22
Examination of witnesses
Deborah Annetts, Marco Cillario and Muyiwa Oki.
Q103 The Chair: Welcome to another evidence session of the House of Lords European Affairs Committee, continuing our inquiry into the UK-EU reset.
This week we are focusing on creative industries and professional services, and the impact that leaving the EU has had on those sectors. I am very glad to welcome three witnesses, a number of whom have given evidence to previous inquiries of previous committees. Thank you very much for your time again, Deborah Annetts, chief executive of the Independent Society of Musicians, Marco Cillario, international policy manager of the Law Society, and Muyiwa Oki, president of the Royal Institute of British Architects. All three of you are very welcome to the committee. I would ask committee members, as always, to declare any interests before asking their question.
To get started, may I ask each of you to say very briefly what current arrangements apply in your sector to professionals when they are travelling to the EU to provide those professional services? And perhaps while you are about it, you could describe the impact of Brexit on your sectors. Other members will then pick up the questions. Perhaps I can start with the musicians’ end of things.
Deborah Annetts: Thank you very much for inviting me again to give evidence this afternoon. I am sorry to say that the position has not improved since I was last here in 2022; we still have the same problems in relation to mobility, visas and work permits. In fact, it is a little worse, which was obviously not the direction of travel we were aiming for. The situation as regards carnets, cabotage, musical instrument certificates, and all the issues we had with the HMRC and the A1 forms remain exactly the same, if not worse. Apparently, it is now taking HMRC six months to issue an A1 form, which is vital if you wish to work in any capacity, even as a freelancer, in the EU. APHA is taking 30 days to issue musical instrument certificates, which are absolutely necessary if you are going to be taking a violin into the EU because you are now caught by the CITES regulations.
The issues around cabotage remain exactly the same because, if you recall, that is governed by the TCA. The TCA will hopefully be reopened but not until next year. So, for musicians the situation has got worse.
You may recall that in 2019, the EU was our largest market in relation to touring musicians. That has fallen. The next market after the EU was the US. The level of earnings has dropped significantly. Musicians have given up touring. About 30% have had no work at all since the TCA came into full force with Brexit.
You can find all these facts in our 2023 report published in August 2023, which you did not have when I last gave evidence to you. It sets out an alarming range of what has happened in the music touring sector. Musicians have lost on average between £500 and £450,000 as a result of not being able to tour. The issues around Schengen, which is the 90-out-of-180-day requirement for the Schengen area, mean that musicians are having to fly backwards and forwards to hold on to the allowance of 90 days that they have to work in some but not all EU states. So, there is no improvement; it is worse.
The Chair: Okay, thank you. That is a challenging start for us, and we will pick out a number of those details.
Muyiwa Oki: I would say that for architects, the current arrangement with the EU is interim. I would like to preface that by saying that architecture and the built environment is fundamental in delivering the UK’s growth ambitions, in so far as the Government have set an ambitious target of delivering and building 1.5 million new homes. We also need to do that within our carbon budget in a net-zero carbon way. So a mutual recognition agreement is necessary to address this current interim arrangement, which has been in place since 2021 and, as with any interim arrangement, brings a level of uncertainty and risk to the market and to architects. Architecture is regulated by an independent body, the Architects Registration Board, which set up the interim arrangement to ensure that European architects who had the previous mutual recognition of professional qualification could come into the UK to practise as an architect. No such facility is currently available for UK architects going the other way across the European bloc, which therefore prejudices against UK architects.
One of the biggest international markets for UK architects is the EU—around 40% to 45% plus of our international export last year came from the EU—so again, I call for mutual recognition agreements to smooth out and create some certainty for future export and future growth in our industry.
Marco Cillario: When it comes to the legal sector and the solicitor profession in particular, there are still many challenges when it comes to practising in the European Union. If we go back a few years, what Brexit has meant for the profession is that we moved from one single set of rules, which allowed us to access any market in the European Union with very few restrictions, into 27 different regulatory regimes because, by and large, access by third-country professionals is regulated at EU member state level rather than at EU-wide level.
The European Union has historically been the single largest export market for the UK legal sector, and Brexit has meant restrictions both to the ability of individual solicitors to provide advice to clients based in the European Union, and to the ability of UK law firms to establish and run offices in the EU.
It is worth bearing in mind that a number of the largest international UK law firms have built a big part of their success by establishing a huge network of offices throughout the EU during the UK’s membership. The sector’s close ties with Europe are one of the main reasons why ours is the second largest legal market in the world, after the US, and a real asset for the UK economy as a whole.
Professional mobility is the biggest of all the issues that the profession is facing when practising in the EU. At the moment, professional mobility is regulated partly by provisions in the Trade and Co-operation Agreement, the TCA, and those aspects which are not regulated by the TCA are regulated at member state level; again, we are dealing with 27 different regimes.
Under the TCA, it is possible by and large for professionals, including lawyers, to travel on business to the EU for up to three months in a six-month period without a visa or a work permit. However, the activities that professionals can carry out under such conditions are very limited and, crucially for lawyers, they do not expressly include the ability to provide legal advice to clients when travelling on business. Again, under the TCA it is possible for UK businesses, including law firms, to send staff on secondment to an office in the EU. However, we hear from law firms all the time that visa processing times are so lengthy that they no longer have the business case, in many cases, to send professionals on secondment to the EU, so they have suspended secondment programmes. This has a huge impact, particularly on young lawyers and young professionals, who for many decades have been developing their careers by spending a period of time in the EU to build their client base and their professional contacts. In many cases that is no longer possible.
Also importantly, despite provisions in the TCA that commit EU member states to be clear when it comes to professional mobility rules, there is still a huge lack of clarity on the provisions that apply in each member state. So we have been calling on the Government to seek improvements to the TCA when it is reviewed next year, and in particular to expand the activities that professionals can carry out when travelling on business for three months in a six-month period, including the ability for lawyers to provide legal advice to clients in the EU.
We have also been calling for the UK to make sure that visa processing times are reduced in the EU, and to negotiate a UK-EU youth mobility scheme. It is crucial that the systems in place to ensure implementation of the TCA are improved because at the moment it is taking too long to implement the provisions in the TCA.
Finally, and most importantly in my view, we believe that considerable improvements can be made within the current trade framework. However, in order to do that the Government needs to be ambitious and go beyond precedent. They need to engage with businesses and business representatives such as ourselves and others. It is very important that the Government make the most of the opportunities that are coming up, crucially including the review of the TCA next year.
The Chair: Thank you very much. We will go into more detail on each of those issues, but Lord Jackson and Baroness Winterton wanted to come in at this point.
Lord Jackson of Peterborough: Just for clarification, Chairman, if I may. Ms Annetts, you mentioned the United States. What is the relative size of the European market in your sector compared to the US? Secondly, and most importantly, how does the regime in terms of touring artists for the United States compare to the European Union?
Deborah Annetts: The value of live performance of UK musicians going into the EU this year is about $13 billion, so that is roughly three times the value of the US market. The US is very problematic in terms of entry and is likely to become more so with the new President.
I wonder if I could pivot to a slightly different aspect, which is how easy it is for EU nationals who are performers, musicians and creatives to gain access to the UK post-Brexit. What we have ended up with is a very un-level playing field, which I am sure was never the intention. It is much more difficult for a UK musician to get into the EU, for all kinds of reasons, whereas the UK has devised four different routes for EU creatives to come into the UK, ranging from a 30-day stay—something called permitted paid engagement—up to one year plus through the creative worker visa. Somehow, we have ended up with the worst of all possible worlds, where we can welcome wonderful EU musicians but we cannot actually get across the Channel into the EU.
Lord Jackson of Peterborough: We have been benign and permissive, and the EU has not.
Deborah Annetts: Well, no; I am afraid we negotiated an agreement that did not mention creatives or musicians. We were led to believe that there would be coverage in the TCA. When it was eventually published, there was nothing about musicians at all. So we ended up with something called a hard Brexit, which we are still suffering from.
The Chair: We are going to come on to more detailed discussion of the creative industries in just a second. Baroness Winterton and Baroness Nicholson wanted quick follow-ups as well.
Q104 Baroness Winterton of Doncaster: Thank you for the presentations. I just wondered, on the legal side, is there any feeling that the professionals within EU countries are themselves resistant to the type of flexibility that there was before? Are they seeing this as a way of getting more work for themselves?
Marco Cillario: That is a good question. The answer is, by and large, no, in our experience. Actually, our counterparts throughout the EU have been quite supportive in trying to find arrangements to make sure that UK lawyers will be able to continue practising in their territory. However, the situation is complex because we are looking at three issues, and if I may I will briefly articulate each of them. The first, which I articulated earlier, has to do with the regime when it comes to business mobility. That is not down to the Bar associations or legal services regulators in each member state; it has to do with the immigration authorities and what regime is in place in each member state, or what provisions are in the TCA that facilitate business travel. That is the area that is causing concern.
There is another issue, which has to do with the ability of UK lawyers to practise as UK lawyers in a member state. There is an important distinction to be drawn for the legal sector between an English solicitor who travels on business to France, say, to provide advice to clients on English law only. In that case we do not see huge competition with French lawyers, because French lawyers carry out a different profession and provide clients with a different service. This seems to be clear, by and large, in the EU, and actually the TCA does have provisions that protect the ability of UK lawyers to practise under their home title in the EU.
However, with these provisions there is an implementation issue. Under the TCA the EU committed to allowing UK lawyers to continue practising under their home title in many member states, but there has been a huge delay in some cases in member states actually transposing that general commitment into their domestic legislation. Just to give an example, Greece—a very important market for the English legal sector due to the importance of English law for the shipping sector—passed legislation only in August of last year to finally allow UK lawyers to practise, even though Greece committed to doing so in 2021. So clearly, there is an issue with implementation. It does not necessarily have to do with resistance from the Greek Bars; it has to do with how easy or difficult it is for us to raise implementation issues, which have to be filtered through to the EU Commission and then down to each member state.
The Chair: The EU is always pressing us for full implementation of the TCA, so it is quite important that the British Government should be pressing for full implementation in the other direction as well.
Baroness Nicholson of Winterbourne: Ms Annetts, is there any mechanism you have yet developed which would show that the lack of rehearsals with orchestras for which you have to travel—of partnerships—has diminished the quality of the output? That might be a good arguing point if we could find that to be the case.
Deborah Annetts: What has happened is that many orchestras have given up touring, because economically the figures do not add up, so it is not a question of a decreased product. Because of the cost of cabotage, carnets, visas and work permits, they simply cannot make the figures work. These were productive tours; they were bringing income into the UK economy and that has by and large ceased.
Baroness Nicholson of Winterbourne: Do we have any numbers on that? It would be very helpful if we did.
Deborah Annetts: I can provide them.
The Chair: If you could do that, it would be very helpful.
Q105 Lord Frost: To broaden out the discussion a bit before we go back into the detail, we have heard about the difficulties that your sectors are facing. Nevertheless, the UK service sector as a whole has been doing pretty well since we left the EU, with exports up about 40%—slightly less for the EU, slightly more for the rest of the world. Why might that be? Do you think the difficulties you face are nevertheless consistent with greater exports, or are your sectors to some extent outliers in a bigger, more successful picture?
Muyiwa Oki: Let me come in on that. For example, architecture as a profession generated about £4 billion in revenue last year. About a quarter of that was from international services exports, and a big proportion of that was from the EU market. But if we want to grow the economy, we would like to grow that proportion of revenue through our exports. It is incumbent upon us first and foremost to consolidate easy access to our nearest neighbours so that we can then grow our international exports.
There is also an issue further down the line for us when it comes to closing the skills gap within the industry. The uncertainty and interim arrangements that we currently have in the architecture sector mean that the talent pipeline is shrinking. Architecture is a highly skilled profession, and it takes about a generation—between seven and 10 years—to qualify as an architect. If we want to grow the economy, if we want to build the homes that we need, we need architects: highly skilled professionals who contribute to businesses that deliver on homes and deliver on the infrastructure that we require. So, it is a two-way street. Yes, we want to grow our international exports, and we are doing that, but we need to do more. We also need to attract and retain the talents that will deliver on our home issues.
Marco Cillario: If I can add to that from the perspective of the legal sector, yes, the sector has continued to grow; I am not going to deny that. We have continued to be successful, and exports have continued to grow. However, I could perhaps flip the argument and say that it is precisely because the services industry is so successful for the UK that it needs more support, because the legal sector is a partner for growth. Lawyers often facilitate business in many other areas, not just for other law firms or other lawyers; they help businesses overall grow and invest overseas. So wherever they face barriers, all businesses potentially stand to suffer, particularly when it comes to English lawyers, because English law is used in many countries around the world as the preferred choice of law for contracts, even when the transaction has nothing to do with the UK. We know for a fact that UK lawyers and law firms are facing barriers in the EU.
The sector continues to be successful; however, the majority of the TCA is dedicated to trading goods, and what is actually a small section of the agreement, largely based on precedent, is dedicated to services. So, precisely because the services sector is so successful and so important to the UK, should there not be even more attention and more support, including through the TCA?
Deborah Annetts: It will not surprise you to hear that from the creative industries perspective, things have become extremely problematic in terms of our wonderful creative industries working in the EY. Music, theatre, fashion and so on are a huge source of our soft power. We can no longer do that to the extent we were able to pre-Brexit, and what is more troubling is that we are seeing the talent pipeline fall apart. Early career musicians have decided that if they want to make a career, they need to move countries. Increasingly, they are moving to places like Germany, which is a much better place to establish a career in music for all kinds of reasons, but chiefly because it does not have the issues around mobility, visas, work permits, carnets, et cetera. If musicians are not doing that, they are giving up touring altogether because it does not make financial sense, or they are leaving the profession.
I do not want to over-egg it, but it has been a devastating agreement from the perspective of the music sector and the creative industries as a whole.
Lord Frost: I appreciate that, but you have all in different ways pivoted from really answering my question to telling me more about the difficulties in your sectors, which definitely exist. You have pivoted to telling me more about why you would have liked a different agreement, which I accept and agree with. Nevertheless, the service sector is growing fast and continuing to grow fast.
I guess what I am trying to get at is that I am struggling to reconcile your picture with what the numbers say, which is that there has been a very significant increase—7%, 8%, 9%, 10%—every year, year on year, in services exports, so something must be going well, right?
Marco Cillario: Obviously, the success of the sector depends on several factors, but in and of themselves the numbers do not mean that there are not opportunities which are being lost by the sector. It is really important to bear in mind that the impact may partly be felt some years down the line, because the statistics are a few years old.
I am not going to deny that the sector, we hope, will continue to do well. But when it comes, for example, to firms not being able to ensure that their young lawyers develop their careers by spending a certain period of time in the European Union to build contacts, clients, connections and so on, the impact of this will be felt many years down the line. That is what we are concerned about: not just the present generation but also the next generation of professionals.
Baroness Ludford: I just wonder whether one of the problems for the music and creative sector, which is even worse than for lawyers and architects, is that you have single-market and customs union issues with carnets, cabotage and transport of musical instruments and so on. It is not just about the mutual recognition of qualifications and supply of services; you have all these other issues.
By the way, the figures that I have to hand show that while our services exports to the EU were 9% higher in 2023 compared to 2019, the rest of the world was actually 15% higher. So we have done worse compared to the EU, but I am afraid I do not know where that figure of 40% comes from. Is that one of the explanations—that you have the additional hassles?
Deborah Annetts: Absolutely. For lawyers—and I am one—basically it is about the individual getting access. They do not have to bring amps, guitars, trucks, crew, worry about their musical instrument certificates, think about cabotage and whether they have already done three tours or routes within the EU arena and then they have to depart, which is causing all kinds of problems in terms of touring.
A musician is not just a musician; they do not just have a guitar on their back, they have a whole host of other stuff, which you have absolutely outlined. It is the other stuff, in addition to the mobility issues with visas and work permits, which is causing so much additional bureaucracy and red tape, and additional costs.
Q106 Duke of Wellington: Could you all please explain to us whether there are other non-EU countries that have more favourable arrangements in these three areas than we, as now a non-EU member, have? We have heard the way in which you are all disadvantaged, but are there other countries—Norway, Switzerland, the United States, even—that have better arrangements?
Deborah Annetts: I will take that. One of the problems that we have is something called the Schengen area, which I am sure you are all very well aware of. Quite a lot of the countries you have just outlined come within the Schengen area, so it depends on that individual country as to whether they have made any provision for musicians. It is from country to country.
Duke of Wellington: For example, has Switzerland, which is in the Schengen area, made special arrangements?
Deborah Annetts: I will have to look at my chart. I have a very handy chart which lists every single country in the EU and the EEA. Switzerland has up to eight days per calendar year. So that is not brilliant in terms of touring.
Duke of Wellington: What about Norway?
Deborah Annetts: We can provide you with this, because it is a very useful map.
The Chair: That would be very helpful.
Duke of Wellington: What about United States musicians, lawyers, architects? Do they practise on more favourable terms than we can?
Muyiwa Oki: In terms of architecture, we have signed with the Architects Registration Board, which is the regulator, and we have signed these agreements internationally. We have a mutual recognition agreement with three countries: the United States, Australia and New Zealand. The ARB has signalled that it is going to sign another mutual recognition agreement with Canada later in the year. That is great for architects in terms of exporting our services, and it adds to the international services exports that Lord Frost was talking about. But what we are advocating for is to ensure that we can grow the 40% plus of international services export that we currently have with the EU through the interim arrangements to ensure that we can attract the best talent.
Duke of Wellington: I well understand that. I am trying to search for whether there is something that we can encourage the British Government to negotiate which would put us on an equivalent basis, as the best arrangement available to a non-EU member state.
Marco Cillario: It is interesting to look at non-EU European countries, Switzerland in particular, not just because of the agreements it has with the EU—Switzerland participates in many of the EU directives—but because of the arrangements the UK has negotiated with Switzerland, which are often way more ambitious than the arrangements it has negotiated with the EU. If you think about the size of the markets, that might be considered a paradox.
The Law Society has strongly welcomed both the services mobility agreement with Switzerland, which allows UK professionals to travel to Switzerland for up to 90 days and explicitly sell services to Switzerland without a work permit—something we do not have at the moment with the EU—and the agreement with Switzerland on the recognition of professional qualifications. It has a system of MRPQ that is much more generous and efficient and works a lot better, compared to the arrangements that the UK has with the EU. So yes, I would encourage the UK Government to look at Switzerland, not just because of Swiss-EU relations, but because of the UK-Swiss relations which can provide a precedent to be replicated with the EU.
Deborah Annetts: Can I just come back on that point and what we could actually do? The EU has visa waiver agreements with 30 countries, which tackle mobility issues, something the ISM has been advocating. In 2021, we took very specific legal advice from Sarah Lee, KC, who is an EU lawyer, and she advised us that a visa waiver agreement would tackle the mobility issues we were encountering. It would sit alongside the TCA, would not require the TCA to be reopened and would give a level playing field across all the different EU states in relation to visas. We do not have that at the moment, because many of the states are different and that makes it problematic for musicians to work out what they need to do. So, if we could persuade at the next meeting with the EU to have a conversation about the visa waiver agreement, which Government officials have told us works, that would be a massive step forward in tackling musicians’ mobility issues.
Duke of Wellington: Do other non-EU member states have such arrangements?
Deborah Annetts: With the EU? Yes, they do.
Q107 Lord Jackson of Peterborough: Ms Annetts, what direct lobbying have you done with the European Commission and the Government on this issue? I accept that the UK Government have a role, in terms of you saying to them that this is something they need to put on their agenda.
Mr Oki, you have made the most progress, with the Architects Registration Board. What is the current status in terms of the Commission and your mutual recognition agreement, and might you need to go to a dispute resolution process? It looks like it may knock back two of your attempts to seek an agreement similar to the one you have with New Zealand, Australia and other jurisdictions.
Muyiwa Oki: And the USA.
Lord Jackson of Peterborough: So where are you on that one?
Muyiwa Oki: It has paused at the moment, for a variety of reasons. Initially in the negotiation, when the UK proposed to continue the Mutual Recognition of Professional Qualifications Directive, it was knocked back because we were not in the single market. That is stumbling block number one. Stumbling block number two, which is where we are currently at, is that we have an agreement to ensure that there is this mutual recognition, but EU architects need to do a UK adaptation assessment, which means that EU architects coming in need to understand UK law and standards to be able to practise as architects. That has been knocked back because the EU has deemed that an asymmetric relationship between us and them.
But we have been talking to the Government and presented as an example the only agreement the EU has signed with architects, which is with Canada. That agreement sets out a 10-hour course that EU architects need to do to be able to register as an EU architect with professions in Canada. So, there is a precedent for this. During the conversations we have had with the Government, they have said that they want to see an end to this issue and draw a line under it, so we are very hopeful and welcome any further discussion—along with any advice we can offer them to unblock.
Lord Jackson of Peterborough: So the Government are listening.
Muyiwa Oki: Yes.
Lord Jackson of Peterborough: Ms Annetts, have you lobbied the Commission?
Deborah Annetts: We have certainly spoken to the Commission, and I think it is open to a dialogue with the UK Government. You are right that we have been lobbying the UK Government for a very long time, really ever since the vote in 2016, because we absolutely understood the implications it had for our sector. There has been a change with the new Government; I would not say we were getting very far with the previous Administrations, but I feel that this latest Government do listen and understand that we need to find some way forward for the creative industries.
We have many warm words at the moment, we have a manifesto commitment, but we also want to see action. That is why we think the meeting in May is so important. The visa waiver agreement does not in any way bring back freedom of movement, particularly when you look at how easy it is for EU nationals to gain access to the UK music market. We just want a level playing field.
The Chair: We probably ought to move on now. Let us go to Lord Stirrup next.
Q108 Lord Stirrup: My questions on the creative industry have pretty much all been asked, so perhaps I could just press Ms Annetts for a couple of points of clarification.
In your list of the challenges and issues facing the creative industry, I noticed that HMRC featured. This is not actually anything to do with the EU, so could you tell the committee what action the UK could take on its side which would make the situation easier for you?
Turning to the EU side, given the potential legal complexities of issues which cross so many boundaries, as has already been mentioned—customs, free movement, and so on—are there certain individual issues which would make life substantially easier, such as the visa waiver or cabotage, or do you have to have the whole package to make any substantive difference?
Deborah Annetts: Thank you for that very helpful question. I am going to provide the committee with another one of my helpful diagrams; I have been studying this subject for too long. These are the buckets. The different buckets have the different issues and who is responsible for solving the different challenges. Some buckets belong to the EU and the UK Government, and some rest solely with the UK Government. On the issues around A1 forms, I checked the HMRC website today and apparently it is taking six months for it to issue an A1 form.
The Chair: Would you please remind me what the A1 form is?
Deborah Annetts: It basically says that the individual is liable for NIC in this country, and they need that form in order to secure a contract outside the UK. It was up to about 30 days, and we had a meeting with the HMRC a number of months ago. ither it the tracker is wrong, or HMRC is not providing a useful service. I do not really know what has happened there. So, that is a UK Government thing.
The issue around the musical instrument certificates is, again, a UK Government thing. We have been calling for about four years now for the Government to talk to Eurostar and persuade it to become a designated port. Most musicians travel by Eurostar, and they need to go through a designated port for their musical instrument certificate to be stamped. Eurostar is not a designated port.
The Chair: St Pancras.
Deborah Annetts: Exactly. It is absolutely hopeless, and so they are having to travel all over the place to get their MICs stamped. This relates to whether, say, you have ivory in your bow. It is totally hopeless.
Lord Stirrup: Could you just clarify: is making St Pancras a certified location a UK government responsibility?
Deborah Annetts: Well, the Government need to lead the conversation with Border Force and Eurostar, and we have attempted this on several occasions.
Lord Stirrup: It has nothing to do with the EU.
Deborah Annetts: Exactly; it is a UK issue.
Then, we have carnets, which, again, are only now in force because of Brexit. So when a musician leaves the UK with something which is non-portable, they need a carnet. That costs around £450, from the London Chamber of Commerce. It is significantly cheaper in the EU. In addition, the musician has to pay a percentage of the value of the instrument; so if you have a valuable double bass, you could be paying a very significant amount of money as a deposit to get the carnet to be able to take the double bass with you into Europe. That is incredibly complicated. They then have to get the carnet stamped when they are in Europe. So, we have been saying to the Government, “Please can you do something to reduce the cost of the carnets?”
I do not know whether it is possible with Europe—I would like to explore whether it is—to get a cultural exemption in relation to carnets. If you have a load of kit, you need carnets for the pedalboards, the cables, the rig and so on, all with their serial numbers. It is so bureaucratic. I do not really know how any musician ever tours Europe now.
Lord Stirrup: Given what you have just said, if I were on the EU side I might be inclined to say, “Why do you keep pestering us about this when you are not even interested in sorting out your own side of the problem?”
Deborah Annetts: That is fair comment.
Q109 Baroness Winterton of Doncaster: My question might have already been dealt with but just to clarify, are you saying that a lot of what you have raised was just not thought of in the beginning? Nobody put it on the agenda, so you are trying to do so, rather than renegotiating what was negotiated before.
Deborah Annetts: No. We explained exactly what we needed to have in the TCA to the DCMS.
Baroness Winterton of Doncaster: I see. It did not make it in there. That is the first thing.
The second issue is what is necessary for other countries to implement on the legal side. You gave the example of Greece. Some things just need implementation, but there are other things that you are now trying to get on to the agenda. You said the EU was more open to dialogue. Do you feel there is more flexibility now from the EU side, even though it might say, “Well, you never asked us about this in the first place”? Is it perhaps more willing, because of this new approach of trying to sort things out? Do you feel it is more open to negotiating on this than previously?
Deborah Annetts: It is difficult for me to comment on the previous negotiations and what was put to the EU by the UK Government pre the TCA coming into effect. We were told that there were conversations going on around creatives, but it just never made the final cut into the TCA. We have now seen the effect of having no provisions within the TCA to support, protect or facilitate the creative industries. Those issues have become very stark and very clear. With the change in government, the EU is more willing to have a conversation.
Baroness Winterton of Doncaster: So, in terms of your bucket list and the bits that involved the EU, you feel it is more open at the moment?
Deborah Annetts: Yes, and the fact that there has been a conversation around the Youth Mobility Scheme gives me hope in all kinds of ways. I am not responsible for negotiating this, but I see it as something we could take on as part of the negotiation on two points: one is the visa waiver agreement, which is fundamental; and the other thing we would like to see is an international touring visa, which would mirror the creative visa that we have in the UK. Both are for one year. This is what I mean about getting to a level playing field.
Q110 The Chair: When we discuss this at the UK-EU Parliamentary Partnership Assembly, we often find a lot of support from MEPs for touring artists to have a bespoke deal, partly because European countries like to have British artists, bands, orchestras and everything else. Do you get any help from European-based associations like your own in trying to push their Governments to see that they are missing out by not having world-leading British musicians and creatives coming to festivals, as they used to do? I know from experience that they were always very popular all over France.
Deborah Annetts: The EU member states recognise how important those big bands are. Some are still going, like Paul McCartney and Adele, but that is because they have so much infrastructure around them.
The Chair: Such as the back office.
Deborah Annetts: Yes, so they can navigate the system. It is more the early-career artists—the jump-ins for opera, the breakout stars, bands like White Lies—which we have lost, and that goes to soft power as well as to the GVA. Europe really wants to have that conversation, but it has to be two-way. The language coming out of this UK Government at present is much more helpful than it perhaps was in the past, as there was an awful lot of talk about freedom of movement. What I have outlined is not about freedom of movement; it is just about facilitating trade.
The Chair: Let us go on to mutual recognition of professional qualifications.
Q111 Baroness Ludford: Lord Jackson already raised this on a supplementary to an earlier question, but I would like to ask Mr Oki about the experience of the architectural profession in trying to get mutual recognition. You gave an answer to that, but can I pursue the matter? As I understand it, the Commission objected that the proposal put forward by the two professional bodies was asymmetric and would give architects who qualified in the UK a level of recognition similar to that which they enjoyed when the UK was a member state; whereas architects who qualified in an EU member state would be required to sit specific professional examinations in the UK.
To play devil’s advocate, is it really surprising that the Commission objected to this? Under the proposed scheme, British architects would not have had any extra hoop to jump through to practise in an EU member state, whereas EU architects would have to sit some exams. I am surprised that the EU architects agreed to this deal, but was that not likely to be objected to as asymmetric? Ms Annetts talked about things needing to be two-way, so I am a little puzzled that the proposal got through.
Muyiwa Oki: As I said earlier, the proposal as it stands does not seem too dissimilar to what the EU has already signed with Canada, the only other non-EU state that the EU has mutual recognition with. We have signed three other mutual recognition agreements with this clause in. We think it is important to have an adaptation assessment, which does not prejudice the position but means that, as an EU professional, you just need to demonstrate that you understand, for example, new building regulations and the Building Safety Act, in order to satisfy the competency required for the UK.
Baroness Ludford: But UK architects going in the other direction to work in the EU would not need to satisfy any additional test of competence and understanding. I am puzzled why British architects thought that this would fly. It was an unbalanced deal, was it not? Was it not bound to be objected to by the Commission?
Muyiwa Oki: RIBA was not a party to that negotiation, but we can take that away and see the details of the recommendations for UK architects going into Europe. But it is important to ensure that EU architects coming in have an understanding of the new rules and regulations that are already set. I can come back to you on the details on the other side.
Baroness Ludford: That was the beauty of being in the EU.
While I have the floor, Ms Annetts, you have referred several times to visa waiver. Do you mean a business visa waiver? We already have a waiver as tourists; we do not have to get a visa to go to an EU country. Are you talking about a visa waiver for business and supplied services purposes?
Deborah Annetts: It is actually a very specific document drafted by our KC, which, again, we can provide to the Committee. It is very short and literally covers just those working in the creative sector, in particular musicians.
Baroness Ludford: It is a waiver from a work visa.
Deborah Annetts: Yes, exactly.
Baroness Ludford: Visa waiver normally means tourist visa waiver.
Lord Jackson of Peterborough: Can I expand on the question Baroness Ludford asked on mutual recognition? Mr Cillario, I was a bit puzzled by your submission, which was very good, but maybe I missed something. You are not so keen on a generic MRPQ deal; instead, you are more interested in youth mobility for businesspeople, as I understand it—for lawyers. Could you not subsume the latter into the former? Is your official position that it is nice to have a deal with mutual recognition of professional qualifications, but the main thing is—you alluded to it, quite rightly, earlier—that it is good to have experience in different countries, regimes and jurisdictions?
Marco Cillario: I would describe MRPQ for the legal sector as a second order priority, the top one being not just youth but business mobility in general. The reason is, for lawyers, there is a distinction to draw between practising under home title and becoming a lawyer in the host legal profession. If we take a step back, normally MRPQ arrangements are those by which professionals qualified in their home country are allowed to carry out the corresponding profession in a host country.
In most cases, an English solicitor travelling to provide legal advice to clients in France will not look to practise the corresponding legal profession in the host country; they will look to carry out their home country legal profession as solicitors and provide advice to clients on English law. That means that, even though in English we use the same word, “lawyer”, to describe a solicitor and a French avocat, they are actually carrying out two separate professions. They do not look to directly compete with each other in most cases.
When it comes to allowing lawyers to provide services to clients in the EU, the biggest issue is to make sure they can travel on business without excessive paperwork in order to carry out their home country legal profession. In our view, that does not require an MRPQ; that requires the protection of home title practice, which is already protected under the TCA in some member states, provided the TCA is fully implemented, which it is still not.
Having said all this, there are professionals, lawyers, for whom better MRPQ provisions with the EU would be very helpful. This is because, post Brexit, UK legal qualifications are no longer considered EU qualifications. For UK lawyers, that has meant the loss of some important EU-wide rights, particularly related to professional secrecy. So, when a lawyer communicates with a client, this is no longer protected by EU legal professional privilege if there is an investigation by EU authorities. UK lawyers have also lost the right to appear before the Court of Justice of the European Union, which, again, is important to some professionals practising in EU-law-heavy areas. The only solution is for a UK lawyer to practise the host country legal profession in an EU member state. In this context, MRPQ will be useful.
Going back to what we said earlier and some points that Mr Oki covered, it is striking that, under the current system with the EU, architecture is the only regulated profession that has attempted to negotiate an MRA, and there is no MRA yet four years after the TCA came into force. To me, that shows that the current system is not suitable; it is not fit for purpose.
Lord Jackson of Peterborough: We agree with that.
Marco Cillario: We need to look at better models. I come back to the point I made earlier: the UK has negotiated much better MRPQ provisions with Switzerland, which commit Swiss regulators to recognise UK qualifications subject to compensatory measures. We would like those provisions replicated with the EU. The precedent is there; it just needs to be used with the EU.
Lord Jackson of Peterborough: That is very helpful. It needs to be said again—Lord Frost knows this much better than I do—that when negotiations were taking place, the Government were under huge pressure from both Houses of Parliament to get a deal done very quickly, which was very difficult. In fact, the Government did attempt an MRPQ. I was involved in the negotiations as well, in a very minor role. They ran the clock out on it, frankly. So, it is not as if the UK Government did not try.
Finally, why are the UK Government—perhaps even this Government; we do not know yet—so reluctant to invoke adjudication and dispute resolution? You mentioned the Greek case. It seems an egregious breach of that agreement to take three years when it has signed a binding agreement with the UK.
Marco Cillario: We have been calling consistently on the UK Government, the EU Commission, the Greek Government and our counterparts in Greece to do more to implement the agreement more quickly, and we continue to make the point that there should be better and stricter systems in place. If the systems are already in place they should be used, because at the moment all that has happened is negotiation with the Commission, which, by the way, officially takes place once a year when the Trade Specialised Committee meets. To us, that is clearly not sufficient to get the TCA implemented. We are still contacted almost on a weekly basis by professionals in Greece who ask us what to do in order to continue practising in Greece, even though the TCA gives them that right.
Legislation has been passed, but we are still waiting to hear from the Greek Bars how they plan to implement it. I definitely agree that this is not acceptable. In future, there should be better systems for implementation, and we are happy to be involved in discussions as to what they should be.
The Chair: That is a very helpful and useful message. Of course, the Trade Specialised Committee could meet many times a year if there was will on both sides to do so.
Q112 Lord Whitty: If you want to see further progress, could you be clearer on exactly what type of arrangement you would like to see for each of your two professions, particularly the lawyers? It seems extremely complicated, but the architects, on the face of it, would appear to be slightly more straightforward. Would you like something that says you have an EU qualification, that the EU recognises the British qualification, or that each member state has separately to recognise the British profession as being equivalent or having rights in their own courts or bidding process? In other words, do you want one piece of paper which the EU says everybody has to obey, or do you want to negotiate with each of the 27 member states to ensure that your profession gets recognised?
Marco Cillario: The way it looks now, you need agreement between all 27 member states, and that is the problem. That is virtually impossible. I do not think I am exaggerating by saying that. You need an EU-wide agreement. In the view of the legal profession, you should use the Swiss model. There is an MRPQ agreement between the UK and Switzerland, which commits Swiss regulators to recognising UK qualifications, and the other way around. It leaves regulators the flexibility to impose what are called compensatory measures—additional tests or a period of limited practise—which is called an adaptation period, but only where there are substantive differences in the skills or professional activities required between the two professions. Otherwise, there is recognition, and you need such an arrangement with the EU. You need this agreement replicated with the EU.
Muyiwa Oki: I second that. I mentioned earlier that Canada and the EU have signed a mutual recognition agreement, and that is a precedent for a similar one between the UK and the EU. To come back on Baroness Ludford’s point about the slight asymmetry, with the Canada agreement, there is a semi-automatic recognition of architects in Canada, and a similar adaptation-style test for EU architects going to Canada. So, there is precedence for that, especially with the Canada example. That is a pathway that we second and lobby for.
Lord Whitty: In default of there being an EU position in each of your professions, are there differences between each of the 27 member states? In other words, are there 27 different rules for you to bid for architectural work in each of the EU countries?
Muyiwa Oki: Yes. As a UK architect, you currently have to satisfy the requirements of each regulatory body across the 27 member states. As I said earlier, in 2021, the ARB, our regulator, set an interim arrangement to allow EU architects who had courses which were part of the former mutual recognition of qualification to come to the UK and practise as an architect. So, currently we have an asymmetric relationship on the UK side.
Lord Whitty: What about the legal side?
Marco Cillario: The EU has 27 different regulatory regimes for the legal sector. However, at EU level, there is mutual recognition, as there was for the UK before the UK left the European Union. So, mutual recognition is possible, but we insist that this needs to happen at an EU-wide level because if you expect regulators to negotiate a mutual recognition agreement with 27 different member states, that is going to be incredibly difficult. Again, it is no coincidence that there is only one regulated profession that has attempted under the current regime, and so far failed, to negotiate an MRA. When it comes to MRPQ, we need to leave to one side the current framework under the TCA and negotiate different and more ambitious arrangements.
Lord Whitty: What lies behind my question is, without an EU agreement, is practising in Ireland different from practising in Slovakia?
Marco Cillario: Yes, it is different.
Lord Whitty: Is it different because of the systems or because of the rules?
Muyiwa Oki: It is different because the rules are different.
Marco Cillario: It is both. For the legal profession, the laws are different, but also the profession is regulated differently. The conditions to become an Irish solicitor or a lawyer in Slovakia, another member state, are different. At the moment, by the way, if you want to become a lawyer in pretty much all except for three EU member states, you need to go back to university, get a law degree either locally or in another EU country, carry out many years of practise, and then you can qualify. Obviously, that is not suitable for lawyers who already have an active practice.
Baroness Ludford: Have I understood correctly that the Law Society wants better arrangements than we had when we were a member of the EU? If you wanted to be able to work under recognition of what you call home title, in other words, your British legal qualifications, were we in the EU—I do not profess to know much about the subject—there would be agreement under EU directives about the content of a legal education and qualifications. You would be outside that structure, so there would be no EU purchase on how lawyers qualify in the UK, but you still want the benefit which EU directives give, and gave us, of freedom to offer services. Your written briefing says you do not believe that mutual recognition professional qualification arrangements are the most effective way. You say you do not want any kind of mutual recognition arrangement because you think British lawyers should be able to offer services in the EU without being part of that superstructure. This may come over as a slightly provocative question, but I am trying to understand what you are proposing.
Marco Cillario: To be very clear, no, we do not look to have more favourable conditions compared to when we were a member of the European Union. We accept that, when we are outside the single market, there are limitations to the deal we can get in order for lawyers to practise in the EU. When we talk about practise under home title, we mean a very restricted practice which allows English solicitors and UK lawyers to provide only the same activities and services to clients in the EU that they would offer at home—without being able to, for example, represent clients in local member state courts, but only giving advice on English law in the case of English solicitors and public international law.
They will not compete directly with locally qualified EU lawyers. EU directives offer much more than that to EU lawyers, who have the right to freely move across member states, to establish themselves in a new member state, and after three years of practice to re-qualify into the host legal profession. When we talk about home-title practice, we mean something that is a lot more limited but still benefits a number of our members who go to the EU to practise. Their problem is to do with professional mobility, which causes different issues, but that has nothing to do with either the EU lawyers directives or the regulation of the legal sector in each member state.
The Chair: Thank you very much indeed. We are coming towards the concluding section now.
Q113 Baroness Anelay of St Johns: I realise you have given us a lot of good, detailed evidence, much of which would have formed part of my question about what one can do other than have renegotiated MRPQs. I still have a question of detail to put to Marco Cillario. Thank you very much for what you just said; it was very interesting.
I have looked at the submission you gave to us. There is one item on that list which is clearly outwith any current negotiations, although it comes under your heading of saying that it should take part in the reset as a priority. You say that the Government should strengthen civil judicial co-operation between the UK and the EU. Can you tell me whether there is a particular area of law that you are focusing on? Is it a law to do with contractual matters and trade, or family law? Clearly, it is an important area where English lawyers practise. Have you had any discussions with the Government on this? Finally, I should declare a non-interest. I am married to a barrister, who practises family law but has never done so in the EU, nor will he, and so it is not a personal benefit.
Marco Cillario: Thank you for the question. It allows me to cover an area that has not been covered. This is a specific point of interest for the legal profession but also for citizens and consumers in the UK and the EU. When we talk about civil judicial co-operation, we mean the ability of judgments handed down in UK courts to be enforced in the European Union. Why is this more important for consumers and citizens than it is for lawyers? At the moment, if any EU or UK citizen has an issue which gets resolved in a UK court, post Brexit, there is a lot more uncertainty as to the rights that judgment confers to the individual and its ability to be enforced in the European Union. This is because, among the many aspects that are co-ordinated at EU level is what we call civil judicial co-operation, which has to do with enforcing judgments. There is a very clear and straightforward solution, which is for the UK to join the Lugano Convention, which is an agreement between the EU and a number of non-EU European countries—Switzerland and the countries in the European Economic Area—that allows judgments to be enforced seamlessly between the EU and the other contracting parties.
We discussed this extensively with the Government. The UK applied to join the Lugano Convention a few years ago under the previous Government. So far, the application remains officially pending, even though the EU Commission has expressed the view that the UK should not join the Lugano Convention. We disagree with this view. The Commission says that essentially, the Lugano Convention is attached to membership of the single market, but in our view, the fact that current members are all in the single market does not mean that European countries that are not should not be party to the Lugano Convention. We believe that in the context of the reset, the UK should again discuss with the Commission and with EU member states in general the possibility of the UK joining the Lugano Convention. That is why we provided this as part of our submission.
Let me stress, this is an access to justice issue, because if your judgment and rights are not enforced and you need to re-litigate matters more than once because you need to do so in each state where they are to be enforced, you end up spending more money and that reduces access to justice. So it is important from the perspective of consumers, not lawyers.
Q114 The Chair: That is very important, Again, it is something that we can keep in mind in terms of proposing an additional element for the Government to have in their reset proposal.
We have had a very extensive and extremely useful round. I will give you an opportunity to air any concluding thoughts. You told us what your preferred outcome would be from the reset to tackle the problems you have in your sectors, but if there is anything else that you have not yet covered, please tell us. Also, we would be interested to know how you find your dialogue with the British Government on these things; are you getting the engagement you need so that the Government understand your concerns?
Before I forget, Ms Annetts, would you mind submitting as evidence your diagrams and bucket lists, so we can then draw on them in our report.
Baroness Ludford: Yes. We want the bucket list.
The Chair: Do you have any concluding thoughts on any of that range of issues?
Marco Cillario: In terms of government engagement, my view is quite nuanced. We have regular engagement with them. The Law Society, by the way, is a member of a group called the Domestic Advisory Group, which was established under the TCA and brings together 50 organisations. It is tasked specifically with reviewing how trade relations between the UK and the EU are going. So, the Government do engage with us, both individually and through this group. However, there is a worrying lack of transparency when it comes to very important milestones which are coming up, the first one being the summit that the UK and the EU are holding on 19 May. As yet, both as the Law Society and as a member within the Domestic Advisory Group—probably my colleagues here would agree—we have no sight of the agenda and no understanding of how we can input into the discussion. This is very worrying, because the Government attach a lot of importance to that summit but are not giving us the opportunity to feed into the process.
Another really important point is that the Government should not underestimate the importance of the TCA review next year. We know that some within the Commission are trying to portray it simply as a review of implementation of the agreement. There are implementation issues, but there are also provisions within the agreement that commit the parties to seeking possible improvements, specifically in the area of professional mobility. This should be used because it is not often that you have the opportunity to negotiate with the whole of the EU, rather than individually with each member state.
Thirdly, and finally, I would recommend that, if possible, the Government also seek engagement not just with the Commission but with EU bodies and businesses. The EU has its own domestic advisory group in which a lot of businesses are represented. The area of business mobility is a concern for those professions, so the Commission’s view that the TCA review should be seen only in terms of implementation does not necessarily reflect what EU businesses are saying. It is important that the UK Government engage with EU businesses as well.
The Chair: Presumably, you are doing that through your own Domestic Advisory Group.
Marco Cillario: We are doing that extensively, of course.
Deborah Annetts: We are very keen to make sure that the creative industries are on the agenda for 19 May. We are not sure if they are as regards mobility, but it is vital that they be discussed. We have been pushing for a dialogue with the EU for a very long time: at least five years. This seems to us a critical moment, given that we are all talking about trade. We know that the geopolitical situation is unstable, and increasingly so for the creative industries, in particular because of the tech companies and their push around AI in the dismantling of the copyright legislation. If that proceeds, the implications for the creative industries workforce are hugely significant.
From my perspective it is vital that we unlock Europe to be a place where our creatives can go and work. It is our backyard. We have lost our backyard and we need it back, given all the trade and tech challenges with AI. I would also like to remind the committee—I am sure you are well aware of it—that the creative industries sector is worth as much as construction and banking. It is worth £125 billion per annum and needs to be fully supported. We ask that, at that 19 May summit, the creative industries and all the issues around mobility be discussed, in particular the visa waiver agreement, which I outlined, and the international touring visa. This Government are listening more than the previous one, which we are incredibly grateful for, but we have not yet seen action, so we urge this committee to encourage the Government to make sure that the creative industries and all the issues around mobility are on that agenda for 19 May.
Muyiwa Oki: I second what my colleagues have said and mention that architecture is a special case. It is part of the creative industries as a design profession, as well as being a business service profession. I reiterate that it is fundamental to the growth that we have outlined as a country to build 1.5 million homes. We need to do that within our carbon budget. We need to ensure that we attract and retain the best talents here in the UK and across Europe. That can be done with a mutual recognition agreement to ensure that architectural practices and individuals can easily export their skills, talents and work into the region, and vice versa. It also means that we need to ensure a way to encourage the pipeline of future architects to take part in and study in our wonderful, high-attaining universities. For example, we have three of the top 10 architecture courses in the world, so we need to ensure that we are able to attract the best talent to address the growth issues and ambitions that we have set ourselves.
The Chair: Thank you, all three of you, very much indeed. It has been a really useful session from our point of view. The message is well received. With that, I draw the public part of our meeting to a close.
