Bill Esterson
MP for Sefton Central · Labour · United Kingdom
“As the Prime Minister said on Tuesday, our energy supply and our energy security are not a question of having either oil and gas, or renewables; they are about both. It is a great pity that proper process was not followed in 2022 or 2023. [ Interruption.”
“I warmly welcome my right hon. Friend’s commitment to continuing Britain’s global leadership on climate action, including by going to COP31. I also welcome his focus on breathing space for people and businesses, but, as he said, it will take a lot more than that to deliver the growth and reindustrialisation that he is so committed to.”
“Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us: “Operational decisions are taken by authorised, trained personnel only.” Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said: “I do not think the idea that the he…”
“As the Minister has just said, new nuclear is essential for energy security. It is also essential as an alternative career for workers in oil and gas.”
“Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me.”
“Hudson primary school in my constituency does a brilliant job. It is a family hub, it specialises in support for children with SEND and autism, and it has a nursery, but its building, which is 80 years old, suffers from a high water table that brings damp, mould and structural problems for the building—as does occasional flooding.”
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“Members in this House and has been clearly defined in statute, with the most familiar test being whether a person has been present in the United Kingdom for at least 183 days in a 365-day period. The definition presented in the draft regulations does not appear to apply the same test, in that it suggests that a person must be resident for at least a six-month period. I ask the Secretary of State— [ Interruption. ] No, not the Secretary of State; he is not here. If only he were.”
“It would be helpful to understand why the Government have sought to remove that section entirely, and how they propose to administer penalties for failures to comply with the obligations set out under the blocking regulation. Draft regulation 3(12) seeks to amend article 11 of the blocking regulation, which sets out to whom it applies. Draft regulation 3(12)(g) inserts a new definition: “For the purposes of this Article, a natural person is resident in the United Kingdom where that person has been so resident for a period of at least six months within the 12-month period immediately prior to the date on which, under this Regulation, an obligation arises or a right is exercised.” The question of residence has been debated many times by hon.”
“The clause has been referred to as the “clawback clause”, as it allows affected counterparties to initiate proceedings against the foreign entity by which they have been affected. A judgment may be made that results in the awarding of damages and legal costs, and in the potential confiscation of assets to settle outstanding liabilities. The blocking regulation dictates that such proceedings must be made in accordance with the Brussels convention, which requires claims to be made in the jurisdiction of the member state wherein the person causing the damage, or an intermediary or assets held thereby, is located, as the Minister mentioned in his opening remarks.”
“Can the Minister tell us whether there are plans to create such a committee? If not, how will existing European Union committee scrutiny be replicated in respect of the regulations? The Government pretending to return sovereignty to our Parliament, while repeatedly applying powers withdrawn from European institutions exclusively to the Executive, has become a familiar occurrence. As an aside, I draw the Minister’s attention to what we think is a drafting flaw resulting from draft regulations 3(8)(c) and 3(8)(d), which suggest that article 7 requires no additional paragraphs. Turning to other proposed changes, draft regulation 3(7) amends article 6 of the blocking regulation, which sets out the powers of an affected person to seek redress or recovery of damages.”
“Why has the Minister removed the obligation to immediately inform Parliament? Will he set out when and how such public reports will be delivered, including under the reporting obligations set out in article 4 of the Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) Order 1996, as amended in 2018? Article 7(b) and article 8 of the blocking regulation make provisions for the European committee on extraterritorial legislation to be consulted in respect of authorisations that are to be made compelling a person to comply with the extraterritorial application of third-country legislation. The draft regulations omit those provisions and contain no proposal for any corresponding committee to have such a role in the United Kingdom.”
“Under article 7 of the blocking regulation, the Commission is obliged to “inform the European Parliament and the Council immediately and fully of the effects of the laws, regulations and other legislative instruments and ensuing actions mentioned in Article 1, on the basis of the information obtained under this Regulation, and make regularly a full public report thereon”. Draft regulation 3(8)(c) seeks to transfer those powers to the Secretary of State but removes the obligation to inform Parliament immediately and fully of the effects of the laws, regulations and other legislative instruments and ensuing actions mentioned in article 1. It retains the obligation to make a public report, but removes the sense of urgency by removing the reference to “immediately” for the new arrangements.”
“The Government have also sought to amend the powers under article 5 by further allowing the Secretary of State to make, by way of regulation, “provision in connection with the making and consideration of applications to be so authorised.” Such extra powers appear to be wide in scope, and it is unclear precisely in which circumstances the Government envisage they would need to be employed. I would be grateful, therefore, if the Minister explained the Government’s intention and whether these powers will be used without the further approval of either House of Parliament.”
“In so doing, however, the Government have made a number of amendments to the original European wording and have sought to delete provisions that provide for a degree of scrutiny by the European institutions, without suggesting similar scrutiny measures to replace them. That should be a matter of concern to members of this Committee. Under article 5 of the blocking regulation, the Commission may authorise that a person complies with third-country legislation, to which these draft regulations apply, where to not do so “would seriously damage their interests or those of the Community.” Draft regulation 3(6) seeks to transfer that power to the Secretary of State, who may make such authorisation by way of a statutory instrument.”
“During those discussions, what conversations have taken place on matters covered by these draft regulations, and what representations has the Secretary of State or the Minister made in defence of British businesses against potential title III claims? On the face of it, these draft regulations appear relatively straightforward, largely replacing references to European Union institutions that remain in retained EU law with references to the United Kingdom. Such amendments will ensure that the provisions, which currently seek to disapply the effects of extraterritorial third-country legislation, will continue to apply in a UK-specific context after Brexit.”
“In order to clarify the Government’s policy intentions, I ask the Minister whether either he or the Secretary of State intends to regard authorisations already given or refused by the European Commission as precedent to follow, and whether any future decisions by the European Commission will inform our own. The current list of extraterritorial legislation to which these draft regulations apply includes only laws and regulations introduced by the United States. The Secretary of State has had many conversations—both formal and informal—with his counterparts in the United States. The Minister may have had similar conversations.”
“Under the existing EU measures, namely Council regulation 2271/96—the so-called blocking regulation—and Commission implementing regulation 2018/1101, which have been implemented into our domestic law by statutory instruments 1996/3171 and 2018/1357, EU persons are specifically forbidden from complying with the judgments, actions or proceedings of any judiciary of those third countries, unless otherwise authorised to do so by the European Commission. The blocking regulation obliges any EU person who may be so affected to notify the Commission within 30 days, so that a determination as to whether to authorise may be made.”
“Perhaps he could also indicate whether he has any intention of adding to that list, and whether he is aware of any further extraterritorial legislation that may be in the pipeline, particularly given the approach of the current United States Administration with respect to Venezuela. British businesses will rightly be concerned about the risk of extraterritorial judgments being awarded against them, encouraged by a White House that has declared open season for US investors. Can the Minister tell us what assessment his Department has made of the potential impact of such claims and of the exposure of British entities to them?”
“It is against that backdrop of the very real threat of legal proceedings and substantial financial claims being made against British individuals and companies that we consider these important draft regulations. The draft regulations seek to replicate the EU’s existing list of third-country legislation to which these measures relate. However, as one might expect, they allow the Secretary of State to add to or delete from the list. Given the imminent threat faced by British businesses, can the Minister confirm that the Government do not intend to delete anything from that list once we have left the European Union?”
“Such was the international uproar over the measures when they were introduced that successive United States Presidents have suspended the application of title III for a period of six months on a rolling, concurrent basis. I think I am right in stating that no such cases have been brought against British companies to date. The current President of the United States, however, has demonstrated that he takes a rather different interest in and approach to international diplomacy and international law compared with his predecessors. In January, he determined that the suspension of title III would be continued on a 45-day basis only. That period has now expired, and it seems it is now open season for US companies to take action against foreign companies.”
“In particular, they refer to listed sanctions measures imposed by the United States on Cuba, Iran and Libya. The underlying EU regulations were introduced as a response to the Helms-Burton Act 1996, which allows US-based companies to sue foreign persons for trade relating to expropriated US-owned goods or assets. Such trade is considered trafficking under that Act and claims may be brought under title III by US companies even where the link between that trade and what may have been expropriated is tenuous. Similarly, Canada, Mexico and Argentina have applied blocking measures in their respective jurisdictions, showing a similar level of concern to the EU in doing so.”
“I saw him outside, and while I will not say that he was sweating in his preparation, he was certainly going through it with a fine-toothed comb. He may not be the only member of this Committee to have been through such a process. A number of concerns flow from the Minister’s opening remarks about how the draft regulations might be applied in a domestic setting, and whether what he has expressed as the Government’s desire is indeed what will happen. It is right and proper that the United Kingdom should determine our own approach to foreign policy and the treatment of our citizens and those legal and natural persons who call the UK home. The draft regulations address the continued disapplication of third-country laws that might have an impact on our citizens.”
“It is a pleasure to serve under your chairmanship, Mr Sharma. Thank goodness the Government were defeated in their attempt to prevent the business of the House motion from going through; otherwise this debate would have been held on the Floor of the House rather than under your chairmanship. I think this is probably the right way around. The statutory instrument appears to be a sensible piece of proposed legislation. It is necessary to ensure that British legal and natural persons are not subject to judicial overreach by the courts or judiciaries of foreign countries when implementing their Governments’ foreign policy objectives. I thank the Minister for his opening remarks and for taking us through the detail of what is quite a technical set of draft regulations.”
“As the Secretary of State is not here, we will settle for the Minister. Can he clarify whether it is the Department’s intention that persons must have been resident for a continuous six-month period or is the 183-day test to be applied? These are serious and complex matters and I welcome the opportunity to debate them today. As the United Kingdom seeks to be a stronger voice in defence of the rules-based system that underpins global trade and international relations, it is important not only that such legislation is in place, but that the Government address the matters raised in this debate and put their policy intention on the record.”
“I am sure it is not an easy thing to do, but presumably some assessment must have been carried out when the EU originally brought in the blocking regulations. Of course, we are staying consistent with that approach, but presumably there is some sense of intent on the part of the United States Government, or of companies in the United States, that would inform the decision and why it is so important that these regulations are transferred.”
“I asked the Minister about the transfer of the current scrutiny arrangements. The specific institutions of the EU that scrutinise the operation of the regulations in the EU have not been replicated in the UK; they have just been taken on by the Secretary of State. On the issue of the immediacy of reporting to Parliament, the requirement for the EU to report immediately is not replicated in the proposed regulations.”
“Foxhunting is illegal in this country, yet it is allowed and even encouraged by some landowners. This is not trail hunting; it involves the pain and suffering of animals before they are killed. Will the Minister confirm that she supports the prosecution of those involved in this cruel activity, including landowners—even if they are Members of this House?”
“The statutory instrument needed to create a new state aid regime after we leave the European Union was due to be debated in Committee on 25 February, but it was withdrawn at short notice. In the four and a half weeks since that date, several other statutory instruments have been laid and debated, including SIs from the Department responsible for state aid. Without a state aid regime that functions properly, businesses that rely on state aid, and those who work for them, will be in serious difficulty, and that will have a profoundly negative impact on our economy. Will the Leader of the House tell me why there has been such a long delay and when the SI is likely to be brought back and considered?”
“I completely agree with the hon. Lady that we should not open up a new fossil fuel front and increase the contribution to climate change; she is absolutely right about that. On planning, my local authority has now twice voted overwhelmingly against fracking in nearby West Lancashire, which affects my constituency as well, but the authority’s views are completely ignored by the approach the Government are taking. Does that not demonstrate that significant local interests should be taken on board? It cannot just be a national Government issue in respect of permitted development rights.”
“It is odd to compare such a small, uncontroversial SI as the one that we are considering—we will support the Government in what they propose—with such significant documents as those on trade remedies, with their far-reaching implications. Frankly, that shows what a bizarre situation we are in.”
“It is a pleasure to serve under your chairmanship, Mr Paisley, on an issue that is of extreme interest to many of our constituents. The brevity of the Minister’s opening remarks possibly does not do justice to the size of the mailbag that many of us receive on such occasions. I was struck by how odd it was that we were given this statutory instrument to scrutinise while we have not been asked to scrutinise certain others, such as the 42-page and 79-page trade remedies statutory instruments that the Minister’s Department laid before the House of Commons on 5 March and brought into force the following day, missing the 21 days for which it is custom and practice to let such instruments be laid before us to consider and, if we so wish, object to.”
“Article 20 of the general agreement on tariffs and trade lists the general exceptions under which members may introduce restrictions on trade, which include measures: “(a) necessary to protect public morals” and “(b) necessary to protect human, animal or plant life or health”. As such, the EU and US bans on cat and dog fur products have not been challenged through the World Trade Organisation since their introduction more than 10 years ago.”
“He will remember that great concern was raised in the European Union’s impact assessment about the challenge of products from outside the EU in the trade in cat and dog fur. What efforts have been made and what analysis have the Government carried out to determine how much of a problem this trade from outside the EU has been, and what plans do the Government have to address that after we have left the EU? My party has been clear that a Labour Government would ban fur imports entirely. Do the Government intend to bring forward their own policy proposals in that respect?”
“It would be helpful to know the Government’s policy intention in that respect and whether the regulations may be followed in due course by other measures to bring about an end to the fur trade or the importing of goods that are considered to be in contravention of our domestic standards on environmental animal welfare or sanitary and phytosanitary grounds. Recent public opinion polls suggest that fewer than one in 10 people in the UK find it acceptable to buy or sell dog, cat or seal fur products. There is, of course, a risk that cat and dog fur products may still enter the UK market, having been mislabelled or otherwise, and I ask the Minister to clarify what efforts the Government are making to police that.”
“The ban was introduced due to public indignation and moral outcry about the trade in fur products and is considered a potential test case for future efforts to end the trade in furs, pelts, skins and other products that have been subject to animal cruelty concerns about the way in which they are harvested. As the right hon. Member for East Yorkshire pointed out at the start of the Minister’s remarks, there is great public interest in this—so much so that 400,000 people signed the “Fur Free Britain” petition.”
“The issue brought to our attention by the sifting Committee is the power conferred on the Secretary of State to “make regulations allowing the placing on the market or the import or export of cat and dog fur or products containing such fur for educational or taxidermy purposes.” I therefore ask the Minister whether the Government have any plans to bring forward regulations to that effect, and if so, how they propose to determine the intended purpose of such imports and how they would ensure that any such future concession is not subject to abuse.”
“I would therefore be grateful if the Minister could advise the Committee of what error was made in the initial drafting and how the amended drafting rectifies the errors or individual error. That said, the regulations before us seem right and proper to ensure that the UK maintains the existing ban on the import and export and placing on the market of products that use cat or dog fur, with the attached criminal penalties for any breach of the ban. It is entirely right that steps are being taken to ensure that the ban remains in place once the UK has withdrawn our membership of the EU and where we are no longer covered by the existing legislation, which comes by way of EC regulation 1523/2007 as adopted in domestic law under the Cat and Dog Fur (Control of Import, Export and Placing on the Market) Regulations 2008.”
“However, without the evidence that we could have been given in a thorough impact assessment and without the engagement of a full consultation process, how can we, as laymen and women without the necessary expertise, really be in a position to judge whether these regulations deliver the technical detail needed to achieve what the Government say they want to achieve? We are having to take this as an item of faith, without the necessary scrutiny to back up the decision making. I place on record that that is a concern we have, but we will have to put that to one side later on. I am aware that this instrument replaces a similarly named instrument previously laid and subsequently withdrawn because of a technical error. That sort of makes the point that I was alluding to about concerns regarding the technical nature of such regulations.”
“That is in stark contrast to the fact that the Government did not feel the need even to revisit what was in the EU’s impact assessment of some years ago and to make similar points about the desirability of these regulations in removing the trade in cat and dog fur and the implications for trade in the fur of other animals. It is regrettable that yet again we have an SI without an impact assessment, especially given the quality and depth of the EU’s work, even on something so straightforward and uncontroversial. I shall explain why I am raising the matter now. I am sure that all hon. Members will reach the same conclusion: this measure is straightforward and clearly something that we need to adopt in UK law and will all want to support.”
“I shall not be drawn too far in responding to that intervention, Mr Paisley, but of course it is not just the statutory instruments Committee that can decide whether an SI is considered using the negative or the affirmative procedure. The Government can decide, in the first instance, whether an SI is dealt with using the affirmative procedure. We will move on. The detail of the European Union’s impact assessment, when it brought the regulation in, acknowledged just how straightforward, important and uncontroversial that was, and its assessment was extremely thorough.”
“We are very clear that we want to maintain minimum standards and alignment with the EU as part of that customs union, as I am sure the right hon. Gentleman knows. It is as important to influence what goes on in the European Union as it is to develop our own domestic policy.”
“There is a clear and demonstrable public opposition to such imports on morality and animal welfare grounds, let alone outstanding questions about the impact on human health.”
“I will say what I should have said in answer to the right hon. Gentleman’s first remark: it is not membership of the customs union, but access to the internal market that would affect such regulations. I was making a point about the WTO, and perhaps the Minister can tell us about the assessment his Department has made of the likelihood of a challenge being made against the United Kingdom as a consequence of the regulations being transferred from the EU to UK-only competence. Assuming that the Minister confirms that such a challenge is unlikely and certainly could not be successful, will he explain why the Government have not sought to ban other imports into the EU such as hormone-fed beef or chlorine-washed chicken in line with existing EU bans once we have left the EU?”
“I am about to conclude my remarks. We welcome the Government’s efforts to introduce these measures. There are serious concerns about the Government’s future policy intentions. When the Minister responds, perhaps he will address those concerns and state whether he will rule out imports of agricultural products now or in the future, including those that I mentioned, that are not produced to the same standards as our own and that offend our national moral sentiments.”
“The Prime Minister said at her press conference last night that she would honour the commitments made by the Minister for the Cabinet Office to hold indicative votes if the withdrawal agreement was defeated again. I think that the Minister just confirmed that he agrees with her on that point. So when he confirms again in answer to this question that that is what he has just said, will he also confirm that the Government will be bound by the results of those indicative votes as a way out of the crisis that this country is currently in?”
“I agree that the role of Hamas should have been part of the investigation, but by abstaining, have not the Government undermined what the Minister said, and what was in the article yesterday, including about the fact that the demonstration and its organisers were legitimate and that the use of live fire and excessive force were inexcusable?”
“In her answer to me now, will she recognise that it is so much harder for those agencies to do their jobs, along with the police, when they have had such fundamental cuts to their budgets since 2010?”
“The disappointment about the Minister’s objection to the urgent question is not about us in here, but about the impact it will have on the families and on victims who have survived. Honestly, these are great opportunities for her to take examples and hear feedback from around the country on the sort of things that will make a difference in dealing with this epidemic. I know the Minister said she cannot tell us exactly who will attend the summit, but will she take on board what my hon. Friend the Member for Walthamstow (Stella Creasy) said about education, as well as the points about youth services, probation, children’s social care and all the agencies that have an influence in reducing the number of knives for one reason or another?”
“Nuclear, solar, tidal, offshore wind, onshore wind: all are forms of renewable energy that have been cut on this Government’s watch. Forty thousand people die prematurely each year as a result of poor air quality, and we all face the threat of climate change. This reckless approach to emissions must stop, so when are the Government going to end their reliance on fossil fuels and make the switch to electric and hydrogen-powered vehicles?”
“There are real concerns about the regulations and the ability of the FRC to put in place a system that ensures their robust implementation. Given that this instrument has already been through the House of Lords, I hope the Minister is in a position to give detailed responses to the points I have raised. They were raised in the House of Lords equivalent of this debate and I would like to think that she has come prepared to answer them.”
“Have the Government lobbied the US to adopt IFRS? Will the Minister tell us about the impact on US-UK trade agreements of a lack of adoption of those standards and of having different regulatory environments? Are these matters being discussed by her colleagues in the Department for International Trade in their preliminary discussions about potential US-UK trade agreements? On the setting up of the endorsement board, will the Minister tell us who will be represented on it? Will it reflect stakeholders, including those independent of the profession, as well as representatives of the nations of the United Kingdom? Accounting standards are of great importance, and making sure that regulations are in place in the event of no deal is essential.”
“The Minister’s Department told a House of Lords Committee that it was “currently working with the FRC to build capacity to set up the new Endorsement Board…in time for EU Exit.” The Department also told the Committee that “stakeholder input helped us define the extent of the FRC’s role in relation to the new Endorsement Board”. How is the setting up of the new endorsement board going, who are those stakeholders and what was their input into the creation of the board? The European Commission currently oversees the application, and influences the development, of IFRS across the EU. What is proposed raises concerns about a lack of political oversight of the board. I will be grateful for the Minister’s comments on that point. The United States applies IFRS only piecemeal, which reduces the international effectiveness of IFRS itself.”
“I believe that Australia has such a system; I notice that Australia was mentioned a few times in the draft explanatory memorandum. I wonder why the Government have not considered what seems to be an effective system of political oversight and why they have taken this light-touch approach to the day-to-day management of this incredibly important piece of work. I remind the Committee that the independent review of the FRC found that it is not fit for purpose and has serious problems in how it recruits top staff. Those reasons are enough now for having that active political oversight, and they will be cause for great concern until that primary legislation comes forward and a new body is set up.”
“The concern is that the FRC simply has enough on its plate already, as set out by the Secondary Legislation Scrutiny Committee when it recommended that the draft regulations be subject to the affirmative procedure. I am also curious to hear the Minister’s view on the Association of British Insurers’ suggestion that the Secretary of State should have active political oversight of the endorsement board. It made that suggestion because of the upheaval at the FRC, and also because of longer-term implications; as the international financial reporting standards evolve, a significant amount of work by the board will be needed. The Minister mentioned the annual report by the Secretary of State to Parliament, but that is very different from active and regular political oversight of the endorsement board.”
“That is of concern that we are in a position where, as the front page of the Financial Times put it, the FRC is “to make way for stronger accounts watchdog after a string of audit failures”. Given that concern about the FRC, it seems quite odd to ask it to take on this additional responsibility. The FRC is subject to 83 recommendations for change, a third of which require primary legislation. Will the Minister say how the FRC will have the capacity, and how we can be sure it has the competence, to take on this added responsibility as a result of the regulations? It is incredibly important that we get our financial standards right, for the reasons I set out.”
“I do not know whether the Minister is able to say when that primary legislation will be considered and when that work will be undertaken, but it clearly will not happen in time for these regulations to be enacted and for the FRC to take on the responsibilities set out in these regulations. Perhaps she can tell us when time will be made available for the work that needs primary legislation. Given the volume of legislation—we hear talk of the Easter recess being cancelled so that we can consider further statutory instruments like this one—perhaps she can tell us when that primary legislation is due to be considered by Parliament so that the FRC can be reconstituted.”