Common Rules for Exports (EU Exit) Regulations 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Common Rules for Exports (EU Exit) Regulations 2020.

My Lords, I hope that the Committee may be unanimous in support of these regulations and their objective. The regulations were laid before the House on 21 September and were approved by a Committee of the House of Commons on 14 October. They are made under powers in the European Union (Withdrawal) Act 2018, which I will refer to as “the Act” from now on. The Committee will be aware that, given the context, these powers are limited. All that they allow is the correction of technical deficiencies in existing EU legislation that, by the operation of the Act, is to be retained in United Kingdom domestic law following withdrawal from the European Union. The amendments made by these regulations correct those deficiencies by, for example, replacing references to the European Union, its institutions and legislation with the appropriate United Kingdom references.

The retained EU regulation, as amended by these regulations, lays down the basic principle that exports from Great Britain will not be subject to quantitative restrictions unless the restrictions are applied in conformity with the retained EU regulation. The new legal regime makes it clear what the purpose of any export restriction should be. In general, export restrictions may be used only where there is a risk of a critical situation arising on account of a shortage of essential products or to remedy such a situation, or where such a measure is needed to fulfil international undertakings entered into by the United Kingdom.

I start by drawing the Committee’s attention to the fact that these regulations amend the retained EU regulation only as it applies in respect of Great Britain. This is consistent with the Northern Ireland protocol, which preserves the ability of the European Commission to exercise these powers in Northern Ireland. However, as is also set out in Article 6 of the Northern Ireland protocol, nothing may fetter the movement of goods from Northern Ireland to Great Britain, other than to fulfil an international obligation. The EU regulation is not used to fulfil international obligations and so does not fetter the movement of goods within the United Kingdom.

Through the course of the year, we have seen the use of export restrictions on medical goods grow around the world in response to shortages arising during the fight against Covid-19. Indeed, the European Commission used the EU regulation in March in response to shortages of personal protective equipment—PPE. Under this EU regulation, the United Kingdom was required to temporarily authorise any exports of PPE, following a review of licence applications from exporters. In the vast majority of cases, the United Kingdom authorised these exports.

While export restrictions can be appropriate in dealing with critical situations in the short term, the restrictions we have seen build up around the world have disrupted the normal flow of trade and exacerbated the efforts of many countries to combat the global pandemic.

My Lords, I do not believe that I have yet spoken in a debate being replied to on behalf of the Government by the noble Lord, Lord Grimstone. I welcome him to his role—although he has been there for some time. I see him as a very capable and grown-up figure. I wish that could be said of the rest of the Government in which he serves.

I am speaking in this debate because I am a member of the Secondary Legislation Scrutiny Committee and this measure came before us a couple of weeks ago. In terms of Great Britain, it seems a perfectly sensible amendment of retained EU law. There is however some uncertainty, which is why I am speaking today, about its implications for Northern Ireland.

Perhaps I may quote from the 29th report of your Lordships’ Secondary Legislation Scrutiny Committee. Paragraph 7 states:

“While we note the Department’s explanation that the Commission could impose export controls or restrictions on Northern Ireland only in very limited circumstances, such as in relation to the movement of endangered species, it is not clear what other circumstances may allow the Commission to exercise its powers. These are issues that the House may wish to explore further, given the sensitivities around future trade between Northern Ireland and the rest of the UK.”

That is why we drew the regulations to the special attention of the House.

We have already had a rather shameful episode, in my view, where the Government signed up to the Northern Ireland protocol and then, when they considered it in more detail, decided that they did not like its terms. As a result, they attempted something which, as we saw in the Divisions last night, this House regarded as a gross breach of international law—to change provisions of the protocol which they did not like. What I am seeking today is an assurance as to what exactly are the circumstances in which this bit of EU law will apply in Northern Ireland, and whether the Government will give an absolute undertaking that they will not seek in any future piece of legislation to override these provisions. Given what we have seen in the last year, I think that is a perfectly reasonable request.

I am sorry to interrupt the noble Lord but the time limit for speeches in this debate is three minutes.

That is even given the very few speakers in the debate, which I do not understand. I will sum up in a moment. So, the protocol speaks of

“the extent strictly required by any international obligations of the Union”,

but it goes on to say that, despite Northern Ireland’s integral place in the United Kingdom, the applicable EU legislation would apply in Northern Ireland. What would that mean?

I am sorry to interrupt the noble Lord once again but we are very tight on time. I am afraid the noble Lord will have to conclude his remarks.

I conclude my remarks, but I hope that we do not get into legal problems similar to those we have seen already.

My Lords, after hearing Conservatives and Ukippers preach year after year about the unnecessary bureaucracy of European regulations, it is sad that we now have a Government hurrying to transpose European regulations into domestic law as necessary and useful elements in diverse aspects of government and in managing our economy. That is a sad irony.

My first question to the Minister is to ask whether he can tell us yet how many more SIs are still to come before the House from his department before transposition and replacement are complete. We will be very busy between now and the new year with continuing legislation to clarify our future external trade policy and our relations with the EU and others. How many more SIs are still to come? Secondly, has preparation for this transposition been accompanied by any contingency planning in Whitehall about products not easily available in Britain that could be critical in an emergency?

I understand that constraints on exports of specific foodstuffs might be rational and necessary in an emergency. I am aware that the UK produces a range of pharmaceuticals to which this SI might apply. However, we have learned during the current Covid-19 emergency that there are a number of medicines that we do not produce in quantity, and a wide range of other medical supplies of which we have lacked domestic stocks—and which the Government had failed to ensure were available in usable forms in stockpiles.

Now that the UK is abandoning its guaranteed access to its largest market from which to source many essential products, have the Government embarked on any discussions with the EU and its member Governments about future co-operation in any shared or global emergency? Do they have plans to increase domestic production or expand domestic stockpiles?

I shall leave the Irish dimension to others, beyond noting that the growing prosperity of the Irish economy means that Ireland has also become a significant source of medical and related products used within the UK. Instead, I wish to inquire what the officials who gave evidence to our Secondary Legislation Scrutiny Committee meant when they said that our pursuit of national priorities and constraint of exports would be limited by the need “to meet international obligations”. What international obligations would limit government sovereignty under such circumstances? Which states or international organisations could impose such obligations on us?

My Lords, I will make two points about these regulations. As I have said before, a multitude of retained EU law is coming through Parliament. Some legislation may better serve its purpose if, instead of amending existing EU law with multiple statutory instruments—meaning the original instrument has to be consulted as well—we had one completely new instrument. It would make the law much less complex and possibly less confusing, especially with regard to this instrument and its implications for the Northern Ireland protocol.

Secondly, the pandemic has thrown a light on the difficulties that can be faced in accessing goods from other countries, when goods are in high demand and stocks are low, such as with PPE. Even Brexit itself and the end of the transition period may cause some shortages, especially if there is no deal. What if there were a shortage of some vital product and the UK Government put quantitative restrictions on it to ensure adequate supplies within the UK? There is no fetter on the movement of goods between Northern Ireland and Great Britain, as per Article 6 of the Northern Ireland protocol. Those goods are sent across to Northern Ireland where they are needed.

In this situation, the EU does not have any quantitative restrictions on goods, as it does not have a problem with supplies. In such a scenario, can the Minister tell us what precautions are in place to stop a company selling their goods on to the EU without having to follow the same restrictions as in the rest of the UK, and thus gaining a competitive edge over other companies within the UK?

My Lords, these regulations are presented to the Grand Committee as no more than a correction of technical deficiencies in existing EU law that are to be retained on 1 January, irrespective of the outcome of current negotiations. Specifically, as the Minister confirmed, the regulations address the basic principle that exports from Great Britain will not be subject to any quantitative restrictions unless the restrictions are applied in conformity with the retained EU regulation.

It is to the first point made by the noble Lord, Lord Liddle, and the work of the Secondary Legislation Scrutiny Committee to whom we should be grateful for the level of interest shown in these Committee proceedings. As has been noted, the purpose of these regulations is specifically focused on the retention of retained EU law on common rules for exports to operate effectively in Great Britain after the end of the implementation period. This provides the Secretary of State with the powers to impose export control or restrictions where this is necessary to prevent a critical situation arising due to a shortage of essential products or to meet international obligations. Vaccines would fall into the former, CITES into the latter. However, these are the only two examples which have been given to Parliament, although I note in the EC note of 17 August that cultural goods are mentioned in this context.

Clearly, under the precise wording of these regulations, their potential application could be wider, and the wider they are, the greater the potential divide between Great Britain and Northern Ireland in trade. Therefore, I ask the Minister to clarify the breadth of their application and the circumstances surrounding it.

One issue of concern is that it is unclear whether proposed export restrictions are specifically to be used where there is a critical situation arising on account of a shortage of essential products. For example, on the definition given by the Minister today, and picking up comments made by the noble Lord, Lord Loomba, is it envisaged that the Oxford AstraZeneca vaccine will be subject to these regulations? If so—assuming that that vaccine will come into use after 1 January— will the only recourse Parliament would have to the recommendations of government be to negate the regulations placed before the House, possibly after the date of their implementation, if the Covid-19 regulations are a suitable precedent?

My Lords, in his opening address to the Committee, the Minister said that the European Commission will “exercise these powers in Northern Ireland”. Will the Minister explain to the Committee how it is possible for the status of Northern Ireland not to be changed after 1 January if a foreign power, which the EU Commission will become on that date, exercises power within what is supposed to be an integral part of the United Kingdom? How are the two things consistent? If it came to a dispute, in so far as products coming from Northern Ireland to Great Britain were deemed by the European Union to be better retained within the EU rather than sent to Great Britain, who would pull the lever and take a decision on that matter?

There has been a consistent refusal by the Government to accept the realities of their proposals to the European Commission, dated 2 October last year, in which they put forward an alternative to the then withdrawal proposals. They have created a border in the Irish Sea but consistently denied it. I ask the Minister again: how is it consistent with the integrity of the United Kingdom if a foreign power has the ability to exercise powers within a part of the kingdom, even though the people living there will have no say whatever in the decisions that the Commission might make? The Minister owes the Committee an explanation for that.

I thank the noble Lord, Lord Liddle, and other committee members who have looked at this. It is interesting that everyone who has spoken so far has zeroed in on this issue. The inconsistency is so obvious. How can you take back control if, where I live, those who I had the pleasure and privilege to represent for many years are effectively abandoned to a foreign power? Does the Minister not realise the implications of this? I hope that, when he comes to sum up, he will be able to give the Committee an explanation.