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Smith Square Review – 23 March 2018

Smith Square Review – 23 March 2018

Scottish MPs mullet over a challenge

A storm brewed over Westminster this week, as Secretary of State for Leaving the European Union David Davis announced on Monday that the UK would only fully retain control of British fisheries after the Brexit transition period.

Although there are very few people who would call themselves  experts on fishing policy, it is clear that this is politically a tough issue for Theresa May.

The fishing community is small, but extremely politically active. Throughout the EU referendum campaign, they promoted the case for leave as a way to ‘save’ their industry from the overly zealous Common Fisheries Policy imposed on Britain. In the process, they won a lot of support from pro-Brexit MPs, as fishing enabled them to point at a tangible benefit to British industry that could be delivered immediately after we decided to leave.

But, as David Davis confirmed this week, such a result will not be delivered immediately – and this is seen as a betrayal by pro-Brexit MPs. However, perhaps more importantly, it was also met with fury by Scottish Conservative MPs, who among them represent much of the UK’s fishing community. Douglas Ross, MP for Moray, described the outcome as a “pint of cold sick”.

With Scottish Conservative Leader Ruth Davidson confirming after the general election that the Scottish Conservatives would vote as a bloc if they felt Scottish interests were at risk, the current electoral arithmetic means their potential opposition to Brexit legislation represents a big problem for the government. Especially if this opposition were backed by pro-Brexit Conservative’s from the rest of the UK, too.

But, after a quick meeting with May in Downing Street, the Scottish Tories took a backwards step, and promised to place their disdain on hold. Though they claimed they had placed the government ‘on notice’, they could take further action in the future.

Once again, Theresa May’s government has just about managed to hold it all together, but how long the government can continue to do so remains to be seen.


Peers choose the nuclear option

Peers inflicted a double defeat on the government in the House of Lords this week over its plans to leave Euratom, the European treaty governing the market and use of nuclear energy in the EU. The government has said it wants to establish a new domestic nuclear regime as well as negotiate a nuclear agreement with the EU once the UK leaves on 29 March 2019, and the Nuclear Safeguards Bill is necessary to allow this to be delivered.

However, despite government opposition, Labour and Liberal Democrat peers voted to insist the UK should not withdraw Euratom unless a replacement deal is in place. They also voted to require quarterly updates on nuclear negotiations to be given to Parliament. The amendments were led by the Chair of the Nuclear Industry Association, former Labour cabinet minister Lord Hutton, arguing that Euratom should be a “back-up” option in case direct arrangements with individual counties cannot be negotiated in time.

Although Lord Hutton was at pains to stress that his amendments were not about keeping the UK in Euratom, it was also true that every peer pushing the amendments has previously asserted their opposition to this process. This was certainly the interpretation adopted by the government, who said the amendments would create huge risks and uncertainties to the UK’s ability to operate as an independent nuclear state” following Brexit next March.

The amendments will both now have to be considered by the House of Commons when the Bill finishes its progress in the Lords next week. However, the government previously faced some opposition to the legislation from Conservative MPs when the Bill started in the Commons last summer, and there will be now be some concern that the Lords amendments will derail progress on the bill on which the government had hoped to secure Royal Assent by parliament’s Easter recess.


A green future for the UK

Just a week after a four-way Select Committee criticised the Government’s actions to improve air quality, the Environmental Audit Select Committee (chaired by Mary Creagh MP and counting among its members Zac Goldsmith MP) called in experts to give evidence on Defra’s 25 Year Environment Plan.

After its publication in January, industry stakeholders and environmental groups such as the Campaign to Protect Rural England praised the plan’s emphasis on reducing plastic waste, protecting the Green Belt and AONBs, and creating a Natural Environment Impact Fund to replace EU environmental impact investments after Brexit. But while panellists at Tuesday’s Committee hearing welcomed the fact of the plan’s publication, their prognosis was mixed.

Witnesses from the Wildlife Trust and National Trust, environmental law firms and research centres, were concerned that it lacked sufficient detail on a number of issues. Most perplexingly, on whether or not EU environmental protections would be transferred into UK law, and how the Government would be held accountable once it had left European jurisdiction.

Panellists also felt that the plan omitted sufficient reference to urban planning, the use of chemicals and pesticides in agricultural production, private sector investment, or how the UK would transition to a profitable low-carbon economy. Local and combined authorities, it was also suggested, should have featured more heavily, given their role in development schemes.

The prospect of a trade agreement with Trump was also a feature of the discussion; the government should not let standards slip in order to attract a transatlantic better deal, members of the Committee and panel agreed – to do so would be to contravene international law.

The plan is long on ambition,” summarised Dr Stephanie Wray of the Chartered Institute of Ecology and Environmental Management, “and very short on legally binding actions.”


Carillion: the game has changed

This week ministers faced the Carillion Joint Committee Inquiry, with searching questions for Esther McVey MP, Secretary of State at the Department of Work and Pensions, and Greg Clark MP, Secretary of State at the Department of Business, Environment and Industrial Strategy (BEIS).

Committee chair, Frank Field MP, was keen to know when BEIS became aware that Carillion was insolvent and facing a pensions shortfall which now totals approximately £900m. Mr Clark conceded that he was only informed by profit warnings. Mr Field declared that relying on being informed by newspapers essentially meant “acting late”, as the banking crisis previously evidenced.

Mr Clark was further asked if Carillion had considered itself too big to fail, and whether government liquidity support had been considered. The secretary of state would not be lead on this matter, citing concerns that ‘criteria’ for future government intervention could be unhelpfully established.  Mr Clark reassured the committee that he would remain an “activist” minister with resolve to prevent a similar failure happening in the future. The secretary of state committed to protecting the UK as a ‘jurisdiction to invest in with confidence’.

More positively for the Government, Mr Field lauded DWP’s recent white paper on pensions, which would allow for new sanctions against those undermining pensions, ranging from fines to prosecution. Mr Field hoped that this would extend to “banging up” the most reckless company directors.

Specific interest also focussed on the possible retrospective use of these hypothetical powers. This could allow for punitive actions against Carillion executives who neglected their obligations regarding pension provision. Mr Field advised Ms McVey that ‘the House is in the mood to give you those powers’ and that the message to dysfunctional company directors should be clear: “the game has changed”.