Cynulliad Cenedlaethol Cymru

Yn ôl i Chwilio

Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol

External Affairs and Additional Legislation Committee

16/07/2018

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

David Rees AC Cadeirydd y Pwyllgor
Committee Chair
Jane Hutt AC
Michelle Brown AC
Steffan Lewis AC
Suzy Davies AC

Y rhai eraill a oedd yn bresennol

Others in Attendance

Dr Christopher Huggins University of Suffolk
University of Suffolk
Dr Rachel Minto Prifysgol Caerdydd
Cardiff University
Yr Athro Piet Eeckhout Coleg Prifysgol Llundain
University College London

Swyddogion Cynulliad Cenedlaethol Cymru a oedd yn bresennol

National Assembly for Wales Officials in Attendance

Alun Davidson Clerc
Clerk
Elisabeth Jones Cynghorydd Cyfreithiol
Legal Adviser
Gerallt Roberts Dirprwy Glerc
Deputy Clerk
Manon George Ymchwilydd
Researcher
Rhys Morgan Ail Glerc
Second Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 14:11.

The meeting began at 14:11.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon and can I welcome Members and the public to this afternoon's meeting of the External Affairs and Additional Legislation Committee? Before we get on with our business, can I remind Members that the meeting is bilingual and, if you require simultaneous translation from Welsh to English, that's available on the headphones via channel 1. If you require amplification, that's also available on the headphones, but that's via channel 0.

There are no scheduled fire alarms today, so, if one does take place, please follow the directions of the ushers to a safe place. Can I remind Members and everyone else to turn off their mobile phones or put them on silent in case any other electronic equipment may interfere with the broadcasting equipment? We've received apologies from Mark Isherwood and Jenny Rathbone this afternoon, and no substitutes have been identified. 

2. Perthynas Cymru ag Ewrop yn y dyfodol—rhan dau: sesiwn dystiolaeth
2. Wales’ future relationship with Europe—part two: evidence session

Let's move on to the business today. Our first evidence session this afternoon is continuing with our look—[Interruption.]—at Wales’s future relationship with Europe, part two.

Members are reminding themselves to turn their phones off. [Laughter.]

Can I welcome Dr Rachel Minto from Cardiff University and Dr Christopher Huggins from Suffolk University to this afternoon's session? Thank you very much for your presence today, and we want to go into questions, obviously, relating to the type of relationship we can have with the EU and with regions and nations within the EU following our exit. We'll go straight into that area, and I'll ask Suzy Davies to start. 

Thank you very much. Welcome, both. What I'm interested in is the countries within the European Union at the moment who have strong links with the UK, and Wales in particular, as of today, and those who will perhaps be more reluctant to see the UK go than other countries within the EU-27. So, for example, we know that Ireland would be hit hardest by a Brexit, soft or hard, whereas somewhere like Estonia or Croatia perhaps less so. Which countries and within which regions of those countries should we be working hard now on the soft diplomacy side of things and trying to talk, potentially, with bilateral ideas in mind, which I think other members might talk to you about? But, where should we be focusing our attentions, particularly for trade, but not exclusively for trade, as we're leaving the European Union? How do we target our resources? I don't mind who answers, seriously.

Yes, sure. So, Wales has already developed a number of links and it will, possibly, make sense to look at what those links are and how deep those partnerships are, because you've already got a direct link with someone you're already talking with. So, Wales, for example, has had in the past a strong link with the region of Brittany in France, for a number of reasons—geographical proximity being one, and similar policy interests around marine issues for example. So, part of this process, I guess, is identifying what the priorities for Wales should be, and then which regions or which other areas around the EU have common shared interests, and to target, if you like, your resources to developing relationships around that, because if you can develop links with partners who share common interests, those partnerships and those links are more likely to work effectively.

14:15

Can I just butt in there and ask whether you see those relationships as feeding up to state level, so that the state-level relationships have, shall we say, a positive effect on how trading negotiations could go in the future when we're looking at free trade deals?

Possibly. I don't know if I can comment on whether there would be a causal relationship and if, say, Wales and Brittany strike up a good link, that that would mean the UK and France as a whole will be able to strike up a good link. Thinking about the wider picture of developing links with those countries, it's something that—. You know, if you want to pursue common interests, if you want to operate on the European level, then having partners in Europe who share common interests, share common policy objectives, if you like, helps to build a critical mass of trying to get your voice out there.

The only thing I'd really comment on there, because I don't know—. My focus hasn't been on those bilateral relationships. I suppose it's important to think about, if they did get to where we are thinking about state level and how Wales would feed into this, what Wales's international strategy is going to be post Brexit, but also in the context of Global Britain. So, will it be a case that Wales will, if you like, do some sort of tracking exercise along with Global Britain? Will there be some tracking of where the UK is prioritising those bilateral trade relationships? Because, certainly, there would be a rationale in doing that. So, if you have a free trade agreement between the UK and another third country, then certainly within the context of that it would make sense for Wales to focus its resources on that particular bilateral relationship. But, otherwise, what we've seen within the context of Europe in general and the European Union has been those multilateral relationships and  those multilateral networks that have developed around particular policy areas or particular industries. So, it's not solely that bilateral, but the multilateral as well.

Right, okay. I'm sure you'll get some more questions on that. Thank you.

I'm going to bring Steffan in in a minute, because he wants to ask specifically about that area.

You talked about common interests, Christopher, as being a reason, but last week the Basque Country and Wales signed a memorandum of understanding, basically because the Basque Country had identified areas it wants to prioritise because of its strategic goals, rather than, perhaps, common interests. Should Wales now be looking at its own strategic goals and seeing which regions fit into that?

Yes. The main message is don't find somewhere else and go, 'Oh, that looks nice, what they're doing; we'll tag onto it'; it's establish what you want to get out of this bilateral or multilateral contact first, and then develop your partnerships and your network activity around what you want to get out of it. So, there's always a temptation when you engage in this stuff to think, 'Well, Wales should be at the international level; it should be at the European level, and we'll just attach ourselves onto this network and this network and this network, because that way we'll be visible.' But if it's going to get real benefits, then it's got to meet what your underlying strategy is. So, you've got to have that strategic objective there first before you can go out and identify who you should be working with.

Can I just quickly ask—? The chances are that a Welsh strategy, if it's any good, should be focusing on not only existing good relationships and building on them in Europe, but also the 'global Britain' thing. How much extra—? I don't expect a figure here, but do you foresee that we will need considerable extra resource to be able to work on both those fronts?

My response to that would be 'yes'. In the first instance, in the European context, if we think about the resources that are invested in Brussels at the moment—and Brussels is such a rich venue, because you have the meeting of 28 member states, the regions within them, and other regional and national actors meeting in Brussels as well—post Brexit, Wales isn't going to have the kind of access that it has at the moment. It's going to have to, I think, invest more, invest in different ways to influence and also to seek out those opportunities post Brexit.

Okay, but it looks like we're going to need to find more cash and people from somewhere. Brilliant. Thank you.

Yes. I just wondered how you would characterise Welsh Government's international strategy at the moment. What do you think of the international strategic—or even the European strategic—objectives, both bilaterally and in terms of networks?

14:20

I think that I'm—. I think I've got some observations as opposed to an appraisal of the international strategy or the European strategy. Really, we see a very crucial role for the Welsh Government Brussels office, and what we've seen them doing over an extended period of time is essentially developing an understanding of how Brussels works, the institutions, who's who, which actors are working on different projects and therefore being able to identify opportunities that are perhaps in line with that specific Welsh Government strategy and also linking it back with different actors in Wales. So, I would say that they have a particularly important role to play in responding to those opportunities that are available within the European Union. I don't have a sense of the extent to which this—how much this is driven from Cardiff or responsive based on actually the opportunities that are there and their knowledge of Brussels and their knowledge of Wales and the strengths of Wales.

I'd only add to that by effectively saying that success is in the eye of the beholder. So, if you're trying to look for an appraisal, it ultimately depends on what your underlying strategy is and what your underlying objectives are. What Wales has managed to do is develop a profile at the European level, so not only through formal institutional arrangements such as the Committee of the Regions, for example, taking part at some level in the Council of Ministers, so engagement through that, but also through some of the sort of informal networks, as Rachel has mentioned. So, Wales has managed to develop the profile that's necessary to engage in this business, but ultimately it depends what your own objectives are and whether you're meeting them. One of the fundamental challenges with this sort of activity is that, if one of your goals is to get EU funding and EU money, it's quite easy to see how well you're doing because there's a nice round figure on it. If your objectives are, say, non-pecuniary in nature—so, we are able to influence policy or we are able to learn lessons from what other people are doing abroad—it's certainly possible to measure success, but it's much more difficult because those things aren't necessarily as tangible. So, a lot of the time, this activity has to provide multiple benefits to justify its engagement.

What do you think the Welsh Government's assessment of itself would be?

'I don't know' is the honest answer to that.

You touched on it just now in terms of the office in Brussels being the linchpin, really, of Welsh activity at a European level, certainly, and probably amounts to Wales's international policy full stop. But I wonder whether maybe we've neglected the bilateral element of our relationships, whether there are other sub-state nations in Europe—Flanders, Basque Country, Catalunya and others come to mind—that seem to do a good job of both getting the profile right in terms of the European networks and the multi-agency actors but also very strong bilateral links across the continent as well. Would that be a fair assessment?

Possibly, yes. In my research, I looked at mainly what's happening between the UK and France. So, a lot of this activity started in the 1990s and, at that time, it was mainly focused on building those bilateral relationships. So, the link between Brittany and Wales, for example, I think is one that was developed in the early 2000s. What we've seen generally across the EU as a whole is more of a shift towards this sort of multilateral networking, and there are a number of reasons for that. One of those is down to resource and having to build a critical mass to survive at the Brussels level. The other is more sort of the nature of the European policy process. If you can engage networks that have a broader representation than, say, just a bilateral link with two people, then you're able to justify policy based on that by saying, 'Look, rather than engaging with individual regions or one or two regions, we've engaged this network that has regions in every EU member state.'

So, there's been a general shift towards multilateral networking. As for whether that's seen these bilateral partnerships diminish, I couldn't say other than that, compared to the multilateral networking, there's less of an emphasis now on bilateral networking. Whether there should be more of an emphasis on bilateral networking again is more of a political decision as to whether building those relationships with individual regions is more important than having the wider EU presence within these networks.

14:25

Or whether the fact that we'll be outside the European Union might make bilateral work the only real option in town if we're frozen out of the multilateral fora.

Possibly, yes, but a lot of this depends, I guess, on the final deal that will happen at the end. So, a lot of these multilateral networks you see in Europe—there's the Conference of Peripheral Maritime Regions, for example—include non-EU members as well, and part of that is down to the nature of the opportunities that are there. So, if the final deal or the final relationship that comes out of Brexit that we get with the EU will provide opportunities for continued co-operation, then that's a route that's still potentially open. One of the other questions earlier was: what role does the wider international picture have to serve? There are these sort of multilateral networks that work on this global scale. So, networks such as the Network of Regional Governments for Sustainable Development, for example, is a global network focused, obviously, on sustainable development. You've got networks such as the C40 Cities, which is mainly focused around urban adaptation to climate change. So, these networks aren't necessarily confined to Europe—there are other opportunities out there—but a lot of this depends on ultimately what the final relationship with Europe will be, because that will determine whether it's worth going to Europe, or whether the opportunities to engage will still be there.

Can I just add onto this—? Just following on from what Chris says, it will make sense to think about the network of international offices as well, and actually how they can come into play, and what the underpinning rationale has been up to now for where they're located currently, and how they're going to be developed, because since the referendum we know that the Welsh Government has announced that new offices will be opened. So, how does the Brussels office fit within that international network and how does that international network fit within the Welsh Government's post-Brexit international strategy?

You've highlighted the multilateral, and that's the direction that Europe has actually be going in—to an extent, understandable—but we seem, in Wales now, because the issue of Brexit, to be going in the direction of looking to see whether we can have the multilateral, because CPMR, I agree, is not dependent upon membership, while other ones are. But we also see to be having bilaterals now. We got, as I said, last week the Basque; a couple weeks further than that, there was Nord Holland. So, there seem to be bilateral agreements also being made. Is the combination of those something you will expect now to be a way in which we create relationships with nations and other areas?

So, the detailed research I did, which was mainly based on English local authorities engaging in this activity—they normally had a portfolio of this activity. So, they would engage in these multilateral networks, but they would also have a couple of key bilateral partners. So, in some cases those bilateral partners would be for a variety of reasons. So, Kent, for example, in England, had its link with what used to be the region of Nord-Pas-de-Calais in France, in part because you had the direct links there between them, and even thinking about Brexit, that's still going to be an important link for them because of the ferry route between Dover and Calais. Other regions and localities look at, say, common business links or common links with industry. So, if you've got, say, big businesses that operate in certain regions, you might have networks or bilateral links that are formed based on those links.

So, a lot of this is trying to understand, really, what the Welsh Government, or even the Welsh Assembly, wants to get out of this activity, what its priorities are, and as I said earlier, the focus should be choosing which partners you want, based on what works, based on what your objectives are, as opposed to trying to pursue any particular model of engagement. So, I wouldn't go into this saying, 'Well, we should have 50 per cent bilateral links and 50 per cent multilateral links.' The local authorities or the subnational Governments that pursue this stuff effectively are the ones that have a clear idea about what they want and are able to map that to their activities.

But the bilaterals should be based upon the strategy of the Government, in this case, and its delivery, rather than trying to just respond to somebody else who wants a bilateral with us, in a sense.

Yes, so, just responding to a call of, 'Do you want to link up to us?' isn't going to be very well if you have nothing in common with the partner region—you don't share policy objectives and so on. So, you want to base your activities on what, fundamentally, you want to get out of it, otherwise you're tied to a partnership or you're investing resource in a partnership that isn't going to deliver what you want out of it.

14:30

Did you want to come in, Suzy? In a second; just one question for Rachel. Obviously, we've seen these two bilaterals: have you looked at the Welsh Government strategy to see whether this fits into their strategy, or is their strategy available yet?

I'm not able to say whether those two bilateral relationships fit into the Welsh Government's European strategy now or post Brexit. I'm afraid I'm not able to provide any more information.

I wonder if I can ask you to employ your crystal ball again, just for a minute or so. Obviously, the Welsh Government has offices in various countries around the world now, and that, I would hope, is part of an international strategy, at least of sorts. Are you getting any kind of indication from the activity in those offices—the non-European ones now—about levels of success, or directions of travel, even, about what's trying to be achieved in those offices?

I'm afraid I'm not able to give you any information about that. My understanding is that those offices are actually quite small at present, so it may be, over time, referring to your question earlier on, that the investment of those offices will have to be, perhaps, readdressed, post Brexit.

Okay. Do you think it's an indication of where they're hoping to—I don't want to say 'explore' because that's the word they're already using—but expand to, then?

Again, I can't really say, because this is getting into the question of, 'What does the Welsh Government want to get out of this?', and—

We're hoping you might be able to tell us. That's why I'm asking you—[Laughter.]

Unfortunately, 'I can't tell you' is the honest answer.

Can I ask whether the Wales Governance Centre will be looking at the strategy of the Welsh Government as far as its international relationships and whether perhaps in the future we may be able to see something?

Certainly, in the context of the work that I'm doing at the moment around European networks and Wales participating in European networks, this will be something that we can expand into, certainly.

And as Christopher talked about, actually, it's not just Government, it's also the Assembly as well. I know that Jane's got some questions in relation to the Assembly side of things.

Yes. In a sense, it's building on the importance that's come through our first report and particularly the evidence received from civil society and business about the importance of maintaining and building those networks, sustaining and—. We mustn't just talk about what exists now, we've got to talk about new relationships and new prospects in terms of networks and structures. Have you got any views on how we could enable the Assembly's relationship in terms of scrutiny of the Welsh Government, and also, for Wales, how we can develop and sustain those relationships? 

I'd be very keen to just pick up an element of your introduction there, because the focus so far has been on the Government and the Assembly. And in the work I've been doing with Paul Copeland from Queen Mary University of London, we've been focusing on civil society organisations as well, and the importance of those European networks to allow civil society organisations to plug into Europe, which is really important in terms of exchanging policy ideas, in accessing funding, and in advocacy work as well. So, it's a huge concern to those within civil society, and for those working at a devolved level there's a particular significance to those European networks. There's a concern about the nature of their relationship with those European networks post Brexit, and I think this is something that's really important that we emphasise—it's not only the Government and the Assembly, but it's really important for non-state actors as well.

But that's something that hopefully the Assembly and certainly Welsh Government should and can play a part in in trying to sustain and nurture those relationships, obviously, for support for our third sector civil society business, because they are important in terms of transnational relationships. Some of these have been funded, of course, and that funding will come to an end. I think it's also about the international networks that we want to sustain and connect with after Brexit and whether you've got any views on how the Assembly can engage—our external engagement programme—as a result of Brexit. 

14:35

Is this with particular reference to civil society organisations?

Obviously that's something you've got a lot of expertise on, but I think it needs to go broader than that, really, in terms of the economy. Also, we've talked about culture, equalities—a whole range of policy scenarios.

I think what will be really important is to get a very strong sense of, at the moment—and I make reference to civil society organisations—what in particular they gain from being plugged into those European networks and what the challenge is to them being able to continue their participation post Brexit, both in terms of the statutes of those European networks and the resources that are required for them to continue participation, and try to plug those gaps.

In your discussions with those organisations where you say that they want to try and plug those gaps, are they discussing with you whether Welsh Government has been involved with them to identify exactly those points? Because one of the things we identified in our previous work was that that needs to be done—that exercise of trying to find out who does what, where, with whom needs to be undertaken so we can see how we can build upon that. Are those civil society sections actually telling you, 'Yes, the Welsh Government has engaged with us, we are working with them to the future', or are they simply saying, 'We don't know what's happening yet'?

I haven't had any specific conversations about the extent to which they're working with the Welsh Government. However, within civil society there has been a mobilisation of a number of groups coming together; in part, some work that's organised by some colleagues—I can forward you some information—to help identify what are the key concerns of civil society organisations. Something that has been highlighted has been that continued access to European networks, and for Welsh actors, as I say, there is a particular significance for those European networks because the European Union provides a setting, if you like, for Welsh actors to be recognised as distinct actors to gain resource directly for themselves that they can feed into their own policy discussions. So, certainly there's research going on now to try and identify that. The extent to which that is linked to and feeding into a discussion within the Welsh Government I can't tell you, but I can certainly forward you some more information about the work around civil society organisations that is going on. 

Have you got any examples of best practice in terms of third party or subnational engagement with the EU?

Are you talking specifically within the EU institutions, or in the sort of networks that we've been discussing so far? 

In terms of the sort of characteristics that make an organisation successful at doing this activity—and I define 'success' here as how these organisations define whether they think it's worthwhile or not—I would say these organisations need a clear strategy with defined objectives and benefits that they want to get out of this, and they pursue relationships and activities based on what's in that strategy. So, to echo my—

Have you got examples of how you think it's working well in terms of those kinds of—?

I can speak to my research on local government, for example, in France and mainly in England. So, the region of Brittany, for example, in France is very good at this, because they have an upfront strategy that says, 'This is what we want to achieve out of it.' They have a separate budget document, for example, that goes along with that strategy, saying, 'These are the resources we're putting into it' and 'This is what we expect to get out of it' as well. So, the objectives are quite clearly defined. There are other examples in southern England where it has been the case that you've got quite clearly defined strategies. Brighton and Hove City Council, for example, had up until recently a quite rigid international strategy document that guided and prioritised their activities.

You also need resources and investment to do this, so this activity requires an upfront cost, not only in terms of hard cash to pay people to do it and to have a presence in Brussels, because I think one of the things Rachel has pointed to is that it's quite important—Brussels is like the hub, if you like, of many of these links and activities, so you get a lot of bang for your buck if you go to Brussels, because there's a high concentration of people there than you can link up with and network with. So, you need the resource to do that, but you also need investment in people with skills. So, if you want to do EU engagement, you need people who know how the EU functions, not only in terms of its formal legislative procedures, but also in terms of how to play the Brussels game of informally influencing policies, for example, and people who are sensitive to what's going on around them. So, people with language skills help, for example, because it allows you to build those one-to-one relationships that are often quite crucial to building these wider partnerships.

On top of that, I'd say you need willing leadership. It's all very well having the money to do it and the resources to do it, but it also needs to be driven from somewhere, whether that's a mandate, say, from the Assembly or from the Welsh Government. It needs some sort of leadership to drive this activity.

The final point I'd make is effective oversight to make sure you're meeting those objectives, but also oversight of this function serves to promote what's going on. So, with a lot of these organisations that undertake this type of engagement activity, it's quite tempting for it to happen in silos. So, you have a Brussels office or a Brussels team that'll just be sat there, they'll report back once a month about what's going on, and it's quite easy to forget what they're doing, or maybe the benefits aren't being felt as far as they should be. So, those, I guess, are the four main things I'd say are quite crucial. 

14:40

Thank you. Many people said that they voted to—. This is a question, sorry, for you, Dr Huggins. I believe you've done some research into how subnational Government—for instance, local authorities—interact with the EU and therefore bypass national Government. One of the big things that people voted for in the referendum was the return of sovereignty that's been ceded over the years to the EU. So, local authorities bypassing national Governments that are directly elected to access money on certain conditions from the EU is an example of how that sovereignty is being transferred away from us. So, did any of your research look at whether the public felt that that kind of arrangement—that kind of bypassing of national Government—was desirable or not? Do you know whether the public in general are even aware of it?  

I'm not aware of any public opinion research that's looked at that specific question as to whether local authorities or subnational authorities or governments and so on should be undertaking this activity. 

To go to the sovereignty question, I think that's a bit more complicated. So, one of the stated reasons why regional governments and local authorities engage in this activity, particularly in a centralised country like the UK—which, by and large, is centralised—is that actually we can get heard in Brussels. So, this bypassing activity enhances our profile, and while we are members of the European union, there's an awful lot of policy that comes down from Brussels to this level, and so the idea is that you can engage at that level and influence things there when you might not have as much effectiveness engaging directly with Whitehall. So, it's another route, if you like, to influence the policy process.

As to what would happen after Brexit, that's ultimately a question of where those currently Brussels-based powers will eventually settle and fall, if you like. So, if those powers come back to the devolved level, great. If they get stuck in Westminster and Whitehall, then there's a question there about how will you have to change your activities to try and influence what's going on there. Does that make sense?   

Yes. It raises the question why you think that we—. You know, what are the reasons that we have less, supposedly, influence in Westminster than we do in the EU? Because when you look at the number of representatives Wales has on things like the Committee of the Regions and places like that, we don't have—. It's a much, much smaller influence we have than we have domestically. So, why do you think we have more influence with the EU than in Westminster? 

This comes back to the question of how difficult it is to measure success in these sorts of things, because these are all non-tangible benefits, and it's quite hard to say, 'We as Welsh Government have put this line into this policy, and that's a win for us.' It's quite hard to account for success in those ways. What's most often cited by those engaging in this activity, at least in the UK, is that there's a different type of culture at the EU level, which is that they're much more open to influence, much more receptive to other interests coming in. Again, there's a question about how effective that access is in being able to change the policy, but there's a perception at least that Westminster and Whitehall can be quite closed to taking influence from subnational actors compared to the EU, which will at least listen, if not take those ideas on board. So, there's a perception by subnational actors that engage in this activity—or at least, one of the reasons they use to justify this activity is, 'We get more of a hearing at the EU level than perhaps we might get at the national level.'

14:45

Sorry, Michelle, but on that point, is there a fear amongst those bodies that, as a consequence of Brexit, they will lose influence and there is still uncertainty as to how that influence may be exerted in Westminster compared to what they would have had in Brussels?

Yes. I think it's fair to say that there's a fear that that influence will be lost. And if you look at how the Welsh Government, how other devolved nations in the UK, and local authorities in the UK as well, have responded to Brexit, one of the responses has been, 'Well, we need to ensure that our voice is protected and how policy, when it's repatriated back to the UK—we need to ensure our voice is heard.' One of the things to remember about the EU is that local and regional governments have a legal consultation role in the policy process in the EU through the Committee of the Regions. Again, there's a question about how effective that is, but nevertheless, that formal, consultative role is there. That sort of body won't exist after Brexit, in effect, so that formal consultative role at least won't, as the legislation currently stands, exist. So, it will be down to building these informal links, especially in areas of policy that are, say, reserved by the UK Government, but will, nevertheless, impact on the activities of Wales. 

Thank you. Coming back to, I suppose, the lack of influence Wales has in Westminster, we've been members of the EU for 40-odd years. That's a lot of career time for politicians and civil servants. There is a possibility, I think, that that has meant that negotiations and discussions are focused on affecting the EU at EU level because that's where a lot of our important laws were coming from. I completely understand that; it's inevitable. What can Wales do to increase its influence in Westminster going forward? Because, obviously, we're forced, ultimately, to work through Westminster. We need to maximise our influence on Westminster so that the interests of Wales are protected. What's the best way for Welsh Government and other people in Wales to do that?

There are very healthy, vibrant, dynamic discussions ongoing about the nature of inter-governmental relations in the UK. And, in fact, we've given evidence previously to this committee about inter-governmental relations within the UK, and the Welsh Government has been very outspoken about the weaknesses of the current model in place. We have the joint ministerial committee, and the problems attached to the regularity of the meetings, and the extent to which the UK Government is really using this as a forum to actively engage with the devolved administrations. And certainly, in the context of Brexit, for example, I would say that we have the Joint Ministerial Committee on European negotiations. There was a certain amount of hope for this forum in the early stages, but over time, both Scotland and Wales have been more strident in articulating the weaknesses in this. So, there are very, as I say, healthy ongoing discussions, and it's not for lack of Welsh Government or National Assembly for Wales engagement with these conversations; they are wanting to make really—certainly the Welsh Government—big changes to the way those inter-governmental structures work. So, there was the paper in the context of the Brexit negotiations around devolution, and potentially the kinds of structures that we could see in the UK post Brexit for the four nations in the UK to actually work with each other. So, these conversations are absolutely ongoing.

14:50

So it's an opportunity for a better relationship, in a way, between the nations of the UK. Coming back to the networks that Wales and Welsh Government are involved in in the EU, and the institutions, how useful are those during the Brexit process, from the point of view of Wales?

Potentially quite useful. One question is: at what level are the negotiations—the Brexit negotiations—going to happen? Are we saying it's between purely the UK Government and the European Union, for example? So, if the EU is open to influence, these networks might be one way to influence, say, at least the EU side of the negotiation. But the reality I think, however, is this has been led at quite a high level, so it's being led by the UK Government, and it's being led by the 27 other EU member states, who have given the European Commission a relatively rigid mandate on what to negotiate. So, there's the opportunity to try and influence through these networks what is going on, because Brexit doesn't just effect the UK, it effects elsewhere, what's going on in Europe as well. But, ultimately, a lot of this is determined by the high politics of Brexit, if you like, and the extent to which other actors will be involved in that process. So, there's probably a case to influence at the EU level, but there's also, definitely, the case to influence at the UK Government level. But what we're seeing with the Brexit process in general is a lot of this is being handled at the higher end of the political levels.

On that aspect, the Committee of the Regions, when we met with the president, clearly indicated that the withdrawal agreement could be a mechanism by which it would block off, perhaps, future relationships, and that they were meeting with Michel Barnier to look at how they could get that withdrawal agreement to allow the possibilities of a relationship beyond Brexit.

Do you see the institutions, such as the Committee of the Regions or the European Economic and Social Committee, which are EU institutions—? They are very much dependent upon the withdrawal agreement, but are there other organisations, such as CPMR, who are going to be more flexible? Because when we met the Basques, again, they were talking about a two-state Committee of the Regions, in one sense—one for municipalities, one for legislatures. Is there a mood in Brussels for things to change, and for that type of structure to be in place, which would allow, perhaps, greater flexibility for relationships for the Assembly? I have to separate the Assembly from the Welsh Government, because they are the Executive; they have different tasks to what we have. Because we want to have discussions with parliamentarians, the people who make the laws, so we can have that influence on how we do it. So, do you think that two-tier approach could be something that would benefit us?

Possibly. And if we look at the Committee of the Regions, one of the gripes is that it does have this sort of un-nuanced mix of just throwing everyone in the same chamber, whether you're a quite small local council, or you're a national legislature. The problem with the flexibility angle on that is these are organisations that operate under the EU treaties, and so their role and membership is very clearly defined in those. And if you want to change how those organisations operate, or under what rules they operate, you've normally got to change the EU treaties, which is very difficult to do. So, this is where the opportunities of engaging in these networks is better, because, as you say, they operate on a more informal basis. I mean, they'll still be codified, they'll still have their rules of operation, but these are not formal institutions; these are effectively informal networks that have been built to informally influence EU policy on a more informal level, rather than through bodies like the Committee of the Regions. Does that make sense?

Yes. And so for the Committee of the Regions it would be more of the soft power approach that would be beneficial to us then.

Yes. The Committee of the Regions as a consultative body is always going to have that soft power role. It doesn't have formal decision-making powers. One of the criticisms that it often gets is it is just a consultative body. The other institutions don't have to listen to what it says. All of these areas, I guess, are about how you maximise the various routes where you want to try and influence what's going on, and rather than putting your eggs in one basket, like the Committee of the Regions, you might pursue a range of different networks as well, related to whatever you want to get out of this activity.

14:55

Certainly—focusing for a moment on the Committee of the Regions—they do have models now for engagement with non-EU countries. Neither of those ones are for neighbourhood policy [correction: with non-EU countries in the context of neighbourhood policy] and others in the context of enlargement. They wouldn't be a perfect fit for the UK, but there is a precedent there for the Committee of the Regions to have a relationship with what will be the closest European non-EU country. In the interviews that I've done within the Committee of the Regions, in the context of the work I've done with Jo Hunt and Paul Copeland, certainly there is, at officials level, an interest in keeping UK actors connected with the Committee of the Regions, because of the contributions that they do make to the formal and informal networks as part of the Committee of the Regions. So, post Brexit, that EU institutional architecture will not be necessarily closed off altogether.

I'm conscious of the time now, we're coming to the end of our session. Have Members any further questions for our witnesses? No. Can I therefore thank you both for your evidence this afternoon and for going through that explanation of some of the complexities—I think—still ahead of us? You will receive a copy of the transcript. For any factual inaccuracies you find, please let the clerking team know as soon as possible. 

Sure, thank you.

Thank you very much.

I now propose we move into private session for five minutes, before the next item on the agenda. Are Members content? We'll move into private session for five minutes.

Gohiriwyd y cyfarfod rhwng 14:47 ac 15:01.

The meeting adjourned between 14:57 and 15:01.

15:00
3. Cyfraith Ewropeaidd a chyfnod pontio Brexit—sesiwn dystiolaeth
3. European law and the Brexit transition—evidence session

Can I welcome Members back to this afternoon's evidence session of the External Affairs and Additional Legislation Committee? The next item on the agenda is evidence from Professor Piet Eeckhout from University College London and we're now looking at the issue of European law and the Brexit transition period. Can I welcome Professor Eeckhout this afternoon? Perhaps we can start off with a very simple one. The paper that you co-authored was back in November 2017, I understand, and obviously there's been a lot happening since then—we've seen changes, we've seen more. We've now seen, perhaps, the publication of the White Paper. I appreciate you might not have had much time to reflect upon that. But, have the events since November led you to change your position from that paper?

Not very much, I think. First of all, thank you, committee, for inviting me to give evidence. I don't think, as a matter of fact, that since November 2017 a lot has changed. It already looked at that point as if there would be a transition period agreed and that's part, of course, of the draft agreement that the European Commission has published. So, we do have a bit more information about a number of elements, but I think, in terms of the fundamentals, I don't see a lot of change as of yet.

The transition period, as we understand it, is between 30 March 2019 and 31 December 2020, as per the withdrawal agreement. Article 50, if I understand it, is only simply—. The withdrawal agreement doesn't, actually, identify any transition period. Therefore, once article 50 has been completed, which is in March 2019, that's over and done with. So, where are we if we wish to extend the transition period?

That's a good question. There's quite a bit of debate on the question whether article 50 would allow for a further extension of the transition if the withdrawal agreement itself does not provide for that. The current draft does not provide any scope for extending the transition. That might, of course, still change during negotiations. In the absence of the agreement itself providing for an extension, the question arises whether something like that could be done on the basis of article 50 itself. I, personally, think that the overarching objective of article 50 is that it has to be read not only on its terms but in the context of the wider institutional law of the European Union. The overriding objective is to arrange for an orderly withdrawal; one that doesn't create the kind of chaos that one would see if there was a cliff edge, or a really sort of abrupt exit from the European Union. So, from that perspective, I think that article 50 could well be construed as allowing the European Union to actually also amend the withdrawal agreement. But, I'm conscious that not everybody would agree with that. There could be a view on article 50 that, once the withdrawal agreement has, as it were, expired, that's not possible. Ultimately, that would be a question for the European Court of Justice. But, personally, I think that in the interests of an orderly transition from withdrawal to the new relationship with the exiting member state, it should be possible to amend the withdrawal agreement—for example, by extending the transition.

15:05

Thank you. Just to let you know, we're having some trouble with the technical side of things. We'll continue on as best we can, but there are some technical problems with some of the sound.

Yes, I heard that.

You've obviously got it as well. We are asking our technical staff to look at it, but we'll continue for the moment.

In that sense, would you expect any element within the withdrawal agreement to identify whether we can use article 50, or whether there'll be another aspect of a treaty that would allow an extension of our transition? If there isn't one, then, basically, will we be looking at the withdrawal implementation Bill as giving us some guidance on that?

In the absence of the agreement itself providing for the possibility of an extension, I don't think it would be possible for the UK's own legislation unilaterally to arrange for such an extension, because it would need to be agreed with the European Union. There is, within EU law, always a lot of room for legal creativity.

I reflected a little bit on the question, 'Imagine that the transition period comes to an end and the agreement doesn't provide for an extension—what else could be done?' Well, for example, the current White Paper of the UK Government talks about an association agreement as embodying the future relationship. We have known association agreements—for example, the original one with Turkey—which are quite bare and have just a few provisions, and which deal with more specific implementation through protocols. So, perhaps an association agreement could be, as to its overall basic provisions, negotiated and concluded fairly quickly, for then the detail of the trade relationship to be agreed, and protocols on such an association agreement could, up to the point that the new trade relationship kicks in, provide for an extension of the transition. Again, that would require quite a bit of legal creativity. But, generally, the European Union, at least, in how it deals with these matters, is quite creative. We've always seen solutions found at a legal level when the political will is there to achieve something. 

The association agreement, I think, is being promoted very heavily by the European Parliament at this point in time. Is there only the example with Turkey at the moment?

There are many association agreements—in fact, the European Economic Area agreement is an association agreement. The provision in the treaty on the functioning of the European Union on concluding association agreements is often used as a legal basis for wide-ranging agreements between the EU and third countries, particularly where there's a close relationship. It's often used because it's very open-ended, it doesn't really define what an association is, so there's a lot that can be done with that provision as a legal basis for a relationship with a third country.

So, in a sense, that type of agreement—that type of treaty—that creates an association agreement is the simplest way of putting in place the opportunity for a transition period and then the flexibility beyond that to look, if we haven't yet reached a point where we can get a free trade agreement, at extending that.

Yes. So, for example, I mentioned Turkey, and that is, of course, a very old example, because the original association agreement dates back to 1963. But, the way in which this has worked with Turkey is that protocols were added, and the protocols—. For example, on the customs union with Turkey, there's now a proposal to modernise that through a new protocol. Politically, at this point, that's quite difficult, but I think that can quite easily be done from a technical and legal perspective.

Apart from just confirming that, actually, pragmatism is what's needed here, and there are other ways of resolving the problem if extension is needed, if it's not included presently. One thing that did strike me was when we were in Brussels some time ago, Michel Barnier told us that the transition period would only be permitted anyway if the UK was clear about where it wanted to go, and it wasn't for negotiating anything new; it was just simply to give us more time to administer what was already agreed. Are you worried that there might be some loose ends in the current proposal that mean that, actually, our end point isn't that clear, and therefore the very existence of a transition period is at risk anyway?

15:10

At any rate, the transition period as it's currently conceived is sort of, I think, at the edge of what can actually be done under article 50. It's certainly not the implementation of a future relationship, because it simply commits the United Kingdom to continuing to observe its obligations currently under EU law. So, it is really a little bit sort of buying more time for the future relationship. That being said, I don't think it is possible to conclude a withdrawal agreement with transition without also at least having, what seems to be the plan, a political declaration agreed between the European Union and the United Kingdom on the future relationship. I think all these elements are indispensable for being able to conclude a withdrawal agreement with a transition. If there wasn't any agreed framework for the future relationship, I think then the transition would become something really problematic, because it would, in a sense, be an abuse of the rule in article 50 that says that article 50 can be extended. If, of course, the UK and the EU were to decide that they haven't had enough time, they can extend article 50, and that shouldn't really be done through a transition and a withdrawal agreement. But if there is some basic agreement on the future relationship, then I would say that it's perfectly possible to do this kind of transition within the scope of the withdrawal agreement.

Okay, thank you, but we're still in the position that if, by March next year, we haven't agreed everything, then nothing remains agreed, including the existence of a transition period.

Absolutely, yes.

If a transition period is agreed as a result of the next stage of the negotiations, how do you think that the EU will, in practice, seek to ensure UK compliance with EU laws during that transition period? For example, would they be likely to consider commencing new infringement proceedings?

That's certainly possible. I think, actually, the terms already agreed on the transition provide for the full jurisdiction of the EU Court of Justice during the transition, which means that there can be references from UK courts to the European Court of Justice, and that the Commission, or indeed a member state, can take infringement proceedings against the United Kingdom. The difficulty with that, of course, is that these proceedings all take quite a bit of time, and as the transition period is scheduled to take only about—how many months—21 months, there really wouldn't be too much sense in making constant use of the infringement proceedings, as by the time the European court would decide a case, the United Kingdom would have left the European Union anyway, and the transition would no longer be valid.

Apparently the Commission is keen on finding a different route to ensuring that the UK complies—and that's not agreed; that's clear from the current text, or at least the one published in March, which is the latest I have seen—namely that they would seek to have the terms of the withdrawal agreement, including the transition, made part of UK domestic law, and that requires an Act of Parliament. If there was such an Act of Parliament that gave effect to the transition in the same way as, currently, the European Communities Act 1972 gives effect to EU law, then that would, I think, for the European Union, constitute a very significant guarantee, because it would simply mean that anyone in the United Kingdom who has rights under EU law under the transition would be able to go to court and have any UK court enforce those rights. But that has apparently not been agreed yet by the United Kingdom Government in the negotiations. That's a much more effective way of ensuring compliance, I think, because you decentralise compliance to any party that has an interest in compliance—any private party, any company, any person, any business—rather than putting the burden on cases brought by the European Commission. 

15:15

Thank you. We had evidence last week just in terms of dealing with compliance and issues and disputes. We heard evidence that the new joint committee, the joint EU-UK committee could be used to informally resolve disputes over UK compliance during the transition period. Are you aware of that view and do you have a view? 

I think that is in itself also already agreed in the draft withdrawal agreement, the role of the joint committee generally and that it would concern itself with any disputes between the EU and the United Kingdom. But that is of course a purely diplomatic, political way of trying to resolve disputes, which may well work in many cases. On the other hand, the experience in the EU is that the EU is very heavily based on the rule of law and on ensuring that the law is properly applied through court proceedings, either brought by the Commission or through national courts by any private parties. I would not think that the EU would easily accept that the joint committee would be the only way of settling disputes between the United Kingdom and the European Union. 

Okay. What do you feel in terms of the Chequers statement about the UK Government's proposals on the role of the European Court of Justice, and do you think that's likely to be acceptable? Are those proposals likely to be acceptable to the EU?

So, I think those proposals speak more to the future relationship after the transition period is over, and, of course, that negotiation hasn't really started yet. I think what is in the Chequers White Paper, published last week, goes quite some way to recognising what, for the European Union, is very significant, particularly the point that, whichever sort of method of dispute settlement is chosen, as soon as any court, any dispute settlement body, any arbitration panel look at what are effectively provisions of EU law that may be copied into the new relationship, they cannot have the last word, that actually the European Court of Justice has the ultimate jurisdiction to determine what the interpretation of EU law should be. That's a particular difficulty as soon as you have a close relationship where a lot of the terms of the relationship are actually borrowed from EU law or fully incorporate EU law.

If you look at the proposals on trade in goods, for example, there will be a common rulebook. In that case, the EU will not only insist but it is actually a point of law: the European Court of Justice considers that the jurisdiction to determine what EU law is cannot be given to an external court or dispute settlement body. Now, the current White Paper proposals already recognise that and say that there may be an arbitration panel, which would then be able to refer questions of EU law to the European Court of Justice. It doesn't quite say that the panel would be bound by the decisions of the European Court of Justice, but their decisions would have to be consistent. I'm sure that the EU will say, 'No, the panel must be bound.' But that would be a workable way to actually come to an agreement that recognises what the European Court of Justice will require anyway.

The only other way I can see is to borrow the European Free Trade Association court to actually bring the future trading relationship also within the jurisdiction of the EFTA court, which is a sort of parallel track. The EFTA court, of course, looks at the case law of the European Court of Justice, and the other way around as well. That's another sort of avenue that can be explored, but the White Paper doesn't really do that.

15:20

Sorry, I've lost my—I got a little bit distracted. I just wanted to ask a question about extending the transition period. You've said that the transition period would be easily extended, but it tends to be human nature that a task tends to take as long as the time that's available—so, doesn't an easily extendable transition period really, in effect, mean that we have no actual deadline for the transition period at all? 

Well, if I created an impression in the committee that extending the transition is easy, I do want to dispel that. There are clearly a number of difficulties, particularly with the current draft, which doesn't provide for an extension. So, if ever the question were to arise, 'Shall we try to set up an extension?', there would be a number of legal difficulties as well. So, there would be an argument about whether that is possible. 

Now, in terms of whether the scope for extending that fails to concentrate minds at a political level, that's perhaps not for me to concentrate on. It does look, so far—particularly the statements by the EU negotiators are to the effect that actually they are not keen at all on having the transition extended beyond December 2020. So, that seems to be sending a clear message. But, obviously, there is a risk that the problems, the questions, around 'no deal' and a cliff-edge Brexit, which present themselves now in relation to March 2019—that those same issues may resurface in December 2020 if there is no agreement between the European Union and the UK on the future relationship, because then all those questions resurface, of course. 

Thank you for that answer, Professor. You've made the comment that, in terms of any hypothetical extension of the transition period, the main issue with it is going to be the political feasibility of it. Are you aware of any studies or research into how the UK electorate would feel about an open-ended extension of the transition period, and, if there aren't any, would you be able to give us a guesstimate of the likely reaction, given the referendum result and all the statements that were made, particularly by the 'remain' side, leading up to that result? 

I'm not aware of any studies. I may have seen some in passing on my Brexit radar, but I haven't really focused on the question, so anything I say here is simply a personal impression and not based on any proper surveys or research. What I can see, of course, is that, if the transition were to be further extended, that it looks like Brexit is never happening. I would understand that many UK citizens, particularly the ones who voted in favour of 'leave', are probably currently wondering why it is taking such a long time to actually have the UK fully leave the European Union. My answer to them would be that it is clearly an extremely complex process and that there are a number of risks to leaving, certainly without a deal. But I can see how there might be quite a bit of unrest if the transition keeps on being extended.

Personally, I actually think—but that's not on the political radar at all—that, instead of having a transition period, which is indeed quite awkward, the way in which it has been set up, because it will oblige the United Kingdom to continue to respect EU law fully without being a member state and without being represented on the EU institutions—so it's not really taking back control; it's quite the opposite for that transition period—. So, instead of doing that, perhaps the negotiators could have taken more time to negotiate both the withdrawal agreement and the future relationship. I think that could all have been done in one. There's a legal view, particularly in Brussels, that that is not possible. I've disputed that, but it looks like that ship has sailed and that that's certainly not on the radar any longer. That would be a more appropriate way of dealing with things, because then the UK would simply remain a member state for as long as the new relationship has not been agreed. 

15:25

And is it fair to say, in your view and opinion, that that would have extended beyond 2019 because of the complexities?

Yes. It would, yes. I think it was very difficult to do all this work in just two years. 

Can I ask—? Once we leave the EU, which is, as you say—. The European Union (Withdrawal) Act 2018 basically repeals the European Communities Act 1972 and transposes EU law into UK law. That's the process. But, as you quite rightly point out, for that transition period, we will be abiding by European law as part of that agreement. Would you expect to see within the withdrawal and implementation Bill primary legislation that allows us to do that conversion, because how are we going to make sure EU law gets put into UK law, or how will the EU be confident that we will be abiding by the EU law, if we don't have that type of mechanism in place?

Well, I think the withdrawal Act, which has become an Act just a couple of weeks ago, already provides for legislation by Parliament on the withdrawal agreement, and I do think that the withdrawal agreement itself will need separate legislation. Exactly how this will be done—there are a number of ways of doing it. It could, in theory, be an amendment to the current withdrawal Act—I don't think it could be done simply by Ministers on the basis of the current withdrawal Act—or it could be a separate Bill, which, for the period of transition, and other withdrawal matters, sort of comes first, before, actually, the withdrawal Act itself takes effect in terms of continuing EU law. I find the way in which this has been structured at the legislative level within the UK quite difficult to get my head around. I've always wondered whether there was really a great need for having this withdrawal Act before you saw the terms of the withdrawal agreement—you could have had legislation doing it all in one go. I can also see that you've got the difficulty of the time pressure, and that this legislation would need to be adopted very soon after the withdrawal agreement is negotiated. But I do expect there to be further legislation. For example, part 2 of the withdrawal agreement, and there's been agreement between the parties on most of that part, concerning citizens' rights, I don't think that can be done simply by having the withdrawal Act continuing to apply EU law in the United Kingdom. I think there are specific measures that are required there to protect citizens' rights for the future—that is, EU citizens present in the UK—which will probably require primary legislation. 

I'm glad we're not the only ones who are finding it difficult to get our heads around it sometimes. But have you also looked at the devolution aspects of this? Because there's going to be a situation where we may have EU law in areas that are not part of the common frameworks concept, and so the pace at which different institutions may work at may be interesting as well. There will have to be some co-ordination, I would have thought, to ensure that all the nations across the UK actually implement and transfer at the same time. 

I will not try to say too much on devolution, with apologies, because it's really not within my expertise. I did look again at, for example, the White Paper on the future relationship, which mentions devolution up to a point, but doesn't really seem to be going down the route of saying that in areas of devolved powers or competences it would be for the devolved legislatures to actually adopt legislation. But, as I say, that's not really within my expertise, and that's a complex area of UK constitutional law on which I wouldn't want to comment without having studied it.

That's fair enough, but, obviously, it's of keen interest to ourselves. The ability to look at which aspects we would be required to transpose into Welsh law, and which ones may be frozen and held back at the UK level, is all part of the additional complexities, I think, that will come during the transition period. So, interesting points. I think we've come to a lot of the issues—you've actually covered quite a lot of the questions we had, in a sense, on those matters. The court of justice—you rightly pointed out that, for EU law, they will be the final say, and, once we leave the EU, during the transition, we're still agreed that the court of justice will still have that point of say. But if there is a situation beyond transition—and I am going beyond transition, because of the White Paper last week—which says 'common rulebook', there must be a natural assumption that decisions by the court of justice will still have to be, basically, effective in the UK if we wish to have that common rulebook. Because how you implement the laws and how you interpret the laws will have to be similar, surely.

15:30

I fully agree with that, and it is something the European Court of Justice would very much insist on. It's developed quite a bit of case law focusing on what it calls the concept of the autonomy of EU law, where the court of justice considers that it is just not possible for the EU to set up an agreement with a third country with its own dispute settlement system, where anybody there could develop its own interpretations of what are, effectively, provisions of EU law. The reason why the European Court of Justice doesn't accept this is that, within EU law, the principle is that decisions of such a dispute settlement body set up under an agreement with a third country are binding on the institutions of the European Union—so, that would include the court of justice. And the court sees it as completely subverting its own function if the EU were to, as it were, outsource the interpretation of its own rulebook to an external court, a court set up with a third country, whose decisions would, effectively, bind the European Union. There's a lot of debate about that, but that's the core idea.

So, as long as an agreement—. Take, for example, the agreement with Canada, the free trade agreement—that is not one that incorporates a common rulebook; it's not one where you will find many references to EU legislation, let alone any incorporation of any EU regulations or directives. If that has its own dispute settlement body, that is fine. But the reason why we have the EFTA Court, in fact, for the EEA, is exactly because the original EEA agreement, which, essentially, copies all of the internal market law and extends it to the EEA parties—. Originally there was to be a joint court, and the European Court of Justice rejected that, and, ultimately, they found the solution of having a parallel court for the EEA states. And that court—the EFTA Court—has to take account of the court of justice case law.

So, to me, if you like, the red line—it's not for me to comment on that politically, but the red line that the jurisdiction of the court of justice should end, if that is to be fully maintained, it simply means that you cannot have a close relationship with the European Union that would incorporate, for example, a common rulebook on goods or other basic provisions of EU law that would be copied into that relationship, because the European Court of Justice will not accept that as a matter of law.

Have there been any examples where the EFTA Court has rejected the decision of the European Court of Justice, having taken it into consideration?

The EFTA Court itself, or the former president of the EFTA Court, would say 'yes'; the European Court of Justice would say 'no'. This is what lawyers' business is all about, of course, to argue about the law. There's clearly been, from time to time, a little bit of creative tension between the two courts. And I think it's Professor Baudenbacher, the outgoing president—he just left the EFTA Court a couple of months ago, I think—who's commented quite a bit on this. And I think he's right in saying that, occasionally, the EFTA Court has diverged from the case law of the of the European Court of Justice—not to a large degree, and it's a matter for debate between lawyers whether these cases are really divergent, but I would agree with him that they certainly haven't always slavishly followed the case of the European Court of Justice. And it's quite a good model, I think, which works pretty well. In a sense, it's not too dissimilar from the relationship between the EU Court of Justice and the national supreme courts and the national constitutional courts of the member states, where there's also a bit of creative tension in the case law.

15:35

Just on that, you mentioned that there was a tension between the two courts about whether there'd been divergence or not. Presumably, though, in those circumstances, the ECJ wouldn't have taken that particular decision as a precedent for future decisions anyway, if there was a question mark over its robustness as an agreed decision. It would be parked, presumably, and not referred to again as a precedent.

The European Court of Justice does not refer to the case law of the EFTA Court really as precedent. There are a couple of cases in which the European Court of Justice makes reference to findings of the EFTA Court, but it will always do so as a further reason in support of its own reasoning. It will develop its own reasoning and say something like, and I paraphrase, 'By the way, the EFTA Court has adopted similar findings in a comparable case X.' But they do read each other's case law and there is a mutual influence between the EFTA Court and the ECJ.

If ever there were really a serious divergence between the ECJ and the EFTA Court, the ECJ would not give in. They would be able to consider themselves to be the court of 27 member states of the European Union and so, if there was really a conflict with the EEA on a particular interpretation by the EFTA Court, I think that would have to go to the EEA and the EU Joint Committee for resolution in some way. The EFTA Court seeks to avoid that as well, of course. But, that being said, there is mutual influence there.

Okay, that's really helpful to know, because obviously we don't have an equivalent of the EFTA Court in the current plans, but there are provisions for the Supreme Court in the UK to make certain decisions. My best guess would be that the Supreme Court and the ECJ wouldn't want to come into significant conflict—the problems would always be ones of nuance. In which case, I'm just asking you, really, whether we're worrying about something that'll never really happen, and I'm not talking quite about a blind eye being turned, but whether there will be insufficient conflict for it ever really to blow up into a big issue. Would that be a fair guess?

I think that's a fair guess. On the condition, I would say, that the terms that are agreed between the EU and the United Kingdom are made part of UK domestic law, because if they're not made part of UK domestic law, then the Supreme Court simply wouldn't be able to enforce that particular law—that agreement. So, that seems to me to be a condition. I would certainly agree that the European Court of Justice and Supreme Court would try to avoid divergence, as they have done in the past, and as the Court of Justice has done with other supreme courts. I think there is still a bit of a difficulty—it may be more of a formal concern than a genuine concern, but I do wonder whether the European Union will accept that the UK's own Supreme Court becomes the judge of the withdrawal agreement. The difference with EFTA Court, of course, is that the EFTA Court is a supranational or an international court set up by the EFTA states to enforce the EEA agreement; it's the domestic courts of Norway, Iceland and Lichtenstein that can refer questions to the EFTA Court. So, the EU might argue that there must be, at international level, a way of resolving disputes. But I would certainly agree that if the terms of the agreement are part of UK law, I don't see that the issue would be one of divergence between the case law of the Supreme Court and the European Court of Justice. 

15:40

Do any Members have any other questions? We seem to have gone through all the questions. You seem to have given us sufficient answers to our questions to satisfy our minds to a certain extent, but at the same time leaving us with still some thoughts as to how this will work during the transition period, and particularly we need to keep an eye on the withdrawal implementation Bill and any other amendments to the withdrawal Act, as it is now, to see how that may then be used to allow the transposition of EU law into UK law during the transition period, and allow the possibilities of an extension, if one is required, because we've yet to reach an agreement on the future relationship. Because everyone tells us that—. Twenty-one months, as you say, is still too short a period of time to complete all this. And particularly, as we see the White Paper saying, 'Goods: one set of rules'; services: another set of rules', and our economy split between the two. There is very delicate manoeuvring still to go ahead.

Can I thank you for your evidence this afternoon? You'll receive a copy of the transcript. If there are any factual inaccuracies, can you please let the clerking team know as soon as possible, so that we can get them corrected? So, once again, thank you very much for your time, and perhaps we will again have a chance to discuss things as things progress.

Thank you very much.

4. Papur i'w nodi
4. Paper to note

Members of the committee, we move on to the next item on the agenda. There are papers to note, which is one paper, and that's the correspondence from George Hollingbery, who is the Member of Parliament and Minister of State for Trade Policy. He's replaced Greg Hands. Having written to Greg Hands, I think we wrote to George Hollingbery following that appointment to seek whether he would still honour the commitment to come before the committee. You will note that the letter highlights the fact that the Trade Bill is going before the Commons tomorrow, and there are interests in that, and he also highlights some of the amendments that they are proposing, because there were concerns that we had that there were similar issues on the Trade Bill as there were on the EU withdrawal Bill initially. And he's clearly talked about trying to put similar amendments in place so as to resolve that matter, and I'm very grateful to him for providing us with details of those amendments.

He also commits that he will come and talk to us in October as well on that. Of course, at that stage, I'm assuming that the Bill may well be going through the House of Lords. So, we'll have an opportunity to explore some of the amendments that maybe are being discussed on that. And the Trade Bill is critical for us because it gives powers to Ministers, again, in areas. And some of them are Henry VIII powers, so, please, keep an eye on those. So, I'm very grateful for that. There's nothing else to say other than that paper to note. Are Members content to note that paper?

Just for Members to be aware, we've also written to the new Secretary of State for Exiting the European Union to offer him the same that we offered David Davis, to come before the committee to discuss the White Paper. Obviously, he's just in the post, so we haven't had a reply yet. But we look forward to a positive reply if possible. 

5. Cynnig o dan Reol Sefydlog 17.42 (vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

The next item on the agenda, under Standing Order 17.42(vi), is to exclude the public from the remainder of the meeting. Are Members content to do so? I see we are, therefore we now move into private session for the remainder of today's meeting.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:43.

Motion agreed.

The public part of the meeting ended at 15:43

Archwilio Cynulliad Cenedlaethol Cymru