Documents considered by the Committee on 22 March 2017 Contents

Meeting Summary

The Committee looks at the significance of EU proposals and decides whether to clear the document from scrutiny or withhold clearance and ask questions of the Government. The Committee also has the power to recommend documents for debate.

Brexit related issues

The Committee is now looking at documents in the light of the UK decision to withdraw from the EU. Issues are explored in greater detail in report chapters and, where appropriate, in the summaries below. The Committee notes that in the current week the following Brexit-related issues and questions have arisen in documents or in correspondence with Minsters:

Fisheries

The Committee noted with interest the Government’s assessment that the EU’s new Multi-Annual Plan for North Sea fisheries management could provide a valuable framework for future UK-EU fisheries cooperation in the North Sea and asked:

Security of Energy supply

The Committee asks whether any assessment has been made of the impact of “no deal” on gas security and gas prices.

British Overseas territories

Brexit will end the special status of British Overseas Territories under EU law, which grants them preferential terms of market access and also provides financial assistance under the European Development Fund.

The Committee has asked the Foreign Office to provide further information of the impact of Brexit on the Overseas Territories, and how they could safeguard their access to the European market if the UK and EU fail to agree on a new trade deal.

Defence R&D

The Committee ask how the Government will seek to maintain access for UK businesses to EU funding for R&D in the defence technology sector, and whether it will seek to maintain UK access to the defence procurement market in other Member States after Brexit.

Digital Single Market: E-commerce package

Given the importance of data flows and consumer rights to the digital economy, the Committee ask what Digital Single Market initiatives could be achieved solely through domestic law, and which would necessitate a continuing bilateral agreement of one form or another.

Summary

2017 Fishing Opportunities

The fishing opportunities (catch quotas and effort limitations for 2017) were agreed in December. The Committee considered a letter from the Minister summarising the outcome. He was largely content but noted that there were some challenges for the UK on stocks such as bass, cod, and megrim in the South West and sole in the Eastern Channel. The Committee sought clarification on the rules relating to bass and raised a number of Brexit-related issues in addition to those noted above:

Given that the fishing opportunities have been agreed, the Committee released the document from scrutiny. In the light of the joint evidence session held with the Environment, Food and Rural Affairs Committee on matters pertaining to Brexit and Fisheries, the Committee decided to draw the chapter to the attention of that Committee.

Cleared; further information requested; drawn to the attention of the Environment, Food and Rural Affairs Committee.

The Committee also considered a Commission Communication on Illegal, Unreported and Unregulated Fishing and a Multi-Annual Plan for North Sea Fisheries.

Security of gas supply

In order to address gas supply vulnerabilities, particularly as a result of tensions between Russia and Ukraine, the Commission proposed new EU security of supply rules in February 2016. The main elements were: mandatory regional co-operation (involving better cooperation and coordination); ensuring the availability of the necessary infrastructure; improved risk assessment and prevention; increased supervision of the supply obligation for protected consumers; and the incorporation of a new solidarity principle. Agreement between Member States and the European Parliament is imminent. The Government has written to update the Committee and to ask that the proposal be released from scrutiny. The Minister also took the opportunity to address various Brexit-related matters raised by the Committee but could not reassure the Committee that any assessment had been undertaken as to the impact on gas price and gas security of failing to reach an agreement on energy cooperation with the EU post-Brexit. The Committee seeks confirmation that an analysis of the impact of “no deal” either has been prepared or is under preparation in order that the Department is able to mitigate the impact of any such outcome.

Cleared; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee.

European Defence Action Plan

The European Commission has published an Action Plan to increase the capacity of the EU’s defence industrial base, to make defence procurement by EU countries more cost-effective. The major new proposal is a European Defence Fund, which would finance both joint defence research and the joint acquisition of defence technology by multiple Member States. In addition, the Commission is also proposing to make it easier for the European Investment Bank to lend money to suppliers in the defence industry.

The Committee considers that the main elements of the Action Plan lack detail, and has asked the Minister to provide further information. The Committee has asked how the Government will seek to maintain access for UK businesses to the EU funding and other Member States’ defence procurement market after Brexit.

Cleared; drawn to the attention of the Defence Committee.

EU financial assistance for UK overseas territories

Under the EU Treaties, the UK’s Overseas Territories such as the Falklands, Bermuda and Pitcairn benefit from preferential market access to the EU, and many of them are also eligible for financial assistance under the European Development Fund.

The Committee has asked the Foreign and Commonwealth Office to provide more information on the potential consequences of Brexit for these territories, some of which are economically reliant on access to the EU market. In particular, the Committee has asked whether the Government will make up any shortfall in funding resulting from the UK’s exit from the EU, and how the Overseas Territories might safeguard their current levels of market access if the UK and EU fail to agree on a new trade deal.

Cleared; drawn to the attention of the International Development Committee.

Retaliatory customs duties on imports from the United States

The Committee considered the renewal and amendment of longstanding EU retaliatory trade measures against the United States, raising duty on imports of sweetcorn, spectacle frames and mountings, crane lorries and women’s denim trousers. These additional duties were first imposed in 2005 following a WTO ruling against US trade-distorting legislation (the ‘Byrd Amendment’), and have since been imposed annually by the EU. The Committee drew the attention of the House to the matter in the context of current debate on the UK’s future trade policy, relations with key trading partners, the development of trade defence measures post-Brexit, and WTO dispute resolution mechanisms.

Cleared; drawn to the attention of the International Trade Committee.

Digital Single Market: E-commerce package

The Government has provided the Committee with a detailed update regarding progress in relation to the Digital Single Market (DSM) Strategy, which aims to increase cross-border e-commerce in the EU by enabling consumers and companies to buy and sell products and services online more easily and confidently. The Minister states that despite the UK’s imminent exit from the EU the Government will continue to play a proactive role in DSM negotiations and votes, and notes that the UK has recently succeeded in expediting progress of a number of key DSM measures, including the geoblocking and portability regulations. The Minister declines to provide information about the Government’s negotiating priorities, but does indicate that data flows are paramount, and also acknowledges the importance of consumer rights in the digital economy. In response the Committee requests a clear legal assessment of which DSM initiatives could be achieved solely through domestic law and which would necessitate a continuing bilateral agreement of one form or another.

Not cleared: drawn to the attention of the Business, Energy and Industrial Strategy Committee

Documents drawn to the attention of select committees:

(‘NC’ indicates document is ‘not cleared’ from scrutiny; ‘C’ indicates document is ‘cleared’)

Business, Energy and Industrial Strategy Committee: Security of gas supply [Proposed Regulation (C)]; Digital Single Market: E-commerce package [Commission Communication (NC)]

Defence Committee: European Defence Action Plan [Commission Communication (C)]

Environment, Food and Rural Affairs Committee: Illegal, Unreported and Unregulated Fishing [Commission Communication (C)]; Fisheries: catch quotas and effort limitation for 2017 [Proposed Regulation (C)]; Multiannual Plan for Demersal Fishing Stocks in the North Sea [(a) Proposed Regulation, (b) Executive Summary and (c) Impact Assessment (NC)]

International Development Committee: EU financial assistance for Overseas Countries and Territories [Commission Report (C)]

International Trade Committee: Retaliatory customs duties on imports from the United States [Commission Regulation (C)]





24 March 2017