Documents considered by the Committee on 27 February 2019 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’s 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 issues and questions have arisen in documents or in correspondence with Ministers:

Summary

Proposed Directive on Whistleblowing

The proposed Directive aims to harmonise national laws to a minimum standard on whistleblowing in relation to breaches of EU law. It seeks to improve on the current piecemeal approach to whistleblowing at EU level by introducing a horizontal approach across most EU policy areas. The proposal follows in the wake of recent scandals disclosed by whistleblowers like Cambridge Analytica. Historically, the UK has led the EU in terms of the legal protection it affords to whistleblowers (see the Public Interest Disclosure Act 1998 and Employment Rights Act 1996). But the Government has not been supportive of the proposal due to the potential costs and burdens for business of internal reporting procedures. This is one of the main differences between the current UK and proposed EU legal frameworks. As currently drafted, an adopted Directive would not have to be transposed before 15 May 2021. This means that the UK would not have to implement it, either in the case of “no-deal” or a negotiated exit where transition is not extended beyond 31 December 2020.

Our chapter reports on the Government’s latest letter. This provides an update on the text agreed in Committee of Permanent Representatives in the European Union (COREPER) which is expected to be put to a formal vote in Council on 7–8 March as a General Approach. However, we do not grant a scrutiny waiver for that General Approach. This is for various reasons. We are mindful that the proposal could have to be implemented by the UK if a transition period is extended: the maximum extension being 31 December 2022. We also note the Government’s continuing and significant concerns about the proportionality of the obligations on UK small businesses to set up internal reporting systems and regarding the hierarchy of reporting. Finally, there remains doubts about the legal integrity of the proposal arising from the use of multiple legal bases and potentially different legislative procedures. We request instead legal analysis from the Government on this issue. We also flag our disappointment that, in any case, the vote in Council may be no more than a rubberstamping of the COREPER text.

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Brexit-preparedness: PEACE Programme

The EU has agreed, with the support of the UK, that cross-border projects supporting peace and reconciliation on the island of Ireland should remain in place in a no-deal Brexit scenario. While supportive of the legislation, the UK formally registered concern about a reference in the text to the UK’s continued liabilities for its financial obligations assumed as a Member State. The Committee considered it helpful that the UK highlighted its concern in order that agreement to this Regulation does not prejudice future discussions on the UK’s financial liabilities.

Cleared; drawn to the attention of the Northern Ireland Affairs Committee

Drinking Water Directive

A compromise is in sight on the Commission’s proposal to revise the EU’s Drinking Water Directive. The proposal has already been the subject of debate in the House as, on the recommendation of the Committee, it adopted a Reasoned Opinion on the proposal last summer, expressing concern that the provisions on access to water breached the principle of subsidiarity (i.e. that the objectives of the measures are better achieved by action at the national, regional or local level rather than the EU level). While the Minister was initially resistant to the Committee’s concern about subsidiarity, the Committee was pleased to note from the Minister’s most recent letter that this is an area that has been picked up by the UK and others in negotiations, coalescing around text that affords greater flexibility at the local level. The Committee had also noted that the Commission was proposing some chemical parameters at a more stringent level than recommended by the World Health Organisation. Of these, the main outstanding concern is around lead. To comply with the proposed levels would require substantial investment in UK water infrastructure at significant cost. The Committee granted a scrutiny waiver to allow the Government to agree to a General Approach at the 5 March Environment Council. Potentially challenging negotiations with the European Parliament would then follow.

On Brexit, it is possible that the UK would need to comply with this legislation under the terms of any future relationship enshrining the principle of environmental non-regression. That principle is already included in the Backstop and so ought to feature in the future relationship.

Not cleared; but scrutiny waiver granted; further information requested; drawn to the attention of the Environmental Audit Committee and the Environment, Food and Rural Affairs Committee

Commission ‘no deal’ preparedness: air connectivity

The Commission’s proposal is a unilateral measure that would apply in the event of a ‘no-deal’ Brexit. It would provide for the continuation of basic air services between the EU and UK for a limited period of time (up until an air transport agreement with the UK enters into force or 30 March 2020, whichever is sooner). It is not indented to replicate current arrangements or to maintain the status quo (as prevails whilst the UK is an EU Member State).

As a Union initiative for the soon to be EU-27, the intended effect of the proposal—to ensure basic EU/UK air connectivity in the event of a no-deal Brexit—would be dependent upon UK reciprocity and similar domestic provision being made (whether by legislation or administrative methods). In summary, if adopted, the proposal would differ from current arrangements in that it would: grant first, second, third and fourth freedom air traffic rights to UK air carriers (thus preventing UK carriers from operating services between two Member States or within a single Member State); restrict the use of ‘operational flexibility devices’ such as code sharing arrangements; and freeze the capacity that UK air carriers are allowed to offer in the Union at pre-Brexit levels (i.e. the number of flights that can be undertaken). The proposal would also require UK carriers to continue to comply with Union airline ownership rules. The Committee suggest retaining the proposal under scrutiny pending satisfactory answers to the questions we have asked of the Government on the substance of the proposal and, importantly, whether it would reciprocate the rights—and meet the obligations—stemming from the Regulation and, if it would, how these would be given effect to domestically. Given the political sensitivity of the proposal and the interest of multiple stakeholders in its form, we expect that it will be subject to further changes before adoption. It would, therefore, be wise to continue to closely scrutinise its progress.

Not cleared from scrutiny; further information requested

Connected vehicles: future communication standards

The Commission’s proposal would set universal standards and specifications for future communications technologies to be utilised by ‘cooperative intelligent transport systems’ (C-ITS). By way of analogy, the proposal covers the ‘language’ that, for example, cars and road-side infrastructure will use to ‘talk’ to each other in the future. With the mass deployment of autonomous and connected vehicles expected within the next decade, the proposal is of significant legal and political importance. As its terms would have to be met by communication service providers and vehicle and infrastructure manufacturers, it would also have significant indirect financial implications. The proposal has caused significant disquiet amongst stakeholders. This stems, in particular, from the Commission’s decision to approve a form of Wi-Fi-based communications technology—along with a 3G/4G standard—whilst excluding LTE-V2X and 5G. Given the potentially wide-ranging implications of the proposal, the Commission’s explanatory memorandum justifying regulatory action is worryingly deficient in a number of areas. In summary, it fails to: provide a full justification of the need for legislation; reconcile its choice of Wi-Fi over LTE-V2X and 5G against previous commitments to technology neutrality and open competition; is not clear in its understanding of interoperability or the implications that this would have for future standards; and is incomplete in its analysis and suggestions for the protection of user privacy and the security of C-ITS applications. The Government Minister responsible for the proposal echoes some of these concerns in his explanatory memorandum. Further questions arise, however, in light of the Government’s recent approach towards ‘amending’ like acts to account for deficiencies arising from the UK’s withdrawal from the EU (i.e. the process of incorporating EU law into ‘domestic’ law under the EU (Withdrawal) Act 2010). As such, it is uncertain how, if approved, the Government would give effect to the delegated act or, indeed, whether this would be done in full or only partially. Against these concerns, the Committee recommends that the proposal is retained under scrutiny and a request for a response to our report made under an expediated timeframe. This is to account for the Commission’s plans for the adoption of the proposal by the summer.

Not cleared from scrutiny; further information requested

UK participation in the Schengen rule book

In 2018, the European Commission proposed a Regulation setting out changes to the EU’s current network of Immigration Liaison Officers (established in 2004) to ensure that it contributes more effectively to the EU’s migration policy priorities in third (non-EU) countries. The UK participates in the existing network but is entitled to opt out of the proposed Regulation as it is a Schengen-building measure. The European Scrutiny Committee last considered the proposal in September 2018 and asked the Minister to inform it as soon as possible of the Government’s decision. Since then, the European Commission has proposed a Council Decision which indicates that the UK has decided to opt out of the proposed Regulation. This decision means that the Council is required to determine whether the UK can continue to participate in other elements of the Schengen rule book, applying the criteria set out in the Schengen Protocol annexed to the EU Treaties. The Immigration Minister (Rt Hon. Caroline Nokes MP) belatedly confirms that the Government has decided to opt out of the proposed Regulation and is content with the Commission’s assessment that this decision should not have any wider implications for the UK’s participation in the Schengen rule book. She anticipates that both proposals will be endorsed by Member States’ Ambassadors to the EU (COREPER) on 20 February and formally adopted by the Council shortly afterwards. The European Scrutiny Committee expresses frustration that it was not informed sooner of the Government’s decision to opt out of the proposed Regulation and notes that this failure puts the Government in breach of its own Code of Practice on parliamentary scrutiny of EU justice and home affairs opt-in and Schengen opt-out decisions. Whilst making clear its dissatisfaction with the Government’s handling of the proposals, the Committee considers that the European Commission has applied the criteria in the Schengen Protocol properly and in a way which is beneficial for the UK.

Cleared from scrutiny; drawn to the attention of the Home Affairs Committee and Justice Committee.

Interoperable EU information systems for security, border control and migration management

The European Commission has proposed two Regulations containing the technical detail needed to make EU security, border and migration information systems interoperable so that information on cross-border security threats and irregular migration can be shared more rapidly. The UK is only entitled to participate in the proposed Regulation covering the EU information systems in which the UK takes part (the Schengen Information System, the Eurodac asylum database and a new information system containing the criminal records of third country nationals convicted of a criminal offence within the EU). The other proposed Regulation concerns Schengen-related information systems from which the UK is excluded. Although the new interoperability framework is unlikely to be up and running until around 2023, after the expiry of the transition/implementation period envisaged in the draft EU/UK Withdrawal Agreement, the Government has decided to participate in the first proposed Regulation. The Committee’s scrutiny has focussed on third country access to data obtained through the interoperability framework (and the underlying EU information systems) as well as the impact of the proposals on British citizens whose personal data, post-exit/transition, will be held on many of the EU’s information systems. The Government informs the Committee that trilogue negotiations have concluded and that it has not succeeded in securing more favourable terms on third country access. The Government also considers that some of the provisions (for example, on police access to data) have been watered down, diminishing the operational benefits of the interoperability framework. It therefore intends to abstain when the Regulations are brought to the Council for a vote on their adoption. The Committee granted a scrutiny waiver in December 2018 but, in the event, the proposals were not voted on at the Justice and Home Affairs Council. As there is no further prospect of any changes being made, and the Government intends to abstain when the proposed Regulations are brought to Council in March or April, the Committee is now clearing them from scrutiny.

Cleared from scrutiny; drawn to the attention of the Home Affairs Committee and Justice Committee.

Tightening EU rules on explosives precursors

The European Commission has proposed changes to EU rules on explosives precursors—chemical substances used in home-made explosives—to keep pace with the evolving security threat whilst also maintaining “a level playing field” for legitimate trade. The proposed Regulation would further restrict access to these substances by ordinary members of the public, tighten up the licensing regime, and strengthen point of sale checks on “professional users” who need the substances for their trade or profession. The Government broadly welcomes the changes but has expressed concern that some of the tighter restrictions could affect “a small number of members of the public who would be prevented in some cases from being able to participate in their hobbies” (mainly drag car racing and pyrotechnics). In its latest update, the Government indicates that it has been partially successful in securing changes to mitigate the impact of the proposal on “hobbyists” but has been unable to make any headway on chlorates/perchlorates used in pyrotechnics. The Government nonetheless considers that the compromise text provisionally agreed by the Council and European Parliament represents a positive outcome for the UK and would like to support it when brought to the Council for formal adoption ahead of the May 2019 European Parliament elections. The European Scrutiny Committee agrees to clear the proposed Regulation from scrutiny now that trilogue negotiations have concluded and the final text secures the Government’s main negotiating priorities.

Cleared from scrutiny; drawn to the attention of the Home Affairs 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: Unfair trading practices in the food supply chain [Proposed Directive (NC)]; Whistleblowing and breaches of EU law [Proposed Directive (NC)]

Environmental Audit Committee: Drinking Water Directive [Proposed Directive (NC; scrutiny waiver granted)]

Environment, Food and Rural Affairs Committee: Unfair trading practices in the food supply chain [Proposed Directive (NC)]; Drinking Water Directive [Proposed Directive (NC; scrutiny waiver granted)]

Exiting the EU Committee: Negotiating mandates for EU-US trade talks [Proposed Decisions (NC)]

Foreign Affairs Committee: Negotiating mandates for EU-US trade talks [Proposed Decisions (NC)]

Home Affairs Committee: UK participation in the Schengen rule book [Proposed (a) Regulation; (b) Decision (C)]; Interoperable EU information systems for security, border control and migration management [Proposed Regulations (C)]; Tightening EU rules on explosives precursors [Proposed Regulation (C)]

International Trade Committee: Negotiating mandates for EU-US trade talks [Proposed Decisions (NC)]

Justice Committee: Interoperable EU information systems for security, border control and migration management [Proposed Regulations (C)]

Northern Ireland Affairs Committee: Brexit-preparedness—continuation of territorial cooperation programmes [Proposed Regulation (C)]

Transport Committee: Connected vehicles: future communication standards [Commission Delegated Regulation (NC)]; Commission ‘no deal’ preparedness: air connectivity [Proposed Regulation (NC)]





Published: 5 March 2019