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

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.

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.

I call again the noble Lord, Lord Bhatia, in the hope that we shall be able to hear him this time.

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.

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 sensitivities 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.