The last week has been an extremely busy one for RPP's Brexit team with our first Brexit event held at Imperial College Business School on Thursday 3rd November. Planned almost perfectly, or by coincidence, last Thursday was also the day the High Court ruling was given on whether the Government could use the Royal Prerogative to trigger Article 50, see two articles on this below. Whilst the Government will appeal this ruling in the Supreme Court in December, it seems that if a vote does go to the House of Commons, it should pass quite easily, with the Labour Party saying that it won't try to block it, rather scrutinise the negotiation process. Securing passage of a bill to trigger Article 50 through the House of Lords may be more challenging, but many commentators are saying that if Peers tried to block such a bill it would create a constitutional crisis of such size that it could result in huge changes being made to the unelected second chamber of the British Parliament.
- After making a judgement to uphold the sovereignty of Parliament, the judges involved in the High Court case have come under intense criticism from the Pro Brexit wing of the press. Some of this criticism has certainly gone too far, but as many commentators have pointed out a free judiciary and free press are key to upholding British democracy, and at times people may not like the actions of either of them, they are both equally important.
- There have been some questions asked over whether it is necessary for the Government to appeal the decision at the Supreme Court, and the Prime Minister's judgement on this strategy has been questioned by some. Most stridently perhaps by Conservative MP Stephen Phillips QC who has announced that he is resigning from Parliament due to the Prime Minister's handling of Brexit, amongst other issues. Phillips was a Brexit campaigner, and believes that it is wrong for May to try to side-step Parliament, when he believes that Parliamentary sovereignty was the reason to leave the EU. Others have commented that Phillips was very disappointed not to have been promoted in the recent reshuffle and as the highest earning MP due to his work outside of Parliament as a top barrister and judge, his reasons for resigning may be as much due to those factors.
- The by-election to replace him should be relatively comfortable, as his seat of Sleaford and North Hykeham in Lincolnshire is strongly Brexit supporting with a large Conservative majority. This by-election combined with that of Zac Goldsmith's in Richmond over Heathrow expansion will certainly be a distraction for the Government, and if followed by further resignations could see the Government lose its slender majority and be forced to hold a General Election, during which Brexit would certainly be a central topic.
- David Davis MP, Secretary of State for Exiting the EU speaking in Parliament on Monday 7th November, confirmed that the Government would be appealing the High Court decision and that they still intended to trigger Article 50 by the end of March. He also condemned the abuse of the judges involved in the High Court case, as well as threats against Remain campaigner Gina Miller, who brought the case to the High Court, labelling them "criminal".
- Finally, Theresa May is this week in India meeting with Prime Minister Modi to discuss building trade links between the two countries. She has been joined by Secretary of State for International Trade Liam Fox MP and his Minister of State, Greg Hands MP. The Prime Minister rejected calls to relax Indian visa rules, saying the UK has a “good system” for applications. However, she does intend to make it easier for Indian business executives to come to the UK.
Written by RPP Head of London Office, Andrew Brown
RPP Holds First Brexit Event
On 3rd November RPP held the first in a series of events to discuss Brexit and its impact on the Life Sciences Sector. The event was held at Imperial College Business School, with the evening kicking off with a Round Table discussion chaired by RPP Head of Office Andrew Brown, with Lord Andrew Lansley, former Secretary of State for Health, and Richard Phillips, Director of Healthcare Policy at the Association for British Healthcare Industries as guest speakers. The table included representatives from leaders in the pharma, healthcare and medtech industries, creating an interesting and informative discussion on the impact of Brexit on research funding, access to staff and the regulation of medicine. Also discussed, were the current political developments involving Brexit, particularly the High Court’s judgement that an act of parliament was required to start the formal process of exiting the European Union.
The evening was followed by an Imperial College Business School Healthcare Network event which featured a debate on whether Brexit was an opportunity or a disaster for the UK Life Sciences Sector. The panel included Lord Lansley, Richard Phillips, Professor Azeem Majeed, Professor of Primary Care and Head of the Department of Primary Care & Public Health at Imperial College and was again chaired by Andrew Brown, of RPP. The panel put forward a convincing case that leaving the European Union could bring a positive impact to the Life Sciences both in the UK and outside, and according to polls taken at the beginning and end of the debate, moved multiple audience members to take a more positive outlook on the consequences of Brexit, despite recognising its many challenges.
The London team was joined for the event by RPP Partner, Marc-Angelo Bisotti as well as Senior Director Advocacy and Policy, Thomas Krings, who writes about his take on the High Court Ruling below. RPP will be holding future Brexit events in London, Brussels and other venues over the coming months and years. Please get in touch with the Brexit team if you would be interested in attending future events.
Written by the RPP London Team, including Andrew Brown, Mark Walker and Lucy Kerr
The High-Court Ruling, a Brussels Perspective
Around the discussion table with former Health Secretary Lord Lansley at Imperial College in London last week were many representatives from the European Med-tech and Bio-pharma companies, it was very interesting to see that many of them, given their specific product portfolio, considered the Brexit exercise as a big opportunity. Some even expressed the opinion that they think that “business” will find solutions during the Brexit process and that politicians might find themselves rather running after economic developments during the negotiations. So, the latest ruling of the High Court about Article 50 which must now pass through Parliament, was very much perceived as some kind of a home-grown problem, or as a Swiss observer had put it, “what can be more superior than the vote of the British citizens?” or as we could read in the Daily Telegraph: “Judges should have stayed out of this and left it to the politicians” and “The judges versus the people”.
Many MPs in the Remain camp have already expressed that they would vote for Article 50 in order to respect the referendum result, the concern of many Brexiteers is, that some MPs might try to amend or to limit the plans to Leave. Not only from a British point of view, it seems that the domestic handling of the Brexit process, has not been “simplified”. Not only “Europeans” take the view, that the longer the process will last, the longer uncertainty will prevail which could have a negative impact on the European economy. As a representative of the Belgian business community puts it: “We will certainly be able to handle the Brexit from a business point of view, but we do not need additional uncertainty or any kind of prolongation during the process, let us get over and done with the Brexit.” The Governor of the Bank of England, Mark Carney, has taken the same view. Assuming this verdict is upheld by the UK Supreme court, the UK Government has ‘de facto’ lost its power to impose its own political Brexit predilections. It is a defeat for Theresa May’s government and might make the other side, the European Commission, a bit stronger when the talks begin. But the Commission is also well advised to make most out of it.
In Brussels, the ruling has also generally been perceived as an element that makes things more complicated, although on the “continent” and particularly, among the political elite in Brussels, the Brexit discussion seems to be far more linked to the thoughts of the political decision makers rather than the future of the European Union. Brexit is just one element in the general discussion about the future of the EU: How will the EU look like when one of the bigger and important Member States has left? What will be the common future? As we face a new situation in which nearly all those who have been apologists of an “ever closer Union” during the last decades, like Belgium, the Netherlands, France and Germany are very reluctant, due to the increasing political pressure of “populists” back home, to even express thoughts about how Europe should and could carry on in the future. Many political observers in Brussels criticise, the political timidity and high degree of reluctance of the European Commission when it comes to contributing to the discussion on the future of the European Union. Led by Michel Barnier, the Commission has put an experienced team together. But the Commission will have to take into account the two-fold role it will have during the talks: on the one hand, the negotiations with the British government and on the other hand, the Commission will have a strong impact when conducting the talks, on the future of the EU and how “Brussels” will be perceived. This will take place in a climate that in most of the EU Member States is rather hostile to “European efforts”. There are also important elections in France or Germany where both governments face populist dissent.
As the Prime-Minister has expressed to activate Article 50 by March, which would start the two-year process that would bring Britain outside the EU by April 2019, will be just one month before the next elections to the European Parliament and one year before the next general election in the UK. Given that the two-year period is relatively short, some Brussels observers predict, that some kind of a provisional agreement along the lines of the European Economic Area (EEA) Agreement could be made, which would also allow Britain to gradually negotiate trade agreements with the rest of the world. Essentially, that could create the possibility of Britain still being in the EU at the time of a general election, which could consequently then become a vote on whether Brexit should ever happen! A perspective that could also be in the interest of the European Union, as some Brussels stakeholders have pointed out. Although many people in Brussels seem to favour a hard (and fast) Brexit. Brexit means Brexit, the question is, on what terms?
Written by RPP Senior Director Advocacy and Policy, Thomas Krings
The High Court Ruling, a Westminster Perspective
On Thursday 3rd November, the High Court in London ruled that Article 50 could only be triggered with approval from the UK Parliament following a high profile court case. This ruling had constitutional, as well as procedural implications, for the UK and its withdrawal from the European Union and has led to further policy maker and public debate about the next steps that the UK Government should take in its negotiations with the EU.
Lord Chief Justice, Lord Thomas, remarked that ‘the sole question in this case is whether, as a matter of the constitutional law of the United Kingdom, the Crown - acting through the Executive Government of the day - is entitled to use its prerogative powers to give notice under Article 50 for the United Kingdom to cease to be a member of the European Union’. Lord Thomas, as well as three other judges, ruled that it did not have that power and that Parliament must be consulted. The UK Parliament is king. The Government’s response was swift and, although the judgement was respected, the Prime Minister, Theresa May MP, insisted that the timetable that she had set for Article 50 would remain in place, making a point of phoning up the Commission President, Jean-Claude Juncker, to inform him.
Subsequent policy positions from the opposition Labour Party have indicated that the Government would not have any trouble getting an Article 50 Bill through Parliament as they have said that they would not ‘stand in the way’ of it being passed and would instead focus on the terms of the negotiation once Article 50 has been formerly triggered by the UK Government. This should ensure that a ‘one line’ Bill, containing one clause as has been suggested by some Conservative backbenchers, is passed in the House of Commons. Given that the Government does not currently have a majority in the House of Lords it is unclear whether such a Bill would pass there but current indications are there is a sufficient majority of Peers who would vote in favour of it.
So, as it stands, there does seem to be a route through the Parliamentary process that would mean that the timetable of triggering Article 50 by March 2017, is still viable. The next few weeks will be crucial, particularly the position which the other opposition parties take. There has been speculation that the Scottish Nationalist Party (SNP) may also join the legal action, which is being led (as the lead claimant) by Gina Miller, a London-based investment manager. The Welsh Government may also join. It should be noted that Lord Thomas did remark that the judgement on the 3rd November was a ‘pure question of law’, and would have no bearing on the ‘merits of the UK withdrawing from the EU’. However, prominent Leave campaigners have speculated that the legal system could be used to delay the UK Government’s process of leaving the EU and the next steps that Gina Miller and her legal team take will also need to be seen. It should also be noted that the Government has appealed the Court decision, with a hearing expected in the Supreme Court for early December.
Overall, it is clear that the UK Parliament is now likely to have a greater say in the Brexit process, whether the UK Government wins its appeal case or not. This development has ramifications for the Crown’s prerogative powers also. These powers are a collection of Executive Powers that are derived from the Crown from medieval times and are now used by Ministers to make day to day decisions. This judgement may curb those powers in the future, or, if the Government wins its appeal, it may reassert their importance. As Lord Thomas said in his judgement, ‘an important aspect of the fundamental principle of Parliamentary sovereignty is that primary legislation is not subject to displacement by the Crown through the exercise of its prerogative powers’. In short, the Government cannot use Executive powers to override legislation. Only legislation can override legislation.
Written by RPP Director of Advocacy and Policy UK, Mark Walker
The UK Life Science Strategy, a model for the UK's Industrial Strategy?
One of the noticeable changes of direction that the Theresa May Conservative Government has taken, in comparison to Cameron's Government, is the focus on a comprehensive industrial strategy. With the pressures of Brexit, and the associated need to "rebalance" the British economy and revitalise manufacturing and exports, there is logic to this idea, although it also has its critics. At the roundtable with Lord Lansley last week the point was raised that whilst the industrial strategy is a new policy, the UK Life Sciences strategy which was championed by the Coalition Government from 2010 to 2015 could be viewed as pilot, or vanguard!
The UK Life Sciences Strategy was published in December 2011 by the then Health Secretary, Rt Hon Andrew Lansley MP and Business Secretary, Rt Hon David Willetts MP, also now a member of the House of Lords. This built on the work done by George Freeman MP who David Cameron made the Government's Life Sciences Champion and then promoted later in the Parliament to Life Sciences Minister. George is no longer a minister under Theresa May, but has been made Chair of her policy board based in number 10.
Through the two documents, "Strategy for UK Life Sciences" and "Innovation, Health & Wealth" the Government set out how it would aim to support the Life Sciences, encourage research and development, make the UK the best place in the world to trial, develop and launch new pharmaceuticals and medical devices, and to make the NHS an early adopter of new innovative technologies.
During the passing of the Health and Social Care Bill 2012 through Parliament, I worked on amendment with the Association of British Healthcare Industries that successfully saw an amendment accepted by the Government that the NHS had a "duty to innovate", which I believe demonstrates that there was significant will from the top of Government to make good on its Life Science Strategy.
Whilst there is still a lot more to do in the NHS to make uptake of new drugs and medical devices, hopefully to be addressed by the recently launched "Accelerated Access Review" and the "Innovation and Technology Tariff", the wider Life Sciences Strategy does seem to have borne fruit.
According to George Freeman MP, since the launch of the strategy in 2011, the Life Sciences Sector has attracted more than £6 billion in new investment and created up to 17,000 new jobs. This is a good record, and whilst many Life Sciences companies were strong supporters of Remain during the referendum, announcements of new investment since June 23rd suggest the sector still views the UK as a good place to invest.
Specifically in July, UK based GlaxoSmithKline announced a £275 million investment in three of its manufacturing sites. Not wanting to be left out, the following day AstraZeneca, also UK based, announced a £330 million on a new research and development centre in Cambridge, saying that it is "hard to find a better place in the world to do science than Cambridge". American drugs giant Mallinckrodt has also announced in October that it would be moving its global HQ to the UK.
Whilst there are certainly still risks for the Life Sciences Sector associated with Brexit, as highlighted by the note by the Japanese Government to the UK and EU a few months ago, and by the almost certain loss of the European Medicines Agency, Brexit so far doesn't seem to have been as bad for the sector as many predicted before June 23rd.
An interesting point made by Lord Lansely at the roundtable last week was that after Brexit, four out of the five largest pharmaceutical companies based in Europe will not be in the EU, with two in the UK and two in Switzerland. This will create an interesting dynamic in the regulation of the sector.
Finally, the UK Life Sciences Strategy does arguably seem to have been a success for the UK economy. The more difficult task will be can the Government replicate its success across many different sectors at the same time as negotiating Brexit.
Written by RPP Head of London Office, Andrew Brown