8.The Department for International Trade (DIT) has laid this Order with an Explanatory Memorandum (EM) and Impact Assessment. The Order relates to the Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and its Member States and Canada. In the EM, DIT explains that the objective of CETA is to promote bilateral trade and increase economic growth by reducing tariff and non-tariff barriers that businesses face when trading goods and services and investing between the EU and Canada. CETA will enable firms to export and import at a lower cost and give more opportunity for businesses to bid for public procurement contracts in Canada, as well as providing reciprocal opportunities in the EU for Canadian businesses.
9.DIT says that the Order is intended to specify CETA as an EU Treaty by Order in Council in accordance with the European Communities Act 1972 (ECA). The principal effect of this specification is that section 2(2) of the ECA (which provides for the general implementation of EU Treaties) may be exercised in relation to CETA. This allows, for example, measures, such as statutory instruments, to be passed under section 2(2) if needed for the UK to implement CETA.
10.We obtained additional information from DIT, which we are publishing as Appendix 1. In particular, given DIT’s statement in the EM that, at this stage, it appears that no new legislation or other implementation is required for the UK, we sought clarification of the reference to passing statutory instruments. DIT has told us that specification of CETA as an EU Treaty is important in relation to individuals’ directly effective rights under EU law.
11.The CETA Treaty itself is likely to be laid before Parliament in the second half of June.
12.This instrument updates the list of organisations that produce information which is classified as “official statistics”. Official statistics are governed by the Statistics and Registration Service Act 2007 and are subject to certain requirements, for example, their production and publication must be overseen by the Statistics Board, comply with a Code of Practice if they are designated as “National Statistics”, and adhere to relevant rules and principles relating to the granting of pre-release access to official statistics. The Committee noted the wide range of bodies covered which includes Sports England, Historic England and The Student Loans Company Limited as well all Government departments.
13.This Order will bring into force four revised Codes of Practice issued under the Police and Criminal Evidence Act 1984 (“PACE”) to bring them into line with changes in legislation, policy, operational policing practice and case law. The main revisions to Codes C and H, (which, respectively, deal with detention and questioning under PACE and under terrorism legislation) concern:
14.Revisions to Codes E and F (which deal, respectively, with the audio and visual recording of interviews of suspects) make substantial changes to the sort of systems that can be used for each purpose and extend these revised provisions to cover all interviews for all types of offence.
15.These Regulations extend the deadline for farmers and land managers to submit payment claims in relation to Countryside Stewardship agreements under the Rural Development Programme for England (RDPE). The RDPE covers a number of schemes in which farmers and land managers receive grants to improve the natural environment, increase the productivity of forestry and farming and promote rural economic growth. Countryside Stewardship agreements operate under the RDPE and provide farmers, woodland owners, foresters and land managers with grants to make environmental improvements. Grants can take the form of multi-annual payments, but recipients of such payments need to submit annual payment claims. The statutory deadline for claims under the RDPE is 15 May, but the European Commission decided to give Member States the option of extending the 2018 deadline for claims in relation to Countryside Stewardship agreements to 15 June because several EU Member States had experienced difficulties in implementing changes to their administrative systems.
16.We asked the Department for Environment, Food and Rural Affairs (Defra) whether such difficulties had occurred in England. Defra explained that the processing of applications for Countryside Stewardship agreements, due to start on 1 January 2018, had fallen behind this year because of stricter evidence requirements, updates to land data and a higher number of applications. Defra therefore decided to make use of the option to extend the original deadline to 15 June to help applicants avoid late claim penalties. This extension, however, only applies to payment claims relating to Countryside Stewardship agreements in England; claims made in relation to other schemes under the RDPE or the Basic Payments Scheme retain the original deadline of 15 May.
17.In order to adapt the law to cope with developing technology, these Regulations create an exception to the provision which prohibits the use, while driving, of a hand-held mobile telephone or other hand-held interactive communication device, when the device is only being used to perform a remote control parking manoeuvre.
18.This instrument will extend the powers of the Government to intervene in mergers or takeovers where the target company operates in one of three advanced sectors of the economy which are considered relevant to national security: military and dual use technologies, computing hardware and quantum technologies. The Order builds on another instrument, the Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018, to which the Committee referred in its 24th Report, and which received parliamentary approval in the House of Lords and House of Commons on 1 and 2 May 2018 respectively. The previous instrument amended the “share of supply test” that allows a merger to be scrutinised, so that it is now met where a merger or takeover involves a target company with 25% or more share of supply in the UK, or where the deal leads to an increase in the share of supply to, or above, this threshold. The Department for Business, Energy and Industrial Strategy (BEIS) says that the new Order will lower the turnover threshold above which the Secretary of State will be able to intervene in a merger or takeover involving companies operating in advanced sectors of the economy that are considered relevant to national security.
19.Under the new rules, the Secretary of State will be able to intervene if the annual UK turnover of the target company is more than £1 million, compared to more than £70 million under the current rules. According to BEIS, the lower threshold reflects the fact that some of the most innovative companies are those with small turnovers. BEIS explains that while the majority of foreign investment into the UK raises no national security concerns, the Government need to be alert to the risk that foreign control of critical businesses or infrastructure could enable espionage, sabotage or inappropriate leverage. In the longer term, BEIS will publish a White Paper with proposals for more substantive changes to the way foreign investment is scrutinised in the light of national security concerns, and that this will be followed by primary legislation.
20.The Department for Business, Energy and Industrial Strategy (BEIS) has laid these Regulations with an Explanatory Memorandum (EM) on behalf of the Intellectual Property Office (IPO). The instrument implements the EU Trade Secrets Directive which aims to ensure an effective internal market by giving businesses access to comparable levels of redress in all Member States if their trade secrets are acquired, used or disclosed unlawfully. A trade secret is confidential information that can be used to gain a competitive advantage in the marketplace and may include, for example, business plans, market strategies or customer information. The IPO explains that the UK already has a robust and well-established legal framework that protects trade secrets through the common law of confidence which can be enforced in the civil courts. According to the IPO, the Regulations therefore only address areas where there are gaps in UK law, and where implementation of the EU Directive will improve legal certainty by making the law more transparent and coherent across all of the UK’s jurisdictions. Elements of the EU Directive that are being transposed into UK law through the Regulations include, for example, the definition of a trade secret and the time limits that apply for bringing claims to court.
21.The IPO says that it sought views on the proposed Regulations through meetings with relevant stakeholders and a four week technical consultation. We note that only 19 responses were received during the consultation, and that a number of civil society organisations expressed concerns about the potential impact of the proposed Regulations on whistle-blowers, public authorities, journalists, trade unionists and others. A key concern raised was that rather than producing greater clarity, the Regulations risked creating legal and practical ambiguities, especially with regard to the protection of whistle-blowers. There were also concerns about a lack of a public interest defence in the Regulations and about insufficient protections against abusive litigation, including for trade unionists who legitimately disclose information. The EM explains that while the Directive makes provisions for protection of whistle-blowers and others, these have not been implemented in the Regulations, as such protections are already available under UK law, including through the 1998 Public Interest Disclosure Act.
22.We have obtained additional information from the IPO on its approach to the Regulations and asked why only four weeks were allowed for consultation and how the concerns raised during the consultation have been addressed. This information is published at Appendix 2. In the light of the concerns expressed during consultation, the Committee is of the view that there may be a case for reviewing the complex arrangements that currently protect whistle-blowers in UK law through both case law and primary legislation.
4 Specifically, section 1(3) of the ECA.
5 , Session 2017–19 (HL Paper 114).