The shape of future parliamentary scrutiny of UK-EU relations Contents

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2The need for scrutiny in 2021 and beyond

Introduction

12.In September 2019 the House of Commons Liaison Committee published a Report into The effectiveness and influence of the Select Committee system.24 It identified tasks for committees relating to Brexit, including:

• scrutiny of future UK-EU relationship negotiations;
• examining the work of the Withdrawal Agreement Joint Committee;
• monitoring developments in EU law and policy; and
• the development of future UK-EU relations.

13.The need for effective scrutiny of UK-EU relations does not end with the conclusion of the Transition Period. The tasks identified by the Liaison Committee can be updated and refined now that the Transition Period has ended and the UK and EU have agreed the Trade and Cooperation Agreement (TCA). They are tasks that arise because of the agreements that have been reached with the EU, and because the UK’s relationship with its near neighbour and a significant trading partner will continue to influence UK policy as it evolves.

14.The Withdrawal Agreement Joint Committee has wielded a significant amount of power and will continue to do so. Our predecessor Committees,25 the European Scrutiny Committee,26 and our equivalent Committee in the House of Lords27 have all been concerned by the Government’s lack of transparency in relation to the work of the Joint Committee and associated Specialised Committees, which has posed significant challenges for Parliament. As we noted in our Report Implementing the Withdrawal Agreement: citizens’ rights, we consider this lack of transparency to be wholly inadequate and there needs to be a better formal structure for Parliamentary scrutiny.28

15.The Partnership Council is the joint UK-EU body created to oversee the Trade and Cooperation Agreement.29 Anton Spisak, from the Tony Blair Institute, has produced a diagram (see below) showing the Partnership Council, its specialised committees and associated institutional structures.30 The decisions Ministers will take on the positions they adopt in the Partnership Council and its specialised committees, or in the Withdrawal Agreement Joint Committee, have the potential to affect people’s lives. Some of the decisions may need legislation to be passed or amended to give effect to them. Ministers have extensive powers to make and change legislation with little reference to Parliament. Given the effect these decisions could have it is important that Parliament knows what is happening and what decisions have been taken so that Ministers can be held to account. Professor Catherine Barnard, professor of EU law and employment law, University of Cambridge, said:

You also have a very powerful Partnership Council, which has quite considerable powers. It can amend the Agreement, not just to deal with infelicities in the Agreement, but to make quite significant changes. A really important issue going forward, for you as a Committee and for Parliament, is how to scrutinise not only how the deal is working, but how changes are being made to the deal and what is being done under the deal.31

16.Professor Adam Cygan, Dr Philip Lynch and Dr Richard Whitaker, University of Leicester, point to new accountability challenges Parliament will encounter with the UK outside the EU’s institutional architecture. They argue that the Executive, not Parliament, will be the primary beneficiary of the repatriation of competences to the UK.32 Dr Hannah White, Deputy Director of the Institute for Government, supported this analysis, telling us that “there has been a massive shift of power towards the Executive and away from the legislature.”33

The future relationship

17.The UK’s future relationship with the EU will be shaped by the implementation and operation of the agreements it has already reached with the EU: the Withdrawal Agreement and the Trade and Cooperation Agreement and the other ancillary agreements. It will also be shaped by any negotiations on further agreements, amendments to existing agreements, and disputes. The end of the Transition Period does not change the need for Parliament to monitor and engage in these areas. The UK-EU relationship will be affected as the two sovereign equals evolve their respective policy and regulatory frameworks, particularly where they start to diverge or where there is a strong common interest in coordinated action. Beyond this it will be in the UK’s interest to seek to influence the way the policy and regulatory framework develops in the EU, particularly in areas where the UK might have a comparative advantage. These are all good reasons why Parliament should want to scrutinise what the Government is doing with respect to European affairs, and to monitor how the Government is responding to developments in the EU.

The EU-UK Trade and Cooperation Agreement

18.The EU-UK Trade and Cooperation Agreement includes several aspects of the future relationship that are subject to deadlines where decisions need to be made, and where the arrangements may evolve. Parliament will have an interest in scrutinising these. For example:

• The Agreement says that the UK and EU “shall jointly review the implementation of this Agreement and supplementing agreements” after five years, and then every five years thereafter.34
• The Protocol on Access to Waters provides for an adjustment period from 1 January 2021 till 30 June 2026, and requires the EU and the UK to “notify the other Party of any change in the level and conditions of access to waters that will apply from 1 July 2026.”35 After this, there will be “consultations annually to agree” on the total allowable catch for fish stocks in the forthcoming year.36
• The energy chapter ceases to apply on 30 June 2026. In the time between 1 July 2026 and 31 December 2026 the Partnership Council can decide that the energy chapter can continue until 31 March 2027. Thereafter the Partnership Council can decide for it to continue on an annual basis until 31 March of the following year.37
• The TCA provides for the continued transfer of data from the EU to the UK for a period of four months, possibly extended to six months, on condition that the UK continues to apply the relevant data protection law as of 31 December 2020. This is to allow time for the Commission to carry out its data adequacy procedures. Any data adequacy decisions could be reviewed, suspended or revoked by the Commission in future or invalidated by the CJEU.
• The TCA contains a review clause for rules of origin relating to certain products relating to batteries for electric vehicles, not sooner than four years from the entry into force of the Agreement. On the basis of such a review, the Partnership Council may amend those product-specific rules as from 1 January 2027.38

19.The TCA includes dispute settlement mechanisms that include binding enforcement, an independent arbitration panel, and cross-sector retaliation where there is non-compliance with the decision of the arbitration panel. The dispute resolution mechanism covers the “vast majority” of the trade part of the TCA.39 Professor Barnard described the TCA as “riddled with provisions on disputes” and said that “the dispute resolution mechanism is extremely complicated, because there are so many of them.”40 In addition, there is a separate dispute resolution mechanism for the Law Enforcement part of the Agreement, that allows for consultation in the specialised committee on law enforcement, and, in the absence of a mutually agreed solution, for the law enforcement committee to manage how any part of the law enforcement arrangement is suspended.41 It also contains a provision for one party to terminate the law enforcement part of the Agreement, including if the other denounces all or part of the European Convention on Human Rights.42

20.The TCA also contains a rebalancing mechanism, which allows for one party to retaliate where the other introduces significant changes in areas of the Level Playing Field, such as state aid, environment or employment law, and where that has a material impact on trade or investment. The timetable for the retaliatory measures is shorter than compared to traditional FTAs.43 We were told that the mechanisms in the TCA for dispute resolution in the areas of Level Playing Field and the rebalancing mechanism were stronger than those in the EU agreement with Canada. Sam Lowe, Senior Research Fellow, Centre for European Reform, told us:

In the EU-Canada agreement or the EU-Japan agreement, when it comes to parties breaching their obligations under the labour and environment commitments, there is no sanction. Ultimately, a panel of experts will create a report and everyone will have to discuss it and try to work it out, but there is no consequence to breaching your obligations. There are consequences here. You can have aspects of the agreement suspended. […] You also have the rebalancing approach. It is very different. There is actual consequence to divergence and breaching obligation in areas where, in EU-Canada or EU-Japan, that is just not the case.44

21.Parliament will have an interest in areas where the UK and the EU agree to change the TCA and where the UK or the EU act in a way that leads to a dispute in an area covered by the TCA.45 Furthermore, Parliament will have an interest where the UK or EU propose to act in a way that could trigger the rebalancing mechanism.

Future agreements and negotiations

22.We were told in our evidence session on the TCA that there is scope for the relationship to be “chipped away” at, or be built upon in areas such as sanitary and phytosanitary checks, the mutual recognition of professional qualifications, or mutual recognition agreements on conformity assessments in certain areas.46 While not included in the TCA, there may be scope for improving the relationship on financial services in a forthcoming memorandum of understanding,47 or in the event that the EU adds to the two out of 39 potential equivalence decisions on financial services.48

23.Professor Barnard told us that:

One very striking feature of the agreement is that it envisages that there will be further bilateral agreements. Indeed, the possibility of future bilateral agreements is repeatedly referred to. […] any future bilateral agreements, on whatever matter it might be, will be sucked under this overarching framework [of the TCA].49

24.She also drew our attention to the ability for the Partnership Council to amend the TCA, not just to deal with deficiencies in the agreement, but to make “quite significant” changes. She argued therefore that:

A really important issue going forward, for you as a Committee and for Parliament, is how to scrutinise not only how the deal is working, but how changes are being made to the deal and what is being done under the deal.50

In addition, the TCA includes a mechanism for the Partnership Council to consider the effects of new countries joining the EU and whether that might require the TCA to be amended.51

Implications for the UK of the evolution of the EU’s policy and regulatory framework

25.In late 2019 the European Scrutiny Committee began an inquiry into Post-Brexit Scrutiny of EU Law and Policy.52 The written evidence they received contained different views of what future scrutiny should look like but, a common theme running through the evidence they received was the notion that “in virtually all conceivable long-term scenarios EU law and policy will continue to have an impact upon UK domestic policy—both directly and indirectly”.53

26.The Liaison Committee also noted in their September 2019 Report on select committee effectiveness that it was accepted that EU law would continue to play a significant role in the UK with its role varying depending on the nature of the future relationship between the UK and the EU.54 In evidence to their inquiry, Agata Gostyńska-Jakubowska, Centre for European Reform, contended that the EU and its laws would continue to have an impact on the UK under any EU exit scenario, including no deal.55

27.Dr Sylvia de Mars, Newcastle University, Mr Colin Murray, Newcastle University, Professor Aoife O’Donoghue, Durham University, and Dr Ben Warwick, University of Birmingham, have pointed out that “geography alone suggests that it is in the UK’s best interest to remain closely apprised of what legislative and policy developments are taking place within the regional bloc”.56

Impact of EU policy on UK business and consumers; regulatory alignment

28.Which? have argued for continuing parliamentary scrutiny of the EU from the perspective of consumers, saying:

When it comes to post-exit scrutiny of EU policy and law, it is vital that Parliament and Government have appropriate scrutiny and monitoring processes in place to assess policy developments in the EU and to understand the potential impact new legislation may have on UK consumers.57

29.The Law Society of England and Wales also believes that after UK membership of the EU has ended “it will be critical for the UK to monitor and scrutinise EU policy developments”.58 This is because “the links and interdependencies between the EU and UK markets are deep and are significant to the UK economy. Decisions taken in the EU will continue to impact UK businesses and consumers and we are strongly of the view that the UK cannot ignore upcoming changes and the underlying reasons or objectives associated with the development.”59 They said that the UK Government and Parliament would be putting an undue burden on businesses and consumers if there was not official monitoring and scrutiny of such changes. It may also be that EU developments call for a corresponding response within the UK, whether this is to maintain alignment or pursue an alternative approach.60

30.Regardless of whether there is regulatory alignment, EU policy will still be relevant to businesses operating in the UK, especially those doing business in the EU. For example, the Chemical Industries Association told our predecessor Committee that even if the UK did not formally agree to align with EU standards, most companies in the sector would manufacture to EU standards anyway as they do not “have the luxury” to operate differing manufacturing regimes and the EU REACH regulation sets the “global bar” which businesses will have to abide by.61

31.Professor Kenneth Armstrong, University of Cambridge, sees a role for Parliament in “monitoring regulatory developments of political importance with a view to engaging stakeholders in understanding the European origins of domestic regulatory developments”.62 In his view, given the potential for divergence, parliamentary scrutiny should be oriented towards monitoring divergences in regulatory policy and evaluating the political importance of those divergences.63 (See paras 17–24 above on The Future Relationship.)

Northern Ireland

32.The Northern Ireland dimension is also critical. Agata Gostyńska-Jakubowska said that, as a result of the continued application of aspects of EU law in Northern Ireland, the UK Parliament should “ensure that the Government continues to present draft EU legislation in both Houses, together with thorough impact assessments.”64

33.The European Scrutiny Committee said in a scoping paper that “effective parliamentary oversight of the Ireland/Northern Ireland Protocol would include monitoring and scrutiny of changes to EU laws listed in the Protocol and of new laws within the scope of the Protocol; how they affect the UK internal market; what mitigations are proposed; the role of EU institutions, in particular the European Court of Justice; and liaison with Northern Ireland Assembly.65

34.Professor Adam Cygan, University of Leicester, suggested that, to ensure legislative coherence, Parliament should monitor whether the implementation of new EU laws under the Protocol will lead to divergence with the rest of the UK and what the effect of any divergence could be on the UK Single Market.66 He went on to point out, should the UK Government propose to diverge from EU law, Parliament could also consider what effect this may have on the Ireland/Northern Ireland Protocol and the UK Single Market.67

Areas of UK-EU common interest

35.Dr Sara Hagemann, London School of Economics and Political Science, made the case to us of the importance of continuing to monitor certain EU policy areas post-Transition:

It is extremely important that we keep in mind the political and policy developments in Europe at the moment. We are looking at really important new initiatives in a range of areas, which the UK has a strong interest in being closely associated with and collaborating on: security and defence issues or the new initiative of the health union. All of those are big policy topics and it is substantively in the UK’s and Parliament’s interests to know what is happening on the European side.68

Awareness of EU affairs needed in order to influence

36.The Local Government Association made the case that the ability to gain intelligence and influence EU legislation in relation to “trade, competition, migration, environment, sustainable development, climate change, energy, regional development, transport, fisheries, research, education and youth programmes” would “remain of strategic importance to the UK even if we are formally outside the scope of EU law”.69 In evidence to us Professor Simon Usherwood, University of Surrey, was wary of the UK “not being caught by surprise by what the EU does or might do”70 in the future. It will only be possible for the UK to influence the EU’s policy agenda if we are to understand their intentions.

37.Professor Adam Cygan noted in his evidence to us that much EU documentation is readily available via the Commission’s website but that Parliament will need to be proactive in order to ensure that it accesses documentation in a timely manner on future EU policy and legislative proposals that may be relevant to the UK.71 That said, he also made the important point that:

In order for effective scrutiny to be possible the government should also continue to provide Explanatory Memoranda systematically as these will form the basis of scrutiny whenever relevant.72

Tasks for Parliament

38.The key tasks now for Parliament are:

• Monitoring the implementation and operation of the EU-UK Trade and Cooperation Agreement, with a focus on the work of the Partnership Council, its specialised committees and working groups
• Scrutinising the work of Withdrawal Agreement Joint Committee73 and its specialised committees and monitoring the implementation and operation of the Withdrawal Agreement, with a particular focus on:
  • the Ireland/Northern Ireland Protocol, including the work of the Joint Consultative Working Group and the Joint Committee’s Specialised Committee on the implementation of the Ireland/Northern Ireland Protocol
  • the rights of EU citizens in the UK and of UK citizens in the EU,74 including the work of the Independent Monitoring Authority in the UK and the Joint Committee’s Specialised Committee on Citizens’ Rights
• Monitoring and examining any disputes that arise under any UK-EU agreements75 and monitoring how any remedies to resolve disputes are applied
• Scrutinising the effectiveness of the UK-EU relationship and examining any negotiations to change or extend the terms of current agreements or to add new agreements
• Monitoring developments in EU law and policy that affect the UK
• Developing interparliamentary relations with the European Parliament and parliaments in EU Member States

39.It will be important for Parliament to continue to scrutinise the UK’s relationship with the EU. There are compelling political and policy reasons for doing so beyond the process and procedural reasons built into the Agreements. We recommend that the Government brings forward proposals for reform of the current system for scrutiny of European affairs by the end of April at the latest so that the House can decide what it wants to do. In drawing up its proposals we recommend that the Government consult the European Scrutiny Committee, the Liaison Committee, the Procedure Committee and the chairs of committees that are likely to be the most closely involved in European Affairs going forward.

40.We recommend that the Government provide a statement to the House after each meeting of the Partnership Council and of the Withdrawal Agreement Joint Committee. Such statements should include details of any decisions reached by these bodies and should be followed by an opportunity for questions.