Lord Ashton of Hyde

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That the House do now adjourn.

Lord Ashton of Hyde (Con)

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My Lords, in moving that the House do now adjourn, I would like to wish all Members and staff who have remained to this late hour a very happy Christmas. I beg to move.

The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)

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I beg to move,

That this House agrees with Lords amendments 8P, 8Q, 8R, 8S, 8T and 8U.

I am delighted to be able to come back to the House today with positive news for business and for our constituents. As I have said before, I am immensely grateful to colleagues across both Houses for their constructive discussions with Government, and I would like to extend my thanks to all colleagues in both Houses for working with the Government to reach agreement on how we can best ensure that the frictionless intra-UK trade we enjoy today can continue into the future, especially as we recover together from covid-19. As we have made clear, this Bill is about protecting businesses and livelihoods—real people and real jobs—and I am pleased that both Houses have worked constructively to do that. I want to again extend my thanks to colleagues on the Opposition Benches in this place, and in the other place in particular, for their engagement.

As I set out to the House yesterday, the Government are committed to the common frameworks programme. We attach enormous value to the fora that they provide for collaborative working with the devolved Administrations. The Government have also been clear that the market access principles will work in tandem with common frameworks. We have been asked to provide as much clarity as possible on our continuing commitment to the programme, and we have thought long and hard about this over recent weeks. It is important that we respect the flexibility, and also the commonality, of common frameworks, paying close attention to the interests of all parts of the UK involved in the common frameworks programme and protecting the voluntary and consensus-driven nature of the programme. Indeed, these aspects are key to the effectiveness of the processes. The Government have listened carefully and reflected on the points put forward in both Houses about putting common frameworks on the face of the Bill, and we have now done so through these Lords amendments.

Alan Brown (Kilmarnock and Loudoun) (SNP)

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Obviously we welcome some sort of concession on common frameworks, but the Minister said yesterday that enshrining common frameworks in the Bill would create uncertainty for business, so what has changed from last night to today?

Paul Scully

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What has changed from last night to today is the convivial and constructive discussions we have had to allow for amendments that are worded to the satisfaction of, certainly, the other place and I hope this place, that will allow us to progress with both the common frameworks as a voluntary process and the certainty of the internal market.

Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)

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Before the Minister starts launching the fireworks in celebration of the progress in the Lords yesterday, I would like to remind him that the Welsh Government remain deeply dissatisfied and have announced that they intend taking the UK Government to court over the provisions in the Bill, not least the state aid provisions and the economic intervention proposals. Will he explain how the common frameworks process will work and where power will reside within the common frameworks, because there is a degree of ambiguity about that? Will he also commit the British Government to bringing forward a statement on the common frameworks to the House of Commons for scrutiny in the new year so that we can have a discussion about whether this is actually the best way forward?

Paul Scully

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Clearly it is disappointing that the Welsh Government have chosen to issue that statement, especially in the light of the productive working relationship that we have enjoyed with their Ministers and officials during the passage of the Bill. I know that the common frameworks have been subject to much debate, and I hope I will be able to clarify this as we go through. There will be more discussion in the new year about the frameworks and how they will work moving forward, because they have been productive in a number of areas to date, and I know that that will continue.

Jim Shannon (Strangford) (DUP)

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I, too, thank the Minister for what he has brought forward, but I seek clarification, as I often do, on the position of Northern Ireland within the United Kingdom. Will the final decisions on any movement of goods, east-west, north-south, or whatever it may be, lie with the Northern Ireland Assembly or with this place? Also, what discussions has he had with the Northern Ireland Assembly, the First Minister, the Deputy First Minister and the Minister at the Department of Enterprise, Trade and Investment?

Paul Scully

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Ironically, not particularly on common frameworks or the United Kingdom Internal Market Bill, although I have taken over from my ministerial colleague, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), in the quad discussions with the devolved Administrations. We had my first one this morning, and I look forward to further conversations. As for what happens to Northern Ireland goods to GB and vice versa, we have had an agreement in the Joint Committee. I look forward to seeing the results of the talks that are continuing in Brussels, because ultimately if there is a pathway to a deal, that will help to smooth the transition process. Ultimately, however, the long-term aim of what happens to the workings of the Northern Ireland protocol will sit with the elected representatives of Northern Ireland, given their vote in a few years’ time.

The Government here are demonstrating their commitment to the programme by, first, placing common frameworks on the face of the Bill, through our amendments yesterday in the other place, and, secondly, clarifying the relationship that we see between agreements made under the common frameworks processes and the internal market principles established by the Bill. Specifically, we are making it clear, through amendments 8P to 8S, that delegated powers under clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. In such cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from market access principles a specific agreed area of divergence. That would follow consensus being reached between the UK Governments and all the relevant parties that that was appropriate, in respect of a specific defined topic within a common framework.

For parts 1 and 2 of the Bill, previous amendments are provided for consent to be sought from the devolved Administrations. If that is not forthcoming within a month, MPs and peers from all parts of the UK would thereafter be able to debate and, if appropriate, agree to the change. We do not currently expect such cases to arise very frequently, but want to be clear that appropriate means are in place to respect them when they do.

The amendments to clauses 10 and 17 are complemented by amendments 8T and 8U. In line with other Government amendments to enhance the overall transparency of the United Kingdom Internal Market Bill and the role of the Office for the Internal Market, these amendments demonstrate our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. As part of the OIM’s five-yearly review into the effectiveness of parts 1 to 3 in supporting a healthy internal market, the OIM will now also address how parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the internal market. This will ensure proper scrutiny of both regulatory changes and the progress made under common frameworks.

The Government are confident that these amendments provide an appropriate way to ensure that market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market for all British businesses and citizens. They do this while allowing a degree of agreed flexibility, reflecting different circumstances in particular parts of the UK. In reaching agreement on these amendments and thus agreeing on the final outstanding issues of the Bill, both Houses will be protecting and preserving the United Kingdom’s internal market, which has been the bedrock of our shared prosperity for centuries.

Lucy Powell (Manchester Central) (Lab/Co-op)

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Well here we are again—groundhog day. Early on, I dubbed this Bill the infernal market Bill, and it has certainly lived up to that name. It is good to see the hon. Member for Stone (Sir William Cash) in his seat again. I am not sure what he is going to do in a few weeks’ time after all his doughty energies tackling issues around Brexit. I am not sure whose fault it is all going to be in a few weeks’ time. Perhaps Ministers should watch their backs; they might find it is their fault once Brexit can no longer be blamed for all his ills.

Let me start by thanking Ministers and their officials for the discussions that we have had in recent days about how we can make the best of this bad Bill. Let us be honest: when it first saw the light of day, it was clear for all to see what a terrible Bill this was. It was wrong in seeking to break international law, and it was wrong in disrespecting the devolution settlement and failing to understand the way the UK now works through power sharing. That is why we have been so vociferously opposed to it in this House.

We led the way on that, starting, as you will remember, Madam Deputy Speaker, with my right hon. Friend the Member for Doncaster North (Edward Miliband) taking down every single argument of the Prime Minister, who was here himself on Second Reading. Through the Bill’s many stages in this House, we have been clear in our opposition to some of its serious flaws. It has been a long and difficult process.

Alan Brown

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If Labour has really led the way, why did it back down in the votes in the other place on protecting devolution in respect of Westminster’s ability to spend and meddle in devolved affairs?

Lucy Powell

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The hon. Gentleman knows that that is not the case. That is not what happened in the other place. It is thanks to the Labour leadership in the other place that we have seen improvements to the Bill, and I will say a bit more about that in a minute.

The Bill is now in much better shape than it was. It is far from good, let alone perfect, but it is better. That is thanks to the leadership shown by Labour colleagues in the other place, who built alliances and worked with guile and tenacity to get us to where we are. The Government, by the way, have a majority in the other place; despite that, we managed to inflict a number of Government defeats. As a result, the Government dropped most of part 5, which was the international lawbreaking part of the Bill originally and now upholds the Northern Ireland protocol.

After Labour worked cross-party with colleagues and others to ensure successive Government defeats in the other place, and after several rounds of ping-pong— I have lost count of how many—the Bill has been improved in a number of ways. We have the one-month mechanism for the devolved Administrations’ consent on regulations; the operation of the internal market in the interest of consumers; the consent and involvement of the devolved Administrations on the make-up and operation of the Office for the Internal Market, and the removal and review of the Henry VIII powers.

Today, we welcome the Government’s concessions on common frameworks in response to Lord Hope and Lord Stevenson’s amendments. In particular, amendments to clauses 10 and 17 allow for agreements arising from common frameworks to be excluded from the application of market principles. They also include in the Bill a definition of a common framework agreement, something that we have been seeking from the beginning. We also welcome the amendment to clause 31 that provides for the Competition and Markets Authority and the Office for the Internal Market to include in their five-year reporting details of the interaction between market access principles and common framework agreements, and of the impact of common framework agreements on the operation and development of the internal market.

We have fought long and hard to ensure that the Bill does not undermine devolution, because we believe in devolution. These are important safeguards that really do strengthen the Bill.

Jonathan Edwards

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The hon. Lady will be aware that, as I alluded to earlier, the Labour Government in Wales are threatening legal action. Is that something that she and the Labour party in Westminster will be supporting?

Lucy Powell

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I have just been alerted to that. I am not sure of the details at this stage, so it is probably best that I do not comment. However, it is obviously a Labour Administration, and we support them and have worked very closely with them. I thank them for their co-operation with us on the Bill.

Common frameworks will allow different nations in the UK to set their own standards in key areas and to agree minimum standards for all. That is why it was so important to us from the start that there was recognition of common frameworks on the face of the Bill. However, it is still far from ideal, and the Government have been dragged kicking and screaming to these issues only because of the pressure we have applied, working tirelessly in the other place, and I pay tribute again to Lord Hope, Lord Stevenson and Baroness Hayter for all their work on this.

Sir William Cash (Stone) (Con)

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I was very taken by the reference the hon. Member for Manchester Central (Lucy Powell) made to improvement. Having looked at the Bill and followed it over the last few weeks, I find it difficult to call it an improvement.

However, I want to pay tribute to the Public Bill Office. Given the amendments, and the contortions the Public Bill Office has had to absorb in looking at the Reasons Committee’s consideration of these issues and at the question of what insistence on disagreement or agreement is at a particular point in time before it comes from one House to the other and goes back again, this has been an incredible exercise in complexity—so much so that it would be asking an awful lot to expect anybody, including the Minister, to be able to claim that they really understand what it is that has ultimately arrived. I was going to ask him if he would like to explain exactly what all this means. We will only find out in due course.

I was looking at the reasons for disagreeing only yesterday, and they were very clear. One said that the Government disagreed with the Lords over the question of legal certainty and disruption to business. Suddenly, almost at the wave of a magic wand, all of that has completely evaporated into thin air, and we have ended up with this extremely contorted, extremely confusing and ambiguous series of statements. However, at the heart of it, there is one point that I want to put to the Minister. Does he recall the famous Schleswig-Holstein question? Only three people comprehended what was going on, or they had originally, but unfortunately one had forgotten, one had died and the other had gone mad. [Interruption.] I am not going to attribute any one of those to the Minister. However, right at the heart of this, a lot of very complicated drafting has been put in to try to salvage some face. As I read it, the Secretary of State can make these regulations but—this goes to the heart of it—that process would be subject to the affirmative resolution under clause 10(2), which is mirrored in clause 17. It strikes me that there is one fundamental question: can the Minister effectively veto matters that have been discussed and consulted on with the devolved Administration? If the regulations are subject to the affirmative resolution, it seems that may well turn out to be the case. Who knows? I do not know at the moment, and only when the process reaches its conclusion will we know whether the reserved powers in the Scotland Act 1998 will bite. I cannot be sure of that. I have a feeling that this may end up in the courts, and perhaps the situation will be made clearer. We are at the end of the line for this Bill, and I regard the whole thing as being difficult to plot in terms of a clear path to any conclusion.

Jonathan Edwards

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In the 10 years that I have been in this place, I think this is the first time that I have agreed with the hon. Gentleman on a substantial point. The concession last night in the Lords opens up a number of new questions, and there needs to be a well thought out process regarding how the common frameworks will work, where power will reside within the frameworks, and who has the power to create them. I would like a far more consensual approach than we have seen today.

Sir William Cash

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I am glad to hear that. I am not sure—we cannot be sure—whether these provisions might eventually be declared void for uncertainty, and I am not clear about what they will do in practice. At least, however, we have got to the end of the Bill. I am in favour of the Bill in principle, and that is about all I need to say for the moment. As far as I am concerned, the future lies ahead with uncertainty built into these provisions.

Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)

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Any improvement to the Bill would be welcomed, but the proposed amendment does nothing to protect the devolution settlement—the Minister said as much in his opening remarks—and the provisions will simply allow this Parliament to overrule Scottish Parliament and Welsh Parliament decisions. It is incredible to hear Labour Front Benchers trying to take credit. They say that they led the way, but they have actually paved the way for this Bill to do that to the Scottish Parliament. They talk about the guile they have shown, but it is gall that they have when they talk about this. You can understand, Madam Deputy Speaker, why Labour has only one MP in Scotland.

Instead of taking this Bill apart, as they should have done, those on the Labour Front Bench spend more of their time talking about the democratically elected Members of Parliament that they have here, who, as I pointed out, are in vastly greater numbers than the one Labour MP from Scotland. They are not listening to Scotland—they never do—and Labour has allowed this aberration to come forward in this way by abstaining in the House of Lords.

The amendment does not protect devolution, as I said: the Minister has laid that out clearly today for everybody to hear. Westminster Ministers will still have the right to impose lower food, environmental and other devolved standards on Scotland, regardless of the view of Holyrood. This Bill is the biggest assault on devolution in the history of the Scottish Parliament. It undermines devolved policy making, grabs spending powers, and removes state aid from being a devolved responsibility. The Scottish Parliament and the Welsh Assembly refused to give this Bill consent, and it is outrageous that the UK Government are once again ignoring the wishes of the people of Scotland as well as Wales.

In welcoming the amendment, Professor Aileen McHarg warned:

“There are still significant problems with this Bill: it changes the scope of devolved decision-making; it reserves additional powers to Westminster; it empowers the UK Government to spend in devolved areas that have nothing to do with markets (eg prisons, sport, international student exchanges); and above all—unlike EU law—it has an inherently asymmetrical effect on decision-making for England and for the devolved territories.

This is a Bill which squarely falls within the scope of the Sewel Convention, and the necessity of which is deeply questionable.”

But of course the Government have not listened to that, and Labour has capitulated on it.

The only reason for this Bill as it now stands is to demolish devolution. If the Government take this Bill forward today, as they obviously will, that is what they will be doing. Any pretence thereafter by the Scottish Tory MPs that they respect the democratic rights of the people of Scotland will be blown apart if they support this today. In fact, they have already supported it, because it seems that it will go through. They have done nothing to protect the democratic rights of the Scottish people.

People in Scotland are watching. People in Scotland, when they see the effects of this Bill, will be angry about the fact that their rights are being taken away by these Tory Ministers, aided by their Labour bedfellows. They will be furious about the fact that their rights are being stripped from them. They are listening, they are watching, and they are seeing developments in this place. They are understanding, now, that the only way to protect their Parliament, their rights and their democracy in Scotland is to go forward as an independent nation—and they will be voting for that, I am sure, in due course.

Wendy Chamberlain (North East Fife) (LD)

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Yesterday I said that there was still time for compromise, so I am glad that the Government have finally gone for some degree of a consensus approach, and there is no doubt that what will be on the statute book is an improvement on the legislation that was initially introduced back in the autumn. I would like to acknowledge the Minister’s engagement over the Bill. I also thank my Liberal Democrat colleagues in the Lords, who have played an important role, and our staff teams across both Houses.

However, I do still have concerns about the Bill, one of which is about the Office for the Internal Market. The Government need to be transparent about what role that office will play in future trade deals. Can foreign investors in a US trade deal use it to undermine the devolved nations? I have asked that question repeatedly. I am also conscious that the legislative value of this Bill might, in practice, be limited, or indeed pretty much non-existent, especially if we reach a trade deal and a standards agreement with the EU. We obviously need more clarity on this, as the hon. Member for Stone (Sir William Cash) said.

Unfortunately, as I pointed out yesterday, these changes, while positive, are too late, because the damage has already been done. The Minister heard the speeches of SNP Members yesterday, but I wonder whether he listened. With this Bill, the Government have been pouring fuel on a fire, as alluded to by the hon. Member for Manchester Central (Lucy Powell). I ask the Minister: what has this all been worth? If the Government are committed to the future of the United Kingdom, they need to start acting like it.

I cannot count the number of newspaper articles I have read over the past year reporting a reset in the Government’s approach to the Union, that a new Cabinet Committee has been set up to finally solve the Government’s problem as regards relations with the devolved nations, or that the Prime Minister is going to love-bomb Scotland. I urge the Government: this is not about Committees, or grand new offices in Edinburgh, or bridges or tunnels over or under the Irish sea. Those of my constituents who are uncertain about where they want Scotland’s future to lie will not be convinced by Union Jacks on UK Government infrastructure projects: cack-handed stuff, as the passage of this Bill clearly indicates. What they will be convinced by is a UK Government who treat the devolved nations with respect, maturity and honesty, and who work together with the devolved nations to find consensus, because I do believe that we have too much in common for borders to divide us. Are we in this place capable of that? I like to believe we are, but for too many of my constituents, it has not felt like that over the last few months with this Bill.

So I do urge the Government: compromise and consensus were the reluctant final steps they took with regard to this Bill. Noting the comments of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) in relation to the Welsh Government’s statement, let the first steps the Government take in their future relationship with the devolved nations be that compromise and consensus.

Deidre Brock (Edinburgh North and Leith) (SNP)

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I suppose it is good to see that the Government have finally admitted that they have to listen to the concerns being raised about their appalling ignorance over devolution and how the UK currently works. Is it not bizarre that the unelected bunch along the corridor had more appreciation of the democratic deficit at the heart of the UK than the Government of “reclaiming sovereignty” fame?

It is appalling too—I have to say this—that the loyal and spineless Opposition betrayed generations of Scottish Labour activists and politicians who fought to establish devolution and battled their own party sometimes, but who learned to work across civic Scotland to deliver it. I think they must not have heard the warnings of Scottish Labour Action that a powerful devolved Administration in Scotland were not a frippery, but an absolutely essential counterpoint to Westminster and Whitehall blindness to issues anywhere outside the south-east of England. I expect nothing better from the Tories, but the Labour party has betrayed its own members and the activists who spent so long on the Calton Hill vigil. This desperate attempt to appeal to Tory values to try to bury the incompetence of the previous leadership might seem a decent old political strategy, but it renders the existence of the Labour party utterly meaningless.

In any case, we finally have a nod to the devolution settlement, even if it has been forced by the House of Lords. In yesterday’s debate, the Minister said this legislation was about devolution, demonstrated that it was about dismantling devolution and failed to answer any of the questions raised during the debate. It seems that Ministers in this UK Government no longer seek to engage in discussion, but instead merely fling pre-written barbs that they clearly think are clever. It is not clear whether they know how to debate and choose not to, or do not actually have command of their brief. Either way, it is unfitting for a Minister and no way to run a Government.

Instead of offering amendments to this elected Chamber yesterday or at any point during the passage of this Bill, the Government arranged their business in the unelected Chamber—somewhere it clearly feels most comfortable, among the privileged and away from the bother of the concerns of the people we represent. Those amendments, I will grant, go a little way towards addressing some of the concerns that have been raised, but I suggest that they were driven more by a desire to mollify cantankerous Lords than by the need to create decent legislation. They are tiny baby steps in the right direction at the time we needed giant strides and they leave, as we have already heard, reams of unanswered questions—how disputes between Governments will be resolved, for example, and how consumers can be protected from unthinking and uncaring Prime Ministers, for another.

The amendments will also embed an imbalance in the framework of a post-Brexit UK that will see England’s Government outweigh the other Governments in any negotiation, as the hon. Member for Stone (Sir William Cash) pointed out. He put his finger on the exact nub of this problem. England’s Government will outweigh the other Governments in any negotiation, because it continues to claim overlordship as the supposed Government of the UK. Labour might be interested in looking at that, because it echoes the democratic deficit that drove the creation of the devolved Administrations in the first place.

Sir William Cash

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I personally have always believed that there should have been a referendum of the whole United Kingdom over the devolution question. I put down my own amendment back in 1997, and half the Conservative party went against a three-line Whip and followed me into the Lobby. That is the real way to get consent. I believe in the Union, and I believe that there should never have been devolution other than through a United Kingdom referendum, if it was going to happen at all.

Deidre Brock

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I do not want to be rude to the hon. Gentleman, but he presents us with a glorious example of exactly why many on the SNP Benches want to get away from this House of Commons.

Scotland faces the same situation as we did in the last quarter of the last century: a UK Government of a hue that we did not vote for and would not support are riding roughshod over the interests of the Scottish people and will ignore them if they can. This Bill will pass today, but the debate will continue, and we have not yet begun to fight.

Alan Brown

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I would like to briefly add to what my colleagues have said. We welcome some sort of recognition of the common frameworks. There is a lot still to be teased out in terms of how that will work. We know that Westminster’s sovereignty will overrule things, and that is still a big concern, but we welcome that measure. I still do not understand how the Minister stood at the Dispatch Box yesterday and said that common frameworks could not be enshrined in the Bill, because it would be so bad and would cause businesses uncertainty, and now he says, “We’ve listened to the Lords, and everything’s okay.” It would be good if he could clarify that when he sums up.

Despite what the hon. Member for Manchester Central (Lucy Powell) said, Labour did not lead the way on this. Labour gave up on devolution, and it gave up in the other place. Labour did not even back my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) in the Reasons Committee. Labour sat on its hands in the vote in that Committee. Lord Stevenson said, “We will not divide the House.” That is giving up. Labour gave up in the Lords.

Let us look at clause 48 and what Labour gave up on. Westminster is now allowed to provide infrastructure at places in the United Kingdom, including infrastructure connected with any of the other purposes mentioned. That infrastructure includes water, which is still publicly owned in Scotland, electricity, gas, telecoms, sewerage—also publicly owned in Scotland—railway facilities and roads or other transport facilities. As the hon. Member for North East Fife (Wendy Chamberlain) said, that paves the way for the glorious Union bridge or Union tunnel that we do not want and do not need, because we can invest better in transport infrastructure ourselves.

There is no doubt that the greatest improvements in Scotland’s infrastructure have come since the introduction of the Scottish Parliament, making decisions for the people of Scotland on behalf of the people of Scotland and representing the people who elected them. [Interruption.] Does the hon. Member for Manchester Central want to intervene? No. As I was saying, the greatest improvements in Scotland’s infrastructure have come since the introduction of the Scottish Parliament. MSPs are answerable to the people who elected them. Unfortunately, we have a right- wing Tory Government who Scotland did not elect, and now they are free to overrule us. Labour backed down. It does not matter what the hon. Member for Manchester Central said; Labour backed down and gave up.

The Bill allows Westminster to spend not only in Scotland but in Wales, overruling the Welsh Labour Government on health, education, culture, sports facilities, court or prison facilities and housing. We are leading the way in building social housing in Scotland. We ended the right to buy. The Tories obviously still think that the right to buy is a good thing, forcing councils to get rid of their housing stock. How dare Westminster legislate to provide housing in Scotland—we have done very well without your help, thank you very much.

State aid is something else that Labour gave up on. It has been stated clearly that state aid was never a reserved function, and therefore it was devolved to the four nations, so why is Westminster taking it back? Does it think that that sends out a good message?

People are watching. Studies in Scotland have shown time and again that people in Scotland trust the Scottish Parliament to legislate and invest in these matters over Westminster, so why Westminster thinks it can do a better job is beyond me. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey said, it looks like independence is the only way that we can protect the powers of the Scottish Parliament. Bring it on.

Paul Scully

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Let me quickly answer a few points. My hon. Friend the Member for Stone (Sir William Cash) asked for a bit more detail on the amendments. In the small number of cases in which the market access principles apply to divergence agreed under a common framework, clauses 10 and 17 could be used to exclude the agreement from the market access principles. The Secretary of State would be able to do so following a consensus agreement that that was appropriate under the common framework. That is the appropriate way to ensure that the market access principles in the Bill can ensure certainty and a seamlessly functioning internal market while still respecting agreed limited divergence under the common frameworks programme.

Originally, Lord Hope’s amendments would have required the Secretary of State to exclude any divergence agreed under the common frameworks process from market access principles; by contrast, the Government’s amendment makes it clear that this is an option open to the Secretary of State, thereby giving the Secretary of State the discretion to ensure that the disapplication of the market access principles would never lead to the emergence of unacceptable trade barriers within the United Kingdom.

The hon. Member for North East Fife (Wendy Chamberlain) talked about the CMA, the OIM and what would happen with international players. The CMA and the OIM have the flexibility to investigate and report on any issues that they choose, but they are not themselves decision makers on market access principles. Throughout the Bill’s passage, we have made sure that both the OIM and the Bill itself will apply rules to each part of the UK—to England, Scotland, Wales and Northern Ireland—equally.

Wendy Chamberlain

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I thank the Minister for his response, but will he accept that, in the letter he wrote to the Scottish Affairs Committee after his appearance before the Committee in relation to the Bill, he was unable definitively to rule out foreign investors being able to take the UK Government to court, whether through the OIM or otherwise?

Paul Scully

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In establishing the Office for the Internal Market through this Bill, I wanted to make sure that it was not the Office for the Internal Market itself that it would be able to work through, so that is within the purview of this particular part of the Bill.

The hon. Member for North East Fife talked about about the fact that when we talk about devolution it is not about Committees, and I totally agree: it is about dialogue, consensus and giving business certainty. This is in stark contrast to what we have seen from the Scottish National party, which walked away from discussions about the internal market in 2019. That is no way to build consensus and to have that dialogue. If the SNP and the Scottish Government want to talk about ending the right to buy and to go with that to the council house-owning residents in their electorate, that is up to them. We are not talking about devolved parts of housing; when we talk about spending or any of these other issues, it is complementary to what the Scottish Government, or indeed the Welsh Senedd or the Northern Ireland Assembly, are doing within their devolved rights.

Drew Hendry

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Once again, the Minister has talked about the Scottish Government walking away from the internal market discussions; of course, the internal market discussions led on to this Bill—we knew it was going to be a bad move forward. The Scottish Government engaged constructively, and continue to be willing to do so, in the common frameworks discussions. The Minister should make that clear when he makes that point about the internal market discussions. On the matter of housing, as my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) pointed out, the Government can now interfere in and overrule legislation in Scotland.

Paul Scully

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No, this is about spreading. I readily accept that the discussions on common frameworks continue, and I very much welcome that. As I say, common frameworks go wider than just trade and the measures covered in the Bill. None the less, to walk away from discussions on the internal market a full year or 18 months before we reached this position is really to walk away from the responsibility to help to shape the discussions, as we have seen in the more fruitful conversations with the Welsh Senedd, including in recent days.

We heard the hon. Member for Edinburgh North and Leith (Deidre Brock) talk about pre-written barbs, but time and again when we have come back to this place it has just been a rehearsal of the arguments not about the devolution settlement or the Bill itself, but about independence. It has been the same debate time and again, instead of Members involving themselves in the detail of the Bill and giving certainty to business.

Alan Brown

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Will the Minister give way?

Paul Scully

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I will not give way.

I finish by thanking everyone who spoke in the debate, and by once again thanking all hon. and right hon. Members and noble Lords who have engaged with the Bill over the last few weeks. I thank the Public Bill Office for its support to all Members and officials across Government. I pay tribute to the entire ministerial team across both Houses and all Departments, who have worked jointly to deliver the Bill—in particular, Lord Callanan, Lord True and the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), and the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker). I also pay tribute to Yasmin Kalhori and the team of the Leader of the House of Lords.

I welcome the contributions and the constructive discussions that we have had in recent days with Opposition Members in both Houses that have got us to this place. We have had some passionate debates on the Bill, because of the importance of the issues. However, the Bill will ensure that UK businesses can trade across the four parts of the UK in a way that helps them to invest and create jobs, just as they have for hundreds of years. I am therefore delighted to ask the House to agree to the amendments, and to complete our scrutiny and consideration of the Bill.

Drew Hendry

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This is an outrage to Scotland. It is not acceptable.

Madam Deputy Speaker (Dame Rosie Winterton)

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Order. The hon. Gentleman must resume his seat, and he knows that. [Interruption.] This is just showing off. He should resume his seat, otherwise I will name him and order him to leave. [Interruption.] Does he want to be named? Is that what is happening? [Interruption.] If that is what is happening, we can do it. [Interruption.] Okay—I will name him. I know what he is doing. [Interruption.] Oh, for goodness’ sake! Very childish.

Drew Hendry, Member for Inverness, Nairn, Badenoch and Strathspey, was named by the Deputy Speaker for disregarding the authority of the Chair (Standing Order No. 44).

Motion made, and Question put forthwith (Standing Order No. 44),

That Drew Hendry be suspended from the service of the House.—(David T. C. Davies.)

Question agreed to.

The Deputy Speaker directed Drew Hendry to withdraw from the House, and the Member withdrew accordingly.

Main Question again proposed.

Question put and agreed to.

Resolved,

That this House agrees with Lords amendments 8P, 8Q, 8R, 8S, 8T and 8U.

Madam Deputy Speaker (Dame Rosie Winterton)

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We will suspend for three minutes, in order to allow safe exit and entry.

The Deputy Speaker (Baroness Pitkeathley) (Lab)

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My Lords, these proceedings will follow guidance issued by the Procedure and Privileges Committee. Any Member of the Chamber may speak, subject to the usual seating arrangements and capacity of the Chamber. Anyone intending to do so should email the clerk or indicate when asked. Members not intending to speak should make room for Members who do. All speakers will be called by the chair. Short questions of elucidation after the Minister’s response are permitted but discouraged. A Member wishing to ask such a question, including Members in the Chamber, must email the clerk.

When putting the Question, I will collect the voices in the Chamber only. Since there is no counterproposition, the Minister’s Motion may not be opposed. We will now begin.

Motion A

Lord Callanan

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That this House do not insist on its Amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M to which the Commons have disagreed for their Reason 8N, but do propose the following amendments in lieu—

Commons reason

The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)

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My Lords, I turn now to government Amendments 8P through to 8U regarding common frameworks. During many weeks—it seems like it anyway—of thoughtful and robust scrutiny, it is the discussions of the common frameworks programme that have at times proven the most thorough and considered. I pay tribute to and thank colleagues on all sides of the House, on the Opposition Benches, and from all sections, for the positive and collaborative tone with which they have approached discussions on this matter. I pay particular tribute to the noble Lords, Lord Stevenson of Balmacara, Lord Fox and Lord Purvis, and to the noble Baroness, Lady Hayter, who have probably spent more time with me than they would have liked in the run-up to Christmas. I thank them for their engagement.

I also give particular thanks to the noble and learned Lord, Lord Hope of Craighead, who has worked so warmly and collaboratively with the Government, and in a wonderful spirit, to try to find common ground. His contributions to each debate, as always in this House, have been hugely constructive and I want to record my gratitude to him.

We have heard praise from every corner of your Lordships’ House for the common frameworks programme and I put it on record again that I concur entirely with this praise, and reiterate once more this Government’s commitment to the common frameworks. The Government have been clear that the market access principles will work in tandem with the common frameworks. We have been asked to provide as much clarity as possible, and to state our continuing commitment to the programme, and we have thought long and hard about this over recent weeks.

As I have previously said to your Lordships’ House, it is key that we respect the flexibility of common frameworks, that we pay close attention to the interests of other parties involved in the common frameworks programme, and that we protect the voluntary and consensus-driven nature of the programme. These aspects are key to the effectiveness of these processes.

The Government have listened carefully and reflected on the points put forward many times by your Lordships’ House on putting common frameworks in the Bill, and I am pleased to say that today we are able to act. Given the strength of feeling on this matter, we would like to demonstrate our commitment to the programme, first, as requested by many noble Lords, by placing common frameworks in the Bill. Secondly, we are clarifying a relationship that we see between agreements made under the common frameworks processes and the internal market principles established by this Bill.

Specifically, we want to put it beyond doubt that the delegated powers under Clauses 10 and 17 may be utilised to, among other things, make provision to reflect common framework agreements. This can be achieved by excluding specific divergence agreed through the common frameworks process from the operation of the market access principles where all parties to the common framework are in agreement.

We believe that these amendments meet the objectives I have set out. They put beyond any doubt the Government’s commitment to the programme while respecting the voluntary nature of the common frameworks programme. They also make it clear that divergence may occur where there is agreement under a common framework, and that such divergence could be excluded from the market access principles. Regulations to give effect to such an agreement can be made under Clauses 10 and 17. In those cases, the Secretary of State would be able to bring to the House a statutory instrument to exclude from the market access principles a specific agreed area of divergence. This would follow consensus being reached between the UK Government and all the relevant parties that this is appropriate in respect of any specific defined topic within a common framework.

It is worth being clear that the regulation of professional qualifications is very different from that of goods and services. Unlike Parts 1 and 2, there is no power for the Secretary of State to amend the exclusions in Part 3. Although the amendment cannot apply in the same way to this part of the Bill, as your Lordships will be aware, Part 3 contains provisions for an alternative system. This will allow relevant authorities to retain control over professional standards and access to their professions.

For Parts 1 and 2, previous amendments have provided for consent to be sought from the devolved Administrations. Thereafter MPs and Peers from all parts of the United Kingdom would be able to debate and, if appropriate, agree to the change. We do not currently expect that such cases will arise very frequently, but we want to be clear that appropriate means are in place to respect them when they do. In our view, this is an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market while respecting limited divergence agreed under the common frameworks programme.

There has, of course, been significant debate in both Houses regarding the relationship between the common frameworks programme and the market access principles in the Bill, and the impact one has on the other. It is nevertheless important that such examples can be identified and that these matters are reported on rigorously, independently and transparently. In line with other government amendments to enhance the overall transparency of the UKIM Bill and the role of the office for the internal market, Amendment 8T demonstrates our commitment to transparency and evidence building regarding the interaction between the market access principles and the common frameworks programme. Therefore, as part of the OIM’s five-yearly review into the effectiveness of Parts 1 to 3 of the Bill in supporting a healthy internal market, the OIM will now also address how Parts 1 to 3 have affected the operation of agreements under common frameworks, including the effect that those agreements have had on the operation of the UK internal market.

We are confident that the amendments provide an appropriate way to ensure that the market access principles in the Bill can act to ensure certainty and a seamlessly functioning internal market. They do this while allowing for a degree of agreed divergence, reflecting different circumstances in particular parts of our United Kingdom. As noble Lords would expect, our partners in the devolved Administrations have been updated on this approach.

These amendments are the product of many weeks of robust and constructive debate. As I said, I thank all noble Lords from both the opposition Front Benches who have been involved in the debate. The amendments reflect the Government’s steadfast commitment to the common frameworks programme, to enhancing the overall transparency of the Bill and to making clear the Secretary of State’s power to exclude areas of divergence agreed under common frameworks. I beg to move.

Lord Stevenson of Balmacara (Lab) [V]

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My Lords, a stranger to our Parliament would find this whole ping-pong process completely bizarre and almost impossible to follow. I have some sympathy, as this is my first time going right through ping-pong from beginning to end, even though I have been in the House for over 10 years. However, the Motion paper before us today, which I think has reached everybody, although superficially complex, tells the story rather well—over eight pages, it must be said.

In essence, we are where we are because we took the view that the internal market Bill as originally drafted was unbalanced between market access principles, which we felt might provoke a race to the bottom on standards, and the managed but limited divergence of standards which we thought would naturally flow from the wish of the devolved Administrations to reflect the views of those who elected them and the particular circumstances, as the Minister says, of their areas. We wanted to make sure that market access principles do not always trump the common frameworks process. We believe that that process has many benefits to offer in building coherence and a feeling of engagement with the UK internal market.

We made that position clear to the Ministers involved in this Bill in our first meeting. Motion A tells the story of the progress in recent weeks. As the Minister said, the meetings were often robust. That is not to be regretted because it is only through real engagement with some of the deeper issues raised by Bills that you can understand the positions of the two sides and make progress, where it is clear one has to compromise one way or another. There were, as the Minister said, many meetings and exchanges of drafts. It is fair to say that when Bills involve many departments—in this case, three separate departments—it is difficult to work across them and sometimes it is hard to manage meetings that necessarily involve 20 or even 30 advisers and others, who need to be involved in developing the thinking behind them.

To cut a reasonably long story short, the meeting that unblocked the situation took place last week, when the noble and learned Lord, Lord Hope, found the key by building a dialogue with Ministers on where and in what form the changes he wanted to see, which we supported, could be made, and in such a way that the issues raised by those responsible for the original drafting would not be sacrificed.

I would like to thank the Ministers—in particular, Chloe Smith, Martin Callanan and Nick True—for sticking the course with us. It would have been easy for them to stamp their feet and say, “Get lost; we have a majority of 80 and we’re going to see this through”, but they did not. I think they sensed there was an issue that needed to be bottomed out for the good of the country as a whole, and I admire them for that.

A special mention needs to be made of the noble and learned Lord, Lord Hope. He is the last person who would want to be singled out for praise, but we would not be where we are today had he not spotted an issue he wanted to address early on, and used his skill and experience in drafting and interpreting the law to pick away at the issues and come up with a solution. He said in his last speech to your Lordships’ House on this issue that it was a bit like unwrapping a Christmas present overenthusiastically wrapped with lots of paper that concealed a rather small present. I said to him that he should have extended the metaphor and said that good things come in small packages. He felt that that was not the way to go, but I will use it now, because it gets to the point of what I am saying.

What the noble and learned Lord has drafted and we and the Minister have accepted is a very small change to the Bill as originally drafted. But it is really important, because it restores the balance that we feared was lost without giving undue prominence or unbalancing the general principles underlying the Bill. It respects how we do things in this country, and the devolution settlement in particular. The noble and learned Lord, Lord Hope, should accept the plaudits offered to him for having the idea in the first place, seeing it through and finding the key that unlocked the differences between us. The differences were real and important, and we have resolved them. I am very grateful to the Minister for what he said today. It has been a good process, and I recommend accepting the measure; we hope it will work well in practice.

Lord Fox (LD)

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My Lords, I will not go through the same list of people to thank as the noble Lord, Lord Stevenson, and the Minister did. I just want to add my thanks and express my admiration for the dogged wisdom of the noble and learned Lord, Lord Hope, in getting us to this point.

Never knowingly unchurlish, I would say that this Bill is not the direction we would have chosen to go in—that is a fact—but, over the course of the past five weeks, I have become absolutely convinced that, thanks to the dialogue between all the parties involved, this Bill has been improved substantially. The illegality was taken out, of course, but the sensitivity toward the devolution settlements, which was not there to start with, has been gradually installed, piece by piece. To get there, we have talked of Welsh coal. We have talked of Scottish teachers. We have talked of drinking straws and Scotch whisky, and of many other examples.

In our thoughtful debate, we have heard from people—including Members on these Benches—who care passionately about the union and felt that things had to happen to this Bill. It is with great pleasure that I can say that many of those things have happened; we are in a much better place and, clearly, look forward to hearing what the devolved authorities have to say.

If I have one reservation, it is about the mechanics of how this market will work and how the office for the internal market will sit alongside the CMA going forward. Clearly, that story may well run but, as the Minister set out, the OIM will have a pivotal role in monitoring how this market runs and in informing the process. How that is configured, who is in it and what its process are will, in the end, be the measure of how successful, smooth and, frankly, unfettered this internal market ends up being.

With those words, I again thank the Minister and his colleagues, and give a special mention to the Bill team, which has also worked relentlessly on this. We look forward to sending the Bill away from this place unmolested by any further amendments.

Baroness Hayter of Kentish Town (Lab)

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I also welcome the Motion moved by the noble Lord, Lord Callanan.

We are delighted that the Government have responded to the repeated and really quite strongly supported urgings from this House to hardwire, if you like, the common frameworks process into the Bill. After all, as we have heard, the Bill was introduced to deal with powers returning from the EU—powers that are devolved but might need to be used in ways that would not interfere with the development of our own UK single market.

Indeed, it was for that reason that the common frameworks process was established in 2017. The Government are about to write into the Bill—in a few moments’ time, when we will vote for it—that, in cases where a particular divergence in a market area is agreed under the common framework, such an agreement can be exempted from the market access principles. This recognises in law that uniformity is not always necessary in an internal market, allowing some divergence and differences to suit the particular circumstances of parts of our union.

Furthermore, as has been said, a review will take place to judge how that interplay between the framework and the market access principles is working in this new internal market. We hope that this review will show that a consensual approach to these issues works well with the wider aim of achieving a successful internal market. However, as the noble Lord, Lord Fox, said, it will also be interesting to see whether the review looks at how this works with the CMA and the OIM. We all have a lot to learn on this.

The Motion means that the frameworks are included in the Bill, which was lacking at the beginning. I thank Ministers for finding a route forward. I think they sometimes have to break more arms on their side than on ours—though they would know more about that than we do. We join them tonight in confirming the recognition of the devolved settlements and our wish to strengthen both devolution and the future of the union. We see those two aims as entirely compatible and I think they do too.

As we close this chapter of our adjustment to the post-Brexit situation, we also thank the Ministers for their other amendments, to ensure that the OIM appointments and most regulations are agreed with the devolved authorities. I think the Minister had a hand in the recognition of my particular pet project of recognising the importance of the internal market working for computers—sorry, consumers; too much time on Zoom. I do thank him personally; I know he had more than a little hand in that.

I thank all concerned. The Bill team have worked wonders. All those who have voted have enabled us to push on this. I thank the magnificent Lords clerks who have worked against the clock and conflicting interests to get this done, our colleague Dan Harris, my noble and learned friend Lord Falconer and my noble friend Lord Stevenson, who has led us on the Bill so well. I also thank our very special Leader, who gets us all here, my noble friend Lady Smith of Basildon. For the moment, let us put this Bill to bed.

Lord Callanan (Con)

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There is a new “computers for consumers” skill that we also need to get passed in a future amendment. As the debate draws to a close, I am once again enormously grateful to those who have contributed to the discussion. These debates have been noteworthy for the breadth of ground covered and the depth of expertise on display. Everyone has acted in the finest traditions of your Lordships’ House. I would like to put on record my thanks for the contributions of colleagues on all sides of the House.

Today’s debate and amendments are the product of intense engagement, often to very tight timescales. I have already thanked colleagues who were involved in long team Zoom calls at different times, but the noble and learned Lord, Lord Hope, deserves all the praise that has rightly gone his way. I also add to the thanks from the noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, to the Bill team. I thank the Bill manager, Shreena Kotecha, and Jayne McCann, Satchi Mahendran, Jefferson Yen, Dominic Entwistle, Katrina Gajewska, Bridget Micklem, Greg Dyke, Amy Smith, Dominic Bull and all their colleagues. I thank Martynas Zekas in my office, who has done such a fantastic job. They have all worked many long hours, late into the evening and at weekends, in difficult circumstances and often from home. They have all acted in the finest traditions of the Civil Service and we should put our thanks to them on the record. I also express my thanks to my ministerial colleagues—my noble friends Lord True, Lady Bloomfield, Lady Scott and Lady Penn. They have made invaluable contributions and helped to get this measure on the statute book. Thank you very much to all of them.

Throughout these debates, the enthusiasm for the common frameworks programme has been heartening. While discussions have been robust, as always, it is encouraging to hear unanimous support for the programme, which is a cornerstone of mutual co-operation between the Government and devolved Administrations. These amendments are the result of these discussions and underline the Government’s commitment to the programme. They make clear in the Bill the relationship between common frameworks and market access principles. I hope noble Lords will agree to support the Motion. I say to the noble Lord, Lord Fox, that some amendments go back to bring common frameworks into the Bill. I hope noble Lords will agree that this represents a positive conclusion to the work of your Lordships’ House on this Bill.

Madam Deputy Speaker (Dame Rosie Winterton)

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Before I call the Minister, I should tell right hon. and hon. Members that, as they will see, we have one hour for this debate and a fair number of speakers, so it is likely that I will have to put a time limit on Back-Bench speeches of about four minutes.

After Clause 10

Further exclusions from market access principles

The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)

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I beg to move,

That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

I am pleased that we continue to make positive progress on the Bill and that both Houses have continued to find agreement on a number of issues. In large part, this is due to colleagues from across both Houses continuing to have constructive and positive discussions with the Government. I want to put on record my thanks to colleagues on the Opposition Benches in this place, and the other place, in particular, for their engagement.

There are still a few outstanding areas, which have gone back and forth between the Houses, and I will outline the Government’s rationale for why we cannot accept the proposals as drafted. I will begin by speaking about the approach to exclusions taken by the Bill, which is a shared point across amendments 1F, 1G, 1H, 1J, 1K, 1L and 8M. I will then address the specifics of the common frameworks amendments and wider market access exclusions.

As I said last week, and as my noble friends Lord Callanan and Lord True said in the other place yesterday, the Government have been clear throughout these debates that we agree that there is a need for an exclusions regime. However, it has to be carefully drafted and provide certainty for business. In drafting the Bill, and clauses 10 and 17 specifically, the Government have designed an exclusions approach that achieves a careful balance. Both the noble and learned Lord Hope and Lord Stevenson have narrowed the scope of their amendments and I thank them both for their continued dialogue with the Government on those. Our assessment remains, however, that the approach in both sets of amendments goes too far both in the breadth of exclusions that it would require the Secretary of State to create and the uncertainty that it would lead to. These amendments would be detrimental to the clarity, simplicity and certainty that the Bill intends to provide.

Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)

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My reading of these amendments is that they are extremely watered down from what we would want. They essentially still give the Westminster Government a veto over the ability of the devolved Governments to legislate within devolved competency, so these are very meagre proposals. In refusing to accept even these proposals, is not the true nature of the Bill revealing itself? It is the British Government’s intention to use the Bill to impose uniformity over Wales and Scotland.

Paul Scully

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The purpose of the Bill has been from the start and remains to give businesses certainty as we leave the transition phase—to have one single internal market.

Alan Brown (Kilmarnock and Loudoun) (SNP)

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The Minister spoke about certainty for business. Can he give an example of something that he thinks would fall in these exclusions that would cause widespread panic in businesses in the UK?

Paul Scully

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The hon. Gentleman needs to speak to Scottish businesses more to see that they are concerned. They want to have the Bill in place to have the certainty, with 17 days to go until the end of the transition phase.

It is important to reiterate that the common frameworks are processes, not outcomes, and therefore broad exclusions are not suitable in this legislation. That leads me to amendments 1F, 1G, 1H, 1J, 1K and 1L. The common frameworks programme facilitates a conversation about a common approach and thus provides for consensus-based decision making in sectoral areas of the economy. However, it is neither the purpose nor in the purview of common frameworks to determine whether matters should or should not be in the scope of the market access principles. It is only right that the UK Parliament and parliamentarians from across the UK have the final say on this matter.

The Government also believe that the system that they have designed creates a proper balance between the independent operation of devolved powers and the automatic application of the principles that protect the market and give certainty.

Sir William Cash (Stone) (Con)

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My hon. Friend has quite properly said that it is a matter for Parliament to make these judgments. As Chair of the European Scrutiny Committee, I had hoped that the Chancellor of the Duchy of Lancaster would come before my Committee. The Standing Orders quite clearly give us the right to examine questions relating to matters that are politically or legally important, and to report to Parliament accordingly. The problem that we have is that he has declined to do so three times in response to our written requests, and now this morning I have heard that he is not going to appear before the Committee. Would the Minister be kind enough to take that back where it belongs?

Paul Scully

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I am sure that my right hon. Friend the Chancellor of the Duchy of Lancaster will have heard the message from the Chair of the Committee and his clear steer. It has been said many times in this House and in the other place, but it is worth stating again the Government’s commitment to the common frameworks programme. We attach enormous value to the forums that they provide for collaborative working with the devolved Administrations.

Pete Wishart (Perth and North Perthshire) (SNP)

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The Minister talks about consensus and involving the devolved Administrations. This is the opposite of consensus and agreement; it is imposition and constraint. These Lords amendments were his last chance to get this right. He has failed to do so. Will he now impose his will on the devolved Assemblies of the United Kingdom and force this Bill through the House?

Paul Scully

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I am glad that the hon. Gentleman thinks that I can force my will through both this House and the other place. What we have done throughout is to seek to collaborate. We continue to seek to collaborate on both the common frameworks and the internal market as we move forward. I hope that the Scottish Government will come with us on that journey, but the common frameworks process is just that—a process for agreeing and managing policy divergence in a variety of specific policy areas. As such, the programme is primarily concerned with ways of working, rather than determining policy outcomes.

The common frameworks programme will put in place durable arrangements for the intergovernmental working between the Government and the devolved Administrations in the policy areas covered by individual common frameworks. Those clearly defined ways of working will lend themselves to the common frameworks programme, and the individual common frameworks of which it is comprised are being considered as part of the business as usual discussions that will take place in our future intergovernmental relations infrastructure, and will benefit accordingly. Our intention is that these mechanisms for sector-specific co-operation will allow for coherent policy making between the UK Government and the devolved Administrations in those policy areas. I therefore ask the House to disagree with amendments 1F, 1G, 1H, 1J, 1K and 1L, and to vote instead to provide certainty for businesses.

Amendment 8M would cut across the Government’s objectives, and leave businesses exposed to new burdens and barriers. Despite a reduced list of aims, very broad areas of public policy could be excluded from the market access principles. Alongside the problems posed by the areas suggested for exclusion, there is a more fundamental issue with the approach taken. To be excluded under the approach proposed in the amendment, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have a tangential relationship to a social policy objective to be taken out of scope. The amendment would also lead to uncertainty as to when the market access principles apply, not least by a very unusual use of the term “proportionate”. It would fall to the courts to determine the relative extent to which different policies meet one of the aims, with no consideration of the burdens introduced. This will not deliver the certainty that business needs.

In addition, I want to stress one point that I feel has sometimes been overlooked. Market access principles do not prevent the devolved Administrations from introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. They can do so in the context of mutual recognition, which is necessary to protect the free flow of goods around the UK. Without this, we would see a decrease in consumer choice, increased prices and additional costs for businesses. I do not believe that anyone in either House would support such an outcome, nor is it in the interests of business or our constituents. I have constantly heard claims in this House and the other place that the Bill would prevent charges on single-use plastics in Wales, for example. That is categorically not true, as the Government have repeatedly made clear across both Houses.

Manner of sales policies, which have typically been the most innovative types of policies, will not be impacted by the market access principles, as long as they do not discriminate and are not designed artificially to circumvent mutual recognition. This covers innovative policies such as plastic bag charging and minimum unit alcohol pricing. The Bill is also clear that the devolved Administrations would no longer need to notify and justify new measures to the EU Commission when they want to innovate and try new policies. What they will not be able to do is erect harmful and unwanted trade barriers between other parts of the UK. I therefore call on the House to support the Government and disagree with amendment 8M.

I end by saying that the other place, as is their right as a revising Chamber, asked the Government and the House to reflect on their approach. The Government have carefully considered the arguments put forward by hon. Members, right hon. Members and Lords across both Houses, and we have come to agreement on reasonable proposals in some areas. However, the Government cannot agree to these amendments as they stand.

I appreciate the constructive approach that peers in the other place have taken in discussions with Government, and we will continue to engage and find common ground. However, I am afraid that these amendments as drafted still do not provide the certainty that businesses need. I therefore call upon the House to support the Government and provide the clarity that our businesses need and, ultimately, preserve the UK internal market, which has been the engine of growth and prosperity for centuries.

Lucy Powell (Manchester Central) (Lab/Co-op)

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I rise to uphold the Lords amendments that we are discussing today. It is a pleasure to be back at the Dispatch Box, given that I have been cooped up at home self-isolating, having been pinged. I was not pinged as part of this ping-pong though; I was in fact pinged by the coronavirus app, so I was not here last week. I put on record my thanks to my boss, my right hon. Friend the Member for Doncaster North (Edward Miliband), who deputised for me on these occasions last week—and did so incredibly well, I hasten to add.

As ever, my right hon. Friend made a strong case against the Government’s United Kingdom Internal Market Bill, which has been poorly drafted from the outset. Without the Lords amendments we are debating today, the Bill poses a real threat to the future of our United Kingdom. Even though I was not here last week, it does feel a bit like we have been in suspended animation with this Bill. I appreciate there have been welcome changes in the meantime as a result of the Government dropping part 5, but it still, I am afraid, feels a bit like groundhog day. Here we are, yet again asking where the oven-ready deal is for Brexit. We are still asking the same questions on market access principles. We are still seeking the same recognition in the Bill of the devolution settlement through the common frameworks process. As with every other groundhog day where we have been debating this Bill, we will soon be hearing from the hon. Member for Stone (Sir William Cash).

Liz Saville Roberts (Dwyfor Meirionnydd) (PC)

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I am sure that the shadow Minister agrees that the Bill is a disaster for devolution, but let us just focus on financial powers and state aids, because Labour abstained on those amendments in the Lords yesterday, despite there being no meaningful safeguards in the Bill. How does she explain why her party in the other place saw fit to throw the Labour Welsh Government under the proverbial Tory bus, rather than seek even minimum safeguards to devolved powers in these areas?

Lucy Powell

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I disagree with the point that the right hon. Lady makes. We have been making the weather on the Bill, both in this place and the other place, which I will come on to discuss. We have been seeking safeguards for consent from the devolved Administrations when it comes to financial assistance powers. Now that we are trapped in groundhog day, perhaps today and tomorrow will be the moment when the Government listen and take on board some of the amendments from the other place.

Sir William Cash

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The question of state aids very much lies at the heart of much of these debates. Does the hon. Lady accept that the EU state aid rules are a racket? I know very well the areas around Sheffield, Yorkshire and the midlands, where the coal and steel communities were destroyed, effectively, by the application and the discrimination that was made against—[Interruption.] And in Scotland. Does she accept that is why we need our own sovereign state aid rules, as I said yesterday on the Floor of the House?

Lucy Powell

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It would be really nice if the Government used the powers that they already have, let alone those that it will soon acquire, to invest once and for all in British industry and British manufacturing. I am afraid that the Conservative Government do not have a great record when it comes to supporting our industrial heartlands, and that is plain for everyone to see.

I hope the Government will take on board the amendments from the other place, especially those in the name of Lord Hope and Lord Stevenson,  which have received clear support on each occasion.

In normal times it would be Christmas party season—I am sure we will debate that again at some point—but the Government’s hokey-cokey on the Bill really needs to end. We had part 5 in; now we have part 5 out. We were told the Bill would create a thriving internal market that would strengthen the Union and keep Scotland in, yet the reality is that it could lead to Scotland being out—something that Members on both sides of the House do not want to happen. The Government have been shaking it all about with the legislative games they have been playing in respect of the Bill, and I am not sure that has been good for anybody. I really hope that we can now see the end to some of these shenanigans.

On the amendments, I will not rehearse the arguments: we have heard them put eloquently by their lordships and Members of this House on previous occasions. [Interruption.] Sorry, did somebody want to intervene? Or is the hon. and learned Member for Edinburgh South West (Joanna Cherry) just trying to sledge me from behind? Just the usual.

Joanna Cherry (Edinburgh South West) (SNP)

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Will the hon. Lady give way?

Lucy Powell

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Yes, I will give way, if the hon. and learned Lady has something she wants to say.

Joanna Cherry

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I have got something useful to say: why did the Labour party abstain on the amendment in the House of Lords that would have re-reserved state aid? Devolution is Labour’s baby—it was the late Donald Dewar who devolved state aid—so why did her party abstain on that? I think the people of Scotland would like an answer.

Lucy Powell

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We have worked incredibly hard to maintain the devolution settlement through the Bill; that is not something that the hon. and learned Lady’s party want to do. The SNP wants to use measures in the Bill to break up the Union and seek independence in Scotland. That is not something that we agree with. We have tabled amendments and voted on them to ensure that the devolution settlement in this country is respected, and I hope that the Government will continue to talk to us about that.

We welcome the Government concessions so far and are hopeful that with some more good will we can get some more recognition of common frameworks in the Bill in these late stages of ping-pong. The Lords amendments to strengthen the common-frameworks approach and fair access to the market are good ones that we will vote to uphold today. I am grateful to Ministers and Lords colleagues, especially Lord Hope and others, for their continued engagement on this issue, because there is a lot of agreement between us. Ministers are rightly proud of the common frameworks process, which has brought about a number of areas of agreement on standards and market access because it involves the Government working with the devolved Administrations. It is an approach that both Front-Bench teams agree on.

We also agree—unlike the SNP—that the UK Parliament should be the ultimate arbiter of the internal market, and we agree that no one nation should be able to frustrate that process, that all must act in good faith before the UK Parliament intervenes, and that safeguards should be in place to make sure that that is the case. It really feels to me like the Government could move further on this issue, because there is a huge amount of common ground. We need to see in the Bill a recognition of the common frameworks process and the devolution settlement that it represents, which is why I hope and expect that in returning the Bill to the other place today, the Government will introduce some final amendments along those lines. If they do so, they could receive broad support. It did not need to take quite so many iterations and pleas from both Houses, had the Government not taken such a hostile, blunderbuss approach with the Bill in the first place.

Jonathan Edwards

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Will the hon. Lady give way?

Lucy Powell

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No, I am afraid I will not; I am finishing.

I sincerely hope that the Government will reflect on that approach in future.

Sir William Cash

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I have already made my point about the European Scrutiny Committee. I would now like to turn quickly to the issues that face us in these negotiations, because what is going on in the Bill is mirrored by the negotiations. We have not yet had a draft treaty text in black and white. We need to see it. We wish the negotiators well. As far as I am concerned, along with my colleagues who support my propositions, it is essential that we get this right, because it is about our national interests and the future of this country.

Sammy Wilson (East Antrim) (DUP)

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I am glad that the hon. Member has highlighted the role that the EU would have in state aid, not only in Northern Ireland but in Scotland, Wales and England where those firms have any connection with Northern Ireland. Does he therefore find it surprising that, while Opposition parties have been complaining about state aid rules not being devolved to them, they are quite happy to have the EU plunder through any support given to industries in their own country?

Sir William Cash

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They do not have a clue. They are going to get clobbered—they really will—and they do not get it. They just want to go on about devolution without regard to the effect that all this will have. I entirely agree with the right hon. Gentleman.

The Bill itself defines aid with reference to EU law—it refers to article 107 of the treaty on the functioning of the European Union. This is something that we will be affected by, because that amendment is not sufficient to enable us to maintain our sovereignty on all the matters relating to state aid rules. I look to the Prime Minister, I look to the Chancellor of the Duchy of Lancaster, and I look to the Government and the negotiators to get this right. This is the moment to do it. We are at a crucial moment. I trust the Prime Minister. I believe he will deliver. He said he will, and we will hold him to that promise.

It would go against UK national interest to accept EU demands of agreeing to legally binding commitments to mirror the EU state aid regime, given that EU state aid rules are created on the basis of objectives of common interest of EU member states, which no longer includes the UK, and are tested by the Commission on the basis of compatibility criteria that it has developed. They are non-binding guidelines, and therefore they can be changed at will. Under article 132 of the protocol and article 174 of the withdrawal agreement, provisions of the withdrawal agreement and the protocol referring to EU law or to EU law concepts or provisions are to be

“interpreted in conformity with the relevant case law of the Court of Justice of the European Union.”

That duty continues beyond the end of the transition period on 31 December and includes European case law handed down after the end of that period.

There is a real problem here. This is down to the negotiators as well as to those who are responsible for this Bill. We are faced with a very difficult situation, which impinges on our sovereignty and on our necessity to avoid, indeed to prevent, EU state aid rules from continuing to apply to the United Kingdom. This is a crucial moment in our economic, political and constitutional history. We must maintain the sovereignty of the United Kingdom. That is the message that I send to the Government and I trust that the Government and the Prime Minister will deliver it.

Madam Deputy Speaker (Dame Rosie Winterton)

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This is what is going to happen. This debate has to finish at 3.10. I want to bring in the Minister at 3.06 to wind up. A lot of hon. and right hon. Members have been sitting in the Chamber from the beginning of the debate. If others come in and intervene, it does take time from those who have been trying to participate and have put their names down to participate. Before I bring in the SNP spokesperson, I have to say that I will now have to reduce the time limit to three minutes and, with that, I still may not get everybody in, so if colleagues want to take fewer than three minutes, I am sure that it would be appreciated by others.

Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)

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Thank you, Madam Deputy Speaker. I will do my utmost to whizz through what I can here.

We welcome the Lords amendments seeking to protect both the devolved settlements and the policy divergence across the nations of the UK, but we also know that the Prime Minister and his Tory Government simply detest devolution. All pretence otherwise has been swept away by this Bill, as it puts into action the casual contempt that they have.

The Prime Minister, as we know, believes that devolution is a disaster. Well, we think the same about him. Last night, however, in the Lords, Labour opened the door for the Tories, as they hollowed out devolution, withdrawing support for Lord Thomas’s amendments that challenged the UK Government’s clauses on direct spending in devolved areas. Equally disappointing was Labour’s abstention on the vote for the amendment of Baroness Llandaff to halt the brazen power grab on re-reserving state aid. This is not currently reserved. It is not listed in the reserved powers under schedule 5 to the Scotland Act 1998. It is a devolved power being grabbed back, along with the measures in this Bill in place to overrule decisions taken in Scotland.

I have been quoting absolutely committed Unionists in the other place throughout this debate, and I am grateful to be able to quote them again today. Lord Thomas said:

“The power to control state aid is not reserved. If it were, these amendments would be unnecessary…I ask why the UK Government would not work together with them, consult them before the Bill was produced and try to find a common solution…I fear it is an example of Westminster saying that it knows best, rather than working with the devolved Administrations.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1486.]

But once again, the Labour Front-Bench team took weak words from the Government as assurances and chose to abstain on that important measure.

Lord Stevenson’s amendment alters schedule 1 so that environmental standards and public health are exempt from market access principles. He warned the UK Government not to make

“the market access principles, which operate automatically, too narrow and too prescriptive. That would fatally undermine the opportunities for devolved Administrations to diverge”.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1457.]

Baroness Bennett highlighted that much leadership on climate change has actually originated from the devolved Governments. Lord Hope explained that his amendments seek to ensure that the UK Government’s commitment to market access principles do not undermine the UK Government’s commitment on the common frameworks. On policy divergence, he warns:

“As the Bill stands, a measure that gives effect to an agreed decision to diverge can be ignored by traders bringing goods in from other areas. This undermines the opportunity to diverge, rendering it worthless and ineffective.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1446.]

Baroness Hayter of Kentish Town provided this summary:

“When the case for Brexit was all about ‘taking back control’, we failed to understand that the Government meant taking control to themselves, even over issues that were fully devolved.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1447.]

Time and again, across all the nations of the UK, across all parties and none, and across all the affected industries, trade bodies, academia and the legal profession, this Tory Government have been told that the Bill grabs power from devolution and places it here in Westminster. The Bill allows UK Ministers to control spending in devolved areas of economic development, infrastructure, cultural activities, regional development, education, water, power, gas, telecoms, railways, health, housing and justice. The people of Scotland did not vote for the Tories to make these decisions at Westminster. Madam Deputy Speaker, you are far too young to remember the last time the people of Scotland did that, although your grandparents might just have—but only just!

This Bill was born bad to the bone, setting to break international law and break devolution. The Government have been forced to drop some of it, but it remains an aberration and continues its assault on devolution, Scottish public services and public life. The Scottish public, unlike this Government, are listening and watching. They will choose their own path to protect their Parliament and democracy in the near future.

Wendy Chamberlain (North East Fife) (LD)

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So here we are again. I am glad that the Lords have continued to press their points on the common frameworks and the impact of the Bill on the devolved Administrations. The Lords seem to understand that the Bill poses a great threat to the devolution settlement, so I cannot understand why the Government do not even accept the damage that this Bill has caused in the devolved nations. We are told by the Minister that it is not a political Bill. It is almost laughable. I wish the Government would just be honest with us. If they want to have a debate about the merits of devolution, many Members, not just on this side of the House, would be willing to argue in its favour. The Minister would also do well to remember that it was not the Scottish National party that brought about devolution in Scotland in the first place.

A case in point of the Government’s failure to own up to the impact of this Bill on devolution can be seen with the amendments that have been brought by the Lords on the common frameworks. Last week, I raised the question of what the Bill was for, in situations where common frameworks were already in place. I again ask the Minister to address that question. There is a huge hole in the Government’s argument, and they have left that question unanswered. There is also a real question about the interaction of the Bill with any potential EU trade deal, and I urge the Minister to address this. If we reach agreement with the EU on regulatory standards, which I hope we do, what will become of those clauses of the Bill on standards and frameworks? Will they ever come into effect, or will they become obsolete, with future standards being the subject of regulatory alignment with the EU? If the answer is the latter, I hope the Government will reflect on what this has all been for, and whether it has been worth it.

The Bill had two main aspects. The first was the part that broke international law, which was removed last week. That part of the Bill has resulted in huge damage to our international standing. It was reported this weekend that the serious mistrust sown as a result of those clauses has been a significant barrier to getting the trade deal that the Government claim they want. It has caused huge disquiet among our allies, including President-elect Biden. All that, for clauses that will never even reach the statute book.

Then we have the parts of the Bill that impact the devolution settlement. Those clauses will reach the statute book, but if there is a deal, it is likely that they will have no practical effect. However, the damage has already been done. This has caused deep dismay to the people of Scotland, Wales and Northern Ireland and given those SNP Members sitting around me grist to their mill. Congratulations! This is what you might call a PR nightmare for the United Kingdom and for the Union. Although in many respects it is already too late, I urge the Minister to accept the Lords amendments and finally deliver some form of limited consensus on this Bill.

Deidre Brock (Edinburgh North and Leith) (SNP)

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Most of us here in the Chamber recognise that Brexit is an exercise in self-harm, and this Bill is an attempt to ensure that no one escapes that harm, no matter how sensible they are. No one will be safe from English Government decisions—and they will be English Government decisions because, as Professor Michael Keating notes in his excellent paper on the United Kingdom Internal Market Bill:

“In the UK, England has 85 per cent of the population so…it will be English standards, set by the UK Government, that prevail.”

So no one will be safe from the English Government’s decision to impose lower safety standards on food, electrical appliances or kids bikes, or on personal protective equipment for the NHS that has been produced by some ministerial crony with no experience in that field at all.

These Lords amendments, which are sadly ever-diminishing in strength, will none the less provide some small protections, because the Bill as it stands allows a Prime Minister sitting in Downing Street to casually cast aside the concerns of the Scots and the Welsh as he sells out safety for the sake of some second-rate trade deal. Consumer protection is being discarded by the scorched-earth shenanigans being pursued by this UK Government. Perhaps it is more fire sale than scorched earth, with the protections that consumers—our constituents—value so highly being sold so cheaply.

Farmers already know that their livelihoods are being thrown into the gutter by the abandonment of any pretence of protecting food standards. They know that England’s shift from farm subsidies for food production will adversely affect England’s farmers and indirectly threaten Scotland’s ability to support farmers. We all know that the courts will be busy with a procession of spivs seeking to remove protections so that they can make cash. What we can see will be disastrous; what we cannot yet see may be even worse.

The Governments of Scotland and Wales know that the Bill spells danger for the citizens of their countries. The Senedd and the Scottish Parliament have similarly made it clear that it is not acceptable; both Parliaments withheld legislative consent and made it clear that it will be damaging to them and to the people they serve.

Alan Brown

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The Lords have tried to improve the Bill, but it has been subject to only minor improvements. I wish that, during ping-pong, the Lords had done double insistence and brought down the whole rotten Bill. That is what is really needed—for it to go away and be brought back in a completely different form.

It is no wonder that the Government have been so pig-headed about rejecting these amendments. As we have heard, last night in the Lords, Labour—the self-styled party of devolution—gave up the key fundamentals and principles of devolution. It gave up on direct spending and on state aid, which drives a coach and horses through the whole devolution settlement. It gives Westminster carte blanche to do what it wants in Scotland and Wales, where there is a Welsh Labour Government. Labour has given up on its own Government in Wales.

When summing up in last night’s debate, Lord Thomas said that the one thing he was holding on to was the thought of

“the catastrophic result for our union if the Government did not adhere to the principles that have been explained”.—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1480.]

Basically, he hopes that the Tory Government will do the right thing. If not, that will bring down his precious Union. It seems that Labour is now relying on this right-wing Tory Government to do the right thing with the precious Union—good luck there.

On Lords amendment 1F, the Government have already refused to adhere to the common frameworks principle and enshrine that in the Bill as a way for the devolved nations to co-operate. The amendment massively waters down that principle, but it would prevent divergence on harmonised rules that have been agreed through the common frameworks. Why do the Government want to reject that? If there is agreement between the nations, and common frameworks with agreed rules and regulations, why do the Government reject that that is something to be protected? That tells us everything we need to know about what they think of devolution.

It has been said many times, but it is worth repeating. The Prime Minister has said:

“A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde.”

Who is kidding who if we think that this Tory Government, under that Prime Minister, are suddenly going to spend lots of money in Scotland and Wales for our benefit? It is a joke and it undermines their whole attitude to devolution.

On state aid and Lords amendment 8M, why do the Government want to reject protection of environmental standards and of public health? Why should those things be excluded from the simple protection of state aid? Again, that tells us all we need to know about what they think of devolution. What Lord Thomas says is going to happen: the Union will end.

Joanna Cherry

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I support the Lords amendments because they seek to protect the devolved settlements and also policy divergence across the United Kingdom. Lord Hope’s amendment attempts to salvage the common frameworks process and to prevent this UK Government from giving themselves the power to override policy divergence in devolved areas. As Lord Hope himself said:

“It was because of devolution that the common frameworks process, and the opportunity for policy divergence, was instituted with the encouragement of the UK Government in the first place. Their support for that process must involve support for policy divergence too.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1446.]

He is quite right. Lord Stevenson’s amendment exempts environmental standards and public health from market access principles. In so doing, it also seeks to protect policy divergence. As Baroness Bennett pointed out in the Lords, the smaller nations of the United Kingdom have often led the way on environmental policy divergence and it would be a shame if that was to stop.

I am speaking with a sense of weariness and inevitability because we have all been here before and we all know what is going to happen today. We know that these amendments will be defeated by a Tory majority that does not represent the political reality on the ground in Scotland, or indeed Wales. Once more, the Minister will get to his feet and mouth meaningless platitudes about speaking to the devolved Administrations. Scotland did not vote for Brexit. Scotland did vote for devolution. It is anti-democratic that Brexit is being used to undermine devolution, and it is happening in breach of all the promises that were made to no voters in 2014, including the infamous vow, which included a promise from all three parties that the Scottish Parliament, as well as getting extensive new powers, would have the final say on spending in all devolved matters.

It is therefore a really sad state of affairs that the official Opposition could not field a single Back Bencher to speak up for devolution today. I know that they only have one hon. Member in Scotland, but they are not always averse to putting forward MPs from other parts of these islands to opine on Scottish affairs. Their no-show here today is not surprising, though, given that their colleagues in the Lords sat on their hands yesterday with regard to amendments seeking to keep state aid a devolved matter and Lord Thomas’s amendment challenging the Government’s clauses on direct spending in devolved areas. This is happening in direct breach of the vow that the then leader of the Labour party signed. But Labour does not care. It is happy to wheel out Gordon Brown to talk about federalism when independence is riding high, but when it comes to defending the existing devolved settlement, it is missing in action. This is a shameful state of affairs, and it falls to the SNP to defend devolution. We are doomed to fail, but that will simply further reinforce the case for independence.

Stephen Flynn (Aberdeen South) (SNP)

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I have to start by expressing my deepest sympathies to the shadow Minister, the hon. Member for Manchester Central (Lucy Powell), who has had to come to the House to try to defend the completely and utterly indefensible. [Interruption.] She says that she does not need my sympathy—well, she is getting it anyway. The reality is that the Labour party has once again turned its back on voters in Scotland. Last night Labour had the opportunity to stand up for the Scottish Parliament, to stand up for devolution and to block direct spending by this UK Government on devolved matters, and it sat on its hands. That is why there is a not a single Labour Back Bencher here in the Chamber this afternoon.

But my sympathies do not stop there: they also extend to the Minister himself. He talks about business certainty—business certainty! Four and a half years after the Brexit vote, after three Prime Ministers and two general elections, it is 17 days to the end of the transition period and the Minister could not name, in any way, shape or form, what the trade status of the United Kingdom is going to be. I pity them all. This is why the people of Scotland will choose a different path in the very near future.

Let us look at the Bill as it stands in a little more detail. It remains—it utterly remains—a blatant attack on devolution. For me, that is extremely frustrating, because, like my hon. Friend the Member for Glasgow East (David Linden), I am young enough to have lived almost entirely under the Scottish Parliament. I do not remember a time when there was not a Scottish Parliament. It has been a positive, progressive force for Scotland that we are proud of. I am not going to come to this Chamber and let a party that has not won an election in Scotland since the 1950s dictate to the Scottish Parliament as to what will happen. It is a complete and utter shambles, and the Government should be utterly ashamed of that.

To finish, something that has been asked a lot in this Chamber—I have heard the shadow Scotland Office Minister say it as well—is, “Name a single power that is being grabbed. Name a single one”, but this is much bigger than that; this is a blatant, all-out attack on devolution itself. It seeks to undermine the very premise of devolution. To prove that very fact, The Press and Journal just four days ago said:

“The Secretary of State has been very clear he wants to deal direct with local authorities”—

not just going beyond the Scottish Parliament or the Convention of Scottish Local Authorities, but going straight to the local authorities themselves. That is absurd and a blatant attack on devolution, and we will not stand for it.

Tim Farron (Westmorland and Lonsdale) (LD)

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I am overwhelmed by a sense of déjà vu, with the Labour Front Bench getting more grief than the Treasury Front Bench, as back in the day. I am also overwhelmed with a sense of déjà vu because I feel a great sense of this Government being in the same place—in my heart, in my mind—as the European Commission once was. Back in the days when we were not little Britain, I remember feeling enormous frustration and anger with the European Commission when it would do stupid things, in particular with agriculture, playing into the hands of separatists who only wanted the end of our relationship with the European Union.

I feel exactly the same about this Government now playing into the hands of my friends and colleagues around me on the SNP Benches—to whom this is music to their ears—by undermining the Union and being cloth-eared in the process. The Minister has had every chance to accept Lords amendments and to do what he can to stand behind the integrity of the Union and of the devolution settlement.

I have another great concern. I mentioned agriculture a minute ago, and what is critical in the race to the bottom that is built into the Bill when it comes to standards of farming, animal welfare and the environment is something that is not restricted to the Bill alone; it is something that the Government are repeating in other areas of their approach. We have seen the failure of the Government to accept proposals from my party and others that the high standards of British animal welfare and our environmental standards should be written into all new trade deals, but those were refused at every turn—clearly preparing the way to sell out farmers in all corners of the United Kingdom at the first chance the Government get in any trade deal.

At the same time, although most of us in this House agree with the Government’s direction in terms of the English changes to farm payments—from basic payments to the environmental land management scheme—the plan has been to underfund the scheme and to bodge it, getting rid of the basic payments before the new payments are in place, therefore killing off English family farms, which are the unit that allows us to have high-quality animal welfare and environmental standards. All those things together paint a picture of a Government who have lost touch with the countryside and with agriculture, and are prepared to set out a range of policies—almost a manifesto, a catalogue, of attacks on British farming—that undermine our standards, animal welfare and the quality of our produce, and to sell our farmers down the river.

I am proud of the quality of British farming, throughout these islands, and I want the standards that are the highest in any nation to be the highest across all four. I would love the Government to learn from the mistakes of the European Commission—not to play into the hands of separatists, but to make sure that they defend our Union and the devolution settlement.

Alison Thewliss (Glasgow Central) (SNP)

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We are clear on the SNP Benches that Scotland does not want this Bill and that it overrides powers within the Scotland Act 1998. The explanatory notes state:

“The Bill’s provisions replace the existing limits on the effect of legislation made in exercise of devolved legislative or executive competence”.

The Bill is clear about taking new powers.

We know that divergence will not be tolerated, because it is not tolerated currently. In immigration policy, Scotland has been refused any degree of control. On the control and sale of fireworks, we have been ignored in our request to regulate fireworks. In the treatment of drug law, an area close to my heart and that of my constituents, despite crying out for years in the face of a drugs-death crisis—a crisis which last year saw 1,264 souls lost—the UK Government say that Scotland will not be permitted, not allowed, not trusted to take further action to prevent the deaths of our citizens. Scotland accepts responsibility in the areas where we can act, and we know we must do more, but we do it with our hands tied behind our back. I do not trust this Government to behave any differently when they grasp with grubby hands Scotland’s powers over economic development and infrastructure, such as our water supply, our transport, our health or our education. The only way to protect the powers of our own Parliament is for Scotland to vote for independence.

David Linden (Glasgow East) (SNP)

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It is an honour to follow my constituency neighbour, my hon. Friend the Member for Glasgow Central (Alison Thewliss). Like other hon. Members on the SNP Benches, I welcome the amendments from their lordships to try to protect the devolved settlements from policy divergence across the UK. However, it strikes me as a rather bizarre state of affairs that we are desperately relying on the unelected and democratically illegitimate House of Lords to defend devolution and democracy. That irony is not lost on me, but I will return to that just a little bit later.

I rise today to speak in favour of Lord Hope of Craighead’s amendment on the common framework; I remain enormously frustrated that the Government are opposing it in this House in order to protect their grubby power grab on the devolved legislatures. Of course, that should not come as a surprise to the House: not only did this British Tory Government campaign against devolution in 1997, but they actively loathe it even now, and make no attempt to hide that view.

We have a Prime Minister who told his Back Benchers that devolution was “a disaster” and that devolving power was Tony Blair’s “biggest mistake”, which will certainly come as a surprise to those of us who opposed the war in Iraq. However, it is not just the Prime Minister who holds that anti-devolution view; it runs all the way through this Bill. The Leader of the House and Lord President of the Council is also on record as saying that,

“constitutional tinkering has weakened our Parliament and has helped to divide the United Kingdom”—[Official Report, 26 November 2020; Vol. 684, c. 989.].

I would argue that the Government do not need much help with that, frankly.

We are where we are, and that is why I support the amendment to the Bill made by Lord Hope. We should not be surprised by the Tories’ anti-devolution rhetoric, but I must say I was surprised and disappointed to see the British Labour party withdraw its support for Lord Thomas’s amendment, which challenged clauses on direct spending in devolved areas. Perhaps it is a sign of just how out of touch the Labour party has become that Lord Stevenson, speaking for his party in the Lords last night, said that,

“the points made by the Minister on the shared prosperity fund were sufficient to ensure that we do not need to go back over this again. It is not our view, as Her Majesty’s loyal Opposition, that we need to divide the House on this issue again.”—[Official Report, House of Lords, 14 December 2020; Vol. 808, c. 1476.]

It is hard—really hard—to imagine a giant such as Donald Dewar, for example, uttering those words in Westminster, but they reaffirm my belief that this place and its two biggest parties cannot be trusted to protect our devolved institutions. Perhaps that is why, yesterday, we saw the 16th poll in a row showing majority support for Scottish independence. Alongside my colleagues this afternoon, I will vote for the amendments, but the only way to truly empower the Scottish Parliament is with independence, not with Lords amendments. Scottish independence is only a case of when, not if, and I suspect the Minister knows that too.

Paul Scully

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I am grateful for the forbearance of colleagues who have brought this debate to a relatively short end. I will not detain them for too long; I just want to thank everybody who has spoken today.

It is a shame that a number of the speeches veered from the amendments that we are considering today, but it was somewhat predictable. We are debating devolution, but in reality a number of hon. Members talked about independence, without using the word—I think in SNP bingo the word independence came up only once. The sentiment was that they are using this Bill to further their ambitions for independence, rather than concentrating on respecting the devolved Administrations through devolution and common frameworks.

We have before us today’s amendments, which the Lords considered and voted on, yet much of the debate was about yesterday’s amendments and an attack on the Labour party. I appreciate the opening words from the hon. Member for Manchester Central (Lucy Powell), that it is important that we keep on talking to get this important Bill through, so that we can give businesses certainty.

David Linden

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I do not want to intervene on this love-in of the Better Together alliance, but the Minister spoke earlier about using the United Kingdom Internal Market Bill to divide the United Kingdom. Actually, opinion polling has shown a clear trajectory in terms of Scottish independence—16 polls in a row. Why does he think that is?

Paul Scully

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I am not sure which amendment the hon. Gentleman is speaking to, but I note that the last poll was 52:48, which I am sure he will talk about; it seems to be a figure that keeps coming up.

Why do we need to give businesses certainty? This is not just about Northern Ireland, Wales and England; it is about Scottish business too. Some 60% of Scotland’s trade—more than £50 billion—is with the rest of the UK. Up to half a million jobs are dependent on that internal trade.

Drew Hendry

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On that statistic about Scotland’s exports, will the Minister concede that 62% of manufactured exports from Scotland go outwith the UK, to the EU and the rest of the world?

Paul Scully

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That refers to the 144,000 jobs, as I am sure the hon. Gentleman would say, which were considered by the same institute that came up with the half a million jobs dependent on internal trade. He talks about the manufacturing trade; that is why we are better together as a United Kingdom. We have the whole gamut of skills, whether it is in manufacturing, services, culture, financial services or legal services—all those areas that we can provide as the UK which will make us a force to be reckoned with as we come out as one global Britain, with the opportunities that we will afford ourselves, in 17 days’ time.

Liz Saville Roberts

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Will the Minister give way?

Paul Scully

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I will not, because I need to bring my remarks to a close.

The Government will continue to be reasonable in discussions on the Bill. We have made great progress so far in both Houses on finding areas of agreement—on what brings us together as one UK as we look to leave. I appreciate the constructive approach that peers in the other place have taken in discussions with the Government. We will continue to engage and to find that common ground, but we assess at the moment that the amendments proposed by the other place continue to go too far and run counter to the certainty that the Bill provides and that businesses need.

As we have made clear before, this Bill is vital in preserving our internal market and continuing to provide certainty for businesses as we seek to recover from covid-19, prepare for the opportunities after the transition period and protect jobs. I therefore call on the House to support the Government’s motion.

Question put, That this House disagrees with Lords amendments 1F, 1G, 1H, 1K, 1L and 8M.

Madam Deputy Speaker (Dame Rosie Winterton)

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In order to observe social distancing, the Reasons Committee will meet in Committee Room 12.

In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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My Lords, hybrid proceedings will now resume. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.

These proceedings will follow guidance issued by the Procedure and Privileges Committee. When there are no counterpropositions, the only speakers are those listed, who may be in the Chamber or remote, and the Minister’s Motion may not be opposed. When there are counterpropositions, any Member in the Chamber may speak, subject to the usual seating arrangements and capacity of the Chamber. Any intending to do so should email the clerk or indicate when asked. Members not intending to speak on a group should make room for Members who do. All speakers will be called by the Chair. Short questions of elucidation after the Minister’s response are permitted but discouraged. A Member wishing to ask such a question, including Members in the Chamber, must email the clerk. The groupings are binding. Leave should be given to withdraw.

When putting the Question, I will collect voices in the Chamber only. Where there is no counterproposition, the Minister’s Motion may not be opposed. A participant, whether present or remote, who might wish to press a proposition other than the lead counterproposition to a Division must give notice to the Chair either in the debate or by emailing the clerk. If a Member taking part remotely wants their voice accounted for in the Question, if put, they must make this clear when speaking on the group. Lords following proceedings remotely but not speaking may submit their voice, Content or Not Content, to the collection of the voices by emailing the clerk during the debate. Members cannot vote by email—the way to vote will be via the remote voting system.

Motion A

Lord True

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That this House do not insist on its Amendments 1B, 1C and 1D to which the Commons have disagreed for their Reason 1E.

1E: Because the Lords Amendments will create legal uncertainty, which would be disruptive to business.

The Minister of State, Cabinet Office (Lord True) (Con)

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My Lords, I will address Amendments 1F, 1G, 1H, 1J, 1K and 1L. Last week, the other place was clear in its disagreement with Amendments 1B, 1C and 1D when it removed them from this Bill.

I appreciate the ongoing contributions of noble Lords to these debates on the interactions between the market access principles and common frameworks. I very much welcome the constructive engagement we have had on this issue since last Wednesday. In particular, I thank the noble and learned Lord, Lord Hope, for his continued contribution and for his willingness to engage in ongoing dialogue on his amendments, which he has tabled in lieu.

There have also been constructive conversations with the Labour Front Bench over the past week, for which I am grateful. I look forward to continuing discussions with the noble Baroness opposite and the noble Lord, Lord Stevenson of Balmacara, in seeking to bridge the gap between our two positions. I should also express my appreciation of the helpful contributions and advice from my noble and learned friend Lord Mackay of Clashfern.

As I said in the House last week, the previous amendments from the noble and learned Lord, Lord Hope, would have created a broad regime of exclusions from the market access principles, which would have denied businesses and consumers much-needed clarity regarding the terms of trade within which they operate. The Government have been clear throughout these debates that we agree on the need for an exclusions regime, but one that is carefully drafted and provides certainty for business. In drafting the Bill, specifically Clauses 10 and 17, the Government have designed an exclusions approach that achieves a careful balance.

I understand the aim of the noble and learned Lord’s revision to his amendment, which is to further specify the interaction between divergence agreed under common frameworks and exclusions to the market access principles. However, our assessment remains that the approach in these amendments goes too far in both the breadth of the exclusions it may require the Secretary of State to create and the uncertainty it could lead to. This runs counter to the certainty that the Bill is designed to provide.

To further emphasise the Government’s position, I will take the opportunity to clarify some of the points noble Lords raised during our debate last week. The noble and learned Lord, Lord Hope of Craighead, expressed concern that traders may need to consider relevant regulations in different parts of the United Kingdom. I reiterate that the mutual recognition principle provides reassurance for traders, in that as long as they comply with local relevant requirements they do not need to worry about those other parts. This is the advantage of our proposed approach: we have carefully created an architecture that means that a trader will have clarity regarding the rules they should follow. As I have said before, the uncertainty introduced by the wholesale exclusions from the market access principles afforded by the amendment should not be supported by the House.

The common frameworks process will encourage a conversation about a common approach and so provide for consensus-based decision-making in sectoral areas of the economy. However, the Government believe that common frameworks on their own cannot determine where matters should or should not be in scope of the market access principles. That is a job for the UK Parliament and for MPs from the whole of the United Kingdom.

The Government also believe that the system they have designed should create a proper balance between the independent operation of devolved powers and the automatic application of the principles that protect the market and give certainty. The Government have been clear in Parliament about our commitment to the common frameworks programme, which I repeat today, and the value we attach to the fora that common frameworks provide for collaborative working with the devolved Administrations. As noble Lords are aware, the common frameworks programme provides an avenue for discussing ways of working and as such is primarily concerned with processes rather than determining specific policy outcomes.

The programme aims to put in place durable arrangements for intergovernmental working between the Government and the devolved Administrations, and our intention remains that these mechanisms for co-operation on specific policy areas will allow for coherent policy-making between the UK Government and the devolved Administrations in those policy areas. For this reason, we think that the common frameworks programme is complementary to the mechanisms set out in the Bill, and I respectfully suggest again that the approach put forward in the amendments is contrary to the Government’s responsibility to provide businesses with the certainty they need to operate across the United Kingdom. I repeat my gratitude to other noble Lords for the constructive conversations that have been taking place.

Motion A1 (as an amendment to Motion A)

Lord Hope of Craighead

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At end insert “but do propose Amendments 1F, 1G, 1H, 1J, 1K and 1L in lieu—

1F: Clause 10, page 7, line 23, at end insert—

“( ) The Secretary of State must by regulations under subsection (2) exclude the application of the United Kingdom market access principles to a statutory provision or requirement that gives effect to a decision to diverge from harmonised rules that has been agreed through the common frameworks process.”

1G: Clause 15, page 9, line 27, at end insert—

“( ) “Common frameworks process” means the process, established by the Joint Committee on European Negotiations, by which a measure of regulatory consistency to enable a functioning internal market within the United Kingdom may be mutually agreed between the United Kingdom and the devolved governments.”

1H: Clause 17, page 12, line 42, at end insert—

“( ) The Secretary of State must by regulations under subsection (2) add the services referred to in a statutory provision or requirement that gives effect to a decision to diverge from harmonised rules that has been agreed through the common frameworks process to the authorisation requirements in Part 3 of Schedule 2 or the list of regulatory requirements, as the case may be, to which section 18 (mutual recognition) or sections 19 and 20 (non-discrimination) do not apply.”

1J: Clause 21, page 14, line 35, at end insert—

“common frameworks process” means the process, established by the Joint Committee on European Negotiations, by which a measure of regulatory consistency to enable a functioning internal market within the United Kingdom may be mutually agreed between the United Kingdom and the devolved governments;”

1K: Clause 25, page 19, line 24, at end insert—

“( ) The Secretary of State must by regulations subject to the affirmative resolution procedure exclude the application of section 22(2) to a provision which has been agreed through the common frameworks process.”

1L: Clause 27, page 21, line 19, at end insert—

“common frameworks process” means the process, established by the Joint Committee on European Negotiations, by which a measure of regulatory consistency to enable a functioning internal market within the United Kingdom may be mutually agreed between the United Kingdom and the devolved governments;”

Lord Hope of Craighead (CB) [V]

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My Lords, in moving Motion A1, I shall speak to Amendments A1F to A1L in my name.

I am grateful to the Minister in the other place, Chloe Smith, and her Bill team, for taking time to discuss the common frameworks issue with me last Thursday. I am also grateful to the Minister for taking time on a busy day to attend that meeting, and for his very helpful introduction to this debate. As a result of that meeting, both sides now have a much better understanding of the issues that divide us. We are much closer to a solution, but we are not quite there yet, which is why I have tabled these amendments in lieu, and why I will be seeking the opinion of the House on them at the end of this debate, so that we can continue this discussion.

These amendments I now offer to the House contain two very significant changes from those disagreed to by the other place. First, I have removed a provision designed to protect the common frameworks process while it was in progress. It was objected to as it would have created delays and legal uncertainty. I recognise that it was not in the interests of the internal market, so it has gone. There should be absolutely no misunderstanding about that. Secondly, I have changed my approach to the way in which the common frameworks issue should be fitted in to the Bill, now seeking to use mechanisms already in the Bill to achieve that result. Their purpose is twofold: to cure the inconsistency between the Government’s support for the common frameworks on the one hand and its promotion of the market access principles on the other—which does not fit in with the Minister’s word “complementary” a moment ago—and to provide certainty so that everyone will know what the measure that needs protection is and why it is there.

One of the principles agreed between all four nations when the common frameworks process was set up in 2017 was that, as the devolution settlement required, it allowed for policy divergence where this was within devolved competence. However, a decision to diverge will be agreed under that process only if all the parties to it, including the UK Government, are satisfied after careful examination and assessment of its nature and effect that the decision will not create a barrier to trade across the UK. The Bill’s market access principles, on the other hand, operate automatically. As the Bill stands, a measure that gives effect to an agreed decision to diverge can be ignored by traders bringing goods in from other areas. This undermines the opportunity to diverge, rendering it worthless and ineffective. With reference to the Minister’s comment on what I was saying about uncertainty last time, my concern is not with traders bringing goods in across borders; they have the protection of the market access principles and their position is plain. My concern is with traders doing business within their own areas, having to decide what articles they could properly and safely put for sale on their shelves. That is no kind of answer.

The effect of the amendments is that the Secretary of State will be required by regulations to direct that the market access principles will not apply to a measure of the kind I have described. The UK Government will therefore be involved at every stage of the process. I stress that the decision cannot be put into effect unless the UK Government have agreed to it, and it is only the UK Government, through the Secretary of State, who can give it the immunity it needs.

I emphasise once again that my intention is not to create barriers. It is about allowing for policy divergence in ways found by this process to be consistent with the internal market. I hope that those noble Lords who have drawn on their long experience of what makes businesses work, which this House values so much during our debates, are reassured on that point. At heart this is an issue about devolution. It was because of devolution that the common frameworks process, and the opportunity for policy divergence, was instituted with the encouragement of the UK Government in the first place. Their support for that process must involve support for policy divergence too.

As we continue our discussions, it may be suggested that what I am looking for could be met by assurances, but we are dealing here with arrangements designed to last for a long time. They need to bind future Governments as well as this one. That is why they must be in the Bill. The process of refining my proposals has been rather like opening a Christmas present buried within layer after layer of paper. Eventually it is revealed, smaller that the wrapping led one to expect, and one wonders why it took so much paper. I am afraid it has taken me some time to reduce my proposals to their essentials, but that is where I am now. I beg to move.

Lord Fox (LD)

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My Lords, I thank the Minister for clearly setting out his objections to the last set of amendments. In his closing words he said that the Government view the common frameworks process as complementary to the market access principles. Listening to the noble and learned Lord, Lord Hope, it was very clear that there is a discontinuity—a lack of complementariness—between the two positions. As the noble and learned Lord set out, a central feature of the framework agreement is to come to an agreed process for divergence between the four nations, within which the UK has a major role. That divergence is killed off by the automatic nature of the market access principles. That is the central point that the noble and learned Lord’s amendments address. In doing so, the new versions of the amendments have taken on board the comments that have come back from the other place, having recognised the level of uncertainty that could have been injected by a previous proposed new clause, which has now been removed. The amendments adopt the regulations within the Bill to facilitate that decision, so that it is consistent with the way that the Bill seeks to operate, but also consistent with the principles of devolution that have served this country so well to date.

Baroness Hayter of Kentish Town (Lab)

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My Lords, perhaps we need to remember why we are here. It is really quite simple. When the case for Brexit was all about “taking back control”, we failed to understand that the Government meant taking control to themselves, even over issues that were fully devolved. However, when the Bill was published—without any involvement from the devolved authorities, remember—we soon discovered that it ran roughshod over devolved competences, as the noble Lord, Lord Fox, said, trumping the common frameworks programme.

I have often wondered whether this was deliberate or an oversight, though the lack of prior consultation suggests the former. However, that makes the statement on the publication of the Bill, on 9 September, signed by the Scottish Secretary but not the Welsh Secretary, and by Mr Sharma and Mr Gove, a bit strange in the light of this Bill. It says that the devolved Administrations will enjoy a “power surge” when the transition period ends.

Let us take that at face value. Perhaps the particular construction of the Bill was clumsy—as an oversight rather than deliberate—and perhaps it is right that the Government did not intend to bring back to themselves all the powers long devolved to the other three authorities, but in that case the amendments tabled by the noble and learned Lord, Lord Hope, would rectify the problem. They would simply restrict the market access powers in the Bill, which of course are only about devolved competences, to those where the four-party process failed to reach agreement.

As the Government are one of those four parties, they will be in a very strong position to revert to the Bill, and to Parliament, for the powers they feel are vital for an internal market on areas where disagreement cannot be overcome. That seems, to this side of the House, a simple, clean solution. It would hard-wire in a common frameworks process which the Government themselves described last week in the latest of their three-monthly reports on the frameworks—reports which, I think, we added to Schedule 3 to the EU withdrawal Bill as a requirement for the Government to publish—as

“an agreed approach to ensuring regulatory coherence”

in devolved areas. That is absolutely spot on—coherence, not uniformity—and that is probably where we are trying to get to. The problem is that, as written, the Bill adopts “uniformity”.

The same document, which has just been published, despite having talked about coherence, then asserts:

“Common Frameworks cannot guarantee the integrity of the entire UK Internal Market.”

However, the document does not provide any evidence of why the frameworks will not work. It gives no examples of where, within devolved competences, any agreements might not work. Indeed, the Minister, in introducing the debate, again asserted that it would have to be for Parliament alone to decide when the market access rules would not be used, but he did not explain why the four-party process would not be able to deal with that and why they would come to Parliament only when there was a failure to agree. The same document notes the “freezing power” contained in the withdrawal Act, and it also notes that it has never needed to be used, but it fails to suggest where it might be needed.

Therefore, in the Bill the Government are saying that on the one hand the frameworks are very good and have been able to produce coherence but, on the other hand, the Bill allows the market access principles to trump that process, even if it produces agreement.

We have it said before and I say it again: we on this side of the House want an internal market which thrives and serves the needs of business, the professions, consumers and the environment, but it has to be one that respects rather than dismantles devolution. These amendments seem to us to offer the path to achieve that, so we will support the noble and learned Lord when, as I am sure he will do, he asks the House to vote. I hope that in the light of that vote we can, as the Minister suggested, continue the dialogue so that we can reach an agreed position that would safeguard all that has been going on with the devolution settlements and the common frameworks process but, in the last analysis, would of course come back here.

Lord True (Con)

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My Lords, once again, I am very grateful to those who have contributed to the debate. Although the cast is smaller, I know that the interest is no less great. The sense of respect for the devolved institutions, which has gone right across your Lordships’ debates on the Bill, is important and shared by all of us, however we view the question raised in the amendments.

I also thank all those who have participated in the ongoing dialogue outside your Lordships’ House on this matter. Naturally, I will shortly seek to persuade your Lordships not to support the noble and learned Lord’s Motion for the reasons I have given, but the strength of feeling expressed in this House and in the other place is testament to the important role that common frameworks play in intergovernmental working and this country’s future outside the European Union, and indeed within the overall structure of intergovernmental relations within the United Kingdom.

The Government are committed to working with the devolved Administrations to deliver these agreements to the benefit of people from all four corners of the United Kingdom, and we welcome the strong support that has been shown for common frameworks by both Houses, not least by the noble and learned Lord, Lord Hope of Craighead, in his noble efforts to unwrap a Christmas parcel. I am sure that the jewel of mutual respect is there, whatever the outcome of the debates on this question.

Common frameworks allow the Government and the devolved Administrations to engage in meaningful dialogue about how all parts of the country can benefit from the new powers flowing from the European Union. I say to the noble Baroness opposite that they are flowing from the European Union. However, common frameworks are primarily concerned with processes rather than determining specific policy outcomes, and as such they do not obviate the need for the market access principles in these areas. I believe it is common ground across this Chamber that it is for the United Kingdom Parliament and its Members from all four nations to have a role in safeguarding a market across all parts of the United Kingdom.

Common frameworks are not intended to be an all-encompassing solution to the maintenance of that internal market. The Government’s belief is that additional legislative protection provided by this Bill will provide certainty for the status quo of internal UK trade. Broad disapplication of elements of the Bill risks removing that certainty, which is needed for business and citizens in all four parts of the United Kingdom. Again, I believe that is a common objective. For that reason, we believe both common frameworks and the market access principles—if the word “complementary” is not cared for, I will say “working in tandem”—to be necessary to guarantee the integrity of the entire United Kingdom internal market.

The security that this Bill provides is crucial for the people and businesses of England, Scotland, Wales and Northern Ireland. It is essential that we ensure that this certainty is provided in all areas, including in the devolved policy areas, where powers flow from the European Union to London, Edinburgh, Cardiff and Belfast.

Of course, I hear the arguments and representations put forward in the characteristically modest approach of the noble and learned Lord, Lord Hope of Craighead, but the Government’s belief is that we cannot afford to risk denying our citizens the ability to trade seamlessly across the United Kingdom, as they do now. I hope this is something that your Lordships’ House can agree with, and I hope that, in order to provide this certainty, the noble and learned Lord will find himself able to withdraw his Motion. In the event that he is unable to do so, the remarks that I made earlier obviously stand.

Lord Hope of Craighead (CB) [V]

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My Lords, I am grateful to those who have contributed to this short debate. I would like to pick up on some words that the Minister said in his reply. The words “mutual respect” have characterised the meetings that I have been privileged to take part in as we have moved towards the position that I am adopting. I think it is a very healthy system that allows us to conduct these discussions in such a manner as we seek out the positions that each of us is trying to adopt and possible ways of accommodating them.

At the end of the day, as I have said on a number of occasions, it really is up to the Government. I am looking to them to facilitate in some way the process by which an agreed decision to diverge, which has gone through all the processes of the common frameworks system, may be protected against the sharp edges of the internal market principles. I do not believe that that will in any way disrupt the workings of the internal market; indeed, there are benefits from allowing the devolved Administrations to develop their ideas in a way that is consistent with the internal market by the use of this process and the opportunity for divergence that it allows for.

The Minister has invited me to withdraw my Motion, but in truth I cannot properly do that, given that we are in a process of continuing discussion and we have not yet had a proposal from the Government that provides a solution to the problem that I am seeking to address in my amendments. For those reasons, I wish to test the opinion of the House.

Lord Callanan

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That this House do not insist on its Amendment 8L to which the Commons have disagreed, do not insist on its insistence on its Amendments 13 and 56 to which the Commons have insisted on their disagreement, and do agree with the Commons in their Amendment 15C.

15C: Clause 10, page 7, line 25, at end insert—

“(4) Before making regulations under subsection (2), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.

(5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.

(6) If regulations are made in reliance on subsection (5), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)

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My Lords, this group covers Amendment 8M, which relates to exclusions from the market access principles. The noble Lord, Lord Stevenson, has made changes to the amendment since the debate was last in this House. These move the proposed exclusions text from Clause 10 to Schedule 1 and narrow the list of reasons for derogating from the market access principles to two: environmental standards and protection, and the protection of public health.

While this acknowledgement of the issues created by replacing Clause 10 with a lengthy list of exclusions is appreciated by the Government, it does not address our fundamental problems with this approach. The noble Lord’s Amendment 8M would cut right across the Government’s objectives and leave businesses exposed to new burdens and barriers. Despite the reduced list of aims, vast amounts of public policy could be excluded from the market access principles.

I have previously explained that the narrow approach to exclusions that we have taken ensures that certain policy areas can work effectively within the clearly defined market access principles. Many of these, such as the exclusion relating to threats to human, animal or plant health, will ensure that necessary environmental and public health measures can continue to operate under the bespoke constraints necessary in those areas, all without the need for the wide-ranging environmental and public health derogations which the amendment, even in its revised form, would add to Schedule 1.

However, the way in which the noble Lord’s list of exclusions would work with the test in his proposed new paragraph is also problematic, as I shall explain. To be excluded, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have an extremely tangential relationship to a social policy objective to be taken out of scope.

The amendment would also lead to uncertainty as to when the market access principles applied, not least by a very unusual use of the term “proportionate”. It would fall to courts to determine the relative extents to which different policies met one of the aims, with no consideration of the burdens introduced. This would not deliver the certainty that business needs. The amendment could bring blatantly protectionist measures out of scope of the market access principles because it was unclear what “disguised restriction on trade” meant. We cannot accept protectionism within the UK.

In the previous debate, the noble Lord, Lord Stevenson, also raised the differences with the EU system. It should be quite clear that the EU system is designed for different circumstances—that is, bringing together 27 countries. Now that we are an independent trading nation, the market access principles are naturally more tailored for the UK than they were in the EU system, so it is right that the approach to exclusions in this Bill should be more narrowly focused.

However, I must stress the following point to the House: the market access principles do not prevent the devolved Administrations introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. We are adamant that requirements which prohibit the sale of a particular good should generally be in scope of the mutual recognition principle; otherwise, we would see a decrease in consumer choice, increased prices and additional costs for business. This is an outcome that I do not believe your Lordships desire, nor is it a good one for the citizens of the United Kingdom.

Of course, if there are initiatives that are of serious concern to the UK Government and the devolved Administrations, we should work together as a United Kingdom to implement them. Furthermore, manner of sale policies, which have typically been the most innovative types of policy, will not be impacted by the market access principles as long as they do not discriminate and are not designed specifically to circumvent mutual recognition. This covers innovative policies such as plastic bag charges and minimum unit alcohol pricing, which many noble Lords have cited. In this respect, our system has much greater flexibility in these areas than the current EU system would allow.

For all these reasons, I strongly encourage noble Lords to reject Amendment 8M.

Lord Stevenson of Balmacara

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At end insert “and do propose Amendment 8M as an amendment to the words restored to the Bill by non-insistence on Amendments 8L, 13 and 56—

8M: Schedule 1, page 48, line 47, at end insert—

“5A (1) The United Kingdom market access principles do not apply to, and sections 2(3) and 5(3) do not affect the operation of, any requirements which—

(a) make a contribution to the achievement of—

(i) environmental standards and protection, or

(ii) protection of public health,

(b) are a proportionate means of achieving that aim, and

(c) are not a disguised restriction on trade.

(2) For the purposes of subparagraph (1)(b), a requirement is considered disproportionate if the aim being pursued in the destination part of the United Kingdom is already achieved to the same or a higher extent by requirements in the originating part of the United Kingdom.””

Lord Stevenson of Balmacara (Lab) [V]

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My Lords, in moving Motion B1 in my name, I thank the Minister for his full and comprehensive introduction and make it clear that we agree with his Amendment 15C, which we think is very helpful to the overall operation of the internal market Bill. In particular, it picks up points that we have been making in relation to market access. I have just one point of correction to what he said: the changes set out in my Amendment 8M remove the amendment completely from the main part of the Bill. He said Clause 1, but I think he meant Schedule 1; in other words, even more disguised and hidden than perhaps was the impression he gave when speaking.

In opening this debate, I do not want to spend a lot of time on this issue, which is quite narrow. Indeed, the arguments are very similar to those we have already heard from the noble and learned Lord, Lord Hope. The Minister’s defence of the current drafting in the Bill depended largely on the often-used threat by Ministers that those who are preparing amendments do not understand the unintended consequences that might flow from their drafting. I suggest to the Minister with some humility that we are not the experts on drafting. If there is an issue here that we should progress a little, we would certainly be happy to work with him and the team of draftspeople in his department to try to make sure that any egregious issues are removed. He drew particular attention to a concern about the phrase used in proposed paragraph 5A(1)(c), which those who wish to bring forward changes to market access would not be permitted to do so if they were disguised restrictions on trade. As I understand it, that comes from the existing WTO regulations and is therefore relatively well understood among those involved in the operation; these are trivial points, however, compared to the main points of principle that he raised.

I want to make three main points. The noble and learned Lord, Lord Hope, has already explained in his amendment that the common frameworks issues he talked about require a market access regime as well; the two are interrelated—almost two sides of the same coin. The devolution settlement has to be observed in both the spirit and the letter of the law. We think that the Bill can both honour and enhance the devolution settlement, provided, first, that we emphasise the common frameworks and the coherence that they can bring to the whole process of a devolved settlement and, secondly, that we do not make the market access principles, which operate automatically, too narrow and too prescriptive. That would fatally undermine the opportunities for devolved Administrations to diverge—if they wish and as agreed by all concerned—in a managed and coherent way.

We have a devolved system of government. That must necessarily imply divergence, so it has to be part of the system. In some way, the argument revolves around how it is possible to frame that managed divergence in legal terms. My Amendment 8M uses derogation powers that are already in the Bill to highlight areas of public good that could benefit consumers, workers and traders. The Minister said there was already coverage on these areas within the Bill, so, in a sense, he is making my point that areas such as public health and the ability of people to work in the environmental areas will be public goods if they can be brought forward. Any sensible Government would ensure that the system made it possible for those who wish to make changes that would raise standards —managed and with agreement—to do so.

The amendment therefore enhances efforts to improve environmental standards and public health; I cannot believe that the Government would want to be against that. It amends a schedule, and does not change any of the main clauses in the Bill. We are talking about trying to find a system for allowing divergence to happen in a proportionate way, which will not in any sense damage the ability of traders to trade but will benefit consumers and workers. It is a very small change. As the Minister rightly said, it has been slimmed down in the process of arriving at this point in the Bill’s discussions, and it is very much tied to the amendment that we have just accepted by a majority of over 100 in relation to the common frameworks. I beg to move.

The Deputy Speaker (Baroness Henig) (Lab)

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The question is that Motion B1, as an amendment to Motion B, be agreed to. I have had no notice of anyone in the Chamber wishing to speak—in fact, I call the noble Baroness, Lady Bennett.

Baroness Bennett of Manor Castle (GP)

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My Lords, I rise to speak physically in the Chamber for the first time since March, so I hope your Lordships will forgive me if I feel a little rusty. Although we refer to people taking part remotely and those in the Chamber being treated equally for many procedures in your Lordships’ House, that is unfortunately not the case with ping-pong. That is why I felt that I needed to be here.

In reflecting on that, I want to comment very briefly on the earlier discussion about procedures in your Lordships’ House, because I respectfully disagree with the many people who said that they wanted to go back to how things were before as soon as possible. I think that the remote participation that enables people to participate who, for all kinds of reasons—whether it be disability, caring responsibilities or all kinds of other reasons—may not be able to be in the Chamber is something that we should keep. Of course, remote voting allows a wider democracy, as much as we can, which would surely be a good thing.

I am in favour of Motion B1, in the name of the noble Lord, Lord Stevenson of Balmacara. I will focus in particular on the environment side of it and cite Alok Sharma, the Government’s chair of the COP 26 talks, who spoke yesterday at the climate ambition summit. He pointed out that 45 leaders had announced new climate target plans for 2030, 24 had committed to net zero and 20 had talked about strengthening adaptation. But we are still not on track for 1.5 degrees. As we start to gear up for COP 26, we are starting to see the revival of “One-point-five to stay alive”. We have a long way to go.

If we look at the situation of the nations of the UK, there is no doubt, sadly, that leadership has often not come from Westminster. On everything from home energy efficiency to plastic bag taxes and bottle deposit schemes—all kinds of environmental issues—leadership has come from the nations of the UK other than England. So, if we do not allow that to happen, we are cutting off the opportunity of progressing faster, which I suggest is not in line with the Government’s intentions.

I was speaking at the weekend at an event focusing on the beauty and diversity of the Amazon. There is an innate strength in diversity, in difference, and in different places trying different things and approaches. If you shut that off, as we will by not having this amendment or something very like it, we will actually hamper the efforts on the environment which the Government, I am pleased to say, tell us they are so keen to succeed with.

Finally, I will pick up on the words of the noble Baroness, Lady Hayter of Kentish Town, on our first group of amendments about the “Take back control” issue. When participating remotely, or in the Chamber, I often find myself shaking my head as speakers say, “We are all supporters of the union here”. I believe in subsidiarity and in local decision-making, but I will offer some free advice to those who want to keep the existing arrangements. Squeezing people tighter and taking away independence or rights that have been given is not a way for that to continue. In your Lordships’ House, we have been awaiting for quite some time the very important domestic abuse Bill, which will bring the idea of coercive control into our law. If we attempt to coerce people and take away their independence and the rights that they already have, I would suggest that it will make them seek more independence.

I regret the fact that Motion B1 has been diminished from earlier, similar versions of the amendment. I regret the loss of animal welfare and cultural expression, but it is crucial that we keep the environmental standards and protection. As the noble Lord, Lord Stevenson of Balmacara, said, how in the middle of a pandemic could we not keep the opportunity for every Government in the United Kingdom to protect the public health of their people as best they can?

Lord Fox (LD)

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My Lords, I welcome the noble Baroness, Lady Bennett, back to her seat—just in time for tier 3 to arrive. We have again had a short debate. As we have seen the evolution of this argument—in the amendment’s approach to common frameworks it is, in a sense, the yin to the yang of the noble and learned Lord, Lord Hope—we are now looking at a different way of trying to ensure that diversity can survive under the automation of the market access measures.

In the past, the Minister has brought to bear the Government’s disapproval of the breadth of the exclusions that previous versions of this amendment made. As the noble Baroness, Lady Bennett, pointed out, many of those have now dropped off. So, in a sense, the Government have already pushed this to a narrower set of exclusions. The Minister highlighted his uncertainty around the word “proportionate”. Of course, none of us would want to do something disproportionate, but I cannot help thinking that the Government, in all their wisdom and with all their clever legal people, could come up with a frame of words that will prevent hideous problems developing in the courts—so I cannot help thinking that that is something of a red herring.

As the noble Lord, Lord Stevenson, said, this is getting more modest than was previously attempted, but it still has the overriding aim of dealing with the problem which keeps coming up throughout this debate. The Minister has magnanimously said that the devolved authorities are perfectly at liberty to develop new and innovative ways of doing things—so far, so good—and then, of course, the market access principles mean that those innovations will get undercut if someone else in the British Isles is doing it differently. I do not understand how the Minister can keep linking those two sentences without seeing that the one excludes the other. If it does not do it in governmental terms, it will do it in the courts. This will be a creature of the courts, because there will be businesses that will be going at a legal opportunity to get their products into devolved authorities that have sought to raise standards, as they see it.

The issue of minimum-unit alcohol pricing often comes up, and it is quite clear that this legislation will not affect that at all. We are all in agreement there. But if we were seeking to bring that in once this legislation was in place, what chance would it have of surviving the courts? That is why we will support this amendment.

Lord Callanan (Con)

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I thank everybody who has contributed to what has been a very good, albeit brief, debate. I have listened very carefully to the points that have been raised, and I will respond directly to the points of the noble Lords, Lord Stevenson and Lord Fox. Innovative policy-making relating to public health and the environment will be fully possible under the Bill, within the clearly defined market access principles. Schedule 1 sets out a clear exclusion process for:

“Threats to human, animal or plant health”.

There are also several other exclusions relating to the environment and public health: chemicals and pesticides, for example. All of these are drafted tightly to strike the right balance between these objectives and the integrity of the market.

It is also essential to remember that neither of the market access principles affects the devolved Administrations’ abilities to uphold and enforce rules governing how consumers use goods. Neither would they prevent reasonable “manner of sale” restrictions, as long as they are not discriminatory. If an Administration wanted to introduce minimum alcohol pricing or the plastic bag charges, they are fully able to do so and can use them to fulfil environmental or public health aims in future; the principles would not be an obstacle to that, as long as those rules do not discriminate. I say to the noble Baroness, Lady Bennett, that she is wrong: if a future devolved Administration wanted to introduce the plastic bag charges, they would be able to do so under these market access principles, as long as they were non-discriminatory.

Lord Stevenson of Balmacara (Lab) [V]

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My Lords, this has been a very short debate, but, as the Minister has said, it has been quite interesting, and revelatory in some senses. I thank the noble Baroness, Lady Bennett, for speaking in support. I think that I thank the noble Lord, Lord Fox, for his suggestion that “yin and yang” are the words I was looking for in terms of my relationship with the noble and learned Lord, Lord Hope. We are certainly not yin and yang if you consider size or intellectual ability, but, even so, it is a nice thought.

I recognise that the Minister was not going all out to take down the arguments I was making, and I am grateful to him for that; he can sometimes be quite destructive when he does, and it is nice to have the sunny side of him on show today—he does have a sunny side.

I cannot understand why there is such a concern about divergence. For those of us who were born and brought up in Scotland, it is well known that building regulations there are substantially different for not unreasonable reasons: the weather up there is so different from that which one experiences further south. Those regulations were different in Scotland for many years before devolution took place, and have continued to be.

Of course, there are many other areas of difference, right across a range of activity in Scotland: a different legal system, a different religious environment as well as other factors. This has led to different ways in which people operate, trade is conducted, and people shop and carry out their business. The idea that divergence is not already present in the system and not respected as such seems very strange.

I know that the Minister stands by Schedule 1 because he referred to it at length, but those who have read it carefully—I suspect that not many people have read it right the way through because it is dry—will know that, basically, the only real reason for divergence is set out there very clearly. It says that there has to have been a threat to life caused by a “pest or disease”—that is a very wide-ranging thought and a way we can approach it. Nevertheless, that is really the only sure and certain basis under which divergence would be permitted, other than that which already exists.

In that sense, we are on the right track: there could be a better way of formulating that. The schedule contains many other ways of implementing curtailment and restriction that we could use if the wording currently in our amendment is not satisfactory. However, I do not think that the Minister has said anything that would negate our feeling that this amendment, in its essence, is the counterpart to the amendment that we already agreed in relation to common frameworks—and that it would play a necessary part in making sure that devolution continues. I recommend it, and I would like to test the opinion of the House.

The Deputy Speaker (Baroness Henig) (Lab)

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Members taking part remotely have given their voices in support of this Motion, and I will take that into account.

Lord True

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That this House do not insist on its insistence on its Amendments 14, 52, 53 and 54 to which the Commons have insisted on their disagreement for their Reason 14C.

14C: Because the Lords Amendments (together with Lords Amendment 55 which has been agreed by both Houses) were only made in consequence of the omission of Part 5 by Lords Amendments 42 to 47 and so have become unnecessary following the Lords non-insistence on Lords Amendments 42, 43 and 46.

Lord True (Con)

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My Lords, I am introducing a new government amendment, containing new Clause 43A, as well as moving Motions C, D and E, which will rectify the oddities left by the removal of Clauses 44, 45 and 47. Now that we have an agreement in principle with the European Union through the joint committee, as we discussed in the last round of these discussions in your Lordships’ House, the safety net clauses are no longer required.

The EU’s declaration on Article 10 of the Northern Ireland protocol clarifies that subsidies are within scope of the state aid rules in the protocol only where there is a “genuine and direct link” to Northern Ireland and a “real and foreseeable” impact on trade between Northern Ireland and the European Union. The House has been concerned, as has the other place, about the risk of reach-back; the EU’s clarification addresses this. The concern was that a company in Great Britain with only a peripheral link to commercial operations in Northern Ireland could be caught inadvertently by the tests within the protocol’s text, which was neither acceptable nor what the protocol had envisaged.

However, public authorities giving subsidies and the beneficiaries still need guidance regarding Article 10 of the protocol. Therefore, new Clause 43A stipulates:

“The Secretary of State must publish guidance on the practical application of Article 10”.

The clause requires the Secretary of State’s guidance to reflect any relevant decision or recommendation of the joint committee or any declaration made by either party of which the other party takes note. The Secretary of State may update the guidance, for example, to reflect developments in either the joint committee or relevant EU law. Public authorities will be required to have regard to this guidance, helping to ensure a consistent and uniform application of Article 10. This approach is fully in accordance with the United Kingdom Government’s commitments under the Northern Ireland protocol and international and domestic law. The new clause is an important part of putting the protocol into effect and for the agreement in principle with the European Union to function.

I know that noble Lords have welcomed progress on this part of the Bill, and I beg to move.

Lord Judge (CB) [V]

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My Lords, I speak to Clause 43A. Consistent with the Minister’s undertaking last week, this new clause is not tainted with the admitted unlawfulness that marked Clauses 44, 45 and 47. By way of a footnote, in view of the Minister’s observation, I will say that those clauses should never have been there in the first place. As the Minister has explained, this clause is concerned with the issuing of guidance by the Secretary of State in relation to Article 10 of the Northern Ireland protocol, and any subsequent implementation of that guidance. Either process must pay full attention to the decisions and recommendations of the joint committee, itself established under Article 164 of the withdrawal agreement. Non-compliance, if it were to arise, would, if necessary, be justiciable.

There is nothing further that I can say in relation to this clause. It seems to be a very sensible solution to a difficult problem.

Lord Newby (LD)

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My Lords, this is the last knockings on Part 5 of the Bill. It has been a sad and sorry saga from beginning to end. The Government understandably drew huge opprobrium, both domestically and internationally, for being prepared to break the law. They have now withdrawn in the best way they can, but the truth is that they have done so with their tail between their legs. I am extremely pleased that we have reached this point, but sorry that the Government ever put Part 5 in the Bill in the first place and that it needed your Lordships’ House to help kick it out.

Lord Falconer of Thoroton (Lab)

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The noble Lord, Lord True, has been true to his word. He has produced Clause 43A, which does not contain any element of illegality, as the noble and learned Lord, Lord Judge, said. I also agree with the noble and learned Lord that it is a sensible provision and we welcome it. It brings to an end a saga for which this country has plainly paid a price. Everybody commenting on the position of the European Union at the moment is saying that the reason it is currently seeking the arbitral and consultation provisions, and the threshold for the ratchet up, is that it does not trust us—and one of the reasons for that is the internal market Bill and its illegality.

Lord True (Con)

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My Lords, the noble and learned Lord opposite always has a delightful habit of ending his eloquent speeches with a couple of sentences that I find it hard to agree with, and I do not agree with his interpretation there. But I thank those who have contributed to this short debate. I am grateful for the welcome for the Government’s proposal—I do not talk about tails between legs—and that the other parts of Part 5, to which your Lordships objected before, have been accepted. As perceived from this side of the House, that was the correct action.

I need not repeat the essence of this. Clause 43A is required in the Bill because, as the noble and learned Lord, Lord Falconer, said, it is an important part of implementing the protocol. The clause places a duty on the Secretary of State to provide guidance. I welcome the fact that the EU has clarified that subsidies are within the scope of Article 10 only under the conditions that I described—a genuine and direct link to Northern Ireland and a real, foreseeable impact on trade between Northern Ireland and the EU. This addresses the risk of reach-back and must be reflected in the guidance that the Government will provide.

I am also, of course, grateful for the remarks of the noble and learned Lord, Lord Judge. In concluding, I will emphasise, as he did, that this approach is fully in accordance with the United Kingdom’s commitments under the Northern Ireland protocol and international and domestic law.

Lord True

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That this House do agree with the Commons in their Amendment 45C.

45C: After Clause 43, insert the following new Clause—

“43A Guidance on Article 10 of the Northern Ireland Protocol

(1) The Secretary of State must publish guidance on the practical application of Article 10 of the Northern Ireland Protocol (State aid).

(2) For that purpose Article 10 is to be read in the light of—

(a) any relevant decision or recommendation of the Joint Committee, and

(b) any relevant declaration that is made in the Joint Committee by either party, of which the other party takes note.

(3) The guidance must be published before the end of the period of one month beginning with the day on which this section comes into force.

(4) A person with public functions relating to the implementation of Article 10 (including functions involving the provision of financial assistance or other subsidies) must have regard to the guidance when exercising such functions.

(5) The Secretary of State may—

(a) revise or replace the guidance;

(b) if satisfied it is no longer necessary, withdraw the guidance.

(6) In this section “Joint Committee” means the committee established by Article 164(1) of the EU withdrawal agreement.”

Lord True

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That this House do agree with the Commons in their Amendment 47C.

47C: Clause 43, page 35, line 3, leave out paragraph (b)

Baroness Penn

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That this House do not insist on its Amendments 48B and 48C to which the Commons have disagreed for their Reason 48D.

48D: Because the Lords Amendments would alter financial arrangements made by the Commons, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

Baroness Penn (Con)

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My Lords, the other place has disagreed with Amendments 48B and 48C regarding the power to provide financial assistance which the Bill confers on the UK Government. Once again it has invoked financial privilege. I remind noble Lords that this is not a decision for the Government to make but is independently determined in the other place. It would, of course, be contrary to normal practice for the House to insist on any amendment disagreed for a financial privilege reason.

Amendments 48B and 48C, in the name of the noble and learned Lord, Lord Thomas, required the Government to have the consent of the devolved Administrations before exercising the financial assistance power in devolved areas. As I emphasised last week, this power is additional to the devolved Administrations’ existing powers, which I was glad to see noble Lords accept in the debate last Wednesday. It does not override the devolution settlements. I note that the noble and learned Lord, Lord Thomas, has tabled further amendments on this matter and I thank him for discussing these with me in advance. I also thank the noble Lord, Lord Stevenson, and the noble Baroness, Lady Hayter, for their discussions with me on these matters.

Amendments 48E and 48F would require the Government to consult on and publish the principles for investment, and to seek advice from representatives jointly appointed by the UK Government and the devolved Administrations before providing financial assistance in devolved areas. I reassure the noble and learned Lord that, when using this power, we will, of course, work with the devolved Administrations and other key stakeholders throughout the country. As I have mentioned previously, the UK shared prosperity fund provides a more detailed example of how we intend to use the power to provide financial assistance. In doing so, I hope that noble Lords recognise that the process is consistent with the intent of the amendments proposed by the noble and learned Lord, Lord Thomas.

The financial assistance power means that the UK Government can make good on our commitment to level up and create opportunities across the UK in places most in need, such as ex-industrial areas, deprived towns and rural and coastal communities, and for people who face labour-market barriers. We have discussed the UK shared prosperity fund extensively and I reiterate that, while the specific arrangements for the governance of the fund are still being developed, there will be governance structures and the devolved Administrations will have a place within those structures. I hope that noble Lords will accept that this is a clear commitment to work collaboratively and demonstrates that this is not at all “Westminster knows best” or “a Westminster power grab”. As noble Lords have mentioned, we have also worked collaboratively with the Scottish Government, the Welsh Government, and the Northern Ireland Executive for over six years on city and growth deals, and we intend to continue in that spirit of partnership and joint working.

The power in the Bill creates a unified power that operates consistently UK-wide. In exercising that power, we will work with stakeholders, including the devolved Administrations. This will help to make sure that UK Government investments and devolved UK Administration spending will deliver effective outcomes for the people of Scotland, Wales and Northern Ireland. The UK Government are best placed to identify and fund schemes that take into account all parts of the country and across administrative borders to connect all parts of the UK. Indeed, we have shown how crucial the scale and responsiveness of the UK Government support can be throughout this difficult year.

The response to Covid-19 has illustrated how the Government can work strategically and at scale to save jobs and support communities throughout the UK, working alongside the devolved Administrations to keep every citizen safe and supported, no matter where they live. I hope that this will encourage the noble and learned Lord to withdraw his amendment.

Lord Thomas of Cwmgiedd

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At end insert “and do propose Amendments 48E and 48F in lieu—

48E: Clause 48, page 40, line 41, at end insert—

“(1A) The powers in subsection (1) may only be exercised—

(a) after consultation with the relevant authority on the principles under which financial assistance may be provided by a Minister of the Crown;

(b) after publication of such principles; and

(c) after considering the advice of persons jointly appointed by the Minister of the Crown and the relevant authority for each of Wales, Scotland and Northern Ireland as to the way in which, applying the principles, the allocation of financial assistance respectively to Wales, Scotland and Northern Ireland which could have been given by a relevant authority should be provided.”

48F: Page 41, line 10, at end insert—

““relevant authority” means the Welsh Ministers in respect of Wales, the Scottish Ministers in respect of Scotland, and the Northern Ireland Executive in respect of Northern Ireland.””

Lord Thomas of Cwmgiedd (CB) [V]

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My Lords, I thank the Minister for the opportunity to have had discussions with her on two occasions. I am grateful indeed. There are three short reasons why I hope that the House will accept Motion F1 and Amendments 48E and 48F, which I seek to move and the compromise within that is intended. Those reasons can be explained briefly as follows.

The first is that the assertion of financial privilege is one to which there are two answers: it is not a financial issue, it is a constitutional and devolution issue. The scope of financial privilege is a question that will need to be discussed further in due course as the precedents on financial privilege need to be considered in the light of devolution. However, this is not the occasion. The issues in relation to devolution are addressed in this amendment in a way that simply seeks to clarify the need for consultation, principles and advice, all of which are so essential to the function of a union, but they do not impinge on the power of the other place.

My second reason for the amendment is that the way in which it seeks to proceed is to set out a principal reason for spending in the devolved areas. The UK Government and the devolved Governments should work together to strengthen confidence both in the Governments and in the union. The clause requires, as before, consultation in establishing the publication of principles and—this is new—the consideration of advice from the devolved Governments in the field where powers have been devolved. This goes nowhere beyond the devolved powers and it seeks simply to uphold the devolution settlement. The keys are consultation, principle and advice.

It is of course for the UK Government to decide whether they will follow that advice, but perhaps I may make three short points. If the advice were to be followed, it would stop the UK going back, as the Minister has observed, to “Westminster knows best.” If the UK Government were to follow the advice, it would say that they can work with the Governments that have been elected by the people of Northern Ireland, Scotland and Wales to spend wisely in the devolved fields by accepting the advice of those who know best in the devolved institutions. Secondly, it would also give the spending of those funds a considerable degree of democratic legitimacy by ensuring that the democratic mandate to spend in the devolved fields was heeded. Thirdly, if the advice was followed, spending would be much more efficient, as there should be co-ordination of spending. The real risk of inconsistent and, worse still, competitive spending, would be avoided.

My last main reason is, in short, is that the amendment seeks to lay part of the foundation for the exercise of statecraft, something that is so necessary to ensure the future of our union. The question may therefore be asked: why is it necessary to put this into a Bill? We simply cannot afford the failure of statecraft in relation to the union. Experience has shown that a clear mechanism is the best way of providing for co-operation between the four nations. There can be no more important area in which to do this than in relation to the working together, with a common and unified purpose, to increase the prosperity of each of the four nations, and here I refer in particular to the very deprived areas within those four nations. I beg to move.

Lord Adonis (Lab)

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I strongly support everything that has just been said by the noble and learned Lord, Lord Thomas, and I hope that my noble friends in the Labour Party will support him in his amendment if he presses it to a vote. The points he has raised are absolutely fundamental to the devolution settlement. The big issue here is what happens in lieu of the big decisions that used to be made about the structural funds. The noble Baroness the Minister said in our last debate that it was the European Union that would decide, which of course was technically true because these were EU funds, but the advice upon which projects are prioritised within the devolved Administrations very clearly flowed from the devolved Administrations themselves. If we do not observe that principle in respect of the Shared Prosperity Fund and whatever may replace it over time—the noble and learned Lord, Lord Thomas, has explained that we are putting in place within statute a regime that could now last for decades—what we will be doing is substantially rolling back the devolution settlement.

The noble and learned Lord used a slightly antiquated term, “statecraft”, but it is coming back into vogue, because we have so little of it. Indeed, as some noble Lords might recall, the Prime Minister told us some while ago that it would be a failure of statecraft if there was not a deal, which he very nearly railroaded the country into over the past weekend. It would be an equal failure of statecraft if the devolution settlement starts to break down because of irreconcilable differences between the devolved Administrations and the UK Government on fundamental issues relating to the allocation of structural and regional funding within the UK.

The position that we are in, which is why I think it is so important that the noble and learned Lord presses his amendment, is this: can we simply take the rather vague assurances that the Minister has given us today as being sufficient? In respect of the operation of the whole devolution settlement, which is something that one would expect to roll over from Government to Government as a part of our constitution, I do not think that the assurances which have been given as set down in Hansard are sufficient. It is important to have them in statute. Thus, I think that the arrangements that the noble and learned Lord has set out in his Amendment F1 are absolutely appropriate to what we are facing in this area.

The other reason is that in my experience, people’s past behaviour is always the best guide to their future behaviour. On the basis of the Government’s past behaviour, I do not believe that we can accept those assurances as being sufficient. This is the Government that introduced the towns fund under which Ministers themselves could decide on a wholly arbitrary basis that was not related to any objective statements of need, how they would allocated hundreds of millions of pounds—I think in the end billions of pounds under the fund; I have just been told £4 billion—based on arbitrary and essentially political criteria. How can we accept a vague assurance about consultation with the devolved Administrations when we know that that is how Ministers of the Crown have behaved?

It seems to me to be absolutely essential, not simply desirable, that we put into statute the requirements of the noble and learned Lord’s Amendment F1. They seek that the Government should make these further investments only after consultation, which is the crucial element of his proposed new wording for Clause 48

“on the principles under which financial assistance may be provided by a Minister of the Crown.”

That would set out in law the requirement that there must be consultation on principles.

If I have a concern about the noble and learned Lord’s amendment, it is that it is too weak. This is the classic problem when one starts to compromise. You end up by giving up too much ground. As I read it, I think that the wording of his amendment is too weak because it requires consultation on principles. On my reading of the amendment, it does not require the consent of the devolved Administrations to disbursements that are made in respect of additional investments like the Shared Prosperity Fund.

I will put this to the noble and learned Lord: what would happen if, having consulted, the United Kingdom Government do what they now seem to do routinely—the Prime Minister has told us that he does not believe in devolution—and simply override the view of the devolved Administrations and decide on a political basis to make what are essentially politically motivated investments anyway?

I hope the noble and learned Lord can disabuse me, but my reading of the wording of his new amendment is that the United Kingdom Government would, having consulted, none the less be able to ride roughshod over the devolved Administrations and decide what they want to do for political reasons in London and Westminster. The noble Baroness said—we liked her words—that she was seeking to give backing to the principle that it is not the case that Westminster knows best; my reading of the state of the law, which is what will matter on these things, is that it would be perfectly okay for future Governments to say not only that Westminster knows best but that the Conservative Party knows best and will distribute funding in Scotland, Wales and Northern Ireland in respect of Conservative Party priorities and not any priorities agreed with the devolved Administrations.

I strongly support the noble and learned Lord’s amendment. It goes to the heart of what will happen to devolution after Brexit. My concern is that, in the process of compromising as this Bill has gone through, the amendment is too weak to deliver the objectives which the noble and learned Lord so rightly set out.

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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My Lords, I have had three more requests to speak. I will take them in order: the noble Lord, Lord Liddle, the noble Baroness, Lady Bennett of Manor Castle, and then the noble Baroness, Lady Noakes. I call the noble Lord, Lord Liddle.

Lord Liddle (Lab)

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My Lords, the serious point here is whether responsibility for economic development measures, which are the purpose of the shared prosperity fund, will be devised, agreed and undertaken with the consent of the devolved Administrations and devolved bodies in England.

Last time I spoke on this, the Minister claimed that the distribution of EU funds was decided in Brussels. That is not the case, as she well knows. As I am sure the noble Lord, Lord Callanan, would confirm on the basis of his great experience of European matters, the EU established criteria against which funds should be spent and rules for determining the areas of greatest need, which were based on the relative GDP of an area in the European Union—which areas were Objective 1, which were Objective 2, and all the rest. It did not decide on individual projects. That was never determined in the Commission.

The way individual projects were decided under the structural funds—as I think Conservative and Labour Governments have practised since the 1990s—was on a bottom-up principle, which I think the noble Lord, Lord Heseltine, probably started off agreeing with. If we were to have effective economic development, it had to have the buy-in of local areas, and of the nations when we had devolution. The best way to do this was through mechanisms that brought together locally elected people with businesspeople in bodies at local, regional and national levels to determine which projects should be prioritised.

As I understand it, the present proposal is that, instead of this devolved system, which has worked reasonably well over the past few decades, this Government want to take power to centralise decision-making. The precedent for this—as my noble friend Lord Adonis mentioned—is the towns fund, which is a completely centralised pork barrel dished out to Members of Parliament representing constituencies that the Conservative Party has recently won. That is what the towns fund is. I know from my own county, Cumbria, that Carlisle, Workington and Barrow will be recipients of towns fund money. Why? Yes, they have great needs, but it is because they have recently elected Conservative Members of Parliament.

Baroness Bennett of Manor Castle (GP)

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My Lords, I will speak very briefly in favour of Motion F1 in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. I thank him for his strong and determined pursuit on this issue over the many stages of this Bill. I join the noble Lord, Lord Adonis, in hoping very much that we will see our Opposition Front Benches support this and push it forward.

I will refer to many of the same issues that I raised on Motion B; we are talking about local control and local prioritising, as the noble Lords, Lord Adonis and Lord Liddle, have said. Without this amendment, this Bill would take financial control away from the devolved Administrations—money is power, as we know. I think it was in Committee that I raised the phrase “pork barrelling”, which has reappeared again and again. This is heading towards an American-style politics, and we have many reasons why we would not wish to head in that direction.

This means in practice that if you have, as we do, an Administration in Westminster who are keen on building new roads—even though they just create more air pollution and new traffic—and airport expansion, and not on spending on nature, that priority will be forced on to local devolved Administrations.

I slightly disagree with the noble Lord, Lord Liddle, who held up as a model local enterprise partnerships and the previous model under the coalition Government; business and elected people is one partnership, but I would like to see something which is much broader and takes in all elements of the local community.

I have been seeing a great rise in enthusiasm across many parts of government for deliberative democracy, for the climate assembly and the people’s assembly approach—the chance to bring together representative groups of people to make decisions. Given that increase in enthusiasm, I would like to see it written into the Bill. Perhaps we will pursue it in the future.

I come back to my point from the debate on the previous amendment about the issue of coercive control raised by the Domestic Abuse Bill. That explicitly looks at financial control as a way in which people in households exercise unequal control. I hope that your Lordships’ House would agree that in an ideal household, everyone has a real and equal say in the spending of financial resources and a real chance to have their say. I would be interested in the noble and learned Lord’s comments on this; the noble Lord, Lord Adonis, said that this was in consultation. I agree that we should have the word “consent” in this amendment. We are talking about democracy, about people having their say and about how we would like to see our nations run.

Baroness Noakes (Con)

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My Lords, when the Minister introduced the Motion, she explained clearly that the other place had claimed financial privilege and that it was customary for this House to respect that decision made by the Speaker. The noble and learned Lord, Lord Thomas of Cwmgiedd, said that this was not a financial issue. I respectfully say to the noble and learned Lord that it is not for this House to determine whether or not it is a financial issue. As I understand it, it has been accepted by this House for a very long time that the final arbiter of what is or is not a financial issue for which privilege can be claimed is the other place, through its Speaker. If we continue to disregard the Commons claim of financial privilege in relation to amendments we send to the other place for consideration, we not only show a lack of respect, particularly to the Speaker, but might be starting on a route to a constitutional clash with the other place, which would be most unfortunate.

When I sat where the noble Baroness, Lady Hayter, sits, many years ago, we often faced financial privilege being invoked against amendments we were pleased with ourselves for having sent back to the other place for consideration, but we always respected that decision when it came back. I hope that the noble Baroness, Lady Hayter, will continue that tradition in this place. Does the Minister know of any precedence for this place insisting on its amendments not once but twice in the face of a financial privilege claim by the other place, and does she agree with me that this is not a path down which this House should go?

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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Does anyone else in the Chamber wish to speak?

Lord Fox (LD)

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There is almost no one left in the Chamber who has not spoken. This has been an interesting debate and, no doubt, the Minister is carrying away lots of advice from some of the Benches. I thank the noble Lords, Lord Adonis and Lord Liddle, for their passion. If that passion is matched by votes in the event that the noble and learned Lord, Lord Thomas, decides to ignore the advice of the noble Baroness, Lady Noakes, and press this to a vote, I will have more excitement because otherwise, it is merely a rhetorical gesture.

The noble and learned Lord set out his view on devolution. It is quite clear, as was set out a number of occasions, that in the structural fund process, which this will herald the replacement for, the devolved authorities were in the driving seat of deciding where and on what the money was spent. It is not clear from anything the Minister said today, or in answer to questions last time, that the Government will not seek to impose things on the devolved authorities. The Minister said there would be governance structures; it would be interesting to hear how those governance structures will be introduced and what the Government envisage. In other words, do central Government have the veto in deciding what goes where? In the end, that is the difference between this being genuinely consultative and, as we have heard described around the House, a Westminster-knows-best process. Consultation is fine but only if it is adhered to.

My final point on the quantum of money and its distribution comes back to a question I asked earlier. I think the Minister said that the amount of money envisaged to go into the shared prosperity fund is equivalent to that which came through the structural fund. The Minister also indicated a much broader remit for spreading that money around than was the practical reality of the structural fund. How will the Government manage the process of certain areas that have been particularly well funded through the structural fund, such as Cornwall and Wales, getting less money if there is no increase in funds and they are spread more widely? Furthermore, the European Union distributed that money using classifications of need, so how will the UK Government develop those? Do the Government envisage that they will be different, and can they undertake that they are transparent?

In conclusion, if the noble and learned Lord, Lord Thomas, decides to call a vote, we on these Benches would support it, but there are a lot of questions we would be grateful if the Minister could answer.

Lord Stevenson of Balmacara (Lab) [V]

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My Lords—[Inaudible]—on earlier discussions around this issue and the issue that will come up in the next group of amendments on state aid and spending as a result of moneys which may be available to support that. We should pause and take note of the fact that the noble and learned Lord, Lord Thomas, has engaged with this issue again despite the view taken in the other place that it is a financial privilege. The noble Baroness, Lady Noakes, is right in saying we are in a difficult area. I am not sure how the comments from the noble and learned Lord, Lord Thomas, will take him forward. He certainly has a point, but I do not think this is the right amendment or place to explore it. It needs a wider perspective. Many of these issues date from time immemorial; it is important to respect them and understand where they come from, but they should not block debate and discussion on key issues.

The issue the noble and learned Lord is raising, which has also been picked up the Minister, is how, in the future, possibly using statecraft—whatever that is—we will manage spending in the devolved areas, which are not reserved, when the funding mechanisms are different and have to be adapted to meet current arrangements. There are issues that will need to be addressed in the future, but we covered a lot of ground in earlier debates, and I thought the points made by the Minister on the shared prosperity fund were sufficient to ensure that we do not need to go back over this again. It is not our view, as Her Majesty’s loyal Opposition, that we need to divide the House on this issue again.

If the issue is common between us, we need to understand where we can get to in respect of comments made from the Dispatch Box. The noble and learned Lord, Lord Thomas, made a number of good points and asked a number of questions, and I am sure the Minister will respond to them. I do not think the points added by my noble friends Lord Adonis and Lord Liddle vitiate that approach; they made a good case that we will need more in this area in the future, but this is not the right amendment to take us down that route.

Baroness Penn (Con)

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My Lords, I thank all noble Lords for their contributions to a debate that was slightly longer than the one we had during the previous round of ping-pong. I will address the points made by the noble and learned Lord, Lord Thomas of Cwmgiedd, and in doing so I hope to address those made by other noble Lords too.

On financial privilege, I very much welcome my noble friend Lady Noakes saying that this is not a decision by the Government but one taken by the Speaker in the House of Commons. I do not have an answer for her on whether there are any precedents for twice resisting financial privilege as a reason given by the Commons, but it must be highly unusual. This is not the place to raise further constitutional questions in bringing that principle into doubt in this Bill.

The noble and learned Lord talked about a principled basis for the spending powers being taken through this Bill. I completely agree with him on that. He spoke of consultation, the establishment of principles and advice from jointly appointed advisers. We do not propose a structure involving jointly appointed advisers, but we do plan to have the devolved Administrations represented in the governance structures for the fund. I apologise to the noble Lord, Lord Fox—I cannot give further details of how that will work at this stage; we will work on that with the devolved Administrations. There are further stages to come in the development of the shared prosperity fund, its governance and the principles around it, after this debate and in future. As I have said to noble Lords before, the fund will not be introduced until the following financial year, which gives us time to work through some of these details.

I hope I have made it clear to noble Lords that the Government have already been engaging in consultations on the shared prosperity fund. To date, we have conducted 25 engagement events across the UK, attended by over 500 stakeholders, including the devolved Administrations. The noble Lord, Lord Liddle, made a good point about LEPs and mayoral authorities—of course we will want to consult and collaborate with those organisations as well as the devolved Administrations as we take these proposals further. Those mentioned at the Dispatch Box were not an exclusive list of those whom we wish to engage, but the debate has focused very much on the question of devolution.

As for the establishment of principles, raised by the noble Lords, Lord Fox and Lord Liddle, and others, there is not a huge amount of disagreement here. The EU set the terms and conditions for investment in the UK as well as other member states, with which the UK Government and the devolved Administrations alike had to comply. Devolved Administrations and other areas were then responsible for managing EU funds in those projects. The idea of setting out principles in a framework and then collaborating in local delivery is very much something we wish to take forward. We have set out some of those principles already in the heads of terms for the shared prosperity fund that we published at the spending review. We have said that a much more detailed investment framework will be published in the spring, following further discussions.

Regarding the focus of that investment, I would have thought the noble Baroness, Lady Bennett of Manor Castle, would welcome our saying at the spending review that investment should be aligned with the Government’s clean growth and net zero objectives. Those are the kinds of principles we have already set out and that we want to see in the investment from these funds.

On the establishment of principles and the conduct of consultations, the Government and noble Lords are rather in agreement. The noble Lord, Lord Fox, asked about the quantum and the distribution of funding. Again, I apologise and will have to disappoint him slightly. I said at the spending review that the quantum will ramp up to £1.5 billion a year, I think, to match that commitment to, at minimum spend, the previous levels. I also referred in the last debate to our setting out certain commitments in our manifesto that will guide us in future. But there is more work to be done on the detail—from taking the heads of terms to the investment framework—to get the kind of answers that the noble Lord is asking for.

I have mentioned some of the details of the shared prosperity fund, and I also talked about our approach to city deals. I gently disagree with certain noble Lords’ use of “pork-barrel politics” terminology. I point to examples of our trying to take a collaborative approach—a principles-based approach from the centre, while also working with those on the ground regarding their needs. That is very much the approach we plan to take with the shared prosperity fund.

I am afraid that I will have to take away the concerns of the noble Lord, Lord Stevenson, about a possible replacement for Erasmus and how that might operate. Again, this is an example of the fact that the detail of this matters. The Government take this very seriously. However, we disagree on some points. This power will be used for the shared prosperity fund and may be used in other areas. We want it to be flexible enough for the UK Government to respond quickly and at scale to investment challenges and opportunities. It is not practical to set out a single plan for investment in legislation now, which is why, for the shared prosperity fund, we will set out plans and collaborate with the devolved Administrations as we will have developed that. In other areas in future—the noble Lord mentioned Erasmus, for example—we will take a similar approach.

I hope that the noble and learned Lord, Lord Thomas, will feel able to withdraw his amendment although it did not sound as though he was minded to.

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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I call the noble Lord, Lord Adonis, to ask a short question for elucidation.

Lord Adonis (Lab)

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I want to ask the Minister a very specific question. She talked about consultation, but will she undertake on behalf of Her Majesty’s Government to commit that they will not make investments under the shared prosperity fund, or any of its successors, in the territories of the devolved Administrations without their consent? This is about not just consultation but consent. Further, does she realise that, if she does not do so, none of the other assurances that she has given is worth the paper they are written on?

Baroness Penn (Con)

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I believe that this issue was the subject of the amendments tabled by the noble and learned Lord, Lord Thomas, in the previous round of ping-pong. Those amendments were sent to the Commons and the Commons rejected them, so we are discussing a new set of amendments in this round of ping-pong. This question was dealt with in the previous round and is, as the Speaker of the House of Commons determined for previous amendments, subject to financial privilege.

Lord Thomas of Cwmgiedd (CB) [V]

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I thank all noble Lords who participated in this debate—particularly the noble Lords, Lord Adonis, Lord Fox and Lord Liddle, and the noble Baroness, Lady Bennett of Manor Castle—which has lasted slightly longer than I anticipated.

The debate on both this occasion and previous ones has centred on the question of financial privilege. I am very grateful to the noble Baroness, Lady Noakes, and the noble Lord, Lord Stevenson of Balmacara, for their observations on the uncharted territory into which we might be moving. It is important for the future to work out the way in which ancient principles may no longer be applicable to constitutional issues if we are to keep our union together.

In looking at this whole series of debates together, there has been another consideration. At least there is now a much greater understanding of the importance of respecting the devolved settlements and devolution. I was heartened when the Minister referred to an abandonment of “Westminster knows best”. That is progress indeed. I have also taken the Minister’s assurances into account. As one looks at the debates in the other place on the previous debates in this House, it is clear that those from Edinburgh, Cardiff, Belfast and other places within those three nations, pay particular attention to what has been said. I am glad the Minister has given assurances in relation to principles of consultation and heeding advice.

It is a question of weighing up whether putting a structure into the Bill in the circumstances I have outlined would be a sufficient safeguard. Or is there a better safeguard: that is, the deterrence of the catastrophic result for our union if the Government did not adhere to the principles that have been explained? It would be catastrophic not only for the union but for trust in government if there was ever a hint of unprincipled distribution or application of these funds—[Inaudible.]—and of the pork barrel.

Therefore, with considerable hesitation, but bearing in mind that deterrence is a strong way of ensuring people keep to their principles—possibly stronger than structures in some places—with great reluctance I beg leave to withdraw this amendment.

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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Is it your Lordships’ pleasure that Motion F1 be withdrawn?

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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You wish to test the opinion of the House? The Question will be decided by a remote Division. I instruct the clerk to start the remote Division.

Baroness Penn (Con)

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My Lords, I believe the clerk will give us some advice on how to proceed in hybrid proceedings in these circumstances. I suggest we adjourn for five minutes until we get that advice on how to proceed.

The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)

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My Lords, the Hybrid Sitting of the House will now resume. In accordance with paragraph 93 of the Procedure Committee guidance, leave to withdraw cannot be objected to. Therefore, motion F1 is withdrawn.

Lord Callanan

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That this House do not insist on its Amendment 50C to which the Commons have disagreed for their Reason 50D.

50D: Because, while the Commons agree to Lords Amendment 50B, it is not appropriate to link the operation of the reservation proposed by Clause 50 to Common Frameworks.

Lord Callanan (Con)

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My Lords, I turn once again to the thorny issue of subsidy control. I will begin by addressing Amendment 50E from the noble Baroness, Lady Finlay, before moving on to Amendment 50F from the noble Baroness, Lady Bowles.

I start by saying how pleased I am that we have reached agreement in both Houses on the necessity of Clause 50, which is, of course, the reservation of subsidy control. I welcome the agreement that we should continue the UK-wide approach, which this reservation now confirms in law. However, despite both Houses agreeing to the principle of the reservation of subsidy control, concerns remain about the process for reaching an agreement with the devolved Administrations on designing our future approach.

We recognise the importance of working constructively and co-operatively to design a unified approach that meets the needs of the UK economy. Both Houses supported the Government’s amendment to create a specific duty to consult the devolved Administrations on any response to the forthcoming public consultation. This will bolster the ongoing engagement that already exists between the Government and the devolved Administrations, and it ensures that, at the critical decision point for our future regime, the devolved Administrations will have advance sight of, and the opportunity to comment on, the Government’s conclusions.

The amendment proposed by the noble Baroness, Lady Finlay, would provide a different process for working, through the common frameworks programme. This amendment, like the Government’s amendment that both Houses have now approved, concerns the period between now and a decision on the design of our future subsidy control approach.

The noble Baroness’s amendment reflects the recent proposals put forward by the Scottish and Welsh Governments. While we are grateful for their constructive engagement on this issue, the Government do not believe that this approach is suitable. I emphasise once again that state aid has never been included in the common frameworks programme. The common frameworks programme was designed to operate in policy areas where regulatory powers previously held at EU level intersect with devolved competence.

As I have said many times to your Lordships’ House, state aid has always been reserved. The devolved Administrations have never previously been able to set their own subsidy control rules. This was covered of course by the EU state aid framework. Therefore, the approach proposed in this amendment would, in our view, not be appropriate. Indeed, by accepting the reservation clause both Houses have confirmed the position that subsidy control should not be devolved. Therefore, it is not eligible for inclusion in the common frameworks programme.

The practical effect of the amendment would be to delay the agreement and implementation of any new UK-wide approach. Such a delay, with the unacceptable uncertainty it would create for business on our future approach, would come at a time when the Government are focused on supporting the UK’s economic recovery.

In the previous debate, the noble and learned Lord, Lord Thomas, queried whether this reservation would cut across part III of Schedule 5 to the Scotland Act. I reassure noble Lords that the purpose of this reservation is not to affect devolved competence on other issues, but to allow for the provision of a single national subsidy control regime.

As I have said previously, there has sometimes been a misplaced conflation between the devolved spending powers and the overall system that regulates the potentially harmful and distortive effects of this spending. It is important to note that these are two distinct and separate responsibilities. All UK public authorities are and will remain responsible for their own spending decisions on subsidies, for how much, to whom and for what, within any subsidy control regime. I hope that noble Lords agree that the Government’s Amendment 51B to consult the devolved Administrations is the best way to ensure that we reach a collective and timely agreement on the future of the UK’s approach to subsidy control.

I turn now to Amendment 50F from the noble Baroness, Lady Bowles, which seems to try to determine particular aspects of the UK’s future approach. By pre-empting the outcomes of the forthcoming consultation, the amendment would limit Parliament’s ability to legislate on subsidy control in future. The effect of the amendment would be that the Secretary of State could not make changes to the tests for a harmful subsidy, for remedies, for the scope of exceptions and for the conditions or time limits associated with such subsidies.

It is important to note that most of the elements referenced in this amendment are aspects of the state aid rules. As the noble Baroness will know from her participation in the recent SI debate on this matter, the current state aid rules will not apply to the UK from 1 January. The State Aid (Revocations and Amendments) (EU Exit) Regulations, which were passed in both Houses, provide absolute legal certainty on this point, so it is unclear what the noble Baroness is trying to achieve in trying to prevent the Secretary of State making changes. Most of the elements referenced will not exist in UK law from 1 January, apart from in a more limited way under aspects of the Northern Ireland protocol. “Approvals”, for example, is a concept that does not exist under WTO rules, which the UK will continue to follow from 1 January.

As such, and as I hope noble Lords will understand, I cannot support the amendment. It would be inappropriate to determine particular aspects of the UK’s future approach or to seek to limit the Secretary of State’s ability to design those aspects at this stage. Through the forthcoming consultation, the Government will develop the details of any future domestic subsidy control regime, including the appropriate definitions and mechanisms for oversight. Should the Government then decide to legislate, these proposals will of course be brought before this House and the other place. I reiterate that the purpose of this reservation is to ensure that any future legislation is a matter for the UK Parliament to determine, and that if any legislative regime is introduced, following the agreement of both Houses, it would apply to the whole of the United Kingdom.

For all the reasons I have set out, I cannot accept Amendment 50F from the noble Baroness, Lady Bowles. Moreover, I cannot accept Amendment 50E from the noble Baroness, Lady Finlay, as it is not appropriate to link the operation of the reservation proposed by Clause 50 to common frameworks, and as we have addressed the concerns in Amendment 51B. As such, with this explanation, I hope that the noble Baronesses will not press their amendments.

Baroness Finlay of Llandaff

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At end insert “but do propose Amendment 50E in lieu—

50E: Clause 50, page 41, line 27, at beginning insert—

“(A1) Subsections (1), (2) and (3) shall take effect when the Welsh Ministers, the Scottish Ministers and the Northern Ireland Executive have agreed with the Secretary of State a common framework applicable to the United Kingdom to regulate the provision of subsidies by a public authority to persons supplying goods or services in the course of a business or, if agreement cannot be reached, 18 months after the passing of this Act.””

Baroness Finlay of Llandaff (CB) [V]

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My Lords, I shall speak to Motion G1 and move my Amendment 50E to Clause 50. At this stage I am minded to seek the opinion of the House, particularly because I wonder whether the House wants to have a conscience vote on some of these issues. I have found the Government’s response to our deliberations worrying. I remain concerned that the damage to the union that will come about as a result of their refusal to commit to a process of codesign of a future subsidy regime will come back to haunt us all.

We are of course a revising Chamber. We asked the Commons to think again, and after many hours of debate we gave clear messages through large majorities on key aspects of the Bill. We have seen some concessions and they were essential changes, but the huge problem of the current approach to the devolved Administrations remains unresolved. Given the Government’s current difficulties with the pandemic and unknowns over the end of the transition period, less than three weeks away, I fear that any stand-off with the devolved Administrations will compound and massively magnify them by fuelling the break-up of our union within only a few years. I say this because, as someone living in Wales and with family in Scotland, I see the Bill acting as a recruiting sergeant for separatist movements.

It is imperative to recognise the common frameworks, and we have signalled that clearly. As part of “taking back control”, the devolved institutions must have at least as much latitude—or call it “control”—as they felt they had within the EU to deal with the question of state aid. To establish durable intergovernmental working with the devolved Administrations, there must be clarity and certainty that the differing needs across the UK will be acknowledged and are seen as a joint responsibility that listens from the ground up and gives decision-making to the devolved Administrations.

As I understand it, neither Parliament nor the devolved Administrations had legislated on state aid in the past as these decisions were taken at EU level and regulations were directly applicable. Now that the EU mechanisms have been removed, it is still unclear where the decision-making now happens. State aid was not on the list of reserved powers and it has never been tested in the courts; indeed, such a test would do untold damage to relations between the constituent nations of the United Kingdom.

I hope I misheard the Minister, or that it was a slip of the tongue. If I heard him say “dissolved competence” instead of “devolved competence”, I am really worried.

My noble friends and I have listened to the objections that three years is too long to wait to put a framework in place, so we have reduced it to 18 months and I am currently minded to seek the opinion of the House on this. Eighteen months is scarcely longer than it would take the Government to consult on a framework and bring forward the legislation to enact it. This could be far speedier should the Government accept the offer from the Scottish and Welsh Governments to proceed rapidly on developing a clear process for them to be part of the codesign of state aid, establishing the consensus through a seat at the table from the outset of such deliberations.

Of course, I share the House’s clearly stated support, restated again today, for the common frameworks process. That is essential, and I do not wish to jeopardise that in any way, as we must move forward together. Yet I believe that the Government will try to say that state aid is already reserved—in fact, I believe that is what I have already heard—and that to include it in the common framework process might somehow jeopardise that position of constitutional principle.

I would be very happy to accept a clear assurance that the Government will make every effort to ensure that the consent of the devolved Governments to a subsidy regime will be secured and will make a statement to Parliament when introducing the necessary legislation if they should override that process. To summarise, I believe that this House will want to hear that the Government will seek to agree with the devolved Governments any new subsidy framework and will explain to Parliament whether they have succeeded or not and, if not, why not. I believe that that is the minimum we can expect. I beg to move.

Baroness Bowles of Berkhamsted (LD) [V]

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My Lords, I will speak to my Amendment 50F and Motion G2, which I may wish to move. I also support Amendment 50E and Motion G1. Amendment 50F looks to the stage at which there may be changes to state aid provisions, whether that be changes in definitions, remedies, or the scope of exemptions, or introducing conditions or time limits on approval. I agree with the Minister that at the moment they are gone, but might not alternatives be introduced, or some aspects reintroduced? I think that would also constitute a change.

The EU state aid provisions were indeed the subject of a statutory instrument recently, and they end at the end of the transition period. But, as the Minister has informed us previously, the UK will follow WTO rules and consult and report on whether any wider scope is to be introduced. If the outcome is a recommendation for going wider—some kind of policy change—it begs the question of how it will be introduced.

My proposal is not made instead of consultations and approvals with the devolved Administrations, which we support; it is in recognition that the full range of public authorities and businesses are affected wherever they may be. Therefore, the detail of how any post-consultation policy change is implemented is of significant interest.

The withdrawal Act was used to make the changes that happen at the end of the transition period. But it would seem inappropriate for that to be used for any new policy. A new policy other than moving to the WTO default should surely have the scrutiny of primary legislation.

I know the Minister may say that how policy is to be implemented can be a point in consultation, but my submission is more constitutional than convenience. Parliament should be able to scrutinise and amend, and to spot those weaknesses and problems that this House in particular has the experience to iron out, especially at the first time around of making independent, post-Brexit state aid rules.

Therefore, my Amendment 50F seeks to put on the face of the Bill that changes to the test for harmful subsidy remedies, the scope for exemptions or the conditions or time limits on approvals may not be done by regulation. I do not seek to prevent policy change being made by the Secretary of State; I am just saying that, at least first time around, it should be made by primary legislation. It may be that the Minister can put my mind at rest, and I await his response with interest.

Lord Thomas of Cwmgiedd (CB) [V]

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My Lords, I will speak briefly in support of the eloquent and persuasive speech of my noble friend Lady Finlay in moving the amendment in Motion G1. First, I thank the Minister for his letter of Friday, which makes clear the Government’s wish for a constructive and collaborative relationship with the devolved Governments on state aid control and that the clause does not cut across the power of the devolved Governments to provide state aid or to determine how it is provided; it seeks only to restrict the distortive effects. With those thanks comes one short observation and two questions.

My observation is this: the proposal is very modest and not to the devolved institutions’ liking because, at the end of the period put forward in this amendment, it would nevertheless reserve a matter that the devolved Governments are right in saying is devolved. Of the many strengths of the proposal, it would provide a means for agreeing the regime and ensuring that it does not go forward without any risk of unilateral attack by a devolved institution. Surely the prize of agreement and strengthening the union is worth having.

I now pose my two questions to the Minister. First, the devolution statutes are now all framed based on reserved powers. That means that, if the UK Government have not reserved something, it is devolved. The power to control state aid is not reserved. If it were, these amendments would be unnecessary. This amendment therefore plainly changes the devolved settlements by removing a power that the devolved Governments have and transferring it to the UK Government. In those circumstances, I ask why the UK Government would not work together with them, consult them before the Bill was produced and try to find a common solution to that which I have always accepted as an absolute necessity: a unified state aid control regime. I fear it is an example of Westminster saying that it knows best, rather than working with the devolved Administrations.

Secondly, if the desire was to work together but, at the same time, provide a means of subsidy control, why, when changing the scheme of devolution, was a commitment not made in the Bill to work together with the devolved Administrations to develop the new regime? These questions seek to show that much could have been done to proceed in a way that strengthens the union, for that is the point of these amendments: to ensure that the UK Government work together with the devolved Administrations.

It is therefore necessary to ask the Minister a general question: how serious are the UK Government in their claims that the devolved legislatures and Governments will be fully involved in developing the subsidy regime? There are many important questions, particularly the role of the CMA as an independent regulator and not an adviser to the UK Government. I am grateful to the Minister for his letter and the constructive conversations we have had, but I join the noble Baronesses in asking for these further assurances and hope we receive them.

The Deputy Speaker (Baroness Fookes) (Con)

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I have received a request to speak from the noble Lord, Lord Adonis.

Lord Adonis (Lab)

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My Lords, before I address the specific amendments in the names of the noble Baronesses, Lady Finlay and Lady Bowles, I will make an observation on the ruling from the Deputy Speaker on the previous group, when the noble and learned Lord, Lord Thomas, sought to withdraw his amendment. It directly relates to this because, for all I know, the same might happen in this case, too. I put on record for future discussions the question of why, as is the normal practice of the House, amendments are not the property of the House once they have been moved.

I understand that was the case when, on 26 November, the noble Lord, Lord Woolley, moved his amendment in the ping-pong on the Parliamentary Constituencies Bill. He sought to withdraw it, but other noble Lords were not content that he should and the House then voted on it. I do not understand the difference between what happened on 26 November on the Parliamentary Constituencies Bill and what happened today when the noble and learned Lord sought to withdraw his amendment. I think this is quite an important point about the procedure of the House and whether, on significant issues of this kind, the House, rather than an individual noble Lord, has responsibility for amendments that have been moved.

Lord Fox (LD)

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My Lords, I can assure the noble Lord, Lord Adonis, that we on these Benches are not keen to hustle this through; we are keen to see one or other of these amendments put back so that we can continue to have the discussions in this area that we need.

I shall speak briefly to both amendments, starting with Amendment 50F, as put forward by my noble friend Lady Bowles. The Minister said that the amendment limited Parliament’s scope. Au contraire, it would make sure that Parliament was in the driving seat of any significant changes. State aid is clearly important—so important that the Government are prepared to crash the entire economy to maintain control of it. If state aid is so important, Parliament and not Ministers or the Secretary of State should be in the driving seat. That, briefly, is what my noble friend Lady Bowles’s amendment seeks.

On Amendment 50E, in the name of the noble Baroness, Lady Finlay, even through the attenuation of the virtual system, her passion for and understanding of devolution, her understanding of the union and the threat she sees posed to it by the overall communication atmosphere created by this Bill and other things—a view which many of us share—rang through her speech. It is clear that, without co-creation, as she called it, that threat to the union remains strong. The Minister should heed the noble Baroness and, whether or not she presses her amendment, look at ways of genuinely bringing on board the devolved authorities so that there is shared ownership of this important process. If either proposer presses their amendment, we will support them.

Lord Stevenson of Balmacara (Lab) [V]

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My Lords, I agree with others who have spoken that this has been an interesting debate. It is clear that good discussions have taken place between Ministers and the movers of the amendments, which is a good sign and reflects changes.

The Government have made a concession and a commitment to extensive consultation prior to bringing forward proposals for their state aid regime. That is a major change compared to where we were at the start of this Bill, which we welcome.

Like the noble and learned Lord, Lord Thomas, we agree that control of state aid and the regime which underpins it must lie at the UK level, but, as we discussed when debating a recent regret amendment to the statutory instrument referred to by the Minister, we think that policy development in this area has been quite bizarre. How on earth Parliament is expected to opine on state aid rules without first knowing what those state aid rules might be—whether we are continuing where we were, whether we are changing to WTO or whether it is somewhere in between—is beyond me; it is not the way we normally do things, as we made clear in that debate. I imagine, and it has been said by others, that it is because this issue is still at the heart of the never-ending discussions in Brussels about the future of the EU free trade agreement. We may begin to see progress once that is resolved, but we are where we are, and we are moving to World Trade Organization rules—much discredited—on 1 January and have yet to consult on an appropriate state aid regime. This is not the way we should do things.

However, we on this side of the House accept that Ministers have given assurances at the Dispatch Box, and they have been repeated today, that spending on state aid, as opposed to the control of policy on it, is an issue that has to respect the devolution settlement. It needs to be done in a way which brings forward the consultation and the seeking of consent that have been discussed by just about everybody who has spoken today. However, a final assurance from the Dispatch Box is required to take the trick on this matter. If the Government repeat that they will make every effort to work consultatively and seek the consent of the devolved Administrations, I do not think that this is right amendment on which to divide the House on this issue or the right time to do it, so we would not support that.

The noble Baroness, Lady Bowles, on the other hand, is moving ahead of the game, looking to future changes and asking how they would be introduced. She is right that these are big decisions that need to be thought through very carefully. If they are to be slipped through in some form of secondary legislation, they will not achieve the scrutiny and debate that they should. She makes some good points about that, and about the gap that will emerge if there is no primary legislation, let alone the need for consultation and discussion with those who have to implement the legislation once it is brought in. Although I discussed it with the noble Baroness prior to this evening’s debate, I suspect that this amendment has been picked up too late to be included in the Bill at this time. As she said, however, it would be good to hear the Minister set out his plans at the Dispatch Box. Again, if he does so, I would not be prepared to divide the House on this issue.

Lord Callanan (Con)

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My Lords, I have once again listened carefully to the points made in the debate today. It is always particularly entertaining to listen to the noble Lord, Lord Adonis, who has once again benefited us with his Brexit prejudices. I give some advice to the noble Lord: he just needs to accept that we had a referendum on this subject as well as a general election that was mainly devoted to it. He really needs to use his considerable talents in other areas and get on with his life. The issue is settled; we are leaving the European Union. I respect his ideas and opinions, but he lost. As a Conservative from the north-east, I know when I have lost an election, and there have been plenty of them in the past.

Regarding devolution, in my previous job I chaired the Joint Ministerial Committee with the devolved Administrations on ongoing EU business. I attended many meetings with both Scottish and Welsh Ministers. Of course, we did not always agree on the outcomes or the issues, but we certainly had a very good personal relationship. I listened to their concerns very closely, as indeed they listened to mine; as I said, we had a good working relationship.

I reiterate, first, that I welcome the shared consensus in this House to continuing the UK-wide approach to subsidy control and confirming this in law. While I am grateful for the time and the effort that has been devoted to scrutinising this provision as is right for your Lordships’ House—perhaps too much time and effort, but we are where we are—it is important to note that we have asked the other place, the elected Chamber, to think again on the relationship between subsidy control and common frameworks. It has been clear that subsidy control does not fall within the common frameworks programme, and that any undue delay is not something to be supported. I hope that noble Lords will be able to respect that decision. I recognise the concerns of the Welsh and Scottish Governments, but I reiterate that the noble Baroness’s amendment is not the best way forward. This amendment is inconsistent with the reservation clauses that both Houses have now agreed should remain in the Bill.

I also reiterate that state aid has always been reserved and, as such, has never been part of the common frameworks programme. This amendment seeks to reverse a decision which has already been made. We need to move forward on this issue as I have indicated, and this will be done through the forthcoming consultation.

The noble Baroness, Lady Finlay, asked me for an assurance that we will make every effort to get devolved Administrations’ support. Amendment 51B demonstrates that the Government are committed to maintaining a constructive, collaborative relationship with the devolved Administrations, as it is in all our interests to ensure that a new regime works for the whole of the United Kingdom. We hope that this amendment will enable us to discuss and resolve any such issues before the publication of any consultation response, and we will commit to listen very carefully to the devolved Administrations’ concerns.

We all agree that the UK Government and devolved Administrations should work constructively and co- operatively in this policy area. That is why, as I have said, the UK Government have set out an amendment that commits to consulting them. The amendment ensures that, before publishing any relevant report relating to the outcome of the UK subsidy control consultation, the Secretary of State will provide a draft of the proposed response to the devolved Administrations, inviting them to make representations. The Secretary of State will then consider any representations and determine whether to alter the report in light of that consideration. If after all that we decide to legislate, it will, of course, come to this House.

This process will ensure that the devolved Administrations’ voices are heard, but it avoids creating the unnecessary delays and confusion that a legislative requirement to try to agree a common framework would introduce. Potentially waiting 18 months for a UK-wide system to be agreed would create uncertainty for UK businesses and damage our efforts to promote the UK’s economic recovery. For these reasons, I respectfully suggest that the approach put forward in the amendment from the noble Baroness, Lady Finlay, is not appropriate at this time.

Baroness Finlay of Llandaff (CB) [V]

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My Lords, I am most grateful to all noble Lords who have spoken in this debate. I start by commenting on the amendment proposed by the noble Baroness, Lady Bowles. She highlighted the constitutional issues here and that this is ahead of its time.

As my noble and learned friend Lord Thomas of Cwmgiedd said, we need a unified state aid scheme and we need something in the Bill to strengthen and not weaken the union, because the devolved Administrations must be fully involved. I appreciate the passion of the noble Lord, Lord Adonis, for supporting the devolved Administrations. The noble Lord, Lord Fox, made some very important points about who is in the driving seat and heard clearly and reiterated the threat that some of us see to the union, as well as the need for co-creation. I appreciate very much the support that he has offered.

The noble Lord, Lord Stevenson, is right that there has been a good discussion, but I am not convinced that we have really heard enough from the Minister. While the Minister certainly works with the devolved Administrations—and I am not disputing that—I was listening very carefully for the words that “consent” would be sought over agreements and that there would be “agreement”. Simply consulting is not enough; one can consult and then reject and ignore whatever is said.

Being at a distance in the hybrid House, it is difficult to feel the atmosphere in the Chamber or know what the feeling of the House is. Some may disagree, but my feeling is, from where I am now, that many in the House are unionists and feel passionately that we must not jeopardise that union and must strengthen, however we can, the working between the devolved Administrations and Westminster. Therefore—hesitantly, but I feel that there is a need for it—I wish to test the opinion of the House, because I wish to give all Members of the House, whichever Bench they sit on, the opportunity to vote according to their conscience over the threat that this poses to the union going forward. I beg to move.

Baroness Bowles of Berkhamsted

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At end insert “but do propose Amendment 50F in lieu—

50F: After Clause 50, insert the following new Clause—

“State aid

The Secretary of State may not, by exercise of powers under this or any other enactment, make any changes to the test for a harmful subsidy, remedies, the scope of exemptions and conditions or time limits on approvals.””

Baroness Bowles of Berkhamsted (LD)

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My Lords, I have put down my marker on this point. It is not going away, and nor am I. I thank the noble Lords who spoke in favour of the principle which I laid out but, for now, this Motion is not moved.

Madam Deputy Speaker (Dame Rosie Winterton)

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We now come to consideration of the message from the House of Lords on the United Kingdom Internal Market Bill, which is to be considered in accordance with the order of the House of 14 September.

I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 48B and 48C. If any Lords amendment engaging financial privilege is agreed to, I will cause the customary entry waiving Commons financial privilege to be entered in the Journal.

Before I call the Minister, I should say that hon. and right hon. Members will be aware that we have one hour for this debate, which means that I will impose an immediate five-minute time limit. However, that may end up being four minutes, depending on how long the Front Benchers take. I just want people to be aware of that.

After Clause 1

COMMON FRAMEWORKS PROCESS

The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)

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I beg to move,

That this House disagrees with the Lords in their amendments 1B, 1C and 1D.

Madam Deputy Speaker (Dame Rosie Winterton)

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With this it will be convenient to consider the following:

That this House agrees with the Lords in their amendments 8B, 8C, 8D, 8F, 8G, 8H, 8J and 8K, but disagrees with the Lords in their amendment 8L, insists on its disagreement with the Lords in their amendments 13 and 56, and proposes amendment (a) to the Bill in lieu of Lords amendments 8L, 13 and 56.

That this House insists on its disagreement with the Lords in their amendments 14 and 52 to 54 but does not insist on its disagreement with the Lords in their amendment 55.

That this House does not insist on its disagreement with the Lords in their amendment 44.

That this House does not insist on its disagreement with the Lords in their amendment 45, and proposes amendment (a) instead of the words left out by the Lords amendment.

That this House does not insist on its disagreement with the Lords in their amendment 47, and proposes amendment (a) to the Bill consequential upon the Lords amendment.

That this House disagrees with the Lords in their amendments 48B and 48C.

That this House agrees with the Lords in their amendment 50B, but disagrees with the Lords in their amendment 50C.

That this House agrees with the Lords in their amendment 51B.

Paul Scully

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I will try to be brief in going through the amendments—but with some detail, Madam Deputy Speaker—to make sure that others can speak.

I am glad that, since our last debate on the Bill on Monday, there have been a number of very positive developments. I am delighted that the peers in the other place and the Government have worked together constructively to agree on a number of areas. However, it is clear that there are still a number of outstanding issues, which I will address today. I will set out the Government’s rationale and I call on this House to support the Government’s proposals.

I want to start with some of the positive developments, notably on part 5 and Lords reasons 14B, 45B, 52A, 53A, 54A and 55A. The Government have been clear throughout that they were committed to implementing the withdrawal agreement and the Northern Ireland protocol. We were also clear that as a responsible Government we could not allow the economic integrity of the UK’s internal market to inadvertently be compromised by the unintended consequences of the protocol. That is why, through clauses in the Bill, we sought limited and reasonable steps to create a legal safety net by taking powers in reserve, whereby Ministers could guarantee the integrity of the United Kingdom and ensure that the Government were always able to deliver on their commitments to the people of Northern Ireland.

We sought those measures to guard against the possibility of not reaching agreement with the EU at the Joint Committee. As my right hon. Friend the Chancellor of the Duchy of Lancaster and his EU counterpart have reached an agreement in principle, I am pleased to say that the clauses that provided for the safety net are no longer needed and the Government are removing them from the Bill: that is, clauses 44, 45 and 47.

I am pleased that the other place has now also agreed to clauses 42, 43 and 46 and consequential amendments, which are purely about protecting Northern Ireland’s place in the UK customs territory and internal market, delivering unfettered access in line with the Northern Ireland protocol and codifying in legislation existing practice in terms of the Foreign Secretary notifying the European Commission on state aid.

Alongside that, and in line with the agreement in principle, we have tabled a new clause that will require the Secretary of State for Business, Energy and Industrial Strategy to set out guidance for public authorities on how the state aid provisions of the protocol will work in practice, as well as consequential amendments as a result of removing clauses 44, 45 and 47. Guidance must take account of any declarations made by the EU and the Joint Committee, which would include the proposed EU declaration that forms part of the package agreed in principle by the Chancellor of the Duchy of Lancaster. I call on the House to agree with the Government’s approach in this area.

I turn now to amendments 1B, 1C and 1D. Yesterday, noble Lords in the other place once again commended the importance of the Government’s continuing co-operation with the devolved Administrations on the common frameworks programme and reiterated their support for it. I would like to take the opportunity to thank the noble and learned Lord Hope for his considered intervention yesterday, and for all his thoughtful work on the Bill. However, while his new amendments would clarify the interaction between divergence agreed under common frameworks in the market access principles, they would still potentially undermine the certainty that the market access principles are designed to provide for business, because of the possibility of differing interpretations of what is permitted under an agreement. Moreover, as I set out on Monday, the amendments could create a broad exclusions regime. In itself, that denies businesses and consumers much needed clarity about the terms of trade within which they operate.

I would also like to take this opportunity to remind the House that common frameworks are processes for negotiation and reaching agreement, and are not in themselves a policy outcome. Wholesale exclusions from the market access principles of agreement reached through the common frameworks process could therefore lead to the unacceptable risk of harmful trade barriers being erected across the UK. Such barriers could not be erected under the EU system unless justified and notified to the Commission, and they are undesirable in our own UK internal market. For those reasons, I respectfully suggest that the approach put forward in the amendments is not appropriate.

I have said previously that the Government are committed to completing the delivery of the common frameworks programme and protecting these areas of co-operation to the benefit of jobs, people and livelihoods. We welcome the support of hon. and right hon. Members here in achieving that. However, amendments 1B, 1C and 1D have considerable drawbacks and I therefore call on the House to disagree with them.

Let me turn to Lords amendment 8L. I remind the House that, in drafting the Bill, and clause 10 specifically, the Government designed an exclusions approach that achieves a careful balance. It sits within the fundamental framework of the market access principles, which protect the UK’s highly integrated internal market, but allows the Government to remove very targeted and specific policy areas from scope, so it can continue to operate for the particular conditions, where they are needed, under the bespoke constraints that are relevant to those circumstances. Let me repeat the point for emphasis: we agree that there is a need for an exclusions regime, but one that is carefully drafted and provides certainty for business.

I am therefore disappointed that the other place has again voted to upset that careful balance with an altered, but still fundamentally flawed, expansive list. It would render the protections and benefits of the internal market proposals under part 1 meaningless. This would allow unnecessary trade barriers and unjustifiable costs to businesses and consumers.

Amendment 8L captures all kinds of public policy objectives and only requires a new regulation to make a contribution to any of the aims in the list. That means that almost any regulation that the UK Government or the devolved Administrations propose in the future could be excluded from the scope of the market access principles. I therefore call on the House to disagree with amendments 8L, 13 and 56, and agree with the Government’s amendments in lieu.

Liz Saville Roberts (Dwyfor Meirionnydd) (PC)

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The Minister refers to the Government amendment, which also refers to consultation and consent. Yesterday, the Senedd voted to withhold consent from the internal market Bill. Its provisions regarding consultation are meaningless. When he says that Wales will be consulted, what we hear is contempt. Will he admit that to press ahead regardless, against the express will of the people of Wales and Welsh democracy, is to follow, as Lord Thomas put it in the other place, the

“discredited principle of ‘Westminster knows best’”?—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 278.]

Paul Scully

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We want to work with the Welsh Senedd. We want to work with the Welsh people. We want to work particularly to ensure that Welsh businesses have certainty, and English, Scottish and Northern Irish businesses as well. That is why we need to work at pace to ensure that we have an internal market that works for all come 1 January.

Let me turn to amendments 48B and 48C. It is right, as we leave the transition period, that the UK Government have the right tools to make sure the whole country can benefit from investment, which strengthens the communities, economies and connectivity within and between all parts of the UK. I emphasise once again that this power is in addition to the devolved Administrations’ existing power. It does not take away responsibilities from the devolved Administrations; rather, the power will enable the UK Government to deliver investment more dynamically and in collaboration with the devolved Administrations and other partners.

The Government will work with the devolved Administrations to ensure we can complement their existing and continuing powers, used to support citizens in Scotland, Wales and Northern Ireland. We will also work collaboratively with other crucial partners, including local authorities and wider public and private sector organisations.

Alan Brown (Kilmarnock and Loudoun) (SNP)

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If the desire is to work collaboratively, why on earth are the Government rejecting these amendments, which simply ask for consent from the devolved Administrations? That would be collaboration.

Paul Scully

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I have talked about the fact that we have spoken with the Scottish Government and continue to do so and we are very open to that. What has been frustrating, in terms of collaboration, is that although we have collaborated on common frameworks, the Scottish Government have pulled away from discussions about the internal market, and that started to cause this detachment. But we do want to hold out our hand to make sure we can continue to collaborate in the future to complement, as I said, the existing powers.

I want to touch briefly on the UK shared prosperity fund. This power means that the UK Government can make good on our commitment to the UKSPF. The UK Government intend to work with the devolved Administrations and with local communities to ensure that this power is used to best effect and that the UK shared prosperity fund supports citizens across the UK. Indeed, we have confirmed that the devolved Administrations will be represented on the UK SPF governance structures. The Government will set out further details of the objectives and administration of the shared prosperity fund in the UK-wide investment framework, which will be published in the spring. We will continue to engage the devolved Administrations as we develop the investment framework in advance of its publication.

Madam Deputy Speaker (Dame Rosie Winterton)

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I appreciate that the Minister was as brief as he could be, given that he took interventions, but I think we will have to start with a time limit of four minutes rather than five minutes.

Edward Miliband (Doncaster North) (Lab)

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I will try to be as brief as I can, Madam Deputy Speaker. I want to say to the Minister that we should note the progress made in the removal of the law-breaking clauses from part 5. What has essentially happened here is that the Joint Committee set up to deal with the outstanding issues on the Northern Ireland protocol has dealt with the issues on the Northern Ireland protocol. We are in a slightly through-the-looking-glass world here. The Chancellor of the Duchy of Lancaster this week described Maroš Šefčovič, the Vice President of the Commission, and his team as displaying

“pragmatism, collaborative spirit and determination to get a deal done that would work for both sides.”—[Official Report, 9 December 2020; Vol. 685, c. 847.]

These are the same people the Prime Minister described in his Second Reading speech in September as being

“willing to go to extreme and unreasonable lengths”.—[Official Report, 14 September 2020; Vol. 680, c. 42.]

He also said that they had engaged in an “extraordinary threat” and refused to take the “revolver off the table”.

There are two conclusions we can draw from this sequence of events. The first is that Mr Šefčovič has changed his whole character, attitude and personality in three months; the other is the Prime Minister has a man who will make up any old nonsense for political advantage. I tend to the latter view.

Sir William Cash (Stone) (Con)

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Will the right hon. Gentleman give way?

Edward Miliband

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I am going to make some progress; lots of people want to speak and there is not much time.

With the law-breaking powers that undermined our reputation in the world gone, we are left with the legal but, I believe, deeply flawed proposals for undermining our shared governance at home. I am glad that the other place has, by large majorities, stuck with the insistence on upholding the devolution settlement, particularly in respect of common frameworks. I say to the Minister that this is absolutely critical to the kind of country we want to build post Brexit. We want a functioning UK internal market, but we believe that can be achieved in a way that upholds high standards and allows devolved Governments both to have a voice in setting those standards and to make choices in devolved areas appropriate for each nation. The principle is clear: we have a system of governance based not any more on power hoarded at Westminster but on power shared. That should be respected.

All of that brings me to Lords amendments 1B, 1C and 1D. I hope that in the course of the coming days the Minister, with his colleagues, will reflect on this: the Government say that they support common frameworks, that they are a great innovation and that they are proud of them—and they are a good innovation in many senses—so why not give them legislative backing?

This is quite an arcane debate, so I wish to make it as simple as I can and return the example of single-use plastics, which I mentioned on Monday, to show the difference between the common frameworks approach proposed by Lord Hope and others and the Government’s approach. Environmental policy, including on plastics, is a devolved question. Under the EU rules we currently have, the Welsh Government, for example, could ban the production and sale of single-use plastics in Wales; under the Bill as it stood when it went to the other place, the Government of Wales would not be able to ban their sale because the UK Government do not propose to ban such plastics themselves. Because of the market access principle and the way it is implemented, the lowest standard in one Parliament will be the standard for all, which means that Welsh shops will have to stock these plastics. I do not believe that that respects the devolution principle. The power may be formally devolved, but in essence it is rendered ineffective by the approach taken in the Bill, which takes control back to Westminster. If the Minister can explain why it does respect devolution, perhaps he should do so, but I have not heard a good explanation.

What is the alternative to that? The alternative is the common frameworks approach, which provides a different way forward by attempting to find consensus for high standards among the four nations while respecting devolved powers and the ability to diverge through agreement. That is what Lord Hope’s amendments seek to do, which is why we support those amendments and will, indeed, seek a vote on them.

Lords amendments 8L, 13 and 56 also seek to preserve the ability for there to be higher standards in different nations, where they can be justified. Again, this is about our vision for the future. Instead of a race to the bottom, we want to see a race to the top on standards. We have seen this over the course of devolution: on the smoking ban, plastic bags and a whole range of issues, we have seen experimentation in different nations drive up standards. I say to the Minister that both sets of amendments are the right thing to do to respect the devolution principle, and I believe they are consistent with the internal market that we want to see.

I turn briefly to Lords amendments 48B and 48C, which would oblige agreement with the devolved Administrations before there was spending in devolved areas. If anything, this is a clearer and more simple test of the Government’s real intentions. They say that they believe in devolution. The city deals are worked out jointly with the devolved Administrations; the Government are taking enormously wide powers in the Bill on spending in devolved areas. If this is not about hoarding power to Westminster, the Government can surely agree to the proposal that such spending should have the consent of devolved Administrations. This is about the principle of shared governance. I make the point that that was certainly the case in relation to EU structural funds. The Minister set out some proposals on the shared prosperity fund, but the Bill proposes much wider powers in relation to spending in devolved areas. If this is not a power grab and is not about hoarding power to Westminster, surely it is possible to say, “Yes, this spending should be agreed with the devolved nations.” If the Government refuse to accept the amendment, they slightly give the game away.

I think there is a big picture here, which is that, as I said on Monday, all of us who believe in the United Kingdom must, I believe, go the extra mile to protect devolution. I think it is incredibly important. It is the key to keeping our United Kingdom together, in my view. While we welcome the removal of the offending parts of part 5, this Bill just does a bad job of doing that, I am afraid, and I think the other place is telling the Government that loud and clear. I am very struck, by the way, that the Conservatives who voted for the amendments yesterday—Lord Mackay of Clashfern and Lord Dunlop, to take two examples—are people who are steeped in this issue as Conservatives and are incredibly keen to protect both the devolution settlements and the Union.

I say to the Minister that we want the United Kingdom Internal Market Bill to reach the statute book. It must happen, however, in a way that does not ride roughshod over the way we are governed. I hope very much, for the sake of the United Kingdom and for the sake of respecting the devolution settlements, that the Government will reflect on this over the coming days.

Sir William Cash

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In a nutshell, I am concerned about the fact that the Government have not insisted on this disagreement with respect to the notwithstanding clauses. I do not have time to go into all the detail, but I would simply say this. They remain needed, and I have put down amendments this afternoon to the Taxation (Post-transition Period) Bill for next week for the same reason.

The first thing is that this is to do with sovereignty and with judicial powers. It is to do with the fact that the notwithstanding clauses, with the use of the words “notwithstanding” and “whatsoever”, actually deal with the job effectively, and we should not take them away when we do not even know what the text from the Joint Committee is and we have just in effect been told that decisions are taken. There is this new clause talking about guidance. Guidance on what—on what agreement? We have not seen it, and we do not know what it means. I shall therefore almost certainly abstain on that at the very least.

The second thing is the question of what the right hon. Member for Orkney and Shetland (Mr Carmichael) said yesterday—he knew perfectly well when he used the word “Factortame” what he meant. It is what I have been talking about in respect of, for example, the quashing of Acts of Parliament: the ability of the courts under the rubric of European law to be able to take action to strike down UK law. Those principles may be retained—indeed, I believe it is more than possible that that would actually happen. There is a necessity to ensure that it does not happen when we have had a referendum, we have had Acts of Parliament and we have had section 38 of the European Union (Withdrawal Act) passed, all of which enables us to be able to provide for these notwithstanding clauses.

We should not remove these clauses on the basis of a jeu d’esprit or leave them out on the basis that everything is now all right in respect of these absurd allegations over breaches of international law, which are complete nonsense. Nobody has put forward a single argument in the House of Lords to substantiate the allegation that there is a breach of international law. In fact, the reality is that article 46 of the Vienna convention deals with these matters, and it is therefore perfectly proper for us to keep the clauses. I believe that we need to retain them not just as a safety net or as belt and braces, but because it may well turn out to be necessary to avoid, for example, either the House of Lords or the courts, in extremis, taking action the effect of which would be to undermine the Brexit process. That is the key issue. It is about sovereignty, which the British people have made clear is what they want—the same applies to the red wall seats, as the Labour party knows only too well.

The bottom line, therefore, is that I want an assurance from the Minister that measures will be taken in legislation—in primary legislation—to restore those notwithstanding clauses. I have discussed this with our team in the Whips Office today. I hope the Minister will simply say, “Yes, we will take note of what my hon. Friend has said, and indeed will give effect to it if we find that, at the end of this weekend, it is necessary to return those clauses to the taxation Bill and also, if necessary, to this Bill,” but without prejudicing the safety of the United Kingdom Internal Market Bill in its entirety as it stands at the moment.

Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)

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This shabby, shambolic, pernicious Bill should never have seen the light of day. It has already been delivered a historic defeat in the Lords—they rightly tore it apart—yet this Government overturned all their amendments and sent the Bill back. No sooner had they done that than there came the press release—as ever, bypassing this House—to say that the Government would be retreating from breaking international law with clauses that should never have been in the Bill in the first place, and that have only served further to diminish this Government and the UK’s already tattered international reputation. They are now reinstating these amendments.

Of course, it is not just the other place that this Tory Government ignore; it is almost everybody. When it comes to devolution and the nations of the UK, they are still determined to ignore the democratically elected Parliaments. As we have already heard, both the Scottish Parliament and the Welsh Senedd have voted to withhold legislative consent on this Bill, yet this Government say that it is about working with the devolved Governments. It is not.

Lords amendments 48B and 48C pretty much deal with the shared prosperity fund that we have heard about. Under these amendments, the Government would have to agree with the devolved Governments on the way in which and where funds would be spent for matters within the devolved competences—roads, health and education, for example. The Government have said that the devolved nations will be represented, but Lord Thomas did not fall for that smoke and mirrors approach from the UK Government. He noted that,

“the clause without my amendments would enable the UK Government to spend in devolved fields and bypass the devolved Governments and Parliaments in Scotland, Wales and Northern Ireland who have been elected to be responsible for those fields. It would, in effect, hollow out the devolution settlements.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1293.]

It is disgraceful that we still do not have details of the shared prosperity fund, just weeks before we leave the EU. I was asking about this in 2017, and we have still not had anything from the Government.

Lords amendments 50B and 50C set out an attempt to agree a common framework, which is a regime that can govern the control of subsidies. Lord Thomas warned that, without this,

“Having changed the settlement for a policy that they have not yet devised, the Government then wish simply to consult…and then announce their decision. That is what I would call ‘way one’—the UK Government way.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1309.]

The SNP will not accept this brazen power grab. State aid must remain a devolved competence.

We welcome the changes through motion C1 in the Lords. The amendment removes the law-breaking clauses from part 5 of the Bill. Lord Judge said:

“They were constitutionally improper and a constitutional aberration. They subverted the rule of law.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1277.]

They have even been knocked down by former Tory leader, Lord Howard.

Sir William Cash

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Will the hon. Gentleman give way?

Drew Hendry

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I am not going to take interventions. We are very short on time, so I am going to press on; sorry.

Lords amendments 8B to 8L, 13A and 56A require the Secretary of State to seek the consent of the devolved Administrations before exercising the powers, setting a time limit for that and a process if consent is withheld. Lord Stevenson said:

“The purpose of our amendment is to preserve the potential for managed policy divergence that is central to the devolution settlement.”

Again, the UK Government just ignore that. Lord Stevenson also noted:

“The Government have failed to explain properly why their list of exceptions is so much more restrictive than that of the EU—well, we can probably work that one out”. —[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1268-69.]

Let us not forget that this covers a huge range of effects for people in Scotland, Wales and Northern Ireland:

“environmental standards and protection…animal welfare…consumer standards, including digital and artificial intelligence privacy rights…employment rights and protections…health and life of humans, animals or plants…protection of public health…equality entitlements, rights and protections.”

It has a massive impact on Scottish public society.

Lords amendments 1B, 1C and 1D seek to protect the role of the common frameworks in the Bill. The Minister thanked Lord Hope, but he was the one who pointed out that

“if there really is a will on the Government’s part to make this system work, a solution can be found.”

He also said:

“Traders from other parts of the UK who had no regard for the higher standard could simply ignore it, irrespective of how simple and easy it was to comply with. That is not where we should be going.”

He concluded:

“A balance needs to be struck here, if devolution is to be respected.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1249-50.]

Time after time after time, Members of the Lords pointed out the massive disrespect and contempt the Government have for the devolution settlement. Baroness Hayter of Kentish Town warned the Government

“to be very careful about clawing back decisions from our now quite long-established devolved settlements.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1256.]

The Scottish Government, by the way, remain fully committed to the common frameworks process, as this Minister knows. I cannot use the language I would like to use in this House about what the Minister repeated, but he knows that the Scottish Government have remained 100% committed to the agreement that was set up to take the process through, and he should correct the record.

This Bill is unwanted and unwarranted and unashamedly undermines devolution. It is an attack on the democratically elected Scottish Parliament and the vast majority of the Scottish public who value it. Since 2014, promises to them have been routinely broken in this place. Their votes and their views have been ignored over Brexit. Now, Scotland will be the only country not to get what it voted for in that referendum. They will in the next one. They know that. The only way to protect their rights and their Parliament is for them to take the next logical step and for Scotland to become an independent nation.

Sir Robert Neill (Bromley and Chislehurst) (Con)

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I welcome the fact that the Government have accepted that it was unwise, if I can put it charitably, to have certain clauses in this Bill that might have impugned our international reputation for supporting the rule of law. I welcome the Minister’s approach and that of his colleague Lord True in the other place. The Bill is better off without those clauses. I had sought at the very least to ensure there was a parliamentary lock should such clauses ever be needed, but I hope that through the agreement achieved in the Joint Committee, thanks to the work of my right hon. Friend the Chancellor of the Duchy of Lancaster, they are not needed at all. It is better, therefore, to leave the Bill clean in that way to serve the other important purposes that it does have to achieve.

That is why, with all due respect to my hon. Friend the Member for Stone (Sir William Cash), I trust that the Minister and colleagues will firmly resist any temptation to try to reinstate such clauses, which would be unnecessary, provocative in more ways than one, and unhelpful to the purpose we all seek to achieve.

I read with care the speeches of two former Lord Chief Justices and the former leader of my party, my noble Friend Lord Howard of Lympne, who himself was a distinguished Queen’s counsel with many years in practice before he came into this place. They certainly were not talking nonsense; they were making legitimate and fair points about areas of concern, even though I perhaps was more content to go with the view of David Wolfson QC, who was quoted by Lord Naseby, that the taking of such clauses into the Bill was not of itself a breach of international law until such time as they were brought into force. We are none the less better off not going down that route, so I hope the Minister will resist any temptation to put anything of that kind back into this Bill or into the Taxation (Post-transition Period) Bill, because that would muddy the waters needlessly, legally and politically.

We are going to require political goodwill on all sides to make the coming days and weeks work. Were it ever to be necessary to take such extreme measures in such extreme circumstances that might occur, immediate primary legislation on an emergency basis could of course be done, and that would give the parliamentary lock that I was concerned should exist, but through another form. It is not necessary for us to go down that route now, because, frankly, to try to reinstate the clauses would be fatal to the progress of the Bill, and that would not be in the interests of the Government or anyone else. I thank the Minister for the way in which he and his colleagues have approached this matter.

Sir William Cash

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Will my hon. Friend give way?

Sir Robert Neill

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Nobody else has been giving way, with every respect to my hon. Friend. Other people want to get in. I have said what I have to say. In fairness, he and I could happily go on all day about this in a friendly manner of disagreement, but I think possibly that is for outside the Chamber, rather than in it. I say that in the nicest possible way.

Mr Deputy Speaker (Mr Nigel Evans)

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I will call Mr Scully to close the debate no later than 2.30 pm.

Wendy Chamberlain (North East Fife) (LD)

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I am pleased to have the opportunity to speak today, having been unable to do so on Monday.

Because of the international law-breaking clauses, I believe that insufficient attention has been given to how this Bill affects the devolution settlements, which is a matter of great regret. Throughout its passage, my colleagues and I have been keen to work constructively on that aspect. Now that the law-breaking parts have been taken out of the legislation, I hope we can ensure that the voices of the devolved nations are listened to.

At earlier stages I tabled amendments to ensure that the devolved Administrations had input into the membership of the Competition and Markets Authority, following the precedent set by the Scotland Act 1998. The Lords have made amendments to the common framework and the functioning of the Office for the Internal Market, and on engagement with the devolved Administrations—amendments that build on the devolution settlement rather than undermine it.

I have found the Government’s rationale for refusing these changes to be highly frustrating. A case in point is the interaction between the common frameworks and the UK internal market. Why do we need this legislation when the common market frameworks have buy-in from all the devolved nations? The Government tell us it is because the internal market deals with cross-sector issues, whereas the common frameworks deal with specific sectors. Yet when the Minister appeared before the Scottish Affairs Committee, I asked him whether he could give an example of a cross-sector issue that the Bill will help to solve. He could not. When he wrote to the Committee on this matter—I am grateful to him for doing so—he said:

“We would refer you to pages 81-83 of the White Paper, which sketch out a cross-sector example in the form of an illustrative supply chain in the agri-food area.”

I think that says it all. The Government cannot provide a real-life example of an affected product that is cross-sector. Indeed, the implication in the White Paper is that there are no common frameworks in those different sectors. I do not see how, if the common frameworks are in place, there should be an impact. Therefore, there is no need for the Bill’s provisions.

The Government’s refusal to support Lords amendments on common frameworks, in particular amendments 1B, 1C and 1D, is therefore frustrating, but I am also concerned by the Minister’s response to the Committee on the role of the Office for the Internal Market, which will have huge powers. The worry is that parties involved in trade deals—the example I gave in the Committee was that of US investors—could sue the devolved Administrations or indeed the CMA. The Minister’s response to that point was:

“The CMA is therefore able to accept reporting requests from bodies and individuals with relevant concerns connected to”

the operation of the internal market,

“including those from outside of the UK.”

Although the letter then suggests that such reports would not interfere in devolved competences, can the Minister confirm that, by submitting a request to the CMA, foreign investors could potentially interfere with devolved Administrations? If the CMA refuses such a request, could those foreign investors then challenge that in the court?

The Minister has insisted that is not a political Bill, but given that the Paymaster General just this morning was unable to confirm to me whether the Government would bring forward international law-breaching clauses in future business, such as the Taxation (Post-transition Period) Bill, which the hon. Member for Bromley and Chislehurst (Sir Robert Neill) referred to, if the outcome of the EU negotiations is no deal, then it is clearly nothing but.

Sammy Wilson (East Antrim) (DUP)

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First, I welcome the fact that the provisions in clauses 42 and 43 safeguarding Northern Ireland’s position within the internal market and its unfettered access to that internal market, and also within the customs union, have been maintained. I am not grateful to the Lords that they have not removed them; it would have been a scandal if they had decided to abandon Northern Ireland in that way.

However, I say to the Minister that if we are maintaining those clauses to safeguard Northern Ireland’s position within the UK market, with unfettered access, and the UK customs territory, thereby ensuring no barriers to trade in the form of tariffs and so on, then the means to deliver that must be in place, because it is still under threat, regardless of the agreement reached in the Joint Committee. Some of these issues are under review. Some businesses in Northern Ireland will still be subject to EU tariffs; therefore, there is a tariff barrier between Northern Ireland and GB. The means of safeguarding and delivering on the commitments made in the Bill are therefore important. What I am surprised about, though, is that the Government have accepted the Lords’ removal of the clauses on state aid.

Alan Brown

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We all know the Prime Minister does not believe in devolution, and neither does the Leader of the House, who made more derogatory comments about it this morning. In fact, over the years, the Prime Minister’s comments are nothing less than anti-Scottish. I accept that the Government do believe in an abstract of the Union, but more important to them is Westminster sovereignty and the fact that we in the devolved nations should do what we are told and be grateful. It is quite clear that there is a huge resentment that the people of Scotland and the people of Wales vote for Governments who are non-Tory.

If this Government have any scintilla of respect for the Union and for devolution, they would accept these regional amendments that have come back from the House of Lords. Instead, what we have heard from the Minister is platitudes about collaboration and working with the Government, but in actual fact the Government will not allow the devolved Administrations to have consent. They will ignore the legislative consent motion votes in other Parliaments, so, actually, that is Westminster imposing its will on the devolved nations yet again.

Amendment 48 seeks to ensure that any Westminster spend in devolved areas is undertaken with the consent of the devolved Governments. What is there to argue about that? If we are talking collaboration, the Government should just accept this simple, reasonable amendment. The Scottish Tories always tell us that they want both Governments of Scotland to work together—as they call it. We were promised the best of both worlds in 2014. Well, this simple amendment would make a statement about the fact that the Tory Government are willing to work in collaboration with the devolved Administrations and show them the respect that they deserve.

If the Scottish and Welsh Tory MPs vote to strike out the amendment, they should hang their heads in shame, and it would show that it is all bluff and bluster when it comes to respecting devolution. In fact, doing so is confirmation of the Lords assessment that devolution is simply an inconvenience to the Tories and they are ignoring the advice from Lord Dunlop not to use their own votes to overturn these Lords amendments. It is absolutely disgraceful that we still do not know what the shared prosperity fund will look like. Again, the word “shared” seems a bit of a misnomer, given the attitude of the Tory Government. Why are we moving into a consultation phase after all these years? It is a disgrace that they have mucked about and mucked about, and nobody knows what will replace these vital European funds—funds that have helped many regions in Scotland to make up for a lack of spending from Westminster over the years.

If the Government do not agree to the formalisation of common frameworks, once again, that shows there is no real intent to work collaboratively with the devolved Administrations. What is wrong with formalising common frameworks? The Minister saying that it will cause uncertainty beggars belief. It does the opposite of cause uncertainty—it provides a clear way forward for us to work together. It seems to me that, yet again, this is another way for Westminster to impose its will on the devolved Administrations.

We know that there are too many free marketeers in the Government, and the fact that they will not allow state aid to be devolved or to be part of common frameworks suggests to me that there will be a race to the bottom in the future, when this Tory Government pull subsidies. There is a pretence at the moment that the argument with the EU is about how the Government want to provide more state aid—who’s kidding who? We know that in the long run, free marketeer rules will win, so it has nothing to do with supporting industry.

We have had 313 years of the Union and Westminster rule. We have only had 20 years of devolution. It is now clear to more and more people what has had the biggest impact on inequality and holding Scotland back, and it is not the 20 years of devolution. We look forward to independence, because more and more people realise that it is the only way forward.

Joanna Cherry (Edinburgh South West) (SNP)

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It is a pleasure to follow my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown). I rise to support the Lords amendments in respect of devolution. Northern Ireland is allegedly sorted out now, and the international lawbreaking parts of the Bill have gone, but what of Scotland? According to the Chancellor of the Duchy of Lancaster, businesses in Northern Ireland will enjoy “the best of both worlds”: access to the single market and, at the same time, unfettered access to the rest of the UK market. Presumably this means that when Scotland becomes independent and a member of the European Union, Scotland too could have the best of both worlds: access to the single market and to the rest of the UK market, with no hard border and no infrastructure on the border. We shall see, but one thing is for sure: the Conservative party can never again be allowed to get away with claiming that Scottish independence means that a hard border with England is inevitable.

Scotland has yet to vote for independence, but that is only a matter of time. In the meantime, we want to protect what we have. Scotland did not vote for Brexit, but Scotland did vote for devolution in very significant numbers in 1997. This House should not use Brexit, which Scotland did not vote for, to undermine devolution, which we did vote for. The Lords amendments are designed to protect some of the essentials of the devolved settlement. It is very telling that Lord Hope, who I count as a friend and who is a former Lord President of the Court of Session, former Deputy President of the UK Supreme Court and also a Unionist, said that initially, when he heard SNP politicians talking about a power grab, he thought it was an exaggeration, but after reading the Bill, he agreed with us. That is not a nationalist—that is a Unionist, so Government Members would be wise to listen up.

Others in the Lords did not fall for the Government’s sleight of hand in the Bill either. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, Lord Thomas said yesterday:

“the clause without my amendments would enable the UK Government to spend in devolved fields and bypass the devolved Governments and Parliaments in Scotland, Wales and Northern Ireland who have been elected to be responsible for those fields. It would, in effect, hollow out the devolution settlements.”—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1294.]

Lord Adonis warned:

“This Bill is deliberately intended to cut across and undermine the devolution settlements because the Prime Minister does not agree with them”.—[Official Report, House of Lords, 9 December 2020; Vol. 808, c. 1294.]

The game’s up, and Government Members should realise that the heads of voters in Scotland do not zip up the back. Devolution is very popular in Scotland across parties. It is supported by the vast majority of voters in Scotland. Even some Scottish Conservatives—some, not all—support the current devolved settlement. Donald Dewar set it out carefully, making a delineation between reserved and devolved powers, and that is what this Bill is driving a coach and horses through. We must not forget today that Scotland’s Parliament—the democratically elected voice of Scotland’s people—has voted against the Bill by a margin of 90 to 28 MSPs.

I say to the Minister that we are sick to the back teeth of the Government’s disingenuous words, saying that they listen to the Scottish Government. Listening is not enough; they have to have respect for the democratic voice of Scotland, which is expressed through our Parliament. Our Parliament has said it does not want this Bill, and if the Government do not listen, then a vote for independence is inevitable. I say, “Bring it on.”

Mr Deputy Speaker (Mr Nigel Evans)

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To sit down no later than 2.30 pm, Mr Tim Farron.

Tim Farron (Westmorland and Lonsdale) (LD)

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Thank you very much, Mr Deputy Speaker. It is a pleasure to follow the hon. and learned Member for Edinburgh South West (Joanna Cherry). The Government’s position throughout this Bill, as it is on every other piece of legislation, is directed at an audience. The audience that was listening to their intentions to break international law was an international audience. While of course it is welcome that those clauses have been withdrawn, it is ludicrous that they were ever on the table in the first place. International opinion of the United Kingdom has been measurably affected by that as a consequence.

The fact that Britain is a country that is prepared to break its word and break international law so flagrantly—for whatever purpose Government Members might think they have behind that—is heard, noticed and remembered. As a consequence, Britain’s standing in the world is reduced, Britain’s influence in the world is reduced and Britain’s sovereignty is reduced. That is why the sovereignty myth being peddled by the Government at the moment is so far off the mark of reality.

I will focus my comments in the moments ahead of me on the issues to do with mutual recognition and the differences between the four nations of the United Kingdom. Mutual recognition is embedded in this Bill and we seek to remove it, because it is about setting the United Kingdom’s formal negotiating position using the standards that are the lowest among the four nations. As we go and have a negotiation on food, farming and other trade issues with other countries, we will use the standards of whichever of the four nations has the lowest as the common standard across the United Kingdom.

That is appalling for two reasons. It is a race to the bottom when it comes to standards in agriculture and in other matters as well, and it is a threat to the integrity and the survival of the United Kingdom. Both those realities hurt my communities in Cumbria, first because of the impact on farming. The fact that the British Government continue to refuse to write into legislation minimum standards—particularly on animal welfare and environmental standards—leaves our farmers open to being undercut by cheap imports from other countries; people talk in particular about the United States, but there are other deals as well.

That is hugely damaging to our proud record of high-quality animal welfare and environmental standards and ethics in this country. Alongside that, the Government’s decision in 28 days or so to start removing a vast chunk of farm incomes in England through the basic payment scheme undermines family farming in this country to the extent that it will reduce our capacity to feed ourselves and fundamentally change the landscape of places such as the Lake District. That is wrong, and we need to ensure that those standards—our proud, high British agricultural standards—are written into statute.

However, from my perspective and that of most people here, it is also massively regrettable in how it undermines the integrity of the United Kingdom. In Cumbria, we share a border with Scotland. Animals raised in Dumfriesshire are sold at market in Cumbria, and animals raised in Cumbria are sold at market in Dumfriesshire. The border is pretty meaningless to most of us on either side of it. To undermine the integrity of the United Kingdom in this way, and to play into the hands of those who would want the United Kingdom to be split up, is utter folly from the Government. Some 95% of Cumbrian farm exports are to the single market, but the single market that matters most to us is the United Kingdom single market. My great fear is that Conservative Members increasingly know little, and care less, about what it would take to keep the United Kingdom together.

I run the risk of offending some people around me, but I say this to the English nationalists on the Government Benches whose modus operandi to win the elections of the past few years has been to blame all the ills of the country on people outside our borders: that has done you a lot of good in terms of electoral results in recent years, but it can happen to you in reverse, as nationalists north of the border point to the nationalists on your Front Bench and decide to make a call that it is time to end the Union. That is why we need to uphold the Lords amendments: because we believe in the future of the United Kingdom.

Mr Deputy Speaker (Mr Nigel Evans)

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A few references to “you” there, Mr Farron—you should know better.

Tim Farron

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I do, and I am sorry.

Paul Scully

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I appreciate everybody who has taken the time to speak today. My hon. Friend the Member for Stone (Sir William Cash) spoke about the “notwithstanding” paragraphs in the Bill. Clearly, we have made the arrangements. We have found an agreement with the Joint Committee, and I sincerely hope that that will continue through to the next stage, which will be getting a free trade deal, on which the Prime Minister is working very hard with Lord Frost and his counterparts in Brussels. We will always make sure that we look after unfettered access for Northern Ireland into GB, which comes to the points that my hon. Friend made.

Sir William Cash

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I did ask for an assurance in general terms that the necessary measures would be taken in primary legislation if things were to go wrong for the future. That is all I am asking for. It is not very much, but it is really important in relation to the potential striking down in legislation.

Paul Scully

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I appreciate what my hon. Friend says. I think we will give the appropriate measures and protections, whatever form that comes as—if it is indeed needed; I hope that it is never needed in the first place. We will look to make sure that we protect Northern Ireland and its unfettered access.

My hon. Friend talked about state aid rules in Northern Ireland. They will apply to Northern Ireland as agreed under the withdrawal agreement and the Northern Ireland protocol, but they are not the same state aid rules that apply today, because there are new flexibilities of service providers. We welcome that agreement in principle in the Joint Committee, which was about managing the risk of reach-back into Great Britain and guards against the Commission taking an extreme or irrational interpretation of article 10 of the protocol. That means that there is no longer a need for the safety net.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) talked about the common frameworks and Scotland’s involvement. I hope I was correct in saying that I believed that the Scottish Government pulled away from discussions about the internal market, not common frameworks. I hope that is clear; if I did mis-speak, that was exactly what I meant to say.

We have now had 90 hours of scrutiny on this Bill across both Houses. I reiterate that I am grateful for how right hon. and hon. Members in this place have debated, scrutinised and engaged on the Bill. I said on Monday and again emphasise that we have been and will continue to be reasonable in discussions on this Bill. Since Monday, we have had a lot of good, positive movement and agreement and we welcome that, but ultimately, Government need to balance this with the need to deliver a Bill that provides the certainty that business wants and needs to invest and create jobs.

Mr Deputy Speaker (Mr Nigel Evans)

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Perhaps somebody from the SNP could inform the Chair privately who its Tellers might be, should they go afterwards.

Question put.

Mr Deputy Speaker (Mr Nigel Evans)

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In order to observe social distancing, the Reasons Committee will meet in Committee Room 11.

We will not be suspending, because the Dispatch Boxes were sanitised during one of the Divisions.