My Lords, I am grateful to my noble friend for taking us through this statutory instrument this afternoon, and I am delighted to see him back in his place.
Rather than comment on what is set out in the regulations, I will first comment on what is not set out. In preparing for today, I am grateful to the House of Lords and House of Commons Joint Committee on Statutory Instruments and the conclusions in its 32nd report, on which I will rely heavily.
In particular, I will quote two paragraphs and how the conclusions were reached. In paragraph 5.4, the committee concludes:
“The Committee accordingly reports regulation 7(9) for defective drafting, acknowledged by the Department.”
This could have been put right. The committee states that
“it would have been open to the Department to withdraw the instrument and re-lay it before Parliament with the defect in article 42N(2) corrected”.
Apparently, the department chose not to do this because it intends to include the correction in amending legislation to be made early in 2021. It considers the likelihood of the defect in the legislation having any practical impact before the correcting legislation in 2021 to be very low.
The Joint Committee in its 32nd report states:
“The Committee is not convinced by this explanation. In the view of the Committee, the Government should not make legislation which it knows will have an effect which is significantly different from what is intended, unless doing so cannot reasonably be avoided. Nothing is said in the Department’s memorandum to indicate that laying a corrected draft would not have been practicable.”
So, with regret, I argue that the statutory instrument before us today will not lead to a fully functioning customs and excise move. Why did the Secretary of State for Trade choose not to submit a corrected statutory instrument for today’s purposes? Why was the procedure open to the department in this regard not used?
I understand that the department entirely acknowledges the error. Paragraph 5.3 of the 32nd report of the Joint Committee states:
“It appeared to the Committee that the exception in article 42N(2) may have been drawn too narrowly in requiring both the conditions in sub-paragraphs (a) and (b) to be met. It is inconsistent with the position under article 12 of the 2008 Order as it currently has effect before IP completion day. The current position is that a transfer to a destination within the EU customs territory is allowed if either the final destination for the transfer is within the EU customs territory, or the software or technology will be subject to processing or working within the EU customs territory.”
So we seem to be in the very unhappy situation where there will be a hiatus between what is currently on the statute book and what will be on the statute book early in 2021, which is highly regrettable. Will my noble friend explain why we are in this unhappy position and why the Secretary of State and the department chose to go down this particular path?
Equally, paragraph 5.7 of the 32nd report states:
“The Committee is not convinced by the Department’s explanation. It seems to the Committee that Government should as a matter of general principle avoid making legislation which it knows to be defective. In this case, the Trade in Torture Regulations were approved in draft by both Houses more than 18 months ago. Since that time there has been a significant change in circumstances in that the EU withdrawal agreement has been entered into, including the Protocol on Ireland/Northern Ireland. The amendments made by Part 5 include amendments in regulation 15 which are needed to take account of the effect of the Protocol. Accordingly, the Committee reports Part 5 of the Regulations as making an unusual or unexpected use of the enabling powers.”
In a previous paragraph of the report, paragraph 5.5, the Committee states why that is the case:
“Part 5 of the draft Regulations amends the Trade in Torture etc. Goods (Amendment) (EU Exit) Regulations 2020 (‘Trade in Torture Regulations”). The Trade in Torture Regulations have not yet been made and accordingly the Committee asked the Department to explain why Part 5 of these Regulations is being used to amend another statutory instrument which has not yet been made, rather than making that other instrument with the necessary changes incorporated in it.”
So, for the reasons set out in the report, with which I entirely agree, I ask my noble friend to explain why the department has drafted a defective instrument. Why has it opted for an unexpected use of enabling powers which have been overtaken for the reasons I have given, as set out in the 32nd report of the Joint Committee on Statutory Instruments, with which I entirely concur. We seem to find ourselves in an extremely unfortunate position. I repeat my question: why have the department and the Secretary of State put us in the position that we find ourselves in today? With those few remarks, I ask him to explain the circumstances in which we find ourselves today.
4.48 pm