establishes minimum content standards and provides for freedom of reception and retransmission for audio-visual services such as television and video on demand. Crucially, AVMSD provides that a service which is regulated in one member state can adhere to that country’s rules while being available all across the EU. Services are thus allowed to operate with a single regulator’s licence, regardless of where the service is received in the EU. This is known as the country of origin principle.
In the event of the UK exiting the EU without a deal, the country of origin system of authorising services would be deficient, as reciprocal arrangements created by AVMSD would no longer exist. Without the amendments carried out through this instrument, television services originating in EU member states would still be allowed to be broadcast in the UK without a licence, thereby leaving the UK with no possibility of regulating the content of such services and protecting UK viewers from harmful content. The draft regulations remedy this deficiency by introducing the country of destination principle, which will require any television service that is available in the UK, whatever its country of origin, to be licensed by Ofcom.
However, a licence will not be required for television services provided by broadcasters in those countries that have signed and ratified the Council of Europe’s European Convention on Transfrontier Television, known as the ECTT, which the draft regulations would implement into UK law. The ECTT was signed and ratified by the UK in 1993, but it has not been implemented into UK law because of a disconnect clause in the convention which provides that EU member states must apply the relevant EU legislation in their mutual relations instead. The convention provides for a similar system of freedom of reception and transmission between the parties to the convention as the country of origin principle. All but seven of the EU 27 countries are parties to the ECTT.
While the convention cannot be considered a full replacement for the AVMSD, the ECTT sets out some minimum content standards for cross-border services and a system of mutual co-operation to enforce the standards. Furthermore, both the AVMSD and the ECTT provide that a majority of transmission time on a television channel must be reserved for works of European origin. The AVMSD refers to the convention in its definition of European works, and this in turn safeguards the UK’s status as a producer of European works, which is important for content sales and the UK production industry. This has been confirmed by the European Commission.
The draft regulations also ensure that services with Irish language content— RTÉ One, RTÉ 2 and TG4—continue to be available in Northern Ireland. The UK made those commitments in the Good Friday Agreement, and later through the European Charter for Regional or Minority Languages. This is necessary because these services are established in Ireland, which is not a party to the ECTT, so under the changes introduced through the draft regulations, they would now need to be licensed by Ofcom. However, we are making these services exempt from this requirement, to keep within the spirit of the Good Friday agreement.
The draft regulations introduce a new power for the Secretary of State, who will be able to designate regulated electronic programme guides after consulting with Ofcom. This was a necessary change because Ofcom’s jurisdiction depends on whether services are available on UK EPGs. We need the power to amend the list of regulated EPGs if there are new EPG entrants into the market. Being a designated EPG does not in and of itself carry any burdens on the companies who provide EPGs. Rather, creating this category was a necessary change to ensure that the legislation around licencing continues to operate effectively.
To conclude, I believe that the draft regulations are necessary to ensure that the UK statute book works on exit and that audiences are protected from harm, and I commend them to the House.
My Lords, the Minister will be pleased to hear that it is not my intention to oppose to this instrument. As he indicated, in the event of a no-deal Brexit, we need to ensure that those companies that provide at least linear television services in the UK are properly licensed—whether they are based here or elsewhere—and that viewers are protected. However, I take a very different view from the Minister in describing this instrument, particularly the description we find in the Explanatory Memorandum. Paragraph 12.3, for example, explains and justifies the lack of an impact assessment on the grounds that,
“the instrument will maintain the status quo as far as possible”.
It also suggests that the only inconvenience broadcasters with services available in the UK will face is the,
“need to familiarise themselves with new licensing system and guidance as proposed by Ofcom”.
Both lines show significant complacency on the part of the Government and are a massive oversimplification of what will happen if the instrument is needed.
The Explanatory Memorandum states explicitly that,
“no, or no significant, impact”,
on the private or voluntary sector is foreseen. Frankly, this is nonsense. When this instrument was debated in the other place on 29 January, the Minister there, Margot James, was forced to admit that at least 50 or 60 channels will for the first time be required to be licensed by Ofcom—hardly evidence of no, or no significant, impact.
Even more significantly, the Minister appeared to acknowledge that the loss of involvement with the AVMS directive regime, including the country of origin principle, should be of concern to us in this country, noting that the UK currently has a sizeable share of the entire European television market. As noble Lords will be well aware, we have something like 1,200 of the 3,000 channels across the whole of the EU. She said:
“A sector that grows at 25% more than the average rate of the economy is certainly a success. In part, that success is indeed down to the very beneficial regime, the AVMSD”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 29/1/19; col. 7.]
So the loss of that “very beneficial regime” can surely be expected to have rather more than,
“no, or no significant, impact”.
The reason, of course, is that owners of the 600 or so channels currently licensed in this country but shown in other EU countries will now need to make new arrangements, not least by seeking licences elsewhere in the European Union. As I am sure noble Lords are well aware, to achieve that, they will either have to move their headquarters from the UK to another EU 27 country, or at the very least move some of their editorial staff to ensure that they have what is known as a “meaningful presence” in a different European country.
We already know that Sony is moving its headquarters to the Netherlands. We have already heard about Discovery Channel, Turner and NBC planning the movement of staff. Even the BBC is planning the movement of staff. Hardly surprisingly, Ireland, Germany and the Benelux countries—Belgium, the Netherlands and Luxembourg—are all actively targeting UK-based companies to persuade them to move to their country so that they can benefit from the AVMS directive and the current country of origin regime.
Given that we do not know yet which companies are likely to move their headquarters or their staff, and we do not know where they are likely to go, or how many staff are likely to go with them, it is difficult to be clear about precisely what the impact will be. However, I would argue strongly that there should have been a detailed assessment of the likely impact. We should have had, for example, detailed discussions with each of the potential receiving countries about what is meant in their country by a “meaningful presence” to ensure that a company would be allowed a licence in that country. Indeed, it is somewhat unclear what a meaningful presence in this country would be. Could the Minister give us a definition of what would amount to a meaningful presence here, enabling a company to get a licence here?
We know that some UK-based companies already have staff in other countries. I am not suggesting that there will be a total flood of people leaving, which would be catastrophic for the industry, but it will certainly make a significant dent in our world-beating broadcasting sector. Does the Minister believe the words in the Explanatory Memorandum—that there will be,
“no, or no significant, impact”?
Can he justify why we have not had an impact assessment for this instrument?
I am aware that when the Minister responds to my query he may refer to the convention on transfrontier television—the ECTT. He may argue, just as the instrument does, that implementing the ECTT—which, as he rightly pointed out, we signed and ratified as far back as 1993—provides a similar system of freedom of reception and transmission between the parties to the convention as the AVMS does between EU members. If the Minister uses that to justify the claim that,
“the instrument will maintain the status quo as far as possible”,
I suspect he will be in significant difficulty, because there are major problems in making that claim.
The Minister said that “only seven” of the EU member states are not members of the ECTT. However, only seven is more than 25% of the EU 27, so that means that UK companies that wish to have their channels shown in Belgium, Denmark, Greece, Luxembourg, Sweden or—especially important in this regard—the Netherlands or Ireland, will have no choice but to move HQ, as I said, or at least to move some staff, to another EU country. So will he acknowledge that describing the ECTT as a “similar system” is not a widely shared view?
Indeed, PACT—a trade organisation representing, among others, UK television companies—notes that the enforcement regime of the ECTT has nothing like the same ultimate recourse to a body such as the EU Court of Justice. COBA, the Commercial Broadcasters Association, describes the ECTT as having significant limitations. Our own House of Lords EU Select Committee, in HL Paper 135, said that,
“neither the Transfrontier Television Convention nor coproduction treaties are viable alternatives for trade”.
In the other place, the House of Commons DCMS Select Committee concluded just last month that the ECTT was “severely limited”.
Even the former Digital Minister, Mr Matt Hancock, was forced to admit when giving evidence to the EU Select Committee, that the ECTT was agreed in 1993, and that,
“in this space, that is a long time ago”.
No doubt because of that huge distance, another difference appears, in relation to how the ECTT handles advertising, compared with the AVMS directive.
If the Minister needs any further convincing, he should surely note what the creators of the ECTT itself said. What did the Council of Europe say about it? It published a paper very recently—its 2018 report, Brexit: The Impact on the Audiovisual Sector—which says:
“In the absence of the COO principle, UK-based companies would face new barriers when broadcasting to Europe and could choose to relocate their headquarters to another member state, with the consequent direct negative effects on employment in the UK, and additional indirect losses for the UK creative economy”.
Even the creators of the ECTT do not appear to think of it as the solution to the problem. Faced with all this, does the Minister stick to the view that the ECTT is a similar system to the AVMS directive, that if we implement it there will be no, or no significant, impact, and that the status quo is being maintained? Surely he cannot agree with any of that.
I turn now to another aspect of the instrument that definitely does not meet the Government’s claim to be maintaining the status quo. By waiving any UK licence or notification requirements for on-demand services other than UK-based ones, they will intensify rather than mitigate the already uneven playing field between linear and the increasingly popular on-demand services. It is already bizarre that, in relation to non-EU so-called third countries, we rely on the host country’s regulator to provide a licence, and no UK licence is required, even if the services are being made available here in the UK.
Of course, I am prepared to admit that, in a sense, under the AVMS directive that is also true for on-demand service providers coming from the other EU 27 countries. But there is a major proviso: there is no formal legal dispute mechanism through the European Commission in the alternative arrangements. We will suddenly deny ourselves any formal dispute mechanism, at least for on-demand services coming to the UK from the EU 27 countries.
The instrument makes a major change to the status quo. COBA gives an excellent example of why this is a problem by considering what would happen if we in the UK wished to introduce new rules for on-demand services over and above the standards required by the EU 27 under EU rules. It suggests considering what would happen if, for example, we in this country wished to place further restrictions on the advertising rules for foods high in fat, sugar and salt—something I believe we are very likely to do in the near future. In such a case, we would be reliant on the EU, which we will have just left, to enforce those new rules for us. That seems highly unlikely, not least when the EU 27’s on-demand services are already meeting arrangements in line with EU requirements. Why would they want to accede to our wishes in those circumstances?
More generally, this instrument could have provided a vehicle to address the uneven playing field between linear and on-demand services. I regret that it did not but, to be fair, the Government acknowledge the problem. In the other place the Minister, Margot James, said:
“We recognise that after exit we may need to consider a long-term and future-proofed approach to video-on-demand regulation”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 29/1/19; col. 8.]
It is a widely held view, which I share, that this issue needs to be addressed as quickly as possible. Will the Minister go just that little bit further than Margot James and tell your Lordships’ House that, after exit, the Government will develop plans for a long-term and future-proofed approach to video on demand?
It is clear that this instrument does not live up to the claims made for it in the Explanatory Memorandum. That said, it is still needed to provide protection for UK citizens and a degree of certainty for the providers of broadcasting services here, but I hope I have made clear that exiting the EU will be accompanied by additional burdens for our hugely successful broadcasting sector and the wider creative industries. I hope the Minister will acknowledge that this will be the case and commit the Government to doing all they can to protect our creative industries by, for example, maintaining a strong copyright regime and the existing very successful production incentives of tax breaks. Above all, would the Minister be at least willing to pick up the recommendations from my noble friend Lord Clement-Jones and many on these Benches who have been calling for a rethink on some of the elements of the proposed new immigration system so that broadcasters and others in the creative industries can continue to access highly skilled talent from the EU 27 after Brexit?
My Lords, I support that excellent speech from the noble Lord, Lord Foster of Bath. It was extremely well argued and well researched and brought out a series of very real concerns. I have sat patiently through these discussions. We are seeing how Brexit will potentially destroy some of the jewels in the crown of Britain’s industrial and economic capacity. There is no more striking case of this than in broadcasting, which is one of Britain’s great success stories.
My experience of this is as a member of your Lordships’ Internal Market Sub-Committee of the European Union Select Committee, which did a thorough report on non-financial services and took evidence from broadcasters. At the time I was really shocked by the concerns expressed about the viability of their activities in this country. There is no doubt, whether to a greater or lesser extent, that what we are talking about will destroy opportunities for hundreds of young people who would otherwise have the chance of really fulfilling jobs in the media and broadcasting sectors.
No one I recall coming across in this field believes that the European convention is a full substitute for the EU directive. I would like to hear on what basis the Minister thinks it is. It clearly is deficient in that it is not comprehensive and does not have any means of enforcement through the Commission and the court. The fact is our industry is showing that it has no confidence in this poor substitute by the fact so many companies are relocating to the continent.
One thing about the statutory instrument really worries me. What we are doing with it—I can see why from the point of view domestic regulation—is saying that from now on we will no longer have the country of origin principle, but the country of destination principle. That will be used against us by commercial interests on the continent that want to prevent full UK access to the market. They will say, “You want to switch to a country of destination arrangement. That means we insist on the right to regulate your right to broadcast in our country”. This is very bad news for the British entertainment and broadcasting sectors. The Minister has many difficult questions to answer.
My Lords, I share the concerns so powerfully expressed by the noble Lord, Lord Foster. His speech demonstrates that these regulations, like so many of the exit regulations we are debating, raise fundamental policy questions. They are being presented under Section 8 of the withdrawal Act and other powers as merely transitional provisions designed to tidy up loopholes, but they are not. They raise fundamental issues of policy.
I have a specific question for the Minister concerning those broadcasters based in EU states that are not parties to the Council of Europe’s European Convention on Transfrontier Television. As the Minister and the noble Lord, Lord Foster, have explained, there is currently no need for Ofcom to license them because they are based in another EU state. As I understand these regulations, and the Minister will correct me if I am wrong, broadcasters based in non-convention states, including Belgium, the Netherlands, Luxembourg, Ireland—apart from for Irish-language programmes—Sweden and Denmark will now need to be licensed by Ofcom. Is it right that they will have to apply for a licence on 30 March or before then, or will there be a transitional provision by which they will be granted one automatically by reason of the fact they were previously covered by the EU directive?
My Lords, I thank the Minister for introducing the instrument before the House this evening. I should declare my interest: I was the Shadow Minister in the other place for the Conservatives when the Ofcom Bill was taken through. I was an adviser to the Conservatives on the committee that covered film policy, and also devised a film policy for the Conservative Party that did not go very far but concluded that it was in their most favoured interest to have a tax break. I have been a beneficiary as a modest investor in films of which I am very proud—not many have been released in the cinema, but they have been broadcast.
The noble Lord, Lord Pannick, asked the very same question on procedure that I would have asked, but I have a very specific question for the Minister that I hope is relevant to this directive. Broadcasters and film producers have benefited from a very specific budget line, which is a legal instrument empowering finances for co-productions throughout the European Union, from which British producers and others have benefited. A number of Danish and Swedish co-productions have been shown on British television, which have been of huge interest to viewers in this country. Going forward, will we benefit from that budget line to the same extent and will co-productions still be viewed as a positive development? It will be of great interest, I am sure, to the film and broadcasting industry to know if that is the case.
My Lords, I have a very short question for the Minister again on this issue of consultation. The broader issues were raised in the excellent speech made by the noble Lord, Lord Foster. On consultation, in paragraph 10.1, it says:
“Ofcom, as the audiovisual regulator, were consulted in drafting this instrument”.
Was Ofcom the sole body consulted in the preparation of this instrument? In light of the speeches that have been made in the House, I find that extraordinary, given the range of interests, companies and organisations affected. Will the Minister say why Ofcom was the only body consulted, given the broader themes that have come out? It is extraordinary in light of the speech made by the noble Lord, Lord Foster, to read paragraphs 7.2 and 7.3 in the Explanatory Memorandum. You would think that you were talking about two entirely separate sets of proposals. Paragraphs 7.2 and 7.3 make it sound as if these changes from country of origin to country of destination are the purely technical and unavoidable dotting of commas and crossing of “t”s as a result of leaving the European Union. Only as the speech made by the noble Lord, Lord Foster, unfolded did we realise that these are fundamental changes to the whole broadcasting regime in Europe that could have extensive consequences. In that case, why was Ofcom alone consulted?
I rise briefly to support my noble friend the Minister. It is a difficult situation in broadcasting, and I think it is sensible and creative of DCMS to make use of the Council of Europe treaty. Whatever your views on Brexit, we need to be ready for exit day. This ensures that 50 or 60 channels that will continue to come in from the EU can be regulated against Ofcom standards from 29 March, or at the end of the transition period. Along with the noble Lord, Lord Adonis, I would be interested to hear who has been consulted about the detail of this. There will be scope in the future to look at the longer-term arrangement. As an ex-Minister and ITV director, I look forward to that, including looking at the future of new broadcasting methods, video on demand, the effect of social media, and so on.
My Lords, this is an interesting debate and many points that we will be wrestling with well beyond 29 March have been raised in the course of it. I want to begin my remarks, as I will every time I stand on such an occasion, by bemoaning the fact that so many man and woman hours, by able civil servants, have been necessary to plough their way through successive Acts of Parliament to disentangle and extricate details that can be strung together in order to release them from a perceived enslavement to European legislation—a freeing of them, a “Fidelio” moment, that brings them into the light of day—so that they can then stand on their own feet as part of a self-defined and perfectly functioning legal system in this country. It is very regrettable that all this has had to happen. I used to do textual analysis as a favourite aspect of my studies. I promise that this would defy any of even the most complicated pieces and puzzles that I have wrestled with in the past. We are where we are, but I feel the need to say that. Again and again, hundreds of times, we are going to have to express regrets that all this energy, vitality and brilliance of mind has been tied up into producing what are effectively a strung together set of proposals that get us over the line at the end of March in the event of there being no deal.
Having said that, the second rather general thing that I want to say, which echoes things that have been said by others, relates to consultation. Again and again, that is where my eye goes first when I get these Explanatory Memoranda. Once again, I wonder that only Ofcom has been consulted, when many other bodies have been mentioned in the course of this debate as being stakeholders in all that is about to happen. Surely there might have been consultation in those cases. We are working under pressure, and impact assessments and consultations are both reduced almost to nothing, and we can only regret that. In a previous debate which I was sitting in your Lordships’ House for, I overheard the discussion between my noble friend Lord Adonis and the noble Lord, Lord Warner, who is not now in his place, about what we might have expected in such pieces of secondary legislation, according to the rule book, as it were—12 weeks of consultation, a published account of the results of that, and all part of the debate going forward. Even though I stand here wanting to narrow the considerations that I address to the particular point of keeping something legitimate on the law book to allow us to take that step, I feel it necessary to express regret about the levels of consultation and openness. I do not know what my noble friend Lord Adonis thinks about those who are trustees and on the inside circle who were consulted, but I know there are people in the industry, as far as this one is concerned, who have things to say and whose voices would have been very legitimate in bringing us to this point.
When the matter was debated in the other place, there was a lot of reference to the fact that meaningful presences were beginning to appear in countries on the other side of the Channel. The Minister was asked if she could put a figure on them. She could not and did not. At the same time, we have heard that Sony has already done this, and others look as if they are going to. It is a legitimate thing to ask, regarding the impact of this proposal, to what extent we feel this is going to continue and to be a worrisome factor.
This is a way of coping. The memorandum is my main interpretive document, because while I can read complicated things, these wretched SIs are beyond complicated. No doubt the noble Lord, Lord Pannick, takes them in his stride, with his paracetamol in the morning or something. I thought it was an honest attempt, at the level of getting us from here to there, to look at all the angles that need to be looked at—in a perfunctory manner, yes. I am not an expert in picking up the details of difference between the AVMSD and the ECTT, for example, but it seems to me that the countries that are not in the ECTT, in so far as they are given six months to look at how they are going to harmonise themselves with the proposals being made, have been offered something, anyway, and Ireland seems to have been treated very properly indeed, with the reference to the Good Friday agreement thrown in.
I did not find, granted the narrow concern in front of us here, that there was much I wanted to quarrel with, but in terms of the issues we are bound to go on wrestling with when this particular dust has died down, we can only note what the noble Lord, Lord Foster, and others have said and recognise that this will not be the last word.
My Lords, I have a very short question for the Minister. What would his advice be to UK broadcasters when it comes to working with those countries that are not party to the ECTT? I know that many broadcasters are concerned that these new regulations will not cover the areas that at the moment they just take for granted as far as European-wide broadcasting is concerned. What about those countries, other than Ireland, that are not party to the ECTT?
I cannot always keep up with the noble Lord, but I will try. I am very grateful, as I said in our last outing, for his interest in DCMS matters, which is fairly new.
I shall start in a fairly random order with answers to some quick questions before we get on to some of the points that the noble Lord, Lord Foster, made. The noble Lord, Lord Pannick, asked whether non-ECTT EU countries would be required, therefore, to be licensed in this country. The answer is yes: we have identified 50 to 60 channels which may need a licence from Ofcom in order to continue to be received in the UK. These are mainly specialist minority channels, religious channels and adult services.
May I ask a question in relation to that? Would it not be more sensible, given that these broadcasters have been broadcasting into this country already and have been licensed in an EU member state, to grant them a licence automatically, rather than their having to apply? Then, of course, Ofcom would regulate them thereafter. If there is a problem, Ofcom may impose conditions or sanctions on them.
If I am allowed to continue, those services that now need to apply for a licence so that they can continue to be available to UK audiences will have a grace period of six months, so they will continue to broadcast into this country. They will have six months to apply for a licence. It is necessary for them to apply for a licence because they should still be regulated by Ofcom in this country; otherwise we cannot control what they produce because we will not have recourse to the EU dispute resolution services. Of course, the six months is not a difficult problem for them because they start on the same basis—today, they are regulated by the AVMSD. We will start on an equal footing for Ofcom to begin to regulate them after the grace period of six months.
I am grateful to the Minister, but that does not address my point. Why should these broadcasters, who are already broadcasting into this country with, presumably, no difficulty at all, have to go through the administratively burdensome task of applying for a licence after six months? Why should Ofcom have to consider the details of their case and grant them a licence? Would it not be more sensible to say, “Let us continue the status quo, let us deem them to have a licence and, thereafter, Ofcom can regulate them”? Why a new licence? That is my question.
Effectively, that is what is happening after six months. They are being allowed to continue for six months, after which they will have to have a licence. The reason Ofcom is licensing them is so that, in the future, we can make sure that the content they produce is in accordance with the licensing conditions, which we would not be able to do if we were relying only on the AVMSD.
The noble Lord, Lord Puttnam, asked about the Ofcom response and whether there was anything positive or negative. First, there was not a response per se, so it was not asked that question. It was, of course, consulted and the basis of this SI—here I have to disagree with the noble Lord, Lord Pannick—is not trying to create new policy, because all it is trying to allow is for television channels that would otherwise not be regulated to be regulated, because the method by which Ofcom regulates channels is using the AVMSD, and that will not apply any more. Where the noble Lord, Lord Puttnam, is correct is that he gets to the crux of the problem, which is that leaving the EU is the issue that may or may not create a problem for broadcasters, not the actual details of this SI.
The noble Baroness, Lady Crawley, asked what advice I would give broadcasters. My advice to them would be to read the technical notice that we published in September: it precisely answers the question of what they should do and gives such things as the order of priority for being recognised in EU countries, whether it is establishment criteria or technical criteria such as satellite uplink. That is explained there and it makes the point, which I shall come to later, that ECTT may not be the answer in every case and that they should take advice and will possibly be required to have a licence. I shall come to that in a minute. I was foolish to think this would be quick.
The noble Lord, Lord Foster, mentioned video on demand. It is true that one of the differences is that the ECTT does not cover video on demand because, as noble Lords mentioned, it is a relatively old convention. I have to echo my friend in the other place: we are aware of the need to consider a long-term approach to regulating those video on-demand services that are available in the UK, but we cannot do it in this statutory instrument. It would be new policy, to take the point of the noble Lord, Lord Pannick, if we started regulating video on demand. There are some video on-demand channels today, for example, that come from America and are unregulated. We accept that it is a problem and we will have to deal with it in the future, but not through this SI.
The noble Lord, Lord Foster, and my noble friend Lady McIntosh talked about support for the sector: I think they were talking about the creative industries in general rather than just broadcasting. There is no change in the direct impact on such things as creative sector tax relief, which will still apply because they are established in UK legislation and the cost is entirely borne by the UK Exchequer. We have provided reassurance that the Government will underwrite the payments of awards for programmes such as Creative Europe, and have entered into a number of bilateral film and television co-production agreements with other countries, including Canada, Australia and China. I think my noble friend was talking about co-production in particular. We are also party to the Council of Europe’s Convention on Cinematographic Co-production, which will continue to operate after exit. There is a new version of that convention which we are intending to sign.
Lastly, and very importantly, this SI means that, by implementing the ECTT, UK content will continue to qualify as European works. The EU Commission has confirmed that will be true, even if we leave with no deal.
Presumably this is potentially one of the measures in the £39 billion package that we will agree if we have a deal on leaving, because that particular line of the European budget, to which we will have been subscribed in this seven-year period, relates to co-productions. It was very specific, and has brought benefits to this country. I do not expect my noble friend to have the answer at his fingertips, but I would be grateful if he could write to me.
I thank my noble friend. I do not have it at my fingertips—mainly because this is a no-deal SI, and that is the basis on which I have prepared—but I will write to my noble friend with that answer.
The noble Lord, Lord Liddle, mentioned in a rather pessimistic way that this was the end of the jewel in the crown of broadcasting. I was not sure whether he was talking about broadcasting or the creative industries. I have mentioned that we will continue to support the creative industries. I agree that they are a jewel in the crown. We are, of course, aware of some reports in the media about broadcasters relocating their licence to other countries. But the reports also suggest that companies are relocating only a minority of their workforce, in order to comply with the licensing requirements. There are no signs of a mass exodus from the UK. It is too early to tell, but the technical notice spells out clearly that it is not always necessary to transfer even the head office or the editorial elements of a company to qualify for an EU licence under the AVMSD. Most broadcaster satellite uplinks are in France or Luxembourg, so, if you can use technical methods such as the satellite uplink, technically you can get a licence in one of those two countries because that would bring you under the jurisdiction of the AVMSD.
This SI does not relate specifically to the creative industries; it is more to do with the broadcasting industry. There is a link between the broadcasting industry and the creative industries, but this deals with things such as production, which have historically tended to follow broadcasting. We have not made that assessment yet, because it is too early to tell, but clearly there is the possible danger that, if all broadcasters move their editorial and head offices to an EU country, production might go with them. Obviously, that would depend on where they go. It is too early to tell on that specific point, but the tax credits and other things I talked about will specifically help the creative industry, rather than broadcasters.
I am grateful to the Minister for answering the points I raised, but I am concerned about two things. First, I am a bit disturbed to hear that the Government are reading about what is happening in the newspapers, rather than being in constant consultation with this important sector of the industry. Secondly, if there were good will, the European convention might be an adequate substitute for European regulation; but in this situation we are talking about no deal, where there will be no good will.
We are not—as noble Lords might have realised—reading about this only in the papers, although we do read them. We have had extensive consultation—not perhaps the public consultation where all pros and cons are publicised, as the noble Lord, Lord Adonis, would prefer. But noble Lords should be under no illusions: we have had extensive consultation on this situation and this specific SI, not only with Ofcom, which has been instrumental in drafting the SI to address the problems of regulation of television services—how they should be construed and defined—but with the sector. We have organised round tables at ministerial and official level. We have included AETN, AMC Networks, BBC Studios, Channel 4, Discovery Channel, Disney, ITV, NBCUniversal, Nordic Entertainment Group, Sky, Sony, WarnerMedia, Viacom and Viasat. We have met these and further broadcasters on a bilateral basis, because a lot of these discussions are commercially sensitive, depending on what they are going to do with their establishments to meet the problems of Brexit. I reiterate that this is an issue about Brexit, not about this SI, which is about the regulation—making sure that a regulatory system exists if we have no deal.
I take that point, although I would not bet on it myself. On that point, I emphasise that the ministerial round tables took place not just once but regularly between August 2016 and March 2017, led by the Secretary of State, and in March and July in 2018, led by the Minister. But I take the point about explaining that. The difference between this and the SI we talked about the other day is the commercial sensitivity of the decisions that have to be made in moving head offices, the effect on the workforce, and so on.
I will address the general issue of whether we are being complacent about relying on the ECTT. We acknowledge that it might be possible that some services will require two licences—one for the purposes of the AVMSD, and one for Ofcom—because this is the case for services which are available in both ECTT and non-ECTT countries. In the way that these services are received—by satellite—it is difficult to exclude some countries from the distribution. There are about 500 Europe-facing services out of the 1,200 that Ofcom currently licenses. To date, we are aware of about 130 licences moving. It is fair to say that broadcasters are concerned about the risk of dual regulation, and are reluctant to rely on the ECTT—it is considered an untested convention, as EU law has been in place for so long. Nevertheless, I am sure noble Lords would agree that we should not ignore conventions and international agreements that we have signed up to, nor should the other countries which have signed them.
If we follow the Minister’s logic, he said earlier that there are about 50 or 60 channels that are currently not EEA members but which are based there, and which will need a licence. They will get a six-month period, a point raised by the noble Lord, Lord Pannick. In view of what the Minister is saying, is it not quite likely that the number of channels that are in EEA EU countries will themselves decide to get an Ofcom licence? What assessment has he made of the number that may well choose to do that, and in considering that, is he aware that the latest information I have received is that only one company is considering basing all of its planning on the ECTT? Following from that, presumably there will potentially be a large number of people wanting licences from Ofcom, so can he also tell us how long it will take Ofcom to deal with each licence and whether it will be able to get through the requisite number in the six-month period?
That was not the point I was making. The point is that I understand that it is quite likely that a number of companies that are providing services to the UK, which could rely on the ECTT to not require a licence, will, none the less, make the decision that it is in the best interests of their protection to seek such a licence from Ofcom. Presumably, they will be required to do it within the same six-month period, so there is a potential problem with the number of licences that Ofcom can handle.
I will give a specific example: it could be in relation to the differences that exist in the advertising regime, to pick up the point I raised earlier in my initial contribution about any changes that we might make. Given that there is not a formal legal redress system under the ECTT, they may feel it better to have a licence here and simply stick to the rules that we impose.
Of course, that is a possibility that was not available to them under the AVMSD, and it may be of benefit to them. It is impossible to say. I agree that they may do that. I think it is unlikely, but the noble Lord is absolutely right that it is possible.
Very few services would be able to rely solely on the ECTT. First, the main broadcasters already have a physical presence in the EU, which brings them into EU jurisdiction. As I said, it is also extremely difficult to limit services to being available in purely ECTT countries because of the way that satellite transmission works. One of the problems with the AVMSD is that it does not set down any hard and fast rules about which services fall to be regulated; it talks about services receivable on standard consumer equipment, which is a benefit that the new Ofcom definition will address.
To date, we are not aware of any companies currently licensed in the UK which intend to rely on the ECTT. The smaller companies based in the UK which provide an EU-facing service only would be able to access the AVMSD market under the technical criteria, based on their satellite uplink. Therefore, I do not think we are being complacent about relying purely on the ECTT. The evidence for that is the fact that in the technical notice, we specifically said:
“If the service is available in the EU and only available in one or more of the 20 ECTT countries noted above, freedom of reception should be permitted in accordance with ECTT. However, you should seek local legal advice to check how national law deals with ECTT obligations to permit freedom of reception of the service and what action (if any) needs to be taken … You should be aware that you may need to have two licences”.
We have been clear on that.
Finally, I confirm to the noble Lord, Lord Foster, our commitment to regulate video on-demand services. Just to reiterate, a letter that my honourable friend the Digital Minister wrote to Kevin Brennan in the other place says that the Government are aware of the need to consider a long-term approach to regulating video on-demand services in the UK but that such changes cannot be introduced under the draft regulations.
I hope that I have covered most of the points that noble Lords raised. I am grateful for them.
Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018
Motion to Approve
My Lords, I hope I shall speak also to the other three sets of employment rights regulations before the House on the Order Paper. These SIs are part of a package of measures that the Government have promised to introduce to make sure we are prepared in the event that we leave the EU without a deal. It is important to remember throughout this debate that these changes will not be needed if there is a deal. The SIs in front of us make amendments to EU-derived employment law in both Great Britain and Northern Ireland.
As noble Lords know, new directives agreed in the EU are transposed into UK law. The act of the UK leaving the EU therefore does not remove these rights, as they are already in UK law. In passing the European Union (Withdrawal) Act, Parliament gave the Government the ability to ensure that necessary changes can be made to keep the statute book in proper working order. These statutory instruments make only minor changes to language to ensure that existing regulations reflect that the UK would no longer be a member of the EU. These changes are necessary to ensure that the statute book is accurate and clear. It is important that businesses, employees and citizens have clarity on their rights and responsibilities.
We are not making any changes to employment rights or employment policy through these regulations. The Prime Minister, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy, and many other colleagues have been clear that there will be no rollback of workers’ rights when we leave the EU. I wish to highlight that these statutory instruments would make some changes to the regulations for European works councils. This would be an unavoidable impact of the UK leaving the EU without a deal. I can explain these changes in more detail later.
Looking to the future, the political declaration on our future relationship with the EU states that we will build on the withdrawal agreement commitment not to reduce our shared standards—a commitment not to regress from existing EU legislation. I will now go into more detail on the amendments made by the statutory instruments. The Employment Rights (Amendment) (EU Exit) Regulations and the Northern Ireland equivalent regulations repeal four powers that the Government can use to make secondary legislation. These powers relate to parental leave, part-time work, fixed-term work and information and consulting rights. The powers that are repealed relate only to obligations that the Government would be under from EU directives. As the Government would not be under these obligations if the UK left without a deal, these powers would be redundant. We would not be able to use them even if they remained. For clarity and legal certainty, we are seeking to remove these powers. Removing them in no way changes the rights that workers enjoy, nor the Government’s ability to protect workers in the UK in future.
The Transnational Information and Consultation of Employees Regulations 1999 are also amended to reflect the UK’s departure from the EU. Withdrawing from the EU will mean that the UK is no longer included in the EU rules on European works councils, which is why changes are required to the legislative framework set out in those TICE regulations. Provisions relating to existing EWCs—which can continue to operate in a no-deal scenario—are maintained. These include the protections for workers and their representatives on EWCs.
I move on to the next pair of regulations—the Employment Rights (Amendment) (EU Exit) (No.2) Regulations and their Northern Ireland equivalent. These are listed first on the Order Paper, despite their numbering. The amendments made through these regulations amend the text of existing Acts to reflect the UK’s departure from the EU. None of these changes affects the rights workers enjoy or changes employment policy.
The changes that may elicit the greatest interest across the House are those made to Section 38 of the Employment Relations Act 1999 and its equivalent in Northern Ireland. These relate to TUPE protections. The SIs amend the wording of the existing legislation to maintain the current scope of a power currently derived from EU directive obligations. This power has been relied on to make secondary legislation to cover situations where workers are not covered by TUPE regulations. The revised clause still retains the breadth of the existing powers for the Government to amend TUPE regulations to protect the rights of workers. The changes also protect the regulations that have previously been made under this power. These amendments do not change the rights to which workers are entitled.
There is one further point I wish to bring to the House’s attention. Of course, I hope that these regulations will not need to come into effect. I hope agreement can be reached with the EU and these regulations can be revoked. However, in the event that there is no agreement—no deal—it is vital that these regulations are enacted. Failure to pass these largely technical regulations would mean uncertainty over both workers’ rights and employers’ obligations. This could lead to disruption for businesses and citizens, and an increased risk of litigation. This is in no one’s interest. It would be unacceptable not to provide this clarity to businesses and I hope noble Lords will accept that the Government are delivering on our workers’ rights commitment and that these SIs can therefore be approved. I commend them to the House and beg to move.
My Lords, it is pretty obvious that these regulations were drafted—as was necessary—before the conclusion of the current talks that the Prime Minister very belatedly initiated with the TUC and others about employment rights post Brexit. I understand that talks with the Business Secretary are still going on. I hope that at the back of the Minister’s mind is the thought that these regulations might well be altered in the light of any progress made in these talks. In effect, the TUC seeks a binding guarantee that existing employment rights will not just be maintained but will not fall below any levels of protection developed in the rest of the European Union and its single market.
There is a lot going on in the European Union at the moment on precarious employment, the gig economy, self-employment and protections for migrant workers. The key point in these negotiations with the Business Secretary is whether there can be any chance of a meeting of minds in these areas. So far, the Prime Minister has said to the union negotiators, “Trust me to make sure we will do the right thing”. “Trust me” is not quite good enough, given the transitory nature of being Prime Minister or party leader in this country. Binding guarantees are rather better than good intentions in this area.
The backcloth to these regulations has been drawn to my attention by the TUC. It has circulated a brief to Members of this House, which I hope noble Lords have had a chance to read. The first point is a procedural one about consultation. I echo previous debates in the House today by asking: who has been consulted on the regulations?
I turn first to the regulation dealing with the European works councils. It is worth reminding Members of this House that there are 850 or so EWCs and UK workers are represented on 500 of them. About 10 million European workers in total are covered by European works councils. Although their performance varies, as one would expect, on the whole they have been very successful in holding companies to account on their future plans and strategies. This is an important dimension in a world where pressures from financial markets on companies not to consult, inform or discuss their plans are very powerful.
We welcome the Government’s commitment to maintaining British participation in existing EWCs, but this commitment does not extend—at least as yet—to including new ones or to absorbing into UK law any changes in EWC arrangements that come into force over the next period. No new EWCs will be required to be set up under UK law after Brexit. We are worried that—at least in some cases—UK workers might lose their seats on the European works councils and therefore put British jobs at much greater risk than those of our neighbours across the channel and the North Sea. In other cases, I think there would be voluntary agreement. There are specific measures on the rights of UK worker representatives, such as paid time off to attend meetings. I note that these will be maintained after Brexit in relation to EWCs, but not necessarily to new EWCs that have a British component.
If there is no deal, most of these regulations are designed to come into force on Brexit day. What is the timetable should a withdrawal agreement be concluded? In our view, they should not come into force during a transition or implementation—or indeed a backstop—period.
I turn to the 2018 family of regulations. These are centred primarily on TUPE—the transfer of undertakings legislation—which has been valuable in handling transfers of staff due to privatisations in particular. They came in during the 1980s, under the Conservative Government at that time. The TUC is concerned that the regulations in this area lack a clear definition of what “TUPE-like protection” actually means. This is the phrase that has been adopted. I have not come across this kind of legal term before. “TUPE-like” seems to lack precision, as least to my layman eyes. Unless someone can explain the contrary to me, I think a clearer definition is very much needed.
The regulations do not extend TUPE-like protection and provisions to employee representatives, only to employees. Under the TUPE regulations, employee representatives have certain rights to information and consultation, and they should be maintained in whatever the future holds for us in this area.
Next, can we have an assurance that the regulations will not be brought into effect in any transitional or backstop period—that we would stick with the status quo? The powers under Section 13 of the withdrawal Act would hinder the UK’s ability to keep up with changes in EU law during any transition or backstop period and in the event of no deal. We want to avoid workers in the UK during such a period not having the same rights and protections as workers in other European countries. Protection during a transitional or backstop period is very important.
I thank the Minister for his explanation. These four statutory instruments have been somewhat of a revelation to me. I was not aware that Northern Ireland has a different system of rules, although it comes under the same European legislation as the rest of the United Kingdom. I hope that the Minister and other colleagues will forgive me if some of the questions I am about to ask seem a little naive: I do not have the same level of expert advice, and hope that the Government and the Official Opposition will bear with me. I also did not get the TUC paper referred to by the noble Lord, Lord Monks.
Two of the statutory instruments obviously relate to Northern Ireland, and I was surprised to discover that legislation which presumably covers the same European Union rules differs. Why, under the same general legislative EU framework, does Northern Ireland go its own way, to a degree? In what way do the Northern Ireland regulations differ?
The regulations for mainland UK and Northern Ireland cover paternity and adoption pay, fair employment tribunals, industrial tribunals, shared parenting, working time, posted workers, small businesses and so on. I saw no reference to TUPE regulations in the Northern Ireland statutory instruments. I am sure that that is my omission, but do those elements operate differently? Surely TUPE exists in Northern Ireland as it does in the rest of the United Kingdom.
I also note that the statutory instruments amend primary as well as secondary legislation, so presumably the instruments cover areas where the primary legislation is amendable by secondary legislation. Can the Minister confirm that that is correct?
I have another question on the instruments relating to England, Wales and Scotland. Paragraph 12 of the main regulation relates to statutory paternity pay where a person has worked in the EEA. Can the Minister confirm that statutory paternity pay will not be affected by our exit from the European Union for fathers working in the rest of Europe?
Finally, I get twitchy when I read examples such as in part 1 of Schedule 1, paragraph 2, which states:
“In section 79(2) (entitlement to parental leave—supplemental) omit subsection (3)”
of the Employment Rights Act 1996. There are several such examples throughout the SIs. Can the Minister assure us that no existing rights are being omitted or weakened in any of the statutory instruments we are considering this afternoon?
In discussing the withdrawal Act—it seems a long time ago now—we sought assurances from the Government that employment rights would not be weakened post Brexit. Our fears were echoed by the noble Lord, Lord Monks. We do not know what will happen; indeed, one needs a crystal ball to predict what will happen next week, let alone after any possible Brexit. Will the Minister assure the House, as much as he can, that employment rights will not be diminished?
In conclusion, I hope that none of these instruments will ever need to apply, unless we commit the wilful act of self-destruction of leaving the European Union without a deal. The Minister alluded to that. Is he still feeling optimistic?
My Lords, I draw attention to my various interests in the register to do with trade unions. I am very pleased to follow the noble Lord, Lord Monks, a distinguished former general-secretary of both the TUC and the European TUC. Many of us in this House forget that the European TUC is a very powerful body that represents workers from all over Europe and has had a decisive impact on much legislation that has covered workers.
I have also been extremely pleased recently to see that the Government, on the road to Damascus, are now again talking to the unions. It must be two and a half years since union leaders last met a Prime Minister. When I was working as trade union adviser to David Cameron, one of my jobs was to ensure that that scenario never existed. I hope that the present Prime Minister will realise that a regular dialogue with the trade union movement is for the good of Britain, because it enables trade union leaders, who have a very good bird’s eye view of what is going on in Britain, to contribute to the national wealth.
We have spent most of today talking about things which we really hope will never matter—in other words, that we will not leave the EU without a deal and that therefore none of what we have dealt with today will come into force. I noticed that both of the main SIs state that they can be,
“deferred, revoked or amended”.
My first question is whether consideration has been given as to which one of those three is likely to come into force. I would like them never brought into action and revoked straightaway, but the word that worries me the most is “amended”. In other words, they would no longer be SIs if we leave without a deal but would be amended in some way to accommodate a deal.
My next point is on the enshrinement in law of workers’ rights in the side agreement that we had with the EU. When I met Gavin Barwell, the Prime Minister’s chief of staff, I specifically asked: “How strong is this agreement and how enforceable is it?”. He confirmed to me that it was not enforceable. When legislation comes to this House to deal with post Brexit when there is a deal on the table, a number of Members will be looking to write those agreements on workers’ rights into Bills, to make them fully enforceable.
I want to make one or two points on the documents in front of us. I will try not to copy what the noble Lord, Lord Monks, has said. However, there is concern about workers’ councils. They play a valuable role and we will be looking to the British industry part of workers’ councils to maintain a commitment to them—in other words, not to use the absence of Britain from the EU as a way of weakening the ability of workers from the British side of workers’ councils to continue to participate in them. We will be looking for the Transnational Information and Consultation of Employees Regulations to be kept fully in force.
What will happen if an external request is made for a new European workers’ council from a European country? I notice that companies that operate in Switzerland often include Switzerland within their scope and include Swiss worker representatives as EWC members. Switzerland is not in the EEA—that is one reason why I use this example—and the provisions do not appear to make provision for workers’ councils continuing to include the UK within their scope on a voluntary basis. I would like to know what the Minister sees as the future in that area.
On the updating rights, the Minister can enact legislation to keep UK law in line with EU law. I would like to think that we will do our best to do that. Has he had any thoughts on that?
I turn briefly to the other regulations. I agree completely with the noble Lord, Lord Monks, that we need a much clearer definition of what “TUPE-like” means. This looks like something, but is not quite the same. I would like to see an agreement that TUPE-like means that TUPE, as practised at the moment, will be the standard to which Ministers will try to hold any future statutory instrument or legislative developments.
I thank the Minister for bringing this to the House tonight. I look forward to his responses and promise him that when labour relations matters come up, I will continue to represent the 30% of paid-up trade union members who vote for the Conservative Party.
My Lords, I am grateful to the Minister for setting out these draft regulations. Like other noble Lords, I am concerned about any potential loss of updating rights.
Does the Minister agree that, both on the European works councils and on TUPE, these regulations remove powers currently enshrined in primary legislation, under which Ministers can enact legislation to keep UK law in line with EU law? Will removing those powers mean that it will be harder to keep workers’ rights up to the same standard as EU workers’ rights, as EU law develops?
May I underline the point made by the noble Lord, Lord Balfe, and my noble friend Lord Monks on the “TUPE-like” reference? TUPE has been a boon, particularly for women workers moving between jobs, especially when we see how women’s pensions are often a lot less than men’s pensions.
My Lords, it has been a very helpful and useful debate and we look forward to hearing the Minister’s response. I have a number of questions that pick up on points already made by other noble Lords.
I will not delay the House too long, but I cannot let pass my normal question to the Minister, when dealing with SIs, about commencement dates. His department has a very bad record on bringing out regulations that commence on the common commencement dates. He promises to do better, but I have yet to see it. Unfortunately, these are not ones that I can tease him with because they are supposed to come out only if required and on exit day.
However, that is not quite the case here, is it? If we look at the Employment Rights (Amendment) (EU Exit) Regulations 2019 and the parallel regulations for Northern Ireland—which I think are numbers three and four as grouped on the Order Paper—both of them say that the regulations,
“come into force on exit day, subject to paragraph (2)”.
Paragraph (2) provides that certain elements of the regulations,
“come into force the day after the day on which these Regulations are made”.
When the Minister introduced the regulations, he said that we did not have to worry about them, that there was nothing in them that would need to take place, and that he was optimistic that there would not be a need for them to come into force. However, that is not true, as some parts of these regulations will come into force. In that context, could he reinforce what he said, which is that there is no diminution in existing rights as a result of the parts of these regulations that will come into force before exit day—and are, therefore, not strictly EU exit regulations in that sense, although we will pass over that, if the issue is indeed trivial, as I suspect it is, given that they seem to be corrections to earlier regulations and primary legislation that may not have kept pace with nomenclature in the EU. If that is not the case, the Minister owes it to the House to make a statement about exactly what is happening under these regulations.
More generally, several speakers—my noble friends Lord Monks and Lady Crawley and the noble Lord, Lord Balfe—have raised points about what is meant by the fact that, on the one hand, the Government are withdrawing powers which, as my noble friend Lady Crawley said, are currently in force and could be implemented to maintain workers’ rights and the rights of employee representatives but, on the other, the Government intend, although there is no evidence for this apart from the assertions of both the Prime Minister and the Minister, that there should be no diminution. Where is the legislation that is going to bring forward that levelling up to the existing situation? If the Minister cannot give us an answer, will he please write to us about what the Government’s intentions are? Clearly, the regulations amend Section 13 of the Work and Families Act. That amendment reduces, in crude terms, the rights of workers currently. What is the timescale for that being rectified?
On the question of what TUPE means and the definition of “TUPE-like”, again the regulations remove powers that exist. Where is the regulation that is going to bring forward the parallel arrangements to make sure that that continues in UK law? The rights of employee representatives, which were mentioned in particular by the noble Lord, Lord Monks, are similarly affected.
These may not seem to be very serious comments, but I think that people across the country will be concerned that their rights are being eroded. At the same time, politicians are saying that they should not worry about it, because the Government have in mind to make sure that there is no diminution. So it is not just a question of the diminution but of making sure that, when changes are made that would have happened had we stayed in the EU, those are also replicated in UK law. I would be grateful to hear the Minister’s comments on those points.
My Lords, I thank all noble Lords for their comments. The noble Lord, Lord Monks, complained that these regulations had possibly been drafted before the talks were concluded. I have to say that it would be rather difficult to draft them after the talks were concluded because I suspect that they might be somewhat late. I think that to start drafting these amendment regulations at 10 minutes to midnight would not be the right way to go about it and I would be quite rightly criticised.
What I can say, and I think that the noble Lord will be pleased about this, is that the Employment Rights (Amendment) (EU Exit) Regulations were published in draft form in December 2017. That allowed for extensive consultation and allowed us to comply with the statutory obligation to consult the relevant bodies on a change made to the conduct of employment agencies and employment business regulations. We received, I think, two responses, one from the National Association of Schoolmasters Union of Women Teachers and the other from the Recruitment & Employment Confederation. I need not go into detail, but neither raised concerns about the drafting of the amendment: rather, they commented more on EU exit in general. We also, as I said, shared these regulations in draft with the TUC and with the CBI—so there was considerable consultation on them.
I shall repeat the commitment that has been made by my right honourable friend the Prime Minister, by my own Secretary of State and by Ministers throughout the Government. Now as a Parliamentary Under-Secretary of State I shall repeat it, although it has been made by people who are far important than me. We are committed not to rolling back on workers’ rights, and by laying these SIs we are upholding that commitment. We already go beyond the EU minimum in many areas of employment law; that is well known. I can say to the noble Baroness, Lady Burt, that we have no intention of making any changes to statutory maternity pay. People will not be affected whether we are in the EEA or not. That is true for all the concerns that have been put forward.
Looking to the future, as my noble friend Lord Balfe invited us to do, I would remind the House of what we discussed in a Statement debate—and there will be other chances to discuss it. Our Good Work Plan sets out our vision for the future of the labour market and our ambitious plans for implementing the recommendations that arose from the Taylor review. That important package will ensure that workers have access to the rights and protections that they deserve in a changing labour market, with the changing technology that we face. In addition, it will create a level playing field for employers, thereby ensuring that good employers are not undercut by the small minority who seek to circumvent the law. That is worth stating at the Dispatch Box as I move these instruments.
Perhaps I may deal with one or two specific concerns, in particular the drafting points made by the noble Lord, Lord Monks, and echoed by others. He asked whether the new phrase “TUPE-like powers” provide the same scope for power. The phrase “TUPE-like provisions” is needed to maintain the current scope of the powers, and the new wording ensures that the Government will continue to have the power to enhance workers’ rights as we do now. We will continue to do that and I repeat that commitment once again. The noble Lord also asked whether these statutory instruments would need to be amended following the talks that he referred to. I can make it quite clear again that these SIs are for no deal. We hope that once we have a deal they will be unnecessary.
The noble Lord also put a question about European works councils. He asked how the Government could claim to be preparing for Brexit when they did not have plans for workers to have proper representation in the absence of European works councils. We are preparing for a no-deal exit, as any responsible Government would do. UK employees will still be able to be represented on works councils—but, again, that will be a matter for the employer and employee representatives. Employees and their representatives on European works councils will retain their existing protections in all circumstances.
The noble Baroness, Lady Burt, asked about the differences as regards Northern Ireland. This is a devolved matter in Northern Ireland in a way that I do not think it is in Scotland. The TUPE-equivalent amendment in Northern Ireland is to the Employment Relations (Northern Ireland) Order 1999. However, in the continued absence of a Northern Ireland Executive, it is for the UK Government to take any necessary EU exit legislation for Northern Ireland through Westminster. However, I can give an assurance that the Northern Ireland departments have been consulted in the preparation of these statutory instruments.
The noble Lord, Lord Monks, also asked whether they would apply during any implementation period. Again I can say that they will be needed only in the case of no deal. I have dealt with the question of statutory maternity pay, which will remain the same. My noble friend Lord Balfe asked about the ability to repeal the legislation. If the SIs are no longer required on exit day we expect, as I think he quoted, to defer, revoke or amend them through further legislation in time for the end of the implementation period. Which route we take will be a matter for us to decide at the time—but, regardless of what we decide, we will uphold our commitment not to roll back on workers’ rights.
With that, I think that all I need to do is to repeat the assurance to the noble Baroness, Lady Crawley, and others that these amendments do not narrow TUPE powers: rather, they ensure that the Government will continue to have the power to enhance workers’ rights, as we do now. One last question was put to me about European works councils by my noble friend Lord Balfe. He asked whether we could apply the EU directive on EWCs like Switzerland. I repeat that these SIs are only for if there is no deal. Switzerland is covered by the directive under the deal that it has with the EU, so that would be a matter for future negotiations.
I wonder whether the noble Lord could answer my question about the commencement date and the discontinuity between the fact that these are supposed to be brought in only on exit day although two of them refer to regulations that will come into force on the day they are passed—which presumably will be today. If the noble Lord does not have any inspiration at this moment, perhaps he could write to me.
I had completely and utterly forgotten the noble Lord’s obsession with commencement dates in the excitement of dealing with orders of this sort. It might be that inspiration comes to me, but it may not be the sort of inspiration that would satisfy the noble Lord. I am told that the standard practice for statutory instruments is that they have a coming into force date. If that does not answer the noble Lord’s question, I will write to him.
I think that I have dealt with all the points that were put to me.