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European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020

Volume 808: debated on Monday 30 November 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the European Union Withdrawal (Consequential Modifications) (EU Exit) Regulations 2020.

My Lords, the Government have already undertaken extensive work to provide for a functioning domestic statute book by 31 December. Ahead of our exit from the EU on 31 January, the Government made a significant amount of exit-related legislation, including more than 630 statutory instruments. The Government continue to deliver the secondary legislation required to ensure a functioning statute book at the end of the transition period, so we are able to seize the opportunities of being an independent sovereign nation.

This instrument is a clear example of that. It makes various consequential amendments and repeals in respect of retained EU law, relevant separation agreement law and other EU-derived domestic legislation. I will explain this in further detail in a moment, but in short, it is highly technical and does not implement any new policy. It will ensure that the UK statute book works coherently and effectively following the end of the transition period.

The instrument was laid by my right honourable friend the Chancellor of the Duchy of Lancaster in exercise of temporary powers provided for in the EU withdrawal Act 2018 and the EU withdrawal agreement Act 2020. These powers allow Ministers to make provisions that they consider appropriate in consequence of those Acts. These are standard consequential powers that are commonplace in legislation. Such powers are inherently limited, their main expected use being for matters of a technical nature. This instrument is no exception.

The Government have already made several exit-related consequential statutory instruments in recent years, which were needed as a result of the European Union (Withdrawal) Act 2018. However, since those instruments were made, we have left the EU with a deal—the withdrawal agreement—and entered the transition period. The statutory instrument we are discussing today includes provisions required as a result of the withdrawal agreement and the legislation that implemented it: the European Union (Withdrawal Agreement) Act 2020.

The main changes arising from the European Union (Withdrawal Agreement) Act 2020 are: it introduces the transition period and delays the commencement of exit-related statutory instruments until the implementation period completion day; it provides that retained EU law comes into effect on IP completion day instead of exit day; and it establishes relevant separation agreement law. In the light of the introduction of relevant separation agreement law, the instrument clarifies how references in UK legislation to EU instruments are to be interpreted after IP completion day. This includes how references to EU instruments that form part of relevant separation agreement law should be read.

The amendments made to the 2018 Act by the implementation of the withdrawal agreement mean that it is possible for EU instruments to form part of retained EU law for some purposes and have effect as relevant separation agreement law for other purposes. This means that after IP completion day, references to EU instruments in domestic legislation can have a dual meaning. This instrument makes interpretation provisions to remove uncertainty about which version of an EU instrument applies: the retained version or the version applied by the withdrawal agreement. This ensures that the correct interpretation of the EU instrument applies following the end of the transition period and removes room for confusion or uncertainty.

At this point, I draw your Lordships’ attention to the fact that, although the negative procedure could have been used for making this instrument under the consequential powers, we are following the affirmative procedure. This is to provide the opportunity for parliamentary debate.

To make these interpretive provisions, the instrument makes minor technical amendments to primary legislation, including the 2018 Act, the Interpretation Act 1978 and the latter’s devolved equivalents: the Legislation (Wales) Act 2019, the Interpretation Act (Northern Ireland) 1954 and the Interpretation and Legislation Reform (Scotland) Act 2010. Although the Government are not required to seek consent from, or consult with, the devolved Administrations on the provisions included in this instrument, there was extensive engagement at official level prior to the laying of this instrument to make sure that it worked effectively for the devolved legislatures. I note our gratitude to the devolved Administrations for their constructive collaboration on both this instrument and the wider body of readiness secondary legislation that is needed by the end of the year.

The instrument also makes technical repeals to redundant provisions within primary legislation arising from the European Union (Withdrawal) Act 2018, primarily due to the fact that it repealed the European Communities Act 1972. The 2018 Act provided for the repeal of the amended provisions of the 1972 Act, but not the amending provisions that lie behind them. As a consequence of those repeals, the amending provisions are redundant. Without these regulations, this legislation would continue to sit meaninglessly on our statute book; repealing it ensures that the statute book remains clear and effective.

As well as repealing redundant legislation, this instrument also makes consequential amendments to the European Union (Withdrawal) Act 2018 (Consequential Modifications and Repeals and Revocations) (EU Exit) Regulations 2019 to reflect the fact that they come into effect on IP completion day rather than exit day, and ensure that they operate effectively in the light of this.

I hope that noble Lords therefore agree that these draft regulations perform a small but worthwhile role in our preparations for the end of the transition period and demonstrate the Government’s commitment to ensuring certainty and clarity in the UK’s statute book. I beg to move.

I want to take this opportunity to thank my noble friend for introducing the regulations before us and for the fact that they follow the affirmative procedure, enabling us to have a small debate on them.

In its 31st report, the Secondary Legislation Scrutiny Committee devoted just one paragraph to these regulations:

“This is an important technical instrument, necessary to ensure that the statute book operates correctly after Implementation Day.”

It concludes:

“The instrument provides a general gloss to ensure that the correct interpretation of any EU instrument applies. Cabinet Office states that statutory instruments being prepared by other departments in order to implement the Withdrawal Agreement, including the Northern Ireland Protocol, are relying on these glosses.”

I am somewhat confused as to what “gloss” means. To me, if you put a gloss on something, it potentially puts a spin on it. I could not find in the document that this was a term my noble friend’s department used—probably for a very good reason. I would be interested to know what gloss he puts on that interpretation in the report.

Obviously, we discussed these issues at some length during the passage of the two Acts to which my noble friend referred, and the instrument today helpfully sets out the sources of retained European law. One is missing, namely case law from the European Court of Justice, presumably up to the end of January this year but potentially up to the end of December this year. It is not clear to what extent we will have any regard to EU case law as agreed by the European Court of Justice. Obviously, we will not refer cases, because the Government have been very clear about that in the past. However, there may well be an expectation among some companies that feel that they are affected by this statutory instrument that they would have the right to rely on that case law in a UK court. I would be interested to know whether that is true in my noble friend’s view when he comes to sum up.

Another category of EU law on which I questioned my noble friend and his colleagues during the passage of those two Acts, and which particularly interests me, relates to the environment and agriculture generally, where these instruments of EU law were agreed but were not implemented by the end of 31 January 2020. To be honest, I do not have a clue whether they are ambulatory or non-ambulatory, but I would be very interested to know what decisions have been taken in regard to the applications of those instruments, whether they will be applicable to citizens and companies in this country and whether they can rely on them going forward.

Paragraph 2.8 of the Explanatory Memorandum, on page 2, helpfully says:

“The interpretation legislation amended by this instrument is not EU law; it is domestic legislation, which is being updated in consequence of”

the two Acts to which my noble friend referred, as he said. Paragraph 6.4 on page 4 sets out retained EU law without, as I say, including what I would consider to be EU law, namely the case law that has been decided during the course of this year. Paragraph 6.7 on page 4 states that the two Acts

“provide temporary powers to make provisions that Ministers consider appropriate in consequence of those Acts.”

In that regard, does my noble friend expect to come back at a future date to repeal other provisions of EU law, if he and his department intend to keep this under review? Paragraph 7.4 states:

“Where there is a dual meaning, the interpretive provision applicable to references to EU legislation that have effect as relevant separation agreement law will apply to the extent that the EU legislation takes effect as relevant separation agreement law.”

Paragraph 7.5 continues:

“These interpretive provisions are needed to ensure that the legislative framework for the Withdrawal Agreement and the Protocol on Ireland and Northern Ireland operates effectively.”

Paragraph 7.7 states that Regulation 3 makes amendments to the European Union (Withdrawal) Act 2018

“to provide how existing ambulatory references to EU instruments that will have effect as relevant separation agreement law are to be interpreted after IP Completion Day. Ambulatory references are references to EU instruments that automatically update when the EU instrument is updated.”

I do not intend to use the full time that has been generously allocated to me, but I will end on a general question. With all interpretations of EU law that is now deemed to be retained EU law for UK purposes, in the event of a disagreement, who will interpret the provisions? Will it be the Minister’s department that is the ultimate arbiter, or will recourse to the courts be required? I understand that, probably still, one potential niggle that might be delaying the conclusion of a deal with the EU 27 this week—perhaps he could comment on this—is what the dispute resolution mechanism will be. Is there any update in that regard?

With those few words, I welcome this opportunity to consider the instrument that the Minister was kind enough to set out this afternoon.

The noble Lord, Lord Bhatia, is having technical difficulties. In the circumstances, we will move on to the noble Lord, Lord Thomas of Gresford.

In 32 days’ time, the whole body of law concerning our relationship with the European Union, developed over 48 years, will disappear, and we shall be entering new legal territory. Retained European law will be added to our domestic law—a whole body emanating from the directives and regulations that we have hitherto followed through our membership of the European Union. This was the effect of the European Union (Withdrawal) Act 2018. As I understand it, if we wish in future to depart from or change anything in retained EU law, we will do it by the normal processes of Westminster legislation. Ambulatory provisions in European regulations, which provided for an automatic update in accordance with changes in European law, will cease.

All that was difficult enough, but understandable. However, as a result of the withdrawal agreement that was finally concluded earlier this year, the European Union (Withdrawal Agreement) Act 2020 was taken through Parliament. One purpose of that Act was to replace references to exit day with “IP completion day”; the changes made by the 2018 Act were, therefore, pushed back from exit day—the day when we left the European Union, at the end of last January—to 1 January next.

Another purpose of the 2020 Act was to fulfil the promise made in the Conservative 2019 manifesto that all British courts, down to and including magistrates’ courts, could throw off the burden of EU case law and principles, as interpreted by the European Court of Justice. The thinking behind that was not to promote the clarity and stability of our domestic law: it was, as I said in Grand Committee last week, the expression of the Conservative Party’s allergy to the European Court of Justice—an itch which has to be scratched.

As the 2020 Act required, there was extensive consultation of 73 bodies, encompassing the whole legal and judicial community. The manifesto commitment had by this time been watered down to a proposal that only the courts at Court of Appeal level should be able to depart from the precedents set in Europe. Only 20% of the consultees were in favour of this proposal, as we discussed last week; 80% were either wholly against it or did not support it. The Minister will no doubt be interested to hear that the noble and learned Lord, the Advocate-General for Scotland, in introducing the rejected proposals last week, nevertheless told us that we could be reassured by the fact that consultation had taken place. He did not actually mention the result of the consultation. Well, there is no such problem here, as there has been not the slightest consultation over these regulations—yet they, too, are supposed to introduce sweetness and light.

Unfortunately, the 2020 Act introduced the new concept of the “relevant separation agreement law”, which provides that any question as to the validity, meaning or effect of any “relevant separation agreement law” is to be decided in accordance with the withdrawal agreement and the like agreements and is to be consistent with various articles of the withdrawal agreement—and not just the current articles that are in issue, because the definition of “relevant separation agreement law” is widened by a final coda saying

“as that body of law is added to or otherwise modified by or under this Act or by other domestic law from time to time”.

Any lawyer trying to advise a business client as to his position with regard to, say, contractual or intellectual property rights already has a difficult task. Any individual embarking on litigation to sort out a dispute faces extensive legal costs and untold worry.

However, that is not the end under these regulations. Paragraph 6.6 of the Explanatory Memorandum tells us that the provisions of the European Union (Withdrawal) Act and the amendments made to that Act by the 2020 Act

“mean that it is possible for EU instruments to form part of retained EU law for some purposes and have effect as relevant separation agreement law for other purposes. This means that after IP Completion Day”—

in 32 days’ time—

“references to EU instruments in domestic legislation can have a dual meaning. For example, referring to the original version of the EU instrument that has effect as relevant separation agreement law for some purposes and referring to the domesticated version of the EU instrument that forms part of RDEUL for other purposes.”

So, in these regulations we are now importing into our domestic law retained EU law as amended by relevant separation agreement law, and any future amendment of it, as interpreted in the articles of the withdrawal agreements—and references to EU instruments in domestic law can have a dual meaning. Incidentally, the Northern Ireland protocol is part of the withdrawal agreement and is already under fire, with power to make regulations to break the law included in the UKIM Bill as drafted. We will have to see how that turns out.

For the sake of the sanity of the Court of Appeal and the Supreme Court, will the Minister kindly tell us how this dual meaning is supposed to take effect? What exactly are the separate dual meanings and for what purposes will one meaning be applicable in relevant separation agreement law and one in the domesticated version that is to form part of the retained domestic EU law? I cannot think of any legislation with a dual meaning for the same wording in the same provision which is to be interpreted differently in different legal contexts. I am willing to be enlightened.

I cannot expect the Minister to sort out this mess at the Dispatch Box, but I would be grateful if a memorandum could be prepared and published to make the position clear for lawyers advising their clients and judges seeking to interpret already complicated provisions of law. In any sensible legislative body, this instrument would be withdrawn and reformulated. Unhappily, so ineffective and weak are the procedures of the United Kingdom Parliament in scrutinising secondary legislation—as we are supposed to be doing now—that this instrument will go through in its present form. God help those who have to interpret it.

My Lords, this SI has been prepared by the Cabinet Office. Its purpose is to ensure that the UK statute book works correctly and effectively following the end of the transition period. The UK left the EU on 21 January 2020, following which the supremacy of EU law over UK law came to an end. The EUWA has achieved this legal severance through the repeal of the ECA on exit day. The withdrawal agreement agreed between the UK and the EU came into force on exit day.

The withdrawal agreement aims to ensure the UK’s orderly withdrawal from the EU. The EUWA has implemented the withdrawal agreement and provides the vehicle for the Government to give effect to the EEA EFTA separation agreement and the Swiss citizens’ rights agreement. The UK and the EU agreed in the withdrawal agreement that the UK’s exit from the EU would be followed by a time-limited transition period. That period started on exit day and ends on 31 December 2020.

Although the ECA was repealed on exit day, certain parts of it are to be kept in force by the EUWA, and EU law continues to apply during the transition period under the terms set out in the withdrawal agreement. This SI makes various consequential amendments and repeals in respect of retained EU law and the relevant separation agreement, laws and other EU-derived domestic legislation. This ensures that the UK statute book will operate effectively and coherently in relation to EU-derived domestic legislation and removes from the statute book domestic legislation that has been made redundant as a result of the EUWA.

Finally, this SI does not apply to activities undertaken by small businesses. Can the Minister give some estimate of the cost of this SI?

My Lords, this has been an interesting debate on a somewhat technical range of issues. I am not going to pretend that I understand all of them, but a particularly interesting one was raised by the noble Baroness, Lady McIntosh, concerning the word “gloss”. I have seen the word used in the explanatory notes to a number of other orders and I assumed that it was a legal term. However, if the noble Baroness, who is legally trained, does not know the answer, it clearly is not in common legal use. As the Minister has now had time to find out about it, perhaps he could enlighten us.

Part of all this work arises from the completely misplaced idea that a system of law-making that we have had for almost half a century can suddenly be replaced by a domestic equivalent, with none of the time, debate, consultation and thought which normally goes into it. In fact, the Minister himself gave it away when he said that we have already had 650 SIs. In a sense, what we are doing is concertinaing into a couple of years what took almost 50 years to develop across the EU.

This also arises in part from the Government’s early denial that any implementation period would be needed. It was the Labour Party that first said we would need something like that, and to begin with there was resistance. I am grateful that the Government understood at the time that a period of adjustment was needed. The problem I have with “implementation”—or “IP completion date”, as it now is—is that it is still the wrong term. We are not implementing anything because we do not have a deal yet. We are actually still at the end of leaving: we are not implementing new rules because we do not know what the new arrangement is yet. It may be a question of semantics, but the word “implementation” is a bit odd and “transition” would be better. We are a month away from the end of the transition and we still have to sort out, as this provision is, the end of the withdrawal legislation.

As we have heard, this SI incorporates retained direct EU legislation or the relevant separation agreements into the Interpretation Act 1978 and its equivalent in the devolved Authorities. As the Minister said, it amends the Interpretation and Legislative Reform (Scotland) Act 2010, the Interpretation Act (Northern Ireland) 1954 and the Legislation (Wales) Act 2019. I think the Minister said that each of the devolved Authorities was “fully engaged” in the preparation of the regulations. He did not say whether they were content with them. Will he confirm that they were not only involved but happy that we are proceeding with the regulations today?

I am sure that the answer is yes, but will he also let us know whether the Law Society—

Sitting suspended for a Division in the House.

My Lords, I am sure that the answer to this question is yes, but can the Minister confirm that, in addition to the devolved authorities, organisations such as the Law Society and the Bar Council, and European law specialists in particular, have been consulted in the preparation of these regulations?

There is also the issue of using secondary legislation to amend primary legislation: not just the Interpretation Act 1978 but also parts of the European Union (Withdrawal) Act 2018. This is the issue the noble Lord, Lord Thomas, raised, in a way. Can the Minister outline what assessment has been made of the effect on accountability and scrutiny of amending the withdrawal agreement by statutory instrument? Is he really content that that is a good way to proceed? I think he knows all the sensitives in the House about secondary legislation, so he will understand the question.

The Minister will also know of the concerns, touched on by the noble Lord, Lord Thomas, within and beyond the legal sector about the uncertainty that clients, lawyers and courts will face after January. One example is that, without the Lugano framework, we will revert to the national laws of each individual country to decide which court has jurisdiction over a legal issue and whether a judgment will be enforced. This is obviously key in family, bankruptcy, companies and transport law, and no doubt much more besides. Can the Minister update the Committee—if not now, perhaps he will write—on this and similar issues that the legal profession and its clients will face from January? In particular, can he update us on the Lugano framework? I have rather lost track of where we are on signing up to that; an update would be useful.

Just from looking at these regulations, it seems that the complexity of statutory instruments such as this will increase legal uncertainty. Perhaps the Minister could provide some assurance that, even if I do not understand every technical word, every lawyer in the land will.

Well, my Lords, I am loath to speak for any lawyer, let alone every lawyer in the land. I hope this SI proves to be the clarifying instrument that we hope it is.

I was asked a number of questions, not all of which, as was gracefully conceded, may be answerable on the spot. Regarding the last question, about the Lugano framework, I am certainly not advised on that currently and will have to respond.

On the question of “gloss”, it is a term used frequently by parliamentary counsel meaning “a modification to how legislation is read”. In terms of the gloss as used in the report referred to, the interpretive glosses provided by this instrument provide general interpretive rules for how cross-references to EU instruments should be read. This means that interpretive provision does not need to be provided in other legislation because it is already provided by these glosses and so ensures consistency.

I was asked whether the SI has financial implications. It does not.

I was asked about the consequence of importing EU retained law into domestic law. As a result of the introduction of relevant separation agreement law, interpretive provision needs to be made so that it is clear how references to EU instruments that form part of relevant separation agreement law are to be read. Essentially, references to EU instruments that form part of relevant separation agreement law are to be read as they are applied by the withdrawal agreement. Interpretive provision for retained EU law has already been provided. This SI makes amendments to these provisions to ensure that the interpretive provisions for relevant separation agreement law and retained EU law work together. I hope that that answers the question asked by the noble Lord, Lord Thomas of Gresford. If not, I will ask my officials to see whether any further information needs to be added.

I was asked about consultation. Obviously, I said in my opening speech that it is an accepted principle in terms of these consequential amendments that it is possible for secondary legislation to amend primary legislation in a number of confined technical cases such as this. I do not have the full details on consultation with all the devolved Administrations although I am assured that they took place.

Obviously, the European Union (Withdrawal) Act 2018 gives the United Kingdom Government the power to make statutory changes to correct deficiencies in the statute book that arise as a result of the UK leaving the EU. Ministers can use those powers in relation to devolved matters but have committed not to do so normally without the agreement of the relevant DAs. These commitments do not extend to all powers in the EUWA and the withdrawal agreement Act. There are the specific powers that I have just referred to, under which secondary legislation can be made in devolved areas without consent from or consulting with DA Ministers where those changes are technical in nature.

However, in relation, for example, to the case of Wales and in fact more generally, I understand that legal officials in my department consulted with the devolved authorities’ lawyers and their respective parliamentary counsel throughout the drafting process. Initial correspondence was sent on 6 August, with the first draft of the statutory instruments shared on 19 August, and the final draft of the SI takes into account the devolved authorities’ comments and drafting suggestions. Policy officials shared details of the statutory instrument on 25 September, with a final draft of the SI and Explanatory Memorandum shared on 30 September. Therefore that process of engagement has gone on for some time.

I was asked—although this is slightly wide of the statutory instrument—about the current state of negotiations. Intensive negotiations with the EU are ongoing this week. They have resumed in person, and intensive negotiations are taking place in person in London as well as virtually via Webex. The teams are continuing to work very hard and are committed to meeting on a daily basis.

The familiar difficult issues remain. Although there has been some progress across many areas, wide divergences remain on fisheries and the level playing field. We will not abandon our core principles to reach a deal. While an agreement is preferable, we are prepared to leave on Australia-style terms if we cannot find suitable compromises. Either way, as the Prime Minister has made clear, people and businesses must prepare for the changes coming on 31 December, most of which will happen whether there is a deal or not. Obviously, this SI is part of the preparations for the transition.

I was asked about recourse to the courts in the event of any disagreements in relation to EU law and who is arbiter. At the end of the transition period, it is true that there may be a number of cases related to infringements that have not yet been resolved. Infringements arising during the transition period may be brought before the CJEU for up to four years following the end of the transition period.

I was asked whether we would return in future to repeal further legislation under the EU withdrawal legislation. It is an optimistic statement to have to make, and I shall be guarded in making it. I simply say to your Lordships and advise that we are confident, currently, that all critical legislation will be in force by the end of the transition period, ensuring that the statute book is functional.

A couple of other points were made by my noble friend Lady McIntosh of Pickering. I believe that I picked up most of her points; if not, we will look and see whether we can make good. Governments always like to try to make good, hence this statutory instrument before your Lordships.

I shall reply outside on the Lugano framework, as I have undertaken. I am not going to follow further down the line of political remarks. It is true that the Government, as the noble Lord, Lord Thomas of Gresford, said, do not care for the idea of a lasting role for the European Court of Justice, which was confirmed by the British people in both the referendum and the election. Here we are dealing with important, practical and technical legislation, and I am grateful for all the extreme interest in the matter and will endeavour to ensure that any unanswered questions are answered.

With that, I hope that this instrument can be approved so that we can ensure that the statute book works coherently and effectively following the end of the transition period.

Motion agreed.

Sitting suspended.