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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“I think my hon. Friend has anticipated my question. Will the Minister explain what the scrutiny process will be for the Secretary of State’s decision making in the event of no deal?”
“Friends—that the Government cannot guarantee at this stage how the takeover regime will operate in the event of no deal. I suggest that she needs to answer that today, if she can. If she cannot, she should write to all members of the Committee with more detail about how the regime will operate in the event of no deal regarding the multi-jurisdictional challenge. The regulations show again how important it is that the Government do everything in their power to avoid the prospect of no deal. The way forward is to get a plan that Parliament and the EU can support so that we do not end up in that situation in the first place.”
“Perhaps the Minister can tell the Committee how big those companies are and how significant they are for the UK economy. If they are sizeable companies, that is not an insignificant issue—and, let us face it, if they are involved in takeover activity, they are likely to be sizeable companies. That raises the question of why the Government have decided not to produce an impact assessment. I mentioned the consequential amendments. Paragraph 7.14 of the explanatory memorandum speaks of a duty of co-operation. EEA member state bodies will have no duty, and we will have no duty, so will the Minister explain how that will work, and address the points that have been raised? It seemed from the Minister’s initial remarks—I think there were some gaps in her analysis in response to her hon.”
“Friends, who will regulate in cases where companies have a registered office in an EEA member state and trade their securities on the UK stock exchange? That is the point about multiple jurisdictions. The fact that a company is registered in an EEA state does not mean that we are not interested; if it is trading on our stock market, we have an enormous interest in ensuring that we supervise adequately. I am afraid we are becoming rather used to an absence of impact assessments for the SIs we are discussing relating to no deal, which are coming thick and fast—one last week, and two this week that the Minister and I are dealing with. The explanatory memorandum states that “the impact on most businesses will be minimal”, so an impact assessment was not produced. However, it also says that 10 UK companies are affected by the regulations.”
“That paragraph describes the consequential amendments required and demonstrates how many changes are needed to existing legislation in this country to disentangle us from the EU arrangements that we are party to at the moment. Perhaps the Minister can address that point and the apparent confusion between her remarks and what she said in the letter I quoted. In addition, will the Minister talk about what will happen with takeovers that are across multiple jurisdictions? Can she tell us what preparations the Competition and Markets Authority has made? What will the experience of the existing and additional staff be? What qualifications will current and new staff have? How long does it take for staff to acquire the skills needed to supervise such arrangements adequately? Coming back to the points made by the Minister’s hon.”
“That is a really important point that the Minister will need to address. As with so many other areas of business dealings and the regulatory environment, there is a real problem. The UK domestic takeover regime will need to function outside the existing EU framework. My understanding is that it is fully integrated at the moment because of our EU membership, but that will no longer be the case. Perhaps the Minister can confirm exactly how it will operate, because her two hon. Friends have highlighted a very real problem regarding the current complexity. That complexity is pretty clear from paragraph 7.1 of the explanatory memorandum.”
“The problem is that the duty to co-operate will no longer apply, as the Minister said. The hon. Member for Basildon and Billericay asked an even more pertinent question on reciprocal arrangements, and I want to quote part of a letter the Minister wrote to the shadow Secretary of State, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey): “At EU exit, however, EEA Member States will no longer be bound by a duty under EU law to cooperate with the UK. To leave section 950 of the Companies Act intact would therefore be to impose a duty on the Panel that is not reciprocated by supervisory authorities elsewhere in the EEA.” The hon. Member for Basildon and Billericay hit the nail on the head: we cannot guarantee that the supervisory arrangements will be in place from the EEA once we have left.”
“The Minister’s remarks show that the prospect of no deal should be avoided at all costs for this reason alone; there are many other reasons for avoiding it, but let us explore the risks in the regulations. The Minister talked about legal clarity and certainty, and referred to part 28 of the Companies Act 2006. However, the regulations move from a specific provision, covered by our relationships as part of the European Union, and of the EEA in particular, to general obligations in terms of international co-operation, the implication of which is that we move to a weaker takeover regulatory system. The hon. Member for Amber Valley talked about what happens in the event of a takeover that straddles exit day and about how we guarantee continued co-operation before and after exit day from our EEA counterparts.”
“As I have said, several dozen pieces of legislation are affected—sometimes, as the Minister indicated in her opening remarks, in significant ways. This SI gives rise to many questions and I question whether we are able to do it justice. I am not a lawyer and neither is the Minister, although undoubtedly she has lawyers advising her. I question whether this process allows for adequate scrutiny. It is a very good example of why the Government really must do everything in their power to avoid the prospect of no deal.”
“The UK Trade Policy Observatory also says that “a claimant for a private damages action will have to open new proceedings in the UK courts, and would be well-advised to do so now for any current investigations before the European Commission”, because “an infringement of EU competition will no longer be binding after Brexit for the purpose of follow-on actions in the UK courts.” I would be interested to know whether the Minister agrees with that observation. If she does not agree with it, what might her analysis be? Significant, wide-ranging changes are being proposed in the event of no deal. Parliamentary scrutiny of them involves just the small selection of Members on this Committee, following a similar Committee sitting yesterday in the other place.”
“What consultation has been undertaken regarding potential future divergence between the EU and the UK on competition law? Perhaps the Minister has the results of that consultation and can share them with us. I put to the Minister comments made by the UK Trade Policy Observatory: “An issue which was addressed in the EU (Withdrawal) Act 2018 is the scenario where UK courts are obliged to follow EU judgments that pre-date Brexit. The new s60A (7) provides that the relevant court or decision-maker may disapply the interpretative obligation if they consider that to be appropriate in the light of various criteria”. What guidance will the Government give to decision makers?”
“I read on Friday that the Government had issued the tender for fleet solid support ships as an international competition, on the grounds that they are not naval ships. There is no one in the navy or in the shipbuilding industry who regards fleet solid support ships as anything other than naval ships; it seems that only the Government do that. However, the consequence is that we now have an international tender, rather than a domestic opportunity for domestic shipyards, which is causing huge problems for the workers at Cammell Laird shipyard in the Liverpool city region. As the Government do not regard these ships as being naval, I wonder—because it is in the papers—whether they are covered by the liner shipping block exemption. Perhaps the Minister can answer that question.”
“What assessment have the Government made of the CMA’s capacity and of its ability to address its additional responsibilities? The CMA will also have a new role in relation to state aid. Will the Minister spell out what that role will be? We know that the Government have often been reluctant to use state aid. They are far less prepared to do so than other countries, including our European partners, or to organise tenders in a way that supports UK businesses. I remember the lengthy debates we had in 2010, when I was first elected to Parliament, about the competition between Siemens and Bombardier for Crossrail trains. The contract went to Siemens rather than to UK-based Bombardier, which shows the Government’s reluctance to support UK-based industry.”
“I suggest that there is rather more involved than changing the wording from “EU” to “UK” in multiple pieces of legislation. It is a surprise to Opposition Members that a statutory instrument is considered sufficient for such an important topic. Might it have been better to scrutinise the impact on each of the specific pieces of legislation that she described? She summarised the situation in her opening remarks, but there seems to be quite a lot more to it than is perhaps implied in the explanatory memorandum. According to the Practical Law UK website, the Competition and Markets Authority has indicated that it will have a much bigger role after Brexit. That is self-evident, given the competition law responsibilities that the UK is to take on from the EU.”
“I would be interested to hear the Minister’s view. If I have counted correctly, the Practical Law UK website describes a total of 18 pieces of legislation that will be amended by the draft regulations, with a further eight consequential changes and five more amendments that require secondary legislation. That is a significant shift in legislation. Is a statutory instrument appropriate for such a major change? When the Minister read out the title of the regulations, I noted that it includes the word “etc.” Now, what does “etc.” mean? [ Interruption. ] She points out that it covers a long list of potential areas. The draft regulations cover a lot of ground—a vast array of legislation is being amended. The Minister used the phrase “highly integrated”, which gives us a clue about the complexity.”
“The UK element of disputes that involve overseas businesses with UK operations will be affected, so will the Minister explain how things will work in the event of no deal when businesses are involved in disputes that cross jurisdictions between the UK and the EU? I am not entirely clear that her speech or the explanatory memorandum have addressed how the Government see that issue being resolved. The Minister said that no impact assessment had been carried out. An awful lot of legislation is being amended merely to cover the costs of leaving the EU. Will she take this opportunity to confirm that the Government will not allow no deal, to avoid those costs? Will she set out her view on how the Government will go about avoiding no deal? [ Interruption. ] I note that the Government Whip is shaking her head; I cannot possibly imagine why.”
“It is a pleasure to serve under your chairmanship, Sir Christopher. I note that we have 82 minutes remaining for our deliberations. I thank the Minister for writing to me in detail a few weeks ago about this important, detailed and complicated matter, which relates to how we adjust domestic competition law in the event of no deal. It is perhaps appropriate to ask the Minister to indicate what the Government’s plans will be for addressing changes to domestic competition law if there is a deal. The SI raises a number of questions, starting with what the consequences will be for existing competition proceedings under EU law.”
“Is the problem not that, if there is no deal, by definition there will not be an agreement to ensure that co-operation? How does the Minister envisage the CMA and our competition framework coping in that situation?”
“T6. A 2% increase in pay and prices will cost Merseyside police £6.2 million extra. I know the Minister for Policing and the Fire Service wants the police precept to double, but that will not come anywhere near covering that £6.2 million figure, so unless the Government fund the increase in police pension costs, it simply will not be possible for Merseyside police to deliver on keeping the public safe. I know he will not tell us what is in the police settlement, but can he perhaps tell us that he is lobbying the Treasury for the funds needed to cover the police pension liabilities?”
“If the Trade Remedies Authority is to be involved, does that mean that the Trade Bill is to reappear and conclude its remaining stages? It seems to have disappeared mysteriously into the ether. The hon. Member for Livingston made the point about the nations and regions. We have debated that at length, and the lack of engagement with and involvement of the nations and regions was one of a number of our concerns about the Trade Remedies Authority. The hon. Lady made a good point about that and it applies in this case, too.”
“That seems unlikely, given that some may be involved in existing complaints and that others, including through relationships with other EU businesses, are likely to be in the future. I suggest that the Minister should confirm that the change in procedure will have an impact on UK businesses. The Department has said that feedback on the effectiveness of the trade barriers regulatory system has been mixed? What does “mixed” mean? What was said in the informal consultation, and should there not be a more detailed consultation on the system that will be adopted? If the Minister wants to intervene to explain the rather quizzical look on his face, I will be delighted to give way. He is choosing not to. What is his plan is for the new system? Will it involve the Trade Remedies Authority? How might that work?”
“Did the Minister consider that soft power is, in fact, extremely effective? Are the Government missing the point that the current system works very well indeed? I also understand that a number of industry groups involving both UK businesses and those from the rest of the EU, including in ceramics, are at different levels of raising complaints through the existing trade barriers mechanism, so I put it to the Minister that the existing system is used more than might appear at first glance and, perhaps, more than he indicated in his opening remarks. Perhaps the Minister could advise those currently engaged in actions using the existing system as to whether they should continue their complaints using that system or switch to the UK’s new procedure. The explanatory memorandum claims that there will be no impact on UK businesses.”
“If we examine the examples, we start to see a bit of a pattern. The Confederation of European Paper Industries lodged a complaint that measures imposed by Turkey on the imports of certain varieties of paper were inconsistent with both the WTO and the EU-Turkey customs arrangement rules. Turkey immediately withdrew the unfair measures because the possibility of action through the statutory system was enough. How does the Minister know that his new system will be as effective as the current one, without the back-up of either the Commission itself and the system it operates or a similar UK version? Previously, the threat of the procedure being used has been sufficient, as the paper industry example demonstrates. Did the Government consider that the reason the procedure is so rarely used is precisely that the threat alone is sufficient?”
“The sifting committee said that the House might wish to explore further with the Minister the Department’s plan for the new non-statutory reporting mechanism. Opposition Members certainly want to do so. As the explanatory memorandum notes, it is correct to say that other avenues are used for complaints to the Commission about trade barriers, but more trade barriers are being created in the new world order. In 2017, 70 new barriers affected EU businesses, and that number appears to be growing. It is true that of those 70 new barriers, only one was reported to the Commission, and the Government think that that proves that there is no need for a statutory system. The Government plan to replace the current system, but what is it about the new scheme that gives the Minister confidence that it will deliver what business needs?”
“Businesses, trade associations and states may complain to the European Commission if they find evidence of a trade barrier in a non-EU state, as is currently the case with United States tariffs. After leaving the European Union, we will not be part of the TBR scheme—that much has been made clear by the Minister—and it will be replaced by a non-statutory system. I am surprised that the Government did not automatically debate the issue in a Delegated Legislation Committee. Instead, it took the sifting committee to challenge the Government’s decision, and I am glad that it did so. When the Minister said that the system is drawn-out and complex, he rather let the cat out of the bag about how important it is for us to get it right and for Members of Parliament to be able to debate and scrutinise what is happening.”
“It is always a pleasure to serve under your chairmanship, Sir David. What is the objective of the trade barrier system that we should have? Surely it must be to ensure that we have a robust system in place to support our businesses and workers as necessary and as they might expect. Given the new world order in which might is right, where protections and tariffs are rife and we verge on the prospect of very dangerous trade wars, it must be appropriate for UK businesses to expect the absolute best from their Government. What, therefore, have we been presented with? At present, we are part of the European Commission trade barriers scheme, which operates as a statutory system.”
“May I suggest to the Minister that, rather than revoking the regulation, it might have been a good idea to make a greater effort to investigate whether the current system was effective and whether the fact that its statutory element was not used very often was a sign that it was working successfully, rather than the opposite? I need to hear from him how the alternatives that he proposes will deliver the same level of protection for UK businesses that we have seen under the current system.”
“Specifically, what will happen to EU regulation 2016/1036 on protection against dumped imports, and EU regulation 2016/1037 on protection against subsidised imports? To return to my main points, we have a system—the Minister made the point that there has been a decline in its use over 25 years—in which trade barriers have been addressed through our membership of the EU. It appears that there has not been an evidence-based approach to considering how effective that system has been, and whether something similar would work.”
“That is a wider issue, but it is directly relevant. Paragraph 10.5 of the explanatory memorandum states: “Stakeholders from across sectors advocated a forum akin to the EU’s Market Access Advisory Committee in which industry associations and government departments can discuss avenues for resolution before initiating enforcement mechanisms.” That relates to my earlier question, and I want to ask the Minister why it has not been developed yet—or has progress been made towards achieving such a mechanism? The trade barrier regulation is only one area of the EU legislation that deals with dumping. The SI before the Committee is part of the process of revoking the EU legislation. What is happening to other pieces of EU legislation that deal with dumping?”
“To move on to the Minister’s points about the digital service, there are great concerns among smaller firms, and the organisations that represent them, about the Government’s moving to the use of digital systems in a number of places in government. How will the use of the digital route ensure that smaller firms are not disadvantaged? That is of great concern to many small businesses. Should not the arrangement have been sorted out before the revocation of the existing legislation? I note that the Minister said it would be in place by the end of March. Will he confirm whether that digital system has been tested, whether there is awareness of it, particularly among smaller firms, and how he envisages greater access to and use of it by the smaller firms that might be interested in using it at some time in the future, if not today?”
“I certainly agree that the need for regional engagement and for the nations of the UK to be involved in addressing trade barriers is incredibly important—as it is for large and small individual businesses across the country. What will the procedure be during the proposed transition period set out in the withdrawal agreement and the political declaration, in the unlikely event of the Prime Minister’s deal surviving? What will happen if, as seems inevitable, the deal is defeated? If, God forbid, there is no deal, what will happen then? Paragraph 2.3 of the explanatory memorandum states: “In the EU, the vast majority of trade barriers are raised via the Market Access Advisory Committee”. Does the Minister propose to replace that committee, which is a non-statutory part of the current arrangements?”
“I am grateful for the Minister’s comments on both trade remedies and trade barriers. He spoke about the confidence he has in our ability to lay our own schedules at the WTO. He will know, as will other Members, that there are countries that are suggesting that they may object. It only takes one country to do so. What sort of indications and discussions have been had in very recent times—in the last few days—that suggest that those objections have been removed? Without that, this would be very difficult to achieve.”
“It is important to clarify exactly what I said. I did not say that they were not arising; I said that they were resolved, without the need for recourse to the statutory part of the procedure. That is a very different point to the one the Minister appears to have answered. I accept that he may have misinterpreted my words, but that is not what I was saying.”
“Article 8 of the withdrawal agreement says that the UK will not have access to EU networks after we leave. That clearly contradicts the political declaration and its weak references in paragraph 24 to common regulations. Will the Prime Minister finally come clean with the chemicals, aviation and medical sectors referred to in the political declaration and admit that she has not the first idea how to deliver what they all need?”
“The Prime Minister’s botched Brexit deal creates uncertainty for business. The lack of any commitment to permanent customs arrangements means that there is no guarantee of tariff-free, frictionless trade. Frankly, I am amazed that any Business Secretary would put their name to this deal. Without any commitments to frictionless trade, how can the Government claim to be helping business?”
“This is just the latest example of what the Work and Pensions Committee described as “ripping off pensioners” using pre-packs. I understand that the Government announced they were holding a review into the impact on pensions of pre-pack administrations. Has the Secretary of State discussed when that review and its results are likely to be published, and when some of the pressure on the Pension Protection Fund will be relieved, as it is under enormous strain and going way beyond what it was intended to do?”
“The Secretary of State spoke earlier of how highly regarded UK goods are. That is true of successful exports such as dairy, smoked salmon and vegetables. I noticed that the Minister made a commitment in his initial answer to not dropping our food standards. Given that the United States has made it clear that that is exactly what has to happen to agree any future trade deals, will he now rule out any trade deals, including with the United States, that see any drop in our very high and successful food standards?”
“The Prime Minister says that this is a choice between her botched option or no deal, but it is crystal clear to everyone that there is no majority support in the House for either of those options. It is also clear that the half-hearted preparation for no deal means she knows that it is not a realistic choice. When is she going to admit that she needs to allow Parliament to come up with alternatives, and that she had better do that sooner rather than later?”
“In her statement the Minister said that the Government have many concerns, but I did not pick up what they were. She mentioned some of the things that the Commission said, but could she spell out the Government’s concerns about the proposed change in time rather than the procedural stuff?”
“To clarify: with my previous question, I hoped that the Minister would tell us the Government’s concerns about the impact of the change on the economy, society, business, the voluntary sector, schools and other areas. Could she spell those out?”
“Following on from the initial question that my hon. Friend the Member for Walthamstow asked, can the Minister spell out for us what the procedure is for this proposal being blocked, if the reasoned opinion is supported by the Committee today? How does that get support? Is it a system of majority voting, do we have a veto or is it another system? Can the Minister tell us how this would be allowed to go through or stopped, whichever is more likely, and give us a few scenarios?”
“Concerns were raised, in the one English language commentary we found on the matter, about the gap between solar and social time and teenagers dropping out. There is a whole other debate to be had on whether teenagers should go to school later in the day, but that is for another Committee on another occasion. However, there are concerns about health and about the impact on workers. There is some evidence of small energy savings to be had, whichever way round we go.”
“When we were initially looking at daylight saving time and double summer time, for example, we were in a different era. The importance of the agricultural sector in this country and the impact on agricultural workers were of a different nature, but we still have to consider that. We still have to consider the impact on postal workers, on children going to school and on commuters in the early mornings and whether there is an increase in the number of road traffic accidents when the clocks change. These are all important points that need to be taken on board. We can start to look at evidence from those countries that have made the change that the Commission suggests. The one piece of evidence that my researcher was able to find relates to Iceland, which has been in a position of removing daylight saving time for some years now.”
“They make the point well that we have concerns about what the Commission is proposing. We were being helpful. There are some health studies about this matter, and I hope that the Government will look into them. A Nobel prize was awarded to chronobiologists this year, and additional work will be carried out to indicate the health benefits or otherwise of changing the clocks—whether the clocks should change or not. I hope that the Government look at that. One issue is disruption to the circadian rhythm—did I pronounce that correctly? [Hon. Members: “Yes.”] Good; I got that one right. The issue is whether moving the clocks helps or not. What is the impact on the circadian rhythm and health? These are important points. There are points about the impact on the economy.”
“Well, what an interesting set of sub-questions. We made some progress and got answers in the end; I thank the Minister for that. I will offer just a few additional thoughts. I was surprised that the Minister said that the Government had not carried out an impact assessment. I gently suggest that they might need to do so because, on the basis of her other answers, we do not appear to be in a position to stop the Commission issuing the directive if it decides to go ahead. That might be helpful to the whole country, whether on the island of Ireland or not. Opposition Members were trying to be helpful with some of our questions. The questions my hon. Friend the Member for Blaenau Gwent asked about the safety of putting the clocks forward and daylight saving time are actually part of the argument to the Commission.”
“Perhaps she will write to members of the Committee with her findings as soon as possible, so that the work we have done today is followed up as thoroughly as possible.”
“I hope that there will be a good deal, not the inadequate one being put forward by the Prime Minister—it has little to no support from anybody in her own Cabinet, let alone anywhere else—but we absolutely must not have no deal. If we do get a deal, there will be a transitional period. If this goes ahead, we will have to be ready for it, as with so many requirements coming from the European Union. I hope that the Government will do the work necessary to prepare us for that eventuality. These questions were raised by the European Scrutiny Committee and are set out in paragraphs 1.19 and 1.20. The Minister is well aware of the concerns raised today. I hope that she will go away and ensure that the Government do that preparatory work and carry out their own impact assessment.”
“In the absence of certainty of evidence that a change is a good thing, we want to be as strong as possible, along with our allies and partners across the European Union, in influencing the Commission’s final decision. My hon. Friend the Member for Walthamstow was absolutely right to push as strongly as she did the points about what happens in Ireland. She might also have mentioned Gibraltar, of course. It would be very difficult to see differences on either side of those two land borders. These points should go back to the Commission in as strong a manner as possible. We are due to leave the European Union on 29 March, as the hon. Member for Mid Dorset and North Poole said—I know that he is very passionate that we do leave on that day. As things stand, we are leaving on 29 March.”
“This debate is about those things, but it is interesting that the documents that we were given cover in some detail all the points that I have raised—without the background, it is very difficult to go forward. I was about to move on—the hon. Gentleman’s intervention was quite timely—to quote paragraph 1.16 of our papers, where his own Committee quotes the Commission, which “acknowledges, ‘evidence is not conclusive as to whether the benefits of summer time arrangements outweigh the inconveniences linked to a biannual change of time’, leaving room to doubt that a fully harmonised approach is necessary.” The reasoned opinion that we give back must be as strongly evidenced as possible, if we are to have as much influence as possible.”
“Right across Merseyside, we have similar stories to those of my hon. Friends the Members for Lewisham West and Penge (Ellie Reeves) and for Lewisham, Deptford (Vicky Foxcroft). Some 1,600 police staff have gone through Government cuts since 2010. If not funded, this proposal will cost another 300 police officers. Our PCC, Jane Kennedy, talks of these cuts swinging a “wrecking ball” through her budget. She is right to say so, isn’t she?”