Fourth Report Contents

Instruments of interest

Draft Northamptonshire (Structural Changes) Order 2019

11.This instrument has been laid by the Ministry of Housing, Communities and Local Government (MHCLG) with an Explanatory Memorandum (EM). Section 7 of the EM sets out background information to this Order. The Ministry notes that, following concerns regarding the financial management of Northamptonshire County Council, on 9 January 2018, the Secretary of State announced they had appointed an inspector to undertake an independent review of the Council’s governance and financial management under section 10 of the Local Government Act 1999.4 The inspection report was published on 15 March 2018.5 The EM notes that this Order gives effect to the proposal from seven Northamptonshire councils for the establishment of a single tier of local government for Northamptonshire, which was made in response to an invitation from the Secretary of State to submit proposals to replace the existing two-tier system.6 MHCLG states that: “Corby Borough Council was involved in the preparation of the proposal but decided to not support its submission”; additional information regarding this is enclosed at Appendix 1.

12.The EM notes that the existing county and district areas are to be abolished as local government areas, and all eight councils7 in Northamptonshire are to be wound up and dissolved. They will be replaced by two unitary councils called North Northamptonshire Council and West Northamptonshire Council, which from 1 April 2021 will be the sole local authorities for the local government areas of North Northamptonshire (the existing local government areas of Corby, East Northamptonshire, Kettering and Wellingborough) and West Northamptonshire (the existing local government areas of Daventry, Northampton and South Northamptonshire). Additional arrangements, including preparing for the transition to the new Councils, are also set out in the Order. Section 10 of the EM provides details of the consultation processes and outcomes; including outlining where differing levels of support were received. MHCLG notes that the benefits of the unitary proposal are anticipated to be: “aligning infrastructure, housing and environment services to help deliver growth; advantages in relation to health and wellbeing; improved education and skills provision; and improved community safety”. Paragraph 7.6 of the EM notes that cost savings are estimated to be £12 million per year within two years of the establishment of the new councils. The House may wish to seek a commitment from the Minister to review whether the benefits and savings have been met. The Ministry also states that: “It is expected that there will be job losses as duplicated roles are removed and in the short term there will be costs associated with implementation. These impacts, benefits and savings are in line with previous local government restructures of similar configuration”.

Agricultural Products, Food and Drink (Amendment) (EU Exit) Regulations 2019 (SI 2019/1366)

13.These Regulations, laid under the urgent ‘made affirmative’ procedure, amend retained EU food and drink regulations concerning geographical indication (GI) schemes8 to protect existing precedence arrangements in relation to GIs and trademarks. The Department for Environment, Food and Rural Affairs (Defra) explains that where a conflict is identified between a trademark and a GI, for example where a trademark evokes a GI or directly copies it, current EU law gives precedence to the GI over the trademark where its application has been submitted earlier. In such a case, the trademark application will be refused, or, if the trademark is registered already, invalidated. Where a GI application is received after a trademark has been registered, it may co-exist with the trademark and the rights holders to both forms of intellectual property may legally use the name in question. According to Defra, this instrument preserves these precedence arrangements in the UK after EU exit. It will allow the UK to recognise the application date to the EU of all pending and existing GIs and traditional wine terms, if the applicant applies to the UK within nine months of exit day, or if the term falls into the scope of an international agreement to which the UK is a party. Similar recognition of application dates is already in place for trademarks. Defra says that the instrument addresses concerns by several trading partners that without recognition of the EU date of application for their GIs, a trademark application which conflicts with one of their GIs could be successful after the UK has left the EU. Defra explains that any risk posed to the protection of GIs in the UK could undermine the agreement and ratification of future trade deals and that this instrument provides trading partners with reassurance that protection of their GIs in the UK will continue after EU exit.

Cross-Border Distribution of Funds, Proxy Advisors, Prospectus and Gibraltar (Amendment) (EU Exit) Regulations 2019 (SI 2019/1370)

14.Building on earlier EU exit instruments, these Regulations, laid under the urgent ‘made affirmative’ procedure, further amend retained EU law to ensure that the UK’s regulatory regime for financial services can continue to operate effectively after EU exit. According to HM Treasury (HMT), the instrument provides that proxy advisors9 will be subject to the UK oversight regime after EU exit only if they have their registered office in the UK or Gibraltar or, if registered overseas, provide services through a UK establishment, and if they provide services to a shareholder that has shares in a company registered in the UK or Gibraltar, and that is trading on a UK or Gibraltarian regulated market. The instrument also revokes an EU regulation10 which took effect on 1 August 2019 and seeks to facilitate cross-border activity of collective investment schemes across the EU, including by allowing national regulators to pre-verify promotional marketing material from funds passporting from other Member States. HMT says that after exit, the UK will fall outside of the EU’s single market for financial services, including the passporting regime, so that current provisions in this area will no longer be operable in the UK. Additionally, the instrument extends by two years an exemption under which certain investment funds do not have to produce a “key investor document” (KID) which sets how a fund works and potential investment risks. This exemption is set to end on 31 December 2019, but the EU has agreed a two-year extension to allow the Commission to review whether the current requirements for KIDs are appropriate or should be adjusted or removed. This instrument replicates the two-year extension in the UK. The Regulations also amend a previous EU exit instrument in relation to prospectuses11 to retain an exemption under EU law which means that issuers of securities do not have to produce a prospectus under certain circumstances, including when a company is issuing additional shares which amount to no more than twenty per cent of shares already issued. HMT says that the exemption is retained as prospectuses can be a significant cost factor.

Immigration (Amendment) (EU Exit) Regulations 2019 (SI 2019/1383)

Statement of Changes in Immigration Rules (HC 170)

15.The Immigration (Amendment) (EU Exit) Regulations 2019 (SI 2019/1383) (“the Statutory Instrument”) introduce changes which the Home Office deems appropriate to increase security and better protect the public once the UK leaves the EU. They do so by making changes to the Immigration (European Economic Area) Regulations 2016 (SI 2016/745 – “the 2016 Regulations”), pending the intended repeal of those Regulations by primary legislation. In particular, they:

16.This Statutory Instrument was laid under the ‘made affirmative’ procedure to manage a ‘no deal' exit on 31 October 2019. However, its provisions will now operate from whichever exit day applies in the case of ‘no deal’ or, in a deal scenario, from the end of the planned implementation period on 31 December 2020, as set out in the draft Withdrawal Agreement with the EU reached on 17 October 2019.

17.The Statutory Instrument is accompanied by a Statement of Changes to the Immigration Rules which, in the case of a ‘no deal’ exit, would establish the European Temporary Leave to Remain Scheme in Appendix EU to the Immigration Rules. This would enable EEA citizens moving to the UK after exit, and before the implementation from January 2021 of the new points-based immigration system, to obtain a temporary UK immigration status (36 months’ limited leave to remain) which would allow them to remain in the UK after the end of 2020 once the 2016 Regulations have been repealed.

European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No. 3) Regulations 2019 (SI 2019/1423)

18.On 29 October 2019 the European Council adopted a decision in agreement with the UK to extend the period provided for in Article 50(3) Treaty on European Union to 31 January 2020, or earlier if the Withdrawal Agreement comes into force before this date.12 These Regulations consequentially amend the definition of “exit day” in section 20(1) of the European Union (Withdrawal) Act 2018 (“the 2018 Act”) from 31 October 2019 to 31 January 2020. Because the 2018 Act amended the Interpretation Act 1978, wherever the term “exit day” is used in other enactments and statutory instruments it will have the same meaning. Equivalent provision is made in the Legislative Reform (Scotland) Act 2010 and the Interpretation Act (Northern Ireland) 1954 for Scottish and Northern Irish enactments respectively.

4 HC Deb, 9 January 2018, HCWS394

5 Independent Inspection, Independent Report Northamptonshire County Council Best Value Inspection (March 2018): [accessed 1 November 2019]

6 Proposal from seven Northamptonshire councils, Northamptonshire Local Government Reform Proposal (31 August 2018):
[accessed 1 November 2019].

7 Northamptonshire County Council and the seven district and borough councils of Corby Borough Council, Daventry District Council, East Northamptonshire District Council, Kettering Borough Council, Northampton Borough Council, South Northamptonshire District Council and Wellingborough Borough Council.

8 Product names can be granted with a ‘geographical indication’ (GI) if they have a specific link to the place where they are made. GI recognition aims to enable consumers to trust and distinguish quality products while also helping producers to market their products better.

9 Proxy advisors provide research, advice and recommendations to shareholders and their intermediaries and can have a considerable impact on how shareholders exercise their voting rights. They are subject oversight as set out in the Proxy Advisors (Shareholders’ Rights) Regulations 2019 (SI 2019/926).

10 Cross-Border Distribution of Collective Investment Undertakings Regulation (EU) No. 2019/1156.

11 Companies wishing to raise capital by issuing securities (such as shares and bonds) may be required to provide investors with a prospectus which describes a company’s business, shareholding structure, and details of the securities that are admitted to trading on a regulated market or offered to the public.

12 European Council Decision (EU) 2019/1810, OJ L 278 I, 30 October 2019, p. 1

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