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Budget and Brexit related bills continue through Parliament

28 November 2017

Last week the Chancellor of the Exchequer delivered the first Budget of the current Parliament. It focused on addressing the UK’s investment in research and development and announced a number of measures aimed at addressing ‘inter-generational unfairness’ for young people – including changes to stamp duty land tax aimed at helping people on to the housing ladder.


Read our full Budget summary of the announcements and our response to the announcements.

The House of Commons continued to debate the EU (Withdrawal) Bill at Committee Stage and the Taxation (Cross-border Trade) Bill (formerly known as the Customs Bill) was read out for the first time, which will give the government the ability to establish a standalone customs regime following Brexit.

The Financial Guidance and Claims Bill was read for the final time in the House of Lords, where the government stated that it will table amendments (in the House of Commons) to ban cold calling.

The Sanctions and Anti-Money Laundering Bill was debated at committee stage in the House of Lords for the first time, in which the Labour Spokesperson for Foreign Affairs said a Law Society briefing ‘raised huge concerns’ about Clause 16 (which gives ministers powers to introduce substantive new indictable criminal offences), and added to the “wide range of opinion” against the government on this.

Looking ahead to this week, the Law Society has briefed a number of backbench MPs ahead of a debate on legal aid in the House of Commons on Wednesday. The Law Society launched its Early Advice campaign.

In addition, Brexit spokespeople from the Labour Party and the Liberal Democrats will give evidence to the House of Lords Constitution Committee as part of its inquiry on the EU (Withdrawal) Bill. The Department for Business, Energy and Industrial Strategy has also published a white paper on its Industrial Strategy.

This week in Parliament

Monday 27 November

House of Commons

  • Continuation of the Budget Debate
  • Communities and Local government Select Committee: Homelessness Reduction Act 2017 – one off evidence session on the government consultation

Government

  • Department for Business, Energy and Industrial Strategy to launch a white paper on a ‘long term plan to boost the productivity and earning power’ of people in the UK.

Tuesday 28 November

House of Commons

  • Treasury Oral Questions
  • Conclusions of the Budget debate
  • Public Administration and Constitutional Affairs Committee: Devolution and Exiting the EU. Witnesses include:
    • Liberal Democrat Shadow Brexit spokesperson Tom Brake MP
    • Shadow Secretary for Exiting the European Union Sir Keir Starmer QC MP.

House of Lords

  • Oral questions on proposed Domestic Violence and Abuse Bill and the inclusion of measures to prevent violence against women and girls and measures to deal with perpetrators.

Wednesday 29 November

House of Commons

  • Backbench debate on Legal Aid, led by Paul Sweeney MP

House of Lords

  • Constitution Committee Oral Evidence on EU (Withdrawal) Bill. Witnesses include:
    • Liberal Democrat Shadow Brexit spokesperson Tom Brake MP
    • Shadow Secretary for Exiting the European Union Sir Keir Starmer QC MP.
  • Sanctions and Anti-Money Laundering Bill – Committee Stage (Day 2)

Thursday 30 November

  • Nothing relevant

Friday 1 December

  • Nothing relevant

Last Week in Parliament

Monday 20 November

House of Commons

Taxation (Cross-border Trade) Bill

The government’s Customs Bill has been published and renamed the Taxation (Cross-border Trade) Bill. It will give the government the ability to establish a standalone customs regime, and ensure that VAT and excise legislation operates effectively after Brexit. Read the full text of the Bill and the explanatory notes.

Purpose of the bill: The Taxation (Cross-border Trade) Bill is sponsored by the Treasury, and does not presuppose any particular outcome from the negotiations. In assessing the options for the UK’s future customs relationship with the EU (and therefore, how the government uses the powers in the Bill), the government will be guided by what delivers the greatest economic advantage to the UK, and by three strategic objectives:

  • Ensuring UK-EU trade is as frictionless as possible;
  • Avoiding a hard border between Ireland and Northern Ireland; and
  • Establishing an independent international trade policy.

The Bill’s purpose is to allow the government to:

  • Charge and vary customs duty on goods;
  • Specify which goods are subject to what duty;
  • Set preferential or additional duties in certain circumstances – e.g. to secure the benefits of global free trade while protecting domestic industries, providing necessary and proportionate safeguards against unfair trade;
  • Support developing countries by offering preferential treatment; and
  • Ensure that VAT and excise legislation function effectively upon EU exit.

A date for Second Reading of the Bill has not been set yet.

House of Lords

The Financial Guidance and Claims Bill – Third Reading

The Financial Guidance and Claims Bill had its Third Reading. The main points:

  • Cold calling - The government noted that they have not yet tabled an amendment to the Bill to introduce legislation to ban cold calling but intend to do so when then Bill goes to the House of Commons.
  • Interim fee cap on PPI claims management services – The government tabled amendments to the Bill to introduce an interim fee cap in respect of PPI claims management services. This will set a fee cap of 20% of the claim value which will apply to both CMCs and legal services providers that carry out claims management services in relation to PPI to be enforced by their relevant regulators. This will bridge the gap before the FCA’s fee cap is in place.
  • Whiplash claims – Lord Hunt welcomed the steps to regulate CMCs in the Bill but noted that more needed to be done to regulate those CMCs who handle personal injury claims. The Minister said that the government and FCA are aware that the government’s whiplash claims could have an impact on the CMC market and the FCA will keep this sector under review.

The Bill will now make its passage through the House of Commons. First Reading in the Commons took place on Tuesday 22 November but no date has been set for second reading (where the Bill will have its first debate in the Commons).

Tuesday 21 November

House of Commons

EU (Withdrawal) Bill

The EU (Withdrawal) Bill completed its third of eight days in Committee Stage. Day four of Committee Stage has been scheduled for the 4 December. The Law Society briefed a number of MPs before the Committee stage (the briefing can be found here).

The government defeated four Opposition and backbench amendments at division:

  • EU Charter of Fundamental Rights - The narrowest vote was on Amendment 46, which would have ensured that the EU Charter of Fundamental Rights was not excluded from the category of retained EU law the Bill creates. Shadow Brexit Minister Paul Blomfield argued it was important to keep the Charter inside UK law, even if steps had to be taken to ensure it could be implemented. In reply, Justice Minister Dominic Raab said the government was committed to ensuring that leaving the EU did not see a diminution or reduction in substantive rights. It was defeated at a division with 301 votes for and 311 votes against.
    • Changes to EU provisions affecting UK rights - New Clause 79, moved by Labour MP Ellie Reeves, was intended to ensure that Parliament was informed of changes in the EU or European Economic Area (EEA) provisions that might amend UK laws around family-friendly employment rights and gender equality and their potential impact. Ms Reeves wanted to ensure that the rights of workers and employees with caring responsibilities and women’s rights were no less favourable once the UK was outside the EU. Responding, Raab said the new clause was unnecessary given the wider snapshot of EU law the Withdrawal Bill would capture at the time of Brexit.
    • Retaining general principles of EU law - Labour’s Amendment 336 sought to retain the existing principles of EU law within domestic law, whether they came from case law of the CJEU, EU treaties, EU legislation or directives, at the end point of any transitional arrangement. Speaking for the government, Solicitor General Robert Buckland said the amendment prejudged the negotiation outcome and introduced inflexibility, by seeking to bind the UK to CJEU decisions on general principles for the full duration of any implementation period. It was defeated at a division with 296 votes for and 315 votes against. 
    • Protection of right to damages - Amendment 139 formed part of a group moved by Labour MP Mary Creagh to restore the right to obtain damages after exit day in respect of government failures before exit day to comply with EU obligations. It was defeated at a division with 295 votes for and 315 votes against. Clause 5 and Schedule 1 were agreed to without amendment in the Bill. These deal with exceptions to the saving and incorporation of EU law.

Conservative MP Dominic Grieve did not press his Amendment 10 to a vote after Solicitor General Robert Buckland provided assurances they would be bringing forward their own similar amendment at Report Stage. Grieve’s proposal would have allowed challenges to be brought to retained EU law on the grounds that it was in breach of the general principles of EU law. He said there was a core issue that must be addressed about the ability to bring a right of action in domestic law based on a failure to comply with a general principle of EU law when it concerns the operation of retained EU law.

House of Lords

EU Justice Sub-Committee hears evidence on the jurisdiction of the CJEU following Brexit

The four witnesses of the session were:

  • Rt Hon the Lord Hope of Craighead, Convenor of the Crossbench Peers and Former Deputy President of the UK Supreme Court
  • Rt Hon the Lord Neuberger of Abbotsbury, Former President of the UK Supreme Court of the United Kingdom
  • Rt Hon the Lord Thomas of Cwmgiedd, Former Lord Chief Justice of England and Wales
  • The Rt Hon Sir Konrad Schiemann, Former judge at the European Court of Justice of the European Union.

Summary of the key issues discussed:

Interpretation of retained EU law

  • Lord Neuberger said Clause 6(2) as drafted, would give judges an uncomfortably wide discretion because they will have to decide whether to take into account diplomatic, political or economic factors when deciding whether to follow the decision of the CJEU.
  • Lord Hope raised the problem of there being no opportunity for a non-member state to be heard by the CJEU and that after Brexit the UK’s voice would not be heard, not only because we would not have a member of the court but because we will not even have an opportunity to attempt to guide or influence the way the court looks at a problem.

Ending direct CJEU jurisdiction

  • Lord Hope suggested that after leaving the EU, we will have no direct access to CJEU if an issue comes up as to the meaning of EU directives.
  • Lord Thomas raised two issues of concern, the first that he was unclear how the UK intended to keep the law up to date (in areas such as data). The second problem he raised was the extent to which the UK Supreme Court may be asked to depart from and develop a slightly different jurisprudence from that of the CJEU.

Criminal and civil mutual recognition mechanisms

  • Baroness Ludford asked the panel if they could envisage the UK continuing inside the European Arrest Warrant (EAW), while refusing to recognise the CJEU’s jurisdiction and enshrine the EU Charter of Fundamental Rights in domestic law. Lord Neuberger said he’d be surprised it that arrangement received agreement from the other 27, and that he doubted the CJEU would frank an order to give effect in an EU country to a warrant issued in the UK if they were not signed up.
  • Lord Thomas conceded that while it would be possible to agree an extradition treaty with the EU, the EAW operated in a fundamentally different way - premised upon judicial co-operation, unlike treaties.
  • Lord Hope said it was possible for the UK to agree a treaty covering the whole area of security and judicial co-operation, but that he didn’t know how this could be achieved without involving European courts.

Workable alternatives to the CJEU

  • Lord Neuberger said that any degree of consistency with the EU would be politically difficult as they would have to be agreed with the EU, and potentially subsequently established as lawful by the CJEU in EU terms.

Legality of alternative dispute mechanism

  • Sir Konrad raised a scenario where all parties agreed on an alternative dispute resolution system – either non-binding or binding – but the question then arising whether they are empowered by EU law, to do that sort of a deal. Referencing attempts to formalise the relationship between the CJEU and the ECHR, Sir Konrad said it was possible the CJEU could rule at a late stage that EU treaties make no provision for the agreement and throw it out.

Withdrawal agreement and implementation period

  • On whether both the withdrawal agreement and the implementation period would be referred to the CJEU, Sir Konrad said a procedure did exist where, for example, a French company could bring through its national court a question to the CJEU whether any agreement was lawful.

Direct rights of access for UK citizens to new court

  • Lord Thomas said it was desirable that an individual (e.g. a commercial enterprise) seriously affected can go directly to the court when constitutional or inter-state issues emerged. He highlighted investor protection arbitrations, saying it would be quite difficult to envisage a court system where access was only permitted to a government.

Data Protection Bill – Committee Stage

The Data Protection Bill was debated at Committee Stage for the fifth and sixth day (22 November). Baroness Hamwee (Liberal Democrats, solicitor) tabled a total of 10 amendments suggested by the Bar Council. All amendments concern legal professional privilege. The amendments:

  • Amendment 163B would extend the stated restrictions to enforcement notices.
  • Amendment 164B addresses restrictions for professionals in providing information to the commissioner in respect to processing, because of privilege or an obligation of confidentiality, compliance with the Bar code of conduct, or rules or orders of the court.

The government spokesperson (Lord Ashton of Hyde) said:

  • The government does not dispute the right of a person to seek confidential advice from a legal adviser is ‘a fundamental and a crucial part of the legal system’. He said the Bill does not erode the principle of legal professional privilege.
  • Under the current draft legislation, if counsel decides that the data is not privileged, the data controller can still dispute the Information Commissioner’s right to access that material and has the right to appeal to a tribunal. He again said the government are seeking only to replicate, as far as possible, in the current Bill the existing provisions relating to legal professional privilege in the 1998 Act.
  • Clause 128 introduces a new requirement for the Information Commissioner to publish guidance on how legally privileged material obtained in the course of her investigations will be safeguarded. He pointed out there was no similar requirement in the 1998 Act, so in that respect the current Bill actively strengthens protections for legal professional privilege. He said the legal profession has not always understood that it must disclose the data and that the commissioner then has processes and procedures to protect that data.
  • Introducing a wide definition of ‘confidential legal materials’ (Amendment 161D) is unnecessary.

None of the amendments passed and the Bill will now move to a report stage on 11 December

The Sanctions and Anti-Money Laundering Bill – Committee Stage

The Law Society briefed a number of Peers before the Committee stage and drafted amendments. Our parliamentary briefing can be read here. The Law Society was mentioned in the debate by Lord Collins of Highbury, Labour’s Foreign Affairs spokesperson in the Lords. He said that our briefing had “raised huge concerns” about Clause 16 (which gives ministers powers to introduce substantive new indictable criminal offences), and added to the “wide range of opinion” against the government on this.  

Other key points from the debate:

  • Creating new criminal offences: In response to concerns that Clause 16’s potential for creating new criminal offences, Foreign Office Minister Lord Ahmad of Wimbledon said such offences already existed and that the government had set a cap of 10 years on maximum sentences for breaches of trade sanctions, and lower sentences for information provisions and money laundering regulations.

Lord Ahmad added that Clause 16 would enable the government to extend the existing criminal offence for failing to supply information on financial sanctions breaches. The provision would extend this offence, from applying only the financial services sectors and related businesses, to a general offence applicable to everyone.

Following this Baroness Northover said she expected to return to these issues in report stage but withdrew amendment 47. Clause 16 continues to stand part of the Bill.

  • Making sanctions regulations, & treaty obligations: Lord Judge spoke in favour of the amendments he and Lord Pannick had tabled on Clauses 1 and 7 (the power to make sanctions regulations and sanctions under UN obligations respectively) and repeating his description of the Bill as a “bonanza of regulations.” Lord Judge said his proposed amendments intended to clarify the term “appropriate” in the context of the Bill, saying it was too vague, subjective and dependent on ministerial discretion. He added that it also vests far-reaching powers in the minister to rule by regulation on fulfilling treaty obligations, in addition to powers to deal with terrorism.
  • Impact assessment and stakeholder consultation: Baroness Northover and Sheehan spoke in favour of amendment 9, saying it was essential to review sanctions to identify any disproportionate impacts and make adjustments, reduce unintended consequences for diplomats and aid workers, and also to enable stakeholders (e.g. banks, businesses and experts in sanctioned countries) to be included in any discussions. In response, Lord Ahmad said he feared this may risk tipping off potential sanctions targets, therefore undermining the effectiveness of sanctions.
  • Sanctions on not directly designated persons: Responding to concerns from Lord Judge and Baroness Sheehan, Lord Ahmad said their amendments in this area would restrict the government from being able to designate a person on the basis of their involvement with other designated persons. He added that the ability to impose sanctions on groups of people, or on all people connected in a specified way with a prescribed country, was a necessary part of some sanctions regimes and that more broadly sanctions can be drawn the greater the impact they will have.

The next day of committee stage will take place on Wednesday 29 November.

Wednesday 22 November

House of Commons

The Budget

The Chancellor of the Exchequer Philip Hammond delivered his first Budget of the Parliament, which replaced the Spring Budget.

  • The Chancellor focused his statement on addressing ‘inter-generational unfairness’ and boosting the UK’s comparative research and investment public funding. He said the OBR expects debt to peak at 85.6% this year and said borrowing will fall year-on-year between now at the end of the Parliament.
  • As expected, there was a large focus on providing scope for building new homes and helping young people get on the housing ladder. The Chancellor said the Budget would aim to support the economy through the uncertainty ahead as the UK leaves the European Union.
  • Hammond said the government will allocate a further £3 billion into Brexit preparations. He also said the government have invested £700 million in Brexit preparations already.

A full summary of the announcements can be found in our special Budget report and our response to the Budget.

Thursday 23 November

House of Commons

Law Society’s concerns about Ministry for Justice cuts highlighted in Parliament

Following the Chancellor of the Exchequer presenting the Budget, the House of Commons continued to debate the announcements.

  • Ministry of Justice cuts – On Thursday in Oral Questions to the Leader of the House of Commons, Valerie Vaz (Labour, Solicitor) highlighted a tabled written question from the Shadow Justice Secretary Richard Burgon MP which said the Ministry of Justice will have suffered cumulative cuts of 40% in its budget in the fiscal decade ending 2020. She highlighted the Law Society’s post-Budgetpress release, in which we said the cuts are having an impact on the most vulnerable in our society to access justice.
  • In response, Andrew Leadsom MP (Leader of the House of Commons) said that departments are looking to make efficiency savings, and it is ‘not the case that cuts automatically mean less access to any service’. She went on to say that the ‘efficiencies being made right across government are to be welcomed as they offer better value to the taxpayer.’
  • Global Legal Centre – While debating the Budget Communities Secretary Sajid Javid MP highlighted the UK’s leading sectors and said ‘our legal system is the most respected in the world’.

House of Lords

Involvement of the Devolved Administrations in Brexit discussions

Lord Wigley (PC) asked the government what progress has been made in discussion with the devolved Administrations relating to the establishment of an agreed intergovernmental forum between Westminster and the devolved governments to decide on appropriate competence for powers relating to devolved functions repatriated from the European Union following Brexit. He said an intergovernmental mechanism should immediately be put in place to resolve any issues that might distort the UK single market.

Government spokesperson Lord Young of Cookham responded by saying the Joint Ministerial Committee (EU Negotiations) facilitates engagement and collaboration between the UK governments and devolved administrations on the UK’s exit from the European Union. He did not respond directly on the suggestion of an intergovernmental mechanism.

He said progress was made at the most recent meeting on 16 October in agreeing a set of principles that will underpin the establishment of common frameworks as powers are repatriated from the EU. Following agreement of the principles at that committee, the government are working with the devolved Administrations ‘to make quick progress’ on the potential role for frameworks in some specific policy areas. The committee is due to meet again in December, ahead of the European Council.

In addition, he said:

  • Fears that Westminster will hang on to all powers that are repatriated from the EU are misplaced.
  • government will repatriate powers and is in consultation with regional mayors, local authorities and the Local government Association to understand the impact and challenges of Brexit.
  • The devolved administrations concede that some powers will have to be subject to a common framework established by the Joint Ministerial Committee.

Friday 24 November

Government

Justice Secretary speaks about the future of UK legal services after Brexit

The Secretary of State for Justice Rt Hon David Lidington MP gave a speech today at the launch of the TheCityUK’s legal services report, Legal excellence, internationally renowned: UK legal services 2017. Below is a summary of some of the key points:

  • Economy – Lidington praised the contribution the legal services make domestically and internationally, noting the number of jobs provided (300,000 quoted), the £24 billion contribution and a trade surplus of £4 billion.
  • Clarity and continuity on Brexit – Lidington said he recognised the need for the government to make further announcements on Brexit negotiations with the EU. He went on to say that the government is aiming to replicate existing principles as an outcome from the negotiations and securing ‘continuity and certainty’ for business was a priority, emphasising the need for ongoing civil judicial co-operation with the EU.
  • Global Centre - He said the strengths of the UK legal system make it ‘a hugely attractive destination for litigants and legal service providers alike, now and in the future.’ He referred to the government’s ‘Legal Services are GREAT’ campaign (which was launched in October with the support of the Law Society). He said we wanted London to continue to be an international hub for finance and legal services after Brexit and highlighted the need for regional centres to ‘serve as specialist hubs’.
  • Technology – The Lord Chancellor said technology and innovation in legal services will be key to ensuring the United Kingdom stands out. He highlighted smart contracts, which he said are ‘expected to increase trust and certainty, and reduce friction in the performance of business and other contractual agreements’.

Question or comments? Contact the Public Affairs team at parliamentary@lawsociety.org.uk or 020 7320 5858.

Tags: Westminster weekly update

About the author

Alexandra Cardenas is Head of Public Affairs and Campaigns at the Law Society. Public Affairs manages the relationships with parliament and government. She is a dual qualified solicitor in England and Wales (2014), and Colombia (2002). Prior to the Society, she practised as a human rights lawyer and worked at Macmillan Cancer Support and Animal Defenders International.

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