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The EU’s mandate for negotiating a new partnership with the UK: outcome of Select Committee consultation Contents

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1The EU’s mandate for negotiating a new partnership with the UK1

In the opinion of the European Scrutiny Committee, the Council Decision (published in draft on 3 February 2020 and adopted in amended form by the Council on 25 February 2020) authorising the opening of negotiations for “a new partnership” with the UK and establishing the EU’s negotiating position raises matters of vital national interest to the UK under section 13A of the European Union (Withdrawal) Act 2018.2 The European Scrutiny Committee has consulted Departmental Select Committees of the House of Commons which it considers also have an interest in this EU legislation.3 Accordingly, pursuant to section 13A, we propose a debate and vote on the following motion: That this House, having regard to the constitutional and legal functions enshrined in the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020, urges the Government to conduct its negotiations with the European Union with the fullest possible transparency to facilitate essential parliamentary scrutiny; also urges the Government to make regular progress reports on the negotiations, including on stakeholder contributions to the consultation on The Future Relationship with the EU: the UK’s Approach to Negotiations, and to address the issues identified by the European Scrutiny Committee in its Fifth Report of Session 2019–21, HC 333, as matters of vital national interest.”

Overview

1.The UK left the EU on 31 January 2020 and is now in a transition period. The Government says it will not extend the transition period beyond the end of 2020 and this commitment is enshrined in UK law.4 The Government expects the UK to “regain our legal and economic independence” on 1 January 2021.5 The Report on EU Withdrawal: Transitional provisions and dispute resolution published by our predecessor Committee in March 2018 both charted and criticised the early stages of the UK’s exit negotiations.6 Since then, two Acts of Parliament have been passed. The European Union (Withdrawal) Act 2018 repealed the European Communities Act 1972 on exit day—31 January 2020—while amendments made by the European Union (Withdrawal Agreement) Act 2020 temporarily “saved” and applied some of its provisions during the current post-exit transition period. Following a general election in December 2019, the European Union (Withdrawal Agreement) Act 2020 was passed by a large majority in the Commons and gives effect in UK law to the EU/UK Withdrawal Agreement. Meanwhile, the EU and UK are striving to agree a new relationship to take effect at the end of transition. For this to happen, they will have to complete the bulk of the negotiations by the autumn of 2020 to allow time for a new agreement (or agreements) to be ratified and for businesses and others to prepare for and adjust to the new arrangements.

2.The EU and the UK each set out their approach to the negotiations in February 2020, the UK in a Written Statement made by the Prime Minister (Rt Hon. Boris Johnson MP) and supplemented by a more detailed Command Paper, the EU in a Council Decision establishing the official negotiating mandate. The European Commission proposal on which the Council Decision is based was deposited for scrutiny by the Government in February. The Government recognises that the UK is in a unique position, affected by EU laws and policies for as long as the transition period lasts, but with no presence or formal say when they are being discussed and agreed by the EU, and accepts that there is a continued need for scrutiny during transition. In this regard, we draw the House’s attention to section 38 of the European Union (Withdrawal Agreement) Act 2020 on Parliamentary sovereignty. Scrutiny is indeed imperative because decisions which may affect the UK are often taken by the EU’s Council of Ministers behind closed doors, by majority vote or no vote at all (when it acts by consensus), and there is no public transcript to explain the reasons for its decisions.

3.In examining the proposed Council Decision in March, we had two tasks in mind: to fulfil our traditional function of alerting the House to EU documents which we consider to be legally or politically important for the UK and also our new statutory duty, under section 13A of the European Union (Withdrawal) Act 2018, to determine whether specific EU legislation (or a proposal for EU legislation) “raises a matter of vital national interest to the United Kingdom”. We were also mindful of the reaffirmation in section 38 of the European Union (Withdrawal Agreement) Act 2020 that “the Parliament of the United Kingdom is sovereign” and that nothing in the Act implementing the EU/UK Withdrawal Agreement “derogates from the sovereignty of the Parliament of the United Kingdom”.

4.To inform our assessment of vital national interests under section 13A of the 2018 Act, we published an initial Report in March inviting Select Committees to provide their views on the EU negotiating mandate in the areas of policy for which they are responsible.7 Our request came at a time when many Committees were shifting the focus of their work to scrutinising the Government’s efforts to tackle the Covid-19 pandemic. We are immensely grateful to those that were able to respond, at short notice and in challenging circumstances. Their responses are summarised in the Annex and reproduced in full in the Appendix to this Report.

5.Having completed the consultations foreseen in section 13A of the European Union (Withdrawal) 2018 Act, we consider that the Council Decision establishing the EU negotiating mandate for “a new partnership” with the UK raises matters of vital national interest to the UK that should be debated on the floor of the House on the following motion.

That this House, having regard to the constitutional and legal functions enshrined in the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020, urges the Government to conduct its negotiations with the European Union with the fullest possible transparency to facilitate essential parliamentary scrutiny; also urges the Government to make regular progress reports on the negotiations, including on stakeholder contributions to the consultation on The Future Relationship with the EU: the UK’s Approach to Negotiations, and to address the issues identified by the European Scrutiny Committee in its Fifth Report of Session 2019–21, HC 333, as matters of vital national vital interest.

The Government’s position on the EU negotiating mandate

6.We examined the main elements of the EU negotiating mandate in our earlier Report, agreed on 11 March 2020, and identified areas in which we considered that the EU position could affect matters of vital national interest to the UK. The Paymaster General at the Cabinet Office (Rt Hon. Penny Mordaunt MP) has since provided an Explanatory Memorandum which contains no significant assessment of the main legal, policy or financial implications of the mandate itself, stating only that “it was agreed without the UK’s involvement” and that its direct impact for the UK is “to allow negotiations to begin”.8

7.In further correspondence, we suggested that lack of UK involvement strengthened rather than weakened the need for effective Parliamentary scrutiny of the Government’s position on EU proposals made during transition, not least so that stakeholders likely to be affected by them would have some basis on which to assess their potential implications.9 The Minister nonetheless maintained (in her letter of 1 April 2020) that there would “surely be no benefit” in publishing an assessment of the impact on the UK of the EU’s opening position for the negotiations, since “this is not a position the UK Government would accept” and the impact envisaged would therefore “never come to pass”. Moreover:

[…] making such a broad ranging assessment and putting it in the public domain would severely undermine the UK’s negotiating position and would go beyond any assessment the EU produces.

8.We likewise assume that the EU would not accept in its entirety the UK starting position, as set out in the Government’s Command Paper, The Future Relationship with the EU: The UK’s Approach to Negotiations. On 12 March 2020, the EU published its draft text of the future partnership agreement with the UK. In his Written Statement to Parliament on 9 March 2020, the Chancellor of the Duchy of Lancaster (Rt Hon. Michael Gove MP) said that the Government expected to table “a number of legal texts, including a draft Free Trade Agreement” shortly.10 We understand that these texts have so far only been made available, on a confidential basis, to the European Commission Task Force responsible for negotiating with the UK. The Minister told the Committee on the Future Relationship with the EU that it would be appropriate to share these texts with Parliament, but “regarding the key question as to when [they are] published, no decision has yet been taken on that timing”.11 Given the preparations and adjustments that many stakeholders will need to make before the end of the year if a new agreement is to be in place from 1 January 2021, or if there is no agreement, this is a significant concern.12 Against this background, we consider that a greater degree of transparency is possible and desirable without undermining the UK’s negotiating position. As the European Commission has published its draft legal text, we encourage the Government also to publish the draft legal texts it has made available to the European Commission’s Task Force for Relations with the United Kingdom and to undertake to make subsequent draft legal texts available to Parliament.

Progress in negotiations

9.The EU and the UK have made a legally binding commitment to “use their best endeavours, in good faith and in full respect of their respective legal orders” to agree and apply the terms of their new partnership “to the extent possible” from the end of transition.13 The Government must be vigilant in ensuring that the EU uses its best endeavours and acts in good faith throughout the negotiations. The Prime Minister has made clear that the transition period will end on 31 December 2020 and Parliament has enacted legislation to this effect.14 Reinforcing the Government’s determination, the Chancellor for the Duchy of Lancaster told the Committee on the Future Relationship with the EU:

The course is set and it would be foolish for anyone to imagine that the Prime Minister is not going to stick to that timetable and stick to that commitment. People underestimate him at their peril.15

10.In February, the EU and the UK agreed Terms of Reference for the future relationship negotiations and established 11 negotiating groups working under the guidance of their Chief Negotiators—for the UK, David Frost, Head of the UK’s Task Force Europe team reporting directly to the Prime Minister, and for the EU, Michel Barnier, Head of the European Commission’s Task Force for Relations with the UK—who chair the opening and closing plenary sessions for each negotiating round. The negotiating groups broadly correspond to the envisaged framework for the future relationship set out in the Political Declaration accompanying the EU/UK Withdrawal Agreement—“an ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation”—but with one exception. At the UK’s request, there is no negotiating group on foreign policy, security and defence.16

11.The Terms of Reference include a timetable for the initial rounds of negotiations from March to mid-May. The first round took place in Brussels from 2–5 March. The second round, scheduled for 18–20 March in London, did not take place because of Covid-19 restrictions.17 The Chancellor for the Duchy of Lancaster has said that the Government remains in contact with the European Commission and that the “structure of negotiations is likely to change to reflect the current situation”.18 On 7 April, the UK’s chief negotiator David Frost posted on Twitter:

I want to reassure everyone that UK-EU contacts have been continuing in these difficult times. We have remained in touch throughout, both sides have exchanged legal texts, and last week we had a series of conference calls to explore & clarify technicalities.

12.A video conference followed on 15 April at which the chief negotiators “took stock of the technical work that has taken place since the first negotiating round on the basis of the legal texts exchanged by both sides” and agreed three further negotiating rounds in April, May and June (each lasting a full week and by videoconference). They underlined the need to “make real, tangible progress” by June.19

13.The EU and the UK both described the first round of negotiations as “constructive”. For the UK negotiating team, it was an opportunity to make clear that on 1 January 2021, the UK “would regain our legal and economic independence—and that the future relationship must reflect that fact”, in line with the Prime Minister’s Written Statement of 3 February 2020 and the Government’s Command Paper, The Future Relationship with the European Union: The UK’s approach to negotiations. While achieving “a degree of common understanding of how to take the talks forward”, the Government recognised that there were “significant differences” in some areas, such as fishing, governance, criminal justice and the so-called ‘level playing field’ issues covering common standards in the areas of State aid, competition, social and employment matters, the environment, climate change and aspects of taxation.20

14.For his part, the EU’s Chief Negotiator highlighted convergence on some objectives and specific issues, such as civil nuclear cooperation and UK participation in some EU programmes, but also underlined “very serious differences” in the EU and UK approaches in other areas. The most immediate point of contention is fisheries. Under the Political Declaration agreed in October 2019, the EU and the UK have said they will use “best endeavours to conclude and ratify their new fisheries agreement by 1 July 2020 in order for it to be in place in time to be used for determining fishing opportunities for the first year after the transition period”.21 The EU is insistent that fisheries must be an integral part of the future trade and economic agreement, not negotiated separately. In addition, the EU wants the future relationship to:

• be based on a single overarching governance framework (rather than split into multiple sector-specific deals, each with its own governance structure);
• include a legally binding commitment to maintain high standards on level playing field issues, as well as appropriate mechanisms to ensure effective compliance with the standards; and
• also include a formal commitment on the UK’s part to continue applying the European Convention on Human Rights and to recognise “the proper role” of the EU Court of Justice in interpreting EU law, especially in the police and criminal justice field where individual rights may be affected.22

15.While negotiations on the future relationship and discussions on the implementation and application of the Withdrawal Agreement are proceeding on separate tracks, the latter overseen by a Joint Committee (co-chaired by the Chancellor of the Duchy of Lancaster for the UK and by the European Commission Vice-President Maroš Šefčovič for the EU), the EU’s Chief Negotiator has been keen to emphasise a degree on interdependency between them, stating in March 2020 that proper implementation of the Withdrawal Agreement is a “pre-condition” for building what the EU envisages as a future partnership.23 The ability of the Joint Committee to resolve any differences between the EU’s and UK’s understanding and application of the Withdrawal Agreement in the coming months, and to take the necessary decisions to ensure the smooth operation of the Protocol on Ireland/Northern Ireland before the end of the transition period, may therefore be an important factor in ensuring steady progress in negotiations on the future relationship. We have joined with other Select Committees in writing to the Chancellor of the Duchy of Lancaster to underline the importance of effective parliamentary scrutiny of the Joint Committee.24

16.The European Commission has published its own timeline for the EU and UK to conclude negotiations and allow for ratification of one or more agreements by the end of 2020, with a meeting of EU leaders in October flagged as an important occasion for reaching a final agreement amongst the EU27. The Government’s aim is to “secure the broad outline of an agreement” in time for the Prime Minister’s high level meeting with the EU in June 2020 to take stock of progress, and to finalise negotiations by September 2020.25 If the Government considers there has been insufficient progress to achieve its aim at that June meeting, it will “need to decide whether the UK’s attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion”.26 There are no hard and fast markers for judging whether sufficient progress has been made to continue negotiations with the EU. The Chancellor for the Duchy of Lancaster told the Committee on the Future Relationship with the EU in March that “we will know it when we see it”, adding: “It is one of those things where you just have to look at the overall package and consider the dynamic in the talks”.27 Even if negotiations continue beyond June, he also acknowledged that there are “particular challenges” in reaching an agreement on internal security and that “we may not necessarily have concluded everything” by the end of 2020.28 In that case, the Government would not be seeking “any transitions or temporary carry-ons” to bridge the gap between the end of transition and any new agreement on internal security becoming operational.29

17.The June rendezvous will take place shortly before the deadline set in the EU/UK Withdrawal Agreement for the Joint Committee to decide whether to agree a one-off extension “for up to one or two years” of the transition period. The Government’s commitment not to extend is clear. Responding to speculation that the Covid-19 pandemic might prompt the EU or the UK to request an extension of the transition period, the UK’s Chief Negotiator David Frost posted on his Twitter account:

As we prepare for the next Rounds of negotiations, I want to reiterate the Government’s position on the transition period created following our withdrawal from the EU. Transition ends on 31 December this year. We will not ask to extend it. If the EU asks we will say no.

Extending would simply prolong negotiations, create even more uncertainty, leave us liable to pay more to the EU in future, and keep us bound by evolving EU laws at a time when we need to control our own affairs. In short, it is not in the UK’s interest to extend.

Consultation with Select Committees

18.We consulted 24 Select Committees30 and have received 23 responses. Our summary Table annexed to the Report provides an overview of the key issues raised by Select Committees in their responses to our consultation under section 13A of the EU (Withdrawal) Act 2018. The full responses are reproduced in the Appendix to the Report.

19.We noted in our earlier Report that the EU negotiating mandate covers a wide range of complex, cross-cutting policy areas. Our initial assessment was that it raised “matter[s] of vital national interest for the UK” because of the potential for there to be substantial issues arising such as, amongst other matters, the jurisdiction of the EU Court of Justice, as well as:

• the influence of the Court of Justice (CJEU) and other EU institutions in the UK after transition and how they affect the autonomy of the UK’s legal order, having regard to section 38 of the European Union (Withdrawal Agreement) Act 2020 reaffirming the sovereignty of the United Kingdom Parliament;
• the role of the European Convention on Human Rights and the Human Rights Act 1998 in underpinning and protecting fundamental rights in the UK after transition;
• ease of trade between the UK and the EU and the wider ramifications for trade within the UK’s internal market (between Northern Ireland and Great Britain) as well as UK trade with (non-EU) third countries;
• the degree of regulatory autonomy that the UK will have after transition;
• the operation of particular sectors of the UK economy, from fisheries to freight transport and financial services;
• mobility and the conditions governing movement between the EU and the UK;
• UK involvement in EU programmes, for example on science and innovation or student exchanges, and the UK’s contribution to the EU budget;
• air, road and rail connectivity between the UK and the EU and the provision of services by UK operators within the EU;
• the cross-border sharing of data to facilitate trade, research, and to counter threats to public safety and security;
• operational cooperation in tackling serious cross-border criminality; and
• wider cooperation in managing and responding to global security threats.

20.The contributions we have received from Select Committees touch on all these issues and help to flesh out how particular elements of the EU negotiating mandate may affect vital national interests. Many Select Committees note the importance the EU mandate attaches to “a level playing field that will stand the test of time” and underline how the scope and nature of any commitments agreed by the EU and the UK might not only affect standards of protection across many sectors of the economy, but also the terms of access to the EU market and how much regulatory autonomy the UK will have after transition. The vital need for data-sharing arrangements to underpin commercial transactions, regulatory cooperation (for example, on chemicals, public health and pandemics, the safety of medicines and medical devices), cross-border research collaboration, and effective law enforcement also features in many of the responses we have received.

21.No less important are the practical arrangements for implementing the Protocol on Ireland/Northern Ireland to ensure an invisible North/South border and, linked to that, the application of EU State aid rules, including how recent changes to these rules affect loan guarantees made to mitigate the effects of the Covid-19 pandemic for businesses. We also highlight financial services market access as a crucial issue for the UK, as well as the potentially profound budgetary implications of any prolongation of the transition period beyond 31 December 2020. We are pursuing a number of these more technical issues, for example on the quantification of UK contributions to the EU budget, exposure to the European Investment Bank, and the loss of the rebate, separately with the Treasury.31

22.It is too soon to tell how the Covid-19 pandemic will affect the timetable for negotiating the different elements of the future partnership between the EU and the UK, though it will influence the progress and possibly also the content of negotiations to a degree not anticipated when the EU and the UK each set out their initial negotiating positions in February. Health and public health systems are at the top of the political agenda in the UK and the EU27 and likely to remain there for the duration of the negotiations, along with a much greater public awareness of how regulatory standards (for example, on medical devices such as ventilators), trade in essential goods (such as Personal Protection Equipment) and mobility of workers (in the health and social care sector) affect how these systems are able to respond to a pandemic. We referred to these issues in our Report, The Covid-19 pandemic: the EU’s policy response and its implications for the UK.32 In this context, we also draw attention to the response from the Health and Social Care Committee which highlights “the general omission [..] of health as a regulatory floor” in the EU and UK negotiating positions and the need for a broader reflection on the treatment of health and healthcare systems in international trade negotiations.

23.Select Committees have also underlined a vital need for parliamentary scrutiny and oversight of negotiations with the EU and, by extension, of the work of the Joint Committee established by the EU/UK Withdrawal Agreement, given the possibility that it may well have repercussions for the progress of the future relationship negotiations. Effective scrutiny depends on frequent reporting to Parliament itself, so that Ministers are accountable for the positions they take (particularly if they depart from those set out in the Government’s Command Paper), but also depends on openness to consultation and engagement with the large variety of stakeholders whose interests will be affected by the outcome of negotiations. We recall in this context section 38 of the European Union (Withdrawal Agreement) Act 2020 on Parliamentary sovereignty, as well as the statutory commitment in section 15A of the European Union (Withdrawal) Act 2018 to end the transition period on 31 December 2020.

24.The motion we propose for debate in the House urges the Government to provide updates to Parliament on stakeholder contributions to the public consultation launched in its Command Paper on The Future Relationship with the EU: the UK’s Approach to Negotiations and to address concerns raised by the European Scrutiny and other Select Committees on aspects of the EU negotiating mandate which raise matters of vital national interest to the UK.

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