Professor Catherine Barnard, Sir Richard Aikens, and Professor Graham Butler.

Q13 The Chair: Good afternoon and welcome to the European Affairs Committee of the House of Lords. We are continuing our inquiry into the Government’s reset proposals. This is our second public evidence session, and I am delighted that we are joined by three distinguished legal figures. The first is Professor Catherine Barnard, newly appointed as professor of European law at Cambridge—Catherine, many congratulations.

Professor Catherine Barnard: Thank you.

The Chair: We also have Sir Richard Aikens, former senior judge and now at Brick Court Chambers, and, on the line, Professor Graham Butler, professor of law at the University of Southern Denmark. Thank you very much, all three, for joining us. Your evidence this afternoon is going to be really useful to us in shaping the inquiry we are setting out—giving us the legal context that will, I think, inform all our other evidence as well as being important for our report, which we hope to get out later in the year.

Not everyone needs to feel they have to answer every question. We have questions for each member, so by all means be selective in the questions you answer. Perhaps I can just ask you to get us started. Since we are, most of us around the table, lay men rather than lawyers, perhaps you could set out, as you see it, the legal framework that exists for the current UK-EU relationship and how to go about changing it under EU external law and the provisions of the TCA, so that we have the different legal options that are available to a Government who wanted to change, amend or extend UK-EU relations. Okay, enough of that. Professor Barnard, do you want to kick us off?

Professor Catherine Barnard: Thank you very much for the generous invitation to be here. Obviously we are operating under the TCA, the trade and co-operation agreement, and it is a bit like a very large sandwich. The reason I say that is because it has a framework which has common provisions across the top and common provisions across the bottom, and those common provisions frame the meat in the middle. The reason why that is significant is because, unlike Switzerland, which has 120 or so individual agreements with the EU, the UK has this framework which has got meat in the sandwich, but more meat can be added to that sandwich. If you look at Article 2 of the TCA, it is headed “Supplementing agreements”, and says: “Where the Union and the United Kingdom conclude other bilateral agreements between them, such agreements shall constitute supplementing agreements”. It is possible that it was always envisaged that there would be more meat that goes into that sandwich.

The question then is: how do you come about with that meat? There are a couple of ways. First, it is worth noting that the Partnership Council under Article 7 has quite considerable powers to amend the agreement where the text of the TCA provides it. But, secondly, it is also possible to amend the agreement through the usual routes that the EU adopts for any international agreement. That is essentially that the Council gives a mandate to, usually, the European Commission to act as negotiator for any changes, any international agreements and any agreement that the Commission negotiates. It has to be able to point to a legal basis—a power in the treaty to enable the EU to act in a particular area. If an agreement is reached, then the Council will have to approve it. Depending on its content, it might also need to be approved by the member states as well. That is for areas within the broad framework of the TCA. Of course there are important areas outside the TCA—defence, and foreign and security co-operation. In those areas, it may be that you have a separate type of arrangement outside the framework of the TCA.

The Chair: We will come on to that, probably in more detailed questions. Sir Richard?

Sir Richard Aikens: Professor Barnard has outlined very clearly what the position is under the TCA, and I do not think there is anything I want to add on that. As she rightly says, defence and security is something different. The question will be: to what extent is it going to be possible quickly, if the Government want something done quickly, to make amendments to the TCA? I think we are going to come on to that later.

The Chair: We will come on to all these questions in detail. Professor Butler, is there anything you want to say, preambular?

Professor Graham Butler: Thank you to the committee for the invitation. I will just follow up where Professor Barnard left off, and I would be more focused maybe on what is on the plate beside the sandwich, to further that analogy a little bit more. On the Common Foreign and Security Policy (CFSP), there are not that many international agreements that the EU concludes by putting a framework agreement on foreign, security and defence affairs. In practice, what happens is that there is lots of flexibility for third states—non-EU Member States—to be involved in certain initiatives, but it very much depends on what that initiative may be. If we are talking about restrictive measures (sanctions) against individuals for harmful acts, the third states can voluntarily align with the sanctions regime, which the UK does to some extent already, along with many other non-EU Member States in central, eastern and western Europe. It becomes a little bit more tricky, I suppose, for involvement when it comes to actual operational Common Security and Defence Policy (CSDP) missions, which tend to be based outside the European Union in third states altogether. But there are possibilities and precedent for states that we are more familiar with—the models like Norway and Switzerland and so forth, and we can come on to those a little bit later. But I will be very much focusing today on the foreign, security and defence aspects of things that are also on the plate.

The Chair: Very good; thank you. The committee is very interested in that, I think, not least because it is probably the area of the reset that will move fastest and soonest towards an agreement.

Q14 Baroness Lawlor: The question I have here is: which possible changes to the current UK-EU relationship could be made through amendments to the TCA, and which would require new agreements? I am particularly interested in what exactly would need to happen in UK law for that to proceed smoothly. Could you possibly each comment on the implications for such changes of the current Product Regulation and Metrology Bill now going through the Lords, and due to go to the House of Commons after Committee stage?

Sir Richard Aikens: Let us start with the question as it is there. It is not going to be possible to make amendments to the TCA which are attempts to go outside its framework, so it seems to me. In that sense, what is on the two outsides of the sandwich is going to govern what can go into the middle. Whether the Government want to attempt to do that or not, I do not know, because so little has been said of any detail on what is really sought by the so-called reset.

So far as UK law is concerned, anything that is agreed between the United Kingdom and any other outside legal entity such as another state or the EU, which is recognised as a legal entity for these purposes, cannot have effect in UK law unless it is given effect by an Act of Parliament. That could either be done by a new Act of Parliament, or it could be done if there is power to do so under an existing Act of Parliament. I think in a case like this, if you really did want to make significant amendment to the TCA, it would require a new Act of Parliament. That would then raise a question, at least to me, to what extent this was going to be something which went against either the letter or the spirit of existing Acts of Parliament which ended our participation in the EU. In other words, putting it bluntly, is it going to be going against Brexit and the resulting legislation?

Now, you asked specifically about the Product Regulation and Metrology Bill, which is which is a short Bill. The interesting provision from my point of view in the Bill is Clause 1(2), which gives the Secretary of State power by regulation to “make provision, in relation to the marketing or use of products in the United Kingdom, which corresponds, or is similar, to a provision of relevant EU law for the purpose of reducing or mitigating the environmental impact of products”.

Without that qualifying pass at the end of that proposed sub-clause, the powers that would be given to the Secretary of State would be immensely wide and would effectively push a cart and horses through the whole of the idea of Brexit, which was that we were going to get outside the EU’s control of such things as the regulations relating to the marketing or use of products. The qualifying clause, “for the purpose of reducing or mitigating the environmental impact of products”, is extremely important, and one assumes that the Secretary of State would adhere to it. Even so, it does seem to me that it is possible that that could be given a wide interpretation, and therefore it would mean that there would be the reintroduction of a lot of EU regulations into UK law. If so, one wonders how far that would go without, again, it appearing that a coach and horses is being driven through the Brexit legislation and so forth.

Professor Catherine Barnard: I agree with what has just been said. Going back to the broader question that Baroness Lawlor asked about any changes, as you know, we are what is called a dualist legal system and therefore any new treaty which has legal effect will need to be implemented in the UK via, usually, an Act of Parliament. But of course, if it is within the existing framework, then the interesting question is about how far the EU future relationship Act extends—you remember that it was the Act which was hurried through Parliament in that window between Christmas and new year—and to what extent there are powers under that Act that would enable amendments to the TCA to be included.

Professor Graham Butler: I have nothing to add on this question. I defer to my two fellow witnesses on those points.

Q15 The Duke of Wellington: My question, which you will have seen, basically is: to what extent do you think it would be advisable or likely that there would be some general new agreement on a number of matters with the EU—changes to current practice in some way? Or would it need to be a number of individual, specific, sectoral—I suppose—new agreements fitting somewhere within that sandwich? I am not quite sure, because we have heard slightly differing definitions of what can be put into the meat within the sandwich—

The Chair: We will have to move on from this analogy at some point.

The Duke of Wellington: I agree, but I was just picking up the previous references. Nevertheless, I think the serious point in the question is: is it likely to be a series of single-subject new arrangements or all wrapped up in a general new agreement?

Sir Richard Aikens: This is much more a political question than a legal one, with respect.

The Duke of Wellington: I agree.

Sir Richard Aikens: I can only talk to you really as a lawyer because I am not a politician but, as a lawyer, one knows that it is usually a great deal easier to concentrate on one thing and getting that agreed. You can do so usually more quickly and more comprehensively than trying to agree a whole load of things. But the other thing one knows—again, from trying to negotiate or being there as a lawyer in the negotiation of agreements or settlements in cases, things like that which are perhaps comparable—is that each side has got an agenda: what it wants to achieve out of the negotiations. The UK will have what it wants; there will be perhaps particular things that it wants, such as veterinary agreements or better provisions for touring artists, or something like that. The EU may want to deal with that but may have other things on its agenda, and it may think that in order to get those it is not going to agree to just one thing or two things, but will want a comprehensive agreement and will only give way on what the UK wants if the UK gives way on what it wants. I do not think I can say more than that.

I suspect that in practice there will be a compromise of a compromise. There might be specific agreements on some things, but other things would have to wait for something more general—which might mean waiting years or even decades, on the basis of what one has learned about previous attempts by third-party countries and the EU to agree on things.

Professor Catherine Barnard: It might be useful to look at the Windsor Framework, the amendment to the Northern Ireland protocol. There it turned out to be a rather complex package of legal documents delivering on the objectives. Of course, the Windsor Framework is operating under a different legal regime, not least because large tracts of EU law continue to apply in Northern Ireland. That has a conduit pipe into the UK system via the provisions of what is now the European Union withdrawal Act.

It was easier at one level to give effect to that package of 13 or 14 different legal instruments which were at stake. It may be that a similar approach is legally delivered, because ultimately there will be negotiations around a range of issues. For the Germans, for example, youth mobility is a precondition for any negotiations on other matters. From what the Financial Times is reporting this afternoon, it looks as though there will be movement over CBAM and ETS. That may require a different type of legal instrument to deliver UK joining—I use that word in the loose sense. It will be negotiated as a larger package, but the delivery legally will take different legal forms.

Professor Graham Butler: Regarding the Duke of Wellington’s question, and following on from Sir Richard on the preference of parties, it is perhaps better from a legal perspective to have everything in one consolidated agreement. From the perspective of EU law and following EU practice, that tends to be the preference—to try putting something in a framework agreement outside of the CFSP. With the EEA Agreement, as much the EFTA states applying the EEA Agreement that are part of that system want to keep as much as possible within it, in practice that becomes quite difficult because of the particular objective.

For example, right now the EU is negotiating air transport agreements and the data sharing of passenger names with Norway and Iceland. It is doing that not under the auspices of the EEA Agreement but as potential separate international agreements. Similarly, it has separate surrender agreements because the European Arrest Warrant (EAW) is not part of the EEA Agreement. This is also similar to how it has done the Lugano Convention.

It all comes back to the objective of this reset. As was pointed out in the call for evidence, we do not know precisely what is being sought here. It will depend very much on the substance. That will determine the form.

Q16 Baroness Blackstone: Do you think that the EU’s experiences with other non-member states will affect its approaches and its attitude to the UK reset? If so, can you tell us how?

Professor Catherine Barnard: The UK is in a unique position regarding any form of negotiation over the reset. There are as many views out there as there are commentators, regarding how enthusiastic or otherwise the EU is about a reset. In reality, the EU does not speak with one voice but is comprised of multiple institutions. Parts of the Commission are very enthusiastic about some form of reset but others still remember the difficulties over the negotiations in 2019-20 and are much more reluctant.

Geopolitical circumstances may dictate greater alacrity. There are signs that the EU is prepared to reach out. The fact that Keir Starmer is attending the meeting on 3 February indicates already that it sees the UK as different from other third states. The fact that there will be a summit in the spring is also positive. The EU has lots of summits, but the good thing about a summit is that it will at least create a structural template for things to be taken forward, assuming that this is what you want, which is what the Government seem to be saying.

The mood music is good. There is still a lack of substance, but within the Civil Service some senior appointments are being made to take this reset forward. Michael Ellam is a very experienced Whitehall operator who will show some determination to take the reset forward, if that is what the Government are committed to.

There is still quite a lot of uncertainty about exactly what the UK Government want from that and frustration on the EU side that the UK has not been more forthcoming with its asks. Maroš Šefčovič proposing PEM— the customs arrangement—as a possible consideration indicates that the EU is still coming up with the ideas for the UK.

Sir Richard Aikens: There is not much that I can add to that. I come back to my earlier point. At the moment we do not know in any detail what kind of agenda the UK Government have for the UK’s reset. Do they want to do everything other than rejoin the customs union and the single market? Are its aims much more limited in terms of having some kind of agreement on veterinary matters and other specifics?

I suspect that the reason why there are a variety of views among EU members and within the Commission itself is because they do not know. The first thing that I would respectfully suggest that the UK Government must do is set out their stall. Until they do, and until those of us in the UK know what that is, how can we expect to have some kind of common view from the European Union—although its aim will always be to have one if it can?

The Chair: I am going to bring you in first on some of the security and defence questions, Professor Butler, to ensure that you get your opportunity. Is there anything you would like to say in response to the question?

Professor Graham Butler: Yes. I just add that this type of negotiation on any sort of arrangements, if it is to come to that after the UK decides what it wants, will be very different to the Brexit negotiations. Yes, the same individuals and the same memories of how difficult those negotiations were will still be present, but it will be a different type of negotiation. The Brexit objective on the UK side has been achieved. It has agreed an international agreement with the EU. Therefore, there is no difficulty this time in negotiations setting out precisely what all the parties want.

Despite, as the previous speaker pointed out, us not knowing what the UK wants, we do not know fully what the EU wants either. However, I stress that the UK appears to be keener for discussions than the EU.

Baroness Blackstone: Should a reset be a big one, to make a difference to the relationship between the UK and the EU and to get into a deep and longer-term set of resolutions about what that relationship should be? Would it better for it to be a series of small things, putting our toe into the water but not trying to do something much larger? I accept that it is a political question, not a legal one.

Professor Catherine Barnard: In reality, there is not going to be a huge reset, because the huge reset in the terms that you describe would be rejoining the customs union and single market, and that is ruled out. The fact is that the single market is actually a really quite broad area, so the space around is not that vast. The obvious exception to what I have just said is, of course, foreign, defence and security policy, where there is much more space for action, and it has traditionally been an intergovernmental matter anyway.

While Boris Johnson was very much criticised at the time for not having CFSP or equivalent in the framework of the TCA, it may be with hindsight that some people would say that it is a good thing, because now, while relations are looking better and sadly the geopolitical situation is looking far worse, it may be the time that you can do something much bigger in respect of defence and security. Although we talk and have heard before about youth mobility, veterinary arrangements, and a bit about touring musicians—actually, legally, that is probably one of the most difficult—in fact, all these are very small things. They certainly will not tip the dial in any way to improve the growth agenda, but they will at least be a signal to the EU based on the fact that we are a country that will be trusted from its point of view. It will be small steps outside defence and security, in my view.

The Chair: Can I just give Baroness Nicholson an opportunity? I know she has to leave early.

Q17 Baroness Nicholson of Winterbourne: Would the professor like to comment on the point she has just made, on the difficulty she identifies of working more responsibly on the touring of musicians? Given that we understand there was a very good offer, which, sadly in my opinion, we turned down, why should catching up on that be so difficult? This is such an important issue. Is there any light you can throw on it?

Professor Catherine Barnard: Do you want to go first, Sir Richard?

Sir Richard Aikens: First of all, I will declare an interest as somebody who is very keen on music and who did a little bit towards, before Brexit, getting English musicians out into France, where we have a house and have connections with music there. I know how difficult it has become since Brexit, so I have every sympathy with wanting to do something to enable musicians—and other artists, of course—to be able to tour in Europe more easily.

On the face of it, it looks as though it ought to be something simple, like having a kind of cultural exemption within the TCA. Now, I do not know precisely whether that was what was offered and that was turned down by the UK at the time or not. But my understanding is that there are almost ideological objections on the EU side to this, because it would create an exception to other general rules with regard to movement of people and so on and so forth. I cannot believe that it is beyond the wit of man—and women, of course—and lawyers to do something for it. Although, as Professor Barnard said, it is not going to move the dial on growth, it will move the dial, I think, on all sorts of other things which would help relationships between the UK and the EU, because culture is so important. So I would encourage it. But again, it is a political question; it is not really a legal one. I think legally it could easily be done, provided people are not too ideological on either side about it.

Professor Catherine Barnard: Could I just follow up on that? In respect of musicians themselves, the problem at the moment is that they do not fall into any of any of the categories that you find in the annexe to the TCA enabling them to move. There are provisions on, for example, short-term business visitors and, if you look at the list of who is covered as a short-term business visitor, musicians are not there, nor are they there under independent professionals. That is the easy bit to solve, in fact, because, if there was agreement, you could just extend the list of those who are allowed to move to include musicians, artists and others. Where the difficulty comes is, of course, that most musicians are not just the single actor; they come with a team of people, so you would need to extend musicians to include all their support people. Then there is an issue about transport and moving all their equipment from the UK to the EU. Then there is a further issue about the instruments themselves, which would also be dealt with under a different part of the TCA. It seems to be the musical instrument side, and the transportation, which is a particular problem.

Q18 Baroness Hayter of Kentish Town: I was chairing the International Agreements Committee when we watched, post Brexit, the Government starting to learn how to negotiate trade deals, as we did with New Zealand, Australia, CPTPP and so on. I am just wondering now what main lessons you think that the Government should be able to draw from there, after the referendum negotiations, those with America—though, of course, that came to nothing—and indeed the negotiations they have had with the EU, to help future negotiations?

Professor Catherine Barnard: Of course, we know we had a very inexperienced set of negotiators, and the inexperience is because the EU had the exclusive competence for negotiating most trade deals, so it did all the work. One of the issues in trade negotiations, we know, is about the size of the kid in the playground, and the EU was a large kid, as the US is and China is, and we are now a medium-sized player, so we do not have that strength. So it was a combination of inexperience and no longer being part of a much bigger and more powerful trading bloc. That said, the Government did put a lot of resource into training trade negotiators, and there is now a more mature team of people who are working hard on mastering these issues. I know, because I have had the benefit of talking to a number of the civil servants, that they are doing some really very serious thinking about what our offers can be and how we can negotiate.

What we know from these trade deals generally is that how much they affect GDP is very small. For Australia and New Zealand, it is 0.1% of GDP over 15 years; it is tiny. That said, I think what is looking much more encouraging about any future negotiations between the UK and the EU is that this Government are putting some serious resource into the reset. Now, again, we have also got a new Government, who have not had the experience that the previous Government have been through for the last 14 years, but obviously there are still a lot of people around who lived through the 2019-20 negotiations. But it is tough, and the EU is a tough negotiator, because it knows that the member states are watching very closely.

It must be said that, for a lot of the member states, the TCA is good, because the EU has a trade surplus with the UK in respect of goods. The EU got a very good deal under the TCA in respect of goods. We had a trade surplus with the EU in respect of services and the arrangements on services were very poor, something that Lord Frost himself has now acknowledged. So, of course, there is not that much interest from a number of member states to do much about it. Even in respect of financial services, or perhaps particularly in respect of financial services, member states are very reluctant to make any changes because they know it is where we have a competitive advantage.

Sir Richard Aikens: I agree with that.

Professor Graham Butler: I concur.

The Chair: We are going to move into the area where Professor Butler can perhaps lead among our witnesses. Baroness Anelay?

Q19 Baroness Anelay of St Johns: I am turning to the realm of security and defence. I noticed earlier on, Professor Butler, that you referred to the fact that there may be more flexibility in this area. As a politician, I am now going to ask for some legal assistance; I think that is the reality here. Back in December, we took evidence from the Europe Minister, Stephen Doughty. He said—this is setting out the stall; I am thinking of Sir Richard's comment earlier on, but it is a rather vague stall—“The aim is to start with a security partnership, leading in due course to a deeper and broader pact”.

What is the legal difference between the security and defence partnership that the EU has with countries such as Norway and the Government’s apparent preference for a security pact? What are the advantages and disadvantages of those two approaches? Having set out on one road, is the other objective achievable or legally flexible enough?

Professor Graham Butler: In the context of preparing for today, I recapped on all the different names that the EU has given to the various international agreements related to foreign, defence and security policy and other things over time. I already have the title of a future academic article: “What’s in a name?”. There are many ways to style these things, be it a pact or whatever. Historically, the terminology that the EU went for was an “association agreement”. We know that the TCA is, formally speaking, an association agreement as the EU Treaties would define that.

As Professor Barnard pointed out earlier, there must be a legal basis for this type of action with a third state. Notwithstanding the Minister’s comments when he spoke to the committee, it is more important to look at exactly what is sought to be achieved by those agreements rather than what they are being styled as. As we know, while the EU can conclude agreements, commitments, partnerships—whatever you want to call them—the legally binding commitments in them vary highly. In the area of foreign, defence and security policy, there tends not to be concrete, binding obligations that demand like-for-like action because of the need for foreign policy to have as few constraints as possible.

While the EU or the UK can include whatever agreement they want, and can make agreements with other parties, it depends precisely on what is being sought within those agreements. Therefore, I would not get too caught up in the terminology.

Baroness Anelay of St Johns: Having been a Minister, I am aware that one can be rather lax in the use of wording. Do you mean that it could be productive for a Minister to use different words to set out a stall later that might perhaps be moving with the times?

Professor Graham Butler: I agree. I do not know what I can add to what I have already said in this regard. Compared with the three areas that were spoken about earlier—the SPS, touring musicians and the other item—this is an area where the EU is perhaps a bit keener to have a formal arrangement, even if that entails non-binding commitments. When it comes to foreign, security, and defence policy, there is recognition on both sides that the UK has a lot to add within this sphere. If you look at the last two and a half to three years, since the Russian invasion of Ukraine, there has been a lot of alignment between the EU and UK, the UK aligning itself with the EU sanctions regime and targeting the same individuals. That is done without any legally binding commitments to do so. This is an area that has worked quite well because the foreign policy objective there has been 100% aligned.

In the context of the worsening geopolitical crisis that Professor Barnard mentioned earlier, the objectives of the UK and the EU here vis-à-vis broader global issues have been more aligned than ever in living memory.

Q20 Lord Stirrup: Following up on that previous question, Professor Butler, when we strike defence co-operation agreements bilaterally, they are usually built around specific endeavours. We can do that with the EU now and have done regarding sanctions. What is different from now if we have the security partnership with the EU—or is the answer to your earlier question of what is in a name, “Nothing”?

Professor Graham Butler: I will not be losing any sleep over whether an EU-UK security partnership exists. I do not see any true meaning to it, from a lawyer’s perspective. Ultimately, when it comes to these policy issues, what matters is what is agreed. The basis of the EU’s international agreements in these spheres is that nothing is ever really automatic. We can see this with the EEA. When it comes to adopting EU regulations and directives, they are not automatically applied. The EEA Joint Committee must take that extra step itself, and within time. That is why we have EU legal Acts that are of ‘Text with EEA relevance’ and must eventually be adopted by the EEA Joint Committee. However, on the basis of the EFTA states being part of this arrangement not being EU Member States, they retain sovereignty and are to adopt unilateral acts in their own right, together, within this system.

Again, a partnership might be great to set out a framework for establishing a firmer political dialogue regularly. We see with many third states right now, with respect to a ‘partnership council’ or ‘association council’ of some kind, annual meetings being held more regularly in the context of all the different sub-committees. With the UK, this happens under both the Withdrawal Agreement and the TCA. In the context of foreign, security, and defence matters therefore, you can have a framework agreement that involves intense regular contacts between officials which might be fruitful in coming to legally binding obligations when certain events call for certain levels of co-ordinated action.

Lord Stirrup: Supposing that the UK does wish to negotiate specific arrangements on security and defence with the EU involving co-operation in certain areas, whether in terms of policy formulation or specific action. The EU’s default position for including third parties in such activities is that they essentially fit into an EU framework. They do what the EU has decided will be done in the way that the EU has decided it will be done.

I am assuming that the UK Government would be looking for something a bit more strategic than that, where they have more influence, more say, more control, more input, particularly given what they will be bringing to the table in security and defence terms. If that is to happen, clearly there will be important political judgments to be made here, but is it possible to do this legally under existing EU arrangements, or will it require the formulation of specific carve-outs or new arrangements between the UK and the EU?

Professor Graham Butler: The main instrument that the EU uses here regarding foreign, defence and security policy is the CFSP. Through the lens of an EU constitutional lawyer, this is one of the weaker points when it comes to decision-making. It is one of the last hold-outs in the EU Treaties that requires unanimous decision-making within the Council. For anyone who has been following developments within the Council in recent times, one Member State in particular has been bothersome about the adoption of some of the sanctions packages that the Council has sought to adopt.

One of the things that the EU Treaties allow for is to move this area to qualified majority voting. This applies to nearly all other areas of decision-making. We are not at that point yet. We do not necessarily need a future treaty amendment in EU law to do that; it can be done within EU law. However, that would be the key sticking point for the EU internally, before ever going near the position of giving a formal decision-making right to a third state. I do not see that being legally possible, to allow this joint decision-making.

Sir Richard Aikens: Again, I feel that we are treading more into political areas than legal areas. The legal restraints are as Professor Butler has pointed out. We must also remember that NATO exists and that many EU member states are members of NATO as well. One of the difficulties would be to ensure that nothing detracted from NATO or might lead the present Administration in the United States to think that NATO and its participation in NATO was going to be diluted somehow by whatever else might be agreed in Europe. Putting it bluntly, the United States is much more of a strategic and military power than the rest of Europe put together, and we must not disregard it. However, that is a personal view and not a legal view.

Q21 Baroness Ashton of Upholland: I want to push back with my question. We have already started to talk about the co-operation with the EU on security and defence within CFSP—not CSDP. We have negotiated trade deals and negotiated around association agreements and defence and security partnerships with a number of countries, and those are fundamentally different from each other. I think that terminology does matter. It is how the EU works out what it has done and what the relationship with the third country is.

How would it be best for the co-operation and relationship to be done, if it could be done, within CFSP? I do not disagree with everything that has been said but want to tease out a bit more how the rules are made within the PSC, the discussions with the military and so on. I take the point about NATO because it is also often done in connection with NATO.

Also, to add something a little different to that, how far might the Government’s ambitions, especially on defence industrial co-operation, an area that we have not talked about yet, engage with trade policy and the need to look at trade negotiations? Having been one of Her Majesty's Trade Commissioners, I know how complex that can be.

Professor Graham Butler: I do not think that anyone knows this area better than Baroness Ashton, so I take her point on the terminology wholeheartedly, even if I disagree on the legal relevance of it all.

To answer the second question, I have something to add regarding the parts that are not part of the foreign, defence, and security policy. In recent years, the European Union has developed the European Defence Fund (EDF). Despite “defence” being in its title, legally speaking it is nothing to do with the EU’s foreign, defence, and security policy. The legal basis of the EDF is to partner with, to use Baroness Ashton’s phrase, the industrial complex.

It has two different legal bases. One is the EU’s industry power internally. The other is the research and innovation legal base. These are obscure provisions found later in the EU Treaties, which not much attention is given to. There is a possibility for “associated states” to be part of this EDF. That is specifically provided for within that context. The only “associated states” allowed within the EDF so far are the three EEA states which are not EU Member States. However, that is not to say that this could not be amended unilaterally based on some form of international agreement between the EU and the UK to open up possibilities there for further including the UK within this framework—particularly given the industrial contribution that the UK would have to give in this area.

The Chair: Do either of our other witnesses want to venture further into that area? No? Then thank you—the Committee will be paying a lot of attention to that area.

Q22 Lord Jackson of Peterborough: My question is about sanitary and phytosanitary agreements. I also want to ask a question about the emissions trading scheme, because for reasons which I will outline I think that they are linked.

What are the key legal differences between an SPS agreement based on alignment and one based on equivalence? I also have a related question regarding the emissions trading scheme. My understanding of the EU negotiating mandate is that there can only be a union of the two schemes in 2026 or 2027, for instance, based on dynamic alignment and the legal writ of the European Court of Justice. Those are two good examples of possible reset issues, but surely they would breach the Government’s red lines—both the emissions trading scheme union and an SPS agreement. The former SPS agreement is the most talked about. What are your views on those areas?

Professor Catherine Barnard: My understanding too is that on the ETS the EU requires dynamic alignment. Regarding the SPS scheme, again the EU insists on dynamic alignment. In reality, the UK will favour dynamic alignment ultimately because of the issues over the Northern Ireland border. Given that there is already dynamic alignment in respect of rules on goods in Northern Ireland, the current Government may think that is a price worth paying to ensure that they get any SPS agreement that they want.

On your question about the distinction between alignment and equivalence, the New Zealand scheme is based largely on equivalence. However, New Zealand is significantly further away. The EU will, I imagine, insist on dynamic alignment on any SPS matter. This will have the beneficial knock-on effect that you do not have divergence between GB and NI.

On the role of the European Court of Justice, it is striking that the Government’s red lines are only over no single market and no customs union. The Government have not ruled out a role for the European Court of Justice. I suspect that the Government recognise that this is a price that they will have to pay.

We also know that the European Court of Justice still has a role in respect of Northern Ireland and all the UK until 2028 over citizens’ rights matters. The UK as a whole has not severed all links with the European Court of Justice. It still has a role.

Lord Jackson of Peterborough: You will be interested in the Official Controls (Amendment) Regulations 2024, which we are debating tomorrow. They seem to move the border between Great Britain and Northern Ireland from the Irish Sea to the border of Northern Ireland and Ireland. I am not telling Granny how to suck eggs, but that will be debated tomorrow. As you know, Lars Karlsson was very keen on saying that there was an alternative, to have customs arrangements away from the border. That was disregarded by the previous Government and has been by this Government. We are moving towards that situation incrementally, but that is a niche issue.

Sir Richard Aikens: I make two points. First, if there is this continuing alignment as opposed to equivalence, that is legally possible. There is no difficulty about that. Politically, however, the Government will have to think about the extent to which agreeing to that will create difficulties with the existing proposed pan-Pacific agreement and possibly with any further trade agreements that they want to make with other partners, particularly the United States. There may be very different ideas and regimes. That is a political judgment that this Government would have to make.

So far as the ECJ is concerned, that is not a red line for this Government, though it certainly was for the last Government. The difference, however, is that whereas effectively the ECJ is dealing with what might be called historic matters, as far as the United Kingdom is concerned, if there were to be any new agreement regarding alignment and other matters, presumably this would continue. Therefore, you would have a situation post 2028 of a court of justice which we would otherwise have nothing to do with, and which we would have no representative judge on at all.

It would mean us having no control over the development of EU law at all and no input. The question would also arise about the extent to which all UK courts would be bound absolutely by decisions of the ECJ in all areas which were reintroduced. A commencement order was stopped with regard to disapplication of EU law by courts below the Supreme Court. It was going to come into force and now will not, for reasons which I do not understand. However, the ECJ’s decisions will have less and less effect as time goes on. If you have this continuing realignment then, depending on the extent to which it is proposed, it could mean that the ECJ’s rule will be much reintroduced over the UK and UK courts. That has not been highlighted but ought to be. It is a big legal change.

Baroness Lawlor: On alignment vs dynamic alignment, dynamic alignment would involve adopting EU law. Therefore, one would envisage the ECJ being supreme in this matter. However, alignment would involve what is currently envisaged as a matter of choice for the UK Government, as in the Product Regulation and Metrology Bill. What benefit would that give to the UK unless it formally re-entered the customs union or the single market? Would the EU recognise that this meant that it could be treated on a par with other EU states?

Professor Catherine Barnard: Your distinction between alignment and dynamic alignment is an interesting one. On the Product Regulation and Metrology Bill, it is a unilateral choice by the UK to implement EU rules in the areas which have an impact on the environment. That is separate from what might be negotiated going forward. Dynamic alignment we already have in respect of the goods matters under the Northern Ireland protocol. The UK is obliged to keep up to date. The general product safety regulation is a good recent example of changes to regulations. The UK has had to keep up with that regarding Northern Ireland. There are powers in the 2018 Act to enable that to be done by secondary legislation.

Would it be good for the UK to have dynamic alignment? It would be good for manufacturers. From their point of view, there would be fewer checks because there will be a legal obligation to produce goods according to EU standards. Where you stand then becomes a political choice—whether you think that is a good thing politically or not.

Baroness Lawlor: What about the attitude of the EU to it? Does it make any difference to the EU what you do voluntarily, or for it to make a difference does one have to go the whole hog, with the whole acquis.

Professor Catherine Barnard: No, because the whole acquis goes way beyond goods, so there would be no obligation to comply with it. Even as we see with the Northern Ireland protocol, there are about 300 provisions identified in the annexe. Those are the provisions that Northern Ireland must comply with, and it would be the same again under any form of SPS or veterinary agreement. There would be a range of EU legislation identified that the UK would have to ensure that it has implemented and keeps up to date with.

Q23 The Chair: We need to move on. I want to give Professor Butler the floor and then move on to a couple of final questions in the time available. We have given that quite an extensive round of discussion. Professor Butler, do you want to add anything?

Professor Graham Butler: Just to follow up on Lord Jackson’s issue related to the SPS, I will focus my remarks mainly on dispute resolution.

Just today, 28 January 2025, the UK and the EU are now engaged in dispute proceedings before the Permanent Court of Arbitration (PCA). In other words, under the TCA we are now having some dispute resolution not dealt with by the European Court of Justice. These are being dealt with in other international fora, so we are already seeing a concrete shift in dispute resolution there.

However, at the same time, as was rightly pointed out by Professor Barnard earlier, the European Court of Justice applies to EU citizens in the UK until 2028. Some matters did expire at the end of December 2024, which is why the EU pushed a final infringement procedure before the ECJ just last month. However, under the Northern Ireland Protocol and the Withdrawal Agreement, the jurisdiction of the European Court of Justice over the protocol is in perpetuity until the parties decide otherwise.

It depends on how alignment, dynamic alignment, and SPS veterinary matters are incorporated, on whether it is put into the TCA or is a separate agreement, and on the substance within the forms of dispute resolution management. The point that two other witnesses made, that this has not been set out as a red line by the UK in advance, is to be welcomed, from my point of view.

Baroness Ludford: Sir Richard, you briefly alluded to the subject of my question. What are the consequences of a possible SPS agreement between the UK and the EU and our trade agreements beyond Europe? You referred to the trans-Pacific partnership agreement but there is also the United States. Can you elaborate on your earlier reference?

Sir Richard Aikens: I cannot elaborate very much because it is all a question of what might be negotiated in the future. The key point is that once you have agreed with the EU that you will always adopt whatever it says, that could preclude you from having a satisfactory agreement with other possible trading partners or existing trading partners, such as the trans-Pacific partnership agreement. This is because what they want is incompatible with what the EU demands. It is that simple. I suppose it is a question on the trade and political front of deciding what is in your best interests. I come back to the legal issue. If we have dynamic alignment with the EU, inevitably it will bring the ECJ back into all this, and from my point of view, the less that we have to do with the ECJ, the better. I have never regarded it as a very satisfactory court. However, that is speaking as a lawyer.

The Chair: Indeed.

Professor Catherine Barnard: I make two points. Some of those frictions might be reduced if the EU joins the CPTPP. In pragmatic terms, the CBI says that agri-food trade between the UK and the EU was worth £41 billion to the UK in 2019. That is 74% of the total UK imports for that year. In terms of the scale of exports to the UK, ultimately it may just be a cost-benefit analysis that ultimately an SPS agreement is far more valuable for the UK than any of its international trade agreements.

Professor Graham Butler: I have nothing to add on this question.

Q24 Baroness Scott of Needham Market: Professor Butler, you talked about disputes. No meeting of this committee would be complete if sand-eels were not mentioned. To what extent is that sort of dispute, and concerns about whether the UK is fully compliant with the TCA, part of the normal cut and thrust of the relationship? Could anything there fundamentally affect the reset or our renegotiation of the TCA?

Professor Graham Butler: That is a great question. I will predicate my remarks by saying that I am not a fisheries lawyer, but a generalist EU lawyer, and so will look at it through that lens alone.

These are the types of disputes that are dealt with regularly by the EU General Court of the European Court of Justice. They hear hundreds of cases every year. This would be a technical fisheries dispute that raises no major point of principle regarding the TCA as an international agreement. If this was a matter of the UK still being an EU Member State, this fisheries issue would be within the jurisdiction of the European Court of Justice, as all other matters do on EU affairs for EU Member States, this would just be brought under the infringement procedure. Instead, now, it is now a case before an international arbitral tribunal finding whether a provision of an international agreement has been infringed.

I do not know what answer you are looking for, but I would see this sand-eels case before the PCA as a technical matter and not one that raises any points of concern, but we will wait and see. The proceedings open today and the oral hearing lasts for three days, which is longer than the average oral proceedings at the European Court of Justice. They are usually confined to half a day, or a day at the most.

Sir Richard Aikens: Sand-eels sound ridiculous, but there is a dispute of principle here. This is in an area of the North Sea which is essentially British waters. The decision has been taken by the UK authorities that these sand-eels are in danger of extinction because of overfishing. As I understand it, 99% of the fishing is done by Danish fishermen. We must accept what our UK experts have said—that sand-eels are in danger and that there should be no fishing.

The EU takes a different view, and you can see why. It wants to protect the Danish fishermen. There is currently a dispute in France about fishing in the Bay of Biscay. Fishing there stopped for a month for all trawlers above 8 feet in length, to protect young dolphins that get caught in the nets. The fishermen there are in outrage about this and say that this is wrong.

The principle at stake is who to trust in terms of environmental needs. If the UK environmental officials say that this is what is needed, I think that we should trust them. I am suspicious that this is a manufactured dispute that is being put in terms of, “Is the EU complying with its obligations under the arrangements that have been made?”, but really is about protecting the interests of Danish fishermen.

Professor Catherine Barnard: I declare an interest as I was involved in writing an amicus curiae on behalf of one of the environmental groups that has intervened on the sand-eel case. Sand-eels are a keystone species. Therefore, it is an important point of principle. It touches upon sovereignty over waters and on our own environmental protection and the steps that we have taken to protect our integrity. The UK consulted widely. I should be careful here. The English and Scottish consulted separately, but both concluded that there should be no fishing for sand-eels in those waters. The EU says that this is a breach of the fisheries provisions of the TCA. Interestingly, they have not brought the proceedings under the fisheries provisions but under the general provisions of the TCA.

There are three legal questions at stake. Both sides agree on that. The first is: “Has the UK done what it has chosen to do based on the best scientific evidence?” There are a lot of disputes over what is the best scientific evidence. Secondly, is there discrimination at play? Is there a difference between the treatment of British fishermen and EU fishermen? Thirdly, there is a question of proportionality. Is a ban on fishing in the waters proportionate? Those are the legal questions.

On the bigger-picture question, the provisions on fisheries in the TCA are subject to review in June 2026, at the same time as the review of the provisions on energy. Meanwhile, going back to the earlier questions about a reset, for some of the member states—France being the obvious example—fisheries, albeit economically small, is a crucial issue.

This is important for the specific environmental question and for the integrity of the UK and its ability to set environmental standards for itself. However, it also fits into the bigger picture of what the renegotiation might look like.

Baroness Scott of Needham Market: That is really useful, thank you.

The Chair: We have a correspondent from Denmark. Does Professor Butler want to add anything on this issue before we let him go?

Professor Graham Butler: I have nothing further to add and no interests to declare as regard the sand-eels case at the PCA.

The Chair: Thank you very much indeed to all three witnesses. You have been generous with your time. We have run over the hour, but it has been a very valuable discussion which certainly has helped us to get our heads round the legal issues for the rest of our inquiry. Thank you very much indeed.