Formal Minutes
Wednesday 14 March 2018
Members present
Sir William Cash, in the Chair
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Geraint Davies Richard Drax Marcus Fysh Kate Green Kate Hoey Kelvin Hopkins |
Darren Jones David Jones Stephen Kinnock Andrew Lewer Michael Tomlinson David Warburton |
1. EU withdrawal: Transitional provisions and dispute resolution
Draft Report, EU withdrawal: Transitional provisions and dispute resolution, proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 6 read and agreed to.
Paragraph 7 read as follows:
“Under Article 50, the European Union Treaties will cease to apply to the UK on 29 March 2019, at which point the UK will become a “third country” vis-à-vis the EU. This means that, firstly, the UK will no longer be able to rely on a variety of public policy functions currently exercised wholly or partially by the EU (e.g. trade policy; state aid investigations; issuance of licences to airlines based abroad). This requires additional resources and infrastructure which are unlikely to be in place by March 2019. Similarly, the Government has to convert all EU law into UK law, ready to take effect when the former ceases to apply, i.e. 29 March 2019.”
Amendment proposed, in line 6, to leave out “which are unlikely to be in place by March 2019”.—(Marcus Fysh.)
Question put, That the Amendment be made.
The Committee divided.
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Ayes, 8 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson David Warburton |
Noes, 3 Geraint Davies Kate Green Darren Jones |
Question accordingly agreed to.
Paragraph 7, as amended, agreed to.
Paragraph 8 read.
Motion made, to leave out paragraph 8 and insert the following new paragraph:
“If negotiations conclude that the UK will leave the Single Market and Customs Union, this will fundamentally change the trading relationship between the UK and the EU. Within the EU’s internal market, there is an underlying principle of mutual recognition (especially for trade in goods), underpinned by statutory harmonisation on matters such as tariffs, VAT and regulatory standards. Mutual recognition allows minimal barriers to trade. Remaining in the Customs Union reduces border checks through eliminating tariffs and rules of origin checks. The Government’s own analysis, as well as the assessment of Parliament’s own Committee for Exiting the EU, shows that a policy to leave the Single Market and Customs Union will have a severe negative effect on the economy. In her Mansion House speech, the Prime Minister re-iterated that the UK’s negotiating position was to ensure frictionless trade. The only way to ensure full harmonisation and mutual recognition, in order to deliver frictionless trade, is if the Government seeks to remain in the European Single Market and Customs Union.”—(Geraint Davies.)
Question put, That the new paragraph be read a second time.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 8 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson David Warburton |
Question accordingly negatived.
Paragraph 8 agreed to.
Paragraphs 9 to 28 read and agreed to.
Paragraph 29 read as follows:
“We are profoundly concerned about the manner in which legislation is made behind closed doors and by consensus within the Council of Ministers, and our predecessor committee strongly objected to this in its report following its inquiry in 2016.”
Amendment proposed, in line 1, to leave out “profoundly”.—(Kate Green.)
Question put, That the Amendment be made.
The Committee divided.
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Ayes, 6 Geraint Davies Kate Green Kelvin Hopkins Darren Jones Andrew Lewer David Warburton |
Noes, 5 Richard Drax Marcus Fysh Kate Hoey David Jones Michael Tomlinson |
Question accordingly agreed to.
Paragraph 29, as amended, agreed to.
Paragraphs 30 to 60 read and agreed to.
New paragraph—(Geraint Davies)—brought up and read as follows:
“We ask the Government to seek an extended Transition Period. The UK’s future relationship with the EU should not be at the mercy of the EU’s Multiannual Financial Framework. If a longer Transition Period is necessary for the UK to implement Brexit and establish the UK’s future relationship with the EU, then the Government should seek this extension.”
Question put, That the paragraph be read a second time.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 8 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson David Warburton |
Question accordingly negatived.
New paragraphs—(Geraint Davies)—brought up and read as follows:
“We ask the Government to provide clarity on the level of flexibility during the Transition Period to seek changes to the agreement with the EU. This should include clarity on (a) whether the UK will be able to re-join the EU, and what mechanisms are in place to achieve this, should it wish to; (b) whether the UK will be able to remain in the Single Market after the end of the Transition Period, and what mechanisms are in place to achieve this, should it wish to; and (c) whether the UK will be able to remain in the Customs Union after the end of the Transition Period, and what mechanisms are in place to achieve this, should it wish to. There should also be mechanisms in place for parliamentary and public consultation on these matters before and during the Transition Period.
“We ask the Government to seek a legal opinion on the possibilities of (a) pausing the article 50 process or extending the deadline, in the event that negotiations stall or breakdown, and (b) revoking Article 50, in the event that parliamentary or public opinion opposes leaving the EU. The Government should also produce economic impact assessments of the impact of pursuing these options and seek parliamentary and public consultation on the matter.”
Question put, That the paragraphs be read a second time.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 8 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson David Warburton |
Question accordingly negatived.
Paragraphs 61 to 73 read and agreed to.
Paragraph 74 read.
Motion made, to leave out paragraph 74 and insert the following new paragraph:
“Although the Committee agrees with this principle, the arbitration mechanism falls short of UK standards of rule of law, and therefore offers a poor alternative. The arbitration system lacks transparency and accountability. It does not respect the Doctrine of Precedent, there are issues with the composition of tribunals, since there is no defined way of ensuring sufficient expertise or independence behind decisions, and tribunals are not bound to apply any particular area of law.”—(Geraint Davies.)
Question put, That the new paragraph be read a second time.
The Committee divided.
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Ayes, 4 Geraint Davies Kate Green Kelvin Hopkins Darren Jones |
Noes, 7 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson David Warburton |
Question accordingly negatived.
Paragraph 74 agreed to.
Paragraphs 75 to 108 read and agreed to.
New paragraph—(Geraint Davies)—brought up and read as follows:
“We have concerns about the level of transparency on the proposed Joint Committee. If it is modelled on the CETA committee, the UK will be denied the level of transparency and accountability enjoyed by EU member states through the Commission and European Parliament. The Government ought to seek clarity on the composition of the committee, its transparency, and how it is to be held accountable. The UK should seek a means to nominate members to the committee, to minimise power held by officials. This is to ensure that decisions are not made behind closed doors, especially as many of these decisions will be within the public interest.”
Question put, That the paragraph be read a second time.
The Committee divided.
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Ayes, 4 Geraint Davies Kate Green Kelvin Hopkins Darren Jones |
Noes, 7 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson David Warburton |
Question accordingly negatived.
Paragraphs 109 to 126 read and agreed to.
New paragraph—(Geraint Davies)—brought up and read as follows:
“The Committee notes the manifold problems within the Investor-State Dispute Settlement (ISDS) system, and recommends that the construction of any dispute resolution procedure should be based on substantively ensuring respect for rule of law, rather than ideological preference (regarding the CJEU or other courts).”
Question put, That the paragraph be read a second time.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 6 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Paragraph 127 read and agreed to.
New paragraphs—(Geraint Davies)—brought up and read as follows:
“We ask the Government to reassure Parliament that the arbitration mechanism will not be modelled on ISDS, given its impact on democracy, human rights and the rule of law. The ISDS arbitration mechanism lacks transparency and accountability, and does not respect the Doctrine of Precedent. Furthermore, there are issues with the composition of tribunals, since there is no defined way of ensuring sufficient expertise or independence behind decisions, and tribunals are not bound to apply any particular area of law. The lack of an appeal system in ISDS, and the fact that they are only accessible to foreign investors at a cost of circa £5 million each time, means that ISDS does not conform to UK principles of rule of law.
“We ask the Government to press the EU for clarification on the level of transparency and accountability in the Joint Committee. If the committee is modelled on the CETA committee, the UK will be denied the level of transparency and accountability enjoyed by EU Member States through the Commission and European Parliament. The Government ought to further seek clarity on the composition of the committee and how the committee is to be held accountable. The UK should seek a means to nominate members to the committee, to minimise power held by officials. This is to ensure that decisions are not made behind closed doors, especially as many of these decisions will be within the public interest.”
Question put, That the paragraphs be read a second time.
The Committee divided.
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Ayes, 4 Geraint Davies Kate Green Kelvin Hopkins Darren Jones |
Noes, 6 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Paragraphs 128 and 129 read and agreed to.
Paragraph 130 read.
Amendment proposed, in line 2, to leave out from “This was” to the end of the paragraph.—(Geraint Davies.)
Question put, That the Amendment be made.
The Committee divided.
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Ayes, 1 Geraint Davies |
Noes, 7 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Paragraph 130 agreed to.
Paragraphs 131 to 141 read and agreed to.
Paragraph 142 read, as follows:
“We note that the Prime Minister and Brexit Secretary have both expressed the hope that during the transition period the exclusive jurisdiction of the CJEU might be phased out and a dispute resolution mechanism reflective of future EU-UK relations phased in. We believe they are right.”
Amendment proposed, in line 4, to leave out “We believe they are right.”.—(Kate Green.)
Question put, That the Amendment be made.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 6 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Another Amendment proposed, at end, to add “Although the Committee agrees with this hope in principle, we have concerns about alternative models of dispute resolution.”.—(Geraint Davies.)
Question put, That the Amendment be made.
The Committee divided.
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Ayes, 4 Geraint Davies Kate Green Kelvin Hopkins Darren Jones |
Noes, 6 Richard Drax Marcus Fysh Kate Hoey David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Paragraph 142 agreed to.
Paragraphs 143 to 165 read and agreed to.
New paragraphs—(Geraint Davies)—brought up and read as follows:
“The Committee asks that the Government clarifies its position on regulatory alignment and jurisdiction of the CJEU–both during transition and after. In order to achieve mutual recognition and ‘frictionless trade’, as set out by the Prime Minister in the Government’s negotiating position, it is necessary to maintain both the same regulations and the same legal interpretations of the regulations. Regulatory alignment therefore requires the same legal authority for interpretation, as provided by the CJEU’s jurisdiction. To achieve regulatory equivalence, it cannot be the case that UK courts make different interpretations to EU courts. Since the Government’s stated intention is also to leave the CJEU’s jurisdiction, this exposes a contradiction in the Government’s negotiating strategy.
“We recommend that the Government establishes an arbitration mechanism which meets high standards for human rights, democratic accountability and rule of law. The ISDS model falls short of UK standards of rule of law and therefore offers a poor alternative. There are concerns that the arbitration system lacks transparency and accountability. For example, the TTIP ISDS model does not respect the Doctrine of Precedent, there are issues with the composition of tribunals, since there is no defined way of ensuring sufficient expertise or independence behind decisions, and tribunals are not bound to apply any particular area of law.
“We recommend that the Government seeks a more transparent and accountable Joint Committee. If the Joint Committee is modelled on the CETA joint committee, it will not have sufficient levels of transparency and mechanisms for public accountability. Through the UK’s current membership of the EU, these are guaranteed through the Commission and the European Parliament. The Joint Committee does not have the same level of democratic safeguards as these institutions, and the Government should push for this in negotiations with the EU.”
Question put, That the paragraphs be read a second time.
The Committee divided.
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Ayes, 3 Geraint Davies Kate Green Darren Jones |
Noes, 7 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson |
Question accordingly negatived.
Summary agreed to.
Question put, That the Report be the Nineteenth Report of the Committee to the House.
The Committee divided.
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Ayes, 7 Richard Drax Marcus Fysh Kate Hoey Kelvin Hopkins David Jones Andrew Lewer Michael Tomlinson |
Noes, 1 Geraint Davies |
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
[Adjourned until Wednesday 21 March at 1.45pm.
Published: 20 March 2018