United Kingdom Internal Market Bill
Monday 14th September 2020
(4 years, 2 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Notices of Amendments as at 11 September 2020 - (14 Sep 2020)
22:00 - The House divided: - Ayes: 213 / Noes: 349 - Question accordingly negatived.
22:15 - The House divided: - Ayes: 340 / Noes: 263 - Question accordingly agreed to.
22:30 - The House divided: - Ayes: 343 / Noes: 49 - Question accordingly agreed to.
Mr Speaker
I inform the House that the amendment in the name of Keir Starmer has been selected.
The Prime Minister (Boris Johnson)
I beg to move, That the Bill be now read a Second time—and that this House act to preserve one of the crucial achievements of the past three centuries, namely our British ability to trade freely across the whole of these islands.
The creation of our United Kingdom by the Acts of Union of 1707 and 1801 was not simply a political event, but an act of conscious economic integration that laid the foundations for the world’s first industrial revolution and the prosperity we enjoy today. When other countries in Europe stayed divided, we joined our fortunes together and allowed the invisible hand of the market to move Cornish pasties to Scotland, Scottish beef to Wales, Welsh beef to England, and Devonshire clotted cream to Northern Ireland or wherever else it might be enjoyed.
When we chose to join the EU back in 1973, we also thereby decided that the EU treaties should serve as the legal guarantor of these freedoms. Now that we have left the EU and the transition period is about to elapse, we need the armature of our law once again to preserve the arrangements on which so many jobs and livelihoods depend. That is the fundamental purpose of this Bill, which should be welcomed by everyone who cares about the sovereignty and integrity of our United Kingdom.
We shall provide the legal certainty relied upon by every business in our country, including, of course, in Northern Ireland. The manifesto on which this Government were elected last year promised business in Northern Ireland
“unfettered access to the rest of the UK”.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am listening carefully to what the Prime Minister is saying, but why did one of his own distinguished Members describe his policy this week as “Nixonian Madman Theory”? Is the Prime Minister not deeply worried that his policies and approach are being compared to those of the disgraced former US President Richard Nixon, rather than someone like Winston Churchill?
The Prime Minister
Actually, I think that this Bill is essential for guaranteeing the economic and political integrity of the United Kingdom and simply sets out to achieve what the people of this country voted for when they supported our election manifesto: not only unfettered access from NI to GB and from GB to NI, but also—I quote from the manifesto—to
“maintain and strengthen the integrity and smooth operation of our internal market.”
The Prime Minister
I will not.
The Bill is designed to honour that pledge and maintain those freedoms. When we renegotiated our withdrawal agreement from the EU, we struck a careful balance to reflect Northern Ireland’s integral place in our United Kingdom, while preserving an open border with Ireland, with the express and paramount aim of protecting the Belfast/Good Friday agreement and the peace process. In good faith, we accepted certain obligations in the Northern Ireland protocol in order to give our European friends the assurances they sought on the integrity of their single market, while avoiding any change to the border on the island of Ireland. We agreed to conduct some light-touch processes on goods passing between Great Britain and Northern Ireland, in case they were transferred to the EU.
The Prime Minister
I give way to the hon. Gentleman, who knows a great deal about the subject.
Jim Shannon
This is a very important debate, as the Prime Minister and I know and as everyone in the House knows. Does he accept that the EU’s determination to use Northern Ireland as a stick to beat the UK with as punishment for daring to leave an institution that had no respect or concern for our people has been underlined by the behaviour of MEPs, and indeed of some in this House, as they seek again, against the will of the majority of people, to stop Brexit instead of doing the honourable thing: respecting the vote and the recent general election validation, taking care of the UK and putting our people first, as the Prime Minister has said he will do? This legislation is a way of doing that.
The Prime Minister
The intention of the Bill is clearly to stop any such use of the stick against this country, and that is what it does. It is a protection, it is a safety net, it is an insurance policy, and it is a very sensible measure.
In a spirit of reasonableness, we are conducting these checks in accordance with our obligations. We are creating the sanitary and phytosanitary processes required under the protocol and spending hundreds of millions of pounds on helping traders. Under this finely balanced arrangement, our EU friends agreed that Northern Ireland—this is a crucial point—would remain part of the customs territory of the United Kingdom, able to benefit from free trade deals with other countries, which we are now beginning to strike. It ensures that the majority of goods not at risk of travelling to the EU—and that is the majority of goods going from GB to Northern Ireland—do not have to pay tariffs.
But the details of this intricate deal and the obvious tensions between some of its provisions can only be resolved with a basic minimum of common sense and good will from all sides. I regret to have to tell the House that in recent months the EU has suggested that it is willing to go to extreme and unreasonable lengths, using the Northern Ireland protocol in a way that goes well beyond common sense simply to exert leverage against the UK in our negotiations for a free trade agreement. To take the most glaring example, the EU has said that if we fail to reach an agreement to its satisfaction, it might very well refuse to list the UK’s food and agricultural products for sale anywhere in the EU. It gets even worse, because under this protocol, that decision would create an instant and automatic prohibition on the transfer of our animal products from Great Britain to Northern Ireland. Our interlocutors on the other side are holding out the possibility of blockading food and agricultural transports within our own country.
Andrea Jenkyns (Morley and Outwood) (Con)
Does the Prime Minister agree that there is no greater obligation for MPs than to our voters, that the British people were told that no deal is better than a bad deal and we would prosper without a deal, and that given that the EU refuses to negotiate in good faith, we have no alternative but to legislate to protect our internal market?
The Prime Minister
My hon. Friend is entirely right. Absurd and self-defeating as that action would be, even as we debate this matter, the EU has not taken that particular revolver off the table. I hope that it will do so and that we can reach a Canada-style free trade agreement as well.
It is such an extraordinary threat, and it seems so incredible that the EU could do this, that we are not taking powers in this Bill to neutralise that threat, but we obviously reserve the right to do so if these threats persist, because I am afraid that they reveal the spirit in which some of our friends are currently minded to conduct these negotiations. It goes to what m’learned friends would call the intention of some of those involved in the talks. I think the mens rea—
Sir Robert Neill (Bromley and Chislehurst) (Con)
Will the Prime Minister give way?
Sir Robert Neill
I never object to another promotion.
I have listened carefully to what the Prime Minister says, but does he accept that were our interlocutors in the EU to behave in such an egregious fashion, which would clearly be objectionable and unacceptable to us, there is already provision under the withdrawal agreement for an arbitrary arrangement to be put in place? Were we to take reserve powers, does he accept that those reserve powers should be brought into force only as a final backstop if we have, in good faith, tried to act under the withdrawal agreement and are then frustrated? The timing under which they come into force is very important for our reputation as upholders of the rule of law.
The Prime Minister
My hon. Friend is absolutely right in what he says. He knows a great deal about this matter, and it is of great importance that we go through the legal procedures, as we will. As things stand, however, in addition to the potential blockade on agricultural goods, there are other avenues that the EU could explore if it is determined to interpret the protocol in absurd ways, and if it fails to negotiate in good faith. We must now take a package of protective powers in the Bill, and subsequently.
For example, there is the question of tariffs in the Irish sea. When we signed the protocol, we accepted that goods “at risk” of going from Great Britain into the EU via Northern Ireland should pay the EU tariff as they crossed the Irish sea—we accepted that—but that any goods staying within Northern Ireland would not do so. The protocol created a joint committee to identify, with the EU, which goods were at risk of going into Ireland. That sensible process was one achievement of our agreement, and our view is that that forum remains the best way of solving that question.
I am afraid that some in the EU are now relying on legal defaults to argue that every good is “at risk”, and therefore liable for tariffs. That would mean tariffs that could get as high as 90% by value on Scottish beef going to Northern Ireland, and moving not from Stranraer to Dublin but from Stranraer to Belfast within our United Kingdom. There would be tariffs of potentially more than 61% on Welsh lamb heading from Anglesey to Antrim, and of potentially more than 100% on clotted cream moving from Torridge—to pick a Devonshire town at random—to Larne. That is unreasonable and plainly against the spirit of that protocol.
The EU is threatening to carve tariff borders across our own country, to divide our land, to change the basic facts about the economic geography of the United Kingdom and, egregiously, to ride roughshod over its own commitment under article 4 of the protocol, whereby
“Northern Ireland is part of the customs territory of the United Kingdom.”
We cannot have a situation where the boundaries of our country could be dictated by a foreign power or international organisation. No British Prime Minister, no Government, and no Parliament could ever accept such an imposition.
Miss Sarah Dines (Derbyshire Dales) (Con)
How will my right hon. Friend ensure that Derbyshire Dales lamb, grown in our country, can be enjoyed by our fellow citizens in Northern Ireland, which is part of our country?
The Prime Minister
I thank my hon. Friend very much. The best way for us all to be sure that such lamb can be sold throughout the whole United Kingdom is to vote for this Bill, and to protect the economic integrity of the UK. [Interruption.] To answer the questions that are being shouted at me from a sedentary position, last year we signed the withdrawal agreement in the belief, which I still hold, that the EU would be reasonable. After everything that has recently happened, we must consider the alternative. We asked for reasonableness, common sense, and balance, and we still hope to achieve that through the joint committee process, in which we will always persevere, no matter what the provocation.
Jeremy Wright (Kenilworth and Southam) (Con)
I am grateful to my right hon. Friend for giving way, and I want to ask him, if I may, about the ministerial code. When I was the Attorney General in the previous Government, I was happy to confirm that the ministerial code obliged Ministers to comply with international as well as domestic law. This Bill will give Ministers overt authority to break international law. Has the position on the ministerial code changed?
The Prime Minister
No, not in the least. My right hon. and learned Friend can consult the Attorney General’s position on that. After all, what this Bill is simply seeking to do is insure and protect this country against the EU’s proven willingness—that is the crucial point—to use this delicately balanced protocol in ways for which it was never intended.
The Bill includes our first step to protect our country against such a contingency by creating a legal safety net taking powers in reserve, whereby Ministers can guarantee the integrity of our United Kingdom. I understand how some people will feel unease over the use of these powers, and I share that sentiment. I say to my right hon. and learned Friend that I have absolutely no desire to use these measures. They are an insurance policy, and if we reach agreement with our European friends, which I still believe is possible, they will never be invoked. Of course, it is the case that the passing of this Bill does not constitute the exercising of these powers.
The Prime Minister
If the powers were ever needed, Ministers would return to this House with a statutory instrument on which a vote—perhaps this is the question to which the hon. Gentleman is awaiting an answer—would be held. We would simultaneously pursue every possible redress—to get back to the point I was making to my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—under international law, as provided for in the protocol.
In addition to our steps in domestic law, if we had to make clear that we believed the EU was engaged in a material breach of its duties of good faith, as required and provided for under the withdrawal agreement and the Vienna convention on the law of treaties, we would seek an arbitration panel and consider safeguards under article 16 of the protocol.
It is a question not of if we meet our obligations, but of how we fulfil them. We must do so in a way that satisfies the fundamental purpose of the protocol, the Belfast Good Friday agreement and the constitutional position of Northern Ireland. We will work with the EU on all of these issues. Even if we have to use these powers, we will continue to engage with the joint committee so that any dispute is resolved as quickly and as amicably as possible, reconciling the integrity of the EU single market with Northern Ireland’s place in the UK’s customs territory.
What we cannot do now is tolerate a situation where our EU counterparts seriously believe that they have the power to break up our country. If that is what hon. Members on the Opposition Benches want them to have, then I am afraid that they are grievously mistaken. That illusion must be decently dispatched, and that is why these reserve powers are enshrined in the Bill.
In addition, the Bill will help deliver the single biggest transfer of powers to the devolved Administrations since their creation, covering a total of 160 different policy areas. Each devolved Administration will also be fully and equally involved in the oversight of the UK’s internal market through a new independent body, the Office for the Internal Market. The Bill will maintain our common cause of high standards, where we already go beyond the EU in areas ranging from health and safety to consumer and environmental protections.
Chris Bryant
May I take the Prime Minister back to the question asked by the former Attorney General, the right hon. and learned Member for Kenilworth and Southam (Jeremy Wright)? It seems to me quintessential to the way we do our business that Ministers abide by the law. Indeed, the Justice Secretary is required by law to swear that he will uphold the rule of law. How, therefore, can the Prime Minister seriously advance a piece of legislation that says:
“regulations…are not to be regarded as unlawful on the grounds of any incompatibility or inconsistency with relevant international or domestic law”.
That is just gobbledegook, isn’t it? It is complete and utter nonsense.
The Prime Minister
I do not know whether the hon. Gentleman was listening, but I made it very clear that we do not relish the prospect of having to use these powers at all. We hope very much, as I said, that the EU will be reasonable, but any democratically elected Government of this country—indeed, I would say any MP representing the people of this country—must be obliged to do whatever he or she can to uphold the territorial integrity of this country. That is what we are doing. Furthermore, instead of UK taxpayers’ money being disbursed by the EU, this Bill, which is an excellent Bill, will allow the Government to invest billions of pounds across the whole of the UK to level up.
A year ago, this Parliament was deadlocked, exasperating the British people by its failure to fulfil their democratic wishes and, worst of all, by undermining our negotiators, as the right hon. Member for Leeds Central (Hilary Benn) will recall. Effectively, Parliament told the EU that if it played hardball, this House would oblige it by weakening our country’s hand and legally forbid our representatives from walking away from the negotiating table. I hope that this House will never make that mistake again. Instead, let us seize the opportunity presented by this Bill and send a message of unity and resolve. Let us say together to our European friends that we want a great future relationship and a fantastic free trade deal.
Steve Brine (Winchester) (Con)
The Prime Minister will remember that we have some history in this regard. I did not want us to leave with no agreement last year, and we fell out over that. But he was true to his word and we had an agreement.
We said in our manifesto:
“We will ensure that Northern Ireland’s businesses and producers enjoy unfettered access to the rest of the UK”.
Is it not the truth of the matter that the way to do that is either through this Bill or by agreeing the free trade agreement—the Canada-style deal—that the EU said was on the table and of which the Prime Minister said when he came into office, “Okay, they now seem to have stepped back from that”?
I thank the Prime Minister for saying that tonight is difficult for some of us, but this is an important piece of legislation. Will he assure me that it is still his policy and the policy of his Government to secure that FTA with the EU that it said it wanted and that we know we want?
The Prime Minister
I thank my hon. Friend for the spirit in which he asked his question and made that important point. He is absolutely right to focus on where we are now in our talks on the free trade agreement. It is by passing the Bill tonight and in subsequent days that we will make the possibility of that great free trade agreement more real and get it done sooner.
Therefore, with this Bill we will expedite a free trade agreement not only with our European friends and partners, but with friends and partners around the world; we will support jobs and growth throughout the whole United Kingdom; we will back our negotiators in Brussels; and, above all, we will protect the territorial integrity of the UK and the peace process in Northern Ireland. I urge the House to support the Bill and, as my hon. Friend the Member for Winchester (Steve Brine) rightly said, to get back to the business of securing a free trade agreement with our closest neighbours that we would all wish to see. I commend the Bill to the House.
Edward Miliband (Doncaster North) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House notes that the UK has left the EU; calls on the Government to get on with negotiating a trade deal with the EU; recognises that legislation is required to ensure the smooth, effective working of the internal market across the UK; but declines to give a Second Reading to the Internal Market Bill because this Bill undermines the Withdrawal Agreement already agreed by Parliament, re-opens discussion about the Northern Ireland Protocol that has already been settled, breaches international law, undermines the devolution settlements and would tarnish the UK’s global reputation as a law-abiding nation and the UK’s ability to enforce other international trade deals and protect jobs and the economy.”
There are two questions at the heart of the Bill and of why we will oppose it tonight. First, how do we get an internal market after 1 January within the UK while upholding the devolution settlements, which have been a vital part of our constitution for two decades and are essential to our Union? Secondly, will our country abide by the rule of law—a rules-based international order, for which we are famous around the world and have always stood up?
Those are not small questions. They go to the heart of who we are as a country and the character of this Government. Let me start with the first question. An internal market is vital for trade and jobs at home, but also for our ability to strike trade deals. It is the responsibility of the UK Government at Westminster to safeguard that market and legislate. On that, we agree with the Government. But that must be done while understanding that the governance of our country has changed in the last two decades. Two decades of devolution settlements reflect a decision that we would share power across our four nations, including devolving key powers over issues such as animal welfare, food safety and aspects of environmental legislation. We should legislate for an internal market, but in a way that respects the role and voice of devolved Governments in setting those standards. That is to respect the devolution settlement. From across the UK, we have heard that the Government are not doing that; that they want to legislate with a blunderbuss approach that does not do that and simply says that the lowest standard in one Parliament must become the standard for all, with no proper voice for devolved Governments. If the Westminster Government decided to lower standards, there would be no voice for the devolved nations, even in a discussion about those standards because the Government have decided not to legislate for common frameworks.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
The right hon. Gentleman is getting to the nub of the matter. We have Joint Ministerial Committees, and huge progress had been made in the last few months on agreeing frameworks that would allow us to do exactly what the right hon. Gentleman asked for. Is not the right way to proceed through frameworks in agreement with the devolved Administrations, not the race to the bottom that we get with the Bill?
Edward Miliband
The right hon. Gentleman and I come from different positions. I want to respect the devolution settlements that uphold the Union and he has a different point of view, but on this matter we should be legislating for common frameworks. That would be the way to respect devolution. I do not know whether the Prime Minister even understands the legislation—I know he has many things on his plate—but I am sorry to say that on this issue, the Government’s approach has been cavalier. Since 2017, common frameworks have developed and the Government could have legislated for that. We will seek to do that during the Bill’s passage.
The issues were prefigured in the White Paper. Since then, we have an even bigger question to confront. Let me say at the outset that we want the smoothest trade across our United Kingdom, including Northern Ireland. There is a way to resolve those issues in the Joint Committee set up for that purpose. I have to say that, from a man who said he wanted to get Brexit done and won an election on it, the Bill gets Brexit undone by overturning key aspects of the protocol that were agreed.
I have been part of many issues of contention across the Dispatch Box, but I never thought that respecting international law would be a matter of disagreement in my lifetime. As Leader of the Opposition, I stood opposite the Prime Minister’s predecessor David Cameron for five years. I do not know why the Prime Minister is rolling his eyes. I disagreed with David Cameron profoundly on many issues, but I could never have imagined him coming along and saying, “We are going to legislate to break international law” on an agreement that we had signed as a country less than a year earlier. Yet that is what the Bill does, in the Government’s own words.
I want to address three questions at the heart of the matter. Is it right to threaten to break the law in the way the Government propose? Is it necessary to do so? Will it help our country? The answer to each question is no. Let us remember the context and the principle. If there is one thing that we are known for around the world, it is the rule of law. This is the country of Magna Carta; the country that is known for being the mother of all Parliaments; and the country that, out of the darkness of the second world war, helped found the United Nations. Our global reputation for rule making, not rule breaking, is one of the reasons that we are so respected around the world. When people think of Britain, they think of the rule of law. Despite what the Prime Minister said in his speech, let us be clear that this is not an argument about remain versus leave. It is an argument about right versus wrong.
The Brexiteer and former Chancellor of the Exchequer, Lord Lamont, says that the Bill is impossible to defend. The Brexiteer and former Attorney General who helped to negotiate and sign off this deal as Attorney General says that the Bill is “unconscionable”. And the Brexiteer Lord Howard—the Prime Minister’s former boss—said this:
“I never thought it was a thing I’d hear a British minister, far less a Conservative minister, say, which is that the government was going to invite parliament to act in breach of international law…We have a reputation for probity, for upholding the rule of law, and it’s a reputation that is very precious and ought to be safeguarded, and I am afraid it was severely damaged…by the bill”.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Does the right hon. Gentleman think that the EU has been negotiating in good faith?
Edward Miliband
It is very interesting that the hon. Gentleman should say that because a report came out today from the Northern Ireland Affairs Committee, which is chaired by a Conservative Member. This is what the report says and this is my answer to him:
“These talks began in March and continued throughout the summer in a spirit of good faith and mutual respect for the delicate arrangements in Northern Ireland.”
That is what the Conservative-controlled Select Committee says about this issue.
The Prime Minister has said many times that he wants to bring unity to the country during his premiership. I therefore congratulate him on having, in just one short year, united his five predecessors. Unfortunately, their point of agreement is that he is trashing the reputation of this country and trashing the reputation of his office. Why are these five former Prime Ministers so united on this point? It is because they know that our moral authority in the world comes from our commitment to the rule of law and keeping our word. We rightly condemn China when it rides roughshod over the treaties dictating the future of Hong Kong. We say it signed them in good faith, that it is going back on its word and that it cannot be trusted. And his defence? “Don’t worry; I can’t be trusted either.” What will China say to us from now on? What will it throw back at us—that we, too, do not keep to international law?
Edward Miliband
Actually, yes we do, and I will tell the hon. Lady why. We respect the fact that the Conservative party, under this Prime Minister, won the election. He got his mandate to deliver his Brexit deal: the thing that he said was—I am sure she recalls this because it was probably on her leaflets—“oven ready”. It is not me who is coming along and saying it is half-baked; it is him. He is saying, “The deal that I signed and agreed is actually—what’s the word? Ambiguous. Problematic.” I will get to this later in my speech, but I wonder whether he actually read the deal in the first place.
Ms Angela Eagle (Wallasey) (Lab)
My right hon. Friend is making an extremely good speech. Would he perhaps tell the House who on earth might have signed this terrible deal with so many ambiguities less than nine months ago?
Edward Miliband
My hon. Friend makes an important point; I do believe it was the Prime Minister who signed the deal.
In fairness to the Prime Minister, I want to deal with each of the arguments that the Government have made in the last few days for this action. It is quite hard to keep count of the different arguments—you know you are losing the argument when you keep making lots of different arguments—but I want to give the House the top five. First, let us deal with the argument about blockades, which made its first outing in The Telegraph on Saturday through the Prime Minister, and obviously it made a big appearance today.
I have to say, I did not like the ramping up of the rhetoric from the European Union on Thursday, following the Prime Minister’s publication of this Bill, but even by the standards of the Prime Minister, this is as ridiculous an argument as I have ever heard. Let me let me explain to him why—the point was very well made by the former Attorney General this morning. This is what article 16 of the protocol says:
“If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures.”
In other words, let us just say that this threat somehow materialised—and by the way, I believe that Department for Environment, Food and Rural Affairs officials would have to implement it, making it even more absurd that it would happen. If the threat materialised, it is not overturning the protocol that is the right thing to do; it is upholding the protocol, as article 16 says. But do not take my word for it, Madam Deputy Speaker; take the word of the former Attorney General—who definitely read the protocol—who wrote this morning:
“There are clear and lawful responses available to Her Majesty’s government”.
As if that was not enough, there is also an irony here—the Prime Minister tried to slip this in; I do not know whether the House noticed—which is that this Bill does precisely nothing to address the issue of the transport of food from Great Britain to Northern Ireland. It is about two issues where the Government are going to override international law: exit declarations, Northern Ireland to GB, and the definition of state aid relating to Northern Ireland. If the Prime Minister wants to tell us that there is another part of the Bill that I have not noticed that will deal with this supposed threat of blockade, I will very happily give way to him. I am sure he has read it; I am sure he knows it in detail, because he is a details man. Come on, tell us: what clause protects against the threat, which he says he is worried about, to GB-to-Northern Ireland exports? I give way to him. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The right hon. Gentleman cannot give way unless he is asked to.
Edward Miliband
There you have it: he didn’t read the protocol, he hasn’t read the Bill, he doesn’t know his stuff.
Let us deal with the second bogus argument. The Prime Minister claimed on Wednesday that it was necessary to protect the Good Friday agreement. The first outing for that argument was on Wednesday, at Prime Minister’s questions. I have to say to him, I would rather trust the authors of the Good Friday agreement than the Prime Minister, who has prominent members of the Government who opposed the agreement at the time. However, this is what John Major and Tony Blair wrote—[Interruption.] They don’t like John Major. They said that the Bill
“puts the Good Friday agreement at risk”—
[Interruption]—this is very serious—
“because it negates the predictability, political stability and legal clarity that are integral to the delicate balance between the north and south of Ireland that is at the core of the peace process.”
These are very important words from two former Prime Ministers, both of whom helped to win us peace in Northern Ireland. The Prime Minister may not want to believe them, but he will, I hope, believe himself—[Laughter]—maybe not—because this is what he said about the Northern Ireland protocol:
“there are particular circumstances in Northern Ireland at the border that deserve particular respect and sensitivity, and that is what they have received in the deal.”
It is
“a great deal for Northern Ireland.”—[Official Report, 19 October 2019; Vol. 666, c. 578-579.]
I do not understand this. He signed the deal. It is his deal. It is the deal that he said would protect the people of Northern Ireland. I have to say to him, this is not just legislative hooliganism on any issue; it is on one of the most sensitive issues of all. I think we should take the word of two former Prime Ministers of this country who helped to secure peace in Northern Ireland.
Sammy Wilson (East Antrim) (DUP)
Before the shadow spokesman lectures the Prime Minister about reading documentation or starts lecturing us about the Good Friday agreement, does he not recognise, first of all, that the Good Friday agreement talks about the principle of consent to change the constitutional position of Northern Ireland, which is what this protocol does? The Good Friday agreement has within it a mechanism to safeguard the minorities in Northern Ireland through a cross-community vote, which again the protocol removed. So before he starts talking about the threats to the Good Friday agreement, does he not recognise that the protocol was a threat to it in the first place?
Edward Miliband
The right hon. Gentleman did not like the protocol at all. He would rather have not had the protocol. He and I just have a disagreement on this issue. I believe it was necessary to make special arrangements for Northern Ireland, or for the UK to be in the EU customs union to avoid a hard border in Ireland. That is why the Prime Minister came along and said the protocol was the right thing to do.
Let me deal with the third excuse we heard. This is the “It was all a bit of a rush” excuse. As the Prime Minister said in his article, times were “torrid” and there were “serious misunderstandings”. He tries to pretend that this is some new issue, but they have been warned for months about the way the protocol would work. The Chancellor of the Duchy of Lancaster, who is sitting in his place, was warned at the Select Committee in March and was asked about these issues. The Business Secretary was written to by the House of Lords Committee in April.
Let us just get this straight for a minute, because I think it is important to take a step back. The Prime Minister is coming to the House to tell us today that his flagship achievement—the deal he told us was a triumph, the deal he said was oven-ready, the deal on which he fought and won the general election—is now contradictory and ambiguous. What incompetence. What failure of governance. How dare he try to blame everyone else? I say to the Prime Minister that this time he cannot blame the right hon. Member for Maidenhead (Mrs May), he cannot blame John Major, he cannot blame the judges, he cannot blame the civil servants, he cannot sack the Cabinet Secretary again. There is only one person responsible for it and that is him. This is his deal. It is his mess. It is his failure. For the first time in his life, it is time to take responsibility. It is time to ’fess up: either he was not straight with the country about the deal in the first place, or he did not understand it.
A competent Government would never have entered into a binding agreement with provisions they could not live with. If such a Government somehow missed the point but woke up later, they would do what any competent business would do after it realised it could not live with the terms of a contract: they would negotiate a way out in good faith. That is why this is all so unnecessary. There is a mechanism designed for exactly this purpose in the agreement: the Joint Committee on the Northern Ireland protocol. What did the Chancellor of the Duchy of Lancaster say on 11 March at the Committee on the Future Relationship with the European Union? He will recall that he was asked about state aid. He said:
“the effective working of the protocol is a matter for the Joint Committee to resolve.”
The remaining issues to which the Bill speaks are not insignificant, but nor are they insurmountable, and that is the right way to pursue them, not an attempt at illegality.
Let me come back to the excuses. Fourthly, on Sunday, there was the Justice Secretary’s “the fire alarm” defence: “We don’t want to have to do this, but we might have to.” I want to be clear with the House about something very, very important about a decision to pass the Bill. I have great respect for the hon. Member for Bromley and Chislehurst (Sir Robert Neill), but I want to make this point. The very act of passing the Bill is itself a breach of international law. It would be wrong for hon. and right hon. Members on either side of the House to be under any illusions about that as they decide which Lobby to go into tonight. If we pass the Bill, even if there is a nod and a wink from the Prime Minister to the hon. Member for Bromley and Chislehurst, we equip the Government with the power to break the law. That in itself is a breach of the Northern Ireland protocol and therefore a breach of international law.
Sir Robert Neill
I have listened carefully to the right hon. Member’s formulation and I understand much of what he says. However, an Act passed by this House only becomes law when it comes into force. He will be right, I submit, to say that as soon as any of these provisions came into force we would potentially breach international law. That is not quite the same thing, as I think he would fairly concede.
Edward Miliband
That is not a risk we are going to take.
So the fire alarm defence simply does not work. The last defence was floated as a trial balloon, one might say, by the Northern Ireland Secretary last Tuesday, I believe. He said it was a breach of the law in a “specific and limited way.” That really is a new way of thinking about legal questions. It now turns out that breaking the law specifically and in a limited way is a reasonable defence for this Government. We have all heard of self-defence, the alibi defence, the innocence defence; now we have the Johnson defence: you can break the law, but in a specific and limited way.
Think about the grave context we face. The Home Secretary is in today’s newspapers warning everyone, “You must abide by the law.” On this, she is absolutely right. She says,
“I know that, as part of our national effort, the law-abiding majority will stick to these new rules. But there will be a small minority who do not”.
You couldn’t make it up. What she does not say in the article, but what we now know about this Government, is that the Johnson defence means something very specific: there is one rule for the British public and another rule for this Government. Pioneered by Cummings, implemented by Johnson—that is the Johnson rule.
This is the wrong thing to do. It is not necessary and it is deeply damaging to this country. Let us think about the impact on our country in the negotiations. The Government’s hope is that it will make a deal more likely, but that relies on the notion that reneging on a deal we made less than a year ago with the party we are negotiating with now will make that party more likely to trust us, not less. Think about our everyday lives: suppose we made an agreement with someone a year ago and we were seeking to have another negotiation with them; if we had unilaterally reneged on the first deal we made, would it make them more likely to trust us, or less likely? Obviously, it would make them less likely to trust us.
We know the risks. I very much hope the Prime Minister gets a deal. As a country, we absolutely need a deal. We know the risks of no deal if this strategy goes wrong. The Prime Minister said last week that no deal is somehow “a good outcome”. He is wrong. I hear all the time from businesses—I am sure the Business Secretary, who is in his place, does too—that are deeply worried about the danger of no deal. I know what the Prime Minister thinks about the views of business, thanks to his four-letter rant, but this is what businesses have to say. Nissan says there could be no guarantee about its Sunderland plant if there were tariffs on UK to EU trade. Ford says that no deal would be disastrous. The NFU says it would be catastrophic for British farming—indeed, the Chancellor of the Duchy of Lancaster, when he was Secretary of State for Environment, Food and Rural Affairs, said the same thing. We are in the biggest economic crisis for 300 years, the biggest public health crisis for 100 years. No deal is not some game; it is about the livelihoods of millions of people across our country.
What about the prized trade deal with the United States? I know the Prime Minister thinks he has a friend in President Trump, but even he must recognise the necessity of being able to deal with both sides. The Speaker of the House of Representatives, Nancy Pelosi, said:
“The UK must respect the Northern Ireland Protocol as signed with the EU… If the UK violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a US-UK trade agreement passing the Congress.”
This is the signal that we—the country known for the rule of law, the country that abides by the law, the country that founded international law—are sending to our friends and allies around the world. That is why we cannot support the Bill.
The Government must go back, remove the provisions breaking international law and ensure that the Bill works in a way that respects the devolution settlements. That is what a responsible, competent and law-abiding Government would do. This is a pivotal moment to determine the future of our country—who we are and how we operate. In shaping that future, we have to stand up for the traditions that matter: our commitment to the rule of law. The Bill speaks of a Government and a Prime Minister who are casual, not to say cavalier and reckless, about the gravity of the issues confronting them. The Prime Minister should be focusing on securing a Brexit deal, not breaking international law and risking no deal. He is cavalier on international law and cavalier on our traditions. This is not the serious leadership we need, and it is why we will oppose the Bill tonight.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Before I call the Chairman of the European Scrutiny Committee, I should draw to the attention of the House that 100 Members are hoping to catch my eye from the Back Benches. It will not be possible to call everyone, but in order to allow as many people as possible to participate in such an important debate, we will have a time limit of four minutes with immediate effect. I call Sir William Cash.
Sir William Cash (Stone) (Con)
It would be unconscionable for us to have left the EU lawfully, which the EU has accepted, and then allow it to threaten us and strangle our jobs and businesses by imposing unfair state aid rules that go much wider than traditional subsidies, and then for it to seek unwarranted legal action when we are properly defending our national, economic and political sovereignty. If so, we would become a neutered, trivial Lilliput—an enslaved economic satellite of the EU. No UK Parliament could allow itself to be so prostrated. We won the referendum and the general election across the country because voters wanted to leave the EU and free ourselves from undemocratic rule from Brussels and from majority voting, and to regain our right to govern ourselves and our economic freedom. This Bill guarantees that promise to them and maintains the Union.
International law comes in all shapes and sizes. There are many instances of express override in UK statute law. The EU itself sometimes breaks international law, including refusing certain compliance with World Trade Organisation rules. EU retaliation by a blockade would be utterly unlawful. Even the Belfast agreement contains “notwithstanding” provisions, as does USA statute law. The express powers in the Bill, which constitute the taking of powers rather than actual implementation, are justified precautions against the risk of an expansionist interpretation of article 10 of the protocol, which would lead to great uncertainty, litigation risk and a serious threat to the territorial integrity of the United Kingdom into the indefinite future.
There has never been a level playing field in the EU. Its cardinal objective in these negotiations from the outset has included preventing us from being able to compete fairly. That is not good faith. Under the protocol, the EU would even control our legal tax freedom to create freeports and enterprise zones. All of this would massively undermine our businesses and jobs and therefore our voters.
Let us consider the wide legal sphere of EU state aid regulation. It is concerned with not only subsidies but tax reliefs; taxation favouring particular sectors or undertakings; remission of national insurance contributions; bank bail-outs such as those of RBS and Lloyds, where contrived, draconian EU legal conditions were imposed; and a raft of other measures too numerous to list, including gas tariffs for horticulture, airport landing fees, private health insurance, carbon trading emission certificates for free, failing to follow public procurement procedures and so on. By contrast, more recently, the German Government have procured approval for vast amounts of aid, notably for Lufthansa, and this is a pattern that has continued for decades across many commercial sectors. I recommend that people read Ambrose Evans-Pritchard’s article today in The Daily Telegraph.
Mr Šefčovič has outrageously dared to threaten the UK Parliament itself if we do not remove the clauses, and he misrepresents our position on the Good Friday agreement. This contradicts our sovereignty and autonomy, which the EU accepted. The EU seeks to subject us to a foreign regulator, taking essentially political decisions and armed with undemocratic prohibition powers and authorisations. It would be unconscionable and utterly naive for us to allow that to happen. It would be contrary to our national interests at this time of economic instability generated by coronavirus.
I remind the House that section 38 of the 2020 Act was passed without a single person in either House formally objecting, either on Second Reading or in Committee. The Bill is needed as an insurance policy and as a guarantee of our national sovereignty within the meaning of the Vienna convention, and our national security.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Over the past few years, we have all witnessed this Tory Government plunging this Parliament and our broader politics into ever deeper chaos and disgrace. In that time, Scotland has been dragged out of the European Union against our will. It is almost a year to the day on which this Parliament was illegally prorogued, and in recent months a raft of senior civil servants has been forced out the door. That instability is this UK Parliament’s new normal; it is now part and parcel of a broken Westminster system.
Here we are again: having dragged us deeper and deeper into their dangerous agenda for the past four years, today this right-wing Brexit cabal has reached rock bottom. The United Kingdom Internal Market Bill is the greatest threat to devolution that Scotland has faced since our Parliament was reconvened with the overwhelming support of the Scottish people in 1999. We are discussing the principles of a Bill that this Tory Government casually and brazenly admit violates international and domestic law—a Bill that cynically uses the precious peace at the heart of the Good Friday agreement as nothing more than a Brexit bargaining chip.
The Bill runs to 50 pages, but people across these islands have a right to know exactly what it proposes to do. It does two fundamentally dangerous and undemocratic things: it breaks international law and it breaks devolution. Those two facts explain why there has been such a widespread chorus of opposition to the Bill. That opposition comes from every profession, sector and corner of these islands, and it is why this legislation should and must be resisted by anyone who claims to respect the rule of law and anyone who claims to respect the current devolution settlement.
As we know, there is opposition on the Conservative Benches. In the other place, the former Tory leader, Lord Howard, told the Government that the legislation would result in the UK is showing itself as having “scant regard” for its treaty obligations. When the Government are getting verbally slaughtered by a Brexiteer who has—how shall I say it?—“something of the night” about him, it is as clear as day that the Tories have gone way beyond the pale.
The Law Society of Scotland has commented on the Bill, stating:
“The bill should, as a matter of principle, comply with public international law and the rule of international law, pacta sunt servanda…should be honoured. Adherence to the rule of law underpins our democracy and our society. We believe that to knowingly break with the UK’s reputation for following public international law could have far-reaching economic, legal and political consequences and should not be taken lightly.”
I repeat: to knowingly break international law. I ask each Member to think on that tonight.
Every Member has a choice. We know that the Bill breaks international law—so many learned individuals, including the previous Attorney General, have told us so. Tonight, this House can tell the Government that it is not on and that this House is not going to be complicit in a breach of international law. I venture that that is the responsibility that each Member has. Every Member—every Member, Madam Deputy Speaker—should examine their conscience. This is about a Bill that breaches the terms of a treaty, the ink of which is barely dry and on the delivery of which the governing party fought an election.
Ms Angela Eagle
The right hon. Gentleman is making points that go to the heart of the Bill, and I share his worries about them. Does he share my worries that the Bill also attempts to curtail judicial review, or prevent it entirely, once that law has been broken?
Ian Blackford
The hon. Lady is correct about that, because we know that the Government have got into trouble with the judiciary over their actions in the past, and I will come on to talk about that.
The right hon. Member for Doncaster North (Edward Miliband), who spoke for the Opposition, was correct when he said that the Prime Minister cannot pretend that he did not know the terms of the treaty or its obligations when he signed it—that simply beggars belief. This is a test for the House this evening; do not wait for the Committee stage, as legally, morally and ethically the right thing to do is to vote down this Bill tonight. This House must be accountable. Do not follow the Prime Minister in acquiescing in breaking the law—if you vote to give the Bill its Second Reading tonight, that is exactly what you are all doing. So this is a test, and I understand the challenge the Conservative Members face. Do not support the Prime Minister by breaking the law this evening—it is as simple as that.
Of course, the Prime Minister has form: a year ago he went to the Queen to prorogue Parliament, an illegal act that the courts forced him to reverse. Here he is again—although in this case he is not, because he has run off—woefully breaking international law this time, seeking to ask the Queen to enact legislation that breaks international law. We have the power individually and collectively to stop the Prime Minister in this act of madness this evening. This is a matter of principle; it is about this House saying that we should not breach our legal obligations—I implore the House to say exactly that.
We were expecting the Secretary of State for Business, Energy and Industrial Strategy to have drawn the short straw in having to come here to argue for this dreadful piece of legislation, but he was stood down. We all know who the parcel of rogues are behind this legislation; this Bill has the fingerprints of the Prime Minister, the Minister for the Cabinet Office and, of course, Dominic Cummings. We have just heard the bluff and bluster of the Prime Minister in seeking to defend the indefensible. He can try all he likes to dress this up as a business Bill, but no amount of dressing up will hide the fact that this is a naked power grab. The Tories are fooling no one, least of all businesses in Scotland. If this UK Government were actually serious about delivering an ounce of business confidence, they would not be threatening to blow apart any hope of a future trade deal with the European Union.
Bill Esterson (Sefton Central) (Lab)
We can see from the right hon. Gentleman’s speech so far that he clearly shares many of the concerns of the Labour Front-Bench team. On that basis, will he confirm that he will be supporting the reasoned amendment standing in the name of the Leader of the Opposition?
Ian Blackford
I am grateful for the question. We will be voting against this Bill this evening but we will not be supporting the reasoned amendment, because of some of the other conditions attached to it, not least that there should be a single market Act that does not enshrine the rights of the devolved nations to be able to protect their own interests—that is the fundamental difference we have this evening. I ask the House to oppose the Bill and vote it down on Second Reading.
The provisions of this legislation recklessly and deliberately risk a bad deal or, increasingly, the economic devastation of a no deal. You cannot claim to support business while pursuing a bad Brexit. You cannot claim to support business by burdening it with yet more economic uncertainty, in the face of a global pandemic, one where we know the challenges we face. Yet, in the midst of this, the Prime Minister brings this Bill. The Government cannot claim to support the Scottish economy by taking more economic powers away from Scotland’s democratically elected Parliament.
I will turn now to some of the contents of the Bill, and specifically the numerous aspects that will undermine the powers and authority of Scotland’s Parliament. Clauses 2 to 9 contain sweeping powers that could act to compel Scotland to accept lower standards set elsewhere in the UK. That means standards on animal welfare, food safety and environmental protection to name but a few. We all know the risk and the threat that that will bring, especially for Scotland’s farmers and consumers. This law is a Tory invitation for chlorinated chicken and hormone-injected beef in our supermarkets. [Interruption.] We can hear the guffawing from the Conservative Benches, but yesterday morning on “Politics Scotland” a Treasury Minister more or less admitted that they could not stop chlorinated chicken coming into the United Kingdom. [Interruption.] Go and check the tapes; it is there.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I am sure that the right hon. Gentleman shares my dismay that the non-discrimination clause would mean that popular policies already made by the Welsh Government and our Senedd to do with the smoking ban, the ban on plastic bags, and organ donation could have been called in and not been valid under this legislation.
Ian Blackford
The right hon. Member makes a very good point. There are policies that we are very proud of introducing in Scotland, such as minimum alcohol pricing, which was so critical in dealing with misuse of alcohol in Scotland, but there is no guarantee that we would be able to bring in such initiatives in the future. We would have to go cap in hand to Westminster for authority. The days of us being “too wee, too poor, too stupid” are well and truly over.
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
Don’t be so hard on yourself.
Ian Blackford
The sneering contempt that we get from the Minister for the Cabinet Office—he really ought to be ashamed of himself.
In part four, provision is made for the establishment of a new unelected monitoring body called the Office for the Internal Market. The Bill proposes to hand that unelected body—we often hear about unelected bureaucrats, but here we are—the power to pass judgment on devolved laws, directly over the heads of the Scottish people’s chosen Government. It will also lead to an open invitation for businesses with deep pockets to challenge the democratic decisions of our Scottish Parliament.
Clause 48 reserves state aid: one of the most blatant power grabs in the Bill, and that is a very high bar. We know that the state aid provisions will merely mirror those of the World Trade Organisation. That will inevitably make a deal with the EU even more difficult and provide little or no scrutiny. Finally, there is clause 46: the ultimate insult and the ultimate attack on devolution. If this legislation is forced through, powers will be given to UK Government Ministers to design and impose replacements for EU spending programmes in devolved areas: infrastructure, economic development, culture and sport, education and training—all of it.
The Government’s agenda is clear. The Transport Minister would have input and decision-making powers over road building in Scotland, over the heads of the Scottish Parliament. We won a referendum in 1997, when 75% of the people of Scotland voted to have a Parliament. We have elections every five years. Manifestos are put in front of the Scottish people. It is the settled will of the people that that Parliament has control over health, education, housing and transport. How dare this Tory Government feel that they can come in and impose their will on those areas of democratic accountability in Scotland? What an insult to our Parliament in Edinburgh and our Parliament in Wales. I say to this Government, “We will stand up against this attack on our Parliament, and on those that enshrined that Scottish Parliament.”
The agenda of the Conservatives is clear. The Tories will seek to bypass democratically elected MPs and Ministers in Scotland. Union Jack-badged projects will be paid for and prioritised ahead of the priorities of our Parliament. Bitter experience is a good teacher. Tory Governments cannot be trusted to spend money in Scotland.
We remember what happens when the Tories control state aid spending. In 1992, John Major’s Government diverted cash from the highlands to try to boost dwindling Tory support in south-east England. And we have not forgotten that this legislation comes from a Prime Minister who bragged that a pound spent in Croydon has far more value to the country than a pound spent in Strathclyde. That is the way that the Conservatives look upon Scotland. The Tories will look after their own interests. They will never—not ever—support Scotland’s interests. This Bill would allow them free rein to serve their own narrow needs.
At its heart, this Bill confirms the centralising obsession of this UK Government. Those in No. 10 who not so long ago made a lucrative living scribbling endless newspaper articles about a supposed centralised Brussels elite are now attempting to centralise and grab every devolved power that they can get their hands on. Apparently, the Tories are not only determined to preside over the death of devolution; they are clearly determined to oversee the death of irony, too.
The real reason behind this Government’s hunger to pursue this power grab is what should concern us most, though. Paragraph 26 of the explanatory notes makes it clear that the Business Secretary will be given the power to change exemptions from the Bill at any time. In effect, this is a Trojan horse allowing Tory Ministers to encroach even further on devolution, and we know where that will inevitably lead. In order to deliver bad trade deals—the only deals they can now realistically get—the Tories want private health companies to have a guaranteed right to trade unhindered in Scotland and across the UK. With no protections for our Parliament, this would fundamentally weaken and undermine our national health service in Scotland. The same is true for private water companies, with the same threat of undermining standards and raising prices in Scotland. The Tories’ real agenda is about imposing the creeping privatisation and rampant deregulation that they are already implementing in England.
I am heartened by one thing: the scale of the threat of this legislation is equalled by the scale of the opposition with which it has been met across Scottish society. Those on the Government Benches, especially the Scottish Tories—mind you, there is only one of them in here—would do well to listen to this. The National Farmers Union Scotland confirmed that
“the proposals pose a significant threat to the development of Common Frameworks and to devolution.”
The chair of the Scottish Crofting Federation, Yvonne White, expressed fear that
“the proposed legislation will lead to a race to the bottom, threatening our high standards in food, environment and animal welfare, thus damaging the image of Scottish produce.”
She concluded:
“These standards are best safeguarded by the Scottish Parliament.”
[Interruption.] I hear someone shouting from a sedentary position, “Don’t let the facts get in the way.” That is a statement from the chair of the Scottish Crofting Federation. It might not suit those on the Tory Benches, but that is the reality.
The Scottish Council for Development and Industry believes that
“mutually agreed common frameworks should be the foundation of the UK internal market, rather than the imposition of a single approach across the UK in devolved policy areas.”
The SCDI is absolutely right. Why is the Joint Ministerial Committee not finishing the work it was engaged on in delivering those frameworks on a consensual basis? But of course that does not suit the Tory Government, who want to attack our democratic institutions.
The General Teaching Council for Scotland said that supporting the Bill
“would undermine the four UK nations’ devolved education functions.”
Ian Blackford
I hear the Cabinet Office Minister shout, “How?” Perhaps he should go and talk to the General Teaching Council, and it will give him its views directly. [Interruption.] Really? We have the Business Secretary, who is supposed to be taking this Bill through, sitting laughing—laughing at the legitimate comments made by stakeholders in Scotland. It is little wonder that the Tories are rejected in the way they are at the polls in Scotland.
On its impact on devolution, Professor Nicola McEwen, co-director of the Centre on Constitutional Change, found that the internal market Bill
“limits policy divergences and risks stifling innovation”.
The Scottish Trades Union Congress stated that the Prime Minister
“is uniting political parties, trade unions and wider civil society in Scotland against a power grab which would see UK Government interference in previously devolved matters and a rolling back of the”
devolution
“settlement we voted for in 1997”.
What is happening is that the Tories are uniting civic Scotland against this attack on our Parliament and its powers—farmers, crofters, teachers, industry, academics and trade unions: a coalition of opposition to this Bill and this Tory agenda. Civic Scotland has made its voices and views crystal clear. Anyone supporting this Bill will be ignoring their interests.
We all have a responsibility to listen to these voices. The new Scottish Tory leadership have been running around half the summer, telling anyone who would listen just how keen they were to stand up to the Prime Minister when they think he is wrong. Well, you have that chance tonight. Listen to the coalition of opposition in Scotland rather than your masters in Downing Street. If the Scottish Tories follow their colleagues into the Lobby in support of this power grab, they will expose themselves as being weaker than ever, as failing to stand up for Scotland’s interest against a London power grab. The very first test of the new Scottish Tory leadership will have turned out to be their biggest, and they will have failed. They will simply have shown themselves to be the Prime Minister’s poodles, turning their back on Scotland’s interests. They will have failed once again to stand up for Scottish democracy.
There is also a special responsibility that falls on the Labour party. Much of the devolution project is a legacy of its Government in 1997. This Bill is a direct attack on that legacy. We must collectively oppose the Bill. I am urging the Labour party at every parliamentary stage to take full responsibility and work collectively with us to hold the Government to account. The Welsh Labour Government are advising the same. They have said that
“the UK Government plans to sacrifice the future of the union by stealing powers from devolved administrations”,
and that it is
“an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland, who have voted in favour of devolution on numerous occasions.”
That statement and its analysis comes to the very core of the argument. Over the course of the last 21 years of devolution, Scotland’s people have benefited from the progressive and divergent priorities that our own governance has given us the freedom to pursue. They have seen it, experienced it and come to fiercely value it. Even with limited powers, Scotland’s Parliament and our Government have always sought to mitigate or reject the Conservative policy paths set out at Westminster. We have forged our own path. If this legislation had been in force previously, it would have prevented many progressive policies and divergent choices.
Over recent months, that conviction and belief in our Parliament has grown. People have seen the exceptional leadership of our First Minister throughout the course of this terrible pandemic. It has reaffirmed their faith and confidence in our institutions, our governance and our nation. Our people have come to a simple but powerful conclusion: decisions about Scotland are best made in Scotland. Right now, poll after poll—the latest one only last Friday—shows that a growing majority have come to the conclusion that all decisions and all powers should now be fully entrusted to the people of Scotland.
The Tories have never been able to reconcile themselves to that truth. As usual, when they are confronted with change, they are in the depths of denial. Instead of accepting the right of Scottish people to choose their own future, they are trying to grab the powers back that were returned to Scotland 21 years ago. That is exactly what this law is designed to do. It is a full-frontal attack on Scotland’s Parliament and on Scotland’s democracy.
It has been stated that power devolved is power retained. This implies that this Tory Government can do anything they like with the powers of our Parliament. That is what this Bill is about. It gives them direct spending in Scotland in devolved areas: in health, education, housing and transport. Just dwell on this. We send parliamentarians to Holyrood so that they can enact the people’s priorities, but Westminster is about to ride roughshod over that. If the Bill passes, this Government in London can interfere directly in all those devolved areas, over the heads of the Scottish Parliament and our people. There is only one way to stop them—only one answer, and only one option.
The only way to defend Scotland’s Parliament and its powers is by becoming independent. Our Parliament will consider a new referendum Bill before the end of 2021. The chance to choose an independent future is now coming. No amount of Tory denial and disruption can stand in the way of Scotland’s people’s democratic right to choose a different and better future, and once it comes, people will have their democratic say. I am more confident than ever that they will choose to be part of a new Scotland back at the heart of Europe. We can choose to leave behind the chaos and instability of Westminster. We can get on by becoming an independent, international, law-abiding nation.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I will endeavour to prove that the best advocacy can be the most concise.
There is a great deal in the Bill that I support and that is necessary, sensible and desirable. However, there is one important part of the Bill that creates very real difficulty for me and many others, and I want to go straight to the rub of that point. Part 5 of the Bill, as it stands, gives me real concern as to its leading the United Kingdom into a breach of our international obligations and the law that stems from them. That is, as many others have observed, not something that any country should do, save in the most extreme and pressing circumstances.
The difficulty arises in relation particularly to clauses 42, 43 and 45. They are different from the rest of the Bill, because they give very wide-ranging powers indeed to Ministers to disapply elements of the withdrawal agreement and the protocol, which have the force of international law, by regulation. These are measures of a very sweeping kind, involving any kind of legislation and any part of the agreement, not just those related to the protocol, and appearing to oust the jurisdiction of the courts in any respect. I question whether their being so wide can be justified.
My other concern is that the way the clauses are phrased at the moment runs the risk of bringing us into breach of our legal obligations before it is necessary. I heard what the Prime Minister said about an insurance policy, and I heard what the Lord Chancellor has said about a “break the glass in emergency” provision. That is fine, but it seems clear from the protocol that there are steps that must be gone through first and exhausted before that can properly be done. The most important part to bear in mind is that if article 45 is brought into force immediately after Royal Assent, we would at that point have disapplied the concept of the direct effect of European law, which is part of the agreement we signed up to and which this House passed less than a year ago. So bringing it into force on Royal Assent is needlessly provocative to our negotiations and needlessly undermines our reputation for sticking to the rule of law.
There are also provisions that bind us to act to resolve disputes only through the arbitration process, which is set out in the withdrawal agreement. Article 168, which we have signed up to, states that
“the Union and the United Kingdom shall only have recourse to the procedures provided for in this Agreement.”
There are detailed procedures and timelines for that.
It seems to me that we should be very careful about moving forward with bringing these clauses into force until every opportunity to resolve any dispute has been carried out through the arbitral mechanisms. Only then, and if it is necessary because the EU has not responded to a result of the arbitral mechanism—
Jeremy Wright
Does my hon. Friend agree that one thing that should give us some optimism about the use of the mechanisms that he is describing is the specific references to the defence of the Good Friday agreement and of Northern Ireland’s status as part of the United Kingdom in the protocol and the withdrawal agreement themselves?
Sir Robert Neill
My right hon. and learned Friend is absolutely right. That is, I think, the best approach for us to take. We should stick to the letter of those provisions, as that gives proper defence of our strategic interests. For example, there is the safeguard provision in article 16, which would enable us to act if, in extremis, the stability of the situation in Northern Ireland and the Union was threatened, but we could do that while maintaining the moral high ground and our intellectual reputation. I see that the Chancellor of the Duchy of Lancaster is listening. I hope that he will be able to go further than the Prime Minister, either tonight or in the course of debates on the Bill, and assure us that those provisions will not be brought into effect unless and until every one of the legal mechanisms open to us has been exhausted and unless and until there has been a specific vote of this House—not by a statutory instrument, which does not give enough scrutiny for such a constitutionally significant issue, but by a specific resolution. That is why my amendment seeks to give the Government an opportunity to have that “break the glass in emergency” provision, but without our triggering a breach of the international legal obligations before it is absolutely necessary.
Steve Brine
Further to that, does my hon. Friend not agree that, while there will be some who are still on the, shall we say, Blair end of the argument, notwithstanding what he says, that position would be seen by the majority of people as being a reasonable one for us to take in this Act before we enact the nuclear button that is so often talked about? Would that not be reasonable?
Sir Robert Neill
I agree entirely with my hon. Friend, and I do hope that the Government will listen carefully to that. I want to be able to support the Bill. I cannot support it with these clauses in it as they are at the moment. I hope that we will take the opportunity to change and improve these clauses and the way in which they might operate so that we do not fall into a means of damaging our reputation. That is why I cannot support the Bill tonight. I hope that we will see amendments to change what I believe are the egregious, needless and potentially damaging elements of part 5 of the Bill. Unless there are those changes, I will have further difficulty in supporting the Bill. None the less, having listened to what the Prime Minister has said, I want to give the Government that chance in a constructive spirit, and I know that the Chancellor of the Duchy of Lancaster is listening carefully to that.
I do hope that the Government recognise that to act in a way that unilaterally breaches our international obligations is wholly against the spirit of what this country stands for. It is against the spirit, I think, of the party that he and I have always adhered to as a party of the rule of law, and we need to find a constructive means of making sure that we meet our obligations to the Union, but without undermining our obligations to the rule of law. I do not believe that is impossible with good will.
Hilary Benn (Leeds Central) (Lab)
I have to say, from listening to the Prime Minister and watching the growing dissent on the Government Benches and in the Conservative party, that there is a moral here. The first moral is: read stuff before you sign it. The second moral is: do not go around telling the world that the United Kingdom cannot be trusted to keep its word.
On exit summary declarations—the Prime Minister said there were three issues—I have to say that I have some sympathy with the Government’s argument: exit summary declarations should not be required for goods moving from Northern Ireland to GB. When Wrightbus sells one of its wonderful buses to a transport operator in the UK, why is the form needed and what is the EU going to do with the form? But is it really worth ruining our international reputation, running the risk of no trade deal with the European Union, and running the risk of no trade deal with the United States of America for the sake of an electronic form? On goods at risk, surely it is possible to reach a pragmatic solution, because a lorry load of goods destined for a supermarket in Belfast can hardly be described as being at risk of entering the European Union. I would say to the Chancellor of the Duchy of Lancaster that it would be helpful for everybody if he was not quite so secretive—and I use that phrase—about what goes on in the Joint Committee. Every time I have asked in the Committee on the Future Relationship with the European Union, he has said, “Well, that’s a matter for the Joint Committee.” Well, I know it is a matter for the Joint Committee, but we would like to know, as the House of Commons, how things are going.
On the question of east-west trade, the Government knew from the start that there would be checks and controls, and that tariffs might be paid in certain circumstances. The Prime Minister then cranked up the blockade threat, even though, as the House will be aware, the Irish Foreign Minister has described that threat as “totally bogus”. By the way, I think it would help if the EU just said now, “Of course we’re going to give third-country listing to the United Kingdom.”
If the Prime Minister actually believes the threat of blockade, why did he then say that there is nothing in the Bill to do anything about it? Can the Chancellor of the Duchy of Lancaster, in responding to the debate, give us an assurance that the Government do not intend to bring in another bit of legislation breaching international law? If the Government are looking for a remedy, a safeguard or an insurance policy, they should look to the protocol they have already negotiated, and in his brilliant speech, my right hon. Friend the Member for Doncaster North (Edward Miliband) drew attention to article 16. I say to Ministers, use the process to resolve these questions, and do not break international law.
The final point I want to make is that this is a terrible diversion from the task at hand. We have less than four months to go, and the livelihoods of many businesses in this country depend on getting a deal with the European Union. For a long time I thought the Government would get one, but in the last few days I have begun to doubt whether they actually want one, because they seem to be acting in a way that undermines the prospect of an agreement.
I say to the Minister that it would be utterly irresponsible to head towards a lack of agreement that would damage sectors of the British economy. The Prime Minister read out the tariffs that he says would be charged on goods moving from GB to Northern Ireland. Those are exactly the same tariffs that would be charged to businesses in Great Britain if we do not get an agreement with the European Union. It is no good everybody on the Conservative Benches saying, “Isn’t that shocking?” if we end up with no agreement at all, and it would be utterly irresponsible to add to the pain caused by covid. For the Prime Minister to describe tariffs as a good outcome, frankly, leaves me perplexed.
Frankly, both sides should stop posturing, both sides should get back to their job and both sides should now negotiate through all of these questions, compromising as they need to, to get an agreement that, ultimately, would benefit the people of the UK and the EU.
Alun Cairns (Vale of Glamorgan) (Con)
In the limited time that, unfortunately, is available to us, I want to focus on the protection of the UK market and on the enhanced powers that this Bill will give to UK Ministers to act in UK nations. Without this Bill, the way in which businesses trade and interact could be at risk. There is a realistic potential that the marketplace could become chaotic. We all recognise—
Alun Cairns
If the hon. Member gives me a moment, I will continue the argument and he can make an intervention later if he wishes.
We all recognise the status of the EU single market, which is something many of us will have championed and questioned in equal measure over the years. Rarely have we commented, however, on the UK market, yet the single UK market is more important and directly relevant to the businesses in each and every constituency across the country. It gives us the right to trade freely and seamlessly in all parts of the UK. It sets minimum standards for products and services—a common rulebook for tradespeople to work from. It allows for the mobility and flexibility of labour, protects against unfair subsidies and enables the recognition of qualifications, confirming free and fair competition and opportunity wherever people are based in the United Kingdom. It is so important to our prosperity and so obvious that until now many people will have taken it for granted, which is why we need to act in this Bill.
Over the last six months, we have seen that the agendas of each Administration around the UK are not always in line, and therefore the potential to create chaos in the marketplace exists. Protecting the interests of businesses and consumers in all parts of the country must be our priority, and that is exactly what the Bill does. It does so in a way that also respects and supports devolution by enhancing the devolved Administrations by extending their powers still further.
I am particularly encouraged and grateful that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has included clause 46 in part 6. It is particularly welcome: it enhances the powers of UK Ministers to act and to be relevant in UK nations. That is essential for the future of the Union, and to my mind it is the start of the Union fightback. It shows that Whitehall now understands the changing nature of our make-up as a United Kingdom.
Since devolution, UK Ministers have been prevented from acting directly in support of businesses, charities or authorities in UK nations. UK-scale investment projects have always been difficult to achieve since devolution. Every Secretary of State has been frustrated by that, partly because of the devolved settlement and the limitations that it has put in place. After all, for someone who is unemployed and living in one of the poorest communities, which may have substandard education and limited training opportunities, in a run-down town or village, at this point the UK Government’s answer to calls for help would have to be, “You need to contact your Assembly Member or the Welsh Government Minister.”
Chris Bryant
I am sorry, but I have been asking for money to make good the problems that we have had with flooding in the Rhondda all this year; I have not had a single penny out of the Westminster Government for it. I have been calling for the work that needs to be done in the Rhondda to take away the 60,000 tonnes of material that has fallen into the river from tips, which are a responsibility of the UK Government, to be funded by the UK Government; I have not seen a penny. I am not going to listen to all this nonsense of pretending that they are going to send us money—it is a whole load of tosh.
Alun Cairns
The hon. Member has made my point. He recognises that the areas of policy that he is talking about are devolved: the capacity of the UK Government to act in those spaces does not exist, as it stands. He recognises that the devolved settlement already gives Wales, or the Welsh Government, £120 for every £100 spent in England, so the answer that I might suggest is: I am sorry, but the hon. Member will have to contact the Welsh Government Minister to act in his constituency.
When people live in the circumstances that I have described, they do not care where the help comes from; they just want the Government to give hope and opportunity, and to play a part in bringing about change. The Bill allows for exactly that. I have long argued that the future of any nation would come under pressure if a wide wealth gap continued to persist between nations and regions. The Prime Minister’s levelling up agenda recognises that, and this Bill empowers that levelling up agenda in Scotland, in Northern Ireland and in Wales.
Sammy Wilson (East Antrim) (DUP)
The warnings that my party gave about the withdrawal agreement when it was discussed at the end of last year are now coming home to the Government. They are beginning to realise the impact that it had; indeed, they are beginning to admit what their own assessment said: that the withdrawal agreement would reduce trade and business investment in Northern Ireland, affect consumer spending and have a disproportionate impact on small businesses. If the Bill is an attempt to undo some of the damage done by the withdrawal agreement and respond to the points that Arlene Foster and other Ministers have pressed the Government to address, we welcome it. However, I have to say that it does not go the whole way or address all the issues that need to be addressed. Indeed, those who are criticising the Government about the non-implementation of the withdrawal agreement ought to know that only on Friday the Secretary of State for Environment, Food and Rural Affairs overrode the Northern Ireland Agriculture, Environment and Rural Affairs Minister and instructed civil servants in Northern Ireland to put up border posts and put in a proposal for border posts, even though all the information about what would be necessary had not been accepted.
Two arguments have been made against the Bill. The first is that it goes against the Good Friday agreement. For the life of me, I cannot understand why a Bill that prevents businesses in Northern Ireland from being able to sell goods freely in the rest of the UK is going to bring about violence in Northern Ireland. For the life of me, I do not understand why a decision that will enable businesses in Northern Ireland to bring goods from GB without paying unnecessary taxes, which they then have to claim back at some future time, is going to affect peace in Northern Ireland. The argument about the Good Friday agreement and violence in Northern Ireland is always rolled out when the arguments are weak against what the Government are doing.
The second argument is that the Government are reneging on their international obligations. The obligations in the withdrawal agreement are two-sided. There is a requirement for both the EU and the UK Government to act in good faith and with best endeavours to ensure that there is unfettered access and unfettered markets within the UK between Northern Ireland and GB, and to ensure that the Government of the United Kingdom have the ability to rule their own country and to make laws that affect their own country. Even a casual observer would see that the tactics of the EU and the comments that have been made by the negotiators make it quite clear that there has been no good faith and no best endeavours from the EU in these negotiations. In those circumstances, the withdrawal agreement allows the UK Government to act unilaterally.
The hon. Member for Bromley and Chislehurst (Sir Robert Neill) said that we have obligations to the rule of law and obligations to the EU. What about the obligations to the people of the United Kingdom to ensure the provisions of the Act of Union? The economic basis of the Act of Union makes it quite clear that there shall be no barriers on trade between different parts of the United Kingdom. I believe that the Government are fulfilling, in part, their obligations to the people of Northern Ireland in this Bill, and that is why we will support it tonight.
Sir Christopher Chope (Christchurch) (Con)
It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson), who served with me on the Brexit Committee in the previous Parliament and had great insight and passion for this cause. He is absolutely right in saying that the Government were warned about the dangers involved in the Irish protocol. Indeed, many members of the Committee pointed that out, but he was foremost among them.
Having listened to the Prime Minister’s cogent analysis of where we are, I can see why we have this Bill before us, because what he really said is that the EU is not complying with its duty under EU law of sincere co-operation, which it still has until the end of December. By not sincerely co-operating, it is forcing the Government to anticipate what ghastly things might happen. They are very wise so to do, because of course the European Union has form in all this. As Charles Moore said in a recent article in The Daily Telegraph:
“The breaking of international law is a sport at which the EU itself often excels.”
I want to remind the House of an episode not referred to in Charles Moore’s article but based on my experience when I was chairman of the Legal Affairs and Human Rights Committee of the Parliamentary Assembly of the Council of Europe. Members will recall that the European Union agreed under article 6(2) of the treaty of Lisbon that it would accede to the European convention on human rights. Has it done so? No, it has not. It is in breach of international law. It is showing that it does not respect the rule of law. What is its defence? Its defence is its own interpretation of an obscure protocol attached to the Lisbon treaty—protocol No. 8. The European Union’s interpretation is not the interpretation that normal people would put on those words, but it got the support of the European Court of Justice—its own tame Court of Justice—to say that it would be incompatible with the European treaties for the European Union to accede to the European convention on human rights, which it had already decided to do during a prolonged negotiation in the preparation for the treaty.
Where are we now? We are in a situation where the Council of Europe’s parliamentary committee, the Council of Europe itself, and the European Parliament are trying to negotiate a way round this issue. In so doing, they are trying to exercise common sense and good will, because they recognise that the EU argument is essentially one of sovereignty. The EU is saying, “We do not want to subordinate our sovereignty to the European convention on human rights.” The argument in the Bill is that if the EU carries out all its threats, it will destroy the territorial integrity of the United Kingdom and deprive us of the opportunity to administer for the whole United Kingdom with internal trade arrangements. If one is sympathetic to the idea that we should negotiate things with common sense and good will, that applies to the EU accession to the European convention on human rights, as well as to where we go from here to ensure that we get the full Brexit for which the people voted.
Darren Jones (Bristol North West) (Lab)
The focus of today’s debate ought to have been on the functioning of the internal market, and the legitimate role that the devolved Administrations play in our Union. That is what business needs from us today. Instead, we are having to call out this ludicrous suggestion from the Government that the only way to secure a Brexit deal, which we were told was oven-ready, is to breach international law and damage Britain’s standing in the world. We are told that that is okay because it is merely an insurance policy, but we all know that if the current Bill is passed, we will already have breached our legal obligations and caused damage to our standing and reputation in the world, irrespective of whether or not those powers are used.
When summing up the debate, perhaps the Minister can tell the House why, if those protections are so important, they were not negotiated in the first place and included in the withdrawal agreement, before the Prime Minister signed it. This behaviour does us no favours in our negotiations with the European Union, or with any other country around the world, and such facts mean that we must instead conclude that the Government are merely playing politics with British jobs and British business.
Just as in negotiations to update the North American Free Trade Agreement, where President Trump threatened to walk away without a deal unless he got what he wanted, it seems the Prime Minister has adopted a similar strategy. In playing such a reckless game in these negotiations, we risk failing to secure a trade agreement not only with the EU but with the US, where as we have heard, the Speaker, Nancy Pelosi, has said that Congress would not pass any trade agreement that undermines the Good Friday Agreement, and rightly so.
I am at a loss to understand what the Government are seeking to achieve by acting so irresponsibly. Today we are left merely with the opportunity to appeal to the consciences of Members of the House about the constitutional importance that Parliament plays in such a situation. It is this Parliament that is sovereign, not the Government, and that places a personal obligation on each and every one of us, which we sign up to when we take our parliamentary oath. We are the check and balance on an irresponsible Executive.
Such disregard for the rule of law by the Government is perhaps not surprising in context of their disregard for the institutions of our country, from the courts to the civil service, and indeed this Parliament. This is but an obvious extension to this Prime Minister’s approach to governing, and as a member of the Opposition, I gently say, with the greatest of respect, that such reckless disregard for our institutions, for what it means to be British, for how we expect Britain to be governed, and for our aspirations for Britain’s role in the world, is also not very Conservative.
We have already heard the verdict of three Conservative Prime Ministers. Can Members imagine for one second what Mrs Thatcher would say from that Dispatch Box in these circumstances? [Interruption.] I assure hon. Members that Mrs Thatcher would not have agreed to breaching international obligations and the rule of law, because of the way that it weakens our standing in the world and our negotiations with the European Union. Conservative Members may wish to look to the Republican party to see where that goes if we fail to stand up to it.
On the substance of the Bill, on the constitutional obligations on us all, which we should take seriously and not with humour, in the national interest and—dare I say it—in the interests of Conservative Members regarding their own party’s standing, I hope that they will join Opposition Members in voting down the Bill this evening.
Andrea Jenkyns (Morley and Outwood) (Con)
I welcome the Bill as a reasonable and essential step for our Government to take in the light of the EU’s unreasonable position. It has become crystal clear, ever since our country voted to leave, that the EU would not act in a constructive spirit and would not treat the UK as an independent country with equal basis in the negotiations, as it has with other countries such as Canada. Despite this country’s decision to say no to the project of ever closer integration, which was reinforced by last year’s general election result, Brussels has continually attempted to trap us in its orbit. The British people will never accept the status of a vassal state, despite the arrogant efforts of Mr Barnier—just look at his Twitter feed as evidence.
The Bill is a reasonable step for any Government to take to maintain their sovereignty. It upholds the principle of article 4 of the Northern Ireland protocol and without it, trade across the Union of nations would be severely limited. In the light of the EU’s continued resistance to a mutually beneficial free trade agreement, no deal will be our only available option. The Bill makes provision for that. Otherwise, Northern Ireland would remain subject to the EU’s customs laws and large portions of its internal market laws, all enforced by the EU’s Court of Justice.
Ian Paisley (North Antrim) (DUP)
The hon. Lady has put her finger right on the issue that affects Northern Ireland: under the protocol, Northern Ireland goods will be subject to import declarations, entry summary declarations, safety and security certificates, export health certificates, phytosanitary certificates and certificates of origin. The Bill, thankfully at last, clears up that we will have a Union without paperwork.
Andrea Jenkyns
I thank the hon. Gentleman—a true patriot, putting our country’s interest above the EU’s.
EU rules on state aid would allow the EU to impose its state aid regime on any UK domestic policy. That is not reasonable. We chose to say no to further integration in 2016. Four years on, our friends in Brussels have not understood that. While we are happy to trade freely with them, we do not want to be ruled by the ECJ, we want our fishermen to have full access to our waters, and we do not want our future to still be determined by unelected EU bureaucrats.
The Bill is reasonable in solving those problems and it is essential in upholding the international obligation of the Good Friday agreement. It is essential that great effort is made to prevent a hard border between Northern Ireland and the mainland of Britain. We have seen time and again the naked political considerations—most of the EU’s desire is to see our country fail. That is hardly an example of negotiating in good faith, and it is that that has determined and dictated the EU’s negotiating position. The Government had no option but to introduce this Bill.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
In a “specific and limited way” is how the Prime Minister uses the words integrity and good faith. When the Bill was launched, an establishment newspaper in Scotland called it a day of national shame and infamy. It was right. With malice aforethought, the UK Government are breaking international law and breaking devolution. We reject the Bill and will never support legislation that breaks international law.
The Bill clearly threatens food and environmental standards, and opens up a race to the bottom in all aspects of life in Scotland, from the water we drink to education and health. It leaves our businesses uncertain and wary. It is no wonder that in Scotland, poll after poll shows that it is now the majority view that independence is not only the way to ensure the needs of the people of Scotland are delivered, but the only way to protect the Scottish Parliament. The Bill is emblematic of a Government with no regard for, or will to work with, devolution. It is a bare-faced power grab. The Scottish Tory leader has boasted that he will vote for the Bill tonight. In his other job, he runs the line; in this job, he crosses the line.
Clause 46 completely undermines the devolution settlement by stripping spending powers away undemocratically from the Scottish Parliament, jeopardising the current Barnett funding levels. We know only too well, as was mentioned by my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford), the consequences of allowing Tory Governments control of our spending, from when the highlands lost out to shore up votes in the south of England.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Is it not a fact that over a 10-year period the Scottish block grant has been cut by the Conservative Government, and these measures give free rein for the UK Government to make further cuts to the Scottish block grant and to impose their spending in Scotland, such as through this stupid Boris Brexit that nobody wants?
Drew Hendry
I could not agree more with my hon. Friend. The people of Scotland are wise to these tricks and can see the utter contempt that this Tory Government have for their needs. Their Parliament will once again be ignored, in spite of that Parliament voting 92 to 31 against the White Paper for this Bill. The response of this Tory Government is as self-defeating as it is petty and harmful. Do not take my word for it. As the House has heard, the National Farmers Union, the General Teaching Council for Scotland, the Scottish Council for Development and Industry, the STUC, the Welsh Government and even the Chair of the Public Administration and Constitutional Affairs Committee have all agreed that this is a power grab.
The threat to environmental standards is palpable. Clauses 2 to 9 contain sweeping powers to compel Scotland to accept lower standards set elsewhere in the UK on animal welfare, food safety protections and a host of other elements with a direct impact on people’s lives. When directly challenged only yesterday, a UK Government Minister refused to rule out that we will have to accept chlorinated chicken in our shops. Imported hormone-injected beef can and will undercut our farmers and their quality production. Building control standards will be affected. Private companies will be able to trade unhindered to weaken and undermine our NHS and publicly owned water company—lowering standards, raising prices and undermining health.
This Tory Government are determined to break international law. This is proof to all looking on that they will break any boundary, concerned only with their own dogma. They do not want to work with others; they are not interested. Any real co-operation and consultation is anathema to them. They are a Government petulantly demanding compliance. Any deal, understanding, commitment, promise or even legally binding treaty is disposable. The common good is of no concern, especially when it gets in the way. Trust, honour and obligation are now words to trade on and be sneered at. What other inconvenient laws are next? Where does this stop?
Finally, what is the Government’s answer to the concerns of the Scottish people, businesses and communities to the poll after poll after poll showing that independence is now the majority view—not more powers or any attempt at understanding, but a pre-meditated move to put devolution to the sword? Madam Deputy Speaker, you bet we will be voting against this affront to Scotland and democracy tonight.
Sir Oliver Heald (North East Hertfordshire) (Con)
I cannot go all the way with the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), I am afraid, and I do think his remarks were well over the top.
It is important that we have measures in place to run the UK internal market so I support that aspect of the Bill. However, I do have concerns about part 5, because for our country to break its word and breach international law is just not something that we do. I will speak a bit further about that if I have time, but let me just say that I was surprised to see the Secretary of State for Northern Ireland justify this with the alleged precedent of the general anti-abuse rule set out in the Finance Act 2013. I was a Law Officer at the time and Dominic Grieve was Attorney General, and one thing I can say about Dominic Grieve is that he was very correct and extremely painstaking, and he made sure that Government legislation did not offend the rule of law. That Act did not breach Britain’s treaty obligations. That was made clear by Ministers at the time and I cannot recall anyone arguing that it did. It had the support of the OECD and the countries with which Britain had tax treaties. It was written after a review led by our leading tax QC Graham Aaronson to ensure that it was focused properly and was in line with our tax treaties. There was full consultation. Since it was passed, it has not been attacked as being in breach of treaty obligations, and the wording of that Act simply confirms the agreed legal situation. In fact, if it is an example of anything, it is an example of reaching agreement and doing things properly.
Britain stands as a rule of law country that is respected across the world for its stance. It is right that all three Prime Ministers I served under have come out with grave concerns about this Bill and the point I am concerned about. Margaret Thatcher herself—she was a barrister—made clear how important the point is, often saying that democracy is not enough without a love of liberty and respect for the rule of law. I am therefore hoping that the discussions going on at the moment can be successful. I am pressing the Government and the EU, as much as I can, saying, “Come on, let’s get an agreement”, because breaking international law would be the last thing we want to do.
I support the amendment tabled by the Chairman of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), which says that if we come to the point where the negotiations have failed, all is lost and this country really must contemplate breaking international law, then so be it, but that day is not today and we should give the negotiations more time.
I have known my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) for many years. He laughed a little when I was talking about international law. I can remember him telling me once that we should leave the EU without any agreement at all. I do not know if he remembers that. He said we should ignore having any agreement, just repudiate everything and off we go. Personally, that is not my approach.
Wayne David (Caerphilly) (Lab)
I have been a Member of this House for a good many years, but this is the worst piece of draft legislation that I have ever seen brought before us. It is a shabby and dishonourable piece of legislation, and I say that for two fundamental reasons.
My first objection to the Bill is that, if enacted, Ministers would have the ability to break international law, and the law would prevent there being a legal challenge to the use of those powers. Much of the debate so far has rightly focused on Northern Ireland, and I take seriously the potential threat to the Good Friday agreement but, importantly, the Bill also has far-reaching implications for all international obligations in this context. Those are not my words or those of the Opposition but the considered, objective and carefully expressed view of the House of Commons Library.
My second concern is that the Bill significantly undermines the devolution settlement for Scotland, Wales and Northern Ireland in two important respects. First, the Bill states that the devolved nations will have to allow the sale of imported goods in Wales, Scotland and Northern Ireland, as agreed by the UK Government when they act solely for England, even if those imported goods did not meet quality standards, consumer protection levels or appropriate labelling agreed by the Scottish Parliament, the Welsh Parliament or the Northern Ireland Assembly. Of course, there should be agreement whenever possible—that should apply right across the UK—but there is a very real danger of standards falling as the UK Government cobble together trade deals. The Bill facilitates that.
My second devolution objection relates to funding and state aid. When Britain was in the European Union, less well-off areas, such as south Wales, benefited substantially from EU structural funds, the European regional development fund and the social fund in particular. My constituency, like many others, benefited enormously. The Government have proposed a shared prosperity fund to replace the structural funds. The Bill gives a legal base for that fund, but significantly, the Bill gives exclusive power to the UK Parliament and the UK Government to decide where and how that money is spent. Previously, the devolved institutions had a real say in how European money was spent in their areas. What I think will happen is that resources will not go to poor areas—the areas of need—but will be allocated according to Tory central Government priorities. That is structurally and morally wrong.
Alun Cairns
Is the hon. Gentleman fully aware of the frustration among communities in Wales that so much money has been wasted over so many years of the highest level of European funds? That could be the funicular in Blaenau Gwent, which broke down within weeks of being completed and was never used again, or so many other projects elsewhere that I could highlight.
Wayne David
What I am aware of is that many communities across Wales are fed up of Tory cuts. Despite the difficulties that many areas have experienced because of central Government policy, they have seen the European Union offer some help, and the concern is that that help will now not be coming from a Tory Government. The help will go to areas that are already well off, which is morally and economically wrong.
That is why I conclude that this Bill is one of the worst pieces of draft legislation ever to be put before the House. It enshrines the possibility of illegality. It objects to international law as it is widely applicable. It rides roughshod over the devolution settlements. It opens the door for resources to be given to well-off areas, rather than being allocated on the basis of demonstrable need. It also undermines the international standing of this country in the eyes of the world.
Mr Laurence Robertson (Tewkesbury) (Con)
All through the Brexit debates and the referendum campaign, we were constantly reminded that we should do nothing at all to damage Northern Ireland, and particularly the economy in Northern Ireland. I entirely agree with that advice, but as soon as the Government try to do something to protect Northern Ireland and the economy of Northern Ireland, we are told that we are wrong.
It has been interesting to listen to the speeches tonight. Members have quite rightly warned that we should not implement the Bill’s provisions before it is absolutely necessary. The logic of that argument is that they accept that it might, under certain circumstances, be necessary. Indeed, if one reads beyond the headlines of what was said by David Cameron, who has been quoted tonight, he goes on to say that these provisions should only be used as a last resort, therefore accepting that they may have to be used. I entirely agree with that—they should only be used as a last resort, and the Prime Minister was clear that that would be the case.
Ian Paisley
I thank my right hon. Friend for giving way. He was a wonderful Chairman of the Northern Ireland Affairs Committee, and he actually gets the situation in Northern Ireland. Does he agree that what really perturbs us about the opposition to the Bill tonight is people saying that it will somehow attack peace when what it does is remove the impediments to economic progress? It is through economic progress that we have created more jobs in Northern Ireland and helped to create peace in Northern Ireland.
Mr Robertson
My hon. Friend is wrong—or perhaps premature; I am not quite sure—to elevate me to the Privy Council, but he makes a very good point and leads me on to my next point.
Although north-south trade is extremely important to Northern Ireland and, indeed, to the Republic, east-west trade is far more important for both Northern Ireland and the Republic. That is not to say that the other is not important, of course. We should therefore do nothing to damage that trade.
The right hon. Member for East Antrim (Sammy Wilson) referred to the Act of Union. He did not have time to go into detail, but article sixth of the Act of Union 1800—the very Act that created this United Kingdom—states that
“in all treaties”
made by “his Majesty” as it was then, his heirs and successors,
“with foreign powers the subjects of Ireland shall have the same privileges as British subjects.”
It goes on to refer to manufacturing, trade and navigation. That Act should not be breached. It may or may not have the legal status—whatever that is—of a treaty, but surely it is an international Act of Parliament, which brought two sovereign nations together. That should be respected.
Article 184 of the 2019 withdrawal agreement should be respected when it talks about the need for both sides to operate
“in good faith and in full respect of their respective legal orders”.
In other words, the United Kingdom’s legal order should be respected. Clause 38 of the European Union (Withdrawal Agreement) Act 2020 asserts that
“the Parliament of the United Kingdom is sovereign.”
It is wrong for people to say that Ministers will run off with powers and act illegally—they would be given the powers by this Parliament if we pass the Bill. Ministers are therefore not running off and acting illegally at all. It is important that we deliver the Brexit that people voted for. I do not want a spat with the European Union and I have no reason to believe that it will behave so unreasonably as to deny all EU manufacturers and businesses—the people who send more than £90 billion of exports to this country, which is more than we send to them—trading opportunities.
I want a free trade agreement with the European Union because that would benefit businesses and people on the continent and in this country. It would also remove all the arguments that we are having tonight about the withdrawal agreement and the Northern Ireland protocol, so I really do hope that we can make progress. That is the way forward. If there is bad faith, and if we are put to the test of deciding whether we support the United Kingdom or the European Union, then I remember the oaths that I have given on seven separate occasions in this House, and my loyalty will be to the United Kingdom.
Colum Eastwood (Foyle) (SDLP)
“I believe that these arrangements are in the interests of Northern Ireland and the UK as a whole. It is a great deal for our whole country.”—[Official Report, 20 December 2019; Vol. 669, c. 149.]
Not my words, but those of the Prime Minister. How can anybody trust the word of the Prime Minister when he does a deal not even a year ago and he comments on it in those terms, but now he is ripping up that agreement only a few months after he made it? How can any of us believe a word that comes out of his mouth? Last month, we lost Ireland’s greatest son, John Hume, the pathfinder for our peace, the creator of the Good Friday agreement. He understood what that agreement was about. We have been told by Ministers in this House and on the airwaves that we need this Bill to protect the Good Friday agreement. Two key principles of that agreement are that there will be no hard border in Ireland and that local people will make local decisions for local communities. This Bill rips up both those principles.
This is not just about trade. It is much more fundamental than that. We are not going backwards, despite what the Government or anybody else in this House will try to drag us back. We are refusing to go back to a place that caused so much hurt and so much pain, despite what anybody says. This Government knows nothing about the Good Friday agreement. Some prominent Members in this House opposed that very agreement. They have risked nothing for peace. They have not had to live with the violence, intimidation and division. John Hume spilled his sweat so that nobody else would have to spill their blood. This Government know nothing of that.
Of course, the DUP tonight are talking about the Good Friday agreement and interpreting it for us. They were standing outside the gates of Stormont when it was being negotiated, shouting and holding placards. How did that all work out?
The protocol is there to protect us from a hard border. That is why it is there. Without that protocol, the only thing we are being offered to protect us is the word of a man whose word can clearly not be trusted. Openly admitting that he is going to break international law by being prepared to break a deal that he just did with the European Union has consequences. People in this House need to remember that Ireland has very good friends in the United States. I want to thank former Vice-President Joe Biden, Speaker Nancy Pelosi, Congressman Richie Neal and Congressman Brendan Boyle for all that they have done to support our peace process and for all that they have said this week. They have been very clear: there will be no trade deal with the United States if this Government do violence to the Good Friday agreement or this protocol—no trade deal at all. It is not me saying that; it is the Chairman of the House Ways and Means Committee, the Speaker of the House of Congress and, potentially, the next President of the United States. That is the reality that we are risking with this Bill.
This may all turn out to be a dead cat, but let me tell the Government very clearly that every single day more and more people—people we would not even expect—are saying to me that this Union is very close to becoming a dead duck.
Sir Desmond Swayne (New Forest West) (Con)
The Prime Minister has warned us that a threat has been made to interpret the agreement in such a way as to exclude the possibility of the people of Northern Ireland having access to goods from the rest of the United Kingdom—a threat that clearly shows that those who have made it have abandoned any notion of their binding obligation to negotiate in good faith and make best endeavours to secure an agreement. The Government would be utterly negligent if they were not to take precautions to prevent that from arising; it would be outrageous.
The Chairman of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), has said that the powers that the Government envisage arming themselves with should be used in only the most extreme circumstances. I put it to you, Madam Deputy Speaker, that breaking up the economic integrity of the United Kingdom is just such a circumstance. This Bill is a precaution. It is a deterrent. The best way to prevent ourselves from being in the position of needing these powers is to arm ourselves with them.
There is a principle in international law, which is that no country can be bound by an obligation that it made when that obligation is interpreted in such a way as to undermine the very integrity of that country. That is a principle of international law, and there is only one court that can arbitrate in those circumstances. That is the court of international opinion, and the world can see exactly what is going on. The world has had its own dealings with the European Union and its negotiations. It has seen its infractions of the World Trade Organisation. It has seen what it has done over the European convention on human rights, and it knows what is going on.
There are those who have said that there is somehow a comparison to be made between the powers that we envisage in this Bill and what China is doing in Hong Kong. That is such a grotesque comparison as to undermine any argument that they might have.
Ms Angela Eagle (Wallasey) (Lab)
I never thought I would ever see a piece of legislation this objectionable put before the House. It is a gigantic act of self-harm masquerading as a negotiating strategy in the EU-UK trade talks, as the flounder and the end of the transition period looms. It unilaterally repudiates the devyolution settlements and centralises power to the UK Government.
As currently drafted, this Bill will give Ministers the powers to disapply or unilaterally reinterpret parts of the Northern Ireland protocol and ignore their legal obligations in both domestic and international law to enact the protocol as it was negotiated. It asserts that these powers will be legally effective even though they break international law, thereby unilaterally repudiating the foundations of the withdrawal agreement, which was only enacted by the House earlier this year. The Bill orders the domestic courts to prioritise this new law over any existing international law we have signed up to and it attempts to preclude any prospect of judicial review.
It has already been admitted on the Floor of the House by a Cabinet Minister that the Bill breaks international law in a very “specific and limited way”. The reality is that this is a shocking repudiation of everything the UK holds dear. It threatens to destroy our hard-won reputation as an upholder of international law and as a country that can be trusted to keep its word. Once lost, that reputation will not be easy to regain. This is not only morally wrong—it is self-defeating and undermines the prospect of reaching a deal at all. It is a sign of just how dangerous the Government’s actions now are that all five living ex-Prime Ministers, both Labour and Conservative, have made public their opposition to this reckless course of action, as have the Brexiteer ex-leaders of the Conservative party, Lords Hague and Howard.
This morning, the Prime Minister’s first Lord Chancellor called the Bill “unconscionable” and revealed that he will not vote for it. Many legal experts argue that both the current Lord Chancellor and the Attorney General are in breach of their oaths of office and should resign. Last week, the head of the Government legal service did resign over the Bill because it breaks international law. Given that we have an unwritten constitution which relies on ministerial restraint and responsibility, the Bill is even more dangerous than it first appears. It unilaterally tears up treaty obligations made just months ago and makes it less likely that any of our future undertakings will be believed or trusted, just as we must renegotiate all our existing trading agreements with the rest of the world.
What are we to make of a Prime Minister who presides over this moral vacuum and this reckless gamble with our international reputation; the man who resigned over his predecessor’s deal, which had no Irish border, pronouncing it a betrayal and using it as his path to power in the Conservative party; the man who, nine short months ago, negotiated and signed the withdrawal agreement, declaring it “fantastic”, and expelled from the Conservative party and Parliament all his own MPs who did not back it; the man who went to the country with this “oven-ready” Brexit deal and won a huge majority; the man who now believes it was rushed and flawed, and must be unilaterally written by him and him alone, the world king acting like a two-year-old having a tantrum because he did not get all he wanted; a Prime Minister who is completely careless of the consequences of his own actions; and the leader of a Government who think they can do what they want, purge who they want and act how they want, a Government who think there is one law for them and another for everyone else, repudiating treaties they have just signed and ignoring the lockdown rules they impose on everyone else?
This will not end well. The Government must step back from the brink, withdraw the lawbreaking clauses in the Bill, and think again.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Rarely can a few words uttered from the Government Dispatch Box have overshadowed a debate like this to such an extent or indeed caused so much instant fury and indignation, but I do not think the House should be in any doubt that the author of those words will have been delighted by the reaction they caused, and that the real purpose and significance of those words will probably prove to be much less than that. The law of this land and international law are both of great importance. I will leave that to the lawyers. The underlying question for the House to address is about where this nation now finds itself.
I support the Bill, because it will be necessary to address at least the worst aspects of the withdrawal agreement and protocol. We cannot be bound by it indefinitely or continue to accept laws imposed on our country by the EU court. At least there was a means of leaving the EU, but there is no obvious means of leaving this withdrawal agreement.
Much has been said about the potential to lose the respect of the international community, but what will other nations think if this great and sovereign nation cannot bring itself to accept that we made a mistake ratifying this agreement? [Interruption.] Some of us warned about it at the time. But the key points are these: the UK will gain respect if we extricate ourselves from the worst aspects of this agreement, which have the capacity to impose laws on our country with even less democratic legitimacy than under our previous membership of the EU.
Alan Brown
Is that now the measure of how we are going to go forward with international treaties: when countries change their minds, they say, “Oops, I made a mistake. We’ll forget about it.”?
Sir Bernard Jenkin
I do not think it is a matter to be done casually and without very great care, but, as many right hon. and hon. Members, even those objecting to this Bill, are now saying, if the worst comes to the worst, we may have to avail ourselves of these powers, because it is the obligation of this House, first and foremost, to stick up for our national interests.
The EU says it will act against the UK through the European Court, but there is something absurd about the EU attempting to impose its laws on a member state after it has left the bloc—when did the voters endorse that? There is something ironic, even bizarre, about MPs in this Parliament demanding that the EU should continue to impose its laws instead of themselves wanting to make the laws for their constituents—they still do not accept Brexit. One wonders whether the Government recognise better than many here how most voters will react to this. Most of those shouting the loudest now showed how little they understood the voters in the 2016 referendum. Voters will support a Government who are determined to resist the unreasonable enforcement of the withdrawal agreement by the EU. Today, the Government have a strong mandate and a secure Commons majority for taking back control of our laws—voters will expect no less than that and they will give little quarter to this Parliament if they are let down again.
We are in a process of constitutional transition, from being subordinated by the EU legal order towards the restoration of full independence. While we are in this penumbra period of mixed constitutional supremacies, it is unsurprising that this kind of controversy should arise. Our other allies and trading partners will have far more respect for the UK if we stand up for our interests in this way than they will if they watch us accepting that we are to remain indefinitely a non-member subsidiary of the EU. The Government must ensure that there will be a clear end to the jurisdiction of the EU Court; that is the test of whether we are taking back control of our own laws, and our democracy demands it.
Brendan O’Hara (Argyll and Bute) (SNP)
What a self-made mess this Government find themselves in, and it was beautifully articulated by the hon. Member for Harwich and North Essex (Sir Bernard Jenkin). For three long years this Government struggled to get their withdrawal agreement through this place. So much time was spent on it that I doubt that there was a dot or comma of that agreement that was not known to the Government. In January, they signed a legally binding international treaty. The Prime Minister signed it and described it then as a “negotiating triumph”. Not only was it a negotiating triumph, but, as he told the electorate in December, it was “oven-ready” and good to go. He told the electorate, “Vote for me and I will get Brexit done”, and for reasons that I will never fathom, the people of England did. So in December, flushed with a huge majority, he led every single Tory MP through the Lobby to support his deal. However, the Government now want unilaterally to move the goalposts and renege on what they signed up to at the start of the year. In so doing, they are wilfully prepared to break international law, take the UK’s already diminished reputation further into the gutter and take a wrecking ball to the devolution settlement. Even for this Government that is quite an achievement.
Are Ministers asking us to believe that, despite three years of intense negotiation, they did not actually understand what they were voting for, and that they did not understand what their confidence and supply partners from the Democratic Unionist party were saying about differential arrangements between Northern Ireland and the rest of the UK? Are we to believe that they were unable to grasp the implications of their own Northern Ireland protocol—the one they designed with the EU to prevent a hard border on the island of Ireland? It is not credible because it is not true.
Alan Brown
My hon. Friend makes a fine point: it is not credible and there has been bluff after bluff. Is it not the case that when the warnings were pointed out, Ministers stood at that Dispatch Box and said, “Don’t worry, we have a magic solution There won’t be any cameras or infrastructure at the border; technology will solve it all.”? We have technology that can control the movement of people and goods and deal with different customs arrangements”? Yet another bluff from an incompetent Government.
Brendan O’Hara
My hon. Friend hits the nail squarely on the head. That is absolutely true. They knew exactly what they were signing up to and exactly what they were voting on—a fact acknowledged by the Chancellor of the Duchy of Lancaster himself, who said in April that the deal ensures that we can leave the EU, and it is “entirely consistent” with the Belfast agreement and all our other domestic and international obligations.
So, how did we get from the agreement being a negotiating triumph in January, and being entirely consistent with domestic and international obligations in April, to today, with a Government boasting that they will knowingly breach international law if they do not get their own way? I believe that, in short, it is because those at the heart of this Government have decided, in true Trumpian fashion, that the UK will no longer play by the rules. They have cynically done their sums and reckon they have the numbers to push this legislation through. It is the behaviour of a Government who have lost their moral compass—a Government who have been reduced to using the Good Friday agreement as a bargaining chip.
It is little wonder that the United Kingdom is fast becoming regarded as a bad-faith actor among the international community, where adherence to international law and the obligations that come with it are what sets us apart from rogue states and dictatorships. The irony of all this is that it emerged against the backdrop of the faux outrage about the last night of the proms and whether it was appropriate to play “Rule, Britannia! Britannia, rule the waves!”; we know it is a case of Britannia waives the rules. It is not just now; it was ever thus. Ask the Irish and the people of India. Go to large swaths of Africa. Go anywhere that is still recovering from the wreckage of British colonialism and the people there will give chapter and verse about Britannia bending, breaking, inventing and waiving the rules all day long to suit its own ends. The world had hoped and probably half expected that those days were gone; sadly, they clearly are not.
For Scotland, it does not have to be this way: we have an escape route available to us—an escape route with independence that will take us back to the family of nations of the European Union, as a law-abiding European country on an equal footing with every other independent country. It is little wonder that opinion poll after opinion poll has shown a majority for independence. I confidently predict that tonight’s shenanigans will bring that independence closer and Scotland will become an equal member of the European Union, because that is the fast-approaching settled will of the Scottish people.
Imran Ahmad Khan (Wakefield) (Con)
Just like the overwhelming majority of Members, I was returned to this House on the promise of getting Brexit done. I am an ardent supporter of Brexit and look forward eagerly to the opportunity to bolster the United Kingdom’s position by becoming an independent, self-governing nation, possessed of the confidence that flows from our vision and principled values.
Although I stand four-square behind the Government’s policies and objectives, including those advanced by the Bill, I cannot vote for legislation that a Cabinet Minister stated from the Dispatch Box will break international law. Before I was returned to this House, I spent many years in distant, sometimes dangerous places on behalf of our country, our closest friend, the United States, NATO and the UN, where I was committed to upholding the international rules-based system, which is the only shield we have against the law of the jungle. The rules-based system is, of course, one that the United Kingdom was proud to play a central role in building.
I have every sympathy with Her Majesty’s Government and place the responsibility for the impending denouement firmly with the EU, as it haughtily refuses to deal with the UK as a sovereign equal, like our sibling Canada. The Northern Ireland protocol was agreed on the assumption that Brussels would provide an off-the-shelf trade deal with no bells and whistles, as Monsieur Barnier himself offered. That would have involved no more than a light-touch border between Britain and Ulster. The EU has moved the goalposts. The prospect of a no-deal rupture and intra-UK trade tariffs has constitutional implications for the United Kingdom, creating a much harder trade border in the Irish sea than Unionists supposed. It therefore intrudes ineluctably on the Belfast agreement.
Ian Paisley
I appreciate the points that the hon. Gentleman is making; they are important to the debate. Is he appalled by the suggestion that was made tonight from the Opposition Benches that we would invoke America to stop doing a trade deal with the United Kingdom just because of this? Is he appalled that someone in this Parliament would invoke America to do that? Is he appalled that someone would do it just to save little bits of paper between Northern Ireland and GB when doing trade? Is he not appalled by that? Because I am.
Imran Ahmad Khan
I am mildly surprised. I worked for some time for the Pentagon and the State Department, and I know the Americans very well. Like the United Kingdom, it is a nation built upon laws and it has representatives. The Americans know their national interest exceptionally well, and of course it is in the American national interest to have an expansive and ambitious free trade agreement with the United Kingdom, given our size and wealth.
It is not only certain Members of this House who make peculiar statements. I have no sympathy with the hysterical, hypocritical and hyperbolic statements from the EU, declaring that the UK uniquely will be in breach of its international commitments. Half the countries of the EU are in breach of their various treaty obligations. Germany and France both choose to deliberately breach their EU treaty commitments relating to budget deficit limits, and others are famous for being selective in deciding which rules to follow. However, the UK has always held itself to a higher standard. Our principles of fair play and freedom, underpinned by the rule of law, are who we are. They are part of our DNA, and must be protected. Our position of global leadership and permanent membership of the Security Council is derived not from being a victorious power but from our moral authority. Moral authority is hard earned and easily lost. Once damaged, it is difficult to repair.
Having consulted highly respected experts in international law, some of us have concluded that if the EU, in breach of its obligations to act in good faith and with best endeavours, were to employ the withdrawal agreement as a Trojan horse, this Bill, if enacted and employed, would not necessarily constitute a breach of our commitments, under either UK or international law. Rather, the Bill would then serve as a protection against the abuse of our good nature and a reminder to the Commission of its obligations.
Jim Shannon
There have also been other legal opinions sought, one of which was from Martin Howe QC. He refers to the alteration of the “constitutional status” of Northern Ireland that across-the-board tariffs on GB-to-Northern Ireland exports would entail, saying that this would be a breach of the core principle of the Good Friday agreement. He goes on to say:
“International law does not justify a later treaty to which these community representatives are not parties being used to over-ride the rights they enjoy under the earlier treaty”.
That is another legal opinion, and it might be very different from those sought by the hon. Gentleman.
Imran Ahmad Khan
My great problem with the Government’s position is the predicament in which they have placed people who share my view—I think the hon. Gentleman probably shares it too—because that view has been undermined, I am sad to say, by the assertion of a Government Minister that the Bill would represent a specific and limited breach of international law.
Alexander Stafford (Rother Valley) (Con)
Does my hon. Friend agree that the Government have been put in this situation only because the EU has not been playing with a straight bat? If the European Union played this straight and treated us as equals, we would not been in this situation. In fact, the fault for all this lies with the European Union for not treating us fairly.
Imran Ahmad Khan
I entirely agree with my hon. Friend in as much as the EU has not been playing with a straight bat, but I find it difficult to understand the statement, the motivation behind it or, indeed, the credibility of the comment, because I simply reject the notion that we would be in breach of our international obligations.
We have been placed in a predicament because of that statement that the Bill would represent a “specific and limited” breach of international law. Only if my right hon. Friend the Chancellor of the Duchy of Lancaster, in his response to the debate, can provide assurances to the House that Her Majesty’s Government share my interpretation—our interpretation—that such powers, if enacted and employed, would not automatically constitute a breach of our legal obligations will I support the Bill.
Lilian Greenwood (Nottingham South) (Lab)
If any of my constituents are watching this afternoon, I think they will be wondering what on earth is going on. “Why,” they will ask, “are MPs banging on about Brexit again? Isn’t that what the general election last December was meant to end? Didn’t we leave the EU in January? Wasn’t there meant to be an oven-ready deal?” They will ask, “Is this really what you should be focused on today?”
Right now, some of those constituents will be sitting at home feeling ill, anxious that they might have coronavirus but unable to get a test. Or they will be trying to work from home while looking after their son or daughter, who cannot go to school because they have a cold—or maybe it is coronavirus, but they do not now because they cannot get a test. Or perhaps they are on furlough because the business they work for has not yet fully reopened, or has not got everyone back yet, and they are anxious about whether they will have a job when the coronavirus job retention scheme ends next month.
People who work for one of our east midlands manufacturing businesses will be especially worried about the Prime Minister’s bluff and bluster earlier today; they, more than anybody else, require us to secure a deal, because their jobs depend on it. All those people will be asking why we are arguing about Brexit again when the top priority should be tackling the pandemic that threatens lives and tackling the resulting economic crisis that threatens their livelihoods.
Agreeing a trade deal with the EU is vital, but the Government need to get on with it rather than making it more difficult with the sort of posturing that we have heard today. The protocol contains a mechanism for dealing with disputes. The Chancellor of the Duchy of Lancaster himself said that
“the effective working of the protocol is a matter for the Joint Committee to resolve.”
Surely they need to get back round the negotiating table, stop posturing and reach an agreement on how the protocol should operate.
Tom Hunt (Ipswich) (Con)
I am sorry that it is really politically inconvenient for Brexit to come back to this Chamber because it reminds people that it was the Labour party that turned its back on the verdict of the British people three or four years ago, but surely it is not surprising: when the transition period is about to come to an end, these debates will come back to the House. Does the hon. Lady not agree with me that it is good that we finally have a Prime Minister who is fighting for British interests?
Lilian Greenwood
I think my constituents will expect a little bit better than that. They will expect the Government to get on with the job that they promised to do. The Government said they were going to deliver a Brexit deal, they said they had it ready, and my constituents do not expect them now to say that they made a mistake—that somehow it was not what they expected.
Matt Rodda (Reading East) (Lab)
At the heart of it, is not the issue that this whole thing comes across as a giant piece of bluff and bluster by a failing Prime Minister? As my hon. Friend rightly hints at, this is a means to distract the public from other immediate pressures. To make matters worse, it damages our reputation in the eyes of the world at a time, as Members have correctly pointed out, when we need to seek a trade agreement not only with the EU but with a number of other countries.
Lilian Greenwood
My hon. Friend makes an important point. The timing is very interesting. We are at a point when many people are looking at the Government and are extremely worried about their incompetence and the way they are dealing with the current health crisis. With today’s debate and the Prime Minister’s position, well, people will wonder what is going on.
People will be baffled because every time they have listened to the news, watched politics on TV or opened a paper in recent days, they will have seen a senior Conservative MP, or a former Tory Attorney General, Prime Minister or Chancellor of the Exchequer, expressing grave concerns about the content of this Bill. Those concerns are not just from those who might be called “the usual suspects”—those who were remainers—because this is not about whether we leave the European Union. We have left. That argument is over. Their concern is that the Bill deliberately breaks international law, will prevent us from completing a deal with the EU in the very short time available to do so, and will have much wider ramifications for the future of our country. They are risking the UK’s reputation across the globe.
Many hon. Members have already asked how other countries, with whom we want and need to make trade deals, will trust a Prime Minister who, just a few short months after he negotiated and signed an agreement, now says that he intends to break its terms. We do not have to guess what they will think; we can see for ourselves the reaction from our friends and allies, including, as has already been said, from the Speaker of the US House of Representatives. If the Prime Minister really considers that this deal contains serious problems that could break up our country, why did he sign it? Why did he claim it was a great success? Had he not read it, or did he not understand it?
Of course, the dangers of the Bill are not just about the UK’s ability to negotiate trade deals; they are about the UK’s reputation and its moral authority. How can our Government seek to uphold the rule of law if we break it ourselves? How can we hold other nations to account on their treaty obligations on international standards when we disregard our own?
Lilian Greenwood
I will not, because we are very short of time. Speaking to the House earlier, the Prime Minister claimed that the provisions of the Bill will be used only as a last resort, and sought to play down the problems that it poses but, as the House of Commons Library briefing states,
“the existence of the power to override a number of the UK’s international obligations may itself constitute a violation of international law.”
The very fact that it has been tabled is already undermining the reputation of this country, and damaging our relationships with those we need to reach deals with.
There are other concerns about this Bill: that it runs contrary to the devolution settlement; that it will enable a race to the bottom on standards; and that it undermines the rights of the devolved nations to set their own spending priorities. The Government should ensure free trade access across the UK. We need a strong internal market, but this Bill is not the way to do it. Unless it is amended, I cannot, and this Parliament should not, support it.
Jeremy Wright (Kenilworth and Southam) (Con)
The majority of the Bill is sensible and necessary for an effective United Kingdom single market when we are no longer subject to EU rules. My issue, as for others, is clauses 42, 43 and 45, which take what was agreed less than a year ago about the primacy of the withdrawal agreement over domestic law and reverse it. They are not a clarification but a contradiction of that agreement, and the Government are very clear about this: doing that would be breaking international law.
I agree that it is possible to break international law without automatically breaking domestic law. It is also true that Parliament is sovereign, and it can choose to break international law if it wants to, but the fact that an international law breach is not a domestic law breach and is not unconstitutional does not make it a good idea. The blatant and unilateral breach of a treaty commitment could be justified only in the most extreme and persuasive circumstances. The Government say that such circumstances are those in which no ongoing trade arrangement is made with the EU and where the Joint Committee established under the withdrawal agreement to resolve problems of interpretation is unable to do so, leaving the UK in an impossible position.
Sir John Hayes (South Holland and The Deepings) (Con)
That is the nub of the argument, is it not? These are exceptional circumstances. We are about to negotiate by far the most important agreement that this country has reached for the last 40 years. In those highly dynamic circumstances it is right that this Parliament should give the Government sufficient flexibility to get the best possible deal for Britain. That is what this is about, and that is why we should support the Bill.
Jeremy Wright
If my right hon. Friend will allow me, I will address exactly that point and what the Government could be doing instead of what they are proposing to do. Let me say first that the possibility of reaching no trade agreement and of deadlock in the Joint Committee was foreseeable yet when the withdrawal agreement was signed, and again when it was legislated for, the Government did not say that the risk of the outcomes they rely upon now undermined the deal on offer; they said then and they say now that this was a good deal. So what has changed?
That leads to the argument to which my right hon. Friend refers: that, unexpectedly, the European Union is now adopting an interpretation of the Northern Ireland protocol so outrageous and so far from a rational reading of that protocol that we could not have seen it coming and we could not possibly accept it, leaving no option but to abrogate ourselves the relevant parts of the protocol. But the withdrawal agreement sets out a mechanism for resolving disputes about interpretation, involving binding independent arbitration and penalties including the suspension of obligations under the agreement. If the EU’s new approach is so far from what the agreement intended, why would the Government not succeed in using that mechanism?
Sir Bernard Jenkin
The answer is that any question in European law, under article 174 of the withdrawal agreement, has to be referred to the European Court of Justice, and the Court is acting not on behalf of the 28 as before, but on behalf of the 27. We know it is a political court.
Jeremy Wright
My right hon. Friend might be right to be sceptical about the Court of Justice of the European Union, but the issue likely to arise here is not a question of European Union law; it is a question whether there is compliance with the withdrawal agreement signed by both sides. That does not necessarily raise a question of European law; nor, in my view, is it likely to. It raises a question of treaty law and whether or not this is being abided by in good faith.
I accept that the Government have a problem, but I cannot accept that the proposed solution is either necessary or right. International law matters. The rules that bind nations underpin what the United Kingdom says on the world stage on a variety of subjects, from the Skripal poisonings to the treatment of the Uyghur people to the detention of Nazanin Zaghari-Ratcliffe. We speak often, and rightly so, of the rules-based international order as the foundation of freedom and justice in the world and of our security. The rules referred to are, of course, rules of international law. If we break them ourselves, we weaken our authority to make the arguments that the world’s most vulnerable need us to make. Nor is it in our long-term diplomatic or commercial interests to erode the reputation we have earned for the strength of our word and our respect for the rule of law—a reputation that, ironically, we will rely on more than ever when the Brexit process is complete.
I do not believe that my right hon. Friend the Prime Minister or his Ministers wish to undermine that reputation, but I do believe that if Parliament were to give Ministers the powers they are asking for, and if they were to be exercised, we would all come to regret it. That is why I cannot vote for the clauses as they stand, or for a Bill that contains them.
Pete Wishart (Perth and North Perthshire) (SNP)
Sometimes a piece of legislation comes along that is just so audacious, pernicious and chaotic that it is difficult to comprehend the scale of the carnage it will deliver in its wake. This single market Bill is a prime example of that type of legislation. It is almost unbelievable. It is a Bill that only this Government, with their weird assortment of Brexiteer oddballs, would consider going anywhere near. In fact, it is almost perfect for them, given their penchant for governance by chaos and disorder.
Breaking international law? For this Govt, that is a trifling detail. They just do not care. For them, being a rogue state is as natural as leaving the EU without a deal, or illegally proroguing Parliament. They are even starting to tell us now that being a pariah state somehow enhances the UK’s international standing. We can imagine, in a few years’ time, the Foreign Secretary of rogue state UK turning up to the United Nations during an international crisis that threatens the world order involving, say, Iran or North Korea, or an international convention or treaty. What authority and credibility would rogue state UK have in that situation? Kim Jong-un would turn around and say, “I’m firing these missiles, but only in a limited and specific way.”
I want to confine my remarks to what this rotten Bill will do to my nation. If the Government want their rogue state, that is up to them. If they want their no-deal Brexit, go ahead, have it, we will wish you all the best, but do not bring down our beautiful nation in the process. Never before has there been such a sustained attack on our Parliament or our democracy. The invention and development of the idea of a UK single market has been one of the most spectacular and dishonest pieces of political chicanery we have witnessed in recent times. The barefaced nonsense of this being a power surge is contradicted by practically every detail of the Bill.
There are two areas I particularly want to touch on. One is what is included in clause 46—the one that allows the UK Government to legislate directly in devolved responsibilities. This mechanism is designed to bypass the Scottish Government. The Scottish Tories know that they will never come anywhere near governing Scotland, so what they will do is just get around the process. Even under the new leadership of the ever charming ray of sunshine that is the hon. Member for Moray (Douglas Ross), they are still going down in the polls, so what they need to do is circumvent Scottish democracy and ensure that they get direct control and access to specific interests when it comes to Scotland. That is what they are doing with this particular Bill.
The other thing is the Competition and Markets Authority. I remember listening to all those Brexiteer colleagues over there, when they used to rage against all the unelected bureaucrats—remember these mythical creatures of yore? Well, I found them—they are not sitting in an office in Brussels; they are sitting in the Cabinet Office. They are not called the European Commission; they are called the Competition and Markets Authority, and it is them that will arbitrate on everything to do with devolution and what the Scottish Government can and cannot do.
Ian Paisley
Did the hon. Member not oppose the Northern Ireland protocol because it discriminated against the needs of the people of Scotland? Now for some reason he seems to be taking to his hind feet, wanting to support the protocol and oppose the Bill that removes those pernicious aspects of the protocol. Why has he changed?
Pete Wishart
I think the hon. Gentleman may be confusing me with somebody else. I say ever so candidly to him that I did not oppose just parts of the Government’s EU Brexit—I opposed it in its totality, as did the people of Scotland. We opposed overwhelmingly the idea that we have to be taken out against our will.
This is what it is coming down to. In the next few months, the Scottish people have a critical decision to make about the type of future they want for their country. They could decide to remain part of rogue-state UK, with the Government’s no-deal Brexit and all the other things that they want to do, or they could simply decide that they want to become an independent country of their own, making their own decisions and their own way in the world, deciding things in good faith, negotiating as a nation, and coming together with other nations in the world to ensure that we get the best possible future for us and our allies.
We have only a few short months when it comes to this, and I think we are beginning to see just where we are going. Independence now sits at 55%—the highest it has ever secured. There is sustained majority support for independence in Scotland. My nation is making up its mind about the type of future that it wants, and it is not this future as a pariah state, taking us out of the EU against our national collective will. We have only six months to get this debate properly focused and determined. I am pretty sure, when I am looking at opinion polls and seeing where independence is, that Scotland is making up its mind. Scotland is deciding that it is going to be a nation of its own.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
After the next speaker, we will reduce the time limit to three minutes. I am sorry about that, but it enables more people to be able to contribute to this lively debate.
Douglas Ross (Moray) (Con)
Following the speech of the hon. Member for Perth and North Perthshire (Pete Wishart), I simply say that Scotland is my nation as well. The SNP does not speak for Scotland. The SNP is not Scotland. I am proud to be Scottish and British, and when the SNP stands up and claims that it speaks for the whole of Scotland, it does not. The hon. Gentleman would be advised to stop making out as if it does.
I want to make the point that this Bill at its heart, at its core, at its centre, is about jobs and businesses. Is it not telling that in all the SNP speeches that I have listened to tonight, jobs and businesses have not been mentioned once? The SNP was opposed to this internal market Bill long before the events of the past few days, because it is opposed to what it means for Scotland and to what the UK Government can do for Scotland and for the 545,000 jobs that the Fraser of Allander Institute says rely on the internal market of the United Kingdom. In 2018, that internal market ensured £51.5 billion of trade between Scotland and the rest of the United Kingdom—three times more than the trade that Scotland does with the whole European Union put together.
This Bill’s protecting and enshrining our internal market in the United Kingdom is about protecting those jobs and those businesses. It is about ensuring that businesses in Forres and Fort William can do the same trade across all four nations of the United Kingdom as those in Felixstowe and Farnborough. That is what is important about this legislation. That is why we have to ensure that it is there, and that it is capable of delivering for individuals, for businesses, for their jobs and for the communities that they serve. That is why I believe that at the heart of this legislation we should be speaking about what it means for our communities, our businesses and our jobs the length and breadth of the country.
I want to focus on remarks by the hon. Member for Perth and North Perthshire (Pete Wishart), and by the SNP the whole time, about how this is somehow a power grab. It cannot be a power grab when more than 100 extra powers are going to Holyrood, to the Scottish Parliament and to the Scottish Government, and not one is being taken away. That cannot be explained as a power grab.
Douglas Ross
I apologise to the hon. Gentleman; I like debating with him and he has tried to get in plenty of times, but I must say to Members on both sides that debating time is about to be constrained by a further minute for each speaker and there are more than 100 Members on today’s call list, so I will not take interventions.
There is no power grab; 100 extra powers are going to the Scottish Parliament, and not a single one is being taken away. For some reason, SNP Members are now against the UK Government investing in Scotland. This is the same SNP and Scottish Government who are saying, “We don’t want your money in Scotland.” Well, I do. In my nation of Scotland, I want to see our two Governments working together as they do on city and growth deals the length and breadth of the country. Every part of Scotland is now covered by a city and growth deal, which shows our two Governments working together and investing together. That is what people want: not a rehash of the division of the past, which the SNP continually wants to drag us to, but looking to the future of Scotland—looking to the future of what we can achieve together as a United Kingdom, with our UK internal market delivering for jobs, communities, the economy and businesses. That is what we want to focus on.
I understand the concerns of Members across the House, but by voting for this legislation at stage 2—Second Reading—tonight, we will allow it to go into Committee and allow the democratically elected Parliament of the United Kingdom to scrutinise, debate and, potentially, amend it. That is what we should be doing.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It has been a pleasure to hear the erudite legal arguments tonight from Members including the right hon. and learned Member for Kenilworth and Southam (Jeremy Wright) and the hon. Member for Bromley and Chislehurst (Sir Robert Neill). I am not an erudite international lawyer, so I see it as it is, and perhaps I will put it in simpler terms. It is an utter shambles. It is chaotic.
We have a history of cheap slogans that are now coming home to roost. When people boil down major international issues into three-word slogans and believe that they are true, this is what happens. We had “Take back control”, when we already decided the vast majority of our laws. We had “Get Brexit done”, when it is not as simple as that at all, as we can see from our being here today discussing it. Then we had the “oven-ready deal”—the deal that was then delivered by the current Prime Minister but is now being undermined by his very own Bill. It threw up squarely and clearly the problems between Brexit and the hard-fought Good Friday agreement, and it is now being ripped up and is causing huge problems, playing fast and loose with devolution.
The impact on the independent decision making of the Welsh Government, the Scottish Government and the Northern Ireland Executive is frankly shocking, especially for a party that describes itself as the Conservative and Unionist party, but that is not entirely surprising. This is a Government who think that the law can be applied differentially. We saw it with the shutting down of Parliament illegally before the last general election. We have seen it with the breaking of lockdown rules for some favoured few. Shockingly, we see it now with the breaking of international law. The hon. Member for Harwich and North Essex (Sir Bernard Jenkin) says that, if we break international law, it should not be done casually. Well, this seems rushed and casual to me. Less than a week ago, none of us knew that this was coming—perhaps not even the Prime Minister—but it has huge long-term impacts.
This afternoon, I chaired the Public Accounts Committee. We were looking seriously at the Government’s proposals around export strategy; the Government have a target to boost exports, which we would all expect. We were challenging the Department about how it was going to achieve that. There is a real will to deliver it, but what country will trust us now if we pass this Bill, which says that we will legislate our way out of any international deal?
In short, this Government are not competent. They have been cavalier, they are undermining the Union and they are damaging the UK’s international reputation irrevocably.
Andrea Leadsom (South Northamptonshire) (Con)
It is always a great pleasure to follow the hon. Member for Hackney South and Shoreditch (Meg Hillier). I have a lot of respect for her opinions, but I fundamentally disagree with her on this.
I look around the Chamber at so many dear colleagues with whom I have debated at quite some length over the past four years—nearly four and a half years. This has been so frustrating. Leaving the EU has been the most divisive subject since June 2016. We now have to get to the end of the transition period. We really want a free trade deal as an independent sovereign nation with our EU friends and neighbours that works in the interests of every part of our United Kingdom, and also works in the interests of our EU friends and neighbours and protects their single market. On that, surely, we can agree—apart from perhaps a few of those who still wish we were having a second referendum, but let us not go there.
We negotiated the withdrawal agreement in good faith, as, I think, did the EU member states. The problem is that the Joint Committee, which was set up by that withdrawal agreement, was designed to provide the definitions. It was designed to give us clarity around what “goods at risk” meant, how the Northern Irish protocol would work, and all the details that, as yet, have not been ironed out. What we have discovered—
I can say this, having been part of Cabinet Sub-Committee meetings that discussed some of the EU’s proposals—is that the EU has not acted in good faith. I am very sorry to say that, because EU leaders do, as a rule, want to have good relationships with the United Kingdom, but the Commission has sought to reach into our sovereign United Kingdom and force us, as a member state that has left the EU, to abide by its rules on an ongoing basis, and that is utterly unacceptable.
I will be supporting the Bill today. The reason for that is that we, as the United Kingdom Government, must always be able to hold our heads up high to say that we have acted with integrity in the interests of our United Kingdom, that we are protecting the Belfast Good Friday agreement, and that we are giving the essential clarity and certainty to businesses that they desperately need. I urge all colleagues to please support the Bill tonight.
Alyn Smith (Stirling) (SNP)
I am appalled by this Bill, and I have been trying to think why. The conclusion that I have reached is that we have two genuinely opposing world views conflicting tonight. From the perspective of the SNP, on behalf of Scotland’s interests, we have a fundamentally different view from the Members on the Government Benches—not illegitimate but different. We are two nations going in two different directions with different ambitions, and this Bill cuts across deep visceral principles of my party. We believe in the rule of law. We are a constitutional party. We believe in a multilateral, rules-based order. We have a clear vision of how we want Scotland to fit into that organised, binding international solidarity. We believe that agreements should be honoured. I would not have thought that that was a controversial statement, but it is in the face of this Bill, and it shames this House that we are even considering it.
We believe that the people best placed to make decisions for Scotland are the people who live in Scotland. In 1997, by 74%, the people of Scotland endorsed that principle, and endorsed the model of devolution that said that, unless specifically reserved to this place, decisions should be made in Scotland by our democratic authority. It is that principle that this Bill undermines.
Members should be in no doubt: the operation of this Bill is a wholesale, calculated, deliberate reversal of the devolution principle. There is no amount of bluster that will distract from that—not that we have heard much of it; they have all gone quiet. It is there in the Bill for all to see. In clause 46, there is an explicit assumption of budgets in Scotland, without Scotland’s consent. In clause 48, a power of subsidy is explicitly assumed, again without Scotland’s consent. In part 1, on the mutual recognition rules, it is clear that the operation of the UK internal market will undermine out of existence the competence and capacity of the Scottish authorities to make different decisions.
The most egregious part for me is part 4, on the role of the Competition and Markets Authority. For people who talked about unelected bureaucrats, here are unelected bureaucrats on steroids: people who will sit above each and every public organisation and authority in Scotland and gainsay every budget and every decision going forward—a politically appointed death panel that will sit above every democratic decision of every organisation in Scotland. We reject it. It is not in Scotland’s name.
This is a bad Bill. It undermines devolution. It actually strengthens the case for independence, if Conservative Members really want to have some pause. This House should reject this appalling piece of legislation.
Mr David Jones (Clwyd West) (Con)
The withdrawal agreement is a profoundly self-contradictory document, and never more so than in respect of Northern Ireland. It declares ringingly, for example, that Northern Ireland is part of the customs territory of the United Kingdom, whereas the substance of it is that it is part of the customs territory of the European Union. Similarly, it provides that Northern Ireland should have unfettered access to the mainland British market, but at the same time it sets up arrangements to frustrate that. These provisions can potentially have the most serious adverse consequences on the integrity of the UK market.
The position is that unless provisions to the contrary are agreed in the joint committee or in the future relationship negotiations, trade between Northern Ireland and the rest of the UK will be severely impeded. Checks will apply to goods passing between Northern Ireland and Great Britain, and the EU customs code will apply to Northern Ireland, potentially meaning tariffs applied on goods passing between Great Britain and Northern Ireland. Part 5 of the Bill amounts to a safeguard against the potential consequences of this state of affairs. Of course, if a free trade agreement can be concluded, there will very probably be nothing to worry about. An acceptable free trade agreement could subsume the withdrawal agreement and thus the problem, and put relations between the UK and the EU on a more regular footing.
The EU is crying foul at the publication of this Bill, but the fact is that the EU’s own conduct in the negotiations has simply not adhered to the provisions of the withdrawal agreement. As the right hon. Member for East Antrim (Sammy Wilson) pointed out, these obligations move in both directions. The agreement provides that both parties should attempt to negotiate a free trade agreement acting in good faith and using best endeavours. The political declaration provides that the negotiations should respect UK sovereignty and the integrity of the United Kingdom market. However, the EU’s conduct has not reflected the obligations it has under the withdrawal agreement. It has refused to discuss anything apart from its own red lines of fisheries and the so-called level playing field. It is therefore essential that we should put in place measures that will protect us and our internal market in the event that the negotiations do not result in the sort of free trade agreement we are seeking.
It would be contrary to the national interest of this country if this Bill were not passed. The consequences for our constituencies and the livelihoods of their residents would be very serious if the Bill were not enacted, and it therefore has my full support.
Chris Bryant (Rhondda) (Lab)
This law is a scoundrel’s charter. I was taught as a child that it was the quintessence of Britishness and the quintessence of honour that my word was my bond—that what I had signed up to I was pledged to and I would stand by. We, the United Kingdom, Her Majesty’s Ministers on behalf of the whole nation, and this Parliament—the newly elected Parliament—signed this into law. We signed on the dotted line. The Prime Minister called it a “fantastic moment”. He said it was a great, great deal. The Tory manifesto was absolutely clear that it was a wonderful ready-made deal for the United Kingdom. Now the Government intend to trail our honour through the mud, and I will do everything I possibly can to prevent that.
If this goes through in the way that it is drafted at the moment, we will become the scoundrels of international law. The Government have even put their bad faith into the Bill. With the single word, “notwithstanding”, they have made Government Ministers do contortions. Who ever thought that we would hear a Government Minister say that the Bill breaks international law in a “specific and limited way” as if that is fine—some kind of Cummings get-out clause? Even worse, the Justice Secretary said, “I’ll quit if the rule of law is broken in an unacceptable way.” So now, according to the Justice Secretary, there is an acceptable way for somebody to break the law—again, the Cummings rule.
Clause 45 actually uses the word “notwithstanding”. I thought I might hear Vladimir Putin say, “notwithstanding the Budapest accord, which guarantees the territorial integrity of Ukraine”, or President Xi say, “notwithstanding the Sino-British joint declaration”. I never thought that I would see in a British Bill signed off by British Government Ministers, who are meant to respect the rule of law, a line that says:
“notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent”.
The hon. Member for Harwich and North Essex (Sir Bernard Jenkin) said, “It’s just a mistake; we should say it’s a mistake.” Well, why did everybody vote for it? What honour can you possibly have if you think that this is just a mistake?
There is another fib at the heart of the Bill, which is that it purports to say that there is going to be lots of extra money for constituents like mine in the devolved areas of the country. I do not think we will get a single extra penny, because we have been waiting for the shared prosperity fund for weeks and months and years, and not a single word has yet been published about it.
The truth is that we need the rule of law in this country; we rely on international treaties. It guarantees contracts. It makes us honest and protects us from overbearing government. I say to the Government: if you try to sack members of your own party because they have a conscience, you are on the route to dictatorship.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
It is always a pleasure to follow the hon. Member for Rhondda (Chris Bryant).
This is of course an essential Bill for the good order of the internal market. It is essential for our economic success, wellbeing, jobs and employment, and I support it. I am very surprised at the EU’s negotiating strategy and purpose, particularly in offering my right hon. Friend the Member for Maidenhead (Mrs May), in effect, the Canada deal, and then declining, to date, to offer the same terms to the Prime Minister. I therefore have no hesitation in supporting the Bill’s Second Reading, and I give the Government my strong support for reaching a deal.
But I am not going to vote to breach international law, and I want to explain why. As International Development Secretary in the coalition Government, I consistently spoke up for the rule of law. Britain has been a beacon, in some very difficult places in the world, for support for the rule of law. Our support is relied on in that respect, and it matters, whether we are dealing with the rights of gay people in Uganda or ensuring the last vestiges of law in Zimbabwe, never quite snuffed out by dint of Britain’s strong support for the rule of law. Many in this House have rightly spoken up for the rights of Hong Kong citizens when China has sought to resile from international agreements it had signed. We are one of the five permanent members of the United Nations Security Council. We have a duty to uphold international law. The rule of law is incredibly important for our basic liberties and human rights, and failing to do so will do incalculable damage to our reputation all around the world.
I have two further points to make. The first is that Members of the House should read with the greatest care what John Major and Tony Blair have said about the dangers of all this for the Good Friday agreement and peace across Northern Ireland. I have been here long enough to remember the awful statements about violence in Northern Ireland, with innocent civilians maimed and worse. Secondly, we have one of the largest national debts of any country in the world, and confidence in our debt depends on an absolute understanding that Britain will always stand by its word.
In the past, I have voted in this House in ways that I have regretted. I voted for section 28, I voted for the poll tax and I voted with the then Prime Minister on Iraq. But I do not believe I have ever gone into a Lobby to vote in a way that I knew was wrong, and I will not be doing it on this occasion either.
Sir Edward Davey (Kingston and Surbiton) (LD)
I agree with the right hon. Member for Sutton Coldfield (Mr Mitchell): this Bill breaks the rule of law. It is against the national interests, and my party will oppose it. That might not surprise people. We have argued for Britain to work with our European partners at the heart of Europe, but in our opposition to the Bill, I am determined that we represent the views of leave voters as well as remain voters.
From the Prime Minister’s promise that he had an oven-ready deal to his promise that he wanted a global Britain, this Bill breaks those promises made to leave voters. If the Government were to carry out their threat and breach the international treaty that the Prime Minister himself signed, it is clear that there would be no deal. The oven would not even be opened. If the Government deliberately and intentionally break international law, global Britain’s ability to exercise influence in the world would be weaker than at any time since the first half of the 18th century.
As the arch Brexiteer and former Conservative party leader Michael Howard said, what message does this send to China, Russia or Iran? What credibility will Britain have in urging other countries to uphold international law if our great Parliament votes for this Bill? What about the future trade deals that Britain so desperately needs as we leave the world’s largest single market while trying to recover from covid and this deep recession?
Our Prime Minister likes to portray himself as a modern-day Churchill, but Churchill said that the rule of law is part of the “title deeds of freedom”. Churchill will turn in his grave if this Bill passes tonight. Let us remember what we teach our children in every school across this country. We teach them about British values of democracy, individual liberty and the rule of law. This Bill is against the very values that we teach our children about the importance of obeying the law.
For a Government to send this law-breaking signal would be appalling at any time, but we are in the middle of a pandemic, and if we are to beat this dreadful virus, people need to obey the law, even when the emergency covid laws were among the most draconian that the British people have faced for centuries. The rule of law has never been more precious to the health of our nation, and yet the Prime Minister has chosen this moment to trash the rule of law. This House must stop him tonight.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
In the short time available to me, I want to focus on the aspects most relevant to Scotland. This Bill is about protecting those who work or do business across the four nations of our United Kingdom. That single internal UK market has served us well for centuries, creating a barrier-free internal market that was one of the core purposes of the Acts of Union. Until we joined the European Communities in 1973, that internal market was regulated by this Parliament. From the point that we joined the European Economic Community, the crucial aspect of market control passed to the European level. Europe took those powers for pragmatic reasons, because they were simply needed to operate its single market. That is the spirit behind this Bill too.
We have heard a lot about devolution in the context of the Bill, including from a number of Members during the debate. The devolution settlements were made in the late 1990s, when there was virtually no thought that the UK would leave the EU. EU law was binding on the devolved Assemblies, and the UK Government, acting on behalf of the whole UK, represented all four nations at the Council of Ministers, including in devolved areas.
Stuart Anderson (Wolverhampton South West) (Con)
Does my hon. Friend agree that the Bill strengthens the Union rather than weakens it as Opposition Members are saying?
John Lamont
I am grateful for that point and completely agree with my hon. Friend. The Bill not only protects jobs but strengthens the bonds of the Union that ties the United Kingdom together. As well as remembering the history, we must understand what devolution is in the United Kingdom. It is a means of giving people in Scotland, Wales and Northern Ireland the freedom to craft policies and take decisions on matters that affect them, while continuing to derive all the benefits of membership of a unitary United Kingdom. Right from the very beginning, it has been a central assumption of devolution that matters essential to the operation of the United Kingdom would be decided at UK level.
This Parliament is the democratic embodiment of the United Kingdom, and it contains Members who have been elected on an equal basis and who represent every square inch of the United Kingdom. It is here that decisions affecting the UK as a whole should be taken, just as those that affect the whole of the European Union are taken in Brussels—a fact with which very few Opposition Members had any problems at the time. That inconsistency speaks volumes, especially when the net effect of Brexit will be a massive increase in devolved powers, including those on air quality, energy efficiency and elements of employment law. It is a further irony that SNP policy is to hand those new powers straight back to Brussels at the first available opportunity.
Sir John Hayes
As my hon. Friend knows, this Parliament is the guarantor of people’s freedoms. That is not about international arrangements or foreign Governments; this sovereign Parliament guarantees people’s freedoms in this country, and guarantees that the will of the people is expressed here and honoured. That seems to be lost on many critics of the Bill, and I hope that, like me, my hon. Friend will support it with enthusiasm.
John Lamont
I absolutely will support the Bill with enthusiasm. It protects the 500,000 jobs in Scotland that my hon. Friend the Member for Moray (Douglas Ross) mentioned earlier. This is about protecting the Union, and we should not forget that this Parliament is sovereign and a protector of the rule of law.
The Bill is about making the UK work as a fully integrated, seamless internal market. It is in the interests of every business trading across the United Kingdom, and of everyone who wants to make devolution work. It should be of no surprise that it is so hated by those whose sole political purpose is to destroy devolution by ripping Scotland out of this most important single United Kingdom market.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
It is a pleasure to follow my fellow Unionist from Scotland, and I agree with him. The first question I ask myself about the Bill is this: will it strengthen the Union? In as far as it goes, I believe it will. We would like more to be done, but let me briefly mention the points raised about the Good Friday agreement. I grew up in a Northern Ireland that was deeply troubled. I lost members of my family, who were murdered during those troubles. I do not want to go back to those dark days.
Who is it that threatens the peace process in Northern Ireland? It is not Her Majesty’s Government who threaten that peace process; it is these men and women in the shadows. Who is playing fast and loose with the peace process? Who is using it as a political football in this situation? I do not believe the UK Government are using the Northern Ireland peace process as some kind of political football or a negotiating point.
Jim Shannon
Clause 47 ensures that as a sovereign nation, the UK will set the rules on state aid for Northern Ireland. Does my right hon. Friend agree that that is a vital means of fending off predatory behaviour from our nearest competitor, and EU threats regarding the supply of food without an agreement and without this Bill? The Bill is necessary to ensure that Northern Ireland has basic food importation from the rest of the UK, if those threats are carried through by the EU in the event of a no deal.
Sir Jeffrey M. Donaldson
I simply pose the question: how does it threaten the Good Friday agreement to ensure that people in my constituency can go to their local Tesco, Asda or Sainsbury’s and buy the same food that people can buy in any other constituency in the rest of the United Kingdom? How does that threaten the peace process? How does it threaten the peace process to ensure that businesses in my constituency do not have the burden of added paperwork, or the cost of export declarations?
Neil Parish (Tiverton and Honiton) (Con)
I very much agree with the right hon. Gentleman and shall be supporting the Bill tonight, because we must keep the United Kingdom together and we must not have a barrier down the Irish sea. Is it not the case that the European Union wants to keep us in the same rules, so that it can integrate the food systems on the island of Ireland? It needs to be much more practical and to come up with a solution whereby we can trade across the border but do not have to comply exactly with its rules.
Sir Jeffrey M. Donaldson
At the heart of the Belfast/Good Friday agreement is the principle that every signatory to that agreement accepts that Northern Ireland remains an integral part of this United Kingdom. Sadly, what the EU proposes breaches that core principle of the agreement. It is that breach that threatens the stability of Northern Ireland, because peace and prosperity go hand in hand. What kind of peace is it in Northern Ireland if we do not have prosperity—if our businesses are failing because of the added burden that the EU wants to impose? How does that bring prosperity, stability and peace to Northern Ireland?
The Bill is fundamental to delivering what we need, but we need even more than this. That is why we will seek to amend the Bill, specifically to address the point my hon. Friend the Member for Strangford (Jim Shannon) made about state aid. It is not enough just to address the state aid issue in the context of Great Britain; it must also be addressed in respect of Northern Ireland. The UK must set the rules on state aid in Northern Ireland, not the European Union. Such a tool is vital to help Northern Ireland businesses fend off predatory behaviour from our nearest competitors, and in Northern Ireland our nearest competitors are in the European Union.
I welcome the progress that is marked by this Bill in dealing with export declarations on goods moving from Northern Ireland to Great Britain, but 65% of the goods that Northern Ireland purchases come from Great Britain. Therefore, we need the Government to go further and guarantee that we will not have export declarations on goods moving from one part of the United Kingdom to another part of the United Kingdom, be that from Great Britain to Northern Ireland or from Northern Ireland to Great Britain. That is what unfettered access actually means, and the European Union signed up to unfettered access and to the United Kingdom Government having the power to ensure that Northern Ireland has unfettered access. The Bill before us will deliver that, subject of course to some amendments that we would like to make.
In conclusion, as someone who represents a Northern Ireland constituency, I do not accept the contention that the Bill threatens the Belfast or Good Friday agreement. I do not accept the contention that the Bill threatens the peace process. Prosperity is essential to building peace in Northern Ireland. The arrangements proposed by the EU threaten the prosperity of Northern Ireland, and in threatening the prosperity of Northern Ireland they threaten the peace.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that the wind-ups will begin at 9.40.
Stephen Hammond (Wimbledon) (Con)
As ever, it is a pleasure to follow the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson).
Like my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), I think there is much in the Bill to admire. The general aims of the Bill and much of its content are absolutely necessary to ensure that the competences that return to the UK from the EU are put into UK law. However, like many people across the House, I have serious concerns about part 5 and the effect of those provisions on our international reputation, the rule of law and Northern Ireland.
Many people seem to be justifying part 5 as necessary to avoid an impact on GB-to-Northern Ireland trade. It is one thing to reject a draft treaty on those grounds; it is an entirely different premise to consider breaching existing treaty obligations, freely entered into by the Government. Some level of bureaucracy for trade between Northern Ireland and Great Britain was and is the foreseeable and obvious consequence of the withdrawal agreement that we signed. That point was highlighted at the time, but it was justified as a way to move on to the next phase. Moreover, many of us were reassured at the time that technology would ensure that those checks would be simple and quick.
The withdrawal agreement and the Northern Ireland protocol, and the consequent effects on trade, were negotiated by this Government and were part of our election manifesto. If the Government believe that the EU is acting in bad faith, making threats to food supplies or critically affecting the integrity of the UK, there are already agreed mechanisms in the withdrawal agreement to deal with that. For example, if the Government believed that we could not import food into Northern Ireland, article 16 of the protocol specifically allows the UK to act at that point to remedy the problem however it wants to.
The UK has a proud reputation of upholding the rule of law, as many hon. Members have said, and has been a trusted international partner. This country cannot and does not break international law just because it does not like the compromise that it has signed up to. I was interested in my right hon. Friend the Prime Minister’s remarks about regulations being made under these powers and the possibility of the House having a further vote. I would be interested to hear later from the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, my right hon. Friend the Member for Surrey Heath (Michael Gove), whether the Government intend to table an amendment to that effect, because I think that doing so would reassure many people. Nevertheless, clause 45(2)(b), if passed, at the moment of Royal Assent would lead to a breach of international law and the withdrawal agreement. I say to my right hon. Friends on the Front Bench that there is still plenty of time for those of us who have concerns about part 5 to be reassured, and I look to my right hon. Friend the Chancellor of the Duchy of Lancaster to give us those reassurances later this evening.
Craig Mackinlay (South Thanet) (Con)
It seems to me that some arguments we are hearing this evening are broadly about international law and those sorts of obligations, despite France and Germany being in the premier league of infractions of their EU obligations, and many other instances raised by hon. and right hon. Members about other global infractions by various nations. Let us be clear: the provisions of this Bill are fully allowed for within the Northern Ireland protocol. The right hon. Member for Doncaster North (Edward Miliband), who opened for the Opposition, made reference to the exact appropriate article—paragraph 1 of article 16—which says:
“If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures.”
Karin Smyth (Bristol South) (Lab)
If these provisions are entirely within the protocol, why are the Government saying that they are breaking the law?
Craig Mackinlay
That is a matter for the Government to answer; I do not believe that we are breaking international law in any way.
What we are proposing in the Bill is also allowed for under section 38 of the European Union (Withdrawal Agreement) Act 2020, which was passed by this House in quick time and by broad measure. There are no surprises in this Bill. Surely any Member could appreciate that these provisions stand to reason, with negotiations going nowhere; best endeavours, as required in the withdrawal agreement, seemingly ignored by the other side; demands that we become the only independent coastal state on this planet that would have its fisheries resource controlled by a foreign power, and that state aid and level playing field rules continue, leaving us as a supplicant nation; and, the latest we hear, a threat to the food supply and supply of goods from GB to NI.
I am going to talk about fists. We all have them and they are potential weapons for illegal acts if we use them wantonly or recklessly, but we do not so they are not. The law gives us the absolute right of self-defence using those physical assets to protect ourselves and/or our family. Northern Ireland is part of our family of this Union of nations. The provisions in this Bill are for self-defence only—defence of our Union, and particularly in defence of the businesses and people of Northern Ireland.
We are elected to this House to stand up to bullies, and I will do everything that is necessary and within my power to deliver Brexit properly and cleanly. If the EU will not discuss future arrangements fairly and with best endeavours, we must take any measure that is necessary to ensure the continuance of normality and trade across our Union. I will be supporting the Bill wholeheartedly this evening.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
For over 20 years now, the people of Scotland have had a Parliament to call their own. Since the Scottish Parliament was reconvened in 1999, it has become an established part of Scotland’s political life, delivering on the priorities of the people of Scotland. More importantly, it has demonstrated what a modern Parliament, close to the people it serves, can look like, in contrast to the remote and often stuffy atmosphere in this place.
With the United Kingdom Internal Market Bill, the mask has well and truly slipped. The Tories have revealed their anti-devolution instincts. This Bill is nothing less than a brazen attack on established norms and institutions, setting dangerous precedents for the rule of law and Scotland’s Parliament. A Government Minister admitting that this Bill has been drafted with the intention of breaking international law is a clear sign of just how far the Tory party has been captured by this Dominic Cummings Government.
Since breaching solemn agreements is now a cornerstone of Tory party policy, I will remind Government Members of the agreement they entered into with voters in 2014. They said that the people of Scotland would get the “best of both worlds”—that the Scottish Parliament would be strengthened within the Union. The promises of 2014 could not be further from the reality of what this Bill will do to undermine the devolution settlement. It sticks in the mind when someone breaks an agreement, engendering feelings of anger and betrayal. It is perhaps no surprise that there is a genuine shift towards majority support now for independence for Scotland, as we are seeing the multitude of broken promises made by the Better Together parties mount up throughout the Brexit process.
This Bill is the worst of all worlds. It kicks off a race to the bottom between the four UK nations on food and environmental standards. It re-reserves subsidies in areas previously covered by EU state aid, even if those subsidies relate to devolved areas such as agriculture, infrastructure and culture. To top off this shameless power grab, the Bill will, if it completes its passage unaltered through this place, become a protected enactment under the Scotland Act 1998. As a result, the Scottish Parliament will not be allowed to legislate in a way that is incompatible with the rules laid down in the Bill, even if the proposed legislation falls within the devolved powers of the Scottish Parliament. That is a clear breach of the principle of the Scotland Act 1998 that power devolved is power retained. That is why I and my colleagues on the SNP Benches this evening will be defending devolution by voting against the Bill tonight.
Sir Charles Walker (Broxbourne) (Con)
I hope I will not be too foul tempered tonight, Mr Deputy Speaker; it is not a disposition I warm to.
There is a worrying trend—a worrying narrative—emerging, and this debate is a good opportunity to get a lot of things on the record, as I build an argument in the next 2 minutes and 45 seconds. First, I am extremely concerned that we are placing severe restrictions on people’s liberties without any recourse to Parliament. I would actually vote, in certain circumstances, to take people’s liberties away if I thought it was in the national interest, but I would like to have the chance to debate it on the Floor of the House and represent the concerns of my constituents.
I am also concerned that we go around arresting old men in Trafalgar Square for having a peaceful protest and fining them £10,000. I never thought I would ever be defending Mr Corbyn in the Chamber, but I am—I am defending a Corbyn. We have to be allowed to protest without fear of arrest and being fined, and today we hear that the public will be urged to inform on their friends and neighbours, because granny has followed grandad into a family home of five. This is a profoundly un-conservative thing.
All these things are un-conservative, and I do think that we are being asked here to put this country—this House, Members of this House, our constituents—on the wrong side of the law before we have exhausted all other options. I am no fan of the EU—I was in every single Division Lobby for Brexit and I think the EU is a pain in the neck—but surely we have to exhaust all other options before we press the nuclear button.
I will not be voting for the Bill’s Second Reading, because if you keep whacking a dog, you shouldn’t be surprised when it bites you back. We are all Members of Parliament and we deserve to be taken seriously. I accept that there is a pandemic and a national crisis, but surely that is the time when our voices should be heard on behalf of our constituents. It is the most important time, so I hope—I see the Chancellor of the Duchy of Lancaster in his place—the Government go away tonight and the Prime Minister reflects on what is going on, listens to the concerns of this House and comes back with a solution that allows me to skip through the Lobby on Third Reading and support him on this important Bill. I do believe, colleagues, that the Conservative party is the greatest political party ever, and we have to have the courage to live up to that greatness.
Wes Streeting (Ilford North) (Lab)
The Prime Minister said that the Northern Ireland protocol was a very, very ingenuous scheme—sorry, a “very, very ingenious scheme”. I will say it one more time, because it is worthy of repetition. He said it is
“a very, very ingenious scheme”.—[Official Report, 19 October 2019; Vol. 666, c. 594.]
It is almost Trump-esque in its rhetoric, and as we find so often with populists around the world, it is very easy to make far-fetched promises, but it is much harder to deliver them in practice. Reality is biting the Prime Minister and it is biting him hard.
As we have seen this afternoon, things have not exactly gone to script. The Prime Minister has been turning up at Prime Minister’s questions in recent weeks wishing he was facing a former leader of the Labour party. This afternoon, he got one and my right hon. Friend the Member for Doncaster North (Edward Miliband) wiped the floor with the Prime Minister, so much so that he had to scurry away back to his office, so badly battered and bruised was he. He was not even able to defend the Bill. He probably had not read it, because it is certainly clear from what he has said in recent days that he had not read the withdrawal agreement or the Northern Ireland protocol. Even this afternoon, he still did not understand the content that he has signed up to.
Contrary to there being a remainer plot, the script simply does not work. We have left the European Union. We are no longer members of the European Union. We are not going back. The only question now is whether we have a trade deal with the European Union that puts to bed so many of the difficult, thorny, challenging, but not insurmountable issues that many of us warned and argued over recent years would arise. The Prime Minister can hardly be surprised.
What I am surprised by is the scale of their misjudgments and their incompetence, even by this Government’s standards. With one decision, they have shaken the foundations of the Good Friday agreement, threatened the prospects of a trade deal with the European Union, and risked the prospects of a trade deal with the United States of America. With that, they have jeopardised future prosperity, jobs and the economy when we are facing the worst recession in hundreds of years. They have given further cause for grievance to the nationalists and threatened the Union. The irony is that a Bill that is supposed to strengthen the Union actually threatens its future. Perhaps worst of all, it threatens the standing and reputation of our country around the world, not only in the eyes of our allies, but in the eyes of our enemies, too.
I ask Members on the Government Benches: what has happened to the Conservative and Unionist party of Disraeli, Churchill, Macmillan and Thatcher? I cannot think of a single former Conservative Prime Minister who would behave in this way. I just say to them that, from experience, it is hard standing up to your own side when they are doing something wrong, but you will be doing the right thing by opposing this Bill and will sleep more soundly for it.
Mrs Maria Miller (Basingstoke) (Con)
We need to come back to some reality about what this Bill is actually about. This Bill is about safeguarding the future of the United Kingdom, because it is about safeguarding the ability of nations to be able to trade with each other. I am sure many of our constituents would be flabbergasted that we even have to pass a Bill to do that. They would think that would come as a matter of course. In doing so, we will be giving businesses the certainty they need during this very difficult period. So many of the details that should have been ironed out by now are still left hanging, so we should be unsurprised that we are discussing this Bill tonight.
When the withdrawal agreement was put to the House of Commons and we voted on it, we did so based on the notion that it would be dealt with in negotiations in good faith and using best endeavours, because that is the way negotiations proceed, but all of us who remember the way that our country has been treated throughout this process perhaps should not be surprised that we find ourselves here today and that the Government feel that this Bill is an essential safety net that needs to be put in place.
Mrs Miller
I will not give way, as a lot of people need to speak today. This is a safety net to stop the EU being able to determine UK trade policy, not overseas, but within our own countries. Despite a referendum result, votes in this Parliament and the clear will of the British people at the last general election, we still find ourselves in this period of uncertainty with the EU. So I believe the debate tonight is as much about British sovereignty as it is about the rule of law, and Members need to reflect on that.
The Government are in an invidious position. They are negotiating with an organisation that is renowned for and thrives on its love of last-minute agreements and all-night negotiations. The truth is that the EU still wants to make this country’s exit from its trading bloc as difficult as possible, and its behaviour, in delay upon delay, has to come to an end. If this Bill is part of that process, it gets my full support. The British people can see the tactics being deployed by the EU for what they are. Many Opposition Members know this and sit uneasy when listening to their Front Benchers’ rationale for not supporting the Bill tonight, because they know that their electorate are as fed up as everybody else that we are here today again, with the EU attempting to stifle the will of the British people. I speak as somebody who voted to remain in the EU but who has been appalled by the way we have been treated ever since, with the EU using its treatment of the UK as a strong message to other member states. I listened carefully to what was said by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), and I hope that the Minister will deal directly with the issues he raised.
Stephen Kinnock (Aberavon) (Lab)
The Prime Minister won the last election based on the promise to “get Brexit done”. That was his mandate, given to him by the British people—to move on. He said there would be
“no more dither and delay”.
He said, “Let’s get our oven-ready deal through.” He won an 80-seat majority based on that withdrawal agreement, and this Parliament ratified it. We are calling on him to deliver the deal he promised, one that would work for Britain in terms of protecting jobs and the Union, and then we can get on with tackling the coronavirus crisis. So why is he dithering and delaying? Why is he introducing legislation designed to reopen old Brexit wounds? He called the withdrawal agreement a “fantastic” deal for the country, but now he says it never made sense. Was he deliberately misleading the British people then, or is he doing so now?
Not only has the Prime Minister undermined trust here at home, but he is trashing his Government’s reputation as a trustworthy and reliable member of the international community, because it is absolutely clear that this legislation breaks international law. The Brexiteer who signed off this deal as Attorney General described the Bill as “unconscionable” and all five living former Prime Ministers are united in agreement.
Our greatness as a country is built upon our values and the fact that we have long stood up for the rule of law. This Prime Minister wants to throw all that away. The UK needs to be standing up to the Chinese communist party’s breaches of international law and Russia’s foul play, but how can we do that with credibility if we are advocating breaking international law? With one stroke of his pen, this Prime Minister has torpedoed the painstaking work that our diplomats do every day.
This is not just a question of trust or morality; it is also about our commercial and economic interests. We are going out into the world to negotiate new trade deals post Brexit, but how can any other country trust us to keep to those agreements? If this Bill passes into statute, the Prime Minister will be sending his trade negotiators naked into the conference chambers. This Bill is not only dismantling the manifesto pledge and our international reputation, but it is creating a constitutional crisis, trashing the common frameworks that are the basis for our devolved constitutional settlement and creating the conditions for a race to the bottom on standards, opening the door to chlorinated chicken and hormone-injected beef becoming the norm. Trade negotiations are never a walk in the park. Both sides will always defend their interests, and that is fair enough, but the rules are the rules. A commitment is a commitment. Our word is our bond. I therefore urge hon. Members to behave with honour and to join us in the No Lobby this evening.
Dr Jamie Wallis (Bridgend) (Con)
I refer Members to my entry in the Register of Members’ Financial Interests. This is an important debate for me, considering that I represent Bridgend, a constituency in Wales, which stands to benefit greatly from ensuring that our internal market within the UK remains intact, as it has for hundreds of years. I am proud to say that if the pollsters are to be believed, Wales is now the most Unionist part of the UK, and my constituents voted leave in 2016 and, of course, backed the “get Brexit done” party at the last election. On those bases, and as a staunch Unionist myself, I will support the passage of the Bill through this place.
On the issue of one single internal market, I just cannot imagine a scenario where a Bridgend-based business is unable to export its goods or services, or faces difficulty in exporting its goods or services, to England, Scotland or Northern Ireland. The internal market is vital to the whole of the Welsh economy, and illustrative figures from the White Paper show that any contraction to the GDP of Wales will be five times greater than that of the UK average. I pledged to my constituents to help to make a success of Brexit, and allowing economic barriers between any parts of the UK clearly runs contrary to that.
The people of Bridgend have two Governments: the Welsh Government and the UK Government, and I am particularly pleased that the Bill will facilitate the latter to invest in businesses and communities across Wales as we recover from covid-19, and I look forward to meeting Ministers to talk about my ideas on how that could be done. To those who argue that somehow the Bill undermines devolution, I remind them that many of the powers ceded to the EU, many of which were ceded before devolution existed, will be transferred to the devolved Administration. Around 60 to 70 new policy areas will now be decided in Cardiff Bay, making the Welsh Government more powerful than it has ever been. For those reasons, I will support the Government tonight, and do so wholeheartedly.
Bell Ribeiro-Addy (Streatham) (Lab)
The Bill is a very grave mistake, and there are numerous reasons to oppose it. Any one of them by itself would be enough, but taken together they make this quite possibly the worst piece of legislation brought before this House by this Government, and that is saying something. The legal consequences of passing the Bill are largely negative. It drives a coach and horses through the withdrawal agreement. Ministers should not need reminding that the withdrawal agreement is part of a solemn and binding international treaty, and that breaching a treaty breaches international law.
The passage of this Bill has wider international legal consequences. It undermines the basis of the Good Friday agreement, another solemn, agreed international treaty, which has laid the basis for peace in Ireland. It is absolutely not the case that the withdrawal agreement undermines the Good Friday agreement, as some Ministers now wish to claim. None of the main political parties in Ireland agrees with Ministers on that point.
While I am on the theme of undermining different parts of these isles, I point out that this legislation risks the integrity of our Union by undermining the devolution settlement. Any Government who claim to be truly Unionist would not develop legislation without the co-operation, collaboration and, above all, consent of the devolved Administrations. That is not what this legislation does.
The Bill also calls into question the good faith of this Government in their entire dealings with international partners. Must they now factor the integrity of Her Majesty’s Government into discussions and agreements? Do the Government really want to make us that country, known for reneging on its agreements because we later find them inconvenient?
I will focus my remaining remarks on the wider impact on this country of what the Government propose. It is now clear that the Government are aiming for an enormously damaging no-deal outcome to the Brexit negotiations. Let me be clear: a no-deal outcome will be disastrous for the living standards of people in this country.
As if the shocking revelations of the Operation Yellowhammer leak were not bad enough, forecasts by the Cabinet Office’s EU transition taskforce go considerably further and combine the potential issue of no deal with a second wave of coronavirus. The forecasts include shortages of fresh food, medicine and fuel, and even of chemicals for water purification, as well as price hikes on everyday items. Worst-case scenario, yes, but would a Government who cared even risk it?
I simply cannot get my head around the fact that the Government are attempting to push through a project that the Treasury’s own analysis says will lower GDP by 6.9% and destroy jobs. That analysis was made even before the effects of the pandemic. It is a far cry from the Conservative party posters we saw that said, “We are taking back control to protect jobs and businesses”. The Bill is an enormous act of self-harm. It damages us legally, reputationally and economically and, as Government Ministers admit, it is literally criminal to pass it.
Claire Coutinho (East Surrey) (Con)
As Conservatives, we believe that this family of nations bound together by the Union forms the bedrock of our prosperity. Central to that prosperity is the freedom to trade unhindered across these islands—an internal market without barriers knitted together over 300 years. For the past 40 of those years, the framework underpinning our single market was EU membership but, now that we have left, it is vital that we set our own framework as we forge our future as an independent nation state.
In 1707, the Act of Union brought England and Scotland together. Of its 25 articles, 15 were economic in nature, including the creation of a customs and monetary union. The reasons that spurred us on 300 years ago still exist today: to unlock our full financial power by pooling and sharing our resources; to defend the security of our nations; to provide access across the four nations to our international trading opportunities; and to create an integrated economic internal market. Those four goals are just as valuable to the British people today as they were then, and the Bill will help to us achieve them. It will ensure that Scottish and Welsh businesses can continue to export their goods and services to their main trade destination—the rest of the UK— unhindered. That destination accounts for a greater proportion of their trade than the rest of the world combined.
The Bill also allows the UK Government’s spending powers to benefit all UK citizens—to join up and level-up infrastructure spending with UK-wide strategies to create a stronger economy for Scotland, Wales, England and Northern Ireland—and it protects Northern Ireland’s position in our Union by ensuring that the Good Friday agreement is protected and that east-west economic relations are maintained.
I sincerely hope that the negotiations with the EU will, as intended, find a way to de-dramatise checks between Great Britain and Northern Ireland, either through the protocol or through a new free trade agreement. I was glad to hear the Prime Minister say earlier that we will continue to use the mechanisms—such as the Joint Committee—set out in the withdrawal agreement to resolve disputes. However, given the EU’s reluctance to uphold the withdrawal agreement’s clear and stated aim of ensuring that Northern Ireland businesses can have unfettered access to Great British markets, I support our holding the new powers in reserve.
Despite what those on the Opposition Benches might say, the Bill will give more control, which will flow to Cardiff, Belfast and Edinburgh. From fishing to farming to the environment, the devolved Parliaments will gain 74 powers across the different policy areas in the Bill. In fact, the Bill will be the greatest power-up of the devolved Parliaments since their formation.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Bill started out as quite a sensible measure to protect the internal market, but it has become a monster that threatens devolution and our standing in the world. I listened carefully to the Prime Minister, but all I heard were the same old distortions, prevarications and half-truths. It is not good enough. I will vote for the reasoned amendment, and if that fails, I will vote against the Bill, because I am clear that lawmakers cannot be lawbreakers.
Conservative Members won their seats by telling the electorate that they had secured a deal. The Prime Minister toured the country and TV studios telling us that it was a great deal; now he claims that it is full of flaws and holes. What is becoming all too clear is that it is our Prime Minister who is full of flaws and holes. Did he not know what he was signing when he toured those studios? Was he simply talking tosh?
We are being asked to risk our country’s reputation and our ability to negotiate or seek to enforce any future treaty or trade deal. International treaties are either binding or not; we cannot have limited non-compliance. A lifetime ago, I worked with young offenders. I came across plenty who had broken the law in a specific and limited way; it did not make any difference. No one present should countenance the idea that what we are being asked to agree is anything other than lawbreaking.
People who remember the troubles know that we cannot take chances with Northern Ireland. We should not risk the security provided by the Good Friday agreement. The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, the right hon. Member for Surrey Heath (Michael Gove) told us that the protocol was about ensuring continued peace and preserving the agreement. Surely we have enough on our plate trying to combat the pandemic. Maybe the Prime Minister should apply himself a bit more thoroughly to that task. We risk a return to mass unemployment, with all the suffering and societal tensions that will bring. He should apply himself to that. We do not need juvenile brinkmanship; we need mature leadership and responsible behaviour. We need the Government to knuckle down and fulfil their obligations under the agreement they signed and get us the deal they promised. Anything else is a betrayal of the British people.
Christian Wakeford (Bury South) (Con)
I rise to support the Bill. Our internal market of the United Kingdom, which has been established and has flourished for hundreds of years despite what Opposition Members claim, supports millions of jobs and livelihoods across all four nations of the United Kingdom. It is right that we act to preserve the status quo of the internal market. It is what businesses are crying out for and is what the Bill sets out. The Bill ensures that goods can move freely throughout these isles to benefit our numerous sectors, from Scotch whisky and Welsh farming to manufacturing in the north-west of England. In 2016, and again last December, the UK voted to take back control. We must do just that and the Bill intends to do just that.
The Scottish National party claims that the Bill takes powers away from Scotland. That could not be further away from reality. Scotland sells more to the UK than to the rest of the world combined and we on the Government Benches wish for that to continue. Those on the SNP Benches wanted to revoke article 50. If they had succeeded, they would have received no new powers whatsoever. The Bill sees one of the biggest transfers of power to the devolved nations in the history of devolution, but, alas, that transfer of power does not fit with their narrative.
Like most Members, I have received a full mailbox about this Bill, with correspondence from both sides of the argument. It has been mainly from those with hashtags such as #FBPE and #rejoin on Twitter, or from those urging me to back my promise to the British people by getting Brexit done and delivering on the withdrawal agreement. Having signed up to the “Stand up 4 Brexit” pledge, I intend to do just that and back my promise to the British people.
For a successful negotiation, we need both parties to act in good faith. Hearing from my right hon. Friend the Prime Minister and reading what the UK’s chief negotiator has said, it is clear that that is no longer the case. The Bill addresses the lack of good faith from the European Union and maintains tariff-free, border-free trade within the internal market. Government Members want the internal market to prosper as a truly global Britain, as my right hon. Friend the International Trade Secretary highlighted today with the Great Britain-Japan trade deal.
I am happy to see that the Opposition have finally come out of hiding with regard to anything Brexit related for the first time in months. However, Opposition Members seek to hold back our opportunities, as they have over the past four years, in a bid to reduce the great ship Britannia to nothing more than a sluggish canal barge.
Stephen Farry (North Down) (Alliance)
We now have a different range of voices from Northern Ireland in this Parliament and I want to make a few things clear at the outset. The majority of people in Northern Ireland voted to remain. They also supported the wrongly maligned backstop and they now pragmatically recognise the need for the protocol, despite its challenges. To be very clear, the majority of people and businesses in Northern Ireland do not want the Government to break international law on their behalf.
Northern Ireland only works on the basis of sharing and interdependence. The problem with any form of hard Brexit is that it requires some form of interface between the UK and the single market and customs union. The protocol is the inevitable consequence of a hard Brexit, in order to address the particular circumstances of Northern Ireland and to protect the Good Friday agreement. We are working off decisions taken here in the UK, not something that the European Union has foisted upon us.
Indeed, I am deeply concerned that the Prime Minister and the Government are twisting and distorting the meaning of the Good Friday agreement for their own political ends. The principle of consent is certainly one major component of the Good Friday agreement, and it is entrenched in the withdrawal agreement, so the Union is not up for grabs in this situation. That is a matter for the people of Northern Ireland to determine in due course. The Good Friday agreement is, in fact, a broad range of relationships across our islands.
The protocol is, in effect, the bare minimum to avoid a hard border on the island of Ireland. If we default on that, we risk a return of some form of border in that context. The European Union is entitled to protect the integrity of the single market and customs union, and that will create a fresh form of tension.
It is pragmatically easier to manage an interface down the Irish sea than across the land border. We are talking about seven air and sea crossings versus 270 land crossings, and the number of daily movements on the island far outweighs the number across the Irish sea. However, we must do all we can to reduce that interface to a minimum—to make it a dotted line. The way to achieve that is through building trust and good faith with the European Union and by working through the mechanisms of the withdrawal agreement—the Joint Committee and, if necessary, the arbitration mechanism—rather than circumventing it. We need to define what flexibilities and modalities we can.
Through their action, the Government are risking having no future relationship with the European Union. That brings huge consequences for the UK economy and makes the impact of the Northern Ireland protocol down the Irish sea even more stark. I support a trade deal with the United States, which is the dream of many Brexiteers who are forgoing the relationship with the European Union. I am not sure that they are picking up that that is a complete dead end if the Good Friday agreement is compromised by this Parliament.
Danny Kruger (Devizes) (Con)
This evening there has been much criticism of the Prime Minister, and I think he was at fault. He was at fault for believing the EU when it said that it would negotiate in good faith. He was at fault for believing it when it said it would respect the integrity of the UK and of our internal market. But he is not at fault for trying to remedy the situation with this legislation.
I think it is quite simple: if we do not get a deal that we like, we really have three options. First, we can accept the EU’s idea of a deal by accepting a rule-taking role in relation to Europe. That would breach our manifesto and would fail to deliver Brexit in a form that the people would recognise. That is option one. Option two is to get no free trade agreement but to accept a border within the UK. That would breach the Act of Union and threaten the Belfast/Good Friday agreement. Option three is to make a reasonable and legal change to the withdrawal agreement, on terms that were understood and acceptable when that agreement was first framed, in order to safeguard the Union and deliver Brexit. I suggest that those changes would be legal, on the simple grounds that when laws conflict, as they do at this sort of transition phase, domestic law takes precedence.
I pay tribute—I wish he were in his place—to my hon. Friend the Member for Stone (Sir William Cash), who has done more than any Member of this House, past or present, to deliver the sovereignty of this nation. In the negotiations this time last year, he stood up more than anybody for the sovereignty of the UK, and it is because of him that we have enshrined in the European Union (Withdrawal Agreement) Act 2020 the commitment to UK sovereignty that we rely on now.
There is a fourth option, of course. There are those three unpalatable options—the third, which I hope we are legislating into force now, is an unpalatable one—but there is a fourth option. It is to get a deal that we can all accept—a deal that the EU itself accepted in principle in the negotiations last year and said at the outset of our trade negotiations would be possible: an agreement based on the deal that it has with Canada. That is the deal that would be acceptable, and it would mean that we did not have to do any of the unpalatable options I mentioned. The way to do that is to pass this Bill to give the Government the negotiating hand they need.
Ruth Jones (Newport West) (Lab)
It is clear from the Bill and from many of the contributions from Government Members, bar some notable exceptions, that there appears to be little or no respect for democracy, devolution or international diplomacy on the Government Benches. I have heard from many people in Newport West in the past few days and, like them, I believe that the Bill represents the starting gun of a crude and unacceptable race to the bottom. If approved, it will ultimately lead to the undermining of our high food standards, our animal welfare rights and the environmental standards that have helped to save lives and clean our air.
The principle of mutual recognition in the Bill will mean that if, say, the Welsh Government legislate to ban the sale of chlorinated chicken, a company based in England could add chemicals to its poultry, sell it across the border and face no penalties. In fact, if any attempt were made to prevent the sale of its produce, the company could sue for loss of profits. To quote my colleague the Welsh Counsel General, Jeremy Miles, the UK Government plan to
“sacrifice the future of the union by stealing powers from the devolved administrations”.
The Bill is an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland, who have all voted in favour of devolution on numerous occasions. This is nothing but a shameless power grab, and it must be stopped.
The First Minister of Wales, my right honourable friend Mark Drakeford, has said that he is willing to negotiate in good faith with the UK Government on the content, scope and structure of the frameworks that regulate the internal market, but he wishes to do so on a genuine national approach. I want to see the Welsh Government, the Scottish Government, the Northern Ireland Executive and the Westminster Government working together to agree common frameworks. Anything forced on Wales, Scotland and Northern Ireland by Westminster is simply unacceptable.
Our Prime Minister, who has developed a taste for breaking international law, now claims that the Bill is necessary because the withdrawal agreement was rushed through. I have not been here as long as some Members, but I have never heard such claptrap. The withdrawal agreement was negotiated by this Prime Minister, agreed by his Cabinet and taken to the country in a general election. I say to Members on the Treasury Bench: “Don’t try to take the people of Newport West or any other part of our country for fools, because you won’t get away with it.”
We have heard from two former Conservative Prime Ministers, including the right hon. Member for Maidenhead (Mrs May); we have heard from former Conservative party leaders; we have heard from many senior Tory Back Benchers in this House and in the other place. They all raised caution, all recognised the importance of our international leadership, and all made it clear that we can never sanction law-breaking. I urge Ministers to heed their calls. Sir John Major said:
“If we lose our reputation for honouring the promises we make, we will have lost something beyond price that may never be regained.”
It is 2020, and my constituents in Newport West and millions across the country have a Government who seek to undermine treaty obligations, who openly admit to breaking international law, and who have failed miserably at giving the country the leadership that it needs. Britain deserves better than this.
Joanna Cherry (Edinburgh South West) (SNP)
Great consternation is felt in Scotland about the way in which part 5 of the Bill seeks to flout international law by breaking a treaty into which the Prime Minister entered freely barely a year ago. There is a long tradition in Scotland, going back to the declaration of Arbroath, that neither the monarch nor the Government are above the law. The Prime Minister should really remember that, because it was Scotland’s Supreme Court that led the way last year in ruling his Prorogation of Parliament unlawful, but it seems that he has learned nothing from that debacle.
Nor has the Prime Minister learned anything from the revulsion that was felt when he allowed his adviser Cummings to flout the lockdown restrictions that the rest of us had to obey. Over the past few days, we have watched a succession of Tory Government lawyers make mealy-mouthed excuses for what the Bill seeks to do. The Lord Chancellor says that he will resign only if the Government break the rule of law in a way that is “unacceptable”. What—pray tell, Lord Chancellor—is an acceptable way to break the law? I am sure that the thousands of ordinary men and women who have been fined for breaking lockdown restrictions will be very interested to know the answer to that question.
The Attorney General tells us that the English doctrine of parliamentary sovereignty means that she is happy to support the Bill; she cites the case of Miller I. Seemingly, she is in ignorance of the fact that at paragraph 55 of its judgment on that case, the UK Supreme Court affirmed that
“treaties between sovereign states have effect in international law and are not governed by…domestic law”.
If she were capable of applying the most rudimentary legal analysis, she would realise that that means that, so far as international law is concerned, the English doctrine of parliamentary sovereignty cannot supersede the UK’s freely given agreement and obligations in the withdrawal agreement.
I am ashamed to say, as a member of the Scottish Bar, that my fellow Scottish advocate, the Tories’ man in Scotland, the Advocate General, also seems to think it is okay to defend the Bill. I can only assume he is happy to ignore the fact that, in seeking to oust the jurisdiction of the Court of Session in respect of judicial review, clause 45 breaches another treaty—the treaty of Union, of which we have heard much this evening, article 19 of which protects the supervisory jurisdiction of the Court of Session.
The Prime Minister and others have described the Bill as a necessary safety net to protect the Union, but if he looks at the opinion polls in Scotland, including the one commissioned by his own Government, or reads the newspapers over the weekend, he will realise that far from protecting the Union, the Bill will put a final nail in the Union’s coffin.
Gareth Bacon (Orpington) (Con)
The Bill is necessary to secure free trade and prosperity throughout the United Kingdom, but the focus of much of the debate has not been on that; rather, it has been on the legality or otherwise of the Bill and the proposals before us. In response, it must be noted that Parliament is sovereign. Parliament is supreme. Parliamentary sovereignty is one of the cornerstones of our constitution and always has been. Legislation and the content of legislation, whether to pass it or otherwise, is for Parliament and Parliament alone.
The withdrawal agreement signed by the EU and the UK acknowledged that there might be difficulties with the Northern Ireland protocol. That was acknowledged earlier by the right hon. Member for Doncaster North (Edward Miliband). The agreement states that if the application of the protocol leads to
“serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”,
the European Union or the United Kingdom may unilaterally take appropriate safeguard measures. Provision was made for exactly this contingency in the European Union (Withdrawal) Act 2020, section 38 of which states:
“It is recognised that the Parliament of the United Kingdom is sovereign… Accordingly, nothing in this Act derogates from the sovereignty of the Parliament of the United Kingdom.”
That was done because of the ambiguities of the withdrawal agreement relating to Northern Ireland. The agreement holds simultaneously that there will be unfettered access between Northern Ireland and the rest of Britain after the transition period and that the EU’s customs code will have direct effect in the territory of Northern Ireland. At best, and at the very least, that is ambiguous; at worst, it is a direct contradiction, because it means that access would be fettered to one place but not to another. This was always going to have to be dealt with in subsequent negotiations.
The main clauses in contention this evening—clauses 42, 43 and 45—will come into effect only if the Joint Committee cannot reach agreement. We know that the Joint Committee negotiations have been going badly, particularly in relation to third country listings. It has become apparent that the EU is taking a direction that we cannot possibly support. We also know that the EU is fearful. Why would it not be? A strong, independent Britain prospering on its doorstep is not something the EU would necessarily welcome.
In saying that, I am sure that both sides in the negotiation want to secure a free trade deal, and I wholeheartedly support that outcome. A free trade agreement would be a win-win for both sides, but it must not be at the expense either of our independent sovereignty or of the Union of the United Kingdom of Great Britain and Northern Ireland. We must be honest: the EU is negotiating with its members’ best interests at heart, not Britain’s. It has always sought to use Northern Ireland as a weapon to gain leverage in free trade talks. We must give the Government the tools to push the EU in the direction of agreeing a strong free trade agreement. The Bill seeks to do just that, and I will support it unamended.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am a Unionist. I believe that we are stronger together and I want a functioning UK internal market, but it must be one that is based on respect, on partnership and on consent—the very principles that underpinned the devolution settlement that I and my party have proudly supported for the past few decades. That settlement respects our different histories, cultures, languages and perspectives, but couples those with the pooled benefits of working together. To undermine and disrespect that settlement, which is underpinned by multiple referendums and the Good Friday agreement, is both a breach of trust and deeply dangerous.
On Northern Ireland specifically, let us not forget that it was this Prime Minister who personally negotiated with the Taoiseach on the Wirral and gave his word to the Taoiseach and all the communities of Northern Ireland, so to renege on those commitments now is both dangerous and devoid of moral principle, quite apart from the fact that it also imperils the Government’s stated wider goals for so-called global Britain such as a US trade deal. As Nancy Pelosi said, “What were they thinking?” All the chumminess of the Prime Minister and the Chancellor of the Duchy of Lancaster with President Trump will not circumvent the United States Congress.
The other fundamental issue at stake is international law and the rule of law. I commend what the former Attorney General, the right hon. and learned Member for Kenilworth and Southam (Jeremy Wright), said. Clauses 42, 43 and 45 are, in his words, not a clarification, but a contradiction, not only of our commitment to international law, but of the very principle of the rule of law, for which Britain has stood as a beacon for many centuries. That saw us being instrumental in the founding of the United Nations, which has its 75th anniversary this year. The first General Assembly took place across the square from here. We stood for the rule of law in the establishment of the global human rights regime, the International Criminal Court and a rules-based financial and trading system, let alone the defence of our own interests from the Falklands to Gibraltar. We ask Iran to abide by its nuclear commitments, the Communist party of China to adhere to the Sino-British joint declaration and Russia to respect the territorial integrity of Ukraine or take responsibility for poisoning its citizens or using chemical weapons on the soil of this country, or when we rightly support the prosecution of those who committed genocide in Bosnia, Rwanda and now in the case of the Rohingya or the Uyghurs.
This goes well beyond Brexit. We all have our views on Brexit and the Prime Minister’s failure to produce an oven-ready deal. It is about Britain and the type of country we want to be: whether we want to be one that upholds the rule of law and standards, and stands as a beacon for democracy and rule of law in the world, or whether we want to become a pariah. I know that there are many Conservative women and men of courage who say things in the corridors of this place. The question is whether they will stand by their consciences in the vote tonight.
Brendan Clarke-Smith (Bassetlaw) (Con)
We should not be here today debating the Bill, not because it is wrong but because it should not be necessary. We entered into an agreement with the European Union in good faith and it is a shame that that has not been reciprocated. Using third country listings, which should be a formality, as leverage on state aid and fisheries policy is not negotiating in good faith. Does the EU believe that its own rules and standards are not good enough now? Those are the rules and standards that we currently operate under. The EU knows them well, although it should be said that it is not always the best at following them.
We must now be explicit: Northern Ireland is not on the table, nor are the people who live there. They never have been. We will not accept the blockading of agriculture within our own country. The Bill is about making the choice very clear: Canada or Australia. The EU told us that the Canada deal was on the table, so what has suddenly changed?
The Bill gives us the option of protecting our internal markets and the status of Northern Ireland as an equal partner in this United Kingdom, not as a bargaining chip or an afterthought. I hope we never have to use it, but we owe it to the people of this country to make the provisions. We must stand in solidarity with the people of Northern Ireland and our hon. Friends in the Chamber from Northern Ireland to protect the status of the Union and the Belfast agreement. We will not allow the EU to divide us.
If the Opposition want us chained to EU rules and to make concessions on fisheries and state aid, they should say that. There is an old saying that starts with the phrase, “Give a man a fish”. Unfortunately, some would give a man as many fish as he wants. We should not run the risk of a blockade on agriculture between Great Britain and Northern Ireland. Perhaps the EU wants to cut off its nose to spite its face, whatever the cost to itself and its economies at this difficult time. Perhaps it wants huge tariffs on our lamb, our pork and our beef, though I doubt it. It knows the risks and that, if my hon. Friends will excuse the term, the “steaks” are too high. That is why the Bill is so vital.
The European Union needs to learn that Northern Ireland and our precious Union are off the table. Our Opposition now need to come off the fence. I wholeheartedly support the Bill and urge others in the Chamber to do the same.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr, Mr Dirprwy Lefarydd. It is difficult to know where to start with the Bill, so numerous are the egregious assumptions, the pitfalls and the Trojan horses lurking within it, so I will be brief and specific.
For Wales, the Bill is damaging without precedent, emerging fully fledged as the single biggest sustained assault yet to threaten devolution and our powers. It scorns two referenda and seeks to overturn the reiterated will of the Welsh people, not only weakening the powers of the Senedd, but explicitly reserving new powers to this place.
This Bill would render Wales powerless to stop low-quality produce, such as chlorinated chicken, flooding our supermarkets and undercutting Welsh farmers by being cheaper. This Bill would permit a 21st-century Tryweryn by giving Westminster more spending powers directly over water infrastructure. It would invalidate “buy local” policies in Wales by making it illegal to place goods from another part of the UK at a disadvantage compared with local goods in Wales.
The Conservative party would hold the whip hand over our Senedd’s attempts to protect our NHS against privatisation through damaging trade deals. The Bill holds up the spectre of no trade deal with the UK due to the Prime Minister breaking international law, which would wreak havoc on businesses already suffering the effects of covid-19. It could force Wales to accept abuses of animal welfare and food production, with the Senedd powerless to block such produce from entering our markets if they were to be tolerated in other parts of the UK, and who is even speaking for the future of the port of Holyhead?
Whatever some Conservative Members like to say, devolution is no experiment; it lives and breathes in Wales. Our democracy has been growing in the last two decades and more, in confidence and in power, and our wings will not be clipped. Plaid Cymru will stand up for our powers and our Senedd every step of the way, and we will not be supporting this Bill.
Nicola Richards (West Bromwich East) (Con)
I would like to start by saying that the Government are right to bring this Bill forward. It protects the Union of the United Kingdom, safeguards Northern Ireland and paves the way for the return of many of our laws from Brussels. There has been a lot of talk in the media and from the Opposition about the supposed illegal nature of this Bill if it becomes law, but this Bill does not itself break international law. Many commentators seem to think that passing the Bill means that we are immediately breaching the withdrawal agreement, but the Bill is simply a safeguard in case no trade agreement is reached with the EU. Should Ministers end up using the powers made available to them under this Bill, the withdrawal agreement could indeed be broken, but it is clear that this is very much the last resort.
Let us face it: most EU member states are not squeaky clean on these issues. On Thursday 10 September, the European Court of Auditors reported that 15 EU states had breached EU rules in agreeing bilateral commercial deals with China that it has identified as having both political and economic risks, as well as having violated EU rules by bypassing the European Commission before they completed those trade deals. It is this level of hypocrisy and double standards that I and the people of West Bromwich East recognised prior to casting our votes in 2016, and it is what spurred 68% of my constituents to vote to leave. As has been made obvious throughout these negotiations, it is the EU that is not for turning.
I have spoken before about this level of hypocrisy, both in this Chamber and to Mr Barnier himself when he appeared before the Committee on the Future Relationship with the European Union. On 5 May, the German Federal Constitutional Court ruled that the European Central Bank’s 2015 policy to buy bonds as part of its quantitative easing stimulus package was not covered by its mandate. The German courts ruled that they had the ability to determine when and if Germany is subordinate to EU law. Mr Barnier dismissed my points. He said it was unfortunate, but not relevant to Brexit, but it most certainly is because, for the first time in history, a national court refused to submit to the European Court of Justice as a member state. So why, as an independent state, should the UK be subject to EU law in our future relationship, while Germany seems to believe its domestic courts can supersede ECJ rulings on monetary policy?
The EU does not recognise this hypocrisy, but my constituents do, so if the EU does not like this Bill, there is a very simple solution. It should drop its arbitrary red lines, get around the table in a good spirit and do a trade deal that we can accept. The fact that we have to go to these lengths to protect the Union of the UK further highlights the absurdity of the situation and why we voted to leave. I would urge all Members in this place to put the Union of the United Kingdom above the European Union and pass this Bill tonight.
Claudia Webbe (Leicester East) (Lab)
By rushing through this legislation, this Government are treating the people of Leicester and the entire British public with utter contempt. Perhaps more than any election in recent memory, the 2019 general election was decided by a single issue. The Prime Minister promised to get Brexit done, and his party boasted time and again about an oven-ready deal that would settle the divisive issue of Brexit for good. “Very good”, “great”, “wonderful”, “fantastic” —those were just some of the words that the Prime Minister used during the general election campaign to describe the Brexit deal, which he is now openly willing to break international law in order to rewrite.
This is an agreement that the Prime Minister negotiated and signed himself, yet he now says that it contains grave problems that could break up our country. I do not know of any instance in which a Government have openly admitted to flouting their central election promise less than a year into their Administration. This is an unprecedented failure that raises serious questions about the Government’s entire mandate. Sadly, it comes as no real surprise. This Government are the embodiment of elitist double standards, where it is one rule for them and another for everyone else.
The Prime Minister is apparently not satisfied with misleading the public once by claiming that his half-baked deal was oven-ready. In addition, his Government are now being dishonest about the reasons why the deal must be changed. The issues of state aid and customs declarations are not a revelation but were repeatedly and explicitly spelled out to the Government last year, not least by their confidence and supply partners, the DUP. In this House, we cannot risk the sanctity of the Good Friday agreement or threaten peace on the island of Ireland, yet that is what this legislation proposes to do.
Why? This self-inflicted crisis is either a counterproductive negotiating tactic or a pathetic attempt to distract from this Government’s calamitous record over the last few months. After all, this Government have overseen the worst coronavirus death rate of any European country. Boris Johnson and his Ministers are used to U-turning—[Interruption.] The Prime Minister and his Ministers are used to U-turning, but tearing up their own international—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am sorry, but we have to move on, and please remember not to refer to other Members by their names.
Lee Anderson (Ashfield) (Con)
I agree with the people of Ashfield who tell me that British Members of Parliament should act in the best interests of the UK and not the EU. Let us face it: the EU has negotiated in bad faith throughout, and we need to protect ourselves by showing strong leadership when dealing with the EU. We have a proud tradition of standing up for ourselves in Europe, and be in no doubt: there are other European countries looking at us right now for leadership.
This time last year, I was just a normal member of the public watching this place on the telly, shouting and screaming at these green Benches because of the deadlock and the daily nonsense we had to put up with. Well, I am here now, and the people of Ashfield will be listened to. On 31 December, we will lose rules that have regulated the home nations for the past 45 years, and this legislation will ensure that we retain internal trade, which hundreds of jobs in Ashfield depend on. Business leaders in Ashfield and Eastwood tell me that they cannot go into next year with unnecessary barriers for business and additional costs for consumers. They need certainty, and this oven-ready Bill provides certainty.
We are at a critical moment in ensuring that we have a prosperous future post Brexit, and we need a system in place that allows a free market in goods and services for all four nations in the UK. This Bill allows that. This Bill will protect jobs and encourage growth across the whole of the United Kingdom, while allowing Northern Ireland unfettered access to the rest of the UK. I cannot understand why anyone would not be in favour of it.
Our Prime Minister is right to put our country first, and he is right to try to secure trade for the UK. I strongly believe that he has our best interests at heart and I back him 100%. We voted to leave and he is making sure that we do so on our terms while putting the whole of the UK first. Once again, it is disappointing to see the Opposition oppose what the British people want. Perhaps they need to speak to some real people, not their mates in the Tea Room reading The Guardian. By real people I mean people like those in Ashfield, which is now a safe Tory seat.
There is nothing illegal about bringing this Bill to Parliament. We voted to leave to take back control and to make our own laws, which is what we are doing right now. Members of this House need to decide where their loyalties lie. Is it with the EU or with the United Kingdom? On behalf of the people of Ashfield and Eastwood, my loyalties are with the UK.
Karin Smyth (Bristol South) (Lab)
I first raised the issue of the Northern Ireland border on the Monday after the referendum—I have skin in the game, with family on both sides of the border. I have watched every twist and turn of events since. I despair at the language, at the deep ignorance, at the disregard for fragile settlements and for the 1.9 million people who live there who, frankly, deserve better.
The Tories got themselves caught up in a toxic triangle of the ERG Brexit, the differential rules across the Union and their obligations under the Belfast Good Friday agreement, and the Prime Minister chose his party. He did so through the protocol and now we need to make it work, because he agreed the differential rules across his precious Union.
I take a lot of interest in the constitutional settlement across these islands. I am vice-chair of the British-Irish Parliamentary Assembly, and I have visited many of those legislatures: in Edinburgh; Cardiff; Belfast; Dublin; Jersey; Guernsey; Sark and the Falklands. Those places reflect their history as part of the United Kingdom family. They take great pride in it and in what we do, and they are watching.
I read the White Paper in July with some dismay. In the past two decades in particular our constitution has changed, but after reading that White Paper it felt as if nothing had changed in 200 years. The Acts of Union that got us to this place did not just happen: they were violent; they were disputed; and they involved an awful lot of money and land passing hands. There are different readings of our history, which has resulted in many years of debate across these islands. It is an evolving dynamic situation and one that is actually very precious and it is something of which we need to be mindful.
I am also a member of the Public Administration and Constitutional Affairs Committee. This summer, we expressed our great reservations about the Bill, particularly with regard to the speed of the consultation and the constitutional aspects. It is primarily an economic Bill, but it is also deeply constitutional. We have asked for an independent monitoring body to report directly to the House of Commons, as we are concerned about the provisions in the Bill and the need to take account of the intergovernmental relations that are coming.
Last week, the Chancellor of the Duchy of Lancaster appeared before the Committee and we were told that the Dunlop review would be published before the Bill hits the statute book at the end of this year. It is a case of putting the cart before the horse. It would have been much better to have these discussions and a respect for the common frameworks before bringing this Bill forward. The Government need to dial down the rhetoric. They need to get back to the negotiating table, and they need to treat this Parliament and the devolved legislatures with much greater respect.
Saqib Bhatti (Meriden) (Con)
I will not spend what precious minutes I have talking about what the people voted for in December, because, frankly, the mandate given to us by the British people should already be reverberating around the Chamber. The mandate was clear: we were expected to leave the European Union. Certainly, as a member of the Conservative and Unionist party, I have an obligation to do everything that I can to protect the integrity of the Union.
I do not think that we can ignore the context of this Bill. We are in the midst of a negotiation. In fact, we are quite near the end of it; we are almost there. It is a negotiation that both parties entered into in good faith and it was a reciprocal obligation. Clearly, the European Union is not acting in good faith, and, naturally, it will do everything in its own interests. Why would it not? It will want to do everything that it can to make it harder for us to do a deal, but threatening the integrity of our Union is not negotiation in good faith and it goes just too far.
Too often, I hear that the EU is some noble entity—as is so often argued not only in many parts of the Chamber, but across the country—but it is one that has no objection to overturning the mandate of the people when it does not get what it wants. It has a track record that is anything but noble, but that is not us. This Bill protects the Union and also says that Northern Ireland is part of our Union and is not a negotiating football. Our job is to strengthen the hands of our negotiating team. This Bill is a plan B, but it is a plan B that says we will not be bullied. It is a plan B that says that this is one mandate that the European Union cannot ignore.
Bill Esterson (Sefton Central) (Lab)
The Labour party stands for the rule of law. We stand for the international rules-based system. We stand for peace in Northern Ireland and the settlement that has lasted for 22 years, and we stand for keeping promises to the British people, which then go on to be enshrined in British law. That prompts the question: what do Conservative MPs stand for anymore if they are prepared to break promises on all three of those areas? Why is what they are promising different now from what they promised in a general election—an oven-ready deal, a deal that was the easiest in human history? What changed? What went so wrong? Why are they shouting for more time and saying that they did not have enough time then when they were telling us then that that was all the time they needed and that they did not need to spend any longer scrutinising the legislation, which suddenly they find to have flaws?
There is a serious lack of trust and credibility, as we can see around the world and across these islands, as a result of the behaviour of this Government, supported by far too many of their Back Benchers so far this evening. We heard a Cabinet Minister say at the Dispatch Box last week, in a breathtaking, brazen way, that it was okay to break international law in a “specific and limited way”. It is breaking the law, whether it is in a specific and limited way or not, and that is the reality.
The withdrawal agreement, of which the Northern Ireland protocol is part, is part of the answer to guaranteeing the peace that has been so sacrosanct for the last 22 years. The Government are in denial. They are pretending that it is the opposite. They are pretending that what they said last year was the way of defending the peace is no longer true, and it simply does not stack up.
What of state aid? Today we hear of a deal being done with Japan—that is good news—but with a completely different state aid regime from the one that the Government say they want with the EU. They cannot operate two different state aid regimes. It will not work. When is the penny going to drop for them?
As for standards, the Bill undermines farmers. It undermines our animal welfare standards. It undermines the devolution settlement and it lacks the scrutiny, just as the Trade Bill did before and continues to do—so, too, with this Bill. Ministers will be able to act as they want. This is a bunch of incompetents and chancers at their worst, and they need to think again.
Nick Fletcher (Don Valley) (Con)
It is my understanding that the Government have done nothing illegal in putting this Bill before Parliament. After all, debating and amending Bills is the purpose of this place. For the Government to bring this Bill before Parliament for it to be scrutinised, amended and put through only reaffirms the sovereignty of Parliament. As the withdrawal Act reasserts the sovereignty of Parliament, it would be flawed to conclude that the laying of this Bill breaks any law.
Furthermore, right hon. and hon. Members should remind themselves that the reasoning behind the Bill is to protect the greatest Union of nations that has ever existed. In 2016, it was the people of that Union who voted to leave the European Union in a referendum. They did not vote to be broken up. My constituents in Don Valley voted overwhelmingly for our country to leave and re-establish our place in the world as a sovereign, independent state once again. The European Union needs to accept that. After all, it was only yesterday that the Leader of the Opposition wrote in The Sunday Telegraph that “both sides” should
“hunker down in good faith and break the logjam.”
Unfortunately, after recent reports from our own negotiating team, the EU does not appear to be conducting negotiations in any form of good faith. It is due to this lack of good faith from the EU that the Government, and rightly so, have formulated this Bill to protect the Union. While I understand the reasons why some hon. and right hon. Members have reservations about the Bill, it is the best way for the Government to send a clear message to the European Union that we are serious about protecting the internal market.
Before I became a Member of Parliament, I watched this House debate our withdrawal from the EU and tear itself apart in front of the eyes of the country, the European Union and the world. It was this chaos that strengthened the European Union’s position and led it to pressure the then Government to sign up to a withdrawal agreement that was rejected three times by this House. We must not let this happen again. Most Members, including me, still want to deal with the European Union, yet only by uniting behind this Bill can we sufficiently strengthen our negotiating team’s position. I fear that if the European Union yet again sees this place divided, it will carry on acting in bad faith and continue to act unreasonably. I therefore urge hon. and right hon. Members to support the Bill so that this Parliament can show unity, protect the Union, and uphold the will of the British people.
Anna McMorrin (Cardiff North) (Lab)
This is a deeply shameful moment for our country—showing how far this toxic Government are willing to threaten peace, erode co-operation and trust, and strip devolved Governments of their decision-making powers. How easy they find it to dangle the safety and security of our fragile and covid-hit economies, businesses and livelihoods. How unashamed this Government appear when faced with risking Britain’s reputation and breaking international law. I stand here speaking for my constituents in Cardiff North, who are aghast at this Government’s behaviour.
This Bill should actually be about how the internal market works, but it is instead a full attack on democracy—on the people of Wales, Scotland and Northern Ireland who have voted for devolution several times over. We need an efficient, functioning internal market, but this Bill does not just threaten more than two decades of devolution: it rips right through the devolution settlements without consent. It is a power-grab preventing Wales from imposing its own standards on goods and services, leading inevitably to a race to the bottom, undermining the people of Wales and their democratic rights and overriding the Welsh Government in acting in their best interests. This issue should be determined by the Welsh people and those they elect to the Senedd. The Government are preventing a common framework and stealing powers from Wales, riding roughshod over the Welsh Government’s right to set food standards and to create laws on single-use plastics, animal welfare standards and the environment, to name but a few. It is simply an assault on the people of Wales.
I will continue to fight for my constituents in Cardiff North against this blatant power-grab, against the dilution of rights and standards, and against a Bill that breaks international law. It does not just steal powers: it robs the Welsh people of a way of life and values that we have come to expect. The people of Wales and the people of Cardiff North deserve better, and that is why I will be voting against this Bill tonight.
Alexander Stafford (Rother Valley) (Con)
We have heard time and again tonight that the people are watching and our reputation is on the line. I could not agree more: the people of the world are watching and our reputation is on the line. But the people who are watching are asking whether we are a sovereign independent nation. Do we have a reputation for upholding the will of the people, or do we want to be shackled to the European Union—a body that our public have, time and again, voted in one way or another to make us leave? Are we willing to be subservient? Are we willing to backslide against our own voters? Are we so ashamed of our own country that we cannot stand on our own two feet?
That is what the Bill is about: standing on our own two feet. It is about our internal market and, yes, it about the Union. It is about the most successful Union ever in the world: the United Kingdom—that Union of four great nations. It is not about the failed ideology of the European Union—a failed organisation that is willing not to play with a straight bat, that is going against its word and that is willing to break up our Union for the sake of itself. That is not playing things straight.
The European Union reminds me of a spoilt child in the playground that we do not want to play with anymore. Instead of allowing us to borrow their ball, they will happily break our ball. They will happily break up our United Kingdom. All Members of the House have to realise who we are dealing with. We are not dealing with people who are treating us equally. These are people—an organisation—who are willing to sacrifice our country, our very essence, for their own project.
The European Union is perfectly entitled to do that, because it is fighting for its own members’ rights, but I am here to fight for the people of Rother Valley. I am here to fight for the rights of the people of England. I am here to fight for the rights of the United Kingdom of our four countries. I am not here to represent the European Union. I am not the hon. Member for Brussels East or for Warsaw West. I am here to represent the people of Rother Valley, because they want a United Kingdom and they want to leave the European Union.
This opposition and this disunity is no more than people once again saying, “You don’t know what you voted for. You are too stupid to negotiate. You can’t dothis.” And I say no. We voted again and again for our country, and again and again the Opposition—the Labour party, in hock with the SNP, who of course want to break up our country—are willing to destroy everything.
Alexander Stafford
It is our country. We had the Acts of Union and a referendum to have it our country. We are one family. Just like when we fall out with our nephews or nieces, we are still family. We have disagreements. I will tell hon. Members who is not a part of the family: the European Union. We have had the divorce Bill—we have divorced it and we are going our own free way. We need to be united together against the European Union and its backsliding, and say, “We are one country. We are a proud nation, and together we will go forward as one United Kingdom.”
Kate Osborne (Jarrow) (Lab)
I have been contacted by a number of constituents about the Bill. It is of concern to many in the Jarrow constituency. Whether the constituents of Jarrow voted to leave or remain, the majority of them want the Government to get on with securing the best possible deal with the EU. They want a deal that governs future trade and relations, and one that protects and promotes jobs, employment rights and peace in Northern Ireland. I share that view.
I am disappointed that the Government are stalling over their Brexit deal. It is extremely frustrating, when we were told that the UK and the EU were so close to agreeing an oven-ready Brexit deal and that progress was being made on the outstanding issues. The Prime Minister is willing to tear up the withdrawal agreement in preparation for a no-deal end to the transition period. That would be an absolute disaster. The Government are no strangers to U-turns, but tearing up an international agreement that they negotiated has to be a new low.
We do not have time for this. We are in the middle of a public health emergency and an economic crisis. The Government need to stop frustrating their deal so that we can all focus our efforts on tackling the coronavirus crisis. A competent Government would never have entered into a binding agreement with provisions they intended to go back on. Or did the Government just not read the small print? For the Government to openly flout international law tells me that we are in dangerous territory. Just as the Prime Minister is no stranger to a U-turn, he is no stranger to breaking the law, as we saw last year with the unlawful shutting down of Parliament.
We may need a strong internal market, but this should have been a straightforward piece of legislation. Instead, it has caused chaos in the party of Government, it risks our international reputation and it advocates breaking international law. For those reasons, among others, I cannot support it and will vote against it.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Our Union benefits us all, and I support those measures in the Bill that strengthen our Union, support our businesses, and create more opportunities for those living and working in the UK. However, several clauses in part 5 cause me great concern, and I wish to lay out my thoughts and concerns to the House.
Parliament is sovereign. The critical question is not whether Parliament “can” do this, but whether it “should”. Parliament can, if it wills, create, amend, or rescind any domestic legislation or, as we are discussing today, break an international treaty enshrined in domestic legislation. It is not unimaginable that there may be situations where that is necessary, such as in response to a national crisis or a dire emergency. However, such a decision must never be taken lightly, and we must do everything reasonably possible to avoid that, so important is the rule of law and our commitment to international obligations. The consequences of breaching an international treaty are grave, and if we do that, or even propose to do it, not only must our justification be clear, but it must also be the last thing we do after we have exhausted all arbitration and legal recourse. Such action must be taken in extremis, not pre-emptively.
We trade and benefit from our international reputation. The United Kingdom has an old and proud democracy. My constituency, Runnymede and Weybridge, is the birth place of the Magna Carta and the rule of law. As we go out into the world as global Britain, seeking to make new trade deals, we will depend on our reputation more than ever. That means respecting the rule of law. If we damage our reputation, we will hamstring global Britain and our ability to seize the opportunities that Brexit presents.
I know that my neighbour, the Chancellor of the Duchy of Lancaster, and the Government, are mindful of the issues I have raised about our international reputation and obligations, the difficulty we will have in calling out Russia and China when they breach their commitments, and the importance of squaring that with protecting our Union. I ask them to think again about a resolution to the issues we face. I hope they see the constructive nature and spirit of my words, and hear the concerns of many fellow Members across the House.
More than anything we need a Canada-style free trade deal with the EU, which the Government are pushing hard to get. With or without a free trade agreement with the EU, the UK needs this Bill. There is a lot of good in it, and I want to support it, but for the reasons I have laid out, I regret I cannot support it unamended.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
This Bill is an outrage. We are thumbing our nose at international law, our Irish friends and EU allies, even while still in negotiations with them. It would be farcically funny, were it not so deadly serious. The Prime Minister has been double dealing not only with our international partners but with ordinary people, because the oven-ready deal he sold has been shown to be nothing more than a pig in a poke. That the Bill has been introduced, never mind that it will almost certainly be passed by the Chamber, is extraordinary. It is hugely damaging to the reputation of the UK, and it speaks starkly to the drastic weaknesses and feeble checks and balances at the heart of the UK constitution.
The Bill lays bare the Government’s attitudes to devolution and democratic accountability—in short, they do not care for it one jot. The Government pretend they are merely adopting an EU-style approach to creating a single market, but they are doing nothing of the sort. Where we should have had consent and co-operation, we have imposition; instead of subsidiarity, we have centralisation; instead of minimum standards, we have the starting gun for a race to the bottom; instead of protecting devolved powers, devolved powers are being reserved or utterly undermined.
The Bill speaks more broadly to the direction of travel that we face in the United Kingdom. Instead of a partnership of equals, it is “Westminster knows best.” Yet again, one Parliament—this Parliament—is unilaterally altering the competencies of another, and giving Ministers the power to do so again and again at the stroke of a pen. That does not happen in other western democracies where there would be double majorities, super majorities, and referendums before one Parliament or Government could take powers from another. Perhaps the one positive from the Bill is that it makes plain like never before that the constitution of the British state is not fit for purpose, and it flags up the real dangers that lie ahead if Scotland remains part of it.
Rachel Reeves (Leeds West) (Lab)
The UK has left the European Union, and we all agree on the need for clear terms for the UK’s single market to operate effectively. Many, although not all, of us believe in a United Kingdom, but we should all value devolution and its contribution to the rich tapestry of our country. The Good Friday agreement, whose groundwork was begun under a Conservative Government and fulfilled under a Labour one, has rightly been a source of admiration around the world, as has our adherence to the rule of law. I want to read out a few lines that have really resonated with me.
“The rule of law is the most precious asset of any civilised society…which makes sure that when those who hold power abuse it, they can be checked”.
Those words are from the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, the right hon. Member for Surrey Heath (Michael Gove), and in a few moments’ time he is going to urge hon. and right hon. Members to vote for a piece of legislation that he and the Government accept seeks to break international law. How on earth did the Government get in this place? That is a question that many hon. and right hon. Members have asked in the Chamber throughout the debate.
We have heard some incredibly powerful contributions today, and it would probably be unwise to single out any of them, but let me mention just a few. The hon. Member for Foyle (Colum Eastwood) invoked John Hume as having been a pathfinder for peace in Northern Ireland. The right hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) said that breaking the law was something that this country just did not do. My hon. Friend the Member for Wallasey (Ms Eagle) spoke about the gigantic act of self-harm that we are embarking on, masquerading as a negotiating strategy. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) spoke about the danger of watering down our standards. And of course, the hon. Member for Bromley and Chislehurst (Sir Robert Neill) made a powerful speech. He and I have history: he roundly defeated me in the Bromley and Chislehurst by-election in 2006, but I did not hold that against him. He is held in high esteem on both sides of this House. He is motivated by trying to get the Government to move, and I hope that they do.
However, whatever the Bill lays down about when the provisions come into force, the very act of Parliament passing this legislation is in itself a breach of international law. That is because it breaches article 5 of the Government’s withdrawal agreement—an international treaty—by going against the Government’s commitment to refrain from measures that jeopardise the attainment of the objectives of the withdrawal agreement. It is important to understand this, because this is merely the starter for the law-breaking that this Government envisage. As we know from the Prime Minister’s speech today, the main course on GB-NI trade is still to come, presumably in the Finance Bill. So hon. and right hon. Members should be under no illusions. If they vote for this Bill tonight, they will find themselves on a slippery slope, being asked to vote for yet another law-breaking Bill. We say that it is time to draw a line and stand up for the rule of law.
There is a certain degree of irony in all this. Today we are asking the public to adhere to much stricter guidelines about who they can meet and where. Breaking those laws can result in police action. Indeed, this morning in a radio interview, the Minister for Crime and Policing, the hon. Member for North West Hampshire (Kit Malthouse), said that if people were concerned about others breaking the law, they should consider phoning the non-emergency police number. Madam Deputy Speaker, I wonder whether you could give some guidance to the House. If the British public observe this Government breaking the law, who should they telephone? A party that once treasured institutions, traditions, conventions and the rule of law now trashes them in plain sight with the whole world looking on in despair. This was once the party that claimed to be the party of law and order, but Sir Robert Peel would not recognise the modern Conservative party promoting the Bill this evening.
The Government say that they have no choice, so let me directly address the latest claims that the Government make. The Prime Minister’s project fear speaks of food blockades and that the Northern Ireland protocol could enable “a foreign power” to break up our country. The question has to be asked: how could any responsible Prime Minister sign up to such an agreement, campaign on it throughout a general election and ratify it as an international treaty if that were the case? Is the message to the House and the country that the Prime Minister was too incompetent to notice the contradictions? Or that he noticed them and simply did not care? And if that really was the case, why then does this legislation only address trade from Northern Ireland to Great Britain? The Bill even fails under the terms of the Prime Minister’s own arguments. He has not thought this through.
Or is the real justification for all this to serve other political purposes? Is this some unorthodox negotiating strategy, trashing our good name in the process? Reputations are hard won but they are easily lost, and that is what the Government are embarking upon this evening. In doing so, they are using Northern Ireland as a political football. That is wrong—so wrong. Not one of the explanations to justify the Bill this evening speaks well of the Prime Minister’s integrity, and it does not speak well of his judgment either.
I urge the Government to take a step back. It is not too late. Ministers will have heard this afternoon and this evening from hon. and right hon. Members in all parts of the House urging them to take a step back, think again and not go down this route. It is not too late. I urge both sides, the United Kingdom and the European Union, to drop the rhetoric, stop the posturing, as my right hon. Friend the Member for Leeds, Central has argued this afternoon, start negotiating properly and take this seriously. That message is for both sides in these negotiations.
Let me end by saying this. I have spoken in many debates in this House in the 10 years that I have been a Member of Parliament, but few have had the gravity or the implications of today’s debate on the Bill that we are voting on this evening. Every living Prime Minister—five of them in total, three of them Conservatives—tells us that this Bill does serious damage to our standing in the world. The two former Prime Ministers who were the architects of the Good Friday agreement, so vital for our United Kingdom and peace within the United Kingdom, warn us of the dangers of what the Government are doing. Every Member of this House should heed those warnings and listen to those words. No one knows more than those former Prime Ministers the risks that we are taking and the risks of the slippery slope that we are embarking on. Around the world, people are looking at us and asking who we really are. What kind of country do we want to be on 1 January next year, outside the orbit of the European Union? Let us stand up for our proudest traditions. Let us stand up for the Britain that I know and love—a Britain that stands proud on the world stage and stands there with moral authority; a country that cares about the rule of law, here and abroad, and stands up for it. I urge Members in all parts of the House to support our reasoned amendment this evening and vote against this squalid Bill.
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
It is always a pleasure to follow the hon. Member for Leeds West (Rachel Reeves), who always makes her case with clarity, with force and from principle. I know that everyone who listened to her speech will have recognised the powerful case that she was making. I did not agree with everything that she said, but I am sure everyone in the House recognises that she is a strong and effective advocate for her party and her principles.
I thank all those who spoke in this debate. We had more than 60 speeches, all of them I think contributing to the reputation of this House. We had very thoughtful speeches of course from a variety of Select Committee Chairs and also some very passionate speeches, including, as the hon. Lady mentioned, from the hon. Member for Foyle (Colum Eastwood) and the right hon. Member for East Antrim (Sammy Wilson). Those two representatives of Northern Ireland constituencies took passionately different views on the merits of this legislation. It is that very passion and, indeed, the importance of democracy, not just to Northern Ireland but to the whole United Kingdom, that means we should all try to look calmly at the Bill before voting tonight and before looking at the various amendments that may be tabled in Committee.
It is important that I remind the House of what the Bill does and what it does not do, as well has how, together, we can address the legitimate concerns that have been raised in good faith by hon. Members. The Bill protects, enhances and strengthens our Union and the prosperity of all our people. It is all the more crucial that we take these steps as we recover from the dreadful covid-19 pandemic. We need to work together as one United Kingdom, displaying solidarity and resolve, to ensure that the prosperity that we generate is shared for all the people we represent. It is a fact that each of the parts of the United Kingdom trade more with each other than with anyone else. It is a fact that each of the peoples of the United Kingdom rely more on each other than anyone else. All the peoples of the United Kingdom are stronger when we work together, act together and stick together.
No one summed up the essence of the Bill better than my hon. Friend the Member for Moray (Douglas Ross). He said it is a Bill about jobs and businesses. As he reminded us, some 545,000 jobs in Scotland rely on the integrity of our internal market. He reminded us that, coincident with this Bill, there is a power surge for all the devolved Administrations, with hundreds of powers going to the devolved Assemblies to strengthen devolution. He also stressed that the importance of devolution was that all our citizens could see our Governments working together—the United Kingdom Government working with the Northern Ireland Executive, the Senedd in Wales and, of course, the Scottish Government.
Michael Gove
Not at this stage.
The Bill does not walk away from negotiations with the European Union. Those negotiations go on with David Frost and Michel Barnier and with myself and my friend Maroš Šefčovič in the Joint Committee. We are committed to making a success of the negotiations. The Bill is not about abandoning the withdrawal agreement. The withdrawal agreement is there. We are safeguarding the rights of 3 million EU citizens in the UK, just as EU nations are safeguarding the rights of 1 million UK citizens in the EU.
The Bill is certainly not about declining to implement the Northern Ireland protocol. As the right hon. Member for East Antrim reminded us, with some regret on his part, we are erecting border-inspection posts for sanitary and phytosanitary checks in Northern Ireland, even now. We are investing hundreds of millions of pounds in helping Northern Ireland businesses to be ready for the new processes that come with the protocol. If we were not serious about implementing the protocol, we would not be incurring the inevitable resistance, from some, as we see those border-inspection posts erected and traders being prepared for the implementation of the protocol. The idea that we are abandoning it is simply for the birds.
The Bill is also not a threat to devolution. I must turn to my old friend, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). He gave the longest speech in this debate and, like all his speeches, it was true to the John Lewis guarantee: no argument was knowingly undersold. In his gusto to make his arguments and the lyricism with which he made his case, I fear he obscured one or two details. He talked about the threat to water in Scotland, but the Bill and the schedule are clear that water is excluded from the provisions of the Bill. He talked about the threat to the NHS, a UK institution, but if we look at the schedule to the Bill, we see that healthcare services are excluded.
I am perfectly happy to spend more time with the right hon. Gentleman, because it is always a pleasure to take him through the Bill, to calm him and to point out the ways in which it not only strengthens the Union but respects devolution. And devolution is what, indeed, it does respect—
Alison Thewliss (Glasgow Central) (SNP)
Will the right hon. Gentleman give way?
Michael Gove
No.
The other thing about the right hon. Member for Ross, Skye and Lochaber is that sometimes in his speeches he employs the Humpty Dumpty principle: a word means what he wants it to mean, whatever else the rest of us understand by it. He talked about defending devolution; well, what is devolution? It is two Governments working together—the Scottish Government and the UK Government; the Welsh Government and the UK Government. He says he wants to protect devolution, but how does he want to do that? By going for independence, smashing the devolution settlement, separating this family of nations and undermining the prosperity of the people who he and I love in Scotland. Even though he spoke at length, and lyrically, when he was challenged he could not give one single example of any power that the Scottish Government or the Scottish Parliament currently has that is not being retained. Indeed, powers are increasing.
Let me turn briefly to the speech given by the shadow Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for Doncaster North (Edward Miliband). I think we can all agree that it was an excellent speech. He raised a number of legitimate concerns and fair questions, which I hope to address. He talked about the importance of common frameworks, and we agree on that, which is why progress has been made on them. Indeed, one of those common frameworks specifically covers food standards and provides reassurance that the fears that he and others have about a race to the bottom will not be realised. It is also the case, as is acknowledged widely, including in his speech, that common frameworks are important but they are not enough. Progress on common frameworks is a good thing, but we also need legislation to underpin the internal market overall. I also noted his passionate commitment in his speech to getting Brexit done, and I am pleased to welcome him to the ranks of born-again Brexiteers.
One thing the right hon. Gentleman will know—indeed, the Chairman of the Select Committee on the future relationship with the European Union, the right hon. Member for Leeds Central (Hilary Benn), repeated the point—is that the EU has not always been the constructive partner that all of us might have hoped. In excellent speeches, my hon. Friend the Member for South Thanet (Craig Mackinlay), my right hon. Friend the Member for Basingstoke (Mrs Miller) and my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) pointed out that the EU has not always done what we might have hoped it would do. The EU is bound by a system of what are called autonomous processes to ensure that we have equivalence on data and financial services, and that we are listed as a third country for the export of food and other products of animal origin. There has been no progress on any of those. We were told that we would get a Canada deal, but that is not on the table. The Prime Minister has reminded us that the threat on third country listing could mean an embargo on the transport of goods from Great Britain to Northern Ireland. The EU has also insisted on an interpretation of an end to the common fisheries policy that would mean that they could carry on fishing in our waters just as before, even though we had pledged to take back control. I am not a diplomat but let me try to put it in diplomatic language: some people might think that the EU had not been negotiating absolutely 100% in line with what all of us might have hoped. Given that, it is important that we redouble our efforts to seek agreement but that we are also prepared for any eventuality.
Importantly, it is not just me who acknowledges that the EU might not have been doing everything it should to secure agreement. As I say, the Chairman of the Select Committee made the point that there is no need for exit declarations for goods coming from Northern Ireland to Great Britain. He made the point that it is a shame that we have not got third country listing, and I agree with him—and I agree with the hon. Member for Leeds West that the EU must up its game.
It is also crucial that we recognise what this Bill seeks to do in order to ensure that we can get an appropriate resolution, and here I turn to the remarks made by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill). He is an old friend of mine and he is on to something here. He made the point that we need to show that we are operating in a constructive spirit, and I agree. That is why we want to secure agreement through the Joint Committee, which is why we met last week. It is why Maroš Šefčovič and I have been working, setting aside our differences, in order to achieve agreement. It is also why our first recourse will be to the arbitral panel if we do have problems. We recognise, as my hon. Friend pointed out, that if we cannot secure agreement, under section 16 there are steps we can take in extremis, as a safety net, to ensure that our interests are protected. It is the case in international law that we can take those steps, if required, in order to achieve the goals we wish.
Tom Tugendhat (Tonbridge and Malling) (Con)
My right hon. Friend is making some clear points. Will he make it absolutely clear that any breach of the withdrawal agreement will come only at the very end of a long process, at which point the only resolution in respect of keeping food flowing between GB and Northern Ireland is this Bill?
Michael Gove
My hon. Friend, the Chairman of the Foreign Affairs Committee, makes an important point. It is the case that patient negotiation is the way forward. [Interruption.] No, I entirely agree with him. This time last year, we and the EU were at loggerheads. There were obstacles and roadblocks, but we negotiated with rigour, with determination and not without some bumps in the road in order to achieve progress. If we apply the same determination now as we did then, I believe that we can make progress in these negotiations, but just as last year, when we were ready to support our Prime Minister in showing steely resolve to get the best possible deal and to make sure that our negotiators had everything that they needed, so now we must back our Prime Minister and our negotiators and recognise that this safety net is a critical part of making sure that we can achieve everything that we wish. We should support the Bill this evening.
Question put, That the amendment be made.
TABLE | ||
|---|---|---|
Day | Proceedings | Time for conclusion of proceedings |
First day | Clauses 28 to 39; new Clauses and new Schedules relating to Part 4; other new Clauses and new Schedules relating generally to the internal market for goods and services in the United Kingdom | Six hours from the commencement of the proceedings on the Bill on the first day |
Second day | Clauses 46 and 47; new Clauses and new Schedules relating to Part 6 | Six hours from the commencement of the proceedings on the Bill on the second day |
Third day | Clause 11; Clauses 40 to 45; Clause 50; new Clauses and new Schedules relating to Part 5 | Six hours from the commencement of the proceedings on the Bill on the third day |
Fourth day | Clauses 1 to 10; Schedule 1; Clauses 12 to 16; Schedule 2; Clauses 17 to 27; new Clauses and new Schedules relating to Parts 1 to 3; Clauses 48 and 49; Clauses 51 to 54; remaining new Clauses; remaining new Schedules; remaining proceedings in Committee on the Bill | Six hours from the commencement of the proceedings on the Bill on the fourth day |
United Kingdom Internal Market Bill (Programme) (No. 2)
Tuesday 29th September 2020
(4 years, 1 month ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)
Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that I have not selected the amendment to the programme motion.
Ordered,
That the Order of 14 September 2020 (United Kingdom Internal Market Bill (Programme)) be varied as follows:
(1) Paragraphs (4) to (6) of the Order shall be omitted.
(2) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order.—(Paul Scully.)
United Kingdom Internal Market Bill
Tuesday 29th September 2020
(4 years, 1 month ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)
18:05 - The House divided: - Ayes: 256 / Noes: 350 - Question accordingly negatived.
00:00 - The House divided: - Ayes: 258 / Noes: 351 - Question accordingly negatived.
18:35 - The House divided: - Ayes: 264 / Noes: 342 - Question accordingly negatived.
18:51 - The House divided: - Ayes: 256 / Noes: 354 - Question accordingly negatived.
20:05 - The House divided: - Ayes: 256 / Noes: 348 - Question accordingly negatived.
20:21 - The House divided: - Ayes: 340 / Noes: 256 - Question accordingly agreed to.
Mr Deputy Speaker (Mr Nigel Evans)
I have not selected the recommittal motion in the name of Ian Blackford.
New Clause 4
Objectives and general functions
‘(1) In carrying out its functions under this Part the CMA must have regard to the objective in subsection (2).
(2) The objective is to support, through the application of economic and other technical expertise, the effective operation of the internal market in the United Kingdom (with particular reference to the purposes of Parts 1, 2 and 3).
(3) The following do not apply in relation to the carrying out of the CMA’s functions under this Part—
(a) section 25(3) of the Enterprise and Regulatory Reform Act 2013 (duty to seek to promote competition), and
(b) sections 6(1)(b) (function of giving information or advice to the public) and 7 (provision of information and advice to Ministers etc) of the Enterprise Act 2002.
(4) The CMA may give information or advice to the Secretary of State on matters relating to any of its functions under this Part.’—(Paul Scully.)
This new clause makes provision about the objective to which the Competition and Markets Authority must have regard in carrying out its functions under Part 4, and the application of certain general functions of the CMA in relation to its functions under Part 4. The clause would be inserted after Clause 28.
Brought up, and read the First time.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker
With this it will be convenient to consider the following:
Government new clause 5—Office for the Internal Market panel and task groups.
New clause 1—Withdrawal Agreement and rule of law duty—
‘(1) An appropriate authority exercising any function to which this Part (Northern Ireland Protocol) applies must—
(a) respect the rule of law;
(b) allow for the possibility of judicial review of an enactment, decision, act or omission by the appropriate authority;
(c) use the provisions of Article 16 of the Protocol to protect the interests of the United Kingdom.
(2) An appropriate authority exercising any function to which this Part applies must comply with the obligations of the United Kingdom under international law.
(3) An appropriate authority exercising any function to which this Part applies must comply with—
(a) the requirement under Article 5 (Good faith) of the Withdrawal Agreement for the EU and the United Kingdom to assist each other in full mutual respect and good faith to carry out the tasks which flow from the Agreement;
(b) the requirement under Article 167 (Consultations and communications within the Joint Committee) for the EU and the United Kingdom to endeavour to resolve any dispute regarding the interpretation and application of the provisions of the Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution;
(c) the requirement under Article 184 (Negotiations on the future relationship) of the Withdrawal Agreement for the EU and the United Kingdom to use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration of 17 October 2019 and to conduct the relevant procedures for the ratification or conclusion of those agreements, with a view to ensuring that those agreements apply, to the extent possible, as from the end of the transition period;
(d) the requirements of the Good Friday or Belfast Agreement of 10 April 1998 between the Government of the United Kingdom and the Government of Ireland and the other participants in the multi-party negotiations, which is annexed to the British-Irish Agreement of the same date.
(4) An appropriate authority exercising any function to which this Part applies must comply with the Human Rights Act 1998.’
This new clause is intended to replace Clauses 42, 43 and 45 of the Bill, to require Ministers to respect the rule of law and uphold the independence of the courts and the practice of judicial review, and to require UK Ministers to implement the Withdrawal Agreement.
New clause 2—Internal market common framework—
‘(1) The Secretary of State must seek to reach agreement with the Scottish Government, the Welsh Government and the Northern Ireland Executive on a common framework on the United Kingdom internal market.
(2) A common framework under subsection (1) may cover—
(a) the functioning of the United Kingdom internal market;
(b) the effectiveness of market access principles; and
(c) drawing up a shared prosperity fund to balance economic development across the whole of the United Kingdom.
(3) The Secretary of State must take into account the common framework on the United Kingdom internal market in exercising any powers under Part 6 (Financial assistance powers) of this Act.’
This new clause would put the Common Framework process on a statutory footing.
New clause 3—Duty to consult, monitor, report and review—
‘(1) Within three months of the date on which this Act is passed, the Secretary of State must lay a report before each House of Parliament on the dates on which each section—
(a) was commenced; or
(b) is planned to commence.
(2) The Secretary of State must arrange for a review to be carried out within three months of the date on which this Act is passed, and thereafter at least once in each calendar year on the operation of this Act.
(3) The Secretary of State must invite the Scottish Government, the Welsh Government and the Northern Ireland Executive to contribute to the reviews in subsection (1).
(4) The reviews under subsection (1) must make an assessment of—
(a) the functioning of the United Kingdom internal market;
(b) the effectiveness of market access principles;
(c) progress towards agreeing common frameworks with the devolved administrations;
(d) progress towards drawing up a shared prosperity fund framework; and
(e) progress in resolving issues through the Joint Committee machinery in the Withdrawal Agreement.
(5) The Prime Minister must arrange for a report of any review under this section to be laid before each House of Parliament as soon as practicable after its completion.’
This new clause would ensure Ministers have a duty to report back to Parliament on the progress of the functioning of the internal market; market access; progress towards agreeing common frameworks; progress towards drawing up a shared prosperity fund; and progress in resolving issues through the Joint Committee machinery in the Withdrawal Agreement.
New clause 6—Economic development: climate and nature emergency impact statement—
‘(1) Any financial assistance provided under Part 6 of this Act for the purpose of economic development must take into account the overarching need for a sustainable strategy aimed at long- term national well-being.
(2) Every proposal for financial assistance under this Act must be accompanied by a climate and nature emergency impact statement.
(3) Responsibility for the production of the climate and nature emergency impact statement required in subsection (2) resides with the applicant for financial assistance.
(4) Responsiblity for assessment of the climate and nature emergency impact statement required in subsection (2) resides with Ministers, who are required to publish this assessment for any successful proposal.
(5) The climate and nature emergency impact statement produced should take account of any carbon budget, climate, nature and environmental goals approved by the relevant Parliament.
(6) In subsection (5), the “relevant Parliament” means—
(a) where the proposed financial assistance relates to a person in England, the House of Commons and the House of Lords;
(b) where the proposed financial assistance relates to a person in Scotland, the Scottish Parliament;
(c) where the proposed financial assistance relates to a person in Wales, Senedd Cymru;
(d) where the proposed financial assistance relates to a person in Northern Ireland, the Northern Ireland Assembly.’
The intention of this new clause is to ensure that those seeking financial assistance for economic development, etc under this Act are obliged to undertake a climate and nature emergency impact statement to ensure public money is only granted to development consistent with climate, nature and environmental goals and targets.
New clause 7—Northern Ireland’s place in the UK internal market—
‘(1) As part of its obligation under Article 6.2 of the Protocol on Ireland/Northern Ireland to use its best endeavours to facilitate trade between Northern Ireland and other parts of the UK, the UK Government must—
(a) publish an assessment at least every 12 months of any impact on businesses and consumers arising from the Protocol on trade between Great Britain and Northern Ireland and vice versa; and
(b) develop mitigations to safeguard the place of Northern Ireland businesses and consumers in the UK internal market.
(2) The assessment published under paragraph (1)(a) must include assessment of the impact of any actual or proposed regulatory or trade policy divergence on Northern Ireland’s place in the UK Internal Market.
(3) Any official or administrative costs arising from the duties under subsections (1) and (2) may not be recouped from the private sector.’
New clause 8—Interpretation of the Northern Ireland Protocol in accordance with International Law—
‘(1) In the event that the European Union fails to act in accordance with the principles of public international law in its implementation of the Northern Ireland Protocol, by
(a) failing to undertake acts that are required by the provisions of the Northern Ireland Protocol;
(b) committing acts that are not in accordance with the provisions of the Northern Ireland Protocol;
(c) failing to undertake acts that are necessary for the effective implementation of the Northern Ireland Protocol;
(d) asserting positions in the Joint Committee that are not in accord with the provisions of the Northern Ireland Protocol; or
(e) refusing to discuss in the Joint Committee proposals on implementation of the Northern Ireland Protocol tabled by the United Kingdom;
(2) For the purposes of subsection (1), the principles of public international law that may be invoked include—
(a) the provisions of the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations 1986, including, in particular,
(i) the need to act in “good faith” and
(ii) the need to avoid results that are “manifestly absurd or unreasonable”;
(b) established international practices, having the status of customary international law; and
(c) the commitments made in the preambular paragraphs of the Northern Ireland Protocol.
(4) A unilateral interpretative declaration issued under subsection (1) may not be submitted unless—
(a) a Minister of the Crown has laid before each House of Parliament
(i) a copy of the proposed declaration,
(ii) a statement on the nature of the dispute with the European Union,
(iii) a statement of the intended effect of the proposed declaration; and
(b) the declaration has been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown; and
(c) a motion for the House of Lords to take note of the declaration has been tabled in the House of Lords by a Minister of the Crown and—
(i) the House of Lords has debated the motion, or
(ii) the House of Lords has not concluded a debate on the motion before the end of the period of five Lords sitting days beginning with the first Lords sitting day after the day on which the House of Commons passes the resolution mentioned in paragraph (b).
(5) When a response to the submission of any unilateral interpretative declaration is received from the European Union, a Minister of the Crown shall lay before each House of Parliament the response received from the European Union, and—
(a) in the case of the approval of the declaration by the European Union, the Minister shall issue a written statement confirming that the declaration has obtained the status of an authentic interpretation of the Northern Ireland Protocol;
(b) in the case of opposition to the declaration by the European Union, the Minister shall issue a written statement, assessing any alternative interpretation formulated by the European Union and indicating the government’s intended response; or
(c) in the case of the recharacterisation of the declaration by which the European Union purports to treat the declaration as an illegal reservation, the Minister shall issue a written statement of what action it intends to take to resolve the dispute.
(6) In this section—
“approval”, “opposition” or “recharacterization” of a declaration shall have the meaning given in Guideline 2.9 of the Guide to Practice on Reservations to Treaties, contained in the report of the International Law Commission on its Sixty-Third Session in 2011;
“Joint Committee” means the Joint Committee established under Article 164 of the EU Withdrawal Agreement;
“Lords sitting day” means a day on which the House of Lords is sitting (and a day is only a day on which the House of Lords is sitting if the House begins to sit on that day);
“submit” means to make a submission to the depositary of the EU Withdrawal Agreement, as specified in Article 183 of the EU Withdrawal Agreement; and
“unilateral interpretative declaration” means an interpretative declaration as defined by Guideline 1.2 of the Guide to Practice on Reservations to Treaties, contained in the report of the International Law Commission on its Sixty-Third Session in 2011.’
Government amendments 31 and 32, 19, 33 to 38, 20 to 26, and 1 to 11.
Amendment 16, page 37, line 10, leave out Clause 45.
Government amendments 12, 13, 15 and 14.
Amendment 18, page 38, line 36, leave out Clause 46.
Amendment 29, page 39, line 27, leave out Clause 47.
Government new schedule 1—Constitution etc of Office for the Internal Market panel and task groups.
Amendment 17, in schedule 1, page 48, line 14, at end insert—
‘(8A) In the case that there is one REACH authorisation process for Great Britain, an authorisation that is lawful for the Northern Ireland market will be valid for the Great Britain market.’
The intention of this amendment is to apply the non-discrimination principle to the REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regime.
Government amendments 27 and 28.
Amendment 30, in title, line 7, leave out from “aid” to “to” in line 10.
Amendments 18 and 29 would remove both clauses in Part 6 (Financial assistance powers). This consequential Amendment removes from the long Title “to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.
Paul Scully
It is a pleasure to serve under your chairmanship, Mr Deputy Speaker. I want to begin by thanking all Members for their engagement throughout the passage of the Bill and the Public Bill Office for its excellent work in supporting Members and officials.
Before I turn to the specific amendments that we are debating, I want to briefly remind Members why it is crucial that we pass this Bill. Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as exports to the rest of the EU. About 50% of Northern Ireland’s sales are to Great Britain. In some local authorities in Wales, over a quarter of workers commute across the border. When we leave the transition period at the end of this year, laws made in Europe can be made in the UK.
Pete Wishart (Perth and North Perthshire) (SNP)
The Minister will have noticed yesterday that the Scottish Government declared their intention not to give this Bill a legislative consent motion. Does he intend to ignore that or dismiss it, and does he hold Scottish democracy in contempt?
Paul Scully
I very much do not hold the devolution settlement in contempt. It is right that we work together. I believe that the UK is stronger together. It is important that we give Scottish businesses—just as much as Welsh, Northern Irish and English businesses—the certainty that they want to be able to trade, so we will continue to engage with the Scottish Parliament and officials and politicians up there to achieve legislative consent.
Hundreds of powers will flow from the EU to the devolved nations and the UK Government in an unprecedented transfer. As we recover from covid, we must ensure that our economy is stronger than ever. That is why the Government have introduced this Bill and why it is essential that we pass it. We want to guarantee the continued functioning of our internal market, to ensure that trade remains unhindered in the UK.
I will begin by speaking to the amendments tabled by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, starting with those that strengthen the Bill’s measures relating to the governance and functioning of the Office for the Internal Market. The office will sit within the Competition and Markets Authority to monitor and report on the internal market on an equal basis for all Administrations. The Competition and Markets Authority has a strong reputation for independence and impartiality. The Government have strived to preserve that reputation in setting out the functions to be carried out by the Office for the Internal Market. By providing non-binding, expert reporting and technical monitoring on regulations and proposals, it will provide robust evidence on the actual or potential impact of regulatory measures.
New clause 4 gives the Competition and Markets Authority the objective of supporting the effective operation of the UK internal market through the provision of economic and technical advice and expertise. That will exist in parallel to the existing objective of the Competition and Markets Authority to promote competition for the benefit of consumers.
New clause 5 enables Competition and Markets Authority functions under part 4 of the Bill to be carried out by an Office for the Internal Market task group and introduces a new schedule setting out the Government’s arrangements for the Office for the Internal Market panel and task groups. That mirrors the existing arrangements for the establishment of panels and groups that it has in place.
New schedule 1 establishes a panel of experts to lead the work of the Office for the Internal Market. The Secretary of State will appoint a chair and further members, following consultation with Ministers from all three devolved Administrations.
Sir William Cash (Stone) (Con)
Will the Minister confirm that the arrangements under the Bill regarding the CMA guarantee that we will not have any jurisdiction by the European Union or the European Court over the CMA and, furthermore, that one of the cardinal principles on which the European Union and the Commission are taking their stand is that they insist that we should not benefit competitively from leaving the European Union and we should not be able to compete with them on reasonable terms?
Paul Scully
I am grateful for that typically wise intervention. I am happy to provide that confirmation.
Amendment 1 provides absolute privilege against defamation for the Competition and Markets Authority when carrying out its functions under part 4. That will ensure that it can report and provide advice independently without needing to expend resources on preparing to defend litigation, and that businesses with deep pockets cannot sue or threaten to sue the CMA to obstruct it from carrying out its functions.
I shall set out briefly for the House the amendments that will improve the Bill’s drafting. Through amendments 31 to 34, we are taking the opportunity to put it beyond any possible doubt that alcohol minimum unit pricing-type regulation and any other sales requirements are not in the scope of the mutual recognition principle, unless they amount in practice to a total ban on a good being sold. That came up in Committee. We want to make sure that rather than politicking, we can return to a business continuity approach.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Minister just told us about an amendment to take into account concerns about the minimum unit pricing aspect, but UK Government Ministers have been telling us for weeks that the Bill does not affect that. Clearly, that was a concern until now and we were right. Is it not also true that the non-discriminatory aspects of the amendment make it completely useless anyway?
Paul Scully
I thank the hon. Gentleman for his intervention, but the answer is no. To ensure we take that political football totally off the table and return the Bill to what is was always designed to be about—giving businesses in Scotland and all parts of the UK the business continuity and certainty they need without such distractions—the technical amendment dots the i’s and crosses the t’s.
Jim Shannon (Strangford) (DUP)
For Northern Ireland to be a successful part of the United Kingdom, may I gently suggest that the Minister should work with us on new clause 7, which my party has tabled? It is an imperative tool to ensure that Northern Ireland is not left behind in Brexit in terms of being an integrated member of the United Kingdom of Great Britain and Northern Ireland—in other words, that we are treated equally.
Paul Scully
I will turn to new clause 7 in a second, but clearly we will treat Northern Ireland equally.
Amendments 2 to 11, 24, 27, 28 and 35 to 38 are technical changes to remove sources of potential confusion in the drafting. Amendments 19 and 21 provide fuller clarification that a wide range of agricultural processes are considered to be in scope when we refer to the production of goods. Amendment 20 ensures that the UK Government and devolved Administrations can continue to respond to specific biosecurity threats arising from the movement of animals and high-risk plants and that they are excluded from the mutual recognition and non-discrimination principles of the Bill.
Amendments 22 and 23 clarify the meaning of clause 16 that a change to the conditions attached to an authorisation requirement would bring it in scope of part 2 of the Bill. Amendment 26 ensures that the exemption in clause 23 covers the replication of non-statutory rules as well as a re-enactment of legislation. Amendments 12 to 15 ensure that the higher courts in England and Wales, Scotland and Northern Ireland may make declarations of incompatibility in respect of the regulations under clauses 42 and 43, but may not quash them. That will ensure that, in the unlikely event of a violation of convention rights, there is a remedy available through the courts.
Joanna Cherry (Edinburgh South West) (SNP)
Notwithstanding the terms of amendments 12 and 13, can the Minister tell us whether the Secretary of State continues to be confident that the statement he has made in terms of section 19(1)(a) of the Human Rights Act 1998 is accurate?
Paul Scully
We have been quite clear in the approach that we have taken in terms of the human rights impact, so I am confident that the Secretary of State has talked about that.
Sir Robert Neill (Bromley and Chislehurst) (Con)
May I press the Minister a little further in relation to amendment 13 and so on? I accept “preserving a remedy”, but it is a remedy by way of a declaration of incompatibility, as opposed to removing any offensive regulation in domestic law. It is a much harder burden or obstacle for a litigant—for every person—to go through to get a declaration of incompatibility. What is the compelling reason for adopting this unusual approach?
Paul Scully
This achieves the right balance in terms of a remedy, in the unlikely event of a breach of convention rights, for the reason that I have covered in terms of our impact assessment on human rights. I hope that right hon. and hon. Members will feel able to support these important but mainly technical amendments.
I will move on to the Opposition amendments, because it is important that we give them due care and attention, but I first want to remind hon. Members of the core purpose of the Bill. The Bill puts into law a market access commitment by enshrining the principles of mutual recognition and non-discrimination in the law. That means that goods and services from one part of the UK will be recognised across the country, and it will ensure that there is equal opportunity for all UK-based companies trading in the UK.
New clause 2 would place an obligation on UK Ministers to seek to agree a framework covering the UK internal market, which would need to be taken into account in the exercise of financial assistance payments. The new clause would fundamentally alter the basis on which common frameworks are developed and would not be in line with the design of common frameworks that was agreed by the UK Government and devolved Administrations. The principles agreed made it clear that the common frameworks are based on consensus rather than legislation, as we discussed in Committee. The principles also set out that the common frameworks are limited in their scoped powers returning from the EU, which have a devolved intercept.
An overarching framework would not materially contribute to effective joint working between the United Kingdom Government and devolved Administrations. Through the common frameworks programme, we are agreeing mechanisms for effective intergovernmental working. Those will cover many areas engaged by provisions in the Bill for the internal market.
We are also developing proposals for an enhanced intergovernmental system, which will support work to maintain policy coherence across the United Kingdom. This collaborative model is likely to be more effective and provide greater clarity than the process set out in the new clause, which does not clearly define when the duty in subsection (1) and the due regard duty in subsection (3) would be met.
Common frameworks are designed to allow for collaborative and flexible working between the United Kingdom Government and the devolved Administrations. Creating a framework such as this, which is underpinned by obligations in law, could undermine that effective joint work.
New clause 3 seeks to require the Secretary of State to provide Parliament with regular reviews on the functioning of the internal market, the effectiveness of provisions in the United Kingdom Internal Market Act and progress towards delivering provisions not in the Act, such as common frameworks. While I commend the intention behind the amendment, the review provisions it seeks to deliver are already provided for. They exist either in the Bill, through the Office for the Internal Market, or in previous legislation.
As part 4 of the Bill sets out, the Office for the Internal Market will have a number of reporting and monitoring responsibilities. Clause 29 sets out how the office will need to compile yearly “health of the market” reports on the functioning of the internal market, and five-yearly system reviews on the operation of parts 1 to 3. Those reports will be laid before the UK Parliament and the devolved legislatures for consideration, ensuring parliamentary transparency and accountability. I consider, therefore, that the new clause risks being highly duplicative.
It is essential that both those reports are compiled at arm’s length from both the UK Government and the devolved Administrations. That will enable the office to deliver a credible, impartial and expert analysis that delivers difficult messages to the Administrations, if necessary. However, when conducting those reports, the Office for the Internal Market will be able to consider the views of all relevant interested parties, including the devolved Administrations, in order to present evidence on how well the internal market itself and the Government’s proposals are serving stakeholders across the UK. Moreover, regarding the specific areas listed in the amendment, the Government already publish quarterly reports entitled, “The European Union (Withdrawal) Act and Common Frameworks”, which set out joint progress on common frameworks.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Minister is putting a brave face on things, as always. It is all very well talking about reviews and reports, but does he accept that, for an internal market to function, there actually needs to be communication between the Prime Minister and the leaders of the devolved Administrations? Why has the Prime Minister failed to communicate regularly with the First Minister of Wales, instead speaking to him only once every few months? Especially at a time of national crisis, why has the Prime Minister been so poor in his communication?
Paul Scully
The Prime Minister, the Secretary of State and Ministers work with all the devolved Administrations. My colleague in the Business Department has meetings—especially at this particular time—with businesses across the devolved Administrations, including in Wales.
As I say, for this particular area, we already publish the report I referred to. However, we consider it right that any reporting on the Joint Committee machinery or the UK shared prosperity fund should be undertaken separately from that on internal market provisions. For that reason, I am not able to accept the amendment.
John Redwood (Wokingham) (Con)
Will the Minister confirm that Brexit is a huge opportunity to increase the powers both of this House—over our own internal market and economic prosperity—and of the devolved Administrations, which will gain power? Should everybody not cheer up and welcome the fact that both the devolved Administrations and the Union Parliament can take back control?
Paul Scully
I thank my right hon. Friend for the opportunity to absolutely agree with him that this gives us a great opportunity to come together as the United Kingdom, to give that sense of certainty to businesses and, just as importantly, to grab hold of the opportunities provided by leaving the European Union.
Before I address the amendments to the Bill’s Northern Ireland protocol measures, I remind hon. Members of the points made by the Minister of State, Northern Ireland Office, my hon. Friend the Member for Worcester (Mr Walker), in Committee last week. He made it clear that
“the Northern Ireland protocol…is designed to recognise and protect the needs and unique circumstances of Northern Ireland. Central to that is ensuring that the Belfast/Good Friday agreement, its successor agreements, and the gains of the peace process are protected.”
He stressed that it was crucial to
“ensure that the delicate balance between all communities in Northern Ireland is maintained and that the UK Government pursue policies for sustained growth and stability in Northern Ireland…Through this Bill, we are acting to uphold those priorities and deliver the commitments we made in our election manifesto that we would provide unfettered access between Northern Ireland and Great Britain and ‘maintain and strengthen the integrity and smooth operation of the internal market’.”—[Official Report, 21 September 2020; Vol. 680, c. 647.]
I will now speak to new clause 1, which seeks to replace clauses 42, 43 and 45, as well as amendment 16, which intends to remove clause 45. The Government have already been clear that these clauses are required to provide a safety net of powers in reserve, which Ministers may need to use to guarantee the integrity of our United Kingdom and to ensure that we are always able to deliver on our commitments to the people of Northern Ireland, in line with the three-strand approach of the Belfast agreement.
Stephen Farry (North Down) (Alliance)
The Minister talks about giving a safety net to the people of Northern Ireland. Does he recognise that the majority of people in Northern Ireland regard the Bill as taking away their safety net by undermining the Good Friday agreement? That is the view in Northern Ireland, and it is important that the Government listen to it, not act contrary to it.
Paul Scully
I have spoken to businesses in Northern Ireland, and a number of them are very supportive of this. I suggest that anybody in Northern Ireland or elsewhere in the UK who believes that the Bill actually takes away from the Belfast agreement is listening to the wilful misrepresentation of the Bill by certain people politicking. Actually, the Belfast agreement has a three-strand approach, and the Bill will be a safety net only in the event that we cannot reach agreement with the EU through the Joint Committee.
Several hon. Members rose—
Paul Scully
I will make progress, because these are important points. New clause 1 and amendment 18 would remove that safety net, which we just cannot agree with. These clauses were supported by clear majorities of the whole House at Committee stage.
I can reassure hon. Members that many of the proposals in new clause 1 are already addressed in the Bill. First, the Government have been clear that regulations made under clauses 42 or 43 would be subject to judicial review on general public law grounds, while ensuring that any claims must be brought within three months. This ensures any challenge to the regulations will be subject to timely resolution before the courts. This is essential to ensure that Northern Ireland businesses and investors in Northern Ireland have the certainty that they need. Amendments to this effect have already been agreed to in Committee, and I thank my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), who helped make that happen.
Secondly, on article 16 of the protocol, which new clause 1 mentions, in the event that regulations were made under clauses 42 or 43, we have been clear that we would activate appropriate dispute settlement mechanisms to find a solution in parallel to domestic legislation. Thirdly, the UK Government will continue, as we have always done, to negotiate with our friends and partners in the EU in good faith.
For the avoidance of any doubt, let me confirm again that we are of course committed to implementing the withdrawal agreement and the Northern Ireland protocol, and have already taken many practical steps to do this. However, as a responsible Government, we cannot allow the gains of the peace process or the economic integrity of the UK’s internal market—
John Redwood
Would the Minister confirm that the Government are not intending to break the law—and I do not think anything they have suggested is breaking the law—and will he confirm that those who say otherwise are deliberately undermining our negotiations with the EU?
Paul Scully
I thank my right hon. Friend for that. Indeed, our intention, as I say, is to work on implementing the withdrawal agreement and the Northern Ireland protocol. I have talked about the fact that we have taken many practical steps to do this. We continue to negotiate in good faith.
Several hon. Members rose—
Paul Scully
I am going to make progress because I still have a number of amendments to cover.
We cannot accept any amendments that will undermine provisions in the Bill by rendering them no kind of safety net at all. New clause 1 does that, I am afraid.
I now turn to new clause 8. I appreciate entirely the spirit in which this has been put forward. While all of us hoped that the EU would negotiate and discharge its obligations under the withdrawal agreement and protocol in good faith, this amendment seeks to frame in statute a number of steps that Ministers could take under international law were that not to happen. However, this amendment is not necessary, as it would already be open to Ministers to take the steps my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) proposes.
As I have mentioned, the Government have been working with the European Union to reach agreement through the Joint Committee process, and through this Bill we are preparing for a scenario where that does not happen. On 17 September, the Government issued a statement setting out the circumstances in which we would use the powers provided for under clauses 42 and 43: the Government would
“ask Parliament to support the use of the provisions in Clauses 42, 43 and 45 of the UKIM Bill, and any similar subsequent provisions, only in the case of, in our view, the EU being engaged in a material breach of its duties of good faith or other obligations, and thereby undermining the fundamental purpose of the Northern Ireland Protocol.”
Mr Shailesh Vara (North West Cambridgeshire) (Con)
Does the Minister agree that those who object to the clauses he has just mentioned should bear in mind the language that has been used by the EU in recent weeks in terms of what it interprets the Northern Ireland protocol to mean? It has denied the existence, as it is written on the face of the Northern Ireland protocol, of matters such as the internal market, unfettered trade and so on. So these provisions are necessary as a safety net—nothing more than a safety net. I say to the critics, “Just look at the language of the EU” and if they look at the language of the EU, they will see that these measures are perfectly reasonable.
Paul Scully
I am grateful for that, and my hon. Friend is absolutely right. These are reasonable steps to act as a safety net.
In the statement I referred to, the Government also make it clear that
“in parallel with the use of these provisions it would always activate appropriate formal dispute settlement mechanisms with the aim of finding a solution through this route.”
Several hon. Members rose—
Paul Scully
I will happily give way to the mover of that amendment. [Interruption.]
Sir Edward Leigh
Actually, to be fair, the Minister has just been dealing with new clause 8, which I have moved. I am very grateful for what he has said. He seemed to suggest that the new clause was not in itself wrong, but was not necessary. But will he accept that, certainly when this Bill goes to the House of Lords, it might be helpful for the Government to produce an idea like this as another arrow in the armoury to reassure those who want to use international law in the right way, if the EU acts unreasonably? The advantage of a unilateral interpretive declaration under the Vienna convention, is that we can do it in this way, so I am grateful to the Minister.
Paul Scully
I thank my right hon. Friend. It is right that he gets to speak as it is about his amendment. He is trying to be helpful in this regard, and I know that Ministers in the other place will take heed of his comments as they engage with colleagues there.
Gavin Robinson
I am grateful to the Minister for allowing me to come in at this point. There is no need to consider what steps would be taken in that scenario, given this new clause. It is open to the Government to accept the new clause and thus give clarity and comfort to businesses in Northern Ireland who do not know, but suspect, that there may be divergence, difference and associated costs. Nothing that he has said thus far would be injurious to his position or frustrate his hon. Friends in supporting the new clause this evening.
Paul Scully
I heard cries from the Opposition Benches, but I think it is fair that I give way to Members who have tabled amendments.
We will obviously consider how we reduce the burden further, but we do not think it necessary at this stage to make such reporting a statutory requirement or, notwithstanding what the hon. Gentleman said, to frame it in the very broad terms set out in the new clause.
Amendment 17 deals within the mutual recognition of authorisations granted under the EU’s REACH—registration, evaluation, authorisation and restriction of chemicals—regulation. It would automatically allow substances authorised to be placed on the market in Northern Ireland under REACH to be placed on the market in Great Britain. The acceptance of mutual recognition that we have introduced for chemicals in schedule 1 is there to allow the relevant authorities to respond to local factors. Authorisations granted by the EU after the end of the transition period will not take into consideration local conditions such as lower river flows or exposure levels where those chemicals are used in Great Britain. I would like to emphasise that authorisations relate to the use of substances of very high concern, such as chemicals that can cause cancer. It is important that the Government and devolved Administrations can take local factors into account in order to prevent avoidable harm to human health or the environment from the significant risks posed by such chemicals.
Gavin Robinson
That response is in precisely the same terms as the one we received last week in Committee, but we are not touching on, or interested in, what the local considerations may be. The fact is that this Bill, even though we are talking about non-discrimination and the implications that there could be for business, envisages businesses having to adhere to and satisfy two separate regulatory regimes. We cannot square the circle between discrimination and non-discrimination in two separate and distinct legal regimes, whether there are local factors or not; we should have to adhere to only one. From a business perspective and an animal welfare perspective, it would be useful to have clarity. We can have one or the other, but definitely not both.
Paul Scully
I understand the hon. Gentleman’s concerns, and obviously we are moving towards that one regime, when we can, but we are also already committed to working on a common framework for chemicals and pesticides policy. That common framework is being co-created by the Government and the devolved Administrations, and will allow us to co-ordinate policy making on matters such as REACH authorisations. Through this framework, the UK Government and the devolved Administrations will be required to set out the strategic direction for the UK regulatory regime, ensuring that existing environmental, human health and workplace standards are maintained, or exceeded where possible.
Finally, I want to discuss the amendments that address the power to provide financial assistance. By creating a new power for the Government to provide financial assistance in the areas of infrastructure, economic development, culture and sports, and education and training activities, the Government will deliver on the commitments upon which they were elected: levelling up, delivering prosperity for all our citizens and strengthening the ties that bind our Union together.
Wera Hobhouse (Bath) (LD)
The Minister did not seem to mention amendment 16 when he went over that area. The amendment would remove clause 45, because legal experts fear that if the clause stands as it is, it will set up the Government against the courts. Will he explain why he thinks that is not the case?
Paul Scully
I think I have covered why those clauses should remain, although I did not specifically talk about the amendment.
I want to turn to amendments 18, 29 and 13, which together seek to remove the power to provide financial assistance. The Government are determined to deliver on those commitments, as I was saying. It is important that we strengthen the ties that bind our Union together, that we level up and that we deliver prosperity for all our citizens.
Paul Scully
I will not give way at the moment.
Part 6 of the Bill, which includes clauses 46 and 47, helps us to achieve that. This part of the Bill confers a power to ensure that the UK Government can invest UK taxpayers’ money nationwide on UK priorities. In terms of immediate relevance, it would allow the Government to support people and businesses across the country to recover from covid-19. The Government have a responsibility to people, businesses and communities across the whole of the UK.
Paul Scully
I want to make some progress.
This part of the Bill will allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales without taking away responsibilities from the devolved Administrations. New clause 6 will require by law all financial assistance given under part 6 to take into account the applicable climate, nature and environmental goals and targets. It will require that any financial assistance be accompanied by the Minister’s assessment of the project’s climate and nature emergency impact statement.
The Government are committed to ambitious climate targets, and next year we will lead the world in discussions at COP26. It is also crucial that the UK meets its domestic obligations under the Climate Change Act 2008 and its international obligations under the Paris agreement. The Climate Change Act requires Governments to set five-year carbon budgets towards meeting our target of net zero greenhouse gas emissions by 2050, covering the whole of the UK.
Paul Scully
Not for the moment.
Any net emissions increase from a particular policy or project is therefore managed within the Government’s overall strategy for meeting carbon budgets and the net zero target for 2050, as part of an economy-wide transition. Moreover, through the Environment Bill that was introduced into this House in January, the UK Government will have a power to set long-term, legally binding environmental targets across the breadth of the natural environment.
Caroline Lucas (Brighton, Pavilion) (Green)
That whole section of the Minister’s speech was a perfect example of why he should not be objecting to this amendment. It is a helpful amendment that would simply ensure that the financial contributions would actually support all those lovely climate and nature objectives he has just talked about. EU structural funds have a requirement to align with sustainability. His Government keep telling us how Brexit gives us the opportunity to go further than EU environmental policy, so in that case, why does he not accept the amendment? Why is he flunking his first test?
Paul Scully
I have had non-viability and flunking today—I am doing well! I will come to this in a moment. We are framing this in a number of pieces of legislation. I have talked about the Environment Bill, which was introduced in January. It will require the Government to set at least one target for each of four priority areas: air quality, biodiversity, water and waste reduction, and resource efficiency. It will also protect the environment from future damage by—
Paul Scully
The hon. Gentleman keeps wanting to intervene. At least he has had the decency to put his name down on the speakers list this time, so maybe he will have a chance to make his points when he speaks later.
The Environment Bill will protect the environment from future damage by embedding environmental principles at the heart of policy development across Government, with clear and pragmatic guidance on their implementation. The environmental principles will be used by Ministers and policy makers to ensure that policy and legal frameworks help minimise the ill effects of human activity on the environment. Given the Government’s strong commitment already to meeting their ambitious climate targets, and the frameworks established under the Climate Change Act and proposed under the Environment Bill, I do not think that it is necessary to put such a legislative requirement in this Bill.
Paul Scully
I know that a number of people want to speak. I hope that I have set out the rationale for the Government’s amendments to the Bill, and that hon. Members will support them. I trust that I have addressed in sufficient detail the Government’s objections to the amendments put forward by other hon. Members, and that they will therefore feel able to withdraw them. I look forward to engaging in the debate on this crucial Bill.
Lucy Powell (Manchester Central) (Lab/Co-op)
I rise to speak to the new clauses in my name and those of my hon. and right hon. Friends.
Here we are again—day five in the new House of Commons series, “The Internal Market Bill Debates”. While the coronavirus crisis rages on, here we are again, watching Ministers justify a Bill that breaches an international agreement signed only months ago and that threatens to break up our United Kingdom. It is a shame that we will not hear from the Prime Minister again today on Third Reading, as my right hon. Friend the Member for Doncaster North (Edward Miliband) was hoping for a sequel. He will have to make do with the Prime Minister’s understudy, the Business Secretary—what fun.
If Government Members have not been tuning in to the previous episodes, let me repeat our position on this Bill. We support a strong, successful internal market that underpins a vibrant, prosperous Union, with the UK Parliament as the ultimate arbiter of that market. We do not want a Brexit rerun; we want to get on to the next series—you know, the one where the Prime Minister delivers on his oven-ready deal and gets a good trade deal with the EU? That one. That is what the trailers promised us, anyway, and it is what the Prime Minister promised us, too.
Lucy Powell
That is what we are calling for: getting Brexit done. Get the oven-ready deal done. The hon. Gentleman says that is what this Bill is about. The Government have had months to prepare it, and here we are adding amendment to amendment at this late stage.
We have been clear that the Bill, as drafted, is a bad Bill that is not in the national interest. Today, we will once again work to try to improve it. It is a Bill that breaks the law and could break up the UK. We have heard some noble and notable interventions during the debates. We saw that many distinguished Government Members felt unable to support the Bill on Second Reading and on some of the key clauses in Committee. As usual, though, they were met with a tin ear from the Government.
Stephen Doughty
I wonder whether my hon. Friend is aware that this disquiet seems to stretch across Government. The Foreign, Commonwealth and Development Office this weekend launched a campaign called “This is democracy”. It features a picture of a judge standing in their robes, and it says:
“Independent judges free to uphold the law. This is democracy. #BeHeard”.
Does she think that perhaps the FCDO is trying to send a message to the rest of the Government and the Prime Minister?
Lucy Powell
My hon. Friend makes a good point. Like him, I had a wry laugh when I saw that advert.
Lucy Powell
I will just make some progress, if the hon. Gentleman does not mind.
Those noble contributions aside, we really have heard it all from those on the Government Benches during these debates. In trying to justify their latest cack-handed approach to public relations ahead of crunch trade talks with the EU, they have come up with a whole menu of reasons to support the Bill as drafted. Here is the highlights package. Do the Government break an international agreement—an agreement that the Prime Minister signed a few months ago? Do they break the law? Apparently, this Bill only breaks the law in a “limited and specific way”. Others on the Government’s own Benches, as we have already heard today, disagree. Some Members said that the Bill does not break the law in any way, but the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said that it was okay because other people break the law, too. So which is it?
Lucy Powell
Perhaps the hon. Gentleman might be able to answer that question. Which is it?
Sir William Cash
I would just like the hon. Lady to answer a simple question. Is she aware that, when in power, the Labour party frequently overrode treaties and has, therefore, in her own terms, broken international law. Is she aware of the number of times that that has happened and how egregious it was? The same applies to many of the matter to which she has just referred.
Lucy Powell
The hon. Gentleman has failed to give me an example, so I am not sure what he is referring to. He has spent his whole political career campaigning for us to leave the EU treaties, and the withdrawal agreement, which he supported and which his Government signed, did exactly that, and he is still not happy with it, so I do not know which it is.
The former Prime Minister said in a powerful speech last week that this Bill will tarnish and do “untold damage” to our reputation and weaken the UK in the eyes of the world.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does my hon. Friend agree that this breaking of the law not only affects our relationships with the European Union, but jeopardises our chances of securing a deal with the United States?
Lucy Powell
My hon. Friend is absolutely right on that. We heard that from the presidential candidate and others after the Foreign Secretary’s visit there the other week.
As I was saying, the former Prime Minister made a very powerful speech. Others agree with her. One said:
“The rule of law is the most precious asset of any civilised society.”
Another said that the UK is renowned
“for promoting the rule of law, and for doing business with integrity.”
In another notable quote, we heard that
“the rules-based international order, which we uphold in global Britain, is an overwhelming benefit for the world as a whole.”
It was not Members on the Opposition Benches who said those words—oh, no—but the Chancellor of the Duchy of Lancaster, the Foreign Secretary and the Prime Minister himself. We have had some debate about when the withdrawal agreement would actually break the law. Is it now as we pass the Bill, or upon the powers being used? The truth is that, even with the additional vote conceded from my friend the hon. Member for Bromley and Chislehurst (Sir Robert Neill), it does not change the fundamentals that this Bill itself breaks the agreement and breaks international law.
Lucy Powell
I will give way one more time, and then I will make some progress.
Alex Sobel
My hon. Friend is making an excellent speech. We also heard another former leader of the Conservative party, Lord Howard, say that, even with the concessions, even with the amendments that the Minister is bringing forward, the Government are still asking Parliament to pass legislation that will break international law.
Lucy Powell
My hon. Friend is absolutely right. For the first time probably in my political career, I agree with Lord Howard on that point as well. Our new clause 1 would require Ministers to respect the rule of law while implementing their own withdrawal agreement. This is the crucial amendment today for those who want to stand by those values espoused by members of the Cabinet.
The Government have also told us that this is merely a tidying-up exercise or an insurance policy, as we have heard today—it is okay because there were “deep flaws” in the withdrawal agreement, and it was not any good anyway. It just beggars belief. In October last year, the Prime Minister tweeted that he had a “great” new Brexit deal. He told the House that this deal was a good arrangement for Northern Ireland, so which is it? No, okay, we do not have any answers to that. As the former Prime Minister also said in her speech last week:
“The United Kingdom Government signed the withdrawal agreement with the Northern Ireland protocol. This Parliament voted that withdrawal agreement into UK legislation. The Government are now changing the operation of that agreement. Given that, how can the Government…be trusted to abide by the legal obligations in the agreements it signs?”—[Official Report, 8 September 2020; Vol. 679, c. 499.]
Ministers had no answer for her then and I wonder whether they do today—no, no answer on that one.
Caroline Lucas
The hon. Member is making a powerful case in favour of new clause 1, which I absolutely support. Does she agree that Government amendment 13 makes the illegal power grab that she is describing even worse, because not only are Ministers seeking to take powers to legislate in breach of international law, but they are trying to close down every possible way in which Parliament could hold the Government to account?
Lucy Powell
I strongly agree; I will come to that point shortly.
The Government’s next justification was that it was necessary to rip up the withdrawal agreement because the European Union is ripping it up itself, but we have heard differing accounts of this: the Northern Ireland Secretary said throughout the summer:
“The Government is extremely confident that the EU is working in good faith”.
Which is it? We are still not clear about that.
Perhaps the most dangerous of all the contortions relates to Northern Ireland. The shifting justifications of the Government over the last three weeks have added to the sense that they are using Northern Ireland as a pawn in a wider negotiating strategy. Remember, this is a deal that the Prime Minister told the House was
“in perfect conformity with the Good Friday agreement”—[Official Report, 19 October 2019; Vol. 666, c. 583.]
Callous or careless? Untrustworthy or incompetent? The Government are playing a dangerous game, and it is the people and businesses of Northern Ireland who risk paying the price.
Jim Shannon
I thank the shadow Minister for the constructive way in which she is putting forward her point of view. Does she agree that new clause 7, which was tabled by my colleagues, among others, and has some supporters in the House, is essential to ensure the viability of businesses in my constituency and across the whole of Northern Ireland whose biggest trading partner is the UK? Does she further agree that Northern Ireland cannot be left at the whim of Europe and that we must have security when these measures go before the House?
Lucy Powell
Yes, I do agree. I will mention that point in a moment.
For the people of Northern Ireland, this is not the latest episode in a Brexit drama; it is a profoundly worrying moment. Little wonder that the Lord Chief Justice of Northern Ireland himself, Sir Declan Morgan—a widely respected voice—said that the Government’s actions “undermine trust”. Let us remember that this issue could scarcely be more sensitive. In order to ensure the continuity of the Good Friday agreement in all its dimensions—recognising the unique circumstances of Northern Ireland sharing a land border with the Republic, and therefore the special responsibility and role that the UK and the Republic of Ireland have as co-guarantors of the Good Friday agreement—any change in the constitutional status of Northern Ireland rests on the consent of the people of Northern Ireland in their plurality. That is why it is essential that the protocol upholds Northern Ireland’s place in the internal market and that this delicate compromise builds the confidence of all communities. That is the principle behind new clause 7, which we have co-sponsored with the DUP and Alliance.
But instead of proceeding with due caution and going the extra mile to seek consensus, the Government resort to legislative vandalism. They also stoop pretty low—into “straight bananas” land—with scare stories about what the Bill is needed to prevent, some of which we have heard again today. The Prime Minister warned that the Bill was necessary because the EU wants to enforce an embargo on the transport of goods from Great Britain to Northern Ireland and are
“holding out the possibility of blockading food and agricultural transports within our own country.”—[Official Report, 14 September 2020; Vol. 680, c. 43.]
Yet nowhere in the Bill do the Government safeguard against this. Despite the many amendments at every stage, there is nothing at all in the Bill regarding the movement of goods from GB to NI.
Lucy Powell
The hon. Gentleman is failing to answer my point, which is that there is nothing in the Bill to protect against the very thing that the Prime Minister told us we needed an insurance policy to guard against.
When the Prime Minister was challenged—or, should I say, humiliated—by my right hon. Friend the Member for Doncaster North on this point, the Prime Minister shrank into his seat. They then said that they would bring forward changes in the Finance Bill to protect against these imaginary blockades by EU warships in the Irish sea, but there is no Finance Bill now, is there? So what is their plan for dealing with this? Maybe the Minister could tell us.
In their final flourish to push the Bill through, the Government say it gives back powers to the nations, but the devolved Administrations strongly disagree. The Labour Welsh Counsel General has called the Bill
“an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland.”
A Conservative Senedd Member, the former shadow Counsel General, resigned because he shared those concerns. As we have argued, if the Westminster Government decided to lower standards, there could be no voice for the devolved nations, because the Government have decided not to legislate for common frameworks, but are legislating for their own veto.
The Government must respect the devolution settlement and work collaboratively in good faith with the devolved Administrations to build a strong and thriving internal market. Our new clause 2 would facilitate just that. Not doing so would threaten our precious Union by putting rocket boosters under the campaign for independence in Scotland and elsewhere.
The Government have also said that this Bill will ensure more money for the nations and regions, as we heard again today, yet we still have no detail on how the shared prosperity fund will operate. They say they want to level up and invest in the regions and nations. “Trust us,” they say on this point, “because we have the right motives.” Yet last week, the mask slipped, didn’t it, with the breath-taking admission from the Chancellor of the Duchy of Lancaster that his Government were going to funnel this cash into the new Conservative seats—pork barrel politics at its worst.
Our new clause 3 would ensure that Ministers had a duty to report to Parliament and ensure oversight of the progress of this and other measures in the Bill.
Karin Smyth (Bristol South) (Lab)
My hon. Friend makes an excellent point, particularly about the English regions. I am from the south-west as she well knows, and the south-west has consistently returned Conservative MPs and received a great deal of money from Europe, and is frankly getting little in return. Could not the Government elucidate on how they are going to meet their promises across the regions in England and across the various nations in the United Kingdom, and on how they will make sure that places such as Cornwall do not lose out further?
Lucy Powell
My hon. Friend makes a good point, but I am afraid that, as we heard last week, her constituency is unlikely to get more money because it is not one of the new Conservative seats that we heard were going to be prioritised for this reallocation of money.
The truth is that the Government have been making it up as they go along. The UK’s reputation and territorial integrity are collateral damage to a No. 10 fixated on public relations and posturing more than on making sure that its policy works and is in the national interest. We have had an unprecedented number of amendments from Ministers to their own Bill during its passage. We have further new clauses today, which, as we have heard, further undermine the rule of law. They are making it up as they go along—change after change underlying the haphazard incompetence of this Government.
We want a successful internal market. This Bill does not deliver that. We want a strong Union built on mutual respect. This Bill could fatally undermine it. We want the UK to play a global role for good. This Bill actively damages that. The Prime Minister says that measures in the Bill are just an “insurance policy”, but you cannot get insurance for a house you have already torched.
I hope Conservative Members who still have reservations about the Bill will support our new clauses and join us in the Lobby.
Sir Robert Neill
One of the most salutary but, in retrospect, useful put-downs I ever had when I was a young barrister came when I perhaps overindulged in hyperbole in advancing arguments to the Court of Appeal and Lord Justice Cumming-Bruce said to me, “There’s no jury here, Mr Neill, you can cut out the hyperbole and stick to the arguments.” He was right and perhaps it is not a bad thing to try to do in the Committee on the Bill, as there has been a deal of hyperbole surrounding its passage, coming from those in all parts of the House. We might be better off cutting it out a little and getting back to the nuts and bolts of what we are discussing, because a lot of the Bill is perfectly reasonable and necessary. It is not a necessity I particularly like, because I wish we were not leaving some of the arrangements we currently share, but it has to happen as we exit the transition period. The real difficulty comes from the issues in part 5, which we have discussed on a number of occasions, so let me just return to them.
I listened with care to the Minister, and I do not doubt his sincerity and good intentions in this regard. He must have thought it a pretty rum do when, as a trade Minister, he found himself in the middle of a lawyers’ argument, but that has never stopped the lawyers making that case. I recognise that the Government have endeavoured to shift to try to make clear some of their intentions in relation to the difficult and sensitive matters that part 5 threw up. I will not pretend that we should have started from here; it might have been better to have contemplated the idea of some emergency legislation should we be confronted by what, I am glad to say, the Minister says is an unlikely eventuality, as this is what we all want to avoid if at all possible. I can see arguments the other way as well, so I welcome the constructive approach the Government have adopted towards myself and a number of my hon. Friends who had significant reservations with the Bill, as tabled, to try to make it clear that it is not the Government’s intention to act in a way that would undermine our reputation as a nation and jurisdiction that supports and upholds our obligations in international as well as domestic law.
Sir William Cash
I am glad my hon. Friend is referring to a constructive role. I gather from what he said the other day that he was talking very much in terms of last resort, and I want to be constructive, too. As he knows, I have already made the point that the Labour party has been passing Acts of Parliament that clearly and unequivocally override international law and that this has also happened in relation to other legislation in the UK, as I pointed out to my right hon. Friend the Member for Maidenhead (Mrs May). So will my hon. Friend bear that in mind when he is considering the question of last resort, the threshold he referred to the other day and the fact that this is more common and happens more frequently than he may appreciate and that sovereignty, above all else, is the keystone upon which the whole of Brexit depends?
Sir Robert Neill
I am not sure whether or not that is an argument for Brexit; on that basis, the Don Pacifico affair was a great statement of national sovereignty, but I do not think it was a great triumph of intellect, integrity or national interest. Leaving that to one side, I accept that there will be a number of occasions when Governments may have departed from their international obligations, but that does not make any of them desirable and it does not mean that we should not seek to limit the circumstances in which that might occur to the barest necessities. So I think we have some common ground there, or at least I hope that we have. That is why I welcome the statements the Government have made to flesh out their intentions on the way in which part 5 would be used.
I say to Opposition Members that I accept that there are certain circumstances in which we might find ourselves in difficulty because of the attitude of our counterparties in the EU. I hope that that will not come to pass and that we are seeing just a matter of the rhetoric of negotiation. There is, however, a respectable legal argument, which has not been ventilated before, although it is held by a number of senior lawyers I have spoken to, to say that, as we all know, the withdrawal agreement is binding on the UK as a matter of international law—that must be right—but that that is based upon the true construction of the withdrawal agreement.
The withdrawal agreement is clearly subject to the provisions that stipulate that Northern Ireland is part of the United Kingdom. There is an obligation on the parties in good faith to negotiate a free trade arrangement between the UK and the EU such as would render the need for checks on goods passing between the UK and Northern Ireland largely, if not completely, unnecessary. Provided that is done, I do not think any of us get into any difficulties. I accept that in negotiations there has been some language—I hope it is no more than the language of negotiation at this stage, a posture—that might suggest that the EU could argue for a substantial array of checks that might go beyond that which is compatible with the true construction of the agreement in so far as it must respect the role of Northern Ireland within the United Kingdom.
Sir Robert Neill
Can I just finish my point, and I will happily give way to the hon. and learned Lady?
Were it to get to the stage that the level of checks being insisted on were to threaten the integrity of the UK, it would, arguably—perfectly respectably arguably—be threatening the integrity of the agreement itself upon its true construction. That, I think, would be an arguable point for saying in international law that the UK would have a case for saying it was entitled to take measures to protect the underlying purpose of the agreement.
Joanna Cherry
I am very grateful to the hon. Gentleman for giving way. I think that he is describing a situation in which the European Union might be in bad faith, but last week when Professor Catherine Barnard, the very well-respected professor of European law at Cambridge University, gave evidence to the Committee on the Future Relationship with the European Union, she said that there is no evidence whatever at present that the EU is negotiating in bad faith but that there is a strong argument that the existence of the Bill and clause 45 breaches the United Kingdom’s duty of good faith in article 5 of the withdrawal agreement. As Chair of the Justice Committee, the hon. Gentleman will be aware that that is a widely held view by lawyers. Does he recognise, as she said, that there is a strong argument that, merely by bringing the Bill to the Floor of the House, the United Kingdom is already in breach of its article 5 duty of good faith under the withdrawal agreement?
Sir Robert Neill
With respect to my hon. Friend, I do not regard it as total tosh. I happen not to agree with it in totality, but I do not think that we should ever dismiss serious legal argument from serious practitioners on either side of the question as being out of consideration. It is a matter that we ought to weigh carefully. I do think that there is an answer. Part of that answer is the one I have just been formulating, which suggests to me that there can be certain circumstances in which the breach of the true meaning of the agreement is such that the UK itself will be entitled to use its international law right.
Sir William Cash
I just wonder whether my hon. Friend would consider that bringing in a Bill was a matter of privilege for the House.
Sir Robert Neill
I am sure that it is a matter of privilege for the House, but I just come back to the point: I do not think that that engages with the issue we are concerned with here. Of course, it is perfectly within the rights of the House to bring forward any legislation it likes. I know my hon. Friend played a role in having section 38 inserted into the European Union (Withdrawal Agreement) Act 2020, but, with respect, that simply restates that which we already knew and probably picked up in the first week of the law course; that, essentially, Parliament is sovereign and of course it can legislate in the way that it wishes. It can legislate in a way that is incompatible with international law. That does not make it a desirable course to go down. I think that is the point that needs to be said. Of course, it may be possible and I do not think privilege is engaged. The point I am seeking to make is that the UK should be very wary about doing anything that breaches its international obligations. I do not think it has yet and there are reasons why we may be able to avoid that, but that is why I think we need to keep the debate a little more calm in terms of what the rights are.
Joanna Cherry
Is not the problem that some Government Back Benchers are falling into the distinction between domestic law and international law? It is true as a matter of domestic law that this House can pass any Bill it likes, but as a matter of international law, as stated by the Supreme Court in paragraph 55 of its judgment in Miller 1, it does not impinge on international law. If we sign treaties, we are bound in the eyes of international law. There is a distinction here between domestic law, which means that this House can do what it wants—God forbid—and international law, which means that sometimes when this House does what it wants, it could be in breach of international law.
Sir Robert Neill
I think that is clearly established law. It is perfectly possible to act within one’s domestic law and still breach one’s international obligations; however, I do not think that that means that the Bill itself, at this stage, is a breach of our international obligations, particularly now that it has been reinforced by comments made by Ministers on the Floor of the House, which I am sure the Government therefore regard as binding as a matter of good faith in itself, that the provisions would be used only in circumstances where the EU had behaved in such a way that it had breached its duty of good faith under the agreement.
The Government have also importantly committed not to use the provisions of part 5 to undermine the pre-existing provisions in relation to both article 16— the safeguarding arrangements of the protocol—and articles 167 onwards, on the arbitral arrangements. Given those circumstances, I reach a different conclusion from that of the hon. and learned Lady and the professor. I do not dismiss the arguments, but I make the case for why I think, as a matter of law and fact, it is possible to distinguish them.
John Redwood
Does my hon. Friend agree that we have these complications with this agreement because it was only half an agreement? The original idea was that nothing was agreed until everything was agreed, which would include the future relationship. A lot of that had to be shunted into the political declaration. The danger of what was signed up to is that part of the agreement on so-called withdrawal matters could pre-empt the future agreement in a disobliging way to the United Kingdom. That is why we are in this difficulty and why I think that there is nothing illegal at all in the UK seeking to sort this out in the negotiations and not be at a disadvantage in them. Does he agree with that?
Sir Robert Neill
I think that we are in agreement to the extent that I do not believe that the UK has yet trespassed over its international legal obligations, and I agree that we want to get this sorted out in the negotiations. I do not think that I can go further than that at this stage, but I understand that we all want this to be dealt with in the negotiations if possible. I voted for the withdrawal agreement, and I voted for the previous Prime Minister’s withdrawal agreement. It might have saved us a lot of trouble if Members on both sides had voted for that withdrawal agreement in retrospect, but we are making the best of the situation that we have inherited, if I might respectfully say so.
Stephen Doughty
The hon. Member is being generous in giving way. Does he accept that damage has already been done to the UK’s international reputation? He rightly wants to deal in facts and the reality of what is going on. I know from conversations that I have had with, for example, officials in UN institutions in Geneva, that the UK has been publicly questioned by other countries, in elections to bodies and negotiations on other matters beyond this matter, because of the very statements that the Government have made and the very clauses in the Bill. That, potentially, seriously undermines our abilities on the international stage on a series of issues: security, trade, climate change and well beyond.
Sir Robert Neill
It is certainly fair to say that it would have been better to have had the caveats that the Government have now put into the Bill to begin with, and I am grateful to Ministers for having worked in the way in which they have to achieve that. It would be absurd to pretend that there has not been real concern expressed by people whom we respect and ought to be able to deal with as allies and counterparties going forward. There is a way to ensure that that concern is alleviated and lasting harm is not done, and I am sure that the Government are committed to trying to do that.
Superficially, new clause 1 is attractive, but I am inclined to give the Government the benefit of the doubt that it is not necessary for the reasons that they have set out. I was going to press the Minister, but he has anticipated much of what I have to say. I am sure that he will confirm again, in winding up, that we are committed to ensuring that part 5 is not used to undermine the legally binding commitments and until such time as it is necessary to act to protect a significant national interest of the UK in relation to the integrity of the Union, as a result of bad faith by the EU counterparty —which, please God, I hope never arises—and that we will do so without seeking to oust the legal obligations that we entered into in relation to the safeguarding provisions and the arbitral arrangements under article 167.
Given that, we can make a good case for saying that new clause 1 is not necessary and that the Government’s own intention will deal with that, but I urge the Government, as a friend, to ensure that they reinforce those points very strongly as we go forward, because to persuade the Upper House will be an important task. Continuing evidence of good faith and a willingness perhaps to look at some of the wording would be helpful to the Government.
I have sympathy for new clause 8. My right hon. Friend the Member for Gainsborough (Sir Edward Leigh) and I were reminiscing that we were the two youngest members of the Conservative group of the Greater London Council. We were actually abolished by Mrs Thatcher, by Act of Parliament, but that does not seem to have entirely destroyed our careers or done us lasting harm. I very much take on board my right hon. Friend’s points about the value of the Vienna convention. He and I served on the Council of Europe together, and that convention—again, the UK contributed significantly to it over the years—may benefit us a good deal going forward. Even if it is not necessary to take the wording of new clause 8 into the Bill, the sentiment behind it is useful, and I hope the Government will bear in mind the arguments my right hon. Friend will advance later in the debate, because they may well be useful elsewhere.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Colleagues will see that many Members want to speak in the debate. We simply will not be able to get through everyone unless speeches are brief. My advice would be for Members to limit their remarks to five or six minutes, but if they do not, I will have to impose a time limit. I would rather not do that, but I am keen that we get as many people in as possible. I call Drew Hendry.
Drew Hendry
Thank you, Madam Deputy Speaker. Although I will try to be as quick as I can, this Bill fundamentally affects Scotland, and therefore I have a lot to say about it. It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Sir Robert Neill), who chairs the Justice Committee. It is always a pleasure to listen to him, to the hon. Member for Manchester Central (Lucy Powell) and to the Minister, who is an affable and normally very helpful chap. I have great sympathy for him as he tries bravely but barely conceals his embarrassment at having to drag this shabby Bill through the House.
Before I get to my party’s amendments and our reasoned amendment, let me report on the Bill so far. This Bill sets out to break international law. It sets out to break devolution. It sets in train the biggest power-grab since the Scottish Parliament was reconvened and a race to the bottom on health protections and environmental standards. The flood of amendments simply proves that the Bill lacks credibility. It is reckless, and it is absolutely typical of this Tory Government and their entire process.
Drew Hendry
I will make some progress.
In setting out to break international law, the Government are undermining trust, respect and shared values in a very specific but very unlimited way. The Bill sneers at the words “trust”, “honour” and “obligation”. Because of this Bill, any deal, understanding, commitment, promise or even legally binding treaty is now utterly dispensable—think of that! The questions now must be: what is the next inconvenient law for this Government? What happens to society as the Government embrace lawbreaking? How will international players treat their agreements with the UK? Make no mistake: this is going rogue.
Both the former Prime Minister—the right hon. Member for Maidenhead (Mrs May) still sits in the House and is likely to vote against the Bill—and the former Northern Ireland Secretary have spoken out against this action. The Law Society of Scotland has confirmed that clauses 40 to 45
“would empower Ministers to make regulations that are contrary to the Withdrawal Agreement… and preclude challenge in the UK courts through clause 45”,
and that the Bill, if enacted,
“would breach Article 5 of the Withdrawal Agreement.”
Part 5 of the Bill has triggered international condemnation. As we have heard, presidential candidate Joe Biden warned that
“Any trade deal between the U.S. and U.K. must be contingent upon respect for the Agreement”—
the Good Friday agreement—
“and preventing the return of a hard border.”
There are already meetings in Washington amid American interest in Brexit’s implications for Northern Ireland. The Government’s amendments to part 5 of the Bill create more problems and unanswered questions. As Professor Mark Elliott, in consultation with Graeme Cowie of the House of Commons Library, points out:
“clause 45(1) provides that regulations made under clauses 42 and 43 ‘have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent’. How is this to be reconciled with the fact that clause 45 as amended now contemplates the possibility of judicial review?”
He goes on to note that Government amendments 12 to 15 would produce an “extremely odd outcome”, and that amendment 13 appears to attempt to “cancel out” the effect of amendment 14. He concludes:
“It leaves us with a Bill that clearly authorises Ministers to break international law”.
Joanna Cherry
Does my hon. Friend share my concern that Government amendments 12 and 13 may render incorrect the statement by the Secretary of State that the Bill is compatible with convention rights under section 19(1)(a) of the Human Rights Act 1998? Is he aware of any plans the Government have to revisit that statement? I asked the Minister about that, but he did not seem to understand the point I was making.
Drew Hendry
My hon. and learned Friend makes a telling point. No, of course the Government have not brought anything forward on that, because this is a Cummings-directed Prime Minister and a complicit Tory Government who have sought to justify a law-breaking, democracy-reducing, shabbily produced, lazy and dangerous Bill with a breathtaking factionalism bordering on pseudologica fantastica.
Mr Vara
As we go through the process of leaving the European Union, this Parliament will take no powers away from the Scottish Parliament. In some 70 policy areas currently managed by the EU, powers will be handed over to the Scottish Parliament. Can the hon. Gentleman not bring himself just once to be a statesman and appreciate that this will actually be for the benefit of the Scottish Parliament? Just once, be a statesman!
Drew Hendry
If this were not so deadly serious, it would be a comedy, such is the hypocrisy from Tory Members. There is good reason why people in Scotland are now looking at independence as the settled view and the majority view in Scotland. It is because of the reckless disregard that the hon. Member has for the facts. He has not even looked at the fact that the Secretary of State for Business, Energy and Industrial Strategy will have, contained in the Bill, the power to overrule anything that the Scottish Parliament decides. I will come back to that point later.
Put simply, this is a bad Bill. It does bad things and no matter how much the Government scramble to justify it, they cannot get away from that point. Let us face it, the Tories have always hated devolution, but even by their standards, the Bill reaches a new level of contempt for the Scottish Parliament and for those of the other devolved nations. Clause 48 is a blatant power-grab, with the UK Government reserving the devolved policy of state aid. In clause 46, powers are given to UK Government Ministers to design and impose replacements for EU spending in devolved areas such as infrastructure, economic development, culture and sport, education and training, and much more, centralising power at Westminster—exactly what the people of Scotland rejected when they voted in 1997 to re-establish the Scottish Parliament. We see in poll after poll that people in Scotland reject it now. That has led, as I said earlier, to the fact that independence is now the majority view in Scotland.
This power-grab not just the view of the SNP, and it is not just the view of those in Scotland. The Welsh First Minister Mark Drakeford highlighted the issue, when he said that there are
“some voices in the Conservative government who having found out that devolution exists after 20 years, find they don’t much like it, and think it would be better if we returned 20 years and all the decisions were made in Whitehall and would rather not be spending their time talking to us very much.”
Does not that just capture it correctly?
Gary Sambrook (Birmingham, Northfield) (Con)
Will the hon. Gentleman give way?
Drew Hendry
I want to make some progress.
Organisations across Scotland are also deeply concerned about the proposals. NFU Scotland has confirmed the attack on devolution. It said that
“it is the clear view of NFU Scotland, and the other faming unions of the UK, that the proposals pose a significant threat to the development of Common Frameworks and to devolution.”
The General Teaching Council for Scotland said that the proposals
“would undermine the four UK nations’ devolved education functions.”
The STUC has warned:
“Johnson is uniting political parties, trade unions and wider civil society in Scotland against a power grab which would see UK Government interference in previously devolved matters and a rolling back of the constitutional settlement we voted for in 1997”.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I have resisted the temptation to ask the hon. Member to give way up to this point, despite the fact that he may be inadvertently misleading the House by pretending that, in some way, this Government are intent on grabbing powers back from Holyrood and taking them to Westminster when nothing could be further from the truth. I will bring him up, however, on his using the National Farmers Union of Scotland and its arguments as a reason not to back this Bill. The NFUS said:
“NFU Scotland’s fundamental priority, in the clear interest of Scottish agriculture…is to ensure the UK Internal Market effectively operates as it does now.”
That is what the Bill delivers. Nothing of what he has said up to this point is any way relevant to the Bill today.
Drew Hendry
Of course, the hon. Member is entirely wrong with his selective quoting. This absolutely underlines why the Tories have not won an election in Scotland since 1959. You have to be about 90 years old to remember voting in an election that the Tories won. Why? Because they do not listen to the people of Scotland and they do not have their interests at heart. Using this Bill, they are able to lower standards by holding a veto over Scottish Parliament decisions. The mutual recognition mechanism in the Bill starts a race to the bottom on standards, with the UK Government imposing their will.
As we heard, clauses 2 to 9 contain sweeping powers on animal welfare, food safety, environmental protections —every single aspect of Scottish life: the water we drink, the food on our table, the buildings we construct, and even our NHS. We know that chlorinated chicken is on the table and that it will be bloating our tables as a result—[Interruption.] They groan, but Donald Trump said that
“everything is on the table”—
and that means products from the States, including that and hormone-injected beef. What else will be presented to us while the UK Government desperately scratch around for a trade deal, leaving no stone unturned regardless of who or what is underneath it?
The Bill hamstrings the Scottish Parliament from protecting the highest standards of food safety, from protecting Scottish farmers’ livelihoods, and from protecting the highest standards in our environment and our building control. It hampers the Scottish Government’s ability to keep public companies in public hands, including preventing attacks on the NHS. Worse still, as I said earlier, it puts the power to overrule Scotland’s Parliament in the hands of one Tory Minister. The Secretary of State for Business, Energy and Industrial Strategy has the
“power to alter these exclusions”.
Professor Michael Dougan has warned of the impact of the mutual recognition principle and the effect that it will have on Scottish produce:
“The impact in practice of this Bill in many of the proposed exercises of devolved competence in relation to trading goods or services is to effectively penalise domestic producers or traders and not be able to enforce the same standards against imported goods or service providers.”
As I mentioned earlier on the teaching council, Scotland requires secondary teachers to have a relevant degree in the subject that they teach. However, part 2 of the Bill, on professional qualifications, forces Scotland to accept teachers with lower qualifications. The chief executive of the General Teaching Council for Scotland, Ken Muir, said that
“our key concern about the Bill is the extent to which we ourselves, and parents, and users of the education system would feel that”—
it—
“would be watering down the teaching profession in Scotland”.
The Minister mentioned that the Government have tabled a new technical amendment, amendment 32, with the purpose of
“further clarifying the freedoms of all parts of the UK to regulate pricing and manner of sales policies as long as they are non-discriminatory.”
Of course, that is the key line—
“as long as they are non-discriminatory”—
and they say that “we have now acted to provide increased legal certainty around this point”. The Minister conceded earlier that that was in relation to alcohol minimum unit pricing. I remind hon. Members that Ministers had told us that that was not affected by the Bill and did not come into account in it, and now they are admitting that it does and they have put this absolute sham of an amendment in place to cover that. All it does is leave this open to be overridden by the non-competitive clause.
We heard about financial assistance. In case anyone is seduced by the spending promises, I have been calling for clarity on the so-called shared prosperity fund since 2017 along with my SNP colleagues. As the Financial Times reported, an individual close to the discussion said:
“The current plan is an odd combination of reserving state aid [for control from London] but then agreeing to a free-for-all. They just want to be able to bung money at things and do not want UK internal market legislation cutting across that.”
That is odd, or is it just convenient?
The Tories’ Communities Secretary has spent millions of pounds from the towns fund on 61 towns, 60 of which happen to be Tory marginals, including his own seat. In the highlands, we understand that directly, because in 1992, Prime Minister John Major took money from the highlands to shore up flagging support in the south-east of England. We have experienced the altruism of Tory Governments.
The flood of amendments to fundamental aspects of the Bill, including from UK Ministers, shows that it is completely bad and shoddy. Clause 5 transfers the CMA functions to the OIM. Drafting errors abound throughout. Amendment 15 actually attempts to further undermine the rule of law. It says:
“No court or tribunal may entertain any proceedings for questioning the validity or lawfulness of…section 42(1) or 43(1).”
That is dangerous and toxic stuff. That follows an absolutely useless and terrible consultation that failed to include and engage the devolved Governments on aspects of the Bill that see the Government strip powers from Edinburgh, Belfast and Cardiff. The legislation was shared with the devolved Governments only hours before publication.
The recklessness of the Tory Government only creates more uncertainty. When their reasonable worst-case scenario is two-day delays to freight on the channel and 7,000 lorries in Kent, with an estimated 275 million new customs declarations each year post Brexit that will cost about £15 billion, they can add the words “absurdly” and “tragically” to reckless.
Poll after poll now shows that people in Scotland understand that the only way to protect their democratically elected Parliament, to protect standards and to keep their waters and NHS safe is through Scotland becoming a normal independent nation and taking its place in the international community. This Bill insults Scotland. We will not vote for this Bill.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Just another reminder: I am conscious that many of the initial contributors are speaking to amendments, so it is important that we are flexible, but I say again that if we want to get in the many Members who want to contribute to the debate, it is important that at this stage, Members are as brief as they can be while getting their important points in.
Sir William Cash
There has been a heated and, in many respects, misconceived debate about the question of our compliance with international law. I had something of an exchange with my right hon. Friend the Member for Maidenhead (Mrs May) on Second Reading. I made the point that UK law has, in the past, breached international treaties. That stands, because it is important for us to recognise that that has been the case.
Indeed, it is often forgotten that the EU guidelines of 29 April 2017, which my right hon. Friend’s Government allowed to happen, unilaterally imposed on us requirements contravening article 50 of the Lisbon treaty and insisted that we should obey the basis of the EU’s idea of the conduct of negotiations. As Clausewitz said, diplomacy is war by other means; I believe the gloves are about to have to come off.
The withdrawal agreement and the political declaration recognise the autonomy of the EU and the UK, but whereas the UK is a sovereign state, the EU is merely an international organisation. UK sovereignty is expressly recognised by the EU as of its own kind—sui generis. The EU manifestly contradicted that by insisting on European Court jurisdiction, thus subverting the constitutional status of Northern Ireland itself. It was even reported that that was the price we would have to pay. The EU continually denied our sovereignty during the negotiations with a wanton disregard of our unique, unwritten constitution and sovereignty, which it is bound to understand because we have been in a relationship within the same legal order for the last 40 years.
Sir William Cash
I do not have time, I am afraid.
At the same time, there have been a number of UK precedents, which I have explained already. I do not have the time to go into them; I will attempt, as other Members will have to, not to go into huge detail, but I will give a few examples. In 1945, a Finance Act passed by the Labour party overrode international law. The same applied to the Indian Independence Act 1947 and the Burma Independence Act 1947. In fact, in the case of India, more than 400 treaties were broken.
Sir William Cash
I assure the hon. and learned Lady that I am not giving way. I am very happy to do so normally, but not today.
Furthermore, a Conservative Government, in the Income and Corporation Taxes Act 1988, provided clauses that were notwithstanding anything contrary to the arrangements of the Act. It goes on. It is a substantial list.
I will go further. Those who are interested can look at my previous contributions to other debates, where I extensively describe the myriad occasions when the EU itself has broken international law and, furthermore, when EU member states have egregiously broken international law and admitted it in their own Parliaments. For example, Helmut Schmidt, in the Bundestag, could not have been clearer, going through every single treaty that Germany deliberately broke in defence of its own vital national interest, because that is itself a reason why national law can have a degree of predominance over international law.
National and constitutional law, in certain circumstances —where it affects sovereignty, as in this case in the United Kingdom—can prevail against international law. I am extremely grateful to my good friend, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), who I know recognises this. It has taken a bit of time for us all to come to terms with that, because it is a bit complex, but the reality is that it is well established in international law itself. The German federal court confirmed this as recently as 2015. I quoted the court in a previous debate, so it is already on the record that it is well within the framework of international law for a country—a democratic country, I hasten to add—to actually override international law in its own vital national interest, and most specifically, as in this case, on questions of sovereignty.
I will therefore just touch on my exchange with the hon. and learned Member for Edinburgh South West (Joanna Cherry). With regard to Miller 1, the Supreme Court unanimously confirmed that, under the dualist approach, treaty obligations only become binding in the UK system to the extent that they are carried out in domestic legislation, and that whether to enact or repeal legislation, and the content of that legislation, is for Parliament alone.
This principle was approved unanimously by the Supreme Court in Miller 1.
Sir William Cash
My hon. Friend is nodding his head because he knows this is the case.
Gavin Robinson
It is a pleasure to follow the hon. Member for Stone (Sir William Cash). He is right to chide the European Union about seeking to interfere with the integrity of this sovereign nation. However, the end of that sentence should encapsulate the disappointment of some of us at the fact that our own Government would accept a framework that seeks to do just that.
That brings me to our amendments, which are in my name and those of my right hon. and hon. colleagues—both new clause 7 and amendment 17. Last week, Madam Deputy Speaker—it is a pleasure to address you in that way—a very concerned constituent of mine, Mike, chided me engagingly, as he always does, for referring to you in personal terms. I had to outline that that was because we were, for day after day, in Committee, so it is good that we are on Report. I am mindful of the time constraints, so I do not intend to rehearse the many sincere arguments that we advanced in Committee that lie underneath our amendments, but I will touch on them in relation to new clause 7 and amendment 17.
I listened carefully to the Minister, who is now back in his place, when he spoke about amendment 17 in his opening remarks, which, as I mentioned in my intervention, replicate quite closely those of the Minister of State, Northern Ireland Office, the hon. Member for Worcester (Mr Walker):
“I understand Members’ concerns and support mutual recognition and the non-discrimination principle, but the exception to mutual recognition that we have introduced for chemicals is there to allow the relevant authorities to respond to local factors. Authorisations granted by the EU after the end of the transition period will not take local conditions into consideration. I emphasise that the authorisations relate to the use of substances of very high concern. It is important that the Government and devolved Administrations can take local factors into account when they decide how to protect human health or the environment from the significant risks posed by such chemicals.”—[Official Report, 21 September 2020; Vol. 680, c. 658.]
That is a fair enough analysis of why we should be within the UK regime on REACH regulations, but the thrust of this Bill is to ensure that our businesses are not unfairly disadvantaged in the conduct of their activity. I have highlighted in Committee and I highlight again today the fact that it is unnecessary to ask businesses to adhere to two separate and distinct regimes on chemicals and dangerous substances—an EU regime and a UK or GB regime—in the conduct of their business.
I heard the Minister say, in response to my intervention, that the Government were working on a common framework, but in pushing this amendment, we are asking them to accept that this will have real, tangible implications for a small subset of our businesses. It demonstrates acutely the burdens that will be added to our businesses when we have one foot in the GB market and one foot in the European Union single market, with all the rules that come with that, and when we are expected to adhere to the rules of both jurisdictions. That will make our businesses less competitive.
Jim Shannon
To illustrate the “best of both worlds” that my hon. Friend has referred to, does he remember that as recently as last year two Northern Ireland skippers were arrested for fishing in waters within six miles of the Republic of Ireland, after an EU judgment? We never seem to get a good deal in Northern Ireland. Does he agree that that illustrates the importance of our new clause 7, which would guarantee a review of business and trade?
Gavin Robinson
My hon. Friend touches on new clause 7, which I will turn to in a moment. The egregious circumstances to which he refers, in which the skippers were arrested last year, were completely outrageous. However, Judge Coughlan in the south recognised that they were men of deep integrity, that they did not deserve convictions and that Irish fishermen were doing exactly the same in Northern Ireland waters. Had it not been for his clarity of thought, things could have been much worse.
Sammy Wilson
My hon. Friend makes the good point that businesses in Northern Ireland might have to adhere to two sets of regulations. Does he accept that there will be occasions when EU regulations could be totally contrary to the regulations developed for the rest of the UK, and that at that stage, Northern Ireland businesses would have to choose? In fact, they would not have to choose, because they would be obliged to follow the EU regulations and would be unable to comply with UK regulations affecting trade.
Gavin Robinson
My right hon. Friend is absolutely right. That is a conundrum that we keep having to address, and the reason we have to keep raising it in these debates is that it is not filtering through. Despite the “lines to take” that have been distributed to colleagues and friends across the Chamber, those conundrums have yet to be answered, and businesses in Northern Ireland still require clarity, whether on selling into the GB market or buying from the GB market. The Bill attempts to address part of that journey, but only part of it, and it does not give us the clarity that we need.
On the REACH regulations and amendment 17, I want to refer to an email I got yesterday from a constituent called Audrey, who outlines something that had not been part of my thought process. She says, “All new and existing substances made and imported into the EU under the REACH regulations at levels of more than one tonne per year must be registered with the European Chemicals Agency. Registration also involves tests on live animals. Cruelty Free International estimates that already 2.6 million animals have been poisoned and killed in this process and that a full minimum data set for the high production chemicals would be approximately 5,000 animals per year, including rats, mice, rabbits, fish and even birds. Based on the information from the Health and Safety Executive, in two years of the UK’s exit from the European Union, UK-based companies must provide the full data package that supported their original registration with the ECHA, including full test reports for each applicable toxicity concern. Because of access to those data issues, many UK registrants could be left with no choice but to repeat the tests on animals that have already been complied with for EU purposes.” Even if Members do not accept my arguments around the implications for businesses, do they think—if those datasets are not agreed and if a common framework is not reached between the EU and the UK—that all those subsets of tests and all that cruelty is genuinely necessary? I think it is avoidable, and I ask the Government to consider amendment 17 more thoughtfully.
On new clause 7, I thank hon. and right hon. Members from across the Committee who support the endeavour and the aspirations that it brings. I wish to put on record my appreciation for the shadow Secretary of State for Northern Ireland—the hon. Member for Sheffield, Heeley (Louise Haigh)—and the right hon. Member for Doncaster North (Edward Miliband) for their engagement with and understanding of the implications that there are for Northern Ireland. They signed the amendment and I am grateful to them for doing so. I am grateful to the hon. Member for North Down (Stephen Farry), who similarly joined us in this endeavour, and, I have to say, to the hon. Members for Foyle (Colum Eastwood) and for Belfast South (Claire Hanna), who have indicated their positive approach to the new clause and signed it when we tabled it to the European Union (Withdrawal Agreement) Bill back in January.
Nothing that the Minister said—I cannot re-emphasise this point enough—undermined the benefits of accepting new clause 7. He indicated that the Government will rightly carry out an analysis of the implications for business in Northern Ireland, so there is nothing wrong with agreeing to it as part of the Bill. We know that there are distinct differences associated with the operation of the Northern Ireland protocol. The new clause seeks not to undermine the protocol but to ensure that Government carry out these impact assessments. In doing so, it seeks to indemnify businesses in Northern Ireland who are unduly, unfairly and uncompetitively put at a disadvantage to their colleagues and counterparts in GB. That is the very essence of the commitments that have been advanced as part of the Bill; indeed, the “lines to take” that Conservative Members have been given tell them that the Bill is about ensuring the integrity of the UK internal market. If they believe that to be the case, then there is nothing in new clause 7 that undermines their position. I say that very earnestly.
Looking across the Chamber, I see Members—friends—who have an interest in Northern Ireland and, more than that, an unbridled belief in the benefits of the Union, and who believe that we should not only hold but build and enhance what we have. If they are of that view and respect our integral place within the United Kingdom—I know that many have gone through the angst of having to accept compromises as part of the withdrawal agreement to get Brexit for themselves in England, knowing that it will have distinct differences for us in Northern Ireland—I earnestly hope that they will consider new clause 7 in a positive vein. It does not undermine the Government’s position—they have offered no fundamental objection to it—and it does not undermine the process that Members are seeking to achieve on Brexit. It would, however, make an enormous practical difference for businesses in Northern Ireland who are faced with uncertainty and a lack of confidence in the arrangements that will come forward, and, should there be a negative impact or consequence, they would know that Government will stand with them.
Sir Edward Leigh
I rise to speak to new clause 8 in my name. I shall attempt, within your time constraint, Madam Deputy Speaker, to get these complex legal and international law arguments on the record.
The problem is not the possibility of the UK breaking international law, which we do not want to do, obviously; the problem is the UK’s being prepared in case the EU fails in its willingness to interpret the protocol on Northern Ireland in a proper way. We have a legal tool at our disposal that would help clarify the situation in accord with international law: a unilateral interpretative declaration. My new clause 8 describes in some detail how that could be done. It would help our negotiating position in securing an EU trade agreement and, just as importantly, it would help get the Bill through the House of Lords.
Many in the other place will be concerned about the possibility that the UK Government may be opening the door to breaking international law. We pride ourselves on the rule of law and we should maintain our commitment to it. The real problem is whether the EU is willing to implement the protocol in a reasonable and effective manner. We do not need to break international law; we need to prevent the EU from breaking international law by violating its treaty commitments.
The EU has suggested that it would break its commitments in the protocol. It has said that it would consider breaking its commitments to allowing food from England, Wales or Scotland to be sold in Northern Ireland if the UK did not make concessions on the free trade agreement. That is on the record in Michel Barnier’s statement on 10 September. In the light of that, the Government understandably introduced this Bill, so that we can act when the EU threatens the economic integrity of the United Kingdom.
We are committed to implementing the protocol, which we signed up to, but we are only committed to what we actually agreed to—no more and no less. This is the nub of the problem. We are not bound by new interpretations of the protocol that the EU might seek to impose on us. We are not required under international law to accept all the proposals that the EU tables in the negotiations. We cannot accept any bargaining linkage being made between implementing what has been agreed under the protocol in good faith, and what has still to be agreed about our future relationship.
There is a compromise available. We can use international law to ensure that the EU meets the commitments it made in the protocol. We can assert our position, as I have argued, in a unilateral interpretative declaration, if—and only if—the EU behaves unreasonably.
The initial version of the Northern Ireland protocol agreed to in November 2018 could have bound us indefinitely to maintaining full alignment with the EU’s single market regulations and membership of the customs union. In an Adjournment debate in February 2019, I advocated the use of a conditional unilateral interpretative declaration to assert the temporary nature of the backstop. That word “temporary” was then in the protocol.
My right hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), who was then the Attorney General, took this up to seek a time limit or a withdraw mechanism from the backstop. That was the basis of documents tabled on 11 March 2019 for the second meaningful vote. Unfortunately, the unilateral declaration issued then was not made strong enough to guarantee an exit from the backstop according to many people in this House. The Government, I believe, should have asserted a stronger interpretation.
Nevertheless, in December last year, we succeeded in getting rid of the backstop. The question is whether the agreed Northern Ireland protocol will be implemented in good faith. The protocol is a good compromise. Rather than abandoning international law, we must use the full provisions of international law to ensure that the protocol is implemented as we agreed.
The general principles of international law applicable to the withdrawal agreement and the protocol are spelled out in the 1986 Vienna convention on the law of treaties. In addition, in 2011, the International Law Commission of the UN codified a guide of practice for handling disagreements about the interpretation of treaties. That allows an individual Government to issue a declaration on their interpretation of the meaning of specific aspects of a treaty. The UK can do that unilaterally, without any agreement from the EU.
To leave the realm of politics and enter the realm of international law, any unilateral interpretative declaration must be sent to the depositary of the treaty. I proposed in an amendment in Committee that the Government should use this declaration to assert their position if the EU were to fail to implement aspects of the protocol. My new clause 8 now spells out in some detail how the declaration could be used. Subsection (1) specifies that the Government should invoke this procedure if the EU fails to carry out the requirements of the protocol. Subsection (2) specifies that the Government should ensure that their interpretation of the protocol is justified by, and in accord with, the provisions of the Vienna convention.
It is important to note that the Vienna convention covers the need to act in “good faith” and the need to avoid results that are “manifestly absurd or unreasonable”. Subsection (3) therefore requires the Government to obtain parliamentary approval before they make a legal challenge, and subsection (4) requires the Government to report back to Parliament on whether the EU has approved the interpretation. If the dispute were to continue, there would be a choice: we could seek negotiations to achieve a compromise in the Joint Committee, or we could invoke the withdrawal agreement’s arbitration procedures. If the dispute could not be resolved and arbitration were required, we would have acted in good faith—that is the point—in international law. We would have established our case and started arbitration on our own terms.
The Government are right to challenge the EU. We can uphold international law. We can challenge the EU with proper legal methods. We do not need to accept its interpretation of the protocol. When we face unreasonable demands, we have a chance to state our interpretation of what we agreed when we signed the protocol. We can challenge the EU with a unilateral interpretative declaration and, hence, defend our position in full accord with international law. I ask the Government to consider positively this compromise, on which we can all agree and which is offered to the Government in good faith.
Caroline Lucas
I rise to speak to new clause 6, which is in my name. Its intention is to ensure that those seeking public money for economic development under this legislation are obliged to undertake a climate and nature emergency impact assessment.
The powers set out in part 6 of the Bill provide assistance in a way that would be subject to very few restrictions. New clause 6 is designed to be a genuinely constructive and practical suggestion to help Ministers see the serious gap in the legislation, and to help them to assess and decide whether the money they are dishing out is trashing the environment or supporting its restoration.
Both the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully), earlier this afternoon, and the Minister of State, Cabinet Office, the hon. Member for Norwich North (Chloe Smith), last week, said that the UK Government have a determination to see climate and environmental goals achieved. Well, I am very glad to hear that, but it makes me even more perplexed that they are not willing to accept what I regard as a helpful and friendly amendment. In fact, both Ministers have also said that it was not necessary to introduce any kind of conditions on the financial assistance powers in the Bill, because apparently there is already an overarching legal and policy framework for achieving those goals. That is not good enough. We need commitments that would make those fine words actually bite when it comes to the wide financial assistance decisions set out in the Bill.
The Bill has conferred astoundingly broad powers on Ministers, but without clarity or direction over the mechanisms that they will use to judge whether they are upholding policy commitments—and vague references to overarching frameworks just will not cut it. The bottom line is that, in order to tackle the nature and climate emergencies that we face, the state must not risk supporting projects, companies or industries that threaten to undermine progress toward meeting climate, nature and environmental goals and targets. To avoid that risk, people need to be asking and proving how their requests measure up to climate, nature and environmental goals and targets, and the Government need to check.
The production of impact statements for any proposal for financial assistance will not only help to ensure that individual projects consider long-term sustainability, including avoiding or mitigating potential negative impacts, and maximising the benefits of delivering a green economy; it will also enable Governments across the UK to better understand the aggregate impacts of such financial assistance, and measure them against the goals and targets to which they have already committed themselves. In other words, impact statements would be not an additional burden, but a necessity to reach stated goals. They would also provide a useful opportunity to demonstrate the positive impact that ambitious and well directed investment can bring. The statements would help Ministers—and, indeed, all of us—by providing the benefits of public accountability and value for money, as well as important integrated policy making to tackle the nature and climate crises.
Let us not forget that we have had so many commitments —at least in fine words—from this Government on keeping high standards post Brexit. The Conservative party manifesto promised
“the most ambitious environmental programme of any country on earth.”
It is extraordinary that a Government who say that balk when it comes to any practical measure that would enable them to implement that commitment.
Just yesterday, the Prime Minister’s comments at the signing ceremony of the Leaders’ Pledge for Nature sounded positive. He said that we need to turn words into action, and I could not agree with him more. He said that we need ambitious goals and binding targets and, in his characteristic language:
“We cannot afford dither and delay because biodiversity loss is happening today.”
Yes, Prime Minister, it is, and this straightforward measure would enable him to deliver on the fine words by supporting a mechanism that is designed to achieve exactly that. Otherwise, words are cheap.
New clause 6 is not just a “nice to have” or a green add on; it is a vital way of ensuring that we implement our existing commitments. In May last year, Parliament passed a motion declaring a climate emergency. Marvellous —I was the first to be pleased about that, but we need a mechanism to ensure that subsequent policy making is in line with that commitment. Otherwise, it is meaningless. We have heard time and again how post Brexit, the UK will be able to have higher environmental standards than the EU, yet the next round of European structural funds will have tackling climate change and addressing the just transition as a major theme. Surely at the very least we should aspire to do the same.
Evidence that we must act responsibly and urgently is mounting every day. As I have already said, the UK Government are failing to meet as many as 17 of the 20 biodiversity targets that we set ourselves 10 years ago. We have plenty of examples of money that is being spent in a way that undermines environmental sustainability, so we know we need to act.
Just this morning, Professor Simon Lewis of University College London reminded us that the biodiversity crisis is not a problem in someone else’s backyard; it is happening in the UK. We live in one of the most nature depleted countries on earth. We have lost 55% of our forest birds in 50 years, and 97% of our flower-rich meadows since the second world war. We have just 13% woody cover, compared with an EU average of 38%. Scientists regularly document huge declines in beetles, bees, butterflies, moths and ladybirds.
Those things do not happen by accident. They happen as a direct result of public policy. They happen as a direct result of where money is spent. It is therefore critical that, if and when Ministers choose to exercise the powers in the Bill, they do so in a way that is consistent and compatible with any environmental and climate goals and targets in the relevant part of the UK.
I know time is short, Madam Deputy Speaker, but I want to say how much I support new clause 1, which has been tabled in the name of the shadow Business Secretary, the right hon. Member for Doncaster North (Edward Miliband). His powerful speech to the House on Second Reading left the Prime Minister embarrassed and exposed. Embarrassed because this is frankly all a bit of a game for a Prime Minister who does not like to lose, and exposed because the Prime Minister is at least supposed to uphold international law. In this case he is asking Parliament to give his Government authorisation to break a treaty that he negotiated and signed last year, and on which his whole general election campaign was based. You almost couldn’t make it up, but that comes after the Prorogation scandal, and a string of attacks on civil servants and the operations of our democracy, delivered by a Prime Minister who thinks little of shutting down Parliament when it gets in his way.
Under any Government of principle, new clause 1 would not be contentious, but sadly it is needed tonight because the Government’s amendment still leaves us with a Bill that clearly authorises Ministers to break international law. This is not a matter of left or right, or of leaving or remaining in Europe; this is about our democracy. To vote for the “treaty undercut” clauses in this group is not to provide a safety net, as the Chancellor of the Duchy of Lancaster desperately suggested yesterday. Instead, it is to fire a cannon ball through the safety net of democratic principle. By contrast, new clause 1 gives MPs the opportunity to demonstrate the immovable principle that it is outrageous for any Prime Minister, any Attorney General, any Justice Secretary—indeed, it should be out of the question for any MP—to be part of legislation that authorises Ministers to break the rule of law. So I hope that every Member of the House will vote for new clause 1, and against the indefensible precedent that the Government seek to set.
Government amendment 13 is yet another attempt by the Government to avoid scrutiny of their actions, this time by the courts. It is basic to our way of life and to our history that no one is above the law, but clause 45 is a crude attempt to put Ministers above the law. Not only are Ministers seeking the power to legislate in breach of international law, but Parliament is being asked to pass a law whose aim is obviously to prevent any effective constraint on Ministers. This should be out of the question for any Government with any respect for the rule of law. Again, none of the Law Officers, no Minister and no MP should be prepared to vote for such an attack on the basic principles of our constitution.
John Redwood (Wokingham) (Con)
I support the Government’s amendments to the legislation for the reasons outlined admirably by the Minister—it did need a little strengthening and this is a welcome clarification—but I rise mainly to oppose new clause 1.
I am disappointed with the official Opposition, because I was delighted after the clear decision of the people in the last general election that the Opposition said that they now fully accepted the result of the referendum, although it took place years ago—the previous Parliament blocked its timely implementation. We had a rerun in the general election and the Opposition fully accepted the verdict of that general election, yet here we are again today, with new clause 1 deliberately trying to undermine the British Government’s sensible negotiating position in the European Union.
Whenever there is a disagreement in interpretation of that original withdrawal agreement between the United Kingdom and the European Union, the Opposition and most of the other opposition parties rush to accept the EU’s—very political—interpretation of the situation and rush to say that anything the UK Government wish to assert in this Parliament, or in a court of law if it came to that, is clearly illegal.
It is preposterous that we have so many MPs who so dislike the people of this country that they are still trying to thwart the very clear wish to have a Brexit that makes sense.
John Redwood
I must not take up too much time. I wish to develop my argument quickly.
We have to recognise what we are dealing with here. The EU withdrawal agreement was pretty unsatisfactory and one-sided because the previous Parliament stopped the Government putting a strong British case and getting the support of this Parliament in the way the British people wanted. The Prime Minister wisely went to Europe and did his best to amend the withdrawal agreement but it was quite clear from the agreed text that a lot was outstanding and rested to be resolved in the negotiations to be designed around the future relationship, because we used to say that nothing is agreed until everything is agreed and that the withdrawal terms had to run alongside the future relationship.
The EU won that one thanks to the dreadful last Parliament undermining our position all the time. This Prime Minister is trying to remedy that and the only reason I was able to vote for the European Union (Withdrawal) Act 2018—much of it was an agreement that I knew had lots of problems with it—was that we put in clause 38, a clear assertion of British sovereignty against the possibility that the EU did not mean what it said in its promises to my right hon. Friend the Prime Minister and did not offer that free trade agreement, which was going to be at the core of the new relationship. We therefore needed that protection, so I am pleased that the Government put it in.
That made me able to vote for the measure to progress it to the next stage, but I was always clear that the EU then needed to get rid of all its posturing and accept what it had said and signed up to—that the core of our new relationship was going to be a free trade agreement. We were going to be a third country, we were not going to be under its laws and we were not going to be in its single market and customs union, but it has systematically blocked that free trade agreement. The UK has tabled a perfectly good one based on the agreements the EU has offered to other countries that it did not have such a close relationship with, but it has not been prepared to accept it. Well, why does it not table its own? Why does it not show us what it meant when it signed up to having a free trade agreement at the core of our relationship? If it will not, we will leave without a deal and that will be a perfectly good result for the British people, as I said before the referendum and have always said subsequently.
Of course, it would be better if we could resolve those matters through that free trade agreement. As colleagues will know, many of the problems with the Northern Ireland protocol fall away if we have that free trade agreement, and we are only in this position because the EU is blocking it.
Why is the EU blocking the agreement? It says that it wants to grab our fish. I have news for it: they are not on offer. They are going to be returned to the British people, I trust. I am always being told by Ministers that they are strong on that. The EU wishes to control our law making and decide what state aid is in the United Kingdom. No, it will not. We voted to decide that within the framework of the World Trade Organisation and the international rules that govern state aid—rules, incidentally, that the EU regularly breaks. It has often been found guilty of breaking international state aid rules and has been fined quite substantially as a result.
I support the Government’s amendments, and I support this piece of legislation. We need every bit of pressure we can to try to get the free trade agreement and the third-country relationship with the EU that we were promised by it and by the Government in the general election. We can then take the massive opportunities of Brexit. It is crucial that new clause 1 is not agreed to, because it would send a clear message to the European Union that this Parliament still wants to give in.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. We have not done too badly, all things considered. However, after the next speaker, I will introduce a four-minute time limit, so that we can get in as many people as possible. I call Stephen Farry.
Stephen Farry
Thank you, Madam Deputy Speaker. Regardless of that, I will try to honour what you just said about the length of speeches. I primarily want to speak to amendment 16, in my name and those of others, regarding the removal of the most offensive and dangerous clause in the Bill—clause 45—and I will touch on some other amendments.
At the outset, I want to be extremely clear: the vast majority of people in Northern Ireland and most businesses in Northern Ireland do not want to see this Government breaking or threatening to break international law, period, and they certainly do not want to see it happening on their behalf. Let us get that straight. The Government are not doing this for the good of the people of Northern Ireland.
The breaking of international law undermines the Good Friday agreement, which is lodged with the UN and is part of international law. In particular, breaking the withdrawal agreement and undermining the protocol does not help our businesses one bit. Instead, it places them in a much more uncertain legal situation for doing business. That is not in their interests, because businesses need to operate in a long-term, sustainable legal framework, especially if they are trading internationally. It risks Northern Ireland being turned into some sort of rogue state.
Whatever happens today, it is important that this House ensures that nothing goes forward in the Bill that either threatens or breaches international law, because it is a very dangerous route to go down. The opportunity exists this evening in new clause 1 and my amendment 16. Any efforts to soften that or put hurdles in place to make the prospect of breaking the law more difficult or push it further down the line defeats the purpose, because the threat is still on the table. That is no way for this country to do business internationally, and it sends a worrying message around the world.
Some of the spin in relation to the Bill is extremely disingenuous. In another debate, we heard references to George Orwell’s “Nineteen Eighty-Four” and doublethink, but the Government are taking that to a new level with some of the arguments used today and previously. In particular, we are told that this is about a safety net for Northern Ireland. I have already made the point that this is anything but that. This is about removing the safety net for Northern Ireland by undermining the Good Friday agreement.
The Minister talked about the businesses of Northern Ireland being supportive of the Bill. That is news to me, and I would certainly be keen to hear who those businesses are. He talked about people who are opposing the Bill wilfully misrepresenting the Good Friday agreement. I was there as part of the negotiations on the Good Friday agreement. I saw John Major, Bertie Ahern and others negotiating the agreement. I saw the role of the United States and the European Union. They understand what is at stake here and what the Government are potentially doing. It is extremely arrogant to suggest that people are wilfully misrepresenting the agreement when we are trying to defend it.
The principle of consent is embedded within the withdrawal agreement. The European Union is very clear and keen that that is the case. We can talk about other consent issues all we want, and if we are doing so, we go back to the very first principle: that Brexit itself was imposed upon the people of Northern Ireland against their will. That is when the issue of consent and pulling away from a carefully balanced set of arrangements began.
Some of the amendments tabled today seek to disapply the Human Rights Act in relation to clause 45. I remind the Government that the Good Friday agreement contains reference to the importance of the European convention on human rights, and the Human Rights Act puts that into domestic effect. The Government are talking about protecting the Good Friday agreement, in their terms, while at the self-same time putting in a clause that undermines it clearly and unambiguously. Indeed, the Northern Ireland Human Rights Commission and the Equality Commission, two institutions named in the Good Friday agreement, have expressed deep concern at the amendments that have been tabled by the Government.
Breaching international law will be a dead end for the Government, and I am not sure what they are seeking to achieve by it. The right hon. Member for Wokingham (John Redwood) talked about those on the Opposition Benches undermining the negotiations. The Government are doing that all by themselves at present. This is not a tenable or sustainable direction of travel. Until the Government withdraw the threat of breaking international law, they are not going to get a proper future relationship agreement, or a free trade deal with the United States. It is no longer just an issue of the Democrats and such people as Speaker Pelosi or Vice-President Biden. We now have Mick Mulvaney, President Trump’s special envoy, echoing those self-same comments. This is now a bipartisan issue in the United States. Whenever the Government have been out-Trumped, that is a very clear message of the danger of the route that they are going down.
In relation to us in Northern Ireland, we have to get the best route possible in terms of the protocol. The protocol is the direct outworking of the UK Government’s decisions around Brexit, so the protocol arises from what the UK has decided to do. It is imposing, essentially, binary choices on a society in Northern Ireland that works only through sharing and interdependence. We do not want any borders, but we have to try to work to mitigate the impact of the protocol. The way we do that is through building the trust and confidence of the European Union, so that we can ask for waivers and other forms of mitigations, not through unilaterally seeking to breach the terms of the protocol.
A very clear example is around the issue of export declarations and other export procedures. As part of the withdrawal agreement, the Government have already recognised that that is the prerogative of the European Union under its customs code; however, waiving that would not really threaten the integrity of the EU’s single market or customs union, unlike some other potential aspects. That may well be a fairly easy thing for the EU to give, but we are not going to achieve that if the Government cannot establish that confidence to work in good faith with the European Union and their partners going forward.
I will make two more points. The first is on new clause 7 from my DUP colleagues in Northern Ireland. As Members may have noticed, the Alliance party does not always follow the DUP on Brexit—indeed, we take radically different positions, including on this Bill—but there is common ground in a number of areas, in terms of trying to ensure that we have unfettered access from Northern Ireland into Great Britain. I recommend that the House approve that amendment if it goes to a vote. I do not think that it does any damage to the protocol or the withdrawal agreement, but it tests on a periodic basis the commitments that the Government are making and that are reflected in the withdrawal agreement itself. I have probably gone on for slightly too long, so I will end on that point.
Simon Baynes (Clwyd South) (Con)
I approach the Report stage of the Bill as a Welsh MP for a border constituency where protecting and enhancing the relationship between England and Wales, and the whole Union of the United Kingdom, is not a conceptual political argument but a vital matter of day-to-day practicality. Thousands of my constituents in Clwyd South go across the border each day to work, attend school or college, visit family and friends, or go shopping, so I am strong supporter of the Bill, which will ensure that businesses in all parts of the UK can continue to trade seamlessly across the UK as they do now—protecting jobs and supporting the economy by avoiding unnecessary burdens and costs being placed on businesses or consumers.
The rest of the UK is Wales’s biggest trading partner by some way, accounting for 61% of Wales’s exports, worth £30.1 billion, and 64% of Wales’s imports, worth £34.3 billion.
Much of those are found in small businesses close to the border with England, such as those in Clwyd South. This Bill will protect the UK’s centuries-old internal market, by ensuring that goods and services in one part of the UK are recognised in the others, and ensure a fair playing field for all companies. As has been mentioned, the Bill will enshrine the principle of mutual recognition, so that goods and services in one part of the UK will be recognised across the country, and the principle of non-discrimination, so that there is equal opportunity for companies trading within the UK, regardless of where they are based. The Bill will also ensure that high standards are protected across the whole UK by promoting co-operation between the UK Parliament and the devolved legislatures. There will be no reduction in our food hygiene or animal welfare standards.
Wera Hobhouse
Let me add my voice to those of the many Members of Parliament, professional organisations and members of the public who have grave concerns about clauses 41 to 45, and their implications for the UK’s commitment to international law. The Law Society and the Bar Council have described them as representing a “direct challenge” to the rule of law without precedent. We are a country with a proud history of protecting and promoting the principle that nations should be ruled by a set of agreed rules laid out in law rather than the whims of politicians. That is the foundation of a free and fair society, and it is true about national law, as it is about international law. That this House is even contemplating going against that proud principle is a travesty and a sad moment for this Parliament, which is often called the mother of Parliaments.
It is through international co-operation that we can address the challenges facing our global community, from climate change to human rights to security. The UK has always stood up for international law on the world stage. It is the very foundation on which we deal with other countries. The Prime Minister said it was “fantastic moment” when he signed the withdrawal agreement, but less than a year later this Government are proposing a Bill that would enable Ministers to go away from the UK’s obligation under that treaty. What does that say about our credibility as a trading partner?
I have said before that the withdrawal agreement left the Government with two options. The first is to abide by that agreement and negotiate a deal in good faith with the EU that avoids the need for a significant internal border between Northern Ireland and the rest of the UK, but it is disappointing that the Government have chosen the second option—to renege on the treaty they signed and break international law. Even a “specific and limited” breach of international law would do immeasurable damage to the UK’s reputation, not only as a trading partner but as a centre of international legal practice and dispute resolution.
All of this comes at a time when we are desperately seeking new arrangements with other countries across the globe. Our application to accede to the Lugano convention is a case in point. That agreement enables civil judicial co-operation with our closest neighbours and it is clearly in our interests to remain a party to it. Our application requires signatures from other countries. Would it not significantly undermine our efforts if we show willingness to negate our international obligations now?
Let me come to amendment 16, which the Liberal Democrats support. Clause 45 has significant implications for judicial review. It is not just about compliance with international law: it has implications for domestic law too. The clause runs the risk that domestic challenges to a potential breach of the international commitments of the UK will end up being litigated at the international level because they can no longer be conducted via judicial review at home. There is not even a precedent for the provision, and the greatest danger is that it will pit our courts against our Government. I urge all Members to support amendment 16 to avoid that damaging consequence.
Ms Nusrat Ghani (Wealden) (Con)
I rise to speak to clause 45 and the amendments tabled by the Secretary of State. I seek further clarification from the Minister about the circumstances in which the clause will be needed, and I seek reassurance on the motivation behind the amendments. I want to ensure that we are on the same page and to assist the smooth passage of the Bill.
Clarity of language and intent are key here. Our country’s reputation as rule makers, not rule breakers, is at stake, however unintended that may be. The Minister will know that I backed what my constituents call the Neill amendment—before I break any protocol, let me say it is the amendment tabled by my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill)—in part to help the Government to undo the damage that was done when five short words were delivered at the Dispatch Box:
“this does break international law”.—[Official Report, 8 September 2020; Vol. 679, c. 509.]
I know that the amendment we tabled was not perfect, but nor were the circumstances and we did get a huge concession, with the Government accepting a parliamentary lock on the powers they sought to give themselves in circumstances when all else had failed. I welcome the changes the Government have made, but making the law and breaking the law should never be taken lightly. In the last few weeks, yesterday and potentially tomorrow, it feels as though we are dragging Ministers by their tails—not that all Ministers require that—to get them to let us to have a say on legislation. That has not been edifying for any of us.
I support the vast majority of the Bill. It is a Bill that allows us to truly take back control from the European Union and establish, protect and enshrine the internal market of the United Kingdom, the most important market for all four of our nations, and provide us with much needed certainty for businesses across our constituencies. That brings me back to my major concern: we all have a duty across the House to leave a legacy that enhances our country’s reputation and, as Conservatives, to progress our cause with respect for the law and institutions—not leave a reputation that dishonours or diminishes our standing on the world stage. As MPs, we are just bit players in the history of our Parliament, but we can leave unintended consequences in the way we legislate that remain on the statute books long after we have gone.
The United Kingdom has a glowing reputation for democracy and the rule of law, which attracted my parents to migrate here. Reputation takes years to form but seconds to destroy. I support the Government in their quest to get the best possible deal from the European Union, which is why I want to give the Prime Minister the best possible negotiating hand, but when British Ministers give their word on the world stage, they are not only giving the word of the Government but that of the Crown. If the Government propose to break international law in extremis at a future date—I accept that it would only take place if the EU acted in extreme bad faith and undermined the integrity of the Union—that power must only be exercised by our sovereign Parliament, but of course I would prefer for us not to be in that situation at all. I would caution the Government against adopting a machismo, scorched-earth policy, and to remember that, as we emerge next year and continue to challenge countries such as Iran, Russia and China as they flout international law, we will need our international friends to stand tall with us. I look forward to hearing from the Minister his assurances on the amendments tabled to clause 45.
Grahame Morris (Easington) (Lab)
It is a pleasure to follow the hon. Member for Wealden (Ms Ghani). I wish to speak about progress towards drawing up a shared prosperity fund, because the English regions, and particularly communities such as mine, are in urgent need of investment. I want to focus my remarks on clauses 46 and 47 and on new clause 3, which relates to the replacement of EU structural funds with the UK shared prosperity fund.
The shared prosperity fund is a mechanism by which the Government can deliver their levelling up and building back better agenda. With all due respect to right hon. and hon. Members from Northern Ireland, Scotland and Wales, this is not an issue just for the devolved nations and regions, but a huge one for many of us in left-behind former industrial areas, and it is somewhat disappointing that, with three months until the end of the transition period, details of the scheme are still scarce.
Structural funds to promote economic growth and deliver infrastructure have never been more important. The divisions and inequalities that have been highlighted during the covid-19 pandemic are deeper and wider today, but they existed previously. As we have learned from previous crises, such as the global financial crash in 2008, it is the weaker regional economies that are hit first and hardest by any economic shock. We therefore need devolution for not only the nations of the United Kingdom but for the English regions that are, to a large degree, disadvantaged by central Government, and the ideal place to start is the shared prosperity fund.
If the fund is to work properly, effectively and in a timely fashion, it needs to be in the hands of town halls rather than Whitehall. In the little time I have, I want to give a practical example to illustrate the point, and that is housing in Horden, in my constituency. In 2015, the housing association Accent Housing abandoned its responsibilities. With the consent of Ministers and the former Homes and Communities Agency, the properties in Horden were auctioned off in a fire sale, with some going for as little as £10,000. That led to an influx of private absentee landlords, who have blighted the village and many others.
Five years later, the numbered streets in Horden have the highest concentration of crime in County Durham, as well as some of the worst housing conditions in the north-east. Durham County Council has consulted extensively and produced a plan, which has been presented to the Government time and time again. However, there are practical difficulties in discussing regeneration at a national level when the issues encompass several Departments—the Treasury, the Ministry of Housing, Communities and Local Government, the Department for Business, Energy and Industrial Strategy, and the Home Office. I raised the issue again this morning, but it is vital that we have cross-departmental working on these issues. I am confident that, if the resources were made available through the shared prosperity fund, regeneration plans such as the one we have developed for Horden, would be given the green light.
Brexit must mean something different for the left-behind areas of the United Kingdom. It cannot be a continuation of bad policy; otherwise, the slogan “take back control”, used frequently by the Prime Minister, will be nothing more than empty rhetoric and a broken promise, with lost opportunities for communities such as the ones I represent.
Virginia Crosbie (Ynys Môn) (Con)
The Bill is a necessary step to secure the future of our United Kingdom outside the EU. By creating the powers to continue the seamless functioning of the UK’s internal market, we will protect countless businesses across the UK, including many in my constituency, such as Menai Oysters & Mussels, Halen Môn, which produces our famous Anglesey sea salt, and countless producers of beef, lamb and seafood, many of which rely on trade between our home nations for the survival of their businesses.
It is not only a matter of continuity. The new shared prosperity fund, which replaces the EU structural fund, will focus on tackling inequalities within communities by raising productivity. In its written evidence to the Welsh Affairs Committee in May, the Isle of Anglesey County Council asked that the shared prosperity fund be less complex, more regionally focused and with faster response times than the EU structural funds. The UK Government are responding directly to those demands through the Bill.
Colum Eastwood
I fully agree with the hon. Member for Ynys Môn (Virginia Crosbie) that it is time to speak on behalf of our constituents. That is why I absolutely and totally reject the Bill.
The Bill is an assault on international law; it is an attack on devolution; and it is a pretty stupid way to negotiate. There are some very valiant attempts to amend the Bill— in particular, new clauses 1 and 6 and amendment 16. They are designed to protect the withdrawal agreement and our human rights obligations and to rail against the blatant desire to break international law. We will play the parliamentary game and support those amendments, but it is my firm view that the responsibility rests with the Government: it is not too late to withdraw the Bill and stop playing such silly games on this critical issue.
Some people in this House think we have just arrived in this Chamber. They need to understand that we have been coming here for centuries. We have seen it all. When we hear hon. Members aghast that the British Government intend to break the law, well, we know better. We are not surprised. From the Peel laws to partition, from Cromwell to collusion, famine and internment, and two Bloody Sundays, we know all about Britain’s adherence to the rule of law. We also know about other outrages. We remember Birmingham and Brighton, Guildford and Warrington, Mullaghmore and Enniskillen, and we are shamed by it all. The reason I mention those events is not that I want to live in the past but that I do not want to go back to it.
It took 20 years to negotiate, but in 1998 our people decided to come together, to look to the future, to decide and vow that never again would we live with violence and destruction. That peace was hard-won, and we are not about to lose it. It has to be minded, protected and nurtured. Brexit itself is an attack on our civility, on our progress. A hard Brexit would be disastrous for us. Of course, that was all recognised and understood by the Prime Minister only a few months ago. That is why he negotiated, signed and lauded the protocol all around the world. Then the Prime Minister sends a man into the television studios to tell us that
“these clauses are a safety net”.
Well, the Chancellor of the Duchy of wherever he is from also said some years ago that the Good Friday agreement was a “moral stain” and a “humiliation”. That gives us some confidence.
How can the European side negotiate with a Government who are pushing through Parliament a Bill that undermines the last deal it did with them? We on these Benches will always be suspicious, but if the Government want to give the people of Northern Ireland any comfort at all that they will be protected, they should withdraw the Bill now and begin negotiating like adults.
If the Bill is not withdrawn, I am absolutely confident that no deal that is done between the Government and the European Commission will pass the European Parliament or even the European Council. That is what our friends across Europe are telling us, so I ask the Government to please stop playing games with something that is far too precious to be messed with.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
I rise to speak in opposition to new clause 1, which as with some of the previous amendments tabled by Labour, shows how little Opposition Members have learnt from the election last year and the tortuous events leading up to it. Yet again, they are failing to put the UK first.
In the past few weeks, I have occasionally felt like I must have stepped through a time machine. Again, this country is at a crucial stage of negotiations with the EU. Although I am sure that the people of the EU and their national Governments do not wish us any ill will, parts of the EU bureaucracy inevitably want to be sure that the UK visibly struggles as we stand on our own two feet. Heaven forbid that we should be seen to make a success of Brexit and give other people ideas. Our negotiating team are doing everything they can to secure the best deal for the country—the entire country— and again, they need the full weight of the Government, Parliament and the country behind them. We need to have their back.
That is where we see, once more, what I can only describe as a warped approach by some who take everything the EU briefs out at face value. Barnier says, “Jump,” and the Opposition ask, “How high?” Conversely, everything our team says must be a half truth, a ruse and not to be trusted. We cannot rely on many things in politics, but the EU can always rely on one thing: in this place, there will always be people who give the EU team the benefit of the doubt and find a smoking gun in everything that the Government say and that David Frost and his team are putting forward.
Not once in her remarks did the hon. Member for Manchester Central (Lucy Powell) do anything other than fall in wholesale behind the line emanating from Brussels. No wonder the British people decided well and truly to plant their feet on this side of the House last year. I am glad that David Frost was able to come to the Government, explain the unreasonable negotiating tactics being used by the EU and see the Government act quickly and decisively to support him and his negotiating team. The Bill will ensure that we protect the interests of the UK, and by doing that, importantly, it will increase the chance that we can secure a deal in the interests of the UK and the EU.
When we are negotiating, the biggest risk comes from the other side thinking that we do not mean business. To suggest that we might not have third-country status was clearly a hardball negotiating tactic—a misplaced and ill-judged one—but with the readiness of Opposition MPs to jump in behind the EU line, is it any surprise that the EU thought it might work? The Bill makes it clear that it will not. Sadly, by tabling new clause 1, the Opposition are buying into that negotiation tactic, grabbing it with both hands and, yet again, making it harder for the country to secure a good deal.
The arguments about international law have been extensive. I welcome the consensus that we have reached with hon. and learned Friends that the powers in the Bill will be used if, and only if, the EU breaches its legal obligations to act in good faith. New clause 1 is completely unnecessary. The rest of the world will be able to see for itself whether this country remains one with which it can do business. I welcome the remarks of the Australian high commissioner to the UK, George Brandis, who insisted that the UK remains a trusted partner.
As we have done already, for the rest of the negotiations we should listen and compromise. We have left the EU, but we have not left Europe. Fundamentally, the Bill seeks to ensure that businesses across the UK can be supported, can thrive and can help the UK to make a success of Brexit. We are putting the UK first. All hon. Members should welcome that, reject amendments that undermine our negotiating team and, for once, pull together on behalf of the British people in the face of EU intransigence.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
Devolution has allowed us in Scotland to carve out a path that is different to that of the rest of the UK wherever necessary for the past 20 years. To understand exactly how this Bill attacks devolution, we need to read only clause 46, which states:
“A Minister of the Crown may…provide financial assistance to any person for…infrastructure”.
Subsection (2) goes on to say that infrastructure includes: health, education, transport, court and prison facilities, housing, water, electricity and the provision of heat. The Bill will allow UK Ministers to dictate and spend money wherever they like and in whatever devolved area they want, as long as it can be justified as they deem it to “directly or indirectly” benefit any area of the UK. We already know that the reality of that is Tory Governments funnelling millions into marginal Tory seats, as opposed to the areas that need it. I wondered why they had specifically included things such as heat and electricity and water, and then I remembered that the only reason why we are able to have publicly owned fresh water in Scotland is that the Scottish Parliament has made it so.
The Bill will explicitly give any Minister of the Crown permission to run riot with the very assets of Scotland that our Scottish Parliament has protected, and nowhere in the Bill—nowhere—does it state that permission must be obtained from the devolved Governments to do so. I have watched this Parliament hand over £40 million for ferries to a company that did not own any ferries. Are we really supposed to expect and rely on this Government to spend money on our behalf? Let us be clear: this would not be some benevolent donation to Scotland from Westminster, because clause 47 says that financial assistance may be subject to conditions, including repayment. We will be expected to pay back money that we never even spent. That is like being asked to take out a car loan even though you cannae drive.
To those who say that we are represented here and that we can change things, I say this: we have tried and we are outvoted at every turn. This gets to the crux of why independence is the only option left for Scotland. Let me give some context: Scotland has 59 MPs and the city of London 73 MPs. This is a Union that England dominates. The only reason why there is not an English Parliament is that the people in Westminster view this place as the English Parliament. We cannot afford to be naive. The only way to protect our Parliament is to become independent.
We regularly hear the Tories brag about how we have the most powerful devolved Parliament in the world, but I have a new thing for them to brag about: the UK is in the Guinness book of records as the country from which most countries have gained independence. Since 1939, 62 countries have gained independence from Westminster and not a single one has asked to come back. Only one country decided to stay and look where we are. In 2014, the idea of Boris Johnson as Prime Minister was a warning. Now, it is a reality.
The Bill provides a framework to allow Westminster to bypass the Scottish Parliament in the hope that we do not notice it, but we are noticing it. It took us 300 years to get our Scottish Parliament and 20 years for this place to put a bulldozer right through it—
Peter Gibson (Darlington) (Con)
I rise to oppose new clause 1. The Bill seeks to preserve and protect the internal market of our precious United Kingdom, having taken back control from the EU. Our membership of the EU predates much of the devolution journey on which our Union has been, and as we break free from Europe, we must put in place the protection that is essential to preserving the marketplace in our own internal market and, in turn, protect our Union.
This Parliament was elected to deliver on the will of the British people. The people of Darlington want to see Brexit done. I know, too, that they want us to have a great free trade deal with our European neighbours. They know that trade benefits us all.
The Bill serves to protect our internal trade, and also makes provision for a situation in which the withdrawal agreement’s provisions prevent our internal trade. I welcome the Government’s intention to seek parliamentary approval for the “notwithstanding” clauses. It is right that our European neighbours should negotiate with us in good faith as we seek to protect our internal market, and it is right that Parliament has the opportunity to debate and vote on such measures. It is my hope and wish that negotiations progress and a deal is secured, such that we do not have to invoke these measures. I regret the coverage that these provisions have attracted generating the unfortunate view that the House is intent on breaking the law.
Sammy Wilson
First of all, I make it quite clear that, so far as Democratic Unionist Members are concerned, despite what has been said by the hon. Members for North Down (Stephen Farry) and for Foyle (Colum Eastwood), the Bill is essential to protect businesses in Northern Ireland. Our worry is that it does not go far enough, because its only reference to keeping Northern Ireland as part of the internal market regards preventing the withdrawal agreement’s requirement that businesses in Northern Ireland make export declarations when exporting to our biggest market, GB. That is the only reference in the Bill. In fact, the Bill also specifically excludes Northern Ireland from protections against EU interference in state aid and support for UK businesses. We are the only part left out of that.
New clause 7 seeks to address some of those things. First of all, it refers to the Government using their “best endeavours” to ensure that trade from GB to Northern Ireland, and from Northern Ireland to GB, is protected within the internal market. Secondly, it would require the Government to monitor the impact of the withdrawal agreement and the Northern Ireland protocol, because we cannot defend businesses in Northern Ireland if we do not know what impact those are having. It stands to reason that, whether defending Northern Ireland through giving support to businesses and helping them to reduce their costs if unfair impositions are placed on them, whether protecting Northern Ireland through mitigation measures or whether supporting Northern Ireland through taking up these issues at the Joint Committee, we must know the impact of the withdrawal agreement. New clause 7 would require the Government to monitor those impacts so that they have the information to make a defence, as Ministers have said from the Dispatch Box that they want to do for businesses in Northern Ireland.
Thirdly, the new clause would require the Government to look at not only the impact of regulations that will be imposed on Northern Ireland by the European Union as part of the protocol, but the impact of any likely regulations, so that they can be anticipated and, again, so that businesses in Northern Ireland do not find that they are affected in a way that I have outlined in this place so many times. In my constituency, at this very moment, a planning application has gone in for a 45,000 square feet, £15 million border post. If we go by what Mr Barnier said yesterday, every lorryload of goods that comes through may have to be stopped, searched and investigated, with the resultant delays, costs and everything else.
It is important that the Government monitor the impact of such impositions. We are trying to ensure that this situation never happens in the first place, but unfortunately the Government already conceded that in the withdrawal agreement and the Northern Ireland protocol. I hope that the negotiations are successful in pushing the EU away from that draconian interpretation of the protocol. If not, there are some provisions in the Bill that will help to ameliorate the situation, and new clause 7 would push that even further. If Ministers mean what they say about protecting business in Northern Ireland and keeping it as part of the internal market, I hope that they will accept our new clause.
Gary Sambrook
This is one of the most important Bills that we will vote on in this Parliament, because it will create the foundation and fabric for our United Kingdom to prosper for many years to come—hopefully for at least another 300 years, to pick a random number. It is so important for all four of our nations to benefit from the Bill and prosper together.
The provisions in the Bill, especially on subsidy controls, are exactly what the spirit of Brexit was all about. It was about people knowing that they were sending billions of pounds to the EU, and feeling left behind here in the UK. I was shocked and appalled earlier to hear the shadow Minister talk about the Chancellor of the Duchy of Lancaster saying that money should be taken to the places it needs to be. The seats she was talking about used to be held by the Labour party, but are now held by Conservatives across the country, and it is because Labour forgot about those seats that so many of us Conservative Members are here today.
One such example, in my own seat, is the demise of MG Rover, which many people will remember. The factory closed down 15 years ago, but there is still 150 acres of land going completely unused. It is a daily reminder to the people who drive past it of that feeling of being left behind—of the billions of pounds going to the European Union, and the lost opportunities for jobs and skills across the constituency of Birmingham, Northfield. Through the subsidy controls provided in the Bill, we will be able to use Brexit to deliver on those jobs and opportunities. I very much look forward to this legislation being used for a bright, positive future across Northfield and Longbridge, when the empty space at MG Rover is used once again.
The clauses and compromises on parliamentary sovereignty are absolutely right and sound. A couple of Members on the Opposition Benches spoke about the nature of negotiations. Most Opposition Members are a second-hand car salesman’s dream. Half of them would leave the showroom without any windows, doors or tyres left on their car because every time someone said no to them, they would just roll over and accept it. If the European Union says, “No, sorry, we can’t do that”, Opposition Members think we should just say, “That’s alright; we’ll do whatever you like.”
We have heard about devolution, especially from Scottish National party Members. I am not too sure what definition of devolution they are working to. We talk about taking powers from Brussels to the UK and giving them to the devolved Administrations—but, no, their definition of devolution is to send them right back over to Brussels and have no control over them whatever. That is because the European Union is supposedly some kind of beacon and fount of progressive politics against a domineering United Kingdom. Well, they should tell that to the political independence campaigners in Catalonia, many of whom are political prisoners now, and one of whom was barred from public office yesterday, at the will of the European Union.
I have 10 seconds left, so I will finish by saying that I wholeheartedly support the Bill and its provisions to deliver our levelling-up agenda for constituencies across the country.
Karin Smyth
The last time I bought a second-hand car, the first thing I did was make sure it was roadworthy, legal and in line with the legislative provisions of this country.
I have followed this debate very closely, speaking both on Second Reading and in Committee, and I say yet again that we have had more heat than light. We started off—let us not forget that it was the Secretary of State for Northern Ireland, and nobody else, who started off—by saying that the Bill would breach international law. It was not the Labour party that said we would accept everything the EU says; it was from the Dispatch Box that he said the sentence that in fact has put this entire Bill under a cloud.
The Government have got themselves in a terrible mess on devolution. A key pillar of devolution is setting priorities in key areas, but, as the explanatory notes to the Bill say, clauses 46 and 47, which aim to provide financial assistance, fall
“within wholly or partly devolved areas”.
That is clearly an area of disagreement.
In parallel with the Bill, we are waiting for Lord Dunlop to report on the UK Government’s Union capability. At the Public Administration and Constitutional Affairs Committee a few weeks ago, the Chancellor of the Duchy of Lancaster said that that would come before this Bill hits the statute book. It is clearly, again, putting the cart before the horse.
We have to admit and understand the asymmetry across the Union given the size of England. It is not hard for us to try to do that. I am somebody who thinks that, despite our Union being forged in conflict, with a very difficult history, it is actually precious. It is an exemplar of what is good about politics, democracy, how we can come together with the hard graft of compromise and the ability of us as politicians to evolve our positions and reflect change over time. However, that has to be based on respect.
It is clear that the heavy-handed way in which the Government have introduced this Bill—and, I have to say, many of the speeches given to Conservative Members to read—has not appreciated such respect or the fragility of the Union. We could have had minimum standards included in this Bill, and we could have had the frameworks put on a statutory footing. It could have been done very differently, and that is a source of great regret.
This is not just an economic Bill, as we were sold it in the first place; it is a deadly serious constitutional Bill, and it is deeply problematic. I would like to speak more about Northern Ireland, but I cannot given the time. Again, it was deeply irresponsible of the Secretary of State for Northern Ireland to herald the Bill in the way he did. We know the situation is fragile and we know that Brexit creates difficult problems on the island of Ireland, and it behoves all of us to dial down the rhetoric and recognise that we are now in for a very long haul on the processes to make this work.
Whether in the Joint Committee, the specialised committee, the joint working group, strands 2 and 3 of the Good Friday/Belfast agreement, the British-Irish Council or the British-Irish Parliamentary Assembly, of which I am proud to be a vice-chair, we are not able to meet at the moment as parliamentarians. That is a real problem because we are not able to talk with people with whom we disagree fervently, but with whom we need to make peace across these islands.
With our demise in the EU, the fact that the 25-odd meetings a day we had as British and Irish parliamentarians —we do have many more common interests than with the rest of the EU—are lost and that those relationships are about to fall away is something the Government need to take much more seriously. In 1990, we started forging these agreements as parliamentarians across these islands, and that was when we started to develop the peace that came some eight years later.
The Government must treat not only the regions and parts of the United Kingdom with much more respect, but they must now take much more seriously the implementation of strands 2 and 3 and the relationship with the Irish Government. We know that there are more things to come with tariffs, and so on, and the Government need to take much more heed of that.
Andrew Bowie
It is a pleasure to speak in this debate on this vital Bill, as it was when I spoke on Second Reading and in Committee.
Contrary to popular belief, I have a lot of respect for my colleagues on the Scottish National party Benches. Their view about the future of Scotland is very different from mine, but I respect their view. I respect the fact that they come down here to improve the lives of Scots in their particular way, as I hope they respect the fact that, from my perspective, I believe I am doing the same, although with a Conservative bent. That is especially the case with the spokesperson for the SNP today, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), which is maybe why I was so disappointed by the tone he struck in his speech. He did not take very much instruction from my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) about the overuse of hyperbole.
Maybe that is also why I am a little perturbed by SNP Members’ opposition to what is a very good Bill—a Bill that is pro-business, pro-consumer and ultimately pro-Scotland. I know they will not take my word for that—I understand that—but maybe they will take the word of the CBI, which said that protecting the UK internal market is “essential”, and that:
“Preserving the integrity of the internal single market—the economic glue binding our four nations—is essential to guard against any additional costs or barriers to doing business between different parts of the UK.”
Or maybe they will take the words of the Scottish Retail Consortium, which said:
“Scottish consumers and our economy as a whole benefit enormously from the UK’s largely unfettered internal single market.”
And I have already quoted Andrew McCornick, the president of the National Farmers Union Scotland, who said:
“NFU Scotland’s fundamental priority, in the clear interest of Scottish agriculture as well as the food and drinks sector it underpins, is to ensure the UK Internal Market effectively operates as it does now.”
That is what this Bill does: it underpins and cements in statute the existence of our most important market—the internal market of our United Kingdom.
Alan Brown
It is a kind of pleasure to follow the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie). He strikes a conciliatory tone and he sounds reasonable, but the bottom line is that he talks complete tosh. Nobody in the SNP is arguing against preserving the UK internal market, but this Bill does not preserve the internal market; it actually undermines Scotland’s position, because it means we can be forced to accept conditions imposed on us by Westminster. It undermines devolution for the very same reason.
The hon. Gentleman says that the Bill allows the UK Government to spend more money in Scotland. That is bypassing the devolution settlement. There is nothing to stop the UK Government working with the Scottish Government at the moment to give the Scottish Government more money to spend on infrastructure and to discuss with them our needs in Scotland.
The hon. Gentleman supports a Prime Minister who in the past has said:
“A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde.”
A Prime Minister who wanted the Barnett formula scrapped. A Prime Minister who said:
“I do think it is pretty monstrous that you have free care for the elderly in Scotland and no tuition fees…when you still get considerable subsidies from the rest of the UK”.
Where is the respect for devolution and for the Scottish Government making their own policy decisions in Scotland? It is non-existent.
As we have heard, clause 46 is the biggest power grab ever, allowing the UK Government to impose spending decisions on Scotland, bypassing the elected Government of Scotland. We have heard that it will be additional money, but where is the proof? This allows the Tory Government to cut the Scottish block grant and then spend that money for its own political gain, pretending that it is top-up money when it is not. It is a con trick.
The first sentence of clause 46 includes the provision:
“A Minister of the Crown may….provide financial assistance to any person”.
Given the Tory track record—as we have heard, they have awarded a ferry contract to a company with no ferries, awarded PPE contracts to their cronies and outsourced the track and trace scheme, for example—how can we trust their spending judgments and their integrity to spend money in Scotland, supposedly for our benefit?
Scotland previously relied on EU structural funds to help to plug shortfalls from Westminster, and now we are supposed to trust the UK prosperity fund, which sits in the Department of English communities and local government, managed by a Secretary of State who ploughed the English towns fund money into Tory marginal seats and who made an unlawful planning decision to save a Tory donor millions of pounds. There is no way we can trust him to look after the needs of Scotland. We cannot trust the Tory Government with clause 46 and, to rub salt in the wounds, clause 47 allows returns and punitive interest to be applied to any spending that comes through clause 46.
Clause 48 allows Westminster to decide what is and is not allowed with state aid. Let us look at farming, for example. The Scottish Government may wish to pay headage figures for lamb and beef production, but the UK Government could overrule that if they do not support English farmers in the same way. If we get to the stage where the free marketeers have their way and UK Government state subsidy is eliminated for certain sectors, by default, the Scottish sectors will also have their rug pulled from under them because of state aid rules. How does that respect devolution? When it comes to farming, the UK Government have form, previously having stolen the common agricultural policy convergence uplift money from the EU.
We know the risk of imports of chlorinated chicken and hormone-injected beef. However, Argentinian beef could come in and undercut the market. Genetically modified crops could be imposed in Scotland. We have more robust climate change targets that could now be overruled by Westminster. The Government might impose this Bill on the Scottish Parliament against its will, but they are going to lose the independence argument.
Marco Longhi (Dudley North) (Con)
I rise to speak in support of the Government’s Bill and their amendments. This Bill exposes an inherent weakness in the withdrawal agreement—namely, that while the EU and UK Government must use best endeavours and act in good faith to reach an agreement, it does not spell out a clear course of action if either or both of those criteria are not met. We all know that the EU has become accustomed to a United Kingdom that repeatedly comes back to the table asking for an extension, and maybe this is why the EU’s format of negotiation is a sequencing one, meaning that it agrees to move forward only once an agreement has been reached on a previous matter. This has the effect of incurring huge delays, and the EU’s unwillingness to multitask must have a purpose—namely, continuous delays desirable to the EU and damaging to the UK’s prospects of a good deal.
Is the sequencing approach to negotiating a demonstration of using best endeavours or negotiating in good faith? I submit that it is not. It is now clear to most objective observers that the EU’s current interpretation of the Northern Ireland protocol is to use it as a lever in the negotiations. How is that a demonstration of negotiating in good faith? This Bill will ensure that Northern Ireland remains part of the UK’s customs territory and that Northern Ireland businesses retain unfettered access to GB markets. I must, however, place on record that more needs to be done in relation to Northern Ireland, having heard very powerful and compelling speeches from Unionist colleagues today and previously.
We know that the withdrawal agreement provided for the Joint Committee to set out heads of terms of a future deal, but the prospect of there being a timely and full agreement now appears unlikely. Why does the EU fail to agree at the Joint Committee on a single exemption from controls and tariffs for any goods flowing between GB and Northern Ireland? Is that behaviour consistent with best endeavours and good faith? Again, I submit that it is not. Why is it failing to agree exemptions at the Joint Committee on food checks for food moving between GB and Northern Ireland when we have been a member of the EU for 40 years and set standards ourselves? However, more fundamentally, what country and what Government in their right mind would devolve such fundamental sovereign powers to a foreign entity so that it would have the right to decide whether we can move our own food around our own Union of nations, as we have done for centuries? If we do not deliver this Bill, the EU will also have jurisdiction over how state aid decisions are made, for example on bail-outs related to covid or any future crisis.
For all those reasons, the Bill is about the delivery of Brexit and about sovereignty. It puts into law the ability for the Government to take action if a deal is not agreed. It delivers on an instruction that the good people of Dudley, and across our Union, gave this place not only in the 2016 referendum but at the last general election. We should, and must, press on with this.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
The debates have been robust and challenging, and I have learned so much about Scottish politics. It has been a pleasure to listen to the sibling rivalry across the House. I have learned a great deal—thank you.
This evening we will be asked to vote on a Bill that moves us towards a situation in which the Government will break their own international treaty obligations. That will make negotiating future deals even harder, at a time when the Government should be focusing on tackling covid rather than reopening Brexit battles. However, I am encouraged by the number of amendments and new clauses in the names of my right hon. Friend the Member for Doncaster North (Edward Miliband) and my hon. Friends the Members for Manchester Central (Lucy Powell) and for Sheffield Central (Paul Blomfield), and all those who have worked tirelessly to try to improve the Bill.
New clause 3 would place on the Government a duty to consult, monitor, report on and review parts of the Bill, including the shared prosperity fund. That is incredibly important to my constituency, which is in desperate need of levelling-up opportunities. My constituents have grown weary of glitzy marketing campaigns such as the northern powerhouse or social mobility, which have failed to deliver meaningful and widespread opportunities for them and their families. New clause 3 would militate against the shared prosperity fund going the same way, because Ministers would have to return to the House to update hon. Members. That report would allow us to examine whether the internal market will deliver desperately needed opportunities across our country. Let us not forget that the Centre for Cities called the UK
“the most geographically unequal developed economy in the world”.
The new clause would also require oversight of any cynical attempt to use the shared prosperity fund as a reward for Conservative MPs in red wall seats.
There is an urgent need to bring new jobs and development out of the south-east and into communities that have talent, people, and enthusiasm but are in need of opportunities. If we are to spread growth around the country in a consistent way, the power to do that must be in the hands of local leaders. By the time the Government report back, we should not still be debating whether the Bill strips devolved authorities of power and undermines the Union. Instead, we should be talking about how it places opportunity in the hands of local representatives—the very people who work in those communities, and know them far better than centralised Whitehall Departments ever could.
The shared prosperity fund replaces the EU structural fund, which many parts of our country benefited from. In Yorkshire and Humber, that fund was about €796 million. Currently, when drawing down resources from that fund, priorities for support funding need to be set locally and delivered by those engaged in the projects locally. The Government should deliver the fund by building on that principle of engagement, and by empowering our devolved Administrations, local authorities and elected mayors. The Government must trust our regional leaders to do what is right for their communities.
The Bill is about Britain’s reputation and position in the world. It is also about how we serve our communities better and ensure that our prosperity is shared properly across our country, on the basis of what would have been received had the referendum result been different.
A number of new clauses and amendments would improve the Bill, and I will be supporting them fully today.
Mary Kelly Foy (City of Durham) (Lab)
As a member of the Northern Ireland Affairs Committee, and someone with family roots in Ireland, I have taken a key interest in the Government’s manoeuvrings over the Northern Ireland protocol and the United Kingdom Internal Market Bill. I am concerned, not especially for the reputation of Her Majesty’s Government, but for people on both sides of the Irish border, many of whom are very worried about the potential return of a hard border, the erosion of the principles of the Good Friday agreement, and all that that might mean.
Jerome Mayhew (Broadland) (Con)
Clause 46 has been the subject of much heated debate in this Chamber, yet when I read it, it seems innocuous enough. It provides power for a Minister of the Crown to provide financial assistance to promote lots of good things—economic development, infrastructure, cultural activities and sport—yet this has caused such seeming offence to the nationalists in Scotland that they have tabled amendment 18 to do away with the power in its entirety.
The SNP talks of a power grab, and yet it is an incontrovertible fact that not a single power held in Edinburgh, Cardiff or Belfast is being removed. In fact, the opposite is taking place—more than 70 powers currently held in Brussels are being devolved, which the SNP would like to give back to the EU. It is true that not every power currently held in Brussels is passing to the devolved Administrations. The reason is that the Government are properly applying the constitutional devolution settlement between the four nations, and quite right too.
I have heard the Scottish nationalists assert that clause 46 goes against the principles of devolution, but the opposite is true. Devolution in Scotland was devised by the late right hon. Member for Glasgow Anniesland. As the father of devolution, Donald Dewar set out his vision in the 1997 White Paper “Scotland’s Parliament”, which said:
“Westminster will continue to be responsible for those areas of policy best run on a United Kingdom basis.”
It goes on:
“By preserving the integrity of the United Kingdom, the Union secures for its people participation in an economic unit, which benefits business, provides access to wider markets and investment and increases prosperity to all.”
That is the vision that Scots backed in 1997, and it is exactly the approach that the Government are following in clause 46.
To be clear, this is not money repatriated from the EU, nor is it money taken from the devolved Assemblies. This is money granted by the Parliament of the United Kingdom to be spent across the United Kingdom. This is money that is needed throughout our country. The response to covid-19 is the most recent example of why we all benefit from this power residing at UK level and as the devolution settlements require.
To cushion the profound economic shock of the virus, the UK Government put in place a truly monumental system of business and employment support, in addition to their spending allocations to the four nations. In Scotland alone, nearly 800,000 jobs—almost a third of the entire workforce—were protected by the furlough scheme and the self-employment income support schemes. In addition, a minimum £12.7 billion has been provided, including £6.5 billion to Scotland, on top of the spring Budget—a 25% increase on pre-virus spending levels.
How do we have access to that money? It does not come from our financial reserves as a nation. Sadly, it comes from the UK Government’s ability to raise debt at very low interest rates because the markets have faith in the financial strength of this United Kingdom. It is the strength created by a unity of 68 million people with the financial firepower of the City of London and Charlotte Square combined. To pretend otherwise would be to perpetrate a fraud on the people of Scotland, Wales and Northern Ireland.
There are arguments for independence, but to remove the powers of the UK Government to provide ongoing financial assistance to every part of the United Kingdom would be a huge disservice to the people of Scotland. And for what reason? To promote a nationalist agenda, even at the cost of support for the people of Scotland.
Bill Esterson (Sefton Central) (Lab)
The Chancellor of the Duchy of Lancaster described the breaching of international law as a “safety net”. That breaching of international law is set out clearly as being such in article 5 of the withdrawal agreement that this Government signed up to, put to the British people and passed in legislation. There is no shadow of a doubt that even bringing this legislation to the House means breaching international law, with all the consequences that flow from that.
To call this a safety net is entirely wrong. It is anything but that. There is nothing safe in the breach of international law whatsoever, as the Minister well knows. The breach of international law invites retaliation under the terms of the World Trade Organisation. It invites us being regarded as a pariah. It invites others to say that we are in no position to criticise those who routinely break international law. It undermines this country’s fine reputation, as set out by Margaret Thatcher—revered by all Conservative Members—who said that Britain is nothing if not a country that sets an example to other countries. It undermines the promised negotiations for deals around the world, including the fundamental negotiation right now with the European Union. We were promised by this Government—by their Prime Minister—that 80% of our trade would be covered by international trade agreements after Brexit had been concluded. What is the figure now? It is 8%—that is all they have managed, not the 80% they promised. The safety net has a great big hole in it; it is nothing of the kind. What of the Prime Minister, who described it as a safety net as well—as a means of preventing this fanciful blockade of Great Britain to Northern Ireland trade? If that were true, why is there nothing in the Bill that deals with this alleged shortcoming?
No safety net is needed, either, because the dispute resolution mechanisms set out in the withdrawal agreement and in the Northern Ireland protocol provide everything that we could possibly need. If those protections are followed step by step, we stay within international law, so why are the Government so keen to go beyond that? The right hon. and learned Member for Torridge and West Devon (Mr Cox) set out what is already provided—I remember; I was here—when he stood at the Dispatch Box and described the process as providing a clear and lawful set of responses, and he was right to do so.
We should not be going down this road. The agreement was signed, it was promised to the British people, and the Prime Minister told us that it was in perfect conformity with the Northern Ireland protocol. This Bill is not needed in its current form. The Government should take out the illegal actions that they are proposing and they should be honest with the British people.
James Sunderland (Bracknell) (Con)
The first duty of any Government is to protect their people from existential threats: it is called defence of the realm. Given that this overrides all other considerations, we need to see this Bill against the backdrop of our negotiations with the EU. It is not only a necessary piece of legislation in its own right but provides an insurance policy against the EU seeking to divide the Union or subjugate our right to exist as a sovereign trading nation.
The central premise of the Bill is to provide clarity over the internal market, to shed regulation, and to apportion powers to the home nations. This is about not just life after Brussels but supporting countless jobs and livelihoods across our whole country. Given that seamless trade between the devolved nations is proven and sacrosanct, there is no question but that we are better off together within the Union and that those who seek to divide us are not working in our nation’s best interests.
I subscribe to the Government’s insistence that the new powers in the Bill seek to protect peace in Northern Ireland, the integrity of the Good Friday agreement, the viability of the internal market, and the importance of the Union. I am also clear that there must not be a hard border between Northern Ireland and the Republic, and that pragmatic measures are needed to reinforce the sanctity of what has been achieved by politicians on all sides. To be frank, the EU does not have a trump card in this regard, and it is for the UK alone to decide what is best for the UK.
New clauses 4 and 5 are pragmatic; clarifying the role and scope of the Competition and Markets Authority within the wider protocols is necessary. Given that, for example, Northern Ireland exports 1.6 times more to the UK than to the EU and imports 2.5 times more from the UK than from the EU, we must maintain Northern Ireland’s integral place in the UK internal market and within its customs territory in the same way that we need to maintain a similar level of integrity for England, Scotland and Wales.
On new clauses 1, 2 and 3, the Bill already contains the safeguards that are needed to uphold the independence of the courts, uphold the rule of law and implement the withdrawal agreement—which, of course, the UK will do. I do not believe it is necessary to impose the environmental safeguards required by new clause 6 for the simple reason that the UK is already at the cutting edge of the green agenda, and that financial assistance to any part of our Union should not be dependent on a climate and nature emergency statement. That will prohibit, rather than enable.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I wish to inform the House that I shall call the Minister at 6 pm to respond to this lengthy debate in five minutes, and then the questions will be put.
Kirsten Oswald (East Renfrewshire) (SNP)
This Bill is shameful and the Conservative party is shameless. The Bill is misconceived, ill-advised and designed to wholly override any notion of devolution. The Welsh Government have described it as
“an affront to the people of Wales, Scotland and Northern Ireland, who have voted in favour of devolution on numerous occasions.”
The Bill seeks to break international law and to break devolution.
One of the many vexing things about this brazen, law-breaking, power-grab Bill is when the UK Government try to suggest it is not so or that there is nothing to be concerned about, as if we should just disregard clear, undisputable facts. Just look at clause 46: it is a mucky muckle power grab. Plainly, the UK Government either know perfectly well what they are doing and they are intent on breaking international law, undermining the Northern Ireland protocol and stripping powers away from the devolved Administrations, or they are utterly and shamefully incompetent. It has to be one of those two things, or perhaps both. What it cannot be, and what is frankly an insult to the intelligence of people watching this charade in Scotland, is the nonsense that some Conservative Members engage in when they suggest that, despite all the evidence to the contrary, their UK Government is somehow exceptionally above international law. That is the dangerous exceptionalism that sits at the heart of the Bill and that is what lies behind their plans to break international law and ride roughshod over the devolved Governments.
We will all suffer for it if the UK Government have their way, because—look at clause 48—these plans open the door to their race to the bottom, to bargain-basement Britain. That is regardless of the many voices calling for them to change tack—the Scottish Government, the Welsh Synod, the Northern Irish Assembly, the General Teaching Council for Scotland, the NFUS, the STUC, former Prime Ministers and the Chair of the Public Administration and Constitutional Affairs Committee. I could go on all night. In the eyes of the UK Government, they are all wrong. I am afraid that is not credible. This Trumpian truth-twisting is all part of their plan to ride roughshod over the law, the Sewel convention and Scotland’s ability to make the decisions that are right for the people of Scotland. Of course, that holds for Wales and it holds for Northern Ireland, as we heard last week when we were discussing part 5.
I have not agreed with the right hon. Member for Maidenhead (Mrs May) on many occasions, but she hit the nail on the head last week when she called the UK Government out on their disregard for law and good faith. This UK Government cannot be trusted. They cannot be trusted on Scotland, on devolution, on standards and on upholding international law. In fact, the Bill shows they cannot be trusted at all. It is no wonder that the Scottish Government are unable to recommend legislative consent.
We were told that we should lead, not leave, that we are a partnership of equals. Actions speak louder than words, and the actions of this reckless UK Government speak loudly and clearly of the pressing need for Scotland to steer another course as far away from the direction of the UK Government as possible.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to follow the hon. Member for East Renfrewshire (Kirsten Oswald), although I fear there is very little common cause between her speech and mine. The internal market is a shared asset, and we all want it to work effectively. As we recover from covid, we must ensure that our economy becomes stronger than ever. That is why the Government have introduced this legislation: to guarantee the continued functioning of that internal market, to ensure that trade remains unhindered in the UK. That is why I support the Government amendments and the Bill as a whole, and I urge the House to reject the Opposition amendments.
It is apparent that we need a clear state aid policy that resides in Westminster, because, as much as the SNP likes to pretend this is the English Parliament, all parts of the UK are represented here, and this place is the only place with the legal and moral authority to act on behalf of the whole of the United Kingdom. Also, our ability to develop trade relations with other countries depends on our having a co-ordinated approach to state aid across our own country, the United Kingdom.
I do not believe that the Bill, or any of the specific provisions in question, undermine our commitment to the Good Friday agreement. Rest assured that those of us on this side of the House remain fully committed to the provisions of that agreement. We will not allow it to be undermined by any possible failure of negotiations, nor by any bad faith interpretations of clauses in the Northern Ireland protocol, and I pay tribute to the speeches from my hon. Friends earlier in the debate.
I will touch on the controversy over the key clauses in part 5: clauses 42, 43 and 45. I am no lawyer, and there are many Members in this House more learned than I am, but it seems to me that international law is breached all the time. The recent actions of the French navy in the channel breached the UN convention on the law of the sea. Where was the pearl clutching from the Opposition Benches then? The German Constitutional Court ruling in May set aside a ruling of the European Court of Justice and brought that international law into question. The European Union itself was only too happy to set aside its own treaties when the stability of its own union was put at risk during the financial crisis.
It seems, as my constituency neighbour, my hon. Friend the Member for Stone (Sir William Cash), put it earlier, international law is, in fact, a mixture of law and politics; I think he said it was 40% the former and 60% the latter. That does not mean that we should not be mindful of our international reputation, but our friends and allies around the world would not expect us to accept bad faith interpretations of the Northern Ireland protocol. They would not expect us to impose unreasonable restrictions on our own internal sovereignty.
That is why the clauses are in the Bill. They are, as my right hon. Friend the Minister for the Cabinet Office said, a safety net in the event of a failure of negotiations. I believe, too, that they strengthen our hand in those negotiations. The people of Newcastle-Under-Lyme expect their representative to stand up for them, but they also expect him to stand up for Britain, and that is what I am doing by backing the Bill.
I do not believe, therefore, that Government amendment 66, which is now incorporated in clause 54, was strictly speaking necessary, though I pay tribute to my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), whose amendment inspired it. However, I believe that incorporating that amendment was wise, because by leaving the final decision about these matters in the hands of this Parliament we are making it clear where sovereignty in these matters, and in this country, truly resides.
Stephen Kinnock (Aberavon) (Lab)
Every once in a while, a piece of legislation comes that goes to the very heart of our character as a country. The internal market Bill is one such piece of legislation. It goes to the very heart of our economy, our national identity and our constitution. There is no doubt that the legislation is necessary. We need a strong internal market so that businesses can trade freely across the UK’s four nations, which will be vital for our shared prosperity, and we want the Government to get on and deliver what they promised: an oven-ready Brexit deal in place for 1 January, so that we can get on with tackling the coronavirus crisis.
However, whether seen through the prism of the economy, of our national reputation or of our constitution, the Bill is fundamentally flawed. On the economy, it creates the conditions for a race to the bottom. Mutual recognition of standards without common frameworks in place simply opens the back door to hormone-injected beef and chlorinated chicken becoming the norm.
Internationally, the Bill will severely damage Britain’s standing in the world. The Government have freely and openly confirmed that the Bill will breach international law by overriding elements of the withdrawal agreement signed only nine months ago by the Prime Minister himself. As the Foreign Secretary himself stated in January:
“global Britain is…about continuing to uphold…our heartfelt commitment to the international rule of law…for which we are respected the world over.”—[Official Report, 13 January 2020; Vol. 669, c. 768.]
Our country’s reputation is on the line. Surely, we want to be seen as a trustworthy nation with which other countries can do business in good faith. Surely, we want to strike good trade deals across the world. Surely, we want to be able to stand up to the world’s authoritarian regimes with credibility. I know many Government Members are extremely concerned about the damage the Government are doing to Britain’s standing in the world. I hope that that concern will be reflected in the Division Lobby this evening.
As a Welsh MP who believes passionately in a strong Wales within a strong United Kingdom, I am profoundly concerned that the Bill risks the integrity of our Union. Devolution is based on the principle of informed consent, but the UK Government are hellbent on cutting the devolved Administrations out of the conversation. Surely, one of the lessons of the covid crisis is that the overcentralised control freakery of this Government is simply not working. The days of being able to sit behind a desk in Whitehall, pull a lever and expect it to deliver the desired outcomes in places such as Aberavon are over. Modern Government should be built on consultation and co-operation, not top-down diktat. As chair of the all-party group on post-Brexit funding, I am profoundly concerned that this approach will be applied to the shared prosperity fund. There is a risk that the UK will undertake both a money grab and a power grab from the devolved nations with regard to how that development funding will be spent. Further still, we hear that the Government plan to funnel money directly into Conservative seats in what can only be described as the worst sort of pork-barrel politics.
The Prime Minister loves to present himself as a Churchillian patriot, but is it patriotic to divide our country? Is it patriotic to tarnish our country’s reputation overseas? Is it patriotic to undermine our economy and the standards we hold so dear? Absolutely not. The key elements of the Bill are holding our country back. We need competence and consensus, not bluster and bullying. We need to deliver on this deal and move forward.
Taiwo Owatemi (Coventry North West) (Lab)
I am pleased to be able to contribute to the debate.
This House and all our constituents were promised an oven-ready deal. Now, it seems as though the Government are not only failing on that promise, but increasingly showing that there was nothing in the oven at all. Britain’s greatness is built on our values and the fact that we have long stood up for the rule of law. However, the Bill represents the disregard of an international treaty the Prime Minister himself personally negotiated and signed up to. If the UK Government can break international laws with their former friends and allies, what will they do to others? Is that the basis and dreadful reputation on which we are seeking to negotiate and agree trade deals with others?
The Government promised to get Brexit done and indeed they should: not by any means necessary, but with the strongest protections in place for my constituents in Coventry North West and for constituents across the UK; and not through a no-deal Brexit, which would decimate jobs and businesses across the country, causing untold harm to our own communities. We need a Brexit deal that will protect jobs and safeguard our health and social care sector. Research from the University of Sussex estimates that the failure to secure a Brexit deal would reduce exports in the manufacturing industry by up to 20% and reduce jobs. The Prime Minister promised to protect our manufacturing industries, which are crucial to our economy and any recovery we hope to see in Coventry. Even a former member of his own Government, Margot James, appealed to the Government to support manufacturers in Coventry, which are already strained by the coronavirus pandemic. How can the Prime Minister safeguard jobs and commit to job creation in manufacturing in my constituency if he is committed to selling the UK short on delivering a Brexit that my constituents are proud of?
Coventry North West and the west midlands in general stand to lose the most from the Government playing fast and loose with both UK and international law. A University of Oxford study found that car production could halve by the middle of the next decade if the UK crashes out of the EU with no deal. We are already losing manufacturing jobs in Rolls-Royce Annesley, so what is next? We have so many thriving small businesses in Coventry North West, but the Bill does not serve them and makes a catastrophic no-deal Brexit more likely. Nor does it serve our health and social care sector, and my caseload attests to the fact that the Government do not have their eye on the ball. Breaking international law will severely impact the UK’s ability to negotiate trade agreements with countries that set a higher bar, as well as to protect the health sector and public health in the UK and to enhance health globally.
Despite what the Government would like people to think, Labour wants a Brexit deal negotiated so that we can press ahead with tackling issues such as the coronavirus, securing important trade deals—
Mr Deputy Speaker (Mr Nigel Evans)
I am terribly sorry, Taiwo. We have to move on.
Paul Scully
I thank everybody who has spoken in the debate, and I once again thank all right hon. and hon. Members who have engaged with the Bill during its stages. This is likely to be my last contribution on this particular Bill—[Hon. Members: “More!”] I know, but I only have five minutes, and I want to pay tribute to my colleagues, the Minister of State, Cabinet Office, 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), who have played an amazing role and worked so hard. I also pay tribute to my Bill team—Jon Robinson, Jeff Yen, Satchi Mahendran, Dom Entwistle, Henry Hutton, Phoebe Gould, Dominic Bull, James Frisby and, in my private office, Ollie Benbow-Wyke.
Those of us on the Government Benches have heard and participated in the passionate debates on the Bill during the past two weeks, and I pay tribute to all their considered contributions. My right hon. and hon. Friends have made some impassioned speeches about the need for business certainty and about why the Union is so much better together than apart.
The debates have obviously been passionate, because of the importance of the Bill, but some of the other speeches in this Chamber today, and on some of the Committee days, have been somewhat circular. We have heard that there will apparently not be a US trade deal, but that we will get chlorinated chicken. We have heard that we love devolved spending, but that we would rather it be done from Brussels. We have heard people celebrating 62 countries having left the UK at various points in their recent history. Not one of those has the UK pound or wanted to join a bigger political union such as—oh, I don’t know—the EU, for example.
None the less, we want to make sure that we can get on with the Bill, because it is so important to 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. The Bill will ensure UK businesses can trade across our four home nations in a way that helps them invest and create jobs, just as they have for hundreds of years. We will do that in a way that supports and enables one of the largest transfers of power in the history of devolution, while maintaining that certainty for businesses. That will be done in a way that preserves our high standards, whether environmental, food or animal welfare, and in any number of other areas. It is therefore crucial that we pass this Bill, and I commend it to the House.
Mr Deputy Speaker (Mr Nigel Evans)
Before I put the question, there are likely to be Divisions, so, please, will only Front Benchers go out through the door in front of me? All Back Benchers must leave behind me, go down to Westminster Hall and join the queue. I am going to ask the Doorkeepers and the Whips to enforce that strictly, because we have to have social distancing.
I apologise to the seven MPs who were unable to get in. If anybody wishes to withdraw from Third Reading, please come and see me during the Division.
Question put and agreed to.
New clause 4 accordingly read a Second time, and added to the Bill.
New Clause 5
Office for the Internal Market panel and task groups
“(1) The CMA may authorise an Office for the Internal Market task group constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 to do anything required or authorised to be done by the CMA under this Part (and such an authorisation may include authorisation to exercise the power conferred on the CMA by this subsection).
(2) Schedule (Constitution etc of Office for the Internal Market panel and task groups) contains provision about the Office for the Internal Market panel and Office for the Internal Market task groups.” —(Paul Scully.)
This new clause enables functions of the Competition and Markets Authority under Part 4 to be carried out on the authority’s behalf by Office for the Internal Market task groups constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013: see NS1. This new clause would be inserted after Clause 28.
Brought up, read the First and Second time, and added to the Bill.
New Clause 1
Withdrawal Agreement and Rule of Law Duty
‘(1) An appropriate authority exercising any function to which this Part (Northern Ireland Protocol) applies must—
(a) respect the rule of law;
(b) allow for the possibility of judicial review of an enactment, decision, act or omission by the appropriate authority;
(c) use the provisions of Article 16 of the Protocol to protect the interests of the United Kingdom.
(2) An appropriate authority exercising any function to which this Part applies must comply with the obligations of the United Kingdom under international law.
(3) An appropriate authority exercising any function to which this Part applies must comply with—
(a) the requirement under Article 5 (Good faith) of the Withdrawal Agreement for the EU and the United Kingdom to assist each other in full mutual respect and good faith to carry out the tasks which flow from the Agreement;
(b) the requirement under Article 167 (Consultations and communications within the Joint Committee) for the EU and the United Kingdom to endeavour to resolve any dispute regarding the interpretation and application of the provisions of the Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution;
(c) the requirement under Article 184 (Negotiations on the future relationship) of the Withdrawal Agreement for the EU and the United Kingdom to use their best endeavours, in good faith and in full respect of their respective legal orders, to take the necessary steps to negotiate expeditiously the agreements governing their future relationship referred to in the Political Declaration of 17 October 2019 and to conduct the relevant procedures for the ratification or conclusion of those agreements, with a view to ensuring that those agreements apply, to the extent possible, as from the end of the transition period;
(d) the requirements of the Good Friday or Belfast Agreement of 10 April 1998 between the Government of the United Kingdom and the Government of Ireland and the other participants in the multi-party negotiations, which is annexed to the British-Irish Agreement of the same date.
(4) An appropriate authority exercising any function to which this Part applies must comply with the Human Rights Act 1998.’ —(Lucy Powell.)
This new clause is intended to replace Clauses 42, 43 and 45 of the Bill, to require Ministers to respect the rule of law and uphold the independence of the courts and the practice of judicial review, and to require UK Ministers to implement the Withdrawal Agreement.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
Before we come to new clause 6, I remind Back Benchers to leave behind me and Front Benchers in front.
New Clause 6
Economic development: climate and nature emergency impact statement
“(1) Any financial assistance provided under Part 6 of this Act for the purpose of economic development must take into account the overarching need for a sustainable strategy aimed at long- term national well-being.
(2) Every proposal for financial assistance under this Act must be accompanied by a climate and nature emergency impact statement.
(3) Responsibility for the production of the climate and nature emergency impact statement required in subsection (2) resides with the applicant for financial assistance.
(4) Responsibility for assessment of the climate and nature emergency impact statement required in subsection (2) resides with Ministers, who are required to publish this assessment for any successful proposal.
(5) The climate and nature emergency impact statement produced should take account of any carbon budget, climate, nature and environmental goals approved by the relevant Parliament.
(6) In subsection (5), the ‘relevant Parliament’ means—
(a) where the proposed financial assistance relates to a person in England, the House of Commons and the House of Lords;
(b) where the proposed financial assistance relates to a person in Scotland, the Scottish Parliament;
(c) where the proposed financial assistance relates to a person in Wales, Senedd Cymru;
(d) where the proposed financial assistance relates to a person in Northern Ireland, the Northern Ireland Assembly.” —(Caroline Lucas.)
The intention of this new clause is to ensure that those seeking financial assistance for economic development, etc under this Act are obliged to undertake a climate and nature emergency impact statement to ensure public money is only granted to development consistent with climate, nature and environmental goals and targets.
Brought up.
Question put, That the clause be added to the Bill.
Madam Deputy Speaker (Dame Eleanor Laing)
I inform the House that Mr Speaker has selected the reasoned amendment in the name of Ian Blackford.
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
I beg to move, That the Bill be now read the Third time.
More than 150 right hon. and hon. Members have spoken during the passage of the Bill so far. We have had around 30 hours of often passionate debate, and I pay tribute to Members across the House for their contributions. The Public Bill Office has been unstinting in its support to all Members and officials across Government, and I am incredibly grateful for all its work. I particularly wish to thank the Minister for Small Business, Consumers and Labour Markets, my hon. Friend the Member for Sutton and Cheam (Paul Scully), 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) who have ably steered the Bill through Committee and Report.
The UK internal market is the bedrock of our shared economic and social prosperity as a country. Since the Acts of Union, it has been the source of unhindered and open trade, which has supported growth and safeguarded livelihoods and businesses. It demonstrates that, as a Union, our country is greater than the sum of its parts.
Since 1973, EU law has acted as the cohering force for the UK internal market. In 2016, the British people voted to leave the European Union, which the Government delivered in January, and as we leave the transition period at the end of this year, the Government will leave the European Union’s legal jurisdiction once and for all. We need to replace this law to continue the smooth functioning of our centuries-old internal market, while of course also ensuring that the devolved Administrations benefit from a power surge from Brussels.
Mr Vara
The fact is that there is nothing in this Bill that in any way compromises the Belfast/Good Friday agreement. Does my right hon. Friend agree that it is deeply regrettable that some people, for political purposes, seek to unnecessarily scaremonger, and that they should desist from doing so?
Alok Sharma
My hon. Friend makes an important point, and I will come on to it. As I was saying, we need to replace the law to continue the smooth functioning of our centuries-old internal market, while also ensuring that devolved Administrations benefit from that power surge from Brussels. The Bill will do precisely that.
Our approach will give businesses the regulatory clarity and certainty they want. It will ensure that the cost of doing business in the UK stays as low as possible, and it will do so without damaging and costly regulatory barriers emerging between the different parts of the United Kingdom. I cannot overstate the importance of this economic continuity Bill, especially as we seek to recover from covid-19. It is ultimately designed to safeguard jobs and livelihoods, protect businesses, give choice to consumers and continue to showcase the United Kingdom as a beacon for inward investment. That is why this legislation is so vital.
My Department and I, along with colleagues across Government, have spoken to a large number of businesses and business representative organisations across the whole of the United Kingdom about our proposals to safeguard our internal market. Businesses have overwhelmingly backed our approach. The British Chambers of Commerce has stressed that
“A fragmented system would create additional costs, bureaucracy and supply chain challenges that could disrupt operations for firms across the UK.”
NFU Scotland has emphasised the importance of protecting the UK internal market, stating:
“NFU Scotland’s fundamental priority, in the clear interest of Scottish agriculture as well as the food and drinks sector it underpins, is to ensure the UK Internal Market effectively operates as it does now.”
I could go on. Make UK has noted that it is particularly important to manufacturers that they can trade simply and effectively across all parts of the United Kingdom. The business community is clear: we must continue to safeguard the sanctity of the seamless UK internal market.
The Bill also respects and upholds the devolution settlements—[Interruption.] The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) says it does not. He will get a large number of powers—an unprecedented level of powers—back after the transition period. If he does not want them, he ought to stand up and say that, but the reality is that he is against this Bill because he wants to be shackled to the European Union forever. That is the reason he is against this—
Alok Sharma
The right hon. Gentleman says from a sedentary position that I am talking nonsense. He just needs to re-read his Second Reading speech and he will see that it is full of inaccuracies. We have engaged in good faith with the devolved Administrations throughout the passage of the Bill. It was very unfortunate that the Scottish Government decided to walk away from the discussions on the internal market last year and, as I said, we want to continue to work constructively.
Let me turn briefly to the Northern Ireland element of this business Bill, which has attracted a disproportionate amount of interest and commentary. I and every Member on the Government Benches stood on a manifesto commitment to ensure that Northern Ireland businesses and producers enjoy unfettered access to the rest of United Kingdom, and that in the implementation of our Brexit deal we would maintain and strengthen the integrity and smooth operation of our internal market. The Bill delivers on those commitments. We have also been clear that we must protect the gains of the peace process and maintain the Belfast/Good Friday agreement.
Sammy Wilson
The Secretary of State is absolutely right that the Bill has no impact at all on the Good Friday agreement, and, indeed, is only helpful to the economy in Northern Ireland—but only helpful in a limited way. He talked about access to the UK internal market for Northern Ireland goods going into GB, but will he say something about the opposite direction? Northern Ireland depends so highly on imports from GB, and yet there is no mention of safeguards to stop trade being blocked in that direction.
Alok Sharma
The right hon. Gentleman knows that discussions continue. He and I have had those discussions as well. But he makes the point that this is a business Bill, and I hope that every Member, like him, will support it on Third Reading.
We have taken these powers to ensure that, in the event that we do not reach an agreement with our EU friends on how to implement the protocol, we are able to deliver on promises in our manifesto and in the Command Paper. This is a legal safety net that clarifies our position on the Northern Ireland protocol, protecting our Union, businesses and jobs.
Fleur Anderson (Putney) (Lab)
The Irish Foreign Minister said recently that this Bill undermines the EU withdrawal legislation, has damaged trust between the Irish and UK negotiating teams, and is damaging Britain’s reputation globally. Does that give the Secretary of State any cause for concern?
Alok Sharma
This has been debated over the long passage of the Bill in this House. As the hon. Lady and other Members will know, we introduced an amendment in Committee that provides a break-glass mechanism that ensures that the safety net will come into force only if a motion in this House is passed with a requirement for a take-note debate in the other place. I hope that will allow her to vote for the Bill on Third Reading.
Alok Sharma
I will not; I am now winding up.
This Bill provides the certainty that businesses want and need to invest and create jobs. It helps to maintain high standards and choice for consumers while keeping prices down. It reaffirms our commitment to devolution, supporting one of the biggest transfers of power to the devolved Administrations. It allows the Government to invest further in communities across the United Kingdom. This is about levelling up across the whole of the UK and strengthening our precious Union, which some would want to put at risk. I am a Unionist, as is the right hon. Member for Doncaster North (Edward Miliband); neither of us are separatists. Above all, the Bill continues to preserve the UK internal market that has been an engine of growth and prosperity for centuries. In voting for this Bill, we protect our constituents’ jobs, businesses and livelihoods. I commend it to the House.
Edward Miliband (Doncaster North) (Lab)
I join the Business Secretary in paying tribute to the Public Bill Office for the work that it has done. I also profoundly thank my hon. Friends the Members for Manchester Central (Lucy Powell) and for Sheffield Central (Paul Blomfield) for the incredible hard work they did during the Bill’s Committee and Report stages. I am pleased to see the Business Secretary back in his place for the Third Reading of the Bill. I am afraid to have to report that the person deputising for him on Second Reading did not do a great job. Next time the Prime Minister asks to fill in for him, I suggest that he tells him to go elsewhere and he will do a very fine job, thank you.
Let me go to the heart of the debates around this Bill. We support the principle of the internal market, but there are two profound flaws at the heart of the Bill, and that is why we will vote against it tonight. On devolution, Labour Members believe deeply in our Union, but the strength of our Union lies in sharing power, not centralising it, and this Bill does not learn that lesson. It makes a choice to impose the rule that the lowest regulatory standard in one Parliament must be the standard for all without a proper voice for the devolved Administrations. I have read carefully the debate in Committee and on Report, and there has been no proper answer forthcoming from the Government about why they did not seek to legislate for the common frameworks, as they could easily have done. Nor can they explain why they are taking such broad powers over public spending in specific devolved areas of competence.
Joanna Cherry
The right hon. Gentleman is making a powerful speech. Does he agree that the great scheme of devolution of the illustrious former leader of the Labour party in Scotland and Scotland’s first First Minister under devolution, Donald Dewar, was that every power would be devolved unless specifically reserved? What is wrong with the Bill is that it gives the British Government the power to override devolved powers. That is the heart of the matter.
Edward Miliband
There is an important point here. To take the example of animal welfare or food safety, those powers remain devolved, but they are devolved in name only, because by imposing the minimum standard as the lowest standard for all legislatures, those powers are seriously undermined. I have to say to the Business Secretary that I fear that the Bill will only strengthen the hand of those who want to break up the UK.
On international law, nobody should be in any doubt about the damage already done by the Bill. I do not blame the Business Secretary, but this law-breaking Bill has been noticed around the world by not just the Irish Government, not just our EU negotiating partners, and not just Joe Biden and Nancy Pelosi, who the Government can dismiss. Even President Trump’s Northern Ireland envoy Mick Mulvaney visited the Republic of Ireland yesterday and said:
“I think anyone who looks at the situation”—
with the United Kingdom Internal Market Bill—
“understands there could be a series of events that could put the Good Friday Agreement at risk.”
When the Trump Administration start expressing concern about your adherence to international agreements and the rule of law, you know you are in trouble. That is how bad this Bill is.
Edward Miliband
I am going to carry on.
It is important to hear the words of the right hon. Member for Maidenhead (Mrs May) in her coruscating and brilliant speech in Committee. Government Members are rolling their eyes about the former Prime Minister. She said that,
“the Government are acting recklessly and irresponsibly, with no thought to the long-term impact on the United Kingdom’s standing in the world.”—[Official Report, 21 September 2020; Vol. 680, c. 668.]
That is what a former Prime Minister—the previous Prime Minister—of this country said.
Sir William Cash
Does the right hon. Gentleman accept that in fact, in the past, there have been substantial breaches of international law by Labour Governments as well as by other ones? Furthermore, does he believe that the Iraq war was lawful?
Edward Miliband
This is unprecedented in the following sense: the Government are coming along and breaking an international agreement they signed less than a year ago. I have heard the hon. Gentleman, and I have read the debates on the issue, and he certainly has not produced an example in any way remotely similar to what is happening in the Bill.
I want to develop my argument, because an important point has been understated in the debate since Second Reading. The clauses are not simply wrong, as so many hon. Members on both sides of the House recognise; they are not simply unnecessary, because the protocol has mechanisms to deal with the issues at hand; but there has been a notable event since Second Reading that has exposed the Government’s strategy even further, which is the cancellation of the Budget.
Let us recall the Government’s fig leaf designed to hide their embarrassment. The issue was at-risk goods travelling from Great Britain to Northern Ireland. The whole case made by the Prime Minister was that the Bill was necessary to prevent the blockade of goods from GB into NI. The threat was described as “extraordinary” and the very reason to break international law, but the measures, as we now know, to break the law in this Bill, do not, as he had to admit at Second Reading, deal with the issue of GB to NI trade.
The excuse was that GB to NI issues would be dealt with in the Finance Bill, as was explicit in the statement put out on 17 September by the Government, which said:
“Further measures will be set out in the Finance Bill, relating to tariffs on GB-NI movements, including the same Parliamentary process that the Government has committed to for the UKIM Bill.”
In case it escaped the House’s attention, the Budget has been cancelled and so has the Finance Bill. So where now is the mechanism to deal with the extraordinary threat that we face as a country? Can anyone on the Government side tell me where it is? The country faces an extraordinary threat that has to be dealt with, but the legislation we are considering does not cover it, nor does any legislation even in view.
I will give way to the Business Secretary if he would like to tell me how this will be dealt with. There is no answer—he would prefer not to. I do not blame the Business Secretary, because let us be clear what has happened here: the legislative hooligans in Downing Street who dreamed this up have moved on to something else, but the Bill is still with us, and so we are going through all this pain, all this grief, all this damage to our international reputation, and the central argument on which it is based is not even covered by any legislation.
What are we to conclude? Was this all a charade—a “dead cat” strategy, as I think it is known—to distract attention? Was it a trap designed to pretend that we were rerunning remain versus leave? Was it perhaps a Government strategy to pretend to their Back Benchers that the Government are willing to break the law in order to soften them up on accepting concessions in the endgame of the negotiations with the EU. Whatever the excuse, all of them reflect so badly on the Government.
We are at a grave national moment—our gravest for a generation, because of coronavirus. We are trying to conclude a Brexit deal, which is vital for our country. We need new trade deals, in which our word is our bond. Yet the Government play these appalling games, thinking so little of their Back Benchers that they think they can pull the wool over their eyes; willing to resile from a treaty that they signed, for a day’s headlines; playing fast and loose with the law for short-term gain.
The Bill will get its majority and go to the other place, but their lordships should know that, across this House, there is deep concern about it. That has been shown again and again by good people on both sides of the House in the last few weeks. I urge the other place to bring the Bill into compliance with the rule of law and salvage our reputation. But we in the House of Commons have a chance tonight to show our concern again. It is an indefensible Bill. It damages our country. It is wrong and self-defeating. I urge Members on all sides to oppose it tonight.
Sir Robert Neill (Bromley and Chislehurst) (Con)
The right hon. Gentleman spoke, as always, with great energy and passion. I sometimes regret that his successor as leader of the Labour party, the right hon. Member for Islington North (Jeremy Corbyn), did not show half as much energy and passion in making the case during the referendum; if he had, we would not need to be debating this Bill at all, but there it is.
The reality is that we must make sure that, as we leave the transition period, we have a working internal market, and I therefore support the Bill in principle. I am delighted to see the Business Secretary. I hope he takes on board a point that I know his junior Minister, my hon. Friend the Member for Sutton and Cheam (Paul Scully) has noted: as we build a working internal market, I hope we can find ways in which to expand it to other close parts of the British family that are aligned with and have great synergy with us. For example, the Crown dependencies—the Isle of Man and the Channel Islands—which are linked closely already to financial services and many other parts of our economy.
In particular—I declare an interest as chair of the all-party parliamentary group on Gibraltar—we should make sure that the overseas territory of Gibraltar has clear, free and unfettered access to the UK internal market. They stood with Britain, despite the fact that, like me, they did not want to be in this situation. We owe it to them to make sure that they are not allowed to become collateral damage, economically or in other respects, as a result of the decision that we took. I hope the Business Secretary is actively engaged with the Government of Gibraltar to find ways in which we can make sure that they are able to participate fully in that market and benefit from it.
It is well enough known that the provisions relating to Northern Ireland cause me and many others great concern in their original form. I am grateful for the approach that the Government have adopted, and for the clarifications of their approach and on the changes that they have been willing to make. I will not pretend that we have solved every problem there. I will not rerun the discussion we had on Report, but I gently say this: sovereignty power and reserved powers are generally best used sparingly, lightly and with great deliberation. I hope that, having taken certain powers, we will make sure through our negotiations: first, that we never have need to use them, because the damage would be real were we to do so; and, secondly, that we exercise them with restraint. Like it or not, and whether necessary or not, even accepting the Secretary of State’s proposition that we need a “break glass in emergency” provision, we do have to reflect that this legislation has, for whatever reason, created concern among many of our closest allies and neighbours—people with whom we need to engage.
I want to be in a position where we can, for example, advance the excellent Judge Joanna Korner’s candidature for the International Criminal Court with a clear hand, and say that we are genuinely committed to the rule of international law. I want us genuinely to be able to say in the Parliamentary Assembly of the Council of Europe and other places that we remain committed to the rule of law internationally.
Sir Robert Neill
I normally try to give way, but time is short; I hope that the hon. Gentleman will forgive me.
I hope that we will be able to say, as a number of hon. Friends of mine have been able to do in the Council of Europe, that we are—despite, for example, the difference over prisoner voting rights—committed to the rule of law. We must make sure that we do not allow anything to undermine that, because reputations take time to build. Ours is an excellent one in international legal circles, and we do not want that to be lost.
The Secretary of State made a fair point about the desire for business continuity and for the UK to remain a beacon for inward investment. As well as benign tax and regulatory regimes, the other—perhaps the most important—reason that people invest here is the fact that we are regarded as a safe jurisdiction in legal terms and a safe polity in which to invest, because we do not behave in an arbitrary manner. I therefore hope that we will be very clear that we will stick rigidly to the clarifications and caveats that we gave in relation to the use of any emergency powers, and that such powers will be used carefully, proportionately and without ousting the other obligations that we entered into through the withdrawal agreement and the protocol.
Let me turn to the other matter relating to business continuity. It is important that we rebuild and strengthen our international links for the practical reason that was mentioned by an Opposition Member on Report, and that is the need to go forward. Once we have left the provisions of the EU arrangements at the end of the transition period, businesses will need and want to have a ready, efficient and swift means of enforcing contracts and judgments upon contracts across the EU and with our neighbours. To do that, at the very least we have to join, as a matter of urgency, the Lugano convention. To achieve membership of the Lugano convention, we must have the consent of the European Union members of that convention. At the moment, the Commission is recommending withholding that consent. The European Free Trade Association members have consented.
It would be profoundly dangerous and damaging for British business were we not able to access Lugano, because of all the difficulties for any international contract that I have pointed out. It would be a huge disadvantage and would affect individuals: the woman seeking to get maintenance payments from the absent father, who is now in an EU country; or the person seeking to pursue a personal injury claim, where the driver of the vehicle that went into them is in a different jurisdiction. Rebuilding the bridges to ensure that we can get back into Lugano may sound prosaic, but it is actually profoundly important for the good operation of our legal system once we have left. Sometimes a little less of the poetry—and a bit more of the prosaic—is required in government. I hope that we can now move forward into that stage.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I beg to move,
That this House declines to give a Third Reading to the United Kingdom Internal Market Bill because it contains provisions which allow the Government to break commitments it has made under international law, and because it does not have the agreed consent to legislate within the competencies of the devolved legislatures which is contrary to the established devolution settlement.
May I thank the Public Bill Office for the consideration that it has given to the SNP as we have sought to table amendments to the Bill? I also thank my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for the work that he has done in Committee.
This legislation has been rushed through by the UK Government over the course of the last two weeks, after a rushed consultation and a total failure to engage with the devolved Governments. The United Kingdom shows no respect for the devolved institutions in this Bill, and it does not have their consent. We are told that this legislation seeks to secure the Union, so it is telling that it has failed to gain the consent of even a single part of that Union.
With limited time in this House, parliamentarians have spent hours debating and dissecting this Bill. We have attempted to scrutinise every clause and every schedule to it. Members from all parts of the House have made significant speeches and a raft of Opposition amendments have been brought forward, yet here we are tonight and nothing has changed. This Bill still does exactly what it set out to do two weeks ago. It still breaks international law and it still breaks devolution. For the absence of doubt, let me make it clear: it breaks devolution.
It is the same auld with this Tory Government. They have not listened, they have not taken the chance to change course and they have not seen the need to compromise. This Government have typically and arrogantly ploughed on. Throughout the passage of the Bill, they have voted down and ignored anyone and everyone who has sought to defend devolution and uphold international law. The character of this Government is crystal clear: they are consistent in their contempt.
As always, we accept and respect decisions with regard to the selection of motions and amendments, but if Members refer to today’s Order Paper, they will see that the Government had options available to them that would have perhaps demonstrated they did have some remaining respect for the devolution settlement and the national legislatures of these islands. They could have held over Third Reading until each of the devolved institutions had considered legislative consent motions. That would have been respectful to the devolved institutions. They could have referred the Bill for further scrutiny to the Scottish Affairs Committee, the Welsh Affairs Committee and the Northern Ireland Affairs Committee. Instead, they insist on using their majority to force the Bill through without even pretending they care what the devolved nations think.
Patrick Grady (Glasgow North) (SNP)
I thank—[Interruption.] Conservative Members are getting very agitated about some of this, but is this not the point—the real power grab here and the real undermining of the devolution settlement is the callous disregard for the Sewel convention, which this Government put on a statutory footing and are now completely ignoring? That is one of the fundamental acts that has undermined devolution across these islands.
Ian Blackford
My hon. Friend is correct. You know, we were told after the referendum in Scotland in 2014 that Scotland’s place would be respected and that we were to lead the United Kingdom, and here we find not just our Parliament in Edinburgh but the Administrations in Cardiff and in Northern Ireland being ignored. We can refuse to give consent, as we are doing, to this Bill, but the Government carry on regardless. Where is that respect for devolution? Where is the respect for the people of Scotland? In a referendum in 1997, 75% of the people of Scotland voted for a Parliament. It is not the SNP’s Parliament. it is not the Scottish Government’s Parliament; it is the Parliament of the people of Scotland—the Parliament of the people of Scotland when the Scotland Act 1998 was passed that gave powers over devolved matters. What those on the Government Benches refuse to see—what the rest of us can see—is that this Parliament is giving itself the power to override the Scottish Parliament in health, in education, in transport and in housing.
Ian Blackford
I can hear the Secretary of State shouting, but it is his Bill and I suggest he reads it, because clauses 46 and 47 are very clear: powers over infrastructure, including
“water, electricity, gas, telecommunications, sewerage or other services… railway facilities (including rolling stock), roads or other transport facilities… health, educational, cultural or sports facilities”.
The Secretary of State can sit and tell us that it does not override devolution. Well, the facts are in the Bill. What the Government have done is overridden devolution and, quite frankly, I can tell you, Madam Deputy Speaker, we in Scotland will be having absolutely none of it.
So tonight, just as—[Interruption.] You can chunter and shout all you like, but at the end of the day, the people in Scotland have been watching what has been going on over the past few months, with Scotland being disregarded. The fact is that we won the election in Scotland last December on the right of Scotland to choose its own future. We had no desire to be taken out of the European Union against our will. In England, you can choose to do what you want as far as Brexit is concerned, but we do not—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I am sure the right hon. Gentleman meant that hon. Members can choose, because when he says “you”, he means me, and he knows that I have no such choice.
Ian Blackford
I am making it clear, Madam Deputy Speaker, that the people in England can choose what they like in this regard, but that we do not consent to Scotland being taken out of the European Union. We have a mandate from the people of Scotland that says we have the right to determine our future, yet we have the callous disregard of this Government, who have so far refused to grant a section 30 licence so that we can have a choice over our own future. Not only are they frustrating the will of the Scottish people to have that referendum on our future, but we now find that they are seeking to take powers back from our Parliament—[Interruption.] I can hear a Conservative Member saying that we have had our referendum, but the point is that when we had our referendum in 2014, we were promised that we would stay as members of the European Union, that we would be respected within this Union and that we were going to get a powerhouse Parliament that would be the strongest Parliament in the world. The opposite has happened, however, and when the facts change, people in Scotland have the right to change their mind.
What the Government do not seem to recognise is that support for the SNP and for independence is gathering momentum in Scotland—[Interruption.] Conservative Members can chortle, but the reality is that many people who did not support Scottish independence in 2014 have rightly changed their minds. They have the choice of a future with Scotland being a member of the European Union and a law-abiding, independent country that accepts its responsibilities in a global world. They have a choice of creating a fairer society and of coming out of the covid crisis and building our economy. It is that choice and that clear vision that we offer, against what has been done to Scotland by this Conservative Government. I can tell this Government that what they are doing with this Bill is absolutely determining that the people of Scotland will make that choice and, yes, we will become an independent country, because we want no future with the disrespect that we see day in, day out from the Conservative Government to our Parliament in Edinburgh.
Pete Wishart
The more Conservative Members chortle, the more the support for Scottish independence will rise, and they know that. I heard the Minister say that this Parliament is Scotland’s Parliament too, but, as my right hon. Friend will know, an opinion poll came out today. Does the Minister want to know what is in that opinion poll? Four times as many Scots now support the Scottish Parliament over this Parliament. Does my right hon. Friend agree that this Government’s aggressive Unionism and undermining of our Parliament has failed, and that all it is doing is raising support for independence?
Ian Blackford
My hon. Friend is correct. I am sure that when he goes back to his constituency and speaks to people, he is finding, as I am, that we are being encouraged to get on with it. People have seen enough. They have seen what is happening to Scotland under this Conservative Government and, as I said earlier, we are having none of it.
So tonight, just as there was during Second Reading, there is a fundamental choice for every Member across the House. This is now the last chance to salvage some dignity and respect for democracy in this place. Leaving it to the other place would be a complete dereliction of duty. This is the democratically elected House, and it is our job to oppose this undemocratic piece of law.
Chris Bryant (Rhondda) (Lab)
Of course I agree with the right hon. Gentleman about the Bill. It is a nonsense and a rogues’ charter, as I said in a previous debate, but would he also encourage Members of the House of Lords, who have historically played a role in defending the rule of law, to ensure that they do their best to improve this legislation if that is possible?
Ian Blackford
I understand why the hon. Gentleman makes that call, but we should not be relying on the Members of the House of Lords; they are unelected. The fact is that this place has not done its job to defend the rule of law, or to protect devolution. I feel for Labour Members who were responsible, under Blair’s Government, for bringing devolution in, because everything that was established under that programme has been undermined. There is a real call to everyone in Scotland, regardless of whether they voted for the SNP in the past, to recognise the maxim that power devolved is power retained.
People in the past have said to me, “Could Westminster shut down the Scottish Parliament?” I have argued in the past that that would be fanciful. Nobody could believe that our Parliament could be attacked in such a way, but what is happening with this Bill is that our Parliament, which has had the support of the people of Scotland—
Ian Blackford
It is being usurped. It is not getting more power—read the Bill. Read clauses 46 and 47, and read clause 48, which takes away from Scotland the powers that we have over state aid. When I look at the Government Benches, it really is Trumpesque—twisting the truth beyond reality.
Alison Thewliss (Glasgow Central) (SNP)
Does my right hon. Friend agree that one of the most harmful aspects of the Bill is set out in the explanatory notes? They state:
“The Bill will be a protected enactment under the Scotland Act 1998 and the Government of Wales Act 2006. It will be an entrenched enactment under the Northern Ireland Act 1998. This means that it cannot be modified by the Devolved Legislatures, and so it will not be open to those legislatures to disapply the provisions of the Bill, or modify their effect.”
We are stuck with it, and this Government can continue to make things worse if they choose to do so. It is taking it out of the Scottish Parliament’s hands.
Ian Blackford
My hon. Friend is correct. It is perhaps worth reminding the House, in this context, that we have the joint ministerial committees, which recognise their responsibility to put frameworks in place.
Ian Blackford
I hear the hon. Lady saying that they have done, and she is quite right about that, because the Governments in Edinburgh, Cardiff and Belfast recognised the need to work together, where it was appropriate, in creating the circumstances to ensure that there was continuation of a market across these islands. The commitment that I make, and that my party and my Government make, is that we will work constructively with the Government in London to ensure that that happens, but the rug has been pulled from under that by a UK Government who have introduced this Bill, who legislate for the market that they want to create and who attack the fact that we have provisions in Scotland in areas such as the environment, food standards and building standards, which we can no longer defend.
There will be a race to the bottom in accepting the lowest standards, and there is not a single thing that we can do about it. There is not a single thing that we can do to protect our food standards once this takes place. The Secretary of State is shaking his head, but we already have differences in, for example, pasteurised milk. What will happen post this? We will not have the ability to keep the uniqueness of our regulations. What happens to support for our crofters and farmers, for example?
The responsibility falls tonight on this House to do the right thing. I obviously understand if those on the Government Benches are unwilling to take advice from me and my party, but they would do well to listen to the strength of the arguments emanating from some on their own Benches. During Committee, the former Prime Minister, the right hon. Member for Maidenhead (Mrs May), gave a powerful and insightful analysis of the dangers of this legislation. Her words are worth repeating for those left on the Conservative Benches who are not yet card-carrying members of Cummings and the Prime Minister’s ideological cabal. She concluded her remarks by warning:
“I consider that, in introducing clauses 41 to 45, the Government are acting recklessly and irresponsibly, with no thought to the long-term impact on the United Kingdom’s standing in the world. It will lead to untold damage to the United Kingdom’s reputation and puts its future at risk.”—[Official Report, 21 September 2020; Vol. 680, c. 668.]
Those are stark words from the former Prime Minister on what the Government are doing to trash the reputation of the United Kingdom. The right hon. Member for Maidenhead and I may not agree on much, but few could deny that not only were those words powerful, but they are very likely to be proven prophetic.—[Interruption.] I hear a comment, “Too long. It is not fair on everyone else.” I will tell Labour Front Benchers what is not fair. It is what has been done to Scotland tonight. I have the right, as the leader of the Scottish National party at Westminster, to make sure our voices are heard, and I tell the House that the SNP voices will be heard and will be heard without apology.
Despite the bluff and bluster we have repeatedly heard, none of us are fooled that this is some kind of benign business Bill. We know the real intent of this legislation: after 21 years of devolution, the Tories are stripping powers from our Scottish Parliament. The Tories did not support devolution and now they see the popularity of the Scottish Government and they do not like it. It is little wonder why, because that support for the Scottish Government stands in direct contrast to the unpopularity of Tory Governments from Westminster.
Earlier today, the Scottish social attitudes survey showed that public trust in the Scottish Government to act in Scotland’s best interest was at more than four times the trust shown in the UK Government. The survey, conducted in 2019-20, before lockdown, shows that people were nearly five times more likely to say that the Scottish Government should have more influence on how the country is run than that the UK Government should. Some 61% of people trusted the Scottish Government to work in Scotland’s best interest, which compares with a record low of 15% for the UK Government—and you can bet your boots that after what has happened tonight it will be a lot lower now than the 15% that was recorded.
Gary Sambrook
On a point of order, Madam Deputy Speaker. Is it in order for the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) to filibuster so much in order to prevent other people from being able to input into this debate? Surely it is not fair on so many people who want to contribute.
Madam Deputy Speaker (Dame Eleanor Laing)
That is a reasonable question for the hon. Gentleman to ask, but if the right hon. Gentleman were to filibuster, it would not be in order and I would not allow him to do it. He is not filibustering; he is making a very powerful argument. I do note the hon. Gentleman’s point that the right hon. Gentleman has spoken for twice as long as the other Front Benchers, and he will appreciate that a great many other people would like to make a contribution to this important debate tonight. However, that is not a matter for me. If the right hon. Gentleman has the floor, he can speak for as long as he wishes, but I know that he is both honourable and a gentleman, and that he will bear in mind that while he has the floor other people do not have the opportunity to speak.
Ian Blackford
Thank you, Madam Deputy Speaker. I think we had a demonstration there from the Conservative Benches that Members from Scotland should sit down and shut up, and that we should not be heard in this House. [Interruption.] I say to the hon. Member for Birmingham, Northfield (Gary Sambrook) that there is a very easy fix to that: let’s have the section 30 order, let’s have the referendum on Scottish independence and we can say goodbye to you—thank you and good night.
The Chancellor of the Duchy of Lancaster does not care for the polling numbers I referenced, and he does not care for devolution. After all, he is the architect of this Bill. [Interruption.] “Parliamentary etiquette”—my goodness! Devolution has been butchered and I hear Conservative Members talking about etiquette—what a load of keech. The Chancellor of the Duchy of Lancaster has set out his agenda: Scotland is to be dealt with, the Scottish Parliament is to have its wings clipped, and Westminster is to take back control and wants to give itself spending powers over our devolved matters.
Pete Wishart
I am interested in my right hon. Friend’s view on the subject of keech. Does he agree that if Government Members want us to go, there is a very elegant and convenient solution, and it is right in front of them: Scottish independence? Support for it is on the rise, and then we will be quite happily out of this place.
Ian Blackford
My hon. Friend is right. Those on the Government Benches know that a referendum is coming; we should just get on with it.
This Bill gives Westminster direct spending control in devolved areas in Scotland—in health, education, housing and transport—and the people of Scotland know from long and bitter experience that the Tories cannot be trusted to spend money in Scotland. The Tories will look after their own interests. They will never support Scotland’s interests, as tonight demonstrates. The passing of this Bill gives the Tories free rein to bypass Scotland’s Parliament and the democratic priorities of the Scottish people.
The democratic principle of the right to choose our own form of governance is at the heart of what is at stake if the Tories force this legislation through tonight. They can try to deny it all they like, but it is the Tories themselves who are breaking the constitutional settlements that have been democratically supported across these islands. This legislation rips apart Scotland’s claim of right, which enshrined the sovereign right of the Scottish people to determine the form of government best suited to their needs. That claim of right was debated on an SNP motion in the last Parliament, which was passed without objection.
It is a long-held principle that sovereignty in Scotland rests with the people of Scotland, not with Westminster. That historic right has its roots in the declaration of Arbroath and formed the basis of the determination in the case of MacCormick v. the Crown by Lord Cooper, when, as Lord President of the Court of Session, he gave his opinion that
“the principle of unlimited sovereignty of Parliament is a distinctively English principle and has no counterpart in Scottish constitutional law”.
The principle of the sovereignty of the people of Scotland is under attack in this Bill.
Sarah Olney (Richmond Park) (LD)
Does the right hon. Gentleman agree that there are plenty of reasons to oppose this legislation that do not necessarily involve the case for Scottish independence?
Ian Blackford
The fact is that, as a consequence of the attack on the powers of Scotland’s Parliament, people in Scotland are making the determination that they wish our country to become independent as soon as possible.
This Bill undermines the settled will of the people of Scotland, who voted in a referendum on the basis of our Parliament having control over spending in devolved matters. It is that fundamental—it is that serious. This is a defining moment. The UK Government are attempting to block the sovereign right of the Scottish people to decide Scotland’s future.
Joanna Cherry
It is great to hear my right hon. Friend remind the House that the principle of the sovereignty of Parliament is a purely English doctrine. Does he agree that, in seeking to interfere with the inherent supervisory jurisdiction of the Court of Session, the Bill also potentially breaches article 19 of the treaty of Union between Scotland and England?
Ian Blackford
That may well be right. My hon. and learned Friend has much experience of these matters. I would simply say that if the House passes this Bill tonight, it really does not seem to care about law and treaties.
Claire Hanna (Belfast South) (SDLP)
I feel like a Pez dispenser of clarification on the Good Friday agreement. In discussing sovereignty, does the right hon. Gentleman agree that it is not an ornament on the shelf? The Good Friday agreement, being endorsed by the people of Ireland north and south, is in fact sovereign as regards Northern Ireland. Does he further agree that this Bill not only does not protect the Good Friday agreement but offends each of its strands and its principles of democratic process, respect for differences and the rule of law?
Ian Blackford
Absolutely—I fundamentally agree with the hon. Lady. We all look on with alarm at what could happen if the Good Friday agreement is disrespected. We give every good wish to our friends on the island of Ireland that the peace is maintained, but there is no question that the Government are playing with fire.
Madam Deputy Speaker, time is short so I must now move on. It is pretty ironic that at the very same moment the Tories are robbing the Scottish people of their sovereign rights, those behind this power grab are using the very same arguments on sovereignty to impose their extreme Brexit agenda. In February, the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, the right hon. Member for Surrey Heath (Michael Gove) lectured us:
“the experience of history tells us that the countries with the maximum amount of control over their own destinies are the best equipped to succeed economically and, indeed, to secure a greater degree of equity for all their citizens.”—[Official Report, 27 February 2020; Vol. 672, c. 478.]
If the Minister holds that to be true, then it ought to be true for Scotland. Yet, through this very Bill, the UK Government are trying to rob those rights and those powers from Scotland’s democratically elected Parliament. The best that can be said for this UK Government is that they at least wear their hypocrisy on their sleeves. When it comes to sovereignty, I have been looking back at what the Chancellor of the Duchy of Lancaster has said over the years. He said on 14 October 2012, when talking about the EU:
“give us back our sovereignty or we will walk out”.
If he thinks this matter is so crucial, why is he leading his Government to attack the Scottish Parliament? Why is he disregarding our sovereignty in Scotland?
Madam Deputy Speaker, we will push our amendment tonight to defend democracy, to defend Scotland’s interests, to defend against this bare-faced attack on our Parliament’s powers. We know that the vast majority of Scotland’s MPs and the Scottish public will be with us. What of the six Scottish Tories, though? Will they stand up for Scotland? Will they stand up for our Parliament? Tonight is their chance to join with us, to reject this power grab, to reject Westminster’s trampling over the devolution settlement, to respect that the Scottish Parliament should determine spending on devolved matters. A failure to join with us will show that the so-called Scottish Tories have reverted to type and reverted to what they have traditionally been: hostile to devolution.
Let me conclude by putting this in context. Over the past number of years, Scotland’s people have watched on as Westminster ignored their views on Brexit, launched power grab after power grab, and undermined our democratic rights. This legislation is the last straw. It leaves us with only one option and only one choice. A growing and consistent majority of our people have now come to the same conclusion. They know that the only way to defend Scotland’s Parliament and powers is through independence.
Madam Deputy Speaker, the words of Charles Stewart Parnell, who used to sit on these Benches just two rows back, still ring true. Tonight, I direct these words to the Chancellor of the Duchy of Lancaster. I will do this with two lines in Gaelic and then give an English translation:
“Chan eil còir aig duine crìochan a chur air adhartas dùthcha. Chan eil còir aig duine innse do dhùthaich, ‘Gheibh sibh cho fada ri seo agus chan fhaigh na b’fhaide.’”
“No man has a right to fix the boundary of the march of a nation; no man has a right to say to his country—thus far shalt thou go and no further.”
Sir William Cash
The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) who has just spoken said he was going to push his amendment. I think he pushed the patience of this House to breaking point.
In the very few seconds I have left I will simply say, with regard to the speech by the right hon. Member for Doncaster North (Edward Miliband), that he completely failed to answer my question. The Labour party has, in fact, on a number of occasions broken international law. He knows it. He could not answer, and did not attempt to answer, whether he thought the Iraq war was lawful.
The bottom line is that the completely irrelevant questions raised in relation to breaches of international law are completely unfounded. The reality is that this country has on occasion in the past, in its own national interest for the sake of preserving its sovereignty and its economic sovereignty, had to occasionally break international obligations. There is no doubt about that, but equally and by the same token this Bill is about the sovereignty of the United Kingdom and preserving the economic sovereignty of the internal market and doing what it can to preserve the Union in all its character and territoriality. The right hon. Member for Doncaster North shakes his head, but the bottom line is that we have now got this Bill through. It has gone through with 100 votes time and again. That proves the point. This is the endorsement of the referendum. This is the endorsement of the manner in which the British people voted in the general election and that is the truth. We have won, and we will continue to pursue the independence of this country and to maintain its sovereignty.
Kate Green (Stretford and Urmston) (Lab)
On a point of order, Madam Deputy Speaker. All Members must be as accurate as possible when they speak in the House, and none more so than Cabinet Ministers. Today, in response to my questions following his statement, the Education Secretary twice made statements that were incorrect. First, he said that
“we have made £100 million available for universities…to ensure that youngsters have digital access”.
That was not accurate. The £100 million funding is for devices for schools and some further education providers, not for universities. The Secretary of State was wrong in what he said. He also said that individual students could seek additional maintenance support from the Student Loans Company, and as far as I can tell that is not right either.
When I asked the Secretary of State about digital access this afternoon, he said that he was sorry I had missed the announcement. Well, I am sorry that he is apparently wrong about the detail of his portfolio. Have you had any indication, Madam Deputy Speaker, that he will return to the House to correct the record on these matters?
Madam Deputy Speaker (Dame Eleanor Laing)
I appreciate the point that the hon. Lady is making, but it is not a point of order for the Chair; it is rather a continuation of the debate that took place this afternoon. But she has taken the opportunity to make the point that she wishes to draw to the attention of the House, and no doubt to Ministers, and she has succeeding in so doing.
United Kingdom Internal Market Bill
Wednesday 30th September 2020
(4 years, 1 month ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)
United Kingdom Internal Market Bill
Monday 19th October 2020
(4 years, 1 month ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 September 2020 - (29 Sep 2020)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I beg to move that the Bill be now read a second time. The United Kingdom’s internal market has been the bedrock of our shared prosperity for centuries. Since the Acts of Union, the UK internal market has been the source of unhindered and open trade across the entire United Kingdom. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade across our country. It has helped to demonstrate that, as a union, our country is greater than the sum of all our parts.
Around 60% of Scottish and Welsh exports are to the rest of the UK, which is around three times as much as exports to the whole of the rest of the European Union. About 50% of Northern Ireland’s sales are to Great Britain. When we leave the transition period at the end of this year, an unprecedented number of powers will flow from the EU to the devolved nations and the UK Government. As this happens, and as we recover from Covid, we must ensure that our economy is stronger than ever. The Bill will guarantee the continued functioning of our internal market to ensure that trade remains unhindered in the UK and businesses can continue to operate with certainty. Without the Bill a Welsh lamb producer, for whom almost 60% of the market is the rest of the UK, could end up unable to sell their lamb as easily as before. Scotch whisky producers could lose access to supply from English barley farmers, unnecessarily putting at risk Scotland’s own whisky industry.
This package guarantees a continuation of our centuries-old position that there should be no economic barriers to trading within the United Kingdom. To achieve this, the Bill will do the following. First, it will introduce a market access commitment for goods, services and professional qualifications respectively. This will ensure that the UK can continue to operate as a coherent internal market and maintain the deep integration and strong economic ties that bind the UK together. Secondly, it provides a statutory underpinning for a new office for the internal market, within the Competition and Markets Authority. This office will independently monitor the health of the UK internal market and provide technical advice on issues that may impact it, reporting to the devolved legislatures and to this Parliament itself.
Thirdly, it introduces provisions to ensure that there is a safety net in domestic law to prevent new checks and controls on goods going from Northern Ireland to Great Britain, in line with the Government’s commitment to unfettered access for qualifying Northern Ireland goods. Fourthly, it enables strategic investment in all four corners of the United Kingdom, giving the UK Government a power to provide financial assistance for the purposes of economic development, culture, sporting activities and infrastructure, as well as both international and domestic educational and training activities and exchanges.
Finally, it reserves to the UK Parliament the exclusive ability to legislate for a UK subsidy control regime once this country ceases to follow EU state aid rules at the end of the transition period. This is to ensure that subsidies do not unduly distort competition within the UK’s internal market. Let there be no doubt: this Bill is crucial in providing certainty to businesses, and we must give them that certainty.
My department and I, along with colleagues across government, spoke to hundreds of businesses and business representative organisations from across the UK to gather views and feedback on our original White Paper proposals. Over 270 businesses and organisations responded to a public consultation on the proposals, and businesses overwhelmingly supported our approach. I record my thanks for the engagement we have had from all aspects of business on this.
The Bill will put in law a market access commitment by enshrining mutual recognition and non-discrimination: mutual recognition to ensure that goods and services from one part of the UK will be recognised across the country, and non-discrimination to guarantee that there is equal opportunity for companies trading in the UK regardless of where in the country that business is based. The same principles of mutual recognition and non-discrimination will also be applied to services and will introduce a process for the recognition of professional qualifications across the whole UK internal market. This will allow professionals such as doctors and nurses, qualified in one of the UK nations, to work in any other part, as I am sure Members would expect. Furthermore, the Government are inviting views on the regulatory framework for professional qualifications, to ensure that our approach remains world leading. We have, of course, listened to those in the devolved Administrations and business, and have made some exemptions, for example to respect the divergence that exists between the legal professions in England, Wales and Scotland.
The Bill will also ensure that Northern Ireland qualifying goods benefit from the market access commitment and receive mutual recognition in the rest of the UK, guaranteeing a continuation of our centuries-old position that there should be no economic barriers to trading within the United Kingdom.
We consulted on how to ensure an independent monitoring and advice function to uphold the UK internal market. In response, and to oversee the functioning of the internal market, the Bill will set up an office for the internal market within the CMA. This office will monitor and report on the internal market to the UK Government, devolved Administrations, the legislatures, and external stakeholders, ensuring the continued smooth operation of that market that businesses so desperately desire.
Subsidy control has never been devolved. It is crucial to continue to have a UK-wide approach, to protect our internal market and prevent harmful and distortive practices arising. The purpose of the Bill is to ensure that we continue to have fair and open competition across the UK, and so it is right that we have a UK-wide approach to subsidy control. As we take back control of this policy from the EU, the UK will have its own domestic subsidy control regime. From 1 January, the Government will follow the World Trade Organization rules for subsidy control, and any related commitments the Government have agreed in free trade agreements.
We will consult on whether to go further than those existing commitments, including whether legislation is necessary to achieve a system that promotes a competitive and dynamic economy throughout the United Kingdom. We appreciate that our longer-term approach will have implications for business and all public authorities that grant subsidies with taxpayers’ money, including the devolved Administrations. So we will take the time to listen closely to those voices and design a system that promotes a competitive and dynamic economy throughout the whole of the United Kingdom. However, we will not return to the 1970s approach of bailing out unsustainable companies, be they in Scotland, England, Wales or Northern Ireland.
As we leave the EU and take back control of our money, we will require new powers to continue to invest across the United Kingdom. Therefore, this Bill will confer a power to make sure that the UK Government can invest UK taxpayers’ money nationwide, including on the UK Government’s priorities, supporting people and businesses across the UK and delivering on our commitment to level up all parts of our country. Currently, unelected EU bodies spend billions of pounds that we provided as a net contributor, on our behalf. They spend our money, with very little say from elected politicians in the UK. This will, rightly, change as we leave the transition period.
The UK Government intend to take a much more collaborative approach in delivering programmes that replace EU funds. This includes engaging heavily with local authorities as well as wider public and private sector organisations. And, of course, it means working closely with the devolved Administrations to make sure that investments complement their existing—and continuing—powers used to support citizens in Scotland, Wales and Northern Ireland. This power to provide financial assistance will cover infrastructure, economic development, culture and sport. It will also support educational and training activities and exchanges both within the UK and internationally, much of which of course was previously done at EU level.
These powers are not designed to take powers from the devolved Administrations, but to add powers to direct investment in a similar fashion to the EU Commission, while reforming programmes and empowering MPs from Wales, Scotland, Northern Ireland and England to design and scrutinise funds in a way that was never possible within the EU. This will also allow the UK Government to meet their commitments to replicating and matching EU structural funds within the shared prosperity fund. This is in line with the Government’s manifesto commitments to strengthen the union and level up the country. This power to provide financial assistance is one of the mechanisms by which the Government hope to achieve these ambitions.
We will also be introducing limited and reasonable steps to provide a safety net to ensure that peace can always be preserved in Northern Ireland. In the event that we do not reach an agreement with the EU on how to implement the Northern Ireland protocol, we must be able to deliver on promises in our manifesto and in the Command Paper. This is a legal safety net which clarifies our position on the Northern Ireland protocol, protecting our union and ensuring that businesses based in Northern Ireland have true “unfettered access” to the rest of the United Kingdom, without paperwork. The Bill will also provide certainty on state aid, ensuring that there is no legal confusion and that, while Northern Ireland will remain subject to the EU’s state aid regime for the duration of the protocol, Great Britain will not be subject to EU rules in this area.
This Bill, and our wider approach to protecting our internal market, is designed for co-operation between the four parts of the United Kingdom. It will protect our common causes, such as the setting of high standards in our economy, and will work in concert with the common frameworks programme and the IGR, which is due to conclude shortly. After all, the UK has some of the highest standards in the world. It is worth reminding noble Lords that we go beyond EU rules in many areas, including health and safety in the workplace, workers’ rights, food, health and animal welfare, consumer protections, household goods, net zero and the environment. We will maintain that commitment to high standards, including as we negotiate trade agreements that will provide jobs and growth in the UK. We have been driving this forward through our common frameworks programme, to drive collaboration and a coherent approach to policy across the UK now that we have left the European Union. I therefore want to reiterate the Government’s invitation to all devolved Administrations to work together on this Bill, with the common frameworks process and with the internal market as a whole.
This Bill is crucial to ensuring that we continue to work together as one United Kingdom to support jobs and livelihoods across our entire country. As we rebuild and recover from Covid-19 and look ahead to opportunities following the end of the transition period, this Bill will provide the certainty that businesses need to invest and create jobs. It will accompany one of the biggest transfers of powers in the history of devolution, with hundreds of powers flowing from the EU to the devolved Administrations at the end of the transition period. This Bill will do all this and preserve the internal market, which has been an engine of growth and prosperity since the Acts of Union. That is why we need this Bill. I beg to move.
Amendment to the Motion
Lord Judge
“As an amendment to the motion that the bill be now read a second time, at end to insert “but that this House regrets that Part 5 of the bill contains provisions which, if enacted, would undermine the rule of law and damage the reputation of the United Kingdom.”
Lord Judge (CB)
My Lords, I beg to move the amendment in my name on the Order Paper. If I believed in compulsion, and executive compulsion in particular, I would make an order that every member of the Cabinet should read the report from the Constitution Committee and the report from the Delegated Powers and Regulatory Reform Committee and understand what they mean. What I read in those reports we have read time and time again, and, so far, nobody has paid much attention to them. I can sit down now, can I not? Perhaps not.
I do not want to grandstand, but the rule of law is a bulwark against authoritarian incursion, and even the smallest incursion threatens it. When those responsible for making the law—that is, us the Parliament, we the lawmakers, who expect people to obey the laws we make—knowingly grant power to the Executive to break the law, that incursion is not small. The rule of law is not merely undermined, it is subverted. There is one consequence, and the damage is to our standing in the world. We have no real power now, except soft power—the English language and an understanding that we in this country have a traditional belief in the rule of law and we respect it. We hope that, one day, all the countries in the world that do not have respect for the rule of law will have it. Yet here we are, about to tear it into tatters. Our contribution to happier days around the world will be diminished.
I want to make it clear that I passionately believe in the sovereignty of Parliament. I extol it, I discuss it abroad, I explain its advantages over a written constitution, which includes the flexibility that we now have. I also accept that Parliament can make any law it likes; it can criminalise anything it wants to. Let me give you a silly example, which is not that far removed from what has been going on through Covid. I happen to support Leicester City FC. Parliament could make it an offence to be a supporter of Leicester City FC. They could make it an offence for 10 Leicester City FC supporters to gather together to support the club. It obviously will not do that, but in theory it can do exactly what it likes.
The rule of law requires properly enacted laws. I accept that; rule by properly enacted laws is one of the ingredients, but it is not definitive. When the sovereignty of Parliament is tossed against us—fair enough, it is important, it is crucial, it is our constitution—let us remember that every country in the world has a law-making body. Think of one that has not. It will produce the laws by which that country is ruled. Of course, it will. But some constitutionally, properly enacted laws are the antithesis of the rule of law. There are so many examples, but here is one that leaps to mind. Apartheid South Africa, where everything about you as a human being and the way you were treated by the law depended on the accident of birth: the colour of your skin. Depending on the colour of your skin, your rights were more or less; they were certainly different. We tend to forget—we should not—that apartheid South Africa’s abhorrent laws were the result of a perfectly clearly understood constitutional enactment. In law, they were utterly justified in making any law they liked, just as we are. But somebody tell me that apartheid South Africa, with its properly enacted laws, was a place where the rule of law could be found. It was miles away, the furthest constellation in the stars you can imagine.
We need to be careful to distinguish between the rule of law and rule by laws. It is the rule of law that carries us and gives us the protection that we need from the abuse or misuse of the constitutional power that is enjoyed by Parliament. It is our safest shield against authoritarianism. It is a phrase that was conjured up by the Commons for the first time in 1610 to tell an overweening king that he was seeking to exercise overmuch power. It is a phrase we should use to remind an overweening Executive that they are going too far.
I know that I am not alone in finding it offensive that we are asked by a Minister in Parliament to seek Parliament’s authorisation to allow him to break the law deliberately and knowingly. Saying that it will be done only in a very specific and limited way is a total obfuscation. A thief who steals only a tin of tuna is still a thief. Over the years, Parliament has heard many strange words, it has heard some very surprising words, it has heard some inspirational words. It is part of the history of our country. But I have not yet found an occasion—I have tried, and if the Minister can find one no doubt he will tell me—when Parliament was invited to agree that a Minister should be entitled to break the law.
We must look on the impact of Part 5 as a totality. It is not just Clause 47 that is pernicious. Let us go back. We became party to a new agreement with the EU, which provided sensible get-out clauses for both sides and which either side could use, and re-enacted the withdrawal Act this year, just before Covid hit us. The Northern Ireland protocol was integral to it, with its own get-out clauses. I recognise, if I may say so, the distaste and hostility with which some people in Northern Ireland regard what happened then. I suggest to them that this debate is not about the protocol; it is about the rule of law.
The Act gave legal effect to the withdrawal agreement and the protocol, and thus it became domestic legislation implementing an international agreement. Of course I accept that international agreements and treaties occupy a separate star in the firmament, but breaking international law is not different, in principle, from breaking domestic law. The rule of law is no less an ingredient of the legal relationship between nations as it is domestically. Let us get ourselves rid of the myth, the spin, that when the rule of law internationally is damaged, the rule of law domestically is nevertheless quite unscathed. It is absurd. The rule of law is indivisible. And let us disabuse ourselves of a further myth or spin that actions already taken have not diminished virtually to extinction the assertion by the Minister in the other place that we are a beacon around the world for the rule of law and international law. The light given by that beacon is being extinguished.
Finally, we must not be beguiled by the recent argument that the legislation would be used only if necessary, in an emergency. It does not cure the fault, does it? What is not a myth is that not a shred of evidence has been produced that would justify the use of the get-out clauses; hence this proposed legislation. Part 5 provides that a Minister of the Crown shall be vested with the power to use secondary legislation in effect to repeal an Act of Parliament that Parliament has only just enacted, almost before the ink on it is dry. That is not how the sovereign Parliament should be treated by the Executive. We do not have executive sovereignty.
But this is worse than the standard Henry VIII clause. To talk about a standard Henry VIII clause is itself a shameful thing to have to do, but we are faced with them in every piece of legislation, like blossom in spring when the wind blows. And, despite the recent arguments by the Lord Chancellor, Part 5 as a whole was obviously intended to prevent any legal challenge to ministerial decree—and the Lord Chancellor himself accepts that such rights will be reduced.
This is not an attempt to limit the court’s jurisdiction over primary legislation: it is now being extended to secondary legislation. The House has heard me speak before on the subject of the inadequacy of parliamentary control of secondary legislation but, if Parliament will not exercise control, and the courts cannot do it, where then are the controls on the Executive? They are vanishing into the air. So now we are being asked to give a Minister of the Crown, on behalf of the Executive, the lawful authority knowingly and deliberately to repeal recent domestic legislation and to break international treaties, all through secondary legislation over which parliamentary control has crumbled through disuse and the normal scrutiny of which by the courts has been reduced to a whimper.
I am nearly done. The rule of law has served us well. It has not made a perfect society—nor could it. But we all know that without it our society would have been, and would still be, catastrophically worse. We must defend that bulwark, and I hope that I shall be supported, because I intend to take this issue to a Division, so that the House can give its own opinion on this dangerous legislation. I say, “Not in my name.”
Baroness Hayter of Kentish Town (Lab)
My Lords, while thanking the Minister for opening the debate, we concur totally with the regret expressed by the noble and learned Lord, Lord Judge. I will, however, leave it to my noble and learned friend, Lord Falconer, to set out our case on this, having allocated some of my speaking time to him, while my noble friend Lord Stevenson will cover the state aid and competition parts of the Bill, as well as the governance, independence and powers of the OIM.
Today will be a notable one for your Lordships’ House, given the expertise that we will hear, and we look forward to the maiden speeches of my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, as well as those of my noble friend Lady Andrews, chair of the Common Frameworks Committee, my noble friend Lady Taylor, chair of our Constitution Committee, and the noble Earl, Lord Kinnoull, chair of the EU Committee, whose reports the noble and learned Lord, Lord Judge, has already referred to.
I also look forward to hearing the speech of the most reverend Primate the Archbishop of Canterbury, who, with church leaders from across the four nations, writes in today’s FT of the grave responsibility of Peers, given that the Bill
“will profoundly affect the future of our countries and the relationships between them”.
It is hard to understand how the Government have got so much wrong in a Bill that was long expected as a result of our exit from the EU. Perhaps it is symptomatic of their genetic inability to work with those whose interests are affected by legislation—hence their undermining of the protocol without a word to Irish politicians, and their willingness to break international law, and renounce a treaty, with nary a word to the judiciary or the co-signatories, which led to the EU taking legal action, via a letter of formal notice, for a breach of the good-faith terms of the withdrawal agreement.
Moreover, despite claims that it would strengthen the integrity of the union while upholding the devolution settlements, the Bill actually,
“risks de-stabilising an integral part of the UK’s constitutional significance”,
in the words of our Constitution Committee.
In a letter to the Lord Speaker, Jeremy Miles, the relevant Welsh Minister, describes the Bill as
“an unprecedented attack on the devolution settlement”,
arguing that it would undermine the Senedd’s right to regulate in devolved areas of competence and would explicitly amend the Government of Wales Act. Unsurprisingly, the Senedd’s legislative consent memorandum concludes that, unless the Bill is substantially amended, the Welsh Government would not be able to recommend consent.
A similar reaction led the Scottish Parliament to vote by 90 to 28 against granting legislative consent, with the Scottish Government stating that they could not recommend consent to a Bill that,
“undermines devolution and breaches international law”—
and it looks as if that response has led to a third of Scottish voters being more likely to back independence.
There has been a real issue to resolve, because when we entered the EU in 1973, there was no devolution. But we thought we had achieved a solution with the common frameworks in the Withdrawal Act. Within the EU, common standards, mutual recognition, labelling, testing, professional recognition—or whatever—were decided by consensus across the 28, with MEPs from our four nations signing off the various measures. Our exit repatriated powers to the UK, but they included powers in some devolved competencies.
So how did the Government react? Did they set up a mechanism akin to EU co-determination, designed with the devolved Administrations? Did they build on the common framework efforts already in play? No, they took to themselves significant repatriated powers, annulling elements of the devolved settlement, to replace a system that had evolved slowly and by careful negotiation over decades by government edict. They published their plans with statements from Messrs Gove, Sharma and Jack, from a Scottish businessman and from the Scottish Retail Consortium, but with no word from the Welsh Secretary of State and no involvement of devolved Governments. They sweep state aid to themselves and give a role to the CMA, which is unrepresentative of the devolved nations.
The Bill grants UK Ministers powers on mutual recognition without any input from the devolved Administrations. So if England, for example, imports chlorine-washed chicken, consumers in Aberdeen and Aberystwyth could find it on their supermarket shelves without any say by their elected Governments. Similarly, the Bill’s lack of a public health exclusion from market access principles makes it difficult for all parts of the UK to implement policies to reduce harms from alcohol and tobacco, for example, or to tackle environmental harms.
Meanwhile, this House’s Delegated Powers Committee describes the Bill as a constitutional power grab, apparently horrified by its “extraordinary, unprecedented powers”, which allow Ministers to amend or repeal parts of this Bill—or indeed any Act of Parliament or statutory instrument.
We do not concur with the Government’s assertion that
“the Bill ... is not constitutional but economic”.
Rather, we agree with the Archbishops that
“the effect on devolved policymaking is of constitutional significance”.
The Delegated Powers Committee calls on us to ensure that major decisions are taken by primary, not secondary legislation, noting that much of the Bill’s reliance on statutory instruments has no relation to any need for urgency.
I turn to the CMA. Its present structure is inadequate, not simply by failing to represent all four nations, but by lacking a clear duty to place consumers at the heart of its work. It is notable that nowhere in the Minister’s letter to your Lordships of 1 October does the word “consumer” even appear. You have to get to Clause 32 before you find a welcome mention of
“impacts on prices, the quality of goods and services or choice for consumers”.
Competition is not an end in itself; it is to serve consumers, prevent rip-offs and promote fair trading and growth. Intervention exists to get a market working for consumers, so that objective must be hard-wired into the CMA’s DNA. The noble Lord, Lord Tyrie, as chair, produced an excellent suite of suggestions to make the CMA consumer-focused and fleet of foot. We will seek to write these into the Bill, as well as to reflect all four nations.
In this Bill, the Prime Minister has managed to anger lawyers, devolved authorities, the EU, the churches, his own Back Benches and the majority of your Lordships. He is really like a bar-room brawler, taking on all comers. Is it possible that they are right and he is wrong? Perhaps it is worth reminding Mr Johnson on the oft-quoted words that Barack Obama left in the Oval Office for President Trump:
“We are just temporary occupants of this office. That makes us guardians of those democratic instructions and traditions—like rule of law ... it’s up to us to leave those instruments of our democracy at least as strong as we found them”.
Something is needed to replace the EU’s competition-based open market, such that consumers do not lose out, so that public health, the environment and food standards are protected and that the union is strengthened, but it is not this Bill. This must be amended to be workable, legal, democratic and respectful of the devolution settlements. For that reason, we share the regret expressed in the amendments of the noble and learned Lord, Lord Judge, and the noble Lord, Lord Cormack, that the Bill undermines the rule of law and reneges on a treaty, reducing our standing on the world stage. That is regrettable indeed, and completely avoidable.
Lord Newby (LD)
My Lords, this Bill is, on a number of grounds, the most dangerous and baffling piece of legislation to come before your Lordships’ House in the 23 years since I became a Member. It is dangerous because, for the first time in that period, a British Government are explicitly legislating to break their word in a treaty recently entered into and in breach of international law. It is baffling because none of its other provisions are necessary at all to meet its ostensible policy goals.
I shall take the dangerous part first—the provisions in Clauses 44, 45 and 47 to allow the Government to override the provisions of the Northern Ireland protocol that could impede unfettered access to Great Britain’s markets for Northern Ireland goods. I pass over the provision in Clause 43(2), which allows a whole raft of new checks, controls and administrative procedures on such trade, which the Government now accept is necessary, and in doing so makes a mockery of the whole concept of unfettered access in the first place. On the offensive provisions themselves, let us be clear on three questions. First, do they indeed break international law? Secondly, in these particular circumstances, is such a breach justified? Thirdly, if not, what should now be done?
On the first question, the answer is clear. The Government have themselves accepted that the provisions
“break international law in a limited and specific way”.—[Official Report, Commons, 8/9/20; col. 509.]
To use a slightly different example from that of the noble and learned Lord, Lord Judge, if I go into a shop and steal a specific and limited number of Rolex watches, I have still committed a theft. Government amendments to the Bill in the Commons would require Parliament to vote before any provisions could be introduced under the offending clauses, but as the Bingham Centre for the Rule of Law puts it, such a vote
“does not alter the fact that Parliament is still being asked by the Government to legislate in deliberate breach of its treaty obligations.”
So, the provisions without doubt break the law, but are they still justified, as the Government contend? They have argued that they are, on a number of grounds. They have produced the lamentable excuse that, because they signed the withdrawal agreement in a rush, they did not realise what it meant. They have resorted to scaremongering, saying that the EU was planning to impose a “blockade”—their word—on agricultural goods moving across the Irish Sea, a suggestion the Irish Foreign Minister has described as “totally bogus”. They have argued that the UK Government have broken international law on numerous occasions in the past to justify doing so again. However, the briefing to your Lordships’ House by the Law Society and the Bar Council knocks that on the head when it states:
“We are unaware of a precedent for such an approach in UK legislation or administrative process.”
The truth is that there is not a shred of justification for breaking international law, as provided for in this Bill. Its effect will simply be to diminish our international reputation as an honest partner and an advocate of the universal application of the rule of law. So, what should your Lordships’ House do? We must ensure that the law-breaking clauses do not enter the statute book. I have considerable sympathy with those who argue that we should vote against the Bill today, at Second Reading, because that is the cleanest way of getting rid of the offending clauses, and because, for reasons I will explain, I do not believe that the remainder of the Bill is necessary at all. However, I understand that this is not the view of others across the House, so we will work with them to excise the specific offending clauses when we get to them. My only plea, though, is that when it comes to ping-pong, the many noble Lords who, over the next few hours, will express their abhorrence of what the Bill contains, will be willing to gird up their loins for the repeated ping-pong which will surely be necessary if our common views are eventually to prevail.
If the Northern Ireland protocol clauses are dangerous, the remainder of the Bill succeeds in being completely unnecessary, while at the same time undermining some of the basic principles of the devolution settlement. Veterans of the EU withdrawal Bill will remember grappling with how to manage the repatriation of measures that underpin the single market: which should be retained at UK level, which should be devolved and which should be jointly determined? With the help of the noble and learned Lord, Lord Mackay of Clashfern, we arrived at a system of common frameworks that would, between them, deal with all aspects of the single market. There are some 40 of them, and they have either been fully negotiated or are in the process of being negotiated. When finalised, they will render the ostensible purpose of the Bill—to ensure the smooth operation of the UK’s internal market—completely unnecessary.
However, the Bill does not simply provide overarching UK-wide market access provisions; it takes away power from the devolved Administrations and reserves it to London at the same time. There are several ways in which it does so. It undermines the devolved institutions’ right to regulate in devolved areas of competence. It gives wholly new powers to UK Ministers to spend public money on devolved issues in Scotland, Wales and Northern Ireland, without necessarily involving them in deciding on priorities. And it seeks to amend the state aid legislation, so that the UK Government could impose a new state aid regime without the agreement of the devolved Administrations. Over the course of the debate, my noble friends and other noble Lords will set out in detail why this legislation is so very damaging to the devolution settlement.
To seek to undermine devolution in these ways, under the innocuous cloak of maintaining market access for goods and services across the UK, is not simply disingenuous; it is dangerous, because it can only give succour to those who want to break up the United Kingdom. Amendments will be laid on a cross-party basis at Committee stage, supported by the Welsh and Scottish Governments, which will seek to reverse the worst aspects of what the Government are proposing in respect of the devolution settlement. I hope they will be supported across the House.
As we face the ravages of Covid-19 and the impending costs and disruptions of Brexit, to have to spend weeks of legislative time, as we now are, trying to stop the Government breaking international law and undermining the devolution settlement is both depressing and infuriating. But if this House of Lords has any purpose, it is to protect the rule of law and the constitution, and it is up to us now to rise to that challenge.
The Archbishop of Canterbury
My Lords, I look forward to hearing, here and online, the contributions to come, especially the maiden speeches of the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz.
I also concur totally with the powerful and remarkable speech by the noble and learned Lord, Lord Judge. What we are called to do above all in this country, deeply embedded in our Christian culture and history, is to act justly and honestly. We cannot do so if we openly speak of breaking a treaty under international law, reached properly, on which peace in part of the UK relies. My distinguished former colleague Sentamu, who paid with beatings for his defence of law and justice in Uganda would have spoken trenchantly. I regret his absence.
There are some who claim that I and my colleagues who wrote in the FT this morning are misinformed. But the letter—and this intervention—followed the lead of those who have spent their lives seeking peace in Ireland. Peace is surely something of which religious leaders should speak. We also listened to the Select Committee on the Constitution, to all five living former Prime Ministers, two former Conservative leaders, and distinguished judges, including former Presidents of the Supreme Court and the former Lord Chief Justice of England and Wales, to name but a few.
This country has different characteristics and needs in its regions and nations. They must be reflected in all our relationships if the union is to survive. There is no watertight door in relationships between economics and constitutional issues. They overflow from one into the other. The timing of anything that the UK Parliament or Government do in Northern Ireland is always especially significant to relationships. It is particularly so at present. The revived Assembly is scarcely a year old; 2021 is the centenary of the establishment of Stormont and the creation of the border. Much progress has been made since the 1990s in building confidence and peace, yet it is clear from many visits in the last few years, and clear to anyone who listens, that the tensions continue. Peace and reconciliation need continual reinforcement and continual progress. I will therefore be seeking to work with others for amendments which ensure that the process of peace and reconciliation is pursued and that powers exercised under this Bill, when it becomes law, involve consultation amidst the immense complexities of Northern Ireland. I hope we may act on a cross-party basis.
Politics, if it is to draw out the best of us, must be more than just the exercise of binaries, of raw majority power unleashed; it exists to seek truth, to bring diverse peoples together in healthy relationships. Our reputation as a nation, our profoundly good and powerful influence and example, which I know from experience around the world, will suffer great harm if law-breaking is pursued—greater harm than this Bill seeks to prevent. In the Church of England, we are all too clearly aware of the shame that comes with failing morally. Let us not make the same mistake at national level. This House exists to amend and improve legislation, not to derail it, and that must be our urgent aim now.
The Earl of Kinnoull (Non-Afl)
My Lords, it is a great pleasure to follow the most reverend Primate, and I congratulate him and his most reverend colleagues on their very welcome letter today, with which I, too, wholeheartedly agree.
The European Union Committee published our report on the internal market Bill last Friday. It was the 74th Brexit-related report that we have made since the referendum in 2016. It was unanimous, as all the previous reports have been. Once again, I pay tribute to the outstanding committee staff, working all hours as they do, to such a very high standard over such a long period. The report is short. It deals only with Part 5 of the Bill and its interaction with the Government’s implementation of the withdrawal agreement. It was designed to fit together with the excellent report of the Constitution Committee and its wider analysis of the rule of law issues.
I have said before in this Chamber that there is an inherent tension at the heart of the Ireland/Northern Ireland protocol, essentially in marrying up the aspirations of the recitals with the hard legal texts of the articles that follow. The committee reported in June that there was not enough urgency among the parties in the negotiations, who in a pragmatic way need to seek the compromises to sort this out, protecting, first and most importantly, the Belfast/Good Friday agreement and, secondly, the two mighty single markets involved—those of the EU and the UK. That report also dwelt on the multilayered dispute resolution mechanisms contained within the withdrawal agreement. The Bill before us supplants those mechanisms without their ever having been tried out. We have heard already of the Secretary of State’s clear and repeated statement that, in doing so, the Bill breaches international law. The result, as we report, strikes at the heart of the withdrawal agreement and hence poses a threat to the maintenance of the Belfast/Good Friday agreement itself. It is corrosive, too, to the future relationship discussions, as trust has become a casualty of the arrival of Part 5 of the Bill.
We wrote to the Chancellor of the Duchy of Lancaster on 18 September, with nine questions on the situation. To date, we have had no response to that letter and the letter is set out as Appendix 2 of our report. I very much hope that the Minister will carefully cover these nine questions in his response tomorrow. In the absence of convincing answers to these nine questions, the committee recommends removing Part 5 of the Bill.
In closing, I note that the amendment proposed by the noble and learned Lord, Lord Judge, is entirely in keeping with our report. I therefore strongly support it, and for once, and after advice, can follow him into the virtual voting Lobby when he divides the House.
Lord Howard of Lympne (Con)
My Lords, it is a pleasure to follow the noble Earl, Lord Kinnoull, and I congratulate him on his committee’s report. Like the noble and learned Lord, Lord Judge, with whose every word I agree, I entirely accept that the sovereign Parliament of the United Kingdom has the power to legislate in breach of international law. That is not the issue that this Bill presents. The question is not whether we can so legislate; the question is whether we should so legislate. I do not often quote the President of the European Commission, but then the President of the European Commission does not often quote Margaret Thatcher. What Mrs Thatcher said was this:
“Britain does not break Treaties. It would be bad for Britain, bad for our relations with the rest of the world and bad for any future treaty on trade”.
That says it all.
I was surprised, nay astonished, that my noble friend the Minister did not deal with nor even mention—unless my hearing has totally failed me—that Part 5 is in breach of international law. The admission by the Secretary of State for Northern Ireland in another place that it is in breach was not, as was suggested by one of my noble friends in the recent debate in Grand Committee, merely a “clumsy” form of words: those words were read from a brief; they were prepared; they were premeditated; they were deliberate; they represented the Government’s clear intention, and, as far as I am aware, the Government have not sought to resile from them.
It was suggested that the dispute resolution provisions in the withdrawal agreement would be activated in parallel with the activation of the provisions in the Bill, but I draw your Lordships’ attention to Article 168 of the withdrawal agreement. It is short, so I shall read it in full:
“For any dispute between the Union and the United Kingdom arising under this Agreement, the Union and the United Kingdom shall only have recourse to the procedures provided for in this Agreement.”
The Government may have second thoughts about that article; they may regret that they have signed up to it, but it is too late: they did sign up to it. They are bound by it and they should honour it.
Together with the majority of those who voted in the 2016 referendum, I voted for Brexit. I do not for one moment regret or resile from that vote; I want the United Kingdom to be an independent sovereign state. However, I want it to be an independent sovereign state that holds its head up high in the world, that keeps its word, that upholds the rule of law and that honours its treaty obligations. I want it to be an independent sovereign state that is a beacon unto the nations. I do not want it to be an independent sovereign state that chooses as one of the first assertions of that sovereignty to break its word, to break the law and to renege on a treaty that it signed barely a year ago. I shall vote for the amendment in the name of the noble and learned Lord, Lord Judge, and, if it is put to a vote, that in the name of my noble friend Lord Cormack. I shall vote against the clauses in Part 5 which are in breach of international law, and I urge your Lordships to do likewise.
Lord Falconer of Thoroton (Lab)
It is a real pleasure to follow the noble Lord, Lord Howard of Lympne, and to have heard the speech of the noble and learned Lord, Lord Judge. They were two incredibly powerful speeches, and I agree with every single word of them—except the bit where the noble Lord, Lord Howard, said that he had voted for Brexit, because I did not.
I very much look forward to hearing the maiden speeches of the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz, which I know will be incredibly good. My noble friend Lady Hayter has given me five minutes of her speech, and it has been agreed with usual channels that I may exceed the advisory limit a bit because I am speaking from the Front Bench.
The Northern Ireland protocol ensures an open border in Ireland to preserve the Good Friday agreement. It does this by creating a regime, legally binding on the United Kingdom as a matter both of domestic law and of international law, whereby goods in or entering Northern Ireland will be compliant with single market rules. On that basis, the border remains open and the integrity of the single market is protected. The protocol also provides that Northern Ireland remains within the customs territory of the United Kingdom and there is unfettered access for goods between Great Britain and Northern Ireland. On 8 September this Bill, including Part 5, was published, giving the United Kingdom Government the express power to break the terms of the protocol. The key foundation of an open border—namely, the legally binding commitment freely entered into by the United Kingdom Government—was fundamentally undermined when the UK explicitly stated that it no longer regarded itself as bound by all the protocol. Law is not a protection when those to whom it applies can choose which particular laws to accept.
Closing the border is ultimately the only way to protect the single market’s integrity if the United Kingdom will not accept its legal obligations, destroying our reputation as a country that abides by the law and depriving the European Union of confidence that the border can remain open. Why? The Prime Minister says that the European Union is negotiating in bad faith. He produces no evidence of bad faith. He says that it is to protect the union and to ensure unfettered access for goods between Great Britain and Northern Ireland. The powers being taken in Part 5 give the lie to that defence. It creates a power to break the protocol only in two specific respects, the first being the requirement which the UK signed up to in the protocol that exit declarations be submitted to the UK Government for goods leaving Northern Ireland. I am in favour of reducing unnecessary paperwork, but to suggest that a requirement for a short summary of goods leaving Northern Ireland is breaking up the union is beyond reason. Secondly, the Bill gives the Government the power to break the protocol by giving the United Kingdom power to identify which state aids apply to Northern Irish-Great British trade, in breach of the protocol. This, I was told by Northern Ireland Office officials, is for clarity. I asked for one actual example of where there was a problem; I was not given one. Those are the only areas where the Government can break the terms of the protocol under Part 5.
There is a third issue, not covered by the Bill, arising out of the protocol, which is what goods are to be regarded as at risk of moving from Great Britain to Northern Ireland and then on to the south. It is about trying to avoid some people paying the tariff and then getting a rebate because in fact the goods did not go into the single market. It is an operational issue. I am in favour of as few people as possible paying a tariff when not due and having to get a rebate, but is it the stuff of law-breaking and threatening the union? Absolutely not. The power to break the protocol in respect of the “at risk” issue is not even included in Part 5. There was a reference in a government statement of 17 September to bringing in further law-breaking measures in the Finance Bill. There will be no Finance Bill this year, so that is no longer in play.
There we have it. Our Government have signalled their willingness to break the law and walk away from the legally binding agreement that guaranteed an open border and peace, to reduce some red tape and resolve two issues that half-decent diplomats could resolve in an hour. It makes no rational sense. When they say that they are not walking away, ignore it. Which party will trust their counterparty who says, “I will pick the terms of the legally binding agreement that I am bound by”?
I have no doubt that this comes from No. 10. It is the product of a Prime Minister clueless about detail, so lacking in grip that he cannot or will not see beyond looking tough toward the European Union, who is flailing around trying to deliver on the false promises he made to Northern Ireland businesses that there would be no additional checks between Northern Ireland and Great Britain and to the hard-line Brexiteers that he would do something about the Northern Ireland protocol. He is a Prime Minister with advisers out of control, looking for political stunts to reinforce the insurgent nature of Brexit, happy to sacrifice the rule of law in the hope of a good culture wars row with remainers and some screeching headlines, and oblivious to the consequences to the standing of the UK, its long-term relationship with the EU countries and the security and safety of those who live in Ireland. The defenders of the rule of law in Government have been forced out, or are too desperate to hold on to the offices into which they have been over-promoted to speak out as they should.
I congratulate Keith Stewart QC on his appointment as Advocate-General, and on the peerage which accompanied it. His predecessor, the noble and learned Lord, Lord Keen, resigned on the basis that he could not square his obligation to protect the rule of law with the policy of this Bill. The Bill has got no better since his resignation. This is not about Brexit—that must happen; it is about destroying one of the foundational values of our country. Without a Government committed to obeying the law, everything is at risk. The law is the ultimate protector. We will invite this House, at the appropriate time, to remove Part 5 of the Bill neck and crop. I hope thereafter that this House will do everything it legitimately can to ensure that it does not return.
Lord Wallace of Tankerness (LD) [V]
My Lords, I follow on from the noble and learned Lord, Lord Falconer of Thoroton, by paying tribute to my successor as Advocate-General for Scotland, the noble and learned Lord, Lord Keen of Elie. I have known the noble and learned Lord for over 40 years, and he is undoubtedly one of the best advocates of our generation. When a lawyer of his calibre and experience says that he found it difficult to reconcile what he considered to be his obligations as a law officer with the Prime Minister’s policy intentions with respect to this Bill, noble Lords should sit up and take note. In an age when resignation on a matter of principle seems to have gone out of fashion, surely we must commend the personal and professional integrity shown by the noble and learned Lord.
As someone who has seen devolution work in practice from within both the Scottish and United Kingdom Governments, I express real concern about the potential for this Bill to do untold damage to the delicately crafted architecture of the devolution settlements. I seriously question whether this Bill is necessary. As the White Paper itself acknowledges, the UK internal market is already strong, with overwhelmingly frictionless trade. By contrast, the evidential base for needing legislative requirements for mutual recognition or non-discrimination between the different political units of the UK is wholly underwhelming.
Divergences already exist. More than 30 years before devolution, different building standards were adopted in Scotland, but now the White Paper flags up differential building standards as a threat to the internal market. I certainly believe that the United Kingdom Governments of the 1960s had a better understanding than the authors of this Bill and the White Paper that differences in climate and the built environment between the Home Counties and Orkney merit different standards. Even within the EU regulatory framework, devolution has led to some divergences to reflect local needs and political priorities. That surely is the essence of devolution. Indeed, the United Kingdom Government supported the Scottish Government in the European Court of Justice when the Scottish Government sought to bring in minimum unit alcohol pricing in Scotland. But this Bill does not replicate the limited grounds set out as legitimate aims, which are provided for under Article 36 of the TFEU, where a legislature seeks to diverge from internal market principles. Nor, indeed, is there any reference in this Bill to the principles of subsidiarity and proportionality, which also underpin the current EU framework. As a result, the scope of devolution is restricted, unprecedentedly without the consent of the devolved legislatures. In replying, can the Minister explain why these differences are allowed to arise?
One further compelling reason to put this Bill aside, as referred to by the noble Baroness, Lady Hayter, is its curious silence in its provisions on common frameworks, heralded as a way forward three years ago. In spite of difficulties, efforts to achieve common frameworks have enjoyed buy-in from all the devolved administrations. On 15 September in another place, Cabinet Office Minister Chloe Smith said that the five frameworks would be delivered by the end of this year. In seeking to commend to the House the whole of the 17th report of the Constitution Committee, on which I had the privilege of serving, I particularly refer to our comments on common frameworks, and our conclusion at paragraph 57:
“We consider that adhering to the principles agreed for formulating common frameworks would improve the likelihood of reaching agreement on how to progress the Bill. We are not convinced that opportunities for managing the UK internal market through the common frameworks process have been exhausted. This contributes to our doubts about the necessity for the Bill.”
I do not underestimate the challenges, but surely if there is a way forward which promotes and facilitates co-operation over the conflict and mistrust which this Bill has come to symbolise, it is in the best interests of all parts of our United Kingdom that we vigorously pursue it.
Lord Clarke of Nottingham (Con)
My Lords, I find it difficult to express how strongly I am amazed and deeply dismayed that any British Government of any complexion should produce before Parliament a Bill which contains the provisions of Part 5 of this Bill. I never expected in my parliamentary career, which has not been a short one, to find myself reading a Bill of this kind presented for parliamentary approval. It has already been said, and will be said many times in this debate, that it appears to give the Government unfettered power to break, in any way they find necessary, particular provisions of a treaty upon which the ink is barely dry. I will not attempt—I do not have the time—to compete with the undoubted eloquence of the noble and learned Lord, Lord Judge, and my noble friend Lord Howard, who have expressed the shock which everybody who has any regard for the rule of law in this country undoubtedly feels.
I move on to my more familiar field, though I am a long practiced and experienced lawyer, and shall talk about the politics which underlines this, which I also find quite bizarre and completely inept. The origins of the need for this Bill are quite extraordinary. It all arises from the decision taken shortly after the referendum that Brexit would involve leaving the single market and the customs union. I strongly disagreed with that, and think that we could have left the European Union and remained. I actually moved a Motion in the House of Commons and got within six votes of a majority for staying in the customs union, which, unfortunately, is nearer than the then Prime Minister, Theresa May, got to achieving anything. But that is not the issue today. I accept that we are committed to leaving the single market and the customs union, and I accept the judgment of Parliament and the population, but it does give rise to all the problems that the Government do not know how to solve.
Once you leave the customs union and the single market, you need a customs frontier between your own internal market and the rest. That is wholly in accordance with all the ordinary practices of international trade in modern times, WTO rules and all. Everybody knows that at Dover this could create a very considerable problem, and we are preparing to recruit the people, get the lorry parks, handle the traffic, and get people to prepare for the paperwork that is involved. The problem of course arose in Ireland, which no one seemed to have thought about very clearly, until they realised that to do the same in Ireland would totally undermine that extremely important agreement for the security of the United Kingdom and the Republic, the Anglo-Irish agreement. The solution was determined that Ulster should stay in the customs union and single market, and Great Britain should leave, which means that we have a customs frontier down the Irish Sea.
This was not a sudden or ill-considered thought; it was argued about vigorously. The Democratic Unionist Party, otherwise firm Brexiteers, opposed the whole agreement on that basis but the fact remains that we have committed ourselves to having a frontier. The proper thing to do now is not to go back on our word with no solution—it is quite unclear what the Government really propose by way of essential customs controls that are still compatible with the agreement—but to minimise the necessary delays, as I hope we are doing in the negotiations with the EU. If we insist on changing standards, we should have equivalence of standards and arbitration procedures to settle disputes, and we should make sure that there are as few disruptions to trade, delays to the border and costs as possible. As I said, it is not quite clear what would happen if you just left a hole in the controls between Ireland and GB.
Baroness Scott of Bybrook (Con)
My noble friend has reached his time limit.
Lord Clarke of Nottingham (Con)
I realise that I have only four minutes to talk on this matter. That is one of the bizarre arrangements in this Chamber that I am getting used to. No other parliament in the world would think that people could do justice to the contents of this Bill with people having four minutes to speak in the way that we are doing. However, I have added my voice and will oppose Part 5, in particular, in every way in which my membership of this House permits.
Lord Pannick (CB) [V]
My Lords, what an extraordinary series of speeches so far. The Minister’s speech was itself extraordinary because he ignored the elephant in the Chamber—that is, the elephant which is trampling through Part 5 on the rule of law.
The noble and learned lord, Lord Judge, in his powerful speech, referred to the report of your Lordships’ Constitution Committee. I am a member of that committee. We unanimously concluded that for this Bill to set out to break international law is without precedent. We described Part 5 as “constitutionally dangerous” . We said that the Bill is
“fundamentally at odds with the rule of law.”
We reached those conclusions not just because Ministers want to give themselves this unprecedented power to breach international law—as the noble Lord, Lord Howard, said in his eloquent remarks, this country is looked at by other nations as a beacon of legality and it is therefore extraordinary that Ministers should want such a power—but because Ministers are seeking to immunise the regulations that they make from challenge in the courts on any ground “whatsoever”, the word used in Clause 47(8).
The Constitution Committee is not a group of “lefty lawyers”—the Prime Minister’s term of abuse in his recent speech to the Conservative Party conference. Nobody, I think, has ever described my esteemed colleague, the noble Baroness, Lady Fookes, in that way. There are some lawyers on the Constitution Committee, but most of the members are politicians and political observers from across the House with decades of political experience. The Government should be ashamed to be responsible for producing and pursuing a Bill that attracts such condemnation from such a committee of your Lordships’ House.
Like those unfortunate people who do not feel pain, and who are therefore at grave risk of injuring themselves and those around them, this Government do not feel shame. It is therefore the responsibility of this House to shout out a warning to the Government that Part 5 of the Bill will, if enacted, endanger the rule of law. I am grateful to the noble and learned Lord, Lord Judge, because his amendment gives us the means by which that warning can, tomorrow, be communicated loudly and clearly.
Lord Cormack (Con)
My Lords, I cannot forbear from saying to my noble friend the Whip on the Front Bench that time limits at Second Readings are advisory. I was sorry that she felt it necessary to interrupt my noble and learned friend Lord Clarke of Nottingham.
This is a particularly sad day for me because, like my noble and learned friend Lord Clarke of Nottingham—we entered Parliament on the same day, although he has had a much more illustrious career than me—I never thought that I would see the day when any British Government produced legislation that would take out a significant part of a treaty that was entered into by this Government following a manifesto commitment and commended to, and endorsed by, both Houses of Parliament less than a year ago. For anyone who aspires to be a parliamentarian, this is shameful; there is no other word for it. I am deeply ashamed that a Conservative Government should have embarked on this course. I like to think that it is the result of Barnard Castle but, at the end of the day, the buck stops where the buck stops and it is the Government who have done this.
I have an amendment expressing regret on the Order Paper. It is similar in intent to, although differently phrased from, that of my noble and learned friend—I call him that deliberately—Lord Judge. I do not intend to exhaust your Lordships electronically tomorrow. As long as he presses his amendment—I cannot think that he would ever change his mind on a subject like this—I will certainly not move mine. However, I tabled my amendment because I was so saddened and disturbed. My feelings have been entirely reinforced by the three reports that have been referred to in your Lordships’ House this afternoon: that of the committee chaired by the noble Earl, Lord Kinnoull, and those of our Constitution Committee and the Regulatory Reform Committee. I have never seen three reports so uniformly damning as those. We in this House have a duty to ensure that the Bill does not go on the statute book in anything like the form it is in at the moment.
Part 5 has to be removed. Some people might talk about the Salisbury/Addison convention, but we would be upholding it by taking that course of action. That convention came about when the Labour Party had a tiny number of people in your Lordships’ House and the Conservatives had an overwhelming majority, but it was agreed that any legislation based on a manifesto commitment would not be prevented from having a Second Reading or getting on to the statute book. As I said earlier, this was part of a manifesto commitment, so we would be upholding and not contradicting that convention.
As we sit in this Chamber, we look up and see the barons of Runnymede—of Magna Carta, from which the rule of law developed over 800 years ago. We in this House have a great duty to ensure that the rule of law is maintained. As my noble and learned friend Lord Judge spoke—he made a marvellous speech—I thought of Tom Bingham, whom I was privileged to count as a friend. He wrote the most wonderful little book called The Rule of Law. Every one of your Lordships should buy some copies and distribute them at Christmas time, particularly to Members of the other place.
The Bingham Centre for the Rule of Law has produced a paper, which I think we have all received. It is very well worded and forcefully argued. We cannot allow those chilling words uttered in the other place a few weeks ago—“specific and limited” breaking of the law—to be the final say. How can we lecture China, or exhort our fellow citizens to obey the draconian laws we are currently thrusting upon them if we take this line? We must not and I hope that we will not.
Baroness Hayman of Ullock (Lab) (Maiden Speech)
My Lords, it is a great pleasure and honour to make my maiden speech today, and to follow the noble Lord, Lord Cormack. I first thank the staff for their support and hard work. Black Rod and her team, the Clerk of the Parliaments, the doorkeepers, attendants and police officers have been helpful, patient and truly welcoming. I am also indebted to my supporters—my noble friends Lady Jones of Whitchurch and Lady Smith of Basildon—for introducing me to the House, and to my mentor, my noble friend Lady Lister, for her advice and guidance.
I was delighted to be able to take the geographic title of Baroness Hayman of Ullock, a village in west Cumbria, where I live on a smallholding beside the River Marron, with my husband and a collection of animals. It is a beautiful place, nestled between the majestic fells of the Lake District National Park and the mountains of Scotland across the Solway Firth. I am passionate about nature, and we manage the land to enhance the environment and to encourage biodiversity. So I was very proud when I was elected to the other place as Member of Parliament for Workington—Cumbria’s first woman MP—and then given the responsibility of Shadow Secretary of State for Environment, Food and Rural Affairs, a role I carried out for nearly three years. To be able to develop policy not just on environment, food, farming and rural issues but on another of my passions, animal welfare, was a huge privilege—and it really is a privilege to have joined your Lordships’ House.
I am aware of the many differences between here and the other place, so I ask noble Lords to please be patient with me if I fall into old habits. I am looking forward to getting stuck in, and also to getting back to singing with the Parliament choir. It was a great honour to be chair of the choir until last year and I made many friends, a number of whom sit in this House.
Having listened to the speeches today, it is clear that there is a huge amount of knowledge and expertise in your Lordships’ House—although, as a long-standing Leicester City supporter, I was somewhat taken aback by the earlier suggestion from the noble and learned Lord, Lord Judge. But I am pleased to be able to participate.
I have already talked of my passion for the environment, but I am also half-Welsh. My mother’s family farmed in the south Wales valleys. The Minister will need to address the concerns that the Bill risks destabilising devolution arrangements and hampering environmental legislation. I have no problem with the objective of ensuring that the UK internal market can work smoothly after the Brexit transition, but it must protect high environmental standards and encourage improvement, and these matters generally fall under devolved responsibility.
The Government have said that our existing high standards for the environment
“will underpin the functioning of the internal market”.
However, the Bill does not give legislative effect to this commitment; on the contrary, in its current form it could make it harder for the devolved nations to achieve their ambitions. So it is vital that our devolved Administrations can introduce and implement their own environmental laws. I ask the Minister to clarify how the Government intend to ensure that current environmental standards are not weakened, and that the Bill will not prevent or deter any part of the UK from introducing or implementing measures that are designed to protect and enhance the environment and mitigate climate change.
Climate change has not stopped because of the global pandemic, yet it seems to have become the forgotten crisis. We should be increasing our ambitions in the fight against climate change, and for every new piece of legislation we should consider the potential negative impact on the environment. I hope the Minister can reassure me that this will be the case with the Bill we are debating today, and that our environment will continue to be both protected and enhanced.
I have chosen to make my maiden speech today because this issue is of such fundamental importance to our future, and I look forward to fully engaging with the work of your Lordships’ House.
Lord Liddle (Lab)
My Lords, it is an inestimable pleasure to congratulate my noble friend Lady Hayman on her maiden speech. We go back a bit of a way. We were both freshers—if that is the right term—in the Cumbria Labour group when it was first elected in May 2013. That is a forum of plain-speaking common sense which I would recommend to some of our national politicians. Together, as we are now in this place, I hope that we will speak up for the north and for Cumbria and its very special concerns—alongside, of course, many other Peers in this place, including my noble friend Lady Hayman’s predecessor-but-one as MP for Workington, my noble friend Lord Campbell-Savours.
My noble friend Lady Hayman—Sue—made a distinctive mark in the Commons. She led the Opposition on environmental and rural affairs, and she thought deeply about the issues. In a Labour Party that was going through a very difficult patch—to put it mildly—she was a voice of quiet calm and reason. It is great—my wife, for one, will be pleased—that she is going to take up again her involvement in the parliamentary choir.
In last December’s general election, so-called Workington Man assumed a mythological status as driving a huge breach in what used to be Labour’s “Red Wall”. I see my noble friend Lady Hayman as a fine and, I believe, more lasting example of Workington Woman, with an instinctive feel for progressive values, a deep concern for the underdog, and a practical passion to secure reform and change. What is more, she is a very decent human being, so I congratulate and welcome her.
I will speed up, I hope, on today’s issue. We are not supposed to be talking about Brexit. People say Brexit is all over. Well, it is, sort of—and of course I accept the result of where we are. But it is because of the Brexit we have chosen, as the noble Lord, Lord Clarke of Nottingham, pointed out, that the Government have got themselves into this very considerable difficulty. Although you can say that the debate about Brexit is over, the consequences of Brexit—not just the economic consequences, which I think are going to be bad; worse than Covid, according to most independent assessments—are going to affect our politics and dominate it, perhaps for years to come.
This Bill is a dramatic blow to Britain's standing in the world. The very act of tabling it has done incalculable damage to our international reputation, and, as the noble and learned Lord, Lord Judge, said, we are now dependent on our soft power for influence. Why has it been done? The proposal for a revised Northern Ireland protocol was put to Brussels by Boris Johnson himself after his walk in the park on Merseyside with Leo Varadkar last autumn. It was the key to having a different withdrawal agreement that he could then get through Parliament. Are we to assume that he never read the provisions of the protocol that he signed or that Michael Gove did not read them on his behalf?
I believe that, by the time we get to Report, these provisions may have been dropped. That is what I very much hope. I think the Government will use the excuse of a skinny trade deal to drop them. However, my fear is that this will not resolve the problem. Trade across the Irish Sea will muddle on for now, but that is only because our rules and standards are presently fully convergent with the EU’s. However, for this Government, the whole point of Brexit is to diverge from EU rules. That will cause great difficulty as time goes on and it has dangerous potential to undermine the Good Friday agreement.
As my noble friend has said, this puts into question the future of the United Kingdom. Furthermore, if I were a Scottish MSP, I would vote to refuse legislative consent to this measure on the grounds that they override the devolution settlement. What we are looking at today is a profoundly dangerous Bill, and this House has constitutional responsibilities to reject the parts of the measure that contradict the manifesto on which the Government were elected and that breach international law. I hope the Lords will neuter it and then stand their ground.
Lord Carlile of Berriew (CB)
My Lords, I, too, congratulate the noble Baroness, Lady Hayman of Ullock, on her excellent maiden speech. As a former Welsh rural Member of another place, I welcome her commitment to the integrity of rural life and rural communities, and I look forward to her many further contributions to your Lordships’ House. She should not be unduly sensitive about the habits of this place. We all get used to being shouted at when we break order by standing up at the wrong moment or in the wrong gangway, but it is never really meant; it is just one of those things.
I suggest that the very fact that so many speakers are expressing their concern about Part 5 of the Bill, combined with their range of expertise and experience, should give Ministers serious pause for thought before this bent-barrelled blunderbuss is fired into the rule of law. This is legislation by offensive weapon rather than logic.
Like many others, I support the amendment to the Motion in the name of my noble and learned friend Lord Judge and moved by him with such clarity. As a former Lord Chief Justice, he speaks with authority, the contradiction of which—on this issue, at least—would amount to brazen and wilful ignorance, in my view. For those who are interested in his support for Leicester City, I remind others who are listening that, at the moment, Leicester City are winning 14:1, as it were. This is a fairly rare experience, and I suspect that it will be a much larger lead by the end of this debate, which is something that Ministers should not overlook.
I urge your Lordships and others outside to beware of thinking that this debate is a lawyers’ wordfest. This is not an issue on which any special knowledge of the law is required at all. Surely, it is a matter of constitutional instinct, international expectation and mutual respect between the United Kingdom and the rest of the world. I remind your Lordships that this Government are the first to resort to the rule of law when it suits them. If you look at the way they have made their submissions in cases concerning foreign terrorism fighters seeking to return to the United Kingdom, however unruly in law those applicants’ other countries of potential citizenship are, they are the first to say, “We rely on the rule of law. We may not like those countries, but they’re entitled to go back there, so there they shall go”. So there is a degree of hypocrisy, on the evidence, in what is happening today.
My parents escaped from the basest of persecutions. After my father, who was a deep-rooted Anglophile, got over my decision not to follow him into the medical profession—a decision about which he expressed deep disappointment, although it was probably to the benefit of my potential patients—taught me politics and history in an international context. He told me of his pride in living in a legal system that would make my qualifications respected throughout the world. I and many others in our current professional lives deal with businesspeople in many countries. One of the beacons that attracts them to making contracts with UK-based entities is their belief that, once a contract and agreement are reached, nothing will be changed in this country arbitrarily, gratuitously or for oblique motives. Some of those dealings are with the British Government.
I am ashamed that the Government are even considering empowering Ministers to derogate from the obligations of the United Kingdom under international law. I am dread-dazed that breaching international law is being contemplated in a way that could undermine the extraordinary achievements of courageous people on all sides in Northern Ireland. I am also appalled by the suggestion that we should be in breach of Article 26 of the Vienna convention, and I hope that the Government will listen to these debates, particularly today’s debate on my noble and learned friend’s amendment to the Motion, and change their mind.
Lord Lilley (Con)
My Lords, I congratulate the noble Baroness on her excellent maiden speech and look forward to hearing both her spoken and her musical words in future. As a non-lawyer, I enter this arena like a Christian facing a pride of angry legal lions. This is made worse by the fact that they have already captured my own archbishop. I am armed only with a simple question: what should a state do if it finds that its obligations under one treaty conflict with those under another treaty or its own constitutional law? The only reply I have received so far is: “You shouldn’t have signed the withdrawal treaty”.
That might work in a student debate, but it fails to address my question, so let me answer it myself, not in my own words but in those of the European Court of Justice. In the Kadi case, the court affirmed that, although the EU seeks to comply with its international legal obligations,
“it would be wrong to conclude that, once the Community is bound by a rule of international law, the Community Courts must bow to that rule with complete acquiescence and apply it unconditionally”.
Likewise, the German constitutional court has ruled that if treaties, even EU treaties, conflict with German constitutional law, the latter prevails. Of course, British Governments have disapplied aspects of international law, the most famous example being the United Nations Convention on the Law of the Sea, 15 days after it came into effect, when the future Lord Diplock ruled that
“the Crown has a sovereign right, which the court cannot question”,
to do so. Moreover, in Section 38 of the withdrawal Act, Parliament explicitly foresaw that it might need to set aside the direct application of the withdrawal treaty, as this Bill permits.
However, no one ever suggested when they disapplied parts of the conflicting laws that the European Court of Justice, the German court or previous UK Governments had broken the law—until Brandon Lewis uttered those fatal words. These have been seized on as a weapon by some, and proved a stumbling block for some of my closest friends, but I believe they should be disavowed. This raises the question: are there potential conflicts between obligations under the withdrawal treaty and our fundamental constitutional laws? There are certainly many internal contradictions within the withdrawal Act, but we ratified it because it contains a mechanism—the joint committee—in which both sides are committed to resolve outstanding issues in good faith and respecting each other’s legal order. So, given good faith and mutual respect, there should be no conflict with our legal order, the pillar of which is the Act of Union between Great Britain and Ireland, which pledges that “all prohibitions and bounties”—that is, tariffs—
“on the export of articles … of either country to the other shall cease.”
This is buttressed by the Belfast agreement, which promises no change in that union without the consent of both communities.
However, the EU has been showing little evidence of good faith, insisting on applying the entire EU customs code, which would mean that no goods could move from Northern Ireland to Great Britain without an EU export declaration—something my noble and learned friend Lord Clarke used to say was one of the disadvantages we would face in all our trade once we left the customs union. That is contrary to both the Act of Union and Article 6 of the protocol, which says:
“Nothing in this protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”
In the other direction, the withdrawal treaty commits both sides to agree before the end of the transition period the definition of goods which are at risk of crossing into the Republic. The EU has implied that, if it declines to agree, the UK will have to levy EU tariffs on all goods going from Great Britain to Northern Ireland. Both these results would conflict with the Act of Union and the Belfast agreement. Happily, because of this Bill, the EU seems to be pulling back from both these positions. I hope that good faith will prevail and we will not need to implement the clauses in this Bill, but it would be irresponsible to leave this country unprepared by rejecting them.
Baroness Taylor of Bolton (Lab) [V]
My Lords, I welcome my noble friend Lady Hayman and congratulate her on her speech. I am absolutely sure that she will make many positive contributions to the work of this House, and it is good to see her here today.
There is no way that I can do justice within four minutes to the report of the Constitution Committee, which I have the privilege of chairing; I will restrict myself to remarking on some major points. When we first heard about this Bill, we were sceptical about the need for legislation, and particularly concerned about the impact on relations with the devolved institutions. I will come later to the rule of law issue, which is now receiving greater attention, but I emphasise the impact in terms of the unity of the United Kingdom. The Bill remains a major concern in respect of this.
The committee believes that there is no reason why the principles for the successful operation of the UK internal market cannot be arrived at consensually. There is, after all, broad agreement on the need to avoid erecting new barriers to trade. There are existing mechanisms to achieve this, including, of course, the common framework arrangements, which we are sometimes told are working well; the Government have never explained why these mechanisms are inadequate. Moreover, the devolved Administrations are required by law to adhere to international obligations such as trade treaties. If the Government are committed to the union, an internal market is needed that all parts of the union have bought into.
The committee took a great deal of evidence on the rule of law and has said very clearly that it applies to everyone, from government Ministers to the person in the street. We are all bound by and entitled to the benefit of the law; indeed, it is an essential characteristic of a democratic society and a fundamental principle of our constitution. The rule of law also includes compliance with international law—yet this Bill provides the Government with extraordinary delegated powers, which the Government themselves acknowledge are for the purpose of breaking international law. We believe that taking powers in this way to explicitly break international law is without precedent, and that for the Government to put such powers beyond the reach of judicial oversight is a step fundamentally at odds with the rule of law. For these reasons, I will support the amendment in the name of the noble and learned Lord, Lord Judge.
There are other concerns; that is obvious. There are implications for the Ministerial Code, on which we raise the question of the need for clarification of Ministers’ duties to comply with the rule of law; there is also the question of the scope of delegated powers, as addressed by the DPRRC; and, of course, the European Union Committee has outlined issues in relation to the Northern Ireland protocol, about which the noble Earl, Lord Kinnoull, and my noble and learned friend Lord Falconer have spoken. A cynic might say that the rumpus around this Bill aids the Government by drawing attention away from the basic ambiguity in their original approach.
Finally, I reiterate my view about the lack of necessity for this Bill. There is general agreement that we need a thriving internal market. No one has argued against it and existing arrangements can deliver this. On EU relations, I do not know whether the Bill is part of the Government’s brinksmanship but, even if that were its purpose, it would be no justification for legislation to break the rule of law. I do know that this legislation is damaging to the UK’s international position, and that this can be in no one’s interests at all. I regret that the Government have introduced the Bill. I ask them to rethink their approach and, particularly, to accept amendments to Part 5.
Lord Bruce of Bennachie (LD) [V]
My Lords, I join in congratulating the noble Baroness, Lady Hayman of Ullock, on her maiden speech. Like others, I look forward to hearing her contributions, whether about Cumbria or the environment, which I think the House will anticipate.
I deplore that a government Bill should contain Clause 45(2)(a), which trashes the UK’s reputation for upholding its treaties and honouring its obligations and seriously undermines our ability to negotiate effective agreements. I believe it reveals that the Government are under the stranglehold of anarchists and disrupters. Indeed, I have no doubt that it suits the dark forces in the Government that this part of the Bill has diverted attention from the other deeply damaging proposals that cut across the devolution settlements, to which I now turn.
I was closely involved with the Scottish Constitutional Convention, which laid the basis of the Scotland Act and the subsequent further extension of powers. I am a passionate home ruler but deeply inimical to the break-up of the UK, which I believe will cause fundamental and lasting economic—and, indeed, emotional—division and hardship. In typically British fashion, devolution has evolved differently in each devolved Administration and is not written into a basic law, but it has become accepted and it works. One of the reasons for this has been the overarching umbrella of the European Union, now being removed.
Awareness of the implications of this was raised by the Joint Ministerial Committee on EU Negotiations in October 2017, with a joint communique setting out principles behind the common frameworks to which many noble Lords referred. As a member of the newly established Common Frameworks Scrutiny Committee of this House, I am now aware that this work has been progressing slowly but constructively. A dispute mechanism is envisaged but has not yet been required, and it is the view of the devolved Administrations that this process is both fit for purpose and practical.
As the Constitution Committee stated, it appears that this Bill is anticipating problems that may never arise but seeking powers that prejudice the effective and consensual working of devolution. By contrast, the devolved Administrations can identify how the powers in the Bill would allow the UK Government to block or disrupt the working of devolution. This could affect building regulations, where, as has been pointed out, in Scotland we want higher insulation standards or we might want lower carbon specs. It could affect single-use plastics, where Wales and Scotland want tighter restrictions than England. The mutual recognition and non-discrimination rules could nullify such divergence, which is why the devolved Administrations argue that it could be an England-led race to the bottom.
Clauses 46 and 47 give the UK Government powers to initiate spending in devolved Administration areas without requiring the engagement or consent of the respective Governments. The motivation behind this seems blatantly disruptive. No doubt the people of Scotland, Wales and Northern Ireland may welcome extra cash from the Treasury over and above their own sources of revenue—city deals are an example of that—but for such a measure to be pursued without the participation or consent of the parliaments or Governments is the total negation of devolution. What is more, to be pursuing this only months before crucial elections in Scotland and Wales is a monumental misjudgment by a Government who care nothing for devolution and talk unionism while trampling all over the settlements that are essential to holding it together.
The Bill is not just unnecessary; it is downright provocative. It shows utter contempt for the hard-won measures that are essential to holding the United Kingdom together. Ideally the Bill will not proceed. If it does, it must be with the removal of lawbreaking and with the requirement of consent from the devolved Administrations, which currently seems unlikely to be forthcoming or even sought. What is missing from the Government’s approach is any concern, consideration or comprehension of the delicate balance of devolution. This is well summarised in the report published by the Centre on Constitutional Change. When five archbishops are motivated to put their anxieties into print, it is time for the Government to recognise that this hastily concocted and ill thought-out Bill is not fit for purpose, whatever the purpose is meant to be.
Baroness Noakes (Con)
My Lords, I support the Bill because it is an essential element of our preparations to be an independent nation again. Before we joined the EU we did not need special internal market arrangements for trade in goods and services within the UK, but devolution has changed that. We need the Bill to ensure that the different parts of the UK can continue to trade with each other as at present without incurring costs or negotiating regulatory hurdles.
The beating heart of the Bill is about protecting the devolved nations. The Government’s UK Internal Market White Paper of last summer showed that Scotland, Northern Ireland and Wales export more to other parts of the United Kingdom than to outside the UK. There are similar patterns for imports. Keeping the ability to trade within the UK on a barrier-free basis should be at the core of the belief set of each of the devolved nations. I have been surprised that they have not grasped this basic economic fact but have instead been focused on working up grievances about the Bill. The economic imperative is not the same for England, which trades goods and services outside the UK more extensively, but nevertheless, intra-UK trade is important for England too.
The Bill is also strongly pro-business. The plain fact is that most businesses in the UK do not export goods or services outside the UK. Roughly 90% of SMEs trade only within the UK. Keeping that intra-UK trade going without friction is of massive importance for the health of the UK economy and for the devolved nations.
Other sensible provisions in the Bill include ensuring that any subsidy control regime is UK-wide in order to avoid distortions in intra-UK trade. We simply cannot have an efficient and fair UK internal market unless subsidy control is exercised on behalf of the whole of the UK. I also welcome the new role for the Competition and Markets Authority.
I know that most of today’s debate will be taken up with the provisions of Part 5 of the Bill and the power that it creates to modify the European Union (Withdrawal) Act. The Government have been clear that they would use such a power only if it really were necessary to protect the position of Northern Ireland within the UK, that they would use it only as a last resort having exhausted all other routes, and, of course, that they would not put the issue of peace in the island of Ireland at risk. I am also clear that the other place would not let the Government do otherwise.
I hope that it is not necessary to breach international law, but we should remember that such breaches are not without precedent. Sometimes countries, and different Governments in our own country, have concluded that, faced with competing evils, the least harm is done by taking that decision. I hope noble Lords who have concerns about this part of the Bill will see that it has the best interests of the UK at its heart.
Lastly, I regret the highly political intervention today by the most reverend Primate the Archbishop of Canterbury and his fellow Anglican primates. Disestablishment is starting to look rather attractive.
Lord Hannay of Chiswick (CB) [V]
My Lords, I regret that our virtual proceedings mean that one can no longer welcome maiden speeches across the Chamber but has to do so remotely. I do that now, both to the one already made and to those that are coming.
I make no apologies for concentrating my remarks in this Second Reading exclusively on Part 5 of the Bill and its Clauses 44, 45 and 47. Other parts of the Bill certainly require the customary careful scrutiny, and very possibly the amendment, that we normally give to legislation, but this section is unprecedented—indeed, unique—and requires more drastic treatment. Why so? Because never before in Britain’s modern history have a Government brought forward a Bill giving them the authority to unilaterally break international law and override our treaty obligations—in this case, obligations entered into less than a year ago and legitimised by legislation passed by this Parliament following last December’s election. There is no doubt about that, because the Secretary of State for Northern Ireland stood at the Dispatch Box in the other place and told us quite explicitly that it was so.
Does that have implications going far beyond the subject matter covered by this Bill? Indeed it does. This country has prided itself that its word was its deed. In the 20th century, we twice went to war—to world war—in 1914 and 1939, to uphold our treaty obligations, but apparently our word will no longer be our deed if these provisions become law. Moreover, it is the Government’s view—which I happen to share—frequently put forward at our own Dispatch Box, that it is in Britain’s national interest to sustain and strengthen the rules-based international order. That order is currently under severe strain. How much credibility will our advocacy of that order have if we start picking and choosing which bits of it we intend to apply and which ones we intend to ride roughshod over? Very little, I suggest. I can just visualise the justifications that the representatives of Presidents Putin and Xi will put forward next time they wish to break international law and their international obligations; they will be identical to the arguments being used by the Government to defend the measures brought forward to us today.
I insist that this is not a matter of which side of the Brexit argument you are on. That matter was settled last January when this House endorsed the deal that the Prime Minister struck with the EU—the very same deal that we are now being invited to override—and it was settled when we left the EU at the end of January. That is demonstrated by the fact that critics of these measures are drawn from both sides of that Brexit argument. What really is relevant is the risk to the Northern Ireland peace process if the Government persist in the course that they have set out on. The Government’s protests to the contrary ring quite hollow to me. The balance of analyses points to a real, genuine, serious risk to that process.
Those are the reasons why I believe the principled course of action is to remove those parts that I have referred to from the Bill. There is just one word that I can find to describe them: an aberration. That is why I shall vote with the Motion in the name of my noble and learned friend Lord Judge.
The Lord Bishop of Leeds [V]
My Lords, I add my congratulations to the noble Baroness, Lady Hayman of Ullock, and look forward to her future contributions to this House. I fully endorse the arguments set out by the noble and learned Lord, Lord Judge. I concur with the concerns set out in the report cited by other noble Lords earlier. I even welcome the commitments articulated by the Minister, but I question how they can be trusted, given the underlying ethic of the Bill—and it is absolutely right for archbishops to ask questions of such matters.
Relations with potential partners usually depend on integrity. Trade, security, migration and so on all rest on fundamental trust. Trust cannot be one-sided, or it is not trust at all. Respecting one’s interlocutors is essential. This is inevitably evidenced in language. The Bill before us assumes that our interlocutors cannot be trusted and will behave in bad faith, and that we need to be protected from them. If they do not give us what we demand, we are free to do our own thing, including breaking the law and reneging on agreements made less than a year ago that were said at the time to be “oven ready”—a good arrangement that required “no more negotiations”. What the Bill does not ask is why our word should be trusted by others.
Integrity and morality matter at the level of international relations and agreements—unless, of course, we are now agreeing to reduce all our relations and transactions to some sort of utilitarian pragmatism. Morality also applies to how we remember history and establish what will shape the national mythologies that future generations will inherit. What story will be celebrated or commemorated next year, the centenary of partition on the island of Ireland: one that chose to end violence and respect difference, including different perspectives on identity, justice and unity, or one of a conscious abrogation of agreements built from bloodshed and courageous willingness to stem the wounds of grievance? Ireland, both the Province and the Republic, needs some certainty and shape in the future narrative, but what sort of certainty is built on a broken word, the negation of trust or the arrogance of exceptionalism?
Irish church leaders are surely right to be concerned about what the Bill implies for relations between the devolved institutions and with the UK Government. These leaders are not talking into fresh air; they straddle the border in Ireland and their deep concerns about a breach of the Good Friday agreement need to be listened to, not simply dismissed with a wave of boosterish optimism from Westminster.
Others will speak about the implications of closing an illegal route to challenge the Government’s implementation of the protocol, but let us be clear: parliamentary sovereignty does not translate easily into executive sovereignty. A decision to prefer short-term pragmatism over long-term ethics will lead to a future in which a question mark will hang over any statement by those whose word and adherence to the rule of law cannot be trusted. More is at stake here than economics.
Lord Hunt of Wirral (Con)
My Lords, I draw attention to my outside interests as set out in the register. In this important debate, it is vital that we do not lose sight of the bigger picture in two important respects. First, our society and our economy have been and continue to be battered this year by the effects of the global pandemic. All the Government’s deeply held fiscal aspirations have necessarily and rightly been jettisoned, as the Chancellor has done everything in his power to protect jobs, economic activity and the National Health Service. Our society and our economy are one and the same thing.
In 2016, the British people voted to leave the European Union and last December the Government won a clear mandate to see that policy through. In so doing, they are inevitably involved in complex negotiations, both with the European Union and, in practice, with individual member states, each with their own particular interests. Defending our economic interests is, and must always be, the paramount concern for Ministers, and that priority has never been more important.
A satisfactory trade deal with the EU was never going to be easy to achieve, with so many competing interests at play. Of course, there must be give and take on all sides. I have stated on many occasions that I believe a constructive and comprehensive post-Brexit trade deal between the UK and the EU is not only the best outcome but an outcome we must all avidly support. I think we all also agree that any repudiation of a treaty, or any action that might be seen as a breach of international public law, must be avoided if at all possible and used only as a last possible recourse in the most extreme situations. I strongly support the tribute paid by the noble and learned Lord, Lord Wallace of Tankerness, to my noble and learned friend Lord Keen of Elie. We certainly miss him in this debate. However, after the damage inflicted by Covid-19, we surely cannot afford to allow anyone, internally or externally, to jeopardise the integrity or efficiency of our internal market in the United Kingdom. That seems to be the actuating principle behind the Bill. Of course, in a Second Reading debate, it is the principle that we are considering.
There is a second point, which is the role of this House. I never cease to be impressed by the exceptionally erudite and public-spirited contributions we hear, week in, week out, from these Benches, especially today with the brilliant maiden speech of the noble Baroness, Lady Hayman of Ullock. None the less, we must not lose sight of where we stand in the delicate constitutional settlement of this land. It is our obligation fairly to consider propositions sent to us by the House of Commons and, where possible, to improve them. On the assumption that that convention is honoured and the Bill progresses, there will be bountiful opportunities to return to the details of this legislation. For now, however, with Her Majesty’s Ministers engaged in highly technical and demanding negotiations, the outcome of which is of the utmost importance to us all, I hope we will find ways of strengthening the hands of those who represent us, rather than seeking to tie them.
Lord Whitty (Lab) [V]
My Lords, most contributions so far have related to Part 5 and the Government’s somewhat ham-fisted attempt to unilaterally disavow an undertaking made only a few months ago. I agree with those sentiments. and with the reports of the Constitution Committee and the EU Select Committee and the contributions by their chairs, the noble Baroness, Lady Taylor, and the noble Earl, Lord Kinnoull. I will also support the Motion in the name of the noble and learned Lord, Lord Judge, at the end of the debate.
However, this is quite a big Bill, and I want to talk about something else. Before doing so, I welcome my noble friend Lady Hayman to the Chamber. I commend her speech, including the importance that she stressed of environmental standards, which relate to this Bill as much as they do to much of the legislation we will face over the coming months.
I want to talk about state aid, which is in the Bill but is dealt with rather superficially. It needs to be clearer before the Bill finishes its passage through this House. In a sense, the noble Baroness, Lady Noakes, referred to this in her contribution. She and I were members of an EU Select Committee that produced a report on state aid about two years ago. We rarely agreed on anything fully, but we do agree on the importance of this issue.
At its most acute, the issue of state aid could be epitomised by the issue in Northern Ireland. As a result of the agreement and the way the Government are now pursuing the matter, through the Northern Ireland protocol Northern Ireland is to be part of the customs union and, to a large extent, the single market. So if the Stormont Government gave a subsidy or preferential public procurement arrangement to, say, a Northern Ireland textile company, the main exports of which are to the Republic, and if its Irish competitors objected, would EU state aid rules prevail or would the UK internal market rule prevail? It is clear that we need a UK state aid regime and it is fairly clear how that will relate to our international obligations under the WTO and, I hope, to future bilateral free trade agreements. But it is not at all clear how it will operate in relation to the internal market, which is the focus of the Bill. If that same Northern Irish company’s main export were to Scotland, what then would the arrangements be? If it were to England, would it be different again, because there would be an equivalent objection from England-based competitors?
The fact is that industrial, employment and consumer policy—all of which are relevant to state aid considerations —are differentially devolved between the three Administration and centralised in England but not in the UK. Of course, even in England there is the expected intention to devolve more industrial and employment policy to the English regions, so the question could, at some stage in the future, apply to Greater Manchester, which may have a different industrial and employment support system from that in the West Midlands. How does that play out in the new state aid framework?
The central question is whether there is yet a draft framework for all of this in relation to state aid, at least between the UK Government and the Scottish, Welsh and Northern Irish Governments. If not, what do the Government think it should look like and, above all, how should it be enforced? Is the office for the internal market, due to be established within the CMA, wholly a creature of the UK Government or will the devolved Administrations have a say in its governance and decision-making? During the EU regime, the Commission’s state aid arm had authority over member states, with prohibitions and fines at its disposal. That could be the case for the CMA.
Baroness Bloomfield of Hinton Waldrist (Con)
I remind noble Lords of the speaking limit.
Lord Whitty (Lab) [V]
Before the passage of the Bill, we need to clarify these issues.
Baroness Suttie (LD) [V]
I also add my congratulations to the noble Baroness, Lady Hayman, on her excellent maiden speech. I look forward to hearing her speeches in the future.
What is perhaps remarkable about the speeches we have heard is that the overwhelming majority, on all sides of the House, agree that the Bill is both unnecessary and deeply damaging. As has been pointed out, we have only four minutes, and so I will make three points.
The first is simply to recall, as other noble Lords have, that this is a problem of the Government’s own making. The fact is that the Prime Minister insisted that it was possible to do three incompatible things. As the noble and learned Lord, Lord Clarke, so eloquently explained, the Government insisted that the whole of the United Kingdom could leave both the customs union and the single market while simultaneously avoiding a hard border on the island of Ireland, as well as down the Irish Sea. Their solution was the Northern Ireland protocol. Just 10 months ago, the Prime Minister referred to the withdrawal agreement with the protocol attached as “fantastic” and “historic”. The Northern Ireland protocol, which is far from perfect, is none the less a carefully constructed compromise to try to maintain peace and stability on the island of Ireland and to protect the Good Friday/Belfast agreement.
My second point is that the Bill in reality does little to address the actual problem about which Ministers claim to be concerned. It does nothing about checks on goods crossing from Great Britain to Northern Ireland, only theoretically providing a power to avoid checks in the other direction. If the UK Government are concerned to ensure that everything possible is done within the protocol to facilitate GB-NI trade, they have the legal means at their disposal through the joint committee.
My third and final point is this: the people in Northern Ireland, from all communities, have been let down too often already by this Government. It is just less than a year since the Executive in Stormont were restored. The progress made in the last 20 years is not something that can, or should, ever be taken for granted. Repeated polling makes it very clear that a majority of people in Northern Ireland recognise the need for the protocol, despite its challenges. They do not want the Government to break international law on their behalf. Businesses need economic certainty and the people of Northern Ireland deserve much better than being used as a political football in the Brexit talks. The solution is clearly to negotiate a better, closer deal between the EU and the UK, and then to use agreed mechanisms to protect trade between Great Britain and Northern Ireland. If the Bill is intended to strengthen the mechanisms that hold together the United Kingdom, it is clearly not succeeding. If the Bill is a short-term tactic to strengthen the Government’s negotiating hand, it is hard not to conclude that the loss of trust that it has generated will do long-term harm to our international reputation.
Lord Howard of Rising (Con)
My Lords, comments of genuine legal concern criticising Part 5 must be respected, however disproportionate. However, most of the adverse comments are, frankly, sour grapes from remainers. That Britain would lose its reputation by passing the Bill is nonsense. There are endless examples of EU bad behaviour: the French shepherding illegal immigrants into British waters, or the EU wilfully breaking international law as with Airbus, et cetera, et cetera. The EU ignores the law with complete abandon. To quote the EU Advocate-General,
“it would be wrong to conclude that, once the Community is bound by a rule of international law, the Community Courts must bow to that rule with complete acquiescence and apply it unconditionally”.
There is a very strong argument that Part 5 would not be in breach of international law. There is not time to discuss detail, but the EU’s behaviour means that various articles of the Vienna convention give the UK the freedom to implement Part 5, if required. If anyone is in doubt, let me quote the noble Lord, Lord Pannick—one of this country’s most distinguished advocates:
“If, therefore, the UK and the EU were unable to reach an agreement on Northern Ireland/Ireland, despite good faith negotiations and despite the arbitration procedures, and if the UK were therefore to be faced (against its will) with a permanent backstop arrangement, the UK would be entitled to terminate the withdrawal agreement under Article 62 of the Vienna convention on the Law of Treaties.”
Furthermore, Section 38 of the withdrawal agreement Act, passed by your Lordships, fairly and squarely confirms the supremacy of Parliament. The Bill gives the power to act if Parliament so agrees. The Bill itself does not initiate anything, so whatever view you take, the passing of the Bill is not an illegal act.
The withdrawal agreement was signed in expectation of reaching a reasonable agreement. For the EU to threaten to withhold third-country status or use the Northern Ireland protocol to try and gain advantage in discussions is not acting in good faith. Monsieur Barnier saying that not even a pat of butter may go between England and Northern Ireland demonstrates this attitude. It is an example of the view expounded by Verhofstadt’s team that Great Britain will become the EU’s first colony. It is how Britain has been treated throughout negotiations. Last Thursday it’s the EU Council arrogantly restated that the its opening position was its continuing position. This is not negotiation but dictation.
With no clear argument against Part 5, we must put the interests of our country first and foremost. We must do our best to achieve what the people of Great Britain have consistently voted for and rid ourselves of EU control. Including Part 5 will show the EU that we are not a colony and are not prepared to be treated as one.
Baroness Andrews (Lab) [V]
My Lords, it is with great pleasure that I join with others in welcoming my noble friend Lady Hayman to this House and congratulate her on her speech. I am sure we will hear many marvellous speeches from her, and it has been good to hear her in this remarkable debate this afternoon.
In respect of Part 5 of the Bill, I would simply say that the recent amendment in the name of the noble and learned Lord, Lord Judge, speaks entirely for me. The changes that are made in this Bill in another place—which simply make Parliament an accomplice in breaking the rule of law—are totally unacceptable.
I want to focus on the risks in the Bill, and particularly on the way it threatens to restrict the existing powers of the devolved Administrations by imposing overriding constraints on the scope of the common frameworks. I declare my interest as chair of the Common Frameworks Scrutiny Committee. For the past three years, and in the context of the incorporation of European law, the four countries of the UK have worked hard to create new consensual common frameworks specifically in order to secure a well-functioning internal market. Of the 40 or so frameworks in progress, some will carry their own legislative competence, but they will all, as appropriate, have their own dispute mechanisms in place. This has been done on a collaborative basis, by agreeing common standards across agriculture, the environment, health and safety—all balanced by respect for the devolved Administrations, in the future as in the past, to diverge in detail, as they see fit.
This managed divergence has led, and will lead in the future, to welcome innovations: not least, for example, for Scotland to introduce minimum alcohol pricing, or Wales a more rigorous approach to single plastics or to refusing GM products—so far, so good. The genius of the process is that co-operation and flexibility have built a stronger foundation of trust between the four nations, just at a time when intergovernmental arrangements have been at their most challenging. Despite the brake on progress caused by the no-deal preparations and now the pandemic, we expect five frameworks to be agreed in the next few months, and more to follow shortly.
This Bill, according to the chairs of both the Constitution Committee and the European Union Committee, threatens to frustrate and disrupt progress made so far and undermine future co-operation, because it does indeed—despite what the Minister has said—provide the Government with powers to alter the competences of the devolved Administrations. Scotland has already withheld consent; Wales and Northern Ireland are deeply provoked. Specifically, the provisions for mutual recognition and non-discrimination would generally require that goods and services that could be legally sold or provided in one part of the UK would have the same legal right to be put on the market in every other part. Forget chlorinated chicken; Wales could not even require different labelling to show the higher levels of fats in a food product. If England were to allow hormones in beef cattle, Scotland could not prevent the import and sale of such cattle. Unlike the European precedent, the only goal is to remove potential barriers to trade at all expense. All other public policy goals are abandoned.
The restraints on devolution set out in these extraordinary and unprecedented delegated powers came as a shock to the devolved Governments. Far from the powers being designed for co-operation, the devolved Governments were not even consulted. They see this as creating new risks, as well as being an attempt to reduce their powers. So my fundamental question to the Minister, once again, is: why is this Bill necessary? What is there to gain from it that cannot be achieved by the common framework principles and process? Why take these risks? It cannot be because the Bill will provide a dispute mechanism, because each framework already has that to resolve differences.
Today the Government received a unique and stern warning from church leaders across the UK not to risk destroying the trust that binds the four countries. I hope that the Minister will not only listen to what the House is saying but will have the wisdom and grace to change the Government’s mind.
Lord Bridges of Headley (Con)
My Lords, I support almost everything in this Bill, although I do regret that Part 5 is in there. I regret that the Prime Minister told Members of Parliament last October that the treaty is a great deal for the entire country and
“a great success for Northern Ireland”—[Official Report, Commons, 19/10/19; col. 581.]
and that the protocol is
“an ingenious scheme”.—[Official Report, Commons, 19/10/19; col. 594.]
But now he wants to rip it all up. I regret, therefore, that the Government either did not understand the implications of the treaty and the protocol, or that they did understand its consequences but, privately, always intended to breach the treaty.
The issues that the Government see as a pretext for breaking their word at some future date have existed and been debated at length for the past few years. This is precisely why the treaty contains processes to deal with them. Consequently, I regret that the Government have decided to call into question the treaty before exhausting the dispute resolution process that the treaty contains. Yes, Parliament will be given a vote before these powers can be used—but let us not forget that the Government’s original plan was no Parliamentary vote, which I regret says a lot about the Government’s intent. Furthermore, I regret that it appears that the very introduction and enactment of the Bill are in breach of the UK’s international obligations, even before these clauses are brought into force or used to make regulations. I would ask my noble friend Lord True to confirm whether this is so when he winds up.
More broadly, I regret that we are being told by some that, just because other nations may disregard treaties they have entered into, somehow this justifies us breaching a treaty we have entered into in good faith. Two wrongs do not make a right. The Prime Minister once said that
“the rules-based international order which we uphold in global Britain is an overwhelming benefit for the world as a whole.”—[Official Report, Commons, 13/3/17; col. 89.]
I agree. I just regret that Part 5 is now calling this into question. Above all, I regret that Conservatives who want to support the Government but believe in upholding the rule of law, are being asked to choose between party and principle. What is at stake here is not “leave” or “remain”; it is our approach to public life, how we think about our place in the world, whether we think it still matters that Britain’s word is its bond and, of course, underlying all of that, our belief in the rule of law.
My noble friends Lord Callanan and Lord True are men of integrity. I have known my noble friend Lord True for decades and I will always see him as a good friend, but on this we differ. Principle comes before party and so, with regret, I will be voting for the amendment tabled by the noble and learned Lord, Lord Judge.
Lord Campbell of Pittenweem (LD)
My Lords, I, too, congratulate the noble Baroness, Lady Hayman of Ullock, on an outstanding maiden speech. However, there is little time for niceties, because I believe that this is a contemptible Bill, in turn contemptuous of law and contemptuous of Parliament. We must, I suppose, thank the Secretary of State for Northern Ireland for his frankness—it may yet cause him to lose his Cabinet place—in admitting at the outset the illegality inherent in the Bill. The noble Lord, Lord Lilley, suggested that that should now be disavowed. The noble Lord, Lord Callanan, had that opportunity when he opened the debate, but far from disavowing it he chose not to mention in any detail whatever the particular clauses that are the most controversial.
Following the admission of the Secretary of State for Northern Ireland, an amendment was passed in the House of Commons. There are those who argue that that amendment somehow cures illegality, but an illegality, whether authorised by Cabinet or by the Commons, is still an illegality, and it is misleading to claim otherwise. I would go further: it is an abuse of this House to invite us, when we are encouraged at this stage to accept the principles contained in the Bill, to accept the principle of illegality.
Like several noble Lords who have spoken, I have the privilege of holding the commission of Her Majesty as one of her counsel learned in the law. Will those who support the Government please tell me how I can fulfil the obligations and responsibilities of that privilege by endorsing the illegality contained in this Bill? If anyone is still in doubt about the illegality, they should read the analysis of Clauses 42 to 45 produced by the Bingham Centre. They should tell us which parts of that analysis they disagree with. They should go further: they should tell us which conclusions of the Constitution Committee of this House they regard as not being well founded. Generally, they should tell us how we can discharge the obligations and responsibilities of membership of this House by endorsing illegality at the whim of a Government.
We regularly recognise the legacy of John Major and Tony Blair in the production and continued observance of the Good Friday agreement. No one in government, however, paused to reflect on the importance of the Good Friday agreement in the domestic politics of the United States. Noble Lords had better believe the words of Speaker Pelosi: there will be no trade deal for Britain with the USA if there is any adverse impact on that agreement. The fact is that whether or not in the end the Government exercise the power to commit the illegality, the damage is done: our reputation is besmirched and the credibility of the United Kingdom undermined. This is shabby business and we should have none of it.
Lord Empey (UUP)
My Lords, I congratulate the noble Baroness on her maiden speech and I look forward to many more on a variety of subjects.
This Bill illustrates how our constitution has been evolving in such a haphazard way over the last two decades, with ill-thought-through lurches into various forms of devolution without a comprehensive plan to co-ordinate them. We have succeeded in falling out with the devolved Administrations and have the consent of none.
I wish to speak to Clauses 44, 45 and 47, but the reason why they exist at all has its roots back in decisions taken one year ago. On 2 October 2019, Her Majesty’s Government produced a proposal for an amended protocol on Northern Ireland entitled Explanatory Note. This note said that the protocol was based first and foremost on our commitment to finding solutions compatible with the Belfast/Good Friday agreement, but if that was the commitment it has not been met.
The Explanatory Note did the following: it proposed to establish a regulatory border in the Irish Sea requiring checks on goods and produce moving between Great Britain and Northern Ireland; it required the establishment of border inspection posts as required by EU law, and traders moving goods from Great Britain to Northern Ireland to notify the authorities in advance. Her Majesty’s Government proposed the establishment of a regulatory border in the Irish Sea with border control posts and the ongoing involvement of the EU courts in Northern Ireland. How on earth is this compatible with unionism?
For some inexplicable reason, the Explanatory Note of 2 October was endorsed by the Democratic Unionist Party. Arlene Foster issued a statement describing it as
“a serious and sensible way forward.”
This opened the floodgates for Brussels and Dublin, and two weeks later the deal was done. How any unionists can support any kind of border in the Irish Sea escapes me. The establishment of this border and the arrangements contained in the subsequent withdrawal agreement are a clear breach of the Belfast agreement. These proposals change the status of Northern Ireland and have the same negative effect as having a land border, which everybody has sought to avoid. Her Majesty’s Government now see Clauses 44, 45 and 47 as essential to keeping some semblance of cohesion in the United Kingdom, illustrating the shoddy nature of the negotiations conducted last year. I have little doubt that some EU negotiator did threaten to prevent food coming from Great Britain to Northern Ireland. That individual must have very little knowledge of Irish history.
Nevertheless, to plunge ourselves into a legal quagmire and various constitutional contortions is not the answer. There is another way: instead of blathering on about the Belfast agreement, which has been used as a political football by Brussels, we should use it as part of the answer. It never ceases to amaze me that those of us who negotiated the agreement are never consulted about its intentions or how some legislative proposals might affect it, even though there are many of us in your Lordships’ House.
The UK could legislate to prevent our territory being used for the export of non-compliant products into the EU market. We could also indemnify the EU if non-compliant products succeeded in getting through. We could, by treaty, establish another cross-border body for educating businesses and preventing any single market contamination, and join the EU to that treaty if some additional devolution to Stormont was initiated.
How are we in such a mess because of trade flows across the land border that accounts for 1.6% of Ireland’s total imports, or, to put in another way, 0.1% of EU trade flows? If we can break a protocol that we ourselves proposed a year ago, even though I continue to oppose it, all bets are off with regard to Scotland, Gibraltar and the Belfast agreement itself. Precedent, dear boy, precedent.
Baroness Boothroyd (CB)
My Lords, I was elected to Parliament some 47 years ago and have witnessed nine Prime Ministers tread the steps of No. 10 Downing Street. However, never in my parliamentary experience have I witnessed such a collapse of the people’s trust in a Government who promised so much and so quickly and who are now groping for desperate solutions to problems that they said would not arise or, if they did, could easily be resolved.
It has been a privilege to listen to such fine speeches this afternoon. Perhaps I thought they were fine because I agreed with most of them. However, let us not beat about the Euro-bush: the Prime Minister set the course that we are on and shows no remorse for steering us off it. The claim continues to be made that a no-deal end to our membership of the European Union is nothing to worry about and that we have every right to break a clause in an international agreement because we do not trust our European partners, but it was our European partners who joined us in signing that very agreement.
Future historians will not need a test-and-trace operation to find those responsible if we end up in a legal battle in the Supreme Court and an economic crisis that rivals the 1930s depression. I was a young girl in the 1930s and I saw the poverty and misery it caused at close quarters, so of course I was alarmed when I read that the noble Lord, Lord Agnew, a Cabinet Office and Treasury Minister, was reported to have said that British businesses and commerce were not as ready as they should be for the start of our new terms of trade with Europe in January. What terms of trade is he talking about? Those whom I know who are working in business and commerce would certainly love to know.
I ask the Government: can we break future terms, as easily as we appear intent on breaking the Northern Ireland protocol, if we do not like the way they work after January? The low regard shown by the noble Lord, Lord Agnew, for British industry and commerce went even further. He was reported to have said that our traders have their heads in the sand as they approach January’s deadline. I am sorry that he did not heed Denis Healey’s advice:
“When you’re in a hole, stop digging.”
The blame game has evidently begun, and the PM started it. He dictates a strategy and blames others if it does not work.
No sooner had the Prime Minister finished his sunshine forecast on Friday, of the prosperity he claims will surely follow there being no trade agreement with the EU, than a New York analyst made a withering comment that took my breath away. Our credit rating had just fallen dramatically but he did not write us off. He did not spare us either. He said:
“the quality of the UK’s legislative and executive institutions has diminished in recent years.”
Who can deny it? The Prime Minister’s claim that we shall survive no deal because we have
“high hearts and complete confidence”
in the future will be exposed as what it is: a sham.
The latest line from Downing Street is that we shall insist on legal texts in future negotiations. If the Government had paid close attention to Article 10 of the Northern Ireland protocol before signing it, they would not need to override it in this Bill. Trust in this Government, both nationally and internationally, is in short supply but our parliamentary democracy has deep roots and I trust that this House will defend our laws and traditions. Who knows? There is still time for yet another U-turn. One thing I am certain of, we shall not deserve our reputation and regain our self-respect until once again the world knows that our word is our deed and that we are committed to the rule of law.
Lord Forsyth of Drumlean (Con) [V]
My Lords, as president of the Steam Boat Association I know a bit about boilers. They are potential bombs and have the capacity to blow a vessel to smithereens. By law, they must be tested annually and have two safety valves to release steam if the pressure exceeds a safe level. The second valve is there to deal with the unlikely failure of the first. In the words of the noble and learned Lord, Lord Judge, it does not cure the fault but it prevents the destruction of the ship. This Bill provides for that second safety valve in the event that the EU does not respect the disputes procedures under the withdrawal agreement, does not comply with its duties of sincere co-operation and threatens the very integrity of our United Kingdom.
After all, the withdrawal agreement was signed on the basis that a trade deal would be implemented in 2020. The Canada-style free trade deal was offered by Mr Barnier but now we are told is no longer available. It is easy to make a case now that the EU is negotiating in bad faith, a point made by my noble friends Lord Howard and Lord Lilley. I have some experience of this kind of duplicity on the part of the EU, which I share with the noble Lord, Lord Kerr. I go back to John Major’s opt-out from the social chapter. We thought that that meant that employment policies were subject to a veto by us but, hey-ho, the EU decided that working time was a health and safety measure and therefore subject to qualified majority. As I recall, the advice from the noble Lord, Lord Kerr, and others at the time was that there was no point in us going to the court to argue on a point of law because the European court would always advance the acquis and was a political court. Let us not be starry-eyed about how the European Union acts in the interests of the rule of law.
I very much regret that my noble and learned friend Lord Keen is no longer on the Front Bench and that he was forced to resign even though he launched a lifeboat for the Government. He suggested that the Northern Ireland Secretary had answered the wrong question in the Commons when asked if the Bill breached or potentially breached the law. He was making the point that “potentially” was the right answer. As Advocate-General he told the House,
“in my opinion, the present Bill does not of itself constitute a breach of international law or of the rule of law.”—[Official Report, 15/9/20; col. 1129.]
That is good enough for me to support this Bill being given a Second Reading. It is for the Committee stage to consider this further, and I ask my noble friend Lord True to make it crystal clear in his wind-up tomorrow that these provisions in Part 5 would be used only in extreme circumstances and be subject to parliamentary approval.
I have enormous respect for the noble and learned Lord, Lord Judge, although comparing this to the abuses of apartheid seemed a little over the top. My noble friend Lord Cormack is assiduous in his work in this House but I cannot vote for the amendment, which is nothing more than parliamentary graffiti. The Bill was passed by a huge majority in the House of Commons and, despite the amendment before us and more than 100 speeches, it will be given a Second Reading in the House tomorrow. Only the Liberals with their miserable mandate at the general election have contemplated throwing the Bill out. Rightly so, for this Bill protects, enhances and strengthens the union. More than half a million jobs in Scotland depend on the integrity of the internal market, and scores of powers are being returned from a supranational bureaucracy to our elected representatives. The very Act of Union itself was about creating a barrier-free internal market and it has brought about more than 300 years of prosperity.
I cannot tell the House how disappointed I was to see the most reverend Primate the Archbishop of Canterbury putting his name, together with other senior Anglican bishops, to a letter in today’s FT headlined “Internal market bill undermines the strength of our union”. Those who wish to break up Britain will be much encouraged by their efforts.
Lord Haskel (Lab) [V]
My Lords, I too welcome my noble friend Lady Hayman and congratulate her on her maiden speech. I serve on your Lordships’ Delegated Powers and Regulatory Reform Committee. This committee was formed in 1992 to deal with the growing tendency of Governments to seek wide order-making powers which give Ministers unlimited discretion. The Bill is a prime example of why that committee is needed. We draw your Lordships’ attention to 11 delegated powers in the Bill, which include seven Henry VIII powers, to which the noble and learned Lord, Lord Judge, referred. These powers allow Ministers to amend, repeal or modify an Act of Parliament or a statutory instrument. Under Clauses 42, 43 and 45, Ministers are able to disregard any international or domestic law which they consider to be incompatible or inconsistent with the Northern Ireland protocol. That is why in paragraph 2 of our report we say that
“Some of these powers are extraordinary; others are unprecedented.”
As the Minister explained, the stated purpose of the Bill is to allow free trade within the United Kingdom. Clause 3 states that any item permitted to be sold in one part of the United Kingdom under devolved legislation is automatically available for sale in other devolved areas on the principle of mutual recognition of goods. This means that the lowest standard becomes acceptable. What is more, this requirement applies not only to the goods themselves but to their packaging, labelling, assessment, registration and documentation, as my noble friend Lady Andrews explained. This is despite government assurances that our standards will not fall when we leave the EU. Standards become a race to the bottom, as the noble Lord, Lord Bruce, explained.
The committee’s view is that Clause 3 should be deleted. I understand that amendments will be brought forward to do this. There are further clauses in the Bill which override powers granted to the devolved Administrations regarding such things as consumer protection, financial aid and social welfare; indeed, powers are granted to UK Ministers to spend money over the heads of devolved Administrations, even on devolved matters.
Clauses 42 and 43 allow Ministers to disregard provisions of international or domestic law for technical reasons; this is one of the unprecedented powers to which our report refers. When your Lordships reported in September, the Bill was in the other place, and, as we say in our note dated 13 October, the Government did not take the opportunity to address the points which we raised. It seems to me that this disregard for the arguments of your Lordships’ committee is yet another example of this Government seeking to impose their will rather than seeking parliamentary approval. In doing so, they ignore the public interest in matters of law, diplomacy and the nation’s integrity. This undermines the integrity of public life and allows Ministers to break the Ministerial Code. The only justification seems to be that Ministers need these powers to act quickly, especially in an emergency. Well, Parliament can act quickly and in an emergency. Speed is no reason for imposing the will of Ministers on the devolved Administrations in this divisive manner.
Baroness Humphreys (LD) [V]
My Lords, it has been a great privilege to listen to the speeches of noble Lords today, especially those who have voiced the concerns of so many of us about this Bill and the impact its invitation to collude in the breaching of international law has already had on the UK’s standing on the international stage.
Politicians in Wales are equally deeply concerned by the contents of this Bill and the implications it has for Welsh devolution, and none more so than David Melding, the highly respected and long-serving Conservative Senedd Member, who resigned his position as shadow Counsel General last month. He cited the need to be able to speak out against what he considers to be,
“a lack of statecraft at this crucial time for the UK’s very survival as a multi-national state.”
Those three words, “lack of statecraft”, are the most telling; a stinging criticism from one of the Senedd’s most loyal Conservatives, and three words that sum up what is so wrong with this Bill. Statecraft involves diplomacy, co-operation, consultation and consensus, but these are words no longer associated with the delivery of the UK’s internal market, and despite the Minister’s conciliatory words and tone when introducing this debate, the words on the face of this Bill tell another story.
It is clear that the UK Government’s response to dealing with devolved governance issues that arise will be to resort to government by diktat. For example, the principles of mutual recognition and non-discrimination are, according to this Bill, to be applied to all goods and most services, with a highly limited list of exceptions which can be changed by UK Ministers through secondary legislation without consultation with the devolved Administrations. In Wales, this is seen as a fundamental assault on devolution, preventing the Senedd carrying out its duty of protecting the citizens of Wales from substandard goods and services.
The proposal that UK Ministers should take new funding powers to enable them to fund hospitals and schools in Wales without consultation with the Welsh Ministers who have the devolved responsibility for these areas is provocative, as is the threat to build the M4 relief road against the decision of the Welsh Government, a decision endorsed by the Senedd on cost and environmental grounds. This attempt to chip away at the powers of the Senedd is an example of Westminster colonialism at its worst. I understand the Government’s dislike of the EU flags seen on Objective 1 projects in west Wales and the valleys, and their need to see the union flag on new projects, but far better to make an investment in areas which are not devolved and for which the UK Government have actually been responsible for years and neglected.
As many noble Lords have already said, the irony is that this Bill is mostly unnecessary. Continued work on common frameworks with the devolved Administrations would ameliorate its impact. The work already carried out by the devolved Administrations, your Lordships’ committee and the UK Government until now has been an example of statecraft at its best. Most worryingly, the imposition of decision-making by Whitehall in areas of devolved responsibility will do nothing to aid the UK’s survival as a multinational state.
Lord Lamont of Lerwick (Con) [V]
My Lords, I want to concentrate on Part 5 and the amendment in the name of the noble and learned Lord, Lord Judge. I have already publicly criticised the statement by Brandon Lewis that the Bill breaches international law. Since the Government have not withdrawn that statement, I have no choice but to vote for this amendment. However, I confess that I am in a dilemma. What the Government are doing certainly is wrong, but on the other hand, the provisions of the Northern Ireland protocol are potentially disastrous. It is a choice of two evils. How can we break international law, and, on the other hand, how could we ever accept tariffs being levied on goods going from one part of our country to another—a border in the Irish Sea? That is not the trivial matter that the noble and learned Lord, Lord Falconer, suggested; it is a threat to the Good Friday agreement. I am also sensitive to the danger of undermining at this moment the Government’s position in negotiations, if they resume.
Many eminent lawyers have spoken in this debate and their verdict has left nothing for the day of judgment, but is this just a legal matter? The Northern Ireland protocol is not a black and white, unambiguous document. It is full of contradictions and matters to be resolved later. There are plenty of examples internationally of politics trumping law. One thinks of the Maastricht treaty and the ignoring of all its provisions on deficits and debt. The disputes between the German constitutional court and the EU have some parallels with our present stand-off, as my noble friend Lord Lilley suggested. Then there is the case of the United States tearing up the Iran nuclear deal; that was an agreement, like the withdrawal agreement, which was lodged at the UN and then simply torn up because the new President took a different view. One may regret these things, but it is fanciful to suggest that the provisions in this Bill would prevent us criticising human rights in China.
The House must bear in mind one important point when considering this Bill. Even if the Commons votes to commence taking the powers in Part 5, the House of Lords would still be able to overturn the policy by voting against the statutory instruments that would negate the protocol. I ask my noble friend Lord True—who knows a huge amount about procedure, perhaps more than anyone else in the House—to confirm that this interpretation is correct, and that even after enactment there will still be opportunities for the Lords to vote against the Government if they choose to activate the policy?
The Government should never have got into this position. I am not convinced by their protests that the EU is not negotiating in good faith; if you lose a negotiation, it is easy to accuse the other side of acting in bad faith. However, the problem we have has been staring us in the face ever since the protocol was agreed in October 2019. That very month, the then Brexit secretary told the Lords EU Select Committee that there would be no export certificates between Northern Ireland and GB. A few hours later, he withdrew that and admitted that there would, but the PM continued in denial and said—including during the election—that if anyone got such a document, they should tear it up.
Today, the Government are trying at the last minute to strengthen their negotiating position by rescinding what they had previously, foolishly accepted. I believe that they have made a mistake in trying to take these powers. The amendment in the name of the noble and learned Lord, Lord Judge, regrets the Part 5 provisions. If the amendment is agreed, what follows is for us to decide later, but since I certainly regret what the Government have done, I shall vote for the amendment.
Lord Rooker (Lab) [V]
My Lords, I welcome my noble friend’s maiden speech and look forward to hearing others. In its summary of the Bill, the Constitution Committee mentioned, among others, the following words: does not justify; it is regrettable; engagement has been poor, limited and unsatisfactory; consultation is problematic; the Bill does not mention common frameworks; there is no time for adequate reflection; delegated powers are extraordinary and unprecedented; many are constitutionally unacceptable; and the Government should explain whether clause 6 seeks to constrain Parliament’s law-making power. It is, therefore, legitimate to ask about the drafting of the Bill.
When I was a Minister in the other place, 20 years ago, there was an occasion when I had to call a halt to a Standing Committee where I was in charge of a Bill. The details are unimportant, but it was only then that I discovered that policy officials do not talk to parliamentary counsel who draft the Bill. They commission the department’s lawyers, who then brief parliamentary counsel. I presume that this is to lock in the client legal privilege rules. So it is clear that government policy officials have briefed departmental lawyers to request parliamentary counsel to draft a Bill which, among other things, appears to “constrain Parliament’s law-making powers” and constrain the judicial review function so as to put ministerial regulation-making powers above the law in an unprecedented manner. Parliamentary counsel have carried out that instruction—and that I think is worrying.
The role of the House of Lords is to protect the parliamentary process. It should be a red line for this House. This Bill has the seeds of undermining the primacy of the House of Commons. I will repeat that. This Bill has the seeds of undermining the primacy of the House of Commons. Are there any limits to what can be put in legislation, or will parliamentary counsel simply use the Nuremberg defence?
As the Joint Committee on Conventions of the UK Parliament made clear in its report in October 2006, quoting the noble Lord, Lord Wakeham, the Lords should be very careful about challenging the views of the,
“House of Commons on any issue of public policy.”
It is not an issue of public policy to agree legislation that neuters the parliamentary process, and neither the Government nor the Commons can claim it is. As such, this Bill, which is in no way a manifesto Bill, requires substantial amendments and deletions. Afterwards, we should hear from parliamentary counsel as to whether they operate within any boundaries with respect to defending the parliamentary process.
Lord Wigley (PC) [V]
My Lords, I warmly agree with the words of the noble Lord, Lord Rooker. I congratulate the noble Baroness, Lady Hayman, on her fine maiden speech. I particularly welcome her Welsh half and her comments on devolution, rural affairs and the environment.
I oppose the Bill, which goes way beyond the policy proposed by the Government at the general election. This House would be totally justified in refusing to give it a Second Reading, as the Government have no mandate for it. I salute the fine speech by the noble and learned Lord, Lord Judge, and unite with him in saying: “Not in my name either”.
The Bill gives draconian powers to UK Ministers over matters which have been long-standing devolved responsibilities. Those powers, which return from Brussels, should automatically come to the devolved Governments. If there is a need to establish an all-UK position on some such powers, that should be negotiated between the four Governments and implemented when there is consensus. I will not repeat the points made so effectively by the noble Baronesses, Lady Hayman and Lady Andrews. There is a real belief across party divides in Wales, and expressed by Labour, Plaid Cymru and Liberal Democrat Senedd Members—and, yes, even by some Conservatives—that the Bill, in its present form, is just not acceptable.
The Welsh Government have lobbied Members of this House, begging us to reject the Bill as it stands. They make three salient central points, which were highlighted by the noble Lord, Lord Newby. First, the Bill would destroy the hard work undertaken by the Welsh Government, in co-operation with other Governments in these islands, to establish common frameworks. It would emasculate the Welsh Government’s regulatory powers, ranging from the food sold in Wales to the qualifications of teachers in our schools.
Secondly, the spending powers arrogated to themselves by Westminster Ministers would undermine expenditure policies currently pursued by the Welsh Government, such as free school meals or the funding of road schemes such as the M4 relief road. If the UK Government assert that such funds are additional to the Barnett block, let them write that on to the face of the Bill and it might well be considered. Otherwise, it is a case of Westminster telling Wales how money within the devolved Welsh block should be spent—and that is just not on.
Thirdly, the intention to make state aid and subsidy policies reserved matters gives Westminster Ministers control over economic development throughout the UK when their actual powers in that regard are currently applicable only to England. Such steps would demolish the successful “buy local” policy applied by successive Welsh Governments in procuring products and services—a policy which helped bring Welsh unemployment levels down to the UK average. The Bill gives powers to UK Ministers to intervene in Wales over water infrastructure, sending a shiver of dismay that we are about to see another Tryweryn foisted on us.
Our experience of Tory government promises of major capital expenditure schemes in Wales over the past decade has been disastrous. They have promised: to electrify railways; to facilitate electricity generation projects; a new Wylfa in Anglesey; and tidal lagoons around the Welsh coast. They insisted on keeping power in Westminster; they just have not delivered. Every such election pledge has been broken, so why on earth should we trust them now? In terms of breaking solemn commitments, the Bill surely goes way beyond what is acceptable in its unilateral abandonment of international treaty commitments. It establishes beyond doubt that the Government’s word is not worth the paper on which it is written, and the challenge to this House is to insist that we will not pass any such legislation in our name.
Lord Howell of Guildford (Con) [V]
My Lords, I join in congratulating and welcoming the noble Baroness, Lady Hayman. I am sure that most of your Lordships will agree that—after defeating Covid-19—the highest priority for our country, if we are to face the challenges of the next 10 years, is to hold this United Kingdom of ours together. The problem is that devolution has created a whole world of delicate compromises and unfinished constitutional business. Then on to the scene comes the Bill, which I am afraid is a bit like a bull in a china shop.
My question on the devolution side of the Bill is this: I admit that the timing may be unavoidable but, as the chairman of the Constitution Committee, the noble Baroness, Lady Taylor, asked, why on earth could not these issues between the different parts of the kingdom be handled mostly within the common framework procedure or consensually? Why was it decided to try to codify, in law, the thousand and one different complex and ever-shifting connections between all the myriad businesses across the devolved regions, rather than address them as they come along, which they will unceasingly, by ongoing practical co-operation—or maybe just by setting up the new internal market office?
As to the rule of law clauses which have so greatly disturbed your Lordships, and disturbed the legal profession, and indeed many of my good friends, including my noble friend Lord Howard, and now the Archbishops as well, I am a little less worried than some of my colleagues. It is quite correct, as the Constitution Committee’s report pointed, that the late Lord Bingham warned against a Government which “routinely”—and I emphasise that word—disregard their international law obligations, and I would not wish to live for one moment under such an Administration. But the reason I am not so worked up as some are in this instance, is that I believe we may be overlooking the degree to which the whole spirit of the withdrawal treaty and the Northern Ireland protocol was and already being undermined, and is now being undermined, by the other party, namely the Brussels negotiators and their legal advisers.
I believe that this is just what the Lord Chancellor meant when he rightly advised the Constitution Committee to consider the context behind the need for this Bill. Here, too, we are in an area of delicate ambiguity and compromise, as Northern Irish affairs always have been—as the Good Friday agreement was as well, and as I know full well from my years of working there at the height of the time of violence. So my question here, before rushing to judgment, is: why were these tangled problems of treaty interpretation, for that is what they are, not handled in the joint committee for settling disputes, which the withdrawal treaty set up? What happened in that committee? Was there a deadlock? Did the EU side make threats which were, in the Prime Minister’s words, “extreme and unreasonable” and undermined the withdrawal treaty? Were these clauses put into this Bill in fact justified as a response on that account? When it comes to would-be violations of the treaty spirit, are the critics, of which we have heard so many this afternoon, quite sure that they are looking entirely and solely in the right place?
We have asked these questions, but we have got no clear answers so far. Can we please have them now? Can we have a bit of chapter and verse about what actually went on the disputes committee? I know that this will not assuage my distinguished legal friends, nor the Church leaders, but it would at least explain more fully why the clauses got into the Bill and why they were felt to be necessary. Perhaps it would persuade me to oppose the two amendments, even though they have been spoken to by your Lordships at your most eloquent, and by people I most admire.
Lord Butler of Brockwell (CB)
My Lords, I congratulate the noble Baroness, Lady Hayman of Ullock, on her maiden speech, which I heard with great pleasure from the Strangers’ Gallery.
In the limited time available, I will not dwell on the anxiety and shame I feel about Part 5 of this Bill, which others have expressed so eloquently. I hope and believe that your Lordships will assent to the amendment in the name of my noble and learned friend Lord Judge. I also hope that, in the next few weeks, agreements will be reached with the EU which enable the Government to assent to removing these clauses from the Bill. In passing, I agree with the noble Lord, Lord Campbell, and others, that the amendment passed in another place—that these clauses would not be brought into effect without a positive vote in the Commons—is not sufficient to remove the mischief. These clauses contain a threat which should never have been made, and which must have no place in the United Kingdom statute book. I invite the noble Lord, Lord Forsyth, to consider the precedents that they would provide for an unscrupulous Government in the future.
I shall address my remarks to the situation that will arise if the Government seek to maintain the clauses and can get a majority in the House of Commons to that end. Your Lordships will then have to decide whether we maintain our opposition to them in the face of a majority in the elected House. I have argued in the past, and continue to believe, that this House must recognise the constitutional limitations on our power and must ultimately defer to elected House. But the issues on this occasion are of a different order. The Northern Ireland clauses in this Bill go to the root of our constitution. On this occasion, the power is in your Lordships’ hands, and we may not be used to that. The Government need the internal market provisions in this Bill by 31 December. They cannot, therefore, use the Parliament Acts to get the Bill through. If this House is resolute in rejecting the unacceptable Northern Ireland clauses, the Government will have to agree to remove them if they are to get the Bill passed.
The issues here are the rule of law and our constitution, as well as our national reputation. I believe that it is the role and duty of your Lordships’ House to defend these things, even in the face of an overweening Executive with a majority in another place, and I urge your Lordships to be resolute in doing so. We can prevent this disaster.
Lord Mackay of Clashfern (Con) [V]
My Lords, I congratulate the noble Baroness, Lady Hayman, on an excellent maiden speech and I look forward to many others.
I regard a Bill dealing with this subject as highly desirable, as the present law is principally contained in EU retained law not easily accessible to our citizens. During the discussion on the 2018 withdrawal Bill, the question arose of where powers released by the EU went in the level of our constitution. I took the view that the internal market powers went to the UK Parliament, as legislative authority for them had to go beyond the geographical limitations of the authority of the devolved legislatures, but that it was highly desirable that any exercise of them be the subject of discussion, and if possible agreement, between all four Administrations. The Scottish Minister with whom I was very happy to work closely at that time was optimistic that agreement would be reached. The Joint Ministerial Committee on EU Negotiations was already in place, and intensive work on securing common frameworks as the robust foundation for continuing co-operation has gone well. The Scottish Government have taken a constructive role in that work. Although they have formally taken up a distinct position, their support for independence has not prevented them agreeing to these matters and participating fully in them.
I suggest that this Bill would be greatly improved by providing that any issue to be the subject of a statutory instrument should be discussed in such a committee, and implemented only if it is agreed, or otherwise after a full debate in both Houses of Parliament, and that the Competition and Markets Authority should report to this committee as a matter of course.
Baroness Quin (Lab) [V]
My Lords, it is a pleasure to follow the noble and learned Lord, Lord Mackay of Clashfern, and to recognise the work that he did in trying to make sure that we have a good system of common frameworks across the United Kingdom. I also add my warm congratulations on the splendid first contribution to this House by my noble friend Lady Hayman.
The context of today’s debate is of course the ending of the EU transition period, and indeed the ever closer threat of ending that transition without a deal. Last week, the Prime Minister sent to all of us what I thought was an extraordinary letter, which not only repeated the usual misleading claims about the pro-Brexit referendum result but also airily proclaimed that we would prosper mightily, completely ignoring the practical concerns and worries that businesses across the country and our own internal market have about the prospect of no deal. I ask the Minister—as we both come from the north-east of England—given that the head of Nissan has said that Nissan Europe would be “unsustainable” if there is no deal and tariffs are imposed, are the Government prepared to see that outcome? How could such an outcome help their stated policy of levelling up the regions across the UK? It is against this background and the end of the transition period that we have to consider this Bill.
Given that there is almost total support in support in Parliament and outside for ensuring that the UK’s internal market works properly and effectively after the Brexit transition, it is actually incredible that the Government have managed to produce a Bill that has been so roundly and universally condemned, both in Parliament and outside. Inside Parliament and this House, we have had powerful reports—which I hope will get much publicity—from the Constitution Committee, from the EU Select Committee and from the Delegated Powers and Regulatory Reform Committee. Both inside and outside Parliament, we have had concerns expressed by eminent lawyers, by the noble and learned Lord, Lord Neuberger, by the report of the Bingham Centre, and indeed in the letter—with which I strongly agree—that the Archbishops have published in today’s Financial Times.
The worries about the Bill are focused on the fact that it breaks international law, and not just once; it provides for future breaks of the law. In some clauses, it exempts the Government from judicial challenge, which is a dangerous principle. It also seems to break the Ministerial Code—perhaps the Minister can confirm whether that is true or not—it adds a lot of extra Henry VIII powers, and it elicits opposition from the Scottish Parliament, the Welsh Senate and the Northern Ireland Assembly.
Others have made this point, but I would like to reinforce it: I do not understand why the Government did not decide to build on the common framework approach rather than coming forward with the provisions in the Bill. The situation in Northern Ireland is very serious, and became serious the minute the Government agreed to establish an effective border in the Irish Sea. I hope the comments that were made by the noble Lord, Lord Empey, which I am sure will be reinforced by my noble friend Lady Ritchie of Downpatrick, will be taken on board and dealt with properly by the Government.
In conclusion, opposition to this Bill is strong, and it is not a question, as has been alleged, of moaning remainers. It is strong, because there is a strong feeling that the Bill is not in our national domestic interest and does huge damage to our international standing. For that reason, I shall vote for the amendment of the noble Lord, Lord Judge, and I hope, too, that the House of Lords, on this occasion, will be prepared to use the powers that have been given to it in our constitution and stand resolute—in the words the noble Lord, Lord Butler, a few minutes ago.
Lord Purvis of Tweed (LD)
My Lords, having spent six days in Committee on the Trade Bill debating how we make treaties, and listening to the Minister say continuously how we will be a trusted partner around the world, I, too, regret that we are having to debate how the Government have breached one and intend to breach more. Alas, I had hoped to hear from the Minister, in opening, why and when agreed processes in the joint committee with the EU, and in joint ministerial committees with our nations, broke down, and why those agreements could not be reached, necessitating this Bill.
I want to address Parts 1 to 4, and I do so as someone who was born and lived on the border between England and Scotland and represented a border constituency all my life. Therefore, in my personal, professional and political life, I have seen at close hand the daily interaction between laws, systems, standards, approaches, and regulations—everything from licensing, trade and speed limits to Covid-19 regulations, building regulations and others, many of which predate the European Union and that approach.
I have also seen at close hand the work within the framework agreements. I recognise that there are powers that are being repatriated. The 2020 framework analysis by the Government showed that of 154 policy areas where EU law interacts with devolved competences that are being repatriated, 115 require no framework at all, 22 require a non-legislative framework, and just 18 require a legislative framework.
The Minister did not refer to a defence of Part 5, but I was curious that he referenced whisky and the odd situation, which will be news to English barley providers, in which they cannot sell to Scottish distilleries. They have not been barred from doing so since 1933 in the first legislation, and there are no restrictions. It will be news to the distilleries, which buy their malted barley from Simpsons Malt in my hometown in Berwick, in England, that there is somehow some threat to this. I hope the Minister can clarify that point. Under labelling, composition and standards, that will be covered by the common framework. In fact, that framework was published on 9 October, so where is the necessity for these elements in the example the Minister gave?
The joint ministerial council approach on the frameworks was outlined in a joint communiqué with Ministers on 16 October 2017, in which it outlined the definition and principles of enabling
“the functioning of the UK internal market, while acknowledging policy divergence … Frameworks will respect the devolution settlements and the democratic accountability of the devolved legislatures … based on established conventions and practices.”
Subsequently, last year, in the Cabinet Office update, which the Minister responding to this debate is responsible for, the government frameworks said that a dispute resolution mechanism was progressing:
“The UK Government continues to seek development of a shared approach to the UK Internal Market”
and
“we are considering how to manage … framework areas”
going forward. However, this Bill, as the Constitution Committee reported, gave two days’ notice to the devolved Administrations of the text and has a litany of over 30 areas in which there will be no consultation or limited consultation, which will be overlooked, and in which England will be treated differently from the other nations.
It does not have to be this way. Both Canada and Australia, which the Prime Minister is very keen to quote, introduced internal markets in the 1990s. Canada introduced an agreement on internal trade that came into effect on 1 July 1995. After a premiers’ conference, Australia, which the Prime Minister wishes to quote a lot, reached an agreement on principles for a mutual recognition scheme. An MoU was signed and, very symbolically, has the signatures of all the premiers and the Prime Minister.
The border area is one area where we will be living with the consequences of this, and we have seen nearly a decade of significant division and polarisation. Please, Minister, do not force a Bill against the spirit of what has been developed over the last three years, which is consensus and agreement. Do not herald a bad omen for a decade of danger for our beloved union.
Lord Skidelsky (CB) [V]
My Lords, I join others in congratulating the noble Baroness, Lady Hayman of Ullock, on her excellent maiden speech.
I want to confine my remarks to Part 5 of the Bill. I find myself swayed by two completely opposite accusations of bad faith. The Government accuse EU negotiators of bad faith in seeking to erect unreasonable customs barriers between Northern Ireland and the rest of the UK. Opponents of the Bill say that the bad faith is our own Government’s. The withdrawal agreement set up a joint committee to resolve trade issues. The Government have chosen not to use it. So, as Ed Miliband argued in his powerful philippic in the other place, the Government were proposing to breach international law for bogus reasons.
However, having reflected on all this, I cannot support the amendment to the Motion and would like to explain why. To my mind, international law is not the main issue. Never before, many noble Lords have said, have a British Government sought to break international law, but never before has Britain faced a problem of extricating itself from as complex a political, economic and legal structure as the European Union. Law, as the noble Lord, Lord Howell, explained, has to take account of political context, and as my hero, John Maynard Keynes, once said in answer to legal fundamentalists of his day:
“I want”—
lawyers—
“to devise means by which it will be lawful for me to go on being sensible in unforeseen conditions.”
Noble Lords know very well that not every contingency can be foreseen.
So I ask noble Lords to judge the legislation before the House on three different grounds: sufficient reason, motive, and consequences. On the first, I agree with the argument that sufficient reason has not been established for the override of Part 5 at the Government’s discretion. However, by Amendment 66, the Government have agreed to obtain parliamentary approval before activating Part 5, and I think that is a reasonable compromise between those who think that Part 5 is unnecessary and those who think it is essential.
Secondly, I sympathise with the argument that the Government signed the agreement in bad faith in order to meet the Prime Minister’s political requirements. However, most noble Lords have ignored the argument that it was always going to require some bad faith and legal creativity—to coin a phrase—to make the Brexit decision consistent with the Good Friday agreement. When Ed Miliband said
“A competent Government would never have entered into a binding agreement with provisions they could not live with”,—[Official Report, Commons, 14/9/20; col. 52.]
I am afraid that he set the bar of competence much too high. Contrary to the view of the noble Baroness, Lady Humphreys, deliberate ambiguity has always been the hallmark of statecraft.
Finally, what will the consequences be? The legal fundamentalists say it will damage our ability to get an agreement, because it will damage trust in the Government’s word—a powerful argument. The pragmatists believe it will force the EU negotiators to come up with a workable exit formula. Time will tell whether the Government have calculated the balance of risks properly. My own feeling, contrary to much noble rhetoric, is that we are still largely in the world of posturing. That is the way the EU and many other international negotiations work: public posturing followed by a last-minute outbreak of common sense. I think that is the way it will turn out, and I do not want to do or say anything that will weaken the hands of our own negotiators.
Lord Dunlop (Con) [V]
My Lords, I declare my interests as independent reviewer of the UK Government’s union capability and as a member of your Lordships’ Constitution Committee, whose detailed report on the Bill I commend, like others, to the House.
I doubt there is anyone in this House who does not support the goal of ensuring our UK domestic market continues to work seamlessly at the end of the EU transition period. This market, and the trade it generates, is, as the Minister said, an engine for providing jobs and prosperity in all parts of our country. The UK domestic market is an essential feature and asset of the union, so the Government are right to want to protect frictionless trade within the UK once we leave the EU’s legal orbit. They are right also to want to be able to guarantee to international partners that the terms of new trade agreements will be implemented throughout the UK. Today, the assurance regime is provided by an EU single market framework, and I agree with the Government that, going forward, we need an equivalent UK framework.
There are, however, two questions that need to be asked, and have been asked during the debate. Is this Bill necessary to achieve the Government’s stated aims? If the Bill is necessary, perhaps as a belt and braces insurance policy, is this the right way to legislate?
On the first question, I am doubtful. The European Union (Withdrawal) Act 2018 already provides a mechanism for constraining the ability of the devolved Administrations to diverge, while a common frameworks process is taken forward to agree UK-wide approaches for the powers flowing back from Brussels—a process that has been yielding results. As we have heard, the devolved Administrations are also already required by law to adhere to international obligations, including trade treaties. Moreover, the Government’s own analysis makes clear the considerable economic costs for devolved territories should there be any disintegration of the UK market, so there are strong incentives for all those involved to agree common frameworks.
On the second question, by bringing forward a Bill in this form, the Government have reached for the proverbial sledge-hammer to crack a nut. For example, the UK Government previously agreed with the devolved Administrations a set of principles for common frameworks. One of these is to
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules”.
However, the regime created by the Bill is more restrictive, with fewer public policy exclusions, than the EU framework it replaces. Whereas common frameworks are subject to joint decision-making involving the UK Government and the devolved Administrations, the Bill confers on UK Ministers extensive delegated powers to alter devolved competence and in places to exercise them without even the modest requirement to consult the devolved Administrations.
All this strikes me—and the Constitution Committee —as an unnecessarily heavy-handed approach to balancing the demands of free trade within the UK with respect for the roles and responsibilities of devolved institutions. Devolution is now integral to the UK’s constitutional arrangements. At a time of national crisis, when it has never been more important for central and devolved Governments to work together effectively, to risk destabilising those arrangements seems careless, to say the least.
The broader question for the House and for this union Parliament is: do we want our country’s future to be all about endless intergovernmental competition and conflict or about co-operation and confidence? I am in no doubt that a modern, thriving, forward-thinking and inclusive UK union needs to look and feel like a joint endeavour, a union less preoccupied with battling over competences and more concerned with winning over hearts and minds. That is why I hope the Government will demonstrate enlightened and imaginative leadership by working constructively to amend the Bill.
Lord Hain (Lab) [V]
My Lords, I was delighted to listen to my noble friend Lady Hayman, who will add high-quality, youthful value to our Labour Benches.
This Bill will breach the European Union withdrawal treaty, freely entered into by the Prime Minister less than a year ago, and the rule of law, as the noble and learned Lord, Lord Judge, and my noble and learned friend Lord Falconer so eloquently argued, significantly backed, among others, by a very recent Conservative Europe Minister, the noble Lord, Lord Bridges. It has also further damaged British-Irish relations by undermining the Ireland-Northern Ireland protocol, necessary to avoid a hard Irish border. As with the Trade Bill, there is an urgent need to insert clear protections for two international agreements the United Kingdom has entered into and ratified recently: namely, the Belfast/Good Friday agreement and that very protocol.
As the Bill undermines the Good Friday agreement of 1998, US leaders have stated bluntly that it could jeopardise any chance of a UK-US trade deal. Without the unifying framework provided by the EU, responsible for policies including state aid, the environment, agriculture, food manufacturing and animal welfare, the Bill represents a clear power grab by London from the devolved Governments. The Prime Minister has suddenly discovered the benefits of having a single market—the UK internal market of 66 million people, rather than the much larger and richer EU single market we have been a member of, of over 500 million.
Under the Bill, not only is state aid policy to be returned from the EU to Westminster but the UK Government also get new financial powers. Both proposals will further weaken the current intergovernmental arrangements, whose fragility has been exposed by Covid-19. Perhaps we should not be surprised that the Government adopt the posture of a public schoolyard bully when it comes to the devolved nations of these islands, where No. 10 seems to believe it holds all the cards and has nothing to lose—apart from perhaps destroying the United Kingdom.
For more than three years, the Governments of Wales, Scotland and Northern Ireland have sunk their very large political differences with the UK Government over Brexit in order to address its fallout in terms of managing the UK internal market. This led to the common frameworks programme, which was intended to take the areas of the economy where—and I stress this—the UK Government believed there to be a risk to the integrity of the UK’s internal market from the removal of the constraints to regulate in accordance with EU rules. This Bill brushes all those common frameworks arrogantly aside.
Whether or not there is an orderly end to the transition period in December, Brexit will have implications for the totality of the relationships between Westminster and the nations and regions of the UK, and for those on the island of Ireland, with the financial provisions of the Bill tightening Westminster control over economic, industrial and regional development policy throughout the UK. This is likely to fuel calls for indyref2 in Scotland and, eventually, a unification referendum in Northern Ireland. It may be that this Bill serves to hasten the break-up of the UK, which is another strong reason to oppose it.
Lord Browne of Belmont (DUP) [V]
My Lords, when we, as one nation, fully transition out of the EU, we must face the new reality and its challenges together and continue to work to maintain and grow the links and ties between all four corners of this country. That means building on the work to date and improving relations throughout the United Kingdom. For the avoidance of doubt, I emphasise that my party, the Democratic Unionist Party, believes that the progression of the Bill is of the utmost importance.
Vast swathes of the withdrawal agreement were wholly unsatisfactory, as in essence they created an unthinkable scenario for anyone who values the United Kingdom: a virtual border in the Irish Sea. Strands of the withdrawal agreement also made provision for a series of potentially complicated and burdensome checks on food and agricultural products entering Northern Ireland from mainland Britain. As a result, some in Northern Ireland, instead of benefiting from the removal of red tape as we leave the European Union would be required to endure extra layers of it. I welcome the Government’s assurance to the contrary, but we must continue to do all we can to ensure that there are no long-term, damaging barriers between different parts of our nation.
The withdrawal agreement and the political declaration, although in parts unsatisfactory, recognise the autonomy of the EU and the UK. However, a unique difference remains between the two parties: while the United Kingdom is a legally defined and globally recognised sovereign nation-state, the EU is simply an international body. During its history, and at the outset of the withdrawal negotiations, the EU recognised the sovereignty of the United Kingdom. Since then, regrettably, negotiators and some spokespersons appeared to disregard this sovereignty by ignoring the settled status of Northern Ireland, thereby interfering in internal matters and potentially undermining the defined constitutional status of Northern Ireland. Comments from officials in Brussels have been unhelpful and have shown a disregard for Northern Ireland’s unique and deeply troubled past, our shared future and the UK’s legal status as a sovereign nation.
Though I welcome the Bill, it remains true that businesses in Northern Ireland are confused. They may still have to adhere to conflicting regulations. There may still be divergence and associated costs. A scenario is still possible whereby a firm located in Belfast is unable to benefit from financial assistance that is available to one in Birmingham or Swansea, and therefore finds it advantageous to relocate. Can the Minister specify whether the Government plan to include Northern Ireland in the provisions outlined in Clauses 42 and 43?
In the other place, my party sought to allay fears by ensuring, through amendments, that the Government carried out impact assessments. Our purpose was to bring some reassurances to businesses that are potentially unfairly disadvantaged compared to their counterparts in mainland Britain. It is essential that we ensure the long-term prosperity of Britain and the viability of businesses. One part of our nation should not be left behind simply because of the proximity of a land border. I firmly believe that there is widespread support for a sensible free trade agreement with the EU that allows the UK to establish itself as a strong. outward-looking trading nation. A free, independent and United Kingdom can, and should, be a major global force on the world stage once more. I support the Bill.
Lord Cavendish of Furness (Con) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Browne. I have heard it suggested that there is no need for this Bill. Indeed, such doubts are rehearsed by the distinguished Select Committee on the Constitution in its 17th report. This may be technically and legalistically correct. However, I would contend that such a view overlooks a significant historical consideration. Before we joined what was to become the EU, a single unified internal market was for 300 years the constitutional bedrock of Great Britain, extended to Ireland 100 years later. The absence of the taxes, custom duties and other restrictions that were so crippling to much of mainland Europe created the conditions to usher in the industrial revolution. Now, as we prepare to leave the EU, it is imperative that we legislate to restore the conditions of a single UK market, tailored to the 21st century. Yes, the Bill is necessary.
There can be no doubt that the Government find themselves in a bind, one that is to a large extent of their own making. Furthermore, the European Union Select Committee, of which I have the privilege of being a member, has long warned of the problems that have now become so critical. I was also deeply saddened that a Minister of the Crown should speak in the other place as he did. As my noble friend Lord Bridges said, it is no mitigation to say that others, including the EU, breach international law. However, there appears to be no agreement among senior lawyers as to the legitimacy of the proposed measures that have given rise to such controversy. I cannot agree with the Constitution Committee’s witness who said:
“Let us accept that the Bill breaks the law.”
The Bill does not break the law, nor does it threaten to do so. According to Mr Martin Howe QC, no breach of international law could possibly occur until regulations under the clauses in question were actually brought into force; even then, whether or not making such regulations would amount to a breach would depend on the circumstances then prevailing and the reasons for making those regulations.
I have heard it said that the inclusion of the controversial clause is part of a negotiating tactic. There are further suggestions that the tactic has worked, to the extent that the EU withdrew from its indefensible position of threatening to withhold third-country listing. The problems that could arise from the failure to address the nightmare so-called direct effect could have catastrophic consequences, something that has been largely ignored by the media and, sadly, has earned scarcely a mention in contributions today. Scandalously, the Opposition Front Bench was entirely silent on the matter.
I support a Government who uphold and defend the country’s vital interests. I sometimes gain the impression that I am in a minority in your Lordships’ House. I hear it claimed that objections to the Bill are unrelated to Brexit. It is certainly the case that many noble Lords, much to their credit, have buried their pain and sadness occasioned by our leaving the EU and chosen to move on. However, this House is essentially a remainer House and its committees are remainer committees. There is nothing dishonourable in that but it seems to have led your Lordships’ House to move from acting as a revising Chamber to being one of opposition, a position apparently supported by the noble Lord, Lord Butler of Brockwell.
I have been a Member of this House for 30 years and I remember being on the Opposition Benches with a built-in majority. I recall how we acted with considerable restraint, as we certainly should have done. In those far-off days, Cross-Bench Peers tended to vote only on matters of their field of expertise while the Lords Spiritual were reticent in displaying their partisanship. It all seems such a long time ago. I mention this because it occurs to me that if this House is serious about trying to influence the Government, it might alter its tone. I reflect that on the great issues of the time, and many others, this House has put itself at odds with the Government, with the other place and, to judge by the general election, the people of this country. It bodes ill for an institution to persist in saying that it knows better than the people it is supposed to serve.
Lord Howarth of Newport (Lab) [V]
My Lords, I add my warm welcome and congratulations to my noble friend Lady Hayman of Ullock. Despite the case just made by the noble Lord, Lord Cavendish of Furness, it is a puzzle to me that the Government have introduced this Bill, given the commitment agreed in the Joint Ministerial Committee—of Ministers of the UK and the devolved Governments—to develop by consensus common frameworks for the UK internal market. We are told that good progress has been made on that yet, with perfunctory consultation, the Bill has been brought in.
The Bill contains no mention of common frameworks. It takes powers to override devolved legislation by means of regulations passed at Westminster and to spend money in areas of devolved competence. It contains only patchy and vague provisions for future consultation on the exercise of the powers that it creates. It has provoked indignation in Wales, Scotland and Northern Ireland, and legislative consent is highly unlikely to be forthcoming. The Bill is disrespectful to the devolved Administrations. When the union is under great stress from Brexit and Covid, it is also reckless.
The Bill is disrespectful towards this Parliament. It contains egregious Henry VIII clauses, most notably Clause 53(2), which says:
“Any power to make regulations under this Act includes power … to amend, repeal or otherwise modify legislation.”
The Bill is disrespectful towards our treaty partners. It authorises breaches of the Northern Ireland protocol and the withdrawal agreement. The Government offer as justification that the EU may intend to interpret ambiguities in the withdrawal agreement—ambiguities that the Government were happy to write in a year ago—to the detriment of the UK’s internal market and the Good Friday agreement. Ministers may see this as a suitable tactic in the Brexit negotiations. It may also be a reckless reminder to other countries not to trust perfidious Albion.
The brutal declaration in the House of Commons by the Northern Ireland Secretary that the Government are deliberately taking power to break international law sounds a loud alarm. The Bill is disrespectful to the rule of law and the judiciary. In this regard it echoes thinly veiled threats to the judiciary in the Conservative manifesto, the notorious remarks in Conservative Home by Suella Braverman shortly before she was appointed Attorney-General, and attacks on lawyers by the Home Secretary and the Prime Minister at the Conservative Party conference.
The Government make the case in self-exculpation that their defiance of international law is legal under domestic law. They also insist that they are not precluding judicial review, although in Clause 47 they go to extreme lengths to insulate regulations made under the Bill from challenge. The Government cannot justify what they are doing by quibbling. Constitutionality entails acting in a spirit of respect towards the rule of law, including both international law and, in our domestic jurisdiction, the effective ability for persons to have redress in court for the misuse of executive power.
It consists in respecting conventions which, though uncodified, ought to be binding on Ministers and on Parliament. These conventions include respect for the role of other institutions which form part of the constitution, among them the devolved Administrations as well as the judiciary, and therefore acting with restraint towards them. Proper government keeps the convoy moving along together. It shows itself to be trustworthy. The doctrine of the omnicompetence of statute, undoubtedly valid, is gratifying to the vanity of parliamentarians and convenient to Governments, but such ill-judged deployment of statutory power as we see in this Bill risks imposing intolerable stresses on the cohesion of the constitution and of the United Kingdom.
The Bill is an expression of a loutishness that characterises this Government’s political dealings. Where will this debasement of our democracy take us if we collude in it?
Baroness Bloomfield of Hinton Waldrist (Con)
I remind the noble Lord of the advisory speaking time. We cannot go beyond midnight, and if everybody goes over, some Lords will have to wait until tomorrow to speak.
Lord Howarth of Newport (Lab) [V]
In this House we must do all we can to limit the damage that the Bill causes, starting by supporting the amendment of the noble and learned Lord, Lord Judge.
Lord Thomas of Gresford (LD) [V]
My Lords, since I am speaking from Hayman House, my home in Gresford, it would be churlish of me not to welcome the noble Baroness, Lady Hayman, and congratulate her on her excellent maiden speech.
On 2 October 2019 the Brexit Secretary, Stephen Barclay, told the EU Committee of this House that Northern Ireland businesses would have to complete export declarations for goods moving from Northern Ireland to the rest of the UK. Shortly afterwards, on 7 November, the Prime Minister told exporters in Northern Ireland, in answer to a question, that if any business was asked to fill in customs declarations, he would direct them to throw the forms in the bin. That is his typical jocularity. He said:
“There will be no forms, no checks, no barriers of any kind. You will have unfettered access.”
That is what the provisions in Clauses 44 to 47 of this Bill are all about: to save face. The Prime Minister cannot admit that he told off-the-cuff porkies—or more likely that he did not understand the written agreement he had signed.
The Government say that the Bill does not in itself breach the written agreement: only potentially, as the noble Lord, Lord Forsyth of Drumlean, argued earlier. The noble Lord, Lord Cavendish of Furness, went further a moment ago and asserted that there was no breach of the law at all. If I give a knife to a person of unstable temperament with the foresight that he will use it to stab somebody, I break the law. It is no defence to say that I thought that he would only use my knife “potentially”. These clauses are an instrument positively designed to empower Ministers, first, to act illegally and, secondly, to ensure that the powers of the court to stop them by judicial review are removed. It is as though I told the potential murderer, “Look, here’s a knife and I guarantee that you will not be prosecuted if you use it”. The noble Lord, Lord Lamont, said, “Well, all they’re doing is threatening to rescind an agreement they should never have made, to strengthen their negotiating position”. Well, it has not worked, has it? As the noble Lord, Lord Butler, said, it is a threat which should never have been made.
It would have been 1945, with Christmas approaching, when my father decided to make me a toy gun. He carved and varnished a wooden stock and added black piping to look like a barrel. On Boxing Day, I proudly took this toy gun out to play, but it was quite a tough area. It is in my mind’s eye now. I was approached by two youths who were four or five years older than me. They threatened to bash my face in if I did not hand the gun over to them. I did so, and you can see that it rankles after 75 years. A threat is not in the long run a good negotiating tactic. You may succeed for the immediate moment, but the resentment lasts for years; the reputation is damaged beyond repair. Why should the European Union believe any compromise the Prime Minister puts forward this coming week on state aid, fisheries or the like? He has weakened his bargaining position.
The Lord Chancellor justifies taking these powers on the basis that there
“could be a material breach by one of the parties”—
he does not say which party or what breach—of the withdrawal agreement. Do you have a better point, Mr Buckland? Robert Buckland comes from Llanelli. When the noble Lord, Lord Campbell of Pittenweem, referred earlier to the oath of Queen’s Counsel, I remembered that it was another Llanelli boy and Lord Chancellor, Lord Elwyn-Jones, who took my oath of office in the Moses Room some 46 years ago. What, I wonder, would he have thought of such a manifest breach of his oath of office, which commences: “I swear by Almighty God to uphold the rule of law”?
The Duke of Wellington (CB) [V]
My Lords, it is a privilege to speak in this debate, but I notice that only a handful of noble Lords appear to support the Bill as presently drafted. I want to put on record that I very much welcome the intervention of the most reverend Primate and the letter signed today by the Archbishops.
This Bill has a significance for this House considerably greater than almost any other Bill that we have been asked to consider. Having over the weekend read the excellent report by the Select Committee on the Constitution, I am even more concerned as a layman by certain clauses in it, particularly Clauses 44, 45 and, especially, 47. In a single piece of proposed legislation, the Government have managed to antagonise almost everyone, including a multitude of counterparties and international public opinion.
First, many members of the United States House of Representatives are concerned about any move that could undermine the Good Friday agreement, and they have made it clear that this legislation puts at risk the future approval by Congress of a US-UK free trade agreement. Secondly, the Government have antagonised the European Union, which sees the legislation as abrogating parts of the withdrawal agreement signed only 10 months ago. Thirdly, they have antagonised the devolved Administrations, who feel that they have not been properly consulted and that the legislation goes against certain parts of the various devolution settlements. The Government have in fact admitted that in certain respects the Bill breaks international law.
It is therefore difficult to believe that government Ministers and their political advisers have really given sufficient thought to the consequences of this proposed legislation. Clearly, legislation is required to ensure that an internal market can operate in these islands, but it was always inevitable, in Mr Johnson’s withdrawal agreement, that there would have to be some sort of documentary border in the Irish Sea. That was not true of Mrs May’s deal, which unfortunately the other place repeatedly rejected. However, the Northern Ireland arrangements can still be negotiated in the joint committee, and as for the arrangements with the devolved Administrations, these can surely be negotiated within the common framework process. So parts of this Bill would seem unnecessary—a word so liked and used by Ministers when rejecting other Lords amendments to other Bills.
The most effective way in which this House performs its duty is to ask the Government and the other place to think again. Surely there could be no more important Bill than this one on which to perform that duty. Having read the various reports from the committees of this House, we must ask the other place to think again, particularly about Part 5. Should the Bill return to us unamended, it may well be necessary, as the noble Lord, Lord Butler, suggested, to do so a second time. In the meantime, I will vote tomorrow for the amendment in the name of the noble and learned Lord, Lord Judge, when it is put to a vote.
Lord Mancroft (Con)
My Lords, I would not dream of questioning the judgment of the noble and learned Lord, Lord Judge, in matters of the law—of course I would not—but I would say that the rule of law, as a matter of principle, is as important to me as it is to any noble Lord, however learned. However, like many legal matters, it is a question of fact and degree. I am not a lawyer but I have been involved in enough litigation to know that two Silks of equal distinction can produce very different and equally persuasive arguments for or against almost any legal question that any of us could pose.
These things are not, as some would like to have us believe, black and white. Like everything in life, they come in shades of grey. To my father, as a newly qualified barrister in 1938, the invasion of Poland in 1939 was not grey; it was completely black and white. However, having sat through the debates in your Lordships’ House in 2003, to me it was clear that many of the lawyers in this House came to a very different conclusion about the legality of the invasion of Iraq from that reached by the Labour Government. To them, it was not black and white; it was a matter of opinion.
In terms of degree, my belief in the rule of law, which I consider to be probably the most important principle that we espouse, has not stopped me from time to time—I hang my head in shame today—parking on a double yellow line. I do not suppose that I am the only noble Lord to have broken the law at some time or another. It would be hypocritical of us not to admit that we can all be flexible when it suits us.
I share with others regret that my right honourable friend the Secretary of State made the statement in the other place that set this hare running. I do not know whether it has been suggested that the Government felt that that declaration from the Dispatch Box would provide some form of legal cover in the event that some remainer obsessive decided to run another case to the Supreme Court in the hope that that court would be prepared to compromise its reputation by indulging in another political judgment.
It is primarily a political and not a legal matter when a foreign power seeks in negotiating an agreement, supposedly entered into in good faith, to use that negotiation deliberately to interfere with the delicate relationship between the component parts of an independent nation state, such as those of Great Britain and Northern Ireland. It is perfectly obvious that the European Commission very early on worked out that this was our Achilles heel, and has done its level best to exploit this for its own ends. That is not the conduct of a good neighbour and trading partner acting in good faith; that is the behaviour of someone who does not wish us well. It is in effect a trap, deliberately placed where it would do the most harm. But what Government, having spotted this trap, would continue to blunder on, rather than take whatever measures they could to avoid it? It is the Government’s duty to avoid a trap, almost at any cost, which is precisely what the Bill seeks to do.
A final point on the issue of national reputation: who is it, I wonder, who will think so much less of us for having ducked this punch, aimed as it was below our belt? For example, I am not very interested in China’s view of our trade arrangements with Northern Ireland, particularly in comparison with their behaviour towards Hong Kong. Nor will I take any lectures from Mr Putin about the rule of law. President Trump thinks we are mad not to have walked away from the EU years ago, and Mr Biden has already made his views—firmly in line with those of his Irish republican voters—clear, and there is no changing that. The current members of the EU obviously think the worst of us, and they always have done. But who cares?
I do business in South America and Africa, and no one I have ever met in either of those continents has the remotest interest in this squabble, but they would all love to do business with us. Our Commonwealth friends are not fooled by this stuff. Saudi Arabia and our allies in the Gulf share the same view as their new Israeli friends—that business is business, a view shared by our Pacific trading partners. If our reputation is harmed, I am struggling to see with whom.
Lord Morris of Aberavon (Lab) [V]
My Lords, as the Attorney-General, I had a duty to advise Ministers of their legal obligations. This was not always straightforward, and I am particularly aware of how I strove to achieve and advise compliance with the law, particularly in Kosovo and the rules of engagement in Sierra Leone. Parliament and Ministers accepted my advice, though as a leading counsel I had to defend the United Kingdom before the international court in The Hague.
As the greatly admired Lord Bingham wrote in his book The Rule of Law:
“The rule of law requires compliance by the state with … international law”
and national law. Ministers, civil servants and our Armed Forces are bound by the need to observe international law. The rule of law is not negotiable; to defer breaches does not alter the fact that Parliament is being asked now to legislate in breach of its obligations. It is similar to blessing a potential burglar or murderer for any future wrongdoing.
We have already lost one esteemed and distinguished law officer. Is it not the time that we have a clear statement on where they stand from the Lord Chancellor, who has a statutory duty to maintain the rule of law, as well as the remaining law officers, who are clinging to office?
I turn now to devolution legislation. As one of the architects of Welsh devolution, which I began as a graduate student in Cambridge in 1953 and culminated in 1999, I regard it as my duty to safeguard the settlement. Once powers are devolved, they cannot be withdrawn. The Bill drives a coach and four horses through the devolved settlement. The Welsh Government tell me that the United Kingdom Governments have worked collaboratively on the common parliamentary programme for three years; this Bill neuters it and hollows out the powers of the devolved legislatures to regulate policy areas. There is no time to give examples. In the memorandum from the Welsh Parliament, it spells out its grievances.
I will make two points. First, the Bill contains, for the first time, powers for the UK Government to spend money over the heads of devolved Ministers—[Inaudible.] I ask the Minister to confirm whether that interpretation by the Welsh Government is right. Secondly, the Bill seeks explicitly to amend the Government of Wales Act to add the design and operation of state aid policy to the list of reserved powers. Again, examples have been given. Could we have a statement on that issue and on whether the Welsh Government are right? Again, I would like the Minister to confirm what the position is.
The brief for the Bill states that the devolved Administrations will see their powers increase significantly following the transition period and the transfer of EU powers, and will be able to use new and existing powers within the internal market system. Who is right: the Welsh Government or the Minister, as he set out in his speech? Is that factual brief correct?
I will ask one further question: is it the Government’s wish and intention to go back on the settlement of devolution over 20 years, or is the Bill an inadvertence that will undermine the unity of the United Kingdom? Is that what they want?
Lord Garnier (Con)
My Lords, I begin by congratulating the noble Baroness, Lady Hayman of Ullock, on her excellent maiden speech and by saying how much I look forward to hearing from my noble friend Lord Sarfraz very shortly.
Because of Part 5, very few are prepared to give the Bill their wholehearted support. I am not one of them, and, in the event of a Division tomorrow, I will without hesitation support the regret Motion moved by the noble and learned Lord, Lord Judge. To do otherwise would be wrong as a matter of principle, but as a former law officer, like the noble and learned Lord, Lord Morris, and as a Member of the other place and of this House since 1992, it would also be a matter of personal shame to agree to such flagrant abuse of the rule of law and our international treaty obligations.
Set against last year’s unlawful Prorogation and the fact that Mr Dominic Cummings is the instigator of Part 5 and is the latest person to have been found in contempt of Parliament, I am not surprised, although I ought to be shocked, that, first, a Cabinet Minister could say that the Government intended to break international law, and, secondly, that the Attorney-General could apparently advise the Government that what was proposed was defensible as a matter of law. It plainly is not, even if some may think it has political advantages.
I have heard excuses for Part 5, which contains provisions that unquestionably breach international law or authorise such breaches, from Members of Parliament not previously noted for their interest in questions of international law and from government Ministers. They appear to confuse the sovereignty of Parliament with the Government’s treaty obligations. If sophistry is an unparliamentary description of what we have been asked to believe, let me say instead that the explanations for Part 5 are risible. They amount to bad law, poor diplomacy and inept politics.
Let us be clear: the European Union withdrawal agreement is not some ancient treaty entered into by two medieval monarchs when our customs and usages were very different, nor is it as difficult to understand as the Schleswig-Holstein question. It is only a year since the Prime Minister agreed to it—not just bits of it, but all of it, including the Northern Ireland protocol, the clauses referring to EU law, and the trading arrangements between Great Britain and Northern Ireland, and Northern Ireland and the Republic of Ireland. It is barely six months since Mr Johnson, in the triumphant afterglow of the general election, recommended it to Parliament for translation into United Kingdom law.
We have not heard publicly from the Attorney-General. It is entirely normal for the law officers to keep confidential their advice to the Government, albeit that the Attorney-General has published a digest of the opinion of the three lawyers she selected to advise her. Its conclusions are not convincing, save perhaps as a political manifesto. Certainly they did not impress the Treasury Solicitor, Sir Jonathan Jones, who resigned rather than be party to this unlawful policy. Nor did they impress my noble and learned friend Lord Keen of Elie, who, despite valiantly trying to bring the Government to a proper understanding of the rule of law and their obligations freely entered into as parties to international treaties, resigned as well.
However, it is not just a breach of international law; Part 5 also undermines our domestic law. Clause 47 is breath-taking. It will give Ministers the power to make regulations and renders those regulations unassailable, even if they break the law. Thomas Cromwell would be proud of this clause. It prevents legal challenge so that no court can rule against them. Government by ministerial decree is certainly not what we should see in a parliamentary democracy.
Under Section 25 of the Theft Act 1968, “Going equipped” is a crime. It is an offence, when not at home, to be in possession of an
“article made or adapted for use in committing a burglary or theft”.
Part 5 is the equivalent of the burglar’s jemmy. Government and law officers should not advocate their use and expect to retain the respect of Parliament or the legal profession.
Lord Stirrup (CB)
Like other noble Lords, I wish to focus today not on the broader provisions of this Bill but on Part 5. Giving Ministers the power to break the law seems to me an astonishing thing for Parliament even to contemplate, let alone agree to. I quite understand that there are situations where there may be argument about what the law is or whether particular matters fall within the provisions of a given law, but that does not appear to be the case here. The Government have acknowledged that they wish Ministers to be able to break a law. The fact that it would be in a “limited and specific way” seems to me to be irrelevant. Why should the residents of Greater Manchester not now feel that they can break the law in a “limited and specific way”?
The Government have advanced the argument that this is a provision that would only be applied if the EU had previously acted in an “unreasonable” way in implementing the withdrawal agreement. However, as we have heard many times, there is already a dispute resolution mechanism in place to deal with this situation, and, if this is deemed insufficient and the Government see the need for new primary legislation, why not enact it once the other party has patently broken faith? Emergency legislation could then be made specific and passed swiftly, and the UK would be reacting to a breach of trust rather than creating one.
However, I wish to make another, broader point about power this evening. In setting and carrying out its foreign policy, the UK is essentially seeking to persuade countries to do things they would otherwise not do or to dissuade them from doing what they otherwise would. Such persuasion rests upon the ability to convince or to compel, which, in turn, is based upon the power that we wield in the international arena. The underlying foundation of that power is undoubtedly our economic strength, but it also depends upon a degree of moral authority.
If we are to convince others of the force of our arguments, they need to know whether they can rely upon what we say, whether we deliver on our obligations, whether we are steadfast or blown by the latest wind— whether they would be prepared to buy a used car from us. Even when we seek to compel rather than convince, both our hard and soft power are most effective when arrayed alongside that of our partners, who know the quality of our contribution, who know that we can be relied upon to fulfil our undertakings and who trust us.
It is clear that certain clauses within Part 5 of this Bill have already undermined international trust in the United Kingdom. EU leaders are looking for harder and more specific conditions in any new agreement with the UK because they now view us as untrustworthy. Our power in the world has been diminished by this Bill and will be diminished further if it is passed unamended. This seems a strange way to advance the cause of global Britain.
Therefore, there are very clear practical reasons for doing something about Part 5, but, above all, there is the fundamental issue of principle. The Government exercise authority through the law; if they undermine respect for the law, they undermine both themselves and the stability of our society. This is surely not the path we, as a nation, wish to follow. I urge the Government to think again, and I shall certainly support the amendment of my noble and learned friend Lord Judge.
Lord Sarfraz (Con) (Maiden Speech)
My Lords, it is with great pleasure that I stand to give my first contribution in your Lordships’ House. I congratulate the noble Baroness, Lady Hayman, on her very thoughtful maiden speech.
I have not been a Member long, but I have learned that this House is full of very kind and generous people who have been incredibly welcoming to me. I would like to thank the wonderful doorkeepers, Black Rod, the Clerk of the Parliaments and all the staff for their warm welcome. I am very grateful to them, as well as to my supporters, my noble friends Lord Goldsmith of Richmond Park and Lord Choudrey. I am particularly grateful to the Prime Minister for giving me an opportunity to be part of your Lordships’ House. I have learned about the procedures of this House from my Whip, my noble friend Lord Borwick, and my mentor, my noble friend, Lord Leigh of Hurley. There is a tremendous amount I hope to learn from Members of this House across all parties, who have had such distinguished and diverse careers.
I grew up in Pakistan in a family with a tradition of military service. Both my grandfathers were officers in the British Indian Army and my father was commissioned as a naval officer at the Britannia Royal Naval College. I could not serve in the military because I have asthma, but I now have the opportunity to serve in a different way from the floor of this House. I understand that maiden speeches are meant to be uncontroversial, so I will keep my contribution short and sweet.
In global Britain, entrepreneurs in the technology industry will play a huge role. I am a proud member of the ethnic-minority community of the United Kingdom and I would like to work with my own community so that we can continue to make important contributions in the global economy. For example, the CEOs of Google, Microsoft, IBM, Mastercard and Adobe—among many others—are all from ethnic minorities. I refer to my interest in technology venture capital as set out in the register. We in the United Kingdom have been at the forefront of innovation for centuries. Many people believe that venture capital was invented in Silicon Valley but it was actually invented in Birmingham. In the 18th century, members of the Lunar Society would meet monthly to discuss, demo and fund the greatest technology innovations of their time.
In my career, I had the privilege of observing that one of the determining factors of success and failure is entrepreneurs having access to a strong domestic market. As global as technology markets are, entrepreneurs who can quickly and easily build a foundation in domestic markets are often the ones who have the necessary platform to then scale internationally. The history of virtually every successful technology company started with early commercial wins in a sizeable domestic market. We are fortunate that the United Kingdom is a strong domestic market, especially for entrepreneurs. We must make sure that our start-ups—whether in space technology in Glasgow, cybersecurity in Belfast, digital health in Cardiff, artificial intelligence in Oxford, life sciences in Cambridge, the internet of things in Manchester or virtual reality in Liverpool—all have access to a strong, stable UK internal market with certainty of rules and regulations. I am therefore pleased to support this Bill in your Lordships’ House.
Finally, I would like to thank my family, my parents, my wife and my beautiful daughters for their long-standing love and support, and I thank noble Lords for giving me an opportunity to participate in this important Second Reading.
Lord Polak (Con)
My Lords, I am delighted to follow my noble friend Lord Sarfraz and congratulate him on his excellent speech. I also congratulate the noble Baroness, Lady Hayman of Ullock.
As my noble friend rightly said, maiden speeches are meant to be uncontroversial. His contribution was in no way controversial; in fact, it was deeply encouraging and seriously important for the House as a whole. The Governor of Punjab, among many political and business leaders in Pakistan, paid tribute to my noble friend Lord Sarfraz on his elevation, saying that Aamer Sarfraz has helped to build a bright image of Pakistan in the international community. He said:
“You made Pakistan and British Pakistanis proud.”
At such a young age my noble friend Lord Sarfraz brings enormous experience as an entrepreneur and venture capital investor. He has also initiated many social projects, including training thousands of smallholder farmers in the Punjab, and has supported many charitable endeavours, including horse-riding therapy for children with special needs. I have no doubt that my noble friend will make many important contributions going forward. From a proud British Jew to a proud British Muslim, I say that I look forward to continuing to work closely with my noble friend for the benefit of British society from within our House of Lords.
My noble friend Lord Sarfraz made a strong point about the need to have access to a strong and stable internal market, with certainty of rules and regulations. I note that the Scottish Government called this Bill a “power grab”. On that point—that goods and services sold in part of the UK must be available for sale in the rest of the country—the Scottish government said it would,
“effectively be limiting standards across the country to the lowest of the four nations.”
I just cannot understand their pessimism. As for it being a power grab, it was no surprise that MSPs voted 90 to 28 to reject a legislative consent Motion. It is clear that the SNP would really like to hand back powers to the EU and/or keep most of them for themselves as an independent country. I joined the Conservative and Unionist Party, and I support this Bill’s intention to maintain high standards across the whole of the UK.
Like the noble Lord behind me, I am not a lawyer, nor are most of the people in our country. They want clarity. I was a reluctant remainer back in 2016 but I am not today: I am neither reluctant nor a remainer. Permit me to put these last few words simply—the sort of words that would be uttered in a pub, if we could get to one. We were a member of a club of 28, where, throughout, there was a rocky relationship. We voted to leave and tried to negotiate a mutual and sensible exit in good faith, but it seems that the good faith has not been reciprocated. There is still time for the EU to act in good faith, and there would be no need to break any laws at all. But, ultimately, we can create our own rules for our own club: the club of the United Kingdom.
Baroness Bryan of Partick (Lab) [V]
My Lords, I congratulate my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, on their maiden speeches of excellent quality. It is really good to have two younger Members join us. I must also congratulate the Government on doing so much to bring about harmony. They have managed to unite so many speakers in this Chamber and all but one of the parties in the Scottish Parliament, to name just two groups.
One of the purposes of this Bill is to enact the political ideology of the ruling faction of the Conservative Party, which demands that unfettered access of business across the UK should be able to overrule any democratically decided public policy goals. BEIS’s own impact assessment makes it clear that market access principles will reduce the ability to pursue targeted social and environmental policy objectives. We were told that Brexit would result in the return of powers to the devolved Administrations, but instead significant powers have been retained by Westminster. This Bill goes even further, as it will take away existing powers.
The noble Lord, Lord Callanan, as I understood him, said that industry subsidies had never been devolved, but Part 7 of the Bill amends Schedule 5 of the Scotland Act 1998 to eliminate state aid from the devolved powers that have rested with the Scottish Parliament for over 20 years. This happened without negotiation and with only the most cursory consultation.
The so-called level playing field is far from fair. How can it be when the players on the field are of massively different size and strength? It would be the equivalent of a football match between Chelsea and Partick Thistle. The big firms in the large countries flourish; small firms in small countries struggle. The Bill does not establish independent arbitration or dispute resolution. Once again, the UK Government will act as both participant and final arbiter and will, as usual, find in their own favour.
This legislation confirms what many of us already know: the current system of joint working between the UK Government and devolved Administrations is not fit for purpose. It does nothing to guarantee high regulatory standards. Instead, it creates incentives to lower standards. It prioritises the removal of potential barriers to trade at the expense of other public policy goals, such as health or the environment, regardless of the democratic decisions of the electorate in the devolved Administrations.
Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine, gave a stark warning in a recent newspaper article. He said,
“this Internal Market Bill, is just the start. The UK Government is back in Scotland. Get used to it.”
If ever a wedge would serve to divide the United Kingdom, this is it. We cannot in all conscience allow this dreadful legislation to be rushed through Parliament. We must ask the Government to think again.
Lord McNally (LD)
My Lords, my first duty is to congratulate the noble Lord, Lord Sarfraz, and the noble Baroness, Lady Hayman, on two excellent maiden speeches. It is not always like this, by the way. In his speech today, the most reverend Primate the Archbishop of Canterbury made it clear that we are an unelected second Chamber with a mainly advisory and revisory role, but along with those responsibilities is another power, rarely used but very important.
In 2006, along with my noble friend Lord Tyler, I sat on a Joint Committee of both Houses set up to examine the conventions that govern the relations between both Houses, and between Parliament and Government. The report and recommendations of that committee chaired by the noble Lord, Lord Cunningham, were adopted by overwhelming votes of both Houses and stand as the basic rules of the conventions between them—not Salisbury/Addison, but the Cunningham conventions. Paragraph 281 of that report said about the powers of the House of Lords:
“Nothing in these recommendations would alter the … right of the House … in exceptional circumstances, to vote against the Second Reading or passing of any Bill”.
It is that right to say no that stops this House being simply a debating society. In the 110 years since the first major reform of this House, its most passionate defenders have argued that the Lords was the safety catch to prevent an abuse of power by a temporary majority in the other place. A constant in all our deliberations has been the special responsibility of this House to uphold the rule of law.
Over the next two days we are considering a Bill on which a Minister of the Crown in the other place admitted a proposed breach of the UK’s international obligations, and where the Government’s senior law officer in this House, the noble and learned Lord, Lord Keen, has resigned rather than be at the Dispatch Box today to try to defend it. When all five living ex-Prime Ministers express concerns about the Bill; when the joint briefing on it from the Law Society and the Bar Council calls for the removal of the offending clauses; when the Bingham Centre for the Rule of Law says that these clauses are in fundamental opposition to the rule of law and damage our standing internationally; and when our own Select Committee on the Constitution calls in aid the late Lord Bingham and states:
“We agree with Lord Bingham that respect for the rule of law requires respect for international law”,
one is bound to ask whether this House could ever have before it legislation which better fits the term “exceptional circumstances” than that before us today.
I will vote for the amendment tabled by the noble and learned Lord, Lord Judge, and it will undoubtedly be carried tomorrow. It does not, however, use the power of this House to remove the offending clauses—Clauses 44, 45 and 47—from the Bill. In that respect, it will allow us to go home feeling good but without having changed the mischief in the Bill.
I am clear that we should refuse this Bill a Second Reading, but am told by my more herbivorous colleagues that the Bill should go to Committee. I hope that during its passage through Committee and Report we will see an amendment to remove the offending clauses, and that, however many times it is brought back, this House will say no. If this is not an “exceptional circumstance” as set out in the 2006 report, I fail to see when this House will ever summon up the courage to use that power. Those who have a contempt for our parliamentary democracy and the rule of law will be emboldened by our failure, and this House will be diminished in the process.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, I too welcome the noble Lord, Lord Sarfraz, whom I have had the pleasure of meeting already, and the noble Baroness, Lady Hayman of Ullock. I hope to work with her on the environment and animal welfare; that would be fantastic.
My noble friend Lady Bennett cannot be here this evening. She would like me to explain that we are dividing this Bill between us and she will speak on the internal and devolution issues. She abhors the destruction by this Bill of the rights of democratic devolution that have been embraced and exercised by the people of Scotland, Wales and Northern Ireland. Scotland has long had a distinct education system with higher qualification standards for teachers. The Senedd too has plans for better control of single-use plastics than we have managed here in England.
I, therefore, will focus on international and rule of law issues in the Bill. First, I congratulate the Constitution Committee on its wonderful report on this Bill. I read it through and laughed with pleasure. I thank the committee for that. This debate has been extremely interesting because I did not think that anyone would have the audacity to defend this Bill, apart from the Minister. The Constitution Committee expressed the problem in relation to the law very well when it said:
“Society cannot afford to take this principle for granted or acquiesce in its violation. The rule of law is essential to an open and democratic society and the institutions which embody and protect it. Any Government that seeks to secure widespread compliance with the law must itself adhere to it”.
It is indicative that there are two amendments. One of them is from the Convenor of the Cross Benches, who is a former Lord Chief Justice of England and Wales, and the other is from a Peer who was a Conservative MP for 40 years. These are hardly rebels of the usual kind. The Government have some cheek to introduce the Bill now, because it is less than a year since they campaigned on Boris’s deal as their main election gambit. This House passed that deal in recognition of the fact that the Government had won the election and it was a quasi-referendum on the deal itself. Now the Government come to Parliament to try to unpick key provisions of the deal that they themselves negotiated.
It is too easy to get bogged down in seeing this as the narrow political issue around Brexit and Boris’s deal; it is much deeper than that. I say to those few noble Lords who have talked about remoaners that I voted for Brexit yet I am deeply unhappy with the Bill. The Government are trying to use the principle of parliamentary sovereignty to justify this course of action. That is wrong. A classic example of parliamentary sovereignty is that nothing stops Parliament from passing a law to ban Frenchmen from smoking in the streets of Paris, but it would have no effect. Parliament has the power to pass legislation that violates international laws and agreements, but that does not mean that it is justified in doing so. There is, therefore, scope for your Lordships’ House to amend the Bill to remove the offending provisions. If, however, this Bill cannot be sufficiently amended, our role as guardians of the constitution will require us to reject the Bill in its entirety. I will of course support the amendment.
Lord Hamilton of Epsom (Con)
My Lords, I join in the congratulations to the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz on their maiden speeches, which I much enjoyed. I hope they enjoy this House as much as I have. I also hope they listened to my noble friend Lord Cavendish of Furness, who gave a slight word of warning that we have lost many of our friends in the other place, and we have not made any new ones, so our future is not quite as straightforward as we might all hope.
I want to talk about the extremely shabby way in which my noble and learned friend Lord Keen of Elie was treated by this House and by others in the Government. He was a very fine lawyer, and probably one of the best Advocates-General for Scotland that we have ever seen. Those are not my words; they were the words of the noble and learned Lord, Lord Wallace of Tankerness, earlier today. We have lost an extremely able man, and the contributions of rather lesser men in your Lordships’ House have contributed to him being removed from office. I do not think that that has done any great favours to our House, or to Scotland.
In previous Administrations in which I served, in a very junior capacity, we always had problems of how you interpret legal situations. A tremendous onus is put on our law officers to decide whether things are legal or illegal. The noble and learned Lord, Lord Morris of Aberavon, made reference to this, with respect to his time as Attorney-General under a Labour Government.
My noble and learned friend Lord Keen, on 15 September, made it absolutely clear that he thought the Internal Market Bill, which we are now considering, was within our obligations under the withdrawal agreement and was legal. A number of noble Lords have chosen during this debate to try to obscure that fact and say that somehow my noble and learned friend Lord Keen was conflicted. He was not. He said on that occasion that
“the EU has materially breached its treaty obligations and … we find that it may have acted in such a way as to fundamentally alter our obligations under the treaties.”—[Official Report, 15/9/20; col. 1131.]
So he was quite unequivocal on the fact that the Government were acting completely legally over this, and he was the law officer.
In my opinion, what he was referring to—these are my words—was the fact that the EU had decided to say that the border in the Irish Sea should remain even if we left the EU with no deal. That, of course, would have undermined completely the single market of the United Kingdom and was totally unacceptable to this country. So it seems quite straightforward that my noble and learned friend Lord Keen considered the actions of the Government to be legal.
Therefore, we have to ask what on earth my right honourable friend the Secretary of State for Northern Ireland was doing when he said that in some way this was a minor infringement or a technical matter that was only slightly illegal. I do not think that things can be slightly illegal—they are either legal or illegal—and I do not really know what Brandon Lewis was doing. He was actually called to the Bar himself in his youth. Why did he not question what he was doing by getting up and saying that this was only slightly illegal? That is rather like the curate’s egg—excellent in parts—or a woman saying that she is only half-pregnant.
At the end of the day, the advice that should have been taken by this Government was from its law officers. There may be many noble Lords in your Lordships’ House who do not agree with the judgment of my noble and learned friend Lord Keen, but he said that this was legal, I believe it to be legal, and for that reason I shall be voting against the amendment moved by the noble and learned Lord, Lord Judge, and supporting the Bill.
Baroness Kennedy of The Shaws (Lab) [V]
Let me join with others in welcoming new Members to this House. I hope that they will have as happy and fulfilling a time as I have had.
I wanted to express my respect and admiration for the noble and learned Lord, Lord Judge, and other noble Lords who have spoken up for the rule of law and our obligations under international law.
Baroness Scott of Bybrook (Con)
We cannot hear you. Can somebody please try to change the sound for you, and we will come back to you?
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
In view of the difficulties experienced by the noble Baroness, Lady Kennedy, we will move on to the noble Lord, Lord Lisvane.
Lord Lisvane (CB) [V]
There is so much wrong with this Bill that it is hard to know where to start—apart from, of course, warmly congratulating and welcoming today’s maiden speakers, the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz.
I will make three points. First, on the use—or, I should say, abuse—of delegated powers, the Delegated Powers Committee has done its usual excellent job. It notes that this Bill contains 11 delegated powers and describes some as “extraordinary” and others as “unprecedented”. There are seven Henry VIII powers, allowing Ministers simply to rewrite primary legislation, with a much lower level of parliamentary scrutiny and public exposure. Overall, the Bill exemplifies the decline in the legislative process that I have observed for nearly half a century. Now it is, I fear, a disaster area, which the promised Constitution, Democracy and Rights Commission should examine as a high priority—although I have little hope that it will do so, or will be allowed to do so.
Secondly, on the Bill’s effect on the devolution settlement, it has successfully united three of the constituent parts of the—presently—United Kingdom in a chorus of execration at what they see as an attempt to undermine the devolution settlements and change the nature and scope of reserved powers. Noble Lords are expressing strong views on this aspect, but I simply draw your Lordships’ attention to the Act of Union Bill that I introduced towards the end of the last Parliament, in which the Constitution Reform Group chaired by Lord Salisbury seeks a more effective and equitable settlement between the constituent parts of the United Kingdom. A moment ago, I described it as the “presently” United Kingdom. I do not think that history will deal kindly with an Administration who contrive to take us out of not one union but two.
I conclude with the rule of law issues. Yes, Parliament can legislate in the way proposed—of course it can—but it should not and, I suggest, must not. The rule of law is not something just for lawyers and academics; it is for us all. As my noble and gallant friend Lord Stirrup said, if I break the Covid-19 restrictions, will the Government come to my aid when I say, “Yes, I was breaking the law, but only in a specific and limited way”? The attempt to present the law-breaking powers in the Bill as more acceptable by making them subject to approval by the House of Commons is naive. It is as though I were to say to your Lordships, “I have a revolver—but don’t worry, it’s empty. I’ve given the ammunition to a friend of mine. But when I ask, he’ll give it back and I’ll put the rounds into the weapon.” The answer is, of course, that I should not have the revolver in the first place.
I shall certainly vote for my noble and learned friend Lord Judge’s amendment, and when the Bill goes back to the Commons it should do so without at least Part 5. What happens then? I agree with my noble friend Lord Butler that this is an issue on which your Lordships should be prepared for a bumpy ride. It would not be possible to use the Parliament Acts in the time available, so the Government would have to rethink their approach.
Please let us have no chuntering about the Salisbury/Addison convention. In 2006, the Joint Committee on Conventions of the UK Parliament acknowledged the change in the nature of the convention over time—hardly surprising as it arose from very specific circumstances 75 years ago—but it still linked the convention only to manifesto commitments, with a reserve responsibility of this House in exceptional circumstances, as the noble Lord, Lord McNally, reminded us. No one could seriously suggest that departing from the rule of law has received electoral approval. I suggest that your Lordships should not be deterred by any assertions of unconstitutionality. If there is unconstitutionality anywhere, it is in this Bill.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I believe we can now hear from the noble Baroness, Lady Kennedy of The Shaws.
Baroness Kennedy of The Shaws (Lab)
I am very sorry if people could not hear me. I hope noble Lords can hear me now.
I start by welcoming our new Members to the House. I also add my respect and admiration for the noble and learned Lord, Lord Judge, and all noble Lords who have spoken in support of the rule of law. I would have thought that all of us would be committed to it.
Some of our colleagues have mentioned our role as a revising and scrutinising House, but our role goes beyond that. Those of us who have the fortune to be in this House are stewards of the constitution. We are also the protectors of the rule of law. We are the people who guard rights and preserve for future generations the things that really sustain this society. We are also the people who are supposed to look at the long term when government may be pressed into or encouraged to think short term.
I urge this House to support the amendment from the noble and learned Lord, Lord Judge. I am a director of the International Bar Association as well as a practitioner at the English Bar, and I recently hosted two webinars on this very Bill. Thousands of lawyers attended not just from the United Kingdom but from around the world. One of the webinars was on the impact on international law, and another on the effects here in the United Kingdom.
The legal profession in this country is united in its opposition to the Bill—the Bar Council, the Law Society, the lawyers and judges. Let me tell you, it is a very small club indeed who think that this Bill does not contravene the rule of law. It seems to me to be following a regrettable trend of undermining law more generally. We are seeing attacks on lawyers and the judiciary, and an effort to undermine the judiciary and its discretion. We are also seeing attacks on judicial review and other aspects of law.
When the webinars took place, international lawyers, much to my surprise, engaged from all over the world, shocked at the fact that Britain was doing this. They said, “It’s to you that we look when we are having difficulties with our own Governments. It’s to you in the United Kingdom that we look as the standard bearer for the rule of law.” One of our distinguished commercial judges, recently retired, said that the City’s position as a world-leading financial services centre is underpinned by our reputation in law. That is not something to play around with, even if you are doing it for a pragmatic reason rather than out of principle. As one or two other noble Lords have said, this is a matter of principle, and I believe that principle at times has to take precedence over party loyalty.
In one of the webinars, the noble and learned Lord, Lord Neuberger, reminded us that we are asking a lot of our citizens in the United Kingdom at this time because of the pandemic. We are asking them to abide by certain rules that constrict their lives. We are asking them to obey the law. That our Government should be dismissive of law and be prepared to break the law at this time sends a very bad message. The Government should listen and remove the offending clauses and the whole of Part 5. I am afraid that to disregard the law is really a very poor prospect for this country.
Lord Alderdice (LD) [V]
My Lords, my perspectives are shaped by my Northern Ireland roots and the implications that I draw from Part 5 of this dangerous Bill.
The inevitable consequence of Brexit was a series of difficulties with the Belfast Good Friday agreement, which had brought to an end not only 30 years of terrorism but a disturbed historical relationship with Ireland that went back many centuries. Those of us who spent many years of our lives negotiating and implementing that agreement had assumed that if we could find a new future for the people of our islands, we could find a way of maintaining our relationships with the rest of the European Union. However, when it became apparent that Brexit was the will of a majority of people in England and Wales, the challenge was to negotiate arrangements that would maintain the Good Friday agreement while taking the UK out of the European Union and at the same time hold together the constitutional union of England, Scotland, Wales and Northern Ireland.
Since Northern Ireland’s relationship with the rest of the UK and Ireland was already a singular one, it was clear that there would be significant challenges, especially if the British Government chose to leave the customs union and the single market. This was widely discussed in Northern Ireland during the referendum campaign and was probably the chief reason why the Ulster Unionist Party became pro-remain.
When Mr Johnson became Prime Minister, he and his party, including the members of the European Research Group, abandoned their Democratic Unionist allies and, last October, signed up for the revised protocol for Northern Ireland that Mr Johnson had negotiated. The DUP was betrayed, but Mr Johnson went on to fight the election on what he called
“a good arrangement, reconciling the special circumstances in Northern Ireland with the minimum possible bureaucratic consequences at a few points of arrival in Northern Ireland.”
The Conservative Party won the December 2019 general election, its manifesto based on the “great new deal” that the Prime Minister said he had done. Now, in presenting this Bill for the approval of your Lordships’ House, he has abandoned the commitment to the British people on which he was elected and seeks to break not only his manifesto commitment but international law. We should not be surprised; the Prime Minister has been entirely consistent—he has never felt the need to be bound by any commitments that he makes to people, nor by any rules or law. He was even prepared to mislead Her Majesty the Queen into approving a prorogation of Parliament, advice ruled to be unlawful.
Now he wants the rest of us in Parliament to collude with him in a flagrant breach of international law. That creates a constitutional crisis. While this House should generally restrict itself to giving advice to the Government of the day, I believe it has a responsibility of constitutional guardianship that is now being called into play by the Government’s premeditated breach of international law. Even the tabling of the Bill is a breach.
It is possible in the short term to toss facts, truth and the law to the side, but as this Government are beginning to discover, truth, facts, the law and broken relationships have a way of coming back to bite. Bluster, hyperbole and waving one’s arms around do not impress the Covid-19 virus; nor, increasingly, do they convince ordinary people in this country.
When one manifestly does the wrong thing—not making a mistake, but doing what is morally wrong and unjustifiable—history will find you out. Members of your Lordships’ House who support this Government’s disregard for the law should reflect on how past leaders have been hauled before the bar of history and their reputations irreparably shredded. Today’s remarkable debate in your Lordships’ House may even be the beginning of the end of this Government, for this is not a mistake or a misjudgment but a consistent pattern of behaviour that must be stopped before it destroys our United Kingdom.
Lord Barwell (Con)
My Lords, I congratulate the noble Baroness, Lady Hayman, and the noble Lord, Lord Sarfraz, on their maiden speeches and for their extreme skill in staying uncontroversial on this most controversial of topics.
I find myself in a curious position today, wanting to defend a withdrawal agreement, parts of which I strongly disagree with. Those of your Lordships who know my background will know that I preferred a different withdrawal agreement, negotiated by the former Prime Minister. The current Prime Minister, and many members of the Government, opposed that withdrawal agreement and the backstop within it because, they argued, there was no way out of it and it would be unthinkable for the United Kingdom to break international law. What was once unthinkable is now government policy. As the noble and learned Lord, Lord Judge, said, we are being asked in Part 5 to give Ministers powers to break the law—powers to override an agreement that was agreed not in some dim and distant past but just a few months ago.
What justification are we offered for that course of action? We have had two. The Prime Minister, in an article, said that these were incredibly turbulent times; it was all done in a bit of a rush and now some problems have come to light. It is also being suggested to us that the EU has been unreasonable. I will leave it to your Lordships to decide whether you believe that the EU’s approach is unreasonable—I doubt I will convince anybody on that point—but I will say that it has been entirely consistent from the word go. The EU has argued that there could be no free trade agreement without a resolution of the issues in Ireland and Northern Ireland and that the UK could never have a Canada-style agreement because of our geographical proximity. The issues that have come to light, and which this Bill seeks to address in relation to customs or exit declarations for goods coming from Northern Ireland to Great Britain, or to state aid, have not materialised overnight: they are in the withdrawal agreement. The Explanatory Notes of the Bill say that they are in the withdrawal agreement, so these are consequences of the agreement that the Prime Minister signed. They are consequences that were pointed out by those of us who had reservations about that agreement at the point at which it was agreed.
As has been made very clear, there was no need to take the course that the Government have taken in this Bill. Article 16 of the withdrawal agreement provides a procedure to use if the agreement leads to economical, societal or environmental difficulties, where parties can take unilateral action.
None of these things is the real reason for what has happened here. The real reason is that David Frost, the Prime Minister’s chief negotiator, asked No. 10 to come up with something that would shift the EU in its negotiating position. My noble friend Lord Hamilton asked why the Secretary of State for Northern Ireland said what he said. He said those words because he was told to say them. The opposition of this House, of five former Prime Ministers and of the most reverend Primate the Archbishop of Canterbury is what Number 10 wanted: it wanted to demonstrate to the European Union the extent to which it was prepared to take a different approach from all previous Governments.
I will end by making two very brief points. First, I am not a lawyer, but you do not have to be a lawyer to think that the rule of law matters. This is not some abstract concept: it has real world consequences. On Friday, Moody’s downgraded the UK’s credit rating; it referred to the weakening of the UK’s institutions of governance in recent years.
Finally, the tragedy of this Bill and the situation that we find ourselves in as a country is that the reason why the Brexit negotiations have proved so difficult is that the EU believed all along that the UK might end up breaching faith. I well recall a meeting with EU officials that I attended with Theresa May, where she asked why the backstop had to be set out in all that operational difficulty. She was told, “Because, bluntly, we do not think you will be there for much longer and we do not trust what is going to follow in terms of living up to any commitments.” That is the tragedy of this Bill. This behaviour was predicted and is one of the reasons why we confront this problem. Let us hope that we reach a deal, that the Government can withdraw these clauses and that we can find a satisfactory way out of this situation in which we now find ourselves.
Lord Hope of Craighead (CB) [V]
My Lords, it is a real pleasure to follow such an impressive speech by the noble Lord, Lord Barwell. For myself, I wish to concentrate on the consequences of this Bill for the devolution settlement. I am aware that this issue might seem to be a sideshow compared with Part 5 of the Bill—perhaps a moment, especially for those of your Lordships who, like me, are participating virtually, to go away and do something else. However, like so many others, I urge your Lordships to take notice of it and take it very seriously.
Frictionless trade across all parts of the United Kingdom is, of course, what we all wish and must aim for, but this depends on the principles of co-operation and on mutual trust between all four nations. As presently drafted, the Bill and the way it has been introduced is deeply damaging to those principles. Mutual trust between the nations has never been lower than it is now: Scotland has refused to give legislative consent to the Bill and Wales, as we have heard, has indicated that it cannot give consent to the Bill in its present form. Of course, this Parliament can do what it likes, but a different approach is essential if the union is to hold together against a growing trend towards fragmentation that will—if this Government are not very careful—bring our precious union to an end.
The devolution settlements were guided by the market access principles of proportionality and subsidiarity that operate under EU law. There was room for a carefully worked out devolution of legislative power which enabled the devolved authorities to pursue their own legitimate policy aims as to the sale of goods where, in their judgment, this was in the public interest. Nobody doubts that the way this freedom has been handled works well at present. It is not in any way a barrier to trade between our nations; on the contrary, it has real benefits. It enables new trading policies to be tried out in one area before the rest. The Bill itself accepts that such divergences as exist at present can remain.
However, the Bill seeks to replace the freedom to develop local standards or separate policy aims in the future with centrally driven, overriding market principles. It does not seek to repeal the various exceptions to the list of reserved powers that are set out in the statutes, but its effect would be the same, as there would be no stopping traders bringing goods in from other areas that do not conform to the home area’s rules. The devolved powers are rendered worthless by this new system. UK Ministers are given powers to do things which contravene the devolution settlements without consultation, let alone consent. The opportunity to create an internal market by agreement through the continued development of common frameworks—about which the noble Baroness, Lady Andrews, spoke so well earlier today—is being undermined because it is being ignored. The common frameworks are not even mentioned in the Bill.
The effect of the Bill has been described as a “power grab” by the Scottish National Party. I am not given to hyperbole—which I thought this was—but now, having read the Bill and the well-founded and withering report of the Constitution Committee, I can see why this expression is being used by them and now in Wales too. There is something very far wrong here; that is the challenge that we face. We do not need this Bill, but if we have to have it, it must be put right.
Baroness Neville-Rolfe (Con)
My Lords, I congratulate my noble friend Lord Sarfraz, a dynamic entrepreneur, on a very fine maiden speech, and also the noble Baroness, Lady Hayman of Ullock. I look forward to the noble Baroness boosting the parliamentary choir and hearing a bit more about that Welsh farm.
I rise to pursue two points. First, I want to address the operation of the internal market provisions. Secondly, I will comment on the great issue of the day and provide some much-needed support for the Government’s position.
The Bill makes a great deal of sense. We need the internal market to function smoothly. As we leave the EU single market, our own UK single market will be even more important. As an economist by training, I believe in the theory of comparative advantage, and that applies across the UK. We need to avoid protectionist measures so, for example, the Scots and English can exchange Scotch whisky and London gin without hindrance or charge. I apologise for resorting to GCSE economics, but the point is a very important one, and it is equally valid for services—80% of the economy. I declare my interests in the register.
That does not mean small variations in law need to be prevented. The Scots have different rules on minimum alcohol pricing and the Welsh were early regulators on plastic bags—both areas in which I am interested—and that has worked fine. However, devolution can only go so far, or it will harm the common interest immeasurably.
I congratulate my noble friend the Minister on producing an impact assessment, and his help with getting the promoters of the agriculture and fisheries Bills to do the same. However, it is disappointingly light on numbers. I think a better effort could have been made at economic assessment and the dynamics of growth—or lack of it, without a proper free market—and that this would have shown how vital the UK internal market measures in the Bill in fact are.
I also have a question for my noble friend. Why has the Competition and Markets Authority been chosen to gather information and monitor the new arrangements in a fancy new Office for the Internal Market? I can see the advantage in terms of recruitment and retention at the CMA. However, the CMA is much more focused on the consumer than on business success and, at a time when we face grave economic difficulties, I find this worrying. It is also a politically charged area, so does it really make sense to delegate these vital powers to a supposedly independent body? PHE and Ofqual spring to mind as not wholly satisfactory analogies.
Much has been said about Part 5 of the Bill. I agree that in principle this approach is undesirable. However, there is at least a theoretical possibility that EU action could place the UK in an impossible position as regards the coherence of its own internal market. If that came to pass, we would be presented with a very unpleasant choice. I am sorry to say this, but the real problem stems from the nature of the withdrawal agreement which the present Prime Minister inherited in an extremely unsatisfactory state from the previous Administration. As my noble friend Lord Howell hinted, the UK-EU joint committee has not stepped up to the mark in resolving the issues for whatever reason, as it would have done had everybody acted in good faith.
So having a safety-net provision in the Bill for use in extremis, and only after a special parliamentary vote, is probably the least damaging way forward. The fact is that treaty requirements sometimes conflict with each other and some member states fail to observe important treaty provisions, such as the Maastricht criteria, as my noble friend Lord Lamont reminded us so eloquently earlier today.
Lord Hendy (Lab) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Neville-Rolfe. I too welcome my noble friend Lady Hayman and the noble Lord, Lord Sarfraz, to the House, and I compliment them on their excellent speeches.
Like so many other noble Lords, I share the view that the Bill would cause this country to be in breach of the rule of law. Having spent over 40 years in practice at the Bar, over 30 of them in silk, I consider myself, like other Queen’s Counsel in this House, to be under a duty to oppose the Bill on that ground. I support the noble and learned Lord, Lord Judge, in his amendment but shall not weary the House by repeating in a pedestrian way the arguments so elegantly and powerfully put by him and others.
I wish to raise another, different point. The Bill seeks to create a uniform internal market for goods and services, but it says nothing about the protection of those who actually make or provide the goods and services—the workers of the United Kingdom and beyond. I use the term “worker” as a lawyer, meaning someone who works for a living whether under a contract of service or a contract for services. The EU single market, from which this Bill takes inspiration, had much in the way of protection of affected workers; the Bill has nothing.
I accept that labour law—the law of the workplace—is not a devolved matter and therefore applies across the UK, with minor variations in Scotland and Northern Ireland, but that does not avoid the issue of social dumping. It is entirely foreseeable that measures are taken in Wales, Scotland and Northern Ireland to protect workers in those countries from being undercut in England or abroad.
Let us take, for example, agriculture. In 2013, the coalition Government abolished the Agricultural Wages Board for England and Wales—a negotiating body representing employers and workers—the agreements of which on wages, housing costs, and, of course, dog allowances, became binding on every farmer and farm worker in England and Wales. The board was originally set up in 1924, a daughter of the Trade Boards Act 1909. Scotland retained its AWB. The Welsh Government, having lost the AWB for England and Wales, set up their own under their devolved power over agriculture. The UK Government considered it intolerable that Wales should exercise this kind of sovereignty to maintain higher pay rates for its farm workers and therefore challenged the Welsh Government in the courts, a case they ultimately lost in the Supreme Court. Wales therefore now retains its own AWB.
In consequence of the Covid catastrophe, there will be more such differential measures of worker protection. Even before Covid, the Welsh and Scottish Governments considered the use of conditions attached to public procurement contracts in order to enhance worker protection and develop social dialogue with trade unions —a concept alien to the Government in Westminster. This Bill should make provision to permit national Governments to discriminate on goods and services in order to maintain labour standards, as well as on the grounds set out in Schedule 1. I propose to move an amendment to this effect in Committee, should the Bill proceed.
Lord Brown of Eaton-under-Heywood (CB) [V]
My Lords, it is always good to follow the noble Lord, Lord Hendy. I start by welcoming and congratulating the two excellent maiden speakers. I doubt they were as nervous as I am making my maiden remote Zoom speech.
I shall vote for the amendment to the Motion moved by the noble and learned Lord, Lord Judge. Like him and so many others who have spoken in this remarkable debate, I deplore Clauses 42 to 47 in Part 5, and I express my deep regret that our great country, champion for centuries of the rule of law, domestically and internationally, has reached the point of prospectively repudiating binding treaty obligations entered into less than a year ago. The damage to our international reputation and standing needs no additional emphasis from me. Similarly, I note the damage to our prospects of finding—as we now need to—trusting new treaty partners and, as mentioned by the noble Baroness, Lady Kennedy of The Shaws, to London’s standing as the economically very valuable centre of international legal practice and dispute resolution by both litigation and arbitration.
I now turn to a rather different aspect of Part 5. It is my contention that these clauses are not merely unlawful and, therefore, intrinsically objectionable in principle; they are quite unnecessary—unless, quite outrageously, they are in the Bill merely to shift the dial to try to bully the EU into a more helpful stance, as the noble Lord, Lord Barwell, suggested. Assuming that they are in the Bill for “good faith” reasons, I strongly agree with the noble and gallant Lord, Lord Stirrup, that, were it ever to be necessary to legislate to breach international law, that should follow—not, as here, precede—that need.
However, I would go further and say it never would be necessary. I will explain why. Naturally, I recognise the imperative under the protocol that it applies to honour and not imperil the Belfast agreement and that it does not destroy the essential unity and integrity of the United Kingdom internal market. This requires reaching a sensible, workable agreement by negotiation or, if necessary, the decision of the joint committee under Article 16 on, for example, what are reasonably to be regarded as “goods at risk”.
However—and this is really the crunch point—if the Government say they truly fear the EU playing hardball on the wider negotiations, threatening to act quite unreasonably or acting in bad faith in its interpretation and application of the protocol, then, instead of our pre-emptively breaking, as these clauses do, the agreement ourselves, we would be able to treat them as being in breach. This would entitle us not merely to invoke, as we would, the dispute resolution mechanism provided for but, in the meantime, temporarily and pending the eventual outcome of any arbitration, to take all necessary and proportionate measures to protect our fundamental interests, which obviously include the Belfast agreement.
That is it: both parties owe the “good faith” obligations and that is plain under Article 5 of the Vienna convention. Neither side is entitled to act unreasonably, such as to frustrate the essential object of the agreement. With those thoughts in mind, it seems not merely outrageous in principle but, in fact, ultimately absurd to include provisions that could never be properly required given that there is, as the Government fear, bad faith on the EU side.
Lord Vaizey of Didcot (Con)
My Lords, I begin by congratulating the noble Baroness, Lady Hayman, and the noble Lord, Lord Sarfraz, on their excellent maiden speeches in this Second Reading debate.
This is the first debate I have taken part in where I have had the opportunity for a dinner break and the chance to discuss with colleagues how the Bill is progressing. One remarked, interestingly, that you know the Government are in trouble when they are condemned by a former Lord Chief Justice and the Archbishop of Canterbury before the debate has barely got going. However, maybe something can be salvaged in this debate.
The first point that all noble Lords must remember is that, leaving aside the controversial Part 5 and Clause 47, the Bill is still important and necessary. We need an internal market Bill after Brexit. As the noble Lord, Lord Cavendish, remarked earlier, we had an internal market in this country for 300 years, and it was effectively taken over when we joined the European Economic Community. Now, as we leave the European Union, the Government must make provision to restore the union and the internal market that existed before we became members of that community. It is my impression that although there is a lot of politics surrounding some of the provisions for replacing the internal market, none of the devolved Assemblies will lose powers that they already have. They will have the same powers when the Bill is passed. In that sense, the glass is half full.
There are, of course, some very controversial measures in the Bill and they are entirely of the Government’s own making. We face a conundrum which has been present ever since the country voted for Brexit and we started looking at how to implement the referendum result: either to have a border between Ireland and Northern Ireland, or a border between Northern Ireland and the rest of the United Kingdom. The then Prime Minister, Theresa May, tried to find a way out of that conundrum, and did so very elegantly by seeking to keep us within the customs union. When I was in the other place, I voted for her withdrawal agreement—I was fond of remarking to some of my more ideological colleagues that I had voted for Brexit more times than they had. The Government then decided to return to a form of Brexit which brings us to where we are today: potentially having to choose, inevitably, between a border between Northern Ireland and the rest of the United Kingdom and a border between Ireland and Northern Ireland.
Again, however, my glass gets slightly fuller, because I think that there may be a way out of this impasse. We know that, despite the confrontational attitude that seems to be adopted now by both sides, who are negotiating the future of millions of people in this country and the rest of the European Union, there is a potential way forward and we may have a free trade agreement. The European Union has said that it will hold a special Council in order to achieve that. I very much hope that that will come about. If it does not, and the provisions in the Bill reach a conclusion without a free trade agreement, we will face some very serious consequences. If, as I hope, we are able to preserve the internal market in the United Kingdom, but we do so under the provisions of the Bill without a free trade agreement, it is inevitable that we will get a hard border between Ireland and Northern Ireland, either one that Ireland itself feels it has to impose or one that the European Union chooses to impose on its behalf. That will be extremely damaging for everyone in this country.
Baroness Finlay of Llandaff (CB) [V]
My Lords, among the historic speeches today, including superb maiden speeches, I venture to address Part 1, on the application of market access principles to goods and public health. The Government say that this part of the Bill is necessary to ensure that no new barriers to trade arise after the end of EU transition, but how might such barriers arise given that, on 1 January, the whole UK will be governed by retained EU law? The current legal frameworks which limit but do not eliminate the rights of the devolved institutions to implement progressive policies in areas such as food safety or labelling will still be in place, but I expect that the Government will warn that barriers could arise from new policy initiatives from the devolved Governments. That is why they propose automatic application of market access, meaning that any goods which can be legally sold in one nation must automatically be offered for sale across the whole UK. What does this mean in practice? If, for example, the Welsh Government wish to change food labelling to improve warnings on sugar or fat content, or want to ban sugary fizzy drinks, they could in theory still do so, but the law would be wholly ineffective because products legally made in, or imported into, England and which did not comply could be freely sold in Cardiff and Caernarfon. This would neuter the ability of the elected legislatures in Cardiff, Edinburgh and Belfast to act within their devolved competences.
There is no imminent threat which renders this measure necessary. For the past three years, all four Governments have worked to create common frameworks in those areas which the Government here in Westminster identified as requiring limits on the extent to which any one part of the UK could diverge from the standards that we will inherit through retained EU laws. Quietly, and without any publicity in this House, good progress has been made on developing these voluntary frameworks, which will bind all Governments by each forswearing the right to diverge too greatly. A great deal of work has been undertaken by the committee chaired by the noble Baroness, Lady Andrews, and was reported to the House on 24 September. Now, this Bill renders all that work superfluous.
The Government, representing the overwhelming share of the UK economy, are reneging on their commitment to the agreed frameworks. They can do whatever they want and whatever they agree in a trade deal without consulting the devolved Administrations. The Bill stops the devolved Governments adopting more progressive policies. It suddenly changes the rules of the game from those agreed and seems to tear up the common frameworks approach that the devolved Administrations have supported. Amendments in my name would protect these negotiated common frameworks and ensure that market access principles were used only when all efforts to agree a common framework had failed.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, the noble Baroness, Lady Gardner of Parkes, has withdrawn from the debate, so I call the next speaker, the noble Baroness, Lady Crawley.
Baroness Crawley (Lab) [V]
My Lords, I welcome the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz, and commend their excellent contributions today.
This Bill comes to us with a reputation rather like that of the Vikings: dangerous, unloved, little respect for the law and disrespect for the kingdoms of Great Britain—it obviously leaves out pillaging, for which much thanks.
First, I add my voice to the rising chorus against Part 5 of the Bill, which as we know allows parts of the Ireland/Northern Ireland protocol to be disapplied. The protocol, being part of the withdrawal agreement, is an international treaty and trumps—if noble Lords will excuse the expression—domestic law. The noble and learned Lord, Lord Judge, is right: Part 5 must go. But, reply the Government, the EU is acting in bad faith. However, there is no evidence. Show us the evidence. There is no evidence at all for that, states the House of Lords European Union Committee. Are we really no longer a member of the international rules-based order—because I did not get the memo? Perhaps the Bill is the memo.
The Bill allows Ministers to make regulations that are inconsistent with the UK’s obligations under Article 4 of the withdrawal agreement. But, say the Government, we may never use these powers. We will just threaten to break the glass and pull the emergency cord, meanwhile not actually being in breach of the state aid and customs provisions of the Northern Ireland protocol.
Ireland, our nearest and most important trading partner, does not agree. On the Government’s claims that these disapplying provisions are needed as a safety net against the possibility of a no-deal Brexit, the Irish Government have been very clear that the protocol is designed and empowered to operate in all circumstances, including the absence of an agreement on the future relationship between the EU and the UK. The UK Government may disregard the views of the Irish Government, but they may wish to take notice of the House of Lords Constitution and European Union Committees. Their recommendations on this sorry Bill are damning—to say nothing of the views of the Anglican Church.
I make my second and final point as a member of the new House of Lords Common Frameworks Scrutiny Committee. My noble friend Lady Andrews and many other noble Lords made strong arguments that common frameworks are better instruments for creating the new internal market than is the Bill. Indeed, the Government themselves said that common frameworks, and the programme that they imply, would in fact map out the area of the UK internal market. These frameworks, whether on food safety, emissions trading, company law or whatever, have been worked up in partnership with the devolved Administrations. Although they are based on regulatory consistency, they respect the flexibility of the devolved settlements, as did the EU. Could the Minister say why the Government are not putting their energy into these consensual frameworks, rather than this divisive Bill?
Baroness Ludford (LD)
My Lords, I add my congratulations and welcome to the maiden speakers, whom I look forward to getting to know. I sincerely thank our committees, on the constitution, EU affairs and delegated powers, for their expert and powerful reports. Part 5 of the Bill, with its attempt to override an international law commitment, in an agreement the Government themselves signed and then enshrined in domestic law less than a year ago, is breath-taking. The comment by the Secretary of State for Northern Ireland that the Bill breaks international law
“in a specific and limited way”
is destined to go down in history alongside “economical with the truth”.
It was commendable, if regrettable, that the noble and learned Lord, Lord Keen of Elie, felt compelled to resign, as did the Treasury Solicitor Sir Jonathan Jones. I regret that this means we do not have a law officer here to answer the debate. The noble Lord, Lord Wilson of Dinton, pithily summed up the situation in testimony to the Constitution Committee when he said of the Bill that
“the constitutional position is that it is an outrage, and the political position is that it is hugely damaging to our reputation internationally.”
The Constitution Committee concluded that Part 5 clauses
“represent a disregard for the rule of law”.
The Bill is only one aspect of the cavalier attitude of Conservative Governments in the last few years to the law and constitutional convention. Examples include: trying to trigger Article 50 without parliamentary approval; illegal Prorogation; and launching attacks on lawyers as “lefty human rights lawyers”, “activists” and “do-gooders”. Was it a coincidence that a knifeman threatened to kill a solicitor last month?
Then they are grossly under-resourcing the justice system; and “taking back control” not for Parliament but for themselves, through an accumulation of executive power and overuse of statutory instruments, to the extent that the legal commentator for the Financial Times, David Allen Green, called it “government by decree”. He quoted Lord Hewart, a Liberal politician and judge who became Lord Chief Justice and who said, in his 1929 book The New Despotism:
“The strategy is different”—
from the “old despotism” of Charles I—
“but the goal is the same. It is to subordinate Parliament, to evade the Courts, and to render the will or the caprice of the Executive unfettered and supreme.”
It sounds very modern.
The Government’s claim that the Bill is simply an insurance policy or safety net has spectacularly backfired. As our EU Committee observed, it has
“in effect, placed the United Kingdom in the wrong”.
The EU responded accordingly by insisting on tougher enforcement provisions and sending a letter of formal notice—the first step in infringement proceedings. The Irish equality and human rights commissions from north and south, as well as the Anglican Primates, have expressed deep concern that the Irish protocol to the withdrawal agreement might be breached, and the human rights and equality provisions of the Good Friday agreement overridden.
The Bingham Centre for the Rule of Law notes:
“The ideal of Magna Carta—that no one is above the law—is a source of global inspiration”,
and the Bar Council and the Law Society highlight the prejudice to the position of London as a centre for international practice and dispute resolution, and to our attempt to accede to the Lugano Convention.
The 20th anniversary of Human Rights Act has just passed, and it is the 70th anniversary of European Convention on Human Rights in a few weeks. It was a Conservative lawyer and politician, Sir David Maxwell Fyfe, as he then was, who was largely instrumental in drafting the ECHR. It is shameful not only that the modern Conservative Party is weakening its commitment to the convention and the HRA, but that our Prime Minister had to be forced by the EU, in order to protect security ties, to pledge not to “materially alter the spirit”—whatever that means—of the Human Rights Act. This was billed as a “compromise” by Mr Johnson.
Part 5 of this Bill is a disgrace. The noble Lord, Lord Howard, was quite right to say that Parliament should fix this Bill and not leave it to the courts; hence the amendment in the name of the noble and learned Lord, Lord Judge, should be supported.
Lord Jay of Ewelme (CB) [V]
My Lords, there is much in the Internal Market Bill that I am happy to support, but I have two reservations. The first is devolution. Bringing back for settlement within the United Kingdom questions which have for a generation been settled at the level of the EU was always going to be difficult. This is particularly so if, as I suspect, the United Kingdom is moving in the direction of a federal state—one of the great ironies of Brexit. The right way forward must surely depend on genuine consultation and negotiation among all four countries of the union, as has been happening over common frameworks. The Bill seems to be putting all this unnecessarily—and, indeed, dangerously—at risk, for reasons I simply do not understand. So I look forward to the noble Lord, Lord True, explaining why tomorrow.
My second reservation relates to Part 5 of the Bill. I have read the reports of the EU Committee and the Constitution Committee, and the Bingham Centre’s analysis of the Bill, and I agree with every word of the letter from the most reverend Primate the Archbishop of Canterbury and his colleagues. It is clear that Clauses 44, 45 and 47 would constitute a breach of international law and, as the Bingham Centre’s report makes clear:
“A breach of the rule of international law is still a breach of the Rule of Law.”
These clauses go against all that the United Kingdom has stood for, nationally and internationally, for as long as I can remember. How can we persuade other countries to observe the rule of law if we are willing to break it ourselves? These clauses not only contribute nothing to the Brexit negotiations—indeed, it seems to me, rather the reverse—but reduce the future effectiveness of global Britain. They must be removed from the draft Bill; meanwhile, I will be glad to support the Motion in the name of my noble and learned friend Lord Judge tomorrow.
Baroness Stroud (Con)
My Lords, I begin by adding my congratulations to the noble Baroness, Lady Hayman, and the noble Lord, Lord Sarfraz, on their maiden speeches. I look forward to hearing further contributions from them both over many years.
The Bill, as we have heard, makes provision for the continuation of the UK’s single market when the transition period ends on 31 December. This single, unified, internal market is a key block in the constitutional foundations of the United Kingdom. It is my understanding that the 1707 Articles of Union between England and Scotland, and those between Great Britain and Ireland in 1800, abolished all customs duties between the different parts of the United Kingdom. Accordingly, free and uninterrupted commerce across all parts of the newly united kingdom were seen as one of the most important advantages of the Act of Union, particularly in Scotland and Ireland, the citizens of which could freely trade into and out of the larger English market.
When Ireland was partitioned and the separate Parliament of Northern Ireland was established, the Westminster Parliament was careful to ensure Northern Ireland and Great Britain should continue to remain a single, integrated, internal market. The devolved legislatures in Scotland and Wales were created after the UK had joined the European community. Because the EU single market rules on state aid and free movement of goods and services apply to regional governments and legislatures as well as the central governments of member states, there was no need, during our EU membership, for specific UK-based rules maintaining the UK internal market against fragmentation. Now that we are approaching the end of the transition period, a vehicle is needed to maintain the free flow of trade across the nation in the post-Brexit world.
As we are all aware, though, there are two clauses in particular that will be subject to much debate and have already been subject to much debate during the passage of this Bill. These would allow the Government to restrict the so-called direct effect of two parts of the Northern Ireland protocol, which is part of the EU withdrawal agreement. These clauses have the goals of protecting the basic functioning of the United Kingdom’s internal market, as it operates between Great Britain and Northern Ireland in the event that it is not possible to reach an agreement with the EU on the UK’s future relationship with it; and allowing state aid in Great Britain to be dispensed under a framework of rules devised in this country, rather than being subject to European Commission control and European Court of Justice jurisdiction.
During the passage of this Bill, it is my intention to focus on and scrutinise, first, the degree to which, under the UK’s constitutional law, international treaties in general do not form part of the law. It is my understanding that, when an international treaty has made it necessary to make changes to the UK’s internal law in order to comply with it, the general practice has been for Parliament to pass legislation to make any necessary changes to the law. Secondly, I want to focus on the degree to which the jurisdiction clauses represent a gross departure from normal international treaty practice, under which sovereign states simply do not accept binding rulings by the courts of the other treaty party and agree only to subject themselves to mutual international courts or tribunals. Thirdly, I shall look at the degree to which, as a matter of UK constitutional law, the UK Parliament is entitled to legislate to remove direct effect from part of, or, if it so chose, the whole of, an international treaty.
I look forward to engaging in the debate on this Bill and hope that, in doing so, we can find a way through that addresses the challenge this Bill seeks to address and remember that having UK law subordinated to EU law and ECJ rulings was one of the main drivers leading to the British people’s decision to leave the EU.
Lord Trevethin and Oaksey (CB) [V]
My Lords, while listening to the many powerful speeches condemning part 5 of this Bill, I have wondered how the arguments in favour of these controversial provisions might be best presented. First, the phrase “breach of international law” is a loose expression, and the Minister in the Commons might well wish now that he had not used it. What is being contemplated here is better defined as a breach of an obligation arising under an international treaty, which is a better way in which to define the matter. This is a familiar contractual problem of quite a familiar sort: one party to the agreement wants to tear up certain provisions that it does not like.
Secondly, it is probably accurate to say that the contemplated breach is potential, not actual. The Constitution Committee concluded in paragraph 152 of its report that this is an open question. The actual breach may occur only if the power to disapply parts of the Northern Ireland protocol is exercised. Therefore, it can be argued that there is no current breach of a treaty obligation, only something rather less objectionable: the equivalent of a solicitor’s letter saying: “We intend to continue negotiating in good faith, but you need to know that we reserve all rights and, in particular, the right—if we have it—to tear up parts of the present agreement that we do not like, if it seems to us necessary to do so”. This is close to being what English lawyers call a “repudiatory and anticipatory breach of contract”, but it is probably on just the right side of the line.
Thirdly, Article 184 of the agreement requires both parties to use their best endeavours, acting in good faith, to negotiate the agreements referred to in the political declaration. That obligation should be read as being informed by the recitals to the Irish protocol. These repay careful reading. In particular, the parties affirm that the Good Friday agreement
“should be protected in all its parts”.
There is ample scope for argument on what may follow from that. It may be argued, as the Government have already argued, albeit faintly and without particulars, that the EU has in various ways itself been in breach of this good faith obligation. Reserving the right to disapply certain provisions of the agreement at some future point is not properly characterised as an outrageous and unlawful threat to renege. It is something different— namely, making it clear that, if the EU persists in conduct which the UK regards as a breach of Article 184, the UK reserves its right to treat the agreement, or part of it, as terminated or suspended. That, it may be argued, is a right that exists under Article 60 of the Vienna convention, which provides that a material breach of a bilateral treaty entitles the innocent party to terminate the treaty or treat it as suspended, in whole or in part.
Fourthly, to move away from the law of contract, it might be said that dealings between the EU and the UK over the last four years have shown very clearly, that in zero-sum adversarial contractual negotiations, it is sometimes necessary to play with a hard ball. The speech made by the noble Lord, Lord Skidelsky, displayed hard-headed pragmatism which Mr Keynes surely would have admired. The noble Lord correctly observed that the most complex treaties involve constructive ambiguity and, often, a degree of what might be called “covert bad faith”.
Those are the arguments. I do not suppose that I have persuaded the noble and learned Lords, Lord Judge and Lord Brown of Eaton-under-Heywood, with whose speeches I agree, and I have not come close even to persuading myself that Part 5 of the Bill is defensible. Clause 47 is an astonishing provision. In that respect, I listened with dismay to the Lord Chancellor’s recent answers to questions put to him by the noble Lord, Lord Pannick. The Government seem to be largely ignoring the details of exhaustive dispute resolution provisions in the agreement—in particular, in Article 168 —which makes it mandatory to use them. Theyhave not done much more than faintly to sketch a case that the EU has acted in bad faith; if they want to rely on that, they should set it out in detail. This is a very wobbly position from which to launch a case that the counterparty is acting in bad faith. In the absence of such a case, there is no legal justification for threatening to tear up part of the agreement. Accordingly, I regret Part 5 of the Bill, and add that, while this House must act in accordance with its perception of what the rule of law requires, it should also bear in mind the admonition of the noble Lord, Lord Skidelsky, that we risk weakening the hand of our negotiators.
Viscount Trenchard (Con) [V]
My Lords, I too would like to congratulate the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz on their excellent maiden speeches. I congratulate my noble friend the Minister on introducing this Bill under fire, so to speak. It builds upon the common frameworks approach to which the UK Government and the devolved authorities are sensibly committed in order to preserve the status quo of intra-UK free trade.
At the time of devolution for Scotland in 1997 and Wales in 1999, the United Kingdom Parliament was free only to devolve those parts of legislative competence that it, as a member state, still retained. High-level principles and frameworks in many areas had already been transferred by the member states to the union. The Scottish and Welsh Governments are now disingenuously arguing that responsibility for these high-level principles and frameworks should be transferred from Brussels to Edinburgh and Cardiff. Does my noble friend agree with the arguments advanced by Nick Timothy in his article in today’s Daily Telegraph entitled “Devolution is a Mess That Fails the Public and Endangers the Union”?
As I am not a lawyer, I should not presume to enter into discussion of the finer legal points. However, I would ask my noble friend if he agrees that the EU and the UK had already broken international law when they signed the withdrawal agreement in October 2019 because it was a breach of the conditions of the Lisbon treaty. According to the website of the European Union, Article 50 provides for the negotiation of a withdrawal agreement between the EU and the withdrawing state, defining in particular the latter’s future relationship with the union. The wording of the article itself refers to negotiation with the withdrawing state, taking account of the framework for its future relationship with the union. However, that did not happen.
I do not think for one moment that the UK’s international reputation as a country that upholds the rule of law is placed at risk by this Bill. I believe the conclusion of the Bingham Centre—that this Bill has serious implications for the rule of law—is based on a narrow legal interpretation of the facts, ignoring the refusal of the EU to negotiate Article 50 and our withdrawal in accordance with the treaty provisions. Our acquiescence to the EU’s demands for the two-stage negotiation was surely predictably going to lead to the present impasse. The world knows that the UK is still negotiating to leave the EU. To suggest that our trade partners will be shocked or surprised by this turn of events is not true. Indeed, the Prime Minister has always been clear and consistent that we want a Canada-style trade agreement and that we will not agree to an internal border between Great Britain and Northern Ireland, dividing the United Kingdom customs territory in two.
I have the highest regard for the noble and learned Lord, Lord Judge, but I would ask him if he knows why the EU and the learned lawyers of the Bingham Centre have remained silent and expressed no outrage at the finding of the German constitutional court that the ECJ exceeded its powers in its recent approval of the ECB’s public sector purchasing programme. I would also ask him if he thinks that Lord Diplock was right in 1964 in defending the sovereign right of the Crown to change its policy. The Crown needs the flexibility to use its sovereign rights as much as ever today, which should help it reach an 11th-hour agreement with the EU in the interests of all our citizens.
Lord Faulkner of Worcester (Lab) [V]
My Lords, this has been a fascinating debate, with many important issues raised with skill and eloquence in all parts of the Chamber, and enhanced by two excellent maiden speeches.
I am a member of the EU Select Committee. The views I express in this debate are of course my own, though I should make it clear that I agree with every conclusion contained in the report which we published last week on Part 5 of the internal market Bill. The report was agreed unanimously, and I pay tribute to the noble Earl, Lord Kinnoull, who chaired our proceedings with skill, distinction and humour.
I also congratulate my noble friend Lady Taylor of Bolton and her colleagues on the Constitution Committee on their report which focuses on devolution arrangements in the UK and the rule of law. Other speakers have dealt with the devastating nature of those issues: the consequences for Britain’s reputation abroad if we appear prepared to ignore the rule of law, the threats to the 1998 Belfast/Good Friday agreement, and the aggravation of the risk that Scotland will leave the United Kingdom.
One concern which has not received much attention in this debate, except, I think, from the noble Baroness, Lady Finlay of Llandaff, is the threat posed to public health. Public health is a devolved responsibility, and the individual nations of the UK have different populations and different priorities. Scotland, for example, pioneered minimum unit pricing for alcohol and England led the way on prohibiting tobacco displays in shops. However, the narrow drafting of this Bill substantially undermines the ability of all parts of the UK to innovate and improve public health policy. This is because of the very limited exceptions for public health. Furthermore, the current exclusions, including the list of legitimate aims that override non-discrimination, can be removed or weakened by statutory regulation. In my view, the Bill must be amended to allow the Governments of the four UK nations to protect the health of their populations. Protecting human health must be included as a legitimate aim for overriding all market access rules. I shall be supporting amendments to this effect in Committee.
In my last few moments, I want to make a couple of other points. First, I want to emphasise that this is not a rerun of earlier Brexit debates. If anyone is in any doubt about that, one need listen only to the powerful speech by the noble Lord, Lord Howard of Lympne, earlier today. And this is despite the intemperate attack by some Conservative MPs on the most reverend Primate and his fellow archbishops for daring to have a letter published in the Financial Times today.
The second point concerns the role of your Lordships’ House. The work of our committees—the Constitution Committee, the European Union Select Committee and the Delegated Powers Committee—has been outstanding and has hugely informed today’s debate. If your Lordships believe that Part 5 should not be included in the Bill, we should not be afraid to say so when we vote on the amendment of the noble and learned Lord, Lord Judge, tomorrow, and when we consider the Bill line by line in Committee. However, if Part 5 survives, I hope your Lordships will look closely at new Clause 56. It provides for the House of Commons to have to approve a resolution before Ministers can use the powers in Part 5 but it is silent about any role in your Lordships’ House. That is something I hope we can address as well.
Lord Hay of Ballyore (DUP) [V]
My Lords, as a proud advocate for our great union of nations, I will never shy from expounding the benefits of belonging to, and strengthening, the deep ties and bonds across the United Kingdom. In an Ulster-specific context, we must continue to do all we can to work across all sectors to ensure that Northern Ireland plays its full part in the long-term future growth of these islands. Working together does not always mean agreeing on every issue; focusing on the general work in hand means working together even if you disagree on certain issues.
As we look to the matter before us this evening, we should remember how far Northern Ireland has come and should be reminded of the lives lost and of families who have fewer seats at their tables today. As we acknowledge this, and reflect on historical differences, we should let the reign of peace and prosperity over the last two decades be an important guide looking forward.
Turning to the specifics before us, the Bill allows the United Kingdom to prosper together, and importantly goes some way toward protecting businesses in Northern Ireland in all eventualities. The Bill makes certain provisions for the regrettable flawed scenario in which parts of the withdrawal agreement would create potential barriers to internal trade. It is for that reason, above all else, that I support the Bill before your Lordships’ House today.
Presently, the EU can inflict significant economic damage on the people of Northern Ireland if a deal is not achieved. My party colleagues in the other place tabled amendments that sought to protect Northern Ireland still further. This Bill is therefore a necessary insurance policy at this stage, although it perhaps does not yet go far enough. Concern still exists for example about the Bill’s exclusion of Northern Ireland from protection against EU interference in state aid. It would be wholly unfair if business owners in Northern Ireland were unable to avail themselves of the same assistance available to similar companies elsewhere in Britain.
I support the general principles of the Bill, as it is aimed at preventing any fundamental undercutting of the union, which would damage business, create uncertainty, and dampen prosperity. There should be no question of further hurdles being introduced that would be barriers between parts of the United Kingdom. Regardless of the eventual free trade deal with the EU, there is a need for a sensible and mature approach to Northern Ireland. Regrettably, in some respects, that approach has been missing to date.
Key to all this is Northern Ireland’s economic reliance on the United Kingdom market, as total trade to Great Britain is significantly greater than trade to the EU. It is the duty of government and political representatives to put the interests of the people of the United Kingdom first. That means leaving the EU fully, securing our sovereignty, controlling our borders, and protecting the integrity of the United Kingdom internal market and our union.
In conclusion, we need to work collaboratively to ensure that the whole of the United Kingdom benefits equally from the various trade deals, economic opportunities and further prosperity that will come from being a free and independent nation state. We have to remain focused on ensuring that our exit from the European Union is a launchpad for a stronger, more determined and more united Britain.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to have the opportunity to participate in this debate. I warmly congratulate the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz, on their excellent maiden speeches, and I bid them a very warm welcome to the House.
My noble friend Lord Callanan set out the reasons why, in his view, the Bill is necessary, in particular to extend market access of goods, services, professional qualifications and other aspects, and to create a coherent internal market now that we have left the European Union. There were always going to be complex questions arising following Brexit, including what happens to the powers that are returned to the United Kingdom, and how those powers are exercised by the Parliament at Westminster and by the devolved Administrations. I pay tribute to the work of both the Government and the devolved Administrations through the common frameworks. This has been an example of excellent co-operation and achievement in reducing to just 16 or 18 issues that will require further legislation.
One area that has not been referred to a great deal during this debate is how agriculture will be dealt with following the adoption of the Bill in its present form. Scotland has a separate agricultural policy that is much the envy of North Yorkshire, Cumbria, Northumberland and other farmers in the border regions. It gives rise to the question of how those policies will be administered now through the common frameworks.
I follow what a number of other noble Lords said earlier, particularly the noble Baronesses, Lady Andrews and Lady Finlay of Llandaff, and the noble and learned Lord, Lord Hope of Craighead, in asking the Minister specific questions. What is the situation now, and where does the Bill leave the common frameworks? Is it intended that work will continue to proceed on the achievements that have been made to date on those frameworks?
I really have no quarrel with what the noble and learned Lord, Lord Judge, set out in moving his amendment, nor with my noble friend Lord Cormack. I also found myself in absolute agreement with my noble friends Lord Howard and Lord Lamont. What I regret most about the Bill in its present form—not just Part 5, to which many have referred, but Parts 1 to 4, although Part 5 in particular—is the fact that the Government are increasingly standing alone internationally and domestically, claiming that they alone are right and everyone else is wrong. There are 27 member states in the EU and they have reached, and maintain, a common negotiating position. It is a matter of note, and it is to be welcomed, that there is a change in that negotiating position announced by the EU today.
The Bill in its present form shows how we risk forming barriers and disagreements with the devolved Assemblies, which will be hoping to work as closely as possible with the Parliament at Westminster. As my noble friend Lord Vaizey has said, there is time, and hopefully scope, to retrieve this situation. I wish the passage of the Bill well, but in heavily amended form before its adoption.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I, too, welcome our maiden speakers.
Like many noble Lords, I find that the conclusions of the Constitution Committee, the European Union Committee and the DPRRC chime with my own concerns about the Bill. I concur with the many magnificent speeches today, led by the noble and learned Lord, Lord Judge, about the rule of law. My humble offering is that the Government have made their bed, must lie in it and must use internationally respected ways to work with it to best advantage.
Regrettably, the theme throughout the Bill seems not to be about working with things but a rush to legislate around primitive principles, lacking the refinements of consultation, consent or even continuity concerning devolution. Really, the question is why. The Bill seems designed to upset. Is it part of the “revolution by disruption” plan, or was it thought that boxes needed ticking right now?
The UK internal market must be taken seriously, but why is there not time to stand still and work intergovernmentally and then legislate where needed, without recourse to Henry VIII clauses to make up for not yet really knowing what to do? The powers in the Bill are a land grab, taking the soul, if not the territory, of the devolved nations as well as sidelining Parliament, allowing anything to be changed by regulation.
I want to make points about the CMA and whether it is the right body and construction to be the embryonic unelected guardian of the single market. Paragraph 35 of the Constitution Committee’s report says it all. Why choose the CMA? Why not establish a properly independent body representing all four nations? Further, the input tenets in the EU lookalike texts of mutual recognition and non-discrimination have neither been agreed by all nations, via the frameworks or otherwise, nor maintain the degree of flexibility and subsidiarity that already exists in the UK.
The CMA itself is sponsored by a Government ministry and all the appointments are still governed by the Secretary of State—despite, for the OIM side, after consulting the devolved authorities. But this is a serious question: why the hermetically sealed and secretive CMA inquiry panel process? I understand it for matters of competition where commercially confidential information is considered and policy is well developed, but for the internal market it will be a matter of public interest and constitutional development. That surely should not be secretive. It will not be simply technical analysis. That leads to overbearing harmonisation; how often have we fought the EU over that?
Analysing the UK internal market must encompass subsidiarity and degree, at least once that has been properly agreed. Does the CMA have that expertise? Surely the evidence, procedures and reasoning need to be seen and, if I may say so, be robust enough to withstand public scrutiny. The Minister has already twice referenced the support of what are, in the end, relatively few of the total of UK businesses. Even within the unsuitable structure, unsuitably appointed, a minimum task group of three is too small and exclusive. Why should it be potentially smaller than the minimum number of judges sitting in the Supreme Court? Are panellists so superior? For such a constitutionally important matter, this all needs a rework.
Baroness Scott of Bybrook (Con)
I remind everybody that there is a four-minute advisory time. We are getting quite late and there are still rather a lot of speakers to come.
Lord Anderson of Ipswich (CB) [V]
My Lords, shortly after the Singing Revolution restored democracy to Estonia, its legal profession welcomed a British delegation to Tallinn’s largest law firm. At the centre of its new partners’ table was a brass disc, proudly engraved with the words “pacta sunt servanda”. As a newly independent nation, our hosts knew the importance of ensuring that promises are honoured, whether in commercial agreements or international treaties.
The precise meaning of such promises is often disputed, but Part 5 of this Bill is no inadvertent or merely arguable breach of some vague or trivial international undertaking. Its whole purpose is to signal to our negotiating partners a kind of anarchic disdain: disdain for this Government’s recent, specific and binding commitments on export declarations and state aid, and disdain for the very principle—fundamental to our status in the world—that treaties must be observed. With respect to the noble Lord, Lord Lilley, the Kadi case in which I appeared against the EU is no sort of precedent for a similar attitude on the part of the EU or its court. In that very case, the Court of Justice of the European Union affirmed its long-standing insistence that
“the European Community must respect international law in the exercise of its powers.”
The Secretary of State for Northern Ireland and a unanimous Constitution Committee have expressed the view that the Bill itself is in breach of the withdrawal agreement, or will be by the time it is entered into force. I agree, although perhaps it matters little since whether it is unlawful itself, the whole point of Part 5 is, on any view, to enable unlawfulness.
Then there are the judges: Francis Bacon’s “lions under the throne”. Here too, the Bill is deeply troubling. It not only authorises the Government to act unlawfully but deems such unlawful actions to be lawful. The lions are still on show, but they are comprehensively defanged by successive subsections of Clause 47. Deprived of their usual power to strike down unlawful regulations, they might as well be mounted on the wall.
Imagine, if we can, that the EU were to renege on the guarantees that it gave to British citizens in the withdrawal agreement. There would be justified accusations of perfidy and duplicity, yet it is, I am afraid, precisely such duplicity that we are asked to facilitate today. Can the strategic damage to our reputation as a trustworthy international partner be mitigated by any tactical advantage in the negotiations? Rather the reverse, I suspect, as the noble Lord, Lord Jay, suggested with all his diplomatic experience. Showing contempt for our existing agreement with the EU will hardly encourage it to sign a new one. More likely it will enhance the unity of the 27, at just the time when we should be testing it, and its determination not to give us the benefit of any doubt.
The Bill seeks to make Parliament complicit in a scheme that openly flouts two foundational principles: that agreements, once made, should be kept, and that government is not above the law. How could we possibly go along with that?
This is not a House of opposition, as the noble Lord, Lord Cavendish, rightly reminded us; but it is a guardian of constitutional principle and, as such, it needs to send a strong and clear signal. For my part, I look forward to supporting the amendment of the noble and learned Lord, Lord Judge, to voting at the earliest feasible opportunity not for some messy compromise but for the simple removal of Clauses 44, 45 and 47, and, like my noble friends Lord Butler and Lord Lisvane, to strapping in, if necessary, for a bumpy ride.
Lord Bowness (Con) [V]
My Lords, it is a little daunting to follow the learned speech of the noble Lord, Lord Anderson of Ipswich, and the excellent maiden speeches that we have heard this evening. However, Brexit is a phantom that still haunts and divides us, and the major issues in the Bill, whether the stated intention to flout a freely entered-into withdrawal agreement or the potential disputes around the devolution settlements as affected by the Bill, are a manifestation of that divide.
I put it to your Lordships, with some regret, that the fault for that rests fairly and squarely on the Prime Minister and his cohorts of hard-line Brexiteers. He said that the divide should be healed, but nothing has been done to bring those of a different point of view close. Most of those who voted remain are ready to accept the realities of leaving the European Union but wanted a closer collaborative settlement. There has been no attempt to accommodate those views. We rejected the single market, the customs union, the Norway option, membership of agencies such as the European Aviation Safety Agency, and all the matters that benefit citizens—mutual recognition of drivers’ licences, blue badges and the European health insurance card, which are currently in limbo. But fear not: we have a blue passport.
The Prime Minister told us that he had achieved an oven-ready deal. He crowed about it and fought an election on its basis. The electorate were, it seems, sold a gold brick because, as it turns out, much of the political declaration that accompanied the oven-ready agreement has been abandoned, if not rejected. There is no more talk of the
“ambitious, broad, deep and flexible partnership”
and more, or of the level playing field.
Now, the famous agreement—signed by the Prime Minister and approved by this Parliament—is considered defective, and this Bill seeks power to flout international law and amend the agreement to make it acceptable to the leader of the Brexit legion. The enormity of what the Government want to do has been more than adequately expressed by other noble Lords of both remainer and Brexit tendencies. To produce a measure considered constitutionally and legally appalling certainly unites both sides, but not in a way that one would have hoped.
It is convenient to blame the European Union for the current situation but whatever difficulties we face in the negotiations, we are the ones who decided to leave. We have a very integrated market with the European Union, we are 22 miles from mainland Europe and we have been part of the system for more than 40 years. It is unrealistic to expect that the European Union will treat us as just another third country. Now, we have the spectacle of the Government almost rejoicing at the prospect of no deal. We shall be like Australia, which has such good arrangements that it is seeking a free trade agreement with the European Union. We want a Canada free trade agreement, but not just the Canada deal—we want Canada-plus, because we believe that we are in some way entitled.
We refused an extension of the transition—pointless bravado. Now we do not want to continue talking, even when the EU negotiators are ready to come here—more bravado. Small wonder that the EU has reacted to the Bill with a determination to stand by what has been freely agreed and signed by this Prime Minister. We should drop the provisions in the Bill which seek to undermine and change the withdrawal agreement.
I will vote for the amendment of the noble and learned Lord, Lord Judge, and vote for any amendments presented during the passage of the Bill which seek to amend the offending provisions. In considering how far we should press our objections, we need to revisit the Prevention of Terrorism Act 2005, when Conservatives and others maintained our objections for five rounds of ping-pong. We must not acquiesce in recreating our reputation as perfidious Albion.
Baroness Clark of Kilwinning (Lab)
I am pleased to join others in welcoming the noble Baroness, Lady Hayman of Ullock, whom I have known for a number of years, and the noble Lord, Lord Sarfraz, whom I met this evening, on their maiden speeches. I hope they enjoy their time in this place.
We have had a number of powerful speeches focusing on various technical features of the devolution aspects of this legislation, but I am not going to focus on specific provisions on whether it will still be possible for the devolved institutions to regulate on issues such as single-use plastic, or indeed on the state aid provisions. I am going to focus on the politics of the situation, and I do that as a former Labour MP in Scotland and as someone who was heavily involved in the independence issue in the lead-up to the 2014 referendum. The constitutional debate in Scotland completely dominated Scottish politics, both during the lead-up to that two-and-a-half-year-long referendum and increasingly as the referendum went on. Indeed, the issue has not gone away, and it is still centre stage in Scottish politics.
As the House is aware, the Scottish Parliament voted 90 to 28 against giving legislative consent to this Bill, and it was suggested earlier on that that was the SNP. I want to make it absolutely clear to this House that the only Members of the Scottish Parliament who voted in favour of giving legislative consent were the Conservative Members. Every other political party and every other MSP voted against giving legislative consent.
The Government will no doubt say again when they sum up—as they did at the beginning of this debate—that further powers are being devolved as part of the changes taking place, and that some of the powers coming back from Europe will be devolved to the devolved institutions. I respectfully say that that is not really the point; the issue is that certain powers are being eroded without consent, and certain powers of the devolved institutions are being eroded when the direction of travel should be transferring powers to those institutions. I was really interested in listening to the speech of the noble and learned Lord, Lord Hope of Craighead, who considered whether it was a power grab or not.
It is absolutely clear that in Scotland in particular—and I will focus on Scotland, because that is my background—there is a genuine view that this legislation undermines the devolution settlement. The backdrop is that, since the 1950s, a significant divergence has taken place in the political views and voting of people in Scotland from those south of the border. To put it simply, Scotland has tended to vote for social democratic-type politics, while nationally we have had few Labour Governments elected in that period. Those political differences, and the differences in voting habits, have had a major impact in Scotland over many decades. It has thrust the constitutional debate into the centre stage of Scottish politics. Most people in Scotland simply believe that decisions affecting Scottish people should be made in Scotland, and they do not think it is fair if they get policies they feel they have not voted for.
It is often said that it was Margaret Thatcher’s Government who delivered devolution. The behaviour of this Government is again having a big impact on the constitutional debate, so I very much hope that they think again.
Baroness D'Souza (CB) [V]
My Lords, the Bill is littered with Henry VIII powers, the Government’s justification being that it allows for speed in decision-making and safeguards trade within the UK, notwithstanding that Parliament has already shown itself to be adept at speed in dealing with the current Covid crisis. The tendency on the part of a Government to extend their powers is a slippery slope; and power, once conceded, cannot easily be won back. It is therefore of great significance that relevant committees—the House of Lords European Union Committee, Delegated Powers and Regulatory Reform Committee and Constitution Committee—have questioned and even strongly advised the deletion of such clauses that empower the Government through secondary legislation.
The Bill goes beyond what is needed to ensure economic and regulatory coherence between the four UK nations, and undermines the purpose of the common frameworks programme, as well as the principles of mutual recognition. The Bill challenges the Sewel convention, as evidenced by the Motion agreed in the Northern Ireland Assembly on 22 September, and the Scottish and Welsh Governments’ stated intentions to withhold consent for the Bill.
The powers that the Government afford themselves are breath-takingly wide, including the non-recognition or enforcement of rights, powers, obligations, restrictions and remedies contained in the withdrawal Act. The Bill allows Ministers to interpret, modify or disapply any of the provisions set out in international and domestic law, defined as any provisions of the European Communities Act, any other EU or retained EU law and
“any other legislation, convention or rule of international or domestic law whatsoever, including any order, judgment or decision of the European Court or of any other court or tribunal”.
The concession to parliamentary approval for the implementation of derogation clauses allowed the Bill to pass in the other place, but the Government have shown their willingness to ride roughshod over an international treaty. Can they therefore not also do the same with this commitment citing, for example, bad faith on the part of the EU to gain parliamentary consent? Legislation, once on the statute book, has a habit of being resuscitated for a purpose other than that originally intended; as such, this so-called safeguard amendment could well become a hostage to fortune.
Meanwhile, statutory instruments are increasingly bolstering skeleton Bills, and both recourse to judicial review and mechanisms to counteract secondary legislation are severely limited. A precedent is being set that challenges the rule of law. Clauses 44, 45 and 47 of the Bill must not reach the statute book. I too will support the amendment in the name of the noble and learned Lord, Lord Judge.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady D’Souza, as I concur with a lot of her views expressed here. I also offer my congratulations and best wishes to the noble Baroness, Lady Hayman, and the noble Lord, Lord Sarfraz, on making their maiden speeches. I look forward to working with them. I will concentrate on Part 5 of the Bill, because I believe that it is totally unnecessary and very damaging. I refer to the bits that deal with trade between Britain and Northern Ireland and the Northern Ireland protocol.
When the Conservative Party jettisoned Theresa May’s proposals and decided that “getting Brexit done” meant leaving the EU customs union, a formal border between the EU and the UK became inevitable. As regards Ireland, this interface could be located only along the north-south border on the island of Ireland or at UK ports, effectively a border in the Irish Sea. In signing the withdrawal agreement and the Northern Ireland protocol, the Government chose the Irish Sea, despite much rhetoric to the contrary. The noble and learned Lord, Lord Clarke of Nottingham, made this point earlier in this debate. In the process, the Government managed to set the nationalist and unionist communities against each other and undermine relations with Dublin by leaving the possibility of a hard border on the island of Ireland on the table for so long—the very issue which the Northern Ireland protocol sought to provide for and ensure did not happen.
Let me be clear that while all Irish nationalists—I am one myself—as well as the EU and others, opposed customs infrastructure on the north-south border and were concerned about the damage it would do to our historic settlement, no nationalists want a hard border in the Irish Sea. I share many of the concerns of my unionist colleagues in Northern Ireland and want to see minimal friction on goods travelling from Britain to Northern Ireland. I also want to see unfettered access to the GB market for Northern Ireland businesses. This should not be a cause of division. No one on the island of Ireland, north or south, wants heavy bureaucracy around trade with Great Britain.
The way to maximise the possibility of this highly desirable outcome is to sign a zero-tariff, comprehensive trade agreement with the EU. This is achievable, and I would like the Minister to comment on it in his winding-up. Instead, we have the internal market Bill, which, under Clauses 44, 45 and 47, proposes to empower UK Ministers to breach their legal obligations under the protocol and which reopens, dangerously, the whole political argument. I am totally opposed to this and I will vote tomorrow for the amendment to the Motion in the name of the noble and learned Lord, Lord Judge.
Baroness Altmann (Con) [V]
I join other noble Lords in congratulating the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz on their maiden speeches, and I warmly welcome them to this House.
On the Bill before the House, I wholeheartedly support the amendment to the Motion in the name of the noble and learned Lord, Lord Judge, for all the reasons that he so admirably and eloquently laid out, and that in the name of my noble friend Lord Cormack. I share the deep regrets expressed by my noble friend Lord Bridges and agree with all the remarks of my noble and learned friend Lord Clarke.
The damning reports of three House of Lords Select Committees, and the exceptionally clear explanation presented to the House by my noble friend Lord Barwell, are clear indications of why it is our duty to ensure that the Bill, particularly Part 5, does not pass through this House. I cannot, in all good conscience, support the measures in the Bill, particularly Part 5 but much else, too. I am afraid that I will have to vote, on every occasion, against the Government’s intention to break international law. I congratulate the most reverend Primate the Archbishop of Canterbury on his brave intervention, and I join other noble Lords in warning about the potential of the Bill, as presented to this House, to pave the way to authoritarian rule.
Principle must come before party, and this is the moment of truth when we must face up to the consequences of seeking to have the same rules within the four countries of the UK while pretending that these rules can somehow differ from those of the EU, particularly Ireland, without erecting borders either in the Irish Sea or on the island of Ireland. Should those mythical alternative arrangements to do away with the need for such borders materialise—arrangements that were promised to us a year or two ago—that would have been fine, but in their absence we must ensure that the Bill does not pass through this House as presented to us today.
Lord Shipley (LD) [V]
My Lords, the Bill will represent a further stage in the eventual break-up of the United Kingdom should it proceed unamended. It centralises power away from the devolved Administrations, gives excessive powers to Ministers, and undermines the rule of law.
In the Minister’s opening address, in which he justified the Bill, he said that the Government wanted a coherent internal market in the UK, with control of subsidies and fair competition. This approach sits oddly with this Government’s negotiating position with the EU, where we are leaving a coherent internal market seemingly to do the opposite with regard to subsidies and fair competition, and, in the process, to override the devolution settlement.
The Minister referred to a huge transfer of powers from the EU to the devolved nations following Brexit. He neglected to say that under this Bill the devolved nations would lose some crucial powers. It is little surprise that the devolved nations have reacted as they have.
In the face of the coronavirus pandemic it has been beneficial to have the devolved Administrations devising and piloting different approaches. We need to encourage new thinking that tests potential solutions, not stifle it on the basis that Whitehall knows best. As an example, the Welsh Government are proposing a ban on the sale of nine single-use plastic products, while the UK Government are proposing to ban only three. This Bill would mean that in Wales the six other products could still be sold, because they have been made in England, Scotland or Northern Ireland. We would therefore have lower environmental standards—levelling down, not up.
The Bill should include derogations that limit the primacy of mutual recognition for matters of environmental protection. In 2011, Wales led the way in introducing a charge on plastic carrier bags. It worked so well that the other parts of the UK followed, and the outcome today is a higher standard of environmental protection for us all. Public health is another area where devolved powers really matter, because they can help to effect positive changes more quickly than centralised structures. We have seen devolved Administrations give the rest of the UK a sense of direction with policies that improve public health. One example is Scotland’s minimum unit pricing for alcohol, as the noble Lord, Lord Faulkner of Worcester, has mentioned. There are other examples. As it stands, however, the Bill could lead to poorer public health outcomes in one country because of the right of market access from others.
There is a solution: the Government could set out a general public health exception to the mutual recognition principle, along with the necessary derogations on matters of environmental protection. However, as the noble Baroness, Lady Finlay of Llandaff, pointed out, these are matters, first, for common frameworks. Market access principles should be considered only when discussions on common frameworks have failed. Even then, the power to introduce derogations would remain essential.
Lord Vaux of Harrowden (CB) [V]
My Lords, I will leave detailed discussion of Part 5 to colleagues, but I will just say that I find the idea of a UK Government knowingly and deliberately breaking the law—to wriggle out of a deal signed less than a year ago—repugnant. It is not something that this House should accept. In the justifiable outrage over Part 5, however, there is a risk that the other flaws of the Bill get lost. As the Constitution Committee has explained so well, it has significant implications for the UK’s devolved structure.
There are three elements that are necessary for the efficient operation of an internal market: rules for market access, a framework for agreeing minimum standards, and a mechanism for resolving disputes. This Bill provides only the first element, the market access rules. If the EU’s single market had worked with only market access rules, it would have allowed, say, Romania to reduce its standards so that its businesses could produce, for export, substandard goods that could be sold freely here. We would not have accepted that as part of the EU, so why would we think it appropriate for our own internal market? I do not often say this, but the Scottish Government are right: this Bill undermines their devolved competencies. This works both ways, and the UK Government should be just as worried about, say, Scotland reducing its standards and selling substandard goods into the rest of the UK. As the Welsh Government pointed out, it incentivises a race to the bottom.
To avoid this, a system for agreeing minimum common standards is essential. We have heard that good progress has been made towards agreeing common frameworks, but the Bill completely ignores them. Indeed, it would undermine them. I would go as far as to say that, if the Bill is not amended to take account of the common frameworks, including the necessary flexibility described by my noble and learned friend Lord Hope of Craighead, it will be more damaging to the UK’s internal market than no Bill. Like the Constitution Committee, I question whether this Bill is really necessary. Perhaps the Minister could explain why the common frameworks have been ignored and how a race to the bottom will be avoided.
The third element required for an internal market to work is a mechanism for dispute resolution. To be acceptable to all parties, any mechanism needs a high degree of independence, all parties should be represented, and it must have the ability to resolve disputes. The Bill creates the Office for the Internal Market, but that is neither independent nor representative. And it cannot actually resolve a dispute: all it can do is issue advice and reports. Does the Minister not see a contradiction in being ready to die in a ditch to prevent the European Court being the arbiter of a trade deal, but not allowing an independent arbiter in our own internal market?
There is general agreement throughout the UK—and I agree with it—on the need for an efficient internal market, but this Bill does not achieve that. We must adopt a more consensual approach between the UK’s constituent parts. After all, there is one overriding requirement for an internal market: the parties must want to be part of it. This Government in particular must know that the heavy-handed imposition of rules from the centre can lead to countries wanting to “take back control”. If the Government want to keep this kingdom of ours united, they would do well to remember that.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, it is an immense pleasure to follow the noble Lord, Lord Vaux, who made some very powerful points. I too pay tribute to the maiden speeches of both the noble Baroness, Lady Hayman, who made some very valuable points on the environment, and my noble friend Lord Sarfraz, who spoke powerfully about entrepreneurship. I also pay tribute to the report of the Constitution Committee, which I found very compelling.
This Bill presents two very real concerns for me. The first relates to the relationship with the devolved Administrations. Over the years, we have made progress in handling devolved relationships. Naturally, it was a little bit raw in the early years, but it has improved noticeably. There is a carefully constructed balancing of interests in the devolved world and we have seen that with the common framework: it exemplified that. I had the opportunity—indeed, the privilege—to see that at first hand: discussion, consultation, and often agreement. This Bill throws all that over, and that is regrettable. It is heavy-handed and pulls rank, and that is unwise. Acting like Goliath with the flexing of muscles is not an approach with much to commend it, particularly given the outcome of that particular engagement. We need consultation and real engagement if we are going to keep our union united.
My second real concern relates, of course, to Part 5. I very much regret the resignation of my noble and learned friend Lord Keen of Elie. I understand the reasons for it, but he is a lawyer of considerable ability and integrity, and of course he went on a point of principle. We should not lose sight of that.
The breaking of international law quite openly and, even when challenged, confirming the breach, is not a pretty sight. It represents a move against a treaty and a protocol that were only recently concluded and, indeed, hailed as a triumph. This Bill goes against a fundamental principle of our law, national character, constitution, history and deeply held principles as a country, taken on with mother’s milk: the upholding of the law. There can be no excuse for it. It is no excuse that we may not use it, that it needs a vote in Parliament or that other countries may breach international law. It is, quite frankly, inexcusable, and our Ministers must in their hearts know that.
Openly breaking international law is not the British way. From Magna Carta onwards, this country has stood for the rule of law, and this Bill should alarm us all greatly. It is not in our national interest for it to pass, as we see the tearing up of this deeply held principle sending a shudder through the reeds at Runnymede. I will certainly be supporting the noble and learned Lord, Lord Judge, and seeking to improve this legislation, which is deeply flawed.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
The noble Lord, Lord Berkeley, and the noble Baroness, Lady Bennett of Manor Castle, have both withdrawn, so I now call the noble Lord, Lord Arbuthnot of Edrom.
Lord Arbuthnot of Edrom (Con)
My Lords, it is a pleasure to follow my noble friend Lord Bourne, with whose words I agree entirely. We have four minutes; I shall try to take no more than one.
In this Bill, the Government invite us to pass a law to break a law. That is not only wrong but patently absurd. If we believe in law, we should not break it. If we do not believe in law, then we should not be passing it. If the Government can break the law, why should the people obey it? If the UK can break the law, why should other countries obey it? So the damage of this Bill will last for the long term. In signing the protocol, we gave our word. Nothing has changed since then and we should keep our word. I shall support the amendment of the noble and learned Lord, Lord Judge, because this Bill brings shame on this country.
Lord Brooke of Alverthorpe (Lab) [V]
My Lords, I congratulate my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, on their great maiden speeches and look forward to hearing them in the future. This has been an extraordinarily long Second Reading and an exceptional one in many respects. However, I think it is worth reflecting on the fact that some of the topics on which there have been the strongest feelings and arguments—for example, Part 5 of the Bill, the opposition to which I fully support—are not actually the topic that is foremost in the minds of the public at the moment. That, of course, is Covid-19 and their health and well-being.
So, like the noble Baroness, Lady Finlay of Llandaff, my noble friend Lord Faulkner of Worcester, and the noble Lord, Lord Shipley—who spoke just a few moments ago—I will focus on what might seem to be a fairly narrow area: protecting the UK’s public health, in so far as this Bill will do so. Will the Bill improve it or not after we leave the EU internal market? Does it provide the framework, to which the noble Lord, Lord Shipley, referred, that will raise standards, or might the existing ones possibly be at risk?
The devolved Administrations’ views are very clear indeed: they fear the balance between market interests and the public health policies they have been pursuing will be at risk and that the Bill could undermine and diminish their ability to enact essential public health legislation for their countries. For example, on alcohol labelling, they pointed out to me that, currently, alcohol labels lack basic information, such as how many calories are in the product or the Chief Medical Officer’s low-risk drinking guidelines—they are not there. In recent years, both the Scottish and Welsh Governments have worked hard at moving forward with significant changes there. The English lead is well behind; we are looking to consult, but we are well behind on most of these issues.
The devolved Administrations say that the drafting of the mutual recognition principle in the Bill, which unlike the current rules allows no general exemption for protecting health, means that Governments within the UK may set higher labelling standards for products originating in their own nations but these standards will not apply to products sold within their borders that come from other parts of the UK or from overseas via another UK nation. Instead, those products must only meet the standard required in the part of the UK in which they originated.
This is just one of the many key public health policies that will be hampered by the Bill. Although the Government have included a public health exemption from non-discrimination, there is no corresponding exemption for the mutual recognition principle. Others have raised this point and I again ask the Minister to explain why it is necessary to water down the public health protections that have existed in our markets up to this point.
Lord Kerr of Kinlochard (CB) [V]
I should say that it is a pleasure to take part in a debate with so many distinguished speakers, such excellent maiden speeches and one informed by three such good reports, but it is not a pleasure because, like the noble Lord, Lord Arbuthnot, I feel that we should not be here debating this Bill; it is a bad Bill. Like the Constitution Committee, I cannot see the need for it, and I cannot support the reopening of the devolution settlement, putting new limits on devolved competence or binning the common frameworks. However, for me, the central issue is stark and shockingly simple: a treaty is a contract binding on the states party to it.
Exactly 12 months ago today, Mr Johnson concluded a treaty. Some of us here said that we found its Irish protocol offensive in principle and likely to prove problematic in practice, but Mr Johnson said that we were wrong; it was fine; indeed, it was fantastic—his triumph. He won his majority and he used it to ensure that this Parliament ratified his treaty. It thus became binding on the country and on all of us, whatever reservations we may have had about it: binding in law and binding in honour—I repeat, honour. That is what this is all about; that is what makes it so shocking that Mr Johnson now asks us to empower him to override his treaty—not to seek to change it, just to choose to break it—and require the courts to ignore it whenever he decides they should.
It is no wonder the head of the Government Legal Service, Sir Jonathan Jones, resigned—I pay tribute to him for doing so. I cannot see how this House could in honour collude in legislating to break a treaty. This is not about frontier checks; it is not about Brexit; it is about honour and reputation. For what purpose are we going to throw all that away? The noble and learned Lord, Lord Clarke of Nottingham, pointed out that Mr Johnson has not told us what arrangements he envisages for the border between the EU single market and our single market. If he overrides the protocol, what will replace it? What will sustain the Good Friday agreement? Why, if Mr Johnson believes that he has grounds for complaint against the EU, does he not use the dispute resolution procedures in the treaty he signed? I refer the House to the nine questions in the letter that the noble Earl, Lord Kinnoull, as chairman of the EU Committee, sent to Mr Gove a month ago—they are at the back of the committee’s report. They remain unanswered; I think that they are unanswerable.
It is hard to avoid the conclusion that what we have here is a simple case of buyer’s remorse. Mr Johnson now dislikes what his treaty said. Just as he chose in the current negotiation to tear up the political declaration that he agreed on this day last year, so he proposes to tear out bits of the treaty. What price honour? He gave his word. Moreover, worse, he gave our word when, at his urging, we ratified his treaty. Ours is the responsibility for saving the national reputation, and in honour we must.
I will vote for the amendment in the name of the noble and learned Lord, Lord Judge, and I trust that we will then move on to remove Part 5 and, if necessary, insist with the noble Lord, Lord Butler, and persevere.
“Perseverance, dear my lord, Keeps honour bright.”
Lord Wallace of Saltaire (LD) [V]
My Lords, some of the language of the Bill brings back distant memories from over 35 years ago. Proponents of free trade and open markets, including Margaret Thatcher as Prime Minister, argued then that the absence of a common framework for regulation across the European Community disadvantaged UK exports to our neighbours. It also meant that British standards usually copied US standards; American regulators exercised what lawyers termed “extraterritorial jurisdiction” over foreign markets such as the UK. For Mrs Thatcher, a European single market would mean that British Ministers could take an active part in negotiating international standards rather than swallowing American ones.
A generation later, in a far more integrated global economy, it has become clear that standards and regulations will emerge from one of three major global players: the United States, China or the European Union. However, our Government are pursuing an antique and absolutist version of Westminster sovereignty, breaking free of the EU. In practice, that means we will end up following either American or European standards on food safety, financial regulation and the internet without much influence on either—losing control, not taking back control.
The doctrine of sovereignty that underlies the Bill was set out by Albert Venn Dicey in his 1885 Introduction to the Study of the Law of the Constitution. Dicey insisted that Westminster sovereignty was supreme and indivisible, internally and externally. Sir William Cash frequently quotes him and the noble and learned Lord, Lord Keen, cited Dicey in this House when challenged about the subject. However, Dicey was writing at the high point of British imperialism when English politicians could assume that Britain shaped international law and other countries had to follow. The Empire has gone, but the mixture of imperial nostalgia and English nationalism that motivates hard-right Conservatives resists negotiating international law with other states. That is disastrous for Britain’s reputation, for London as a global centre for litigation and legal expertise and for our ability to negotiate future trade deals with others, as the noble Lord, Lord Carlile, and others have noted.
Dicey’s approach to domestic sovereignty was shaped by his bitter opposition to Irish home rule. He refused to accept that powers could be shared with a parliament in Dublin. Conservative unionists follow Dicey, insisting that all authority in the UK rests in Westminster. That absolutist view, through opposition to successive proposals for home rule, led to Ireland breaking away from the United Kingdom.
This is a constitutional Bill. It goes to the heart of the rule of law within the UK as well as in relation to other states, and it threatens the further disintegration of our state, with Scotland leaving and Ulster moving towards reunification to leave England diminished and internally divided.
We are now watching right-wing Republicans bend America’s written constitution until it is close to breaking. We have even seen the embittered partisanship of American politics spilling over into this debate in the attack by the noble Baroness, Lady Noakes, on the Bishops who are addressing the moral dimensions of the Bill. We should not allow our increasingly authoritarian Government to bend the conventions of our own unwritten constitution any further.
Baroness Meyer (Con)
My Lords, of course the Government’s Bill has my support. It is sheer common sense. If the EU continues its obstinacy over fisheries and the level playing field, we are unlikely to have in place by the end of the year an agreement on the future relationship. It would be the height of folly not to have an insurance policy against that possibility. That is what the Bill provides—no more, no less. Without such insurance, we could find ourselves in a situation where the EU is able to tell us what we can and cannot do throughout the United Kingdom by way of state aid. That would be to continue to submit to the authority of the European Union and the European Court of Justice. How on earth is that compatible with the decision taken by the British people in 2016, which politicians across the spectrum committed to honour? It would also be in breach of the Act of Union 1800 and the Good Friday agreement.
Our American friends must understand that any threat to the agreement comes not from London but from Brussels. The EU has for four years sought to exploit the Good Friday agreement to its negotiating advantage. To change the terms of trade between Great Britain and Northern Ireland without the explicit consent of the people of Northern Ireland is to violate the Good Friday agreement. Those in Washington and Brussels who profess concern for peace in Northern Ireland would do well to also consider that, without a UK-EU agreement, the only authority that could conceivably want a hard border between the north and the south is the European Commission—to protect what Brussels calls the integrity of the single market. The UK has no intention of erecting a hard border.
The withdrawal agreement and its Northern Ireland protocol do not stand in isolation. They are organically linked to the intended agreement on the future relationship through Article 184 of the withdrawal agreement and the political declaration. As was confirmed by the noble Lord, Lord Pannick, in his letter to the Times of 15 March last year, without such an agreement we would be entitled, under Article 62 of the Vienna convention, to terminate the withdrawal agreement. Article 184 obliges the signatories to negotiate the future relationship in good faith. The EU has failed to show good faith and thus is itself in breach of the withdrawal agreement. There is no other way to describe a negotiating position which, to take one example, insists on the historic pattern of fishing quotas—the common fisheries policy by any other name.
There are two falsehoods here: that the UK is in breach of international law and that the British Government would violate the Good Friday agreement. The reality is precisely the opposite. The internal market Bill seeks to remedy a situation where, thanks to the EU’s bad faith and intransigence, the Good Friday agreement and the British constitution are imperilled. Can the Minister reassure the House that the Government are making an intensive effort to explain to our friends and allies around the world, including and especially the United States, the true state of affairs?
Baroness Greengross (CB) [V]
My Lords, like many of the previous speakers I am genuinely concerned about what is being proposed in this Bill. My main concern—the one I will address—is that the Bill could well undermine areas of medical research and access to new medicines. The Bill might also do considerable harm to the economic prosperity of the country, and it would breach international law—something I never expected to see a UK Government try to do, particularly through legislation.
I am the co-chair of the All-Party Parliamentary Group on Dementia. According to NHS figures, there are 850,000 people living with dementia in the UK, and this figure is set to rise to 1.6 million people by 2040. The Bill increases the likelihood of a no-deal Brexit. In that scenario, access to new drugs and medicines could be delayed by 12 to 24 months, as the UK would no longer be covered by the European Medicines Agency regulations, and instead by a separate UK regulatory system. Also, dementia research that up until now has been carried out collaboratively with researchers and academics in the UK and across Europe could be delayed or undermined if we fail to negotiate a deal with the EU.
I did not support Brexit, but I accept the referendum result. What I cannot accept, however, is that the Government now seek to breach the terms of the withdrawal agreement with the EU only months after they voluntarily agreed to its terms. Britain is a trading nation. One of the things that makes us so successful at this is that we are a nation with a long-standing reputation for respecting the rule of law, including international law. The reputational damage to the UK that Part 5 of the Bill will cause cannot be overstated. A no-deal Brexit, and Britain gaining a global reputation as a nation that does not stick to international agreements, will harm us for many years to come. From an intergenerational fairness perspective, we lawmakers have a duty to do all we can to stop such an outcome, otherwise, we risk reducing the prosperity and well-being of those who will live in this country when we are gone.
There are many who are critical of the House of Lords and do not believe it makes a useful or important contribution to our democracy. With this legislation, we have an opportunity to show the nation the value of the second Chamber. Further, by opposing Part 5 of the Bill, the House of Lords has the opportunity to show the world that the UK is a country that does indeed respect the rule of law.
Lord Shinkwin (Con)
My Lords, imagine this: a foreign power—a trading bloc—is desperate to make an example of a former member state to discourage any others tempted to follow them to freedom. So desperate is this foreign power to protect its empire that since a withdrawal agreement was signed with the former member state, it has issued new threats to the very viability of the former member state’s internal market, and therefore to its future prosperity and security. In short, the empire cannot afford for the break-away member state to succeed. It must be seen to fail. That is the reality this country faces; a reality that I am amazed so many still choose to ignore. Surely when any UK Government realise that the UK is in great danger of being put in a headlock by new threats made since the withdrawal agreement was signed, it is that Government’s duty to counter the new threats through legislation empowering them to act if necessary.
I hear what some of my noble friends have said about Part 5 of the Bill, and I hope they know that, while I may beg to differ, I have the utmost respect for them. However, I fear that other noble Lords’ views remain rooted in a refusal to reconcile themselves with the reality of the referendum result to leave the EU. Nothing, it seems, will extinguish the Euro-federalist dream. But at a time when coronavirus casts such a dark shadow over so much of our lives, neither should we extinguish hope for a better future beyond coronavirus: hope for a return to the growth that will underpin our economic recovery and, with it, the security of the NHS and all that we hold dear.
We should not underestimate how much the Eurocrats stand to lose if the British people are allowed to make a success of their lives after Brexit. Their empire will implode. Brussels can go for broke if it wants to; the United Kingdom must go for growth. Pre-empting a foreign power’s threat to the integrity and viability of our internal market is essential if we want all parts of the UK to benefit from that growth. People will not understand if we fail now to protect them from the very real threat posed to their future well-being and prosperity from a foreign power, the EU, which above all else needs Brexit to be seen to fail. That means poverty, not prosperity. No Government could wish that on their own people. That is why, for the people’s sake, this Bill deserves our support.
Lord Desai (Lab) [V]
My Lords, I will not speak to the legal aspects of the Bill, as I am not a lawyer, and that topic has been well covered. I will simply share with your Lordships my curiosity as to what made the Government try to enact this piece of legislation, which, as many have said, is totally outside the normal character of the constitutional behaviour of the United Kingdom. Some noble Lords have referred to this, but this arises out of historical and contemporary amnesia, which have struck the party in power.
First, let me say that I was a remainer, but I have always respected the decision of the people. However, we should notice one thing, which not many people have realised: that the decision in the referendum was more or less a decision by England, not by the United Kingdom. Of the 34 million votes cast, 18 million were for exit, and 16 million against, and 32 million were cast were cast by the English electorate. The difference in the English electorate, 17 million to 15 million, was exactly the final result margin of 2 million. So Brexit has always been an English decision, not that of the UK. Because the party in power has always been predominately an English party, it has begun to renege on devolution, in which it had no part. It was my party which initiated devolution, during the great Blair Government, and that is now being undermined.
The present party in power, 100 years ago, partitioned Ireland, creating Northern Ireland. At that time, as people may remember, the behaviour of the Conservatives when in opposition against the Liberals, and later when in coalition, almost amounted to subversion of the law, encouraging people in Northern Ireland to defy all manner of laws. Now we have come to a stage when the party in power has almost forgotten Northern Ireland. Boris Johnson inherited this proposition of Brexit, although of course he supported it. But I do not remember anybody at the time of the referendum discussion realising that the geography of the United Kingdom is not just England, Scotland and Wales. There is a region out there, Northern Ireland, which everybody forgot—that because Northern Ireland shares a border with the Republic and because we have signed an international treaty to keep that border open all the time, it was logically and legislatively impossible for Northern Ireland to leave the European Union and also have a free border. The logical and legal impossibility of the separation of Northern Ireland from the Republic of Ireland, while the Republic stayed within the European Union, was not, to my memory, ever discussed.
Lord German (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Desai, because I want to talk about the union—the union of which we are all members. I remind the Government that the union that we now call our United Kingdom is very different from the union that existed prior to our membership of the European Economic Community. We have now had more than 20 years of devolution, and the Bill threatens the union as we know it. Many noble Lords have given examples of how it threatens devolution, and I pay tribute to my noble friend Lord Shipley, who talked about the health implications, and to the noble Baroness, Lady Finlay, who also spoke on this matter. So there are big questions about the union, and they are what I want to address.
First, do we need the Bill now? I do not think we do, because there is no threat to the internal market at the moment. The common frameworks, which are close to agreement, could be used in their draft form, if they are not finally detailed and ready. Common frameworks do not even get a mention in the Bill, yet that work has been going on for two years.
Have the Government put in place appropriate dispute procedures? No, they have not. The Government’s engagement with the devolved Governments has not given an inch on their involvement. Will the Bill weaken devolution in our country? Yes, it will, because it produces override and bypass mechanisms that have the effect of reducing devolved powers. Will the Bill guarantee high regulatory standards? No, it will not, by creating a system that places you at a competitive disadvantage if you follow high standards. Will the Bill promote co-operation and trust between the Governments of the UK? That is an easy one: no, it will not. It will self-evidently not, because of the approach to devolution that the Government have shown. The evidence is that it has managed to bring together three very different democratically elected Governments in their view that it is not the right thing to do.
I will mention a few words on Part 6 of the Bill. That is the add-on part, related to spending. It is not clear how that links to the proposed regulatory structure for the UK internal market, which is the intention of the Bill. Perhaps, in reply, the Minister can say why this section is there at all.
In answer to an Oral Question of mine in your Lordships’ House earlier this year, the Government stated that Wales would receive, pound for pound, what it had previously received from the EU, and that that money would be controlled by the Welsh Government. The question that the Bill documentation does not address is whether the Government still intend to follow the pound-for-pound statement they previously made, and that any money proposed to be spent in devolved areas by this UK Government is in addition to the former EU funds replacement. I must say that the reference to “EU programmes” in the impact assessment says to me that the Welsh Government are set to lose control over these funds.
As it stands, it is very unlikely, almost impossible, to see this Bill having the support of all three devolved Administrations. However, with amendment, there is a very slim chance that it could meet with the agreement of the Welsh Government. I ask the Government to live up to the agreement they made in July 2017 that a UK internal state aid framework needs to be drawn up co-operatively and consensually between the UK Government and the devolved Administrations as equal partners. The Government must avoid actions that could lead to the breakup of this union, but to defend the union, you have to have respect for it, you have to have regard for it, and that is simply not apparent from the way this Government are proceeding at this time.
Baroness Meacher (CB) [V]
My Lords, I will keep my remarks brief and try to avoid duplication—difficult at this time of night. As a member of the Delegated Powers and Regulatory Reform Committee, I must put on record, along with the great majority of the 100 or so speakers today, my deep disquiet that, in proposing the Bill, our Government have shown such disregard both for the international reputation of this country and for one of the most fundamental principles of our democracy: the supremacy of Parliament.
I applaud my noble and learned friend Lord Judge on his very powerful speech. I agree with every word of it and will certainly be supporting his Motion. For the sake of Britain’s standing in the world, I implore the Government to ensure that the Bill never reaches the statute book unless Clauses 44, 45 and 47 are removed, along with most, I would say, of the Henry VIII clauses, which have absolutely not been adequately justified by the Government's memorandum to Parliament on the Bill.
For the sake of the health of our democracy, I trust that the Government will respond positively to the appeal, in a letter to Michael Gove and Jacob Rees-Mogg, from the chairs of the Constitution Committee, the Delegated Powers and Regulatory Reform Committee and the Secondary Legislation Committee. The letter sets out the considerable concerns of the members of all three committees about the truly extraordinary delegation of powers to Ministers in recent Bills, not just this one—although this one, the internal market Bill, is undoubtedly the most extreme and troubling example of this trend.
Finally, I call on the Government to respect the conclusion of the Strathclyde review of the role of the House of Lords in relation to statutory instruments. The review made clear that,
“it would be appropriate for the Government to take steps to ensure that Bills contain an appropriate level of detail and that too much is not left for implementation by statutory instrument.”
Do the Government really want to completely disregard a report commissioned by a recent Conservative Government? I believe that the noble Lord, Lord Strathclyde, would want your Lordships’ House to challenge the exceptionally pervasive use of Henry VIII clauses in the Bill and, indeed, the terrible Clauses 44, 45 and 47, and I very much hope that we can do this on a cross-party basis.
Lord Lea of Crondall (Non-Afl) [V]
My Lords, like many Members I was horrified when I saw this Bill. I was, for many years, on an EU committee on benchmarking, and in those days people had to get used to the idea that if we get best practice in Europe, it is for the good of us all. The slogan we in the trade unions worked out in those days—Jacques Delors and all that—was something like “Europe is the league we are in”. Britain will go nowhere but backwards if we get out, and although we have accepted that there has been a referendum result, we are now going to make the situation far more adverse for our employment and investment prospects. Multinationals said, in a meeting I went to a couple of years ago, that their investment forecasts for Britain were going down even then, and now it is going down very much more than 50% for many industries.
It is so unrealistic to have the idea that we can complain about the 26 countries together wanting to stick with their standards, rather than them saying “Britain wants to change, in a negotiation between equals, so we will change all our standards”. I hear colleagues in this House suggest there is some rational motivation for this Bill, when I can only imagine it was from some late-night conversation in No. 10 Downing Street. That Conservative Party element wants to return to the heyday of Boris Johnson by doing something a bit more dashing, such as tearing up this aspect of the Good Friday agreement because some people have never liked it. Where the Irish question is concerned, the Good Friday agreement has of course been a great contributor to peace. It implies a certain degree of condominium between aspects of life in Northern Ireland and—with dotted lines to them—London and Dublin. If that is the issue lurking behind this it is, historically, such a ludicrous way for the tail to wag the dog.
If we go down this track now, there is a big question about whether we could have third-nation status within the WTO because part of the United Kingdom—Northern Ireland—would need to have one foot in the joint arrangements with Dublin, under the Good Friday agreement, and another foot in the United Kingdom. Therefore, it is hard to think that we would be a normal third nation. Before the lorries queue up at Dover on 31 December, we should start to think how we are going to get away from this ridiculous apotheosis of Boris Johnson’s idea of the world and see what we can do. We need a framework agreement not just for the British Isles but one such as Switzerland has with the European Union, at the least. That is not my ideal, but we cannot simply commit hari-kari in the way we are going.
Lord Flight (Con)
My Lords, the justification for this Bill is to support and advance trade, and, as pointed out, to provide insurance against present negotiations breaking down. The existing internal market is supported by EU law until the end of the year, where this Bill provides for UK law to take over. This is a detailed Bill, which provides for what I call single market membership in respect of our trade with the rest of the EU, if we reach agreement with the EU to this end.
The question is raised; what happens if trade negotiations break down and the UK opts for the WTO? This looks unfortunately likely, from the Prime Minister’s comments yesterday, to be the case. It is clear, I am afraid, that the EU has been acting in bad faith in the trade negotiations, which the PM has pointed out involved a requirement to lead, and not a requirement to lead to a breakdown.
Presumably we could amend and use the Bill as we saw fit. We would, however, have a self-interest to make the Bill as helpful as possible to European importers and exporters to help optimise our trade. As we are leading historic free trade supporters, I am sure we will be happy to be driven by the free trade principles of mutual recognition and non-discrimination. The Bill will become an Act as of 31 December, assuming it passes both Chambers. Whether or not we do a trade formula deal with the EU, this trade legislation will be on the statute book and operative to ensure the smooth functioning of trade.
I turn now to the controversy. It was the UK Government who found out that the EU was seeking to misuse aspects of the Northern Ireland protocol in a way that was not intended and in order to gain advantage in future relationship negotiations. I am somewhat disappointed that no one seems to have made this point, and the whole problem with Clause 5 arises from that. It was for this reason that the UK Government created the safety net of Clauses 44 and 45, to give British Ministers the power to unilaterally interpret, modify or disapply parts of the Northern Ireland protocol.
The UK has agreed to require parliamentary approval of any government initiatives involved here—I think that this is Clause 56. I was always told as a student that there was really no such thing as international law, as there was no agreed single court of law to monitor it. But, in this situation, I am inclined to the view that it may be better to get rid of Clauses 5 and 6 and to address the issues raised in another way.
I remain a staunch supporter of free trade and appreciate the major contribution to upholding free trade afforded by the Internal Market Bill, but it has the weakness of underpinning oligopoly. Most of the trading requirements as witnessed by this legislation are too detailed, too difficult, too expensive and too demanding of businesses—
The Deputy Speaker (Baroness Morris of Bolton) (Con)
My Lords, the noble Baroness, Lady Goudie, has withdrawn from the debate, so I now call the noble Lord, Lord Palmer of Childs Hill.
Lord Palmer of Childs Hill (LD) [V]
My Lords, it appears that Brexit will not only have queues of trucks on roads leading to the Channel ports but will lead to an expected plethora of disputes in the internal market between parts of the UK. The Bill, by its very existence, acknowledges the divisive self-harm being inflicted on our nations by this clueless Government. We already have a common frameworks programme, so well detailed by my noble friend Lord German, and a commitment to collaboration in a regulatory manner. So I do not see how this Bill in any way helps or adds to the resolution of disputes in the functioning of the single market.
The latest proposed quango is the Office for the Internal Market. Its role will be purely to provide independent advice on dispute resolution. Well, we already have the Competition and Markets Authority, which has become a very large body in its own right. It will now also include the Office for the Internal Market—an added and expensive creation. It appears that in the current crisis in health, business and employment, the only growth industry is an expanding Civil Service. Sir Humphrey Appleby of “Yes Minister” would have been proud of it. An article in The Times today suggests that there is one civil servant for every 152 citizens, not counting employees of arm’s-length bodies. This Bill moves us nearer to the doubtful utopia of a civil servant for each and every citizen.
We can see at this very moment in the Covid pandemic how there are divergent policies between Scotland, Wales, Northern Ireland and England. Can the Minister state clearly whether, in the case of a dispute not being solved after the valued advice of the latest quango, the UK Minister will make the decision? If so, that is a sure way to build up resentment in the devolved Administrations. Surely a more collaborative arrangement is required between the devolved parts of the United Kingdom.
This brings us back to the common frameworks programme, detailed, as I said, by my noble friend Lord German. There is no doubt that the advanced development of common frameworks has been complicated by the Bill before us today. The Bill aims for a draconian, even dictatorial, power to ensure that sales in one part of the UK will be acceptable in all other parts. This may be the desired result for some people under any arrangement, but it may not be the desired result in one of the devolved nations.
I require the Minister to explain how the Bill and the common frameworks are to function at the same time. The Bill is unnecessary and could well be very harmful. We should do all in our power to defeat the Bill in its current form.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
The noble Lord, Lord Woolley of Woodford, has withdrawn from the debate, so I now call the noble Lord, Lord Naseby.
Lord Naseby (Con)
My Lords, I am no lawyer, but after 46 years in Parliament, and five as Deputy Speaker, frankly my faith was somewhat shattered in the law when a decision went against the Government on the autumn adjournment, which seemed to me to be perfectly in order in parliamentary terms, and when we normally adjourn for party conferences.
Having said that, three aspects do concern me. First, obviously I am concerned about the amendment to the Motion, and I recognise that the noble and learned Lord, Lord Judge, is sitting here in the Chamber. I am concerned if, as he says, we are undermining an international agreement, particularly by Part 5, and it appears that we are repudiating part of an international treaty which we have negotiated and which we in this House have signed up to.
However, I then listened to my noble friend Lord Howard of Rising. I had a copy of the statement of the noble Lord, Lord Pannick, and as I understand it:
“If, therefore, the UK and the EU were unable to reach an agreement on Northern Ireland/Ireland, despite good faith negotiations and despite the arbitration procedures, and if the UK were therefore to be faced (against its will) with a permanent backstop arrangement, the UK would be entitled to terminate the withdrawal agreement under Article 62 of the Vienna convention on the Law of Treaties.”
Therein may be where the answer lies.
Secondly, I am concerned about the union with the devolved Assemblies of Wales, Scotland and Northern Ireland, and I have a particular concern about Scotland. There must be nothing in the Bill that makes it easier for Scotland to be difficult. Sadly, there is, and I am indebted to the Delegated Powers and Regulatory Reform Committee, which highlights the problems of how the consultation and the dispute processes would actually work.
Thirdly—I am not sure that anybody has actually mentioned this—there is the Office for the Internal Market, which will be part of the Competition and Markets Authority. Even here the portents are not good, because the CMA is regularly criticised for its poor performance, recently over bank reforms and sport monopolies.
This is a Bill fraught with difficulty, not least the reputation of the UK internationally, which is so vital for our future international trade. I shall listen with particular care to my noble friend on the Front Bench, in whom I have great faith, and I hope that he will be able to address the legal point. I hope that the noble Lord, Lord Pannick, is correct, and, if he is, it will be with my support for the Government that I will be voting in the Lobby.
Lord Judd (Lab) [V]
My Lords, we have heard two interesting maiden speeches today. I warmly welcome my Cumbrian neighbour, my noble friend Lady Hayman of Ullock. What she said about the environment was not only right but very important. We look forward to hearing much more from her in the years ahead.
I put on record my appreciation for the forthright clarity of the reports of the Delegated Powers and Regulatory Reform Committee, the Constitution Committee, jointly the chairs of the Constitution Committee and the European Union Committee, and of the brief from the greatly respected Bingham Centre.
Just what are the principal, inescapable mega-issues confronting us all in the UK? Climate change, migration, pandemics, conflict, limited natural resources, the biodiversity crisis, pollution, destruction of the natural environment, terrorism and international crime—they all require multinational co-operation. Not one of them can be dealt with effectively by the UK on its own. They require trust and discipline, hence the indispensability of the rule of law to underpin that essential co-operation. The UK has in the past been respected as a pioneer in the rule of law. What will the ideological, blinkered and visionless proposals in this Bill do to the respect and esteem which has been won for the UK by its principled leadership? What signals will they send to Russia, China, Belarus, Burma and Latin America?
This Bill is indeed a disaster. More immediately in the UK, the stability and trust that has been central to the cause of peacebuilding in Ireland is potentially jeopardised. The Good Friday agreement and the protocol are not just words to be cynically played with. They are crucial. What is proposed in this Bill could threaten that peace and stability which has been so painstakingly and imaginatively built. It is time to say enough. Security demands a more principled and enlightened commitment. How I welcome the reasoned amendment by the noble and learned Lord, Lord Judge. I also totally endorse the arguments of the noble Lord, Lord Butler, on any forthcoming ping-pong experience.
Regarding devolution, the same ideological zeal to recentre control in No. 10 crudely challenges all the progress and success so far in constructively building towards the new constitutional settlement achievements for Scotland, Wales and Northern Ireland. We must beware, for the future peaceful stability of the UK itself. The lowest common denominator becomes the reality. On a practical level, what of the lead given by England in the provision to help curb deaths from cigarettes and other tobacco? What of the legislation in Scotland on alcohol pricing? What of the spring water and bottled water standards established in Wales? What prospects now of their being part of a firm base from which to develop civilised policy for the future? We can now see starkly what “take back control” really meant: control for an ideologically ruthless No. 10. It is high time for us to make a firm stand.
Lord Bhatia (Non-Afl) [V]
My Lords, there is a definite need to give Northern Ireland goods unfettered access to the UK internal market. The Northern Ireland protocol, as part of the withdrawal agreement, creates a unique status for Northern Ireland to remain part of the UK’s customs territory. The EU’s customs code, Community rules and single market rules will continue to apply to goods after the transition period ends on 31 December 2020.
After the transition period, these provisions can rightly continue to apply, with the consent of the Northern Ireland Assembly. Nothing in this protocol should prevent the UK ensuring unfettered market access for goods moving from Northern Ireland to other parts of the UK’s internal market.
The UK Government are committed to having legislation to guarantee unfettered access for Northern Ireland businesses to all of the UK market in place by 1 January 2021. This commitment was made in January 2020 to restore devolved government in Northern Ireland in 2020. We cannot break this commitment. If we do, the UK’s reputation will be severely damaged. We are respected internationally for not breaking commitments that we have made in law.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
The noble Lord, Lord James of Blackheath, has withdrawn, so I now call the noble Lord, Lord Bilimoria.
Lord Bilimoria (CB) [V]
My Lords, the UK internal market operates across England, Scotland, Wales and Northern Ireland, and it is the economic glue that binds our four nations. It is key to helping increase prosperity and raise living standards and opportunities for people and businesses across all parts of the UK. The internal market is critical for the UK to remain attractive to foreign investors and to maximise opportunities from new trade deals.
Firms across the UK have operated with the devolution settlement for more than 20 years. The United Kingdom Internal Market Bill must provide certainty that products made in one part of the UK will not face additional barriers to the market in another part of the UK and, with this, ensure that consumers in one part of the UK are not disadvantaged by having access to goods and services limited.
The UK is a highly integrated market. For the internal market to continue to operate effectively, firms across the UK have been clear that three principles must guide its implementation: first, that there should be no new barriers to trade; secondly, that there should be collaboration across the UK; and, thirdly, that there should be fair, independent and trusted adjudication.
The CBI, of which I am president, welcomes the Government’s plans to give powers to the Competition and Markets Authority to establish the Office for the Internal Market, which will also have the responsibility to report to the devolved Parliaments and Administrations. Where Northern Ireland is concerned, a free trade deal with the EU would minimise the need for strict controls on a range of goods entering Northern Ireland from the rest of the UK, bolstering the Northern Ireland protocol, maintaining the integrity of the UK internal market and respecting the all-island Irish economy.
The United Kingdom Internal Market Bill must work in lock-step with the implementation and operation of the Northern Ireland protocol. England, Scotland and Wales—that is, Great Britain—are Northern Ireland’s biggest market for external sales, being larger than all export sales combined. Over 7,000 businesses in Northern Ireland rely on the GB market, which is worth over £11 billion annually. For this to work effectively, the Bill must work in lock-step with the Northern Ireland protocol and respect the all-island economy between Northern Ireland and the Republic of Ireland. Firms in Northern Ireland have always been clear that they want to see the protocol work. In respect of trade flows from Northern Ireland to Great Britain, the protocol provides that nothing in it shall prevent unfettered access to the GB market for trade in goods.
On 16 October, the noble Earl, Lord Kinnoull, the chair of the EU Select Committee, and the noble Baroness, Lady Taylor of Bolton, the chair of the Constitution Committee, wrote in the Times:
“It is clear that the Internal Market Bill authorises violations of the UK’s obligations in international law. Setting out explicitly to break international law in this way is unprecedented and undermines the rule of law. The bill also risks destabilising devolution arrangements when it has never been more important for central and devolved governments to work together effectively.”
Today, the UK’s five most senior Anglican churchmen joined forces to denounce the Government’s new legislation, claiming that the internal market Bill could set a “disastrous precedent”.
Across the UK, firms are clear that the UK internal market is an essential aspect of how they operate their businesses. Yesterday, the CBI and 71 trade associations and professional bodies, representing 190,000 businesses and 7 million employees, called for politicians on both sides to carve a path towards a deal. The automotive, aviation, chemicals, creative industries, farming, food and pharmaceuticals sectors are united: securing a quick agreement matters greatly for jobs and livelihoods. Clarity on an ambitious deal would turbocharge business preparations, increase confidence in the UK as a place to invest and help to ease the sustainable implementation of the Northern Ireland protocol. This follows an intervention earlier this week by leading European businesses from France, Germany and Italy calling for a solution. Now is the time for historic political leadership. After four years of debate, there must be resolution; 2021 can then be a year to rebuild rather than regret.
United Kingdom Internal Market Bill
Tuesday 20th October 2020
(4 years, 1 month ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135(a) Amendments for Committee - (20 Oct 2020)
13:55 - Division conducted remotely on Lord Judge’s amendment. - Ayes: 395 / Noes: 169 - Lord Judge’s amendment agreed.
Lord Judge
At end to insert “but that this House regrets that Part 5 of the bill contains provisions which, if enacted, would undermine the rule of law and damage the reputation of the United Kingdom.
Relevant documents: 14th Report from the EU Select Committee, 24th and 26th Reports from the Delegated Powers Committee, 17th Report from the Constitution Committee.
Lord Fox (LD)
My Lords, yesterday we heard some remarkable speeches, not least from the two debutants: the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Sarfraz. Over eight hours we heard the Bill broken down into three areas of serious concern: its illegality, its threat to the union, and its structural limitations. The analysis of the noble and learned Lord, Lord Judge, backed up by many other legal Peers, was clear: this Bill establishes a position whereby the United Kingdom breaks international law.
The counterarguments were less numerous, and they were weak. On the one hand, they said that this is an anti-Brexit rearguard action—something easily dismissed by taking note of the powerful speeches of the noble Lords, Lord Howard of Lympne and Lord Lamont of Lerwick, neither of whom is publicly gripped by pro-EU sentiment. The other line taken was that because other countries have broken the law, we can too. It is the cry of the playground: “They started it!” My noble friend Lord Thomas and others demonstrated that that argument is neither here nor there.
This Bill transcends legal affront—and here we should thank the most reverend Primate the Archbishop of Canterbury, who, in his speech, set out a moral case against this part of the Bill. As he put it:
“Our reputation as a nation, our profoundly good and powerful influence and example … will suffer great harm if law-breaking is pursued”.—[Official Report, 19/10/20; cols. 1293-4.]
That point was backed up by the noble and gallant Lord, Lord Stirrup:
“The Government exercise authority through the law; if they undermine respect for the law, they undermine both themselves and the stability of our society”.—[Official Report, 19/10/20; col. 1348.]
It is fair to say that the noble and gallant Lord knows a thing or two about the importance of moral courage.
This is not an academic argument. If we needed to be reminded how this Bill can affect the lives of people on the island of Ireland, my noble friend Lord Alderdice, speaking from his vast experience, set out what is at stake, and as my noble friend Lady Suttie said:
“The Northern Ireland protocol, which is far from perfect, is none the less a carefully constructed compromise to try to maintain peace and stability on the island of Ireland and to protect the Good Friday/Belfast agreement”.—[Official Report, 19/10/20; col. 1315.]
Quite.
Among yesterday’s speeches came a quite remarkable intervention from the noble Lord, Lord Barwell—a man with a unique window on this process. He recalled how, in a meeting with EU officials, Theresa May asked why the Northern Ireland backstop had to be set out in such operational detail. She was told:
“‘Because, bluntly, we do not think you will be there for much longer and we do not trust what is going to follow in terms of living up to any commitments’”.—[Official Report, 19/10/20; col. 1359.]
So, far from sending the EU a stern message about the UK’s resolve, the Bill simply confirms its suspicions about our trustworthiness—or rather, our lack of it.
Moving on to devolution, the noble Lord, Lord Callanan, asserted:
“These powers are not designed to take powers from the devolved Administrations”.—[Official Report, 19/10/20; col. 1284.]
My noble and learned friend Lord Wallace of Tankerness and my noble friends Lord Bruce of Bennachie and Lord German and others made it clear that the reality is something quite different. The Bill pulls back power to Westminster at the expense of the devolution settlement. Many Peers, such as my noble friend Lady Humphreys, pointed to the glaring absence of any reference to the common framework in the Bill.
For its part, the Constitution Committee is not convinced that opportunities for managing the UK internal market through the common framework process have been exhausted—and neither am I. By abstracting the internal market from these frameworks and pushing ahead unilaterally against opposition from devolved authorities, the UK Government are putting the common frameworks at risk. I have to ask: is that what Her Majesty’s Government want? That is what it looks like.
In light of progress being made with the common frameworks, my noble friend Lord Newby questioned, with considerable support, whether the Bill is needed at all. However, in his speech, the noble Lord, Lord Callanan, claimed:
“Without the Bill a Welsh lamb producer … could end up unable to sell their lamb as easily … Scotch whisky producers could lose access to supply from English barley farmers”.—[Official Report, 19/10/20; col. 1282.]
My noble friend Lord Purvis asked some specific questions regarding whisky. I would like to ask: what possible grounds are there to support the Welsh lamb claim?
Further, the noble Lord, Lord Callanan, also said that the Bill
“will allow professionals such as doctors and nurses, qualified in one of the UK nations, to work in any other”.—[Official Report, 19/10/20; col. 1283.]
If by this the Minister is saying that, without the Bill, English doctors will not be able to practise in Wales, I challenge him; if not, what is he saying? I think these comments are entirely baseless and I ask the noble Lord, Lord True, either to demonstrate that they are rooted in fact or to withdraw them.
The third element of the Bill is the role of the CMA as the home for an office for the internal market. As ever, I listened to my noble friend Lady Bowles on such issues. The Committee stage will see significant debate on this.
It will come as no surprise that noble Lords on these Benches will support the amendment in the name of the noble and learned Lord, Lord Judge, but as my noble friend Lord Newby made clear, it cannot stop there. This was backed by a strident call to arms from the noble Lord, Lord Butler. He and others made it clear that your Lordships have to be prepared to stand by the splendid speeches that we heard yesterday when we get to the sharp end of this Bill. In that regard, your Lordships’ House should be indebted to my noble friend Lord McNally for outlining the outcome of the Cunningham conventions. As he explained, we should not be inhibited in standing up to the Government.
The conclusions that I draw from yesterday’s debate are: the illegality of this Bill must be removed; Clauses 44, 45 and 47 should be excised and the Henry VIII clauses removed; the role of the common frameworks as the prime mover in a single market must be reinstated; and consensus must be sought on the principles of the Bill where the market is managed and disputes are dealt with. Finally, if there needs to be an office for the internal market, it needs a different governance structure from that proposed.
We all know that this Bill is illegal, flouts important constitutional issues and threatens devolution. More than that, we know that it has already eroded trust in our institutions and is damaging the reputation of this country, which promotes the rule of law. Finally, and perhaps most insidiously, we know that any law that seeks to permit the Executive to break laws is morally wrong.
Lord Stevenson of Balmacara (Lab)
My Lords, it seems a long time ago now, but I start by thanking the Minister, the noble Lord, Lord Callanan, for introducing the Bill. It was, as many noble Lords commented at the time, a little surprising that he did not cover Part 5, but he may have decided that others would focus on it—he was right. I thank too my noble friend Lady Hayman of Ullock and the noble Lord, Lord Sarfraz, for their excellent maiden speeches. We welcome them to full membership of the House.
We have benefited enormously from the advice of our Select Committees and our deliberations have been improved by the contributions of their members. I thank everyone, from all groups, who has contributed, and the House authorities and the technical wizards who made it all work seamlessly. It was a long but worthwhile day. It is an honour to wind on what I think will turn out to have been a significant debate.
There is usually little to say about why a Government, especially one recently elected with a huge majority, should bring forward a seemingly routine Bill for Parliament to consider. It would have probably appeared in their manifesto, it would have featured in the Queen’s Speech, and it would have been preceded by consultation, a Command Paper or two and possibly pre-legislative scrutiny—although that, sadly, appears to be out of fashion these days. However, this Bill has left no such traces, apart from a vapid announcement and a pretty token consultation over the summer months.
During the debate yesterday, two rather different narratives emerged. On the one side was an assertion that this was a vital and necessary Bill that was required to ensure that the internal market within the UK worked smoothly with effect from the end of the transition period, with Part 5 tacked on just in case it became necessary to legislate if the joint committee failed to resolve issues related to the complex customs and single market situation in Northern Ireland. On the other side was a feeling that the Bill could not be supported as it stood because not only was it asking Members of this House to be complicit in a proposal to take powers to break the rule of law but it was damaging, possibly fatally, to the devolution settlement, was packed with egregious Henry VIII powers and was full of internal inconsistencies about how and to what effect the single market and state aid rules would operate after the transition period ended.
I am not by nature a believer in conspiracy theories, but the communique issued by the Cabinet Office after yesterday’s withdrawal agreement joint committee meeting makes interesting reading:
“The UK reiterated its commitment to upholding obligations under the Withdrawal Agreement and protecting the Belfast (Good Friday) Agreement in all respects.”
It is hard to accept that the Bill before us is just a cock-up, but perhaps only time will tell. Whatever its provenance, the elected House has asked us to consider it, and that is what we have to do.
Before we joined the EEC, we had a well-functioning internal market. We have now left the EU, and with that decision comes the imminent end of the rules governing the single market. How do we move forward, preserving the best of what we currently have? How do we ensure that consumers continue to benefit as they have in the past because of the way in which strong EU competition and state aid rules protected their interests? We do not believe that the proposition for a top-down, centralised standard-setting system contained in the Bill is right for the modern UK economy. The EU single market rules governed trade in goods and services across members states. They recognised the diverse economic, social and legal contexts of those states and harmonised practice, or set minimum standards, only where it was agreed that it was essential to support the market while observing the important principles of subsidiarity and proportionality. Why are these principles patently not in the Bill? The principles that are there, of mutual recognition and non-discrimination, are good in so far as they go, but they will not prevent local divergence or a race to the bottom on standards.
The sensible way of managing policy divergence within the UK internal market is by continuing to develop a suite of common frameworks; that is, agreed common approaches in areas previously governed by EU law but otherwise within the areas of competence of the devolved Administrations or legislatures. The common frameworks are intended to be agreed by consensus, and surely that is a prize worth waiting for. The UK Government have collaborated on a common frameworks programme for three years; many are close to final agreement, with the remainder being progressed at pace. Given how close we are to agreement, why does this Bill ignore rather than build on that programme? We intend to strongly challenge this approach. The Bill threatens to frustrate the progress made so far and to undermine future trust and co-operation because, to quote the chairs of the Constitution Committee and the EU Committee:
“The Bill provides the Government with powers to alter the competences of the devolved administrations and risks destabilising existing devolution arrangements.”
The Bill also seeks explicitly to amend the devolution settlement to add the design and operation of a “subsidy regime”—it used to be known as state aid—to the list of reserved matters. This has been described as a “power grab”, and it cannot be right for the UK Parliament to press ahead with legislation on an issue which is causing such genuine anger and concern. Again, it is difficult to see what is to be gained by pushing ahead with the Bill when so much needs to be determined about how and in what circumstances the UK wishes to evolve its state aid regime for the future. When we learn that the Government intend to follow WTO rules on state aid after 31 December, we ought really to start worrying. We will suggest that the new UK state aid system be run by an independent regulator with the power to rule against illegal subsidies, taking an evidence-based approach to deciding when a subsidy is harmful or distortive. The OIM will not work unless it is independent, trusted and supported across the UK.
My noble friend Lady Hayter has outlined our approach to the CMA, and I repeat her call that the CMA’s present structure is inadequate, not simply because it fails to represent the four nations but because it lacks a clear duty to place consumers at the heart of its work. Competition is undoubtedly an important way of avoiding consumer detriment, but it is not, and never will be, an end in itself.
As I have hinted, most of the speeches in this Second Reading debate have focused on the egregious Clauses 42 to 47. Despite amendments to the Bill in the Commons, it has not been improved by the additions made and the arguments put forward yesterday by a huge range of speakers from all parts of your Lordships’ House were comprehensive and utterly convincing. As my noble and learned friend Lord Falconer and others reminded us, the tensions inherent in the protocol on Ireland/Northern Ireland were not hidden but were apparent from the outset. The breach of international law has been entered into knowingly. The Bill strikes at the heart not only of the protocol but of the withdrawal agreement. It could pose a threat to the maintenance of the Belfast/Good Friday agreement. In bringing forward the Bill, the Government alleged that the EU had not been acting in good faith, but they have not disclosed any evidence that it has acted in bad faith.
The government amendment in the other place does not alter the Bill’s fundamental incompatibility with the withdrawal agreement. The Government’s pre-emptive action has placed the United Kingdom in the wrong. The Bill has damaged the United Kingdom’s international reputation as a defender of the rule of law. As my noble and learned friend said yesterday, we will invite the House to remove Part 5 of the Bill neck and crop, to use his colourful language, at the earliest opportunity, and we hope that thereafter we can work with all parts of your Lordships’ House so that the House can do everything that it legitimately can to ensure that Part 5 remains removed permanently.
The amendments to this Bill put down by the noble and learned Lord, Lord Judge, and by the noble Lord, Lord Cormack, are supported by this side and, as far as I can judge, by the vast majority of your Lordships’ House and by the country at large. If moved, we will support them. I expect that the Government will be humiliated by the size of the majority against them, and a message will go out to the EU and the world that at least this House has standards and principles that others can depend upon, even if the present Government have not. When the history of these troubled months comes to be written, it will not be kind to the current Prime Minister and his Cabinet.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, obviously, I thank all those who have spoken in this long debate and, in particular, the noble Baroness, Lady Hayman of Ullock, and my noble friend Lord Sarfraz for their remarkable and uplifting maiden speeches. Sometimes all of us need uplifting, and long may they stay in this House to enlighten us.
This has been a serious debate, as is appropriate on serious matters of serious importance—the sustaining of the union of the United Kingdom and the building of prosperity in a climate of certainty and security for business. However, I had some reflections during the course of the debate, and at one point found myself asking whether Henry VIII’s foundation of the Church of England was fully in accord with both our domestic law and international obligations.
I apologise if I cannot mention over 100 speakers by name when addressing the many issues raised, but I have listened carefully to every speech, shall respond as fully as I can on the main issues and will write to noble Lords on points of fact where that is not possible. First, I address points made on the main parts of the Bill, ably presented by my noble friend Lord Callanan, before I come directly to answer the amendments before us, on which the noble and learned Lord, Lord Judge, has indicated that—unusually—he wishes to divide the House at Second Reading.
I was pleased to hear understanding across the House for the purposes behind the Bill, even if we do not agree on it. There is agreement that commerce, services and professions must be enabled to operate freely across the whole United Kingdom. That is widely supported—indeed, demanded—by business, including in Northern Ireland. Without this legislation, there could be problematic divergence, putting at risk the seamless trade that businesses in Scotland, Northern Ireland, Wales and England enjoyed before we entered the EU, enjoyed in it and should enjoy hereafter. This Bill will protect trade and secure jobs across all parts of the United Kingdom after the end of the transition period. It will guarantee that UK businesses can trade unhindered in every part of the United Kingdom.
I assure those noble Lords who raised this that the Government will maintain the highest standards for consumers, workers, food and the environment. We have repeatedly stated our commitment to high standards. Under our proposals, the devolved Administrations will continue to have power to regulate within devolved areas, in so far as these do not cause a barrier to internal trade. We are committed to being a global leader in environmental protection and animal welfare standards while maintaining the high quality of our produce for consumers at home and overseas.
Some noble Lords, including those who spoke today, have questioned the need for the Bill, arguing that non-statutory arrangements may be enough. They fear that the Bill may restrict the freedoms of devolved Administrations. We have listened and will continue to listen to such concerns; we wish for close co-operation with the devolved Administrations—there is no so-called power grab here. Indeed, at the end of the transition period, hundreds of powers currently exercised by the EU will flow back to the UK, as the British people have asked. Many of the powers coming back from the EU fall within the competence of the devolved Administrations, which will see a major transfer of powers that before the EU exit they did not have.
As we set out in our White Paper, without an up-to-date, coherent market structure, economic barriers could block or inhibit trade in goods across the United Kingdom, and services could be significantly and detrimentally impacted. Future complexities could arise— for example, differing qualifications for plumbers or technicians could limit access to skilled construction workers and make it harder for one nation’s construction companies to bid for contracts in another. Such costs could ultimately reach consumers, increasing prices or decreasing choice. Significant and unmanaged economic barriers arising across the UK could not only cause serious harm to the interests of our business and consumers but threaten the prosperity of the UK economy as a whole.
I was pleased that so many noble Lords commended the common frameworks programme, which has been mentioned again today. It is an important process and one that will continue. We will update the House on progress as we work with our friends in the devolved Administrations in the months ahead and will study carefully the observations of your Lordships’ Select Committees on this part of the Bill. I assure the House that this Bill does not make the common frameworks redundant, as many, including the noble Baroness, Lady Finlay of Llandaff, my noble friend Lord Dunlop, the noble Baroness, Lady Crawley, the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady Andrews, fear. However, common frame- works do not replace the need for this Bill; they are a mechanism for collaborative policy-making in areas of returning EU law which intersect with devolved competence. They are sector-specific and allow for a deeper level of regulatory coherence, but they do so in a specific set of policy areas. While they remain a crucial part of our regulatory landscape, common frameworks alone cannot guarantee the integrity of the entire internal market.
The Bill ensures that areas without a common frame- work will still benefit from the regulatory underpinning and, crucially, market coherence will be provided for issues that fall around, or between, individual sector-focused frameworks. The Bill complements common frameworks by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy. That will ensure maximum certainty for businesses and for investors, domestic and foreign. I am sure that all noble Lords support that objective. We look forward to pursuing these important issues in detail in Committee —and I give that undertaking.
Let me turn to the subject of most of the speeches yesterday—Part 5 of the Bill and the amendments before your Lordships. The future of our union and the sustaining of the Belfast agreement are at the heart of this Bill. A strong and open internal market with the ability to support all parts of our union and deliver prosperity for communities across the whole of the United Kingdom is something that we should surely all support. That includes Northern Ireland, as is affirmed in Clause 42 in Part 5. Support for free trade across the United Kingdom must extend to the good people and businesses of Northern Ireland; they are our countrymen and women, and part of our union. This Government will allow no foreign authority, armed with whatever pretext, high or low, to undermine the principle of free trade within our customs territory that has been fundamental since the Act of Union.
I am pleased to tell the noble Lord, Lord Browne, that EU state aid rules will not apply to Northern Ireland as they do today. State aid provisions apply only to trade subject to the protocol, which is limited in scope to goods and wholesale electricity markets. Northern Ireland will therefore enjoy new flexibilities with respect to support for its service industries, including those with potential for rapid growth—for example, fintech and cybersecurity businesses.
I thank the noble and learned Lord, Lord Judge, and I hope that the House will forgive me if I send my good wishes to Lady Judge, and wish for a speedy recovery. I thank him for meeting me; I understand why he cannot be here today, and I thank him for sharing with me his thoughts on this part of the Bill. As we have heard, his objections fall not on the objective to safeguard our union and the Belfast agreement, but on his strongly held sense, held by other noble Lords who have spoken, that Part 5 of the Bill, sent to us by another place, undermines the rule of law.
We share a full and fundamental respect for and belief in the rule of law. That is not something handed to us from outside by some directive or convention. It was won in the sacrifice of civil war and affirmed in the Glorious Revolution, the Bill of Rights and the Claim of Right, since when our parliamentary Government and rule of law, as many have said, have been an inspiration to the world.
The Government do not believe that the limited, contingent proposals in this Bill change that position. They do not accept that these safeguard provisions render our country, as has been claimed, an international pariah, or justify, as was asserted, murderous actions by others. People are still talking to us. Indeed, your Lordships’ Constitution Committee said in paragraph 171 that in
“domestic law, it is correct that Parliament may enact legislation which”
infringes
“international obligations.”
This Bill does nothing to abrogate our commitment. We are committed to implementing the withdrawal agreement and the Northern Ireland protocol, and have already taken many practical steps to do this. We continue, as the noble Lord opposite said, to work with the EU in the joint committee set up to address uncertainties and incompatibilities in parts of the Northern Ireland protocol. We hope we may resolve the outstanding issues and avoid the maximalist interpretations by the EU that might lead to a situation where tensions arise between our domestic obligations and our international commitments and we have to act to resolve them.
We cannot guarantee that agreement will be found. The fact remains that we have not reached agreement. Last Thursday the EU summit appeared explicitly to rule out a Canada-style deal. It effectively restated its opening position in the negotiation as its present position, and instructed the UK to move. As my right honourable friend the Prime Minister said last Thursday, the EU has
“refused to negotiate seriously for much of the last few months”.
We must therefore address the contingent possibility that a threat to the union and to the Belfast agreement might arise. The provisions in Part 5 of the Bill are about creating a legal safety net, taking powers in reserve whereby Ministers could act to guarantee the integrity of the United Kingdom and protect the peace process. The Government never have and never will seek north-south barriers in Ireland; equally, we cannot accept east-west barriers in our customs territory. The imperative here is balance. The prerequisite is reason. In the difficult and highly exceptional circumstances in which we find ourselves, it is right that we take these precautionary steps now.
I can also confirm to the House, as asked by the noble and learned Lord, Lord Falconer, that we will take action, if necessary, in a finance Bill in 2020, to address the issue of tariffs.
We are clear that we are acting in full accordance with UK law and the UK’s constitutional norms in our actions. We do not take this action lightly or without good reason.
Your Lordships will have every chance to consider these matters in Committee, and consider them we must. We cannot set aside our constitutional duty to scrutinise a Bill that has passed through the other place with a healthy majority, as was said by the noble Lord opposite. To do so would be a failure to fulfil our revising purpose. Neither amendment before your Lordships refuses that. They accept Parliament’s right to receive and consider legislation such as this. The effect of the amendments is declaratory. As such, their purpose is to send a message. I hear the message about the importance of the rule of law. We can all assent to that. The noble Lord opposite used the language of “message”. There is another message that some will hear; a message, as he said, to the European Union: if the UK Government and the elected Chamber refuse to accept the EU’s most encroaching demands, your Lordships will deny the UK Government a contingent power to protect our union and safeguard the Belfast agreement.
That, and, still more, a threat to destroy this whole Bill, would be a heavy missile to launch at what is a profoundly delicate state of negotiations, when this Government are seeking to fulfil the firm resolution of the people of the United Kingdom that this country should be a fully independent state. That is the context of these proposals. I am deeply mindful of the wise words of my noble friend Lord Hunt of Wirral and the noble Lord, Lord Skidelsky, that this House should not tie the hands of this Government at this time.
It is the Government’s sincere wish that these provisions need never be invoked. We have listened to the views of those concerned and amended the Bill so that Clauses 44, 45 and 47 can be commenced only following approval by the House of Commons. In addition, I can confirm to my noble friend Lord Lamont that regulations under Clauses 44 and 45 could be made only following approval by Parliament as a whole, which includes your Lordships’ House. In circumstances where your Lordships have the power to set a staying hand, at a time when we will know the state of negotiations between the UK and the EU, it would seem quixotic to threaten, as the noble Lord, Lord Butler, did, to destroy the whole Bill now.
My noble friend Lord Bridges posed a question. The Government do not consider that these clauses, as and when the Bill is enacted, of themselves breach Article 4 of the withdrawal agreement, which requires that those provisions of EU law made applicable by the withdrawal agreement are given effect in domestic law in the UK in the same way as they are in EU member states. However, there is a political question before us as well as a legal one, and a balance of judgment to be made in the national interest. I repeat: the fact remains that there is no negotiated agreement, and the Government must be realistic that we are barely more than two months away from the end of the transition period.
I do not accept strictures around morality, although I note with interest that I now have to seek moral guidance in the House journal of Mammon. It would be irresponsible not to have measures in place in our domestic law that allowed Ministers to protect the UK’s internal market and the Northern Ireland peace process. The Government are making sure that the protocol is implemented in a way that works for Northern Ireland; that is, in a flexible, pragmatic and proportionate way, in line with the approach set out in our May Command Paper. That approach was broadly welcomed by the majority of businesses and political parties in Northern Ireland and is the basis on which we have been negotiating and will continue to negotiate with the EU. However, we cannot and will not allow harmful legal defaults under the protocol to take effect.
In all circumstances, Northern Ireland is and must remain part of the UK customs territory, with genuine unfettered access to the rest of the UK internal market. We must at the very least avoid the European Commission applying its state aid rules to companies in Scotland, Wales or England with no link, or only the most trivial one, to Northern Ireland.
As we have made clear, if these measures were ever needed, their commencement would be subject to a vote in the other place and a take-note debate in our House, as set out in the Government’s Statement on 17 September. Your Lordships would have the opportunity to vote against the necessary statutory instrument, although I of course hope you would not be so inclined—one has to travel in hope.
The rule of law is a great matter, and the integrity of this union is also a great matter. There is a balance to be struck in these difficult times, and proportion to be found. We believe that these measures, with all the safeguards I have mentioned, strike that balance without tying the hands of the Government at a critical time.
What is potentially proposed is not an armed invasion of another nation but a contingent and potential power, subject to safeguards, which the Government have stated they hope need never be invoked. It is presented to Parliament fully in accord with our constitutional norms.
I urge noble Lords to support the Bill and not to support the amendments in the names of the noble and learned Lord, Lord Judge, and the noble Lord, Lord Cormack.
Lord Judge (CB) [V]
My Lords, I thank everybody who has taken part in this debate, including those who disagree with me. I welcome the noble Lord, Lord Sarfraz, and particularly the noble Baroness, Lady Hayman—I am sure the noble Lord will not be upset with me if I say that it is an absolute delight to know that there are now three Members of your Lordships’ House who support Leicester City Football Club.
The debate has reinforced my anxiety about the Bill. If it is enacted, we shall be giving the Executive the most extraordinarily wide powers, and until the debate I had not fully appreciated the dangers to the union of giving the Executive in London effectively uncontrolled power over the way in which the internal market will work. That reinforces my anxiety. I wish to make just a couple of points.
I notice that the Minister has not resiled from the proposition which some of those who support him were keen to advance: that the Bill, if enacted, would not break international law or break the law. That it would not break the law seems a crucial element in this. The fact of the matter is that the law would be broken. The Minister in the other place said so; the Treasury Solicitor resigned; and the noble and learned Lord, Lord Keen, resigned. There can be no getting away from it, and, to be fair, the Minister in our House has not sought to do so. That is the starting point.
I then listened to a number of arguments suggesting that the Government are entirely justified anyway because the EU has been acting in bad faith. Although the Minister did not use those words, he just touched upon it by referring to the way in which the negotiations had broken down and to the Prime Minister describing how the EU was refusing to negotiate. If any of that has force, the remedies are there to be found within the Act, the agreement, the protocol and within the ordinary rules which govern international treaties where one side is breaking the purpose and spirit of the agreement. That is the remedy that should be sought if there is indeed bad faith by the EU.
I expect the negotiations to be tough—that is the whole point of them. I hope that our negotiators are being tough—that is what they are there for. That is a very far distant cry from bad faith. No evidence of that has so far been shown to any of the committees which examined these issues; indeed, apart from the most recent observation by the Minister before us today, there is no evidence. Therefore, we are dealing with a hypothetical situation, which is: “We may need these powers at some stage.” Maybe we will; I hope not. If we do, it is perfectly open to the Government to come back to us, to Parliament, to put before us emergency legislation and for both Houses to sit as long and as late as necessary to examine the proposals, and, if they are satisfactory, to endorse them.
I shall not go through the arguments that were deployed before your Lordships’ House yesterday. I add merely that you do not have to be a lawyer to understand the rule of law, and you certainly do not have to be a lawyer to understand when you are giving powers away. That is what the Bill will do. You do not have to be a lawyer to understand the reputational damage to the United Kingdom. That is what this situation will do. We cannot resile from the fact that we are breaking the law if the Bill is enacted. That is what the Government say. That is why, while I quite understand the Minister’s anxiety about the future and I share his concern about it, I will seek the views of this House.
Just before I finish, I thank the Minister for his courtesy and good wishes.
I seek the opinion of the House.
United Kingdom Internal Market Bill
Monday 26th October 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135-II Revised second marshalled list for Committee - (26 Oct 2020)
Baroness Hayter of Kentish Town (Lab)
My Lords, in moving Amendment 1, I welcome that today we are not starting on Part 5 of the Bill, as there are two other major issues which need to be reformed. Indeed, the Bill’s genesis never involved including Part 5, but concerned how to use repatriated competitive and other regulatory powers post transition. Today we will deal with two of these: first, how to give the new competition regime a consumer focus; and secondly, how to organise returning powers into the devolved structure the UK will operate in 2021, as opposed to the 1973 position when we entered the EU.
Amendment 1 deals with the whole point of market intervention and competition policy: to promote the interest of consumers where, for whatever reason, they are operating in an imperfect market. But it also acknowledges that helping businesses to grow or consumers to benefit must not be at the expense of our precious environment. The amendment would write into Part 1 that its purpose is to benefit consumers and to safeguard the environment.
Anyone who has worked in regulation or in the courts knows that these overarching objectives, or duties, are essential in interpreting or enforcing the specific clauses, resulting legislation or indeed future legal cases arising from the Act. The overarching purpose is usually taken into account. Before he left the CMA, the noble Lord, Lord Tyrie, as its chair, called on government to strengthen the CMA’s consumer duty, writing that the internal market will work for consumers only if it is
“fair, competitive and adequately, proportionally and properly regulated.”
Amendment 1 would ensure that legislation on how the internal market is governed has this objective hardwired, or mainstreamed, into its overarching purpose.
A clear example of why this is so necessary is the Agriculture Bill. The Government refused to accept a UK-wide commitment to retaining food standards. I gather that Prue Leith has resigned from the Conservative Party in reaction to that rejection. More importantly for this Bill, just because the UK Government do not want to guarantee high food standards for consumers does not mean that the other countries of the UK do not.
As we roll out a new internal market for the UK, it is essential that an overarching objective of the legislation—the interest and well-being of consumers—be written into the Bill. Given the role of the CMA with regard to this Bill, it is similarly important that it has the duty to the consumer at the forefront of its work. As the noble Lord, Lord Tyrie, said, for the internal market to work for consumers, the CMA must be fit for this task:
“Until Brexit, much of the competition work lay with the Commission. If we are to ensure our companies play fair, do not profit at the expense of ripped off customers, are overseen ... by a competent authority, we need ... changes to the ... composition and duties of the CMA”,
which
“needs new duties to act quickly and with the consumer interest paramount and powers to make this possible”.
The amendments in this group are part of the effort to achieve these aims. Amendment 1 adds the duty to the purpose of the Bill, and Amendment 112, also in my name, adds it to the CMA’s objectives.
The group addresses two other issues: what is known in EU-speak as proportionality, and procurement. Amendment 2 in the names of my noble friend Lord Stevenson, the noble Lord, Lord Anderson, and the noble Baronesses, Lady Bowles and Lady McIntosh, would write the principle of proportionality into law to make sure that the Government, in exercising their powers under the Bill, do not go further than is necessary to effect mutual recognition and non-discrimination; and, vitally, that they respect the principle of subsidiarity whereby matters are agreed at the most local level possible. This would make sure the Government act only when their objectives cannot be achieved by the devolved authorities and would be better done at UK level.
The Government recognise and use this principle of proportionality. Indeed, just last week they tabled an amendment to the Medicines and Medical Devices Bill—which I believe is in Grand Committee even as we speak—stating that disclosure of information relating to medicines covered by international agreements may take place only where it
“is proportionate to what is sought to be achieved by it.”
That same principle needs to be hardwired into this Bill to make sure the powers are not used—for convenience or whatever—by the UK Government when they could be used better by the devolved authorities.
As the Minister will know, having been around the EU for some time, subsidiarity was not always in the EU mandate but, once introduced, influenced all decision-makers’ thinking, making them think twice before taking powers to themselves at too global a level. For those reading this in Hansard, the Minister at this point has a very disbelieving look on his face.
Finally, Amendment 59 in the name of my noble friend Lord Stevenson aims to retain public procurement as a devolved matter, thus exempt from market access principles. This is not to say that public procurement should not adhere to recognised principles, but to ensure that these are covered in the existing work on common frameworks in a public procurement framework. Since 1998, public procurement has been devolved, and our leaving the EU is no reason to alter this or for it suddenly to become a reserved matter, especially when a framework is already being developed. The Government have given no rationale for trying to make it reserved. In the White Paper, they said, without any reasoning:
“For goods, non-discrimination will apply within certain excluded areas such as procurement.”
They said they were considering—only considering—whether and to what extent non-discrimination should apply to public procurement. Perhaps the Minister could provide an update on their thinking. Perhaps he could also explain why Whitehall thinks it can deal with procurement any better than the devolved authorities, particularly given the recent example of UK-wide public procurement under Covid.
There are real concerns about simply handing public procurement to the Government, given that the WTO’s general procurement agreement, which would replace the UK’s 2015 regulations, would not include socially responsible public procurement provisions unless they were nailed down in advance. Amendment 59, therefore, aims to prevent the loss of these safeguards and keep public procurement devolved so that price-quality ratio, rather than simply price, is included in tender evaluation criteria and can be maintained by the devolved authorities along with the normal requirements of value for money et cetera. We want a UK-wide internal market to work for consumers and business, to safeguard standards, maintain the environment and ensure that competition does not fuel a race to the bottom. That would be good for neither workers nor consumers, nor indeed for businesses. These modest amendments would help to achieve that objective. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I am pleased to support Amendment 2; I was about to do my own version when I discovered that the noble Lord, Lord Stevenson, had already tabled a similar one, and it is pleasing that it has cross-party signatories. There is a lot in this Bill about the internal market that is either premature or inadequately or inappropriately worded. It may be that amendments elsewhere referencing the common frameworks will help, but just as the common frameworks have a set of principles that are being followed in negotiations, a bit more about the flavour of the internal market is needed here, beyond mutual recognition and non-discrimination.
One of the principles for the common frameworks is to maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules. Therefore, it seems wholly appropriate to utilise the principles of subsidiarity and proportionality that have been a defining part of the EU internal market and which have helped form the current flexibility. It would also chime with the recommendations of the Constitution Committee in its report The Union and Devolution, which set out six principles of solidarity, diversity, consent, responsiveness, subsidiarity and clarity. We could use all those principles here too, and certainly they should guide how we approach amending this Bill throughout.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I support Amendments 1 and 2, to which I have lent my name; they are probing amendments to ask the Government a number of questions. The concept of the internal market in European Union terms is relatively recent: we have only had the single market since 1992. Of course, devolution followed some five years later, so both are still relatively new in terms of the British constitution.
British competition rules are loosely based on—and generally have always reflected—the original competition rules of the EU treaty on state aid in Articles 85, 86 and 92. The noble Baroness, Lady Hayter, has been right to highlight that, in what we have been used to in terms of both EU competition rules and British competition law as applied by the CMA, what is missing in the Bill is a reference to consumers. The flip side of competition policy to make sure that companies behave well is to ensure fair competition as well as protection of the consumer. I wonder whether leaving out any reference to consumers, both here and in later parts of the Bill, was deliberate. Why is there is no specific reference to consumers in the Bill, as Amendments 1 and 112 would provide?
Equally, Amendment 1 relates to safeguarding and the environment. That begs another question. We are told that our current regulations setting out food safety can always be changed by secondary legislation and that we do not need an Act of Parliament to do so. But that could lead to the situation—particularly if it remains devolved, and the Government have repeatedly stated that this is their intention—where we have to ask: to what extent will divergence be tolerated? For example, if the Food Standards Agency of England made substantial changes to our food safety requirements, would Food Standards Scotland simply diverge and not necessarily follow those changes? In future, could a product produced in Scotland, meeting Scottish environmental and animal welfare standards—I will be supporting the forthcoming amendments regarding those—still be allowed to be imported into England if it no longer met those same standards? This seems to be an obvious potential crisis for Scottish, Northern Irish and Welsh farmers some way down the road. The Government might want to rethink their idea of not having UK-wide standards. I would be most grateful if, when summing up, my noble friend could turn his attention to that potential conflict and the potential for divergence.
Turning to proportionality and subsidiarity, I absolutely agree with Amendment 2, to which I have lent my name, and later amendments. The Bill must clearly set out only what is necessary to achieve its stated objectives. My noble friend will probably answer that this is self-evident, but it bears repetition. Personally, I see some merit in having it on the face of the Bill. The principle of subsidiarity might seem clear now, but I ask my noble friend to consider the horrific situation, some five or 10 years down the road, when we may face a federal Britain. What impact would that have on subsidiarity?
On procurement, does my noble friend share my concern that despite all the potential benefits around procurement provisions that I envisage us enjoying by leaving the European Union—for example, we would no longer be bound by the threshold of €136,000, beyond which any public contract must be put out for tender, meaning that we could source many more of our English, Scottish, Welsh and Northern Irish foods into public institutions such as schools, hospitals, prisons and others—we have completely lost that advantage because through the Trade Bill we are joining the Agreement on Government Procurement, which, surprisingly, has exactly the same threshold of $135,000? We seem to be jumping out of the frying pan and into the fire, without getting all the opportunities that were promised to our farmers by leaving the European Union, such as sourcing more local food to schools, hospitals and other public institutions. That will in fact not come about, because we will be bound by international rules on public procurement. Have the Government done a cost-benefit analysis on how much competition we will face from other providers to source their foods into our public institutions, as opposed to the potential benefits our farmers might have from tendering in other international jurisdictions to source our home-produced food there?
I look forward to hearing my noble friend’s reply to this little debate.
Lord Hope of Craighead (CB) [V]
My Lords, I want to add a few words in support of Amendment 2. Proportionality and subsidiarity are part of the language of EU law which, while relatively new in historical terms, we are now very familiar with. It would be a mistake to think that as we reach the end of the transition period, we should leave these concepts behind. Proportionality, after all, is deeply embedded in our own public law, and has been for decades. It has long since been recognised that black-letter law alone is not a good guide to the way in which public law and public affairs should be administered. One simple example can be found in the civil litigation rules, where the word appears to make it clear that the courts should seek to obtain a just result with appropriate speed and expense in giving effect to the rules that are set out in the document. The point is that individual facts and circumstances vary greatly across the spectrum. Proportionality allows them to be taken into account and avoids blunt decisions where a greater need is to fit the facts together with the rule to find a suitable result that will achieve the desired object.
Subsidiarity too is now deeply ingrained in our constitutional arrangements. It is part of the thinking behind devolution, and the word is used with reference not only to Wales, Northern Ireland and Scotland but to devolution throughout England. The great advantage of this is that local decisions are best taken with regard for local circumstances. For them to be taken centrally sometimes misses the point and leads to solutions that are inappropriate given the local circumstances. It is a useful tool best used in the administration of our affairs to make sure that things are properly organised across the whole of our United Kingdom, which, after all, is what our new internal market is all about.
Both these principles are sound and appropriate guides as to how the two basic principles which are set out in Clause 1 should be administered. I support the argument that, somehow, these principles should find a place in the Bill. Quite how that is done I leave to the draftsmen, but Amendment 2 is at least an important start to make sure that the significance and relevance of these principles are appropriately recognised.
Baroness Noakes (Con)
My Lords, I offer a few comments on these amendments. It seems to me that Amendment 1 has the effect of confining the concept of the internal market to consumers and the environment. That completely misses the point. If we go back to the Government’s White Paper in July, we see they were clear that the policy objectives were economic opportunities across the UK, increasing competitiveness and making the UK the best place to do business, thereby supporting the general welfare, prosperity and economic security of all UK citizens. The amendment in the name of the noble Baroness puts the cart before the horse, trying to make that an overarching requirement when it should be a consequence of achieving all the other things.
I emphasise that this is about frictionless business—about making it easy to do business across the UK. In all our debates, we should not lose sight of the importance of this to the devolved nations. About 60% of the exports of Scotland and Wales go to the rest of the United Kingdom; for Northern Ireland, it is a fraction below 50%. They are important to those economies. We are trying to create an environment in which trade can prosper and grow within the UK, without barriers, which will in turn allow the other objectives to be achieved—for example, the protection of consumers and supporting the general welfare of the country.
Lord Morris of Aberavon (Lab) [V]
My Lords, I support Amendment 1. There is very little that needs to be said in addition to what my noble friend Lady Hayter so clearly set out. In her speech she prayed in aid the Government’s attitude to the Agriculture Bill—which I also took part in—hence the necessity of the amendment. In my innocence, I am assuming that the Government will accept it, but perhaps I am too innocent.
I also support Amendment 2. The purpose of my speech is to serve as a pre-emptive strike to preserve the position of devolved legislatures, as I did in my Second Reading speech. I will make the same point regarding other amendments. Agriculture is a devolved matter. The single market is important throughout the United Kingdom. However, I am wary when power given to devolved Administrations and legislatures is taken away from them. The onus is on Her Majesty’s Government to prove necessity—hence the importance of the words in paragraph (d) in the amendment, which I particularly support.
Lord Purvis of Tweed (LD)
My Lords, I agree with the first point made by the noble Baroness, Lady Noakes, who said that this group of amendments and this debate are about whether it is necessary and desirable to agree with the Government on the definition of mutual recognition and non-discrimination. The question is therefore whether the Government have made their case sufficiently that the Bill’s definitions meet the criteria that the White Paper sets out for the functioning of the single market, which is something that we all value.
I think that the Government have made a less than convincing case on the necessity of these definitions. However, even if it were necessary to make a strategic case for defining these market access principles, such a case was not set out in the consultation, the White Paper, the Commons stages or the Minister’s speech on Second Reading. Have the Government explained why they have deviated from our current approach or from the approach we had before we joined the European Union? We had a functioning single market before we joined the EU and while we were members, as we do now, and it has served our country well. Even before devolution, our internal market before we joined the EU allowed for different laws and approaches and historic divergences in many areas, including in economic development, trading standards and other areas linked to the economy. The question is why the Government have decided to move away from the earlier British approach or the British approach as it was adapted and adopted through the European Union.
Before I turn to the matter of definitions, I want to speak to Amendment 59 on procurement. Noble Lords who took part in the early Committee sittings on the Trade Bill will recall that we debated the procurement aspects. I specifically asked why procurement was mentioned in the White Paper but not in this legislation. The noble Baroness, Lady Hayter, has also asked that question, and I hope the Minister will give us a clear answer. As the noble Baroness, Lady Noakes, indicated, if procurement continues to be a devolved matter—as it has been, in many respects, under the framework of the European standards and the GPA international agreement—and the Scottish Government, for example, wish to have a procurement policy within an overall framework which sets standards for infrastructure or public buildings used for health or education, every supplier will have to meet those standards. That would not necessarily be discriminating against Scottish, English or Welsh construction firms; it would be a standard that they would be expected to meet. I fear that the Government want to have a uniform standard for the delivery of procurement policy across the United Kingdom. That would be worrying because it would be a significant move away from the flexibility we have had within the approach taken by the European Union.
There has been an assessment of the current approach taken within the EU single market—which we have left—which was updated in April 2020 in Regulation 2019/515. The current approach has a well-defined assessment procedure to be followed by competent authorities when assessing goods, which the Government’s approach lacks. The current approach has obligatory elements to be included in an administrative decision that restricts or denies market access. However, that is left open to UK Ministers to decide in a vacuum, and thus is lacking in the Government’s approach. Our current approach offers a voluntary mutual recognition declaration which businesses can use to demonstrate that their products are lawfully marketed in one EU country in a business-friendly, problem-solving procedure through the European single digital gateway for businesses and service providers on how this operates. These important aspects are missing in the new approach. I think it is therefore justifiable to ask on behalf of businesses across the UK which need to prepare for this, why the Government are not ready.
As will become clear in the debates on following groups, the Government are not ready for the implementation of this because the framework relationships are not yet in place. But even if they were, the Government have also failed to state why the nature and scope of the application of these market access principles are different from what we have understood and worked with for many years. For example, as Professor Nicola McEwen of Edinburgh University pointed out, the definition of indirect discrimination is not the same and is now more complicated than EU law. Not only that, Professor McEwen highlighted the circumstances in which mutual recognition rather than the non-discrimination rule will apply, or vice versa, which is different from the position under EU law. It is unclear how certain types of trading rules would be classified. She gives an interesting example of restrictions on the use rather than the sale or marketing of a product, such as the current ban on the use of electric shock training collars in Wales. There is no consistency in the Government’s approach on that. In further groups of amendments we will also need to explore why the range of exclusions and exceptions from the mutual recognition and non-discrimination principles is significantly narrower than under EU law.
The Government should tell us why the UK’s new approach is far more restrictive and more bureaucratic than the position we are moving away from. With a more restrictive approach, and without the previous flexibility that had been obvious in some areas, businesses, service providers and public authorities will have a much more burdensome single market to operate. The Government have presented no justification whatever for that. My noble and learned friend Lord Wallace of Tankerness raised this issue at Second Reading. In a reply, the Minister said why the Government are taking a different approach:
“The market access principles have been designed to take account of the UK’s unique circumstances, reflecting that our market consists of four highly integrated, highly aligned parts. Conversely, EU provisions deal with 27 countries, all with diverse histories, cultures, and competing marketing priorities”.
I note that the Government do not think that our nations have a diverse history and culture, but they most definitely do. If they did not, we would not have had devolution in the first place. However, it does not follow that our current approach, even with devolution, has been more streamlined, and the Government seek to have a more complicated approach going forward.
My noble and learned friend asked about subsidiarity and proportionality, and the Minister replied as follows, which is interesting, given the very well-argued speech of the noble and learned Lord, Lord Hope of Craighead. He said:
“Turning to your comment on subsidiarity and proportionality, we have now left the EU and are free to organise our internal market in a way that is better suited to the UK’s unique constitutional arrangements and common law system.”
The noble and learned Lord, Lord Hope, stated categorically that these approaches of subsidiarity and proportionality are deeply embedded in our constitutional arrangements, so why have the Government chosen to move away from them? I fail to understand why they are even changing their position from that of the frameworks agreement that had been in place. Regarding the principles agreed among all the nations, the second paragraph of the agreement on common frameworks states:
“Frameworks will respect the devolution settlements and the democratic accountability of the devolved legislatures, and will therefore”—
this is the second bullet point—
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules”.
So the Government agreed with the devolved nations that the current flexibilities and approach afforded by current EU rules would continue to apply, but this Bill argues that they will not. Given that this has implications for Scotland’s decision on minimum unit pricing or for a live case of the deposit return scheme that has been put in place, there are considerable concerns about why the Government have opted not to include environmental objectives in these restrictions.
I will close with another point on the environmental side. Can the Minister clarify the position on the relevant requirements for environmental aspects, which were formulated before this Bill but have yet to come into force? The Scottish deposit return scheme, which has been legislated for but is due to come into force in 2022, would, on my reading, come within the scope of this legislation. It has been made but is not yet in force. That legislation was fully compliant with the European approach because of the environmental objectives. Is it the Government’s intention that the Scottish deposit return scheme regulations will now be within the scope of this Bill? If not, this is just one example of why there are real difficulties with the Government not following the common-sense approach. The UK operated a single market before joining the EU and during its membership of the EU, and indeed our approach allowed for devolution to be accommodated within it. Why are the Government putting that at risk with their approach to these market principles, which are more restrictive, less certain, more bureaucratic and less clear? Why are they not seeking continuity?
Lord Cormack (Con)
My Lords, in that extraordinary vote on Tuesday last, your Lordships’ House indicated what it felt about the most objectionable part of the Bill, and I hope that we will have a chance to develop those arguments further next week. However, the noble Baroness, Lady Hayter, was right in her opening words to remind us that, although they are the overwhelming matters of concern in the Bill, they are not the only ones. Indeed, I find myself echoing what a number of your Lordships said in last week’s debate: what is the point of this Bill in its present form?
I draw your Lordships’ attention to the very trenchant comments in the devastating report of our Constitution Committee published last week. It indicated the committee’s unanimous real concern on the whole issue of devolution. Way back in the 1970s, I was not an advocate of devolution, and I sometimes think that my fears have come to pass. However, the fact is that we have devolution, and we cannot ignore what we have or we will truly endanger the future of the union, and that we must not do. Therefore, I very much hope that when my noble friend comes to wind up this debate, he will make it quite plain that he has taken on board our Constitution Committee’s comments on devolution.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, when the Conservative Party came up with its absolutely brilliant slogan about taking back control, many of us, for whom it resonated, felt that it meant that our Parliament would be taking back control. However, over the past year it has become obvious that that is not how the Government see it. In fact, they are using Brexit as an excuse to take more control of the country, which of course is extremely undemocratic. In this Bill, they are trying to seize control from the devolved Governments and Parliaments, and that, as the noble Lord, Lord Cormack, has just said, is extremely unhealthy for the UK. The Bill pretends to replicate what exists in EU law, but it has created a sort of Frankenstein’s monster, which is not at all what any of us were expecting. It is like a legal framework creating a bureaucratic bulldozer that the Government will use to grab more power.
It is obvious that this Government cannot win any seats in Scotland, Northern Ireland or Wales, so they are using this Bill—this bureaucratic bulldozer—to force the elected Governments of the devolved nations to fall in line with Conservative Party policy. These amendments are important because they would stop that undemocratic move. Without them, devolution will be replaced with a sort of lowest-common-denominator system in which the devolved Governments will have to wait for the UK Parliament to take action on any policy or law that relates to the production, distribution and sale of goods and services in the UK before they can take action. That is clearly not what any of us expected. The devolved Parliaments must continue to have the right to make decisions on improving environmental standards and implementing other legitimate policies that will benefit their nations. Your Lordships’ House must amend this Bill and prevent yet another government power grab, and of course protect the rights of the devolved nations.
Lord Inglewood (Non-Afl) [V]
My Lords, now that we are leaving the scope of the single market, the characteristics of the UK internal market become very important; that is why I put my name down to speak to this group and, in particular, to Amendments 2 and 59.
Superficially, it is easy to assume that the UK internal market should, and will, share the principal attributes of the EU single market but, of course, that is far from certain, not least because of the circumstances surrounding it all. After all, the creation of the EU single market was first agreed by member states in an IGC, which is very different from what we are looking at now in this country. The new arrangements have come into being in somewhat different circumstances and across a single territory in which there has been devolution—and within that, the different components clearly have different perspectives.
There is now much less consensus and no prior agreement. In these circumstances, within a devolved as opposed to a federal system, there are potential procedural problems where the UK Government and the English Government—if I might be allowed to call them that—are coterminous. It is not desirable for the repatriation of European competencies to drive a coach and six through the devolution settlement in these islands. For this reason, I believe strongly that Amendment 2 is important to provide a legal framework around the political procedures repatriating these powers. In my view, it is particularly important—I speak as both a unionist and a supporter of the devolution settlements—that England does not emerge as a bully boy imposing its will on the other countries. To do that would be to take the high road to the break-up of the UK.
I also want to touch on Amendment 59, in the context of my chairmanship of the Cumbria local enterprise partnership. As a border region and part of borderlands, any form of potential discrimination—be it direct or indirect, intended or unintended—poses a very real threat to our economy, much of which is focused on both sides of the Solway Firth. Competition law, environmental law and a number of other more general categories of social law are essential components of market economies in our kinds of societies in the 21st century. As a number of speakers have said, there is a real conundrum at the heart of this between local autonomy, which matters, and British cohesion and homogeneity, which also matter. I very much hope that the Minister will spell out exactly how the Government see these things interacting, because, as always, the devil lies in the detail.
Lord Empey (UUP) [V]
My Lords, my concern in this group of amendments and, indeed, with the Bill as a whole is that a fundamental collision is taking place between what is happening in London and what is happening in the regions. I was never struck by the Sewell convention. I believe that we have not properly explained the source of funds to the devolved nations, and I do not believe that any country like ours should leave itself unable to function in certain parts of its own territory. Nevertheless, I believe that we are now paying the price for the haphazard, ill-thought-through lurch to different types of devolution that have been going on over the last 20 years in a virtually unco-ordinated way.
This collision is demonstrated by the fact that we had discussions taking place on the various common frameworks, which have been sort of set to one side and replaced with some of the provisions in the Bill. Probing amendments such as Amendment 2 are important. The Minister and his colleagues have to reassess where they are with all this because there is a pattern emerging—we have devolution and people are now more focused on their local identity. We see this happening in parts of England with the Covid crisis; it is really concerning. Some Members have already expressed their concern about the future of the union as a whole; I very much share that and have done so for some time.
Looking at the best way ahead, while the term “subsidiarity” is European, the general principle that you take decisions at the closest point to the people who are affected by them is a solid and sound way of doing business. There are examples of where the United Kingdom was until relatively recently still a very centralised country compared to some of our European colleagues and other countries around the world.
One other element not mentioned so far is that my own region of Northern Ireland will be subject to different laws on a whole variety of subjects, and it is not entirely clear to me where this will leave us. For nearly all of our economic activity, we will remain to all intents and purposes within the European Union, subject to European and state aid regulations, and there will be a whole, as yet unresolved, customs conundrum as far as our trade is concerned. How all these different measures are to be brought together in a coherent way is entirely unclear to me at this stage. I feel that this probing amendment and others in this group are important because they force the Government to explain to us how this will work in practice.
I accept the concept of common frameworks, in which you get general agreement from the devolved regions. Whether you agree with it or not, this Parliament has given them the power—the fact is that they have it and they are entitled to exercise the functions that have been devolved to them. We should not find ourselves in a situation where ultimately we sow the seeds of further clashes. That would undermine the union and our economy, and I certainly do not want to see that. The Government need to revisit these amendments and this section of the Bill. Unless it is clear and people know where they stand, we will have the sources of further friction built into our legislation—and we have more than enough of those at the moment.
I ask the Minister to address my point specifically: if Northern Ireland is effectively in the EU from an economic point of view, where is the line drawn between functioning under EU laws and regulations and, in the future, such things as market access being involved? I can see circumstances where there could be a significant clash. Procurement is one of the most obvious areas. A lot of small suppliers throughout the United Kingdom have felt that they have been discriminated against because Governments and various authorities have always tended to go to the bigger players. As was pointed out at the beginning of this debate, we could end up with almost the same threshold as we currently have as part of the EU. Will the Minister and his colleagues take seriously the concerns that Members of this House have been expressing about the fundamental clash—the collision—between our devolved settlements and our internal market? To me, that will be the key to making sure that this legislation does good and does not end up doing harm.
Lord Naseby (Con)
My Lords, it is worth reminding ourselves that we are talking about the Committee stage of an internal market Bill. I frankly do not see the relevance of the part of Amendment 1 which talks about the environment. We do of course have environmental laws. They are ever being strengthened and are an important part of our society. What they are not is anything specifically to do with an internal market.
We turn to look at consumers. I am a marketing man by profession. After university, having read economics, I joined the Reckitt and Colman Group as a marketing executive and later a marketing manager, in the UK, India and what is now Sri Lanka. I understand marketing. Marketing is about more than just the consumer. It is about those elements of a market that are all working within it. A whole host of bodies is working there. I share the view of my noble friend Lady Noakes. While the UK was in the EU, which I voted to stay in, we had all sorts of restrictions, some of which were very adverse to industry and commerce in this country—not all by a long way, but some were. We want an internal market where people who manufacture, sell, distribute, research and devise new products can succeed. We want that market there, without the stranglehold of having to agree with half a dozen other nations. That is absolutely key. It is not a simple matter of just worrying about the consumer. I think it was the noble Baroness who opened who spoke about driving competition to the lowest level.
Competition is very healthy but, of course, there must be safeguards. That is why in the Bill there is this new body, the office for the internal market, working alongside the CMA. I criticised the CMA at Second Reading and I believe those criticisms were valid. I want to see this office for the internal market really have teeth and really be able to operate. Reflecting on Second Reading, frankly, it is not right in the Bill to just have a review after five years. We have enough evidence in modern society to recognise that things move much more quickly these days than they ever used to. I put it to the Minister that Her Majesty’s Government should consider a three-year review of that body.
On Amendment 2, it is already part of our public law, so why does it have to be written here—if that is right? It comes later, under Part 5, but we cannot have a situation whereby all parts of the UK can have their own minor arguments on whatever product or service it may be. Then we would end up with everybody having a different viewpoint. That does not seem to me at all sensible. My plea to the Minister is that this is a very exciting time if you are a UK manufacturer, trader, in financial services, in hospitality, in the professions, a retailers or wholesaler, or an online trader. Certainly, in my former constituency of Northampton, they look forward to this internal market.
Lord Fox (LD)
My Lords, if the Ministers shepherding this Bill expected an easy ride, this gives a taste of things to come. It serves a purpose in setting the scene, and a lot of arguments and debates will come in other groups as we go through this process. I shall not labour those points. An overriding sense I got from my noble friend Lord Purvis is that the question everybody wants to know the answer to is: why have Her Majesty’s Government decided to turn away from a process of managing markets that has been extremely successful? It was successful before we joined the European Union and successful afterwards. This is the overriding question that hangs over this whole debate.
On Amendments 1 and 112, if ever we needed convincing that things such as the environment need to be written into the Bill, the speech by the noble Lord, Lord Naseby, convinced me that they do. This is because we cannot take things for granted. Governments come and Governments go, but the law stays, and we need to be sure that our public policy is being directed properly. I uncharacteristically find myself somewhat agreeing with the noble Baroness, Lady Noakes: we have to be careful not to constrain the nature of this Bill. We need to find a way to write in issues such as those of the consumer and the environment. I would add some of the points made by my noble friend Lady Bowles and food safety to that. We need to ensure that there is an assessment of the success of this internal market in some of those areas, including the environment, the effect on consumers, the effect on jobs, et cetera. I share the view of my noble friend Lady Bowles that perhaps more work is needed, but the issue is live and very important. I thank the proposers of the amendment.
Turning to Amendment 2, I do not think proportionality pops up anywhere in other amendments. We had a brief discussion of this extremely important subject from various speakers. I take my lead on this from the noble and learned Lord, Lord Hope, who understands the law, and my noble friend Lady Bowles, who knows a thing or two about regulation. If they are concerned about proportionality, so are we on these Benches. The Government need to find a way of writing that issue into the Bill.
On public procurement, we need to understand what the Government mean by what they seek to do in this legislation. The issue highlighted by my noble friend Lord Purvis is live and real: how will this legislation affect those issues? It is a probing amendment, but for it to work we need answers.
We have started. There are issues we shall return to, but proportionality and public procurement are two on which I hope the Minister will respond at length.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, let me open by thanking noble Lords for their contributions at Second Reading last week. Again, the contributions have demonstrated the tremendous breadth of expertise in this House. This is indeed a crucial piece of legislation. In this respect, I agree with the noble Lord, Lord Fox, and I look forward to providing the scrutiny it deserves and that I am sure it will receive from noble Lords, beginning today and in the days and weeks ahead.
Let me reassure, and to some extent disagree with, my noble friend Lord Cormack, which will not come as a surprise to him. We are not riding roughshod over the devolution settlements. The devolved Administrations will acquire dozens of new powers that they have not exercised before once we leave the EU transition period. The Bill is about ensuring that those powers are exercised in a non-discriminatory manner, but they will acquire new powers and new responsibilities. Before I address the specifics of Amendments 1, 2, 59 and 112, which we are discussing in this first group, I want to remind to noble Lords of why we need this Bill and the context of Part 1.
By opening with the purpose of the Bill, I hope to explain why these four amendments, which seek to alter the Bill’s core principles, are not necessary. The Bill aims to allow the continuing smooth functioning of our UK internal market at the end of the transition period. As we set out in the White Paper, and as I explained at Second Reading, the Bill will establish a market access commitment by enshrining mutual recognition and non-discrimination in law. Part 1 concerns itself with delivering this market access commitment for goods. The principle of mutual recognition is that goods and services from one part of the UK will continue to be recognised across the country. This will ensure the devolved Administrations will benefit from their additional powers and freedoms outside the EU. As the transition period ends, they will gain increased powers, as I said to my noble friend Lord Cormack, to set their own rules and standards across a wide range of policy areas within their competence. At the same time, it provides firm assurance to our businesses that their goods can continue to flow freely throughout the United Kingdom. Non-discrimination ensures that there is continued equal opportunity for companies to trade in the UK, regardless of where in the UK the business is based.
I say to the noble Lord, Lord Empey, that the measures in the Bill will also ensure that Northern Ireland qualifying goods benefit from the market access commitment and receive mutual recognition in the rest of the UK. The Bill will also affirm the principle that those goods are not subject to checks, controls or administrative processes as they move from Northern Ireland to Great Britain. I hope that I can reassure the noble Lord on that point. This means we will fulfil our commitment to legislate for unfettered access, as we promised to the people and businesses of Northern Ireland. This will ensure that businesses and citizens in the United Kingdom can continue to trade freely across the four nations.
With this context in mind, I turn to Amendments 1 and 112 together. These seek respectively to limit the purpose of Part 1 and the Office for the Internal Market’s statutory objective to the protection of the environment and consumer interests. Now, it goes without saying that the protection of the environment and consumers is hugely important, and something that we as a Government are already committed to. The UK, as I never tire of repeating, has some of the highest standards in the world, and we will continue to improve these ahead of others. We remain committed to being at the forefront of environmental protection and a leader in setting ambitious targets to prevent damage to our natural world, building on our already strong environmental record. For example, we have set out a range of new policies in the Environment Bill that are designed to drive up environmental standards in line with the UK’s priorities.
The statutory objective of the Competition and Markets Authority—acting as the Office for the Internal Market—ensures that the office is able to effectively operate as the monitoring body for the internal market, and that there is no confusion between the pre-existing powers of the CMA and those newly conferred on it as the OIM. Distinct objectives will prevent any operationally problematic blurring of functions.
As my noble friend Lady Noakes observed, the office will operate for the benefit of all those with an interest in a smooth-functioning internal market, whether that be regulators, businesses, professionals, the four legislatures or indeed consumers. Explicitly narrowing its focus to consumers would be to the detriment of all the others that I have listed.
Moreover, the functions set out in Part 4 of the Bill clearly establish that the office will consider the economic impacts of regulatory measures on the internal market. Although some of these will of course be environmental protection measures, it will not be authorised to opine on the extent to which these measures safeguard the environment, because this would risk duplicating the role of existing public bodies with a purely environmental focus. As such, given how much the Government are already doing in the area of consumer and environmental protection, I consider that these amendments, which seek to change the purpose of the Bill, are unnecessary, and I hope that I have been able to persuade my noble friend Lady McIntosh and the noble Baroness, Lady Hayter, to withdraw Amendment 1 and not move Amendment 112.
Amendment 2 aims to introduce the principles of proportionality and subsidiarity into the Bill as additional market access principles. These are European law principles. We have now left the EU and are free to organise our internal market in a way that is better suited to the UK’s unique constitutional arrangements and common-law systems. I agree with my noble friend Lady Noakes that the market access principles will protect seamless trade and jobs across all four corners of the United Kingdom following the end of the transition period in December 2020. They have been designed for the UK’s specific devolution arrangements and legal approach, and they already take account of the need for reasonableness and respect for devolution. In contrast, the proposed amendment would muddy the waters with EU concepts that in our view are ill-fitting in the UK. For these reasons, the Government cannot accept this amendment and I hope that noble Lords will not move it.
Amendment 59, on which there was considerable discussion, seeks to disapply the market access principles from the public procurement rules. I assure the noble Baroness, Lady Hayter, and the noble Lords, Lord Purvis and Lord Fox, that the principles proposed in the Bill will not typically operate in the area of public procurement, and indeed that we intend to legislate separately in this area via a wider package of procurement reform, on which we will shortly consult. The market access principles are not relevant to procurement as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement function. We believe that the risk of divergence can be effectively managed through a combination of close devolved Administration engagement and use of the common frameworks, and we are working to develop a concordat on expected public procurement practices and policies between the four UK nations.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, while I am grateful that the Minister has confirmed to me that a piece of legislation that has been made fully compliant with our single market—the deposit return scheme—will now come into scope under this legislation, because it is not yet in force in Scotland, that will be of very significant concern to Members of the Scottish Parliament, who legislated in good faith in a perfectly legal way. This Government have now said that that will come into scope, contrary to the market access principles, because it will not be able to be afforded protection if it is challenged in court because of the lack of environmental objections. I take the Minister’s point that he believes that it will be brought under the scope of market access principles, so I would be grateful if he could write to me to explain how indeed that will happen. If it is under a framework, we are back to exactly where we started, which is that the best approach on all these aspects is a framework.
That leads me to the question that I wish to ask him, because he did reply to the question that I asked about the status of the agreement made between the UK Government and the devolved Administrations on the framework agreement. In the document of September 2020 on the framework analysis, the Government repeated what that agreement was. I will quote from it again for the Minister: it was to
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as is afforded by current EU rules”.
The document goes on to say:
“These principles continue to guide all discussions between the UK Government and the devolved administrations on common frameworks.”
What is the basis of that document and that commitment, given what the Minister has just said in responding on this group: namely, that that is an ill-fitted set of agreements because we are now out of the EU? What is the status of the agreement that was made over the frameworks?
Lord Callanan (Con)
Well, as I have said before to the noble Lord, we remain completely committed to the framework process and we remain committed to frameworks that have already been agreed—but we see this legislation as complementary to that, as it underpins the entire framework process. As I said to him with regard to the deposit return scheme, if it comes into force when it is predicted to do so, then indeed it will be covered by the market access principles, but we are confident that the deposit return scheme can be brought into effect in full compliance with the market access principles.
Baroness Hayter of Kentish Town (Lab)
I am slightly lost on that, but we will come back to it. I thank the Minister for his response and I am grateful for the very interesting debate that has happened. I will say a few words about what was said by the noble Baronesses, Lady Noakes and Lady Bowles, about the point of competition and why it should be here. I agree with the noble Lord, Lord Naseby, that competition is extremely good for consumers. We want to see a successful economy, and I see no difference whatever in what he was spelling out and what we want to achieve.
The problem, of course, is where, for whatever reason, there is not a perfect market. Although here we are talking about goods rather than financial services, I was involved in the Financial Services Consumer Panel, and even though we had and still have—although Covid is throwing everything out—a thriving financial services market that has been good for the economy, for consumers and for the taxpayer, it has sometimes been, as we know from all the compensation that had to be paid, at the expense of consumers. So we cannot assume, simply because we have a good, thriving economy and lots of competition, that there are not sometimes disadvantages for consumers. That is why it is important, while we want a competitive, thriving market, to make sure that those protections are there. So as we look forward to the internal market being all the things that have been described, it cannot be at the price of consumers.
As I have said, I really support competition—we all used to wear NHS glasses until someone freed up the market, so we are all able to get nice red ones now. I doubt there is anything much between us on that. It is important, though, as we look forward to a market that is going to work for the whole UK, that it is not at the expense of consumers or the environment. I have been buying plants recently, hoping that one day we will have some good weather, but they should not be in peat pots. That is not good for the environment. Something may be good for consumers and at a good price, but you also need to consider the environmental aspect.
Consumers are not just interested in price; they are interested in safety and the longevity of products. However, that is not always something they can see at the point of purchase. Price is very easy for consumers: they can look at it and compare. Other things behind the price are also important. It is important as we look to a new market mechanism that we take that into account. I am sorry to have gone on a bit about this issue but as we will come back to it on Report, it is probably helpful for the Minister to understand. We may not have got the wording quite right: I am not trying to trump the Government but to point out why those elements need to be included.
On the devolution issue, the noble Lord, Lord Empey, is right that there is a clash between the settlements and what we are now trying to do with the internal market; I think he called it a collision between London and the regions. I hear very much what the noble Lord, Lord Cormack, said: that if we get this wrong, we are threatening something much bigger than any of us thought. No Brexiteer wanted to challenge the union; that was not what divided some of us who had divisions on that issue.
We need to look at how we deal with devolution. I was really taken by the example that the noble Lord, Lord Inglewood, gave of the IGC process that led to the single market and other things. I will come on to that way of working when we consider a different group of amendments. The confidence to do things in a shared and consensual way is important. The noble and learned Lord, Lord Hope, said that it would probably be important to put in the Bill retention of the subsidiarity and proportionality principles. They have guided us well and there is no reason why we should lose them, just because we are leaving. I think we will return to that issue.
On procurement, I think the arguments were fairly common between us. I am afraid I was slightly thrown by what the Minister said and will have to read later exactly what he said about separate legislation. Maybe we can exchange correspondence on that issue, and on the timing. Clearly, we will need to come back to procurement to ensure that we have something that will work for all four nations. For the moment—and I am sorry about the length of my response—I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 3. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in the debate.
Amendment 3
“( ) This Part only has effect during any time when the United Kingdom is fully in compliance with—(a) the terms regarding the United Kingdom internal market set out in the Northern Ireland Protocol, and(b) the terms of the Good Friday Agreement which are relevant to the United Kingdom internal market.”
Lord Hain (Lab)
My Lords, in moving Amendment 3 I wish also to speak to Amendments 157 and 177, standing in my name and those of the noble Baronesses, Lady Ritchie, Lady Altmann and Lady Suttie, for whose support I am most grateful. I spoke on this Bill at Second Reading and set out my fundamental objections to it then. In particular, along with a clear majority in this House, I totally rejected Part 5, which deliberately and cynically drives a coach and horses through the UK’s respect for the rule of law. Not only that, it drives that same coach and horses through the protections we need for the Good Friday/Belfast agreement that successfully brought an end to most of the Troubles, which had blighted life in Northern Ireland since the 1960s.
In that Second Reading debate and in the Committee stage debate on the Trade Bill, I put on the record of this House the horror and disbelief felt well beyond the shores of this United Kingdom. The most striking reaction was that in the United States, where the current President’s Northern Ireland envoy—his former chief of staff—agreed fundamentally with their rivals in the Democratic party that they cannot do any trade deal with the UK if the UK acts against the Good Friday agreement. That is exactly what is happening here in this Bill. It is a legal document that works against the peace agreement for Northern Ireland. In proposing this, the Government have pulled off a spectacular feat in uniting Republicans and Democrats at a time when they have never been more divided. This, of course, is not a feat but a spectacular own goal, even by the standards of this Prime Minister and this Government.
Since I last spoke, the front-runner in the US presidential election has made his position even clearer, in case people were not listening the first time. I want to add to the record of the House the relevant lines from his policy paper, Joe Biden, Irish-America and Ireland, published on 18 October: Joe Biden
“will support active US engagement to advance the Northern Ireland peace process”
and will ensure that there will be
“no US-UK trade deal if the implementation of Brexit imperils the Good Friday agreement.”
There is nothing subtle here. The front-runner to be President of the United States does not like what he sees as this Government seek to implement Brexit. He is sending a strong warning to us, and we in this House have it in our power, through this Bill, to force the Government to change course.
I am sad to note that the Government’s weak and pathetic defences include the wholly spurious argument that this Bill actually protects the Belfast/Good Friday agreement. Words such as “consent” are thrown about in a misleading way—to put it charitably—in order to create an impression that the purpose of these clauses is to protect all those who brought about the peace agreement. Let us look at all those who did that.
First and foremost, there are the people of Northern Ireland. They voted overwhelmingly for the agreement in 1998 and voted firmly against Brexit in 2016. They went on to vote overwhelmingly for parties opposed to Brexit in last December’s parliamentary election. Secondly, there are the political parties themselves. The majority of parties, representing the majority of the people of Northern Ireland, are opposed to this Bill. Thirdly, the Irish Government, the UK Government’s co-guarantor of our peace process, are opposed to this Bill. Fourthly, the United States, which provided the broker for the agreement in Senator Mitchell and has supported it ever since, is unanimous in its opposition, whatever the result of the forthcoming presidential election. Fifthly, the European Union, which backed up the agreement through PEACE funding and through the openness of the single market, is clear that the Bill is in breach of the Protocol on Ireland/Northern Ireland.
Not one of these groups supports what the Government are attempting through this Bill, so whose consent exactly do the Government think they have? I have been racking my brains to think of anyone, but all I have come up with are the Brexit extremists in the Conservative party and the most Brexit-obsessed end of one political party in Northern Ireland, the DUP—that is it. It has now emerged that both Brexiteer and Unionist-sympathising MPs were, late last year, promised an opportunity to address their concerns about the protocol in order to persuade them to pass the European Union (Withdrawal) Bill into law. It therefore seems most probable that No. 10 always had a step like this in mind, even at the very time of signing the withdrawal agreement. So much for the British Government negotiating in good faith.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow my noble and honourable friend Lord Hain, who is instructive in this regard as a former Secretary of State for Northern Ireland, and who has quite clearly shown the need for these amendments as safeguards to protect the Good Friday agreement and the withdrawal agreement, with direct reference to the Northern Ireland/Ireland protocol.
As somebody who grew up in Northern Ireland and comes from a democratic nationalist tradition but seeks reconciliation with my unionist neighbours, I am in absolutely no doubt that the Bill as currently drafted in terms of trade could cause innumerable problems for north-south co-operation, east-west co-operation between Ireland and Britain, and internal co-operation in terms of the need to build relations between unionists and nationalists—the very thing that the Belfast/Good Friday agreement, as an international treaty, sought to address.
As the noble Lord, Lord Hain, has referred to, in that regard we had the support of the European Union, underscored by peace funds underscored by the United States of America. It is significant that the front runner and others, such as the US envoy to Northern Ireland, have quite clearly stated that this current Bill, with the fracturing of the agreement and the fracturing of the Northern Ireland protocol, could imperil the Good Friday agreement and imperil those relationships. They would not countenance, at this stage, the Bill remaining in its current form, with particular reference to Part 5 on a trade deal with the UK. That is a particular warning signal from one of the biggest Administrations in our global world.
These amendments focus on the need to ensure that the provisions of the Bill cannot be enacted unless they are compliant with the Good Friday/Belfast agreement and the Northern Ireland protocol—and, as my noble friend Lord Hain said, they do provide that necessary safeguard and protection.
Amendment 3 seeks to ensure that the “UK Market Access: Goods” section—Part 1—will have effect only when the UK is fully compliant with the terms regarding the UK internal market set out in the Northern Ireland protocol and the terms of the Good Friday agreement that are relevant to the UK internal market.
Amendment 157 requests the insertion of a clause specifically about the Good Friday agreement to
“address the unique political circumstances on the island of Ireland … maintain the necessary conditions for continued North-South cooperation … avoid a hard border between Northern Ireland and the Republic of Ireland”—
which is what the Northern Ireland protocol was designed to do, and which is clearly and specifically referred to in the withdrawal agreement that was signed by the Prime Minister last year with the European Union—and
“support, protect or implement the 1998 Good Friday/Belfast Agreement”
in so far as it is relevant to the UK internal market.
Amendment 177 is quite instructive, in that it states in the rubric explanatory section:
“No provisions of this Act come into force unless the United Kingdom is … fully in compliance with … the Northern Ireland Protocol … and … the terms of the Good Friday Agreement which are relevant to the United Kingdom internal market.”
Each of these amendments builds on the others, stressing the importance of the Belfast agreement and the Northern Ireland protocol to British-Irish relations and underscoring the bipartisan approach between Britain and Ireland that I have already referred to. In fact, the protocol stresses the essential elements of strands 2 and 3 of the Belfast agreement in respect of north-south economic co-operation and British-Irish relations. So it is important: we need to utilise the machinery of the Good Friday agreement to develop such relations as the North/South Ministerial Council and the British-Irish Council.
It does sadden me that the Government insist that they are trying to protect the Good Friday agreement. Nothing could be further from the truth, because in actual fact, through this United Kingdom Internal Market Bill, the Government are quite specifically fracturing that agreement and fracturing the withdrawal agreement that they signed up to this time last year.
The European Union Committee report, which was published some 14 days ago, has also been particularly instructive in relation to this issue. The committee states that there has been an “inherent tension” at the heart of the Northern Ireland protocol from the outset, due to the divergent expectations of the two parties: for the Government, it is
“maintaining the territorial integrity of the United Kingdom, and its internal market”
and for the EU it is
“to maintain the integrity of the Single Market and the customs union.”
Originally, the idea was to negotiate, in good faith, a pragmatic compromise, providing proportionate safeguards to protect the 1998 Good Friday agreement in all its dimensions. The Lords European Union Committee argues that, instead, the Bill elevates one element—the integrity of the UK internal market—above the others. That is the danger with this particular Bill.
Baroness Altmann (Con) [V]
My Lords, I have added my name to these amendments, moved so excellently and explained clearly by the noble Lord, Lord Hain, and of course the noble Baroness, Lady Ritchie of Downpatrick. So I will not spend too much time going through the proposals of these particular amendments. I would just like to ask the Minister, from these Benches, why the Government are objecting to these amendments being in the Bill.
I understand that one of the arguments is that they are superfluous or not really required. However, given the clear lack of trust or concerns about some aspects of recent statements, and given that, I assume, the Conservative and Unionist Party is indeed committed to the Good Friday agreement, to no hard border on the island of Ireland and to the terms of the Northern Ireland protocol—on which this Government were so recently elected and which our Prime Minister signed up to—this amendment merely aims to ensure that measures in the Bill are fully compliant with both the Good Friday agreement and the Northern Ireland protocol, which was part of the great deal that the Government negotiated and put to the country. If Part 5 is a negotiating tactic and the Government really do not intend to use it and are aiming to get a deal, or if there is no deal, surely we still need to respect the Good Friday agreement, and our internal market needs to respect the promises made that this Northern Ireland protocol will be part of our future relationship with the EU.
I ask my noble friend to explain why the Government are unwilling to accept these amendments and to confirm that our party wishes to maintain our country’s reputation for upholding the legal agreements that we have reached with other countries in good faith.
Lord Carlile of Berriew (CB) [V]
My Lords, I start by apologising to the noble Baroness, Lady Ritchie, for speaking over her earlier; I had not realised that I had already been unmuted.
The issue of the Northern Ireland protocol is about nothing more nor less than peace and stability in Northern Ireland and peace and security in the United Kingdom. I share the view given with such clarity a moment ago by the noble Baroness, Lady Altmann, that this matter should be explicitly declared in the Bill. There is nothing more important to national security and public safety than the Good Friday agreement. It celebrates the 21st birthday of its effectiveness on 2 December this year. My interest in the Good Friday agreement arose from my time as Independent Reviewer of Terrorism Legislation and the years that followed. I have followed very closely both the sometimes fractious, but surviving, political process in Northern Ireland and the recent history of residual terrorism in Northern Ireland. Although it still exists, it is much reduced and is well understood, now, at least, by the authorities.
The Good Friday agreement has secured the United Kingdom. If you visit Northern Ireland and look at its political and business institutions and public authorities, you will see that it has given them a sense of benefit which is sometimes not matched in other parts of the United Kingdom.
I pay tribute to the political parties in Northern Ireland, some of which were regarded as enemies of the people until the Good Friday agreement—and whose presence at St Andrews caused a good deal of criticism of the then Government—for the way in which they embraced constitutional activity in the political issues of Northern Ireland. I once spent some time with some ex-terrorists who had, by then, become respected politicians. I was hugely impressed by the way in which they embraced those constitutional proprieties, both in Northern Ireland and the Republic of Ireland.
There is no more important issue in the context of Brexit than ensuring that nothing is done to undermine in any way the Good Friday agreement. Everything else fades into unimportance. We must be clear that no sacrifices of the stability that the Good Friday agreement has brought will be made in the name of Brexit.
I will listen with great care to what is said by the noble Lord, Lord True, in replying to this short debate. I hope we will hear unequivocally from him not only that nothing will be allowed to happen that undermines the Good Friday agreement but that the Government are prepared to declare that in the Bill.
Lord Cormack (Con)
My Lords, after that speech from the noble Lord, Lord Carlile of Berriew, I am tempted to say “Amen” and sit down, but I will just add a few words. We will, of course, return to this subject when we debate the crucial Part 5 of the Bill.
All I really want to say to your Lordships is this: the Good Friday agreement is the greatest cross-party agreement since the war. It is the achievement, of course, of the Blair Government, but it is also the achievement of the John Major Government. As Tony Blair himself has admitted on a number of occasions, particularly when we had that great ceremony with the Taoiseach in Westminster Hall shortly after the Good Friday agreement, without the groundwork of John Major, Albert Reynolds and others, this could never have come about.
It would be an act of supreme folly if anything we did in this Parliament endangered the continuity of the Good Friday agreement. It is absolutely crucial that each and every one of us recognises this. In whichever party we sit, or on the Cross Benches, this agreement is our heritage and it is our duty to conserve it. It is nothing to do with whether you are on the Brexit or remainer side; that argument is over. What is not over is the continuing relevance and importance of an island of Ireland without hard borders and the principles and achievements of the Good Friday agreement being maintained.
I had the honour to serve as the chairman of the Select Committee on Northern Ireland in the other place. There were many memorable moments, such as addressing a meeting in Crossmaglen with my committee, which would never have been possible without the agreement, but my most memorable moment is this: being asked by the late Lord Bannside, or Ian Paisley as he was then, if I would be kind enough to have a private meeting with him. This was soon after the joint Executive had come into being, and of course Lord Bannside had not been altogether helpful at the time that the agreement was forged. When I congratulated him on working with Martin McGuinness, he said to me, “I have discovered that Martin McGuinness has a spiritual dimension.” I could have fallen off my chair. When I went to Ian Paisley’s farewell at Hillsborough, attended by the Taoiseach and others, a panegyric—and it was that—was delivered by Martin McGuinness, thanking his friend and mentor. We have come a long way and had some rough passages since then, but I will always remember that as an extraordinary illustration of what a political agreement can achieve. We must not jeopardise that.
I am glad that this was introduced by the noble Lord, Lord Hain—he was himself a notable contributor to all these things and has been since. We must not put this at risk.
Baroness McIntosh of Pickering (Con)
My Lords, it is a pleasure to follow my noble friend Lord Cormack, who has spoken so passionately, as did the noble Lord, Lord Carlile. I, too, also pay tribute to the contribution made by the then Conservative Government at the start of the Good Friday agreement. Speaking on the eve of the US elections, never has it been more timely to remind ourselves of the ongoing importance of that agreement.
Given that I do not think that there will be another opportunity to do so, perhaps I may briefly refer to the original Clause 1(3) which states that the principles set out in that clause
“have no direct legal effect except as provided by this Part.”
If they have no direct effect, presumably statutory instruments will need to be introduced for them to have effect. Will they become directly applicable at the same time in all four constituent parts of the United Kingdom?
I welcome in particular the probing nature of Amendment 3. I shall refer in passing to the evidence that we took in the EU Environment Sub-Committee. I am disappointed by the seeming lack of urgency reflected by the Government in preparing, in particular, farmers, producers, the road haulage industry and other interested parties involved in the production of or associated with agri-food, which of course is a mega business for Northern Ireland. In our letter to the Secretary of State, we concluded:
“We urge the Government to consider the likely impacts on Northern Ireland businesses and consumers of the increased levels of checks and controls that will be required as a consequence if the UK-EU future relationship negotiations are not successful.”
We noted that in his original reply the Secretary of State did not acknowledge the challenging timetable to implement the protocol in this regard. I know that when we come to discuss Part 5, there will be opportunities to consider this in more detail, but Clause 11 already looks at some of the details in Part 1 that relate to this.
I will use this opportunity to ask the Minister to assure us that in parallel with the consideration of this Bill, that what the Secretary of State said in reply to the sub-committee on 7 October, which was that the Government are actively engaging with the Northern Ireland Assembly, along with Northern Irish farmers, producers, hauliers and all those who are involved in the agri-food industry to enable them to be fully prepared to do business on 1 January 2021, is the case. Leading up to July, the evidence we took indicated to the contrary. There had been no direct contact of any specific nature with the Northern Ireland Assembly and certainly not with those interested parties from which we took evidence. Can my noble friend put my mind at rest that this has now moved on and that there have been direct contacts with the Northern Ireland Assembly and with the parties that will be affected in this regard?
Baroness Suttie (LD) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Cormack, and the noble Baroness, Lady McIntosh. Along with the noble Baroness, Lady Altmann, they have shown that there is much agreement about this matter on all sides of the House. The noble Lord, Lord Cormack, always speaks with passion, conviction and experience on matters to do with Northern Ireland, especially on maintaining the progress made since the 1998 agreement. I hope that his wise counsel was listened to by the Government Front Bench today. The noble Lord, Lord Hain, and the noble Baroness, Lady Ritchie, set out very clearly in their powerful speeches why we feel that these amendments are necessary, and I am very glad to have been able to add my name to Amendments 3, 157 and 177. As my noble friend Lord Carlile said so clearly, this is a matter of peace and stability.
I would like to make four points. As the noble Baroness, Lady Ritchie, and the noble Lord, Lord Hain, said, it is frankly staggering that the Government are claiming that they are acting to protect the Good Friday/Belfast agreement through the introduction of this Bill. As has been said by many noble Lords, it is the Government’s own withdrawal agreement and protocol that they are now trying to reverse through measures set out in this Bill. They were either wrong in their assessment of the impact of the withdrawal treaty on the Good Friday/Belfast agreement 10 months ago or they are wrong now. Can the Minister clarify which is the case?
My second point is that ahead of the Brexit negotiations, the European Union carried out an extensive exercise mapping the connections between the Belfast agreement and the single market. Clearly, it is important to recognise that north-south co-operation under strand 2 of the Good Friday/Belfast agreement has moved on extensively since 1998. Can the Minister say whether a similar mapping exercise was carried out by the UK Government on the potential impact on the Good Friday/Belfast agreement ahead of the drafting of this Bill?
My third point concerns the hugely important area of rights, safeguards and equality of opportunity. The Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland have expressed understandable anxiety about the protection of these rights following the introduction of this Bill. Can the Minister confirm that there will be no reduction in the rights as set out in the Good Friday/Belfast agreement and that the relevant obligations in the withdrawal treaty will be implemented in full? Can he also clarify whether an impact assessment was carried out specifically on the potential impact on rights and equalities?
My final point is about the Good Friday/Belfast agreement itself. We are blessed to have many noble Lords from all sides of the House who were directly involved in negotiating that agreement. We have several former Northern Ireland Secretaries, including the noble Lord, Lord Hain, who I have appreciated working closely with in producing these amendments. As my noble friend Lord Alderdice said in the Second Reading debate on this Bill last Monday:
“Those of us who spent many years of our lives negotiating and implementing that agreement had assumed that if we could find a new future for the people of our islands, we could find a way of maintaining our relationships with the rest of the European Union.—[Official Report, 19/10/20; col. 1357.]
This Bill now puts a very real strain on that relationship with our European partners, not least because of the potential impact on the Good Friday/Belfast agreement. When the Government committed to the Northern Ireland protocol, it was on the understanding that it was to
“be implemented so as to maintain the necessary conditions for continued North-South cooperation, including for possible new arrangements in accordance with the 1998 Agreement”.
Following the introduction of this Bill, do the Government still stand by that commitment?
It is deeply depressing, as the noble Lord, Lord Hain, has said, that Brussels and Washington appear to understand with greater clarity than this Government what is at stake if we start to disrupt the careful checks and balances based on trust and consent that are so essential to the Good Friday/Belfast agreement. That is why these amendments are necessary. We need to have this continuing commitment in the Bill. I look forward to hearing the Minister’s response.
Lord Falconer of Thoroton (Lab)
My Lords, it is a privilege to speak in this important debate. I say straightaway that we on these Benches support the principles that have been outlined by my noble friend Lord Hain, and the noble Baronesses, Lady Ritchie of Downpatrick, Lady Altmann and Lady Suttie, who have all put their names to the amendment. The essence of this amendment is that the Government should commit themselves to doing nothing that breaches the Good Friday agreement.
There is no noble Lord who has spoken in this debate who does not agree that a critical part of the Good Friday agreement is an open border between north and south. No noble Lord does not agree that, if the border is closed, one of the essentials of the peace agreement goes—and that threatens security and lives in Northern Ireland. That view is obviously accepted not just by the Democratic Party in the United States of America but by the Republican Party.
The dilemma the Government faced in reaching a conclusion about how to Brexit was how to keep the border open yet, at the same time, leave the single market while giving the European Union security whereby the border between north and south would not be an open door for goods from the north of Ireland flowing into the single market to the south. The solution reached, which the current Prime Minister said was “brilliant” and which he formally endorsed “strongly”, was that goods in Northern Ireland and those brought into it which were at risk of going to the south would be compliant with the single market regulations—both regulatory requirements and the payment of duty. That would be achieved with checks on goods, in so far as necessary, coming from Great Britain to Northern Ireland. That was a good solution to the problem and was, as I said, adopted by the British Government.
It was also agreed that there would be four protections in the Northern Ireland protocol to ensure that the constitutional arrangements would not create difficulty for the unionist community in the north. First, there would be a joint committee to settle the detailed arrangements. Secondly, there would be an arbitration provision if there was a dispute about whether they went too far one way or the other. Thirdly, Article 16 would allow the British Government to impose their own measures, in accordance with the terms of the Northern Ireland protocol, if they were concerned about a threat to society, the economy or cultural links between the two. Fourthly, there is a provision for democratic consent if the people of Northern Ireland no longer wish to comply with the Northern Ireland protocol.
Those were the arrangements agreed by the UK Government. Now the Government say that we may not continue to comply with the Northern Ireland protocol. They are signalling to the European Union, to the Republic of Ireland and to the United States of America that you cannot rely on us in relation to the provision that keeps the border open. This Government have the impertinence to say that it is the European Union that is threatening the border. If you say, having just entered into an agreement, “We may not continue to agree or comply with it”, then of course the other side is going to think that you are not reliable. As it happens, you also trash our reputation as a country by doing it. You make this Government an absolute laughing-stock. First, Brandon Lewis said that they were breaking the agreement. Then the noble and learned Lord, Lord Keen, said that they were not. Then Brandon Lewis said, “Oh yes we are”. Then the noble and learned Lord resigned because of what Brandon Lewis said. Then Michael Gove said, “Maybe we are; maybe we aren’t”. That is the position of the Government of the United Kingdom, which has a reputation for complying with the law.
Could the Minister explain? First, are we breaking the law or not? Secondly, if we are, why are we doing so—or even threatening to—when we entered into those four protections to ensure that there was no pressure on the border between Northern Ireland and Great Britain? Thirdly, can he give the assurance required by my noble friend Lord Hain, and the noble Baronesses, Lady Ritchie of Downpatrick, Lady Altmann and Lady Suttie? We all require that the Government will do nothing that threatens the Good Friday agreement. Finally, will the Minister explain how it does not threaten an open border to say, as the British Government do, “We may not stand behind the Northern Ireland protocol”?
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I thank all noble Lords who have spoken, particularly the noble Lord, Lord Hain, the noble Baroness Ritchie of Downpatrick, my noble friend Lady Altmann and the noble Baroness, Lady Suttie, who all signed the amendment. I congratulate the noble Lord, Lord Hain, on the measured and thoughtful way in which he presented his case, and on his ingenuity in getting this amendment in so early in the Bill, so that the Committee can debate this important topic, which is one of the abiding matters of interest in the Bill. I do not demur from sensing the opinions the House has expressed on aspects of the Bill, even if I do not agree with them.
I will and must, as invited, repeat the assurances that the Government gave to the House at Second Reading last week, and will do so again when the Committee turns more fully to the Part 5 clauses. I say again, without demur or cavil, that the Government’s overriding priority has been, and will remain, to protect the Belfast/Good Friday agreement and the gains of the peace process. We agree with all noble Lords who have spoken on that fundamental objective. I assure the noble Baroness, Lady Suttie, that Her Majesty’s Government always give the most careful consideration to the impact of any of their actions in this important respect.
I was asked about the human rights aspect. The Government are, of course, committed to the European Convention on Human Rights. We have made that clear before, time and again. However, we have brought forward amendments to the Bill clarifying that regulations made under clauses which the Committee will discuss later will be subject to judicial review on public law grounds. That will provide an effective remedy in the theoretical and limited scenarios in which regulations might conceivably interfere with convention rights. My noble friend has obviously made the due statement on the European convention on the face of the Bill.
The Government’s commitment to the Belfast/Good Friday agreement and to the peace process is beyond question. We all acknowledge the importance of the delicate balance across communities in Northern Ireland. We should all reflect on the importance of not letting opinions and comment flow which suggest, either within or outside these shores, that this Government, this party, the party opposite or any Member of this House do not believe that this agreement is fundamental. We do. Where we differ is that the Government do not agree with many noble Lords who have spoken that the United Kingdom Internal Market Bill undermines the Belfast agreement. On the contrary, the Bill delivers on our commitment to unfettered access for Northern Ireland businesses to the whole UK market. In so doing, it supports the economic and social links between Northern Ireland and the rest of the United Kingdom. In that way, it complements the provisions of the protocol which avoid a hard border on the island of Ireland. It is, and remains, the Government’s position and policy that there should be no such border. The Bill supports the interlocking and interdependent elements of the Belfast/Good Friday agreement.
The Committee will come back to the questions of the rule of law in detail in Part 5, but I repeat what I said at Second Reading: the Government believe that presenting this Bill to your Lordships’ House, and the fact that it passed through the other House, is in accordance with our constitutional norms and does not infringe the rule of law.
Northern Ireland Peers voted, by a majority, against the amendment moved by the noble and learned Lord, Lord Judge, at Second Reading. That was not every Peer from Northern Ireland and I accept that it reflects differences of opinion. We have to note and respect that. The noble Lords, Lord Kilclooney and Lord Trimble, both of whom negotiated and signed the Belfast/Good Friday agreement, voted against the amendment your Lordships agreed to at Second Reading. I repeat: it is the firm resolve of the Government to maintain, and ensure compliance with, the Belfast/Good Friday agreement, and so I disappoint noble Lords who have spoken. I do not believe that the addition of these amendments to the Bill is necessary.
Turning to the references in Amendments 3 and 177 to the Northern Ireland protocol, again, as I have set out, the Government are committed to implementing the withdrawal agreement and the Northern Ireland protocol and have already taken many practical steps to do this, and continue to do so. I assure the noble and learned Lord, Lord Falconer, and others that we are continuing to work with the EU in the joint committee to resolve outstanding issues arising from the Northern Ireland protocol. Our priority is to secure the outcomes that we need in that forum, working in a spirit of good faith, so that the protocol can be implemented in the pragmatic and proportionate way intended. This is intended to give the best platform for it to command support across the whole community in Northern Ireland. Let me repeat: as a responsible Government, we cannot allow the economic integrity of the UK’s internal market to be compromised inadvertently by certain provisions in the protocol without a safety net in place. The Government have been clear in our statements, including on the criteria set out by the Government on 17 September, that these provisions would, in any case, be used only where, in the Government’s view, there had been a material breach by the EU of duties of good faith or other obligations, and be used in parallel with the dispute resolution procedures that the protocol itself establishes.
These amendments as drafted could remove, prevent or suspend our ability to act in the interests of the people of Northern Ireland, and so ensuring they are treated as our countrymen and countrywomen with equal access to the UK internal market. Furthermore, they could leave core elements of unfettered access—not only the safety net provisions—in a state of consistent uncertainty and open to persistent litigation. It is far from clear how compliance with the Northern Ireland protocol, for the purposes of these amendments, would be assessed or who would make the assessment. For example, it is possible that all the provisions in the Bill could cease to have effect if the EU alleged a breach of the Northern Ireland protocol. Any dispute then would be resolved by the appropriate dispute resolution mechanism, which in some cases would include the jurisdiction of the CJEU. That cannot be the means by which we safeguard the links between Northern Ireland and its most important market, Great Britain, which is the subject of the Bill. That cannot be the means by which we safeguard the interests of Northern Ireland from the end of the transition period and beyond.
I am well aware that we will return to these important matters in great detail later in Committee. At this point, however, I urge noble Lords to withdraw or not move the amendments. Before I do, I refer my noble friend Lady McIntosh to the whole of Clause 1(3), which says, as she quoted:
“Those principles have no direct legal effect except as provided by this Part.”
If she looks at the Bill, she will see that in the rest of that part there are number of provisions for secondary legislation. I apologise for that divergence, but I felt I should answer that point. I return to the fundamental position: this Government are wholly committed to the Belfast agreement, they cannot accept these amendments and I urge the noble Lord to withdraw his amendment.
Lord Hain (Lab)
My Lords, I thank the Minister for his courtesy and all those who have spoken in support of these amendments. I note that a third of the speakers are from the Minister’s own Benches. I think that shows that there is cross-party, cross-Bench support for the principles that these amendments enunciate.
My noble friend Lady Ritchie of Downpatrick spoke with passion about how this Bill, without these protections, imperils the Good Friday agreement. I want to return to that point when I pick up some of the arguments used by the Minister in a moment.
The noble Baroness, Lady Altmann, made a telling point: why are the Government not accepting their own policy? If their policy is, as the Minister states—I accept that in good faith—that the Government support the Good Friday agreement and the Northern Ireland protocol in protecting the Good Friday agreement, why are they not accepting these amendments? If there is some technical issue, and I will return to one of the issues he raised, we could discuss wording and come to an agreement. I ask the Minister to look carefully at what the noble Baroness, Lady Altmann, said about the Government’s own policy being reflected in these amendments. At least, we think it is the Government’s own policy.
The noble Lord, Lord Carlile of Berriew, spoke with great authority because he has spent many years on this. As Secretary of State, I worked with him on this and his review of terrorist legislation, as did the noble Lord, Lord Cormack, who was a distinguished chair of the Northern Ireland Affairs Committee in the other place. He was hugely respected on the island of Ireland for his diligence and the conscientious empathy he showed towards the situation in Northern Ireland.
The noble Baroness, Lady McIntosh, again speaking from the Minister’s own Benches, was compelling on the fact that this should be a cross-party matter. It was, of course, John Major, as she said, who played a crucial role in the lead-up to the Good Friday agreement that enabled Tony Blair to pick up the baton and drive it forward.
Another contributor to this debate, the noble Baroness, Lady Suttie, to whom I am also grateful to for her support for these amendments, speaks with real authority, particularly about what is at stake here. This is not some technical issue; this is about the future of peace in Northern Ireland. My noble and learned friend Lord Falconer, spoke also about the importance of keeping that border absolutely open on the island of Ireland, to take the process of peacemaking forward.
I ask your Lordships’ House to note that the Minister did not explain how the Bill upholds the Good Friday agreement. He asserted it, but he did not explain how it upholds is, especially given that it repeals the Irish Northern Ireland protocol. On Report, I would urge him to explain in great detail—if necessary, in technical detail—how he thinks the Bill actually upholds the Good Friday Agreement. The majority of contributors to this debate—in fact, everybody except him—dispute that. That is the problem that the Government face in setting their face against these amendments.
Unless there is an ulterior motive here, and I am not suggesting that of the Minister personally but of No. 10 Downing Street, I do not understand. If there are concerns about the implementation of the Northern Ireland protocol, there is a committee, as I mentioned in my speech, co-chaired by Michael Gove with a representative of the EU, to iron out the detailed implementation points. It is a joint committee. That makes us all think that there is something much more serious at stake here, which is undermining the whole foundation of the protocol and, indeed, of the Good Friday agreement with which it sits in partnership.
To conclude, this is a series of very modest amendments. They ask the Government to uphold their own professed policy. That is all they are doing. They are not suggesting some revolutionary change in the Government’s policy. They are asking them to uphold their professed policy on the island of Ireland, in particular on continued progress in Northern Ireland. Meanwhile, I will seek leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, we now come to the group consisting of Amendment 4. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anybody wishing to press this Amendment to a Division should make that clear in debate.
Amendment 4
“Purposes of Parts 1, 2, 3 and 4
(1) Parts 1, 2, 3 and 4 promote the continued functioning of the internal market for goods (see Part 1) and services (see Part 2), including the recognition of professional and other qualifications (see Part 3), in the United Kingdom by establishing the United Kingdom market access principles.(2) The United Kingdom market access principles are—(a) the mutual recognition principle for goods and services, and(b) the non-discrimination principle for goods and services.(3) Those principles have no direct legal effect except as provided by Parts 1, 2, 3 and 4, and only to the extent that they have been agreed in a memorandum of understanding by—(a) the Secretary of State,(b) the Welsh Ministers,(c) the Scottish Ministers, and(d) a Northern Ireland department.(4) The Secretary of State must lay before Parliament the memorandum of understanding, which must also set out—(a) how the agreed policy frameworks on the functioning of the internal market in the United Kingdom will operate,(b) any agreed exclusions from the market access principles,(c) proposals for the establishment of a council or councils, comprising representatives of the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department to oversee the operation of agreed policy frameworks and the functioning of the internal market in the United Kingdom, and(d) proposals for the establishment of an agreed dispute resolution mechanism relating to the internal market in the United Kingdom for any disputes among the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department.(5) A statutory instrument containing regulations under section 56(3) may not appoint a day for the commencement of Parts 1, 2, 3 or 4 until the requirement in subsection (4) is met.”
Lord Fox (LD)
My Lords, as I said in winding up at Second Reading, the eight hours of speeches broke the Bill down into three areas of serious concern: its illegality, its threat to the union, and its structural contradictions. As the noble Baroness, Lady Hayter, said, even if Part 5 is removed one way or another, there will still be great dangers lurking within the Bill. This amendment focuses squarely on putting the threat to devolution on ice.
The Minister was right when he said that the devolved authorities get new powers through the Bill, but these new powers are heavily constrained—more so than they were before when there was EU flexibility. We have heard some of this debate already. More importantly, both Ministers have omitted to mention that, at the same time, the Government are taking significant powers away. These losses are far more significant than any notional gains. This has already been correctly characterised by the devolved authorities as rolling back the devolution settlements.
The Governments of Wales and Scotland need only look over their respective borders to see how the UK Gossvernment are treating their regions and cities—where there is only piecemeal devolution—to conclude that taking power back to the centre is not an accident; it is a pattern of behaviour. As an aside, this is not a unique pattern of behaviour. My Scottish friends tell me that the Scottish Government are very enthusiastic about centralising power away from their local councils.
Returning to the Bill, we should not worry when it comes to Westminster’s reputation in Scotland. I read in the press that Michael Gove is heading up a new unit to tackle the secessionist movement in Scotland. What could go wrong there? Perhaps a better way of dealing with the unpopularity of Westminster is to deal with the central devolution issue in the Bill.
There are many later amendments concerning parts of the problem with the Bill. This amendment seeks to deal with it all in one go, taking it head on. It is driven by a central principle which we on these Benches share. We do not believe that it is only the UK Government or this Parliament that should dictate how the future internal market should work. It has to be a collaborative effort between Westminster, Edinburgh, Cardiff and Belfast. To achieve this, Parts 1 to 4 of the Bill need to be rewritten by consensus, not imposed, which is why this amendment seeks to halt the progress of Parts 1 to 4 until a joint process has created the future market structure. In essence, it will put on ice the Bill’s implementation until agreement is reached on the operation of the internal market frameworks.
In order to do this, the amendment rewrites the purpose of the Bill. What stays is the promotion of the continued functioning of the internal market for goods, in Part 1, and services, in Part 2. It includes the recognition of professional and other qualifications in the UK—in Part 3—by establishing the UK market access principles, including, as now, the mutual recognition and non-discrimination principles for goods and services. It adds the important rider that those principles have to be agreed in a memorandum by the Secretary of State, the Welsh and Scottish Ministers and a Northern Ireland department. This memorandum would cover how the agreed policy frameworks on the functioning of the internal market in the United Kingdom would operate and any agreed exclusions from market access principles. It would establish a council or councils, comprising representatives of the Secretary of State, the Welsh and Scottish Ministers and a Northern Ireland department to oversee the operation of the agreed policy frameworks and the functioning of the internal market in the United Kingdom. The current Joint Ministerial Council would need to be strengthened to achieve this objective.
The amendment would also establish an agreed dispute resolution mechanism, relating to the internal market of the United Kingdom. It requires the Secretary of State to lay this memorandum before Parliament. In short, this amendment makes the Government do what it should already have done. Amendment 4 requires them to consult and reach agreement with the devolved nations of the United Kingdom. By pausing and putting this on ice, Her Majesty’s Government can then create the consensus that is needed. It can also address the holes in the Bill, including the role of the common frameworks, which will be discussed in much more detail later, and it can put in place a process of dispute resolution. The deliberate absence of detail around dispute resolution can be viewed with great suspicion by those who are so minded. It seems that in the end, the Westminster-based UK Minister will decide disputes if the Bill remains unamended.
Why should the Government agree to this amendment? The first reason is due process. I met the noble Lord, Lord Callanan, on Friday. His key anxiety was about discipline and time in order to get through all this. If he were to accept this amendment, he would, at a stroke, remove large portions of the subsequent debate up to, but not including, Part 5 of this Bill. He would then meet his time objectives. Much more seriously, by accepting this amendment, the Government could step back from a truly appalling act of political vandalism. To say that this Bill drives a coach and horses through devolution is not hyperbole. This cynical approach to the balance of powers established between Westminster and Scotland, Wales and Northern Ireland, is calling down issues that, once started, will not easily be halted. This amendment seeks to avert this disaster, creating a role for the devolved authorities, including the operation of the internal market frameworks, robust dispute resolution, agreed exclusions from market access principles and representation for all four nations on oversight councils. I beg to move.
Baroness Neville-Rolfe (Con) [V]
My Lords, I refer to my interests in the register as this is the first time I have had the honour of speaking in Committee. Amendment 4 introduces an expanded purpose for the Bill. The noble Lord, Lord Fox, has explained the rationale for his wide-ranging proposal. I can understand his wish to refer to services at this introductory point in the Bill, given that they comprise over 80% of GDP, and to professional and other qualifications, harmony on which is so important to the UK’s single market.
I accept that the changes to subsections (1) and (2) merit consideration. However, I am very uneasy about the proposed new subsections (3) and (4). I fear that they make this a wrecking clause. They give the devolved Administrations a veto over the way internal market arrangements will work, in addition to the substantial powers and money that they have already been given in the various devolution settlements and EU exit Bills. This is a recipe for the politics of national resentment, chaos and delay, at a time when we need rapid agreement on the new order so that the country can move forward and make the EU exit work, difficult though this may be.
Resources are already massively redistributed out of London and the south-east to other parts of the UK, with Scotland alone having a fiscal deficit of £15 billion—namely, a subsidy from richer England—according to a recent article by David Gauke, who served in the Treasury for seven years. We do not want yet another stand-off at this moment in time with the devolved nations, able to hold things up. There has been quite enough of such delay in the exit negotiation process, now more than four years long, I remind noble Lords.
Where I have more sympathy with the noble Lords, Lord Fox and Lord Purvis of Tweed, is on the fact that we need clarity now, before the Bill takes effect. Perhaps I can explain why by way of analogy.
When I was at Tesco, one of the key reasons for success was a clear understanding of who had responsibility for what and a readiness to accept the rules for the greater good. Procurement was done centrally by buyers, who could work with the supply chain, such as British food producers, understand their needs, strengths and innovations, agree a reasonable deal and ship goods to the stores in line with customer demand. When it came to other areas, such as who to hire as employees and how to schedule their hours, that was locally determined. The key was that everyone knew and accepted the division of labour because it contributed to the success of the whole. There was no council where everyone could waste hour after hour arguing the toss, as appears to be proposed in this amendment.
Let us have clear divisions and let us decide them now, not leave them for a great fight over a memorandum of understanding or yet more devolved government bodies backed up by dispute resolution. That is just an invitation to politically motivated folk to stop the country adjusting to the new norms and getting ahead with economic recovery and international ambition.
The proposals in the Bill are a good start, and, as noble Lords can see, I am uneasy about this particular amendment. I served for nearly three years as the single market Minister in the EU and for years as a British official negotiating in Brussels and Luxembourg, and the truth is that, subject to some minor subsidiarity, internal market rules for goods were set at the EU level in the interests of the efficient functioning of the market. By analogy, rules for the UK single market should be set at the UK level. EU services were less streamlined, but we all recognised that and wanted to bring about improvement, which was one of the main objectives of the UK presidency in 2017, but that never happened. I look forward to hearing from my noble friend the Minister, but I will take a lot of convincing that subsections (3) and (4) make sense.
Lord Morris of Aberavon (Lab) [V]
My Lords, I fear I must disagree with the noble Baroness, Lady Neville-Rolfe. I support this amendment. The House will be aware of my approach as a devolutionist, and I will not repeat my general views. However, for my part, the key is subsections (3) and (4) of Amendment 4 on what should be contained in a very necessary and vital memorandum of understanding.
At Second Reading, I raised the divergence in understanding between the Welsh Government and Whitehall. The Welsh Government spelled out that they were losers from the Bill—their powers would be changed. There were two particular differences in understanding between HMG and the Welsh Government. First, they said that the Bill takes powers to spend money over the heads of devolved Ministers on devolved matters; and, secondly, that the Bill amends the Government of Wales Act to add the decision on and operation of state aid policy to the list of reserved powers. In the factual briefing on the Bill, the Government actually claim that they are increasing the powers of the devolved legislatures. Indeed, in the discussion on the previous amendment, the Minister claimed again that new powers were being given to the devolved legislatures. They cannot both be right. A recent meeting of Peers with the Welsh Secretary failed miserably to clarify the position. I now specifically ask for the Government to publish a reply to the Welsh Government’s document on their concerns about the Bill.
Baroness Randerson (LD) [V]
My Lords, I regret that I was unable to take part at Second Reading, but that does not mean that I am not deeply concerned—[Inaudible.]
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We seem to have a technical problem.
Baroness Randerson (LD) [V]
[Inaudible]—needed at all, certainly at this stage. The earlier parts of the Bill, which deal with the establishment of new rules to maintain the internal market now that we have left the EU, have received much less publicity than Part 5. However, these parts are just as constitutionally significant because, under the cover of Brexit, the Government are attempting to slip through the unravelling of devolution. They have claimed that this Bill will increase the powers of the devolved Administrations, which is akin to President Trump claiming that the virus is waning in the USA: the facts demonstrate its falsity, as the clauses in this Bill demonstrate multiple ways in which it undermines current devolved powers.
The UK’s internal market appears to function perfectly well at the moment. The barriers cited by the Government as the reason for this Bill are hypothetical and unlikely to materialise because they are clearly against the interests of the devolved Administrations. There is no clamour to diverge from existing standards set by the EU because they are both high and universally recognised. Therefore, taking the Bill at face value, it seeks to solve a problem that does not exist, but that judgment is rather too kind because the details betray the Government’s real purpose.
Until now, devolution in the UK has functioned under the umbrella of EU legislation. Most of the fundamental devolved powers have operated in that way, and EU regulation has been accepted with noticeably little argument because it operates on such a large scale that there is little perception of party-political bias. The new arrangements set out in this Bill will be very different. Obviously, England will dominate, come what may, but the Government are not content with relying on size alone. This Bill steals all the remaining cards from the devolved nations.
We have a ragged devolution settlement—lopsided, confused, and already under huge strain. Leaving the EU has destabilised it further. Because there is no proper devolution in England, UK Government Ministers are effectively hybrid Ministers. One minute they are acting as Ministers for England and the next they are UK Ministers. Indeed, in some cases, such as agriculture, the Secretary of State is largely just the Minister for England, so it is essential that there is a strong dispute resolution mechanism: there will be problems if that fell back on the Secretary of State alone. This Bill itself will become a protected enactment, which devolved Administrations cannot repeal or modify. However, the UK Parliament will, in practice, be able to override the market access principles when legislating for England. Hence it will have an inherently asymmetrical effect.
Looking at how the market access principles will be enforced, we see a much tighter definition than allowed under EU law. It narrows the territorial scope of devolved legislation, which will no longer be able to apply to all activity within that nation. The Senedd could still vote to ban a wide range of single-use plastic items, for example, but that ban could no longer be applied to products entering Wales from the rest of the UK, nor could it ban sales of those goods. Such a ban would therefore be pretty meaningless. Amendment 4 applies the Government’s own market access principles, but with a framework of respect for the decisions and views of the devolved nations. With all due respect to the noble Baroness, Lady Neville-Rolfe, the UK is not a supermarket. The nations of the UK have individual and proud heritages and identities.
The Government’s regulatory impact assessment recognises that the broad application of the market access principles will limit the ability of the devolved Administrations to introduce distinct approaches to environmental and social policy, which will of course undermine the fundamental purpose of devolution. In the interests of centralisation of power, the Government are attacking innovation. The freedom provided by devolution has encouraged new approaches, such as plastic bag pricing, in Wales and minimum alcohol unit pricing in Scotland and Wales. There is an insidious pattern in many of the controls in the Bill. It allows the status quo to stand in some instances, but removes the right of devolved Administrations to change regulations in the future. This looks like the path to a stagnating economy.
Amendment 4 seeks to strengthen the hand of the devolved Administrations so that their voice can be heard. It replaces the very weak duty to consult with a much stronger principle of consent. That would force the Government to return to a normal approach of partnership and respect. The Bill scythes its way through devolved powers, and the amendment attempts to tackle some of that. The Government have lately reminded me of a drunk in a bar, who swaggers around aggressively challenging the other customers over imagined insults and picking unnecessary fights. This really is an unnecessary fight with the devolved Administrations. Devolution was always incomplete and uneven, and UK identity has been stretched pretty thin recently. Throughout the Bill there is a thread seeking to reverse devolution and recentralise the state, and this Government simply must not be allowed to get away with it.
Lord Dunlop (Con) [V]
My Lords, I want to comment on some of the issues raised by the amendment. It is useful in that, so far as this Bill is concerned, it draws attention to—if I may put it this way—the dog that did not bark. The dog in this case is the agreement reached at the Joint Ministerial Committee in October 2017, between the UK Government, the Scottish and Welsh Governments and the senior civil servant representing the Northern Ireland Executive, on the principles to guide the work on common frameworks. There will be an opportunity to debate in more detail how common frameworks intersect with the Bill’s provisions in the next group of amendments, but looking at the JMC principles is a good starting point.
In its report on the Bill, your Lordships’ Constitution Committee, of which I am a member, concluded:
“We consider that adhering to the principles agreed for formulating common frameworks would improve the likelihood of reaching agreement on how to progress the Bill. We are not convinced that the opportunities for managing the UK internal market through the common frameworks have been exhausted”.
The JMC principles embody what can reasonably be assumed to be core UK Government concerns: the effective functioning of the UK internal market; compliance with international obligations; the ability to negotiate, enter into and implement new trade and international agreements; the management of common resources; and cross-border justice and security. They also address those issues likely to be of most concern to the devolved Administrations: respect for the devolution settlements; devolved competence not normally adjusted without consent; and equivalent flexibility for local tailoring of policies as is afforded by current EU rules, as we have heard.
One of the witnesses from whom the Constitution Committee took evidence— Professor Nicola McEwen from Edinburgh University—contrasted the approach adopted for common frameworks, which she characterised as a co-operative and co-owned process, with the provisions of the Bill, which she described as more top-down. It is fair challenge to wonder whether a top-down approach might be necessary because one of the participants in the common frameworks negotiations is often seen as provocative and difficult to deal with, and of course committed to the break-up of the United Kingdom. The introduction this summer in the Scottish Parliament of a second continuity Bill, designed to give Scottish Ministers powers to maintain dynamic alignment with the EU, might well have been seen by the UK Government in this light. However, I would make three observations about this:
First, the Welsh Government, who, unlike the Scottish Government, gave their legislative consent to the European Union (Withdrawal) Act 2018, are a unionist Government but nevertheless as concerned as the Scottish Government about the implications of the internal market Bill for devolution. Secondly, we have now had eight of the statutory quarterly common frameworks reports from the UK Government mandated by the 2018 Act. Each has confirmed that common frameworks are making progress and that the Government have not felt the need to exercise their power to freeze devolved competence to counter any imminent risk of policy or regulatory divergence. Thirdly, even at a time when relations between the UK Government and the Scottish Government are at a low ebb, and the Scottish Government initially insisted that they would withhold legislative consent as a matter of principle for all Brexit-related Bills, the Scottish Government have in recent months recommended legislative consent—albeit with some qualifications—to the Fisheries, Agriculture and Trade Bills.
In conclusion, the amendment in the names of the noble Lords, Lord Fox and Lord Purvis, seeks to inject into the Bill the spirit of the JMC principles—here I am concerned more by its spirit than its precise terms—and to provide a more co-operative intergovernmental architecture for taking forward the UK internal market, which is currently missing from the Bill. I therefore hope that Ministers—despite the challenges, which I do not underestimate—will not give way to pessimism about the governance of the union, nor give up on a collaborative “four nations, one country” approach to protecting free trade within the UK. As such, I hope they will work constructively to address the concerns raised about the Bill during this debate.
Lord Bruce of Bennachie (LD) [V]
My Lords, I am delighted to follow the noble Lord, Lord Dunlop. That was a thoughtful contribution, and I hope the Government will reflect on it, because it is in the interests of both the Government and the future of the United Kingdom that that kind of approach is thought through.
I speak in support of the amendment, which I contend is a constructive approach to maintaining trust in the existing devolution settlements, which are strained, and establishing a consensual way forward. I believe it is consistent with the report of this House’s Constitution Committee, which, along with others, has questioned the need for the Bill at all—a point that has been mentioned by a number of speakers. Very late in the day, it appears that some in this Government show signs of a growing awareness of the dangerous game they are playing with the devolution settlements and the implications for the future of the United Kingdom. The question arises why the Government are in such a hurry to get this through with totally inadequate consultation with business or the devolved Administrations. The Minister’s claims of business support during Second Reading was, frankly, extremely thin.
The devolved Administrations are, as has been said, opposed to the Bill as it stands, and amendments have been tabled on their behalf on a cross-party basis. When challenged as to why the powers in the Bill are needed, the Government’s responses are wholly unconvincing. From everything I have seen and heard, the Bill appears to be a solution looking for a problem. When Ministers airily suggest, for example, that Scotch whisky distillers may be prevented from buying malting barley from England, without any shred of evidence, they refer to different building standards, apparently in ignorance of the fact that Scotland has different standards that well predate devolution.
Given the flimsiness of the Government’s case and knowing what we do about the high-handed, centralising, cavalier approach of the Government, we are surely entitled to be suspicious about their intentions. After all, as the noble Lord, Lord Dunlop, pointed out, three years ago it was possible to set out in a communique the principles and approach behind the common frameworks process. The language is detailed and consensual. Specifically, the communique setting out the common frameworks describes the objective as enabling the function of the UK internal market while acknowledging policy divergence. It further stated that the devolution settlement should be respected and frameworks will
“be based on the established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent.”
This approach and language are entirely missing from the Bill, so the question to the Minister is not only why the Bill is needed, but, even if that case can be made, why the hurry? More pertinently, having rejected letting common frameworks take all the strain, can the Minister explain why the eminently sensible and constructive approach of the common frameworks is not incorporated into the Bill, as I hope subsequent amendments will allow it to be? We will return to that.
That said, there remains a flaw in the common frameworks approach, which must be addressed and attached to the Bill if it goes forward, and it is identified in this amendment. It is that the devolved Administrations must be fully involved throughout the process and represented in the institutions that progress the frameworks. The proposals for the office for the internal market to be incorporated into the Competition and Markets Authority has been widely criticised. First, the CMA has a dedicated and reserved function, and there is no provision for the devolved Administrations to be represented, but they surely must be represented on the OIM or a better alternative.
As has again been commented on, so far, the common frameworks are progressing with all the appearance of a high degree of consensus and the dispute mechanism has not been called into play. It might be thought that, given the constructive, consensual approach to date, the likelihood is that if dispute resolution reached the apex, it would be accepted. However, it would not be satisfactory as it stands, and certainly not fit for purpose in relation to this Bill. The weakness is that as a dispute escalates, first to Ministers of the devolved Administrations, which includes UK Ministers acting for England, the final resolution lies with UK Ministers. The noble Baroness, Lady Neville-Rolfe, was concerned that the devolved Administrations might be the cause of delay, but I fear she underestimates the resentment of UK English Ministers overruling the devolved territories. That, I suspect, sadly helps explain the rather smug responses from UK Ministers: devolved Administrations may huff and puff, but UK Ministers can blow their houses down.
The Government have quoted examples from abroad to justify their approach but, ironically, they are mostly drawn from countries with properly established federal constitutions, notably Australia and Canada, where state and provincial governments’ views are fully involved in decision-making. In the case of Australia, a two-thirds qualified majority is required.
According to weekend reports, Michael Gove is establishing a unit to combat the SNP and its pressure for independence. I certainly believe that the largely unchallenged fantasy and lies which are fuelling the case for independence that would be so disruptive and damaging on a disastrous scale on top of Brexit and post-Covid recovery need to be challenged, but Mr Gove should have enlightened his colleagues that in its present form, the Bill will make his task almost impossible. Amendment 4 would greatly help him by delaying implementation of Parts 1 to 4 until an agreed approach is confirmed.
As the party with the deepest commitment of any to home rule—we battled for it for over a century—Liberal Democrats are determined to protect the devolution settlement against a centralising government in London and the separatist thrust of the SNP. Scotland’s best interests lie in using the powers that have been secured, ensuring they are not eroded and gaining a positive relationship with the other devolved Administrations and the UK Government. As we rebuild after a botched Brexit and a mishandled Covid-19 crisis, businesses do not need further disruption over constitutional arguments.
With the mechanisms in place and goodwill to seek the best for Scotland, the devolved territories and the UK, confidence can be restored. Ideally, the Government should abandon this Bill, which is at best premature and probably unnecessary but, so long as they push ahead, Liberal Democrats will push to secure this responsible and constructive amendment and save us from an unwanted and unnecessary constitutional crisis. Surely we have had enough disruption for one year—or even 10.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow my noble friend. Amendment 4 was ably moved by my noble friend Lord Fox, and I want to outline some further considerations based on principles and on practical considerations.
I start by reflecting on the important contribution of the noble Lord, Lord Dunlop. I first met the noble Lord when he was the adviser to Prime Minister David Cameron in Downing Street and I was chair of the cross-party Devo Plus group in Scotland, which was arguing for enhanced powers for the Scottish Parliament, which subsequently came into legislation with the Scotland Act 2016. The noble Lord considered our proposals carefully, he has been a very thoughtful contributor to our debates and I look forward to the conclusions of his review on intergovernmental relations. The fact that he has asked for a degree of pause on what could be considered a constitutional rush is important and should be taken seriously. If despite his wise counsel and the thrust of the amendment—which has been tabled sincerely—the Government insist on moving forward on their current trajectory and in their current manner, it will be the first time in a quarter of a century that a major constitutional change will have been imposed on the nations without any form of public or parliamentary consent. That will not serve the start of a new functioning internal market well. The principle of consent is therefore not a theoretical argument; it is important at the political level for those of us who believe strongly in the continued functioning of the United Kingdom and its internal market.
That is in stark contrast with the following groups that we will be considering, where, as the Minister has heard, the frameworks process has been good and we have supported it. The fact that it has been supported across all parties and, indeed, the nations is important.
I reflected on the point indicated by the noble Baroness, Lady Neville-Rolfe, which is that we need the Bill to prevent a veto by one of the nations. That argument would have some form of justification if we had seen that approach within the common frameworks. They cover the policy areas that are being repatriated: 154 of them, of which only four remain where there is not agreement whether they are reserved or devolved. Two of them will be resolved only after we know what is the agreement with the European Union, because they concern geographical indications and state aid—we don’t know what the Government’s proposals are for those two areas because we don’t know what the agreement with the European Union is. That will leave only two. For the 18 that require legislation, it is well under way to being proposed.
So it is not the case that there will be a major gap on the statute book at the beginning of January, and nor is it the case that any of the nations that are in receipt of these powers are seeking to exercise their veto. What those nations are asking, justifiably, is whether the powers being repatriated under the Bill—not the frameworks—are being constrained in a manner that is significantly different from how they were exercised under the single market in the European Union? These are justifiable concerns. So, with the greatest respect, I do not think that the point made by the noble Baroness, Lady Neville-Rolfe, holds any water at all.
It is of concern that in the first group the Minister was not able to categorically reinforce what has been referred to so far, which was the agreement made among the Ministers of Wales, Scotland and the United Kingdom and the representative from Northern Ireland of the principles of moving forward on the framework agreement. I hope that, when the Minister responds to this, he will be more clear in supporting that. If the approach of this amendment had been followed from the outset, I believe that we would have been able to secure consensus, because it would have been consistent with the manner in which we have been approaching it so far.
The point that my noble friend Lady Randerson indicated, which I thought was a very powerful one and which I hope the Minister is not only aware of but very sensitive to, is that this Bill, probably more than most, brings into stark reality the fact that we do not have a federal Government, which means that there are not designated Ministers for England on devolved areas for England. So we will continue to have UK Ministers who will be operating both at a UK level and effectively as Ministers for England. When it comes to areas of the functioning of the internal market, which is about the four nations, and then separately a consideration at the supra-United Kingdom level, the direct conflict of interest that exists in a Minister making the decision in the interests of England, and thus being the arbiter of the approach of Wales or Scotland as to whether they are in breach of the market principles, is a very valid concern.
We have already heard the example of a decision made on legislation in Scotland, the deposit return scheme, where the Minister himself said in the debate on the first group that, under the Bill, it could be disapplied unless UK Ministers decided that it could be within the principles. Now UK Ministers will decide on that. The Minister is shaking his head. If he is shaking his head, it is on the basis of agreement—which is my point. Consensus would be secured on agreement for that.
What is certainly the case—and the Minister cannot shake his head at this—is that the Bill states that decisions made for England by the UK Parliament cannot be bound by any successor UK Parliament. But if decisions made in Scotland or Wales are overridden by the UK Parliament, those parliaments themselves cannot subsequently legislate within those areas. That is why paragraph 88 of the Constitution Committee report asked the Government to
“explain why clause 6 treats legislation intended for England differently from that passed by the devolved legislatures.”
This is the reality—which is why there is justifiable concern. If there is such a concern, what is a better way of approaching it? A better way, as my noble friend Lord Fox and others indicated, would be to look to other countries.
Before I move on to outlining why I think we could look at international precedents, I would like to pick up a further point regarding dispute resolution. My noble friend Lord Fox and I met the Minister and the noble Lord, Lord True, and I am very grateful to the Minister for sending a long letter answering the points that we raised in the question that we asked about when these issues would inevitably arise in disputes. The Minister’s reply of 13 October was very interesting. He said that
“dispute resolution between Administrations will be managed through the appropriate intergovernmental relations fora and are interlinked with the outcomes of the review of intergovernmental relations which is due to conclude in the autumn. The Office for the Internal Market will have a role in providing independent advice in the dispute resolution process.”
Lord Naseby (Con)
My Lords, I shall resist the temptation to follow the noble Lord, Lord Purvis, in what he has said. However, I reflect that in the other place I was responsible for, and chaired most of, the Maastricht Bill, with 500 amendments and 24 days of debate. Even there, I think that I would have been really stretched to have enabled what is labelled here as a new clause to be put into the purpose of Part 1 on an introductory basis.
I understand the feelings of Scotland, Wales and Northern Ireland. I had the privilege of being Parliamentary Private Secretary in Northern Ireland, and I was a local government leader. Of course they feel strongly, as I do about local authorities and the Covid situation. Nevertheless, it is quite clear that the purpose of Part 1 is
“the continued functioning of the internal market for goods in the United Kingdom by establishing the United Kingdom market access principles.”
It then lists what the mutual recognition and non-discrimination principles should be.
If the Opposition and those who do not like what is in Part 1 want to make a point, there is a case for having a small amendment including just the words “and services”. I see merit in that because, as I said earlier, that seems to have some validity, but to suggest in the introductory part, under “Purpose of Part 1”, that we have to await a statutory instrument
“containing regulations under section 56(3)”,
et cetera, is extraordinary. I cannot believe that there have ever been many Bills where that sort of new clause has been inserted into the introductory part.
Therefore, I say to my noble friend on the Front Bench that there are valid questions arising from this alleged new clause to be asked in the right place, but this is certainly not the right place in this Bill.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, as the noble Lord, Lord Dunlop, said, this debate is a sort of appetiser for the main course to come in later groups, when we will dig much deeper into the right approach to ensuring that our current well-functioning internal market continues after the transition period ends and that we can manage the necessary and inevitable policy divergences that we need across the United Kingdom and should welcome.
The noble Lord, Lord Bruce, said that the key questions are why we need the Bill at all, let alone now, why the Government are ignoring the evident successes of the co-operation and constructive progress which have been hallmarks of the common framework programme, why threaten the devolution settlement so directly, and what it is about the top-down approach that the Government wish to introduce that is so attractive, given the huge risks to devolution. Those are very important questions and I look forward to hearing what the Minister says when he comes to respond.
The noble Baroness, Lady Neville-Rolfe, said that she recognised the value of proposed new subsections (1) and (2) in the amendment but was worried that proposed new subsections (3) and (4) made it a wrecking amendment. I do not think that it is. Indeed, I make the same points about the need for a pause before we implement in my Amendment 178, which is in a later group.
I hope that the Government will think very hard about the clear message that seems to come from this debate. We need to carry on down the road well travelled in recent years, encouraging the devolved Administrations to continue to collaborate, to work together with mutual understanding until agreement is reached, and then to go further so that there is agreement on all the issues that need to be agreed and a way of resolving any issues that are left over. This is the way in which we make progress—not by imposing a top-down solution. Indeed, anything else risks destroying the complex but pretty successful devolution settlement that we currently enjoy.
Lord Callanan (Con)
My Lords, Amendment 4, tabled by the noble Lords, Lord Fox and Lord Purvis, would prevent the market access principles applying by the end of the transition period. As my noble friend Lady Neville-Rolfe pointed out, that would produce a considerable delay in providing certainty to businesses that free trade can continue within the UK’s internal market.
I heard the noble Lord, Lord Bruce, query my assertion at Second Reading about business support for these measures, but over 270 businesses and organisations responded to the public consultation on our proposals and, overwhelmingly, businesses supported our approach. Particularly as they look to recover from the impacts of Covid-19, businesses need certainty, and that is what this Bill, as drafted, seeks to provide.
I repeat that the aim of the Bill is to ensure that there are no internal barriers to trade within the UK, while respecting the devolution policies. All devolved policy areas will stay devolved. The proposals ensure only that no new barriers to UK internal trade are created. The Bill aims only to procure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for those Administrations. The Bill ensures that these local policies can be pursued while, at the same time, maintaining seamless trade in the UK internal market.
The noble Lord, Lord Bruce, asked me specifically about barley, and indeed the noble Lord, Lord Purvis, has written to me on the same subject. We believe that this provides a good example of the risks that businesses could be exposed to. Food produce placed on the market must comply with rules on pesticide maximum residue levels. These are currently set at EU level, and so are consistent across the United Kingdom, meaning that food can be traded across the devolved Administrations. This is an example of a policy area which will be devolved after 1 January. At the moment, all Administrations are supported by the same regulator—the Health and Safety Executive. That will, to a certain extent, aid consistency, and we are of course committed to working closely with the devolved Administrations to jointly agree consistent maximum residue levels across Great Britain.
However, without the Bill’s mutual recognition provisions, there would be the possibility of divergent decisions being taken, which would then introduce new trade barriers on food between different parts of our country. Depending on any particular decision, this could affect any agricultural or horticultural produce that has been previously treated with pesticides. For example, different residue rules might mean that it is not lawful to sell in Scotland barley grown in England.
More broadly, without the principles set out in the Bill, harmful divergence would be possible, in spite of the important protection provided by industry standards. That is because industry standards are voluntarily agreed between private economic actors and so cannot provide the same certainty for businesses and investors as the legislative principles set out in the Bill.
The consent process proposed in the amendment would remove that certainty and make operating conditions for businesses across the UK dependent on a number of fairly onerous conditions. These conditions include matters that would cut across ongoing collaborative work with the devolved Administrations. I say to the noble Lord, Lord Bruce, that these include the common frameworks programme and the intergovernmental relations review, both of which the Government are fully committed to pursuing. Indeed, in the next group, we will examine the common frameworks principles in more detail, and my noble friend Lord True will explain our position in more detail.
However, I assure noble Lords that the Government have already committed to appropriate consultation with the devolved Administrations on these matters. Furthermore, we are engaging them in all suggestions for how practically to improve intergovernmental relations, including both the machinery, such as dispute resolution, and the way in which these joint forums are run.
The noble Lords, Lord Fox and Lord Purvis, asked a question about dispute resolution. I can tell them both that the office for the internal market will support existing arrangements for dispute resolution. Its non-binding reporting will ensure that evidence-based dispute resolution takes place in line with the current memorandum of understanding on devolution. The OIM’s reporting will be available to all four Administrations and legislatures on an equal and purely advisory basis. It will provide information and support separate political processes to resolve any disagreements and enable intergovernmental engagement. The amendment would cut across all ongoing collaborative work with the DAs and remove our ability to give businesses the certainty they need at this time.
The noble Baroness, Lady Randerson, said that the Government would override the rest of the UK when legislating for England. That is certainly not our intention. The nature of our constitution is that the UK Parliament will be able to legislate over existing legislation, but the Bill aims to treat all domestic legislation in the same way. Her Majesty’s Government will be cognisant of the importance of market access principles in supporting any extra legislation.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received three requests to speak after the Minister: from the noble Lord, Lord Wigley, the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Purvis of Tweed.
Lord Wigley (PC) [V]
My Lords, the Minister cited the example of pesticides, a subject on which there will almost certainly be unanimity. But on matters such as subsidy control, where there may be a justifiable difference in approach, does the Minister not accept that unless the Government are willing to accept a mechanism such as this to secure consent from the devolved Administrations, he is in effect imposing his solution on them, and cannot in any way claim that this Bill is agreed by the devolved nations—with all the consequences that flow from that unfortunate situation?
Lord Callanan (Con)
The Bill would legislate for subsidy control becoming a reserved matter. We are committed to consulting further with the devolved Administrations before proceeding, if we do, to any further legislation.
Baroness Neville-Rolfe (Con) [V]
I have two questions. First, I called for clarity, trying to explain its importance to organisational success, which, frankly, is very relevant. I noticed almost no support for this from the Benches opposite, yet businesses, citizens and professionals will have to manage in the new market, and if the rules are at risk of changing in different ways regularly, that could be a problem. Obviously, sensible consultation and collaboration are needed, but we must be wary of a political veto. Does the Minister agree that this is a problem, or is the noble Lord, Lord Purvis, right?
My second question is whether the noble Baroness, Lady Randerson, is right or I am. At Second Reading, I mentioned with approval the ability of the devolved territories to do their own thing and gave two examples: minimum pricing of alcohol and carrier-bag charges, both of which I supported at the time. The noble Baroness, Lady Randerson, suggested that the powers to do such things will be undermined, and quoted exactly the same examples. Am I right or is she right?
Lord Callanan (Con)
My noble friend is putting me in the very difficult position of choosing which noble Baroness is correct. If I might venture to say, on the measures she has quoted my noble friend is correct. The Bill has no effect on minimum pricing of alcohol; that is excluded as a policy area, as are all pre-existing measures. This would also apply to carrier-bag prices. The Bill provides clarity and certainty for businesses, which is what we seek.
Lord Purvis of Tweed (LD)
My Lords, I take it as a little chink of victory that the Minister found it difficult to say whether he agreed with his noble friend or me. I will secure that as an achievement of the day, if he does not mind. I will return in a future group to minimum unit pricing and single-use carrier bags, because I am not convinced about that position.
I suspected that the Minister would refer to pesticides, so I took the liberty of reading the Health and Safety Executive’s board report on the framework, which has now been agreed, on pesticides and maximum residue levels. That agreement has been reached, so the concern the Minister is putting forward, of a threat to the operation of the single market, does not exist. That will be a UK-wide provision, and the regulations for Scotland are about policing it. The approach of the HSE has been well established for many years, and the regulation required to police this in Scotland is quite different from what the Government are asserting, which is the exercise of a power that would effectively prohibit goods from entering a Scottish market. That is notwithstanding the fact that if it concerns what is ultimately used for produce such as whisky, it is an industry standard, based on the minimum base that would be taken. The chemicals and pesticides framework from Defra and HSE has been resolved, so perhaps the Minister should stop using this an example. It is not convincing.
Regarding the office for the internal market, the Minister has now said something new: that the CMA, the parent body of the OIM, is involved in existing disputes under the Joint Ministerial Committee’s memorandum of understanding that was agreed after devolution. This will be news to the CMA. Can the Minister repeat that the CMA has a role in the Joint Ministerial Committee’s disputes, under the memorandum? That is what he said in response to the question, but it is not the case. As outlined in the Bill, the OIM has no role in disputes. If the Minister is saying that the dispute resolution mechanism for the internal market is the JMC memorandum of 20 years ago that was agreed for devolution, it simply will not work, because it does not provide for the operation of the single market.
Lord Callanan (Con)
The noble Lord asked a number of questions, and I am sure he will be quick to write to me if I do not answer all of them. On the famous subject of barley and pesticides, he is correct, but the whole point about frameworks is that they are voluntary agreements. Any one of the Administrations can walk away at any time. We are committed to agreeing voluntary frameworks and will continue to take part in those discussions and advocate them, but the point of this legislation is to provide a legislative underpinning for all of the work taking place on frameworks.
Could the noble Lord remind me what the other questions were?
Lord Purvis of Tweed (LD)
I am grateful to the Minister and may well be writing to him on that basis, as he predicted. Can he clarify what the intended role of the office for the internal market will be under the CMA? In a previous answer, he indicated that it has a role in the dispute resolution mechanism in the devolution memorandum of understanding. My understanding is that it does not. Which is the case? If the intention is that the OIM has a role in the dispute resolution mechanism, there is no reference to that in the legislation.
Lord Callanan (Con)
The purpose of the office for the internal market is to provide advice, reports and monitoring to all four Governments and legislatures. It will have no direct role in dispute resolution, which will be a matter for the Joint Ministerial Committee to discuss.
Lord Fox (LD)
My Lords, I apologise to the Deputy Chairman of Committees for having jumped in so soon. I thank all noble Lords for their contributions; the subsequent questions were worth waiting for, so I am glad that I did not plough on.
This has been an interesting debate; however many more hours we will have in Committee, it has uncovered above all else how half-baked—how completely undercooked—this Bill is. It is not worked through. The point of this amendment was to highlight, and give the Government, an opportunity to step back and admit that there are so many open questions and so many issues. I feel sorry for the Minister—I rarely do, but on this occasion I do—because he is having to respond to things that have not been properly locked down in this legislation. So I will look at Hansard, but it is quite clear that, one way or another, we will have to come back on Report to these absolutely central issues. Having said that, I beg leave to withdraw Amendment 4.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
My Lords, we now come to the group beginning with Amendment 5. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or any other amendment in this group to a Division should make that clear in debate.
Amendment 5
Lord Hope of Craighead
“Common frameworks process
(1) The United Kingdom market access principles shall only apply to subjects within a description listed in Schedule (Common frameworks) when the common frameworks process in relation to that subject has been exhausted.(2) The common frameworks process is a means by a measure of regulatory consistency in relation to policy areas within devolved competence may be mutually agreed between the United Kingdom and devolved governments.”
Lord Hope of Craighead (CB) [V]
My Lords, I wish to speak to Amendments 5, 11 and 53 in this group, which are in my name and, in the case of Amendment 5, that of the noble Lord, Lord Wigley. They are directed to an issue that, as we have heard, lies at the heart of the way the internal market is to operate in the best interests of all parts of the United Kingdom. The problem to which they and all the other amendments in this group are directed is this: how can the common frameworks programme fit in with the centrally driven market principles laid out in the Bill?
I must declare an interest in the common frameworks programme, as I am a member of the Common Frameworks Scrutiny Committee, chaired by the noble Baroness, Lady Andrews. For us, scrutiny of a number of these frameworks is already work in progress. So we are looking for an answer to that question, too, quite apart from the need to address it for the purposes of the Bill.
I shall introduce this subject as succinctly as I can, but the issue is one of fundamental importance to the devolved Administrations and to the future progress of the Bill, so I hope I shall be forgiven if I take some time to say what common frameworks are and why they matter. The common frameworks are a means by which the UK and the devolved Governments can agree on a measure of consistency across the United Kingdom for those policy areas returned to us from the EU that are within devolved competence. The process has been going on since the European Union (Withdrawal) Act 2018, which mandated it, was enacted. It is founded on the principles that were agreed by the JMC at its meeting in 2017, to which the noble Lord, Lord Dunlop, referred in the previous group.
To begin with, the UK Government identified 142 distinct areas that might need to be addressed. While we were within the EU, legal and regulatory consistency was maintained across the UK in these areas by EU law—but EU law does not insist on complete regulatory uniformity. The degree to which this has to be so depends on the nature of EU law in each given area. In some cases, minimum standards are set by EU law, leaving a measure of discretion to member states. In other areas, EU law is more prescriptive, leaving little room for variation. The devolved settlements were arrived at against that background. The key to their success is that they allowed for policy divergence within the UK in areas that were not reserved to Westminster.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I support almost all the amendments in this group—particularly those tabled and introduced with such great clarity by my noble and learned friend Lord Hope—because they all tend in the same direction: to narrow the focus of the Bill on to areas where agreement cannot be reached with the devolved Governments, on ways of managing the tension between safeguarding the internal market and safeguarding the rights of the devolved institutions to take measures they have been elected to take. I shall address these issues myself later in the debate.
My role in this group is more specific: to explain why I believe that Clause 51 should not stand part of the Bill. Clause 51, regrettably, reflects the general powers of the Bill—powers which are sweeping in the Bill’s attack on the very nature of devolution. The clause would make the whole of the Bill a “protected enactment”. In other words, it would prevent a devolved legislature amending any part of the legislation as it applies in a devolved nation, even if that change would otherwise be within devolved competence.
There is precedent for that, but those precedents reflect the fact that such protection should be applied only to legislation of fundamental importance to the constitution or to human rights. Currently, only the Human Rights Act, the Civil Contingencies Act and the soon to be revoked European Communities Act are protected in their entirety. Even in the case of the European Union (Withdrawal) Act, the Government undertook a clause-by-clause analysis of the Bill to set out the case why some clauses, but not every clause, should be protected. Not only is this Bill clearly not of an equivalent weight to those that I have named; the Explanatory Memorandum even claims that this is an economic Bill, not a constitutional one. That is worryingly inconsistent. If the Bill is not constitutional, there is no justification for making any part of it a protected enactment.
I therefore ask the Minister to explain why each and every clause in the Bill should be protected. Can he please explain why the Bill shows indifference to the whole edifice of devolved government? This House needs a clause-by-clause analysis and explanation of the Bill. That is what happened with the European Union (Withdrawal) Bill, as it then was. Now we need a sound justification, before Report, for the rationale behind the Government’s asking Parliament to pass legislation that requires it to be protected in its entirety, and an explanation of the adverse consequences that would result if it is not protected when it becomes an Act of Parliament.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is always somewhat intimidating to follow an introduction such as the one we have just heard from the noble and learned Lord, Lord Hope. I think I heard him correctly when he said at one point that he did not have a monopoly of wisdom. That was the only bit of his speech that I really disagreed with.
As we heard from the noble and learned Lord and from the noble Baroness, Lady Finlay, we need a mechanism to ensure that the common frameworks are at the start of the process before market access principles are applied. How exactly that can be finessed between the menu of options we have in front of us, with these and other amendments today, can be a question for discussion—as indeed the noble and learned Lord, Lord Hope, indicated. But, essentially, the role of the common frameworks undoubtedly needs a statutory basis. The consensual mode of working that we have seen via the common frameworks surely has to take priority over other modes of rule setting, and a failure-to-agree process—which must be exhausted before other action is taken—needs to be in the Bill, as it is in the common frameworks mechanism.
Like other Members of your Lordships’ House, I was involved in the work of the European Parliament. I was a party functionary rather than an elected Member. Through that I witnessed the discussions, arguments, concessions, joint working, co-determination, consultation, redrafting and mutual respect that went into the emergence of EU regulations. There was no simple imposition by one all-powerful body. Negotiation and agreement were needed between the European Council, the Commission and the European Parliament for action to be taken. As the noble Lord, Lord Inglewood, mentioned, some really big decisions were referred to the IGC—the Intergovernmental Conference. It was a way of working that produced outcomes to which everyone could sign up. Now, consensus building might have taken time; there was the odd time when clocks were stopped at midnight, which we may have to do again today, but the position reached each time meant that all the parties involved could live with the resulting decision.
My view—and I think the view of all of us—is that the internal market process ought to be replicating, albeit on a smaller and much easier scale, those sorts of international and intranational methods that allow for joint working and consensus building as the prime route for decision-making. Of course, some issues will prove not to be amenable to consensus—this too was mentioned earlier—in which case there has to be an agreed adjudication and decision-making mechanism in place, but with the common frameworks procedures exhausted before any of that has to be set in train.
I turn to Clause 51, which has just been mentioned by the noble Baroness, Lady Finlay. This is understandably of major concern to the devolved legislatures and their Governments. In three quite simple, short subsections it amends the Scotland Act 1988, the Government of Wales Act 2006 and the Northern Ireland Act 1998—and all without a word of warning, far less the agreement of any of those elected authorities whose established settlements it undermines. Few of us expected to read a clause like that, dropped into a Bill on a quite different subject, which would blatantly amend these long-developed settlements.
We heard from the noble Lord, Lord Dunlop, in the previous group and we will hear from him shortly in this group. I hope he will not mind if I quote from what he said at Second Reading. He said:
“Devolution is now integral to the UK’s constitutional arrangements. At a time … when it has never been more important for central and devolved Governments to work together … to risk destabilising those arrangements seems careless, to say the least.”
He went on to ask whether
“we want our country’s future to be all about endless intergovernmental competition and conflict or about co-operation and confidence”.
His preference, of course, was for
“a modern, thriving, forward-thinking and inclusive UK union … to look and feel like a joint endeavour”.—[Official Report, 19/10/20; col. 1336.]
That is what this group of amendments is seeking to achieve, but it is not where the Government are going at present. They seem to be thinking of asking us to pass this Bill without legislative consent from the very authorities whose powers are being diminished. I cannot believe that the Minister wants such an outcome, but how seriously does he take this? Is he really happy to completely override the Sewel convention, set aside the success of the common frameworks process and challenge the devolution settlements that have served us so well for so long?
Baroness Humphreys (LD) [V]
My Lords, I will speak to the amendment to Clause 51 in the name of the noble Baroness, Lady Finlay of Llandaff, to which I have added my name. The amendment opposes this clause standing part of the Bill. In a Bill that stands accused of breaching international law and impacting on devolution settlements, this clause is probably one of the most harmful, in the power that it hands to Ministers, and through them the Executive, to make regulations.
As the Explanatory Memorandum explains, regulations made by Ministers under these powers are to be made by statutory instrument and may be used to amend, repeal or modify the effect of legislation, including Acts of Parliament, which of course include the Government of Wales Act 2006—and, as the noble Baroness, Lady Hayter, has just pointed out, all without consultation with the devolved Administrations.
However, the prime function of this clause, and the whole of Part 7, is to ensure that all clauses of this Bill become protected enactments. It neuters the powers of the devolved legislatures, ensuring that they are unable to put forward Acts in their own Parliaments, in their own areas of devolved competence, to modify this Bill if or when it becomes an Act. This is almost unprecedented. The noble Baroness, Lady Finlay, has already told us that, since devolution, the only other examples of protected enactments covering all sections of an Act are the Human Rights Act and the Civil Contingencies Act.
Even in the case of the withdrawal agreement Bill, which was initially intended as a protected enactment, the UK Government produced a clause-by-clause analysis justifying protected enactment status, which eventually resulted in only a few clauses being protected. Why is this approach not applicable to this Bill? The Welsh Government have asked for a clause-by-clause discussion of why each clause should be protected. I would be grateful if the Minister could outline the Government’s response to this request.
Up to now, the Government have not produced any detailed justification of why protected enactment status is necessary, which exemplifies their cavalier attitude to devolution in general. In Wales this is seen as an assault on our devolution settlement, heralding the return of direct rule from England.
We are faced here with another example, as with the Covid-19 response in England, of Whitehall insisting on managing from the centre rather than understanding and empowering local decision-making. The powers of our devolved legislatures and regional mayors, although limited, seem to be resented and distrusted by the Government, and the automatic response seems to be to claw back control to the centre. My fear is that this Government’s unthinking, knee-jerk reactions all add to the perception that the union is not working for the devolved nations and, as I have said in previous contributions, this is encouraging an increasing percentage of people in Wales to conclude that the future lies in independence.
My colleagues and I on these Liberal Democrat Benches want to see true devolution of power to all four nations, including England, in a federal UK where each nation is equal to the other and treated with equal respect. For our party, the union is important because, as federalists we know, that without a union, federalism cannot exist, but we also know, that without federalism, this union will not exist into the future.
Clause 51 is truly indicative of the UK Government’s attitude towards the devolved parliaments and their powers and the desperate need they seem to have to curtail those powers by a show of strength. It is vital to the devolved nations that this clause does not stand part of this Bill, and if the noble Baroness is minded to reintroduce a similar amendment on Report, she will again have my support.
Lord Mackay of Clashfern (Con) [V]
My Lords, I am a very strong supporter of the common framework system, explained so well by my noble and learned friend Lord Hope. One of the defects I find in this successful system, which I think was a very good invention at the conclusion of the withdrawal agreement Bill when it was set up, is that it is without formal parliamentary recognition. I do not know with any degree of completeness what sort of results it already has, except in the reports produced in accordance with the statutory requirement. One does not know the exact detail of the decisions made. I hoped that as the principles went along in the common frameworks procedure, the principles to be set up in the Bill for the internal market in the UK would become evident. However, so far, that has not been fully revealed in Parliament. I am very anxious that some form of recognition in Parliament of decisions taken and agreed should be set up. This is the purpose of the new clause that I propose in Amendment 170. I do not stand closely on the wording, but some recognition of what is happening in Parliament and ensuring that it is regarded as part of the law would be a useful addition to the present procedure.
The situation between the devolved Administrations and an internal market was regulated by the European Union, therefore some form of renewal of that may be required. I notice that the Scottish Government have said they would not introduce any changes that would damage the internal market, pending legislation. Of course, that is only on the basis that legislation would be something to which they were able to agree. I am very anxious that the results of what we do now should not damage the arrangements for devolution in a way that would point towards independence.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I am speaking in support of my Amendments 172 and 173, which, in two different ways, as the noble and learned Lord, Lord Hope, said, seek to achieve the same as his amendment. Like the noble and learned Lord, Lord Hope, I am a member the Common Frameworks Scrutiny Committee chaired by the noble Baroness, Lady Andrews, and I am pleased to be so. Also a member is the noble Lord, Lord Bruce of Bennachie, who spoke earlier on Amendment 4. He described it as a consensus amendment. I wondered—if it was a consensus amendment—why he did not seek a consensus within the House on it, but I discovered why when I opened my Scotsman this morning and saw the big story, which sought to imply, I think, that the Liberal Democrats were taking credit for opposing this Bill and not wanting others to get any credit for that, but he got the support of the SNP in doing so.
Like the noble Lord, Lord Bruce, I am a long-term supporter of devolution. As some here will recall, I campaigned for it in the 1960s and 1970s, when there were few supporters of it in the Labour Party—John P Mackintosh, Donald Dewar and myself were three of the few—there were even fewer in the Tory party and none in the SNP, who wanted then, as they do now, complete separation. When people are picking up arguments in the cause of the SNP, they should never forget that.
Devolution is different from the unitary state we had. I recall well when in Westminster we were dealing with education in Scotland, which was administratively devolved. That was one of the main arguments for devolution: to have legislative control over what was administrative devolution. Devolution is also totally different from separation, but the SNP now see devolution as a means to achieve their aim, as a slippery slope to independence, and that is something we must be wary about. To the noble Lord, Lord Cormack, who spoke in a debate earlier, I say that Westminster remains ultimately sovereign in relation to all matters, although, if it oversteps the mark and tries to do something unacceptable, there must be other consequences.
As others have said, unfortunately devolution was never followed through in England, and we are left with a difficult situation, difficult most of all for the UK Government who regularly try to act on behalf of England as well as their overall responsibility for the United Kingdom. We have seen that in stark perspective in the pandemic. It does not help when the noble Lord, Lord Inglewood, describes them as the English Government. Successful devolution needs understanding and co-operation between both levels. Incidentally, as some people tend now to forget, it was envisaged originally that powers might be transferred back to Westminster if experience has shown something could be dealt with more appropriately at that level.
What I find a bit alarming is how some colleagues—those who were not in favour of devolution before—now seem to believe that the devolved Administrations are always right. It reminds me of the zeal of the convert. There is no greater critic of the Tories than me—I think the noble Lord, Lord Callahan, the Minister, will confirm that. Incidentally, they are not always wrong, but, thankfully, they are not going to be in power forever here at Westminster, so we need to have a more long-term perspective. On this transfer of powers from the European Union, the SNP describes it as a power grab and the Tories describe it as a power surge. Neither is true or helpful.
Before our regrettable withdrawal from the EU, we accepted that all these powers were better dealt with for all of the United Kingdom—Scotland, Wales, Northern Ireland and England—at a European level because we were all part of a common market. Now, we continue to have a common market here in the United Kingdom, so it is sensible that as many of the transferred powers as possible should be dealt with on a common basis. However, it is my view—as it was that of the noble and learned Lord, Lord Hope, and others—that this is best done by agreement through a common framework procedure and by ensuring there is, as one of my amendments says, no regression or diminution of the standards that we take back from Europe. That is what my amendments seek to achieve in different ways.
It could be, as some noble Lords have said, that all four countries have to agree or—the Minister might like to think about this—it may be appropriate to have a qualified majority, so that one Government could not block something useful by mischievous means.
Incidentally, there has been mention again today, from the noble Lord, Lord Purvis, of the threat to minimum alcohol pricing in Scotland. The Minister dealt with it well. It is, therefore, useful to recall that there was a challenge to minimum alcohol pricing, but it came from within Scotland, from the Scotch Whisky Association, based on it breaking European Union law. Interestingly, the ruling was that it did not break European Union law, and it was the United Kingdom Supreme Court that made that ruling. It is important that we separate party politics, which is not easy for us party politicians, and look at what is best for consumers and the public in general. That may be that things are decided at the UK level, or by Wales, Northern Ireland and Scotland separately.
We will soon need to sort out the English democratic deficit, which is real for the people in England and the regions in particular. We need to make devolution complete with a scheme for England, then the United Kingdom Parliament can properly carry out its federal role, maybe with a somewhat different role for the second Chamber.
Meanwhile I, like the noble and learned Lord, Lord Hope, hope that the common frameworks procedure sets a good co-operative working example. It is a better way than the Bill. I say to the Minister—I have not disagreed with him on everything—that it is a better way of dealing with this than the Bill in its current form, as the noble and learned Lord, Lord Hope, rightly said in his introduction. I hope the Minister will accept the general principle of these amendments, before we return to the Bill on Report. It would certainly make his life a great deal easier.
Lord Hain (Lab)
My Lords, it is a pleasure to follow my noble friend, with whose speech I completely agree. I speak to Amendment 175, which is also in the names of the noble Baronesses, Lady Altmann, Lady Suttie and Lady Ritchie. It ensures that no regulations may be made under the ensuing Act affecting matters that were within the devolved competence of Scottish Ministers, Welsh Ministers or a Northern Ireland department prior to 31 January 2020, unless a common framework on the United Kingdom internal market or the relevant aspect of it has been agreed between the United Kingdom Government and the relevant devolved Administration or Administrations. In this respect, I agree with all the speeches so far, which began so eloquently and compellingly with the noble and learned Lord, Lord Hope.
Sadly, the Government believe that the best method to achieve their objectives in negotiations with an international partner is to stick out their metaphorical tongue and say that, if they do not cave in, they will tear up an agreement made less than a year ago, even when Britain has more to lose than the EU if there is no agreement. Despite the Sewel convention that the UK Parliament
“will not normally legislate with regard to devolved matters without the consent”
of the devolved legislatures, the Government chose to ignore that all three devolved legislatures denied consent to the EU (Withdrawal Agreement) Bill. I suppose we should not be surprised that, when it comes to the devolved nations of these islands, the Government seem to believe that they hold all the cards and have nothing to lose—apart from, perhaps, destroying the United Kingdom once and for all.
The Government claimed, in their White Paper published in July 2020, that the proposals for the UK internal market would provide frictionless trade, fair competition and protection for businesses and consumers in the UK. However, as pointed out by the think tank UK in a Changing Europe, there is no urgency to introduce such internal market rules because all parts of the UK have been within the integrated EU single market for decades; we have all been together.
The provisions of the Bill are highly controversial. Those in relation to the Northern Ireland protocol have provoked legal action by the European Union and could yet undermine the basis for an EU-UK trade deal. Others cut into the ability of the devolved Governments in Scotland and Wales to regulate economic activity. Not surprisingly, the Scottish Parliament has voted against consent to the Bill, which it said
“constrains the competence of the Scottish Parliament and breaches international law.”
The Welsh Government have recommended that the Senedd follows suit.
So far as Northern Ireland is concerned, what is finally agreed—or not—at a UK-EU level will have far more impact on Northern Ireland’s trade with the rest of the UK than will this Bill. That is because the powers of the Northern Ireland Assembly are already constrained by the Ireland/Northern Ireland protocol, under which Northern Ireland will continue to follow the same EU rules on goods and on customs that it follows now.
For this reason, the market access principles set out in the Bill will not deliver unhindered trade within the UK, as Brexit itself will introduce such friction. After 31 January, the greater Great Britain’s divergence from EU rules in a race to the bottom, the greater the friction on the movement of goods from Great Britain into Northern Ireland, as goods will not be allowed into Northern Ireland unless they meet EU standards. There will also be an impact in the other direction, as lower standards in Great Britain would put Northern Ireland goods at a competitive disadvantage.
These market access measures in the Bill therefore appear to be a power grab against the devolved authorities, especially those of Scotland and Wales. This is because the provisions of the Bill will narrow the territorial scope of devolved legislation, which will apply only to goods produced in that territory, not to those imported from other parts of the UK. The Bill includes a much more restricted set of public policy justifications for exemptions from the market access principles than is permitted under EU law. This, as acknowledged in the business department’s impact assessment of the internal market White Paper, will curtail the ability of the Scottish and Welsh Governments to introduce targeted measures, for example, for social and environmental objectives.
Without the protection of these amendments, therefore, the market access principles will significantly undermine the ability of the devolved Administrations to address their own local needs or political preferences, which is surely the whole purpose of devolution. The Welsh Government have confirmed:
“The Bill automatically applies market access principles without requiring intergovernmental agreements, which will effectively nullify/override Welsh rules on product standards, environmental standards and professional qualifications.”
Referring to “this unnecessary Bill”, the Scottish Government called it an “unprecedented threat” to the Scottish Parliament’s powers. For example, if lower food and environmental standards were allowed elsewhere in the UK, Scotland would be forced to accept them. They also noted that, under the proposals, the UK would take over key devolved spending powers and
“the devolved policy of state aid”.
As for Northern Ireland, the UK Government have ignored a Motion passed by the Assembly in June, calling for an extension to the transition period. Matthew O’Toole, a Member of the Northern Ireland Assembly for the SDLP, has said that the Bill may go down in history
“as one of the most disreputable and damaging pieces of legislation ever proposed at Westminster”
on the grounds that
“it jeopardises all the protections against a hardened border between the north and south”
and that it has undermined trust in one of the signatory parties to the Good Friday agreement.
7 pm
In 2017, despite deep differences on Brexit, the UK and the devolved Governments announced that they had agreed the principles that would guide the development of common frameworks to set out a common UK or GB approach, and to managing the internal market. The UK Government reiterated their commitment to respect the devolution settlements. Common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process would be subject to the market access principles. For example, the Nutrition Related Labelling, Composition and Standards Provisional Common Framework, published on 9 October, notes
“The framework arrangements within this framework will also link into any future arrangements for the UK Internal Market.”
However, that does not provide any clarity on how the two will be linked. This programme, which admittedly is as yet a largely subterranean creature with little visibility to your Lordships’ House, has made good progress. It is true that not all will have completed the process by the end of the transition period, largely thanks to the disastrous negotiation strategy of the Government which led to two abortive sets of no-deal preparations. However, I understand that most if not all have been agreed on a provisional basis and that the devolved Governments have undertaken to fully respect them until they have been through legislative scrutiny.
Moreover, since all parts of the UK will inherit retained EU law, it is completely misleading to claim that there will somehow be a dangerous void in the statute book without this Bill. The only void there will be is where the UK Government want to leave one, notably on state aid policy. What there would be in the absence of this Bill is a restraint on the UK Government being able to tear up retained EU law on environmental standards, food standards, the mutual recognition of qualifications, and would de facto force the devolved Governments to follow suit. That is why this is so objectionable. If pressed, this Bill would undermine the good progress made in many of the areas where common frameworks are being developed, and it is not clear how the provisions of the Bill and the common frameworks could function alongside each other. I hope that the Minister will respond to that point.
I shall take just two examples. If this Parliament decided to permit English farmers to use certain antibiotics that are currently banned for treating animal disease, the sale of English products containing those antibiotics could not be prevented in Wales unless the Welsh Government could demonstrate an immediate threat to public health rather than the slow erosion of antimicrobial resistance. If Scotland wanted to introduce a new requirement for headteachers to obtain a specialist qualification in identifying and dealing with mental health issues in young people, the Scottish Government would struggle to prevent an English or Welsh teacher without that specialist qualification being appointed to a headteacher post in Scotland. For this reason, I wholly endorse the other Cross-Bench amendments suggested by the Welsh Government and tabled by the noble Baroness, Lady Finlay, and others, which would restrict the application of the so-called market access principles to areas where negotiations over common frameworks have broken down. This would give the Government every incentive to work with the devolved institutions to agree common frameworks and the chance to come back to this House and the other place if they believe that a devolved Government were attempting to wield a veto. Surely the way forward is to negotiate common framework agreements in all areas where the UK Government feel they have an interest, but which cover areas within devolved government competences. That is what the amendment seeks to achieve, and for the life of me, I cannot comprehend why the Government will not accept it. Perhaps the noble Lord the Minister will explain.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I declare an interest as a member of the Common Frameworks Scrutiny Select Committee, ably chaired by the noble Baroness, Lady Andrews. The noble Lord, Lord Foulkes, and the noble and learned Lord, Lord Hope of Craighead, are also members of the committee. I am a signatory to Amendment 175 along with the noble Lord, Lord Hain, and the noble Baronesses, Lady Altmann and Lady Suttie. The specific purpose of the amendment, as ably demonstrated by the noble Lord, Lord Hain, is to state that no new UK regulations can be made affecting any area that devolved prior to Brexit, including any area with cross-border impacts, without a common framework agreement with the devolved Governments concerned.
As has already been explained, these amendments, particularly this one and others in this group, focus on the primacy of the common frameworks and the importance of devolution. In many instances, throughout this Bill, the Government seem intent on power grabs from devolution to bring power directly to Whitehall. Quite clearly, the aim of our Amendment 175 is to protect devolution. I can think of those special devolution arrangements in Northern Ireland—of which I was once a part as a member the Northern Ireland Assembly and also as a former Minister—that arose out of the Northern Ireland Act 1998 and as a consequence of the Good Friday Agreement. They were based around those interlocking sets of three relationships within Northern Ireland: between north and south on the island and east-west between Ireland and Britain, and the accompanying infrastructure arrangements. These were reflected in the Northern Ireland protocol, and in the Withdrawal Agreement that the Government now seem intent on scuppering through this UK Internal Market Bill.
Interestingly—as the noble and learned Lord, Lord Hope of Craighead, and others have referred to—this Bill does not contain common frameworks. I was at a recent briefing with others, such as the noble and learned Lord, Lord Hope. It was very well organised by the Minister and the noble Lord, Lord Callanan. It was attended by the Minister for the constitution, Chloe Smith. She indicated that the reason why the frameworks were not in the legislation is because they are not all legislative. I found that reason very odd, but also very hollow and flimsy. As the Centre on Constitutional Change has stated, common frameworks are not mentioned in the Bill and it is unclear whether regulatory rules established through the common frameworks process will be subject to the market access principles. This is an issue that has also been addressed by the Lords Constitution Committee and by a group of academics for the Centre on Constitutional Change in their paper entitled UK Internal Market Bill Devolution and the Union, which was published last week.
To go back to the Lords Constitution Committee, it states at point 15 in its conclusions that:
“The Government should explain why the Bill does not mention common frameworks and how it expects the arrangements for the UK internal market will relate to the common frameworks.”
It further states at point 16 that:
“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective UK internal market. Such an approach would obviate the need for the Bill.”
Academics for the Centre on Constitutional Change who published their paper last week stated:
“By abstracting the internal market from these frameworks and pushing ahead unilaterally against opposition from the authorities in Scotland and Wales, the UK Government is putting the common frameworks approach at risk.”
They also state that the market access principles in the Bill weaken devolution, reduce divergence and risk undermining the objectives and principles that have guided frameworks discussions.
The market access principles within the Bill undermine devolution competences in two ways. The UK Internal Market Bill itself will become a protected enactment, which the devolved legislatures will be unable to repeal or modify—hence our Amendment 175.
The Bill also narrows the territorial scope of devolved legislation. Currently, devolved legislation applies to all relevant activity within the devolved territory. This will no longer be the case as a result of this Bill, if it is enacted. The effect of the market access principles would, therefore, significantly undermine the purpose of devolution, which was to enable the devolved nations and regions to legislate according to their own local needs and political preferences. While I am supporting and speaking to Amendment 175, I also support other amendments in this group because they clearly specify the importance of devolution and, above all, the common frameworks scheme.
Baroness Altmann (Con) [V]
My Lords, I have added my name to Amendment 175 in this group, led and excellently explained by the noble Lord, Lord Hain, and in the names of the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie. I also support Amendments 5, 11 and 53, so excellently moved and spoken to by the noble and learned Lord, Lord Hope, and others that seek similar objectives.
This is not a party-political matter. Our devolution settlement was originally pioneered by a Labour Government, then deepened and extended by the Conservatives—as explained by my noble friend Lord Dunlop—and clearly supported by the Liberal Democrats, giving the devolved Administrations additional powers. As other noble Lords have said, common frameworks are important and our existing carefully crafted settlements have kept our union united. Surely, a successful devolution of power cannot consist of dictating to the constituent nations what will happen, informing them what they have to agree to and then saying that they have been consulted, so all is agreed. This is how the measures in this Bill have clearly been perceived by the devolved Parliaments.
We are a federal nation, comprising four proud countries. Until now, our devolution settlement has allowed divergence, even on matters such as taxation, where Scotland has different tax rates. These divergences have been well accepted across the country and ensure clear powers for each of our constituent nations. I will ask my noble friend two questions. First, is he able to confirm that the Government respect and accept the devolution settlement, which has served our United Kingdom so well? Secondly, Amendment 75 and others in this group merely insert proposals to ensure that future regulations will be introduced with a consensual approach. Could my noble friend explain the Government’s objection to such a consensual approach?
Baroness Suttie (LD) [V]
My Lords, I have added my name to Amendment 175, which is, once again, a cross-party amendment, tabled by the noble Lord, Lord Hain—who very powerfully and comprehensively explained it in great detail—and the noble Baronesses, Lady Ritchie and Lady Altmann. In the debate on this group of amendments, as well as on the previous group, noble Lords from all sides of the House have acknowledged that the common framework process has been a positive one. Therefore, I shall concentrate my brief remarks on the Bill’s impact on the delivery of the common framework agreements, which play such an important role, not least in avoiding future disputes and building consensus.
The Bill has illustrated the very worst of a top-down No. 10 decision-making process, with little or no engagement with the devolved Administrations in advance of its publication and in spite of the very real impacts that it will have on every part of the United Kingdom. I would argue that this top-down approach almost always results in rushed and poorly thought-through legislation, which will almost inevitably lead to unnecessary disputes with the devolved Administrations. As the noble and learned Lord, Lord Hope, explained in his excellent and very comprehensive speech at the beginning of this debate, it is, frankly, extraordinary that common frameworks are omitted from the Bill.
In a report published earlier this month, the Institute for Government stated:
“This legislation will cut across many of the areas where common frameworks are due to be developed. It is not clear how the bill and the frameworks are intended to function alongside each other.”
This gives rise to a number of questions. Will the Minister clarify exactly how the common frameworks will be linked to future arrangements for the UK internal market? Does he accept that, as it stands, the Bill risks undermining the ongoing joint review of intergovernmental relations, including the development of common frameworks? Does he acknowledge that this process has been significantly further complicated by the introduction of this Bill?
Lord Dunlop (Con) [V]
My Lords, I support the group of amendments tabled by the noble and learned Lord, Lord Hope. They address a central question: how does this Bill sit alongside the common frameworks process? Common frameworks are the process established to ensure that once the UK has left the EU’s legal orbit, policy and regulatory divergence does not damage the seamless operation of the UK’s domestic market. Unimpeded trade within the UK is something we all agree on.
The common frameworks process was initiated while I was still a Northern Ireland and Scotland Office Minister. The frameworks analysis informing it—the latest iteration of which was published only last month—provides a full assessment of the risk areas arising from EU powers flowing back directly from Brussels to Edinburgh, Cardiff and Belfast. As the noble and learned Lord, Lord Hope, explained, the latest analysis identifies 154 policy areas—115 are deemed to require no further action and 22 require a non-legislative framework, leaving just 18 identified as needing such a legislative framework. Examples in the latest analysis include food standards and labelling, mutual recognition of professional standards, the provision of services, and chemicals and pesticides. As an aside, I am even more confused about the position on pesticides than I was before. When winding up, perhaps the Minister could clarify whether chemicals and pesticides will be a legislative framework. I thought I heard my noble friend Lord Callanan say that it would be a voluntary agreement, from which the devolved Administrations could walk away.
So far as one can tell, this process of common frameworks is making progress—though more slowly than originally intended as a result of Covid. Seven will be in place by the end of the year with a joint commitment from all Governments to deliver the remainder during 2021.
In its detailed report on the Bill, the Constitution Committee concluded:
“The Government has failed to explain why a combination of retained EU law, its existing powers to amend that law, and common frameworks could not provide the certainty required at the end of the transition period to secure an effective internal market.”
When responding to the Second Reading debate, my noble friend Lord True argued that common frameworks are insufficient because they are sector-specific and cannot guarantee the integrity of the entire market. In responding to this debate, I hope that my noble friend will take the opportunity to explain in greater detail the Government’s concerns and the rationale for the approach adopted in the Bill.
There are three specific points that I hope the Minister will address, relating to necessity, urgency and proportionality. First, on necessity, my noble friend Lord True said in his wind-up speech last week:
“The Bill ensures that areas without a common framework will still benefit from the regulatory underpinning and, crucially, market coherence will be provided for issues that fall around, or between, individual sector-focused frameworks.”—[Official Report, 20/10/20; col. 1427.]
I am puzzled by this explanation, as my understanding has always been that the portfolio of legislative and non-legislative frameworks was intended to represent a comprehensive package for managing the identified risks of divergence arising from EU exit. As I have already mentioned, many of the areas identified to be covered by frameworks are cross-cutting, and not simply sectoral, such as public procurement, recognition of professional standards and the provision of services in general. Therefore, can the Minister be more specific in identifying what the issues are that the Government are so concerned about that fall in and around individual sectors, which have not already been identified in the common frameworks analysis?
Secondly, on urgency, I hope the Minister will explain why the Government are legislating in such haste. Yes, this is a major and important piece of economic legislation, but it is also a Bill with significant constitutional implications, not least for the stability of our devolution arrangements and the future of the union. This matters because there are important gaps in the scheme created by this Bill. For example, where in this scheme are the conclusions from the review of intergovernmental relations? When will the review be concluded and published, associated as it is with the work on common frameworks? How will the provisions of the Bill be enforced, and how will disputes between the UK Government and the devolved Administrations be managed?
The timetable for the Bill appears to be predicated on the end of the transition period on 31 December this year, but what is the real risk of regulatory divergence between then and the completion of the common frameworks process in 2021? The House is aware that the European Union (Withdrawal) Act 2018 already confers on Ministers so-called Section 12 powers to freeze devolved competence in relation to EU retained law. It is worth reminding ourselves of its provisions. Ministers can make regulations to restrict the ability of devolved Administrations to change EU retained law for up to two years after our formal exit from the EU. Should they make such regulations, these could remain in force for up to a further five years, so by my reckoning to January 2027. Therefore, on the face of it, there is ample time for the Government to put in place—in co-operation with the devolved Administrations—the necessary protections in the form of common frameworks and the associated intergovernmental architecture to protect the seamless operation of the UK domestic market. In light of the existing legislative protections that are already in place, will the Minister explain the need to legislate on this accelerated timetable, which, as we have heard, has not allowed sufficient time for more than the most cursory consultation? On the subject of consultation, can the Minister confirm whether all the responses to the consultation have been published? If not, will he give a commitment today that they will all be published in full and in short order?
Thirdly, and finally, on proportionality, the Government may be motivated in bringing forward this Bill by Mr Rumsfeld’s famous “unknown unknowns”. Ministers may indeed be confident that a portfolio of common frameworks can do most of the job, but still want to put in place an insurance policy to cater for unforeseen circumstances or to have a mechanism for monitoring the cumulative effects of policy and regulatory differences, which on their own may be entirely harmless. That is fair enough, but if that is so, then is not the scheme in this Bill the wrong way around? Instead of effectively overriding from the outset the practical ability of devolved Administrations to regulate differently to reflect local priorities and to suit local circumstances—and in the process potentially compromising a core benefit of devolution—would it not have been preferable for the Bill to provide a safety net of last resort? Would that not provide a better balancing of the needs of free trade within the UK with the need to respect the roles and responsibilities of the devolved institutions? Would not this create better incentives for all parties to agree sooner rather than later the full package of common frameworks? We all agree with the aims of this Bill. However, I suspect the Government will need to do more to convince the House that the legislative scheme in the Bill is the best way to achieve those aims.
Baroness Andrews (Lab) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Dunlop, and indeed to agree with much of what he said. I support the amendments in the name of my noble and learned friend Lord Hope.
I should declare an interest as the chair of the Common Frameworks Scrutiny Committee. The House will judge that I have a formidable group of Peers to do the work, and we have heard from some of them this evening. It has been splendid to hear so much exposure given to common frameworks because, as many other noble Lords have said, the Bill is silent on them.
It is a particular pleasure for me personally to support these amendments because they are a model of clarity and common sense. They track the history and purpose of, and the co-operation involved in, the common frameworks in the context of our membership of and exit from Europe, holding firm to the principle and practice of devolution.
The Government are silent on the common frameworks and silent on the years of hard negotiation that has gone into them so far to ensure that the principles that govern them bear fruit. I am surprised at that silence because in everything that the Ministers have said so far—and they have said it informally in communications with us, which we very much welcome—they have insisted that they still support the principles of the common frameworks and their role in stabilising the internal market, yet in effect these clauses drive a stake through them.
As my noble and learned friend Lord Hope said, the common frameworks allow for reconciliation across an enormous range of highly sensitive areas of policy—from the safety of baby milk to protections relating to the location and storage of hazardous waste, to maintaining future emissions trading. It has been a slow and careful process because the dispute mechanisms and the legislative frameworks have to be resilient if the internal market is to work with integrity in the future.
As the noble Lord, Lord Dunlop, said, at Second Reading the Minister defended these clauses in the Bill on the grounds that this matter needs regulatory underpinning, because there are issues that fall around and in between the frameworks. First, as he also said, they are not entirely sector based, but the real puzzle for all of us is where these identifiable gaps are. If there are indeed gaps, could not other frameworks be developed as appropriate? We already have the models in front of us. Therefore, like the noble Lord, Lord Dunlop, I would be very interested if the Minister could now tell us in more detail what these issues are that fall around or between the individual sectors. What is the problem to be solved here?
The best clue that we have is that the Minister has suggested that the Bill is needed in case there are future developments that cut across seamless trade. Again, it is impossible to know what the Government think is likely to happen, why they cannot share that with us and why such developments cannot be accommodated. So far, no Minister and no officials, in formal and informal conversations, has come up with an instance of what this means.
It is the more frustrating because, by definition, the frameworks are dynamic. They will be under regular review—they are work in progress. If there is a push for further divergence, the reconciliation and dispute processes kick in. The union becomes the stronger because it acknowledges that culture, demography, local economics and geography drive diversity. If the Government fear that somehow, and at some point, unacceptable barriers to trade will be erected across the union, surely the frameworks are the solution and not the problem.
The Bill is important. It is also important not to exaggerate, but I believe that these clauses will exact an enormous price if they are not amended, as my noble and learned friend Lord Hope suggests. The mutual recognition principle becomes the default position, no matter what the devolved nations hope to achieve. The Government argue that, for example, we have the highest environmental standards in the world. Indeed, we might, but how can these be upheld in a highly competitive market where cheaper food invites cutting standards? How can each nation continue to drive down salt content in food if a cheaper product with a higher salt content becomes available for sale across the UK?
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, the noble Lords, Lord Naseby and Lord Cormack, have withdrawn. I therefore call the next speaker, the noble Lord, Lord Rooker.
Lord Rooker (Lab) [V]
I was attracted to speak to this group of amendments by Amendments 5, 11 and 53, in the name of the noble and learned Lord, Lord Hope of Craighead, and, as I have listened to the debate, I have begun to wonder even more why the Bill is required in the first place. At the risk of upsetting my good and noble friend Lord Foulkes—and I certainly do not want to get involved in Scottish internal politics; that is my caveat for what I am about to say—as a Minister in MAFF, Northern Ireland and Defra, and as chair of the Food Standards Agency, I worked very closely with several Ministers in the Scottish Government, and I always found them totally professional and focused on the issue at hand at the time.
Nobody has asked me to make a speech today on this matter, but I am going to raise matters raised by Food Standards Scotland in consultation in August and in the recent letter in October. The very reason the Food Standards Agency and Food Standards Scotland exist is to ensure that policy formation, regulation and enforcement in relation to protection of consumers’ interests are clearly separated from those responsible for food industry growth and promotion. Food Standards Scotland says the Bill blurs that distinction, which has been in place since the FSA was formed after the BSE crisis in the 1990s. Both the FSA and the FSS have a legal duty to
“protect public health from risks which may arise in connection with the consumption of food”.
That comes from the Food Standards Act 1999 and the Food Scotland Act 2015.
Only a few weeks ago, the UK Government confirmed in their report on the common frameworks that the powers they have to restrict devolved competence under Section 12 of the European Union (Withdrawal Agreement) Act—referred to by the noble Lord, Lord Dunlop—had not been used precisely because
“significant progress is being made across policy areas to establish common frameworks in collaboration with the devolved administrations.”
No party has ever expressed the need for, or provided evidence in support of, a statutory framework to regulate the UK internal market in the way that this Bill tries to do.
It is worth pointing out that the current internal market makes provision to allow the devolved Governments to impose conditions such as labelling and composition requirements or price mechanisms on food business operators in order to meet a public health objective, provided that the proposal meets an overriding public interest test. The Bill makes no equivalent provision and, indeed, makes clear that business cost is the primary driver, with no consideration of either public health costs or non-financial consumer interests and protection. The Bill does not advance the protection of consumers, other than in cost reduction. If consumer interest is defined solely by cost, it is inevitable that it will drive down standards, because lower standards are less costly.
I will briefly deploy three examples of existing responsible policy-making that is fully in line with current UK market issues and industry pressures. They are all evidence based, taking account of industry impacts as well as consumer interests. These three examples of why the present arrangements work were all given in August to the Business Secretary, Alok Sharma, by Food Standards Scotland—to which he has never responded.
The first is the fortification of flour with folic acid to improve pregnancies affected by neural tube defects. This policy has been advocated for some time by the Scientific Advisory Committee on Nutrition and I have raised it in your Lordships’ House on several occasions since November 2013. In the absence of UK Government action, Food Standards Scotland was asked by the Government there to carry out an assessment for Scottish Ministers. It did, and concluded that the nature of the UK market was such that all flour would require fortification and differentiation in product lines was not possible. Food Standards Scotland concluded that a separate Scottish solution should not be followed. UK-wide action is currently under consideration, of course.
The second example is the prohibition of the sale of raw drinking milk in Scotland. The original wide ban has been continued in Scotland, based on illness and deaths and the advice of the Advisory Committee on the Microbiological Safety of Food. Controls in England, Wales and Northern Ireland are less restrictive than in Scotland, so different rules apply. The current system works, and Food Standards Scotland is at a complete loss to understand why the Bill appears to save the existing unique provisions; it is clear that future provisions introduced on public health grounds are not protected. In other words, what will be saved now would not be protected if further provisions were introduced. The Government are making assertions that, without legislative underpinning, unnecessary regulatory barriers could emerge between different parts of the UK. The Government have given not a shred of evidence to support this assertion.
The third example concerns allergen information for consumers on “prepacked for direct sale” foods—that is a unique type of food. Working with Defra, the Food Standards Agency and Food Standards Scotland developed proposals to improve information following the tragic death of a teenager eating a baguette containing undeclared sesame seeds. Four options were considered as part of a UK-wide consultation. In short, option 4 was recommended as in the best interests of consumers, even though option 1 was the cheapest for industry. Under the Bill, if, for example, one of the bodies had opted for option 3—slightly less than option 4—the body that had chosen option 4 would have to go for option 3. Worse still, using the Competition and Markets Authority, it is likely that option 1, which was simply aimed at raising consumer confidence without regulation, would be chosen. It would be the cheapest for industry but the most unsafe for the consumer. These three examples of responsible policy-making show that the current common frameworks system should be used, and be shown to fail, before we move to the mutual recognition system outlined in Clause 2.
Finally, as was referred to earlier, diet conditions might in future require labelling of, for example, high fat and high sugar on public health grounds. This can work perfectly well under the current arrangements. Under the Bill, however, one part of the UK could be lobbied to reduce information on packaging which other parts would be required to follow. I cannot support the lowest common denominator; it is unsafe for consumers. I hope that, in due course, the noble and learned Lord, Lord Hope, will press his solution.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to speak to and support the amendments in this group. The debate demonstrates that it is not just Part 5 of the Bill that has created concern. In particular, I support Amendments 5, 11 and 53 in the name of the noble and learned Lord, Lord Hope of Craighead, and Amendment 170 in the name of my noble and learned friend Lord Mackay of Clashfern.
The House owes a great debt of service to the two noble and learned Lords for so clearly identifying the problems with the Bill and its complete oversight and omission of the common frameworks. In particular, they identify the problem of future common frameworks and their relationship to the Bill. But my concern is that, as there has not yet been agreement on the 18 common frameworks that may require legislative decisions, there may be some uncertainty. I note in passing that, of the 18, a large majority relate to issues being dealt with by Defra. They primarily concern agriculture, food and, to a certain extent, the environment, and that is a source of concern.
I express a concern over Schedule 1 and the impact on movements of animals and farm goods, in the event of threats to human, animal or plant health. The noble Baroness, Lady Andrews, referred to the default position appearing to be mutual recognition. Paragraph 2(2) of Schedule 1 refers to the “first condition” that would form an exclusion:
“the aim of the legislation is to prevent or reduce the movement of unsafe food or feed into the part of the United Kingdom in which the legislation applies … from another part of the United Kingdom”.
As the noble Lord, Lord Rooker, set out in some detail—I entirely endorse what he said—it is all very well when the Food Standards Agency in England and Food Standards Scotland take a similar view. I put to the Minister, for his reply when summing up the debate, my view that Schedule 1 indicates the need for common standards of human, animal and plant health to ensure free movement between England, Scotland, Wales and Northern Ireland. I thought that was the whole purpose of the Bill.
What will happen in future if the Food Standards Agency in England and Food Standards Scotland take different views on food, animal feed or a product from either state? Will Scottish produce be blocked from entering other parts of the United Kingdom, under Schedule 1 and other parts of the Bill? That would cause me great concern.
Finally, I endorse and support Amendment 170, in the name of my noble and learned friend Lord Mackay. He has identified the problem that there is simply no statutory basis for common frameworks. If so, would it not be better to have a common frameworks statutory basis to deal with all the problems that have been addressed during the debate?
Baroness Noakes (Con)
My Lords, it seems that most of the noble Lords who have taken part in this debate have looked at the Bill through one end of a telescope, which focuses on the powers of the devolved Administrations and the threats or perceived threats to them. There is another end of the telescope you could use to look at the Bill, which shows that businesses in all parts of the UK need the certainty of knowing how they will be able to trade within the UK, going forward. That is important for those businesses trying to build a successful economy, particularly coming out of the Covid pandemic.
Lord Vaux of Harrowden (CB) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Noakes, and for once find myself in agreement with much of what she said. In his winding-up speech at Second Reading, the Minister said:
“Under our proposals, the devolved Administrations will continue to have power to regulate within devolved areas, in so far as these do not cause a barrier to internal trade.”—[Official Report, 20/10/20; col. 1426.]
The noble Lord, Lord Callanan, has repeated the same point today. Well yes, the devolved Administrations will be able to continue to regulate, but those regulations will become effectively meaningless if they can be undermined by unfettered market access from other parts of the United Kingdom. The Minister seems unwilling to address that simple point. Within the EU single market the devolved nations have enjoyed a level of discretion to diverge within a wider framework of agreed standards. Despite that divergence, our internal market has operated smoothly, and I do not think that many would argue otherwise.
Like it or not, devolution is a fact and we cannot and should not back-pedal on it. The Government recognised that in the frameworks agreement when they agreed that the common frameworks should
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules”.
Can the Minister please confirm that the Government still stand by that agreement, in spirit as well as letter?
This Bill is a blunt instrument which effectively removes that flexibility for tailoring policies. What would be the point in, for example, the Welsh Government legislating against single-use plastics, if they are unable to block such items coming in from other parts of the UK; or of Scotland tightening labelling requirements, if goods sold in Scotland from other parts of the UK do not need to follow those requirements? Does the Minister seriously argue that those kinds of actions have created or would create significant barriers to internal trade?
The common frameworks programme, as we have heard, provides a simple solution that already exists. The programme is generally thought to have been a positive and consensual process to try to find the right balance. Indeed, as the revised frameworks analysis published by the Cabinet Office states:
“The cooperative approach on frameworks so far demonstrates the progress that can be achieved through proceeding collaboratively”.
As we have heard, however, the Bill as drafted ignores the common frameworks completely. There is not so much as a reference. The Minister said at Second Reading that the Bill does not make the common frameworks redundant, but it is very difficult to agree with that. As explained earlier, any divergence of regulation by a devolved Administration will be undermined by the precedence that this Bill gives to unfettered market access. I really do not see that that is an arguable point. It is the logical result of this Bill.
It is hard not to sympathise with the view of the devolved Administrations that the hard work and constructive engagement on trying to reach agreement on the common frameworks has effectively been torn up by this Bill. The Government cannot, in all honesty, be surprised that the devolved Administrations have rejected it. It is precisely this kind of heavy-handed, non-collaborative behaviour that is adding to the impetus towards the breaking up of our United Kingdom, which I am extremely worried about.
I said at Second Reading that I am not fully convinced that this Bill is actually necessary to achieve its stated aims. The Constitution Committee, and a number of noble Lords, has made the same point. However, I can see that there is some argument for the market access rules it creates, provided that they genuinely work alongside the common frameworks. However, for that to work without undermining them, the common frameworks must be recognised in the Bill, and any agreed permitted divergence from common standards allowed by the common frameworks must take precedence over the mutual recognition and non-discrimination principles of the Bill.
There are a number of ways to achieve that end, and the amendments in this group try to do this in different ways. I am particularly attracted by the approach taken by my noble and learned friend Lord Hope of Craighead in his Amendments 5, 11 and 53, and by Amendment 170, in the name of the noble and learned Lord, Lord Mackay of Clashfern. These seem to be a neat and simple way of recognising the common frameworks explicitly in the Bill and giving them precedence over the market access principles where appropriate, without undermining the Bill as it stands. I am also drawn to the introduction of the proportionality and subsidiarity principles in Amendment 2, which were discussed earlier.
I was heartened by the Minister’s commitment at Second Reading that the Government will
“study carefully the observations of your Lordships’ Select Committees on this part of the Bill”.—[Official Report, 20/10/20; col. 1427.]
Accepting these amendments, or something like them, would recognise that the internal market can work perfectly smoothly in a more nuanced, flexible and collaborative manner, just as it has in the past. That would show sensitivity to the legitimate and reasonable concerns of the devolved Administrations, and the respect for devolution that the noble Lord, Lord Callanan, referred to earlier today, without undermining the smooth-running internal market that we all want and which this Bill is intended to achieve. I would therefore urge strongly the Government to consider these amendments in a constructive light.
The Duke of Montrose (Con) [V]
My Lords, it is a great pleasure and honour to be able to participate in this very important legislation. The search for common frameworks is something that has concerned me from the minute we went down the Brexit road. I would like to support the amendments that were put forward in the name of the noble and learned Lord, Lord Hope. I was also interested to hear the analysis by the noble Lord, Lord Vaux, of ways of solving problems.
It is very important that we go into this area in great detail. I congratulate the noble and learned Lord, Lord Hope, for bringing it in, in this way, this early in our discussion. What he gave us is a very fair and understanding analysis and I hope the Government will pay due attention to the issues that he outlined. We have also been privileged this evening to hear from four Members who have worked on the frameworks committee, and it is of course also very important to look at what they said. I was interested in the way that the noble Lord, Lord Foulkes, supported the issue from the Scottish point of view.
I would like to offer my support to Amendment 170, in the name of the noble and learned Lord, Lord Mackay, which he moved in his intervention. It is very important that agreements that are achieved are formally notified to Parliament, and that was the point he was making.
It is not a direct parallel, but noble Lords will probably remember that, on the introduction of the Scottish devolution Bill, the parties concerned when it was brought into practice in the Scottish Parliament found that they had to achieve a memorandum of understanding. One of the things that was contained in the memorandum of understanding was the Sewel convention. Here in Westminster, we received no details of what this memorandum of understanding contained. One was left wondering how some of the agreements were arrived at. This of course was rectified when we next looked at the Scottish devolution Act and the actual practice was brought in, in a legislative form, under that Act. We need to be kept fully up to date with the agreements that Governments come to. I support that amendment.
Lord Bruce of Bennachie (LD) [V]
My Lords, I also am a member of the Common Frameworks Scrutiny Committee. I would like to give my appreciation to the noble Baroness, Lady Andrews, for the way in which she is chairing the committee. It has a hugely demanding task, which we are all learning extremely fast.
The noble and learned Lord, Lord Hope, is of course a member of that committee. The combination of his work and his expertise in the law has been demonstrated to be one of the strengths of the House today in the amendments that he has drafted, moved and explained in such meticulous detail. This is of huge benefit, and I hope that the Minister will recognise that he should give very serious consideration to what is being proposed.
I do not have the audacity to summarise the noble and learned Lord, other than to say that his basic questions were these: how do the frameworks fit into the Bill, and how will future arrangements be conducted if there is not a proper correlation between the frameworks and the Bill, and indeed the principles behind the frameworks? That is something that we have all been asking the Government to explain.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been an excellent debate, brilliantly introduced by my kinsman, the noble and learned Lord, Lord Hope of Craighead, and with some other excellent speeches, particularly from those who were members of your Lordships’ Select Committee and, of course, the chair, my noble friend Lady Andrews.
The weight of the arguments deployed in this group and the virtual unanimity of views expressed from all sides of the Committee were to be expected, but Ministers might not have expected to be offered a route out of the mess that they have got themselves into. If common sense prevails, there is a win-win here. As the noble Lord, Lord Dunlop, said, the Bill currently has things the wrong way around. The Government need to signal tonight that they will take away the amendments in the name of the noble and learned Lord, Lord Hope of Craighead, and work with him to find a structure that better delivers the aims of the Bill.
They should use this legislative opportunity to encourage the completion of the current work on the common frameworks, to encourage the process to cover the remaining outstanding issues and to anticipate future needs. They should then draft an effective safety net for the Bill, based on mutual recognition and non-discrimination, while, as the noble Lord, Lord Vaux, said, having regard to subsidiarity and proportionality. They should ensure that the current informal processes have a light-touch underpinning, with a regulatory framework that commands trust and the confidence of the devolved Administrations. If they do this, we will happily work with and support them.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, it has been a most fascinating debate. I endorse what the noble Lord, Lord Stevenson, has just said. While I sadly cannot claim to be his kinsman, I thought the opening speech by the noble and learned Lord, Lord Hope, was a masterclass in how to present a case. That does not necessarily mean that the Government accede to the case, but it was entirely clear. I also pay tribute to those members of your Lordships’ Select Committee on common frameworks who spoke. Their experience is obvious and the work of that committee is important. I believe it will shortly meet or hear from my honourable friend Chloe Smith.
Many businesses welcome this Bill. They welcome it on the basis that, after the end of the transition period, they hope, expect and require that they will be able to operate in a period of certainty, not buffeted by any unexpected or unreasonable developments. I respond to the general tone of the debate by saying that it is, of course, the Government’s intention—it always has been and remains so—that the functioning of the UK internal market will be driven by co-operation with the devolved Administrations. The market access proposals here are designed not to replace but to complement the common frameworks; I know that is a phrase I have used before. The common frameworks are the key. They support coherent policy-making across the UK by setting out terms of engagement between the UK Government and the devolved Administrations as well as, where appropriate, common strategic goals and policy approaches.
The Government remain committed to the common frameworks programme. As many noble Lords have said, it is progressing well. The UK Government and the devolved Administrations continue to co-operate closely as we jointly develop the programme. Yes, progress overall has been slower than we would have liked, and I acknowledge the effect of the resource constraints driven by the response to Covid, and the need to prioritise planning in advance of the end of the transition period. However, all parties remain committed to the programme. At a recent JMC (EN) meeting last month, both the UK Government and DA Ministers reconfirmed their strong commitment to it.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Bruce of Bennachie.
Lord Bruce of Bennachie (LD) [V]
I shall not detain the Committee for long but the Minister came up with the example of flour. I think that as the Bill progresses we can all dream up examples of hypothetical possibilities. However, the question that arises from that example is: why should we not follow the principles and dispute resolution model of the common frameworks? Indeed, as the noble Baroness, Lady Andrews, said, where are the gaps that cannot be filled by the common frameworks? Why do the Government need to take such extreme powers for fast Executive action when, in nearly all these cases, the problem will emerge over time? Everybody agrees that if legislation is required, we should have it, but the Government seem to want to take powers in anticipation of unknown challenges. Therefore, why cannot the principles and model of the common frameworks be the basis on which these cases are taken forward and disputes resolved?
Lord True (Con)
My Lords, I should have acknowledged the very thoughtful speeches of the noble Lords, Lord Bruce and Lord Stevenson. I hoped that I had made clear that the common frameworks process would continue. I was asked to give an example of how circumstances might change in the future and how matters that need to be addressed might arise. The emergence of an unregulated new technology might be another example. However, I think it is better that we address these questions in the further discussions that we might have.
So far as pace is concerned, the transition period ends at the end of the year and there is a need to provide a climate of certainty for business when the EU system falls away. Therefore, I do not resile from the fact that it was necessary and sensible for the Government to bring proposals before Parliament to address the post-31 December situation.
Lord Hope of Craighead (CB) [V]
My Lords, first, I thank the Minister for his courteous and careful reply. I also thank all noble Lords who have contributed to this fascinating and very well-informed debate. I shall not attempt to sum it up because the noble Lord, Lord Bruce of Bennachie, did that very ably for me in his contribution before the interval.
I was very grateful to the Minister for his kind opening words. Of course, I am disappointed that there is not more of an indication of movement on his part, but he said that he would consider the arguments, which I am sure he will, and that he was open to further engagement and discussion—for my part, I certainly am, and I am sure that others across the Committee are too. Of course, there is not much point in those discussions unless he has a rather more open mind in appreciating the problems than he has indicated so far.
One point mentioned from time to time was the fact that this measure, and indeed the White Paper that preceded it, emerged with very little consultation with the devolved Administrations. I hope that the noble Lord will forgive me but I have the feeling that there was a certain amount of lack of consultation across the Government.
If I may offer the Minister a little bedtime reading, there is a clause in another Bill which is still before Parliament that illustrates the problem: Clause 39 of the Agriculture Bill. I do not suppose that the Minister knows what I am talking about so I will say a few words about it. It may help him—the Minister sitting in Westminster, looking at the matter from the other side of the fence—to see how things appear from the perspective of the devolved Administrations.
Clause 39 attempts to set marketing standards. It lays down a basis for the setting of market standards in relation to agricultural products that are marketed in England. It contains a long list of matters that will be covered by regulations—there are 15 of them. I will not go through the list, but one or two of them are important. They refer to regulations or cover matters about the type of farming and production methods, as to the use of certain substances and practices—one might think of pesticides, additions of flour—packaging and so on. At the discussions on the Agriculture Bill, I asked the Minister what this means for the farmers in Wales, Scotland and Northern Ireland, given the volume of goods that they move for marketing in England, since these are matters that have been set for all goods marketed in England. There is no reference in this clause to consultation, let alone consent, and my suggestion was that there should be, on the face of the Bill, a provision that if these standards are to be set and people coming from other parts of the UK are obliged to comply with them, then surely that would have to be done with consent. I do not think that the Minister responding to me had any idea that the Internal Market Bill was on the horizon. I mentioned that the White Paper had just come out, but I got no response from him about that either.
The effect of the mutual principles set out in Clause 2 solves the problem as far as farmers in Wales and Scotland are concerned. They need not trouble themselves about regulations, additives, pesticides, packaging, production methods and so on, because they have a complete opening to the market. The question is: is there any point in going through this huge list and laying down carefully regulated provisions for England when the Minister knows perfectly well that people can come from the other parts of the UK under his Bill and ignore them? I am not talking about a lowering of standards, but about different standards which are not provided for. That is the kind of problem that I mean. Can the Minister look at this before he goes to sleep tonight, think it through and see how it looks from the other side of the fence? These are really big issues. Although the Bill is still going through ping-pong, I wonder whether Clause 39 can survive and whether the regulation- making power in that clause will ever be exercised.
These are fundamental points and, to be honest, I do not think that the Minister has really grasped the importance of them. I would like to think that he will, and I look forward to further discussions with him before Report. For the time being, however, I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
My Lords, we now come to the group beginning with Amendment 6. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and anyone wishing to press this or any other amendment in the group to a Division should make that clear in debate.
Amendment 6
“Legislation to which market access principles apply
(1) Legislation on market access principles may only apply—(a) when the common frameworks process in respect of subjects within a description listed in Schedule (Subjects to which market access principles may be applied) has been exhausted, and(b) only so far as it relates to a subject specified in regulations made by the Secretary of State.(2) Regulations under subsection (1) may specify a subject only if it is within a description listed in Schedule (Subjects to which market access principles may be applied).(3) The Secretary of State may by regulations amend Schedule (Subjects to which market access principles may be applied).(4) Regulations under this section are subject to the affirmative resolution procedure.(5) Before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, the Secretary of State must give notice of the proposed regulations to—(a) each devolved authority, and(b) the Competition and Markets Authority.(6) The Secretary of State may not lay the draft instrument before either House of Parliament until—(a) the Secretary of State has received—(i) a statement in relation to the proposed regulations from each devolved authority, and(ii) a report or advice on the proposed regulations from the Competition and Markets Authority, or(b) the period of 12 months beginning with the day on which notice was given under subsection (5) has ended.(7) When a draft of a statutory instrument containing regulations under this section is laid before either House of Parliament, the Secretary of State must at the same time lay before that House copies of any statements, report or advice mentioned in subsection (6)(a).(8) In this section, “devolved authority” means—(a) the Scottish Ministers;(b) the Welsh Ministers;(c) the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment means that the United Kingdom market access principles only apply after the process for agreeing common frameworks has been exhausted. It introduces a new Schedule, inserted by another amendment in the name of Baroness Finlay, listing the subjects to which the common frameworks apply and for which regulations may be made if common frameworks are not agreed.
Baroness Finlay of Llandaff (CB)
My Lords, I have tabled both the amendments in this group. Amendment 6 is arguably the most important of all the amendments that I have laid, because it aims to do what many of the amendments in the previous group also intended to achieve. In the light of the disappointing ministerial response to the amendments in the previous group, so superbly introduced by my noble and learned friend Lord Hope of Craighead, it could be said that I am having another go, in a more watertight way. Amendment 6 puts common frameworks on the face of the Bill. Amendment 44 is consequential on Amendment 6, since it would make the point at which the regulations came into force the trigger point from which the market access principles would apply. I assure the Government that these amendments are drafted with the Welsh Government, who want the process on the face of the Bill.
I am grateful to the Minister for meeting me and other Peers last week and for his letter of yesterday. In it he states:
“The common frameworks programme was designed to find effective, pragmatic and flexible ways of working with the devolved administrations. The purpose of frameworks is to ensure that intra-UK policy-making is based on agreed structures for cooperation across the UK. They are voluntary in nature and allow the UK Government and devolved administrations the opportunity to find common approaches to the exercise of powers returning from the EU. One of the main benefits of the programme is its inherent flexibility to adapt to changing circumstances.
Enshrining common frameworks in legislation would remove the voluntary element on which the common frameworks programme is based. As frameworks are developed jointly with the devolved administrations, any change of this nature which departs from the agreed principles of the programme would need to be agreed with the devolved administrations. It would also likely eliminate the flexibility which makes frameworks effective in managing intergovernmental policy development in the long term.”
I agree that they are voluntary, but without them in this Bill it reads rather like a blunderbuss, sweeping over all in its path. That is precisely why the devolved Government in Cardiff want common frameworks to be the starting point for this legislation, not hidden away and never referred to, like the first Mrs Rochester. These principles of frameworks were first agreed in October 2017. More than 150 areas have been identified where EU law intersects with devolved competence, including 24 areas, now narrowed down to 18, where legislation may be needed. Thirteen of them are well on their way for early delivery. In the Minister’s response to the first group of amendments today, he flagged up that there will be “dozens of new powers” and responsibilities for the devolved Governments—I hope I have quoted his words correctly. This will inevitably mean wider divergence and, I suggest, is an even stronger reason for an agreed mechanism to find consensus and avoid the situation outlined by the example of flour. Only when that hits the buffers should Parliament step in.
The reason they need to be in the Bill—I believe that Scotland would strongly support this approach—is that they provide an agreed framework, whereas the Bill as drafted empowers the imposition of market access principles across all areas of economic activity, regardless of whether divergence between the devolved nations on a specific issue would pose a threat to the coherence of the internal market. It ignores the frameworks process that has been developed. It seems to assume such frameworks will fail without spending time listening to both sides to reach agreement, which may—let us be realistic—be an agreed compromise. It fails, if I may draw on John Lennon, to “give peace a chance”. It may not be the intention—though some may fear it may be—to launch a full-frontal attack on the current system of devolution, but whether it is or not, its approach feels overbearing and intolerant of difference.
This amendment and equivalent ones in respect of Parts 2 and 3 reverse the burden of proof. This would require the frameworks to be worked through properly, not in a tokenistic way. Failure to reach agreement would trigger action. It would create a system where the market access principles could then be brought into effect by affirmative resolution of this House and the other place. The principles would then, and only then, apply to specified areas of economic activity: areas where attempts to agree a common framework by negotiation between the four Governments of these islands had failed and where the Government could make a credible argument that there was a threat to the economic coherence and well-being of the United Kingdom.
Lord German (LD)
My Lords, these amendments have been prepared by the Welsh Government and have their support; I am pleased to support them. The Welsh Government, as noble Lords know, are committed to the union of the United Kingdom. These proposals before us today seek to find a route through in the way that the Bill has been put together. In fact, they intend to put the horse before the cart rather than the cart before the horse. In the discussions that we had on the previous group and subsequently, there have been for me some very puzzling matters, and I am trying to work out quite where the Government have placed themselves.
First, on timing, the Government seem to argue that we must have the Bill in place in its entirety so that on 1 January they can move forward and have something absolutely concrete to work from. I will come back to that point in a moment. The second point is that the Government have not been able to find any way to describe something which falls outside the area of the structure.
In the last round of amendments, the Minister described additives for flour. Flour and additives are part of the common framework on nutrition. I am told that the three frameworks which are already on the way to early delivery and will be fully operational by the end of the year cover nutrition, hazardous substances and emissions.
I am puzzled why the Government are not able to provide any specific examples of what falls outside the framework, apart from “the future”. We do not know what the future is, but as it arrives we will sort out legislation and frameworks as we move along. That is bound to happen.
Timing is another puzzle because the Government do not want to proceed with the common frameworks as the underpinning structure for this Bill. They seem to want to use what the noble Baroness, Lady Finlay, called a blunderbuss. Battle axe might be another way of putting it. Basically, they do not want the co-operative approach which has been at the forefront of these frameworks.
In September, the Government published their view of the frameworks. Right at the front—on the first page—were the principles which the Government are now seeking to break about the way in which they intend to govern, and about giving and not taking away powers from the devolved Administrations. They were right at the top of the Government’s own papers as recently as last month. If the Government want to put them front and centre, but need something temporary, why not say so? Why not put in a sunset clause, or some form of clause which says this will be a temporary measure until particular frameworks are in place?
The Government’s position is not defensible inside Wales as I know it. The Welsh Government have sought to bring forward a proposal which meets the Government’s aspirations. It says, “Put the common frameworks first and then, if there is any dispute whatever, use the backstop which is being put into this Bill through regulations.” We all want to see an alteration to the way in which they have been carried out and for there to be adequate consultation and debate.
My concern is that I am not certain that the Government know where they are going. I am not certain that they know what they mean by “putting the common frameworks front and centre”. Is this a timing issue? I hope that the Government will be able to answer all these questions.
I want to talk briefly about the one-use plastic teaspoon. They will be banned next year by the Welsh Government, through the Welsh Assembly, because they are bad for the environment and do not degrade in the soil. One-use cutlery is damaging for us as a country and for our environment. However, if that legislation is passed, there is nothing to stop a whole generation of English single-use plastic spoon manufacturers bringing them across the border and distributing and selling them wholesale in Wales. This is an extreme example, but it illustrates that there are bound to be some divergences if the power exists. If, as a Government, you have been given powers and you want to enable them, but you find you are being stopped because of this sort of extraordinary behaviour by a Government somewhere else, that is not going to help the union. The union of this United Kingdom is to be treasured, but to treasure it you have to respect it. I do not believe that the Government are doing so in this Bill. So I ask them all those questions about the direction in which they are going. Will they try to outline whether these frameworks will be placed front and centre? Is it a timing issue? Can they come up with some examples—one would do—which would tell us where the gaps are?
Baroness Andrews (Lab) [V]
My Lords, I can speak more briefly to this amendment than the one I spoke to earlier, because my arguments will be much the same. What attracts me particularly about this amendment is that it once again asks the Government to look at the possibility of putting in the Bill the process whereby the Bill becomes the default position and the common frameworks process has to be exhausted before the market principles kick in. I have said before that I think that this is logical. It helps the Government to achieve their own objectives.
When the Minister replied to the previous debate, it was very welcome to hear him say that he was prepared to give more thought to things he had heard the House say this evening. He seemed to think that this process of exhaustion was somehow going to be rather difficult and messy to achieve. From what we have seen in the Common Frameworks Scrutiny Committee, the dispute resolutions are worked out very clearly and in detail. I do not see a problem with that process at all and I would be happy to talk to the Minister about it. If he is worried about that, we can provide some reassurance and, as we scrutinise it, there may be some things we can do to improve the process. If it is a technical problem, then that is what we are here to solve. If it is a problem in principle, then we need to know; he needs to tell us.
The rest of the amendment is slightly more legislative in structure than the amendments from the noble and learned Lord, Lord Hope of Craighead, but I continue to support it in principle because it flags up the significance of common frameworks and the importance of the need for a fit between the Bill and the common frameworks.
The noble Baroness, Lady Finlay, asked me whether we had come across any areas where there was deadlock or difficulty in securing agreement. In the summaries of the frameworks that we have seen so far, and in the one completed framework, we have not seen anything that would alert us to the fact that there is a continuing problem. The problem that the framework negotiators have is the unsettled nature of European negotiations and the issues posed by this Bill itself. They are bound to be waiting for resolutions of different sorts. The processes that they are establishing are clear, transparent and robust. As I say, they offer a solution in practical terms, as well as, frankly, in ethical and political terms, as far as the Government are concerned.
With that, I simply say that I am pleased to support the amendment in principle. I look forward to the Minister, the noble Lord, Lord Callanan, having another go at some of these very specific questions that I think we have a right to hear some answers to.
Baroness Neville-Rolfe (Con) [V]
My Lords, I will speak to Amendment 6. I have already expressed some concerns about delays and problems that could arise in trying to satisfy devolutionary feelings beyond the existing devolution settlements and the withdrawal Act, which have already given many powers to Scotland, Wales and Northern Ireland.
We need always to bear in mind the need for a well-functioning single UK market. That is in the interests of citizens, and of charities and businesses which operate across the borders of Northern Ireland, Scotland, Wales and England. My noble friend Lady Noakes cited some figures which bear repeating. I think she said that 60% of Welsh and Scottish exports and 49% of Northern Ireland exports come to other parts of the UK. Incidentally, I was glad to hear my noble friend the Minister committing the Government to high regulatory standards.
We heard from the noble and learned Lord, Lord Hope, in an impressive speech, and from the Minister in an equally persuasive one, about the role of common frameworks in relation to Amendment 5. I heard what my noble friend the Minister said, but it may be that a brief reference to these common frameworks could make everyone more comfortable with this Bill—I was thinking of an annual report on how they are working and how consultations have progressed. It seems odd, given their importance, that there is no reference to them at all.
Lord Hope of Craighead (CB) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Neville-Rolfe. I found myself in agreement with some of what she was saying, and I respect very much the background in business and marketing from which she comes, which of course is of great value to the House in this discussion. She said that we were all agreed on the need for a fully functioning internal market and, as I tried to make clear in my speech, I am in absolute agreement with that aim. Obviously, everything we would do is working towards that aim, despite the differences of perspective across the various nations of the United Kingdom.
The noble Baroness said that a brief reference might be a way of making the devolved Administrations more comfortable. For my part, I have been trying to adopt a light-touch approach, which may not be too far away from what she is talking about—but it would have to be pointed enough to meet the concerns of the devolved Administrations and give them the assurance that they need for the future. So in a way I find myself in a rather frustrating position. I cannot believe that we are all that far apart, but the gulf that divides us at the moment is very deep. I would love to find a ladder, or something, that would take us across this gulf and solve the problem. That is why I am certainly open to discussion.
Before I go any further, I should say that I am entirely behind the noble Baroness, Lady Finlay of Llandaff, on the principles that lie behind her amendment. Indeed, I am extremely grateful to the Welsh Government, who have done so much to inform us about the background to the issue and who have done a great deal of drafting work to show us what amendments might be made to work to solve the problem as they see it. Although they look very different, my own amendments were inspired by the work that they have done, and I owe a considerable debt of gratitude to them for that, and for their generosity when I indicated that I would want to take a rather different approach in the way that the amendments should be worded. The principles behind us are exactly the same and, for that reason, I entirely support, in principle, the amendment in the name of the noble Baroness and applaud the way in which she introduced it.
This issue is simply not going to go away. We will be pursuing it in various ways on Report. For the time being, I encourage the Minister to appreciate that there is some force in the point made by noble Baroness, Lady Neville-Rolfe. If her approach were adopted, one could see this frustrating gap narrowing slightly—and I would love to see it closed over so that we could solve the problem completely, to the satisfaction of both sides.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
I call the noble and learned Lord, Lord Morris of Aberavon. Do we have Lord Morris of Aberavon? We will move on.
Lord Naseby (Con)
My Lords, I apologise to the House. I understand I was on the list for Amendment 5, but I never applied to speak on that one.
This is an interesting amendment. My colleagues, the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, have already made the point that we are very close to 1 January—in fact, we are 66 days away, by a quick calculation—and so I look at that time dimension against the complications within this proposed new clause.
As I said much earlier in the evening, I am a marketing man by profession; I worked very closely with a large number of manufacturers when I was a senior director in one of the major advertising agencies. I find some of the elements of this amendment, or proposed new clause, too prescriptive. Take subsection (1)(a), where the whole principle is that nothing is going to happen until the
“access principles may be applied”
and have been “exhausted”. We are in a time framework where that is not going to work. It may be necessary, later on, to look at how it does work in principle, and maybe some changes should be made then.
I worry deeply. We are a creative nation. We are in an enormous period of change. One sees now what is happening in the fintech world: it is moving forward at an enormous rate, and it does not want to be stultified by a whole series of restrictions before it can be added to a particular schedule or not. All of us are conscious that there is a whole variety of different companies, across the world, trying to find an answer to Covid-19 through new drugs and vaccines.
Personally, I am terribly practical, and I just do not see the elements of this amendment helping the United Kingdom move forward. There may be bits of it that have some relevance—I am sure there are—and I recognise that they are put forward with a genuineness by people who want things to work. But when I listen to the noble Lord opposite talk about the Welsh Government, and having observed what is happening down in Wales now, one has to say that it is not terribly practical. I am not sure that the credibility of the Welsh Government is very strong in today’s world.
I hope my noble friend on the Front Bench will understand that, perhaps in the future, some of these elements may need to be applied, but, as matters stand today, with 66 days to go, frankly, I do not think that this proposed new clause helps at all.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
I call the noble and learned Lord, Lord Morris of Aberavon.
Lord Morris of Aberavon (Lab) [V]
It has been a most interesting debate. I do not think I have anything to add. I await the Minister’s reply with great interest.
Baroness Randerson (LD) [V]
My Lords, the concept of common frameworks is notable for its absence from this Bill, as many noble Lords have said. For three years, they have been accepted as the way forward, on which the future operation of the UK internal market would be built. Now, they have been silenced.
I, along with a number of other noble Lords who have spoken on this and previous groups, am a member of the Common Frameworks Scrutiny Committee, ably chaired by the noble Baroness, Lady Andrews. I can report that common frameworks are alive and well and that a great deal of work has gone into them. There is general agreement from stakeholders, the devolved assemblies and UK Government representatives that they can provide a sensible and effective way forward. Amendment 6 seeks to flesh out the principles of co-operation on which they should work. That common frameworks process should be exhausted before the market access principles come into place.
The Government respond by saying that there is no need for common frameworks, as a concept, to be enshrined in legislation. I am sceptical. There are already signs that the Government are attempting to sidestep common frameworks—for instance, on the emissions trading scheme, where they have announced their intention to consider replacing it with a carbon tax, which would be a UK responsibility and would effectively take away the devolved powers. That is despite the fact that the common framework on this issue—emissions trading—has just about got to the final point. Despite the Minister’s assurances, I fear that the Government are poised to put the principles in the Bill into effect with the excuse that common frameworks have not proved workable.
Amendment 6 has cross-party support. Noble Lords have emphasised that it has been designed in consideration with the Welsh Government and reflects the well-founded concerns of the devolved assemblies. As with a number of issues, there is a lack of clarity on how common frameworks will link with the market access principles. Common frameworks set up a system—a framework—for the operation of markets, complete with dispute mechanisms. They allow for changing standards over time. So, I ask the Minister: how does this fit in with the provisions in the Bill that remove the right of devolved Administrations to introduce new standards in many circumstances? If the Government genuinely support common frameworks as the fundamental building blocks of the way forward, will the Minister agree to accept Amendment 6, which states that the Bill’s market access principles apply only after the common frameworks process has been exhausted? Will she clarify the relationship of the Bill to common frameworks? Will she accept our assurances that the Welsh Government, for instance, want common frameworks in the Bill?
Will the Minister also explain precisely how the measures in the Bill will guarantee that the devolved Administrations will be able to experiment and develop novel approaches, as they have in the past? That is how a great deal of social and environmental progress has been made in the last two decades. I give the example, used earlier in the debate, of single-use plastic bags. Wales experimented with the concept of paying for single-use plastic bags and was dramatically successful in reducing their use. The English approach to this, taken by the UK Parliament, was very sceptical, but Parliament saw that it worked and, in due course, England followed suit. Wales is an ideal size as an experimental sounding board.
Amendment 44 to Clause 9 refers to the non-discrimination principle. For clarity, can the Minister spell out to us where the requirement for the provision of, for example, labelling in the Welsh language would stand in relation to that principle? There is a legitimate reason for the need for Welsh labelling in certain circumstances, and as policy in relation to the Welsh language matures, it is fairly certain that there will be increasing demand and need for labelling in the Welsh language. How will that fit with the Bill?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, at the end of the previous group the Minister, the noble Lord, Lord True, kindly said that his mind was not closed to further discussion on this issue about common frameworks and how they relate to the Bill. I welcome that. In a sense, the amendments in this group are part of the same debate. I therefore hope that they will also be included in the next-stage discussions, as they are a variation on the theme.
I set out my route map for progress in my response to the previous group and I will not repeat it. However, I endorse the points made by the noble Baroness, Lady Finlay, my noble friend Lady Andrews, the noble Lord, Lord German, and the noble and learned Lord, Lord Hope, particularly their growing confusion about what exactly is in the Government’s mind on this issue. Perhaps the noble Baroness, Lady Bloomfield, coming fresh to the debate, can persuade us that there is indeed a coherent logic to the Government’s position—because it certainly eludes me.
Baroness Bloomfield of Hinton Waldrist (Con)
I hate to disappoint the noble Baroness, Lady Andrews, but it falls to me to respond to this debate. I will now speak to the two amendments—Amendment 6 and the consequential Amendment 44—concerned with how UK market access principles, as proposed in the Bill, will apply. I understand that the noble Baroness, Lady Finlay of Llandaff, has tabled these amendments on behalf of the Welsh Government. Accordingly, I would like to begin by thanking the Welsh Government for their positive engagement on this Bill so far. The UK Government look forward to continuing constructive future engagement with the Welsh Government.
As my noble friend Lord True said earlier, we continue to work closely with the Welsh Government to develop common frameworks, in line with the framework principles agreed by the Joint Ministerial Committee (EU Negotiations) in October 2017. I know the Senedd were happy to see the Joint Ministerial Committee provisionally confirm the first two frameworks of the programme on hazardous substances and nutrition. Work continues in earnest to reach further such agreements in the coming months and beyond.
Before I turn to the detail of the amendments, I want briefly to cover the context of the Bill in order to explain the approach the Government took to applying the market access principles. At the risk of repeating the arguments of my noble friend Lord True, now that we have left the EU and as we recover after our fight against Covid, it is vital that we deliver legislation which allows the continuing smooth function of our UK internal market at the end of the transition period. The Bill aims to ensure frictionless trade, movement and investment between all the nations of the UK. The policies that different parts of the UK choose to pursue in the future is a matter for each Administration. The Bill ensures that these local policies can be pursued while maintaining seamless trade in the UK internal market. There is no question of the UK Government intending to bypass the common frameworks; the Bill is intended to complement them.
The approach we have taken in the Bill will give businesses the regulatory clarity and certainty they want. It will ensure that the cost of doing business in the UK stays as low as possible, and without damaging and costly regulatory barriers emerging between the nations of the UK. With this context in mind, I turn to the amendments. They would, in combination, prevent the market access principles from applying at the end of the transition period. The lengthy process they put in place before the principles can apply, including the need to exhaust frameworks discussions, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. The resulting threat of unmanaged regulatory divergence would not provide the certainty businesses need and could deter businesses that wish to expand and supply customers across the UK. This is not desirable, especially as we continue our recovery from Covid-19.
The amendments would also limit the areas to which the market access principles can apply. Again, this would unduly constrain the scope of the principles and fail to protect the internal market fully. In contrast, the Government’s approach is more comprehensive and ensures that businesses in all sectors can continue to trade across the UK without facing new barriers or discrimination.
The amendments also present a challenge in defining the exhaustion of the frameworks process. In all cases, common frameworks are designed as living arrangements, capable of change by agreement as required. Thus, the process is never wholly exhausted. The new clause also specifies a consultation process with the devolved Administrations and the CMA, or, failing that, a 12-month delay before any regulations can be made specifying areas to which the market access requirement would apply. The Government are already committed to appropriate consultation with the devolved Administrations; however, under the terms of the amendments, the time limits proposed would create unnecessary delay.
The noble Lord, Lord German, asked about the timing of the Bill. Reduced certainty would indeed be a disaster to our recovery from Covid-19. We do not believe that it is acceptable for businesses to have less certainty on trade with their UK supply chain after 1 January 2021 than they have today and have had for centuries. The UK Government are committed to ensuring that the status quo of seamless internal trade is maintained for the shared prosperity and the welfare of people and businesses across all four nations of the UK. Without the internal market, livelihoods would be at risk. There is also the issue of future-proofing the Bill to allow that, for the jobs of the future, mutual recognition will apply across areas that we may know nothing about today, including things such as the artificial intelligence industry.
My noble friend Lady Neville-Rolfe and the noble and learned Lord, Lord Hope, asked whether reference should be made to the common frameworks should be made in the Bill. We already have a statutory obligation to report quarterly on progress on the common frameworks, so there is no need to put this in the Bill as well. Far from being silenced, as the noble Baroness, Lady Randerson, suggested, as she knows, two common frameworks have already been agreed. However, some 38 more have yet to be considered, with only nine or 10 weeks until the end of the transition period. They do indeed provide a very sensible framework, but they remain voluntary. Ultimately, the common frameworks depend on continued co-operation. In spring 2019, the Scottish Government walked away from the internal market project. This legislation is required to provide certainty for business and consumers.
The noble Baroness asked about labelling in Welsh. There is nothing to prevent labelling in Welsh for goods produced in Wales. I was also asked about the use of plastic teaspoons. The Welsh Government can still ban their use, but perhaps not their sale.
For these reasons, and for the uncertainty and confusion that it would generate for businesses and consumers, unfortunately the Government cannot support the amendments in this group and I would ask noble Lords to withdraw or not move them.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
I have received one request to speak after the Minister. I call the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I listened very carefully to what the Minister said about the need for certainty, which seems to be the overriding approach. But, having listened to my noble friend Lord German and the noble Baroness, Lady Finlay, I would refer to the Food Standards Agency report, Food and Feed Safety and Hygiene Common Framework Update. Paragraph 3.15 states, in relation to adopting mitigating measures against mutual recognition, which we will discuss in another group on another day, makes a quite interesting point that
“where common approaches are taken, mutual recognition will not apply.”
If that is the case in this Bill, the common approaches across the nations—the mutual recognition and certainty that she indicated—will not apply. But we do not yet have full agreement on all the common frameworks, so how can that apply under this Bill, given that we have not reached the agreements yet? However, the Government’s own position is that mutual recognition will not apply if common approaches are taken on any regulatory changes. So which is it? Is it in this Bill or is it within the common frameworks?
Baroness Bloomfield of Hinton Waldrist (Con)
I am afraid that the noble Lord has the advantage of me in that I have not seen that bit of the food standards framework. I would rather look at his question again in Hansard tomorrow and reply to him in detail. I do not think that I am able to give him a full answer now.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I am most grateful to all noble Lords who have spoken. I am grateful to the Minister for her response but it is disappointing.
I must say that I appreciate the noble Lord, Lord German, pressing the Government on why they cannot specify any examples of potential disruption to the internal market, because we really need to hear those. Perhaps the Minister might write to me with some of those specific points following this debate. I note that the noble Baroness, Lady Andrews, confirmed that there is no evidence that common frameworks are breaking down, nor that there is an inability to be fast.
I can see that the timing in the amendment needs to be looked at and renegotiated, and I am sure that would not be a problem. I know that the Welsh Government are sincerely committed to bridging the gap that the noble and learned Lord, Lord Hope, outlined so clearly; at the moment it is a chasm, but it can be bridged.
I agree with the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Naseby, that we all want the UK to prosper and things to work, but we must find a way to make them work by not splitting the UK, which is what the Bill seems to be doing at the moment.
I am grateful for confirmation from the noble Baroness, Lady Randerson, and the noble Lord, Lord Stevenson, of cross-party support for this approach. I have to agree with the noble Baroness that there is little evidence of the Government’s good will towards devolution in the Bill as drafted, and that at the moment the logic of the Government’s approach is quite difficult to discern.
The amendment was a genuine attempt to restore confidence between the central Westminster Government and the devolved Governments. I hope we will return to it because I think we need to. This was a hand of peace, an olive branch, and we must return to it later on Report. For the moment, though, pending further discussions and negotiations, I beg leave to withdraw the amendment.
United Kingdom Internal Market Bill
Wednesday 28th October 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135-III Third Marshalled list for Committee - (28 Oct 2020)
The Deputy Chairman of Committees (Lord Lexden) (Con)
We come to the group beginning with Amendment 7. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.
Clause 2: The mutual recognition principle for goods
Amendment 7
Baroness Hayter of Kentish Town (Lab)
My Lords, my purpose in moving Amendment 7, which would exclude imported goods, is to emphasise, in rather stark terms perhaps, that the Bill goes considerably further than simply saying that goods made in one part of the UK must be able to be sold in any other part.
As written, it allows any good that one part chooses to import to be sold throughout the UK, with absolutely no say by the Governments or legislatures of the other three countries. So, if Northern Ireland, for any reason, permitted chlorinated chicken to be imported—although I am absolutely confident that it would not—those delightful carcases would automatically have the right to be sold elsewhere in the UK. Similarly, if Scotland accepted a very high salt content in crisps or we in Wales had too much sugar in our chocolate, or anything else like that, we would be able to import those things in any one country and they would automatically have the right to be sold elsewhere.
It could be something that we do not want for all sorts of reasons. For example, England might import something that perhaps does not damage particular producers, consumers or the environment within England but could affect farming, consumers or households elsewhere. With agriculture, we would well understand the problem with sheep farming—hill sheep farming in Wales being more affected. Certain things imported into England could have a more devastating effect somewhere else; nevertheless, once imported into one country, there would be an automatic right for a good to be sold across the kingdom.
When we were in the EU, of course, we had similar rules on what are called “goods on the market”, whereby goods guaranteed as safe, desirable or acceptable in one country could appear in the other 27 markets. However, the difference is that the EU has a system of mutual recognition of checks, standards, assurance and monitoring, as well as the safety alert system, which applies to all member states, so that each nation has confidence that, when something is imported and on the market in one country, it is equally acceptable in any of the other member countries.
It is not that we distrust any of the fellow Governments in the UK—even Mr Johnson’s—but the worry is the denial of the involvement of the other three nations in decisions on what to import by the fourth. Of course, that then impacts on what can be sold on that market, and that is the problem—the lack of that involvement. The noble Lord will understand that this is more of a probing amendment but I think that it needs justifying and some explanation of the risks in relation to imported goods.
Amendment 8, in the name of my noble friend Lord Rooker, who is of course something of an expert on the subject, is more targeted and would exclude food or animal feeding stuffs from the mutual recognition principle. Obviously, I will let him make the case, rather more effectively than I ever could, for himself, but I should say to the Minister that my noble friend’s amendment is absolutely on the button with regard to consumer worries, so he will need some rather robust arguments for that amendment not to be considered on Report. I beg to move.
Lord Rooker (Lab) [V]
My Lords, at this stage of the Bill, Amendment 8, like Amendment 7, is a probing amendment, but I should just like to comment as an aside on the reference in the amendment to the definition of “food”. Most of our discussion on food safety centres on the Food Standards Act 1999 and the Food Standards Agency, but the bedrock of food safety in the country is the Food Safety Act 1990. Thirty years on, that Act, introduced by a Conservative Government, has really stood the test of time. The change made in 1999 was to separate policy for protecting consumers from the department at the time—MAFF, the producer department.
I do not want to disappoint my noble friend but I shall deal only with animal feed issues. I took the view that there will be plenty of opportunities to raise food issues—of course, I reserve the right to come back to those—but I want to deal with some animal feed issues. There is no lobby and no brief on this; I am simply using my own experience on some aspects and have made a modest internet search for some numbers. It is a multi-billion pound business, and it is crucial for human and animal safety that it is regulated effectively. There are some matters relating to animals—we are talking about food animals—which are all-island matters and which I am not at all clear about, and the Bill does not make them clear.
Animal disease control is currently an all-island matter on the island of Ireland. I say that for obvious reasons, but does that remain the case under the Bill? That is a point that really needs bringing home. If you looked at the other aspect, particularly in Schedule 1, you would think that we in the UK were isolated. We are not. Northern Ireland is on the island of Ireland, and there are some issues—I will give some other examples—where all-island matters take priority.
Animal feed is an area worth looking at because, to be honest, it is not considered to be as important as food, although of course it is. I recall that when I was at the Food Standards Agency—this was under the then chief executive, Tim Smith, who of course is currently distinguishedly chairing the agriculture trade commission and others—discussions with Thompsons in Belfast, the largest feed mill in Europe, centred on a scheme for controlling animal feed imports into the island of Ireland. This was industry-led and was to be through very few ports indeed. Today Thompsons operates an animal feed joint venture with R&H Hall in the Republic via Origin Enterprises to provide grain and non-grain ingredients to animal feed manufacturers and the flour milling industry across the island of Ireland. I want to know how that is affected by Clause 2.
To give a sense of the importance and scale of livestock, it is much more important to the economies of Northern Ireland and Ireland than it is to the rest of the UK. I will give just one example. If we compare human populations with those of the four-legged food production animals, cattle, sheep and pigs—I have excluded horses, which people can get uncertain about; we slaughter horses for feed but we export them—in the UK the ratio is approximately 0.7 of an animal per person, but in Ireland it is 2.6 animals per person and in Northern Ireland the figure may even be 2.7. So one can see that livestock is much more important to the economies of the island of Ireland than it is to the rest of the UK.
Animal genetics are just as important on an all-island basis. For example, Elite Sires has been Ireland’s leading provider of high-quality pig semen for 30 years. It is the sole provider of DanBred cutting-edge swine genetics on the island of Ireland, based of course on Denmark’s remarkable success in pig production. It delivers what it says—because I could not argue between one sample of swine semen and another—is the best swine semen in the land all over Ireland at the time when the animals are ready. How is that affected by Clause 2?
I mentioned that the safety of feed is important. The Food Standards Agency and Food Standards Scotland are responsible for, and carry out, the function of official controls, to use the technical term, via local authorities. That is the case with most food safety issues as well. However, local authorities, particularly in England, have not in the main taken feed issues as seriously as food. The Food Standards Agency, being aware of that—I am speaking now specifically about England—has taken many steps to try to improve the situation, but the picture in its latest assessment is not a good one. I will give some short quotes from the executive summary of the latest audit for England of the way that local authorities look at animal feed, published as long ago as October 2016. Local authority service plans
“had not adequately taken into account the Agency’s National Enforcement Priorities … There had been only limited implementation of the scheme for earned recognition.”
There was “little evidence” that local authorities
“had reviewed the impact of earned recognition on the delivery of official controls”.
Local authorities were
“using an out of date version of the Association of Chief Trading Standards Officers … risk scoring system”.
Half the local authorities audited
“had incomplete feed registers and databases”,
which are absolutely fundamental to traceability. It said:
“Auditors were unable to assess the effectiveness of formal feed law enforcement actions as none had been carried out in the previous two years”.
Lastly, none of the English local authorities audited had
“any specific documented procedures for assessing the accuracy of official feed reports to the Agency”.
I have to say that if the Government want to check on this situation and there has been no significant improvement in the last few years, that function should probably be removed from English local authorities because they are not up to the job. It is fundamental to human and animal safety.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to follow the noble Baroness, Lady Hayter, and the noble Lord, Lord Rooker. I shall speak to my own amendments but I have a question following on from what they have both said which relates to an earlier debate, particularly when in summing up the noble and learned Lord, Lord Hope of Craighead, linked Clause 39 of the Agriculture Bill to the clause relating to the movement and mutual recognition of goods.
Clause 39 of the Agriculture Bill relates to marketing standards, and I have a specific question to put to my noble friend the Minister that I hope he will address head on in view of the remarks made by both the previous speakers. If, in the course of events in the new internal market arrangements under this Bill, the Food Standards Agency with responsibility for England came out with different provisions to Food Standards Scotland, and in the event that the latter adopted different rules for, especially, animal products, food and animal feed, how would that impact on the free movement of goods? Could it eventually mean that there was no longer any mutual recognition, and Scottish goods could not pass into England or other parts of the United Kingdom in those circumstances? Would the same apply if the Food Standards Agency in England produced different rules to other parts of the United Kingdom? It is extremely important that we understand those impacts.
I will now speak briefly to my Amendments 20, 22, 26 and 45. I am extremely grateful for the extensive briefing I have obtained from the Law Society of Scotland and for its drafting of these amendments, which are probing in nature but address some key issues. Amendment 20 is a probing amendment to seek the Government’s interpretation of Clause 4(2)(b). Clause 4 purports to mean that certain regulatory divergences that currently exist will continue to be able to be enforced against goods produced in or imported into other parts of the United Kingdom and would not be able to be so enforced were they introduced after the mutual recognition principle comes into force. However, the Law Society of Scotland has noticed that, in order for a statutory requirement in a part of the United Kingdom not to be a relevant requirement for the purposes of mutual recognition, the conditions in subsection (2) must be met.
There are two conditions in subsection (2), and my comments will relate specifically to subsection (2)(b), which provides:
“The conditions are that, on the relevant day … there was no corresponding requirement in force in each of the other three parts of the United Kingdom.”
What provisions do the Government imagine will be captured by the current terms of Clause 4? For example, food and feed law is mainly derived from EU law, and, in terms of the European Union (Withdrawal) Act 2018, this body of law is retained EU law, implemented throughout the UK. Are Scottish food and feed regulations, and, by implication, all retained EU law, excluded from the application of the mutual recognition principle because there are corresponding requirements implementing the same EU obligation, albeit in slightly different terms, to fit into the relevant law in each of the other parts of the United Kingdom? How does the mutual recognition principle relate to common frameworks? My Amendment 22 simply has a consequential effect, following on from the deletion of Clause 4(2)(b), making the necessary changes there.
Amendment 26 probes the meaning of Clause 5(3), regarding the effect of a statutory requirement under Clause 6. It appears that Clause 5(3) would render a statutory provision in devolved legislation “of no effect”. This lacks clarity. Am I right in thinking that the statutory requirement is valid? Is it valid but cannot be enforced? Is it voidable? It is also not clear regarding the application, if any, of Clause 5(3) if the statutory provision is in an Act of Parliament that applies to England only. I would be grateful if the Minister would take this opportunity to clarify this.
The amendment applies the statutory language that exists in Section 29 of the Scotland Act 1998 to Clause 5(3) in an effort to bring clarity to the point. Section 29(1) provides:
“An Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament.”
It is not the intention of this amendment to amend the Scotland Act 1998 but rather to say that that Act provides, in my view, much clearer language than the Bill. These statutory provisions could be challenged by private parties and will presumably also be a basis for challenging devolved legislation. Assuming the inability to modify the Bill under Clause 51, it will in all cases prohibit legislation that is contrary to its principles. Presumably that is the intention, but it is not the clearest way that that outcome could have been achieved, so I am grateful for this opportunity to seek clarification.
Finally, Amendment 45 is a probing amendment, looking to understand a phrase the Government have used: “substantive change”. What do they interpret as substantive change in connection with changes to statutory requirements? I am grateful for this opportunity to speak to these probing amendments.
Baroness Finlay of Llandaff (CB) [V]
My Lords, Amendment 21 in my name is effectively consequential on the changes I have already proposed to ensure that the market access principles are only applied once regulations have been brought forward, relating to a specific type of goods, when it has proved impossible to reach agreement through the common frameworks process.
The Bill proposes that legislation already in place at the time Part 1 of the Bill comes into force cannot be caught by the market access principles—at least where the restrictions imposed by that legislation are not ones that exist across the United Kingdom. This amendment would simply apply that same principle in the context of a process whereby the market access principles could only be switched on by regulations approved by both Houses, meaning that restrictions to the exercise of devolved powers would only be switched on in specific areas where the Government have made regulations to that effect. In other words, the rules on non-discrimination would apply only where a devolved legislature sought to introduce new statutory requirements in the particular area covered by the regulations. This seems to be both logical and respectful of devolved competencies.
I also record my support for other amendments in this group, notably Amendments 7 and 8, which seek to limit the mutual recognition principle in ways that seem thoroughly appropriate, and Amendment 20 in the name of the noble Baroness, Lady McIntosh. This last amendment touches on an important point and would, on its own, if adopted, broaden the scope of the exemption for prior legislation. It seems to me—and please correct me if my understanding is wrong—that this would address one of my major concerns, which is that the legislation seeks to prevent regulation that increases standards but does not impede regulation that lowers them.
The Bill as currently constructed would mean that, if this Parliament decided to legislate in England for the current ban on the use of hormones in beef cattle to be removed, for example, then the fact that a ban had previously existed in Wales and Scotland could not be invoked to prevent the sale of such beef in those nations. This is because the condition in Clause 4(2)(b) would require the Welsh and Scottish Governments to demonstrate that a “corresponding requirement” had not previously existed in England.
In a letter from the Minister that I received just as we started this debate, he stresses, if I have understood it correctly, that a potential for harmful regulatory divergence did not exist during our membership of the EU, but, at the end of the transition period, that will change and create a significant risk of harmful divergence between the four nations. He goes on to write that the Government have consulted widely on the proposals and have had overwhelming support from businesses and industry organisations on the steps they have outlined to protect our internal market from discriminatory behaviours.
I would be most grateful if the Minister could kindly tell us, either today or in a letter following today’s debate, details of the results of that consultation because I think it is important that those of us speaking to amendments really understand the background of the results that came in. I will be most interested in the Minister’s reply to all the amendments in this group, particularly Amendment 20.
Lord German (LD)
My Lords, I have added my name to Amendment 21 to which the noble Baroness, Lady Finlay, has spoken. It seems to me that the clarification that the amendment is seeking is to understand whether, where a statutory regulation, rule or law is passed in a devolved Administration, that would exist until such time as the UK Government decided something different. Whether or not that is the intention of the Government, I do not understand.
The difficulty that I face in trying to work out the logical progression and the sequencing of what is happening in this Bill is correlated with the issue that we had on the common frameworks. It seems to me that the Government are moving down a dual carriageway in which one road is the internal market Bill and the other is the common frameworks progression, and between them is a brick wall. I do not understand how you can cross over between one and the other. That is the understanding that I got from the discussion we had in the earlier days in Committee.
The problem is that by the end of this year—I will use this as an example, which I would like the Minister to respond to at the end, if he would—the framework on emissions trading, which is a legislative framework, will be completed. I understand that it is with Ministers for final sign-off, but it has been agreed. If that emissions trading legislative framework is agreed, presumably there will then be legislation. I would like to understand where that legislation fits within the context of this Bill. Clearly, that has been reached by agreement—it has been agreed by all parts, including the United Kingdom Government, that there will be a legislative approach to this particular area of work. Then, of course, there will be a piece of legislation that sits either within this Bill or without it. I would like to know where that legislation will occur: will it be stand-alone legislation or will it be an amendment to the Bill we are discussing today?
There are two other frameworks—one on nutrition and one on hazardous substances—that are also virtually complete. They are non-legislative, and I understand that they will be agreed by Christmas. Take those three areas: on one side we have a legislative proposal and on the other we have a non-legislative proposal that the Government have agreed will be a non-legislative proposal and will therefore not require other legislation. And it will not require this legislation, because that is what the Government have agreed. Perhaps the Government could explain how the two are interconnected.
I understand that the reason for turning down a frameworks-only approach is because there are gaps, but we are yet to find out what the Government have established is a gap. We have asked for a current example that we can use, and I hope that, over the past few days, the Minister has found a current example that he can give us.
It seems to me that the fundamental principle that Amendment 21 is trying to establish absolutely is that, where there has been a legislative agreement or legislation that has been passed by either Wales, Scotland or Northern Ireland, when the Government introduce new legislation or regulations on the back of this legislation, such legislation will look only at the future and not the past and will have no retrospective effect.
Baroness Noakes (Con)
My Lords, I would like to remind the Committee of two things about this Bill. First, the Bill is to facilitate trade between all parts of the United Kingdom, not make it harder. Secondly, businesses favour barrier-free trade. That was the very clear message that came from the consultation on the White Paper during the summer. We should be trying to minimise the possibility of barriers being put up to trade within the United Kingdom.
If we allow exclusions of goods from mutual recognition, that will inevitably lead to higher costs. This is analysed in quite considerable detail in the internal market White Paper. Costs generally end up being borne by consumers. Excluding goods can also result in businesses deciding to withdraw from certain markets, which can in turn restrict consumer choice. I know the noble Baroness, Lady Hayter, is keen on consumer protection; she reminded us of that on the first day of Committee. Restricting trade tends to operate against consumer interests, so we should be very careful in trying to put amendments to the Bill that make trade more difficult. I also remind noble Lords that restricting trade is more likely to hit the devolved Administrations’ economies because of their greater dependence on exporting to the rest of the United Kingdom.
I want to comment on a couple of the amendments in this group, Amendments 7 and 8. The noble Baroness, Lady Hayter, said that Amendment 7 was a probing amendment, but by seeking to exclude imports into any part of the United Kingdom we are reducing the internal market rules to a very parochial interpretation. It seems to ignore the plain fact of commercial life, which is that there are complex supply chains and complex distribution logistics. It is of course the way we have been living in the EU; at the moment, we are quite accustomed to importing in one place and those imports being accepted throughout the rest of the community.
It also seems to me that the noble Baroness’s amendment would, in effect, impact exports between different parts of the United Kingdom. For example, if something was exported to Wales and imported to England, it would stop it then being imported into Scotland with the protection of the internal market Bill. That does not seem to make any kind of sense. It is pretty clear from the impact assessment that Wales and Scotland in particular are reliant on intermediate goods coming from other parts of the United Kingdom.
The noble Lord, Lord Rooker, spoke to Amendment 8. I did not follow what he said about pig semen because I do not think that, by any definition, pig semen is an animal feedstuff. I did have a chance to check the definition of “animal feedstuff” while he was speaking, and it is not. Perhaps we can put that to one side. We have to understand that if we try to exclude food and animal feedstuffs from the UK internal market mutual recognition rules, this will again potentially impact the devolved Administrations the most, given their import and export profiles. For example, if you look at Wales’s agri-food chain, you will see that 48% of agricultural inputs to Welsh food manufacturers come from the rest of the UK and 31% of food and drink sold in Wales comes from the rest of the UK. We should be thinking really hard about who we are likely to hurt when we put amendments such as this in the Bill, which restrict barrier-free trade.
Lord Hope of Craighead (CB) [V]
My Lords, I support Amendment 7 in the name of the noble Baroness, Lady Hayter, and Amendment 21 in the name of the noble Baroness, Lady Finlay.
I shall start with Amendment 7. First of all, I entirely agree with the noble Baroness, Lady Noakes, that importing and exporting goods is part of the commercial life of this country. That applies across all parts of the United Kingdom, and one can well understand the point that she makes about the importance for the devolved Administrations of maintaining that system with as little interference as possible. However, the point to which Amendment 7 draws attention is a matter of real concern to the devolved Administrations. As she explained, its effect appears to be to deny them any involvement in decisions on the importation of goods from overseas, to which they might wish to take objection. Various horror stories are of course passed around as one discusses this issue, but I am not concentrating on them so much as I am on the simple lack of ability to contribute to a discussion as to whether or not these goods should be imported.
If one was talking about legislation, I suppose one would say the Sewel principle would apply and consultation would take place, but there appears to be nothing that allows for that. The effect of the way the provision is worded is that something that comes in can take the benefit of the principles and pass without any kind of control to the devolved Administrations, without their having any say. That is of real concern. This is a probing amendment, but it requires some explanation of what place, if any, the devolved Administrations have in trying to resist the importation into, and transmission across borders within, the UK of goods to which, for one reason or another, they might wish to take exception.
That covers Amendment 7. As for Amendment 21, I was attracted by what the noble Lord, Lord German, said about the dual carriageway—the parallel lines—for a particular reason, which I have not mentioned before but must be emphasised. The common frameworks are living arrangements. There is no point at which one can strictly say that a framework has come to an end, although I confess that my own amendment suggests that it could happen. These frameworks are open to subsequent discussion and revisiting as things change. For example, much of the UK emissions trading system is based on EU law and treaty arrangements that could change. If that happened, the framework would be revisited, and, no doubt, different policy decisions may need to be taken. The same is true of the hazardous substances framework.
One has to bear in mind these are two living instruments working side by side: the UK internal market and the common frameworks system. The fact that, as the Bill has it at the moment, there is no means by which they can communicate with each other, is a matter of real concern, because it affects the whole structure of how these things co-operate and will co-operate in the future, in ways we cannot yet predict. That underlines the importance of trying to find a solution to the point I drew attention to on Monday of making some arrangement whereby the decisions taken, based on common framework decisions, to legislate in the devolved Administrations are protected against the effect of the market principles, particularly the non-discrimination principle, which has very broad reach indeed.
The great value of the amendment of the noble Baroness, Lady Finlay, is that it has drawn attention once again to that very real problem. It requires some response from the Minister so that we can have some idea of how he thinks these two parallel carriageways, stretching out into the future, will ever meet and co-operate with one another.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble and learned Lord and to agree with the thrust of his argument, which he made very well. The noble Baroness, Lady Noakes, made the valid point that the purpose of our internal UK economy is to have as few barriers as possible while recognising that we are an entity of four nations with distinct areas that can make their own policies. That is not new. The Agriculture Act 1970 had different applications within the Scottish, English and Welsh agricultural sectors. So many of the areas we are talking about within these groups predate the European Union, so the principle that we have had a different approach in many of the component nations is valid.
The Government, however, have introduced this new concept, which means, for example, that the UK’s biggest food and drink export, whisky, could now be open to a great problem because a decision made by one country, Scotland, could act against the interests of farmers in England who provide products to serve that. It is the barley question, which the Minister has referred to and on which I have asked questions before. As the noble Lord, Lord True, indicated, in summing up the debate on the previous group on Monday and correcting the noble Lord, Lord Callanan, that is an area that will be covered by a legislative framework.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
The noble Lord, Lord Naseby, has withdrawn, so I call the noble Lord, Lord Inglewood.
Lord Inglewood (Non-Afl) [V]
My Lords, this is been an interesting debate. These amendments are important, focusing as they do on food, foodstuffs and animal feed, and the legal framework surrounding them in the UK internal market that is about to come into being.
While I have passed a few law exams in my life, I want to come at the issues from a slightly different perspective, as a farmer. I spoke about a number of these matters during the passage of the Agriculture Bill. What I intend to do is along the lines described by the noble Lord, Lord Rooker, in respect of his amendment, which I am pleased to speak to: probe the Government and get a bit deeper into what their actual position and thinking might be. As a number of noble Lords have said, these matters are still pretty unclear.
In the context of the amendment in the name of the noble Lord, Lord Rooker, perhaps I might say that, as a one-time chairman of Carr’s—one of the country’s largest animal feed suppliers—and as a farmer who had his livestock wiped out in the foot and mouth outbreak, I believe that the points he made merit serious consideration.
First, I declare an interest as someone who farms and manages land in Cumbria. I am also involved with a number of organisations that are stakeholders in and consultees on the forthcoming changes in policy across the UK, although I will confine myself principally to England in my remarks. I should also say that I am the chairman of the Cumbria Local Enterprise Partnership. Agriculture is one of the most important industries in the county, both on its own account and for the role it plays in underpinning the visitor economy—as your Lordships will appreciate, that has been very hard hit.
One of the characteristics of the common agricultural policy was its intention, perhaps observed as often in the breach as in anything else, to establish a single market for agricultural products across the Union. One of its purposes was to establish even-handedness across the whole; albeit it was not a homogenous area and, indeed, as I have said already, it was not always successful. Surely this must be one of the aspirations of the UK internal market that we are now considering.
Noble Lords will understand fully that the systems of support for agriculture are evolving as particular outputs of agriculture are being expanded—I do not think that there is much objection to that—and that, as this is a devolved matter, much of the detail is being dealt with at that level. In this context, as was commented on by the previous speaker, Defra is almost exclusively an English department, albeit part of the UK Government. It is clear that the systems of support are being reconfigured quite significantly across the various home nations, in respect both of quantum and of impact, so there will be real variations.
These differences can and will have a real impact on the marketplace. Perhaps the best example I can quote is historical; I hasten to add that I do not expect the Minister to be familiar with the detail, and I expect it may raise a smile. However, the evidence is clear from what happened in the Cumbrian agricultural economy in the 17th and 18th centuries, when the rules of trade relating to the English-Scots border in the period from the Union of Crowns until after the Act of Union varied quite regularly. I draw the House’s attention to Professor Peter Roebuck’s book Cattle Droving through Cumbria 1600-1900, where this is all spelled out. More recently, in my own case, as a boy I went with my father to buy an Ayrshire bull near Lockerbie. When we got it home, we found that its Scottish licence did not allow us to deploy it in England, though fortunately I am glad to be able to tell the House that, after a bit of trouble, we acquired the relevant authorisation and put it to good use.
Setting aside what is, I think, generally accepted as a better settlement for agriculture in Scotland, Wales and Northern Ireland than in England, let us look at what is about to happen. England is hell-bent on phasing out direct payments. I am not opposed to that but doing so as soon as possible is a problem—unlike in Wales, which is not starting until 2022, and Scotland, which I think will start even later, in 2023, because they want time to be able to put their houses in order and get the policy sorted out.
We must not forget that farm income is predominantly derived from the sale of agricultural commodities and is likely to be so in the immediate future. All the evidence that I have been able to glean from appropriate discussions with stakeholders and consultees is that Defra is formulating its policies for the transition in cloud-cuckoo-land. Its sustainable farming systems were described to me by one interlocutor as “nationalisation by micromanagement”—something that the Government are, at the same time, committed to reducing in the context of planning, as is spelled out in the planning White Paper. Another person, discussing the generality, commented, “Well, you’ll go bust quicker taking the money than not doing so.”
There are clearly all kinds of ramifications of these kinds of things but, in the context of the Bill, the UK marketplace for agricultural products, as has been commented on by a number of speakers, is in imminent danger of being seriously distorted because of all the changes that are being considered. It is not even-handed across the union and it becomes a cancer in the market. As such, it merits the serious attention of the UK Government; as I have said, they just happen to be the English generator, and hence also the architect, of some of the forthcoming difficulties. Furthermore, what confidence can English farmers and English agriculture have that the internal market will not be rigged against them? What will the system of market regulation being put in place be able to do about it?
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
The noble and learned Lord, Lord Morris of Aberavon, has withdrawn, so I call the noble Lord, Lord Liddle.
Lord Liddle (Lab)
My Lords, this is a very interesting debate to join. It is a pleasure to welcome the noble Lord, Lord Callanan, to his place, as it were, once again defending an extremely complex and difficult piece of legislation. I hope he will give pretty comprehensive answers to the points raised by my noble friend Lord Rooker, the noble and learned Lord, Lord Hope of Craighead, and the noble Lords, Lord Purvis and Lord Inglewood, because they all had great merit.
I spoke at Second Reading but was not able to attend the first day of Committee because of commitments in Cumbria. In all the furore about the unconstitutional and completely unacceptable clauses of the Bill, the Government have got away with the rest of it, which may not be unconstitutional but is certainly unacceptable. Therefore, this House should expose it to very critical scrutiny.
We need clarification—this is where my noble friend Lady Hayter’s amendment is so important—in very simple and clear language of what the Government mean by mutual recognition and how this will work out. The idea of mutual recognition was an important foundational principle in the history of the European Union and the single market, but only because mutual recognition without anything else is a weapon that results in a race to the bottom. In the single market White Paper put forward by Jacques Delors in the early 1980s, the whole point was that you had to have common standards and harmonisation in a list of certain areas—I think there were 300—to go alongside the principle of mutual recognition.
I have two points to make on this. First, on the position of the devolved authorities and the nations of Britain, do the Government recognise that an essential principle of devolution is that diversity and experimentation are good things, and that it is therefore important that in a devolved settlement the devolved nations should be able to experiment with setting standards in the areas of public health, environment and consumers? This is part of the point of devolution. It is not something the UK Government should seek to prevent. It is very important that the Government make clear their support for the principle of devolution and diversity.
My second general point is the one to which the noble and learned Lord, Lord Hope, drew attention in his support for my noble friend Lady Hayter’s probing amendment: why do the Government include in their general principle this business of goods being imported into the United Kingdom? Does this essentially tell the devolved Administrations that, in any trade agreement that the UK Government negotiate, they will have no say over the standard of goods coming into the UK and would have to accept them whatever they thought about their compatibility with their own aspirations to set standards? That seems to me a fundamental point that needs an answer. This legislation is deeply complex, but we need clarity from the Government on fundamental points.
Lord Fox (LD)
My Lords, this has been a relatively short debate in terms of the Bill so far, but it has raised some fundamental issues which beg some quite deep and considered answers from the Minister.
When the noble Lord, Lord Inglewood, brought up Cumbrian cattle-driving and we had the noble Lord, Lord Liddle, to follow, I felt we might have had quite a long discussion around that, although we did not. The noble Lord, Lord Inglewood, in characterising Defra as an English department, brought out the Janus face Secretaries of State have in being not only Secretary of State for the United Kingdom but in most cases also Secretary of State for England. Herein lie some of our problems and uncertainties.
The noble Baroness, Lady Hayter, set out and explained very well the issues surrounding mutual recognition. In the noble Lord, Lord Rooker, this House has the benefit of someone with fantastic knowledge and it is important to listen to him. Animal feed is an important area, although it is not always clear. If I may beg your Lordships’ indulgence for a short anecdote, in the mid-1970s our farm was subject to one of the small outbreaks of anthrax, which is very rare—I found the animal that died of it, and it was not a pretty sight. We were put into quarantine—something like lockdown—and it was tracked down to the importation of cheap beans from India. That is why the control of animal food in this country is really important.
In terms of animal feed on the island of Ireland, I was struck that the Government have already exempted the electricity market there—the Minister and I debated this on a statutory instrument—from the overall UK market. They have done that because of the integrated nature of electricity on the island of Ireland; it is an entirely sensible move, of which we approve. It seems to me that animal feed is very similarly integrated and would benefit from a similar island-of-Ireland-wide process. The Minister might like to think about that going forward.
As usual, the noble Baroness, Lady McIntosh, asked a series of excellent and important questions. We need answers to them to understand the objectives of the Bill.
In Amendment 21, the noble Baroness, Lady Finlay, seeks what I think many of us seek to do: to look at this, as somebody mentioned, through the other end of the telescope. This is turning things upside down. Why do we not start with the common frameworks and what is currently working around the devolved authorities and legislate only what needs to be done to create the market we all want? My noble friend Lord German’s twin-track, two-road approach is a very good example. Where is the gap? How do these twin tracks come together? There is no explanation anywhere of how the common frameworks and the Bill are supposed to work together. The only conclusion I can draw is that the common frameworks are allowed somehow to dwindle, because the Government seem to be putting an enormous amount of energy into the Bill.
As usual, the noble Baroness, Lady Noakes, is right: we need to facilitate trade and make it as frictionless as possible across the UK. It is a shame we cannot make it frictionless across the whole of the European Union. The fact is, we have devolution, and the internal market Bill must respect that. At present, it seems that it does not. The noble and learned Lord, Lord Hope, made this point very ably.
As usual, my noble friend Lord Purvis came up with a series of important questions, including Scotch whisky-based ones. He came up with the revelation that there is a complete and absolute internal contradiction in the Bill. The Government brought forward an amendment that causes the following to happen: if England decided to set up its own approval system and started approving active chemicals banned in the EU, Scotland could refuse them. Conversely, Scotland could presumably go further than the EU ban and ban substances which England approved. That is the Government’s position, based on an amendment they brought to the Commons. However, he Minister has said that we must stop this happening, and that the Bill will do that. Something is not right, and the Minister needs to explain what is wrong.
The telling point made by my noble friend Lord Purvis and other noble Lords, including the noble Baroness, Lady McIntosh, is that without clear definitions, it will not be the Government causing the race to the bottom—it will be companies taking this to the courts. That is why we expect from the Minister a very detailed answer to these important questions.
Lord Falconer of Thoroton (Lab)
I strongly endorse what has been said by the noble Lord, Lord Fox. This is an incredibly important and rich debate in which detailed answers are required. It has been a very powerful debate because it has identified a range of problems, both of principle and detail, suggesting that either the Bill has not been properly thought out—subject to what the Minister says in answer—or that there are fundamental problems with it.
I strongly echo what was said by the noble Lord, Lord Inglewood, and endorse what the noble Baroness, Lady Noakes, said—we want frictionless trade as much as possible. I do not know about the noble Baroness, but my experience of business is that if every five minutes one is in the courts trying to work out what is allowed and what is not, that is the classic recipe for a lack of certainty. This Bill, as said so accurately by the noble Lord, Lord Purvis, is creating a whole range of private rights not to be discriminated against, to be treated the same in one place as another. Unless the Bill is clear and has a practical impact, it will be an absolute goldmine for lawyers. It is therefore critical there is confidence this has been properly thought through and the principles work. I am dubious— I am not talking about Part 5 but about the internal market provisions.
We had a very important debate on Amendment 7 about imports, tabled by my noble friend Lady Hayter. My noble friend and the noble and learned Lord, Lord Hope, asked why the devolved Assemblies or Parliaments are excluded from having any voice on what is imported. We were treated by my noble friend Lord Rooker and the noble Lord, Lord Inglewood, to an explanation of all the drawbacks of including food and animal foodstuffs in the arrangements. They gave a devastating series of reasons why these are wrong. Could we have detailed answers for the point made by the former chair of the Food Standards Agency? I ask the Minister to convince us if he can that my noble friend was wrong and the Government are right in the way they have approached this.
The amendments which were very powerfully introduced by the noble Baroness, Lady McIntosh, indicated legal issue after legal issue. I draw attention to two where an answer is important. First, how do the measures already in place apply, and why are they better than the common frameworks approach? Secondly, what is meant by substantive change, rather than significant change? That feels like an issue that could be litigated over for a long period of time.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank everybody who has contributed to what has been, as always in this House, a fascinating debate, ranging far and wide, from cattle droving in the 1700s, through to the immense knowledge of the noble Lord, Lord Liddle, on current EU matters. It is good to see him again to take up cudgels across the Dispatch Box. As he knows, I do not agree with him, but I always enjoy debating these matters. I hope that noble Lords will have patience today. I have quite a lot to say—many points have been raised and I intend to go into a lot of the detail. I apologise if my remarks are a little long.
Amendments 7, 8, 20, 21, 22, 26, 32, 45 and 61, all seek to alter or change the application and scope of mutual recognition and non-discrimination for the internal market and goods. The workings of mutual recognition and non-discrimination as applied in this Bill have been carefully designed to suit the UK’s unique constitutional and legal arrangements. We consulted widely on this, based on the Government’s proposals set out in the White Paper in June.
The noble Baroness, Lady Finlay, wanted to know in detail about the consultation. We published for her benefit, a response in full to the White Paper consultation on 9 September and I would be happy to send her a copy. The consultation demonstrated that UK businesses and industry representatives are overwhelmingly supportive of the measures to prevent discriminating behaviours within our internal market. I will set out the rationale why I cannot accept these amendments. I am happy to explain how mutual recognition and non-discrimination work in greater detail.
We have been clear that the UK will do nothing to diminish its reputation as a leading nation when it comes to setting and expecting high standards of its domestic businesses and international trading partners. I know this is a concern that the noble Baroness, Lady Hayter, has expressed on other Bills that we have discussed in relation to EU exit and is what she seeks to address in Amendment 7, but I contend that this simply will not arise.
Removing imported goods from the mutual recognition principle would mean that those goods, simply because of where they were sourced, could not benefit from the same regulatory treatment as goods produced in the United Kingdom. Even when produced to identical specification and quality as domestic products, this discriminatory impact would put imported goods at a conspicuously unfair disadvantage. Under such a discriminatory approach, we would be likely to be in clear breach of our World Trade Organization commitments to treat imports from other countries no less favourably than similar products produced domestically.
This amendment would also create continued uncertainty for importers. Those businesses whose supply chains rely on overseas sourcing could find themselves at a competitive disadvantage. This amendment would not tackle the issue it seeks to address and would have significant negative consequences for the UK if included.
There was considerable discussion of Amendment 8, tabled by the noble Lord, Lord Rooker, which would ensure that food and animal feedstuffs would not fall within scope of the mutual recognition principle. Like my noble friend Lady Noakes, I was slightly struggling to understand the relevance of his comments about pig semen. I think he asked whether pig semen across the island of Ireland would be affected by Clause 2, but I am happy to confirm for his benefit that pig semen will be subject to the same rules as other goods across the island of Ireland and only when it moves from Northern Ireland to Great Britain will it be subject to any checks. On pigswill, I am happy to confirm for him that the Government will not allow the reinstatement of its use.
This amendment could have serious consequences for the food supply chain, as foods sold in one nation could not be sold in another if there were different regulatory requirements, creating significant barriers to trade within the UK. As I have said, the Government remain committed to maintaining the highest standards in food and feed safety. The UK internal market approach will not change the approach to determining food and feed safety and hygiene policy. I can put at rest the noble Lord’s mind and that of the noble Lord, Lord Purvis: Schedule 1 to the Bill contains an exclusion to the market access principles to continue to enable the UK Government and the devolved Administrations to take appropriate risk-management measures to prevent or reduce the movement of unsafe food or feed from one part of the UK to other parts. I will have more to say about that later.
Turning to Amendment 20 and the consequential Amendment 22, tabled by my noble friend Lady McIntosh and relating to the exclusion of certain existing statutory requirements from the mutual recognition principle, Clause 4 ensures that pre-existing regulatory differences within the UK are excluded from the scope of mutual recognition. This is a forward-looking Bill that seeks to ensure that businesses can continue to enjoy the benefits of our well-integrated internal market after the transition period ends on 31 December. Businesses already live with and have adapted to any regulatory differences that currently exist, so mutual recognition does not need to apply retrospectively. In line with this objective, Clause 4(2)(b) ensures that this exclusion is specifically targeted at those areas in which regulatory differences have previously emerged.
This amendment would widen the exclusion to include any statutory requirement that existed prior to the relevant day set out in the Bill, regardless of whether there had been divergence in that area. However, this is not necessary. Mutual recognition has a practical effect only in areas where requirements differ across the UK, which is why the exclusion is targeted at those areas. Regulatory requirements, which are currently harmonised across the UK, do not need to be specifically excluded as the application of mutual recognition will not make any difference to the status quo. Of course, if the existing requirements excluded by Clause 4 are amended in a way that changes the effect or outcome of the legislation, they would then come within the scope of mutual recognition.
Amendment 21 is consequential on Amendment 6, which we discussed previously as part of a wider discussion on market access principles. It would amend the exclusion of pre-existing requirements from the mutual principle if Amendment 6 is also adopted. My noble friend Lady Bloomfield addressed Amendment 6 yesterday in the fifth group but, in brief, these amendments in combination would enable harmful regulatory divergence within the UK internal market into 2021 and beyond. This could lead to new barriers for businesses trading within the UK, instead of clarity and certainty.
The noble Lord, Lord German, and the noble and learned Lord, Lord Hope, asked about any follow-on emissions trading scheme. This is a non-market framework, so it would not be captured by the market access principles as it does not relate to a good or service.
The noble Lord, Lord Purvis, raised a number of questions about fertilisers. I shall give him a detailed reply. To exclude from the principle of mutual recognition as proposed by the Bill the safeguarding decisions of Administrations in relation to the placing on the market of fertilisers would allow each Administration to ban the sale of a fertiliser or impose conditions on that fertiliser in their jurisdiction in response to a risk to the health and safety of humans, animals, plants and the environment. We think it necessary to retain the current ability for the individual nations to take local circumstances into account and immediately to take a fertiliser deemed unsafe off the market in their territory without the risk of that product finding its way back into that territory via another nation. Without that amendment, it could take some time formally to ban a product through legislation—perhaps a couple of years.
The noble Lord also asked about pesticides. Decisions on which pesticides can be authorised to be marketed and sold in each part of the UK are already within devolved competence. All four Administrations work closely together, supported by HSE, and most decisions can be taken jointly by consensus. However, retaining the ability of each Administration to take its own decision where necessary is important, for example, if merely to consider locally specific factors, such as environmental or farming conditions, which can differ across the UK. This has worked well for many years where there has been occasional divergence between different parts of the UK and has not, so far, caused problems. This amendment therefore maintains the current position.
Amendment 26, tabled by my noble friend Lady McIntosh, seeks an explanation of the meaning of Clause 5(3), which I am happy to give. Clause 5(3) will operate so that any future requirements that fall within the scope of the non-discrimination principle will be of no effect to the extent that they are discriminatory. For the benefit of the lawyers, this does not mean that the requirement is to be treated as if it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effects. This aims to ensure that businesses can continue in their trade and goods can continue to be sold, despite protectionist measures that might treat goods from one part of the UK more favourably than goods from another. As the Bill deals with trade across the whole of the United Kingdom, the intention is that this will apply to all legislation: secondary legislation, primary legislation passed by devolved legislatures and legislation passed by the UK Parliament.
We believe that this does not require further elaboration in the Bill and is clear that only changes to existing legislation that affect the outcome are in scope. The amendment in question could cause confusion as there may be amendments that are considered “significant”, but do not change the outcome or effect of legislation. Fundamentally, however, the drafting in this clause will allow businesses to continue following the same regulations as they have been accustomed to, as our desire is not to disrupt their operations. That flexibility is important, because we want this provision to catch legislation only to the extent that it produces discriminatory effects. If something is not law, it cannot have any effect. As I said, we want to create a presumption that future Acts of Parliament are subject to this rule, which the current drafting allows.
My noble friend Lady McIntosh also asked whether, if the FSA and FSS had different rules, that would impact on the free movement of goods. The principles of mutual recognition and non-discrimination will apply to goods, including food, feed and animal products. This means that a good that can be lawfully sold in one territory can be lawfully sold in the other territories without having to comply with that other territory’s requirements. The only exclusion from this, as I said earlier, is set out in Schedule 1, which provides for exclusion in emergency scenarios where specific criteria are set out.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
I have had a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
The Minister did not explain why services from the Isle of Man to the rest of the United Kingdom will be considered within the United Kingdom internal market, but goods coming from the Isle of Man are outside the single market. There are many service providers from the Isle of Man. In fact, financial services are probably a bigger part of the Isle of Man economy than goods for export. I would be grateful if the Minister could explain this. The Minister did not respond to my point about whether these regulations apply to the services that citizens receive for higher education. This is very important within Scotland.
My point to the Minister, I believe, justifies my argument on the good working relationship across the four nations on fertilisers and pesticides. The Minister referenced the justification for the government amendment about the need to work in emergencies. Paragraph 1 of Schedule 1 already has exclusions from market access principles for threats to human, animal and plant health. Emergencies were already covered. The amendment that the Government brought forward was not on emergencies; I looked at the regulations that it covers, which are in paragraph 9 of Schedule 1 on fertilisers and pesticides. The Bill will allow the Scottish Government, and a Welsh Government or UK Government acting for England, to make a different judgment on the advice they get from the single regulator about the safety of a pesticide for, as the Minister Paul Scully said, “movement and use”.
So, if English farmers, under the authority of the regulations in the Bill, decide to use fertilisers on crops—barley—that are unsafe in the view of the Scottish Government, the Bill will allow the Scottish Government to prevent that barley from being used in Scottish distilleries. The Minister said that the whole purpose of the Bill was to prevent that from arising. So he has managed to undermine the entire intent of his argument at Second Reading, which was that the purpose of this legislation was to prevent a barrier from a different decision being made on safety grounds. If this amendment, which the Government brought forward, allows for different decisions to be made on the safety of pesticides used in different parts of the UK, I hope the Minister will reflect on what he said about the justification for the Bill.
Lord Callanan (Con)
I understand the point the noble Lord is making, but I think we are talking at cross purposes. It would allow provisions on unsafe products, but the provisions would be based on advice from the common regulator—so presumably the authorities in England would draw the same conclusion. It does not allow a Minister to dream up a definition of “unsafe” and implement provisions on that.
On the noble Lord’s first point, if he will forgive me, I will write to him.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
I have had a further request to speak after the Minister from the noble Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am struggling to understand the Minister’s reply on Amendments 26 and 45. I am particularly concerned about Amendment 26, which is a probing amendment and simply asks for greater clarity, which I do not think we have had. Is he saying that the statutory requirement has no effect? Does he mean that it is valid or not? Is it enforceable? I am trying to avoid a situation where there is any doubt whatever, and court action might be taken. I do not quite understand his answer that the possibility of court action is excluded if, in the view of others, a statutory requirement has effect and could, therefore, be actionable.
Lord Callanan (Con)
No, it does not mean that the requirement is to be treated as though it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effect.
Baroness Hayter of Kentish Town (Lab)
My Lords, I think I am Baroness Hayter of Confused. I did not understand that last reply. I thank the Minister for attempting to answer the question, though I have to warn him that I think he is in trouble with the boss. I think he admitted that there would be checks at the border between Northern Ireland and Great Britain on pig semen. The boss said, “No checks, no extra paperwork”. I am now hearing noble Lords say, “New checks”. That is not what the Prime Minister said at that reception. He said, “If there’s a piece of paper, send it to me and I’ll throw it away”. I shall make no comment on semen causing particular problems, but it seems that there would be checks on it.
I shall try to be brief because a lot of points have been raised. I thank all noble Lords who have spoken, particularly those who support the line we are taking. I fear that many of these questions flag up the problem that the Bill was drafted without the full involvement and agreement of the devolved authorities. We may not be where we are if those discussions had taken place beforehand. I think it was the noble Lord, Lord German, who talked about parallel tracks between the common framework and this Bill. It loses not only the consensus approach to the common frameworks that we have discussed before, but the flexibility that the noble Lord, Lord Purvis, mentioned. We want to build on this. I hope the Minister will hear some of these questions and see whether he can give a response that ensures clarity for business, as well as for those operating in this area.
The Minister did not answer on universities and I am not sure he answered about the all-Ireland agreement. A lot of other points were raised about animal feedstuffs and pesticides. It would help if some of those dialogues could continue before we get to Report. It is also worth listening to what my noble friend Lord Liddle said. The Government should stand up and say that they support the maintenance of the devolved settlements, and that they recognise and want to keep diversity where it would still enable us to have an internal market. That sort of statement would be helpful.
I am sorry that the noble Baroness, Lady Noakes, is now not allowed to come back at me for what I am going to say. I partly agree with her. We want trade and believe that it is good, but not at any price—not at the price of safety or the environment. This does not mean that we are not in favour of greater trade with all the benefits that it has brought. I also agree with her that, of course, we favour free, and barrier-free, trade. That is why some of us want a deal with the EU, which has no tariffs or checks, and we wanted to stay as close to it as possible. I know it was not her view that we should stay in. I think I once heard her say—I am happy to correct this at the end if I am wrong—that trading on WTO terms would not be the end of the world. Good, the noble Baroness is nodding, so she confirms that she said it. That, of course, would mean a lot of checks and a stop to free trade.
The issues raised in this debate need further consideration. We have to resolve the question that the noble and learned Lord, Lord Hope, asked. Will there be any input by the devolved authorities into importation by, particularly, the English Government? They will need some comfort over that. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
We now come to the group beginning with Amendment 9. I again remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this, or anything else in this group, to a Division should make this clear in debate.
Clause 3: Relevant requirements for the purposes of section 2
Amendment 9
Lord Callanan
Member’s explanatory statement
This amendment would clarify that the purpose of Clause 3 is to identify what are the relevant requirements that apply to a specific sale of goods (the word “sale” being defined broadly in Clause 14).
Lord Callanan (Con)
I apologise in advance if noble Lords are in for more technical explanations. We will take together the minor technical amendments in my name to Clauses 3 and 4. All involve drafting improvements or clarifying technicalities. None of these amendments results in a change of policy, but they need full and proper scrutiny in this Chamber and noble Lords deserve an explanation of the improvements that they make to the Bill.
First, I turn to Amendment 9. This clarifies Clause 3 by identifying what is a relevant requirement in relation to a specific case where particular goods are sold. Without this amendment, there could be ambiguity as to whether a requirement needs to apply to all sales of all goods to be a relevant requirement. For example, where a business has produced a tin of biscuits in Scotland and seeks to rely on the mutual recognition principle to sell them in England, this amendment makes it clear that the relevant requirements are those that would apply to the sale of the biscuits in England and to the equivalent, hypothetical sale of the biscuits in Scotland, Northern Ireland or Wales. Requirements that apply to other sales of other goods—for example, requirements that apply to the auctioning of a painting—would not be relevant requirements in this context. Without this amendment, there is a risk of legal uncertainty over which requirements are relevant. This could create confusion, costs and inconvenience for businesses.
Amendment 10 provides similar clarification. It emphasises that subsection (2), which defines and therefore enables one to identify a relevant requirement in relation to a particular sale, makes relevant requirements only in relation that sale. Requirements are not relevant in any general way; they are relevant only in relation to the sale in question.
Amendment 18 clarifies that Clause 4(1)(a) refers to a specific sale of goods, rather than a hypothetical sale of goods. It makes clear that we are referring to an actual sale of goods and not to a hypothetical sale. As a result, the amendment removes any potential ambiguity around which existing statutory requirements are excluded from the mutual recognition principle. This amendment also ensures consistency with Clause 3(1), as proposed to be amended by Amendment 9—also in my name. Once again, we are considering requirements which apply specifically to a particular sale—for example, the requirements that would apply to the sale of a tin of biscuits in England, as per my previous example, but not all requirements that might apply to any other sales of goods. This makes clear which statutory requirements might be excluded, if the conditions in Clause 4(2) are met.
Amendment 19 corrects a small drafting error in Clause 4(1)(a). This paragraph refers to “a” part of the United Kingdom when it should refer to “the” part of the UK mentioned in the opening words of the subsection. It removes any ambiguity around which part of the United Kingdom is being referred to in Clause 4(1)(a), so that there can be no doubt that when we are considering English requirements, we are considering how they apply in relation to a sale in England. Without this amendment, there could be confusion over whether we are referring to just those requirements which apply in England or to requirements which could apply in any part of the UK.
Finally in this group, Amendment 23 aligns the language used in Clause 4(2) and 4(5). Both provisions refer to a hypothetical sale on a particular day, rather than to an actual sale. These subsections set out the conditions for when an existing requirement will be excluded from mutual recognition. Both should refer to a hypothetical sale on the relevant day. This amendment clears up the ambiguity by making it clear that both subsections refer to a hypothetical sale, rather than to an actual sale. Aligning the language in this way will make the drafting of this clause clearer and will avoid any confusion over why the wording is different in Clause 4(2) and 4(5) when both should refer to a hypothetical and not to an actual sale.
Taking again the example of the sale of a tin of biscuits, Clause 4(2) and 4(5) refer to the statutory requirements around the sale of biscuits, which would have been enforced in different parts of the UK on the relevant day, which is the day before this Bill comes into force, if the tin of biscuits had been sold on that day. This means that we will always be talking about a hypothetical sale here, and the amendment to Clause 4(5) makes this clear. Without this amendment, it is not clear that Clause 4(5) is referring to a hypothetical sale, which may cause confusion. I beg to move.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.
As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.
Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:
“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.
Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.
I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.
This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.
Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.
Lord Callanan (Con)
My Lords, I apologise to noble Lords for hesitating in my answer earlier. There is a danger of this “tin of biscuits” example assuming the same significance that the maiden aunts of the noble Lord, Lord Lisvane, did, during the EU withdrawal Bills. I see smiles from noble Lords who were involved in those debates. However, I am not sure that we should pursue the “pig semen” argument of the noble Lord, Lord Stevenson.
To answer my noble friend Lady McIntosh, these are technical changes relating to drafting errors that became apparent in further studying the text following amendments tabled by noble Lords. Following further examination by government lawyers, the Bill was drafted fairly speedily over the summer. Our intention was to avoid government amendments, but we wanted to hear the replies to the consultation and the White Paper. They are technical and legal clarifications that change none of the policy intent.
I assure the noble Lord, Lord Purvis, that the minimum unit alcohol pricing policy is unaffected, because it is an existing measure that is excluded, and because it is specifically excluded in addition to that, via various clauses. I will write to reassure him of that. Regarding his points about gin and vodka, I am not an expert on the Scottish measure, but I think it affects the retail price of the sale and not wholesale prices, and therefore the product would need to be sold at a different price, as specified in the Scottish measure. However, I consulted officials when we first debated this legislation and was assured that the Scottish measure would be unaffected by this legislation. I am happy to write reassuring the noble Lord on that point.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
I have received a request from the noble Baroness, Lady McIntosh of Pickering, to speak after the Minister. My apologies; I gather that is not the case.
Lord Callanan
Member’s explanatory statement
This amendment would clarify that a statutory requirement that meets the conditions in paragraphs (a) and (b) of Clause 3(2) is a relevant requirement in relation to the sale mentioned in Clause 3(1).
The Deputy Chairman of Committees (Baroness Fookes) (Con)
We now come to the group beginning with Amendment 12. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press anything in this group to a Division should make that clear in the debate.
Amendment 12
Member’s explanatory statement
This amendment would remove the Secretary of State’s regulation-making power, as recommended by the Delegated Powers and Regulatory Reform Committee in its 24th Report.
Lord Fox (LD)
My Lords, in moving Amendment 12, I will also speak to Amendments 27, 38, 46, 72, 97 and 160 in my name. These amendments would remove the Bill’s regulation-making power, which is fully in line with the recommendations of the Delegated Powers and Regulatory Reform Committee. Its report is a comprehensive review of these issues; your Lordships will be pleased to hear that I will therefore not reiterate them at length. Later, we will hear the wise words of my noble friend Lord Thomas of Gresford, who will describe that your Lordships’ House is approaching a watershed on this issue. He is of course right; this train has been coming down the tracks for some time.
A while ago, the noble and learned Lord, Lord Judge, gave a lecture at King’s College London entitled “Ceding Power to the Executive: The Resurrection of Henry VIII”. He made the stark point that parliamentary sovereignty is the antithesis of executive sovereignty. The two concepts are mutually contradictory. The democratic process is not meant to give—and our constitutional arrangements are not meant to provide us with—executive sovereignty. The burden of the noble and learned Lord’s argument was that Henry VIII powers, although paradoxically conferred upon the Executive by none other than Parliament, are an affront to parliamentary sovereignty. That lecture was held in 2016. Since then, we have seen an acceleration of the erosion of parliamentary sovereignty through these means.
As the House of Lords Constitution Committee put it in its report of the Strathclyde review some five years ago:
“Delegated powers in primary legislation have increasingly been drafted in broad and poorly-defined language that has permitted successive governments to use delegated legislation to address issues of policy and principle, rather than points of an administrative or technical nature.”
This Bill pushes that envelope yet further. The Delegated Powers and Regulatory Reform Committee was clear. It described some of the powers in that report as either “extraordinary” or “unprecedented”. To justify these extraordinary and unprecedented powers, the Government cite the need for legislation to evolve. The possibility of unknown unknowns required a yet unknowable legislative response and a yearning for law-making speed. None of these justifications is extraordinary and none of them is unprecedented.
I beg to move.
Baroness Andrews (Lab)
My Lords, the amendments in my name in this group are for the most part identical to those of the noble Lord, Lord Fox, although in some cases they are wider in their supplementary implications. It goes without saying that I agree with everything he said—and everything that I suspect the noble Lord, Lord Thomas of Gresford, is about to say—about the whole range of excessive and inappropriate delegations. Of course, my amendments follow the advice of the DPRRC; I declare an interest as a member of that committee.
I will make a few general points about what the Government are trying to do in these clauses and how they have justified them. I speak for myself but I suspect that I also speak for many members of the committee —certainly for our distinguished chair—when I say that we have reached a point of almost total exasperation with the Bill. The DPRRC was set up in 1992 to monitor and control the excesses of executive power and the temptation for Ministers and officials to try to avoid parliamentary interference and take inappropriate powers. So it is hardly new, but in recent years, we have been sorely tested— not least on the limits of our vocabulary. Indeed, the DPRRC has described these powers as “extraordinary” and “unprecedented”.
We have seen the increasing use of skeleton Bills and statutory instruments not for the delivery of policy but for the design of policy and for carrying the principles of legislation within the secondary framework. Most recently, we have seen mounting evidence of a Government that will go to endless lengths to avoid scrutiny. This Bill is in a class of its own because of the sheer volume and significance of the Henry VIII powers. Of the 12 delegated powers in the Bill, seven are Henry VIII powers, allowing Ministers to amend or repeal significant provisions of the Bill itself, as well as other primary and secondary legislation. We used to protest when only one Henry VIII power turned up in a Bill.
It sets a different tone, too, because the delegated powers memorandum, in its attempt to justify why these powers to expedite the mutual recognition principle and the non-discriminatory principle are necessary, does not even bother to try to find a convincing justification for the powers taken. In the clauses relating to my Amendments 13, 28, 39 and 47, for example, the explanations for using statutory instruments to amend Acts of Parliament cite the need for speed and flexibility to respond to unforeseen developments—the known unknowns and so on—respond to stakeholders and provide certainty. These are profoundly lazy and threadbare arguments, and Ministers and officials know that. I consider that contempt of Parliament. Secondary legislation does not guarantee speed, flexibility or certainty. Primary legislation, as we know from dealing with the pandemic, can be introduced at the speed of light and amended. Indeed, the Government have conceded in their own arguments that the Secretary of State is not required to declare that the making of regulations is required as a matter of urgency, so urgency is a false trail too.
This disingenuous use of language offered in the memorandum in regard to Clause 6(5) is a case in point. It argues that Ministers need to be able to respond swiftly to future-proof the operation of these principles so that they can be changed as and when Ministers decide that it is necessary. The DPRRC dismisses this as an attempt to completely rewrite the non-discrimination principle. When the Government argue that there is no way that they can change the definition of legitimate aims attached to the non-discrimination principles in Clause 8 other than by secondary legislation, they seem to have completely forgotten that such a thing as primary legislation exists. Indeed, in Schedule 2, for example, the assumption is that only secondary legislation is fit for purpose when it comes to making future amendments.
The powers that my amendments seek to remove are described by the DPRRC as inappropriate and ones that should be removed; the Constitution Committee endorses that. “Inappropriate” may seem rather feeble in the parliamentary lexicon; in fact, it could not be more powerful. Among other synonyms, it means unseemly, unbecoming, lacking in propriety, ill-judged and out of order. Nowhere are those and many other epithets more appropriate than what these clauses have to say about the devolution settlement. For in Clauses 3(10) and 6(7), in relation to mutual recognition and non-discrimination —the two main pillars of market access—there is the explicit instruction that, before making regulations, the Secretary of State must consult the Ministers of the devolved assemblies. The Government are required not to seek consent but merely to consult, so they
“can act without the need to introduce new primary legislation or to obtain the consent of the devolved administrations (the Minister being only under a duty to consult) even though the proper functioning of the internal market is essential to all the administrations of the UK.”
That is a direct quote from the DPRRC.
That most eloquently brings us to the fracture at the heart of the Bill, and to the reason for taking these inappropriate powers which removes them from the full attention of Parliament. It comes back to what the Government insist is the purpose of the Bill—to secure, despite the promise and the purpose of common frameworks, that the internal market will need a new regulatory structure flexible enough to meet the unforeseen demands in the future, notwithstanding that they cannot tell us what those demands are likely to be or explain how they are going to prevent lower common standards permitted by law in this Bill, or why the common frameworks are not sufficient in themselves to prevent that, or why the Bill cannot be amended in such a way as to ensure a tight fit between the common frameworks and the common purposes of the Bill. These inappropriate powers are seen as necessary to expedite what might happen in the future, notwithstanding the impact on the devolved nations or the devolved settlements, the role of Parliament, the balance of powers expressed in appropriate legislation or the integrity of the process itself.
There is a great deal at stake in this Bill, as has been said many times already in the process of the Bill. They are grave matters, and they have been drawn to the attention of this House by the two most senior scrutiny committees. I hope the Minister will find he can agree with me that these powers are offensive as well as unnecessary, and that they will be removed.
Lord Hope of Craighead (CB) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Andrews. I am not a member of the Delegated Powers Committee and never have been, so I think I can, without any embarrassment, praise the work which that committee does so often on behalf of the House and, in particular, the reports it has made in respect of the Bill we are considering today. The issue which it raises, of course, is a very serious one, and it has been very well explained in its own report and spoken to by both the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews. I do not want to say very much more about it. The important point is revealed when you look at the subsection which introduces the power to make regulations in the case we are looking at, first of all in Clause 3(8). There is absolutely no qualification whatever to indicate the purpose for which that power may be exercised. It is a totally unqualified power, which may be used without any control from anybody as to the way in which the power is being exercised.
Twenty years ago, this House was looking at, among other things, the Scotland Bill. It is very interesting for the historian to compare the way in which delegated powers are conferred by that Bill with the way in which they are being conferred by this Bill. Both of them were major pieces of legislation, designed to lay the structure for the future governance of this country. On the part of the Scotland Bill, of course, it was very obvious because it was the first step toward devolution; it had to be carefully crafted, and yet it was moving into an uncertain world. The many powers to make legislation by delegated legislation are all carefully described, so that one knows exactly the purpose for which that power could be used. As the Bill went through both Houses, the reason for the power and the scope that was given to Ministers to use it was carefully scrutinised by both Houses.
We do not have that benefit in this case, in a Bill which is designed to settle the internal market—a Bill of equal importance and, perhaps I might say, equal difficulty. Nevertheless, they have in common that they are major pieces of legislation, and yet, in this case, the power we have to legislate and to scrutinise legislation is really being opened up to Ministers to deal with, without any control whatever. That is the basic flaw which runs through all of the clauses to which these amendments draw attention.
There is, of course, the point that the noble Baroness mentioned, that all that has been required with the devolved Administrations—or the Ministers in the devolved Administrations—is that they be consulted, not consent. That is not in keeping with the Sewel convention, although that is qualified by the word “normally”. I would have thought that in this case, because of the scope of the powers, consent would be appropriate here, because there is no other way of controlling what the power may be used for. That is the reason why the absence of a provision for consent is so important in these cases.
Without saying any more, I must say that I fully support the points that have already been made on these very important amendments.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
The noble Baroness, Lady Noakes, has withdrawn, so I now call the noble Lord, Lord Thomas of Gresford.
Lord Thomas of Gresford (LD) [V]
My Lords, the House of Lords is coming to a watershed. When we threw out the statutory instrument in relation to tax credits in 2015, the reaction of the Government was to wheel in the noble Lord, Lord Strathclyde, to set up a review. His report advised that the House of Commons should be given the power to overrule this House should it ever have the temerity to do the same thing again. Since then, the Labour Party has followed an unwavering policy of abstaining on fatal amendments to statutory instruments.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I welcome this opportunity to agree with what has been said by previous speakers, and particularly thank those who have contributed to this debate through the 24th report of the Delegated Powers and Regulatory Reform Committee, and the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews, for putting into effect the conclusions of that report. The report is indeed striking in its conclusions, and in particular in the power of the language used. I think students of constitutional law will be watching these deliberations very closely to see whether this is a new trend on the part of the Government or a one-off.
My understanding is that the Bill is in large measure to deal with the political fallout of the Government agreeing to the EU withdrawal agreement and the Northern Ireland protocol. Perhaps I am wrong, but that is my understanding. My further understanding is that, when Parliament agrees to delegate powers to the Executive, it does so on the strict understanding that the Government will act on behalf of Parliament with respect for the rule of law and parliamentary democracy. Clearly, in all five parts of the Bill, this is stretched to breaking point. As has been said, the reliance in the Bill on the sweeping Henry VIII clauses is breath-taking. So I entirely echo what has been said by previous speakers and find that I have great sympathy with the amendments.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, and to agree with the amendments in the names of my noble friend Lady Andrews and the noble Lord, Lord Fox. For me, the Delegated Powers and Regulatory Reform Committee is particularly instructive, because it has issued a very scathing report which states quite clearly that, in the absence of a convincing justification for the Henry VIII powers in those clauses, the power is inappropriate and should be removed from the Bill.
The noble Baroness, Lady McIntosh of Pickering, said that perhaps the Government wish to use these powers to get their way in terms of the withdrawal agreement—an international agreement which they signed only one year ago with the European Union—and to undermine the Northern Ireland protocol, which in turn could undermine another international agreement, the Good Friday agreement. I say to the noble Lord, Lord Callanan, that the people of Ireland, north and south, who voted for that agreement and who by and large support the principle behind the Northern Ireland protocol—to prevent a hard border on the island of Ireland and to prevent any further turmoil, trauma, distress or levels of terrorism—will not take kindly to any of that.
I was also very taken with the words—referred to by the noble Lord, Lord Fox—of the noble and learned Lord, Lord Judge, a few years ago about parliamentary sovereignty. Yes, parliamentary sovereignty is the antithesis of executive sovereignty, and I do recall, as a former Minister in the Northern Ireland Executive, that I was always told that the Executive are accountable to Parliament. Can the Minister advise the House whether there has been consultation of any kind with the devolved Administrations? I know that Scotland and Wales have so far refused to give legislative consent to the Bill, because they clearly see the powers within it as totally egregious in terms of what they can do, and in terms of no consent being required from them and no real consultation. I also know that in the Northern Ireland Assembly there was a majority vote against the UK Internal Market Bill.
I believe that there are three different issues with these powers. Giving too much power to Ministers to change the rules of the UK internal market via regulations without proper parliamentary scrutiny is wrong. It is interesting to note that the regulations in these clauses require first a consultation with the devolved counterparts, so there is a need to obtain their consent to such regulations, but that consent is clearly absent. That is what Amendments 13 and 28 are all about.
The Bill also has an extremely narrow understanding of exceptions to these principles. If we compare it with the EU internal market where other objectives such as environmental improvement can be used, at least in certain cases, to restrict mutual recognition and keep more ambitious domestic rules, we see that the Secretary of State also has the power to add, vary or remove exceptions, as set out later in Clause 8 for non-discrimination and in Clause 10 for all the principles to which Amendment 47 refers.
There is no doubt that the UK Internal Market Bill will become a protected environment that the devolved Administrations will be unable to repeal or modify. That is why these amendments tabled by the noble Baroness, Lady Andrews, and the noble Lord, Lord Fox, are apt and timely. They should be supported because both the Delegated Powers and Regulatory Reform Committee and the Constitution Committee believe that the use of these powers is wrong.
Lord Liddle (Lab)
My Lords, we have heard many excellent speeches in this short debate, and I agree in particular with what my noble friend Lady Andrews has said.
I am a member of the Secondary Legislation Scrutiny Committee. The committee shares many of the concerns expressed by the Delegated Powers Committee in its report. However, I would somewhat disagree with the strictures of the noble Lord, Lord Thomas of Gresford, on the behaviour of Her Majesty’s loyal Opposition. We have to be considered and careful about using fatal Motions, but to my knowledge it is certainly not Labour’s position that those fatal powers should never be used.
On the substance of the Trade Bill, the Agriculture Bill and the immigration Bill, I had assumed that the Government are putting extensive delegated powers into the legislation basically because they do not know what their post-Brexit policy is going to be—they do not really have a clue. For instance, they do not have a clue about what national strategy we are going to pursue on trade. Will it be one that maintains our high standards, or will it be one that tries desperately to get trade agreements with the rest of the world that lower standards in order to open markets in the hope that that will compensate for the loss of market access in Europe? I think that the Government do not know. There are deep divisions inside the Conservative Party on where the Government should go on these questions, so the simple thing to do is to put a lot of these policy decisions into delegated powers which Ministers will have to decide on at some future point.
However, in this Bill, I am concerned for a quite different reason: in this case the Government know only too well, in particular on the clauses on the Northern Ireland protocol, what they want to do with the powers that they would have. If we cannot remove those offending Northern Ireland clauses from this Bill, then if delegated legislation comes to this House based on them, we should vote against it every single time, because that is clearly unconstitutional and it would be perfectly within the powers of this House so to do.
Baroness Hayter of Kentish Town (Lab)
My Lords, there is little to add to what my noble friend Lady Andrews and other members of the hard-working, thorough and thoughtful DPRRC have said, along with the noble Lord, Lord Fox, and others who have spoken in the debate. However, I would remind the noble Lord, Lord Thomas, whose party has been in government more recently than we have, that I do not recall any reluctance on the part of the coalition Government to reach for secondary powers when it suited them—but perhaps his memory is rather shorter than mine.
I should say to the Minister that these amendments are pretty much bound to be accepted by the House on Report. That, of course, will leave the Government having to try to defend in the House of Commons in more detail than they have had to thus far why they should gift themselves the most remarkable and far-reaching powers, none of which, as has been said, have they sought to justify by purpose, urgency or anything else. Rather than repeat what the 24th report sets out and what has just been set out so eloquently, I urge the Minister to listen to the wise words and, either after discussion or of his own accord, take these unnecessary and worrying powers out of the Bill.
My noble friend Lord Liddle touched on the powers in Part 5. Obviously we will take those out, but of course the Government might try to put them back in again. We should remember that this group of amendments covers regulations that would, if they manage to keep Part 5 in or return it, be made in some areas of Part 5. These regulations are really serious, due to the current Clause 47(2)(a), which, as everyone will know, gives the status of primary legislation for the purposes of the Human Rights Act to secondary legislation. Inexplicably and extraordinarily, those pieces of secondary legislation would therefore not be able to be struck down if they breached convention rights, rather they would have thrown around them the protective ring that is normally used only for primary legislation. But those measures are regulations that will not have been through the legislative process. They would be introduced as secondary legislation by regulation, but would suddenly be preserved as if having been given the status of primary legislation. That is set out in Clause 47(2)(a)—I hope I have got that right; I have my learned friend next to me, in case I have got it wrong.
Needless to say, the Joint Committee on Human Rights had rather a lot to say about this constitutionally unacceptable ruse. Its members have tabled an appropriate amendment to remove it when we get to Part 5, and quite right too. The Government seem to want to legislate by regulation—unchallengeable in court, therefore —giving it primary status that goes even further than the other Henry VIII powers which were considered by the DPRRC. I have a feeling that the committee met before the insertion of this clause in the Commons—I think I am getting a nod from behind me—which is presumably why the Delegated Powers Committee did not discuss it.
I add a further comment that goes beyond the Bill but is a reflection of what has already been mentioned. I have spoken in the House previously about the book, How Democracies Die, which lists institutional forbearance —along with the rule of law, respect for the opposition and a free press—as a fourth vital element of what the authors call quadrilles, which go beyond democratic elections, on how to have a robust and fully functioning democracy. Institutional forbearance is an interesting term and is defined in the book as,
“the action of restraining from exercising a legal right”,
thereby perhaps avoiding actions which, while within the law, violate its spirit. It is what my former supervisor, the noble Lord, Lord Hennessy, would call the “good chaps” theory of government. I agree that regulation-making powers can be donated to Ministers but the purpose of that was to enable small adjustments to the policy of an Act to be finalised or tweaked without primary legislation. It was not meant to gift big policy decisions—especially not of the sort included in the Bill, which I heard today was hurriedly written over the summer—to the Government with effectively no parliamentary scrutiny or agreement.
Therefore, like my noble friend Lady Andrews, and the noble Lord, Lord Fox—whose extremely useful quote from the noble and learned Lord, Lord Judge, I have not heard before—I am concerned about the extensive, unnecessary and quite unjustified use of Henry VIII powers, not simply in this Bill but in others. It is a worrying pattern that this House has a duty to curtail. I hope that this is the last occasion on which we have to remind Ministers that they should carry out the primary laws as passed by Parliament, not take to themselves powers to make their own laws.
Lord Callanan (Con)
My Lords, I have a sense of déjà vu about this debate. The noble Lord, Lord Liddle, will well remember our debates on the EU (Withdrawal) Bill. These amendments relate to delegated powers included in Parts 1, 2 and 5 of this Bill. I should probably decline the kind opportunity afforded to me by the noble Lord, Lord Thomas, to comment on the parentage of Henry VIII, apart from saying that the noble Baroness, Lady Bloomfield, who is an expert on all these matters, tells me that his parents were Henry VII and Elizabeth of York—officially, at least.
I should say in answer to the noble and learned Lord, Lord Hope of Craighead, and his comments on the Sewel convention that the Government are fully committed to that convention and its associated practices for seeking consent. These powers are purely there to ensure that the legislation works properly and is future proof. There is no intention whatever to use the powers to avoid Sewel processes.
I should like to take this chance to emphasise the importance of these powers for the ongoing dynamism of our internal market, and to emphasise that the Government will not take lightly their responsibility in administering these powers. I am of course listening carefully to what your Lordships say but it is important for me to explain how we intend to use these powers.
The Bill aims to ensure a smooth transition for businesses as they are no longer subject to EU constraints. However, we recognise that this is an ambitious new system and the Government want to make sure that it works as well as possible for businesses and for devolved Administrations. As the system embeds in the functioning of law and trade, we will of course be monitoring this. We will speak to stakeholders and devolved Administrations to ensure that it works as well as possible within our constitutional framework. Where it does not, the Government need to be able to make necessary amendments to the system for the benefit of all parts of the UK. In line with normal arrangements for secondary legislation covering devolved matters, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.
Lord Fox (LD)
My Lords, as I suspected, the speakers who came after me made a far more powerful case for these amendments than I could have managed. The noble Baroness, Lady Andrews, expressed the exasperation of her committee, and I think we could all feel that exasperation coming through in her speech. In reiterating the report of the Delegated Powers Committee, she gave a powerful and devasting critique of the measures that are sought here.
Similarly, the noble and learned Lord, Lord Hope, highlighted the absence of a purpose for these powers—and I will return to the Minister’s response in a minute. My noble friend Lord Thomas was right to characterise this as an issue between Parliament and the Executive, not between the Lords and the Commons. I am also grateful to the noble Baroness, Lady Hayter, who very clearly made the point that there is seriously bad stuff in this Bill beyond Part 5—if I may paraphrase her thus.
The noble Baronesses, Lady Ritchie and Lady McIntosh, and others shared my position on why the Government might be taking on these powers. I was worried that perhaps the noble Lord, Lord Liddle, was going to be kind to the Government for a moment, but I am happy to say that he, too, shares our view that these powers are being accrued in order to do things, not least to the Northern Ireland situation, that should not be done.
In defending the Bill, the Minister not only sorted out the Tudor family tree but put forward a very detailed response, and he and his team should be thanked for the comprehensive nature of that. If noble Lords will excuse me, I will boil most of his reply down to saying, “We might need to change stuff but we’re not sure why”. That is true for every piece of legislation that ever came before your Lordships’ House, so it is not, in itself, a justification. Further, if the Government need to change the number of things that are on the list, they do not need these levels of powers in order to do that kind of amendment.
Furthermore, your Lordships have talked at length about the value of common frameworks. The noble and learned Lord, Lord Hope, talked about these frameworks being a living process which embraces change—the very sort of change that the Minister is seeking to gain through these draconian powers. So, if the noble Lord is worried about future unknown unknowns, I commend to him and his Government the common framework process. That is what it is there for.
So we have had a preliminary debate, and I sense a lot of unity across the Floor. In a vague moment of upset, I am grateful to the noble Baroness, Lady Hayter, for raising the coalition Government’s bringing forward of secondary legislation of this nature. It came in the Public Bodies Bill. On listening to the response, the coalition Government withdrew that measure and it did not go forward in the legislation. That is precisely what we are asking Her Majesty’s Government to do here. I cannot help thinking that there is sufficient consensus to take this forward to Report, and we will be talking with fellow speakers. In the meantime, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
We now come to the group beginning with Amendment 14. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in debate.
Amendment 14
“(9) Regulations under subsection (8) are subject to super-affirmative resolution procedure (see Schedule (Super-affirmative resolution procedure)).”Member’s explanatory statement
This amendment ensures that regulations under subsection (8) are subject to super- affirmative resolution procedure and introduces the supportive Schedule in respect of super-affirmative resolution procedure.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to have this opportunity to speak to these amendments, which in large measure refer to the possibility of introducing the super-affirmative resolution procedure in the parts of the Bill where it is deemed most necessary. Again, I thank the Law Society of Scotland for briefing me so well and for assisting me in drafting these amendments for our consideration.
Paragraph 31.14 of Erskine May states:
“The super-affirmative procedure has been implemented in enactments where an exceptionally high degree of scrutiny is thought appropriate, for instance, for the scrutiny of certain items of delegated legislation made, or proposed to be made, under ‘Henry VIII’ powers. Sometimes it is the only procedure available and sometimes the responsible Minister is given a choice of order-making powers that includes the procedure, a choice that can be constrained at a preliminary stage by either House.”
I remind noble Lords that the super-affirmative procedure provides both Houses with opportunities to comment on proposals for secondary legislation and to recommend amendments before orders for affirmative approval are brought forward in their final form. It is important to note that the power to amend the proposed instrument remains with the Minister.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, the noble Baroness, Lady Noakes, and the noble Lord, Lord Carlile of Berriew, have both withdrawn, so I now call the noble Lord, Lord Naseby.
Lord Naseby (Con) [V]
My Lords, as colleagues know, I had the privilege of being Deputy Speaker in the House of Commons for five years, and of course Erskine May was my bible. Indeed, one had to refer to it pretty regularly during the Maastricht Bill procedures. Just as an aside, Erskine May went to Bedford School, as I did, and history has it that he was the only Clerk of the House of Commons who managed to get Big Ben silenced in the middle of the night. However, that is by the by.
We are dealing with trade, industry and markets here; we are not dealing with life-threatening situations that obviously require anything that comes forward to be looked at in a practical manner. Only in the last few days, we have had news of the future trade agreement with Japan, which has just been signed. The agreement makes it clear that the deal that has been settled between the UK and Japan goes far beyond our existing agreement with the EU.
However, of relevance to this amendment is a letter which I have received and which went to all Peers. On the second page, under the heading “Parliamentary transparency and scrutiny, next steps”, the letter says,
“we have shared the full UK-Japan Partnership Agreement treaty text with both the International Agreements Sub-Committee in the House of Lords and the International Trade Committee in the House of Commons. This is to aid the committees’ important scrutiny work and the production of reports by them on the agreement.”
That is a practical example, in the last few days, of the way in which the Government are proceeding. I have to say to the noble Lord, Lord Liddle, that that rather shoots the fox that he produced earlier—that nobody knew what they were doing and that they did not have a strategy, et cetera. That is a practical example.
Like my noble friend Lady McIntosh, I looked again this morning at what Erskine May says about the affirmative procedures. They are pretty straightforward. Traditionally, there were three variations. The first is used where something has to take place on an SI immediately—we have seen the need for that in relation to Covid—and there is usually a specified period by which it should not continue. It has obviously expanded since the days when I was in the Chair: then, it was about 40 days, and now, it appears to be almost six months, but that is by the by.
Then there is the more normal procedure in which a draft is laid before both Houses, not to be made and have effect unless one or both Houses present an Address to the Crown praying for the order to be made or for agreement to resolutions approving the draft instrument. Therefore, there is already a whole host of procedures whereby anything that comes forward can be debated before it is voted on. The key thing is that it is voted on.
As I have said in our earlier sessions, I have been a marketing man and a trading man. We really do not want yet another hurdle—in this case, the super-affirmative procedure—that just creates more delay, and to my mind this degree of consultation on an issue that was causing a problem to one of the devolved Assemblies, a particular industry or a particular trade would do that. Any of us in trade or business knows that if you have a problem, you put it to the Government of the day and you say that the present procedures are not working. There are already safeguards, as I have indicated; in my judgment, you certainly do not need yet another layer of safeguard unless it is a matter of life and death.
I am sorry. I have to say to my noble friend that I cannot possibly agree with this; I think that it is way over the top. If it is taken to a vote, I will certainly vote against it.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
The noble Lord, Lord Liddle, has withdrawn so I call the noble Lord, Lord Judd.
Lord Judd (Lab) [V]
My Lords, I want to put on record my admiration for the consistent, valiant work done by the noble Baroness, Lady McIntosh of Pickering. She has proved herself over recent weeks as a champion, almost second to none, of the principle of accountability to Parliament, the importance of Parliament and the importance of always being cautious lest power drifts back to the Executive. If we are to have these new arrangements for regulation and supervision, what she has talked about is a prime candidate for this. I believe it is a test of whether the Government really do believe in parliamentary authority and the accountability and supremacy of Parliament, and whether they really believe that there is no attempt by the Executive to take back power. I thank the noble Baroness for having given us another opportunity to raise this, which I hope the Government will take seriously.
I have immense respect for my noble friends who are working so hard and consistently on our behalf on the Bill. The rest of us who have strong feelings therefore have to be very cautious about getting in their way and making generalised statements that hold up proceedings and in the end undermine the effectiveness of what they are trying to do.
I want to make this point: anyone who believes that the Bill is simply about an internal market must face the reality, given that history will judge the effectiveness of this Chamber as a scrutinising Chamber, that it is about more than that. It is about a determined drive, as I see it, by the present Government all the time to increase the powers of the Executive. We must therefore be on our toes strategically if we are not, in our preoccupation with the detail of the Bill, to lose sight of this major challenge that we constantly have to face. I thank the noble Baroness once again.
Lord Thomas of Gresford (LD) [V]
My Lords, it is always a delight to follow the noble Lord, Lord Judd, who always helps us with his wisdom and experience. I join him in commending this understandable attempt by the noble Baroness, Lady McIntosh of Pickering, to strengthen the scrutiny of any regulations made by the Minister under the proposed Bill, whether in the exercise of Henry VIII powers or otherwise. While I entirely support their purpose, I cannot support the precise method that the noble Baroness puts forward. The trouble is that there is no single super-affirmative procedure; there are, as the noble Lord, Lord Naseby, pointed out, a whole host of procedures.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I join the noble Lord, Lord Thomas of Gresford, in thanking the Scottish Law Commission for its contribution to this debate; it keeps an eagle eye on issues in front of your Lordships’ House and from time to time delivers material that is very useful to us as we go through our duties.
As the noble Baroness, Lady McIntosh, said, these are probing amendments. They are about the possible uses of super-affirmative procedures and, as she says, relate to issues in the Bill that might well qualify under her heading for a higher degree of scrutiny.
The noble Lord, Lord Thomas, gave us a useful tour d’horizon of the available ways of doing super-affirmative. I agree with him that there is a case to be made here for looking at them in more detail to make sure that they are picked up and looked at regarding their best purpose, but that perhaps is not for today; there are bigger issues here and they should be looked at, but not in this Bill.
My noble friend Lord Judd asked whether the Government really welcome scrutiny or are simply pursuing their normal process—which seems almost inevitable for any Government—to try to obtain absolute control over the legislation they are bringing forward. I suspect the answer to that question is not to be found in providing for better scrutiny. This is a Bill with deeper problems. I do not think that these proposals, although they have their merits, are the right way forward in trying to unscramble those deeper difficulties. I look forward to hearing the Minister respond.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I thank my noble friend for tabling her amendments, which relate, as she explained to the Committee, to the implementation of a super-affirmative resolution procedure. This debate is something of a coda to the previous group. It teases at the questions that many of your Lordships raised there and to which my noble friend Lord Callanan responded in some detail, so, if the House will forgive me, I will not repeat those general arguments in relation to these matters, although I repeat that the Government believe that these powers are important for our internal market. As my noble friend Lord Naseby said, we are dealing with trade matters. I repeat that the Government will not take lightly our responsibility in administering these powers.
I thank all those who took part in this debate for the interesting speeches we heard. On a personal note, I always welcome seeing the noble Lord, Lord Judd. I agree with his expression of admiration for noble Lords and Baronesses on the Front Benches opposite for their work on this Bill. Perhaps he will allow me to extend that sentiment to my noble friends Lord Callanan, Lady Scott and Lady Bloomfield and my colleagues.
Pleasantries apart, of course we acknowledge that the Bill gives the Secretary of State the ability to amend the list of legitimate aims, relevant requirements and schedule exclusions through a draft affirmative statutory instrument, with just one time-limited made-affirmative power, which relates to the services exclusions in Clause 17(4). We are fully committed to ensuring that the use of these powers is subject to effective oversight and consultation. That is why any use of the power would require an affirmative regulation to be passed in both Houses of Parliament. This will ensure that Parliament would be able to scrutinise and vote on any changes.
Turning to the substance of my noble friend’s amendments, if we were to accept Amendments 14, 29, 40, 76, 77, 101, 133 and 176, to which my noble friend spoke in this group and which call for the super-affirmative resolution procedure, it would cause unnecessary delay when a change was urgently needed. That point was very forcefully made by my noble friend Lord Naseby in a compelling speech made from the standpoint of his immense experience in chairing the proceedings of the other place.
Although your Lordships’ Delegated Powers Committee had many observations on this legislation, it did not propose the super-affirmative resolution procedure. I repeat: there is a risk of undue delay in a situation that may arise where it appears necessary to act swiftly to prevent undesirable outcomes. My noble friend Lord Callanan gave a number of examples on the previous group. The Government may need to respond quickly and effectively to maintain the status quo after the transition period has ended.
We believe that the draft affirmative resolution procedure—noting that the made-affirmative power is time-limited—offers sufficient parliamentary scrutiny while enabling the Government to act quickly. I therefore ask my noble friend to withdraw the amendment. While I think her amendments attracted the interest of the Committee, and I am grateful to her for bringing them forward, I think it would be fair to say they did not carry the support of the Committee.
As my noble friend has acknowledged, Amendment 24 is consequential so I will not address it in detail. Amendment 25 seeks to probe the Government’s understanding of what is meant by “substantive change” in Clause 4. I can tell my noble friend that it means that any changes that re-enact regulation in a way that changes its outcome count as substantive. Where existing legislation receives technical or minor amendments that do not alter its substance, that does not count as a substantive change.
I hope these responses address the concerns of my noble friend and therefore ask her to withdraw her amendment.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I am grateful for the Minister’s comments on Amendment 25. It was a question linked to the previous group that the noble Lord, Lord Callanan, did not respond to, so I am very grateful that he did.
The Minister talked about how “substantive change” is now defined. We are now in the realm of what the Minister said is a Pepper v Hart moment because what is said on the record at the Dispatch Box is very important, and these measures require a different outcome. The policy outcome intentions of many of these measures might remain the same, but some elements would be different. If the Minister is saying—on minimum unit pricing, for example, or on environmental or public health considerations—that if the intended outcome of the re-enacted or updated requirement remains the same, would that continue to be exempt? That is important because, in both the legislation and the Explanatory Memorandum, that is not so defined. If minimum unit pricing changes the level of the price, or if tuition fees continue but their level changes, if the policy intent is the same, the exemption will carry on—is that the correct understanding?
Lord True (Con)
My Lords, I note and hear what the noble Lord has said, but I think he would allow me not to enter into speculative discussions. I have put to the Committee a response to a question—a response provided to me to advise the Committee. As for its application, that is a matter that would be speculative and could be considered further. I will stand by the words that I put before the Committee.
Baroness McIntosh of Pickering (Con) [V]
I thank all noble Lords who have spoken in this debate. I was grateful for the opportunity to probe the extent to which this procedure of super-affirmative resolution may be more appropriate.
My noble friend Lord Naseby might not think that this is a matter of life and death, but if you are dealing with perishable goods—particularly animals and their movement over what will be internal borders—that might be the case. I part company with my noble friend on the EU-Japan agreement; it actually does not go that far. My understanding is that what was heralded as a bigger market for cheese, which will be very welcome, relies on the EU allowing us to use what is left of its quota that it does not wish to use. It is the leftovers—the crumbs under the table. It could be very helpful to our cheese producers, but it is not quite as straightforward as one might first think.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
We now come to the group beginning with Amendment 15. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in the debate. The noble Baroness, Lady Finlay, is having difficulties connecting with us, so I call the noble Lord, Lord German.
Amendment 15
Lord German
Member’s explanatory statement
This amendment requires the Secretary of State to obtain the consent of the devolved administrations before making regulations amending Clause 3(3), which specifies the types of statutory requirement that are within the scope of the mutual recognition principle.
Lord German (LD)
My Lords, the noble Baroness, Lady Finlay, is detained in another part of your Lordships’ House. I will move Amendment 15 and speak to Amendments 30 and 64 in this group, which attempt to place one limitation on the extraordinary and extensive Henry VIII powers that we were talking about in the last group: namely, they require the consent of the devolved Administrations to using those powers. Amendments 15 and 30 would impose this requirement in relation to Ministers’ power to remove or, more worryingly, add to the statutory requirements that are
“within the scope of the mutual recognition principle”
and “the non-discrimination principle”, respectively. Amendment 64 would require devolved consent for any guidance issued in respect of Part 1.
I must say that I am very attracted to the amendments tabled by my noble friend Lord Fox, which would simply strike out the Henry VIII powers in Clauses 3 and 6. As your Lordships will know, these have been strongly condemned by the Delegated Powers and Regulatory Reform Committee—a matter to which I will return later.
Without amendments such as these, it would be possible for the Government to strip back still further the very limited exemptions that these clauses provide for, which are far more limited than is currently the case with EU law, where the principles of subsidiarity and proportionality apply alongside far broader public policy exemptions. I remind your Lordships and the Government that they are working on the basis of principles that they repeated last month and established in October 2017—that they would move forward under
“established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent”.
Those words, “without their consent”, represent a principle to which the Government have signed up. That is why the amendments of the noble Baronesses, Lady Hayter and Lady McIntosh, seek to engage with the devolved Administrations but do not require the Government to achieve their consent.
Obviously, either amendment would be preferable to the current problem, but the issue is that it would be easy for the Government to demonstrate that they had sought the consent of the devolved Administrations on a wholly unreasonable proposal, and the fact that it had not been forthcoming would have no relevance at all. Therefore, the Government could report that they had consulted the devolved Administrations and tick the box required without even attempting to address their concerns.
I return to the issue of secondary legislation; that is the source of these amendments because the powers are so sweeping and there is no restriction on, or knowledge of, what they will deal with. As noble Lords may be aware, three committees of your Lordships’ House have expressed concern about these matters. The Delegated Powers and Regulatory Reform Committee, the Secondary Legislation Scrutiny Committee and the Constitution Committee all wrote to the Lord President of the Council, the Leader of the House of Commons, who has government responsibility for the way in which delegated powers are used.
In Jacob Rees-Mogg’s reply of 19 October, he said:
“I agree that Bills with substantial powers, though sometimes essential, should not be a tool to cover imperfect policy development. As a Government, we must have a clear direction and be able to explain to both Parliament and our constituents how we are fulfilling the promises of our manifesto. I can see that extensive use of delegated powers can hinder rather than help us in that. Therefore, I am happy to consider issuing communications to Secretaries of State on this matter, encouraging them to minimise the use of delegated powers where possible”.
I ask the Minister: has the Lord President of the Council, the Leader of the House of Commons, consulted him on the matters that he is putting before us today? If so, will he heed that warning from Jacob Rees-Mogg?
The other matter that concerns me, which my noble friend Lord Purvis talked about, is the extent to which the powers can be used in a variety of ways. I reflect on the environmental aspects, which the noble Lord, Lord Callanan, just talked about, in relation to the recycling of materials, which is one of the issues on which the Government may wish to introduce regulations. The reason for that might well be that they have a concern about the environment, such as the nature of plastic film or single-use plastics; they might want to introduce those requirements.
However, it could go the other way and make the problem worse. For example, you might stop a devolved authority banning the use of plastic spoons or using plastic film on fresh food. The Government have admitted that they want to carry through all those health and environmental considerations by saying that they are looking at the recycling of materials as something that it might touch in the future.
Therefore, it seems to me that we have grave concerns about the way changes in these areas will be implemented. If we follow the advice of Jacob Rees-Mogg, then, certainly, we would not seek these powers in this Bill at this time because they do not include the policy intent that is to be provided. In these amendments, we can ensure that the consent of the devolved Administrations is given and that we can address and seek their approval, but it would be far better if we did not have these delegated powers at all.
Lord Hope of Craighead (CB) [V]
My Lords, as the noble Lord, Lord German, just said, it would be far better if we did not have these provisions in the Bill at all, but one must assume that they may remain. That is why these amendments, particularly Amendments 15 and 30, to which I have added my name, address the provision which talks about consultation but does not mention the word “consent”.
I have two requests for the Minister; I will not elaborate further on what the noble Lord, Lord German, said in his very helpful introduction to this group. First, would he be good enough to repeat, in the context to which these amendments refer, the assurance he has already given that the Sewel convention principles will be applied without any hesitation in regard to consultation?
Secondly, will the Minister consider whether it would not be wise, in view of the importance of the clauses in which these provisions appear, to adopt the system used, he will recall, in the European Union (Withdrawal) Act 2018 when considering the system of seeking the consent of the devolved Administrations—Assemblies, Senates and Parliaments—to the modification of EU law? He may recall that Ministers were given power to restrict the powers of the devolved Administrations to modify EU law in certain respects by delegated legislation. Provided for in Part 1 of Schedule 3 was a system whereby the Parliaments, Senate and Assembly were given an opportunity to provide consent. The wording in the Scotland provision was:
“A Minister of the Crown must not lay for approval before each House of the Parliament of the United Kingdom a draft of a statutory instrument containing”
the relevant
“regulations … unless … the Scottish Parliament has made a consent decision in relation to the laying of the draft, or … the 40 day period has ended without the Parliament having made such a decision.”
If it came to the point of there being no consent, when the Minister of the Crown laid this draft, as mentioned, before either House, he would be required to explain his decision to lay it without the consent of the Parliament.
That system was arrived at after a great deal of discussion in the 2018 Act; it is quite a useful one that might well be thought appropriate in this case to reduce the element of dismay which the devolved Administrations are feeling about how they are being treated by these provisions—all that has been provided for is consultation. They would at least have an opportunity in their legislatures to consider whether consent should be given. Of course, if they fail to give it within 40 days, ultimately the Minister can go ahead, provided he explains why he is doing so. There is no amendment to this effect, but this is an opportunity for the noble Lord to consider whether it would not be wise to soften the blow that has been felt by the devolved Administrations by adopting that system, which was so carefully worked out and eventually accepted in the 2018 Act.
Beyond that, I support everything the noble Lord, Lord German, has said in support of the amendments to which he has spoken.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord German, and the noble and learned Lord, Lord Hope of Craighead. I thank them both for setting out detailed consideration of this rather long list of amendments, the length reflecting the levels of concern in the Committee about this area of the Bill.
I will speak to a series of amendments in this group to which I have attached my name, Amendments 15 and 64 in the name of the noble Baroness, Lady Finlay of Llandaff, and Amendments 16, 41, 48, 74 and 99 in the name of the noble Baroness, Lady Hayter of Kentish Town. I apologise to your Lordships for not taking part at Second Reading. My name was down to speak, but I was caught up in the collision with the Medicines and Medical Devices Bill, which also prevented me from taking part in earlier Committee sittings.
That is not the only crucial political collision we are encountering at the moment. As a former newspaper editor, I am well aware of the problem of the media being able to focus on only one issue at a time. I sought to place an article about the environmental issues in the medicines Bill with a major news outlet, and was told “No, we’ve already run too many articles on this Bill.” We are at risk of falling into the same problem with this Bill.
I can identify at least three major areas that could in normal circumstances expect attention from the serious media. Rightfully getting top billing are the Part 5 issues that we expect to get to on the final day of this Committee’s deliberations. The second area, which would normally get massive amounts of attention, is the clauses that provide powers even greater than those of Henry VIII, as the noble Baroness, Lady Andrews, the noble and learned Lord, Lord Hope of Craighead, and others spoke to so powerfully earlier today. As a former journalist, I have a shorthand for that—Henry VIII on steroids. I share the liking of the noble Lord, Lord German, for the amendments that wipe those out altogether.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to speak to a number of amendments in my name but also to lend my support to Amendment 16, which I have co-signed, in the name of the noble Baroness, Lady Hayter of Kentish Town. It is essential that we seek the consent of the devolved Administrations in these circumstances, rather than just simply consult, for the reasons the noble Lord, Lord German, gave in moving his Amendment 15 and those alluded to by the noble Lord, Lord Thomas of Gresford, in the earlier debate. I hope that the Government and my noble friend the Minister will look favourably on the request that we should seek the consent of the devolved Administrations.
Again, I am grateful to the Law Society for its drafting of and briefing on the amendments I have put forward. In Amendments 17 and 31, I am seeking greater transparency and inviting the Secretary of State to publish the results of the consultation and give reasons for any decision reached.
I pray in aid the conclusions of the Constitution Committee report on the Bill, at paragraphs 76 to 79, which criticise the powers set out in Clause 3(8) in particular. Paragraph 78 states the following:
“The Government should explain how the consultation process for amending the relevant requirements for goods would work and how disputes would be resolved.”
At paragraph 79, it says:
“We agree with the DPRRC that the power in clause 3(8) has not been justified and should be removed from the Bill.”
I seek to oblige the Secretary of State to consult the devolved Administrations but also to go further and make public, in the interests of transparency, the results of the consultation and the reasons for any decision taken on the basis of that consultation.
Similarly, my Amendment 42, asks for consultation with the devolved Administrations in a host of circumstances, before, as my explanatory statement refers to,
“amending the list of legitimate aims.”
Amendment 43 says that, in relation to Clause 8:
“The Secretary of State must publish the results of the consultation and give reasons for any decision reached.”
Amendment 49 seeks consultation with the devolved Administrations before amending Schedule 1. Amendment 62 seeks consultation with the devolved Administrations before preparing guidance under Clause 12. Amendment 65 is a consequential amendment. Amendment 75 seeks that consultation be sought with the devolved Administrations before amending Schedule 2.
Finally, Amendment 100 seeks consultation with the devolved Administrations before the definition of “legitimate aim” in Clause 26 is amended. I refer here to both the definition of “legitimate aim” being amended and to the guidance having earlier been published. With those remarks, I urge my noble friend and the House to look favourably on these amendments.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I concur with the comments of my noble friend Lord German, the noble and learned Lord, Lord Hope, and others concerning consent and what might be termed the proper conduct of devolution. But I will limit my remarks to the amendments in the name of the noble Baroness, Lady McIntosh, relating to the publication of decisions, to which I added my name, not for the purpose of signalling that I am satisfied with consulting rather than obtaining consent, but because I want to flag up that there must be transparency.
It is difficult to tell from provisions throughout this Bill how transparent various procedures will be, which raises my concern that they may not be very transparent at all. The internal market is a matter of significant public interest, and while individuals may not bury themselves in the minutiae, they will feel the impact. There are various organisations on the front line of helping consumers and small businesses to understand laws and their rights. Therefore, whatever the procedure, there should be publication of the proceedings that are formulating the structure of the internal market.
I have amendments on transparency elsewhere relating to the CMA and the OIM, and they are part of the same theme. If the consumer voice is to be heard and articulated by consumer organisations, access to information is paramount. Otherwise, interventions and understanding may come too late.
Lord Wigley (PC) [V]
My Lords, I agree with the noble Baroness, Lady Bowles, on transparency, and I look forward to coming to those points later. I am pleased to speak to this group of amendments, and in particular to Amendments 30 and 64, to which I have added my name, and to Amendments 75A and 100A, which stand in my name.
Perhaps I should first make it clear that I support Amendment 15 in the name of the noble Baroness, Lady Finlay of Llandaff, moved by the noble Lord, Lord German, which stipulates that not only should the UK Government consult the devolved Governments but that they must obtain their consent. I would have added my name to that amendment had other colleagues not got there first. I agree with the noble Lord, Lord German, that it would be far better if we did not have these powers in the Bill at all. I also believe that the points made by the noble Baroness, Lady Bennett, go to the heart of why devolution of power was made in the first place and is still very much needed.
Amendment 16 does not go as far as Amendment 15. It advocates the need to seek consent of the devolved Administrations but it does not impose a requirement to obtain that consent. Amendment 17, likewise, does not go as far as Amendment 15, in that it again requires the Government to publish the result of consultation, so the implication is that the UK Government may well consult the devolved Governments and then blithely ignore their viewpoints. There is, as the noble Lord, Lord German, implied, no earthly point in having a consultation system if the UK Government may then, willy-nilly, totally ignore the devolved Governments’ viewpoints.
I now turn to the group of amendments that relates to Clause 12. Amendment 64 in the name of the noble Baroness, Lady Hayter, requires the UK Government Minister, in this context, to consult and seek the consent of the devolved Governments. Likewise, Amendment 75 in the name of the noble Baroness, Lady McIntosh, requires the Minister to consult the devolved Governments. But both these amendments give the appearance of consulting the devolved Governments but place no obligation whatever on the Minister to take any notice of the response elicited. The Minister can happily consult then blithely ignore the views of the devolved Governments. That is not good enough. Indeed, it is highly dangerous. It gives the appearance of consultation without providing the substance of a requirement to respect the outcome of any such process. In reality, this plays out a charade of having a joint approach between the four nations and provides an open road for the UK Government Minister to totally ignore the views of the devolved Governments.
My Amendment 75A simply requires the Minister, with regard to subsection (2), to consult and obtain the consent of the devolved Governments. I readily recognise that the UK Government may argue that the devolved Governments should not have a veto over the Westminster approach. That is something I recognise and respect, but the implication is that Westminster should have such a veto. In regard to devolved functions, the whole point is that the four nations should have the right to make their own policies. That is what devolution is about. The Government seem to take the Orwellian approach that all four nations are equal but one is a little bit more equal than the others.
My Amendment 100A applies the same principle to the consultation issues relating to Clause 20(7) and the need for the Minister also to obtain the consent of devolved Governments in that regard. What this comes down to, yet again, is the need to have an acceptable mechanism to resolve disagreements, to have the common frameworks to which we have resorted on so many other occasions and not to take the approach that the Government of England—which it is for the devolved function—always has the right, by dint of its respective size, to overrule the other four nations. If such a mechanism were in place, we would not have to put ourselves through the pain of raising these questions on every occasion that the issue of consultation between the Minister and the devolved authorities arises. I implore the Minister to bring forward an amendment on Report that would obviate the need for us to return to these issues, time after time. Until such a change to the Government’s approach is forthcoming, we will have no choice but to press amendments along the lines of this group at a later stage.
Lord Hain (Lab) [V]
My Lords, as so often, my noble friend Lord Wigley has spoken for the wide consensus on this question in Wales. I will speak specifically in support of Amendments 74, 75 and 99, which seek to ensure that the Henry VIII powers of the Secretary of State to amend the Bill’s provisions relating to market access on mutual recognition, non-discrimination and the “legitimate aim” of regulatory requirements are referred to the devolved Administrations for their consultation and consent. I do so following a series of excellent opening speeches, notably by the noble Lord, Lord German, and the noble and learned Lord, Lord Hope.
The Bill has been justified on the basis that it is intended to support the UK internal market for goods and services once EU rules no longer apply after the transition period ends on 31 December. These rules, derived from EU law, place constraints on the ability of government institutions within the UK to impose constraints on the free movement of goods, as well as people, and significantly reduce the scope for measures that would restrict intra-UK trade. One reason that the UK Government wish to constrain the autonomy of the devolved Administrations in this area is that countries with which the UK is trying to negotiate trade deals may wish to clarify that they have access to the whole UK market, or Great Britain market if the Northern Ireland protocol survives, as it must do.
A White Paper published by the Government in July 2020 claimed that the Bill would provide “frictionless trade”, “fair competition” and protection for businesses and consumers within the UK. To achieve these aims, two market access principles were identified, namely mutual recognition and non-discrimination, which would constrain the ability of all relevant actors within the UK, be they regulators, local authorities or devolved Administrations, to impose new regulations on goods and services. These limit the ability of devolved Governments to regulate economic activity far more than did their EU predecessors. So much for taking back control. Obviously, that does not apply to devolved legislatures, which will lose control under the Bill—to Whitehall.
The UK internal market was initially seen as one strand of work, begun in October 2017 by the four Governments within the UK, to establish a common approach in key policy areas of returned EU rule, referred to as common frameworks, about which I spoke in the last Session. However, it is generally agreed that, by removing the internal market from these discussions and pushing ahead without the agreement of the devolved Authorities, the common framework approach is being completely undermined by the UK Government.
In response to the White Paper, the Welsh Government insisted that any new system must have independent oversight and dispute resolution, and that common rules must be agreed by all four Governments. When the Bill was published, Jeremy Miles, the Welsh Government Counsel General, called it an “attack on democracy”, and the Scottish Constitution Minister pointed out that the concept of mutual recognition could mean that Scotland, for example, would be forced to accept lower food standards—an area that is currently devolved—against its express wishes.
The mutual recognition provisions would, therefore, effectively prevent one part of the UK unilaterally imposing and enforcing requirements, for example for the presentation or characteristics of goods, which are covered by this principle, which also applies to services. There are exceptions under the Northern Ireland protocol. “Manner of sale” requirements, on the other hand, for example governing to whom products may be sold or their price, would not be covered by mutual recognition but by the non-discrimination provisions of the Bill. The exclusion of price from the mutual recognition principle was driven, in part, by arguments in the other place about what the Bill might mean for Scotland’s minimum alcohol pricing regime—subsequently adopted in Wales, more or less—in response to the public health challenge from excessive alcohol consumption.
Schedule 2 contains lists of services that are excluded from the principles of mutual recognition and non-discrimination, such as healthcare, transport and water supply, as well as some privately provided services. Amendments 74 and 75 require the Secretary of State to consult and/or seek the consent of the devolved Administrations before making changes to Schedule 2.
If there is wariness about enabling any one of the devolved nations to exercise a veto—for example, the Scottish nationalists simply refusing to consent to something which would benefit the rest of the UK —leading to deadlock, why, as I have suggested several times in recent debates in your Lordships’ House, do the Government not adopt the Welsh Government’s proposal for a Council of Ministers-type model with a form of qualified majority voting, in place of the current Joint Ministerial Committee, which has been dysfunctional and, frankly, worse than useless? I specifically ask the Minister to respond to this suggestion of the Welsh Government to have a Council of Ministers-type model with qualified majority voting, which could overcome many of the issues involved. This model would require the UK Government, since it represents England with its disproportionately large population and share of GDP, to secure the agreement of at least one devolved Administration before overriding any devolved Administration that wanted to exercise a veto.
The Bill prohibits both direct and indirect discrimination. The latter is permitted if it can reasonably be considered a “legitimate aim”, as defined in the Bill. However, with the Bill as it stands, the Secretary of State can redefine that term by regulations, subject only to an affirmative resolution procedure. Amendment 99 rightly seeks to ensure that there is consultation and consent from the devolved Administrations before doing so. I cannot for the life of me understand why the Government or the Minister, for that matter, would object to that.
New functions will be bestowed on the Competition and Markets Authority—the CMA—to monitor and report on the impact of specific regulations that are considered to potentially have a detrimental effect on the internal market. The Bill also proposes to establish an office for the internal market within the CMA to oversee the application of these principles and the functioning of the internal market. Expert analysis has shown that, whereas EU law had a symmetrical effect upon the UK Parliament and devolved legislatures, the Bill will have an inherently asymmetrical effect as it will become a protected enactment, which the devolved legislatures will be powerless to repeal or modify.
The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods, passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by the business department’s impact assessment of the Bill, would reduce the ability of local legislatures to produce targeted social and environmental objectives, so that the intended societal—[Inaudible.]
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
We seem to have lost connection with the noble Lord, Lord Hain, so I call the noble and learned Lord, Lord Mackay of Clashfern.
Lord Mackay of Clashfern (Con) [V]
My Lords, I have not tabled many amendments to the Bill—although there are many things on which I might seek reconsideration—because it is important that I confine myself to the principal matters. In this group, my amendment requires that the powers in the Bill are to be used only for the promotion of the internal market. Any idea that the Bill can be used for any other purpose should be clearly outlawed.
It is important to note that while the powers of the European Union in relation to our internal market will stop on 31 December, the retained EU law on our internal market will, of course, remain in place unless and until it is altered. Therefore, the question before the Committee now is about the rules that should apply after 31 December, and the powers that exist to change these in that time. I think it is absolutely clear that the responsibility for the internal market in legislative form must ultimately be with the UK Parliament, but of course the UK Parliament includes representatives from all four countries. Therefore, it is a suitable responsibility to carry. However, the other point is that the existing devolved Administrations and legislatures have responsibility for the laws in their particular areas. Accordingly, it is very important to ensure that, so far as possible, the rules of the internal market should accommodate that and be in agreement throughout the whole United Kingdom—in the devolved Administrations and legislatures also.
Therefore, I agree very much with a great deal of what has been said in support of the amendments in this group. I have an amendment later that suggests that every power that the Secretary of State has should be subject to the rule that they consult the JMC(EN), which I think is the committee responsible for the modification and regeneration of the common frameworks. That system seems to have worked very well, as far as I can gather from what has been said. I suggest that every power that the Secretary of State has to make regulations under the Bill should be subject to being put before that committee, which includes Ministers from the devolved Administrations, before they go forward. If, and only if, there is discontent or disagreement, the matter should then be referred to two debates, one in each House of Parliament, to resolve the matter using the responsibility that they have to solve the matters of the common market.
This is absolutely important. It is extremely important that the union we have is preserved by proper relationships between all the Administrations. I see no reason at all why that should not happen. I know that at least one of the Administrations has a desire to forsake the union, but in the meantime, while they are in the union, it is important that we have the best relationships possible with them, so that there is no feeling of resentment. An internal market is a very important part of the union, and a part that would be damaged if there were any degree of separation, both for the remaining units as well as for the unit that was thinking of leaving. This series of amendments in various forms is very important in the preservation of the union, and I support the principles laid down. I do not concentrate particularly on my own amendment, although I think it is quite important.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, the noble Lord, Lord Hain, lost his connection, so we shall try him again now. It seems we are still having problems with the noble Lord, so I now call the noble Lord, Lord Naseby.
Lord Naseby (Con) [V]
I thank my noble and learned friend Lord Mackay. He certainly has a very practical sense of the law, which not all lawyers have. He is right: it is an internal market; the relationships between England, Scotland, Wales and Northern Ireland are usually very close and we all have a common cause, perhaps not in rugby, but in most things. Nevertheless, I repeat that the words used in the Bill are pretty strong. It does not say that, in making regulations, the Secretary of State “may” or “should”, as we see occasionally in law; it uses the word “must”, which is a strong word. He “must consult”; there is no option. That is quite right—absolutely right, but we need to remember what “consult” means.
It is not a soft verb. Its component parts, in my view, involve seeking out information or advice, depending on the subject matter. It means doing one’s best to find out what the views are, to have an interchange and to take into consideration all aspects of the particular action proposed. It is not a dictatorship or anything like that, and I would not believe that any Secretary of State, of any Government, would view it that way. I personally think it is as strong as it needs to be. The addition of “obtain the consent of” in place of “consult” is a threat; there are no two ways about it. When I was in local government and the leader of a local authority, if I had had some legislation in front of me that said, “You have to obtain our consent”, I would dig my heels in. Do not bother about the other 31 local authorities in London—just dig your heels in and that will foul it all up.
That is not what this is all about, so I am not in favour of Amendment 15. I think, though, that the noble Lord, Lord Hain, and my noble and learned friend Lord Mackay have taken the argument a bit further. The noble Lord, Lord Hain, was talking about a qualified majority, when one part of the nation dug its heels in for some reason, and maybe we should look at that. My noble and learned friend Lord Mackay put forward how Parliament might be brought in at a higher level in something that was particularly difficult. There is merit in looking at both aspects, but I just think the amendment before us, Amendment 15, is over the top.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to take part in this fascinating debate, which is very much legal in content. I support the principles enunciated by the noble Lord, Lord German, and the noble and learned Lord, Lord Hope of Craighead. Like him, I would like to ask the Minister, the noble Lord, Lord True, what the Government’s view is of the Sewel convention. What is the Government’s view of devolution?
I speak as someone who was once a Minister in the devolved Administration in Northern Ireland. I dealt with legislative consent Motions all the time. The connection between the consultation and the devolved Administration was vital, particularly on benefits, where we operated the principle of parity.
I support all these amendments because they pivot the debate on the issue of seeking the consent of the devolved Administrations and the level of consultation. If the Government are serious about respecting devolution and honouring the Sewel convention, they should accept these amendments. It is my fear that this Bill is really about a power grab and Henry VIII powers. Unlike the noble Lord, Lord Naseby, who is obviously batting for the Government as a Back-Bencher, I do not think these amendments are meant as a threat to the legislation or to the Government. We must always remember that the Executive should be accountable to Parliament. The words of the noble and learned Lord, Lord Judge, in his treatise on this are very germane on this issue.
The Bill is peppered with many provisions where the Government seem intent on undermining devolution and the devolution settlements. This demonstrates a lack of respect for them and the work they do. Do the Government believe in and subscribe to devolution, or are they trying, by stealth and secondary legislation, to be an integrationist Government? In this regard, I refer to a report from the Lords Constitution Committee, which states:
“As the operation of the devolution arrangements and the respective power of the devolved institutions are constitutional matters, we would expect to see them amended by primary rather than secondary legislation or by using a statutory procedure that requires the consent of the devolved legislatures”.
I ask the Minister: when are the Government going to come back to that position? The Constitution Committee is also instructive about the role of consultation. Point 5 of its summary of conclusions and recommendations states:
“The lack of specificity about the consultation requirements in the Bill is problematic. The Government must set out the process for consultation with the devolved Administrations on the management and adjustment of the internal market arrangements.”
So be it with the mutual recognition principles for goods.
There is also a lack of reference to the common frameworks, an area that would help to resolve some of these issues. Is that because the Government wish to further control the devolved Administrations? There is a strong case for withdrawing this legislation and going back to the drawing board, while a more suitable intergovernmental approach and better consultation are used to develop an appropriate system of governance.
The Government’s approach in this Bill is about weakening devolution arrangements, hence it is important to achieve and obtain the consent of the devolved Administrations for the mutual recognition principles. I therefore fully support these amendments, which are trying to curb the Henry VIII powers.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, I am told that we have the noble Lord, Lord Hain, again.
Lord Hain (Lab) [V]
Thank you, my Lords. I suddenly expired by unilateral mute for reasons that neither the broadcasting hub nor I could understand. I was about to complete what I said so, with the leave of the Committee, I will briefly do so.
The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by BEIS’s impact assessment of the Bill, would reduce the ability of local legislatures to pursue targeted social and environmental objectives so that the intended societal benefits “would be forgone”.
It is therefore clear that the market access principles of mutual recognition and non-discrimination set out in the Bill would present a significant threat to the purposes of devolution, which have been democratically established now for nearly two decades. Surely it is not too much to ask that, at the very least, the devolved Administrations should be consulted and their consent sought on the relevant measures in this Bill, as set out in these amendments?
Lord Liddle (Lab)
My Lords, there have been many excellent speeches in this debate and I doubt that I have anything much to add.
I commend to the Government that they take note of what was said by the noble and learned Lord, Lord Mackay of Clashfern. This is potentially a critical issue for the future of the United Kingdom. I want to see a United Kingdom survive; I am a passionate supporter of that. That means we must have a well-functioning internal market. However, the Government are making a great meal of this issue, building it up into a much bigger conflict than it needs to be. I urge them to follow the route of reviving and working through the common frameworks that I remember David Lidington proposed as part of the European Union (Withdrawal) Act. I do not see why this new Conservative Government have apparently abandoned the approach that David Lidington took then and are seeking to create a confrontation between the principle of consultation, which they favour, and the principle of consent favoured by the devolved Administrations.
The present Government seem to see Brexit as an opportunity for the assertion of the UK as a unitary state. This is very dangerous for the UK’s future. Take, for example, the structural funds, which play an important part in the Welsh and Scottish economies. Under the devolution settlement, the devolved Administrations were responsible for how structural fund money was spent in their areas. This Government are trying to take that away, establishing new powers to direct investment in Scotland and Wales. The Government are trying to reassert a unitary state. This is the wrong path to be following.
The person I think speaks the most sense on these questions is former Prime Minister Gordon Brown. I want to see us evolving in a federal direction and we cannot do that if we are going to tear up principles that have already been agreed. We are on the verge of making the mistake that the Conservative Party made in the 1880s when it rejected Gladstone’s visionary plan for Irish home rule and we will pay very heavily for the consequences.
Lord Cormack (Con)
My Lords, I am very glad to follow the noble Lord, Lord Liddle, because, not for the first time, he speaks a great deal of powerful good sense. We have to recognise that what is at stake here is the future of the United Kingdom as we now have it and not as we used to have it. As I said when I spoke briefly on Monday, I was not an advocate of Scottish devolution because I saw within it the seeds of disaster, but we have it. The fact that we have a Government in Scotland who are bent on independence adds a real danger and we must not play into the hands of those who would destroy the union.
It is all a question of getting the right balance. Far too often we have not got the right balance. I completely accept that the United Kingdom, which I want to see retained, has a Parliament and a Government which are clearly superior in political power to the devolved Administrations. Bearing in mind that one of those Administrations wishes to separate, I believe there is an enormous amount of good sense in what the noble Lord, Lord Hain, said. He talked about qualified majority voting within a council of Ministers drawn from the United Kingdom Government and the devolved Administrations. I beg my noble friend on the Front Bench to reflect on the wisdom of what the noble Lord, Lord Hain, and my noble and learned friend Lord Mackay of Clashfern, to whom the noble Lord, Lord Liddle, referred, said in very thoughtful, well-considered and powerful speeches.
It is clearly crucial that we consult within the four countries. It is clearly crucial that we recognise that one of the four countries has 80% of the population of the United Kingdom. It is clearly important that no tail wags the dog, but it is equally vital that we treat each other as equals and that Ministers meet and come to sensible decisions which are not seen as impositions. That is why I am so fundamentally opposed, as I always have been, to Henry VIII clauses. That Henry VIII should have been recruited in such large measure by the present Government is extremely unwise. To get immediate domination through a means that can only spawn long-term disaffection is not wise, and we need a Government who are able to practise wisdom at this crucial moment in our history.
We have left the European Union, we are going forward as a United Kingdom and we have got to achieve balance and symmetry and a long-term wisdom which does not lead to the replication of the sort of social division that was created in the 1880s, to which the noble Lord, Lord Liddle, just referred. History does not repeat itself, but it does—or should—teach us lessons and we should seek to derive wisdom from the knowledge of what has happened in the past. I beg my noble friend to consider what has been said in this debate, to reflect on the very wise words which we have had from the noble Lords, Lord German and Lord Liddle, the noble Lord, Lord Hain, in particular, and my noble and learned friend Lord Mackay of Clashfern, and let us try to come to an accommodation.
We need to come together in this country more than we have ever needed to. We must not dismiss opinions because they come from parties other than our own. I am not so starry-eyed as to think that we could have a national Government tomorrow, but we have to treat each other with a degree of respect. We have to recognise that it is just conceivably possible that the other side might have a few good views.
Cromwell was not a man for consensus, but he once said, in the predecessor of the other place: “Conceive it possible, in the bowels of Christ, that you may be mistaken.” My message to the Government this evening is: conceive it possible that you may not have got it quite right, and let us come together to help you to get it right.
Lord Judd (Lab) [V]
My Lords, I declare an interest because I am half English and half Scottish, and proud of it. I am very close to my Scottish family. I have always feared that, in this House in particular, we have underestimated the dangers ahead had devolution not happened. The lessons of Ireland are there, and I believe that the peace and stability of our peoples across the islands of Ireland and Great Britain have been ensured by the process of devolution; I am convinced of that.
When my noble friend Lord Hain says he sometimes does not understand why Ministers do not accept the logic of a particular position that is taken, I think that he is failing to look at the driving force behind all that is happening. As I said in a debate on a previous amendment today, I believe that there is a driving force against everything that I think most of us in this House have believed was vital.
There is a world of difference between the concepts of “consult” and “consent”. What builds up the resentment of the Scottish people, for example—I am sure it is true for Northern Ireland and Wales as well—is the patronising assumption that we will consult the others. Those who emphasise the importance of mutuality in this debate are absolutely right. That means that we meet, in a sense, as equals, and we seek their consent to proposals that we may be making.
The amendment is vital. It is vital not just to this internal market Bill but to recommitting ourselves to peace-building. We always seem to react and try to deal with crises when they have overtaken us. In this case, we had the wisdom to look ahead and do things in time. We will need to reassert the whole process of peace-building, mutual consent and the recognition of people as people, wherever they are with their identity. This amendment is very important indeed.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Judd. I agree with him. Reflecting on this amendment, so ably moved by my noble friend Lord German on behalf of the noble Baroness, Lady Finlay of Llandaff, I was struck by the point made by the noble Lord, Lord Cormack. During the 20 years of devolution, none of us has had a unique monopoly on wisdom as to what devolution is. It has been a combination of people on a journey. The noble Lord started from a position of opposition but then perhaps found areas to support, while recognising that there are still frictions within our union. Within my party, there has been a consistent element of support for delivering it.
I hope the Minister accepts that no one in this House wishes our union ill harm. No one wants the internal market not to operate in the best way that it can for the benefit of our businesses and our people. Clearly, there are nationalists across parts of the United Kingdom who have a different purpose, but when we are scrutinising this Bill, we want it to be better.
I want to reflect on the points made to the Scottish Parliament by the right honourable Michael Gove. He was asked why the Government was insisting on putting this legislation forward when it had not received the normal legislative consent Motions. Michael Gove said that these were exceptional circumstances. It is arguable whether all the component parts of this Bill—which creates the framework for an internal market with its long-term consequences—are both exceptional and necessary before the end of January.
The Minister still has to persuade many that the whole of the Bill is required by the end of the IP period, given that we are still awaiting legislative frameworks. As part of EU retained law, there is a standstill period for all those pieces of legislation anyway, so we question the Bill’s necessity. The Government insist that they need it to go through but, since the noble Lord, Lord Callanan, indicated in a previous group that it was drafted in a bit of a rush during the summer, it is right to ask the Government to think seriously about those elements that will have a significant impact on the ability of the devolved Administrations to legislate and of Ministers in Scotland and Wales to act in an executive way within their competences.
Perhaps the Government could reflect and insert some provisions into this legislation in order to reassure the devolved Administrations that the level of consultation to which we have been accustomed in the past will continue in future. As the Constitution Committee report clearly indicated, it is only in Clause 6 where changes would have an impact that the Government are proposing to consult with the devolved Administrations. There is no provision for what would happen if there were a dispute or if the consultation were to indicate that the devolved Administrations did not want the Government to continue on their chosen route.
Clauses 8, 10, 17, 19, 20 and 48 all contain areas where the Constitution Committee has highlighted changes that would have an impact on the devolved Administrations and their legislative competences, and where no consultation is proposed. These areas can be rectified without a change to the timetable by which the Government wish to move forward. This is a legitimate request on behalf of all noble Lords who have contributed to this debate.
In this group, it has been helpful to reflect on the areas where it has become the practice to seek consent for significant changes to the constitutional framework impacting on Scotland, Wales and Northern Ireland. Then there are secondary areas where—if there has been an impact—consultation has been the norm.
Baroness Hayter of Kentish Town (Lab)
My Lords, the noble Lord, Lord Cormack, always worries me when he starts talking about Henry VIII. As any woman knows, we gird our necks a little tighter if there is a threat that that is coming back.
In some ways, this is a continuation of the same debate, which is about why on earth the Government put together a Bill in such a hurry, as we heard earlier, and with so little consultation with—or even consideration of, let alone agreement with—the very devolved authorities whose competences it seeks to amend. It is partly that suspicion which has necessitated a rather sad amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern. To have to add the wording that the powers in the Bill must be used only for the purpose for which they were designed seems extraordinary. That would not normally be needed, if trust and mutual respect had been there in abundance.
Similarly, the amendments requiring consultation with the devolved authorities before introducing regulations or guidance affecting them should never be needed. If Government-to-Government relations were working properly, it would be de rigueur that that had taken place. Clearly, those relationships are not working properly, and that is why we need the amendments: to establish or obtain what the noble Baroness, Lady Bowles, called the proper conduct of devolution—or, as the noble and learned Lord, Lord Mackay, and others said, we have to get this right to protect the union.
I turn to the amendments in my name, Amendments 16, 41, 48, 63, 74 and 99. They make two particular points, one of which, as we have heard, is slightly at variance with those in the name of the noble Baroness, Lady Finlay. They are about whether any one part of the union should have a veto over something that may be of particular concern to the others, which is what the words “obtain consent” imply. Our words are “seek consent”, but make it an overriding obligation to do the necessary to try to reach full agreement. We also accept that there may be times when one party might hold up the process, at which point we will need some sort of dispute mechanism in place, which is something we ought to be discussing. As the noble Lords, Lord Cormack and Lord Naseby, said, maybe we should look at the two suggestions made today: my noble friend Lord Hain’s council of Ministers or, as the noble and learned Lord, Lord Hope, said, using the formula in the 2018 Act. But clearly we need to have thought about something like that before we get to Report, so we could add that.
But the principle, surely, is that the Government cannot simply start down the track of making regulations without first consulting. There was an issue about what consultation is—it is consultation before you even start the process. Handing over a finished draft instrument is not what I call consultation; you start at the beginning of the process. So they should not start down the track of making regulations without first consulting and then seeking to reach consensus with the devolved authorities. In a Bill about making a four-country internal market work, I would have thought that that was obvious—but history shows we need to nail it down. Surely, as I think the noble Baroness, Lady McIntosh of Pickering, said, we cannot believe that the Government would reject a requirement to seek agreement. It is motherhood and apple pie. For them to say, “No, we are not even going to seek agreement”, I think, would be an interesting response.
There is an issue about what all of this is about. Is my noble friend Lord Hain right to say that this, as we have heard, hastily written Bill is about trying to satisfy our US negotiating partners that they will have full access to the whole market and that the Government will not let anything get in the way of that? Or is it, as my noble friend Lord Liddle said, something perhaps in a way more serious, of trying to bring back control into the centre? I am not sure what the answer is to that. We will not go there tonight, but at some point, I think, we need to flesh out what is the purpose of some of this.
I turn briefly to my Amendments 41 and 48, the first of which would require the Government to consult with the devolveds before introducing legislation to amend the list of legitimate aims in Clause 8(6)—an issue touched on by the noble Baroness, Lady McIntosh. These are important—I know they sound a bit techy—because indirect discrimination is effectively excluded from the overarching principle if it can reasonably be considered as necessary to achieve a legitimate aim. So the definition, the list of legitimate aims, is clearly key. Quite rightly, the Bill lists the protection of the health of people in Clause 8(6) as a legitimate aim—amen to that.
The problem, as my noble friend Lord Hain has said, is that the list of legitimate aims can then be amended by regulation. Now, perhaps adding to the list might not constitute a problem, and Amendment 35 —not in this group but in a later one—in the name of my noble friend Lord Stevenson and others, would indeed add some more categories to the list of legitimate aims. But they would be on the face of the Bill, not stuck in by regulation, and that is surely the proper way of doing it. The problem, of course, is that while at the moment human health and, indeed, the health of animals or plants are there, they could be removed by secondary legislation from the list of legitimate aims. That would then extend the areas in which devolved Governments would not be able to set standards for products sold in their jurisdiction. This is real stuff.
Lord True (Con)
My Lords, I am grateful to all those who have spoken in what has been a thoughtful debate absolutely in the proper traditions of your Lordships’ House, both in the spirit of inquiry and in the main—I will come to that point in a minute—in manner. I am of course sorry that the noble Baroness, Lady Finlay, was unable to be here, but I was delighted to hear the noble Lord, Lord German, move the amendment so ably. I was also glad to learn that he is an assiduous reader of the words of my right honourable friend Jacob Rees-Mogg. I can tell him that that is a very improving activity and I heartily commend it to him. I would say in response to his point that this legislation has collective agreement and therefore it is subscribed to by all members of the Government.
Having mentioned the noble Baroness, Lady Finlay, and having in mind the remarks of the noble Lord, Lord Wigley, I would like to thank the Welsh Government, who had an involvement in some of these amendments, for what has been their positive engagement on this Bill to date at both ministerial and official levels. I have had the privilege of being present at discussions on this matter.
When I talked about taking exception, I was thinking about tone. People have asked what the Government’s intention is and what the exceptional circumstances are. Like it or not, the exceptional circumstances are that, after a lengthy period of being a member of the European Union, which effectively controlled our internal market, the British people have elected to leave the European Union and the British Government—and British Governments collectively—have a responsibility to provide for successor arrangements. I do not believe that this should be the occasion for a great set of conspiracy theories. I do not agree with the noble Lord, Lord Liddle, that the Government are making a meal of the system, and I reject what he said about the Government abandoning the frameworks. We have discussed that at length in this Chamber and I have set out the continuing commitment of this Government to the framework process.
So, as we discuss this, it is important that the process of respect goes all ways, and this Government have a profound respect for all the peoples of these islands and all those involved at every level in the difficult process of governing effectively and responsibly the people they have the honour to represent. The Government seek to go forward co-operatively with the devolved Administrations and all other people in our democracy. I do not believe—with great respect to my noble friend Lord Cormack—that it is helpful to use words such as “domination” as an aspiration of the Government, and nor is it helpful for the noble Baroness, Lady Bennett, to talk of dictatorship. That is not the way in which this Government think, behave or intend to go forward. They hope to go forward with respect and co-operation.
The Bill attempts to ensure a smooth transition for businesses, as they are no longer subject to EU constraints, and to maximise certainty through the Covid recovery and the end of the transition period. It does not remove powers from the devolved Administrations. What the Bill does do is ensure that no new barriers to intra-UK internal trade will be created following the end of the transition period, and that companies from all parts of the United Kingdom will be able to trade seamlessly with one another. That is an objective that everybody in this House genuinely shares. I agree with what the noble Lord, Lord Purvis of Tweed, said: I believe that everybody in this Chamber—or, at least, almost everybody—is committed to maintaining the union of the United Kingdom. We intend, and obviously hope, to perpetuate and protect the system where companies from all parts of the United Kingdom are able to trade with each other.
Following the end of the transition period, devolved Administrations will see an increase in their powers in multiple devolved policy areas, as the role of the EU institutions falls away. They will include areas where the EU has previously set regulatory standards. The Bill seeks to strike a balance between respecting devolution and ensuring that UK companies can continue to trade unhindered in every part of the UK. Hearing some of the things that have been said, one would not think that it was this Conservative Administration who, as recently as 2017, extended so profoundly the role of the Welsh Senedd. It is vital that legislation introduced by the Bill should act across the whole of the UK, providing all of our businesses and consumers with the same degree of certainty. That is important in whatever corner of the four parts of our kingdom businesses and consumers live, just as there must be the same protection from discrimination and the same opportunities for prosperity and well-being. We owe that to every corner of this kingdom.
Yes, the driving principle of the Bill—maintenance of the internal market—is captured by Amendment 109, in the name of the my noble and learned friend Lord Mackay of Clashfern. The purpose of the Bill is as he set it out, but I do not see how it could be used for any other purpose, and I do not believe that to restate it on the face of the Bill could be anything other than potentially confusing. But I do take the spirit and the letter of what my noble and learned friend said: this is the purpose of the Bill, and it certainly is not to be set in the context of conspiracy theory. It provides for a new system that is both ambitious and necessary and, as I have said, it is a pivotal moment for the United Kingdom to develop its own bespoke regulatory system and we must make sure that this offers benefits to businesses in every part of the United Kingdom and to the devolved Administrations.
The noble and learned Lord, Lord Hope of Craighead, made a typically thoughtful opening speech. I hope that I misheard him when he said that he regretted the provisions in the Bill as a whole; I believe he was referring to the nature of the regulatory powers. In his remarks, he put forward some ideas that obviously—as my noble friend Lord Callanan said in an earlier debate—we will read carefully.
I can answer directly on the Sewel convention, about which the noble and learned Lord asked a second question. It was addressed earlier by my noble friend Lord Callanan but, for those who were not here, I repeat that the United Kingdom Government continue to demonstrate respect for and commitment to the convention. As such, they have sought the consent of each devolved legislature for the Bill through the established practices and procedures.
However, the convention envisages situations whereby the UK Parliament may need to legislate without consent; the noble Lord, Lord Purvis of Tweed, referred to such a situation. The Government have continued to hold positive discussions with the Welsh Government and the Northern Ireland Executive at both official and ministerial level. The door remains open to the Scottish Government, should they wish to re-engage on internal market matters. It is regrettable that the Scottish Government walked away from discussions on the internal market in March 2019; we urge them to return to the table.
We consulted extensively on the UK internal market White Paper, and received more than 300 responses and overwhelming support from businesses and industry to maintain the status quo and avoid new trade barriers emerging. The consultative nature of that work does not end there. I understand the undertone of what Members have sought in these amendments. We will of course monitor the implementation of the provisions in the Bill and speak to stakeholders and the devolved Administrations to ensure that it works as well as possible within our constitutional setting. The system requires effective and clear governance to provide the necessary certainty for business. Where the system is not working, the Government need to be able to act quickly and effectively to fine-tune the system for the benefit of everyone. That matter was discussed earlier today.
It is suggested by your Lordships that some of the provisions in the Bill should be subject to the prior consent of the devolved Administrations. Amendments 15, 16, 30, 41, 42, 48, 49, 75A and 100A would require this, meaning that, as a pre-condition, Ministers from Scotland, Wales and Northern Ireland would all have to agree with any change before it could be given effect. A number of noble Lords alluded to difficulties that might arise in certain circumstances. Clearly, such a provision could undermine the Government’s ability to act rapidly and decisively to make any changes necessary to reflect the interests of all parts of the United Kingdom, although noble Lords will, I know, have different views on the likelihood of that.
However, there is also a matter of principle at stake: attaching a requirement to obtain consent from the devolved Administrations would undermine the responsibility of Parliament with regard to the internal market. My noble and learned friend Lord Mackay of Clashfern referred in his excellent and thoughtful speech to the importance of the central role of Parliament. The Government believe that this is a fundamental issue. There may at times be a need to legislate effectively for the whole of the UK and only Parliament is capable of doing that. It is a responsibility that we take seriously; we should not resile from or compromise it in any way.
We are fully committed to ensuring that the use of the powers in the Bill are subject to effective oversight and consultation. First, any use of the powers would require an affirmative regulation to be passed in Parliament. This will ensure that MPs from all parts of the UK can scrutinise and vote on any changes.
Secondly, consultation with colleagues in the devolved Administrations is required for any change to the relevant requirements in Clause 3. It is true that a legislative consultation requirement would not be appropriate for the powers relating to exclusions from the market access principles or the list of legitimate aims for non-discrimination. In this case, the Government may need to make a swift decision in the interests of all parts of the United Kingdom, should there be an emergency or an unforeseen issue in future. In these instances, there may be no time to have a consultation period to seek consent. However, for all powers, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.
Lord German (LD)
This has been a very thoughtful debate. I think that it has got to the heart of the problem, which is how the UK Government regard the whole devolution settlement and the way that the United Kingdom currently operates.
I think the mood of the Committee is that we want to get a sense of moving together to sustain and develop our union. In that sense, we require consent, because consent is what eventually drives these matters forward. I pray in aid of the view of the CBI. It is often said in this Chamber, “Business needs to have this. Business needs to have that”. The CBI has said that it wants a collaborative approach, rather like the frameworks that are being used. That is the style that we need to ensure the Government provide.
We have had some very powerful commentary about the way our union should work. If you want to work together for consent, you need, as many noble Lords have said, a method for dealing with any disputes that may come at the end. There have been many suggestions, including from the noble Lord, Lord Hain, and the noble and learned Lords, Lord Hope and Lord Mackay of Clashfern. They talked about how to resolve these matters to move forward together. My sense is that, at the moment, the Government have not got the mood right. They have not felt that there is a need to move together in a way that people feel is the right way forward for the whole of our country.
In passing, one of the effects of what we have been discussing in this group of amendments is of course that it will lead to the end of EVEL in the House of Commons. Basically, everything will have a commentary on everywhere, and therefore it will not be possible to ban Scottish MPs from debating and voting on particular issues. So it will need a change of the way in which Parliament operates as well. But clearly what this whole debate has been about is the collaborative approach and the way in which we can work together in the thoughtful way that people have talked about. What the Minister needs to consider is how you can rectify the deficiencies of that mood inside the Bill.
The right honourable Jacob Rees-Mogg said that the regulations that you produce should clearly express the policy intent. I do not think the policy intent is closely laid out in what these regulations are going to be there for, whereas the collaborative approach would be to say very clearly, “Let’s work together as we go through to the future, and we’ll have some mechanism by which we can resolve disputes between us”. Because I think we are all looking for—and accept that we have to have—a fully functioning internal market. We have to have a sense of divergence, which we already have within our United Kingdom, where already we have a functioning internal market. But we also have to know that there are systems in place in this place and in the Government that will make it all happen.
I thank all noble Lords for their very thoughtful contributions and beg leave to withdraw the amendment.
Member’s explanatory statement
This amendment would clarify that Clause 4(1)(a) relates to a specific sale of goods (the word “sale” being defined broadly in Clause 14). This is for consistency with Clause 3(1) as proposed to be amended by my amendment to Clause 3 at page 2, line 21.
Member’s explanatory statement
This amendment would correct a misleading reference in subsection (1)(a) of Clause 4 that should refer to the same part of the United Kingdom as is mentioned in the opening words of the subsection.
Member’s explanatory statement
This amendment would bring the wording of Clause 4(5) into line with Clause 4(2).
The Deputy Chairman of Committees (Baroness Henig) (Lab)
We now come to Amendment 32. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Amendment 32
Member’s explanatory statement
This amendment probes the description of local goods in Clause 7(3).
Baroness McIntosh of Pickering (Con) [V]
My Lords, I perhaps need to correct something. I may have mis-spoken when I spoke to Amendments 17, 31 and 42. Of course I meant to refer to the devolved Administrations, as is written in the amendments. I apologise if I did not say that on every occasion, but obviously I was referring to consultation with the devolved Administrations. I am grateful for the opportunity to correct that.
I am delighted to have a short debate on whether Clause 7 should stand part and, within that, Amendment 32 in my name. Clause 7 makes provisions relating to “direct discrimination”, and, among these, Clause 7(1) sets out:
“A relevant requirement directly discriminates against incoming goods if, for the reason that the goods have the relevant connection with the originating part, the requirement applies to, or in relation to, the incoming goods in a way—(a) in which it does not or would not apply to local goods, and (b) that puts the incoming goods at a disadvantage compared to local goods.”
Subsection (2) states:
“Goods are put at a disadvantage if it is made in any way more difficult, or less attractive, to sell or buy the goods or do anything in connection with their sale.”
The particular difficulty I have in Clause 7 is subsection (3), and in particular:
“‘Local goods’, for the purposes of this section, are actual or hypothetical goods”.
The purpose of Amendment 32 is to probe the description of local goods and, in particular, what actually constitutes “hypothetical goods”.
Again, I am grateful to the Law Society of Scotland for its help in briefing and preparing me and drafting this amendment. It has concerns about the definition of “local goods” within this purpose, including actual or hypothetical goods. It is very strange that there is no definition of hypothetical goods, and the opportunity that my Amendment 32 creates is to simply ask the Government what they mean by “hypothetical goods” and why on earth we are using such an expression in these circumstances. I am sure it will give my noble friend the opportunity to return to his favourite tin or box of biscuits in this regard.
I will also raise a question that my noble friend Lord Callanan did not answer in summing up an earlier debate, when I asked who decides what is hypothetical? So I will take this opportunity briefly to ask my noble friend the Minister why we have inserted “hypothetical goods” in this clause? What on earth does this mean, and who determines what is hypothetical and what is real? With those few remarks I beg leave to move Amendment 32.
Lord Naseby (Con) [V]
My Lords, I cannot presume to know what my noble friend on the Front Bench is going to define as “hypothetical”, other than to say that I spent 15 years of my life in the marketing profession, as I have already said to your Lordships. In that time, I worked with food manufacturers and pharmaceutical, agrochemical and household-product companies. Each of those markets, and many others, will have on its list test-marketing activities with different strengths, varieties, perfume levels and activity levels: a whole host of variables.
The companies will not know which is the actual product they are going to market—and they might not even market it at all—so, at a certain point in time, those products are hypothetical. They are not registered under a trade name: they are test markets and, quite frankly, that is the normal process for consumer goods. So, as far as I am concerned—and I do not think that I need to speak at great length on this—this is perfectly understandable to anybody who has worked in the pharmaceutical, agrochemical, household-product or food world, or any other product category.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The noble Lord, Lord Liddle, has scratched, so I now call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, this is a short and vaguely surreal debate. I caught my mind wandering to the “League of Gentlemen” with the slogan “Local goods for local people”—but not even they attempted to define “hypothetical” local goods. Indeed, neither have the Government, because there is no explanation in the non-explanatory Explanatory Memorandum which sits at the back. We are indebted again to the eagle-eyed lawyers of Scotland for finding this issue. The question is simple: what is a “hypothetical good”, why are you using this word and who on earth decides what is a good and what is a hypothetical good?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, we are obviously in competition to make the shortest speech of the evening; I cannot imagine why, because this is quite an interesting question, although we had a partial answer to it in an earlier debate. My take on it was not so much about the points raised clearly by the noble Baroness, Lady McIntosh; I am worried about how acceptably these phrases, put into this Bill at this time, work in a digital world. It is clearly stated in the clause that we are talking about businesses that are local and not local, businesses which are located or not located in an area. We are talking about propinquity and the ability of those who have to interpret these clauses to understand where there are real businesses and how they are operating if they are to be seen to be local.
That does not work for Amazon or quite a lot of the shopping we will be doing between now and Christmas, which will be largely digital in form. Is “hypothetical” to mean virtual? I leave that rather complicated philosophical question for the Minister to respond to.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I understand that the purpose of this amendment from my noble friend Lady McIntosh is to probe the meaning of “actual or hypothetical goods” in the Bill, which has foxed a number of other noble Lords. I am very happy to provide further information on that. The inclusion of actual and hypothetical goods in this clause is critical, as it means the provisions work effectively in scenarios that could arise where there are no actual local goods against which impacts on incoming goods can be compared.
If a company has a product which is subject to a patent, it can therefore be made by only one company in the UK. If an authority were to regulate against that product because of where it is produced, there could not possibly be a local good to compare it against to determine relative disadvantage. Being able to compare it to a hypothetical good addresses this and allows the rules against direct discrimination to operate properly and protect all businesses across the UK.
Let us take as an example a new technology which takes an innovative approach to food processing, cutting production times by half. The technology may be completely unique, novel and unlike other technologies for food processing on the market. Without being able to compare this against a hypothetical good, it would be very challenging to deem whether any new measures taken by Administrations were discriminatory or not. Equally, as a further example, if a Scottish company patented a technological breakthrough in quantum computing, this same technology would not be present on the English market and we would therefore need a hypothetical good to be able to compare this innovation to in order to determine whether new English regulations discriminated against this Scottish technology and otherwise created an unfair disadvantage.
The existing wording is also important to deal with situations where arguments could be posited that a local good is similar to, but not the same as, an incoming good, and therefore would not be a good comparator in determining whether discrimination exists. Being able to compare a hypothetical good that is the same as the incoming good, save for location, enables that determination to take place.
I was also asked who determines what a hypothetical good actually is. Ultimately, it would be the courts, but a business would bring forward the challenge and claim discrimination.
I turn to the stand part debate on Clause 7, which sets out the test for direct discrimination. Direct discrimination is where a requirement applies explicitly differently to local goods and goods from elsewhere in the UK and that difference results in disadvantage for the goods from elsewhere. This means, for example, that a Scottish regulator cannot impose additional licensing requirements for Welsh goods unless it does the same for Scottish goods. As another example, take a scenario where Scotland regulated that only Scottish whisky could be sold in pubs; this would be directly discriminatory against the very fine Penderyn whisky produced in Wales, as they would have a clear disadvantage against similar goods on the Scottish market—I see that meets with approval.
“Disadvantage” simply means that it is more difficult or less attractive for those incoming goods to be bought or sold. In this example, any additional licensing requirements on Welsh goods may impose additional costs and potentially increase the price of the Welsh good, meaning it would be less attractive to buy. To be clear, the goods that we are comparing here are the local equivalents of the incoming goods that are materially the same, or materially share the same characteristics, but do not have the same connection to the originating part of the UK. For example, a potato produced in Wales is compared with a potato produced in Scotland. This clause will ensure that directly discriminatory barriers cannot be created by rules that aim at the way in which a good is sold to circumvent the effect of mutual recognition. For example, if English butchers were banned from selling Welsh lamb, this would be directly discriminatory.
It is worth noting that Schedule 1 to the Bill allows for direct discrimination where a requirement discriminates in a reasonable way, as a response to a public health emergency, ensuring that the rules leave scope to react to such situations. I ask my noble friend to withdraw her amendment.
Baroness McIntosh of Pickering (Con) [V]
I am grateful to all noble Lords who have contributed to this little debate, which I hope wins the prize for the shortest debate during the passage of the Bill. I am grateful for the attempt of my noble friend Lord Naseby to give us the benefit of his marketing experience and take a stab at what is meant here, but I am very much in line with the noble Lords, Lord Fox and Lord Stevenson, in that I think it would help to have an explanation in the Bill. Many Bills include definitions, and it would help if this was one such.
One hypothetical example that springs to mind is that, in the days before cloning, one would never have thought that a cloned animal could be bred in the way that Dolly the sheep was by the Roslin Institute, which is part of the University of Edinburgh. As my noble friend has gone to the trouble of explaining—I hope I understand it a little better—in the final analysis, it is for the courts to determine. It is regrettable that we do not have a definition in the Bill that would save court time and legal fees, going forward.
I very much enjoyed the contribution from the noble Lord, Lord Stevenson, particularly his hypothetical question about how this would apply to virtual sales. I do not think we have had an answer to that, so I would be grateful if the Minister could write to us.
Generally, the difficulty I have with Clause 7 has been eased, to some extent, by the explanation from the Minister. As my noble and learned friend Lord Mackay said in an earlier debate, a lot of EU law has been passed over and retained. The non-discrimination part of EU law, under the treaties, is on the grounds of nationality and is inherently clearer. The complicated process we have come up with in Clause 7 could be summed up by how no one can discriminate against a good—or a service in a later part of the Bill—simply because it comes from a different nation of the United Kingdom. That could have been explained more clearly, but I am grateful for the opportunity to have had this little debate and the explanation, as far as it went, from my noble friend Lady Bloomfield. At this stage, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
My Lords, we now resume Committee stage and come to the group beginning with Amendment 33. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in debate.
Clause 8: The non-discrimination principle: indirect discrimination
Amendment 33
Member’s explanatory statement
This amendment is consequential on the amendment in Baroness Finlay's name which leaves out Clause 10 and inserts a new Clause. It removes the provision that a relevant requirement is indirectly discriminatory if (among other things) it cannot reasonably be considered a necessary means of achieving a legitimate aim. The issue is addressed more generally in the new Clause 10.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I am grateful to the noble Lord, Lord German, for introducing the previous group in my name. Technical difficulties were compounded by a timing clash on legislation in Grand Committee.
My amendments in this rather large group seek to achieve three different objectives which are in many ways complementary to one another, but in what is perhaps a belt-and-braces way. Amendment 54 would insert a new Schedule 1. It perhaps more properly belongs with an earlier group, because it is intimately related to Amendment 6 which we debated on Monday. Although Monday no doubt already seems a distant memory, your Lordships may recall that Amendment 6 was intended to restrict the application of the market principles to policy areas where an attempt had been made to develop a common framework but agreement had proved impossible to reach. The proposed new Schedule 1 provides a list of areas in relation to which regulations may be brought forward to apply the market access principles. It is a list of those areas where common frameworks which require legislation are currently in development.
It should be noted that this list is not intended to be unamendable. Obviously, over time, the list will need to change. Should the Government ever be able to identify an area which is not already in the common frameworks programme but where they believe there is a serious threat to the internal market, something which the Minister has so far singularly failed to point out, Ministers will be able to add to or amend the list by statutory instrument, having consulted the devolved Governments. I emphasise “having consulted”, because there is deliberately no requirement to obtain the consent of the devolved Governments in this instance.
I note that the Welsh Government, who originally drafted these amendments, have gone to great lengths to allay the potential anxieties of Ministers here. I think it is a fair-minded and sensitive strategy, in contrast to some of the things that we have seen, because neither one nor all the devolved Governments could veto the inclusion of new subjects in the list of areas to which market access principles could be applied by regulation.
I now turn to the second block of amendments in my name in this group: Amendments 33, 34, 50, 55, 56, 60, 80 and 95. They all have the same objective: to increase the scope of potential exceptions to the application of the market access principles. At Second Reading, many noble Lords pointed out that while the Government refer to the precedent of the European Union in seeking to impose the market access principles —something which one might have expected would rather stick in the throat of Ministers—the comparison is inexact. European legislation frequently gives discretion to member states, and therefore sub-state Governments, according to their powers and competence, to vary the approach to standards for goods, and indeed services and professional qualifications, where there are sound public policy reasons for doing just that.
Lord Anderson of Ipswich (CB) [V]
My Lords, I have put my name to Amendments 35 and 51, which have a number of near relatives in this group. The noble Baroness, Lady Noakes, reminded us earlier today that the purpose of the Bill is to facilitate trade and that different rules in different jurisdictions create costs to business and so may operate against the consumer interest. That is a highly respectable economic argument against devolution, but devolution has been implemented and the logic of devolution is diversity—including, as the noble Lord, Lord Liddle, said, the ability to experiment.
A devolved power to regulate is valuable only if it can be used to give effect to a policy objective of a devolved Administration. Its use will be pointless and damaging to businesses in the devolved territory if non-conforming goods, unencumbered by the higher local standards, have to be admitted from elsewhere. A single market that inhibited the rational, proportionate and non-protectionist use of devolved powers in pursuance of vital policy objectives would put devolution into reverse. This is shown by the fact that it was deemed necessary to exempt existing measures from the market access principles. It would also, of course, be a never-ending source of grievance for nationalists and separatists.
In connection with that, there are two puzzling features of the Bill. The first is the small number of aims that it even acknowledges as legitimate. I do not, myself, insist on all the drafting of Amendment 51—I recall that the European concept of sociocultural characteristics mystified the courts during the Sunday trading litigation—but why is there no place in the Bill for aims as basic as environmental protection save, curiously, in relation to fertilisers and pesticides, and consumer protection? If aims as important as the protection of public safety and security may justify indirect discrimination, as Clause 8(6) provides, why must those same aims, however compelling the circumstances, give way to outside business interests in every case of direct discrimination or mutual recognition of product requirements?
The noble Lord, Lord Callanan, said earlier that we need not slavishly copy the EU single market and he is right—successful, as I am sure he will acknowledge, as that single market has been. However, with respect to him, that is not a sufficient answer. The issue did not go away when we left the EU, and it needs to be addressed on its merits and with proper respect for our own devolution settlement.
The second puzzling feature is the patchy treatment of such aims as are acknowledged, particularly public health. That aim is most broadly expressed in Clause 8(6), but as a potential justification only for indirect discrimination. Paragraph 1 of Schedule 1 provides a general exclusion relating to the movement of pests and disease but paragraph 2, on the movement of unsafe food and feed, applies only to mutual recognition while paragraph 5, on public health emergency, applies only to direct discrimination. The problem with defining permitted public health derogations in such a limited and piecemeal fashion is that, outside the scope of those derogations, policies motivated by public health, however necessary and well-designed they may be, must always give way to trading interests, without any ability to balance the competing factors.
An injection of principle is needed here. That principle, I suggest, is that:
“All the exceptions should apply to the entire panoply of market access rules.”
Those are not my words but those of Dr Peter Oliver, practitioner and author of the leading academic text on the free movement of goods, commenting on the Bill on the “EU relations law” blog. The same principle infuses Amendment 52A in the name of the noble Lord, Lord Young of Cookham, and I support it for that reason. Its list of legitimate aims is disappointingly short, but since the noble Lord has also put his name to Amendment 35, perhaps there is nothing between us on that. To accept that all the exceptions should be capable of applying to all the market access rules need not cause trade to suffer, because the application of those derogations would be regulated, as it is in federal and devolved jurisdictions across the world, by strictly expressed constraints based on necessity, rationality and proportionality.
If the Government are concerned about their ability to include devolved markets in a US trade deal, I add that countries from Canada to Switzerland—and, indeed, the EU—have proved perfectly capable of entering into international trade agreements irrespective of their internal allocation of powers. Consultation, consent and co-ordination are surely the keys.
Most of the amendments in this group would function as shock-absorbers. Their purpose, as I see it, is not to wreck the Bill but to remove genuine grievances on the part of the devolved Governments, weakening the case for separatism and rendering the market access principles, in the areas where they may be necessary, operable in the long term. I hope they will be viewed as the constructive proposals that I believe them to be.
Finally, I endorse the strong comments of our committees, and of other noble Lords, as regards the excessive and extremely troubling powers given to the Secretary of State by, among others, Clause 8(7) and Clause 10(2). In this group, Amendments 39A and 47A, in the name of the noble Lord, Lord Young of Cookham, would retain those Henry VIII clauses, but restrict their use to the adding or broadening of legitimate aims and exclusions. We would be authorising King Henry to act benevolently, but not, in the phrase attributed to Sir Edward Leigh, as “a bastard”. That course, though not for the constitutional purist, has a certain pragmatic attraction, at least for me.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, I have listened to the vast majority of the debates today and I have actually been shocked by some of the speeches: they were, unusually, wonderfully tough and very critical. Therefore, I hope that Ministers are actually listening and understanding that we are trying to help. It thrills me to be speaking alongside so many incredible noble Lords; in particular, the forensically brilliant noble Baroness, Lady Finlay of Llandaff, and the amazing legal minds of the noble Lord, Lord Anderson of Ipswich, and the noble and learned Lord, Lord Hope of Craighead. It is very comforting to be in agreement with them.
Noble and learned Lords will go into the intricacies of EU law, which is, of course, incredibly important, but to me there is one very simple principle, which is that the Government have taken a decision not to be part of the EU’s single market, saying that it is a bulldozer and prevents our Parliament legislating on important policy areas. However, the Government then seek to create their own bulldozer, a new single market that flattens everything and does not even have the carve-outs and reservations that EU single market laws protect, such as legitimate environmental and health policies. There are times when a bulldozer is the perfect machine, but not in this legislation. It is totally false of the Government to make any comparison of this UK internal market with existing EU arrangements without including any of these policy protections and derogations. The Bill actually represents a huge centralisation of power in the UK Government, and tramples over existing legislative rights of the devolved Parliaments, as many noble Lords have said already.
It also demonstrates what I see as the extremist view of this Government—that the free market and capitalism should override everything else, and that there is no legitimate policy that can challenge the free market. That is completely wrong and fundamentally at odds with what the majority of people in this country believe. For me, this legislation is a dangerous wolf that the Government are trying to dress in populist sheep’s clothing as somehow defending us from the hostile manoeuvres of the European Union. The truth is something else entirely: this is an important building block in the extremist ideology of a hypercapitalist future in which the market subverts and consumes everything else. Noble Lords must oppose this.
Lord Young of Cookham (Con)
My Lords, Amendments 39A, 47A and 52A are in my name and those of the noble Baroness, Lady Northover, and the noble Lord, Lord Faulkner of Worcester. They have the support of Cancer Research UK, the Faculty of Public Health and the British Heart Foundation along with Action on Smoking and Health and the Alcohol Health Alliance UK, for whose briefing I am grateful.
The amendments address some of the concerns expressed by the Scottish and Welsh Governments over the Bill, regarding a risk of a race to the bottom in relation to public health. They also complement amendments in earlier debates that sought to restore the flexibility that exists under the common framework for legitimate variations in approach within the component parts of the UK—a common theme that has run through our debates this week—so my amendments are another pair of braces for the belt of the noble Baroness, Lady Finlay.
The noble Lord, Lord Anderson, in a remarkable speech, mentioned public health. Public health is an essential part of this debate; Covid has finally brought home to us the importance of what was previously the Cinderella service of our healthcare system. To quote the Secretary of State for Health:
“The first responsibility of any government is the protection of its citizens, and threats to public health are among the most important of all.”
So it is critical that the provision of market access is balanced against the ability of Governments to protect the health of their citizens.
With regard to goods, the Bill describes exemptions in two places: Clause 8(3) and in the list of legitimate aims, including the protection of human, plant or animal health, public safety, along with a number of other more specific exclusions in Schedule 1. In both instances the Secretary of State can amend the core principles of the Bill, which are quite rightly enshrined in primary legislation, and he can do so by regulation. Again, that has been a consistent theme throughout our debate.
The House of Lords Delegated Powers and Regulatory Reform Committee has raised serious concerns that the power included in Part 1 to amend, repeal or otherwise modify legislation by regulation is inappropriate as drafted and should be removed from the Bill. The Marshalled List is full of amendments raising objections to these powers. My amendments focus specifically on the impact on public health.
The ability to alter these regulations matters. Take, for example, minimum unit pricing for alcohol, as currently exists in Scotland and Wales. The Government have argued that new policies similar to minimum unit pricing would be possible under the Bill because they are covered by the non-discrimination principle, so there is a pathway through which they might be justified. Minimum unit pricing might be a necessary means of achieving the legitimate aim of protecting human health. In future, though, through a simple affirmative resolution procedure the Secretary of State could modify that list of legitimate aims to remove the justification of protecting human health so that that was no longer the case. That is an insufficient safeguard for future legislation to protect our health, and the amendment would prevent that. The reach of market principles is so broad that a number of other potential policies, including regulations to restrict the availability of alcohol, attempts to raise the age of purchase for cigarettes, restrictions on children buying sugary drinks and other legitimate public health measures, could all be similarly vulnerable.
I turn briefly to Amendment 52A, which aims to expand the reach of the public health exclusions listed above. The proposals contained in the initial White Paper would have posed more potential risks for public health, but the Government have listened and have put in the protection of being a
“necessary means of achieving a legitimate aim”,
as I mentioned earlier. This is very welcome, but the protections are unevenly applied, allowing legislation that aims to protect our health and safety to be justified in some instances only. This is because the Bill contains two market access principles, non-discrimination on the one hand and mutual recognition on the other. Currently, only non-discrimination can be overridden by a policy that is shown to be necessary to pursue a legitimate aim. Mutual recognition contains no such clause. This is different from the status quo, where a general exclusion for the protection of human health against a broad range of other aims exists. It is in that respect a step backwards, a point made by the noble Baroness, Lady Finlay. This difference is significant, as mutual recognition covers characteristics of goods such as packaging, content and labelling, all key areas of public health.
To take one example, 40 years ago, when I was a Health Minister under Margaret Thatcher, I argued for a health warning not just on cigarette packs but on individual cigarettes. If, for example, the Welsh Government legislated to do exactly that, I would be delighted to see it implemented but, because this is subject to mutual recognition, Wales would be unable to require it for cigarettes coming into Wales from other parts of the UK, even if they were originally produced overseas. A range of similar examples includes calorie labelling on alcohol, as proposed by the Department of Health and Social Care; including information about the medical officer’s low-risk guidelines, something that Scotland has expressed some interest in legislating on; improved front-of-pack warnings on cigarettes; or even policies such as restricting the amount of sugar in goods sold in Scotland. That was an example given in the Scottish Government’s legislative consent memorandum.
Finally, this could also impact on England. Let us take, for example, the current plans of the Department of Health and Social Care to consult on requiring calorie labels on alcohol products to help reduce obesity in England. Once more, if England implemented this requirement, it would not be able to enforce it on alcohol sold in England but produced, or even first imported, into other parts of the UK.
We have made great strides forward in public health, in part because the swiftest moving parts of our union have been able to lead the others. England led the way on restricting tobacco displays in shops. Scotland and Wales are ahead on policies such as minimum unit pricing. This lack of a broad public health exclusion risks this advantage being inverted and our pace being locked into the slowest moving of our constituent parts. I know that the Minister will have taken note of the concerns raised by noble Lords in this debate and that he will endeavour to meet them, but I hope that between now and Report there will be discussions with a view to finding acceptable amendments that do not prejudice the key pursuit of legitimate public health objectives.
Lord Hope of Craighead (CB) [V]
My Lords, I am in sympathy with the words just uttered by the noble Lord, Lord Young of Cookham, but I wish to speak to my own amendment, Amendment 36, and I am grateful to the noble Baroness, Lady Finlay, for her support.
My amendment is concerned with the meaning of words and, to some extent, achieving compatibility, as far as possible, with devolution legislation. It is directed to the definition of the expression “legitimate aim” in Clause 8(6), which sets out two aims, one of which is
“(a) the protection of the life or health of humans, animals or plants”.
If the draftsman of the Bill was to look at Part 1 of Schedule 5 to the Scotland Act 1998, under heading C5 he would find similar words set out in one of the exceptions to the reserved powers; that is, exceptions which mean that the things described are within the devolved competences of the Scottish Parliament. It refers to the
“protection of animal products, plants and plant products for the purposes of protecting human, animal or plant health, animal welfare or the environment.”
My point is that what one finds in subsection (6)(a) takes part of what is found in that provision but misses out some other important words. The phrase I quoted from the Scotland Act draws a distinction between animal health and animal welfare. There is some basis for that distinction because there are things that are designed to achieve the welfare of animals that are not directly related to their state of health. So there is some force in considering the addition of “animal welfare” to the formula in that provision. It also refers to the environment, and nowadays, thinking of all the concerns we have about the environment, I would have thought one could, without damaging the purposes of the Bill, include the words “protection of the environment” within the formula of the clause.
These are drafting points. I draw them, if the Minister will forgive me, more to the attention of the Bill team and the draftsman of the Bill to see whether he can find room for including words in my amendment. It is to make sure that they cover what I take to be the broad aim of the language; it is the kind of discussion we might have had, had we been given time, around a table, discussing how those particular provisions should be framed.
I am not trying to damage the Bill or adjust it in any more significant way; I just want to see that the language used covers the aim of the provision fully and completely. It is on that basis that I brought forward this amendment.
Baroness McIntosh of Pickering (Con) [V]
I am grateful for the opportunity to speak in this interesting debate on these particular amendments, many of which I support. I will limit my remarks to Amendment 37 in my name; I am grateful to the noble Baroness, Lady Bowles of Berkhamsted, for her support in co-signing.
The purpose of Amendment 37 is to bring the definition of “legitimate aim” set out in this clause in line with the source of EU law as contained in articles 34 to 36 of the Treaty on the Functioning of the European Union. In particular, I refer to article 36 of that treaty, which states:
“The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified”
on the grounds I set out in my little Amendment 37. It goes on to say:
“Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”
For reasons similar to those set out by the noble and learned Lord, Lord Hope, in speaking to his Amendment 36, I think that it will be helpful to have
“public morality, public policy … the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property”
brought into Clause 8. This would be a drafting improvement, so I also make a plea to the drafting team in that regard.
I listened with great interest to what the noble and learned Lord, Lord Hope, said on adding the regulation of animal welfare. It goes to his point in a debate earlier this week on the link between this Bill and the Agriculture Bill, particularly regarding the marketing standards covered by Clause 39 of the Agriculture Bill. It would help enormously if we could have some seamless references across different Bills—in this case, the Agriculture Bill and the Bill before us this evening, the UK Internal Market Bill.
With those few remarks, I am grateful to have my noble friend consider favourably Amendment 37.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I added my name to Amendment 37, tabled by the noble Baroness, Lady McIntosh. However, there are several other amendments on the same theme, all highlighting important considerations that should be legitimate aims. The legitimate aims in Amendment 37 have been in use from the EU treaties, as the noble Baroness, Lady McIntosh, explained. That makes a starting point: they have been tried and tested as well as embodying the status quo, even though, as the noble Baroness, Lady Finlay, and the noble Lord, Lord Young, explained, in the EU, they apply in a wider context to mutual recognition as well.
Lord Faulkner of Worcester (Lab) [V]
My Lords, I wish to draw the Committee’s attention to the risk to future public health policy as a result of the inconsistent nature of this Bill and focus on the impact of artificially splitting the public health exclusion so that it applies unevenly across the market access principles.
I will concentrate on Amendments 39A, 47A and 52A —tabled by the noble Lord, Lord Young of Cookham—to which I have added my name and which are also supported by the noble Baroness, Lady Northover. As the noble Lord, Lord Young of Cookham, said, the exclusions to the market access commitment differ between mutual recognition and non-discrimination. I struggle to understand the rationale of legislation that recognises the importance of allowing policy that is necessary to protect some aspects of human health but provides no equivalent avenue for others. This is not a continuation of how our internal market is currently regulated, but a significant departure from it.
The example of minimum unit pricing for alcohol, which was mentioned by the noble Lord, Lord Young, illuminates the risk of arbitrary distinctions. Much of the discussion in the House of Commons on this Bill’s health impacts revolved around its potential effects on minimum unit pricing, which arguably was covered by the mutual recognition principle. If it were covered by mutual recognition, this could have rendered any future similar policy—possibly even modifications of the existing minimum pricing regime—largely untenable due to the lack of a public health exclusion from mutual recognition.
In responding to this, rather than applying a public health exclusion to mutual recognition, the Government instead moved minimum unit pricing and similar manner-of-sale policies from mutual recognition. When introducing these amendments, the Minister in the other place said:
“We are taking the opportunity to put it beyond any possible doubt that alcohol minimum unit pricing-type regulation and any other sales requirements are not in the scope of the mutual recognition principle, unless they amount in practice to a total ban on a good being sold.”—[Official Report, Commons 29/9/2020; col. 189.]
While your Lordships may consider that this represents an improvement at face value, on closer inspection, it is a cause for considerable concern.
First, the Government’s decision to do this indicates that a thoroughly evidenced-based policy such as minimum unit pricing, which has steadily defeated challenge in the courts, might not have been possible if it were included within mutual recognition. That illustrates just how narrow the exclusions are to this principle.
Secondly, it demonstrates the risk that this Bill poses to future public health legislation. We know about minimum unit pricing, so we can modify the Bill to attempt to protect it, but it is not hard to imagine that we might in future see innovative and effective policy based on health labelling bans or content reformulation of alcohol, tobacco or food products. All these aspects would likely be subject to the rigid mutual recognition principle.
Lastly, regarding the amendments on the powers of the Secretary of State to amend the Bill through secondary legislation, the Delegated Powers and Regulatory Reform Committee concluded that the Government’s adoption in the Bill of wide-ranging Henry VIII powers, whereby:
“Any power to make regulations under this Act is exercisable by statutory instrument”
and includes the power
“to amend, repeal or otherwise modify legislation”
is completely inappropriate. In effect, it allows the removal or weakening by ministerial diktat of the limited public health protections currently included in the Bill.
At Second Reading, I discussed the importance of allowing the Governments of the four nations of the United Kingdom to protect the health of their populations and how that can lead to innovative policy solutions. The UK has been a leader in the past on tackling smoking, alcohol and sugary drinks. This legislation risks us being unable to embrace, let alone lead, key public health policies in years to come. Our amendments will protect the future of public health legislation, and I commend them to the Committee.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Faulkner of Worcester, who, along with many other noble Lords in this group, focused on public health. Covid-19 has reminded us how unhealthy our society is and how inadequate current arrangements are.
Given that my noble friend Lady Jones of Moulsecoomb has spoken with great power and eloquence in this group, I will be brief and address only Amendment 51 in the name of the noble Lord, Lord Stevenson of Balmacara, to which I attached my name. That amendment would provide public interest defences on trade restrictions; environmental standards and protection; animal welfare; consumer standards; employment rights; the health and life of humans, animals or plants; cultural expression; regional sociocultural characteristics; and equality entitlements, rights and protections. These describe what should be the goals of a decent Government aiming to deliver a healthy life for all their citizens and the sustainable development goals that they are signed up to.
The term “public interest” makes me think of public money for public goods. I am aware that “public goods” has a technical definition but the parallels with “public interest” in this amendment are obvious. I cannot, therefore, see how the Government can oppose it, given that they want to spend significant sums of public money for some of the same goals through the mechanisms of the Agriculture Bill and the Environment Bill, whereas here we are simply applying standards to deliver public goods. I am aware that some Members of your Lordships’ House believe that trade, and the greater volume of it, is a good in itself and should be our primary or sole aim, but we come back to the question: do we work for the economic system, or does it work for us?
Many of these discussions have a distinctly Groundhog Day feeling and the Government may respond by saying, “Our intentions are good and we are trying to deliver all these things”. I come back to the word “dictatorship”, my use of which the noble Lord, Lord True, objected to. I reserve my own right to judgment on that. In fact, I do not have to go that far for the purpose of arguing for this or other amendments. We know that Prime Ministers and Governments have not had a long shelf life in recent times, and who knows how long this one will last? We are creating a legal framework and the possibility for action by any future Government, whatever they might look like. Giving the right to all devolved Governments to act on behalf of their citizens to defend them against chlorinated chicken or fruits laced with dangerous pesticides can be the only basis for continuing in a democratic manner.
Lord Teverson (LD) [V]
My Lords, I declare my interest as chair of the Cornwall and Isles of Scilly Local Nature Partnership. I wish to speak to Amendment 52, although I support a number of other amendments in this group. That amendment has been tabled by the noble Baroness, Lady Boycott, who, in a topsy-turvy way, will follow me.
We have naturally and correctly been obsessed by the Covid-19 crisis, yet we still very much have the climate change issues—the loss of nature, the biodiversity challenge and a raft of other environmental issues of great importance, such as plastics, marine pollution and so on. Those challenges are not just global; they are national, as well as being regional and subnational. In the United Kingdom devolution is a fact of life and something that I certainly welcome. Those devolution principles allow the nations that make up the United Kingdom to be able to set their own standards in a number of areas. One key area where those standards can be different and which I believe has been particularly successful is the environmental area, and there is potential in climate change as well.
The history of devolution and different decision-making within the UK in the environmental area has been very positive. There has been almost a competition, if you like, to get ahead of other nations within the UK, and that way the bar has been raised in terms of environmental legislation and what we are trying to do. In fact, the word “experimentation” has been used previously. It is important to see what works in one part of the UK, as this is sometimes copied by others. The plastic bag policy in supermarkets, cotton buds, plastic straws—all are examples of one leading and others following. Indeed, as we have heard many times, even within the EU single market, member states have been allowed to have enhanced standards and have not been challenged.
The challenge is: how do we meet the environmental and climate crises that we have and still keep our internal market? To do that, we cannot rest on the status quo. We have to move forward on all those agendas, as indeed the noble Lord, Lord Callanan, will know well, being the Government’s climate change Minister. We cannot stay where we are and have business as usual.
We therefore need to keep these positive, competitive aspects of environmental and climate change legislation within our devolution in the United Kingdom while keeping that important single market. As has been said before in this debate, no one in this Chamber is looking to restrict that single market in any way in principle. But I believe that this Bill undermines our ability to meet our environmental objectives easily and quickly.
What does the blanket—as I see it—market access principle risk here? One thing we have is offshoring. We have been very good performers in the United Kingdom on our carbon footprint, but that is because a lot of manufacturing has perhaps gone to Asia. That is not the whole story, but it is some of it.
As the Bill stands, if we have stringent rules within one part of the UK, manufacturers would just move to another part of it and effectively import into those other regions or nations. That would be extremely negative. But one key thing would happen: rather than having a “raising the bar” competition between national authorities within the UK, we would risk moving the power to the corporate sector, which is more likely to look for efficiencies or the lowest standards in order to make sure that they can remain strong within the market. That would be a very undesirable outcome of this legislation, which is not the Government’s intention. We risk, potentially, more of a commercial race to the bottom. I have nothing against industry whatever—indeed, I wish to see it promoted—but this would change the power structure within the supply chain. It is as if the legislation were applying the harshest WTO rules internally to our own internal market.
We need to have sensible derogations that can avoid these downsides and outcomes. Amendment 52, in the name of the noble Baroness, Lady Boycott, is exactly what we need for the environment and climate change agenda and for the United Kingdom to stay ahead in this area, not just globally but nationally and regionally as well. Without such derogations, other environmental legislation at a devolved level becomes almost redundant, as it cannot be enforced because goods will come from elsewhere in the United Kingdom—or else devolution will become redundant in this area because, since England is the largest part of the market, Westminster will effectively decide the rules. That is why this amendment is vital.
Baroness Boycott (CB)
My Lords, it is a great pleasure to follow the noble Lord, Lord Teverson. I thank him and the noble Baroness, Lady Jones of Moulsecoomb, for supporting this amendment. I very much agree with what the noble Lord, Lord Young of Cookham, said. I also agree with the noble Baroness, Lady McIntosh, when she said that, if this internal market Bill does not align with the Agriculture Bill, then something is wrong and we are missing a trick.
I have tabled Amendment 52, which seeks to introduce a derogation from the market access principles to allow all four nations to put in place proportionate measures to protect the environment, support the progressive improvement of environmental standards and tackle climate change. My concern is that, in the absence of an agreed common framework, we will not be able to protect existing high regulatory standards in cases where one nation wants to introduce something new and higher, in the environmental sense, for a particular good or service—although not legally prohibited from doing so, it could be disincentivised from doing so. Under the market access provisions in the Bill, goods from other parts of the UK would not have to meet those requirements if standards elsewhere were lower. Other Peers have spoken about this. It is about protecting us against a race to the bottom in setting environmental standards or measures to tackle climate change.
At Second Reading, the Parliamentary Under-Secretary of State, the noble Lord, Lord Callanan, said of the Bill:
“It will protect our common causes, such as the setting of high standards in our economy”.—[Official Report, 19/10/2020; col. 1285.]
But the Bill does not give legislative effect to these commitments. It fails to create the proper framework and fails to deliver the safeguards and assurances needed to ensure that all four nations of the UK can legislate ambitiously, progressively and effectively to protect the environment. Currently, the Bill provides for exceptions only in a limited range of circumstances, such as preventing the spread of diseases or pests. Even then, this is only under very strictly controlled conditions.
Environmental matters generally fall within devolved competence. Regulatory divergence already exists within the UK and there have been a number of examples of really innovative policies which have delivered legitimate public policy objectives—and specifically progressive environmental rules. I know that this has been mentioned before, but Wales was the first country in the UK to introduce a charge on carrier bags. It is atrocious to think that that could somehow have been denied.
Amendment 52 would allow an individual nation to refuse mutual recognition on the grounds of measures protecting the environment or tackling climate change. To give a practical example of why this is so important, there have been mounting calls to ban the sale of horticultural products that contain peat. This is obviously to protect biodiversity, but also to avoid the extraction of peat and the release of high levels of soil-based carbon. If one of our four nations’ Governments decided to ban the sale of products containing peat, this could potentially be undermined by the failure to match those efforts in other jurisdictions, where producers could continue to actively sell these products in a market where they would otherwise be banned.
My amendment would require suppliers to comply with these devolved rules where they relate to the protection of the environment or tackling climate change, meaning that even if regulation in England were to fall behind, say, that found in Wales, those supplying the Welsh market would still have to comply.
At Second Reading, the Minister, the noble Lord, Lord True, responded:
“commerce, services and professions must be enabled to operate freely across the whole United Kingdom. That is … demanded … by business”.—[Official Report, 20/10/20; col. 1426.]
However, business coalitions such as the Aldersgate Group have commented that the objectives of frictionless trade and encouraging a race to the top for environmental standards do not contradict one another. A fully functioning and innovative internal market should strive to both reduce unnecessary costs and uncertainty and protect all four nations’ right to regulate in the public interest.
Finally, protection of our environment and tackling climate change really are not an option anymore. If you listen to Christiana Figueres, who set up the Paris Agreement, you will know that we have 10 years in which to try to get ourselves to 50% of carbon emissions. That means reducing by about 7% to 8% a year. Not to do this is a complete abdication of our rights as legislators because, if we do not put policies in place in this Government and this Parliament, then we will be left pretty legless in the fight ahead.
As the noble Lord, Lord Teverson, said, we cannot do business as usual; we have to do business in a new way. We have many excellent Bills before us that can make this happen, and I commend my amendment to the House.
Baroness Noakes (Con)
My Lords, as noble Lords who have attended this Committee to date know, my role is occasionally to get up and give a minority perspective on the amendments before us. There are 20 amendments in this group and, one way or another, each of them would allow barriers to trade to be erected by one or more of the devolved nations. The effect of the amendments is to restrict the amount of trade to which the market access principles will apply and thereby reduce the extent to which barrier-free trade can take place throughout the UK’s internal market. I say to the noble Lord, Lord Anderson, that that is not an argument against devolution; it is an argument for trade and economic success, which I hope that we all want to achieve for the United Kingdom.
I will not repeat all of what I said on the earlier group, but the more that laws relating to trade in goods and services diverge between the component parts of the UK, the more likely it is that costs will rise and choice will diminish for consumers. Barriers to trade are also likely to result in lower GDP, as the impact assessment analysed, and we need all the GDP that we can get at the moment, given the impact of lockdown and similar anti-Covid measures. I am sure all those noble Lords who support and voted for devolution did not vote to become poorer through devolution.
The amendments give very considerable cover to the devolved Administrations to erect trade barriers under the guise of higher standards but, actually, on grounds of protectionism. At the very least, I predict that there will be massive scope for lawyers to argue for a very long period and to mount legal challenges. That may well be good for the fees of the legal profession—and for the noble and learned Lord, Lord Falconer of Thoroton—but the important thing I want to stress is that it will result in uncertainty for business. If there is one thing that is bad for business, it is an uncertain business trading environment.
Therefore, while I understand the desire for higher standards—and many noble Lords have spoken to this in respect of the particular varieties of relaxation that they are seeking in the Bill—at the end of the day, they can result in trade barriers. We really should be very careful not to wreck the UK’s internal market before it has even started.
Lord German (LD)
My Lords, I shall address Amendment 54 in my name. As the noble Baroness, Lady Finlay, said in moving her amendment, it harks back to debates we have had on the mysterious absence of common frameworks from the Bill. As your Lordships will know, common frameworks are a way of doing business that is supported by the CBI. The amendment would insert a new schedule into the Bill. It may look arcane, or like an obscure pub quiz question, so perhaps noble Lords would like to answer the question: what unites ozone-depleting substances and Caerphilly cheese? The answer is that the list in the schedule is the list of subjects where all four Governments in this country have agreed that legislative common frameworks are necessary. However, this is not intended as an exhaustive list. It would be possible to add to this by secondary legislation if new areas emerge that require a common framework.
I concede that it would not have been necessary to have such a schedule if the dual carriageway with the brick wall in between the two approaches that the Government are taking—this Bill and the common frameworks—were guaranteed to coincide and meet. Both approaches are progressing and have the enthusiasm of the Government behind them. This amendment would be a way of ensuring that those approaches coincided and met. The amendment would help, since it identifies common frameworks without using the name.
One of the more striking aspects of the Bill, as noble Lords and Ministers keep telling us, is that common frameworks on their own cannot guarantee the integrity of the entire UK internal market. They are sector-specific and not intended to address the totality of economic regulation. In answer to every question asked, there has been a real silence from the Government, who have failed to identify any areas where the integrity of the internal market might be threatened that are not covered by common frameworks. We had reference to the threat to the sale of barley from English farmers to Scotland, which has proved an issue already resolved by the common framework. There is also the wholly hypothetical example of a devolved Government wishing to legislate for additives to flour, which is already in one of the common frameworks on nutrition.
We therefore have to manage this problem of having two-track approaches to the internal market. The amendment proposes a way of creating that gateway between the two and ensuring that there is a link between them, so that we know that we are on the same course for a functioning internal market.
Baroness Randerson (LD) [V]
My Lords, I have added my name to Amendment 174 in this group. I wish to speak to that and other amendments that I support.
Possibly the greatest asset that we gained from our decades of EU membership was the development of and assistance on the highest standards. In consumer and environmental protection, employment practices, public health standards, animal health and in the development of social policies, we have all benefited enormously and our quality of life has been greatly enhanced. Often, we as a nation were at the forefront of the development of those EU policies. On occasion, in our own legislation, we chose to adopt even higher standards, as my noble friend Lord Teverson said earlier. Those were the days when we really were world-beating. It is therefore very disappointing that the Bill contains nothing to guarantee high standards; there is no process set out to agree even minimum standards. The amendments in this group seek to rectify this, hence it is a legitimate aim to seek higher standards or to maintain existing standards.
Across the world, the experience of capitalism reveals that unfettered markets—capitalism in the raw—without a sound framework of standards often drive down standards to the lowest common denominator. For example, in the USA, hardly a country struggling for development, market access provisions unaccompanied by agreed minimum standards have led to deregulation as a way to attract business. It is well known as a ploy.
Baroness Hayman of Ullock (Lab)
My Lords, I wish to speak in support of Amendments 35 and 58, in the name of my noble friend Lord Stevenson of Balmacara, particularly because I am concerned about the lack of standards protections. We have been assured that the Government have repeatedly stated their commitment to high standards and that this Bill does not change that commitment, but, as the noble Baroness, Lady Randerson, has just said, it does not alter the fact that there is no evidence of that commitment on the face of the Bill.
Amendment 35 would expand the legitimate aims laid out in Clause 8 to include protection of consumers, environmental standards, social and labour standards, public health and animal health. I do not intend to rerun the various concerns raised regarding devolution, but we need to ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU. Provisions in this Bill must not derail the Government’s ambition to become the first generation to leave the environment in a better state than they found it. I would like to give some examples of why that is so very important.
Since the Second World War, we have lost 97% of our meadows, 80% of our chalk grassland and more than half of our ancient woodland. The recent State of Nature report from the Royal Society for the Protection of Birds found that 41% of UK species that it studied had declined since 1970. It found that 15% were threatened with extinction and 133 species were already extinct. The Natural Capital Committee has concluded that only half of our habitats currently meet minimum quality targets, with bees, butterflies, birds and many plant species continuing to decline. The BMA has called for a commitment to non-regression on all current UK-wide and devolved nation health, well-being, animal welfare and environmental standards to be written into the Bill.
The EU has been a leader in environmental legislation over the last 40 years, and the UK has played a very important part. Now, our domestic legislation must ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU, and we must not risk losing any of those key protections or allow for any regression. Amendment 35 would help to ensure that those minimum standards were met.
I turn to animal welfare and food standards. UK farmers and producers are rightly proud of their high agriculture and animal welfare standards compared with those in many other parts of the world. They have been very clear that they do not want those standards lowered and are calling on the Government not to allow low-quality products to come into the UK.
It is also worth remembering that, when we reach the end of the transition period, the UK will find itself outside the European Food Safety Authority and therefore outside the Panel on Animal Health and Welfare. Farm animal welfare standards post Brexit may well be threatened as UK farmers struggle to compete against cheap imported food from countries that produce to lower standards. UK farmers could become uncompetitive, and welfare standards could then come under pressure.
When I was in the other place working on the Agriculture Bill, I read your Lordships’ committee report Brexit: Agriculture and I am still hugely concerned about one of its conclusions. It said:
“It may be hard to reconcile the Government’s wish for the UK to become a global leader in free trade with its desire to maintain high quality standards for agri-food products within the UK”.
The legislation that is being passed in the run-up to the end of the Brexit transition period, including this Bill, will have huge impacts on the UK’s standards of animal health and welfare, food safety and environmental protection. Those ramifications could be felt for years, so we have to get it right. Farmers have told me that they are particularly concerned about transparency of provenance and traceability.
The United States is often mentioned in the debate about food standards, with chlorinated washed chicken and the use of injected growth hormones in cattle demonstrating the difference in standards between our countries. Both give rise to significant welfare concerns for the animals involved; both are banned by the EU and, until this point, have been banned by the UK. But we also know that a priority for the UK Government is securing a free trade agreement with the USA. This is also about food safety: the United States has 10 times more food poisonings than Europe, so food safety could be compromised. We could also end up with higher pesticide residues in food, if protections are negotiated away in trade deals.
Compassion in World Farming has pointed out that we should be concerned not just about the USA. It has looked at a potential deal with Australia, where hormone-treated beef and battery eggs are still common, and believes that, if concessions are made there, they could form a precedent for other talks and trade deals.
So we need to redefine unsafe food in the Bill, which is where Amendment 58 comes into play. That is why I am supporting it, recognising the impact that lower food standards can have on our safety and health. I ask the Minister to listen carefully to these arguments.
Baroness Altmann (Con) [V]
My Lords, I add my support in particular to Amendment 52, in the names of the noble Baronesses, Lady Boycott and Lady Jones, and the noble Lord, Lord Teverson. It deals specifically with environmental standards and climate protections, and has already been well explained. As so many other noble Lords have said, this amendment introduces a wider set of derogations to allow any one of our four nations to refuse mutual recognition if it believes it is justified by the legitimate public policy objective to protect the environment and tackle climate change. This is really important, to ensure that innovation is not stifled and that there is no race to the bottom, as has already been well explained.
I also support many other amendments in this group, particularly Amendments 39A, 47A and 52A, in the name of my noble friend Lord Young of Cookham, proposing similar protections for public health, safety and security. I also support my noble friend Lady McIntosh of Pickering and other noble Lords who have spoken on the protections required in the agriculture sector.
I recognise the concerns raised by my noble friend Lady Noakes that lack of uniformity could increase costs to consumers and reduce GDP. However, I do not believe that cheap goods are the be-all and end-all. Ethical production standards, safety, health concerns and environmental protections may all add costs in the short term. However, better quality and higher standards can benefit consumers and the long-term sustainability of the economy. Encouraging innovation in environmental and climate protections can and perhaps should be led by individual countries where they have specific expertise, rather than having a centralised uniform approach imposed that could reduce standards in the long term and leave us with a cheaper but less safe future.
I hope that my noble friend can confirm that the Government are in favour of building consensus and agreements across the UK, with common frameworks, while also respecting the rights of individual countries to have different policies in areas of particular importance.
Lord Whitty (Lab) [V]
My Lords, like the noble Baroness, Lady Altmann, I originally put my name down to speak on this group because I wanted to give strong support to Amendment 52 in the name of the noble Baroness, Lady Boycott. She, the noble Lord, Lord Teverson, and the noble Baroness, Lady Altmann, have made a good case; after all, climate change and the other environmental challenges are bigger issues than Brexit, Covid or even the break-up of the United Kingdom. We need to ensure that nothing we do in this Bill or in parallel Bills diminishes our commitment to meeting our international obligations under the Paris Agreement or our national obligations under the Committee on Climate Change’s proposals on carbon budgets and the commitments we make as a Government and as a Parliament to meet our targets on that front. Amendment 52 would help deliver that.
During this afternoon—I was not here on the first day of Committee—I have also become increasingly concerned that the Bill is, as the noble Lord, Lord German, called it, twin-tracking different aspects of government policy on the devolution settlements and the way they are going. The two do not meet. The principal commitment here is market access. There are government commitments to standards in the Agriculture Bill and elsewhere, and there is the whole process of common frameworks, many of which are still in very preliminary form.
With regard to the broad public debate, the Government have managed a great diversionary tactic by banging Part 5 into the Bill and causing public and international outrage. However, there are some fairly profound issues in the lack of commonality or melding in the approaches on market access, common frameworks and the long-term implications for our devolution settlement. They have not been resolved today in the subjects we have discussed. At Second Reading, I expressed some concern that the Bill was not clear in relation to state aid and the internal market, or the role of the proposed office for the internal market.
A lot of this needs to be pulled together before we complete the Bill. I have a proposition. We have as a House established a short-term Select Committee looking at common frameworks. That has called for evidence; the deadline is 30 November. Would it not be sensible for the Government and the usual channels to talk to it? I am afraid I have not consulted my noble friend Lady Andrews, who chairs that committee, on this; it occurred to me only this afternoon. It is looking at the role of common frameworks, but in this Bill, which the Government are trying to get through as fast as possible, we are doing something which cuts across some of the commitments on them. Would it not be sensible to ask that Select Committee to look at the relationship between the Bill and common frameworks before we move to Report, or, if that is not possible, at least between Report and Third Reading? The process we normally adopt will not resolve these conundrums in the Bill; we need to find a novel way of dealing with them, and we have a solution at our fingertips with the Select Committee, which has already begun its work. I ask the Government and the usual channels to look at that proposition.
Lord Judd (Lab) [V]
My Lords, what a powerful team at the end of this very interesting debate. It was great to hear the noble Baroness, Lady Randerson, putting her case on standards so strongly; she is absolutely right. I was also delighted to hear my good neighbour and noble friend Lady Hayman—we live in the same ward in the west of Cumbria—speaking with all her authority. She will bring a very important contribution to the considerations of this House. My respect for the noble Baroness, Lady Altmann, is continuing and constant, and noble Lords hear it again tonight. What my noble friend Lord Whitty was saying about the useful contribution the Select Committee could make in getting things right should be taken very seriously. We get awfully trapped in patterns of organisation for our affairs and debates. Sometimes we do not look at our assets and the contributions they can make.
I strongly support my noble friend Lord Stevenson’s amendment and I am impressed and struck by the importance of Amendments 52, 53 and 54. They all deal with the essential quality of our existence and the action that is necessary to ensure that we have some sort of quality of existence, and ensuring that we are in a strong position to ameliorate the impact of climate change. These are absolutely fundamental issues for our future.
I sometimes look back on a long time in Parliament and politics and think that we sometimes want to fit things into organisational structures. Of course, the market is crucial and what we are debating is a reform of the market and what we are going to do, but the market is not an end in itself. We should constantly be restating the challenge: in the environment, in conditions of work and workers’ rights and employment conditions, of animal welfare, and of good husbandry of our land and care of it. There is also the whole issue of understanding that this is not just a choice of what we might do; we are dependent upon getting it right. From that standpoint, these amendments are a very important part of our proceedings, and I congratulate all those who have been involved in proposing them.
Lord Fox (LD)
My Lords, my name is on Amendments 33, 34, 50, 55, 56, 60, 80 and 95 but, to be honest, all these amendments are trying to cover similar ground in slightly different ways. I suggest that they are trying to meet the gap that the noble Lord, Lord Anderson, in his exceptional speech, characterised —in my words, not his—as the paucity of ambition that lies within the Bill. He also effectively highlighted some of the inconsistencies that crop up throughout it.
Amendment 50 seeks to add a range of additional conditions around the aim of legislation, and Amendment 51 does much the same. The noble Lords, Lord Young and Lord Faulkner, talked specifically about public health, animal welfare came up with the noble Baroness, Lady Hayman, and my noble friend Lord Teverson and the noble Baroness, Lady Boycott, and other noble Lords, spoke very powerfully about climate change.
The last two speakers, and in particular the noble Lord, Lord Whitty, in a way characterised where I had got to; the penny had dropped. I will use slightly different language. I am slow; after 15 hours of Committee I think I am getting there. The problem is that Her Majesty’s Government may hate devolution, or they may want to grab hold of the money and spend it in Scotland—those might be by-products of the Bill. The fundamental philosophy and thinking from the Government’s position, however, is that the only way to have to have a properly ordered internal market is, essentially, for everything to be the same. With non-discrimination and mutual recognition, in the end that is what you will get.
Your Lordships’ House, with the exception of the noble Baroness, Lady Noakes— who very ably put once again the minority view, which is actually the government view—has taken a diverse approach and believes that there can be an ordered internal market that is not the same, but diverse. That is what the common frameworks are there to do. A number of noble Lords raised my noble friend Lord German’s twin highways and questioned how they will ever come together. The answer is that they do not because the Bill rides over the diversity that the common frameworks will deliver. Why are the two things happening together? One can speculate. One started three years ago with a different Government who probably had a different philosophy, and killing it is probably harder than letting it die.
I know that the Minister has been assailed with examples. He has had chlorinated chicken, whisky, all sorts of things—he even brought in hypothetical biscuits. I will give him an example that is the other way round. It is of where the devolved authorities could do things to England. England, very wisely, has banned the household burning of coal. Wales and Scotland have not. If I lived in Herefordshire all the time, I could nip over the border to Harry Tuffins, which is just the other side of Offa’s Dyke, buy a bag of coal, take it home and burn it on my fire in Leominster. So far, so good.
Within the terms of the Bill, I could—[Interruption.] Minister, you will have your chance. If I were heckling you, I suspect I would be told to sit down; I look forward to the debate. If I was a businessperson living in Leominster, I could go to Wales and import that coal. If the Minister tried to stop me, I would go to law and use this Bill to assert my right to sell that coal in England. Whether or not I won we would see, but all those things will be happening all the time. Because of the non-legislative common framework that it is covered by, where does it sit in law beside the iron-clad rules of non-discrimination and mutual recognition?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been a very good and wide-ranging debate—one of the best we have had so far on the Bill. We have heard several notable speeches and some new voices. I look forward to reading their speeches in Hansard and learning from them. The main focus has been the necessary tension between the wish to have unfettered frictionless trade in our internal market and the wish to preserve our existing high standards. This was well expressed by my noble friend Lady Hayman.
My amendments cover this ground. Amendment 35, which I am delighted is also signed by the noble Lord, Lord Anderson of Ipswich, and the noble Baroness, Lady Jones of Moulsecoomb, tries to expand the legitimate aims to include some of the standards to which I have already referred. Amendment 51 expands that and provides for a slightly wider context within which legislative aims are discussed and slightly expanded. It also comes back to the basics: standards of activity within which trading takes place and where we have rightly set high standards that are enjoyed by our consumers.
Amendment 57 deals with conditions excluded by market principles and amends the schedule only as consequential to earlier amendments, I think. Amendment 58 deals with an issue raised by the noble Lord, Lord Anderson of Ipswich, in his very good speech in which he quoted Peter Oliver, who pointed out that some of the restraints that are allowed within the Bill are very limited indeed. Our amendment tries to expand that to make sure that it is not restricted just to basic considerations.
Lord Callanan (Con)
I thank everyone who has spoken in what has been another excellent debate. Most of the points have been valid. I will disagree with many of them but noble Lords made their points well.
Before I start, the noble Baroness, Lady Jones of Moulsecoomb, knows that I have tremendous respect for her: we do not often agree, but I have tremendous respect for her views. However, talking about an “extremist ideology” and “hypercapitalism”—whatever hypercapitalism is—does not aid her cause; I would prefer that noble Lords address the issues in a better and more constructive manner.
The scope of the market access principles and the areas of regulation included in Schedule 1 have been carefully designed to avoid unnecessary barriers within the UK’s internal market while ensuring that the devolved Administrations and the UK Government can act to preserve the proper functioning of certain policy areas. This is where I part company with the noble Lord, Lord Fox, because when he talks about the principle of uniformity in an internal market, that is, of course, the EU system, and I do not recall the Liberal Democrats having much of a problem with that in years past. The system of mutual recognition does allow diversity, but while not discriminating against other countries’ goods. The principle of mutual recognition and market access principles allow diversity of policy. The EU system, of which the Liberal Democrats were previously particularly fond—as far as I am concerned—does not because you have common standards and common principles. I understand the argument about the so-called race to the bottom, et cetera, but that is the system that the Liberal Democrats happily signed up to and defended loyally for many years—indeed, it is still their policy that we should rejoin the EU and assume a further application of common principles. I do not agree with it, but it is a view.
I am listening carefully to what many noble Lords are saying this evening, but it is important, so I will take the time to explain why we have taken the approach we have to the application of the market access principles and the exclusions from these principles. Amendments 35, 36, 37, 39A and 95 seek to alter the list of legitimate aims for the disapplication of indirect discrimination against goods and services. The current list of legitimate aims for indirect discrimination against goods contains
“the protection of the life or health of humans, animals or plants”,
which will, of course, align in many cases with the protection of the environment. It also contains
“the protection of public safety or security.”
I agree with my noble friend Lady Noakes that expanding the list of legitimate aims beyond the current list would increase the grounds on which goods from one part of the UK could face discrimination in another—maybe in small, incremental steps, but with each addition steadily eroding the benefits that we all enjoy of the UK internal market. Expanding the list would also make discrimination easier to create and implement within the internal market, which would contradict our policy objectives.
I am of course aware of the comparisons that have been made to the EU system and its list of legitimate aims. The UKIM Bill and non-discrimination principle have been designed to take account of the UK’s unique circumstances, reflecting that our market consists of four highly integrated, highly aligned parts. Conversely, EU provisions deal with 27 countries, all with diverse histories, cultures and competing market priorities. It is therefore right that the list of legitimate aims in the Bill is more narrowly focused. Should a need to amend the list be identified, the Bill allows for the Secretary of State to add, vary or remove additional legitimate aims.
Let me deal with the points raised about legitimate aims by my noble friend Lord Young and the noble Lord, Lord Faulkner, as well as, on a number of occasions, the noble Lord, Lord Purvis, with regard to minimum alcohol unit pricing. I reiterate that policies such as minimum alcohol unit pricing and other innovative pricing policies are not covered by mutual recognition, unless they result in disguised prohibition. It would also be possible to enforce them regardless of what is on the list of legitimate aims or indirectly discriminatory measures, as long as they are non-discriminatory.
The noble Baroness, Lady Randerson, mentioned air guns. All the existing requirements will be out of scope—as I have said, the Bill is forward looking—unless they are amended significantly. Other than that, the air gun restrictions would have to create a significant adverse market effect for indirect discrimination to apply. That is before any consideration of whether that meets a legitimate aim. On her point about unfettered access for Northern Ireland goods, this is an unequivocal commitment from the Government precisely to take account of the possibility of divergence. It precludes qualifying Northern Ireland goods from being subject to new checks and controls and it protects their access to the whole of the UK market, no matter what the legislative regime is in Great Britain.
Amendment 39A is a more nuanced version of Amendment 38. It aims to limit the Secretary of State’s regulation-making powers to only add or broaden a legitimate aim—the Secretary of State would not be able to vary or remove a legitimate aim. Again, I appreciate the nuance of the amendment, but I must emphasise the importance, as we see it, of ensuring that the Government have the ability to adapt and improve the list of legitimate aims to address any challenges that arise—for example, during the implementation phase. We will of course listen attentively to businesses and to consumer stakeholders and may employ the powers that the amendment seeks to remove to ensure the UK internal market’s continued smooth functioning. To clarify another matter about which some have asked, Her Majesty’s Government and the devolved Administrations are not constrained by the rules against indirect discrimination when they need to take reasonable action to protect the life or health of humans, animals or plants, or to protect public safety or security.
Amendment 95 has a dual purpose. It seeks to remove the list of legitimate aims for indirect discrimination against services in Clause 20 and, as such, it would also remove the Secretary of State’s ability to amend that list. The list of legitimate aims covers a limited range of necessary objectives for regulators, which would justify a requirement that may have a discriminatory effect. The legitimate aims are the protection of the life or health of humans, animals or plants, the protection of public safety or security and the efficient administration of justice.
The inclusion of the list of legitimate aims is in our view vital, as it clarifies whether a requirement should be considered indirectly discriminatory and thus whether it is justified to put an affected service provider at a disadvantage compared to a similar provider from another part of the United Kingdom. To allow the flexibility to adapt to potential changes in circumstance—for example, in relation to future types of services regulation—a power for the Secretary of State to add, vary or remove additional legitimate aims is crucial and has therefore been included in the Bill.
I turn now to Amendments 50, 51, 52, 52A and 56, which seek to add in new clauses before and after Clause 10 of the Bill. The proposed new clauses would introduce a new set of conditions that would need to be met in order for an exclusion to be applied. Exclusions have been tightly defined to areas where the market access principles would adversely affect, or prevent the proper functioning of, the UK internal market. For example, we have made it possible for authorities to continue to consider local environmental conditions when authorising a chemical for use in a particular part of the UK.
Turning to Amendment 52, the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to. The UK leads the world in environmental standards and tackling climate change. We were the first major economy in the world to set a legally binding target to achieve net-zero greenhouse gas emissions from across the economy by 2050. The EU is only just now catching up with us. We have also been quick to take action against single-use plastic, with our ban on the supply of plastic straws, drinks stirrers and cotton buds having come into force on 1 October this year.
Moving on to Amendment 52A, broadening exclusions from market access principles could result in significant challenges for the UK’s internal market. These are intentionally narrowly drafted to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice. These amendments also do not take into consideration the impact any exclusions might have on unfettered access and Northern Ireland’s place in the UK’s internal market.
Amendments 33 and 34 are both consequential on Amendment 50, which I addressed above. Amendments 55 and 56 are consequential on Amendment 50 as well. Taken together, these amendments would replace the existing schedule of exclusions with a significantly wider exclusion process. The proposed process is not sufficiently targeted and would increase the potential for trade barriers to emerge. For these reasons, I ask noble Lords not to press their amendments.
Amendment 47A limits the Secretary of State’s regulation-making powers to only add to or broaden the exclusions in Schedule 1. The Secretary of State would not be able to vary the meaning of the exclusions in Schedule 1, nor to remove the exclusions entirely under the amendment. This might make it impossible for the Government to respond to business and wider stakeholder feedback and to act rapidly to adjust the list of exclusions if implementation shows the need for a review. While we are committed to retaining this power in the Bill, we are also fully committed to ensuring that the use of this power is subject to effective oversight and scrutiny.
First, any use of the power would, of course, require an affirmative regulation to be made in Parliament. This would ensure that MPs from all parts of the UK would be able to scrutinise and vote on any changes, along with Members of this House. Secondly, in line with normal arrangements for secondary legislation covering devolved matters, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This is a system that has worked well for 20 years and continues to do so. I hope, therefore, that noble Lords will agree that it is not appropriate for us to accept that amendment.
Turning to Amendment 54, the proposed new schedule is related to the new clause in Amendment 6, to which I responded on Monday. These amendments would, in combination, prevent the market access principles from applying in time at the end of the transition period. The lengthy process they put in place before the principles can apply would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Furthermore, they would limit the areas that the market access principles could apply to. This would again unduly constrain the scope of the principles and fail to fully protect the internal market.
Amendment 57 removes the requirement that a measure meets all the conditions set out in paragraph 2 of Schedule 1 to be excluded from the mutual recognition principle. The conditions in paragraph 2 of Schedule 1 relate to the exclusion of certain food and feed measures from the mutual recognition principle, where this is required to address a serious threat to the health of humans or animals. A measure will be excluded from the mutual recognition principle if all the conditions in paragraph 2 are met. These conditions were designed to be cumulative and work as a whole, and in our view would not be effective individually. The fourth condition, for example, relates to the responsible Administration providing a risk assessment of the threat addressed by the measure in question, which is essential in situations relating to protecting human, animal and plant health, but is not a stand-alone condition for any exclusion. As this amendment weakens the ability of the Bill to ensure that we can address a serious threat to the health of humans or animals, I hope that noble Lords will agree not to move it.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
I sometimes wonder whether the Minister sustains himself through the long periods of Committee by imagining himself throwing off the yoke of hideous EU conformity. In fact, nothing could be further from the truth. How does the noble Lord explain all the examples of diversity across the four nations of the United Kingdom if there is this conformity? How can his comment that the market has worked very well for 20 years stand up, if this conformity was so bad? Indeed, the 2020 assessment by the Government of the frameworks says that they will maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as afforded by the current EU rules. The Government clearly recognise the flexibility in the current EU rules.
I commend the Minister for getting through that lengthy statement without once mentioning the words “common frameworks”. There is still no explanation of how the common frameworks inform the Government’s view today of the internal market. Will he please answer that question?
Lord Callanan (Con)
I thought my comments might provoke a reaction from the noble Lord. Of course, there are EU common standards in many areas as well as EU minimum standards in many areas, and it is possible for Administrations to go further than those minimum standards in many areas, as he will know from his knowledge of EU affairs.
I have said a number of times that we are committed to the work on frameworks and will take it forward, but we were looking for frameworks in something like 38 different areas. So far, we have managed to agree frameworks in two of them. In terms of the frameworks that have been approved by the ministerial committee, I think those numbers are correct; I will write to the noble Lord if they are not. We are committed to taking forward that work on common frameworks, but we believe that this legislation provides an underpinning to that work. We do not believe that they are mutually exclusive; indeed, we think that they complement each other.
Baroness Finlay of Llandaff (CB) [V]
My Lords, this has been an extraordinary debate. At this late hour I cannot possibly do credit to all the amazing speeches that we have had, but I want to highlight a few points. The noble Lord, Lord Anderson, set the scene superbly with enormous clarity and told us very clearly where the warning signs were. My noble and learned friend Lord Hope of Craighead, reinforced by the noble Baroness, Lady McIntosh of Pickering, pointed out that the meaning of words is what this is all about.
I am surprised at the Minister reinforcing to us that the environment and climate change were a manifesto commitment and then rejecting the really powerful voices from the noble Baronesses, Lady Hayman, Lady Boycott, Lady Bennett, Lady Jones and Lady Altmann, and the noble Lord, Lord Teverson, who were all talking about ways of protecting the environment and future biodiversity. It almost felt as if their amendments would solve the Government’s problem of how to meet their manifesto commitment.
As for public health and welfare, I do not believe that people in this country vote for worse health and therefore shorter lives; they do not expect their Government not to look out for their health, neither do they want to live in a worsening biodiversity that will leave an ecological desert for the next generation. The amendments that we have considered this evening are incredibly important. The noble Lords, Lord Young of Cookham and Lord Faulkner of Worcester, laid out clearly the importance of public health overall. As the noble Lord, Lord German, and the noble Baroness, Lady Randerson, pointed out very clearly, there are enormous benefits in reinforcing the current system and not trying to override it. I am surprised that in his summing up the Minister did not pick up on the suggestion of the noble Lord, Lord Whitty, of going to the committee of the noble Baroness, Lady Randerson, and talking to it about what is going forward.
Although I will obviously withdraw the amendment, I am convinced that we will return to this matter in force on Report. I am also convinced that everyone who has spoken will need to pool resources because we heard some worrying things in the Minister’s response, which blanket-rejected the fact that we are trying to solve the problem, not create difficulties. We all want the United Kingdom to prosper and do well. This is not the time to allow it to drop to the lowest common denominator, when people are striving for higher standards and to make Britain a place of excellence, not low standards. With that, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 66. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in the group to a Division should make that clear in the debate.
Clause 14: Interpretation of references to “sale” in Part 1
Amendment 66
“(4) “Sale” has the meaning given in section 61 of the Sale of Goods Act 1979.”Member’s explanatory statement
This amendment brings Clause 14 into conformity with the existing law of sale.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful for this opportunity to speak also to Amendment 67. I am grateful to the Law Society for its help, as with other amendments, including Amendment 37, in preparing and drafting them.
The amendment looks at bringing Clause 14 into conformity with the existing law of sale. The reason for this is that the Sale of Goods Act 1979 defines a contract of sale of goods as,
“a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.”
It further defines an “agreement to sell” as a contract of sale whereby,
“the transfer of the property in the goods is to take place at a future time or subject to some condition later to be fulfilled”.
The introduction of a new definition of “sale” as set out in the Bill, without reference to the Sale of Goods Act 1979, could produce confusion and lack of clarity among traders and consumers alike. I should be grateful if the Minister could explain the reasons for the Government departing from the definitions of “sale” in that Act to avoid any confusion.
Similarly, Amendment 67 would leave out Clause 14(6)(c). This has the effect that I have just set out. Clause 14(6) applies to other means of transferring possession or property unrelated to sale, including barter or exchange, leasing or hiring, and gift. I would be grateful if the Minister could explain why the Government are seeking to extend the Bill to these transactions, in particular to gifts, which transfer ownership of the item donated without payment or consideration. With those few remarks, I would be grateful to hear from my noble friend why these changes are being sought in the Bill. I beg to move.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
The noble Lord, Lord Liddle, has withdrawn, so I call the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the noble Baroness, Lady McIntosh of Pickering, for putting down this question. The Law Society of Scotland makes a valid point about why there would be a new, and potentially competing, definition of sales between this legislation and the Sale of Goods Act. I will just ask two supplementary questions. The first is a genuine probing question about the Government’s view. Given that many sales are conducted online now—and probably the vast majority in the coming years—what is the Government’s view, with regard to this legislation, on the location where an online sale takes place and how that is covered by the definition?
The example given by my noble friend Lord Fox was about phasing in the banning of coal in England, but not yet in Wales or Scotland. It was a genuine question, and it was a shame that the noble Lord, Lord Callanan, did not have a chance to answer. On a reading of this legislation, someone in England who is banned from purchasing coal for use in their household in England would, under the definition of “sale” in Clause 13, be able to buy household coal from a Welsh or Scottish coal merchant, at a local or online sale, who would then be able to deliver. It would be good if that could be clarified, even if the Minister needs to write to us about it. It is a genuine issue to highlight.
My second question links to this amendment more directly. The noble Baroness, Lady McIntosh of Pickering, and other noble Lords who have Scottish legal qualifications will be familiar with this. I see the noble and learned Lord, Lord Falconer, on the Opposition Front Bench. Sales in Scotland often have a cut-and-paste element, stating that the law of contract of England applies. Of course, it does not in Scotland. That tends to be viewed as not having effect, and that the cut and paste is not accurate, as contract law is different north of the border. When it comes to the definition of sales through a contract, if the sale of an imported good is conducted within Scotland, is it considered local or not? If that is the case, does the contract law of Scotland apply under this legislation or is the default the law of contract for England? If the latter, that is problematic for transactions carried out north of the border.
Lord Falconer of Thoroton (Lab)
I am obliged to the noble Baroness, Lady McIntosh of Pickering, for raising these points. There is a raft of unanswered questions here. It is late at night, so I will try to focus on only the most important. Am I right in assuming that the market access principles, recognition and discrimination, apply to the rental and gifting of goods? If they apply to the rental of goods, what is the policy purpose? What is the purpose of applying them to the gifting of goods and what does it mean in practice? For example, does it apply to statutory requirements for the provision of food by food suppliers that are subject to statutory requirements?
The second head of issues concerns the position of public bodies engaged in commerce. I understand, but only from the Explanatory Notes, that the supplying of drugs by the NHS, even though it does so in a commercial context from time to time, is not covered by the Bill. Is this right? I have particularly in mind Clause 14(2), which says:
“‘Sale’ does not include a sale which … is made in the course of a business but only for the purpose of performing a function of a public nature.”
I read in the Explanatory Notes that that means the NHS supplying drugs. If that is right, what does the completely impenetrable Clause 14(3)(b) mean when it says:
“Subsection (2)(b) does not exclude a sale which is … not made for the purpose of performing a function of a public nature (other than a function relating to the carrying on of commercial activities)”?
Can the Minister explain this to the House? It matters quite considerably because I suspect it will cover a great deal of commercial activity performed by public bodies.
Thirdly, and separately, what is the position in relation to the goods that are made partly in one part of the United Kingdom and partly in another—for example, cars on an assembly line that crosses borders, or planes or high-tech equipment where parts from elsewhere come into it? As a result of Clause 15(3) and (4), is there a separate application to each of the individual components or does one look only at the completed goods?
Lastly, and this is perhaps the most significant, how do the Government envisage that this will operate? My understanding of Clause 6, on the non-discrimination principle, is that where a statutory or regulatory requirement in one part of the country discriminates indirectly, making the sale of those goods disadvantageous in another part of the United Kingdom, that disadvantageous provision can be supported only if it has one of the legitimate aims identified in Clause 8(6).
Let us take minimum alcohol pricing in Scotland. This is a relevant requirement which indiscriminately discriminates against incoming goods on the basis that alcohol brought into Scotland from England by a supplier is the subject of a disadvantage as defined in Clause 8(2); namely, minimum pricing makes it less attractive because the goods are more expensive to buy. As I understand it, this can be justified only if that minimum pricing statutory requirement has one of the following aims:
“the protection of the life or health of humans, animals or plants”
or
“the protection of public safety or security”.
Am I right in understanding that if, for example, a large supplier of alcohol from England into Scotland wished to challenge minimum alcohol pricing, he could do so by taking his buyer to court? There would then be a private law action in the courts of either Scotland or England—could the Minister tell me which it would be, assuming that the minimum alcohol pricing was in Scotland and the supplier was in England?—and the courts would have to decide whether or not minimum alcohol pricing was a regulation that had a legitimate aim.
The consequence of this Act—which is quite tricky to understand and is perhaps unthought-out—is that we in Parliament are handing over to the courts the determination of policies such as minimum alcohol pricing. That seems at the moment to be the consequence of the way that the Bill is drafted. I cannot believe that that is what any sensible Government would wish. Could the Minister please explain how Clause 8 works? I hope she can explain why my conclusions on the basis of Clause 8 are wrong—I really hope they are.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank noble Lords for their contributions to this short debate. There were a lot of questions in there, some of which I will just have to write to noble Lords about because my briefing does not cover the whole gamut of what was asked and I would rather give a full answer.
Amendments 66 and 67 are relatively technical amendments relating to the definitions of “sale” in the Bill. I am willing to provide further details on this issue and discuss any concerns that my noble friend has. Amendment 66 would narrow the definition of “sale” in the Bill. It would narrow the types of supply-related activities that a trader could carry out and benefit from the market access principles. It would therefore reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.
The United Kingdom Internal Market Bill is intended to provide a structural underpinning and additional protections to the status quo of intra-UK trade, ensuring certainty for businesses and investors in the form of a safety net of regulatory coherence. We should not cut holes in the safety net. The definition of “sale” that we have will ensure that businesses can continue to trade in a frictionless way, no matter how they are supplying their goods. It also seeks to align broadly with the scope of the “placing on the market” concept that is central to our existing goods regulation.
I say to my noble friend Lady McIntosh that the Sale of Goods Act 1979 was a very UK-specific way of defining a sale. The EU style of definition that has been brought into our legislation is much broader, and there is a need to ensure that the same principles align across the whole legislative piece. “Placing on the market” is therefore included in this as a concept but not in the Sale of Goods Act. In short, the Government cannot support this amendment, and I ask my noble friend to withdraw it.
Amendment 67 would exclude the supply of goods free of charge from the market access principles. It would include the rental of goods, as the noble Lord, Lord Purvis, pointed out. That would lead to the strange outcome that a good could be lawfully sold under the mutual recognition principle in a part of the UK for only a penny but could not be supplied there under that principle free of charge. This would affect a range of items such as commercial samples, marketing merchandise or introductory offers, and would reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.
I was asked a question by the noble Lord, Lord Purvis, when we were talking about coal. I think the distinction my noble friend was trying to make was between a ban on the sale of coal and a ban on its use. As in his example, you could legally buy it in Wales, but you could not then legally use it in England just because you bought it over the border due to the difference in rules. For these reasons, I ask my noble friend not to move Amendment 67.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
I am grateful for how the Minister responded. I think that the last point she made was really important. The Government have been talking about restrictions on the ability of the devolved Administrations to sell, yet on the point that my noble friend Lord Fox made—that the Government for England have banned not the use but the sale of household coal—the Minister said that it would be possible to continue to provide household coal in England through a Welsh or online retailer. It is quite extraordinary that the undermining of public policy along those lines could be operated, but the Government seem to be perfectly content about that. However, the transparency on that, at least, has been helpful.
Baroness Bloomfield of Hinton Waldrist (Con)
I remember the noble Lord asking that question earlier in the debate. I am more than happy to write to him on that and on the other issues that I have not been able to cover in my response.
Lord Falconer of Thoroton (Lab)
I am not complaining, but the Minister did not try to answer any of my questions, so I would like a comprehensive response.
I am really interested in whether the Government envisage that in private law actions the courts will be resolving whether regulations that are discriminatory on the face of it for public purposes, as defined in the Bill, are valid—that is, whether they are for a legitimate aim. If they are, then the consequence is that Parliament is subcontracting decisions on these policy issues to the courts. I am not asking the Minister to deal with the other issues, but if she could deal with that one now, I would be grateful. If she cannot, because the answer is not yet known or has not been worked out, I would be grateful if she could indicate that. This issue seems to be absolutely key to the question of certainty for business. If where we come out at the end of the Bill is the courts system deciding on the legitimacy of a whole range of regulations, I am sure that that would not be what the Government would have wished. That is why the common frameworks process looks so much more attractive.
Baroness Bloomfield of Hinton Waldrist (Con)
Having looked at that question, I would rather write to the noble and learned Lord giving a full answer—but I will do so very speedily, before we come to the next stage.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to have had this little debate. I am particularly grateful to the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Falconer, for identifying even more issues than I and the Law Society of Scotland had done.
I thank my noble friend Lady Bloomfield for her answers, as far as they went, but, bearing in mind in particular the way that procedure operates in this place as opposed to the other place, it is extremely important that we have a very full letter. Perhaps she could write to the three of us who have contributed, as well as putting a copy of her letter in the Library, before we get anywhere close to the next stage.
I would like to, and still do not, understand why we are bringing in a new definition of “sale” that has a different meaning from that in the Sale of Goods Act 1979. I do not know whether my noble friend is saying that we are widening the definition to include what is generally understood in EU law, but I do not recognise any of this from what is before us in the Bill, so I would be grateful if my noble friend could write to me and say what, precisely, is the legal basis for widening and changing the definition in the way that the Government have in that regard.
I am grateful to the noble Lord, Lord Purvis, for the definitions that he gave and the illustrations that he posted as being a particular problem north of the border. I am also grateful to the noble and learned Lord, Lord Falconer of Thoroton, because I think this is absolutely vital: none of us here this evening wants to put up barriers to trade between the four nations of the United Kingdom. However, it is absolutely essential that we have clarity on the face of the Bill for the reasons that the noble and learned Lord, Lord Falconer of Thoroton, has given: we do not wish to have to resort to private-law actions before the courts—that, surely, is not acceptable. I quite understand that the Government have had to bring this Bill forward in something of a hurry, but I am here this evening to help them identify these issues.
Certainly, I am now even more confused as to why Clause 14(6)(c) has been introduced, particularly as regards the noble and learned Lord, Lord Falconer of Thoroton, referring to Clause 8(6) in this regard. However, rather than delay proceedings this evening, I will say that it would be extremely helpful to have a written understanding from my noble friend Lady Bloomfield as to why we are in this position this evening. With those remarks, I beg leave to withdraw Amendment 66 at this stage.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
We now come to the group beginning with Amendment 68. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Amendment 68
“Purpose of Part 2
This Part promotes the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”
Baroness Hayter of Kentish Town (Lab)
My Lords, I rise to move Amendment 68 but also to speak to Amendments 89, 96 and 102 in my name. I will take Amendments 68 and 96 together. As we discussed on Monday, these are to ensure that, as we go through this process of ensuring a working single market across the UK, we have consumers—in whose interest, after all, public policy needs to act—at the forefront of our minds.
Amendment 68 is particularly important. Noble Lords may recall that, at the start of Part 1, the very first clause outlines the “Purpose of Part 1”. I may have wanted to expand this a little, but at least a purpose is there. As we turn to Part 2, on “UK market access” as it applies to services, it simply says that it will govern the regulation of service providers in the UK, but no objective is set for why this is done.
If we look at the regulation of the financial services sector, for example, we see that clear objectives for their work are set down in the appropriate legislation. It would be good to have a similar set of aims here. My amendment, unsurprisingly, would set the purpose as promoting
“the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”
Other colleagues would add other things, and I am sure the noble Baroness, Lady Noakes, if she was in her place, would also prefer a different focus—although I hope that she would recognise that it should still have an eye on consumers. Surely, however, there has to be a purpose for this regulation.
As we have found with the legal profession under the Legal Services Act, for example, or with financial services under the various FiSMA Acts, intervention was needed because uninhibited competition in a market where consumers often cannot shop around or judge the long-term outcome of services—particularly financial services—necessitates some regulatory protections. If they buy a pension scheme, they cannot tell the long-term outcome, which means as a consumer they are very vulnerable. It is the same with legal services; you have no idea if your divorce settlement was good or bad until many years later. Very often there is an intervention for that purpose, but it is clear why the intervention is happening and what its purposes are. We need a similar thing here. Incidentally, given that such interventions often level the playing field, they have not been shown to restrict the growth of the relevant sector, so one does not need to fear that this will inhibit growth in any way.
Amendment 96 would add “the protection of consumers” to the list of legitimate aims whereby a service may be deemed not to be discriminatory. This might mean providing a service only in Welsh or in some other country specific way, but if it is aimed at protecting consumers, that would allow an opt-out, if you like, from it being discriminatory.
Amendment 89 would remove from the consideration of whether a service provider is discriminating the words,
“it cannot reasonably be considered a necessary means of achieving a legitimate aim.”
I asked not my noble and learned friend here but another of our very learned colleagues how that sounded and whether this phrase was common in law, and at that point, he could not think of an example. It seems a vague definition for a service provider to have to work to. The whole paragraph is fraught with uncertainty as to who would judge that and how something could be reasonably considered necessary, for example, to protect public health, which is defined as a legitimate aim. However, it is a very indistinct definition for someone to decide whether it is discriminatory. Given that service providers sometimes have to act at speed, one has to ask: what sort of certainty would that provide?
Even more confusingly, when looking at whether something could be reasonably considered as necessary —as if that was not hard enough—a further bit in Clause 20(9) says that has to be decided with regard to
“the effects … in all the circumstances, and”
Whether an alternative way of achieving a legitimate aim was available. We are getting into a lot of legal difficulties for a service provider to be able to judge whether they can tailor-make a service for particular needs if they have to go through quite so many indistinct legal loops. I beg to move.
Baroness Finlay of Llandaff (CB) [V]
My Lords, the hour is late, and I will shorten what I was going to say. Amendment 78 is intended to achieve exactly the same objective, in respect of Part 2, as my Amendment 6 does in respect of goods. In other words, it seeks to incentivise both the Government and the devolved Administrations to commit fully to the common frameworks programme and rely on the market access principles only as a fallback when all else fails. The other two amendments in this group, Amendments 67 and 71, are consequential on it, since they would make the point at which the regulations came into force the point from which market access principles would apply. I cannot see why there is any difficulty with that.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
The noble Lord, Lord German, is not taking part in this group, so I call the next speaker, the noble Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con) [V]
I will speak briefly to several amendments in this group. Regarding Amendment 70, again I raise the question of substantial change, and whether that means a “significant amendment”. I am seeking clarification on the part of the Bill to which this refers.
Amendment 81 would delete “of no effect”, as would Amendment 84. Can the Minister say what that means when replying? It is very unclear. I am again grateful to the Law Society of Scotland for its help in putting forward and drafting these amendments.
In Amendment 92, what is meant by “less attractive”? In my view, to put a service provider at a disadvantage is a serious matter in a Bill such as this. Using a phrase such as “less attractive” as part of the assessment of disadvantage is subjective and lacks clarity. I would be very grateful if, when summing up, the Minister could just clarify what his understanding of “less attractive” is.
I turn to my Amendments 103 and 103A. Amendment 103, which would take out “mainly” and insert “substantially”, is a probing amendment to understand the meaning of “mainly” in connection with the gathering of experience—for example, in relation to Clause 23(7). In my view, Clause (23)(7)(b) requires further definition. How should “mainly” be measured? Will it be by the time spent as a proportion of the whole qualifying experience or by some other measure? How will this experience be recorded and verified?
The same questions arise in regard to that aspect of the experience obtained elsewhere than in the UK. The purpose of my Amendment 103A is to ask whether we are excluding all other experience than that obtained in the UK. I pray in aid my own experience, where I practised law in Brussels in two different situations. Would that experience, and the experience of others as well, qualify for the purposes of the Bill? I am grateful for the opportunity to move these probing amendments and I look forward to the Minister’s clarification of these points.
Baroness Neville-Rolfe (Con) [V]
My Lords, I want to speak to this group of amendments for two simple reasons. First, services are incredibly important to the UK and to all four nations within it. As I said on Amendment 4, they are vital to the success of our economy, making up more than 80% of GDP. They range from financial services, mentioned by the noble Baroness, Lady Hayter, which I believe now provide more jobs outside London than in the City, to arts and entertainment of every kind. Invisibles, including legal and accountancy services where we have world-leading expertise, represent more export value than goods.
Secondly, I am mystified by the clauses on services, which are the subject of these amendments. The arrangements seem to work well currently. No doubt some protection is provided by the carryover of EU rules under the withdrawal Acts, which are relatively light touch because attempts to align local rules within the EU on services were also light touch.
We are forcing on to the service industries apparently new rules and new exemptions linked to the principles of mutual recognition and non-discrimination. There could potentially be a whole load of bureaucracy and regulation associated with this activity, which business, the service sector and regulators will need to understand. Lobbyists may try to secure new rules that benefit narrow interests, as they do in Brussels now. Moreover, as someone who takes a morbid and forensic interest in these things, I find the impact assessment—welcome though it is in principle—extremely disappointing. These are usually very helpful to Committee discussions, but the assessment asserts on page 2 that
“the cost savings to businesses, consumers and the wider UK economy would be expected to significantly offset any costs imposed by this legislation, translating into a net benefit to the UK economy.”
The small and micro business assessment on page 37, a section to which I always pay the greatest attention as small business is the lifeblood of this country and key to its dynamism, says:
“Due to a lack of historical need, there is a shortage of data on businesses trading between different parts of the UK. It has therefore not been possible to identify the volume of such businesses who operate across borders, nor the extent to which they benefit because of the hypothetical nature of the future regulatory regimes.”
So we have no evidence to justify the new powers, nor an assessment of their consequences. We almost seem to be creating borders for services where none existed before, which is surely the opposite of what we want.
We need to understand better how this part of the Bill will work, but the material presented so far has stumped me, as a business operator who has worked in various industries across the UK and the world. In that connection, let me ask a simple question on marketing activity, which is not listed in the schedules: would I be permitted to discriminate in favour of a company that was Welsh to help with the marketing of Welsh products or would I have to take time to listen to pitches from English-owned—or, indeed, US or Canadian-owned—companies?
In response to a number of understandable probing amendments in this group, can my noble friend the Minister kindly justify the provisions simply, with some good worked examples relating to significant service sectors, and assuage my fears? I must say, at this point in time, I am confused and therefore concerned.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
Both the noble Baroness, Lady Noakes, and the noble Lord, Lord Liddle, have withdrawn from this group so I call the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, the Minister will no doubt be pleased to hear that I will not ask questions about whisky even though, after nine hours on this Bench, it seems to be at the forefront of my mind right now. I do not know why but a nice glass of whisky would be rather welcome.
I want to follow on directly from the noble Baroness, Lady Neville-Rolfe, and expand on her very good second point about organisations that are not within the Schedule 2 exclusions but may, for example, seek services that have a specific characteristic of one of our home nations or additional requirements—such as having the capacity to speak the Welsh language, which would be important for the provision of certain services in parts of the United Kingdom, or, in the highlands of Scotland or certain parts of Glasgow, proficiency in the Gaelic language. Given that these were covered in the European Union elements, which the Minister argued previously were restrictive but which are actually broad and allowed this trade to be conducted properly, I hope that the Minister can respond as to why those elements would not be covered in this Bill and whether there would be the ability to have some of the specific requirements with regard to regulatory requirements that have specific characteristics.
Aside from language and other conditions with regard to equality legislation, which would be covered under putting services to contracts, I notice that transport services are excluded but water services are not. As the Minister knows, the provision of water services is distinct in our four nations. There are separate industries and these will not be excluded. I would be interested to know whether the current contractual arrangements are out of scope of this legislation because they are current. On the non-discrimination principles in the services sector, I have a concern about the distinct nature of the legislation for the Scottish water industry, which is a public body with one shareholder—the Scottish Minister—and whether an English service provider would be able to challenge the provision of Scottish water services because they are not excluded from this legislation. I would be most grateful if the Minister could allay my concern about that.
Similarly, the provision of water in Wales is a different legal entity—it is a mutual approach. Many private enterprises in the provision of services, as we know, are of an international nature. There is an even greater concern that if, for example, an American service business, through a trade agreement with the United Kingdom, had a brass plate enterprise in the City of London with American shareholders, that might be the gateway for it to challenge the mutual model in Wales or the approach in Scotland. I hope that the Minister can allay my fear about that.
Lord Callanan (Con)
It may be helpful to the noble Lord, Lord Purvis, who I know is interested, if I return to a question he asked on the previous group—the vexed question of coal and the English-Welsh border. Let me build on the answer given by my noble friend Lady Bloomfield. Under mutual recognition, the use of coal could be banned regardless of where it is bought. The sale cannot be stopped simply because the use is not permitted. The use would still not be permitted in England, even if the coal is bought in Wales, or if it is legal to use it there. It is the distinction between sale and use that my noble friend referred to. I thought the noble Lord would like early clarification of that.
Amendments 68, 69, 70, 71, 78, 81, 84, 89, 92, 96 and 102 seek to alter the application and scope of both the exclusions and non-discrimination rules for the internal market in services. Several of these amendments centre on the application of the services rules and the non-discrimination principle. This non-discrimination rule is a fundamental safeguard for businesses, ensuring that there is equal opportunity for companies trading in the UK, regardless of where in the UK the business is based. I will address the amendments in related groups, and I am happy to explain how the services rules work, and the list of exclusions, in greater detail.
I thank the noble Baroness, Lady Hayter, for tabling Amendments 68 and 96 on consumer protection. I hope to be able to persuade her that they are unnecessary. As I set out on Monday, the Government are committed to maintaining and protecting the highest consumer standards across the UK. This legislation will be to the benefit and protection of the country’s consumers. Without an updated, coherent market structure, UK services trade could be significantly and detrimentally affected. Future complexities could arise, and costs could then be passed on to consumers through an increase in prices or a decrease in choice.
Amendments 69, 71 and 78 would provide that Part 2 applies only to services specified in regulations. We believe that these amendments are contrary to the aims of the Bill, because this is the opposite to the current approach, which is that mutual recognition and non-discrimination applies to all services except those specified in the schedule. Further, the amendments set restrictive consultation and reporting conditions on a Secretary of State wishing to make those regulations, and a requirement for devolved Administration consent to regulations extending the list of exclusions in Schedule 2. My noble friend Lord True spoke about this issue earlier today in the group on the involvement of the devolved Administrations.
Clause 17 currently aligns with the wider aims of the Bill—to allow businesses and people to trade as they do now, without facing additional barriers based on which nation they are in. These amendments run contrary to those aims. They would make the raising of barriers to service provision the default position, by not applying mutual recognition and non-discrimination principles in the Bill to any services unless specified. The reporting and consultation requirements the amendments place on specifying regulations also mean that bringing services into scope of the rules of Part 2 of the Bill, including all those to which the principles of mutual recognition and non-discrimination apply under retained EU law, would be both difficult and time-consuming. This would, in turn, cause disruption to businesses seeking to provide their services across the whole United Kingdom.
Overall, these amendments could raise barriers to service provision across the UK where even the current system does not, and would seriously hinder any attempts to develop a co-ordinated and focused response to the evolution of services in the future. Therefore, while I recognise the spirit in which these amendments were tabled, I am unable to accept them. However, to answer the questions asked by the noble Baroness, Lady Hayter, and my noble friend Lady Neville-Rolfe, on financial and legal services, and to allay their specific concerns, I can reassure them that legal services are excluded from the mutual recognition principles, and financial services are excluded from Part 2 entirely.
As my noble friend Lady McIntosh makes clear in her explanatory statements accompanying Amendments 70, 81, 84 and 92, their primary purpose is to probe the drafting of the Bill. On Amendment 70, the intention of Clause 16(5)(c) is to restrict the application of Part 2 only to new requirements that take effect after Part 2 itself does. This is because the Bill is intended to prevent future obstacles to trade within the single market, not retrospectively review all existing requirements.
Clause 16(5)(c)(i) provides that requirements already in force are not subject to the principles in Part 2. Clause16(5)(c)(ii) recognises that there will inevitably be new iterations of rules, which will in fact simply restate the previous rules that were in place. This provision sets out a threshold, beyond which the new requirement will be brought within scope, and that is where the requirement has changed in substance.
My noble friend in particular asks the meaning of “substantive change”, which her amendment would replace with the phrase “significant amendment”. This wording is simply intended to distinguish between those rules which are genuinely new and different from those which may have been in place beforehand, and those which are in fact substantively the same rules. My noble friend’s suggested change uses the term “significant”, which is less easy to quantify and suggests to me a higher threshold before which a change would bring the provision within scope of the principles in the Bill. “Change” and “amendment” are of course covering fairly similar ground, but I suggest that “amendment” would more commonly be used when talking about changes to text. Since Part 2 is operating on requirements imposed by or under legislation rather than the text of the legislation itself, we think, in these circumstances, that “change” is the most fitting word— but there will probably be lots of work for the noble and learned Lord, Lord Falconer, and his friends in interpreting this.
I turn now to Amendments 81 and 84. In Clause 21, a legislative requirement is one imposed
“by, or by virtue of, legislation”.
This extends beyond legislation to rules produced by bodies with powers delegated to them in respect of a particular field of regulation, and it may include licences or requirements contained therein. My noble friend’s Amendments 81 and 84 would appear to have the same effect. However, in my view, the term “of no effect” is the more appropriate to apply in respect of a licence or a non-legislative rule.
Turning now to Amendment 92, the purpose of the words “less attractive” in Clause 20(3) is to encompass requirements which are not outright prohibitive but which otherwise make it harder to offer a service in a particular market. Without these words, the clause could be read as referring only to actively punitive measures, when in fact it is intended to cover a broader range of harms under the definition of direct discrimination. My noble friend will no doubt also be aware of the amendment in my name to Clause 20, which seeks to clarify the meaning of the test for indirect discrimination in that clause—although the language that she highlights remains unaltered by it.
Amendments 89 and 102 from the noble Baroness, Lady Hayter, seek to remove the reference to the legitimate aims in Clause 20. These amendments should be read alongside the other amendments in the noble Baroness’s name. The wider purpose of all these amendments is to alter the legitimate aims in Clause 20. The amendments would have the effect of making the principle of non-discrimination almost absolute, not allowing any requirement which had an indirectly discriminatory effect, no matter how valid or urgent the justification. I suspect that this was not what the noble Baroness intended with this suite of amendments.
Clause 20(2)(d) provides that a requirement will be discriminatory only if it cannot be justified by a legitimate aim. Amendment 89 suggests removing that. Clause 20(9) provides that, to determine whether a regulatory requirement can be considered as a necessary means to achieve a legitimate aim, particular consideration must be given to the effects of the requirement in all circumstances and to the availability of alternative means to achieve that aim. This subsection is key to determining whether a legitimate aim may be relied upon. It is designed to assist the reader and its removal would hinder the effective application and operation of the test. The subsections are both key to the effective operation of the non-discrimination principle provided for by Part 2 of the Bill. I therefore cannot accept these amendments.
Amendment 103 relates to Part 3 of the Bill, concerning professional qualifications. As used in the clause, “mainly” has been used in this context to ensure that the majority of the experience that a professional is relying on is obtained in the United Kingdom. This is so that relevant authorities can reliably assess the professional’s experience. The decision to use “mainly” rather than “substantially”, or other similar words, is so that professionals can rely on their experience for this part of the Bill without it being interpreted as the whole of their experience needing to have been obtained in the UK. I hope, therefore, that this explanation satisfies the House and that the noble Baroness feels able not to press her amendment.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
I have received one request to speak after the Minister from the noble and learned Lord, Lord Falconer of Thoroton.
Lord Falconer of Thoroton (Lab)
I go back to the very interesting answer that the Minister gave on the coal example. Let us assume that the coal example, which he described as being a prohibition on sale but not use, did not come in a pre-existing requirement and that it had been entered into after this Bill became law. I would be right, would I not, in assuming that such a requirement would offend against the non-discrimination principle under Clause 8? It is obviously a disadvantage to be able to sell coal to people who cannot use it. In those circumstances, it is valid only if that was a provision entered into after the Bill became law if such a provision was justified by one of the legitimate aims identified in Clause 8(6). Would I be right in assuming that? Would I be right in assuming that the question of whether the ban on the use of coal survived would depend upon a private law action between the supplier of the coal and the buyer of the coal?
Lord Callanan (Con)
I do not think the noble and learned Lord is correct in his assumption, but it is a detailed legal point, so I will take further advice and reply to him in writing.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank noble Lords who have contributed to the debate, which poses more questions than even I had realised. I have also realised that I have not got a complete handle on the services that are covered. Are financial services excluded? I think auditing is excluded. It would perhaps be helpful if a note could be passed about what services are covered. I assumed they are cultural and intellectual property, education and architecture, but there are some interesting ones where there are big differences at the moment between countries.
I am particularly thinking of residential property, where Wales now licenses landlords and is ahead of us in licensing letting agents. We are now in discussion with the Government about the licensing—shortly, we hope—or authorisation of all property agents, but then that would be different between England and Wales and Northern Ireland and Scotland. Presumably all that would be caught by this, but I am not certain.
This is a genuine question and it would be really helpful to have, without it being part of the Bill and without it committing the Government to anything, a more useful note of what is covered. Then we could look at what is already different, particularly in licensing, as is certainly the case in the area that I know about of residential agencies in Wales and elsewhere.
In a sense, the bigger issue is the one I set out at the beginning. The noble Baroness, Lady Neville-Rolfe, put it much better. I was asking about the purpose of Part 2. I think the noble Baroness went further and asked whether we even need Part 2. It actually comes back to whether we need the whole Bill or whether the common frameworks road might be the better one, or, as the noble Baroness, Lady Finlay, asked, whether it might be sufficient to fall back on the 2018 position on what things could not be agreed—it would probably save an awful lot of this. The purpose of Part 2 needs justifying, rather than defining. Why do we need it? Is the noble Baroness, Lady Neville-Rolfe, correct that we do not need this level of detail?
If the Minister could also informally explain a little more about what would be covered, that would be helpful, and we might come back at a later stage to look at whether we could define why we have this part. However, for now, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
We now come to the group beginning with Amendment 79. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this, or anything else in this group, to a Division should make that clear in debate.
Schedule 2: Services exclusions
Amendment 79
“Teaching Services | provision of teaching services in schools or colleges” |
This amendment would add the profession of teacher and teaching services to the scope of the exclusions from the Bill, in the same way that the legal professions and legal services are excluded.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I beg leave to move Amendment 79, and also to speak to Amendment 106, both of which appear in my name. I acknowledge support in preparing these amendments and presenting this information from the General Teaching Council for Scotland. I also draw on the submission of the Education Workforce Council of Wales to the UK Internal Market White Paper. The Welsh submission noted:
“There is no public register of schoolteachers in England. There are many aspects of the regulatory system in England that are different. For example, there is no requirement for employers to refer cases, and the teaching regulation authority has only one disciplinary sanction it may apply. The rest of the UK and Ireland have registration and regulatory arrangements.”
In its equivalent submission, the General Teaching Council for Scotland said that it
“does not consider that a system of mutual recognition can or should be applied to the teaching profession within the UK.”
It noted, as did the Education Workforce Council, that the systems are structured differently in England from the rest of the UK. The General Teaching Council continued:
“GTC Scotland is not prepared to lose this control over the standard of teachers entering the teaching profession in Scotland in this way and given the devolved education function within the UK, it does not believe that it would appropriate to do so.”
In Wales, the registration and regulatory arrangements were strengthened in 2015 with the reconfiguration of the General Teaching Council for Wales as the Education Workforce Council. That extended registration and regulation from just schoolteachers to include seven education professions. From 2022, Wales is introducing a new curriculum for initial teacher training relating to the specific circumstances of that nation and its systems. In Scotland, the teacher training system continues to be based on formal education, rather than the classroom-based learning that has been adopted as an alternative system in England, where unqualified teachers, who operate primarily in free schools, are allowed.
I am assured that almost all teachers coming from other parts of the UK who apply for registration in Scotland achieve it. This is not about discrimination, but keeping control and maintaining an existing and separate different system and rules, without seeing them swept aside by the Bill—or “bulldozed” in the powerful metaphor that my noble friend Lady Jones of Moulsecoomb used with broader application earlier this evening.
In referring to Northern Ireland, I start with a very useful 16-page briefing paper from the Northern Ireland Assembly. It begins by noting that there is a “complex educational structure” there. It notes that the Assembly has overall responsibility for the education of the people of Northern Ireland and for effectively implementing educational policy. Northern Ireland’s General Teaching Council is an arm’s-length body for the Department of Education, responsible for registering all teachers in grant-aided schools and approving qualifications for the purposes of registration.
We have here four very different systems that have evolved in different ways, for different purposes and for different situations. Three have registration systems under local control. England does not. Forcing them into mutual recognition is, I argue, clearly inappropriate. That is why these two amendments together aim to add the profession of teacher and teaching services to the scope of the exclusions from the Bill, in the same way that the legal professions and legal services are excluded. Mutual recognition is in no way appropriate for this situation. It involves sweeping away established, working, respected different systems. That of course was the point of devolution generally: to allow the nations to head in different directions to fit their particular cultures, circumstances and needs.
I stress that the Bill already acknowledges the different legal systems and the need for these to be treated differently. My amendments are minimalist in that they simply mirror the different treatment of lawyers in the treatment of teachers. However, the issues that I raise may well extend beyond teaching, and certainly beyond Scotland—for example, regarding social work in Wales. The Government have a great deal of work to do before Report to disentangle these complications and possibly extend the amendments even beyond what I have presented here. But adopting my amendments, or something very like them, would at least, by aligning the different treatment of legal systems with teaching, solve one of the problems.
I will continue to pursue these issues to that stage if I need to, but I very much hope that the Government will acknowledge the clear issues raised here and find their own solution to allow the existing, working, devolved systems for the registration of teachers, and possibly other related professions, to operate in all the nations of the UK where that is relevant. If they do not, I hope that some of the noble, and noble and learned, Lords in your Lordships’ House, who I am sure welcome the exemption for the legal profession from the mutual recognition provisions, might be prepared to join in the work to assist another profession to keep independent control of its own activities, as befits professional organisations in the nations of the UK. I beg to move.
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
The noble Lord, Lord Liddle, has withdrawn from this group, so I call the noble Lord, Lord German.
Lord German (LD)
My Lords, I thank the noble Baroness, Lady Bennett, for raising this issue. It is of significance, and the Government will need to make some clear statements in order to avoid a very large flaring up of problems as a result of this matter.
Professional teacher registration is a devolved matter. The General Teaching Council for Scotland was established in 1965 and has ownership of the standards for teachers seeking registration and employment as a teacher in Scotland. The Education Workforce Council for Wales, Cyngor y Gweithlu Addysg, was established by the Education (Wales) Act 2014 to register schoolteachers who wish to work in schools in Wales. Teachers in Wales have to have qualified teacher status and be registered with the body in order to work in the profession. In England, since the introduction of the Teaching Regulation Agency, there is no longer a register of teachers.
Access to the teaching profession differs greatly between England, Wales and Scotland—and there are different qualification entry levels. The General Teaching Council for Scotland has an auto-recognition process for UK teachers who possess adequate qualifications for registration in Scotland. However, that does not mean that all teachers who teach in England or Wales can teach in Scotland. As such, teachers in Scotland should hold a qualification that is the equivalent of Scottish qualifications to enter the teaching profession in Scotland.
Teachers moving to Wales have to have equivalent standards. FE teachers, who are recognised by the National College for Teaching and Leadership in England and who are qualified to teach in England, are not recognised in Wales, and that means that they cannot be registered. Both Wales and Scotland have set different qualification levels to be able to work in the teaching profession.
There is an additional factor in Wales because of the bilingual nature of our education system. I know that noble Lords are aware that the Welsh language has equality status, and teachers have to be able to manage aspects of the school curriculum where they intersect with that language requirement. That does not mean that they have to speak Welsh, but they have to be able to manage aspects of the curriculum in English-medium schools.
Any flattening of qualification requirements would have a detrimental impact on the education provided in schools in Wales and Scotland and would dilute the standards that each country has set. I cannot think of any pressure to change these structures that has an impact on the internal market. The teaching profession should be excluded from this Bill as a result.
Baroness Hayter of Kentish Town (Lab)
As the noble Baroness, Lady Bennett, makes clear, there is really no reason why the teaching profession should not be treated the same as legal services. If there is an answer, I look forward to the Minister supplying it. However, as I think the noble Lord, Lord German, said, it also raises the question of what else is covered, be it medical research, university teaching, religious teaching or driving instruction. It is the same question that I posed before: are these areas of education and the passing on of wisdom to be covered, or are they excluded? We might not have those answers now but we need to be very clear on what is covered in this part of the Bill.
Baroness Scott of Bybrook (Con)
My Lords, these amendments seek to exclude teaching services and the teaching profession from the scope of the mutual recognition principle in Parts 2 and 3 of the Bill. Starting with Amendment 79, the current list of entries in Schedule 2 is largely drawn from the exclusions under the existing framework in the retained EU law. Schedule 2 aims to list those services for which it would be inappropriate to apply either or both of the provisions in Part 2. For example, legal services are excluded in recognition of the long-standing differences between the legal systems in each part of the UK.
I should allay the noble Baroness’s concerns if I explain that public services, including the public education services, are already excluded from the scope of Part 2 of the Bill under Schedule 2. That exclusion will ensure that public education services are not subject to the principles of mutual recognition or non-discrimination in Part 2. For this reason, it is my view that Amendment 79 is unnecessary.
Clause 17 requires the Secretary of State to keep Schedule 2 under review and contains the power to amend it by regulation to add services or requirements to those matters excluded from the principles of mutual recognition and non-discrimination. I can assure noble Lords that the Government will continue to keep the list of exclusions under review to ensure that it includes the appropriate services and requirements, to which either or both market access principles should not apply.
I turn to Amendment 106, which deals with recognition of professional qualifications. I assure noble Lords that teaching standards across the UK are very important to this Government. The provisions in Clause 24 allow relevant authorities to replace the automatic recognition principle with an alternative recognition process if they think that automatic recognition of different UK teaching qualifications would not be appropriate.
We are therefore answering the General Teaching Council for Scotland and the issues brought up about Wales and Northern Ireland; they will still be able to set standards in those devolved authorities, as now, and control who can teach in them. If the General Teaching Council for Scotland or a council in any other devolved authority decides that recognising teaching qualifications from other parts of the UK automatically is not appropriate, it can put in place an alternative recognition process to check qualifications and experience, as set out in the Bill. That should allay a number of the fears brought up in this short debate.
The system will enable relevant authorities to assess an individual’s qualifications before allowing professionals to practise. Relevant authorities will continue to have the ability to refuse access to those who are unable to demonstrate that they meet the standard requirements, such as the Welsh language. This makes an exception for the teaching profession unnecessary. On those grounds, I cannot accept the amendment and hope that the noble Baroness will withdraw it.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received a request to speak after the Minister. I call the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I wish to obtain absolute clarity from the Minister on the exemption in Schedule 2 with regard to:
“Services provided by a person exercising functions of a public nature”—
that is, a public body. That may apply to Wales but the General Teaching Council for Scotland is a charity as well as a regulatory body. The Minister outlined what it would be able to do to change, if challenged, those seeking to be registered in Scotland under the English criteria but who do not meet the Scottish criteria. The fear is that because the council is a charity—it is the oldest regulatory body for teachers in the world—it would be forced to accept teachers of a different standard than the English standard, which I automatically assumed would be a lesser standard. Will the Minister clarify that charities, such as regulatory bodies like the GTCS, are included in Schedule 2? She said it applied just to public bodies.
Baroness Scott of Bybrook (Con)
I am not going to give the noble Lord a definitive answer now but I will write to him to make sure that we are clear about that issue.
Baroness Bennett of Manor Castle (GP) [V]
I thank noble Lords who have contributed to the debate and the Minister for her response. The noble Lords, Lord German and Lord Purvis of Tweed, usefully added some pieces of history, particularly on Scotland and helped to identify that we are talking about long-separate and different systems. The noble Lord, Lord German, identified the way in which Wales has been heading in different directions. The noble Baroness, Lady Hayter of Kentish Town, stressed my point that there is no reason why teaching services should not be treated in the Bill in the same way as legal services and the noble Lord, Lord Purvis of Tweed, made an important point.
The Minister acknowledged the long-standing differences. I understood her to say that teaching would be automatically excluded without needing to be included in the Bill—at least in her initial remarks, but perhaps not so clearly in answer to the question she was asked. I know that that is not what was conveyed to the GTCS in previous discussions and that there is considerable public concern, particularly in Scotland, about these issues. I note the word that the Minister used in her comment that the nations “can” put in place alternative systems. The systems are already in place.
I will go away and look at Hansard, but I reserve the right to come back on Report. In the meantime, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 82. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Amendment 82
Lord Callanan
Member’s explanatory statement
This amendment is consequential on the amendment adding a definition of relevant connection to Clause 20 (page 14, line 16).
Lord Callanan (Con)
My Lords, in moving Amendment 82, I shall speak also to Amendments 83 and 85 to 88 in my name.
Clause 20 provides the test for assessing whether a regulatory requirement is indirectly discriminatory in relation to service providers. The indirect discrimination test comprises several elements, including a test for difference of treatment between incoming and local service providers and a test to assess whether the difference in treatment gives rise to an adverse market effect. This group of amendments would provide greater clarity to readers, particularly in relation to differential treatment and adverse market effect. The amendments would break up concepts previously included in Clause 20(4) and deal with the unequal treatment test separately from the adverse market effect test. This revised drafting also allows for clarification of the language.
This change delivers the same policy objectives but with greater clarity. It is supported by consequential amendments throughout Clause 20, including new definitions for local and incoming service providers. The definition of “relevant connection” is also moved into Clause 20 to link it better to the provision. Limb C of that definition is deleted because it is not relevant to indirect discrimination. A consequential amendment to Clause 19 supports this.
In my detailed remarks, I will focus on Amendments 90, 91 and 93 upon which the other amendments are consequential. Amendments 90 and 91 would provide greater clarity and break up concepts that were previously packed into Clause 20(4). They deal with the unequal treatment test separately from the adverse market effect test, and this division also allows for a clarification of the language. These amendments would introduce and define the concept of “relevant disadvantage”, tying it more clearly to the concept of unequal treatment between incoming and local service providers. Importantly, the more clearly laid out test for relevant disadvantage between local and incoming providers makes plain that it does not require all incoming providers to be disadvantaged or all local providers to be advantaged. That was the intended effect of the drafting; this amendment would ensure that it is clear.
Amendment 93 does two things. First, it defines local and incoming service providers—terms used in this group of amendments. Secondly, it copies the definition of “relevant connection” over from Clause 19, linking it more clearly to this provision. Limb C of the direct discrimination provision is deleted because it is not relevant to indirect discrimination.
Amendment 94, which is unrelated to the other amendments in this group, would simply remove a provision that is now no longer necessary. I beg to move.
Baroness Neville-Rolfe (Con) [V]
My Lords, I apologise to my noble friend the Minister for speaking on a technical amendment. I support much of the Bill and have limited my contributions accordingly.
However, I want to ask for a fuller explanation of Amendments 90 and 93, which again relate to services. Why do we need to make a distinction between incoming service providers and local service providers? Will that not create uncertainties and its own form of discrimination? Is this an insurance policy, for example against unwise anti-competitive moves by a devolved Administration? Is there any evidence that such an outcome is at all likely, given their well-known attachment to the EU single market? What is the underlying purpose of this approach?
The Minister was not able to answer my question on Amendment 68 about how marketing activity would be treated, or indeed the question from the noble Lord, Lord Purvis, on local language capability. The distinction between incoming service providers and local service providers may be part of the answer. I would welcome some simple examples that make some of this service area easier to understand. If the Minister needs notice of the questions, perhaps he would be kind enough to write to me on these points, as it is late.
Lord Purvis of Tweed (LD)
My Lords, I will be brief because of the hour. It would be churlish not to welcome amendments that have the purpose of clarification within this legislation. I just say to the Minister, “Don’t stop here. Keep them coming”. We will certainly welcome further government amendments to add more clarification to the legislation.
I am glad the noble Baroness, Lady Neville-Rolfe, mentioned the point about languages, as an example of something that the Minister did not respond to in the previous group. If certain elements are set down as part of the regulatory requirement—such as language capability, for example, or other characteristics that would have been permitted under the current legitimate aims but are not allowed under the new legitimate aims—what is the status of those? Would that be considered as putting providers at a disadvantage under Clause 20(2)(b)?
My second point was that, under Clause (20)(2)(c), the regulatory requirement has no effect. I note that I do not think there has been a sufficient answer to the question in an earlier group about what “no effect” actually means when it comes to a regulatory requirement. It has no effect if it has “an adverse market effect”. I wonder if the Minister could outline in clear terms what the test for that adverse market effect would be. Where and how would it be judged, and who would judge it? What would the test for that be, given that, as the noble and learned Lord, Lord Falconer, and my noble friend Lord fox said, this is likely to be tested in court because of the lack of clarity?
My final point is this. Given that service providers for higher education are not considered to be public bodies—and this was not answered in the previous group—and higher education is not considered to be within a legitimate aim, if a higher education provider outside Scotland were seeking to deliver services, the higher education system within Scotland would not be able to restrict it on the basis of the indirect discrimination element. If the Minister could state whether that would be the case, I would be grateful.
Lord Fox (LD)
My Lords, the Minister will be pleased to hear that I have got very little to add.
On the question of an adverse market effect, there are also questions around adverse to whom and adverse to what. Is it merely the price and the amount of choice, which is what the Minister appears to fall back on every time the market is described, or is there a wider adversity that comes into this?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, like other speakers, I welcome the idea that this is a clarification of the language currently used in the Bill. However, like the noble Baroness, Lady Neville-Rolfe, I wonder whether what we have got is in fact any clearer, or makes us any more clear about what we are supposed to be doing with this part of the Bill.
The language is, in places, incredibly archaic and obscure. There seems to be no recognition of the digital world. Services provided through the internet are not going to be provided locally; they are not going to be provided “in a region” and there are not going to be local service providers, and yet there seems no reference to them or how they are to be treated. Even if that were not that case—even if we were not living in the virtual world—the idea that somehow a service provider has a relevant connection to a part of the United Kingdom if it has a registered office seems to ignore hundreds of years of the use of brass plates outside solicitors’ offices which provide registered offices but no services, no people, no contribution and no economic effect. Where is all this heading?
Lord Callanan (Con)
I thank noble Lords for the brevity of their contributions, particularly given the late hour, and I shall endeavour—they shall be pleased to hear—to match that brevity.
We think that these amendments make the test significantly clearer. The relevant concepts are unpacked in distinct subsections, and the new subsections more clearly express policy intention on how the test for indirect discrimination will function. The additional clarity ensures that businesses can operate with certainty, which is what this Bill is intended to ensure.
I have noted the requests from my noble friend Lady Neville-Rolfe—the noble Lord, Lord Purvis, repeated them several times—for details of how the service provisions will operate in things like marketing, language tests, et cetera, and for the legal definition of what “adverse market effect” means in practice. I will, of course, provide those for them in writing. With that, I commend these amendments to the Committee.
Lord Callanan
Member’s explanatory statement
This amendment would make clear that Clause 20 is concerned with incoming service providers.
Lord Callanan
Member’s explanatory statement
This amendment follows from the amendment to page 13, line 34 in my name.
Member’s explanatory statement
This amendment follows from the amendment to page 13, line 34 in my name.
Member’s explanatory statement
This amendment would ensure that requirements would only be excluded from the scope of Clause 20 if they are directly discriminatory against the incoming service provider (rather than in a general sense).
Member’s explanatory statement
This amendment is to accommodate the redrafting of the test in Clause 20(4)- it would treat the concept of unequal treatment (or relevant disadvantage) as a test separate from adverse market effect (which is covered by paragraph (c)).
Lord Callanan
“(2A) A regulatory requirement puts an incoming service provider at a relevant disadvantage if—(a) it puts the incoming service provider at a disadvantage in relation to the provision of services in the part of the United Kingdom in which the requirement applies, and(b) it does not put, or would not put, each local service provider at that disadvantage in relation to the provision of those services in that part (at all or to the same extent).”Member’s explanatory statement
This amendment would define the concept of relevant disadvantage, introduced by the amendment to page 13, line 39 in my name.
“(3) A regulatory requirement puts a service provider at a disadvantage in relation to the provision of services in a part of the United Kingdom if it makes it in any way more difficult, or less attractive, for the service provider to provide the services in that part.(4) A regulatory requirement has an adverse market effect if, by putting an incoming service provider (or incoming service providers) at a relevant disadvantage in relation to the provision of services, it has a significant adverse effect on competition in the market for those services in the United Kingdom.”Member’s explanatory statement
This amendment would rephrase what is meant by “disadvantage” and “adverse market effect” in light of the addition of the concept of relevant disadvantage in the amendment to page 13, line 44 in my name.
Lord Callanan
“(4A) For the purposes of subsections (1) to (4)—(a) an “incoming service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies, but(ii) does not have a relevant connection to that part;(b) a “local service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies,(ii) has a relevant connection to that part, and (iii) does not have a relevant connection to another part of the United Kingdom;(c) a service provider has a “relevant connection” to a part of the United Kingdom if the service provider—(i) has a registered office, place of business or residence in that part, or(ii) provides the services from that part.”Member’s explanatory statement
This amendment would define concepts used in the other amendments to Clause 20 in my name.
Member’s explanatory statement
This amendment would remove an unnecessary interpretation provision.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 102A. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and anyone wishing to press this or anything else in the group to a Division should make that clear in debate.
Amendment 102A
“Purpose of Part 3
This Part consolidates existing law relating to the mutual recognition of professional qualifications within the United Kingdom.”Member’s explanatory statement
This amendment is to probe the legal basis for introducing the provisions in this part, and whether they are covered in existing UK law.
Lord Fox (LD)
My Lords, Amendment 102A is a probing amendment to probe the legal basis for the introduction of the provisions in this part and whether they are covered by existing law.
It is a human trait to disregard history that happened before we were born. Most of what we have been describing as previous law and previous regulation has centred on EU law and devolution settlements. However, in their Command Paper, the Government hark back much further than that to the 1700s and the Act of Union. In their July paper, the Government stated that
“the Internal Market has been enshrined in British law for over three centuries”
on the basis of the Acts of Union. I will spare noble Lords the lengthy history lesson, but within this document it says:
“For centuries, the UK Internal Market has been the bedrock of our shared prosperity ever since 1707 when the Acts of Union formally united England and Wales with Scotland.”
The reason we were talking about the General Teaching Council for Scotland regulating Scottish teachers was because that Act of Union specifically carved out education as a Scottish prerogative. That particular activity of regulating Scottish teachers is a direct result of the Act of Union. It has nothing to do with devolution and nothing to do with the European Union.
Quite simply, I am asking for clarification: where does the Act of Union sit within this scheme of things? And where does previous law, made as a result of that Act of Union over the centuries that have followed, but before all these other bits of history we have been talking about, sit? It is not a philosophical question; it is real, because the example I have just given is real. I am sure there are many others for clever people to uncover.
Therefore, I would like to have some sense of the Government’s position, which appears somewhat ambivalent towards the Act of Union. They mention it in the Command Paper but, in a sense, disregard it thereafter. With that in mind, I beg to move Amendment 102A.
Baroness Finlay of Llandaff (CB) [V]
My Lords, Amendment 104 is almost identical to Amendment 6, which we debated on Monday, and Amendment 69, which I moved only a few hours ago. Those two amendments related, respectively, to goods in Part 1 and services in Part 2. This amendment, in the case of “recognition of professional qualifications”, seeks to make the application of the market access principles subordinate to the common frameworks process. In other words, the market access principles can be applied to professional qualifications only in the event that it proves impossible, by consensus, for the four Governments to agree a common framework.
Amendment 105 is consequential, simply moving the time point at which the mutual recognition principle would start to apply. While Part 3 is arguably more niche and therefore less damaging than the two parts that precede it, it is even more complex. I do not understand the exceptions that it suggests or the manner in which these could legitimately be handled.
Clause 24, for example, provides that the automatic mutual recognition of qualifications does not apply where a process of individual assessment is available but only in so far as the process conforms to four different principles. This includes the following principle in subsection (4)(c):
“to the extent that the applicant cannot, on application of the principles set out in paragraphs (a) and (b), demonstrate the necessary knowledge and skills to the satisfaction of the regulatory body, the applicant should (subject to subsection (5)) have an opportunity to do so by way of a test or assessment the demands of which are proportionate to the deficiency”.
However, this is subject to a further condition:
“The process may, without contravening the principle set out in subsection (4)(c), allow the regulatory body in a case to which this subsection applies to decline the application without the applicant first being offered a test or assessment as described in that principle.”
I am not a lawyer, and I will happily defer to any noble and learned Member who can enlighten me, but this appears to me to say that you have to give an individual the opportunity to prove that they possess the attributes necessary to do the job through a process of individual assessment, but you are nevertheless allowed to decline an application without first offering the individual a test.
Although I am not a lawyer, I am assured by those who are that this whole part is, to put it crudely, somewhat of a licence for the legal profession to print money and tie up regulators in litigation that could last years. Perhaps unsurprisingly, only one of the professions that is specifically exempted from this whole part is the legal profession. I am sorry; I know that sounds cynical, but I do find this very difficult to understand. I genuinely believe that, in trying to ensure that the mutual access principles can apply only to the recognition of qualifications when it is truly needed, I am trying to rescue the Government from themselves.
I shall give some examples of where this part of the Bill could prove damaging to the rights of devolved Governments, or indeed to those of the UK Government. Let us suppose that a more enlightened Westminster Government want to make a level 3 qualification in nutrition a requirement of registration as a nursery nurse in an effort to reduce childhood obesity. Presumably a qualified nursery nurse from Northern Ireland, where such a course was not a requirement, would still be able to apply for registration in England. Would this be automatic? Would they have to undertake a test? Could they be refused even without being given the right to take a test, as Clause 22(5) seems to permit? I would really appreciate some clarification.
Lord German (LD)
My Lords, I happen to have spent 10 years of my life working on the mutual recognition of qualifications in Europe. I left that role and, 20 years after that, it was applied to about only four or five professions across Europe. Trying to understand where people are able to employ the appropriate skills, knowledge, understanding and practice in another surrounding is an amazingly complex area. That surrounding might have a different framework of regulation and perhaps a different framework of operation.
The intention to have mutual recognition of qualifications is fine, but the timing for putting it in place is not fine, because the Government want it to happen very rapidly. It seems to me that the most sensible way of doing this would be to try to work through the professions in relation to their activities, trying to make sure that, where there are barriers, those are reduced, or where there are barriers that are appropriate, they are not legislated for by accident in advance.
The noble Baroness, Lady Finlay, has already talked about the Welsh language. There is a very interesting debate to be had about professions that can or cannot operate through the medium of Welsh. It depends on the services being provided and on the context of where those services are provided. A profession operating in a context that is different in different parts of the United Kingdom will have different requirements because of the geography, culture or operation of the services that are to be provided. Therefore, my request to the Government is that they step back a little, take some time, concentrate on trying to fix the things that they can fix and, for goodness’ sake, allow this thing to mature properly before going in with legislation that will be doomed to failure in the end.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, on the next group I will explain that the drafting of some clauses of Part 3 is complex and not as straightforward as it could be. One way or another, it would be useful to have a statement clarifying whether the end result is the status quo, either as a general objective or for certain circumstances.
However, as the hour is late, and as I will elaborate a specific instance on Monday, I do not need to say any more, other than to support what has been said by my noble friends Lord Fox and Lord German. This appears to be a rather complex topic. Maybe taking time to sort it out and make sure that the drafting is as clear as possible would be a good exercise.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, as we grope our way through the Bill and get to what seem even more complex and difficult to understand parts of it, we seem to reach a point where the Bill either does not add anything or is currently so badly drafted that it might destroy what we currently have. I may be being harsh, and I realise that I am asking quite a lot of the Minister, who has probably not been directly involved in any of these parts of the Bill, or concerned with some of the issues we had to deal with earlier this evening, but it seems to me that with every group, and every minute we spend on the Bill, there is a growing understanding that, as the noble Lord, Lord German, said, the Government are trying to push ahead with something that does not take the trick, as far as we are concerned, in relation to the issues before us.
The Government need to step back, take their time, concentrate on the things that they and only they can do, and encourage those who have other responsibilities that bear on what we are talking about to develop them, and out of the gloom will emerge—because they are the answer—the common frameworks. Why do the Government not realise that that is where we are heading? Why do they not get it into their heads that we need to stop being so concerned about the possibilities—the far ranges and the sunny uplands—that may be available in some nirvana they have yet to describe accurately, and work from where we are to try to get somewhere sensible in the time we have?
Baroness Scott of Bybrook (Con)
My Lords, I do not intend to have a debate on the union tonight, but I am sure it will come up later in the Bill. However, I reiterate to the noble Lord, Lord Fox, what I said on, I think, the group before last: the General Teaching Council for Scotland will still be able to set the standards in Scotland, as it does now, and will control who can teach in Scotland. That goes back to Scotland having control over its own education system. Similarly, the noble Lord, Lord German, brought up the Welsh language. If Welsh language requirements were introduced in respect of a profession in any other way—for example, by bringing in requirements for ongoing training—it could come under the equal treatment provisions of the Bill. As such, it would be possible for the regulator to impose Welsh language requirements on professionals qualified outside Wales if equally required of professionals qualifying in Wales. So there is an equality here.
I turn to the amendments in the group, which test and attempt to change the way in which professions would be in scope of Part 3. The purpose of the professional qualification provisions in the internal market Bill is to ensure that professionals can, in most cases, access their profession in all parts of the UK, by ensuring that there is an overarching system for recognition. It is important to ensure that, regardless of future policy changes, UK-qualified professionals will be able to practise across the whole of the UK. Divergence in professional regulation between the four nations of the UK should not increase barriers for professionals living and working in different parts of the UK.
The noble Lord, Lord Fox, has sought, with his Amendment 102A, to understand whether these provisions are covered in existing UK law. Currently, while recognition of professional qualifications between the four nations can and does occur, there is no overarching framework that ensures that it happens consistently. The Bill will create this overarching framework to guarantee that recognition of qualifications between the four nations of the UK will be possible, and that barriers to access will be minimised, so that professionals are not unduly limited in where they may work.
To that end, I must oppose the process that Amendments 104 and 105 seek to establish for bringing professions within scope of the internal market provisions. The Government’s approach ensures that nearly all professions are in scope and that barriers do not emerge. In contrast with the Government’s proposals, Amendment 104 lays out a bureaucratic process for adding professions. Amendment 105 builds on Amendment 104 and seeks to ensure that only professions that are specified in regulations are caught by automatic recognition. Ultimately, these amendments would result in delays and uncertainty, preventing barriers in the internal market being addressed. This would be to the detriment of all UK professionals.
I assure noble Lords that the Government acknowledge the importance of working with each devolved authority on the implementation of this Bill and will continue to do so, as they have done throughout this process. Clause 25 already ensures that existing divergence in professional qualification requirements across the UK is outside the scope of automatic recognition, until further changes are made. This means that there are no immediate changes for relevant authorities to make in respect of access to professions.
We must ensure the smooth functioning of the internal market for professionals. I therefore hope that the noble Lord will withdraw his amendment.
Lord Fox (LD)
I thank the noble Baroness for her answer. I heard the answer she gave two groups ago, which is why I did not repeat the question; I actually asked a different question, about the status of the Act of Union. It was not I who brought it up, but the Government in their Command Paper. It having been brought up, it would be quite helpful to understand how the Government see it fitting into all this. It is a perfectly reasonable question and I hope that, perhaps in writing, I could have a perfectly reasonable answer.
The market the noble Baroness described in the Government’s eyes appears to need fixing. What is broken in professional services that this Bill is seeking to mend? If this Government had a reputation for overwhelming competence, and an ability to really get hold of things and make them better, perhaps I might understand what it is about. There are many things that this Government could focus their laser attention on; mending something that is not broken is not one of them. That said, I beg leave to withdraw the amendment.
United Kingdom Internal Market Bill
Monday 2nd November 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135-IV Revised fourth marshalled list for Committee - (2 Nov 2020)
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, hybrid proceedings will now resume. Some Members are here in the Chamber respecting social distancing, others are participating remotely, but all Members will be treated equally. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
I will call Members to speak in the order listed in the annexe to today’s list. Members are not permitted to intervene spontaneously. The Chair calls each speaker. Interventions during speeches or “before the noble Lord sits down” are not permitted.
During the debate on each group I invite Members, including Members in the Chamber, to email the clerk if they wish to speak after the Minister. I will call Members to speak in order of request and will call the Minister to reply each time. The groupings are binding and it will not be possible to degroup an amendment for separate debate. A Member intending to press an amendment already debated to a Division should have given notice in the debate. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely intends to trigger a Division, they should make this clear when speaking on the group. We will now begin.
Clause 25: Other exceptions from section 22
Amendment 107
Lord Callanan
“(d) in relation to any part of the United Kingdom, the profession of patent attorney or trade mark attorney.”Member’s explanatory statement
This amendment would add patent attorney and trade mark attorney to the list of legal professions the regulation of which is excluded from Clause 22.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, Amendments 107 and 108 in my name aim to clarify the scope and application of the professional qualification clauses of the Bill. Amendment 107 adds patent attorneys and trademark attorneys to the list of legal professions excluded from the application of the automatic recognition principle in Clause 22. As well as work related to trademarks and patents, trademark and patent attorneys may carry out broader regulated legal activities which require an understanding of the underpinning legal system in the part of the UK in which they practise. Accordingly, we are bringing them into line with the other legal professions to ensure that they are not caught by the automatic recognition provisions of the Bill. These exclusions ensure that access to these professions is not affected in any way by the recognition provisions of the Bill. Part 3 will not affect how these professions are regulated, nor will it change what activities trademark and patent attorneys are able to perform.
Amendment 107A has been tabled by the noble Baroness, Lady Bowles, in response to this government amendment and seeks to probe the effects of the amendment in respect of authorised reserved legal activities under the Legal Services Act 2007. In respect of this amendment, I reassure the noble Baroness, Lady Bowles, that nothing in the recognition provisions of the Bill, or in the government amendment, changes how reserved legal activities are authorised under the Legal Services Act 2007, and her amendment is therefore unnecessary.
Amendment 108 is a technical amendment to provide clarity on the type of qualifications and experience requirements to which Clause 22 applies. It ensures that where qualification requirements are attached to specific activities, those requirements are disapplied by automatic recognition only if they apply to activities that are essential to the practice of the profession in question—in other words, if they amount to a barrier to access to the profession as a whole. This will ensure that Clause 22 does not apply to qualifications or experience requirements for activities which are not essential to the practice of the profession, such as optional service activities which professionals may choose to offer.
I recommend that government Amendments 107 and 108 be accepted, as they provide clarity on the scope and application of automatic recognition principles. I regret, however, that I am unable to support Amendment 107A, for the reasons I gave earlier. I hope that the noble Baroness will feel able not to press her amendment. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I am a retired patent attorney, which is what made me curious about Amendment 107. I guess that is an interest of some kind, though no longer pecuniary.
In this group I have tabled Amendment 107A, which is intended to clarify what has become a confused situation. It can accurately cover all the legal professions named in Clause 25, although the confusion relates only to patent and trademark attorneys. Essentially, it says—as I think the Minister agreed—that there is no change to the status quo under the Legal Services Act 2007, which was the Government’s intention all along.
The background to this is that patent and trademark attorneys may be in the unique situation of being regulated and qualified on a UK-wide basis, while, through their sectoral professional qualifications, also engaging in four specific English and Welsh reserved legal activities, no matter where in the four nations of the UK they qualified, reside or practise. They do this as patent attorneys or trademark attorneys, not as lawyers.
The purpose of that unusual provision is, broadly, to enable conduct of litigation for all in the specialist England and Wales Patents Court, and for associated matters such as deeds and oaths to be dealt with. That unique construct does not fit within the definition of Clauses 22 and 23 for the professions when they are identified as patent attorneys or trademark attorneys because you cannot work it out so that there is a relevant part and the other part. Noble Lords are welcome to try—it takes quite a few pieces of paper. The point is that it is the same for all patent and trademark attorneys, wherever they are.
However, somewhere the niggling thought arose that perhaps it was confusing, or that the mutual recognition would apply notwithstanding that Clause 22 did not apply and would somehow extend the enjoyed England and Wales reserved activities to Scotland or Northern Ireland courts, deeds or oaths. Amendment 107 has, therefore, been proposed. It has the effect of defining patent and trademark attorneys as a legal profession in Clause 25, thereby putting them into Clauses 23 and 22 and simultaneously taking them out again. This hokey-cokey amendment was meant to stop confusion. It has, however, also created its own confusion, perhaps best illustrated in an explanation from the Ministry of Justice that said:
“If trademark and patent attorneys were not excluded from the UKIM bill, then one of your practitioners authorised to conduct litigation in Northern Ireland, for example, could potentially argue that under the automatic recognition principle IPReg must also allow them to conduct litigation in England and Wales without meeting the normal IPReg authorisation requirements for doing so”.
However, that does not fit the present circumstances that I have just explained. The patent or trademark attorney in Northern Ireland is qualified to conduct litigation in England and Wales but, actually, not to conduct litigation in Northern Ireland—and that is not the only wrong explanation that has been offered. Indeed, a few moments ago, the Minister referred to attorneys being qualified in respect of the part of the UK in which they practise. There is no such provision for patent and trademark attorneys. They just have that extra bit of add-on, no matter where they practise, which relates to being able to access the England and Wales Patents Court. That is quite fundamental, because that is where you would see appeals from the comptroller and so on.
I believe that a true analysis of the facts ends up as I have said, that these particular professions were not in the original construct, but some people might have been confused. Now they are defined as in and out again but, unfortunately, this leads to other confusions, suggesting divisions in the profession that do not exist but which have just been replicated in the words of the Minister. If the Minister and an MoJ official can get it wrong, who else might? A wrongful accusation, no matter that it can be refuted, is still damaging. My amendment clarifies that the status quo is maintained. It neither adds nor subtracts anything, other than giving clarity—something to point to on the same page as the confusing hokey-cokey.
Baroness Neville-Rolfe (Con)
My Lords, I support the noble Baroness, Lady Bowles, in probing the effect of these two government amendments. As a well-known supporter of a well-functioning IP profession, right across the United Kingdom, I have to say that I am still confused. It seems to me that, in the UK single market, the rights of these various attorneys should be fully reciprocal. Can my noble friend confirm that that is the intention? Will he further kindly reflect on whether it is the effect and, if they are not reciprocal, whether that is justified? Indeed, is there any read-across to the problems that we have encountered on the lack of reciprocal rights for EU and UK attorneys? We have discussed this elsewhere. I know that the department has had a rethink, but are we quite there?
The Deputy Chairman of Committees (Lord Lexden) (Con)
My Lords, the next speaker on the list, the noble Lord, Lord Liddle, has withdrawn. I call the noble Lord, Lord Smith of Finsbury.
Lord Smith of Finsbury (Non-Afl) [V]
My Lords, first, I declare an interest as the chairman of the Intellectual Property Regulation Board—IPReg—which regulates all patent and trademark attorneys. It is fair to say that, when the Government’s amendment first appeared, there was considerable alarm among the profession as to what exactly the impact would be of including patent and trademark attorneys in the list in Clause 25. There had, sadly, been no prior consultation with the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys or, indeed, IPReg.
Since the publication of the amendment, the Government have assured us that there is no intention to change the status quo. I hope that the Minister will be able to give us clear confirmation this afternoon, on the record, that this is indeed the case. There are two things to say. First, intellectual property, its protection and the facilitation of its creation are crucial for our nation’s economy. IP will be fundamental to our economic recovery in the years ahead and we should do nothing to damage it. Secondly, patent and trademark attorneys are not just any other lawyers. Many start off with a scientific background and skill set. Their legal training is bespoke and rigorous, and they are, rightly, regulated separately from the general mass of solicitors.
Lord Clement-Jones (LD) [V]
My Lords, I declare a possible interest as a solicitor qualified in England and Wales and I share all previous speakers’ support for IP professionals, who ensure that we have the necessary intellectual property protection in the UK. I strongly support my noble friend Lady Bowles’s Amendment 107A and share her confusion, not to say bafflement, at Amendment 107. She has drawn attention to the obscurity of the drafting. Why are patent and trademark attorneys included and then excluded?
My noble friend has been, if anything, very kind to the drafters of the government amendment. Not only is it obscure but, as we have heard from the noble Lord, Lord Smith, there seems to have been no proper consultation with the professional bodies and regulators such as CIPA, CITMA and IPReg before it was tabled. This is all compounded by the use by both officials and the Minister of the term “automatic recognition” in communication with my noble friend, when we should be talking about qualifications.
Why has automatic recognition, from which exemption is needed, been introduced? As an interloper on this Bill, perhaps I can ask the most fundamentally naive question: why do we need not just Clauses 22, 23 and 25 but Part 3 in the first place? Are these the emperor’s new clothes? Even the Explanatory Note is rather obscure in its rationale, saying:
“There is currently no overarching system or consistent approach for the recognition of professional qualifications between the nations making up the UK internal market. Therefore, if professional divergence increases across the UK, professionals could have greater limitations on their ability to practise across the UK than exists currently.”
What professional divergence is threatened or envisaged? There is the continuing need for professionals covered in this part to be suitably qualified, but why do we need a new piece of legislation simply to preserve the status quo? I am sure the Minister has the answer at his fingertips.
Lord Naseby (Con)
My Lords, it is a little disappointing that, in a Bill that is vital for the future of our country, there seems to have been some misunderstanding; somehow or other the key role of patent and trademark attorneys has been misunderstood. They are vital to the future of our country because, as it happens, we are quite good at producing ingenious new products, processes and systems of manufacture that are patentable. Equally, we are good at marketing products that require trademarks. Here is an area where we really are at the forefront of Europe’s activity—and, many would say, the world’s—so this is crucial, and we need to be clear that it is going to operate properly without any hiccups.
In my judgment, we need to defend some of our trademarks in particular. When we are marketing on our own outside the EU, I believe that we will get challenges. I have worked overseas and seen it happen there, and I do not see why it might well not happen here in the UK. As we move forward on that challenges dimension, I recall that, as I think one or two of my colleagues know, I worked in south Asia for two years. When I was in India, there was a system of mutual recognition for trademarks in certain categories of products. I wonder whether that is an element of the new deal we have done with Japan.
On my final point, I declare an interest in that I have a son, a lawyer, working in the Cayman Islands—in other words, the Overseas Territories. Given the confusion that we have had today, I am not entirely clear whether in the Overseas Territories a qualified patent lawyer or trademark attorney, who is a UK citizen qualified in the law and in whatever elements are needed for such attorneys, is able to operate although they are not actually in a part of the UK.
Lord Falconer of Thoroton (Lab)
My Lords, intellectual property lawyers, patent agents and attorneys are incredibly important for the future. I thoroughly endorse the remarks made by the noble Baronesses, Lady Bowles and Lady Neville-Rolfe, and my noble friend Lord Smith of Finsbury.
Honestly, confidence in this Bill was weak to start with. That mess-up just then on patent attorneys was appalling, and it made me look at the rest of Part 3. Could the Minister first of all identify what the problem is that Part 3 is dealing with? We had a clue between 11.30 pm and 11.45 pm on Wednesday evening when the noble Baroness, Lady Scott of Bybrook, who sadly is not in her place, said the following:
“The purpose of the professional qualification provisions in the internal market Bill is to ensure that professionals can, in most cases, access their profession in all parts of the UK, by ensuring that there is an overarching system for recognition.”—[Official Report, 28/10/20; col. 375.]
Clause 22 says that where you are qualified in one place, you can be qualified in another, while Clause 25 says that Clause 22(2) does not apply to existing provisions. Let us be clear what is happening here: the Government are saying that we are not making any change to the existing position in relation to professional qualifications, and as far as I am aware—and this is nothing to do with the EU—there is absolutely no problem about the current position. The effect of Clause 25(3) is that these provisions do not apply to any change in the future. Am I right about that? They are making no change for the past but they are bringing in these provisions in relation to the future. Why is that, when there is no problem about the past or the future? The Government are causing problems everywhere with this. I ask them to explain to the House and the wider public why on earth they are doing it. They have messed up the one area that we have looked at so far. Why should anyone have any confidence in this Bill?
On a separate point, I refer the Minister to what the noble Lord, Lord Dunlop—on the government side—said on day one in relation to this matter:
“The timetable for the Bill appears to be predicated on the end of the transition period on 31 December this year, but what is the real risk of regulatory divergence between then and the completion of the common frameworks process in 2021? The House is aware that the European Union (Withdrawal) Act 2018 already confers on Ministers so-called Section 12 powers to freeze devolved competence in relation to EU retained law.”—[Official Report, 26/10/20; col. 88.]
So, if there is any problem about this, it can be dealt with by the Government’s Section 12 powers. That applies not just to this but to wider issues.
Why are the Government bringing forward such an obviously unthought-out Bill that is doing damage to what—and I say this with respect to the noble Lord, Lord Naseby—even the noble Lord, Lord Naseby, thinks is a mess-up, and he is a supporter of the Government’s Bill? Why on earth are they messing everything up like this? Could they please give an answer to what the noble Lord, Lord Dunlop, said on day one? Is he right? If so, the urgency goes.
Lord Callanan (Con)
I thank all noble Lords who have spoken in this short debate on this important subject. I shall start by replying directly to the noble and learned Lord, Lord Falconer, and the noble Lord, Lord Clement-Jones, who spoke about Part 3 and why we felt the need to bring these proposals forward. The Bill is intended to ensure that divergence in professional regulation between the four nations of the UK does not increase barriers for professionals living and working in different parts of the UK. As our economy continues to develop and new sectors emerge, it is possible that new regulated professions will be created and there may be changes to existing qualification requirements that could make it more difficult to access the profession in another part of the UK. These new professions may well be crucial to the UK’s economic future. As in other areas, we do not want barriers to trade across the UK in these sectors. Internal market provisions will apply where part of the UK regulates a new profession, access to which is limited to those holding certain professional qualifications or experience. The provisions will also apply to existing professions where there are changes to the requirements for the qualifications or experience needed in order to access the profession concerned. Currently, while the recognition of professional qualifications between the four nations can and does occur, there is no overarching framework that ensures that it does. The Bill creates such an overarching framework to guarantee that recognition of qualifications between the four nations will be possible and barriers will be minimised.
I am happy to give the noble Lord, Lord Smith, and my noble friend Lady Neville-Rolfe the specific assurance they asked for: nothing in the recognition provisions of the Bill, including the exclusion, affects the current situation. IPReg will continue to be able to decide whether and how trademark and patent attorneys should be allowed to carry out the regulated legal activities that it is designated to regulate in all the different parts of the UK.
The government amendment aims to bring patent and trademark attorneys in line with other legal professions and to place them outside the scope of the recognition provisions of Clause 22 of the Bill. Legal professionals have been excluded from the scope of the provisions on the recognition of professional qualifications in acknowledgment of the different legal systems that exist in the UK. This will ensure that the regulation of and access to these professions, including trademark and patent attorneys, are not affected in any way by the mutual recognition provisions of the Bill and will be completely unaffected. That is why we need Amendments 107 and 108.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received requests to speak after the Minister from the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Fox.
Lord Falconer of Thoroton (Lab)
The noble Lord, Lord Callanan, referred to the idea of new professions being invented. If this happened, there would be a professional body that would need government recognition in some form. Could he give us an example, perhaps, of a new profession emerging without a professional body in relation to which there is a substantial risk? If there is no such example or evidence, it is incredibly unconvincing. The second and separate example he gave was an existing profession giving rise to a particular requirement that would create a barrier to entry in one part of the United Kingdom for another. Could he give an example of when that has happened in the past?
Lord Callanan (Con)
By the very nature of it being a new profession or qualification, it is quite hard for me to give examples of what might happen in the future. There are all sorts of new technologies; even in the noble and learned Lord’s legal profession, there may be new technologies, ideas and proposals that will come forward. There is the whole world of artificial intelligence or gene editing—there is a massive range of new and potential professional areas, bodies and qualifications that may come forward. That is the point: we want the current situation in many of these professions to be unaffected, but, in the case of new professions, it is entirely possible that the individual nations of the UK might seek to regulate them differently, and we want no new barriers to trade to emerge.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have also received a request from the noble Lord, Lord Purvis of Tweed, but I first call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, with all due respect to the Minister, I am sure he understands how unsatisfactory that answer was. My noble friend Lord Thomas of Gresford talked about the gobbledegook of future-proofing, and this is gobbledegook. First, could the Minister tell your Lordships’ House what past examples lead the Government today to this conclusion? Secondly, why is there a problem with bringing any future issues to the Government and your Lordships’ House bespoke in the event that the Minister proves correct and something turns up? To seek to produce a Bill that covers all of the unknown unknowns that are going to happen in the history of time seems overambitious.
Lord Callanan (Con)
I think we are just going to have to differ on this one. We do not want to be returning to the House to create unnecessary difficulties and disagreements in the future; we want to ensure that, before any of these difficulties arise, we have put in place, as in the rest of the Bill, a framework that covers the whole of the United Kingdom to regulate how we will manage and control these issues in the future. That is all we are seeking to do. I understand the points that noble Lords are making. There are differently regulated professions in some parts of the UK already; we accept that and that the status quo is there, but we think that, in future, these things are best regulated on a UK-wide basis, and we want no new barriers to trade to emerge.
Lord Purvis of Tweed (LD)
My Lords, this has nothing to do with powers repatriated from the European Union; it has everything to do with our internal United Kingdom approach. When was the last time that a professional body regulated by law was established where the Government considered there to be major barriers across the United Kingdom?
Lord Callanan (Con)
The noble Lord will be well aware that there is European directive on this subject, and mutual recognition of professional qualifications, so, even in the EU law space, it is accepted that the nations of the EU have different ways of recognising different professional qualifications. I commend Amendments 107 and 108 to the House.
Lord Callanan
“(1A) Provision that limits the ability referred to in subsection (1)(a) to individuals with certain qualifications or experience falls within section 22(1) only if the activities affected by the provision are, in a significant number of cases, essential to the practice of the profession in question.” Member’s explanatory statement
This amendment would provide that provision imposing qualification requirements on particular professional activities falls within Clause 22 only if the activities are, in a significant number of cases, essential to the practice of the profession in question.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 110. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Clause 28: Functions of the CMA under Part 4: general provisions
Amendment 110
Baroness Neville-Rolfe
“Office for the Internal Market
“(1) An Office for the Internal Market (“OIM”), which will report to the Department for Business, Energy and Industrial Strategy, is established.(2) The functions of the OIM are as follows—(a) monitoring the health of the internal market, and(b) advising and reporting on proposals and regulations, and their actual and potential impact on the internal market.”Member’s explanatory statement
This amendment seeks to probe why the OIM is established within the CMA and instead attaches it to BEIS.
Baroness Neville-Rolfe (Con)
My Lords, I rise to move Amendment 110 in my name and that of my noble friend Lady Noakes. My noble friend the Minister has been kind enough to write to me following the debate on where the new office for the internal market should sit. However, I remain to be convinced that the Competition and Markets Authority is its appropriate home. For this reason, I have tabled an amendment attaching it to BEIS. To make that effective, I am also supporting the noble Baroness, Lady Bowles of Berkhamsted, in opposing Clauses 28 and 29.
I will put it simply and bluntly: no case has been made for locating the new office in the CMA, except, I suppose, that it is already an independent agency and the department has some involvement in the appointment of its well-paid top brass. However, the CMA is generally highly sceptical of business, especially the bigger businesses that operate across the UK, which need to flourish if the economy is to recover. That is my past personal experience with various different hats on.
We need an office—call it what you will—that can do two things: it needs to be able to monitor objectively and to advise sensibly on difficult and developing internal border issues. These are highly politically charged, as we can see from experience during Covid. Therefore, we need an office that reports directly to BEIS and, arguably, we need a Minister for the Single Market, in the same way that we had a commissioner in Brussels when we were an EU member. Actually, I prefer the notion of a single market to that of an internal market. Most of us, including the devolved Administrations, had a great deal of time for the single market when we operated within it. Indeed, I devoted some of my career to advancing it because of its benefits to consumers, manufacturers, services, other businesses and, of course, GDP.
I am sure the Minister would agree that not everything done in Brussels is wrong, and I believe we need an in-house and a political dimension. Therefore, for me, the right model for this office is the Intellectual Property Office, which has a chair and a board from outside but also a strong CEO reporting to a BEIS Minister and advising on both policy and enforcement as well as negotiating internationally and across the UK. If BEIS, for some reason, cannot do all of those things in an in-house office, the monitoring role could go to the ONS, which is well regarded in statistical matters. However, above all, the office must be subject to ministerial direction. Recent experience with Ofqual, PHE and even the CMA itself does not persuade me that the approach in this Bill is right. It is not too late to make a change.
I note that Amendment 155 in the name of the noble Baroness, Lady Hayter, has been added to this group. I have a great deal of respect for the noble Baroness and worked with her successfully on consumer legislation in the past. However, I am not convinced that a consumer duty makes sense here, certainly not without balancing provisions on business and the economy. Business stands to lose so much from this new legislation already and from the inappropriate appointment of the CMA as the office of the internal market, and this is at a time when business is more and more adversely affected by the never-ending Covid nightmare. I think we should reflect further, but, for now, I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I have given notice of my intention to oppose Clauses 29, 30 and 41 standing part. This is part of a full set of not stand part notices that signals concerns, in principle and to specifics, throughout Part 4 and Schedule 3. I will also probe what has been left unsaid about what the CMA or the OIM will do in total regarding the internal market. I thank the noble Baroness, Lady Neville-Rolfe, for supporting my opposition to the clauses standing part. We have some common concerns, but we are not entirely in the same place. I will be interested to hear her response to some of the points I will make as the debate develops.
There are three parts to my concern. First, as I said at Second Reading, it seems odd to use the powerful investigatory might of the CMA—or a lookalike OIM—whose information-gathering powers, with accompanying enforcement and penalties for non-compliance, bear down on individuals and companies, but where the main purpose, from weighing up the clauses’ wording, is to advise administrations about their own and one another’s regulation, and not anything the companies themselves have caused. This is extraordinary.
Secondly, there are aspects in the Bill that relate to business activity. However, this is not articulated, except that businesses are presumably among those who could make a proposal to the CMA for it to undertake a review under Clause 31. I am left asking: what else is happening that has not been said? Thirdly, there is the matter of making the CMA or the OIM properly representative of the four nations.
Overall, this seems an authoritarian, unexplained and unfinished state of affairs. The use of the CMA is a hangover from when Mrs May envisaged a corresponding body to the European Commission for all competition and state aid matters. State aid considerations have now dropped away to WTO-type considerations of distortive and harmful subsidies that will not be looked at by anyone; the Trade Remedies Authority might have to respond on incoming international complaints, but the domestic side is bare. That still leaves the market access principles to be enforced somewhere.
The Government’s response to the internal market consultation says that the expansion of the CMA’s remit will not position it as an enforcer. In a letter to my noble friend Lord Purvis after last Monday’s debate, the Minister confirmed that the OIM will provide expertise in scenarios where the economic impacts of particular regulations lead to disagreement between one or more administration, and that the non-binding assessments will ensure a technical underpinning to otherwise political discussions. Under the heading:
“On the Office for the Internal Market, disputes and governance”,
the letter to my noble friend Lord Purvis says:
“The Bill does not introduce new enforcement bodies, but instead relies on enforcement of regulatory compliance provisions in existing goods regulation to ensure that enforcement of regulatory compliance takes account of the opportunities offered by the market access principles of mutual recognition and non-discrimination”.
Does that mean that the CMA or the OIM will take account of the opportunities offered by market access principles? Does the CMA enforce the regulatory compliance provisions in existing goods regulation?
The impact assessment also mentions businesses and stakeholders. Page 29 says that stakeholders can “raise complaints” on internal market matters. This could arise by way of Clause 31 and seeking a review. However, the word “complaints” smacks of adjudication. It would be helpful if the Minister could explain whether that will be the case. Is it related to the mentioned regulatory compliance? How will that work?
Baroness Noakes (Con)
My Lords, I have added my name to my noble friend Lady Neville-Rolfe’s amendment. Like her, I am concerned that the CMA has been chosen as the home for the office for the internal market with very little substantive discussion and certainly no proper consultation. The White Paper the Government consulted on in the summer did not even mention the CMA, and the best the Government could report in their September policy response was that
“a few respondents suggested that the UK Internal Market functions would be a natural fit with the CMA”.
When I say that I do not believe the CMA is the right home for the internal market functions, I hope that will not be taken as a criticism of the CMA. It has done good work over the years, building on that of its predecessor bodies, and its work is respected here and abroad. However, it is not a body that has won universal acclaim. The time it takes on some of its market studies and the lack of impact of some of its findings are often cited against it.
I have three main grounds for seeking a different solution, of which my noble friend’s amendment is one constructive suggestion. First, the CMA’s existing functions are adjacent to the issues that will arise in the UK’s internal market, but they are by no means coterminous. The CMA is fundamentally about competition impacts, whether through mergers and acquisitions or market behaviour. It is also about the protection of consumers. The UK’s internal market is about trade and the avoidance of unnecessary barriers to trade. These are quite different things. The danger is that the CMA could move from being a focused competition and consumer organisation to one that is more diffuse and less targeted. Many organisations have lost their way when they have sought to expand their footprint and have ended up as a jack of all trades but master of none. We cannot afford to take that risk.
While it is planned for there to be a separate panel for the office for the internal market within the CMA, it is inevitable that the functions of the office, and the resources to deliver them, will be intermingled with the CMA’s other functions. It is also clear from the Bill that it is the CMA, and not the office for the internal market itself, which will carry responsibility for the various functions set out in the Bill. We run a very serious risk of the office for the internal market disappearing into the CMA’s back room.
My second reason is that the CMA really has too much on its plate at the moment to contemplate adding such an important new area of responsibility as oversight of the UK’s internal market. There are aspects of its current workings that are not beyond criticism, as I have already mentioned. Importantly, it is about to take on a number of additional activities as we finally exit the EU at the end of the year. If anyone doubts the extent of these additional responsibilities, there are 50 pages of draft guidance on these new activities which the CMA is currently consulting on. These competition functions have already led to a very significant increase in the CMA’s resources and I believe that it was expected that overall staff numbers would increase by 40% as a result. Against that background, it would be crazy to add on significant additional responsibilities. There is only so much change that any organisation can safely accommodate in a given period.
A final reason for wanting to see the office for the internal market set up outside the CMA is to ensure that it has a real presence in our internal market as a respected source of impartial data, analysis and advice. These seem to be the things that the Government want, as set out in this Bill, but setting it up as a mere panel of a much larger, differently focused quango cannot be the right way to achieve that.
Lord Palmer of Childs Hill (LD) [V]
My Lords, my purpose in speaking today is to support Amendment 111, which I have signed, and the detailed comments made by my noble friend Lady Bowles. Amendment 111 aims to clarify that the role of the CMA and the office for the internal market is not the resolution of disputes. We already have common frameworks; we do not need a topdown resolver of disputes.
Last week, the Minister said clearly that the office for the internal market is to provide “monitoring, advice and reports”. He said that it will
“have no direct role in dispute resolution”—[Official Report, 26/0/20; col. 70.]
which will be discussed by the Joint Ministerial Committee. There is no reference to a dispute resolution in the Bill. I hope that, for clarity, the Government will accept Amendment 111, which states clearly that the CMA and, thus the new office for the internal market,
“must not engage in dispute resolution”.
The important role of dispute resolution can realistically be achieved only by discussions and compromises between the nation states of the UK. The amendment seeks to make clear what the OIM can and cannot do. In responding to this debate, will the Minister clarify these powers, or lack of them? Clarification, along with dealing with complaints and inconsistencies, is what is needed. That is what your Lordships’ House is set up for and does so well. The various explanatory documents only confuse even further and imply some resolution powers for the CMA and OIM.
Amendment 111, which puts the CMA and its plethora of civil servants back in the box, is necessary if the Bill is to be approved. The Bill is a mistake; the noble and learned Lord, Lord Falconer, summed it up when he said that it was “unthought-out”. I support the amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
The noble Lord, Lord Liddle, has withdrawn, so I call the noble Lord, Lord Naseby.
Lord Naseby (Con)
My Lords, when I first read through the Bill, I had some reservations about the CMA, not least because of the number of its investigations that have not exactly gone smoothly, as my noble friend Lady Noakes referred to. As all noble Lords are aware, it arose from its antecedent, the old Monopolies and Mergers Commission. I voiced some of those reservations at Second Reading. I then had another look at the OIM and could not for the life of me understand why it did not have its own status. How could it be right for it to be almost subservient to the CMA? I could immediately see a clash of interests. As has just been said, its role is to monitor, advise and report. That may well clash with the basic element of the CMA. While this amendment may not be exactly right, there is a strong case for it.
I will give an example. I have recently been approached by some outside people because they know that I take an interest in the credit lending market, principally credit unions. It is a difficult market because there is the FCA, which does a good job on the whole, but there is also the ombudsman. People who are in difficulty with credit are prone to appeal to the ombudsman for better treatment, as it goes beyond the normal provisions under which the FCA works. That created a real problem for the genuine lenders—not the fly-by-night operators—because of a clash of interests.
I would not expect my noble friend on the Front Bench to respond in any detail today, but the OIM has to have its own status. It should not be in a position where it is embarrassed by the CMA going against what the OIM thinks is appropriate in any situation.
Baroness Hayter of Kentish Town (Lab)
My Lords, the noble Baroness, Lady Bowles, referred to a letter to the noble Lord, Lord Purvis, following an earlier discussion. I have not received a copy of that. Could all the letters sent following these debates be circulated to all Members of the Committee?
Baroness Hayter of Kentish Town (Lab)
I think all speakers in these debates ought to get them. Unless, of course, it is a very private letter to the noble Lord, Lord Purvis—in which case we will leave that between the two of them—all noble Lords should see all the letters that arise from these debates.
When I started thinking about this group, I thought that there were two divergent views, but they are not as divergent as I thought. It looked as if some amendments wanted the OIM, which is an observatory rather than an office, to be almost part of BEIS, with little independence. Our view is to the contrary. Amendment 113 in my name, which is obviously probing, signals that the CMA should not be advising the department but using its powers to intervene as necessary. That did not mean that it should not send messages to the Secretary of State, as the noble Lord, Lord Tyrie, did when, as its chair, he sought more powers for the CMA to intervene. He wanted a proper consumer duty adding to it. The amendment does not say that it should not advise the department but makes the point that it should not be subservient to it.
Lord Callanan (Con)
My Lords, I thank everyone who has participated in this group. I will seek to take forward the suggestion of the noble Baroness, Lady Hayter, that letters be copied around—I have another batch on my desk to approve once we have finished this debate, many of which, I am sure, are to my Liberal Democrat colleagues. I will ensure that they are circulated to all the protagonists. They are not particularly secret; they just help to clarify and explain the Government’s role and answer the many questions that we have been asked. I hope that is helpful.
I will start with Amendment 110, which seeks to replace Clause 28 with a new clause on the establishment of the Office for the Internal Market. As noble Lords will know, this Bill will create an Office for the Internal Market within the Competition and Markets Authority to carry out a set of independent advisory, monitoring and reporting functions to support the effective operation of the UK internal market. The proposed new clause seeks to create a new and separate public body that reports to the BEIS Secretary of State. The effect would be not to establish the Office for the Internal Market within the Competition and Markets Authority.
Let me say in response to my noble friends Lady Neville-Rolfe and Lord Naseby and the noble Baroness, Lady Hayter, that the Government did consider a wide range of delivery options for the advisory, monitoring and reporting functions of the UK internal market, as set out in the Bill. We concluded that the Competition and Markets Authority is best suited to house the OIM to perform these functions. The CMA is an independent non-ministerial department that currently operates at arm’s length from the Government. It is sponsored by BEIS and Her Majesty’s Treasury and—to answer the question posed by my noble friend Lady Neville-Rolfe—Ministers will be responsible to Parliament in reporting on the work of the CMA and the Office for the Internal Market, even though they operate at arm’s length.
The Competition and Markets Authority has built up a wealth of expertise and experience that makes it a natural fit to take on these additional functions. It has a global reputation for promoting competition for the benefit of consumers and for ensuring that markets work well for consumers, businesses and the wider economy. It will also build on the CMA’s existing technical and economic expertise, which will now support further development of the UK internal market.
I should also explain that it is government policy that new arm’s-length public bodies should be only set up as a last resort and when consideration of all other delivery options has been exhausted. Other delivery options that should be considered include utilising existing bodies in order to deliver any new functions. New public bodies should be created only if there is a clear need for the state to provide the function or service through a public body and if there is no viable alternative—effectively establishing new public bodies as a very last resort. For the reasons that I have set out, we are not able to agree with this amendment. I hope that my noble friend Lady Neville-Rolfe will feel able to withdraw it.
Regarding Clause 28 stand part, this clause defines regulatory provisions on which the CMA, through the OIM, will monitor and provide reports and advice. The purpose is to set out the areas where the OIM will perform functions under the Bill, in order to ensure certainty and transparency for Administrations, businesses and the general public in connection with the effective operation of the UK internal market. Regulatory provisions are within scope if they set requirements for the purposes of the mutual recognition and non-discrimination principles of the Bill for the sale of goods and the equivalent for services. Moreover, regulatory provisions are within scope if they apply to one or more nations but not the whole of the United Kingdom. Clause 28 as it stands forms an integral part of the provisions for the OIM to carry out its independent, advisory and reporting duties in respect of the UK internal market. For these reasons, therefore, I am unable to accept the proposal that Clause 28 should not stand part of the Bill.
On Clause 29 stand part, removing Clause 29 would remove the Competition and Markets Authority’s objective when exercising its functions as the Office for the Internal Market. This clause designates the CMA, in its capacity as the OIM, as having a specific role in the operation of the UK internal market. It is additionally important to note that this clause establishes the statutory objectives of the CMA in its capacity as the OIM. This clause will ensure that the CMA in its OIM role is able to operate effectively as the monitoring body for the internal market, and will ensure there is no confusion between the pre-existing powers of the CMA and those newly conferred upon it as the OIM. Distinct objectives will prevent any operationally problematic blurring of functions. Clause 29 as it stands forms an integral part of the provisions for the OIM, and therefore we are unable to leave it out of the Bill.
Moving on to Clause 41 stand part, removing this clause would leave out vital definitional provisions. This clause provides key definitions for the purposes of this part of the Bill. This includes a definition of the Competition and Markets Authority itself and sets out how widely the operation of the internal market in the United Kingdom should be understood. This clause also defines “Relevant competence” in Part 4 as meaning both reserved and devolved competence so that executive and legislative competence in each territory is included. Clause 41 as it stands forms an integral part of the provisions for the CMA in its capacity as the Office for the Internal Market: it ensures legal clarity and certainty on technical terms used throughout this part. For all those reasons, therefore, I am unable to accept the removal of this clause.
Amendment 111 would require the CMA to not engage in any form of dispute resolution while fulfilling its responsibilities as outlined in Part 4. This addresses the points made by the noble Lord, Lord Palmer. In cases of disagreement between one or more Administrations, the OIM, within the CMA, could be called upon to provide a non-binding report to support intergovernmental discussion. An assessment of economic impacts will ensure a technical underpinning to an otherwise political discussion.
Ultimately, the OIM only supports the resolution of disputes among the Administrations politically, and it does not adjudicate. The Government believe that building upon existing intergovernmental arrangements is the best approach to resolving any potential disputes, and this includes mechanisms such as common frameworks and intergovernmental relations, according to a clear and agreed process. The OIM will have its role in disputes between individuals and businesses, but businesses can request that the OIM consider disputes as part of its regular reporting. It is under no obligation to do so, nor will it have the authority to adjudicate on the specific issues.
Amendment 113 would prevent the necessary flow of information from the Competition and Markets Authority to the Secretary of State as the policy’s sponsor. The clause in question allows the CMA to alert the Government when it thinks adjustments may be needed to the way it fulfils its statutory functions, or it wishes to raise issues of particular concern. This is in line with precedent for similar public bodies and mirrors provisions in the existing legislation underpinning the CMA. Removing this provision would hamper the necessary communication between the Government and the CMA across all the other provisions in Part 4. For that reason, we are unable to accept the amendment.
Amendment 155 would make it an explicit statutory duty of the CMA, under its existing duties within the Enterprise and Regulatory Reform Act 2013, to protect and promote the interests of consumers in respect of the internal market. The clause in question establishes the statutory objective of the Competition and Markets Authority in its capacity as the OIM. It will ensure that the office is able to operate effectively as the monitoring body for the internal market and that there is no confusion between the pre-existing powers of the CMA and those newly conferred upon it. Distinct objectives will prevent any operationally problematic blurring of functions. The OIM will operate for the benefit of all those with an interest in a smoothly functioning internal market, be they regulators, businesses, professionals, the four legislatures or consumers. Explicitly narrowing its focus to consumers would, in our view, be to the detriment of all the other stakeholders I have listed. Therefore, I am unable to accept the amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, I am grateful for the Minister’s response. In her speech, the noble Baroness, Lady Bowles, asked some very specific questions, particularly in the stand part bit of her speech. I listened hard but I could not hear any answers to them, so perhaps the Minister could review her speech and write a letter, promptly, making sure that I and the noble Baroness, Lady Hayter, get a copy.
Lord Callanan (Con)
I see the request has the enthusiastic endorsement of the noble Lord, Lord Foulkes. Therefore, as his biggest fan in the House, I am obliged to follow the idea put forward. I will of course write to the noble Lord, Lord Fox, on that.
Baroness Neville-Rolfe (Con)
My Lords, this has been a good debate on an important group of amendments. We are not all agreed, but most of us are doubtful about the decision to allocate the office for the internal market to the CMA in the way the Bill proposes. I favour an office with ministerial leadership—there is a parallel with the EU’s single market commissioner, which has worked well in many ways.
The noble Baroness, Lady Bowles, made an expert and very strong case from a different perspective. She rightly pointed to the huge powers and penalties involved in giving this role to the CMA, and explained useful background as to why it ended up in the CMA, linked to an earlier time when state aid rules were going to be part of the portfolio. She also highlighted a concern about how the arrangements will work for the devolved Administrations, which the noble Lord, Lord Palmer of Childs Hill, developed in more detail and which was referred to by the noble Baroness, Lady Hayter.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
We now come to the group beginning with Amendment 114. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in debate.
Clause 30: Office for the Internal Market panel and task groups
Amendment 114
“(3) Before authorising a task group under subsection (1), the CMA must consult the Joint Ministerial Committee on European Negotiations.”
Lord Mackay of Clashfern (Con) [V]
My Lords, the United Kingdom Parliament has a legislative competence to regulate the United Kingdom internal market, but the devolved Administrations have a fundamental interest also. In my view, it is wise to give them a voice in the way it is exercised. This group of amendments is entirely concerned with that. I am assuming that the structures in the Bill are kept as they are, as—as with the last set of amendments—fundamental changes would affect the effect of the amendments I am proposing.
Amendment 114, which I am moving, relates to the task force set up to examine an aspect of the internal market. I am saying that the devolved Administrations should be consulted on that through the Joint Ministerial Committee. Amendment 141 relates to the submission of CMA reports. It is important that this report from the authority looking into it should go to the Joint Ministerial Committee, which has responsibility for the common frameworks. That can include the Ministers from all the devolved Administrations, as well as the UK Minister, and it is extremely important that the report should go to that committee. Admittedly it goes to Parliament, and the members of course are Members of the Parliaments, but the committee as a whole should have the responsibility of having the report given to it.
The third amendment is Amendment 171. The joint committee is a committee which I think—or I understand —functions well; I hope my noble friend the Minister will comment on that when he replies. But, however well it functions, there is the possibility of disagreement. It is absolutely important that when a Minister of the UK Government uses powers to make statutory instruments and applies to Parliament for them, that should be a matter of thorough consultation with the Joint Ministerial Committee. It should come at a time when the formulation is not complete—in other words, at a time when a committee of this sort would be able to discuss the shape of the statutory instrument that would be laid before Parliament. This is a very good way of involving the devolved Administrations in the nitty-gritty, as it were, of the work that will flow from the Bill when it becomes law.
No matter how good a committee is, there is always a possibility of disagreement; I have tried to deal with that. A number of suggestions were made earlier in these debates about how disagreement should be resolved. In my view, the best way of doing it is by putting it to the United Kingdom Parliament, where all the devolved nations are represented constitutionally. If that is to be done, it is essential that it should be by full debate in both Houses of Parliament before a decision is taken. This is preferable to any kind of majority rule, or anything of that sort. It is important that Parliament, including those Members from the devolved Administration countries, has a responsibility in this matter. I think this is the way it should be resolved, and that is my suggestion.
I thoroughly believe that this proposal is fundamental to the smooth working of the internal market Bill in the future. There is always the possibility of misunderstanding unless there is a full discussion of the proposal quite early on. That is part of what I have in mind. I beg to move Amendment 114.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble and learned Lord, and to agree with the thrust of his comments. This is the last, relatively small, group on the general concept of the consultation, before we move specifically on to what we would expect to see of the OIM’s relationship with the devolved Administrations. It is important, I think, because of Amendment 171 in the name of the noble and learned Lord. The Government’s ability to make considerable changes, through regulation, to any part of this legislation—which could have far-reaching implications for the devolved Administrations—without any requirement for consulting is worrying.
We can look at what is currently under way with regard to consultation. I reflected on the Minister’s previous response to the noble and learned Lord, Lord Falconer of Thoroton, and my noble friend on the regulation of professional services and consultation. I ask the question because the consultation on The Recognition of Professional Qualifications and Regulation of Professions: Call for Evidence, which closed on 23 October—so a very recent closure—was a call for evidence to ask for views on whether there should be a UK-wide system of regulation for professional services. On page 15, under “Future considerations” in the section on the internal market, it says:
“determine whether or not there would be merit in having a UK-wide, cross-sectoral strategy for the regulation of professions (potentially underpinned by regulatory principles).”
But in this Bill we are debating it, because the Government did not wait until the closure of that consultation process before bringing legislation forward and say that this is now absolutely necessary, whereas the consultation by the business department, which closed on 23 October, simply requested people’s views.
I would be grateful if the Government would publish the responses to that consultation and update the House on the consultations on the White Paper which had been requested. I understand that the Government indicated that they would publish those consultations by 9 October, so an update on the status of that would be helpful. The Government’s ability to make regulations without consulting the devolved Administrations, under the last schedule of the Bill, does require consultation. I very much support the thrust of the noble and learned Lord’s amendments.
Turning to Amendments 114 and 141, I note that the Government’s proposal, relating to the CMA and the OIM, in this Bill is that before an appointment to the CMA board, as a chair of an OIM panel, or as a member of a panel, there must be a consultation with the devolved Administrations—so far, so good. But there is no requirement for the CMA then to consult on the establishment of a task group or a panel, so I wonder what the Government’s thinking is on that. The Government will consult the devolved Administrations on an appointment to a panel, but then there is no requirement for that panel to consult before it starts its work.
On the point that the noble Baroness, Lady Neville-Rolfe, recognised in the previous group, some of the work of the OIM in these areas will touch on very sensitive issues, with regard to the devolved powers or the decisions. Given that under this legislation there will be the ability to disapply devolved legislation—legislation in the competence of any of the home nations—there being no requirement to consult before that work commences is highly problematic. The legislation goes further to say that the CMA, after a request, “may” provide a report on proposals by one of the Governments for legislation within the UK; but, of course, if it may, it may not. If it does not consult after a request has been made by one of the nations—one of the Governments—in the UK, there is no ability to know the reasons for the CMA’s decision. The necessity now for the CMA to consult is important, given that a request can be made to report on a specific proposed regulatory provision, without the requirement to consult the body proposing to make that regulatory provision, which is quite extraordinary in my view.
We do not even know, at the very least, what process the CMA would follow in the establishment of a task group to investigate a proposed regulatory provision; nor will that devolved Administration necessarily know the basis on which the task group will investigate. These are basic principles that the noble Lord is correct to highlight.
The Deputy Chairman of Committees (Lord Lexden) (Con)
The noble Lord, Lord Liddle, has withdrawn so I call the noble Baroness, Lady Humphreys.
Baroness Humphreys (LD) [V]
My Lords, I thank the noble and learned Lord, Lord Mackey of Clashfern, for tabling the amendments in this group.
In what is becoming an extremely welcome defence of the devolved Administrations and their devolution settlements in debates on this Bill, these amendments point the way to involving a forum that already exists when discussing and agreeing to regulations under the Bill: the Joint Ministerial Committee on EU Negotiations. The amendments would require the Competition and Markets Authority to consult the JMC on EU negotiations; they would also ensure that regulations are brought before the committee and discussed by it before being laid before Parliament.
The amendments are entirely sensible. The JMC on EU Negotiations appears to be the ideal vehicle for such oversight and deliberations. The amendments also open up the opportunity to discuss the way in which the JMC operates, to examine whether it is fit for purpose and to envisage its future role. Of course, the Joint Ministerial Committee on European Negotiations is a sub-committee of the Joint Ministerial Committee—a committee made up of Ministers from all four national Governments. On looking at the memorandum of understanding that underpins the JMC’s operations, it seems an ideal candidate for this oversight role. It is worth examining its wording. According to the memorandum, the JMC should provide
“central co-ordination of the overall relationship”
between the UK and the devolved nations and, among other things,
“consider devolved matters if it is beneficial to discuss their respective treatment in the different parts of the United Kingdom”
and
“consider disputes between the administrations.”
It seems an ideal candidate indeed, as I am sure we all would agree. This is exactly the sort of forum that we need, not just to have oversight of regulations brought forward by the CMA but to consider all issues arising from the relationship between the four nations. But the reality is slightly different. The JMC has the potential to be a forum to guide devolution issues and resolve them, but the committee itself seems to operate on an almost ad hoc basis.
My noble friend has already pointed out the difficulties with the Joint Ministerial Committee (Plenary), which is supposed to meet at least once every year. Like him, I look forward to hearing when the Prime Minister will be willing to chair another of its meetings. The Joint Ministerial Committee on EU Negotiations, to which these amendments refer, was initially expected to meet monthly. It did so until February 2017 but then ceased to operate for eight months, and its meetings have been held on an irregular basis since then. It met five times in 2019 and, I believe, has met three times so far in 2020. I would be delighted if the Minister could prove me wrong and tell me that it has met more often.
Despite the obvious drawbacks in the way that the JMC and its sub-committees operate, I am extremely grateful to the noble and learned Lord for tabling these amendments, because they point a way forward. The JMC and its sub-committees, actual and potential, could have a vital role to play in resolving issues that arise in and around the operation of the UK internal market, but first we need to resolve the long-standing issues surrounding its constitution. The frequency of meetings and the question of who controls the agenda, for example, all have to be placed on a statutory footing. The JMC and its sub-committees, operating efficiently, regularly and fairly, have the potential to allay the fears of the devolved Administrations and allow for the consensual and co-operative government they seek. I support these amendments.
Lord Naseby (Con)
My Lords, when I read the Bill and the amendments to it that have been tabled, I asked myself, “Why?” Of course, my noble and learned friend Lord Mackay is a very experienced attorney and parliamentarian, but the whole purpose of the CMA is to be independent of government. It is not there to be dictated to because one of the devolved Administrations does not like the look of what the task group is going to be doing. That would be absolutely wrong. The whole basis of the CMA and OIM is that they are independent of government. They publish their results, monitor properly and advise, but the amendment would seem to put in another tier of management, like Europe in reverse. That is very wrong, and it would find no favour with me at all.
Lord Morris of Aberavon (Lab) [V]
My Lords, I support Amendment 114, moved by the noble and learned Lord, Lord Mackay. It is right that we take the opportunity to look at the role and relationship of the Competition and Markets Authority and its relation to the Joint Ministerial Committee.
The single market is important to all of us. Perhaps I may give a practical example of smooth working, which is so essential. In the words of the noble and learned Lord, Lord Mackay, smooth working will ensure that our products are able to be sold in one part of the country and in any other. Nothing would distort that more than if access to the markets were limited. All my family are sheep farmers. They sell their products, produced in Wales—ram lambs, lambs and ewes—in markets in Carlisle and Exeter on a modest scale. It is important for them to ensure that they have easy access to all markets. That is the kind of practical example that we look at in the functioning of our future relationships.
The Duke of Montrose (Con) [V]
My Lords, I support my noble and learned friend Lord Mackay of Clashfern on this group of amendments, particularly Amendment 114. Having the correct dispute resolution mechanism is extremely important. If the Government can find a better one than what has been suggested, I would be interested in the Minister giving us a clue as to what it might be.
The Government have found that the Scottish Administration object to the Bill, particularly the internal market element. My noble and learned friend has drawn on many years of legal and parliamentary experience in trying to find a way for the devolved Administrations to have a forum for formal comment on the arrangements for reinforcing the single market and any SIs.
The Joint Ministerial Council on EU Negotiations has already received wide acceptance in its role of setting up the conditions for negotiating market frameworks. I declare my family interest, which is in a livestock farm in Scotland and in the Scottish agricultural industry. As the noble and learned Lord, Lord Morris, pointed out, the industry as a whole in Wales and Northern Ireland is desperate to see a properly functioning single market across the UK, let alone within the EU. It finds the framework concept so far very reassuring, but it appears that the Scottish Government are looking for more.
I have a reason to declare an interest of another kind in this whole process, in that the dukedom that I represent in your Lordships’ House derives from the role that my six-times-great-grandfather played in promoting the negotiations for the Act of Union. This of course was a desire to get a single UK market at that time, as there were so many areas where Scotland had previously had no way of gaining benefit. The settlement that they agreed left Scotland with much lesser constitutional powers than currently exist; none the less, they were determined that certain characteristics of Scottish life should remain, and they do so to this day. Therefore, I have always watched these developments with care.
Several of your Lordships were here when we debated the Scotland Bill, sometimes quite late into the night. At that time, it seemed incredible that all the items necessary for the administration of the UK could be defined in a schedule, with Scotland having jurisdiction over everything else. We were assured that this was not a worry, because Westminster always retained the final say. Noble Lords—my noble friend the Minister is probably conscious of it too—may remember, during the progress of the Scotland Bill in 1998, a slightly bad-tempered evening in Committee, which was asked to begin sitting at 6 pm and spent some time on the future relationship between Westminster and the new Administration. I was never quite sure if this was a formally prepared answer, but when trying to bring the argument to a head, Lord Sewel uttered the familiar words:
“Clause 27 makes it clear that the devolution of legislative competence to the Scottish parliament does not affect the ability of Westminster to legislate for Scotland even in relation to devolved matters … However, as happened in Northern Ireland earlier in the century, we would expect a convention to be established that Westminster would not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish parliament. If problems do arise the solution is for the Scottish executive and the United Kingdom Government to resolve the matter through political dialogue. That is what differences between mature parliaments and Executives will be concerned with.”—[Official Report, 21/7/98; col. 791.]
This is where we find ourselves today. Any formal reiteration of this power always recognises the full content of this text, but the element that receives much more exposure—to the point where people begin to think that it is the only part of the legislation—is the need for legislative consent Motions whenever uncertainty arises. The encouragement to progress to political dialogue is most certainly relevant to where we are at the present time. In the present circumstances, it would not be ideal for the Government simply to implement UK legislation. Perhaps the Minister can tell the House what stage discussions with the Scottish Government have reached? It seems to me that these amendments are suggesting a form in which the Government’s proposals can be formally conveyed, with a chance that the final positions of both sides can be opened for scrutiny.
Lord Fox (LD)
My Lords, I am grateful for the quality of this relatively short debate on a really important issue. In his speech, the noble and learned Lord, Lord Morris, emphasised the need to avoid a threat to the devolution settlement. When the noble and learned Lord, Lord Mackay of Clashfern, stirs, and tables amendments, it is important for us all to listen. Clearly, he is very concerned about the route that this Bill is taking, as is the noble Duke, the Duke of Montrose, who articulated strong reasons for a consultative and consensus approach to regulating the internal market of the United Kingdom. I am also grateful to him for bringing up again the Act of Union, because this is a live treaty; it still exists and reflects on the issue which we are discussing. We should always remember that.
The noble and learned Lord, Lord Mackay, talked about the need for the devolved authorities, or the Joint Ministerial Committee, to be involved in the nitty-gritty of the market. My noble friend Lord Purvis of Tweed set out the dangers and the discontinuities within the current state of the Bill that make that process impossible. Therefore, it is important for the Minister to explain how this will work, because there are so many missing pieces in a jigsaw puzzle which, frankly, still does not have a picture, and which make it very difficult for us to understand what the Government are seeking to achieve and why.
My noble friend Lord Purvis asked many questions and he raised the issue of triggering disputes. The issue of when a dispute is triggered is central, as is the one which has surfaced in many different debates: the mechanism for resolving disputes. The noble and learned Lord, Lord Mackay of Clashfern, suggested one way; perhaps the Minister can comment on that.
My noble friend Lady Humphreys and other noble Lords have pointed out that the JMC, and its variety of committees, seem to have stalled, not because of any lack of faith from the devolved authorities but because of the Prime Minister not convening a meeting of the Joint Ministerial Committee (Plenary). Can the Minister explain the delay and say when the next meeting will occur? My noble friend Lord Purvis also raised the important question of structure. Where does this all fit in with the JMC’s current operations?
It is the Government who have sought to drag the CMA out of its current area of reserved issues and focus it on devolved issues. I say to the noble Lord, Lord Naseby, that it is not this amendment, but the Government, that have decided to do that. They are pulling the Office for the Internal Market into an as yet undefined dispute role. It is very clear, as the noble and learned Lord, Lord Mackay, set out, that if advice and reports are being submitted, then the JMC must be party to the same information that the UK Government are getting. It is also clear that we have no real idea of the Government’s intention for the operation of this Bill.
Lord Falconer of Thoroton (Lab)
These are important amendments that reveal yet another problem in the Bill. First, they deal with the role of the CMA, which under this Bill is intended to monitor and give advice on the working of the internal market. As I understand the way that Section 30 envisages that the CMA will operate, it will authorise an Office for the Internal Market task group to set up groups to look at particular issues. The amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern, seeks to ensure that, before such a task force is set up, there is confidence that the appointment of the task force, the terms of the task force and what it is doing have broad buy-in from all the relevant parts of the United Kingdom. Can the Minister explain how, without the amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern, this was currently going to be achieved?
For example, the CMA’s parent department is the business department, which is a UK government department. The CMA has a number of board members and panel members; how many of them at the moment have experience of Scottish, Welsh or Northern Irish business issues? As the Bill makes clear, the CMA will be appointing a task force where there is a difference between one part of the United Kingdom and another regarding regulatory or statutory requirements. On what basis do the Government envisage these task groups being appointed and set up? Is there any objection to adopting the noble and learned Lord’s suggestion of how to ensure that you get all the other parts of the country involved, as opposed to only BEIS or the CMA? If not, can the Minister put forward an alternative suggestion?
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, it gives me great pleasure to seek to reply to this extremely interesting debate. I agree with the noble and learned Lord that this is an extremely important area to consider. There were times in the speech of my noble friend the Duke of Montrose when I reflected that I was probably the 14th Mr True in the context of this discussion. I pay tribute to his ancestors for their long service to the Crown and the country of Scotland. It is true that the Act of Union is still of fundamental importance.
I am extremely grateful, as always, to my noble and learned friend Lord Mackay of Clashfern. Everybody who spoke recognised the good, unionist motivation to seek conciliation and collaboration which lay behind his amendments. I think that was shared by even my noble friend Lord Naseby. Often in debate we are asked to measure quantity and quality; although my noble friend was alone until now in saying that these amendments were perhaps not right for the Bill, I welcome his support.
Turning to the speech and proposals from my noble and learned friend, his Amendments 114, 141 and 171 seek to place obligations on the Joint Ministerial Committee on EU Negotiations—my noble and learned friend suggests this should be the core body—to be consulted on a number of considerations relating to the operation of the internal market.
I have been asked about the work of intergovernmental operations. The JMC (EN), which is the subject of these amendments, is a sub-committee chaired by my right honourable friend the Chancellor of the Duchy of Lancaster. It meets at regular intervals to facilitate political engagement between the UK Government and the devolved Administrations on the outcome of the UK’s exit from the EU, of which this Bill is one consequence. In total, since 2016, it has met 25 times, including the meeting that took place on 3 September 2020. The JMC system provides central co-ordination for the IGR machinery. I will come back to that later.
Before I address the amendments individually, I stress that the Government agree that the internal market should be underpinned by an effective system of governance and consultation between the four Administrations of the United Kingdom. However, we argue that the Joint Ministerial Committee on EU Negotiations is not the most appropriate or effective intergovernmental structure to engage on such technical considerations. As I mentioned, it was established in 2016 and has been valuable since then; it involves Ministers from each Administration.
I say with all respect to the noble Lord, Lord Purvis of Tweed, that there is no antithesis in regretting—as I hope he does—the decision of the Scottish Administration to withdraw from internal market discussions last March, as I referred to in a recent speech in your Lordships’ House, while seeking to continue co-operative work in the broad area of intergovernmental relations and through the common frameworks process. I will return shortly to the points on that made by the noble and learned Lord, Lord Falconer. The United Kingdom Government seek co-operation and understanding between the different Administrations. We want effective governance and consultation.
Through the review of intergovernmental relations, which is going on at the moment, as your Lordships are aware, we are working together with the devolved Administrations to revise and update the existing JMC system. Good progress is being made and we look forward to reporting on our finalised governance and parliamentary reporting structures in due course. As such, it would be counterproductive to pre-empt the conclusion of the review of intergovernmental machinery and place these obligations on the existing Joint Ministerial Committee, which would perhaps not be the most appropriate forum.
The noble and learned Lord, Lord Falconer, asked how disputes relating to the internal market should be resolved. Where disagreements relate to the internal market impacts of specific regulations that fall under a common framework policy area, it is anticipated that they will be considered through the dispute resolution mechanisms for individual common frameworks. The Government remain committed to resolving issues, including those relating to the UK internal market, at the lowest possible level. Most conversations on the UK internal market should therefore take place at departmental level to consider the impact on the UK internal market of individual policies at the technical level. This will be done through increased and improved engagement across all UK government departments and their devolved Administration counterparts. The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted by officials from all Administrations and endorsed by Ministers.
The UK Government are committed to the principle of dispute avoidance, as all Administrations continue to work closely behind the scenes to resolve issues through constructive dialogue, rather than detailed procedure. In the past, differences rarely escalated into disputes—in only four instances, I am informed. We can therefore expect the principle of dispute avoidance to remain central to managing disputes in the future.
My noble and learned friend suggested a specific function for the JMC (EN) on these issues. Amendment 114 requires that the committee be consulted prior to a task group of the Competition and Markets Authority being set up. We have already written into the Bill, in paragraph 2(3) of Schedule 3, that the Secretary of State will consult devolved Administrations prior to the appointment of panel members to the office for the internal market. The noble Lord, Lord Purvis of Tweed, referred to this. He said that it is just appointing the panel members but, in appointing members to a panel, it stands to reason that the devolved Administrations, being consulted, will be aware of the purpose for which that panel is being created.
In addition, we need to think carefully before compromising the independence of the CMA. The CMA is an independent non-ministerial department with a global reputation, as my noble friend Lord Callanan argued on an earlier group. Ministers have no day-to-day involvement in its operations. So that the advice and outcomes of the OIM’s work is trusted, its advice and future panels must be seen as impartial. There can be no suggestion of political interference, at any point. The involvement of a political engagement forum would therefore not be appropriate, in our judgment.
Amendment 141 then requires that all periodic reports by the office for the internal market on the operation of the UK internal market are laid before the JMC (EN). Subject to Clause 31(7) and Clause 34(3)— which the noble and learned Lord, Lord Falconer, pointed out, are governed by Clause 30(1)—the OIM will lay reports to the UK Parliament and each of the devolved legislatures. It will be for the relevant Administrations and legislatures, which receive the reports, to determine the most appropriate course of action, rather than a committee such as the JMC (EN).
Finally, Amendment 171 places an obligation on UK Ministers to bring regulations proposed under powers in the Bill to the JMC (EN). It suggests that, in the absence of agreement, UK Ministers would be obliged to lay reasons for the failure to agree before both Houses of Parliament and to table a Motion for a debate on the proposed regulations and the disagreement. I understand why my noble and learned friend is searching us on this point, but this mechanism is likely to introduce considerable delay in the implementation of policy to protect the internal market. Such a process would not facilitate timely discussions, given the frequency of such JMC (EN) meetings, and could undermine Parliament’s responsibility to legislate for the internal market as a whole.
I do not normally like to go with technical objections to amendments, but this amendment, as well as creating a new procedure for all powers across the Bill, would change the way regulations are made for Northern Ireland. It would require all the devolved Administrations to consent to regulations for Northern Ireland. Even if my noble and learned friend were minded to go forward on this route, and I hope he is not, we would have to respect the particular regulating arrangements for Northern Ireland in the Bill.
In summary, I hope noble Lords agree that, although these matters are important—I do not resile from the importance of the considerations raised and I will reflect on the debate—there are clear limitations to using the JMC (EN) in this capacity, particularly for measures relating to the office for the internal market, where there are already provisions in place to report directly to the Senedd, Holyrood and Stormont. With this in mind, I ask that this amendment be withdrawn.
The Deputy Chairman of Committees (Lord Lexden) (Con)
I have received requests to speak after the Minister from the noble Lords, Lord Fox and Lord Purvis of Tweed. I call the noble Lord, Lord Fox, first.
Lord Fox (LD)
I appreciate the Minister’s reply on the important points put forward. Whether the amendments of the noble and learned Lord, Lord Mackay, are adopted or there is some other form of regulating the relationship between the UK Government and the devolved authorities, does the Minister agree that there can be a smooth-running internal market only if there is trust between the UK Government and the devolved authorities? Could the Minister say what the Government’s assessment is of the effect on that trust of publishing the Bill?
Lord True (Con)
My Lords, I strongly agree on the principle of trust between all parties in a negotiation. It is not always there in every negotiation, but this is more than a negotiation; it is a relationship. It is a life together, which we all wish to carry forward as the four nations and peoples of these islands. Standing at this Dispatch Box, I have sought to assure the House of the Government’s total commitment to proceeding with trust and respect. That has to come from every Government and institution in the United Kingdom. I go no further than that. I do not believe that seeking to set out a common approach to the management of the UK internal market in the UK Parliament, to which all four nations of this kingdom send representatives, should in any way undermine trust.
Lord Purvis of Tweed (LD)
My Lords, can the Minister confirm that the discussions of the intergovernmental review, the conclusions of which we are asked to await, will specifically cover the operation of internal market legislation? Until now, as the Minister knows, legislative consent has been denied by both Wales and Scotland. The Minister repeated today that he regretted that the devolved Administration of Scotland has walked away from single market considerations. Will the intergovernmental fora that were referred to specifically cover the internal market?
Secondly, in their joint letter to my noble friend Lord Fox, the noble Lord, Lord Stevenson, and me, the Minister and the noble Lord, Lord Callanan, stated that the office for the internal market will have a role in providing independent advice in the dispute resolution process. With regard to the devolved Administrations in the intergovernmental fora, has it been confirmed that the OIM will have a role in dispute resolution?
Lord True (Con)
My Lords, I believe I heard my noble friend Lord Callanan addressing this point in the previous group and that there was talk of a letter. I may have misheard but, if such a letter were proposed, I would not want to interpose my rather excessively considerable body between my noble friend’s pen and your Lordships’ House. But I take the point. If it is not covered in the response that my noble friend Lord Callanan has promised, I will address it. I am not pleading for an institutional parsing of the text in my comments, but I repeat that we are jointly exploring a number of options to strengthen the impartiality of the intergovernmental dispute resolution process. We hope it can be carried forward successfully.
Lord Mackay of Clashfern (Con) [V]
My Lords, I am grateful for the general support for my proposal to require co-operation between the devolved Administrations and the UK Parliament. I am sorry that my good friend, my noble friend Lord Naseby, does not care for it. I am not sure why that is, because I do not think that what I am proposing would damage in any way the independence of those seeking to set up a task force. All I am concerned about is that the task force should be familiar with the various areas of the United Kingdom that will be affected by the dispute in question. However, I have to be thankful for the support of your Lordships for the general principles that I am trying to further.
I am using the JMC (EN) because I understand that, at the moment, it is the body that is running the common frameworks policy. I want to make it absolutely clear that I am strongly supportive of the common frameworks policy and of bringing together in that connection various important matters. The system seems to work well. I am happy to use any organisation that the Government come out with for continuing that work with a degree of friendship.
I indicated in my speech at Second Reading that although the Scottish Government had stood apart from the situation in a formal way, they were apparently encouraging support for trying to resolve the main problems of the internal market in the common frameworks policy. As far as I can make out, that is the position. Needless to say, I got that information from the Scottish Government. It is a description of our situation which shows a certain degree of separation and co-operation at the same time; I very much welcome that co-operation.
The general point of who will eventually run this is a matter that I cannot anticipate. Therefore, when I use the JMC (EN) in my amendments, I am simply using what I understand is the present situation. The Government may well be able to produce a better system and, if they do so, I will be glad of that. In the meantime, I think that there is general acceptance of the view that the devolved Administrations need to be closely involved. After all, in Scotland at least there is a very strong interest in this, because something like 60% of its exports go to the rest of the United Kingdom. An internal market that functions properly and fairly is very much in Scottish interests, and I certainly would like to do everything I can to promote that.
In the light of the very good response I have had from my noble friend Lord True, I am happy to withdraw my amendment.
The Deputy Chairman of Committees (Lord Lexden) (Con)
We now come to the group beginning with the question that Clause 30 stand part of the Bill. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, for the general reasons that I elaborated in the earlier group, I do not consider the CMA to be the right body, or the OIM the right structure, so in this group I give notice that Clause 30 and Schedule 3 should not stand part of the Bill. Clause 30 is about the setting up of task groups in the OIM and Schedule 3 contains more OIM detail.
Perhaps I may correct a small misspeak in the previous group. I referenced accidentally Clauses 29 and 30 instead of Clauses 28 and 29. I also pointed out then that this is part of a wider aim that Part 4 and Schedule 3 should not stand part, but as the Minister will know, it is not possible to put all of that in one amendment and debate it—we have to go through it clause by clause. However, I do not need to be reminded that removing one clause would leave the rest of them standing in a slightly awkward way. My solution is that we should get rid of them all.
I have also put forward Amendment 116 to probe how an independent OIM would look. It covers broadly the themes or principles that keep recurring as we move through the Bill and which need to be picked up, even when forced into the CMA straitjacket. I also heard what the Minister said about not creating new bodies. I recognise that there is a money aspect to this, but the point is that we need something that is better than the current proposals.
The first paragraph of Amendment 116 mentions having an MoU between the Administrations about the market access principles, and then the OIM being set up to assist in oversight. The message is simple: these matters should be consensual, and a consensually agreed body should be representing the four nations, rather than an imposed one that could potentially pay only lip service to the devolved authorities, or that does not necessarily have the right range of knowledge and abilities.
Proposed subsection (2)(a) envisages transparency, other than for commercially confidential information; maybe there could be some confidentiality for the Administrations in some instances too, but there should be a presumption of transparency, because how else are consumers or anyone else to know whether their views have been properly taken into consideration? Proposed subsection (2)(b) states that the board must include nominations from all of the devolved authorities and from the regions of England. I accept that the regions suggestion is as yet unstructured, but the principle I seek to convey is that it is no good just having the view from Westminster, it needs to be more “on the ground”, which is the enormous benefit of devolution.
The proposed third subsection says:
“Any task or investigatory group within the OIM must have a minimum of five persons drawn from all four nations of the United Kingdom.”
I have not tied the structure to the CMA-type panels, because I do not see that they are needed. However, whatever investigatory teams are used, there should be national diversity, not just cosmetically and not because it is political, but because there are genuinely different sets of knowledge and perspectives. The “minimum of three” task force of the CMA structure is clearly too few.
The proposed final subsection refers to the original CMA, not the OIM, and states that when in the ordinary course of its business the CMA conducts an investigation that requires consideration of the internal market, it shall also appoint balanced inquiry panels from all four nations. This could be in mergers, for example. I note that this part of my amendment contains thoughts that are somewhat similar to Amendment 153 tabled by the noble Baroness, Lady Hayter, which we will get to on Wednesday.
That is my vision of the starting principles for the OIM and how the Government’s construct could also be improved. I do not understand why the Government have given it copy-and-paste structures that derive from those that the CMA has for its investigations, and I question whether that is appropriate. This also underlies the clause should not stand part notices both in this group and generally.
Baroness Randerson (LD) [V]
My Lords, I will speak to the amendments in this group to which I have added my name: Amendments 117 and 118, and Amendments 120 to 124. The noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Baroness, Lady Finlay of Llandaff, have also signed these amendments, which have been put forward with the agreement of the Welsh Government.
Clauses 28 to 40 of this Bill establish a new Office for the Internal Market, within the CMA, as other noble Lords have already noted. The OIM will have reporting, monitoring and advisory functions and information-gathering powers; it will monitor the health of the internal market and provide advice on the economic impact of proposals and regulations, including their impact on trade, investment and competition. It will publish reports available to stakeholders and devolved Administrations. The problem is that all this is to be provided within the existing structure of the CMA, which is a body established and designed to work within the UK Government structure.
These amendments relate to the status, role and membership of the CMA, which was established in 2013 as a non-ministerial government department, accountable to Parliament via its sponsor department, which at the moment is BEIS. Although the CMA works at arm’s length from the Government, BEIS gives it a strategic steer that outlines the Government’s strategic priorities. The Secretary of State appoints, or removes, the chair and board of the CMA, and it produces an annual report for the Secretary of State. It is the CMA which represents the UK Government abroad on relevant issues.
The CMA was designed to deal with purely reserved matters, whereas the Office for the Internal Market is designed to have functions in relation to the devolved Administrations as well. The OIM is therefore a mismatched limb, grafted on to the CMA. For instance, Schedule 3 includes measures to establish an OIM panel and task groups. The Secretary of State must simply consult the devolved Administrations before these appointments. That is inadequate, as it provides no guarantees of agreement from the devolved Administrations before appointments are made and no guarantees of balanced representation.
These amendments seek to address these problems and to be fully respectful of devolution, including requiring the Secretary of State to get the consent of the devolved Administrations to appointments, although with the provision that they must respond within one month so they cannot unreasonably hold up the work of the OIM. Importantly, these amendments would also adjust the structure and relationship of the CMA so that it will no longer be a purely UK Government and parliamentary vehicle. The DAs would each be able to appoint and remove a CMA board member, subject to the usual five-year term and the CMA’s annual plan and annual report would be laid before the devolved legislatures as well as Parliament. Thus the parent organisation, the CMA, is structured to ensure that its offshoot, the Office for the Internal Market, works genuinely for all parts of the UK.
I spoke in an earlier debate about the hybrid role of UK Ministers, who are expected by this Bill to operate at one moment as English Ministers, acting in the specific interests of England, then to switch hats into their UK role and act as impartial arbiters between the interests of the four nations. This Bill requires a similar constitutional contortion from the CMA in relation to its baby, the Office for the Internal Market. There is a reason why the referees in Saturday’s rugby internationals did not come from either of the nations represented on the field—and we all know that. You cannot guarantee an even-handed approach unless you have the structures in place to ensure that, and it has to be built into and throughout the appointments of the organisation, into its remit and reporting processes.
Lord Thomas of Cwmgiedd (CB) [V]
As the noble Baroness, Lady Randerson, has very carefully explained the purpose of these amendments, I can be much briefer than I had intended.
The amendments are directed at the CMA and the Office for the Internal Market as set out in the Bill, but the principles behind these amendments would apply to any different structure that emerged, as the noble Baroness, Lady Bowles of Berkhamsted, envisaged. It seems to me that the critical point for this House to consider is that whatever structure is established must command the confidence of all the nations of the United Kingdom. Secondly, it is obvious that there will have to be a body that exercises independent powers and makes judgments that may go against one part of the United Kingdom or another part of it.
Thus, it is important to ensure, as these amendments seek to do, that the appointments both to the Competition and Markets Authority and to the office for the internal market take into account the change in the CMA’s role and cater for the new role of the OIM—assuming that these roles will be given to them when the Bill emerges from Parliament.
It seems to me that there is one useful analogy to make. Because the CMA has certain quasi-judicial and independent functions, it must be set up in such a way that those who are affected by its decisions know that those appointed to it have their confidence. They must also have a proper knowledge of the different constituent parts of the UK. When this House enacted the Constitutional Reform Act in 2005, a statutory provision was included that there had to be judges from Scotland and Northern Ireland; Wales was dealt with as part of England, and I will say nothing about that today. But recent experience of devolution legislation has shown how important it is for a body such as the Supreme Court—and for this body—to have representatives who know and understand the position in each of the constituent nations.
I need not elaborate on the detail of how this provision will work. I stress that the body must comprise those who understand the different nations of the UK and are able to provide it with confidence in its decision-making. It must address the point to which the noble Baroness, Lady Randerson, referred—namely that, more and more, Ministers are seen not simply as UK Ministers but as Ministers of England.
Lord Palmer of Childs Hill (LD) [V]
My Lords, I speak in support of Amendments 116, 127 and 130, to which I have added my name. I agree with the arguments put forward by my noble friend Lady Bowles, who put it much better than I can.
The aim of the amendments is to seek to bring some clarity to the office for the internal market. Gosh, it needs some clarity. I am unsure that we even require this quango. If it stays in the Bill, then please let us flesh out how it could work. Does the Minister accept that, if the office for the internal market remains, there is still much ambiguity in this Bill? It is not even constructive ambiguity; it is ambiguity pure and simple. Can he explain it?
Amendment 116 seeks to add a clause which should be the bed-rock of the Bill. There has to be an understanding agreed between the Secretary of State, Welsh and Scottish Ministers and the Northern Ireland department in order to make the internal market work, be transparent and involve all the devolved authorities.
Amendments 127 and 130 underline the need for transparency and representation. I hope the Minister can accept that the amendments seek to clarify and flesh out what the Bill means in respect of the office of the internal market and to get rid of any ambiguity. Amendments 116, 127 and 130 seek to do that.
Baroness Finlay of Llandaff (CB) [V]
My Lords, as other noble Lords have explained, the aim of these amendments is to ensure that not only is the office for the internal market appropriately constituted and organised so that it is accountable to all four democratically elected legislatures of the United Kingdom but also that the Competitions and Markets Authority—if this is to be the home of the new office—should be reconstituted to reflect the fact that its functions no longer relate exclusively to reserved matters.
I say “if” the office for the internal market is to sit within the Competitions and Markets Authority. Other noble Lords have already addressed that issue thoroughly and made clear that it is neither necessary nor desirable. The more radical attempts by the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson, to establish the office for the internal market as a truly independent and unattached new body are far more logical and would ensure the proper functioning of the office. The noble Baroness, Lady Bowles of Berkhamsted, explained this very clearly. Their proposal has great merit. We will all be interested to hear the Minister’s arguments as to why a truly independent office is deemed undesirable.
Ministers keep claiming that passing the Bill is extremely urgent. If it is that urgent, perhaps he could explain why it would not be possible to initially brigade the office for the internal market under the CMA as an interim measure until it can be established by statute. After all, that is what seems to be happening with the Trade Remedies Authority. If I am correctly informed, the Government found it easy enough to establish a new body—the Trade and Agriculture Commission—as an independent statutory body.
If there are compelling arguments supporting the current proposal then it is imperative that the CMA can demonstrate that it really can command the trust of the devolved Governments and legislatures. If the Minister cannot give us those arguments during this debate, can he write to us specifying the justification? Nothing in these amendments suggests that it would be impossible for the CMA or for the OIM to function should a future devolved Government simply not want to engage.
The right of appointment of a board member to the Competitions and Markets Authority is important, but the board could function without one or more of these members. In the case of the OIM panel—where the devolved authorities would have to be fully engaged in appointments—if consent is not forthcoming within one month then the Secretary of State could proceed without their consent as long as he made a statement as to why proceeding without consent was desirable. That seems to strike an appropriate balance between ensuring the operability of the new arrangements and ensuring that the devolved institutions have confidence in a body that will have such significance for the future integrity of devolution.
Lord Wigley (PC) [V]
My Lords, I am delighted to follow the noble Baroness, Lady Finlay of Llandaff. As she has made so many of the points that I intended to address, I shall not repeat them and I shall curtail my comments accordingly. I agree with the telling arguments made by the noble Baroness, Lady Randerson, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I shall also limit my remarks because of the diabolical communications between Wales and Westminster this afternoon. Noble Lords may see this as an ironic reflection on the amendments that we have just been addressing.
I oppose Clause 30 standing part of the Bill and support Amendment 117, to which I have added my name and to which the noble and learned Lord, Lord Thomas, has spoken. Like the noble and learned Lord, I shall desist from being drawn into the argument that Wales has so often been treated as part of England; that is for another day.
In the earlier debate on Amendment 110, the noble Baroness, Lady Bowles, said that the CMA should be equally available to all four nations. During the debate on the last group of amendments, the noble and learned Lord, Lord Mackay of Clashfern, argued that the devolved Governments should have a voice. This is why I have added my name to Amendment 117.
The Bill is reinventing the CMA as a hybrid body with the OIM—very different from the widely respected body that has hitherto existed. The CMA has to be restructured accordingly.
The Bill is bringing the CMA into a highly controversial area, as it will be dragged into polarised arguments between the Governments of the four nations. Several noble Lords have already raised doubts about whether it is in any way appropriate that the CMA should be used in this way. If the CMA is going to act as an adviser to the Government, it has surely to be an adviser to all four national Governments within the UK. It has to be equally responsive to all four Governments and not beholden unto one Government more than the other three.
It is in that context that I support the amendment requiring there to be a nominee of each of the devolved Governments on the CMA board. Unless this is delivered, the CMA will be seen as the referee and as a body beholden unto one of the teams between which it potentially has to adjudicate. This will inevitably lead to conflict, and it is to give the devolved Governments greater confidence in the CMA that Amendment 117 proposes having a nominee of the devolved Governments within its structure. Having rejected earlier amendments to amend the statutory functions to avoid these dangers, the very least the Government can do is accept Amendment 117, or alternatively bring forward on Report an amendment to achieve a similar purpose. I urge the Minister for once to take a sympathetic approach to this constructive amendment.
Lord Hain (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Wigley, and all previous speakers in the debate. I wish to speak especially in support of Amendments 117, 118, 125 and 131. As Amendment 131 is in the next group, I shall not speak in that debate as I am listed to do.
These amendments concern the future governance of the Competition and Markets Authority—the CMA—and the creation within it of an office for the internal market, or OIM, under the Bill. These amendments seek to ensure that appointments to these bodies are representative of the four constituent legislatures of the UK and that, in overseeing the internal market within the UK, the OIM does not effectively act as an arm of the UK Government and therefore of only one nation, England.
These proposals are important because they are part of the emerging architecture of what Robert Shrimsley of the Financial Times has called the “one-legged economic strategy” of No. 10, namely the “levelling-up” of the UK regions and nations, which appears to mean allowing No. 10 to subsidise favoured industries without any willingness to partner with either the devolved Administrations or, for that matter, regional and local government, such as mayors. In July, the Financial Times quoted an individual close to these discussions as saying:
“The current plan is an odd combination of reserving state aid [for control from London] but then agreeing to a free-for-all. They just want to be able to bung money at things and do not want UK internal market legislation cutting across that.”
The Bill therefore seeks to create a UK-wide, or at least a Great Britain-wide, regime for market access overseen by the new office for the internal market within the CMA that undermines the current devolutionary settlements, certainly for Scotland and Wales and potentially for Northern Ireland, depending on the outcome of the UK trade negotiations.
The provisions of the Bill to curtail the scope of EU state aid rules that could potentially apply through Article 10 of the Northern Ireland protocol, which the Prime Minister agreed to last year, reflect objections by No. 10 to possible “reach back” into the UK by these EU rules. The Government now seek to give the Westminster Government legal powers to control UK state aid, which will potentially replace the estimated £2 billion average annual European Union structural funds previously distributed to the UK’s devolved nations and regions. Just as the Government are resistant to demands by the EU for a level playing field between the UK and the EU, neither do they apparently wish to see the UK’s internal market subsidy regime between England, Scotland and Wales, and possibly in the event of no deal even Northern Ireland, overseen by an independent UK regulator.
The reason why Scotland and Wales in particular are so unhappy about the Bill is that the arrangements proposed are seen by them as undermining the very principles of devolution. This is because the Bill not only curtails devolved competence in specific ways, for example, by making state aid a matter reserved to Westminster, but will ironically also cut much more deeply into areas of devolved competences to regulate economic activity in relation to goods and services than did the previous EU rules. This is because areas of permissible exemptions from similar EU internal market rules, including public health, environmental protection and the protection and promotion of local heritage, do not appear to be exempt from the proposed UK internal market rules. The Bill also gives the Westminster Government new spending powers in devolved areas with no obligations to consult the devolved Administrations.
The previous Conservative Government of Theresa May envisaged that post-Brexit there would be a new legally enforceable regime for state aid under the CMA. However, the arrangement now envisaged for the office for the internal market is that all appointments to its board and the panel of task force members will, like those currently at the CMA, which is a non-ministerial department of the UK Government, be made by Ministers at Westminster and that the role of the new office will be purely advisory.
Amendments 117 and 118 would give each of the devolved Administrations the power to appoint a member of the CMA board itself and would also ensure that the consent of the devolved Administrations is obtained for appointments of the chair and members of the office for the internal market panel. The Bill as it stands provides only for consultation with, as opposed to consent from, the devolved Administrations in relation to such appointments. Amendment 125 would require the CMA to lay its annual plan, proposals for its plan and its annual report before each of the devolved legislatures. Amendment 131—I accept that it is in the next group—contains similar provisions related the involvement of the devolved Administrations in appointments to the OIM and would strengthen the independence and enforcement powers of the OIM so that it would not be effectively an agent of the Crown.
In addition to crucial aspects relating to undermining devolution in the UK, there is an additional disturbing element to what the Government are trying to achieve here. As pointed out by the Institute for Government, under the Bill as it stands the office for the internal market will have very limited powers. Its reports may be useful in gathering relevant information about how the internal market functions, but there is no obligation on any of the Governments to act on them.
In the Conservative manifesto of 2017 there was a promise to use the returning £2 billion average annual EU structural fund money to set up a UK shared prosperity fund. The March 2020 Budget said that the fund would be realigned to match domestic priorities. The Government have yet to publish a consultation on this fund, but the Welsh Government have already made clear that they are strongly opposed to the idea of the fund being administered from Westminster.
The devolved Administrations have vocally expressed their opposition to the proposals relating to the Bill’s blueprint for the future UK economy, which they say was drawn up with no consultation or respect for divergence between the nations. Nicola Sturgeon has pronounced it “an assault on devolution” and the Welsh Government called it
“an attack on democracy and an affront to the people of Wales”.
I have previously argued that the rarely convened Joint Ministerial Committee, which was created to allow the UK Government and the devolved regions to discuss issues relevant to devolution and consider any disputes between the Administrations, should adopt a modified form of the EU system of qualified majority voting so that the Westminster Government would need the support of at least one of the other three nations for a measure to go forward. Such a measure is supported by the Welsh Government, but not—unsurprisingly maybe—by the chair of the committee, Michael Gove.
The Covid crisis has emboldened the UK’s devolved Administrations to make decisions that significantly diverge from those in Downing Street, and they are thought by many to have shown greater surety in their handling of the pandemic than has Westminster. Far from rewarding them for their competence, however, the Government are exploiting Brexit as an opportunity to impose an autocracy on Great Britain, and potentially on Northern Ireland as well, in respect of these internal market rules.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a great pleasure to follow the noble Baroness, Lady Finlay, and the noble Lords, Lord Wigley and Lord Hain. I agree with much of what they have said. The noble Baroness was particularly clear in setting out the issues that arise with this group. I have attached my name to, and will speak to, Amendments 119 and 126, in the name of the noble Baroness, Lady Hayter of Kentish Town, who I thank for originating them.
They share the purpose of many amendments in this group: to ensure that the devolved nations have a voice in the operation of the internal market—the market that will govern much of what they can regulate and what protections they can provide to their peoples, as the Committee discussed last week in the group starting with Amendment 15.
As the noble Baroness, Lady Hayter, has not yet spoken, I will briefly address the detail. I interpret Amendment 119 as something of a back-up to Amendment 118, which would ensure that the Government have to obtain the consent of devolved Administrations before appointing the chair and members of the CMA’s office for the internal market panel. Amendment 119 says “seek consent”. I prefer Amendment 118, but it is important that at this stage we offer a range of amendments to the Government.
Amendment 126 refers to the membership of the OIM panel, saying that it should include representatives from each of the four nations of the United Kingdom. The purpose of these two amendments, as in so many of the amendments in this group, is—to adapt the well-known phrase— to ensure that there is no regulation, or deregulation, without representation or democracy.
In briefly making the case for these amendments, I go back to the first group debated today, which, as your Lordships will recall, related to professional qualifications. I quote the words of the noble Lord, Lord Callanan, in that debate:
“There is the whole world of artificial intelligence or gene editing—there is a massive range of new and potential professional areas, bodies and qualifications that may come forward … in the case of new professions, it is entirely possible that the individual nations of the UK might seek to regulate them differently, and we want no new barriers to trade to emerge”.
In that one short statement, the Minister managed to sum up the disturbing intention of the Government to centralise in Westminster decision-making on extremely important areas of public policy that are currently devolved; the reasons for the objections to this Bill held by many, particularly those concerned with defending the devolution settlements; and the case for these amendments. Even if the protections that the still relatively new institutions of the nations have been able to create for their peoples stay in place, they will not be able to react to social, economic or technological changes, or strengthen existing protections.
To go back to the single-use plastics example that was discussed extensively under Amendment 15, if the Welsh Government want to provide extra protections for their people and environment from these deeply damaging products, they can rush to get measures under the wire now, before the internal market replaces the single one. For what happens after that, I cannot think of better examples than those provided by the noble Lord, Lord Callanan—gene editing and artificial intelligence, where different regulations might be applied by the devolved Administrations in their areas of competence. That would include areas ranging from agriculture to education, from food safety to transport. We need to ensure that the devolved Administrations can keep control.
Baroness Noakes (Con)
My Lords, I listened carefully to noble Lords who spoke before me. The devolved Administrations are failing to recognise that both the CMA and the office for the internal market are fundamentally UK-wide bodies working on UK-wide issues. They are not bodies where territorial interests will be played out. The devolved nations are part of the United Kingdom, which exists and is not just a federation of four independent nations. There are clear United Kingdom functions, which is why we have UK Ministers looking out for the interests of the whole United Kingdom. We should not regard the UK as somehow morphing into an equivalence with England, which the noble Lord, Lord Hain, came close to saying, even if he did not actually say it, when he spoke earlier.
Furthermore, these significant independent public bodies should not be seen as having nominees or representatives on them: it is important that you get the best people to contribute to the functions given to these bodies by statute. Those people will require qualifications and experience. It does not matter where they come from: the most important thing is to get the right quality of individual on those bodies to carry out their functions. Any sense that those individuals become the possessions of devolved Administrations could take them into political alignment, which would have a very negative influence on the effective operation of the independent bodies.
Schedule 3 already requires consultation with the devolved Administrations over the appointment of the chair and panel of the office for the internal market. That is the normal formulation. I do not think that there is a precedent for what is proposed, for example, in Amendment 117: direct appointments by devolved Administrations to independent UK-wide bodies. That would take us in a direction that could undermine the independence and coherence of those bodies. I hope that noble Lords will not pursue their amendments.
Lord Empey (UUP) [V]
My Lords, as the noble Lord, Lord Hain, has said, much of the debate on this group has coincided with the next group and Amendment 131, and with what I was going to say on that group, so I will not exercise my right to speak then.
The word “confidence” has been used consistently, and it is the one thing currently missing. We do not have the support of any of the devolved Administrations for these measures, and it worries me that if we follow the same pattern in future, areas of conflict will arise, because there is no consensus on what we are trying to do. I take the point made by my noble friend Lady Noakes that this is a UK-wide body and you cannot expect the United Kingdom Government to be held to ransom by any of the devolved Administrations. I would not wish to see that.
Equally, however, we have, in our haphazard way—I have drawn the attention of the House to this before—provided devolutionary powers to these regions. As I said last week, we have a collision between the powers of the devolved institutions and what we are now trying to create. It makes sense, therefore—whichever way the Minister intends it in practice—to ensure that the devolved regions feel confident that they have someone at the table, in this new body, who understands their local circumstances and will speak up on their behalf, as well as exercising the UK-wide powers.
I must say that as far as my own region is concerned, while the Government will not allow the truth to pass their lips, from both the economic and state-aid points of view Northern Ireland is left in the European Union. We will be operating on EU state-aid rules and operating an EU regulatory regime. While we are all on the same page today, over time there will be differences. I do not believe, nor I do see any evidence, that Whitehall fully understands that. If we want proof of that, we were told a year ago to tear up any pieces of paper we were given and throw them in the bin; on 1 July we were provided with £25 million to ensure that our traders could deal with the paperwork and the administrative burden that they were going to be confronted with; and by 29 August that had risen to £355 million.
It is perfectly clear that there is a border in the Irish Sea, there are differences and the regime that businesses in Northern Ireland will have to operate under could well be very different over time, so having representation on this body is the minimum that we wish to achieve. I do not want to see a veto—I do not want to see a body that is crippled by disagreement—but people have to be realistic: if you give powers to the devolved Administrations then you cannot be surprised if they take offence when Whitehall says, “We know best and we will do things that you don’t agree with”.
I would say that we have created our own problems. I would like to see in response to some of these probing amendments the Minister address the point about how we get buy-in if we do not have broadly-based representation on the body that understands the different social, legal and economic contexts, particularly when one part of our United Kingdom is left under EU regulations and state-aid rules. I look forward to what the Minister has to say in that regard because we want to succeed. We have to move forward coherently and with restored confidence, because I have never seen it at a lower ebb than it is today. It would be so much better if the JMC were functioning as it was originally intended and if it were a forum where we could jointly work together on solving our problems. What we have achieved at the moment is a stand-off with the devolved Administrations, none of which support this legislation.
Lord Hope of Craighead (CB) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Empey. I support Amendments 117 and 125, to which four noble Lords with a special interest in Wales have put their names. I should like to add a Scottish point of view when I say that the amendments that they propose have everything to commend them, and the arguments that they put forward are ones that I entirely endorse and support.
The key point underlying both these amendments was expressed by the noble Baroness, Lady Bowles of Berkhamsted, when she said that these matters should be consensual and the body taking the decision should represent all four nations. Whatever the structure of that body, and indeed whichever body we are talking about—the options are before us in these various amendments—it has to command the confidence of all four nations.
Lord Cormack (Con)
My Lords, I also offer my support to these two amendments. It is a privilege to be able to follow two such wise speakers as the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Empey. Implicit in their speeches was a recognition of the fact that the United Kingdom is on the verge of becoming the broken kingdom. The Government underestimate at their own potential peril just what dangers surround us. I beg my noble friend who will wind up this debate—for whom I have a genuine regard, as I have said many times before—to take seriously the points made by the noble Lord, Lord Empey, the noble and learned Lord, Lord Hope of Craighead, and the noble Lord, Lord, Hain, all of whom, coming from different parts of the United Kingdom, speak with a tone of real concern and sorrow because they passionately believe in the UK, as do I, and they know it is in peril.
We have to be extremely careful. I will speak for a moment or two longer than I would otherwise have done. I too, like the noble Lords, Lord Empey and Lord Hain, will not trouble the House in the next series of amendments because they rather overlap with these, and in many ways I would have liked them to have been grouped together so, like both noble Lords, I will speak as if they are.
My noble friend Lady Noakes was right to talk about our dealing with the United Kingdom. However, we have had 20 years or more of devolution and in the case of Northern Ireland considerably longer, although much more fractured from time to time. Therefore, we cannot behave as though ours were the only elected legislative body—of course, we in your Lordships’ House are in a unique position. We cannot behave as if there were just one Parliament; some of us may wish that there were but there is not. Therefore, to neglect what has been built up over the last 20 years would be sheer folly. We have to have a proper regard for the Scottish Parliament, the Welsh Senedd and the Northern Ireland Assembly, and to make sure that in this new world where the United Kingdom is no longer part of the European Union, we pull together, work together, recognise what each constituent part brings to the United Kingdom and strive to ensure that it remains the United Kingdom.
I deeply regret the fact that we are rushing pell-mell towards 31 December. The crisis that has engulfed the United Kingdom over the last seven or eight months, unique and grave as it is, ought to have made the Prime Minister and his Government realise that there would have been real merit not in trying to undo Brexit—that has happened—but in trying to get the very best possible relationship and, therefore, taking more time. I deeply regret that, but, as they say, we are where we are. It is therefore tremendously important—utterly vital—that we go into the new year as a united kingdom, each nation complementing the other and, as a collective country, moving forward.
We have seen over the last few months, with the way devolution has operated in Scotland, Wales and Northern Ireland, that the constituent parts of the kingdom have behaved differently with regard to Covid. I am not making any value judgment, but I would say that we have made our fair share of mistakes in this part of the United Kingdom. We have made some sweeping judgments, which we will be debating on Wednesday, and, in many things, other constituent parts of the United Kingdom have behaved perhaps a little more wisely than we have.
One point that has cropped up time after time in this very interesting debate is that we must command confidence. The prime duty of the United Kingdom Government here at Westminster is to command that confidence. I urge my noble friend the Minister to ensure that the bodies we are talking about tonight are able to command that confidence—that the office for the internal market does not become an office where dissension rules the day but where all the constituent members, from the constituent parts of our country, can recognise that they are complementary one to another, each with a contribution to make. It is therefore important that all four constituent parts are represented within this office by people in whom we can all trust. The noble and learned Lord, Lord Thomas of Cwmgiedd, said that we really did have to be able to trust each other. He made a number of very valid points which I hope my noble friend the Minister will take on board.
I do not want to sound too much of a Jeremiah, but I have never felt more worried for the future of our country than as we enter 2021—for its continued existence as a united kingdom, for its prosperity, and for our ability to come out of this crisis in a way that gives us a new and bright future.
The Government must practice a degree of humility as they realise that they have not had all the answers right in these last few months. If they are to get them more right in the next few months, they must not behave as though they have a monopoly of wisdom— they have not.
Lord Judd (Lab) [V]
My Lords, it is always interesting to hear the reflections of the noble Lord, Lord Cormack, and I have a tremendous amount of sympathy with a great deal of what he said. However, I think he must come to understand—if I may put it this bluntly—that we have moved on and we are perhaps at a stage now where the future strength of our four nations working together will have to be rooted in an understanding of their separate identities and democratic systems, which complement our own.
I happen to believe that the road we should be exploring far more often is that of a federal United Kingdom. I hope that does not hurt the noble Lord; I feel that that is how our people can become strongly united in the way forward. In some ways, the determination to leave the European community has made this more urgent and important than ever. Our success as four nations depends upon our mutual co-operation and our recognition of interdependence.
Our debate this afternoon has been on a theme to which we have returned several times during the passage of this Bill, and it is crucial. We must have a situation in which the peoples of Scotland, Wales, Northern Ireland and England feel a sense of ownership in what is being done, and a genuine sense that it is being done on their behalf rather than being dependent on a dominating lead from England, and finding ways of talking to them to try to meet their needs in the best way possible.
We simply have to make sure that there is common ownership of what is being done. That is why the amendment by my noble and respected friend Lady Hayter is so important and I am so glad to see it—although I am slightly intrigued by the groupings as I think it is closer to the perhaps more detailed Amendment 131 tabled by my noble friend Lord Stevenson. As we go forward, I am sure that we will fail if there is any feeling that there is not common ownership and agreement about the things that are being done. This will take time and effort because, as has already been said, it is not just an administrative matter but a trust-building matter. These amendments are desperately important, and I hope that the Government will take them seriously.
Baroness Altmann (Con) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Judd, and so many other noble Lords. I support the thrust of this group of amendments, particularly those in the name of the noble Baroness, Lady Bowles, who explained her reasoning with such clarity. I also support the aims of the wholly reasonable amendments in the names of the noble Baroness, Lady Hayter, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I particularly support Amendments 116, 117, 121, 128 and 129, echoing the calls for specific representation of all the devolved Administrations in the operations of the office for the internal market. I also support the aims of amendments like Amendment 118, which call for the devolved Administrations to be properly involved in both the OIM and the CMA.
I hope that, when responding to this group, my noble friend the Minister can accept the intention of these amendments and return on Report with proposals to help dispel the impression that the establishment, as currently proposed, of this office for the internal market represents a power grab by the English Parliament, which shows wholly insufficient respect for, and inclusivity of, the Parliaments of each devolved nation in the United Kingdom. As the noble Lords, Lord Empey and Lord Hain, my noble friend Lord Cormack, the noble and learned Lord, Lord Hope, and the noble Baroness, Lady Randerson, rightly say, surely, representation of each devolved Administration is the minimum that is required to reassure each nation that its own particular interests will be taken into account by a representative with local understanding.
I also agree with other noble Lords that the CMA seems an inappropriate home for this new office for the internal market. Of course, I understand and support the aim expressed by my noble friend the Minister in earlier groups to avoid establishing more arm’s-length bodies if there is a viable alternative to use. However, the CMA does not seem to be a viable alternative for this purpose: it is an organisation sponsored by two government departments, BEIS and the Treasury, and it aims to promote competition for the benefit of consumers, which is primarily concerned with large businesses, competition issues, mergers and oligopolistic power. It does not have experience in monitoring an internal market across all four of our nations, particularly with the interests of so many small firms in each sector being at stake. Therefore, I believe that the office for the internal market does not really belong in the CMA, and, whether or not it is there, it absolutely must have representation from all four nations of our United Kingdom.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Altmann, and other noble Lords in this very robust but genuine and philosophical debate about the role of the CMA and the office for the internal market. The general thrust of the debate has been that there needs to be a degree of independence in this body but also that it should embrace the devolved legislatures as well as that within Westminster and Whitehall. As the noble Lord, Lord Judd, said, to protect identities and recognise and acknowledge democracies that Westminster and Whitehall put in place with the devolved settlements, it is important that they are recognised. The best way to do that is through membership on an equal basis on the CMA and office for the internal market panels.
Like the noble Lord, Lord Hain, I was intending to address Amendment 131, which is now in the next group, because I agree totally with its sentiments, as well as Amendments 117, 118 and 119 in this group. It is interesting that, in its recent report, the Lords Constitution Committee states:
“The Government should explain why the Competition and Markets Authority is the right body to have oversight of the monitoring of the UK internal market”.
Perhaps the noble Lord will provide reasoning for that —I hope he does—because none of the noble Lords who have spoken this evening, apart from the noble Baroness, Lady Noakes, have seen any merit in this organisation doing the job that will be required if this legislation is implemented.
The Lords Constitution Committee also states:
“The Government should seek to make the Office of the Internal Market more clearly accountable to the different legislatures in the UK.”
If you want their buy-in—and, as the noble Lord, Lord Empey, has said, there is no buy-in in Scotland, Wales or Northern Ireland—it is going to be an uphill struggle for the Government to achieve that.
In looking at various aspects of this over the last few days, there is no doubt that members should be appointed by all four Executives on an equal rather than proportionate basis, with substantial stakeholder input from the business sector. It should have a dispute resolution capability and sufficient powers of enforcement. Its remit should include measuring additional costs of GB goods to Northern Ireland and the source of the extra cost. Coincidentally, this issue has already been referred to in this debate by the noble Lord, Lord Empey, and an information session was given by the Government to Northern Ireland businesses today, which said that there will be 30 million customs declarations on an annual basis between GB and Northern Ireland. That is the extent of the issue and the extent, for some of us, of the problem and the work required.
There is no doubt that the resources and information necessary to monitor the impact of the UK internal market as it relates to the implementation of the protocol could be covered in Amendment 131, in the name of the noble Lord, Lord Stevenson of Balmacara. I also highlight the capacity to be informed by relevant stakeholders and business and consumer groups. There is a view in the wider business and academic worlds that the Competition and Markets Authority is not a natural fit, as it deals with private, not government, business. The proximity of the CMA to BEIS would always leave it open to accusations of political influence, even though it is a non-ministerial department with strategic influence given by BEIS.
In summary, it is important that that overarching authority should be—here I go further than other noble Lords, perhaps—independent of all political and governmental influence. However, there is no doubt that the work, influence and devolution settlements need to be recognised and, as such, representatives from the devolved structures need to be on the overarching body for it to work and bring some sense to this organisation. I am happy to support Amendments 117, 118 and 119.
Lord Purvis of Tweed (LD)
My Lords, this is a characteristically interesting and deep group, and it is a pleasure to follow the noble Baroness. Having listened to and thought through all the contributions, I start by asking the Minister a question. Did the CMA respond to the Government’s consultation on their White Paper? If so, will the Government publish that response? Over the years, the CMA, as an independent body, has responded to many consultations on government proposals. What was its response to this? We know, as the Minister has indicated in answers to previous groups, that the Bill was, to put it most kindly, drafted within a constrained period; others may say that it was rushed. It seems there are concerns that the Government have found the CMA to be the appropriate body for a function to identify problems which the Government themselves have not indicated exist yet. It is all to do with future problems.
I will start by reflecting on the very good point made by the noble Baroness, Lady Noakes, who is frequently wrong in these debates. Her points are excellent, but when she shows the working of her arguments, we often come to a different conclusion. I have struggled to find a recent example of a UK body, operating on UK reserved matters, which has a direct role on devolved Administrations and Parliaments for areas within their competencies. Maybe the Minister can indicate where that has been the case. If that is not common practice, then we are in new territory. The closest that I can think of would be the operation of certain UK regulators that, by virtue of the decisions they can make within the reserved functions, could have an impact on devolved ones. We addressed that in the Scotland Act 2016, under which there are, for example, new requirements, which did not exist previously, for Ofgem and Ofcom to lay their reports to the Scottish Parliament. Interestingly, both Ofgem and Ofcom have a statutory duty under that Act to appear before a Scottish Parliament committee. This is part of an advance recognition that the decisions that they can make in regulating a UK market will have an impact.
In response to the noble Baroness, the role that the Government seek for the CMA is now markedly different, because the CMA is not just a UK body operating under explicitly UK issues of competition and regulatory functions. It will now report on non-UK-wide policy proposals made by the UK Parliament for England only, for Wales only or for Scotland only. That is a very different way for that body to operate; it was not the policy intent when it was formed in 2013. It is worth considering in detail, because it is a deviation from the policy intent in its parent legislation.
The CMA is also, fundamentally, about private enterprises in the market and the protection of consumer interests, but it will now have new responsibilities to report directly on decisions made by one Parliament, within its legislative competencies, which do not have private enterprise relationships or consumer interests at their heart. This goes back to the debate about what legitimate aims are. We are moving from a single market which had a wider scope of legitimate aims—environmental policies for example—to a more restrictive one. However, the decisions that will be made for England, Wales or Scotland alone will be within their existing devolved competencies or, indeed, their new ones. It goes far beyond what we have at the moment.
Baroness Hayter of Kentish Town (Lab)
My Lords, I rather regret that, early on in this debate, the noble Baroness, Lady Randerson, mentioned rugby. I would have thought that this was not the weekend for her to do it, but I am sure that it cheered up others in the House.
It is hard to add much to the case so clearly set out by earlier speakers, and I thank the noble Baroness, Lady Bennett, for covering the amendments in our names, so I do not need to go through them. I will just say that, yet again, the Bill bears testimony to the haste in which it was cobbled together. Perhaps even more serious was the lack of consultation and joint working with the devolved Administrations. How else was it possible to think it appropriate to give the OIM to a non-ministerial government department, accountable only to the UK Parliament through its sponsor department, BEIS, without a thought to the interests, the responsibility, the competences or the rights of the devolved authorities?
As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, whatever structure we end up with must surely have the confidence of all four nations. Indeed, he said that the appointees should have the experience and the expertise of the four constituent nations. That point was emphasised by the noble Lord, Lord Empey, who said that, particularly in the case of Northern Ireland, which will be working in a different regime from the others, it was absolutely essential to build in the requirement that someone with that expertise and knowledge was involved in the governance of this organisation.
Without these amendments, it would simply be the Secretary of State who had the power to appoint the chair and members of the CMA’s board and of its panel—the latter, of course, as we have heard, is responsible for operational and casework decisions. More than that, BEIS is a UK department, which gives the CMA a non-binding strategic “steer”, as the noble Baroness, Lady Randerson, reminded us. Therefore, one Government of the four gives the CMA a steer with that Government’s strategic priorities, to which it is expected to have regard. Placing the OIM in the CMA to monitor the health of the internal market—apart from all the issues about whether it has any expertise to do so—including its impact on intra-UK trade, investment and competition, but with no voice from the other three parts of the UK, appears, at its kindest, forgetful, but at worst, deliberate.
Lord Callanan (Con)
I thank all noble Lords who have spoken in the debate so far. At the risk of agreeing with the noble Baroness, Lady Hayter, I can say I have been listening very carefully to what everyone has had to say in this debate. We take these matters extremely seriously.
Let me respond directly to the question from the noble Lord, Lord Purvis. No: the CMA did not respond formally to the consultation when we issued it, but as you would expect, there has been extensive, official-level discussion on the design and development of the OIM proposal with the CMA.
Before addressing the individual amendments, I shall set out why Clause 30 and Schedule 3 should stand part of the Bill. I have set out the purpose of the office in previous groupings, and noble Lords will be delighted to hear I will not repeat that here.
The purpose of Clause 30 is to introduce the office for the internal market panel and task groups and allow those task groups to carry out all the functions set out in Part 4 of the Bill on behalf of the Competition and Markets Authority. This will ensure that the CMA, through the OIM, can carry out a set of independent, advisory, monitoring and reporting functions to support the development and effective operation of the UK internal market on an ongoing basis. Building on existing governance arrangements, it allows the CMA to authorise the task groups to do anything that the CMA can do under Part 4. This would include delivering specific pieces of reporting, such as annual health of the market reviews or requested monitoring on the intra-UK trade impacts of specific regulations.
To fulfil those independent functions, Schedule 3 sets out the constitution of OIM task groups, to which functions of the CMA may be delegated by virtue of Clause 30. Schedule 3 also provides for the establishment of a panel from whose members such groups may be selected. In performing its role, the OIM will have the ability to gather market intelligence from UK businesses, professionals and consumers to develop its evidence base. The effect of removing Schedule 3 would be that no public body undertook those independent advisory, monitoring, and reporting functions to support the smooth running of the UK internal market. The Government believe that this outcome would be detrimental to the future health of the internal market and to the benefit of every region and nation of the UK. Thus, it is crucial both Clause 30 and Schedule 3 stand part of this Bill.
Amendment 116 would insert a new clause seeking to ensure that the creation of the OIM was subject to a memorandum of understanding being agreed between the Secretary of State and Ministers in the devolved Administrations. It also seeks to set out how the OIM should handle and use information that it requires to fulfil its functions. It proposes that the office for the internal market panel and task group members should include nominees from the English regions and devolved Administrations. It also proposes who should be members of any internal market work undertaken by the CMA if it undertakes such work separately from the OIM. I will respond to these latter points later, as they are referenced within other amendments.
The Government have considered a wide range of delivery options for the advisory, monitoring and reporting functions for the UK internal market as set out in the Bill. We have concluded that the CMA is best suited to house the OIM to perform these functions. This option was strongly supported by a wide range of stakeholders during the White Paper consultation earlier this year.
The Government have sought to work closely with the devolved Administrations. For example, I would like to say how much the engagement with the Welsh Government to date on this Bill has been appreciated. I believe these conversations have helped enormously to ensure that the purpose and effect of the OIM is understood. The Government are committed to continuing to engage constructively with the devolved Administrations on the establishment of the OIM and how it operates in future in fulfilling its functions as set out. In recognition of the keen interest of the devolved Administrations in the operation of the UK internal market, these appointments will be made following consultation with Ministers from all three devolved Administrations. This will ensure that the panel comprises members who all represent the interests of stakeholders in all parts of the UK. For the reasons I have set out, I am not able to accept the amendment by the noble Baroness, Lady Bowles.
I turn to Amendments 117, 121, 122, 123 and 124. Amendment 117 would allow each devolved Administration to appoint a CMA board member, with Amendments 121 through to 124 setting the terms and conditions of those appointments. The CMA is an independent non-ministerial department with a global reputation for promoting competition for the benefit of consumers and ensuring that markets work for consumers, businesses and the economy. Ministers have no day-to-day involvement in its operations. It is for these reasons that the CMA is a natural choice to take on the functions of the OIM.
The noble Baroness, Lady Randerson, asked how it is that the CMA deals with reserved matters but the OIM can address devolved issues. The statutory objective of the OIM in Clause 29 is designed precisely to draw a distinction with the current CMA objective and functions. This is wholly compatible with operating effectively and independently in relation to devolved matters, with a difference in focus on devolved and reserved matters respectively.
So that the advice and outcomes of the CMA’s work and the members undertaking such work are trusted and continue to be seen as impartial, it is clearly important that board members and the appointments process are seen to be trusted. As my noble friend Lady Noakes said, board members must be seen as capable of overseeing the promotion of competition throughout the entire United Kingdom, rather than as a representative of any one individual nation. It would therefore be inappropriate to risk politicising the CMA’s board by accepting this amendment.
Having different routes to the appointment, resignation and removal of CMA board members would be at odds with the UK-wide remit of the CMA and would have the effect of creating two categories of member. I recognise the keen interest of the devolved Administrations in the appointment process for the CMA board given that the proposed OIM panel chair will, by extension, become a CMA board member. We have stressed during engagement and written into the Bill that devolved Administration Ministers will be consulted on appointments ahead of the OIM becoming operational.
Amendments 118, 119 and 120 propose devolved Administration consent mechanisms for appointing the chair and panel members of the OIM. The first two of these amendments would require the Secretary of State to seek the consent of the devolved Administrations before appointing the OIM’s chair and panel members. As it stands, the Secretary of State appoints the CMA board chair and will appoint the OIM panel members and chair with full and mandatory consultation of the devolved Administrations. The priority will be ensuring that each appointment is on the basis of the relevant range of expertise and, crucially, is someone who can serve the interests of the whole of the United Kingdom.
During this consultation and the appointment process, the Secretary of State will aim to work closely with the devolved Administrations to ensure that their interests and comments are taken fully into account before decisions are made on who should be appointed. These amendments, on the other hand, would encourage a narrowing of expertise and risk the effective establishment of the panel. Consent would give each Administration a veto, which could delay and politicise appointments, which would undermine the OIM from the outset. For those reasons, I cannot accept these amendments.
Amendment 125 would require CMA’s proposed and finalised annual plan and annual report to be laid before each Parliament of the devolved Administrations. I assure noble Lords that the Government share the concern of the noble and learned Lord, Lord Thomas, that adequate opportunities for debate and scrutiny of the CMA’s annual report and other documents exist for the devolved legislatures. The Enterprise and Regulatory Reform Act 2013 requires arrangements to be made to lay the annual plan and report to Parliament; in practice, they are also laid before each devolved legislature. I assure noble Lords that this will continue in future. Should this reassurance be insufficient, the CMA’s annual plan and report are made public, allowing each legislature to scrutinise and debate them if it sees fit. In the light of those reassurances and reasons, I hope that noble Lords will not move their amendments.
Amendments 126, 128 and 129, and subsections (2)(b) and (4) of the new clause proposed by Amendment 116, would require either the OIM panel or task groups to have representatives from each of the four nations of the United Kingdom. This amendment could lead to members of the relevant task groups placing regional or political interests ahead of the CMA’s UK-wide mandate. This would harm the OIM’s ability to monitor the internal market effectively. All panel members chosen to be on each task group should represent the UK as a whole when undertaking reporting for the OIM. For that reason, I am unable to accept these amendments.
Amendment 127 would increase the mandated size of an OIM panel group from three members to five. Having consulted the CMA carefully on this and other points, the Government are confident that three members are sufficient to provide the range of expertise necessary to undertake the work of a task group. Since the panel may need to be able to form multiple task groups at a given time, increasing above this number would reduce the resilience of the panel as a whole and create additional unnecessary expense. For this reason, I hope the noble Lord will not press his amendment.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
I have received one request to speak after the Minister, from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I apologise for detaining the Committee; I know I spoke at length on this group. Can the Minister clarify something that he said at the outset? I heard him say that responses to the consultation supported the Government’s proposals for the CMA having this role, but I have the White Paper and the consultation in front of me. No one asked; the Government did not ask. The CMA is not mentioned at all, as I think the noble Baroness, Lady Noakes, indicated. In fact, questions 3 and 4 do not refer to the CMA, and in the entire section the CMA is not mentioned. To resolve this, would the Government publish the consultation responses before Report, or can the Minister clarify in his remarks that he may have inadvertently misled the Committee?
Lord Callanan (Con)
I will certainly check that, and of course I will respond to the noble Lord if that proves incorrect. We obviously proposed the creation of the office for the internal market in the White Paper and said that we were interested in views—the noble Lord, Lord Purvis, shakes his head but I think we did. I will clarify that for the noble Lord in writing, in one of the many letters that I will be sending him. I definitely remember having discussions at the time of the White Paper with many noble Lords whom I spoke to during the consultation. We certainly discussed at the time how the creation of a new body would best monitor the function and effectiveness of the UK internal market process in the context of the White Paper, but I will certainly clarify that for the noble Lord in writing.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, we have had an extensive and thoughtful debate, and I thank all noble Lords who have taken part. I thank my noble friends Lord Palmer and Lord Purvis for supporting my amendments, and indeed others who have mentioned them; one who springs to mind is the noble Baroness, Lady Altmann. As ever, the major constitutional issue has taken pride of place over technical issues. I am sure that noble Lords have realised that I am rather interested in the technical issues too, but we will end up having to come to grips with them, so I will not reiterate now.
To comment on some of what has been said—I cannot do justice to all speakers—my noble friend Lord Palmer said that there needed to be much more clarity to the OIM, and that we needed to resolve the ambiguity of its structure, flesh out how it works and find out what it meant in real terms. I think that is also the basis for a lot of other thoughts, whether they are technical or to do with devolution. What comes out loud and clear is whether all parts of the UK will feel that they have voice or ownership. My noble friend Lady Randerson led with the proposals that others have also spoken on and which have the support of the Welsh Government. It is all about having a structure that is workable for everybody and not part of something working inside the UK Government.
The Minister says that the CMA is independent. I accept that to a large extent that may be true, but there is still the problem that its strategy can be directed or steered by BEIS. That is just not the way to give the devolved Administrations confidence when, as has been outlined, the hybrid role of UK Ministers leaves us in the rather unsatisfactory situation of the same person trying to arbitrate. It is like the referee in the rugby match that my noble friend Lady Randerson referenced. Indeed, the noble Lord, Lord Wigley, said that basically the referee cannot be the manager of one of the teams—which rather seems to be the situation that we have here.
Some very valid points were made by the noble and learned Lord, Lord Thomas of Cwmgiedd, who said that judges had to be drawn from the different parts of the United Kingdom who understood everything vis-à-vis their specialist knowledge. I would not hold myself out at the level of a judge. I am not bad when it comes to negotiating things internationally, but I am English and would never hold myself out as being able to represent the positions of the devolved Administrations. I know that there are known unknowns that I do not know, and that is the situation we have to recognise. Whatever the integrity of the people on the CMA, you just do not know that the background is there unless they are drawn from a diverse field. I am very much one of those people who says that you cannot have sectoral interests, but this is different. I do not consider that devolution is political in that sense—we are all trying to get on together.
The noble Baroness, Lady Finlay, made a very interesting point when she suggested that it could perhaps be an interim measure because it has all been brought together very quickly. The noble Lord, Lord Hain, investigated the governance of the CMA and came up with many of the same conclusions as others. The noble Baroness, Lady Bennett, echoed that it is all about a voice for the legislatures and how to keep devolution alive.
As I said, I share with the noble Baroness, Lady Noakes, the view that the CMA is meant to be a UK-wide body and that nominees are not always the best people, but what is good enough for judges is, I think, good enough for the OIM. Yes, perhaps you always have to compromise, but my compromise comes down on the side of voice and ownership; otherwise, the body will never be trusted, as the noble Lord, Lord Empey, said. You have to have the confidence of knowing that people are properly at the table. I acknowledge that we have had rather haphazard devolution but, just because we have left the EU, that cannot be solved with “Whitehall knows best” and by taking back things that properly have been devolved.
The noble and learned Lord, Lord Hope, supported consensual Motions and said that consultation is not a guarantee. The noble Lord, Lord Cormack, warned us of the danger of a broken United Kingdom, emphasising again that there was a need for more time to be taken and for more confidence. The noble Lord, Lord Judd, had a good point in suggesting that we need a federal UK. That would perhaps make things easier, but we are not able to resolve that now—so, as he said, it comes back to understanding separate identities and to ownership.
The noble Baroness, Lady Altmann, supported some of my amendments and wanted the proper involvement of all parties. She also felt that the CMA was the wrong home, and really was not a viable place or a viable alternative to constructing a new body, because of the strategic involvement of BEIS and HMT, and because of it not being sensitive to matters of small businesses and diversity.
The noble Baroness, Lady Ritchie, was I think the first to bring forward the same points about needing a degree of independence and embracing the devolved legislatures, and also the fact that the Constitution Committee had also asked, “Why the CMA?” This was echoed by the views of my noble friend Lord Purvis. I agree with him; I could not find the flagging up of the CMA. It may be that one respondent said “a body such as the CMA”, but I did not see any consultation on it being the CMA or whether it was appropriate. The noble Baroness, Lady Ritchie, and other noble Lords also pointed out that the CMA is used to dealing with private business and enterprise and has a BEIS strategic influence.
I cannot begin to summarise what was said by my noble friend Lord Purvis, but the fact is that the CMA is left trying to analyse hypothetical benefits. It is true that we do not really know how this is all going to work out. If noble Lords follow the logic of my noble friend’s argument, they will find that he concluded by asking what incentive there was for this body to be used by the devolved Administrations. It is not intended to stir up wars between the devolved parts of the UK and the centre, but my view is that, by its set-up, it is likely to stoke rather than resolve concerns.
As I said before, the noble Lord does not like looking to the EU for examples, but it is a bit like when the Commission comes out with a proposal. It always wants to harmonise everything to make it easier and then the member states, notably the UK, get stuck in. You then get down to the nitty-gritty and you solve it. At the moment, we have this sort of overview coming from the Government that gives the devolved Administrations no room to manoeuvre—yet, when they get down to the nitty-gritty in the common frameworks, what happens? You can reach a conclusion.
Baroness Bloomfield of Hinton Waldrist (Con)
Perhaps the noble Baroness cannot feel the mood of the Committee, which is that she should now withdraw her opposition.
Baroness Bowles of Berkhamsted (LD) [V]
I am sorry; I had basically come to a close anyway. There is much more that needs to be done. I do not think this is politicising; I think it is respecting devolution.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
Does the Minister wish to add anything?
Lord Callanan (Con)
Not if the noble Baroness has withdrawn her opposition.
The Deputy Chairman of Committees (The Earl of Kinnoull) (Non-Afl)
We now come to the group beginning with Amendment 115. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear during the debate.
Amendment 115
“Office for the Internal Market: establishment as a body corporate
(1) Within the period of six months beginning on the day on which section 30 comes into force, the Secretary of State must by regulations establish the Office for the Internal Market (“the OIM”) as a body corporate.(2) Regulations under subsection (1) may amend or modify any enactment including this Act for the purposes of requiring or authorising the OIM to do anything required or authorised to be done by the CMA under this Part.(3) Schedule (Office for the Internal Market) contains further provision about the OIM once it has been established as a body corporate.(4) Regulations under this section are subject to the affirmative resolution procedure.”
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I move Amendment 115 and speak to Amendment 131. They need to be taken together. We have covered a lot of ground in the last couple of groups, so I will be brief. We have looked at the role, functions and operational mechanisms of the Bill’s proposed office for the internal market and have also covered what happens if and when things go wrong.
The emerging view—although it is not shared by the Minister—is that the Bill has not got this right. Amendments 115 and 131 which, as I said, need to be considered together, take us in a new direction. I take the feeling of the Committee that we are talking about an independent body, which has to be a UK body. As was rightly said by the noble Baroness, Lady Noakes, being a UK body does not mean that it also part of the individuals it is supervising.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, the noble Lords, Lord Hain, Lord Cormack and Lord Empey, have all withdrawn their names from this debate, so I call the next speaker, the noble Baroness, Lady Bowles of Berkhamsted.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I listened with interest to the noble Lord, Lord Stevenson. The separate grouping of these amendments has put an additional focus on some of the intent.
I see the merit in taking time to get it a bit more right and use regulations for the detail, but it seems to me that the moment to legislate is still when there has been agreement between the four nations, rather than in a fixed time period. I am not sure that I condone such a wide ability to amend any Act—could the Act or Acts not perhaps be named?—although I acknowledge that the purpose is limited. However, those are details; I accept the principle and direction the noble Lord is suggesting.
Concerning the new schedule in Amendment 131, I still question the ratio of six Secretary of State appointments to one each for the devolved Administrations, especially in the absence of introducing a regional element for England. Quite controversially, the new schedule also creates powers for the OIM to deal with distortive or harmful subsidies and subsidy races.
Such a provision is the elephant in the room if it is not done at some stage. Third countries could launch trade remedies complaints against the UK if they were affected by distortive or harmful subsidies. From that perspective, it is of great benefit to have a body that is seen to be independent overseeing those matters, rather than being at the political level of government, which is where it seems to be held at the moment. It is the opposite side of, but with the same logic as, the Trade Remedies Authority needing to be seen to be independent. However, regarding the four nations, the scope of intervention would be wider than would interest third countries, unless there is some corresponding agreement with third countries or the EU.
I am not actually sure how it would all work out. As yet, because I have concerns about the CMA—although I accept that looking at subsidies might be something it is better adjusted to do—it will be a little while before I could slip in this enormous power without resolving all the other issues that remain, including powers, unless the noble Lord is suggesting that this is all that the OIM can do. Anyway, I think that there are some good things and some bad things in there, and it is interesting food for thought.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
I call the noble Baroness, Lady Jones of Moulsecoomb.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, the Government are certainly getting a lot of advice during the passage of this Bill. As the noble Lord, Lord Cormack, said, they really ought to know that they do not have all the answers. So I do hope that the Minister listens.
The amendments in this group follow perfectly the Government’s announcement that they are putting the trade commission on a statutory footing. If the Government want to run an internal market, surely it is right to create a fully functioning governance body for that purpose. Merely tagging on a few functions to the Competition and Markets Authority shows a weakness of purpose and a lack of understanding of exactly how everything should run. Giving the new office for the internal market the power to investigate distortive and harmful subsidies could have a powerful impact on wiping out the implicit and explicit subsidies for fossil fuels, particularly unconventional oil and gas fracking. These implicit and explicit subsidies include a streamlined planning process and no requirement for the company to make a bond, unlike the landfill industry, equating to the government underwriting of the clean-up of fossil fuel sites in the event of corporate bankruptcy. So once again taxpayers would pay to clean up other people’s mess.
Just to be clear, the journalist at Drill Or Drop? suggests that the OIM can comment on controversial issues such as fracking, which, as we all know, is a dangerous, polluting, expensive, intrusive and—in view of our global need to limit our carbon emissions—unnecessary process. The OIM could give advice contrary to the devolved Administrations’ decisions. Can the Minister tell me if that is true?
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
I apologise to the Committee and very personally to the noble Lord, Lord Judd, whom I omitted to call before the noble Baroness, Lady Jones. So I call the noble Lord now.
Lord Judd (Lab) [V]
Thank you. My Lords, I will be brief. I just want to say how much I commend the amendments from my noble friend Lord Stevenson. He is setting out principles which are very important, rather than just the general purpose, and for that we should be grateful. I would also like to put on record that I am glad that he has taken, on previous amendments, the point that what we must be aiming for in all this is a situation in which there is a sense of shared ownership and the shared involvement of all the parts of the United Kingdom.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to the noble Lord, Lord Stevenson, for introducing these two amendments and giving us the opportunity to probe the very heart of the functioning of the OIM in terms of its independence. Can my noble friend the Minister say how the Government will ensure that this body will be independent? My noble friend will be aware of my concerns and those of others that the Government have got into the habit recently of creating such public corporate bodies and then trying to direct how they operate. Recent examples are, as the noble Baroness Jones of Moulsecoomb, just alluded to, the Trade and Agriculture Commission, which falls within the Department for International Trade, which basically does not provide any resources to those who serve on the commission and, even more recently, the Office for Environmental Protection which, apparently, is to be appointed by and subsumed within Defra. So that is my main concern here, and there is much to commend in Amendment 115 as to how the body corporate is to be set up.
Furthermore, the noble Lord, Lord Stevenson, asks in subsection 2(2) of Amendment 131 for consultation with the devolved Administrations. I would prefer it if went further, as the noble Baroness, Lady Hayter, requested: consent for such appointments should be sought from the devolved Administrations. Presumably, if the Government were to adopt the terms of this amendment, it would be the OIM that would ensure the level playing field, which I imagine is the Government’s intention. However, if it was not the OIM, can the Minister explain which body would, as in subsection 3(2),
“rule that any distortive or harmful subsidies are illegal and should be repaid”,
and, as in subsection 3(4),
“recommend to the Secretary of State changes to the test for a harmful subsidy, the scope of exemptions, and time limits on approvals”?
There should be a body to ensure levelling-up, not just of the regions but between the four nations. I hope that the Government are taking a consistent approach here, in their position on the European Union and their position on state aid between the four nations of the United Kingdom internal market. It would not behove the Government to be seen to be parti pris on their position on competition and state aid in this regard.
I share the concerns expressed by the noble Lord, Lord Purvis, and others, in the previous debate, regarding responses not always being published. I am having great difficulty, and perhaps the Minister can point me in the right direction, but rather than a summary of the responses, it would be enormously helpful if the Government published the responses to the consultation regarding this amendment in full, and preferably before the next stage of the Bill. That would enable us to form our own view of who said what in response to the consultation.
With those few remarks, I would like to put the key questions to the Minister: how do the Government intend to ensure the independence of the OIM, and how do they intend to carry the devolved Administrations with them in this regard?
Lord Fox (LD)
My Lords, so far there have been four groups of amendments dealing with the CMA and the OIM, and three different Ministers fielding. That perhaps summarises the fragmented nature of this Bill and the unjoined-up nature of what we are seeking to achieve. In those four groups, and this group, amendments have sought, in a sense, to correct and improve this Bill, but there is no point, because this Bill is beyond that stage. Other speakers have sought to probe and get information from the Government, and there has been no point to that either, because the Government have not answered questions. Despite extremely well directed, forensic analysis and questioning, the Government have ducked, dived and shrugged.
In addition to supporting the request made by the noble Baroness, Lady McIntosh of Pickering, for the consultation to be published, I would like this Minister, who is before us for the first time in this debate, to answer the questions on this group, and to undertake, on behalf of the other Ministers, to answer all the questions that the last four groups have presented, because they are all extremely important to understanding what on earth the Government intend to do.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I appreciate the comments made in the debate and I appreciate that these amendments seek to correct, improve and debate the issue. Indeed, that is the role of this Committee. Given that, I take issue with the last point made by the noble Lord, Lord Fox.
Amendments 115 and 131 would bring in fundamental changes to the statutory basis for the Office for the Internal Market. They propose making the office a separate, standalone public body, thereby removing its Crown status. The noble Lord, Lord Stevenson of Balmacara, suggested that the new OIM should use Ofcom or the National Audit Office as a model. This would fundamentally change the nature of the OIM. It would change its funding model and would ask it to operate like a regulator, although it is not intended to act as one.
It has already been explained that the Government have concluded that the CMA is best suited to house the Office for the Internal Market to perform these functions, and the reasons were set out in the Government’s consultation response. I will again emphasise the key points. The CMA has built up a wealth of expertise and experience that makes it a natural fit to take on these additional functions. It has a global reputation for promoting competition for the benefit of consumers and for ensuring that markets work well for consumers, businesses and the economy. We will come on to discuss the concerns of the noble Baroness, Lady Hayter, about the interests of consumers being reflected in the OIM.
The Office for the Internal Market will build on the CMA’s existing technical and economic expertise which will now support the further development of the UK internal market. My noble friend Lady McIntosh asked how we can guarantee the independence of the OIM and ensure that we carry the devolved nations with us. The OIM will be independent and will operate at arm’s length from the Government and the devolved Administrations. It will not be an enforcement body and it will not be able to override the decisions of any of the Administrations. As noble Lords will know, the Government are continuing their engagement with the devolved Administrations as the functions are developed further.
In the last group, the noble Lord, Lord Purvis, asked what the incentives are for the devolved Administrations to use the OIM. All of the devolved Administrations have an interest in the smooth functioning of the internal market and the development of effective regulation to support it. The Government are confident that all the Administrations and legislatures will value the expertise and advice of the OIM and the authority of the evidence base that it will build up.
The noble Baroness, Lady Jones, asked whether the OIM will give advice on the decisions made by the devolved authorities. I assure the noble Baroness that the non-binding advice of the OIM will provide a complementary and expert resource to help facilitate better regulation and, should it be requested, this will include regulation developed by the devolved Administrations as well as by the UK Government. The OIM will be independent and will operate at arm’s length from the Government and the devolved Administrations. As I have said, it will not be an enforcement body and it will not be able to override the decisions of any of the Administrations.
An earlier grouping addressed the involvement of the devolved Administrations in the panel membership of the office. I will therefore say briefly that the direct devolved Administration appointments to the panel of the OIM would risk its effective and independent operation. Appointments to the body will be made by open and fair competition and the chair through the robust procedures of the Public Appointments Commission and the Cabinet Office, which operates across the jurisdictions of all of the devolved Administrations.
I turn to UK subsidy control. Clause 50 reserves to the UK the exclusive ability to legislate for a UK subsidy control regime in the future. It is an issue of national economic importance as it is essential to supporting the smooth functioning of the UK’s internal market. We will debate the detail of subsidy control reservation in a later grouping, but I will cover it briefly now. On 9 September, the Government published a statement regarding the future of subsidy control. In that statement, we committed to publishing guidance on the international commitments that will apply to the UK on 1 January 2021, before the end of the year. This will cover World Trade Organization rules on subsidies and any commitments we have made in free trade agreements.
We also set out our intention to publish a consultation in the coming months on whether we should go further than our WTO and international commitments. This will include consulting on whether any further legislation should be put in place. The amendment would create uncertainty and fundamentally undermine the future consultation which will be the mechanism through which decisions regarding future regulations for UK subsidy controls will be made.
In addition, it should be noted that the function of the office for the internal market will be to provide non-binding technical advice, monitoring and reporting on the health of the internal market. It is not the Government’s intention to give it a range of enforcement and regulatory powers, which the proposed new schedule would do in respect of UK subsidy control.
My noble friend Lord True said on an earlier group of amendments said that, in line with GDPR, not all respondents had consented to sharing their views, so publishing only a subset of the consultation would not offer an accurate enough reflection.
For the reasons set out now and earlier, I am not able to accept this amendment. I hope that the noble Lord will therefore withdraw it.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I have had no request to speak after the Minister, so I call the noble Lord, Lord Stevenson of Balmacara.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank those who have spoken in support of the amendments, particularly the noble Baroness, Lady Bowles, who accepted the principles despite having doubts about some of the factual points, and the noble Baroness, Lady McIntosh, for covering a lot of ground and raising questions that will need to be addressed by Ministers. In fact, I do not think that they were addressed in the response this evening. I thank my noble friend Lord Judd for bouncing back after having been ignored and making some very good points about why it is important to seek principles as we go through the Bill, because they are sadly lacking at the moment. The legislation seems a formulaic response, almost an early policy draft of what one might do if one were to regulate an internal market. It does not smack of having had a lot of discussion and debate or even wider consultation. The Government do not seem to have in mind a process whereby they can arrive at a solution to the problem of how we get shared ownership and trust into a system which is broadly voluntary in its basis without it looking as though it is a top-down, heavy-handed approach. There may be political advantages in that in the short term, but in the long term it is not the way to go.
This was a probing amendment to which we heard some responses, but there are still one or two to come. I am left with the feeling that, whatever we call the body and wherever we locate it, if it is capable only of providing non-binding advice and has no powers, it leaves the question of who will police the whole system. What happens, for instance, if the devolved Administration in Scotland decide they want to do something in particular in relation to whisky, chicken or flour—and we now know an awful lot about flour adulteration? Who will police that? Will it be BEIS? If so, can the Government really say, hand on heart, that the right way to approach what is effectively a devolution issue is through a top-down, UK Government-organised structure? I wonder. I beg leave to withdraw the amendment.
“UK SHARED PROSPERITY COMMISSION1_(1) A body corporate called the UK Shared Prosperity Commission is established.(2) The UK Shared Prosperity Commission is not to be regarded—(a) as the servant or agent of the Crown, or(b) as enjoying any status, immunity or privilege of the Crown. (3) The UK Shared Prosperity Commission’s property is not to be regarded—(a) as the property of the Crown, or(b) as property held on behalf of the Crown.Membership
2_(1) The UK Shared Prosperity Commission is to consist of—(a) a Chair and five members appointed by the Secretary of State,(b) a member appointed by the Scottish Ministers,(c) a member appointed by the Welsh Ministers,(d) a member appointed by the Department for the Economy in Northern Ireland.(2) Before appointing a chair and member under sub-paragraph (2)(1)(a) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3) Before a chair can be appointed under sub-paragraph (2)(1)(a), the appointment must be confirmed by the Treasury Select Committee or a committee of either House whose remit covers the Treasury.Funding
3__ The Treasury must pay to the UK Shared Prosperity Commission such sums as the Her Majesty’s Government considers appropriate for the purpose of enabling the UK Shared Prosperity Commission to perform its functions.Powers
4_(1) The UK Shared Prosperity Commission may distribute sums from the Treasury across the four nations and regions of the United Kingdom following an assessment of relative need.(2) The UK Shared Prosperity Commission may conduct an assessment of relative need across the four nations and regions of the United Kingdom.(3) The UK Shared Prosperity Commission may do anything which appears to it to be necessary or expedient for the purpose of, or in connection with, the performance of its duties in sub-paragraphs 5(1) and 5(2).Accounts and audit
5__ The UK Shared Prosperity Commission must—(a) keep proper accounts and proper records in relation to them, and(b) prepare a statement of accounts in respect of each financial year.Annual report
6_(1) The UK Shared Prosperity Commission must prepare a report on the performance of its functions during each financial year.(2) The report must include the statement of accounts in respect of that year.(3) The report must be prepared as soon as reasonably practicable after the end of the financial year to which it relates.(4) The UK Shared Prosperity Commission must send the report to the Secretary of State.(5) The Secretary of State must lay the report before Parliament.Public records
7__ In subparagraph 2 of the Table in paragraph 3 of Schedule 1 to the Public Records Act 1958 (definition of public records), at the appropriate place insert—“UK Shared Prosperity Commission.” Investigation by the Parliamentary Commissioner
8__ In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments subject to investigation), at the appropriate place insert—“UK Shared Prosperity Commission.”House of Commons disqualification
9__ In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert “UK Shared Prosperity Commission.”Northern Ireland Assembly disqualification
10__ In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert—“UK Shared Prosperity Commission”Freedom of information
11__ In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (other public bodies and offices: general), at the appropriate place insert—“UK Shared Prosperity Commission.”Public sector equality duty
12__ In Part 1 of Schedule 19 to the Equality Act 2010 (public authorities: general), in the group of entries under the heading “Industry, business, finance etc”, at the appropriate place insert—“UK Shared Prosperity Commission.””
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I will also speak to Amendments 167 and 168, which are also in my name. I am grateful to other Members for contributing to this group. The group is about another of the black holes that we are discovering in the Bill. This one is about state aid or, as we must learn to call it, subsidy—or, as the Government would have us call it, “the UK shared prosperity fund”, although details about that are incredibly difficult to find.
State aid matters. It particularly matters if people think money is being stolen from them and used for other purposes. The Government have quite a lot to do to try to explain where they are going with this state aid issue, the timescale and how they intend to make progress in bridging the gap between people’s expectations and where they currently are.
We currently get an awful lot of money through state aid; it is certainly money that would be felt if it were not there. It is hard to get a complete picture of it; the best figures that I have been able to find come from the Institute for Government, which suggests that about £20.7 billion is currently available through state aid in two main forms, the European Regional Development Fund and the European structural funds. The regional development fund focuses on physical development—physical capital, as it were—while the ESF, the structural funds, are about employment and young people and are probably best described as human capital. The combination is a significant quantum of money, held by people who I think regard it as not being money provided directly by the UK Government, although of course money technically circulates around and presumably was originally from taxation in the first place.
Two significant points come from that. First, the headline funding from the EU at the moment is matchable. We currently think that about 40% is added on top of the just over £10 billion—£10.6 billion, I believe—that is available directly from Europe to the UK agencies that spend it, so that gives us the figure of about £20 billion when it is matched with local authority and central government funding and from the lottery.
An issue that is hidden, or at least more opaque, in terms of how state aid is organised is the way in which it seems to come in response to different requirements. For instance, the long-standing convention is that there is a regional bias based on deprivation, which takes into account the broader picture across the whole of Europe. In the UK, there are only two counties currently in the most deprived areas—or most in-need areas, I think they are described as—which are west Wales and Cornwall and the Scilly Isles. However, there were recently rumours that, had we stayed in the EU, which we are not, four more might have been put into that higher-needs category. That leaves the question: will the Government continue that process? Will they also think in terms of how individual parts of the country are treated in relation to that?
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, I apologise; I should have reminded noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate and anyone wishing to press this or anything else in this group to a Division should make that clear in debate.
Lord Thomas of Cwmgiedd (CB) [V]
I am very grateful to the noble Lord, Lord Stevenson of Balmacara, for explaining the place of this in the Bill and for his proposal to try and make something of the provision. As it stands, it seems wholly separate from the other provisions of this Bill. It should not be there, and it is profoundly undemocratic. Its only connection with the rest of the Bill is that it seems part of an attack on the scheme of devolution. I therefore seek to argue that Clause 48 should not, in its current form, stand part of the Bill.
The Bill is concerned with the internal market; it is not concerned with the allocation of government powers to spend money between the devolved Governments and the United Kingdom or English Government. It authorises the UK Government, as it stands, to spend funds in devolved areas—education, roads—and, giving Clause 48 (1)(a) and (b) their ordinary meaning, almost any aspect of government spending, including hospitals.
Therefore, I have a question for the Minister: why is this in the Bill? How is it going to work? Let me put forward some ideas as to why it may be there. First, the Government might, as the noble Lord, Lord Stevenson of Balmacara, has suggested, have the noble aim of investing additional resources into the devolved nations and the other regions of England. If that were the case, they might be doing the work alongside the Governments of the devolved nations and doing it as the English Government in their capacity as the UK Government. If so, why do they need these powers? They have done city deals and dealt with expenditure of this kind without specific statutory versions. If that is the noble aim of this Bill, it seems unnecessary.
There may be a different aim, which again has been foreshadowed by the noble Lord, Lord Stevenson: that the UK Government see themselves as taking over the role of the EU Commission, steering the use of such funding. If the Commission did it, so the argument goes, why should not the UK Government? In other words, it is an example of this Government doing something the EU has done rather well, but which they will never give it credit for. If that is the Government’s aim, it is fair to point out that the European legislation provided for the European Commission to set overall very high-level objectives for funding, and then to negotiate with the devolved Governments of Wales and Scotland as to how these objectives should be reflected in the programmes the devolved Governments designed. The European Commission, at the end of the day, had the veto, but it negotiated with the elected authorities in Wales, Scotland and Northern Ireland, rather than bypassing them in the way the Bill would enable it to.
There may be a third aim, which is that the United Kingdom Government, the Government of England, know far better how to direct spending and cannot trust the Scottish, Welsh and Northern Ireland Governments to spend wisely. Nor, if that is their reason, can they trust the people of Wales, Scotland or Northern Ireland to choose the Government they want, as that entails the choice between different manifestos regarding the way in which money is to be spent on areas of devolved competence.
As it stands, the clause strikes at that democratic choice and the devolution schemes. It will enable the UK Government to spend funds in ways that the UK/English Government think best, but which the people of Wales, for example, may have rejected. That is not democracy. In effect, it would give legislative underpinning to the now discredited principle that the Government in Westminster know best and the people of Wales, Scotland and Northern Ireland, which have Governments with devolved competences, are not to be trusted to spend money wisely in areas of devolved competence.
In short, I can see no justification for these powers which is compatible with the commitment to the integrity of the devolution schemes. Last week, Ministers were asked repeatedly to confirm whether they supported the devolved institutions’ powers to tailor their policies and spending needs to the wishes of the people of the devolved nations. I understand that no such assurances were given. If Ministers wish to overturn the devolution settlements, let them say so. Let them show that the devolution schemes do not work and, in the light of recent experience, that we would all be better off in the devolved nations if only the UK Government could take spending decisions on matters that have been devolved, in place of the Governments in Cardiff, Edinburgh and Belfast.
As it stands, therefore, the clause should not be in the Bill. If there are constraints on how this is to operate, they should be set out in the Bill, or a proposal of the kind made by the noble Lord, Lord Stevenson of Balmacara, should be put in its place.
Lord Bruce of Bennachie (LD) [V]
The Bill appears to invite a clutch of ironic metaphors. In moving the Bill at Second Reading in the House of Commons, the Prime Minister drew inspiration from Adam Smith’s invisible hand but, by contrast, the Bill delivers a clunking great fist, and the Prime Minister’s oven-ready deal is at best not even half baked. The Government assert that substantial powers are coming to the devolved Administrations and, on the surface, that is true. However, the lack of reference to common frameworks, which we have debated, and the subordination of the proposed office of the internal market, on which previous amendments have focused, to the Competition and Markets Authority, all points to a centralising agenda. The state aid and financial powers clauses of the Bill—which, as the noble and learned Lord, Lord Thomas, said, do not appear relevant to the Bill’s stated purpose of regulating the internal market—raise serious questions, providing sweeping powers for the UK Government to intervene directly on a wide range of policy areas without even consulting the devolved Administrations, let alone securing consent and agreement.
At a time when relations between the UK Government and the devolved Administrations are at rock bottom, and with elections for the Scottish Parliament and the Welsh Senedd only six months away, this is absurdly provocative and, frankly, foolhardy. Following the shambolic communication of the emerging lockdown in England over the weekend, confusion reigns today over furlough provision in Scotland. On the one hand, the furlough extension is UK-wide, which is welcome. On the other, it appears that if Scotland goes into lockdown at a later date, comparable support to that being provided in England is not assured. Scottish Conservative leader, Douglas Ross MP, is at odds with the Government over this. It raises the question of whether the Government are trying to force Scotland into a similar lockdown at the same time as England, not because the measures currently being applied north of the border are not working—it is too early to judge that—but just to secure funding for any lockdown. That is not the way to promote trust or make rational, balanced and objective decisions.
Baroness Finlay of Llandaff (CB) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Bruce of Bennachie, and my noble and learned friend Lord Thomas of Cwmgiedd, who has explained, from a constitutional perspective, why Clause 48 has very little to commend it. I will illustrate why the powers that Ministers want to take for themselves might, in practical terms, be dangerous and damaging.
Under the last Labour Government, the Labour-led National Assembly chose to go in a different direction on education, which was one of the ways in which the late Rhodri Morgan put clear water between his Government, reflecting the unique circumstances of Wales, and the Government in London. The Welsh Government eschewed moves to establish foundation schools, academies and free schools. They have maintained the central role of local authorities in funding and supporting all schools, arguing, not least in rural areas, that an unplanned proliferation of schools would damage the viability of all educational establishments. They have vigorously championed comprehensive education. Whether or not you support this approach, the current Welsh Government have a mandate for it, supported by Plaid Cymru, meaning that more than two-thirds of Members of the Senedd back this policy.
Were the powers in Clause 48 to be granted, the UK Government could choose to fund free schools across Wales. This would positively undermine the policies backed by a majority of the Members of the Senedd and, more relevant still, a majority of the electorate. Even if the funding for such an initiative was genuinely additional to the block grant—I ask the Minister to give an unequivocal guarantee that that would be the case—such an intervention, even though it would give extra money, would undermine the Welsh Government’s education policy. A free school in an area such as Denbighshire could easily dramatically impact on the viability of local maintained schools. This does not seem right.
The cleanest way of dealing with and preventing this threat would be to remove the clause from the Bill. Nevertheless, for my part, I would be prepared to support alternative approaches. At the heart of this is the question of the so-called shared prosperity fund, which I am afraid some in the devolved nations suspect is a way of reallocating the funds that should come their way, especially to west Wales, to benefit the prosperity of England. The proposal of the noble Lord, Lord Stevenson, to establish a shared prosperity commission would dispel such suspicions by allocating replacement funds on the basis of need, not politics. However, as my noble and learned friend Lord Thomas explained, the onus really is on the Minister to give an explanation, which has been lacking to date, of why these powers are needed now when they have never been needed before.
Lord Hope of Craighead (CB) [V]
My Lords, I join the previous three speakers in giving notice of my intention to oppose the question that Clause 48 should stand part of the Bill. The grounds for my opposition to Clause 48 are based on paragraph 4(1) of Part 3 of Schedule 5 to the Scotland Act 1998. This is, after all, a devolution issue. That paragraph provides:
“This Schedule does not reserve giving financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment.”
In other words, it is within devolved competence for Scottish Ministers to provide financial assistance for these purposes. The same is true, I understand, of Welsh Ministers and in Northern Ireland.
The geographical reach of this provision is indicated by the fact that it applies to the whole of the UK. The power being sought would seem to cut across the powers of the devolved Administrations to provide this assistance in accordance with their own policies and order of preferences, although I appreciate that it extends over a wider field of activities. Providing assistance for reasons not at one with those policies and preferences would cut across the devolution settlements and for that reason be regrettable. I was very impressed by the example which the noble Baroness, Lady Finlay of Llandaff, gave of how it could interfere with preferences felt in Wales, and no doubt examples could be found in the other devolved Administrations.
More importantly, I, like others, am looking for further information about how this clause is intended to operate. As the noble Lord, Lord Stevenson of Balmacara, asked, what is the plan? Is it the intention that there should be consultation with the devolved Administrations before this power is exercised? If so, what weight will be given to any concerns that they may have? There is no attempt that I can see in the Bill to repeal the paragraph of Schedule 5 to the Scotland Act 1998 to which I referred, so presumably that power is to survive along with the power being given by this clause. To what extent, with regard to purpose and the amount of money involved, is this intended to reproduce within the UK what until now has been forthcoming from the EU? Can we expect the same amount of benefit to be spread among the nations as we have received hitherto? Will the ability of the devolved Administrations to use the powers reserved to them by the provision I quoted be limited in any way when this clause is brought into effect? If so, is that the intention? How are the funds which may be made available to be divided up between the nations? Can we be given any clarity on that point?
I hope that the Minister can shed more light on how this power is intended to operate, but at the moment, from what we have seen so far, it seems to cut across the devolution settlement and to be highly objectionable on that ground.
Baroness Boycott (CB) [V]
My Lords, I tabled Amendment 166, which would amend Clause 48. I thank the noble Baronesses, Lady Jones and Lady Hayman, and the noble Lord, Lord Whitty, for supporting it. As ever, it is a great pleasure to follow the noble and learned Lord, Lord Hope of Craighead.
Clause 48 gives powers to Ministers to provide financial assistance across the UK for a number of purposes, including all economic development and provision of infrastructure. My amendment would set out on the face of the Bill that any financial assistance to be provided must be consistent with the achievement of any applicable climate and environmental goals and targets. As we all now know, we are in the midst of a climate and nature emergency. These powers to provide assistance would be subject to almost no restrictions. The recently published Global Biodiversity Outlook 5 report from the UN highlighted how we have failed to halt environmental decline over the last 10 years, and the 2020 progress report by the Committee on Climate Change says that clear investment priorities to help support economic recovery and the transition to a low-carbon economy are now essential. We need to ensure that financial assistance helps, not hinders, this progress.
My concern is that, if we do not have this amendment, the Government could risk supporting projects, companies or industries that threaten in some way or another to undermine the progress towards meeting our environmental and climate goals. Providing financial assistance for projects that are not consistent with our climate and environmental goals could have major environmental impacts, for instance on roadbuilding, transport and housebuilding. It is also really important that the goals and targets include countries’ respective own targets on net zero—for instance, new targets set under the Environment Bill such as the Welsh recycling targets, which are extremely good.
This is an opportunity to support a progressive domestic climate and environmental policy in all parts of the UK, which is tremendously important ahead of COP 26; Amendment 166 could help achieve this. Indeed, if we do not have an amendment such as this when we turn up in Glasgow this time next year, we could be in a very embarrassing situation. What assurances can the Minister give that these powers will be exercised in a manner that is consistent and compatible with any climate and environmental goals and targets applicable in the relevant parts or part of the UK?
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, it is a real pleasure to support Amendment 166 from the noble Baroness, Lady Boycott, which I have signed along with the noble Lord, Lord Whitty, and the noble Baroness, Lady Hayman. I also, of course, support Amendment 169, tabled by my noble friend Lady Bennett of Manor Castle. These amendments are important because they come back to the crucial question of what the market is for: does the market exist to serve us or do we exist to serve the market?
The noble Baroness, Lady Boycott, used the word “progressive”. We need a progressive agenda. We have to harness and tame the market to make sure that it protects our natural world. The market does not care, and would rather see a woodland turned into logs than exist as a habitat for thousands of species, a sink for carbon, a filter for water, a protector of soils, or the hundreds of other ecosystem services that it provides. In truth, we should be seeing amendments like Amendments 166 and 169 in every single Bill that the Government bring to your Lordships’ House. Their absence is a dereliction of duty by Ministers, not only because we have made promises about the environment, but because we make things worse for everybody when we do not do these things. It is not just about making the market worse; it is society that suffers.
It is a year to the day since the Government announced that the Treasury would conduct a net-zero carbon review following the passage into law of the 2050 net-zero target. This review is still nowhere to be seen. Can the Minister please tell the Committee what has happened to the review, whether it is still happening and, if so, when it will be published?
Lord Whitty (Lab) [V]
My Lords, when the debate on this group of amendments started, it seemed that it would be another round of Westminster versus the devolved Administrations, which is a major theme of the group. Nevertheless, there are other issues.
I added my name to Amendment 166, which the noble Baroness, Lady Boycott, spoke to so ably just now. I also support Amendment 169 in the name of the noble Baroness, Lady Bennett, in principle. Both amendments would correct a glaring omission: the absence of any reference to environmental outcomes in either the Bill and the Government’s earlier statements on a shared prosperity fund or my noble friend Lord Stevenson’s otherwise admirable attempt to set up a shared prosperity commission to administer the framework of financial aid across the four countries of the UK.
In effect, the shared prosperity fund concept is a sort of replacement for the EU’s structural funds and regional funds—probably other funding too—which have hitherto been provided back to the UK by the European Union, largely to level up economic and social well-being and performance across Europe. In principle, I like the concept of such a fund or a commission, which may well be a better home for the administration of that framework than the office for the internal market within the CMA, but I must confess to your Lordships that I do not like the term. I racked my brains as to why. I think that it is somehow a bit redolent of the euphemistic terminology of the Soviet era or, perhaps even more worryingly, of imperial Japanese militarily dominated eastern Asia during the time of the co-prosperity zone in the 1930s and during the war. Neither of those historical examples were ever cited by Brexiteers as preferable to the supposed centralisation by Brussels. If that rings alarm bells for me, no wonder it does for the devolved Administrations. Whatever we do, can we perhaps set up a body such as the one proposed by my noble friend Lord Stevenson, but find a better title?
More substantively, if the UK is to distribute aid to business and others to replace and improve on the benefits of the money that we previously received from the EU—which, quite rightly, disproportionately benefited the devolved nations of the UK and deprived areas in England—we need some objective criteria, constraints and rules surrounding that allocation. We also need an institution along the lines proposed by my noble friend Lord Stevenson. His amendment lists a lot of economic and social criteria that such an award of funds would have to take into account, but there are no environmental criteria.
As Amendment 166 in the name of the noble Baroness, Lady Boycott, indicates, the biggest crisis facing us all is the climate emergency. Our international obligations under the Paris Agreement and national commitments under the budget of the Committee on Climate Change surely mean that future state aid of any sort must advance progress on mitigation of and adaptation to climate change, and certainly not lead to effects that undermine our carbon and greenhouse gas targets or make worse the outcome of our industrial system. To that degree, it needs to be an improvement on the operation of some EU funding to sectors and projects that even I, as a passionate pro-European, recognise were not always done well in the EU—that is, some projects, particularly in eastern Europe, undoubtedly damaged the environmental prospects for Europe as a whole, particularly by favouring the substantial further use of fossil fuels.
It is therefore important that any such criteria are written into the terms of the proposed shared prosperity fund, and the commission must reflect those environmental aims. Indeed, any proposition for state aid subsidy, preferred public sector procurement treatment or clearance for planning permission, whether by the UK Government, a devolved Administration, local government or a quango, needs to have attached to it a clear environmental assessment of the impact on the climate, particularly regarding greenhouse gas emissions.
The noble Baroness, Lady Bennett, takes it further than the carbon figures to cover other environmental dimensions, particularly the protection and enhancement of the natural world. Some of what she refers to may be more difficult to measure than greenhouse gas effects, but in reality, if subsidised projects lead to a deterioration in biodiversity and habitats, as did some European projects under the common agricultural policy, that is a contribution to environmental degradation and in many instances leads directly to increases in carbon, methane and other greenhouse gas effects. We should adopt the concepts in these two amendments before we move any further towards something like the shared prosperity system proposed by the Government.
The negative effects of some government subsidy need to be discouraged by the criteria, but positive investment—in renewable energy and other carbon-saving outcomes, for example—needs to be sustained through this system and written into it. The noble and learned Lord, Lord Thomas, was right to say that Clause 48 in its present form should be deleted, but if we are to provide a substitute it has to be an improvement, and an improvement on my noble friend’s amendment—it has to be greener.
Baroness Hayman of Ullock (Lab)
My Lords, I speak in support of Amendment 166, in the name of the noble Baroness, Lady Boycott. It is an honour to follow her, along with the noble Baroness, Lady Jones, and my noble friend Lord Whitty. I also support Amendment 167, in the name of my noble friend Lord Stevenson of Balmacara, and its inclusion of the impact of climate change—particularly flooding. That is an issue close to my heart, living as I do near Cockermouth in Cumbria, which has suffered such devastating flooding over the past 10 years.
As we heard today, and in last week’s debate, Part 6 does not rule out working through the devolved Administrations, but—and this needs repeating—sets no requirements to do so, and enables Ministers to spend money directly in otherwise devolved policy areas.
Right across the world it has been recognised that we have to combat global warming and restore biodiversity. It has been agreed that the next round of European structural funds will have tackling climate change and addressing the just transition as a major theme. In May of last year, Parliament recognised, on the Floor of the other place, that we are in a climate and environment emergency. Last week, in his response to Amendment 52, the Minister said that
“the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to.”—[Official Report, 28/10/20; col. 339.]
If the Government are serious about achieving this aim, they need to ensure that where direct financial assistance is given it is consistent with these climate and environmental goals. We need to commit to environmentally sustainable, transparent legislation and policies, and apply them to any future trade deals and relationships, if we are to have any hope of tackling climate change. Whatever the formal future relationship between the UK, its constituent nations and the EU, it is vital that we maintain close environmental co-operation and do not risk undermining it through poorly thought-out legislation. As the noble Baroness, Lady Boycott, explained, Amendment 166 could avoid funding being provided for projects that are not compatible with climate and environmental targets and could undermine these goals.
Funding to support the environment needs to be secure as we leave the EU, because we will lose access to so much. I will give a couple of examples that have not yet been mentioned. The EU LIFE programme for environment and climate action has €3.4 billion to support, among other policies, the special conservation areas in the Natura network. The EU maritime and fisheries fund is a €6.4 billion programme, more than a quarter of which supports projects protecting marine environments, developing sustainable fisheries, and supporting the scientific and data-collection aspects of fisheries management. The concept of sustainability involves operating in a way that takes full account of an organisation’s impacts on the planet, its people and its future. That includes how Government operate and the decisions they take. Amendment 166 will help us to secure this for the future.
Baroness Humphreys (LD) [V]
My Lords, I oppose the Question that Clause 48 stand part of the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for introducing this part of the debate so clearly. We have heard assurance after assurance from Ministers that the Bill does nothing to take powers away from the devolved Parliaments, but the inclusion of Clause 48 certainly belies their assertions.
This clause, were it to stand, would mean that powers would be returned from the EU to the UK Government to spend on areas such as economic development, infrastructure, sport and education, and will therefore give Whitehall the powers to fund projects to replace EU funding programmes in areas that are devolved to the Welsh Government. But these powers are wider than those in the EU funding programme. The EU structural funds have never funded health, housing or education, and the inclusion of this clause on financial assistance has given cause for concern. It gives rise to a number of questions, to which I hope the Minister will respond.
Our building regulations, and fire and energy safety standards are different in Wales. If the UK Government choose to fund our housing associations to build more social housing, which regulations and standards would apply? As the noble Baroness, Lady Finlay, has said, there are no academies or free schools in Wales; the Welsh Government have rejected their implementation. Clause 48 would allow the UK Government to fund education projects in Wales. Does this mean that the UK Government would march in, with no consultation, and build these schools in Wales?
The intention of the UK Government to implement the M4 relief road scheme is provocative, to say the least. It is an issue the Senedd has examined and debated in detail. It made the decision to reject the scheme on the grounds of cost and impact on the environment, and to develop plans for another route. It is an arrogance that the UK Government feel they can overthrow its decision.
The UK Government fail to understand that they have no mandate to operate in these areas in Wales. In this House, we are expected to honour the manifesto commitments made by the Government in a general election and not to vote against them. In Wales, at the last Assembly elections, the people of Wales gave the Welsh Government a mandate based on their manifesto commitments. What right do the UK Government have to act against the expressed wishes of the people of Wales? For years, we have been clamouring in Wales for the UK Government to invest in projects that they have responsibility for—in our railways and the development of tidal energy, for example. I suggest that that would be a good starting point.
Wales has been eligible for £375 million a year from EU funds for almost 20 years. The management of these schemes has always been shared between the EU and the Welsh Government. The guidelines and parameters have always been clear, and the principles of co-operation and consensus have always been evident.
Now that EU funding is coming to an end, we need clarity on its replacement. The time has come for this Minister to give this House details of the proposed replacement through the shared prosperity fund. Up until now, the UK Government have failed to explain how that fund would operate and what role the devolved Governments would have in spending decisions made under it. Will the Minister do that today?
Many speakers, from all four nations of the UK, have spoken against this Bill’s attempts to undermine our devolution settlements. At Second Reading and in debates on this and other amendments, we have heard the same calls. I hope that the Minister and, through her, the Government, are beginning to understand that, after 20 years, the devolution genie cannot be put back in the bottle. I know that to this Prime Minister and his Government a bullish determination to win at all costs is important, but we have to find ways of working with and not against each other and to find solutions to our problems together. Clause 48 is a perfect example of the Government attempting to grab the devolution genie and force it, feet first, back into the bottle. Sadly, such an attitude does nothing but provide further ammunition to those who would favour the break-up of the United Kingdom.
Lord Dunlop (Con) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Humphreys, and to participate in the debate on Clause 48 and the financial assistance power in the Bill. I want to offer a further Scottish perspective.
I welcome the intent of Clause 48. The UK Government should be able to invest in all parts of the UK on initiatives that support and strengthen the union. I also recognise the anxiety that, if such an ability did not exist, the danger is that the UK dimension in devolved nations would become squeezed out or diminished as a relevant part of the lives of people for whom Scotland is home. So, as ever, the question with the Bill is, for me, not about its aims but about the best way in which to achieve them.
Let us not forget that, as the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Bruce, pointed out, the UK Government already invest in areas which, strictly speaking, fall within areas of devolved competence. For example, in government I was a very active proponent of the UK Government investing in both a comprehensive network of city and growth deals across Scotland and Scottish cultural assets important to our shared British heritage. The then Chancellor, George Osborne, was persuaded to open the Treasury’s cheque book and the Scottish Government were persuaded to come on board and invest alongside.
Today, the UK Government are investing £1.5 billion in UK city and growth deals in Scotland, with the Scottish Government co-investing a similar amount. The wide range of Scottish cultural institutions supported by UK Government cash includes the Glasgow School of Art, the Burrell Collection, V&A Dundee and a new Edinburgh concert hall. Of course, the UK Government do not get the credit they deserve for these investments, but in my view that is because there has been a tendency to “fund and forget”, just as successive Governments have over the years slipped into a habit of “devolve and forget”.
Clause 48 is a widely drawn power. It has caught many, including the devolved Administrations, by surprise. The internal market White Paper said that the Government would
“consider which spending powers it needs to enhance the UK internal market”.
However, the power in the Bill permits a potentially broader incursion into areas of devolved competence, including, as we have heard, health, housing, education, prisons and sport, and certainly beyond what is strictly necessary to support the internal market. The Government have provided very little detail on how they intend the power to be used. Like others, I hope that my noble friend, when she responds, will fill in some of the missing detail.
It may be that what the Government have in mind is, as the noble Lord, Lord Stevenson, and others have surmised, to replicate, through the UK shared prosperity fund and other initiatives, the range of EU funds that will disappear at the end of the transition period—funds in which the devolved Administrations are of course involved now in deciding how resources are allocated in their areas. The lack of clarity is problematic because the scope for misunderstandings becomes greater. Uncertainty creates a breeding ground for suspicions and scare stories, with predictable but no less unhelpful, consequences.
A month ago, the UK Government announced the union connectivity review to be chaired by Sir Peter Hendy, the chair of Network Rail. In my view, this is an excellent initiative to bring communities across the UK closer together and to support the levelling-up agenda. It is just the sort of initiative the UK Government should be promoting and leading. In response, the Scottish Government have refused to co-operate and taken away their ball. Their response is profoundly unhelpful and not, I would suggest, an example of how to look after the best interests of people in Scotland, so I very much hope the Scottish Government will reconsider their stance. However, while I do not condone in any way the behaviour of the Scottish Government, I cannot help but wonder if their unco-operative approach to the Hendy review might have been avoided if the Government had adopted a more consultative and collaborative approach to the financial assistance power in this Bill.
In fleshing out how the power will be exercised in practice, I hope that Ministers will be guided by three important considerations, which, if addressed properly, will help to ensure that this financial assistance power does not inadvertently destabilise devolution itself. First, on additionality—and here I apologise for getting a bit technical—the block grant allocations for the devolved nations are worked out by reference to a population share of any change to Whitehall departments’ expenditure limits adjusted by a comparability factor, depending on the extent to which a policy area is or is not devolved. So, for example, the comparability factor for education and justice is 100%, for health it is 99.4% and for transport it is 91%. If the power in the Bill is not to undermine the existing funding arrangements, the financial assistance provided by it should be additional to the normal block grant allocations. Can my noble friend explain what effect directly spending more at a UK level in areas of devolved competence will have on the block grant comparability factors, and thus for the devolved Administrations’ budgets?
Secondly, on financial accountability, a core purpose of the Scotland Act 2016, and the fiscal framework that accompanied it, was to make the Scottish Government more financially accountable by making them responsible for raising a significant proportion of the money they spend. The Scottish Government should rightly be held accountable by people in Scotland for the policy choices they make—good and bad. Therefore, the wide scope of the Clause 48 power really does matter and should matter to the Government, too. It should most certainly matter to the Treasury, which will have to fund it. If democratic accountability in Scotland is to flourish in the years ahead, it is important that the allocation of responsibilities between the UK and Scottish Governments is clear and better understood. I suggest to Ministers that, in exercising the financial assistance power in the Bill, they will need to take care not to blur the lines of accountability in a way that lets the Scottish Government off the hook.
Thirdly, on co-operation, if the power in the Bill is to be fully effective, it will be important for the UK Government to work in partnership, not conflict, with the devolved Administrations and representatives of local communities throughout the devolved nations. It would be a retrograde step indeed if Ministers sought to substitute local priorities with the priorities of the centre, uninformed by local views. In my experience, the maxim “The man in Whitehall knows best” is never a popular one, and certainly will not cut much ice in Scotland.
There is one very good practical reason for involving the devolved Administrations in how the power is exercised: many of the delivery mechanisms are ultimately in their hands, from the planning system through to the agencies that have the responsibility for managing and improving, for example, local transport networks. Therefore, I would commend to your Lordships the Constitution Committee’s report on the Bill, which concluded that:
“to ensure practical cooperation around the use of the power, the Bill should be amended to include a requirement that ministers, in exercising their power to spend directly in devolved areas, consult with the relevant devolved administration.”
I want to make a broader point. In a week’s time, we will complete Committee Stage. I sense that the mood of the House is to make changes to the internal market aspects of the Bill, not in order to frustrate it, but in a genuinely constructive bid to advance its aims in a way sensitive to devolution. I suspect the votes will be there at Report to make those changes. Ideally, I hope that, prior to Report, the Government Front Bench will play an active and willing role in working with all parts of the House to improve the Bill. But if Ministers in this House do not have the latitude to respond substantively to suggested improvements, I would ask the Government to consider when the Bill returns to the Commons this simple point: the health of our union is, and always should be, a constitutional issue to be carried forward on a cross-party basis.
As we heard earlier from my noble friend Lord Cormack, in 2021 the union may face some very choppy waters. It will be important that, as we navigate those choppy waters, the Unionist parties in Parliament are able, on this issue at least, to present a united front. For that reason, I hope the Government will think long and hard before overturning in the Commons, on the back of Conservative votes alone, any sensible changes to bring about a better reconciliation within the Bill of the twin aims of UK free trade and respect for devolution. After all, just because you can do something does not mean you should.
Lord German (LD)
It is a pleasure to follow the noble Lord, Lord Dunlop, and to echo many of the points he has just made, caution being one of them and care for the union another. I want to illustrate some of his points in what I have to say. I must declare my interest: I am Welsh and I live in a recipient area of huge amounts of European funding.
This part of the Bill is definitely a bolt-on: it has nothing to do with the operation of the internal market or with the four countries being able to trade freely together. This is about the replacement money for the EU funds—how it will be spent and by whom. Fortunately, I asked a question of the Minister in this very Chamber a few months ago about the European money that came to Wales. I was given a guarantee, which I am hopeful the Minister will repeat today, that the people of Wales will get, pound for pound, what the European funds gave them. That was the guarantee given in this Chamber by the Minister. If he wants to check, I can refer him to the relevant Hansard. The point I am making is this. It was not a question of the receipt of the money: I am pleased to bank the £2.2 billion that the European funds have given to the people of Mid and West Wales—that is two million people—over the last six years, but I am worried about how that money will be spent and what effects it will have. Effectively, this part of the Bill puts the cart before the horse. We have to agree a whole set of rules which cross devolved boundaries in ways we can only guess at, and nowhere are we given clear answers to fundamental questions about upholding and respecting the devolution settlements in the UK.
The implication in this part of the Bill is that it will have no impact on the functioning of the Barnett formula or on additionality, referred to by the noble Lord, Lord Dunlop. However, that is only an implication. Will the Minister give us today the answer to that fundamental question: will it have no impact on the normal functioning of the Barnett formula?
There has been no problem thus far with the UK Government seeking to spend money in Wales, in collaboration with the Welsh Government. Long may it continue, and I will encourage the Government. However, the key word is collaboration. Now, we are being asked to approve a law so broadly drawn that it will have a coach-and-horses effect on the powers of devolved Governments. I have to say to the Government that if it is not done collaboratively, spend does not necessarily mean approval. Approval will not automatically be given when the legal framework is in the hands of the devolved Governments. Factors such as planning approval, environmental impact assessments and curriculum development legislation all have a bearing here.
The Explanatory Memorandum implies that the UK Government will determine what moneys are available and how they are spent. The Welsh Government have had major control over the design and implementation of EU structural funds spent in Wales. For a few years, I had that responsibility in the Welsh Government. It is different, of course, for the smaller cross-EU programmes such as Erasmus and Lifelong Learning, which includes Comenius for school exchanges. These programmes were centrally designed but nevertheless locally administered.
Baroness McIntosh of Pickering (Con) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord German. I would like to build on some of his questions, particularly the question of who administers the funds, especially in relation to regions and local authorities in England.
I am grateful to the noble Lord, Lord Stevenson, for his Amendment 132 and for the chance to debate Clause 48 stand part. The noble Lords, Lord German and Lord Stevenson, and a number of others, asked about the situation going forward in respect of the Barnett formula. Is it the Government’s intention that that will remain in place, or is it the implication of this part of the Bill that the formula will be replaced by a new shared prosperity fund on the criteria that we are currently debating here?
My main concern as someone living in England, albeit of Scottish descent, is about the shared prosperity fund. Who will administer it and to whom will applications be made? How will a balance be reached between rural and urban areas? I declare an interest as a former MP in North Yorkshire for 18 years. I was delighted by the announcement in February this year that £6 million of funding has been allocated for a rural connectivity project in North Yorkshire with the specific task of helping to unlock the rural economy’s potential. It will be to the benefit of farmers and rural communities to support superfast mobile connectivity and rural broadband generally.
Looking at Clause 48(2) as it currently stands, however, rural broadband or broadband and mobile connectivity simply do not appear. Does that mean that, whichever nation or local authority or region you live in, once this shared prosperity fund comes into effect, these funds will disappear? Funds that have only just been allocated this year, presumably, under the existing European Regional Development Fund, will run their course. Is my understanding correct that the omission in the Bill of connectivity—either rural or urban, in whichever nation or region we happen to live in—means that it has been dropped from the shared prosperity fund? I will be interested to know and understand why, in particular, infrastructure has been limited in Clause 48(2) to,
“water, electricity, gas, telecommunications, sewerage or other services (for example, the provision of heat) … railway facilities (including rolling stock), roads or other transport facilities”.
It goes on over the page. I am severely disappointed—I am sure that others living in rural areas will feel the same way—that rural connectivity is being overlooked. It is not acceptable in this day and age that special provision is not being made for rural areas. The 5% who are the hardest to reach are being overlooked. I understand that the Scottish Government have given very generously to rural businesses in this regard, to their benefit and that of English customers who are buying from them.
I want to repeat a question posed by a number of other noble Lords: what is happening with regard to match funding? Will it continue to be required as it was under the ERDF and the European structural funds? How will economic development be administered? Is it going to be the case that local authorities such as North Yorkshire, Ryedale District Council, Hambleton District Council, Harrogate District Council or York City Council will have to go cap in hand to the Government? At this stage, it will be interesting to have more flesh on the bones of Clause 48. Who will determine what the balance is to be in applications from rural and from urban areas?
On the much-vaunted policy of the levelling-up agenda set out so effectively in the Government’s manifesto and to which they promised to commit themselves during the life of this Parliament, and which I entirely support, what role will the shared prosperity fund have in levelling up the regions and local authorities?
I want to end on this note. The noble Lord, Lord Stevenson, referred to the ERDF and structural funds having regard to levels of deprivation. It is not generally understood that rural areas have pockets of deprivation that are every bit as bad as those which are generally better known and recognised in urban areas. With these few remarks, I look forward to the answers from my noble friend.
Baroness Randerson (LD) [V]
My Lords, this is a very important group of amendments because they deal with another recentralising measure in this Bill; that is, powers for the UK Government to spend money on wholly devolved areas of competence. Let us remember that power without spending power is hollow. At the least, this is a petty pot-shot at the devolved Administrations, while at the worst, it will lead to a direct conflict of policies and a huge waste of taxpayers’ money.
Let me give a hypothetical example on environmental spending. You could have the Welsh Government subsidising wind farms and the UK Government paying to close them down. Before anyone scoffs at that idea, in relatively recent years the Conservatives in Wales have campaigned against wind farms. In the best case scenario, it will lead to disjointed rather than joined-up policymaking.
The list of specified policy areas goes well beyond the usual devolved areas, so this is clearly a naked power grab. However, all of this is unnecessary because the UK Government can and do spend money on the devolved areas, but they do so in partnership with the devolved Administrations. City deals are a prime example of this successful approach. In these deals, the UK Government will set out pretty stiff conditions for additional funding. They do not simply hand over the cash. If we take the example of higher education, universities in Wales and Scotland receive funding from UK research funds, and here I declare an interest as chancellor of the University of Cardiff.
If the Government feel that they are not getting full recognition for their funding, they should take a leaf out of the EU’s book and put a badge on it. As the noble Lord, Lord Dunlop, said in his truly excellent speech, they should not just fund and forget. In 2012 in the Wales Office, we recognised that the Welsh Government did not have enough capital funding for the significant infrastructure improvements that were needed if Wales was to compete economically. We gave the devolved Administration additional borrowing powers and we worked with the Welsh Government to agree a shared programme of funding for, for instance, the South Wales Metro. We worked with the grain of their views, but we still set the framework. Now I hear that the UK Government are threatening to build the M4 relief road, which the Welsh Government and local people have rejected.
Looking back to the days prior to devolution in Wales, there used to be huge rows about the smallest details of how social and economic support from the EU should be spent. Often, rather foolish decisions would be made by central Government, which were basically too remote from the areas concerned. The proposals in this Bill threaten a return to that centralised, counterproductive approach.
Lord Judd (Lab) [V]
My Lords, I shall not now speak to the group starting with Amendment 134, in the name of the noble Baroness, Lady McIntosh of Pickering. As this debate went forward, I came to realise that I can perfectly adequately cover what I want to say in that context in this group.
At several points in this evening’s debate, I have been struck by the measured and telling way in which the noble and learned Lord, Lord Thomas, has said that he believes that the Bill is undemocratic. It is certainly undemocratic in the arrangements for the even distribution of resources. I do not want to become a Jeremiah; I would rather leave that role to the noble Lord, Lord Cormack. However, as someone who is half-Scottish and half-Welsh and closely identifies with both families, who has northern Irish blood, and whose wife has Welsh blood, I see disturbing trouble ahead unless we get the spirit of what we are doing right.
The key to that is to recognise that what happens in the future must belong to the people of Northern Ireland, Wales, Scotland and England. Even in the context of this debate, in an excellent speech, the noble Lord, Lord Dunlop, referred to partnership. I am not sure that partnership is an adequate description; it must be a completely common approach, in which all parties are on an equal footing.
We are rather good in this House—no less than anywhere else—at talking with utter conviction about the priorities that must be faced in political and social policy, and then failing to make consensus on the detailed policy before us. My noble friend Lady Hayman of Ullock made that point about the environment very well indeed.
If the Bill is basically undemocratic, Amendment 167 in the name of my noble friend Lord Stevenson, is highly relevant. I am very glad that he has brought into it one of the big preoccupations of this House and the other place: poverty and child poverty. He has made it central to what we are doing.
I also commend the noble Baroness, Lady Boycott, for bringing up the environment and climate change so seriously. Climate change is going to dwarf everything else that we are dealing with as it moves forward. We must not only speak about it and make dealing with it an aspiration; we have to make it central to everything that we do in mainstream policy and legislation. If this is not mainstream legislation, then I do not know what is. Therefore, it is crucial that climate change comes on board as well.
I was very glad to see the amendment in the name of the noble Baroness, Lady Bennett of Manor Castle, because obviously we want policies in the interests of the people in all four parts of the United Kingdom: Scotland, Wales, Northern Ireland and England. We want long-term policies which are sustainable and tackle climate change and the nature emergency. We have a major nature emergency at the moment, not least in the sphere of biodiversity. We need all those things, and I am glad to see that amendment there to keep our eye on the ball and our feet on the ground as we move forward, not just with a constitutional arrangement but with an arrangement that will be viable because it really belongs to all the people of the United Kingdom and deals with crucial issues that will make all our tactical politics seem pretty trifling by comparison.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I thank those who assisted me in getting the chance to speak after the accidental omission of my name from the original list. It is a pleasure to follow the noble Lord, Lord Judd, and welcome his front and centring of the climate emergency and nature crisis. I thank the noble Lord for his expression of support for Amendment 169 in my name. I also thank the noble Lord, Lord Whitty, for his expression of support.
Before I get to that, I wish to briefly speak in support of Amendments 132, 167 and 168 in the name of the noble Lord, Lord Stevenson of Balmacara. It is notable that in the EU there are rules about the funds allocated for the alleviation of poverty and inequality—something that has been entirely lacking from UK practice and procedure, under which the Government have been able to direct money for electoral advantage without rules or oversight. The Americans have a word for that, “pork-barrelling”, and the practice is as unattractive as the metaphor.
I share the concerns expressed by other noble Lords speaking in this group about devolution issues, which other amendments seek to address, but as I have addressed those in other speeches I now speak chiefly to Amendment 169. It seeks to ensure that those who receive financial assistance, provided under the provisions of the internal market, can receive it only if a climate and nature emergency impact statement is undertaken first. This would ensure public money is granted only to development consistent with net climate, nature and environmental targets.
Amendment 169, and my argument for it, build on the comments of my noble friend Lady Jones of Moulsecoomb on the previous group, who reflected on the damage done by massive and continuing fossil fuel subsidies. As others have noted, my amendment has much in common with Amendment 166 in the name of the noble Baroness, Lady Boycott, to which my noble friend has already spoken, but my amendment extends further, calling for a detailed mechanism for each project, rather than the overview included in Amendment 166.
I must remind the Committee, as the noble Baroness, Lady Boycott, did, that the UK is the chair of the COP 26 climate talks. We have a responsibility to be the world leader the Government often proclaim they want to be. Green finance is an issue of great interest to a wide range of international bodies and commercial organisations. All new and continuing financial schemes, whatever their sources, have to be green, given the urgency of our climate emergency and nature crisis.
I note that on 25 June, the Committee on Climate Change made a progress report to Parliament, although we are yet to hear the Government’s response. The report showed how far our current policies are from meeting our existing commitments and the future, larger commitments we must surely make to live up to our enhanced ambition, beyond that of Paris 2015—something we have recently seen China taking a clear global leadership role in.
I refer to an Answer I received today from the noble Lord, Lord Callanan, to a Written Question on the green homes fund. I asked whether the programme would be extended and the funding enhanced. In his Answer, the noble Lord helpfully told me that £65 billion of investment will be needed for housing retrofit across the 2020s—£65 billion in nine years versus £2 billion of current funding. We clearly need to see some of the funding covered by this Bill directed towards this area, not nature-destroying, planet-trashing options.
Since the Government are very keen to look at league tables for education, we might look at two published in the last fortnight on the environment. One showed per capita contribution to plastic waste production. In this, we are, unfortunately, world-leading. We are second behind the United States on this plastic-choked planet—a huge and terrible responsibility. We have to use regulatory tools and funding to promote ways of cutting back on this. Secondly, the European Environment Agency reported that the UK has the third-greatest proportion of marine and land areas in bad conservation status; we are close behind Belgium and Denmark. More than 70% of our habitats
“exhibit overwhelmingly bad conservation status.”
Again, we must not only make sure we do not fund further damage but, as a matter of extreme urgency, direct funding in ways that start to repair the centuries of damage that has been turbocharged by our economic structure in recent decades.
These are not abstract, environmental, “nice to have” issues. They are about human survival. I ask your Lordships to think about the people of Nicaragua and Honduras seeking shelter and safety. To quote an NBC headline:
“Eta forecast to make landfall as a Category 4 hurricane, a rare occurrence in November.”
If noble Lords think that is an odd name for a hurricane, we are using the Greek alphabet now, because the normal alphabet has been exhausted this year.
The Committee might think about the people living now in low-lying areas around the world, including in the UK—we had a reference to flooding earlier. There have been reports from the Arctic of the failure of sea ice to form by the end of last month. That month broke the record for the lowest extent of sea ice in October. Its extent was more than 1.5 million square miles less than the 1980s average. That is an area larger than India, if noble Lords can envisage that.
Lord Purvis of Tweed (LD)
My Lords, I will focus on whether Clause 48 should stand part, as my noble friends have done on this group. In so doing, I shall comment on the contributions. I agree with my noble friend Lady Randerson, who said that the contribution of the noble Lord, Lord Dunlop, was very important. I hope that the Government Front Bench was listening very carefully to that contribution. I see the Minister nodding, and that is very positive.
I looked again at the Explanatory Notes for Clause 48. It is quite telling that the Government are seeking financial assistance powers. I wondered for whom. The Explanatory Notes state that the power to provide financial assistance enables
“the UK Government to provide funding to local authorities, sectoral organisations, community groups, educational institutions and other bodies and persons in order to support and promote these policy areas across the UK.”
It is very telling that there is no mention of the devolved Administrations. It is fairly obvious that the Government’s intention is to have powers which effectively go over the devolved competencies of the nations, because in many respects the areas that had European structural funds are within the devolved competences. As the noble Lord, Lord Dunlop, and others indicated, there is no mention in the Bill of concurrent or shared expenditure, or of supporting joint policy initiatives. This is against the thrust of what we have had over the past 20 years with devolution.
This is not purely about devolution, because this affects developments within England too, such as growth deals and city partnerships. This expenditure will go beyond the structures that have already been agreed, and in many respects all those aspects have been included in the multiannual financial frameworks of the European structural funds. So it right to ask: what is the purpose of this? If this is the mechanism through which the shared prosperity fund will be delivered, why is there no reference to the shared prosperity fund? Why is the scope of the legislation far beyond what the Government said in their 2019 manifesto about a national skills fund? Why is there no reference to the delivery mechanisms that the Government have indicated should be in place for the shared prosperity fund? Or does the legislation seek to go beyond the shared prosperity fund? There is no statement in the Explanatory Note and there is no framework in the legislation for how that expenditure will be committed.
The sums are huge, as was mentioned by the noble Lord, Lord Stevenson, who I am glad introduced this group. I rely on the House of Commons briefing paper from September this year to give the figures. In 2018, public and private sector organisations in the UK received £5.9 billion from the EU, through various channels. On top of that, we received £4.4 billion for UK projects on infrastructure, some supporting the growth of employment, from the European Investment Bank. That is included within this clause of the legislation, but we know that UK support from the European Investment Bank will no longer be available, so what is the source of this expenditure to support infrastructure investment? How will infrastructure investment from loans or grants be delivered?
As the noble Lord, Lord Dunlop, and other noble Lords have said, to date, most expenditure has been allocated to member states and then managed through our devolved Administrations, regional partnerships or local authorities. Until this point, 76% of all European investment has been allocated, first, to the member state to manage—and then it has gone through our existing frameworks. If there is to be a new system to deliver that level of expenditure, separate from our existing delivery and accountability mechanisms, the Government need to say so.
Until now, in the multiannual financial framework 2014-20, the UK partnership agreement gave granular detail—it is a 373-page document—for all projects and where they are, with a chapter for UK-wide expenditure, and chapters for England, Wales, Scotland, Northern Ireland and Gibraltar. Interestingly, Gibraltar is included in this, but there is no reference in the scope of the legislation to providing financial assistance to Gibraltar, so the poor Gibraltarians have been completely dropped off the ability to support.
In their manifesto, the Government said about the shared prosperity fund:
“We will consult widely on the design of the fund, including with the devolved administrations, local authorities, businesses and public bodies.”
It was to be finalised after the comprehensive spending review. That has been delayed, for understandable reasons, but can the Minister state when the conclusion of the design of the fund will be published? If the shared prosperity fund is to be in place from April 2021, as the Government said in their 2019 manifesto, it leaves little time for our public bodies, which will be managing it, to operate. If it is not the intention of the Government for our public bodies to administer it, what central government structures will be in place to administer this fund? Why does this legislation have some areas that go beyond what the Conservative manifesto said, which was that it would be spent on skills?
Secondly, as was referenced by the noble Lord, Lord Dunlop, how do the intended powers of this legislation impact on the statement of funding policy? The statement of funding policy is the core document on financial relationships. It has population proportions expenditure and comparability factors, and it is applied to all spending and spending rounds. How does this power interact with the statement of funding policy? Will it be over the top of regional strategies? How will it be accounted for in the recipient public bodies? If it is to go to local authorities, how will it impact their accounting? If it goes directly to local authorities, how will it go to those areas?
I close with a tangible example. We heard references from colleagues from Wales and across England. I live in the Scottish Borders which, using the NUTS2 areas, has the lowest GVA per head in the United Kingdom, at 59.3% of the UK average. Outer London has 67.9% of the UK average. Under the Government’s current proposals, an area such as the Scottish Borders will not be eligible for this kind of support. Will the Government ensure that this funding is aligned to not only devolved but local authority strategies? Will it be aligned with the state aid maps? This separate approach will be beneficial for our country only if it is consistent with and supports our existing policies and strategies, at a local, regional and national level.
Baroness Penn (Con)
My Lords, this Government are determined to deliver on the commitments upon which they were elected: levelling up the whole United Kingdom, delivering prosperity for all citizens and strengthening the ties that bind our union together. Part 6 of the Bill helps to achieve this. This power to provide financial assistance will enable spending in the areas of infrastructure, economic development, culture and sport. It will also support educational and training activities, and exchanges within the UK and internationally. Previously, as noble Lords have noted, much of this was done at the EU level.
I reassure the noble Lord, Lord Bruce, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, among others, that over the course of discussion and debate on this Bill, throughout Parliament and beyond, the Government have repeated our intention to work with the devolved Administrations. This power, in addition to existing powers, will allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities.
As noble Lords have noted, the response to Covid has shown how the UK Government, alongside important co-operation with the devolved Administrations, can save jobs and support communities. This could only have been delivered strategically and at that scale by the UK Government. This power will ensure that we can invest UK taxpayers’ money nationwide on UK priorities as we leave the transition period, as well as supporting people and businesses across the UK to recover from Covid.
The UK Government are uniquely positioned to level up across every part of the UK, ensuring that the entire country can feel the benefit of increased trade, improved business conditions and a truly global economy. The power to provide financial assistance will facilitate this. Noble Lords will know that these aims support the Government’s manifesto commitments to strengthen the union, level up the country and match the current levels of EU structural funding in each nation through a UK-wide replacement programme—the UK shared prosperity fund. That is why I commend this clause to stand part of the Bill.
I will now discuss Amendments 167, 168 and 132. Collectively, they seek to remove the power to provide financial assistance in Part 6 of the Bill and replace it with provisions for the operation of a UK shared prosperity commission, detailed in a proposed new schedule. Let me begin by emphasising that the power to provide financial assistance in Part 6 would operate UK-wide to support a variety of purposes. This includes economic development but is not limited to it. It is therefore wider than any single fund or organisation. I say this in response to the question of the noble Lord, Lord Purvis, about the purposes of the power.
The effect of these amendments would be that the Bill would not confer on the UK Government the power to provide financial assistance UK-wide for infrastructure, economic development, culture or sport, or to support educational and training activities and exchanges within the UK and internationally. Although the UK Government have some existing powers to spend across the whole UK, the power we are taking now creates a unified power that operates consistently UK-wide, to deliver investment more flexibly, dynamically and in partnership with the devolved Administrations and other partners. Part 6 will make sure that the UK Government are well positioned to deliver investments following the end of the transition period, and to meet their commitment to replace EU structural funds.
I understand that the noble Lord, Lord Stevenson, tabled his amendment to probe the Government’s plans on this and I hope to be able to provide some answers. On the level of funding, the Government committed in their manifesto to maintaining, as I already said, at a minimum the existing levels of investment across all four nations from the EU structural funds. The noble Lord is correct that this was based not on Barnett but on an EU formula. In future, the UK can ensure that funding reflects the needs of the UK, not the 27 other member states, as this work is taken forwards. He is also correct that there are a number of ways in which this funding could be done but, if I may reassure noble Lords about the purpose of the funding, the Government have been clear on their aim: to tackle inequality and deprivation, and level up across the United Kingdom.
On timing, the noble Lord, Lord Stevenson, is right that to prioritise the response to Covid-19 and focus on supporting jobs, the multi-year spending review has been postponed. But he is also correct that we have some time, as EU funds are still being provided. Our aim is to ensure a smooth transition from current EU structural funds to the UK shared prosperity fund.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, I have received one request to speak after the Minister, so I now call the noble Lord, Lord Bruce of Bennachie.
Lord Bruce of Bennachie (LD) [V]
Does the Minister not agree that shared prosperity requires an attitude of sharing—in other words, for the Government to talk with, not at, the devolved Administrations? Are they listening to Douglas Ross, the Conservative leader in Scotland, who says that the Government are completely failing to promote the benefits of the union to the people of Scotland and, indeed, that their attitude is alienating people? Will the Government recognise that, whatever the commitment behind what they are trying to do, the approach is counterproductive and deeply damaging?
Baroness Penn (Con)
My Lords, all I can say to the noble Lord is that the attitude and approach of this Government is one where we intend to work in partnership both with the devolved Administrations and with local communities to ensure that these new powers are used to the best effect and that the UK’s shared prosperity fund supports citizens across the United Kingdom.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank all those who have contributed to this wide-ranging debate, which was conducted throughout at a very high level indeed with respect to the very important issues that we had in front of us. I am grateful to the Minister for her quick-fire response. She covered a lot of ground; I will have to read Hansard carefully to be sure that I picked up all her points.
I have three responses to make. First, I do not think she was convincing in her defence of why the new powers contained in Clause 48 are required. The noble and learned Lords, Lord Thomas and Lord Hope, among others, were incredulous about the reasons for them and put their case very well. I do not think she was able to be as convincing on that as perhaps she hoped to be.
However, the Minister was very positive in response to the questions that a number of us asked about the replacement for the current level of EU funds, saying that the level of funding will be a minimum to match, it will be based on need and will tackle inequality and level up spending for these issues around the UK, and there will be time for a smooth transition. She stressed the collaborative approach that will be taken, but I will want to come back to that. She also left a few serious concerns about how exactly the process would go.
I think she will want to look again at the words of the noble Lord, Lord Dunlop, who spoke with great power; he made a number of points about additionality, accountability and co-operation as the necessary building blocks for any process which involves the insertion of UK Government-led funding in areas which have previously been done on a co-operative basis—bottom up rather than top down. Part of that was also raised by the noble Lord, Lord Bruce of Bennachie, who asked the Minister to recognise the differences that have arisen over time.
I shall leave with her two points. At this stage in the process when it is not certain how things will develop—even if the total amount of money and other things being said around funding are convincing—lack of information and engagement will breed distrust and suspicion. The Government need to think very hard about what approach they will take on a consultative and other basis, or else they will bring instability with them as they move forward.
Secondly, the case made by a number of people who spoke—not just those concerned about the direct impact on devolution but those concerned about other matters to do with climate change—has not been properly answered. There will not be any real return for the Government on this if they think that devolution will be assisted by what looks like a power grab without collateral arrangements being put in place. These funds need to be administered locally and planned co-operatively. At the end of the day, as one person said in the debate, the levers that are used to fund the people who are going to see the money will be local. If the Government do not get that right at the beginning, the rest will not work. However, we will read carefully in Hansard what was said. It has been a good debate on all sides. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, we come to the group beginning with Amendment 134. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and that anyone wishing to press this or anything else in this group to a Division should make that clear during debate.
Clause 31: Monitoring and reporting on the operation of the UK internal market
Amendment 134
Member’s explanatory statement
This amendment deletes the phrase “from time to time” from Clause 31(1).
Baroness McIntosh of Pickering (Con) [V]
My Lords, it gives me great pleasure to move this amendment and speak to the others in my name. I thank the noble Baroness, Lady Bowles, for her support; I think she is going to speak at some stage on the clause stand part debate. I take this opportunity to thank once again the Law Society of Scotland for its briefing and its assistance in drafting these amendments.
Amendment 134 would delete the phrase “from time to time” from Clause 31(1). The reason for this is simply to state that reviews should take place on a more structured and regular basis than simply from time to time. I would like to press the Minister on what the intended timeframe for a review is within the terms of Clause 31.
Amendment 135 is on a similar theme. It looks to set out the significance of a matter that the CMA would review under the terms of Clause 31, and to press the Minister to say that surely it must be intended that the CMA conducts reviews into important and significant matters only. Is that the Government’s intention? Currently Clause 31(1) provides the CMA with an extensive power to conduct reviews. In my view that should be used only in accordance with clear rules that will ensure that only important issues are reviewed. The purpose of the amendment is to press my noble friend and the Government on what would instigate such a review and be deemed a sufficiently important and significant matter for this purpose.
Amendment 137 looks at the purpose of a proposal that should be made only, as I state here, by the Secretary of State or others that I have set out. The purpose is to ensure that only the Government and the devolved Administrations can make a proposal to the CMA to conduct a review. The reason for that is that the Bill currently provides that the CMA can receive and consider any proposals for undertaking a review, so in fact anyone can refer a matter to the CMA. Surely it must be intended that there is some qualification relating to this to exclude vexatious or frivolous referrals that might be deemed to be wasting the time of the CMA or others involved. The purpose of this probing amendment is to restrict the capacity to make referrals to the Government and the devolved Administrations, and to ask my noble friend if that is indeed the Government’s intention.
Amendment 144 looks at Clause 32, taking out “part” and replacing it with “or the entirety of”, thereby ensuring that the Secretary of State can request advice on a report for the whole UK, not simply a part of the UK. That is simply to note that the Secretary of State may request the CMA to provide a report for any part of the UK under Clause 32(11)(d), but not apparently for the whole of the UK. It is my intention to resolve that anomaly and clarify whether my understanding is correct.
Amendment 146 would delete Clause 35(4), which states:
“A duty of the Secretary of State to make a statement to Parliament is to be discharged by laying a copy of the statement before each House of Parliament.”
Is it not the case that such duties should be discharged in person directly to Parliament by making an Oral Statement rather than by laying a copy of the Statement before each House? Or do the Government intend to use that procedure and this is just the phrase that they have used? My amendment seeks to probe this.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I am pleased to speak in this group on my own amendments. I recognise that the noble Baroness, Lady McIntosh, has picked out some relevant points, including probing what I call the business aspect in Clause 31.
I have already rehearsed many of the arguments relating to my stand part notices, so I shall only speak briefly. The question of whether the OIM is set up to provide independent technical advice regarding business disputes with one another or with national authorities, becoming a first-round settlement process—or not, as it chooses—is all left too vague. Some not entirely technical criteria are intimately involved. I cite again my concern as to whether the OIM is the right body or structure and whether the powers exercisable over people and businesses in Clauses 38 to 40 are justified and proportionate to the reporting requirements in Clauses 31 to 34, which largely relate to the activities of Administrations.
My Amendment 145 would delete Clause 33(2), which states:
“A relevant national authority may not request a report from the CMA ... unless the authority has considered whether any other person or body is qualified to provide an independent report on the matter.”
What is meant by “qualified”? I could not find a definition in the Bill other than that in respect of professional qualifications in Part 3, which I do not think applies here. I understand and accept the subsection if the reference is to another statutory body, but the present wording seems to relate, for example, to advisory firms. I might have all kinds of views about that and how the Government seem to use advisory firms too much already, but I am concerned that such private reports would be less transparent.
However, perhaps there is a case for saying that it is more appropriate for an Administration to pay for that research and advice than foist the cost on to businesses, which is what this provision does. Can the Minister advise me of the intention of Clause 33(2)? Does it mean statutory bodies or private bodies?
Finally, Clause 37 requires the CMA to prepare and publish general advice and information about how it expects to approach the exercise of its functions. At present, how the CMA will use its powers is left solely to its own discretion, without guidance or safeguards in the Bill, but I think it is necessary to have guidance about when enforcement and fines are appropriate. For example, they are not appropriate when there is no reasonable suspicion of wrongdoing or contravention of market principles by the person or body from whom information is sought.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
The noble Baroness, Lady Neville-Rolfe, has withdrawn, so I now call the noble and learned Lord, Lord Thomas of Cwmgiedd.
Lord Thomas of Cwmgiedd (CB) [V]
I can be very brief in speaking to Amendments 151 and 152, which stand in my name. They relate to matters that were discussed earlier. The first deals with the need to insert into the Bill provisions to ensure that the Competition and Markets Authority—if indeed it is to be the body that plays a central role in the Bill—consults the devolved Administrations in relation to its policy for enforcement.
The second amendment deals with penalties. The Minister has a regulating power and the amendment proposes that the penalties are made with the consent of the devolved Governments. That is obviously in line with what I hope will be the approach of the Government —that is, to work with the devolved Administrations. The reasons were set out earlier and I need not repeat them.
Baroness Randerson (LD) [V]
My Lords, like the noble and learned Lord, Lord Thomas, I will be very brief. I have added my name to his amendments, which simply reiterate the need for the CMA to consult the devolved Administrations, as well as the Secretary of State, and to obtain consent. They emphasise the importance of respecting devolution. I say to the Government that small things count. They guarantee good and fair government. It is important that the Government take note of the tone of the debates this evening and pay that respect to devolution in the terms in which the CMA operates in the future.
Baroness Finlay of Llandaff (CB) [V]
My Lords, these amendments are part and parcel of the approach that my noble and learned friend Lord Thomas and I, and indeed the Welsh Government, have advocated. It seems essential to ensure that the office for the internal market is genuinely independent and accountable, on a basis of equality, to institutions in all four parts of the UK.
I want to take this opportunity to seek clarification on some of the powers that the Government propose to give the office. I understand that it would be able to compel persons to provide information and impose financial penalties on those who do not. I can see why these powers are necessary for the Competition and Markets Authority when it investigates matters of anti-competitive practices which possibly violate the criminal law. However, can the Minister please explain why the powers are necessary in the very different circumstances of providing independent advice on the potential internal market implications of measures proposed by a Government?
More specifically, one point in particular needs clarification. It is my understanding that devolved Ministers could not be compelled to provide such information, as, like UK Ministers, they are covered by Crown immunity. However, I am informed that such immunity does not extend to the devolved legislatures, meaning that the Senedd Commission could be compelled to provide information and fined if it did not. This seems wholly unacceptable, and I seek clarification.
The Duke of Montrose (Con) [V]
My Lords, I am pleased to be able to contribute to this stage of the debate, and to offer my support to my noble friend Lady McIntosh of Pickering, and particularly to her Amendment 134. Just recently we have heard much discussion, even by the noble Baroness, Lady Bowles, about the suitability of the CMA for this role. But there is no doubt that we need a body, and what we are discussing are the functions it would need to perform. I have sight of the briefing provided by the Law Society of Scotland, which supported some of these amendments, and it has been pretty forensic in striving to ensure, in particular, that this Bill contains enough representation and consultation.
I also support Amendment 135; it seems to me very appropriate that the CMA should have powers to decide what is a matter of importance, because the general idea that anybody could ask it to produce a report is a recipe for overenthusiastic demand from all sorts of people.
Moving on to Amendment 146, Clause 35 deals with who gets to receive the reports that the CMA produces, before, during or after measures that are being introduced, and who will present that report. Subsection (4) excuses the Secretary of State from being the one who gives the report in person. Surely most of the reports will actually be initiated by the devolved Administrations, and reports on the initiative of Secretary of State will be far fewer, so why should the Secretary of State be excused from speaking to the report that he has asked for?
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
The noble Lord, Lord Naseby, has withdrawn, so I now call the noble Lord, Lord Razzall.
Lord Razzall (LD)
My Lords, I will be brief, unlike many earlier speakers in this Committee, who clearly were revelling in being freed from the tyranny of two, three and four-minute speeches. As the evening goes on, I think we come back to the discipline of being brief.
As to whether Clauses 31 to 37 should not stand part of the Bill, the arguments have been well rehearsed earlier and at Second Reading, but I shall reiterate why they seem appropriate here. Why are we rushing to legislate at this stage in this area? Why are we not working with all four Governments to arrive at agreements and to legislate when necessary? As noble Lords who followed this will be aware, the process of managing the United Kingdom internal market through common frameworks has not yet been exhausted. I do not accept the argument of the noble Lord, Lord True, at Second Reading, that the list that has been dealt with by the common frameworks is not exhaustive. Those discussions can continue to take place.
Why are we not continuing to work with the four Governments and to legislate when needed? Why do we not establish a properly independent body representing all four nations in due course, and then legislate? I support the deletion of all those clauses; they should not stand part of the Bill.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
The noble Lord, Lord Judd, has withdrawn, so I now call the noble Baroness, Lady Hayter of Kentish Town.
Baroness Hayter of Kentish Town (Lab)
My Lords, we have said it before, so I will repeat only briefly: these amendments would never have been needed had the legislation been drafted in consultation and agreement with the devolved authorities. Instead, the legislation, as we have heard, reads like a complete desire to run everything from the centre, as if devolution never happened, and that the UK Government would simply decide and tell the others what they are to do. For example, as we have heard, it gives the CMA a cross-UK role with regard to the internal market but leaves the CMA, which currently has no devolved accountability, with the power to set penalties above the IM without any devolved authority consent.
I keep asking the same question: do the Government just forget about the other three Governments? As I have already said to the Minister tonight, we need the Government to respond to the thrust of these amendments positively and make it clear that they respect and want a proper role for the devolved authorities. The noble Baroness, Lady Randerson, said that little things matter. These are quite little requests, but they certainly matter.
Lord Callanan (Con)
I thank noble Lords who have taken part. They have asked for a lot of information on the various clauses and whether they should stand part, and I will provide it.
I start with Clauses 31 to 37 and why they should stand part. As we have discussed previously, Part 4 of the Bill creates the office for the internal market within the CMA, charged with carrying out a set of independent advisory, monitoring and reporting functions to support the effective operation of the UK internal market. Clause 31 defines a regulatory provision for the purposes of the CMA’s UK internal market reporting, advisory and monitoring functions, as well as stating which of these provisions are within scope. The purpose is to establish that the CMA may undertake monitoring reviews on an ad hoc basis, either of its own volition or at the request of other parties, including the UK Government and the devolved Administrations and legislatures. This monitoring will focus on cross-border competition, investment and trade, as well as access to goods and services.
There are two categories of monitoring and reporting that the CMA must undertake. The first is an annual health of the market assessment that will set out trends and developments in the internal market, including levels of integration across different sectors and nations. The second is a review of the impact of the measures in Parts 1 to 3 of the Bill, dealing with the internal market system itself, to be published at least every five years. Both types of report will be published and laid before both Houses and all the devolved legislatures.
Clause 32 sets out the provision for the CMA to advise on a regulatory proposal prior to it being passed or made in law. If an Administration in one part of the UK wishes to do so, it may request non-binding advice from the CMA on an approach to regulation it or any other person proposes to make in the relevant part of the UK. This is on a voluntary basis but will help support effective policy development. The advice, or report, from the CMA will examine the potential economic impact of the proposal on areas such as competition and trade distortions, the impact on prices and the choice and quality of goods and services for consumers. To ensure transparency, all advice will be published and shared with all four Administrations.
Clause 33 details the CMA’s reporting procedure on regulatory provisions already been passed or made in law. The request may be made by one or more Administrations and must concern a regulatory provision applying to its part of the UK and within its legislative competence. Similarly, to ensure transparency, the CMA will publish the report soon after it is provided to the requesting Administration. The noble Baroness, Lady Bowles, asked about this clause. The clause sets out that it is for the national authority seeking the report from the OIM to consider and determine whether another body could provide advice. This is not a technical term and is simply intended to make it clear that the OIM is not intended to displace other bodies that might in theory provide more relevant advice on the same matter and, in doing so, make the best possible use of public funds.
Clause 34 sets out the reporting procedure that the CMA will undertake for regulatory provisions that are already enacted in any part of the United Kingdom and are considered to have actual or anticipated detrimental impacts on the internal market. The CMA may produce reports upon the request of a Minister in the UK Government or a Minister in any devolved Administration. The CMA must provide copies to all other Administrations in other parts of the United Kingdom, laying the report before each House of Parliament and all devolved legislatures, as well as making it public.
Clause 35 sets out the process that the CMA, the UK Government and the devolved Administrations must follow once a report has been produced by the CMA and laid before the legislatures under Clause 32. The process requires the Minister in the Administration responsible for implementing the regulatory provision that was the subject of the report, and the Minister in the Administration who requested the report, to make a Written Statement in their relevant legislature. This supports effective parliamentary oversight, as well as prompting legislatures to determine the most appropriate subsequent course of action.
Clause 36 allows the CMA the discretion to exclude particular categories of information from its reporting on impacts on the internal market. The discretion to exclude some categories is not novel or contentious, and is used by public and private organisations to protect commercial and private information about an organisation or a person. This discretion is necessary in specific circumstances to provide assurances for business and individuals’ interests.
Clause 37 requires the CMA to publish general advice, information and guidance about how it expects to approach the exercise of its monitoring, advisory and reporting functions under Clauses 31 to 34. This mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK.
I turn to Amendment 134, which seeks to delete the phrase “from time to time” from Clause 31(1), which deals with the CMA’s ability to produce ad hoc reports on matters it considers relevant to the effective operation of the UK’s internal market. The Government agree that it is essential for the CMA to undertake reviews and report on matters it considers relevant to the effective operation of the internal market. However, the Government believe that it is also important that, as an independent body, the CMA should not be under pressure to frequently produce ad hoc reports, which is what removing this phrase “from time to time” would imply. As Clause 31(5) and (6) make clear, the office for the internal market will produce regular reports on the health of the internal market; it will therefore be well placed to make the right judgment on the need for the production of other reports.
Amendments 135 and 137 would require the CMA to conduct reviews only into what are called “important” matters, and that only the UK Government and devolved Administrations may request a review from the CMA. The Government appreciate the intention of these amendments, which is to ensure that the CMA is not overburdened by expectations in relation to reviews. However, the CMA is experienced in the matter of reviews and should not have its work impeded due to debates as to what constitutes a “matter of importance”. Furthermore, it is important that all stakeholders with an interest in the internal market should be able to request that the CMA undertake a review. This in turn will help to maintain stakeholder confidence in the independence of the OIM from the UK Government and the devolved Administrations.
Amendment 144 seeks to amend Clause 32 by inserting the word “entirety” to ensure that the Secretary of State can request advice and a report from the CMA on matters relating to the whole of the UK, not just a part of it. The current wording of Clause 32 aims to capture that reporting made possible by the clause is limited only to devolved regulatory competence. In the case of the Secretary of State, this would mean England-only legislation by the UK Government would be in scope of Clause 32. The effect of the amendment would be to extend the scope of Clause 32 to capture powers being exercised for the whole of the UK by the UK Government. To support the effective operation of the internal market, the office will need to focus its reporting and monitoring on areas of regulatory divergence across the UK. If regulatory measures apply UK-wide, the same risks to the functioning of the internal market will not feature. It is therefore vital to narrow the focus of the reporting in question to regulation that covers only a proportion of the UK and could pose an issue to the functioning of the market.
I turn to Amendment 145. The purpose of Clause 33 is to enable the CMA to produce reports on the impact of regulatory provisions which have already been passed or made into law. This procedure is voluntary and can be requested by an Administration, solely or jointly, in all parts of the United Kingdom, in relation to a regulatory provision applying to the relevant part of the UK and within its legislative competence. The Government understand the concerns around transparency, but the aim of subsection (2) is to ensure that the requesting Administration consider whether any other person or body is also qualified to provide an independent report on the matter before a request to the CMA is made. It is important to consider whether any work done by another person or organisation would put the CMA in a better position to provide advice to an Administration and for this to be taken into account and considered before a request to the CMA. This is a pragmatic and wholly sensible approach and ensures that the CMA’s resources are best directed at requests for advice, monitoring and reporting where it has the relevant expertise.
Amendment 146 advocates for the removal of subsection (4) within Clause 35. This clause requires the national authority responsible for implementing the regulatory measure that was the subject of the CMA’s report to then make a written statement in the relevant legislature. This amendment would remove the obligation of laying a copy of a written statement before each House of the UK Parliament. This would clearly result in inconsistency between the UK Government and devolved Administrations in accountability to their respective legislatures. We believe that this change would result in a democratic deficit and the loss of accountability towards both Houses of this Parliament.
Amendments 147 and 148 would require the CMA to consult stakeholders before preparing advice and information about how it expects to approach the exercise of its functions and revising or withdrawing any advice or guidance. Clause 37 mirrors existing requirements in the Enterprise Act 2002 to publish documents, as the UK’s competition authority, on how it works to promote competition for the benefit of consumers, both within and outside the UK. As a matter of good practice and maintaining effective working relationships with a range of stakeholders, the CMA already undertakes extensive consultations with stakeholders in respect of its existing statutory duties before publishing advice and information. The CMA will be maintaining this approach in respect of the advice, information and guidance it publishes under Clause 37. In light of this reassurance, and to safeguard the independence of the CMA, the Government do not think it is necessary to compel the CMA to do this, as proposed by the amendment.
Amendment 151 seeks to amend Clause 39 to explicitly require the CMA to consult the UK Government, the devolved Administrations and other relevant persons in preparing or revising its statement of policy in relation to the enforcement of its information-gathering powers. Clause 39 allows the Competition and Markets Authority to take actions in response to non-compliance with the information requests described in Clause 38. To ensure that its penalties regime is fully considered and proportionate, the CMA will be required, as it already is now under its existing statutory functions in relation to the Enterprise and Regulatory Reform Act 2013, to consult other parties as it sees fit when developing or revising its approach. I can assure noble Lords that, in practice, the UK Government and the devolved Administrations would always be consulted as a duty on the CMA as it stands in the Bill. The noble Baroness, Lady Finlay, asked about compelling devolved Administration Ministers to give information. We can give DAs information notices, but they cannot, of course, receive any penalties for non-compliance.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to all those noble Lords who have contributed to the debate. I did rather enjoy my noble friend’s description of not wishing to overburden the CMA with expectations; I do not think that that is quite the case as yet. As the noble Baronesses, Lady Hayter, Lady Randerson and Lady Finlay, and the noble and learned Lord, Lord, Lord Thomas of Cwmgiedd, have said, we are seeking to ensure that the devolved Administrations are consulted, that consent is sought and that they are respected. That was the main thrust of the argument.
I am disappointed that my noble friend does not find common cause with my amendments. I am very grateful in particular to my noble friend the Duke of Montrose for highlighting the fact that, as he recognised, which is most pertinent, most of the reports will in fact emerge from the devolved Administrations. That is why it is bizarre that the Secretary of State can be excused from speaking to these reports from them so that Parliament itself, along with the devolved Administrations, would be made aware of his arguments and reasons for either accepting or rejecting the reports.
My noble friend’s response begs a question which it will be interesting to explore at subsequent stages. If the Government are not prepared to accept a de minimis rule on what the status of referrals and the reports to be made by the CMA would be, that begs a question about how we define the distortion of the market. I spent six happy months in the European Commission looking at how competition was being distorted in the context of the single market, which we have just left, and what defined a distortion of the market. I shall seek to develop that argument at a later opportunity. For the moment, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
We come now to the group beginning with Amendment 136. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.
Amendment 136
Baroness Hayter of Kentish Town (Lab)
My Lords, I shall speak also to the other amendments in this group that are tabled in my name. I would have thought that it is clear by now, in particular to those noble Lords who have sat through all three days of our debates in Committee, that I think it is really important that, as we look at how the internal market is working, we need to include consideration of how it impacts on consumers.
For example, the first of these amendments would ensure that where the CMA reviews the effective operation of the market, it would measure how well it was serving consumers. Similarly, in Amendment 139, its annual report should include the impact of the internal market on consumers. In Amendment 142 it should look at the prices, quality of goods and services, and choice for consumers, in addition to the volume of trade between the four parts of the union.
We do not want trade to go rocketing up if it simply means monopolies are growing and choice diminishing, nor simply a rush of goods of shoddy quality, or services that offer no standards and no redress. These amendments do not mean the consumer impact trumps everything else, but that it must be considered in the mix in any report so that decision-makers have the full picture at all times.
Incidentally, the wording in Amendment 142 is a straight lift from Clause 32(4)(c), so it is not particularly innovative, nor surprising to the drafters. It is just saying that if you look at how the internal market is working it must not be just by volumes of trade; it must take into account the various aspects of how a consumer would measure whether the market was serving their needs. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I do not need to say a lot in this group because I have already made it clear that I consider transparency an important part of consumer protection and the way to find out whether consumer interests have been looked after. My Amendment 138 to Clause 31 relates to the provision where any person may request a report, which the CMA can then choose to undertake. My amendment would take away the optionality of publishing the report and says that it must be published.
The Minister said in connection with Administrations that such transparency may prevent forthright exchanges. In this location, it is not advice about regulation that comes under other clauses. This is a general case and if it is reporting—for example, opining on what is or is not a subsidy, discrimination or any of the other matters on which it could be consulted—then the opinions form a body of information that should be publicly available. I would concede safeguards, but they are there anyway in Clause 36 about reports under Part 4. However, I think that the wording should reflect the presumption of publication.
The noble Baroness, Lady Hayter, has also tabled amendments about consumer protection. While I have been a bit picky at times or uncertain whether it is the right thing to qualify the internal market with reference to any sector, what she said about consumer protection having to be in the mix is right. Certainly, Amendments 139, 140 and 142 are in the right places to establish that point.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, the noble Baronesses, Lady Noakes, Lady Jones and Lady Neville-Rolfe, and the noble Lord, Lord Palmer, have all withdrawn so I now call the Minister, the noble Baroness, Lady Bloomfield of Hinton Waldrist.
Baroness Bloomfield of Hinton Waldrist (Con)
I start by trying to reassure the noble Baroness, Lady Hayter, that we do not wish to see monopolies increasing and choice and quality declining either.
Amendments 136, 139, 140 and 142 aim to give the monitoring and reporting obligations of the office for the internal market a specific focus on the interests of consumers. Clause 31 enables the office for the internal market within the Competition and Markets Authority to operate general and periodic reporting and monitoring to assess the effective operation of the UK internal market and Parts 1 and 3 of the Bill, including how it operates for consumers. These amendments would limit this function to assessing the operation of the market as it affects consumers.
The role of the office for the internal market is to monitor the health of the UK internal market, including specific regulations, sectors and nations. Moving to a narrower definition of the assessment criteria of Clause 31, from the outset, would hinder its effectiveness in fully delivering this function.
To appreciate this, it is worth setting out the breadth of the areas of monitoring that are in scope. They include emerging trends and developments in the UK internal market, cross-border competition, the nature and level of trade between different parts of the UK and access to goods, services and trade. Monitoring may be undertaken independently by the CMA or upon request by other parties such as the UK Government and the devolved Administrations. Proposals can be submitted to review specific sectors relating to the UK internal market.
In doing its work, the office for the internal market will naturally be able to gather information from consumers, businesses and public bodies. Clause 32(4) also specifies that its advice and reporting can involve consideration of the impact of new regulatory proposals on the pricing, quality and choice of goods and on services for consumers. The interests of consumers are therefore an important concern which is already laid out for the office for the internal market when undertaking its monitoring and reporting functions. So, I can assure your Lordships that it will take into account consumer interests in undertaking its wide monitoring and reporting functions and there is no need for a specific reference to this in Clause 31.
Amendment 138 aims to impose an additional requirement in Clause 31 that reporting on reviews which the CMA undertakes of its own initiative or following a request under subsection (1) on matters relevant to the effective working of the UK internal market must be published. Clause 31(4) already requires that all reports the Competition and Markets Authority produces on matters in subsection (1) be published. Clause 32(10), Clause 33(6)(b) and Clause 34(10) also require publication of the reports on the operation of the UK internal market referred to in those clauses as soon as reasonably practicable. In light of this reasoning, I trust that the noble Baroness, Lady Hayter, will be assured that the amendments are unnecessary and that the amendment moved should be withdrawn. We are already doing a lot of background thinking on consumer protections; it is not a closed issue.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for that reply and particularly for her last few words about ongoing consideration. If these debates feed into that consideration, we will not all have stayed up late for nothing.
I also thank the noble Baroness, Lady Bowles, for her support. I have not looked at the exact wording or at whether what the Minister said is right, but what the noble Baroness said about transparency is important. Because it is very difficult for individual consumers to take up these big questions, transparency is really important for their advocates—that is, consumer representatives—who are often very underrepresented on all these committees. Transparency is particularly important for those who, from the outside, are trying to ask questions about choice, redress, standards, quality and so on. I hope that those who are thinking about that issue will hear some of the arguments we have made. If they influence the sort of questions that are posed, we will put one little tick there, but the proof of the pudding will be in the eating. Will this be better for consumers when we have the market going? For the moment, I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
We now come to the group consisting of Amendment 143. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate and anyone wishing to press this amendment to a Division should make that clear in debate.
Amendment 143
“Advice on proposal to make regulations applying Part 1, 2 or 3
(1) Where the CMA is given notice of proposed regulations in accordance with section (Legislation to which market access principles apply)(5), (Services: application of sections 18 to 20)(9) or (Application of Part 3)(3), the CMA must give advice, or make a report, to the Secretary of State with respect to the proposed regulations.(2) The advice or report must (among other things) consider the potential effects on the matters specified in subsection (3)—(a) of any regulatory provision that any relevant national authority has proposed or might reasonably be expected to propose and that would be affected by the making of the proposed regulations, and(b) of the application of Part 1, 2 or 3 of this Act by virtue of the proposed regulations.(3) The matters mentioned in subsection (2) are—(a) the effective operation of the internal market in the United Kingdom, including—(i) indirect or cumulative effects,(ii) distortion of competition or trade, and(iii) impacts on prices, the quality of goods and services or choice for consumers,(b) the following in each part of the United Kingdom—(i) the health and safety of humans, animals and plants,(ii) standards of environmental protection, and(iii) any other aim that any regulatory provision mentioned in subsection (2)(a) would seek to promote. (4) Where the CMA gives advice, or makes a report, to the Secretary of State under this section—(a) it must at the same time send a copy of the advice or report to the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland;(b) it must publish the advice or report in such manner as it considers appropriate.”Member’s explanatory statement
This amendment requires the CMA to provide advice or a report to the Secretary of State when notified of proposed regulations applying Part 1, 2 or 3 of the Bill and it specifies matters that the advice or report must consider.
Baroness Finlay of Llandaff (CB) [V]
My Lords, Amendment 143 is to some extent a coda to our recent discussions on the role of the office for the internal market and to the amendments I moved last week, which were intended to underscore the primacy of the common frameworks process. They would ensure that the market access principles are triggered only when it proved impossible by consensus for the four Governments to agree a common framework. The triggering would be by bringing forward regulations using the affirmative procedure.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, the noble and learned Lord, Lord Morris of Aberavon, has withdrawn, so I call Lord Fox.
Lord Fox (LD)
My Lords, my name is on this amendment, and I am pleased to support it and to follow the very clear explanation that we have just heard.
I speak briefly to subsections (3) and (4) of the proposed new clause. The former calls for the report to deal with
“indirect or cumulative effects … distortion of competition or trade”
and, as I am sure that the noble Baroness, Lady Hayter, would be pleased to hear were she still here
“impacts on prices, the quality of goods and services or choice for consumers”
then moves on to consider
“the health and safety of humans, animals and plants … standards of environmental protection”
and other issues that have come forward.
This is another way of trying to do many of the same things that have come through the variety of amendments that your Lordships have heard over the course of the last three days in Committee. All the Ministers have all talked about level playing fields, and the purpose of this legislation is to create a level playing field. We all subscribe to that. The purpose of subsection (4) is to create an informational level playing field, to ensure that all the Governments are receiving the same information and create some transparency so that the outside world—indeed, the companies involved and the people involved—also receives that information.
I am sure that the Minister will stand up in a few minutes and give us very good reasons why this amendment should be withdrawn, but before he does, can he undertake to ensure that the level playing field applies not only to the commercial and trading issues, but also to the information that all the players receive when these decisions are being taken?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, it will be interesting to hear how the Minister responds to this request, which has been well described as a bit of a coda. On the other hand, it also contains teeth, which would be there to be used, if someone wished to. It is important to get this right and understand, if it is rejected, why it is. I look forward to that.
Ministers know that we on the Labour side think that the common frameworks are at the centre of the managed divergence that we want to see and allow to happen across the devolved Administrations. It is important that the process continues and that is at the centre of the Bill, because it is not at the moment; it is hardly mentioned, except in passing. If that is the case, we look for some additional reassurance from the Minister that the powers that might be available to the Government, when they feel the common frameworks are not working, are not used too early or vicariously just to show the devolved Administrations who is in charge. As we were reminded by the noble Lord, Lord Dunlop, on day one, the Government already have powers to deal with any default they feel is present in the common frameworks. The questions raised by this amendment are important, and I look forward to hearing the Minister’s response.
Lord Callanan (Con)
I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.
Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.
In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.
The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I am grateful to the Minister for recognising the staying power of some noble Lords, because we have had three days of this debate. I am most grateful to the noble Lord, Lord Fox, for going through some of the aspects of this amendment in more detail and clearly pointing out that its aim is to establish a level playing field, at every level. There has to be a level playing field, because it is the only way in which the four nations will eventually be able to work together properly.
I echo the words of the noble Lord, Lord Stevenson, and I am grateful to him for stating that there is a need to have common frameworks at the centre of the Bill. This is something to which we will return on Report, because the Bill, as it is written, does not make this clear at all. In the way it is written at the moment, it looks as if the common frameworks are almost disposable. We need to come back to that.
I am glad that the Government recognise the involvement and commitment of the Welsh Government to have positive discussions, and I know that from the Wales end that that is true. They want to engage and come to a good solution. They want business certainty just as much as anyone else; they want less bureaucracy just as much as anybody else, but they need to know there will be a level playing field and fairness at the end of the day. That is why the common frameworks were so attractive, and why people have worked so hard towards them and are committed to carrying on working towards them.
Having said that and knowing that we need to have further discussions on this and that we will return to this on Report, I beg leave to withdraw the amendment.
United Kingdom Internal Market Bill
Wednesday 4th November 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135-V Fifth Marshalled list for Committee - (4 Nov 2020)
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, hybrid proceedings will now resume. Some Members are here in the Chamber respecting social distancing, others are participating remotely, but all Members will be treated equally. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
I will call Members to speak in the order listed in the annexe to today’s list. Members are not permitted to intervene spontaneously. The Chair calls each speaker. Interventions during speeches or “before the noble Lord sits down” are not permitted.
During the debate on each group I invite Members, including Members in the Chamber, to email the clerk if they wish to speak after the Minister. I will call Members to speak in order of request and will call the Minister to reply each time. The groupings are binding and it will not be possible to degroup an amendment for separate debate. A Member intending to press an amendment already debated to a Division should have given notice in the debate. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely intends to trigger a Division, they should make this clear when speaking on the group. We will now begin.
We now come to the group beginning with Amendment 149. Anyone wishing to press this, or anything else in this group, to a Division should make that clear in the debate.
Clause 38: Information-gathering powers
Amendment 149
Member’s explanatory statement
This amendment makes explicit reference to legal professional privilege in Clause 38(8).
Baroness McIntosh of Pickering (Con)
My Lords, I will speak to Amendment 149. It will not surprise the House to learn that I am very grateful to the Law Society of Scotland for its help in briefing me and preparing this amendment. I state once again for the record, as on the register, that I am a non-practising member of the Faculty of Advocates, so have had cause in the past to be deeply grateful to solicitors in Scotland.
Amendment 149 amends Clause 38, which relates to information-gathering powers, setting out the powers the CMA will have to gather information in support of its functions in this part; under subsections (2) and (3), it will be able to provide an information notice or require the production of a document by an individual business or public authority. The notice must describe the type of information required and when and how it is expected to be relayed. Under subsection (6), the notice must make clear which precise function of the CMA is relevant, as well as the legal and financial consequences of non-compliance. Subsection (8) sets out that no information can be requested if it could not be compelled to be given in the course of civil judicial proceedings before the court, and that a notice may not require a person to go more than 10 miles from their residence without having their travelling expenses paid or offered to them.
This begs a question, which has been identified. Through this amendment, I would make explicit reference to “legal professional privilege” in Clause 38(8), for the very simple reason that a person should not be compelled, as I just stated, under subsection (8),
“to produce or provide any document or information which the person could not be compelled to produce, or give in evidence, in civil proceedings before the court”.
This provision may apply to legal representatives, but that should be made clear by a reference to “legal professional privilege” in the clause. My direct question to the Minister is this: why is it specifically not referred to? I am sure he will say that it is implicitly relied on, but I pray in aid that legal professional privilege is the client’s privilege, not the lawyer’s privilege. It is an essential aspect of the rule of law which enables clients to consult freely with their lawyers and is widely recognised in statute. I would like it in this Bill, unless I hear extremely good reasons from my noble friend why it is not already there. I beg to move.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I have two amendments in this group. I also support the amendment just explained by the noble Baroness, Lady McIntosh.
This group concerns the information-gathering powers in Clause 38; it applies to Clause 31, under which requests for a report from the CMA may be made by anyone, and to Clauses 32, 33 and 34, under which administrations may request, respectively, advice on proposed regulatory provisions, reporting on the impact of a regulatory provision and reporting on a regulatory provision that is or may be detrimental to the market.
To prepare reports, information needs to be gathered. The powers enable the CMA to ask any person for any document in their possession or to require any person who carries on a business to provide estimates, forecasts, returns or other information as may be specified. As the noble Baroness, Lady McIntosh, has already highlighted, it can further specify the time and place at which, and the form and manner in which, the information is to be provided. It may also require conversion of a non-legible record into a legible and intelligible copy of information. There is no acknowledgment of how onerous this may be other than in subsection (8)(b), which says that travel expenses must be offered if a person has to go more than 10 miles from their place of residence. This could impose significant burdens on individuals or small businesses, to whom time is money.
It does not indicate that the information sought is only that which is readily available; it seems there is nothing to stop it requiring the preparation of estimates rather than, say, just the forwarding of those that might have been given to customers in the course of business. Many businesses may well be happy to assist in what is tantamount to a survey about the effects of regulation, just as many respond to consultations, but for small businesses it could be a burden. For sole traders it may mean a significant loss if income is dependent on work, whether that is as a plumber, lawyer, childminder, shopkeeper or anything else.
I am aware that the template of CMA market study investigations and Section 174 of the Enterprise Act have been followed, but are we truly looking at comparable circumstances? Market studies have more statutory requirements and guidance around them, such as the requirement of a market study notice and all the defined stages and practices. That does not seem to have been transposed into this. Nor are the circumstances those of known market deterioration caused by market participants—for example, it may just be about proposed or enacted regulation, with any flaws caused by administrations, which is completely different from when businesses, collectively or individually, have themselves created oligopolies, monopolies or concentrations.
In Amendment 150, I put forward that there should be provision for loss of earnings—why not, if the circumstance is that the expertise of the business is being sought? An alternative way to collect this kind of information is through consultations or by commissioning research. The CMA is empowered already under Section 5 of the Enterprise Act to commission such reports without resorting to enforced business responses. The members of the panel that will prepare the reports are being paid for their expertise, so why not those others who are being harvested for information?
My Amendment 156, would insert a new clause:
“The CMA must take account of the effects of additional duties imposed on small business in its approach to the exercise of its functions under sections 31 to 34, and its powers under sections 38, 39 and 40.”
This is not a strong amendment, but at least it makes the point, as otherwise there is no guidance. I am sure that MPs would interest themselves in the sorry stories they will be sent if there are burdensome requirements but, absent something like this, they have nothing to point to when overstepping has taken place. I will return to this matter in the context of penalties in the next group, but when there has been no wrongdoing that brings about the request for information—possibly burdensome requests, enforceable through fines rather than encouragement—it seems a wholly disproportionate measure. As I have said, I do not believe the cause is comparable with current CMA market studies.
Whither now the comply or explain principle—I have always been more of a “make them comply” person, as my track record will show, but these measures offend me in principle and seem to come from the department against business. I can see the matter is different if the business is under investigation for their own doings, but there is no distinction made in the clause. Clause 39 has a “without reasonable excuse” provision and I intend to probe that in the next group but, for now, can the Minister clarify the limits to the burden that can be put upon small businesses and the circumstances envisaged? Something of record has to be made.
As a final related point, there are also circumstances, of course, where much more has been opened up for challenges by businesses through Clause 31, giving the CMA reach into both administrative decisions and to other companies. My noble friend Lord Fox will say more on that.
Baroness Jones of Moulsecoomb (GP) [V]
My Lords, I will be very brief, as the noble Baronesses, Lady McIntosh and Lady Bowles, have explained this group extremely clearly. As the noble Baroness, Lady Bowles, said, these measures just offend me in principle. The Government seem, time and again, to understand big business, and are happy to give very large amounts of money and all sorts of leeway to such businesses and organisations but, at the same time, quite often miss the point on small businesses, which often struggle to survive—particularly during lockdown.
Small businesses can be the creative heart of our society at times—creating jobs for a lot of local people and, indeed, more widely. Will the Minister listen and understand that such intrusive and burdensome measures really do impact on small businesses that are already struggling to survive? I know it is very difficult for the Minister to commit to anything, but surely he is prepared to discuss this sort of issue with noble Lords and perhaps come to some sort of agreement.
Baroness Neville-Rolfe (Con)
My Lords, I was glad to see Amendment 149. It is always good to be clear about legal privilege to avoid needless or inappropriate fishing expeditions by regulatory staff, and it matters for in-house counsel as well as for external lawyers. It would be good to be clear on the Government’s intentions.
I also support the sentiment behind Amendments 150 and 156. We need to look after small business, the economic dynamism of which reflects a UK sector that was the envy of everyone when I was the Competitiveness Minister in Brussels. There is much in this Bill that they might fear: rules of which they are unaware; costs, as the noble Baroness, Lady Bowles, suggested, from burdensome requests; big fines; and quasi borders created between the different nations of the UK. I worked with the Federation of Small Businesses on regulation and getting them paid on time, and I try to promote a positive climate for the scale-up of small businesses, rather than a sale to a Silicon Valley, or other, giant after a short run of success. How will the Bill help small businesses, and are there dangers lurking here?
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I am very pleased to support these amendments, the first in the name of the noble Baroness, Lady McIntosh of Pickering, and the other two in the name of the noble Baroness, Lady Bowles. In relation to the amendment on legal privilege, I note that the Lords Constitution Committee report on the UK internal market Bill says:
“We welcome the confirmation by the Lord Chancellor that information protected by legal professional privilege will not be required to be disclosed to the Competition and Markets Authority under the information-gathering powers in clause 38.”
Can the Minister provide any further detail from the Lord Chancellor in relation to this particular issue? Can he say how and when the Government will bring amendments on Report dealing with this specific request to allow protection for clients in respect of the information-gathering powers?
In relation to the two amendments in the name of the noble Baroness, Lady Bowles, I would say that the last thing we need, particularly with Brexit hitting so many businesses and with the impact of Covid and the lockdown, are any more limits to business or on businesses. They have already suffered considerably, particularly the small businesses of sole traders or freelancers.
I think simply of the Northern Ireland situation, where the majority of businesses are small and, combined with the impact of Covid, many could close, resulting in loss of jobs and trading. There are some 148,300 small and medium-sized enterprises in Northern Ireland out of a total population of 1.8 million. This is the fewest of any UK region, as recorded in September of this year.
Another worrying factor is that research by Ulster Bank, a subsidiary of NatWest, shows that any hope of a V-shaped recovery in Northern Ireland has been snuffed out with Covid. I can understand and agree with the sentiments conveyed by the noble Baroness, Lady Bowles, that we do not want to see any further limits on businesses. In that regard, can the Minister advise noble Lords on what discussions he and his colleagues in BEIS have had with the devolved regions regarding these measures in the UK internal market Bill? Maybe he will surprise us and illustrate that there has been quite a bit of discussion.
Lord Fox (LD)
My Lords, I support Amendments 150 and 156, and indeed broadly support Amendment 149. My noble friend Lady Bowles, in characterising the information-gathering powers that are attempted to be brought in through this Bill, ably described the wide, broad remit that is being given to the CMA. I fully support and share her case, which was well put, as to why we should be concerned about this.
This is not just a burden on small businesses. Like the noble Baroness, Lady Neville-Rolfe, I have experienced the sharp end of a market study. It is a lot of work. This Bill envisages more than that for all businesses. No such undertaking should be given lightly without understanding what it will do—particularly, as many speakers have said—for smaller and medium-sized businesses. There should be limits.
More broadly, as prefaced by my noble friend Lady Bowles, during the debate on Clause 31, my noble friends and others raised the potential for universities to be dragged into the ambit of the CMA and the OIM—not least because of the different tuition fee regimes that exist within our nations. As we all know, this is a devolved responsibility. Despite their efforts, Ministers did not satisfactorily explain how this would happen, including in the letter.
We now turn to Clause 38, which, once again, broadens the powers of the CMA and enables it to be involved in these matters. The powers which are envisioned, though extensive and with little or no restraint, further stoke the fears harboured by Scottish universities. It could work the other way around. It could be the English university fee policy that is being challenged. This power is wider, with very few limitations.
I wish to probe the potential role of the office for the internal market under Part 4 of the Bill in relation to tuition fees. According to Universities Scotland’s brief, the powers in the Bill could
“give the OIM/Competition and Markets Authority (CMA) the power to investigate and reach a view on whether differential student fees represent a distortion of the new UK internal market. Regardless of the non-binding nature of the reports and advice of the OIM/CMA, it would have to be taken seriously by Parliament (Holyrood or Westminster). This could introduce new and greater basis for individual challenges to the variable fee regime within the UK, brought by individuals who feel they are discriminated against. … If this understanding is correct, this would apply in both directions, with possible challenges brought by Scottish domiciled students/individuals who consider the fee policy as administered by universities in England to discriminate against their options.”
That is one example of the consequences of this Bill. Will the Minister tell your Lordships’ House whether it is intended or unintended? If it is intended, why do Her Majesty’s Government see fit to mess with this devolved responsibility? If it is unintended, can the Minister acknowledge the issues that pervade this Bill?
In the Minister’s letter to my noble friend Lord Purvis of Tweed, which I hope has been placed in the Library, the Government accept that there are issues about university services. It highlights the power to amend exclusions after the Bill is enacted. This should be clarified by a government amendment before Report, not afterwards.
There are many other examples. In the short time we have had to examine this Bill, we have uncovered anomalies, irregularities and mistakes not just in relation to universities but in the food, alcohol and energy sectors. The noble Baroness, Lady McIntosh, also raised queries about the legal profession. In the spirit of whack-a-mole, I can add more, such as the water industry. Powers under Clauses 31 and 38 could mean that the CMA could be asked by an investor in an English water service company to investigate, let us say, the mutual Welsh Water company. Water is to be considered as a UK market, where it was not before. Once a case is opened, who knows where it will end up? Is this accidental or deliberate?
At the same time as the Government accrue these badly-defined powers to the new OIM and CMA, corporate lawyers on behalf of big businesses headquartered in the UK and beyond are sharpening their pencils. As the Government seek to regulate on a UK-wide basis services that until now have managed very well without Her Majesty’s Government’s help, consumer lawyers are looking into their practice development strategies and preparing to sell litigation ideas to future clients. As the noble and learned Lord, Lord Falconer, put it, this will be “a lawyer’s paradise”. At its heart is the Government’s decision to sideline the flexibility of the common frameworks and pursue the central ambition of trying to create a rigid one-size-fits-all regulatory structure to deliver a one-size-fits-all United Kingdom. The persistent and obvious flaws in this Bill demonstrate that this one-size-fits-all approach is impossible, even if it were desirable, which it is not.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this debate has raised some interesting and important issues. I have listened with care to all the speakers and particularly to the contribution of the noble Baroness, Lady McIntosh, based on information provided by the Scottish Law Commission, whose help I also acknowledge. I look forward to the Minister’s response. The noble Baroness, Lady Bowles of Berkhamsted, raised a number of issues to which I wish to return. Other speakers have made small but important points on SMEs and the role of Northern Ireland.
The noble Lord, Lord Fox, picked up on the recent letter from Ministers about university fees, particularly in Scotland, and questioned whether this could constitute indirect discrimination. This was also raised in an earlier group. Like the noble Lord, I wonder why this could not be better dealt with by the common frameworks approach. This should be applied to all aspects of managed divergence, in relation not just to goods but also to services and the regulation of professions. We will return to this on Report.
In respect of the amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted, the powers included in Clauses 38,39 and 40 are quite extensive and detailed. Do they go beyond the existing powers of the CMA? Are they new because of the responsibilities that will accrue to the CMA or the office for the internal market under this Bill? Or do they simply repeat existing powers reframed in some way to suit the new circumstances? I would appreciate the Minister’s response. As other speakers have said, this additional activity is very detailed and gives specific examples of what can and cannot be done and how it is to operate. Does this not play to the concerns raised by the noble Baroness, Lady Noakes, in an earlier amendment that asking the CMA to extend its focus and the range of its work might blur the good work it does at the moment? Does the Minister accept that there might be a problem here?
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I thank all noble Lords who have taken part in this debate. The noble Lord, Lord Fox, raised issues around university tuition fees and water services. As he said, I have written to him and to the noble Lord, Lord Purvis, about the points they raised in earlier debates. I am told that these letters have been submitted to the Library but there may be a slight delay in their publication. I confirm what I said there about the exemption in the legislation for public services. More details are set out in the letters. If for some reason they have not yet been published, the noble Lords, Lord Fox and Lord Purvis, should get in touch with my office, which will be happy to furnish them with a copy.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
I have received a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
I much appreciate the Minister’s answer. The questions I asked about university tuition fees were in the light of having read his letter, which my noble friend Lord Purvis made available to me—there is no need to send it to me. In it the Minister states that,
“we are aware of the questions raised in relation to university services and how they may interact with the Bill”,
which is good. The letter continues:
“We have the power to amend the exclusions Schedule and will keep the area of higher education under close review.”
It therefore seems that the Government are planning to do that after Report. My point is that it would be a boon to our process on the Bill if the Government were to consult before Report and come back with something that I am sure, given what the Minister said, would merely fulfil their ambition for the Bill while settling concerns in the university sector.
Lord Callanan (Con)
I thought that I had put the matter to rest by writing the letter to the noble Lord, Lord Purvis, on which the noble Lord, Lord Fox, has commented. In our view, there is no doubt that the regulation of tuition fees is outside the scope of the Bill and, therefore, beyond the scope of the office for the internal market’s functions. But as the letter to him confirmed, we will keep the matter under review and not hesitate to take action if there is a problem, which we do not believe exists.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
The noble Lord, Lord Stevenson, and the noble Baroness, Lady Neville-Rolfe, also wish to speak after the Minister.
Lord Stevenson of Balmacara (Lab) [V]
I asked the Minister a specific question on whether the framing of Clauses 38 to 40 was exactly the same, or differed from, the existing powers of the CMA. He did not answer that. I do not want to delay us too much today but perhaps he could write to me about it.
Lord Callanan (Con)
I would be happy to write to the noble Lord but, as I said, the powers to date have functioned effectively and are based on the CMA’s existing powers.
Baroness Neville-Rolfe (Con)
I have another couple of points for clarification by my noble friend. First, does legal privilege apply to in-house counsel, provided that they are properly qualified lawyers? I would be happy for the Minister to write to me about that. Secondly, he referred in the debate about small business to Clause 32(4), and helpfully explained that the CMA will advise on regulatory proposals before laws are made, which provides an opportunity for small business interests to be taken into account. However, my concern was also about enforcement of the law, which would bear particularly harshly on small businesses that do not have the same fancy legal departments as others. I am not sure that the clause deals with that but would be delighted if I was wrong.
Lord Callanan (Con)
On my noble friend’s first question, she will notice that Clause 38(8) states:
“A notice under subsection (2) or (3) may not require a person … to produce or provide any document or information which the person could not be compelled to produce, or give in evidence, in civil proceedings before the court”.
I hope that that resolves the matter. I will write to her on her second point.
Baroness McIntosh of Pickering (Con)
I thank everyone who has contributed, including my noble friend the Minister in summing up the debate. We had an excellent discussion on the issues, and I am grateful to the noble Baroness, Lady Bowles, for raising them because they are pertinent. I am slightly confused as to why it is necessary to include in the Bill powers that already exist. We are told that they are not new, yet my noble friend will not agree to include in the Bill a matter that is already causing alarm.
I am grateful to the noble Baroness, Lady Ritchie, for alerting me to the Constitution Committee report in that regard. It has highlighted its concern and received a verbal undertaking from the Lord Chancellor. I should repeat that we are referring to the Law Society of Scotland, not the Scottish Law Commission. If both the committee of this House and the Law Society of Scotland are concerned, that verbal reassurance is not enough. I may well reflect on the matter and come back on Report. However, for the moment, I am grateful for having had the opportunity to debate this matter and I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
We now come to the group beginning with the question that Clause 38 stand part of the Bill. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this question or anything else in the group to a Division should make that clear in the debate.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, the previous group has already set the scene on Clause 38, where I propose some changes to help small businesses, at least. The point remains that the CMA, or OIM, is an opining body, often for the benefit of Administrations, even if most of those are not happy with how it is set up. I also clarify that I am not against the CMA per se. I have responded to its consultations, been quoted by it and would give it more powers in competition matters. Even if it were the chosen body, I would still consider the same procedures and culture not right for monitoring the internal market, so to copy and paste legislation created for the competition field is not appropriate. I mention again the different approaches of DG COMP and DG Internal Market as an illustration.
In this group, I am further probing the constraints on information-gathering powers. As I have said, they often apply to individuals and businesses that have not done anything wrong, nor have their actions, individually or collectively, distorted the market. If the regulations are amiss, that is created by Administrations. With all due respect to the response the Minister gave on the previous group, that is different from competition matters, which the businesses and their actions have brought forward. I find it alarming that there is no understanding of the fundamental difference between applying competition law and monitoring an internal market, but it is early days and this is all new.
I accept that an investigation into and report on the activities of companies that are causing distortion, as could be the case under Clause 31, is different. Then, it is perhaps reasonable to use the existing CMA powers and scope. But I can assure the noble Lord, Lord Stevenson, that the format of these enforcement powers is copied and pasted from the CMA in its role dealing with companies that potentially threaten the public interest, where there is at least a suspicion that competition laws or norms, such as market concentration or fair pricing, are being challenged. In the Bill, individuals or companies are being used as sources of information for things that they have not brought on themselves, and that is the difference. It is why having the same laws is not appropriate. For this reason, I object to the compulsory scope of Clause 38 for all circumstances, and the same applies to the enforcement and penalty powers in Clauses 39 and 40.
Clause 38(6) states that the notice will be sent with
“information about the … consequences of not complying”.
That is a frightener. Is that the way to treat business? Was it consulted upon? We challenged the Minister on Monday about the information he had been given to say to us, stating that using the CMA was consulted upon. Even if there were a few throwaway lines like “such as the CMA” in response, was any consultation conducted on whether CMA market study legislation fits the rather different circumstance of investigating Administrations’ actions? If businesses or individuals decide that they do not wish to or cannot provide information, and the CMA decides, under its own rules, that their excuse is not reasonable, they can be dealt with as obstructing and fined.
There was an interesting exchange on fines on Monday, when the noble Baroness, Lady Finlay, asked whether a Member of the Senedd could be fined. The Minister said that they could be asked for information, but not fined. Now we see another way to get some of that information: turn any business that had been in discussions with the Senedd into the informer. Who knows? Perhaps one day we might even get some of the unpublished consultation responses that the Government sit on.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
I am assuming that the noble Lord, Lord Naseby, has scratched from this group, so I call the noble Lord, Lord Tyrie.
Lord Tyrie (Non-Afl)
Some very interesting points have just been made that bear serious consideration, and the concerns we have just heard are reasoned, particularly on SMEs. At the very least, the Government may wish to offer a review of the CMA’s use of these powers, after an interval, to give us the assurance that they are being proportionately deployed and to see whether they need some amendment. The argument that they were derived from legislation the purpose of which was very different is well taken and might point to further amendment.
Overall, I support the Government in what they are trying to do here, having decided to create the OIM. It is true that the powers are robust, but they will need to be. If the CMA is to be expected to offer timely and high-quality advice, it will need to secure information quickly, without being given the runaround by devolved Administrations or parts of the private sector.
The penalties proposed are a weakness, though. Crown immunity will be in play for the devolved Administrations. I would be interested to know what thought the Government have given to the penalties that can be imposed for non-compliance in those cases. Public censure might help; on the other hand, a devolved Administration standing up to nasty Westminster might win local plaudits, resulting in the opposite effect. A lot of careful thought needs to be put into this issue if these measures are to be made effective. The proposed fines on the private sector are capped at £30,000. I simply do not see that sum troubling a recalcitrant or determined large third party. Has the Minister considered larger fines in certain circumstances?
It might be helpful to make one more general point. The CMA’s existing arrangements for securing compliance and information gathering across all its other functions are manifestly inadequate, as I saw it during my time there. They should not be used as a benchmark. Incidentally, the £30,000 figure comes from the merger regime. Something has to be done. The European Commission recently fined Facebook £1.6 million for not supplying information, while the CMA recently fined Amazon £30,000 over the merger with Deliveroo for not supplying information. That should give some idea of the disparity.
In February 2019, the CMA put proposals to the Government for improvements to information-gathering powers across all its functions. First, it needs to be able to gather information from a much wider range of sources to reflect the increasingly digital nature of the information that it is trying to collect: iCloud, machine-learning algorithms and so on spring to mind. These are not at all easy to capture with existing legislation. Secondly, and even more importantly, subject to safeguards, the CMA needs a general information- gathering power outside the context of a formal investigation. I do not like giving general powers, but I think the CMA now needs this to find out what is really going on in markets and enable it to think through much better than it can at present. It needs to be able to use the full range of tools to best bear down on consumer detriment. It is struggling to do that at present, and increasingly so with the growth of rip-off culture.
When the Minister returns to his department, he will find the proposals, of which I am just touching the surface, have been fully developed by the CMA and are sitting with his officials. Will he agree to take another look at those proposals to see what might usefully be drawn from them? For improving the ones we are discussing today, quite a lot of what is in there is likely to be relevant. Will he agree to report back to the House on what he has found?
I have been following this Bill closely, particularly Part 4, which I have an interest in because of my previous job. Some very important points have been made across the Committee, not least in Monday’s relatively brief debate on Clause 28 about whether the CMA is the appropriate body in the beginning to have responsibly for these functions. Those points are sufficiently important for us to have another look at them on Report. I hope the House will find a way to enable us to do this.
Baroness Neville-Rolfe (Con)
My Lords, this Committee is nearing its end, apart from Part 5. I support the noble Baroness, Lady Bowles, in her forensic efforts to probe the purpose of Clauses 38 to 40. I welcome my noble friend Lord Tyrie to today’s debate. Although I do not agree with him on fines or general powers, he makes a very good point about digital information. I am sorry he was not here for the debate on where the OIM sits. As he says, that is something we hope to debate again on Report.
On the plus side, these clauses give a great deal of detail. I usually complain to the Minister that EU exit Bills fail to do just that and leave too much to regulations. On the minus side, these are extremely strong powers of enforcement with very high penalties—for example, fixed fines of up to £30,000 would make many a small company bankrupt. There is no due diligence defence that I can see or provision allowing a reasonable excuse. The CMA can use its own discretion to decide whether a request for information has been complied with and can impose a financial penalty if it thinks there has been obstruction or delay. Such powers are fiercer than those of the police. The Minister will be able to tell us whether the CMA has those powers in relation to competition law and perhaps explain in each case why they are justified in the internal market Bill which, as many have said, is a little different from competition law.
Moreover, we do not know to which regulations these various measures and penalties will apply. Can the Minister kindly take us through some examples of their proposed use? He may have done this elsewhere; if so, I am sorry if I missed that. Perhaps more importantly, could he lay some sample regulations for us to review before Report, as his predecessor did so helpfully on the Bill relating to nuclear issues on EU exit?
I worry that both Houses of Parliament have been distracted by unease with Part 5 of the Bill into agreeing wide-ranging, open-ended and burdensome powers in these clauses and, for the first time, on services, the beating heart of the economies in all four nations of the UK. All this has been relatively lightly scrutinised despite our efforts, and experience shows that some nasty surprises might be in store. I am keen to work with others to minimise those while generally supporting the Bill’s direction of travel.
Lord Fox (LD)
My Lords, once again this has been a short but important debate. I congratulate noble Lords on speaking on this. Once again, I find myself in complete agreement with the noble Baroness, Lady Neville-Rolfe, and my noble friend Lady Bowles. It was good to hear from the noble Lord, Lord Tyrie, whose experience is important.
During her speech, my noble friend Lady Bowles sought to characterise the difference between getting information from potential recalcitrants—people who are suspected of or known to have distorted the market—and getting information from people to create a picture of a market. I hope the noble Lord, Lord Tyrie, will not mind me saying that the sort of language used about needing more sanctions and similar issues is coming from the mindset of dealing with recalcitrants. That is where the experience of the CMA has lain to date. There is a real concern that in creating this new role the culture of having to fight to get what you need is transferred into this second activity, and that is not appropriate.
I was interested to hear the point of the noble Lord, Lord Tyrie, about Clause 28 and looking again at the positioning of the OIM and CMA. I would be very keen to hear what he has to say.
Lord Fox (LD)
Perhaps the noble Lord can put his point in writing, or speak after the Minister if it is a question to him.
Enormous care is needed, at the very least, but it is not clear in the Bill where that care is and how careful the Bill is; it seems quite careless. We come back to whether the Bill is deliberately underwritten or accidentally underwritten because there was not enough time. There is plenty of scope for the Minister to answer the questions set out by my noble friend Lady Bowles, the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Tyrie, and to nail how this will work, what it is for and how small and medium-sized businesses in particular will be protected from an overzealous information-gathering process.
Baroness Hayter of Kentish Town (Lab)
My Lords, this debate is perhaps even more important than some of the others that we have had. The real advantage of a stand part debate is that one can question the purpose of a clause rather than getting down into the weeds of amendments.
The issue that the noble Baroness, Lady Bowles, has raised is fundamental to how we have been looking at this. She asked—these are actually my words, although the noble Baroness, Lady Neville-Rolfe, said much the same—whether the competition regime was appropriate for work on the internal market. I am sorry that the noble Lord, Lord Callanan, gave away in an earlier debate that this may have been written hastily over the summer; it certainly sounds like a cut-and-paste job, done without stopping to think. Just because it is the same organisation at the same address in Holborn, or wherever the CMA is these days, you cannot just cut and paste it; as the noble Lord, Lord Fox, was saying, it is about the culture of that organisation as well as whether the structure is available. There is a fundamental question here, which my noble friend Lord Stevenson dealt with under Amendment 115, of whether the OIM should be within this framework, as well as the even broader subject of whether these sorts of penalties are appropriate for such a different role.
There are some specific issues in these clauses, such as whether it is appropriate for the Government to be able to amend the list of exclusions without any involvement of the devolved authorities. We have discussed such matters before, but under this legislation the fixing of penalties could again be altered without any involvement of the devolved authorities. This is serious stuff. They are a part of the overall governance and working of the new internal market, yet the Bill is written as if this is simply a Westminster responsibility.
I come to what the noble Baroness, Lady Neville-Rolfe, was saying: exactly what is covered by these clauses? In an earlier debate I asked the Minister to set out what services were covered, but obviously I was mumbling at the time because he wrote me a very nice letter on 2 November telling me about the services that are excluded, which of course already exist in the Bill. The question that I was trying to ask is: what services will be covered? I still cannot get a handle on that. This is really important given what has been said about whether the demands and penalties applying to services that are covered are appropriate.
Obviously I was not very clear about what I wanted but I had talked about housing and whether someone organising a register of housing would count as a service. I was talking about landlords but the letter refers to social housing. We are talking not about social housing but about landlords of private housing. I am involved with another part of the Government, the Ministry of Housing, Communities and Local Government, in chairing something to try to set up a code for property agents for when the Government are ready to fulfil what they have already promised—that is, to set up a regulator of property agents. They are already a service but the circumstances are different—buying and selling a house in Scotland is very different from England; if you buy there, you tend to go to a solicitor rather than an estate agent—so there are different ways of a service being developed or in existence. Once they are regulated, perhaps property agents will count as a profession, which is a different issue, but before then, as a service, are they going to be covered by these sorts of requirements?
If that is the case—and this is the main thrust of what I want to say on this group— how will these services know that they are covered by this provision? It is important for anyone risking breaking the law, in the sense of civil law, and being charged a penalty to know that that law applies to them. If they do not define what they are doing as a service and therefore do not know that they are captured by this provision, they may find it difficult to understand that they could be required to provide information. I can imagine that this could really affect property agencies. They need to know that it covers them, which is quite an issue, but it is also unclear to me whether the level of penalties is appropriate for this area. For a small housing management group, for example, this daily rate of £15,000 will basically wipe out its business if it has an £80,000 annual turnover. We are talking about levels of penalty.
It seems to me that those agents are covered by this, but I am unclear about the appeals process. If they are asked a question, how do they know that it has legal force behind it? Even if they are told that—most of these people will of course not have lawyers —and there is a penalty, do they have any appeal? I could not find one in the Bill but I am sure the Minister will be able to tell me; it is quite unusual to have a penalty without any sort of appeal. I could not work this out but I am sure the Minister will.
My main ask is: can we know the sort of services that will be covered? Perhaps we could hear more—not in legal language but in language that I can understand—about how they would know and about their rights to appeal any fixed penalty.
Lord Callanan (Con)
I thank all noble Lords who have taken part in this debate. I apologise to the noble Baroness, Lady Hayter, if she found my letter disappointing; I will try to do better next time. The noble and learned Lord, Lord Falconer, looks disapproving; I am not going to write him any more letters if that is the case.
With regard to exclusions on services, all services subject to the authorisation requirements or the regulatory requirements are affected under the Bill unless they are specifically excluded from some or part of the rules under Part 2. I hope that that clarifies the noble Baroness’s question—if not, I will be happy to write her another letter. She is shaking her head in disbelief.
I say to the noble Baroness, Lady Bowles, with regard to her question on consultation, that we consulted on the general office, what enforcement provisions there should be and whether or not it should be included as part of an arm’s-length body. Once we had made the decision that it should be located within the CMA, there was of course extensive discussion between officials and the CMA on the powers and how they will be enforced. I say to my noble friend Lord Tyrie that I am of course aware of the proposals that he refers to on the CMA and I will be happy to take another look at them.
Addressing the specific questions on this clause stand part debate, I will set out the rationale for these clauses. Clause 38, as I believe we already discussed in the previous group, sets out the powers that the Competition and Markets Authority will have to gather information in support of its monitoring, advisory and reporting functions. As I said previously, in order to carry out its functions the OIM must have access to high-quality information to produce accurate, relevant and credible reports. Clause 38 will ensure that the CMA is able to require the assistance of third parties to perform its functions and is able to independently gather evidence in a timely manner.
I hope that the noble Baroness, Lady Bowles, agrees with me that presenting analysis based on partial or inaccurate information could be detrimental to the regulatory decisions taken as a result of OIM reporting and monitoring and would damage the reputation of the OIM among many key stakeholders in these fields. The powers in this clause are therefore put on a strong statutory footing. They will ensure that the reporting that the OIM undertakes will be as effective and comprehensive as possible for the benefit of policy-makers in the UK Government and the devolved Administrations, significantly strengthening existing stakeholders’ ability to navigate the new UK internal market.
Clause 39 describes what action the CMA is able to take in response to non-compliance with the information requests described in Clause 38. As noble Lords said, the CMA has existing powers under the Enterprise Act 2002 regarding non-compliance with its information requests. This is necessary to enable the CMA to carry out its functions effectively. As with Clause 38, the provision for the OIM in Clause 39 is modelled on those powers. The clause will allow the CMA to determine the most appropriate policy approach and the amount of any financial penalty to be imposed within the limits that have been prescribed. The clause also sets out the conditions where financial penalties may not be imposed because more than four weeks has expired since the CMA exercised its relevant functions.
Clause 40 sets the parameters that the CMA should consider for financial penalties in cases of non-compliance with an information-gathering request notice. Let me first say that I understand the concerns of noble Lords, but the preference and expectation will always be that information gathering is on a voluntary basis. The Government do not anticipate that the CMA will need regularly to fall back on the information-gathering and non-compliance powers. However, it is important to ensure that this facility is available to the CMA to detail how penalties will be set. As with other provisions, the Government have chosen to mirror the relevant provisions of the Enterprise Act 2002.
I can say to the noble Lord, Lord Tyrie, and my noble friend Lady Neville-Rolfe that the Secretary of State will make regulations specifying the maximum amounts in practice within the specified ceilings for these penalties in consultation with the CMA and other interested parties. I can confirm for the benefit of the noble Baroness, Lady Hayter, that the devolved Administrations will of course be consulted as part of this. In addition, and as noted in our debates on previous groups, I confirm to the noble Baroness, Lady Bowles, and the noble Lord, Lord Tyrie, that the CMA will not be able to issue a financial penalty against the UK Government or any devolved Government. Let me be very clear about that. Let me also assure the noble Baroness, Lady Bowles, that the Government are committed to not taking any steps to bring in the financial penalties until there is credible evidence that there is a need do so, so we will not commence these provisions without that credible need being demonstrated.
I will deal with a couple of other questions. The noble Baroness, Lady Bowles, asked about third-party requests. Such requests would be permissible if they were within the scope of Clause 31 and the CMA thought that they were appropriate. As I confirmed earlier, the White Paper invited consultation responses on how the functions to be delivered should be implemented as well as on whether an existing arm’s-length body should deliver them or bespoke arrangements should be established. As is obvious, we decided after that consultation that the OIM should be situated within the CMA.
With the reasons I have set out, I hope that I have been able to reassure noble Lords on their legitimate concerns and on why this clause should stand part of the Bill. I hope that the noble Baroness will feel able to withdraw her amendment.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
I have had a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, I thank the Minister for his answer. I have two questions. First, does the Minister understand the difference between a voluntary activity and a voluntary activity where there are potential fines? It is the difference between cleaning the house voluntarily and cleaning the house knowing that I could have my tea withdrawn if I did not. There is a very big difference. That needs to be understood in terms of the culture of the way in which this information is sought. Does the Minister understand that difference?
Secondly, my noble friend Lady Bowles asked a series of questions about what is permissible as a reason for not delivering information. There was a huge multiple choice question and an overarching question. I think that the Minister dodged—sorry, I withdraw that word. The Minister did not answer any of those points. They were an important element of my noble friend’s questions so will he address them, perhaps generally today and more specifically, bearing in mind the very specific questions that she asked, in one of his letters?
Lord Callanan (Con)
With regard to the noble Lord’s first question, I understand why his cleaning abilities might not be up to standard and he might not get his tea. With regard to the questions asked by the noble Baroness, Lady Bowles, on reasonableness, we certainly do not intend to create disparity within the CMA over the functions it carries out and the processes it follows.
To be serious, of course I understand the difference between being asked to do something voluntarily and being asked to do something voluntarily with the back-up of potential penalties. The powers and penalties in question are similar to those used by the CMA for its existing functions, such as conducting market studies. This will ensure consistency in the way that the CMA, under its existing and its OIM capacities, interacts with stakeholders across all its functions. We do not intend to commence the powers on fines until it is proved that they are necessary, as I said.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
I have had a request to speak from the noble Baroness, Lady Neville-Rolfe.
Baroness Neville-Rolfe (Con)
I thank my noble friend for his assurance on commencement. He did not answer my specific questions, but I think that the answer in general terms was that the Government have taken the same powers as the CMA has on competition and applied them pro rata. Perhaps I can pick up something that the noble Lord, Lord Stevenson, said earlier. I wonder whether we could look at this line by line to see whether things are or are not all the same; that would be a helpful Committee-type process.
I really got up to ask a question about examples. The Minister helpfully gave an example of a penalty regulation—he said that he might make regulations with penalties under £30,000, perhaps at a lower level for particular things—but I am confused about what kind of regulations are going to be made here. That may be an impossible question to answer but if my noble friend could give us some more examples, perhaps ones that are in draft or have gone out to consultation, it would be incredibly helpful.
Lord Callanan (Con)
I referred in my earlier speech to the need to make regulations setting the maximum penalty, which the Secretary of State will do, but I will write to my noble friend if there are any other examples of regulations that we feel we may need to make.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
Does the noble Baroness, Lady Bowles, wish to respond to any of the points made?
Baroness Bowles of Berkhamsted (LD) [V]
Yes. My Lords, I thank all noble Lords who have spoken in this debate; I think that it will be even more interesting when we read it in Hansard.
I think that there is still a sticking point, which was exemplified by one of the Minister’s comments. He said that he did not want there to be disparity between procedures in the CMA. The point that I have been making, which seems to have been supported by all the speakers in this debate, is that they are for different things. The noble Lord, Lord Tyrie, acknowledged that it was for a different purpose. My noble friend Lord Fox referred to people being recalcitrant rather than doing nothing. I was trying to say that, within competition policy, the Government are pursuing miscreants, but they are pursuing innocent people for information. In fact, at the beginning of his response, the Minister said that the purpose is to gain the assistance of third parties. That was the first time I had heard a reasonable word about this. The Government are asking the private sector to give assistance. They can go to the devolved Administrations but there is complete asymmetry: the Government cannot fine them but people who find it too difficult to give assistance are at risk of a fine.
Of course we expect reasonable behaviour, but we do not always get it. I point to that wonderful machinery of HMRC on loan charges and ask whether we have evidence that we always get reasonableness where we want it. I am not yet satisfied. There have been some interesting suggestions about reviewing how it has gone, that we can have sight of the regulations, or that we can examine procedures that are likely to be implemented. Surely we could do some of these things between now and Report.
I still think that where we are essentially sampling and wanting views from people in the market, the burden is on the sampler, not the samplee. This is therefore a matter I wish to return to on Report, but I hope it is something we can solve. On Monday on our first group, people said that patent attorneys were vital for the country, so I had a smile on my face. Maybe now noble Lords actually know where I learned to be a nerdy pedant.
The point is that we have to have protections in the Bill where, if something unjust happens, somebody can say, “Hang on a minute, look, it says here that that excuse was reasonable,” or, “You can’t make me do this because I haven’t done anything wrong.” You cannot go around arresting people without reasonable suspicion. I do not think we should fine people without reasonable suspicion that something wrong was done in the first place. We cannot just invent a wrongness by saying, “I wanted you to give me some information and you said no”, which is basically what the powers in the Bill do.
I thank noble Lords. I look forward to a letter with some more answers to my questions from the Minister. I do not think there is anything to withdraw because this is a stand part debate, but obviously I will not call a vote.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
We now come to the group consisting of Amendment 153. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment to a Division should make that clear in debate.
Amendment 153
“Duty to consider the internal market when considering mergers
In section 58 of the Enterprise Act 2002 (specified considerations) after subsection (2E) insert—“(2F) The need to promote the better operation and improvement of the United Kingdom internal market is specified in this section, having regard to—(a) the need to promote research and development and innovation in new and existing industries and enterprises, and(b) the need to act in the interests of United Kingdom public policy.””
Baroness Hayter of Kentish Town (Lab)
My Lords, before I speak to the amendment, I will slightly cheekily ask something about the previous group. At the very end the Minister said that the Government would not commence the powers unless they felt they needed to, or some words like that. As he indicated, each bit of the Bill can be brought into force on different days, as the Secretary of State may by regulation decide. When the Minister responds could he say whether that would be by the affirmative procedure and whether the House would consider the commencement date at that point? He could have some assistance if he does not know. How such things are done is beyond my understanding. It would be quite interesting to debate at that point whether the powers should be taken. I am sorry to ask the Committee’s indulgence to deal with the previous group, but I am sure that everyone is very forgiving.
Amendment 153 seeks to insert into the CMA’s powers a clear and specific reference to the need, when regulating takeovers in the new and initially demanding internal market, to promote research and development and innovation in new and existing industries and enterprises, as well as the need to act in the interests of UK public policy. The latter point is key to attracting long-term investment, as the CMA needs enhanced tools to intervene against hostile takeovers.
There has been a catalogue of such hostile takeovers, such as of GKN by Melrose in 2018—surely a bleak day for British industry, with perhaps 6,000 jobs with the UK’s third-largest engineering company suddenly in the hands of new owners following a very narrow vote by shareholders in favour of the takeover of a 250-year old company. That vote was swung by hedge funds and arbitrageurs who owned 25% of the shares, which had been very recently acquired. Their short-term interest in making a quick profit came at the expense of the jobs, skills, research and development of this major industrial company, to the detriment of UK plc. Needless to say, the result has not been good. Not all takeovers are bad, but when Melrose’s own website describes its strategy as “Buy Improve Sell”, with its objective to achieve a significant increase in shareholder value often in as little as three to five years, one has to ask whether this is in the interests of UK plc.
Last year, Unilever, our third-biggest company by market value, only just escaped a hostile takeover bid from Kraft, which took over Cadbury in 2010. Unilever’s proposed move of its registered office to Rotterdam, which did not actually take place, would have meant that Dutch law, which provides a public interest defence for the company from predators, would have been available. Sadly, we do not have that in UK law. We must now strengthen our laws against hostile takeovers and takeovers generally that are not in the public interest, not just because it is the right thing to do but to encourage long-term UK and overseas inward investors that their investment is safe from short-termism.
Until recently, the law provided only three grounds on which the Business Secretary could refer a takeover to the CMA, which then decides whether it should be blocked. The first is media plurality, the second UK financial stability, and the third national security. The addition of a fourth—public health—earlier this year was most welcome, as it allows for, in its words:
“The need to maintain … the capability to combat, and to mitigate the effects, of public health emergencies”.
Ideally we should add a fifth—the need to foster and promote research and development and innovation in new and existing industries and enterprises—and a sixth: to act in the interests of UK public policy.
As the Business Secretary I think accepts, there remains a concern about foreign takeovers of British companies on the cheap. We need to ensure that, in considering relevant takeovers, the Business Secretary can refer a takeover bid, and the CMA should be able to consider whether the bid is in the interests of research and development or science and technology, or in the public interest generally. That would cover cases where the national interest should be considered, but where the definition happens not to fit neatly into one of the existing categories.
I acknowledge that any such new grounds for referral by the Business Secretary are outwith the Bill’s scope, but as the CMA now stands more alone in the world of competition regulators outside the EU family, we need to give it the tools, as it oversees the development of the internal market, to put the national interest and support for research and development clearly into its thinking and terms of reference. This will help UK plc to build back better after Covid, in the national interest. This is something the Bill allows us to do, adding a useful tool to what the CMA will do. I beg to move.
Lord Naseby (Con)
My Lords, the idea behind this new clause has validity, and particularly will after the pandemic, whenever it is over. There is little doubt that some companies will be strong after the pandemic because they happen to be in a particular market, and others will be extremely weak and looking to be rescued somehow. The only problem I have is that the new clause refers to the
“duty to consider the internal market”
when in fact, that is the only market that will apply from 1 January onwards as far as the UK is concerned. So, it is not as though it is one of several markets; it is the only market in my judgment.
The noble Baroness is quite right that in some of the markets, there are already signs that things are happening. In the fintech market, things are undoubtedly moving quickly—for example, in sections such as payments and operations. You only have to read the Financial Times regularly, as I am sure a lot of noble Lords do, to see that things are moving all the time there. Equally, a fair number of our universities have what you might call cradle operations or primary operations, whereby they are looking to develop research that they believe might be marketable. Many are quoted companies; others are not. There is a lot of activity happening.
Although it is undoubtedly true that we want to see both paragraphs (a) and (b) happen, given the original role of the CMA, which emerged from the Monopolies and Mergers Commission, I think it pretty inconceivable that it would not look at these aspects. My noble friend on the Front Bench will be able to clarify that more than I am able to.
If there is not sufficient cover within the current Bill and other parts of the law, I hope my noble friend will look upon the amendment seriously. If that degree of cover already exists, I can understand why, although the issue is worth looking at and talking about, it may not be appropriate to deal with it in a new clause.
Baroness Neville-Rolfe (Con)
I rise to speak to Amendment 153 in the name of the noble Baroness, Lady Hayter. This is a new clause relating to mergers that might affect the internal market. She may have a reasonable point that this is a matter of public policy about which we should be concerned. It is odd the way mergers involving an overseas player without a UK business cannot be stopped under merger law—think Cadbury, think ARM, as well as GKN Melrose, which the noble Baroness, Lady Hayter, explained was a particularly heinous example—because there is not the necessary lessening of competition. Although she did not say so, perhaps there is a parallel concern about takeovers important to one of the devolved nations or to a particular R&D base.
However, I do not think this is a big risk, as representations would be made to the CMA and taken into account in consultation and decision-making by the CMA, which is domestically focused and operates across the UK. My concern is that the new clause would be a major change to the way merger law works; I do not think it right to try to change one aspect in this Bill. Therefore, I cannot support this amendment.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I support the new clause in the name of the noble Baroness, Lady Hayter of Kentish Town. As she said, it would insert into the CMA’s powers a clear and specific reference to the need, in the new internal market and the regulation of takeovers, to promote research, development and innovation in new and existing industries and enterprises, and to act in the interests of UK public policy.
We already know that the CMA has a number of responsibilities, including protecting consumers from unfair trading practices, investigating mergers between organisations to prevent a reduction in competition and taking enforcement action in relation to anti-competitive practices by businesses and individuals. It will have more burdens as a result of the Internal Market Bill. Put simply, it will be responsible for strengthening business competition and preventing and reducing anti-competitive practices.
The new clause seeks to nail down the role by referring to promoting research, development and innovation in new and existing enterprises. It would also assist with business development and innovation and in so doing, help to encourage overseas investment with job creation and sustainability—central facets of UK economic policy. It could also help to steady the market.
The Institute for Government has already stated that there is a clear gap in the Government’s plans for how governance of the internal market will function at a political level, and it is not clear how disputes concerning the functioning of the internal market will be managed. It is therefore important that this power be inserted to ensure greater protections where there may be hostile takeovers.
In devolved Northern Ireland, companies are generally small. However, the agri-food sector would sit under the new dispensation via the Northern Ireland protocol. There have been takeovers by companies based in the Republic of Ireland, so how would that fare if there were problems with the competition elements in the internal market Bill? The new clause in the name of the noble Baroness might assist in this regard.
The Institute for Government also notes that the office for the internal market within the CMA has very limited powers and, in many cases, can choose not to exercise them. It is worth noting that it can also request specific documents from any individual, business or public body to support its functions. Although it will be able to impose certain financial penalties, it will not be able to request any information that a business, individual or public authority would not be compelled to reveal in court, hence this new clause, on the need to promote the better operation and improvement of the UK internal market.
I therefore have no hesitation in supporting the new clause. It would promote much-needed research, development and innovation in new and existing industries and enterprises, and pump-prime UK public policy on the economy and finance in particular.
Lord Fox (LD)
My Lords, at the outset I should say that, because of my past but discontinued interests, I will not be speaking to the specifics of the example that the noble Baroness, Lady Hayter, brought up; rather, I will speak generally on this issue.
I speak to support the spirit of this amendment. It is a shame that the noble Lord, Lord Tyrie, is not still here because I would have welcomed his view on this issue. As the noble Baroness, Lady Neville-Rolfe, said, there are examples of Secretaries of State who wanted to do more but were constrained, and Cadbury is a good example of that.
However, after two dozen or more hours in Committee, I find myself at last coming to agree with something that the noble Lord, Lord Naseby, said, and that is that this issue goes wider than simply the nature of the Bill. The noble Baroness, Lady Neville-Rolfe, said the same thing. It is an important issue, so we should be thankful that the noble Baroness, Lady Hayter, has brought it up. It is clearly inadequate; the Secretary of State needs a better armoury to assess the public interest and deal with what will undoubtedly be, as the noble Lord, Lord Naseby, said, a flood of potential acquisitions and hostile takeovers.
This may not be the right Bill to be doing it in, but it is a big issue. That said, it also opens up the question of how the new office for the internal market relates to the Secretary of State and the CMA when it is dealing with a hostile takeover that the Secretary of State has called in. As the Bill stands now, allowing for the fact that the Minister may not accept the amendment, how do the Government envision the interactivity between the office for the internal market, the CMA and a hostile takeover bid that the Secretary of State has called in? Who does what, and where?
Lord Callanan (Con)
I thank the noble Baroness, Lady Hayter, for her amendment. I understand her concerns but, as I am sure she is aware, the internal market Bill is concerned with protecting the flow of goods and services across the UK after the end of the transition period. It is not concerned with the general merger regime, nor with Ministers’ powers to intervene in mergers. Noble Lords should be aware that they will have the opportunity to debate these matters further in the Government’s forthcoming national security and investment Bill.
Lord Callanan (Con)
It is forthcoming. Noble Lords will know that I cannot go further in terms of dates. It was flagged up in the Queen’s Speech and is forthcoming.
The grounds for ministerial intervention in mergers are deliberately precise and limited, in order to maximise transparency and predictability for businesses. The effect of the amendment would be to broaden the grounds upon which Ministers may make a public interest intervention in mergers. This would constitute a significant change to the UK’s approach to merger control which, as noble Lords observed, currently puts the emphasis on competition-based assessments by the Competition and Markets Authority, with narrow and specific grounds for ministerial intervention.
It is not clear how such a change would materially assist with the effective operation of the UK internal market which is, of course, the focus of this part of the Bill. The CMA already has significant powers and expertise to investigate the benefits and risks of mergers in relation to competition. An excessively broad power to intervene in the affairs of investors, shareholders and company boards risks stifling competition, innovation and creativity. This could lead to worse outcomes for both businesses and consumers, as well as stifling inward investment. For these reasons, I cannot accept the amendment and hope that the noble Baroness will withdraw it.
Before I sit down, I will answer the other question which the noble Baroness asked about the previous group. The power for the Secretary of State to specify the maximum penalties for breach of information-gathering notices will be brought in by negative SI. This mirrors Section 111(4) of the Enterprise Act 2002.
Baroness Hayter of Kentish Town (Lab)
The Minister is very polite. What he really wanted to say to me was: “Nice try”. There is a serious point here. As I said in my introduction, I know that the basic power is outwith the scope of this Bill, but there is some urgency to this question. The noble Baroness, Lady Ritchie, used the words “greater protections are needed against hostile takeovers”. They may not be exclusively from outwith the UK, but those are some of the ones where there have been particular problems. I think it is agreed that, as the noble Baroness, Lady Neville-Rolfe, said, there is a weakness in our armour because you cannot argue against them on the grounds of competition. I thank the noble Lord, Lord Naseby. The problem is that it is not within the tools of the CMA. It cannot use as a ground the need to either respond to public policy or promote particular industries. If it does not affect competition, it is not within its powers.
This does need to be added. The noble Lord, Lord Fox, is right that this is perhaps not quite the right mechanism, but we are delighted to know that there is a Bill coming and I look forward to the Minister accepting an equivalent to Amendment 153 at that point. I will, needless to say, use today’s Hansard to support that amendment to get this in then. I look forward to the noble Lord, Lord Naseby, and other noble Lords supporting me at that time.
I wanted to table the amendment to this Bill because of the changes there will be when we have got the internal market growing and we are looking for new investments. Even those who think everything is going to be wonderful after Brexit know that we are going to need a lot of support to get the economy going again after Covid. There is a slight weakness, so it would have been nice to have been able to put this clause in at this point. It was a nice try, but I beg leave to withdraw the amendment.
United Kingdom Internal Market Bill
Monday 9th November 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 135-V Fifth Marshalled list for Committee - (4 Nov 2020)
22:41 - Division conducted remotely on Clause 42 - Ayes: 165 / Noes: 433 - Clause 42 disagreed.
22:57 - Division conducted remotely on Clause 44 - Ayes: 148 / Noes: 407 - Clause 44 disagreed.
The Lord Speaker (Lord Fowler)
We now come to the group beginning with the Question that Clause 42 stand part of the Bill. I remind noble Lords that any participant wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear during the debate.
Clause 42: Northern Ireland’s place in the UK internal market and customs territory
Lord Judge (CB) [V]
My Lords, it is only three weeks since an overwhelming majority of this House regretted Part 5 of the Bill. We regretted that the enactment of Part 5 would undermine the rule of law and damage our international reputation. It was a regret shared by members of all parties and none, and all political affiliations and none. Our procedures do not, however, permit us now to record that we are not content that Part 5 should stand part of the Bill. We must address the question clause by clause. I make it clear that at the end of the debate I intend to divide the House, if necessary, on every single clause in Part 5 to record what I hope will be an overwhelming majority view of the House: that we are not content.
Second Reading proceeded largely on the basis of the Government’s concession—maybe their confession—that the provisions in Part 5 breached international law. Clauses 44, 45, and 47, are not the only troublesome clauses. The Committee has not yet heard much criticism, but there is criticism to be directed about Clauses 42 and 43. I adhere to every criticism I made at Second Reading. It is very recent; I do not propose to repeat those criticisms. However, my concern about Part 5 is quite undiminished. Indeed, my criticism has been reinforced by attending the Committee stages of the earlier parts of the Bill, which highlighted the alarming extent of the secondary powers sought by the Government and utterly vindicated the criticisms of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee.
However, for the purposes of today, my basic premise is that Part 5 should be seen as a whole, with each and every clause in it interlocking and related to each other. It is a complete, self-contained, cohesive whole: a programme, or a structure, on which Clause 42 is the starting point and foundation, and Clause 47 is the culmination. For a start: just because the clauses in Part 5 work together in the same structure, so they are all contaminated by the contamination of each of them.
However, this part goes further. It proposes that a Minister should be vested with unconditional power to disapply the Northern Ireland protocol. We have heard so much about this that I shall not go through what it amounts to—we all know. For example, the proposal does not require the Minister first to have tried the remedial provisions in the protocol or the withdrawal agreement; nor does it postpone any ministerial action until the negotiations with the European Union have broken down, or until such time as the Government wish to proceed on the basis that the EU has been acting in bad faith. It flies in the face of our binding agreement that we should refrain from any measures that could jeopardise the objectives of the withdrawal agreement.
It is striking that Part 5 stands separate from the rest of the Bill. The Bill addresses numerous fundamental questions relating to the UK internal market. It does so identically for Scotland, Wales, England and Northern Ireland. You cannot draw the slightest distinction between the ways in which the legislation applies to the four nations, save perhaps for Clause 11, which deals with the Northern Ireland protocol and, importantly, how market access throughout the United Kingdom arising from the application of the protocol should work. That, as I emphasised, is how the protocol is to be made to work. Beyond that, every single provision in the Bill applies equally, with all its flaws, to all four nations, and Northern Ireland is rightly included equally with the other nations in the arrangements for a strong, open internal UK market—that is, until we come to Part 5.
There is no Part 5 that applies to Scotland, Wales or England. There is no special protocol for any of them. Part 5 is expressly confined to Northern Ireland—it says so. Why the difference? Why are the other nations not blessed with their own Part 5? I suggest that there is a short answer: because Part 5 has the single purpose of enabling the Government, as and when they wish, to nullify their international obligations—and, what is more, to do so unilaterally, without recourse to the dispute resolution created in the protocol and the agreement. Surely that is why there is no equivalent provision for Scotland, Wales or England. However, whether that is the purpose of Part 5 or not, in law, that will be its result.
I suspect it will be suggested that Clauses 42 and 43—and perhaps Clause 46—require a different approach to Clauses 44, 45 and 47. One obvious distinction between them is that Clauses 42, 43 and 46 do not fall within the Government’s concession that the other clauses break international law. With respect, that approach is flawed. The clauses in Part 5 cannot be cast into self-contained silos. Clauses 44, 45 and 47 are integral to the whole of Part 5 and pollute all the clauses. Beyond that, merely because the Government have made no concessions about Clauses 42 and 43, it does not follow that they are far from reproach.
Clause 42 starts with aspirational objectives but then comes down to define its relevant purposes, which, first, include implementing the Northern Ireland protocol and, secondly, extend to
“otherwise dealing with matters arising out of, or related to”
the protocol. “Otherwise dealing” are weasel words; they can certainly be seen to contradict “implementing”. This provides power to dilute the protocol, of course. More important, perhaps, here comes the rub: the purposes, as Clause 42(2)(c) provides, include the movement of goods in a country or territory outside the United Kingdom—that is, not Scotland, Wales, England or Northern Ireland. That is not a provision for the UK internal market. If enacted, that function conflicts with the protocol. I respectfully suggest that Clause 42, at the very least, undermines it.
Lord Eames (CB) [V]
My Lords, I am privileged to follow the noble and learned Lord, Lord Judge, and I find myself in support of his comments on the wider ambit of the Bill. I share his reservations coming, as I do, from one of the devolved parts of the United Kingdom. I speak to the amendment that is in my name and that of the most reverend Primate the Archbishop of Canterbury, the noble Baroness, Lady Ritchie of Downpatrick, and the noble Lord, Lord Hain. I thank each of them for their support.
This amendment has two purposes, and I stress that in light of the remarks by the noble and learned Lord, Lord Judge. I aim first to provide a degree of protection for a devolved nation, Northern Ireland, should the Bill progress in its present form. Secondly, I am to allow a statement on the record on the vulnerable nature of the peace process in Northern Ireland in the face of the present nature of the Bill. Those two phrases justify my approach: its present form and the present nature of the Bill.
This amendment places a duty on the Secretary of State to take account of the effects of any exercise of authority conveyed by the Bill on the peace process and progress of reconciliation in Northern Ireland. As the Bill stands, there is potential for unintended consequence on the sensitivities of community peace and harmony in Northern Ireland. Brexit is already asking searching questions of that sensitivity. Issues of internal trade arrangements—north-south and east-west in the United Kingdom—are raising questions that have the potential to threaten the hard-earned progress of community understanding and stability in Northern Ireland, but it is still a tender plant.
We have heard frequent reference in your Lordships’ Chamber to the Good Friday or Belfast agreement on Northern Ireland. That is how it should be. That agreement was a turning point in the troubled history of Northern Ireland. It was an episode of immense significance, but it was an episode. The peace process is not just one episode; it is an ongoing daily process, involving ordinary men and women in their lives, how they do business with and relate to each other and, above all else, how they address their fears. It depends on building bridges across traditional divisions. At times, it lurches from mistakes to just temporary success. Constantly lurking in the background is the threat of violence and terrorism. In the Bill is the potential to threaten the stability of Northern Ireland. That threat, as much as it lies in what the Bill questions of the devolved settlement, raises issues of the Northern Ireland peace process. There are issues for Scotland and Wales which, although not as sensitive as those on reconciliation in Northern Ireland, are equally about community stability.
I ask your Lordships to also consider my amendment in the wider context of the Bill. The decisions implemented by the Bill will have a profound effect on the future of the countries of the United Kingdom and the relationship between them, for the Bill represents a profound shift in how trading relationships within the UK will be regulated and governed in the years ahead. This will not be a return to the trade structure that was in place before the UK entered the EU; rather, it is the construction of a system to replace one that had emerged through careful negotiation over decades.
There is in the Bill a weakening of the principles and effect of devolved policy-making, a constitutional significance already noted by the Scottish Parliament and Welsh Senedd. If the Bill reaches the statute book without the consent and understanding of the devolved legislatures, which would occur if safeguards such as those in my amendment are ignored, then trust and good will among the devolved nations will be eroded. But there has been frequent reference in our debates to how, as it stands, the Bill offers the opportunity for a government Minister to break international law.
My amendment is worded with that opportunity in mind. Those of us who feel a moral responsibility to protect and encourage the process in Northern Ireland are particularly alarmed by that possibility. In particular, we feel that the Good Friday agreement, an international agreement that cements and underpins peace and stability within and between the United Kingdom and Ireland, is under threat. A recent article in the Financial Times by the current Anglican primates of the United Kingdom included these words:
“If carefully negotiated terms are not honoured and laws can be ‘legally’ broken, on what foundations does our democracy stand?”
I speak to noble Lords, through this amendment, with deep personal feeling. My professional life was lived out during the days and nights of the Troubles. I have seen suffering and hurt. I have seen the highest that human nature can reach and the lowest to which it can descend. I have seen suffering. I have presided over funerals and seen the tears of young people. I have no alternative but, with moral justification, to defend the peace process and what is being slowly but surely achieved in my native land. I therefore beg leave to propose this amendment.
Lord Howard of Lympne (Con)
My Lords, it is a pleasure and an honour to follow the noble and most reverend Lord, Lord Eames. His moving words carry great weight and merit serious consideration by the Government.
I hope I may be forgiven for beginning my remarks with a brief tribute to Lord Sacks, whose death was announced over the weekend. His profound wisdom will be sorely missed, both inside and outside your Lordships’ House.
Lord Newby (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Howard, and to agree with him—not inevitable, in my case. As he said, this has absolutely nothing to do with whether you think being a member of the European Union, or not, is a good or bad thing.
This afternoon, your Lordships are being invited by the signatories of the clause stand part Motion, including myself, to strike down the whole of Part 5 of the Bill. Although this is inevitably a contentious matter, there are a number of points on which I think there is no serious disagreement. First, there is no serious disagreement that the Bill as drafted provides for the UK to break international law. Ministers have admitted it, and legal opinion—as voiced so eloquently by the noble and learned Lord, Lord Judge, a moment ago—is firmly of that view. Secondly, there is no question but that your Lordships’ House is completely within its constitutional right to delete Part 5 if it thinks fit. If we cannot take a view on a matter of deliberate law-breaking by the Government, we may as well pack up our bags now.
The key remaining question, which we have to decide today before deciding how to vote, is this: is the breach of the law contained in the Bill justified by the circumstances? It is not impossible to think of theoretical scenarios in which, as a country, we might decide to repudiate an international treaty. But is that the case here? In making the case for the Bill, the noble Lord, Lord True, at Second Reading and the Environment Secretary this morning in the media, made two linked, but central, arguments: first, that the clauses are necessary because Northern Ireland must retain unfettered access to the rest of the UK internal market; and secondly, that there was, in the words of the noble Lord, Lord True,
“a balance to be struck”
between maintaining the
“rule of law … and the integrity of this union”.—[Official Report, 20/10/20; col. 1430.]
To this George Eustice added this morning that Part 5 was necessary for “protecting peace and stability” in Northern Ireland. Both arguments are fatally flawed.
First, the concept of unfettered access under the terms of the withdrawal agreement, whether or not there is a deal with the EU, is a complete mirage. Once the Government accepted that there could be no customs border on the island of Ireland, there had to be one down the Irish Sea. Such a border fetters access, even if there is free trade across it, because there have to be checks, in respect of VAT and excise duty, to prevent smuggling and fraud, and there have to be sanitary and phytosanitary checks as well. These checks cost traders time and money, and for many they can make the difference between trading at a profit and trading at a loss, and therefore whether they trade with Great Britain at all.
The Government accept the need for these checks—these fetters. Clause 43(2) of this Bill provides for them, even if it invokes the other illegal provisions of the Bill for VAT, customs, and reasons of biosecurity. The National Audit Office spelled out the problem last week in its report The UK Border: Preparedness for the End of the Transition Period, where it stated that implementing the Northern Ireland Protocol was a “very high risk” because of, among other things,
“the scale of the changes required … and the complexity of the arrangements.”
In other words, the problem of the fetters.
Earlier in the year, the Government made £355 million available to traders in Northern Ireland to mitigate their costs in continuing to trade with Great Britain. Now £355 million is a tidy sum—not to eliminate the fetters but to try to ensure that they chafe less keenly. So let us not hear any more talk of unfettered trade—there will be none.
The Government’s other justification for Part 5 is that if it were not in the Bill, the integrity of the union would be threatened, and peace and security in Northern Ireland would be put at risk. If this were the case, the Government might have a respectable argument. But, as we have heard in many speeches at Second Reading and in Committee, and in the very eloquent comments of the noble and right reverend Lord, Lord Eames, it is the Bill that threatens peace, prosperity, security and stability, not the other way around.
We have heard from many speakers how Part 5, by breaching the Northern Ireland protocol and reimposing elements of a hard border in Northern Ireland, almost inevitably puts some of the key principles of the Northern Ireland agreement under threat—a view, incidentally, that appears to be shared by President-elect Biden. If these fears were realised, does anybody seriously believe that they would not strengthen demands for a border poll in Ireland? And does anybody seriously argue that Part 5 could in any circumstances strengthen the union with Scotland, where the Government and public opinion are as appalled as most Members of your Lordships’ House at the prospect of being part of a country that is willing to flout international law?
So, far from supporting the integrity of the union, Part 5 weakens it, and in doing so fatally undermines the Government’s argument in favour of these illegal clauses. They do not provide unfettered trade; they do not strengthen the union. They were a political manoeuvre by the UK Government to try to put pressure on the EU. They failed to do this, they reduced the UK’s standing as an upholder of international law for no substantive reason whatever, and they simply must be removed.
The Archbishop of Canterbury [V]
My Lords, I will speak to Amendment 161, to which I have added my name, alongside the noble and right reverend Lord, Lord Eames, the noble Lord, Lord Hain, and the noble Baroness, Lady Ritchie of Downpatrick. The previous speeches have all been both moving and deeply eloquent, and I shall therefore be very brief.
As the noble and right reverend Lord, Lord Eames, so powerfully explained, the purpose of our amendment is simply to put on the record a concern that this Bill in its current form fails to take into account the sensitivities and complexities of Northern Ireland, and could have unintended and serious consequences for peace and reconciliation. The noble and right reverend Lord spent 20 years as Archbishop of Armagh, between 1986 and 2006, and the force of his words was most remarkable. He has experience of everything from the funerals in small churchyards of those caught up in the Troubles through to negotiations behind the scenes for the Belfast agreement. He speaks with the integrity and authority that those 20 years have earned him, and I trust that the House will listen carefully.
One thing must remain certain in a time of turmoil and uncertainty, and it is the inestimable value of peace. The process of peace and reconciliation in Northern Ireland did not end with the Belfast agreement, as the noble and right reverend Lord, Lord Eames, said. It remains an ongoing process that requires work, and awareness from leaders that almost every decision taken and word spoken in relation to Northern Ireland will have an impact. This Bill must show that it is sensitive to these circumstances.
I will conclude by saying something about the amendments in the names of the noble and learned Lord, Lord Judge, and others, including my right reverend friend the Bishop of Leeds. I will not add much, as the words of the noble Lord, Lord Howard of Lympne, were absolutely convincing and extremely clear. I also associate myself with his important tribute to Lord Sacks, whom we will miss terribly in this House.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a privilege to follow the most reverend Primate the Archbishop of Canterbury. I remind your Lordships’ House that the most reverend Primate and I walked through Downpatrick, along with many others, on St Patrick’s Day some five years ago, as a symbol of reconciliation, because the national saint of Ireland is the very embodiment of partnership, working together and reconciliation—those very issues the noble and right reverend Lord, Lord Eames, has already referred to.
Part 5 is the most egregious part of this Bill, in that it jettisons Article 5 of the EU withdrawal agreement and thus breaks international law, as the Secretary of State for Northern Ireland freely admitted in the other place. The Northern Ireland protocol, which was given legislative effect in the EU withdrawal Bill back in February of this year, was based on an international treaty between the UK and the EU, specifically directed at preventing a hard border of the island of Ireland—a hard border between the EU and the UK—and thus safeguarding the Good Friday agreement.
Yesterday the Foreign Secretary, Dominic Raab, was on “The Andrew Marr Show” where he totally misrepresented the situation, levelling blame at the EU for endangering the Good Friday agreement. I remind your Lordships that it was the EU that sought, and is seeking, to protect the Belfast agreement through the Northern Ireland protocol, and it is the Government who are seeking to destroy it through Part 5 of the Internal Market Bill. I just wish that Dominic Raab would correct the situation. Perhaps the Minister will remind him to do just that, because it is important that we move away from this combative rhetoric to find solutions.
I support many of the amendments in this group, and I am a signatory to Amendments 161, ably spoken to by the noble and right reverend Lord, Lord Eames, about the need for reconciliation, Amendment 162, in my name and those of the noble Lords, Lord Hain and Lord Empey, and Amendment 163 in the names of the noble Lord, Lord Hain and the noble Baronesses, Lady Altmann and Lady Suttie. The first two deal specifically with the need to underscore reconciliation in Northern Ireland and, in the case of Amendment 162, to make provision to ensure that goods coming from Northern Ireland into the GB market are not hindered or discriminate against. Thirdly, Amendment 163 would extend the Trader Support Service, which is currently only to run for two years, indefinitely to protect Northern Ireland exports.
Simply, I do not support borders on the island of Ireland or in the Irish Sea, and I share many of the concerns of my unionist colleagues and want minimal friction on goods travelling from Britain to Northern Ireland. But I support the aims of those noble Lords, ably put forward this evening by the noble and learned Lord, Lord Judge, who seek to remove the offending clauses in Part 5 which deal with the Northern Ireland protocol on the basis that they break international law. In fact, the Northern Ireland protocol was, as I said earlier, established to protect the Good Friday agreement, prevent a hard border on the island of Ireland and assist with the process of reconciliation and north-south economic co-operation. That view was clearly articulated by the Anglican primates, who stated in their letter of some weeks ago to the Financial Times that the UK negotiated the Northern Ireland protocol with the EU
“to protect the 1998 Agreement in all its dimensions.”
To further cite those primates,
“One year on, in this bill, the UK government is not only preparing to break the protocol, but also to breach a fundamental tenet of the agreement: namely by limiting the incorporation of the European Convention on Human Rights in Northern Ireland law.”
The purpose of Amendment 161 is to ensure the protection of the principle of reconciliation, which is at the very core of the Good Friday agreement. Another contributory factor is the need to work on the healing process, which has been painfully slow.
As my former, late, party leader John Hume said after the signing of the Good Friday agreement in 1998, we have to move to solutions, we have to move to that healing process. That is very important. It was the very essence of what the noble and right reverend Lord, Lord Eames, was talking about. By fracturing the Good Friday agreement and the Northern Ireland protocol, we are deviating from that principle.
I humbly ask the Government to give due consideration to that and ask the Minister to ensure that these clauses are removed from the Bill, because I know that tonight, I will be voting with other noble Lords as per the speech of the noble and learned Lord, Lord Judge, to remove them because they are difficult, challenging and undermine the very principles of healing, reconciliation and partnership that we were able to achieve through the Belfast Good Friday agreement. If the Government and the Commons still insist on keeping this part of the Bill, we need to ensure that there are other protective measures: the very things that the noble and right reverend Lord, Lord Eames, referred to. Hence Amendments 161, 162 and 163, which I hope the Minister will consider accepting.
In the Brexit process and all of this, the Government managed to set the nationalist and unionist communities against each other and undermine relations with Dublin by leaving the possibility of a hard border on the island of Ireland on the table. Tonight, I am very happy to support the removal of these clauses and to support the amendments to which I have added my name.
Lord Hain (Lab) [V]
My Lords, I agree with everything that my noble friend Lady Ritchie said. The noble and learned Lord, Lord Judge, also spoke for me and, I suspect, virtually the whole House, as did other speakers who followed him.
I shall speak briefly to Amendment 162 and 163, because we know the Brexit realities will hit Northern Ireland first. The EU has been very clear that the protocol must be implemented in full come 1 January. The Trader Support Service, although welcome, will not become live until Monday 21 December, just before Christmas. The following Thursday is New Year’s Eve, after which Northern Ireland will be effectively operating in a different customs and regulatory zone from the rest of the UK. This means that the vital role of the Trader Support Service, the subject of Amendment 163, standing in my name and that of the noble Baronesses, Lady Ritchie, Lady Suttie and Lady Altmann, in directing businesses towards the necessary forms and procedures for moving goods from Great Britain into Northern Ireland, will not be operational until the very last minute. When the Trader Support Service is functioning, it will offer a vital service to keep Northern Ireland businesses integrally linked to the rest of the UK internal market. It is for this reason that Amendment 163 will establish the Trader Support Service more firmly in law as a continuing rather than time-limited commitment.
There is nothing of substance in the Bill that helps reduce frictions to trade that will come for goods crossing from Great Britain into Northern Ireland after 1 January, and Amendment 162 seeks to correct that. Fears about the consequences of retailers avoiding Northern Ireland or facing increasing costs in moving goods from Great Britain into Northern Ireland are real and pressing. In a letter from the Food and Drink Federation to Ministers George Eustice and Michael Gove published on 22 October, the risks are spelled out in stark terms. They say that many GB-based producers are planning to stop supplying the Northern Ireland market after 1 January 2021. Sainsbury’s made an announcement to that effect last week, but the federation added that this does not need to be the case. Solutions are possible and, indeed, many have been put forward by the business community in Northern Ireland itself, but these needs still to be agreed with the EU in the joint committee with the UK.
The Ireland/Northern Ireland protocol means that Northern Ireland is in a unique position vis-à-vis Britain and there is a strong likelihood that the more trade agreements the UK signs with partners around the world, the greater the differences will be between Northern Ireland and the rest of the UK internal market. Indeed, even though the UK Government are committed to seeing Northern Ireland as part of future free trade agreements, there are no firm guarantees that this will happen, or that the other country will agree to it.
The principle of non-discrimination in Amendment 162, also in the name of my noble friends Lady Ritchie and Lord Empey, seeks to ensure that no potential barriers will be added to the movement of goods from Northern Ireland to Great Britain over time. Because Northern Ireland goods will be produced in accordance with EU rules under the Ireland/Northern Ireland protocol, and on the basis of dynamic alignment, there is a risk—if not a likelihood—that divergence between Northern Ireland and Great Britain will grow over time. First, goods in Northern Ireland could be produced to higher standards as the EU increases standards in regulations covered by the protocol and thus the new standards automatically apply to Northern Ireland. Secondly, goods in Great Britain could be produced to a lower standard. Indeed, the Government have indicated that that might be the objective. Therefore, as Great Britain and Northern Ireland standards diverge, there will be increasing barriers to trade and increasing competitive disadvantage for Northern Ireland within the UK internal market.
This amendment would ensure that Northern Ireland goods will not be discriminated against in the UK internal market. Can the Minister therefore explain why on earth the Government would be opposed to that principle?
Lord Empey (UUP) [V]
My Lords, it is difficult to know where to start; there are so many things of major concern in the proposals in this section of the Bill. First, I support Amendment 162, which I signed, for the reasons that the noble Lord, Lord Hain, has just set out. But we need to step back a moment and see how and why it is that we are discussing such dramatic and momentous proposals in the first place. The answer lies in events a year ago. The amendments to the protocol that were produced by the Government have largely been accepted by the European Union, but the fact is that the withdrawal agreement that emerged from those proposals is such a bad deal.
I have heard so many people, including President-elect Biden and others, say that we must all protect the Belfast Good Friday agreement, and that is very true. However, of course, the agreement is balanced. Focus has been, almost exclusively, on preventing a land trade border on the island of Ireland. I do not want to see this, but, equally, I do not want a trade border in the Irish Sea between one part of the United Kingdom and the rest. That is what is actually being implemented as a result of the agreement that the Government signed a year ago, and that is completely contrary to the Belfast agreement, which makes it clear that the status of Northern Ireland cannot change without the consent of its people. If anybody thinks that our status is not changing as a result of what is happening, they are fooling themselves.
I got a Written Answer a short time ago from the noble Lord, Lord True, in which he made it clear, in response to my Question, that UK officials will implement EU law and seek to ensure that it is applied at Northern Ireland ports. The idea that nothing has changed or that the status of Northern Ireland is not changing is completely erroneous.
I want to make my point very clear about the Belfast Good Friday agreement: it is balanced, and a border in the Irish Sea is just as injurious to that agreement as a land trade border on the island would be. I hope that people accept that. I listened very carefully to the noble and right reverend Lord, Lord Eames, who has vast experience of dealing with the downstream consequences of our Troubles. There are very few people, if any, in Parliament who have any experience on that scale, so I think we have to listen very carefully to what he and others have had to say.
There are alternatives, which is what frustrates me: it was never necessary to do a lot of this. The reason why we are doing this, and why this Bill is before us, is the mess that was created a year ago. I believe very strongly that there are alternatives. As a country, we should legally prevent our territory being used to export unregulated goods to the European Union. We could indemnify the European Union if any of them eventually got through. We could set up cross-border bodies to establish a working relationship with the Irish Republic to ensure that the single market is not contaminated. There are a lot of things we can do.
Specifically, I understand the idea that the Government put forward of having a safety net. But the way to do that is not to announce that you will break international law when, in fact, the European Union accepted our proposals for an amendment to the protocol in the explanatory document of 2 October last year, which contained the provisions for a regulatory border and border inspection posts. It was the Government’s idea.
I think that they should prepare an emergency provisions Bill to be used in the event that the European Union demonstrated bad faith or the dispute resolution mechanisms within the agreement were set aside by the EU, preventing Northern Ireland from having proper access to goods and services from the rest of the United Kingdom. I believe that widespread parliamentary support could be built up to prevent such a thing happening in an emergency. Laws can be passed in this House and through our Parliament very quickly, as we know, specifically where they apply to Northern Ireland. They have been done many times before and can be done in 48 hours.
I believe there are alternatives not only to Part 5 of the Bill but to the withdrawal agreement as it currently stands. Going back to the genesis of this mess, which was on 2 October 2019, I say to colleagues that that document contained provisions for border inspection posts and application of the relevant EU rules as well as stating:
“regulatory checks can be implemented at the boundary of the zone”.
The zone here is the 27 EU member states and Northern Ireland. Any idea that this is something new or different is wrong: it was there from the very beginning in October last year, and I deeply regret that our colleagues in the Democratic Unionist Party supported that then, saying, quite clearly, that it was a
“serious and sensible way forward”.
Of course, two weeks down the line, they had to change their tune. Nevertheless, that was the green light for Dublin and the EU, and that advantage was pressed home.
If ever there was a case for the other place having a chance to look at this legislation again, this is it. I sincerely hope that the House of Commons will revisit this. If they talk to people, to some of us who were involved in negotiating the Belfast Good Friday agreement and to colleagues, they will find that none of us want to see Northern Ireland decoupled from the rest of the United Kingdom. I see this whole measure and agreement as a dagger pointed at the heart of the union. Other colleagues have mentioned what is happening in Scotland, and we see changes in Wales and even Jersey. I do not know whether we can get certainty about where the Isle of Wight stands on all of this, but the fact remains that the union is in serious trouble with the way we are handling things. However, there are alternative ways out that can maintain stability, do not break up the United Kingdom and do not set one section of the community in Northern Ireland against the other.
I have no doubt that it may well have been the case that some EU official did threaten to stop food travelling to Northern Ireland from Great Britain. Only a fool with no knowledge of history would dare to say anything that would prevent food getting to Ireland. It is such a stupid thing to say. I do not believe that the United Kingdom needs to turn itself inside out and break up its whole international standing to prevent such a thing happening. There are alternatives.
I do not believe that this Parliament or any party in it would stand by and allow one part of the United Kingdom to be, effectively, starved out because of regulations if the European Union was being particularly difficult. I think we can overcome all of that by consensus and can ensure that the Government are given the strength that they need in the negotiations. If somebody in the European Union did think, for one moment, that they could get away with such a thing, I would disabuse them of that thought. This is not the way ahead.
Baroness Suttie (LD) [V]
It is always a pleasure to follow the noble Lord, Lord Empey, who always speaks with such authority, experience and, as we heard this evening, force on these matters. I will speak in favour of Amendment 163, to which I have added my name, and against all clauses in Part 5 of the Bill. Amendment 163 is a cross-party amendment tabled by the noble Lord, Lord Hain, and the noble Baronesses, Lady Ritchie and Lady Altmann. It calls for the trader support service to be extended to become a long-term commitment for trade from Great Britain to Northern Ireland.
In response to a similar amendment during Committee on the Trade Bill on 13 October, the Minister, the noble Viscount, Lord Younger of Leckie, confirmed that the future of the trader support service will be reviewed after two years. Can the Minister confirm that, if after two years it is seen as a positive initiative for businesses in Northern Ireland, it will continue indefinitely?
I will concentrate the remainder of my brief remarks on the deletion of Part 5 of this Bill. The arguments are well rehearsed. We have heard them made very eloquently, particularly in the most thoughtful speech from the noble and learned Lord, Lord Judge, and the powerful speeches from the noble Lord, Lord Howard, and my noble friend Lord Newby. As other noble Lords have said, unless Part 5 is deleted, it risks diminishing our global reputation and jeopardising the substantial progress made on the island of Ireland since the 1998 Belfast/Good Friday agreement.
The Government sometimes give the impression that the protocol was somehow imposed on them, whereas earlier this year they were claiming it as their great success. As the noble Lord, Lord Empey, demonstrated clearly in his speech, the Northern Ireland protocol is not perfect, but it is the consequence of the Government’s insistence on a set of incompatible promises and on leaving both the customs union and the single market. For all its imperfections, the protocol is a carefully constructed compromise to try to maintain peace and stability on the island of Ireland.
The uncertainty which Part 5 of this Bill provokes has also—in my view, unforgivably—wasted scarce resources and valuable time. This is precious time when businesses could and should have been preparing for the end of the transition period in just over 50 days’ time.
Last week, the National Audit Office said in its report, The UK Border: Preparedness for the End of the Transition Period:
“It is very unlikely that all traders, industry and third parties will be ready for the end of the transition period … There is a risk that widespread disruption could ensue at a time when government and businesses continue to deal with the effects of Covid-19.”
If the arguments against Part 5 remain the same, the political context in which we now find ourselves has very substantially changed. As my noble friend Lord Newby said, President-elect Biden has made it very clear that he will not support any measures that would result in breaking commitments made in the Northern Ireland protocol or that would risk destabilising the Good Friday/Belfast agreement. Yet in the media this morning, the Government made it clear that they do not intend to change their mind on Part 5.
There is a time when sticking to a position looks like strength, and there is a time when it looks out of touch with political reality. I urge noble Lords to vote against all clauses in Part 5 and I call on the Government to think again.
The Lord Bishop of Leeds [V]
My Lords, it is a great pleasure to follow the speech by the noble Baroness, Lady Suttie. I endorse completely the points made by the noble and learned Lord, Lord Judge, at the outset of this debate. I hope the Government will listen carefully to the advice from the noble Lord, Lord Empey, on the alternatives to what is before us. This is not an either/or situation.
I have read every word of the Second Reading and Committee debates and the reports—especially from the Constitution Committee. I have even reread Tom Bingham’s book on the rule of law. I ask myself whether I am missing something, but I still come back to the point of principle. I accept the Government’s intention in this Bill, but not the means. We were given pragmatic answers to questions of principle, particularly in the responses to the Second Reading debate. These will not work. At Second Reading, the Minister dismissed the ethical argument which I tried to set out succinctly in my speech. Yet even in today’s debate, we have heard moral language used. To speak of suspected bad faith by others is to speak of ethics. Ethics must form the basis of political principle. Objections to other countries breaching international law have to be set in moral considerations.
Lord Cormack (Con)
My Lords, I follow the right reverend Prelate the Bishop of Leeds in hoping that the Government will listen.
Earlier today, we had a good example of how your Lordships’ House works at its best. The Agriculture Bill has now gone through all its parliamentary stages with significant amendment—much of its achieved through debate and persuasion in your Lordships’ House. Although there are aspects of that Bill that many of us still question, nevertheless we can claim that the Government have listened and that something will get on to the statute book improved by your Lordships’ House and worthy of our parliamentary process.
We could not be further away from that with the Bill now before us. I listened with admiration and agreement to the noble and right reverend Lord, Lord Eames, and to other noble Lords, but Part 5 cannot be improved. Part 5 has to go. In seeing it off—which I believe it is our duty to do—we are honouring and not abrogating the Salisbury/Addison convention, as I said on Second Reading. This was part of a manifesto commitment. It is not a law passed by some previous Government of another party. This is a law campaigned for by the Government, who won a sweeping victory in the general election last December. The early stages went through this Parliament, pre-Covid, and now we are told that the Government want to abrogate.
The noble and learned Lord, Lord Judge, in a magisterial speech, pointed out what a blemish on our national reputation this would be—and it would. We would rightly be accused of losing our moral compass as a nation. How can we talk to others about honouring the rule of law if we ourselves are pushing through Parliament an Act that abrogates a treaty willingly entered into, commended to Parliament and endorsed by it less than a year ago? As we have debated, the Bill has many imperfections—it is a real threat to devolution—but what is fundamentally wrong with it is that we are abrogating that treaty, and putting ourselves on the level of countries for which the rule of law is not of much consequence.
For goodness’ sake, we are looking across the Atlantic at the moment and seeing how crucial it is that the leader of the free world and the greatest country in the world believes in the rule of law, and not just when it is convenient. I deplore that we are in this position, and devoutly wish that we were not, but I could never support this part of the Bill. I do not like much of the rest of it, but I certainly could never support this part. We have not only a unique opportunity, but also a unique duty, to ensure that this does not pass.
We have certain powers in your Lordships’ House. We are always very wary of how we exercise those powers, and that is right, because the ultimate authority lies with the elected House, but this is something forced through the elected House by our Government, which, as the noble and learned Lord, Lord Judge, said in that splendid speech, puts into the hands of any Minister the opportunity, by secondary legislation, to repudiate law.
Tom Bingham has been cited in evidence before in your Lordships’ House and has been mentioned again tonight. I implore my noble friend on the Front Bench to read carefully that marvellous little book, The Rule of Law. It will not take him long. What would Tom Bingham be saying tonight? How fortunate we are that another former Lord Chief Justice, the noble and learned Lord, Lord Judge, has been able to give the lead with forensic skill, devastating logic and impeccable argument. We must not allow this to go through, and the only way of ensuring that it does not is to vote against every one of the clauses in Part 5 standing part. I propose to do so, and if necessary, will do it again and again.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow my noble friend Lord Cormack. I pay tribute to his excellent work over many years in the other place, not least in his model chairmanship of the Northern Ireland Affairs Committee, which I commend today. I shall speak to Amendments 179 and 180, but I will not press them to a vote. Before I speak to them, I endorse what my noble friends Lord Cormack and Lord Howard of Lympne said. It was a privilege to serve as a humble shadow Minister in the Conservative Party under the leadership of my noble friend Lord Howard of Lympne. I also pay tribute to the noble and learned Lord, Lord Judge. He has set out in his amendments why I shall certainly be voting against this part of the Bill.
On Clauses 42 and 43, the noble Lord, Lord Empey, stated the importance of agri-food and the food industry to Northern Ireland. We should pause for a moment on that point. I pray in aid the evidence that we have heard on the EU Environment Sub-Committee, that all those involved in the production of food in Northern Ireland, and industries such as road haulage and freight, which serve that industry, are distraught at the moment because they all thought that this was done and dusted in the Northern Ireland protocol and under the provisions of the EU withdrawal Act. I regret that we are now discussing those issues again in this context. I have no doubt that this was largely because of a misunderstanding of what the Prime Minister had agreed to in what formed the basis of EU withdrawal agreement.
I cannot support this because I am a non-practising member of the Faculty of Advocates and would be drummed out if I broke my oath. Article 26 of the Vienna Convention on the Law of Treaties clearly states that all agreements should be kept and that every treaty
“in force is binding upon the parties to it and must be performed by them in good faith.”
In the words of the noble and learned Lord, Lord Judge, the provisions in Clauses 42 to 47 are offensive and obnoxious, and I wish to have no part in them. I shall follow the lead of my noble friend Lord Cormack in voting against them this evening and on every occasion when I am asked.
I am grateful to the Law Society for briefing me on this and for preparing me to table Amendments 179 and 180, but if the provisions before us in this part were not bad enough, they were compounded as the Bill made its passage through the other place. The provisions in Clause 56(4) provide additional parliamentary scrutiny of the decision to commence in the sections, which, if enacted, would, if anything, compound the breach of international law. Clause 56(4) is defective for those reasons, not least because it is trying to elevate to a matter of process what is offensive and obnoxious in this part of the Bill. It also downgrades the role that we would play in your Lordships’ House by simply taking note of the commencement order for Clauses 44, 45 and 47.
I do not wish to move my amendments, but I am grateful to the Law Society for pointing out the further deficiencies in this part of the Bill. It is largely academic, because I shall be voting against all five clauses in Part 5 of the Bill.
Baroness Altmann (Con) [V]
My Lords, I am humbled to follow so many powerful, erudite, emotional and persuasive speeches. The noble and learned Lord, Lord Judge, presented the case brilliantly. The noble and right reverend Lord, Lord Eames, the noble Lords, Lord Newby and Lord Hain, my noble friends Lord Howard and Lord Cormack, the noble Baroness, Lady Ritchie, and so many others across the Committee, have outlined why it is essential that your Lordships’ House removes each and every clause of Part 5 of the Bill. We cannot allow the Government to rewrite an international agreement to suit ourselves, and to undermine the very foundation of our democracy, which is based on the rule of law and parliamentary sovereignty.
I am proud to sit in your Lordships’ House, and to have grown up in this country, which I have always considered a beacon of respect for the rule of law, for upholding international law, and for honesty and moral standards of behaviour, but I too join my noble friend Lord Howard in opposing the Bill, and agree with him that this is not about whether one was for Brexit or remain. It is much more important even than that.
Baroness Massey of Darwen (Lab) [V]
My Lords, we have heard some amazing and inspiring speeches. The noble and learned Lord, Lord Judge, spoke of the “lamentable provision” of Clause 47. As has been voiced so eloquently this evening, I fear that there is too much that is lamentable in Part 5 of the Bill.
As a member of the Joint Committee on Human Rights, I shall speak to Amendments 164 and 165, which relate to the committee’s inquiry and report on this Bill. The committee expressed a number of reservations about the Bill, and considers it hard to reconcile the Bill with government statements that it is compatible with human rights. The Human Rights Act 1998 makes it unlawful for public authorities, including Ministers, to act incompatibly with the rights guaranteed by the European Convention on Human Rights. By stating that Section 6 of the HRA does not apply to the making of regulations under Clauses 44 and 45, the Bill removes a prohibition on Ministers making regulations that violate human rights. The committee concluded that it could not see why this provision would be necessary unless the Government were contemplating regulations that did not comply with human rights.
This amendment fulfils the requirement stated in the conclusion of the JCHR report:
“The Bill should be amended to make clear that Minsters making regulations must comply with the rights recognised in the Human Rights Act 1998.”
This is surely an ethical principle, about which the right reverend Prelate the Bishop of Leeds and the noble Baroness, Lady Altmann, spoke so eloquently.
Amendment 165 seeks to omit Clause 47(3). In its report, the Joint Committee on Human Rights concluded that it
“does not consider it constitutionally acceptable for ordinary delegated legislation to be treated for the purposes of the Human Rights Act as if it were primary legislation passed by Parliament.”
I note that the Constitution Committee has echoed this concern. The Bill as it stands would remove the power of the courts with regard to their option to strike down legislation made by Ministers if it is incompatible with the rights guaranteed by the European Convention on Human Rights. Clause 47 would insulate secondary legislation that breaches human rights from the usual consequences of a successful legal challenge. This clause should clearly be removed, as should all of Part 5 of the Bill.
Lord Dubs (Lab) [V]
My Lords, I am also a member of the Joint Committee on Human Rights and I support what my noble friend Lady Massey said in putting forward the committee’s views and concerns. The noble and learned Lord, Lord Judge, spoke for me—and for virtually the whole Committee—in his opening speech. I think I agree with every contribution made so far, so I shall be brief.
On the front of the Bill, under the heading “European Convention on Human Rights”, it says:
“Lord Callanan has made the following statement under section 19(1)(a) of the Human Rights Act 1998: In my view the provisions of the United Kingdom Internal Market Bill are compatible with the Convention rights.”
Every Minister has to certify a Bill’s compatibility with the human rights convention.
The courts cannot strike down primary legislation but can make only a declaration of incompatibility. However, secondary legislation is different; the courts can strike it down if it is incompatible with the rights guaranteed by the European Convention on Human Rights. Why is there a difference? I believe that it is because, while primary legislation can be and is fully debated and amendable by both Houses, in contrast secondary legislation inevitably has a less thorough process of parliamentary scrutiny. That is why these amendments are so crucial. Clause 47(3) would require the regulations under Clauses 44(1) and 45(1) to be treated as primary legislation under the Human Rights Act. That would, therefore, prevent the courts striking them down if they were found to be incompatible with human rights.
The Joint Committee on Human Rights concluded:
“The Committee does not consider that it is constitutionally acceptable for ordinary delegated legislation to be treated for the purposes of the Human Rights Act as if it were primary legislation passed by Parliament.”
The Constitution Committee of this House echoed that point. It was
“concerned that clause 47 seeks to alter the scheme provided in the HRA without wider consideration of its constitutional implications and compliance with the UK’s international obligations under the Convention.”
I know that the Government have occasionally said that they do not like the Human Rights Act, but we should not seek to undermine it by a back-door approach. We surely need a proper debate on the Act, not to have something slipped in in this way.
I shall certainly vote against the Government on all the amendments to Part 5, but I draw particular attention to this, in the hope that the Government will never again try to use such a tactic to undermine the Human Rights Act.
The Deputy Chairman of Committees (Lord McNicol of West Kilbride) (Lab)
The noble Lord, Lord Singh, has withdrawn. I call the noble Lord, Lord Dodds of Duncairn.
Lord Dodds of Duncairn (DUP)
My Lords, we are in the position of Part 5 having to be brought forward because of the contents of the Northern Ireland protocol. We find ourselves in a very unfortunate position. Unionists in Northern Ireland do not find much comfort in some of the clauses in Part 5, particularly the clauses about preventing reach back in relation to the application of state aid rules for Great Britain but nevertheless allowing Northern Ireland to be subject to EU state aid rules, which could cause considerable problems going forward for the competitive position of businesses in Northern Ireland with businesses in the rest of the United Kingdom.
The protocol is at the root of the problem. The noble Lord, Lord Empey, referred to this. The protocol was opposed by us on these Benches because it differentiated between Northern Ireland and the rest of the United Kingdom as we left the European Union and we were always promised that we would leave as one United Kingdom. I have to correct the noble Lord on one thing: he has today and on previous occasions sought to lay some responsibility for this sad situation at the feet of the DUP. Of course, he will know that on 2 October last year—it is worth correcting the record since the assertion has been made—when the Prime Minister sent his proposals to Jean-Claude Juncker, one of the five principles, the elements that the Prime Minister set out, was that any potential all-Ireland regulatory zone on the island of Ireland could happen only if the Northern Ireland Executive and Assembly had the opportunity to endorse those arrangements before they entered into force and every four years afterwards. If consent was not secured, the arrangements would lapse, and it was on that basis, with the security of a lock in the Northern Ireland Assembly, as was agreed in the joint report of the EU and the United Kingdom of December 2017, that we gave a cautious welcome. When the Prime Minister jettisoned that democratic consent principle—and the Government have indeed jettisoned the principle of giving the Northern Ireland Assembly and Executive the right to say that this should come into force in Northern Ireland—we made it clear that we would not support the Government in that. I think it is important to correct the record and lay the responsibility where it truly lies.
On Clauses 43 and 44, we have heard many eloquent speeches tonight, but I speak as one who represented the city of Belfast for more than 35 years. It is a very diverse constituency. Whether a business is owned or run by someone from a unionist family or a nationalist family or indeed of no particular political persuasion, they are all interested in trying to make their company work, be prosperous, employ people and contribute to the economy. They are all united on the fact that it would be disastrous to have checks between Northern Ireland and the rest of the United Kingdom to fetter trade unnecessarily as they would add to costs. More than £8 billion-worth of trade goes from Northern Ireland to Great Britain and from Great Britain to Northern Ireland every year. This is an immense amount of trade. Almost 60% of all trade in Northern Ireland is done with the rest of the United Kingdom.
We talk about grand philosophical and legal principles, and I understand all that, but this is not a unique situation for any country to find itself in. To hear some noble Lords, one would think that this is the only country that has ever decided to step away from an international obligation in the interests of its own sovereignty, its own interests and the interests of its citizens. That is not the case by far. None of that has been referenced, although to go to into all that is perhaps more appropriate for a Second Reading speech than the debate on these clauses. However, it is important to remember the reality of the economic position that many companies in Northern Ireland and the people who are employed by those companies will find themselves in if sensible arrangements are not made to recognise that Northern Ireland is a full member of the customs union of the United Kingdom.
We must remember that the Government and the EU made commitments in this regard. I referred earlier to the joint report agreed between the United Kingdom Government and the EU back in December 2017, which allowed the negotiations to move on to the next stage at that point. Paragraph 50, which the EU agreed to, states:
“In the absence of agreed solutions … the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless”—
this is the point I made earlier—
“consistent with the 1998 Agreement”—
they would uphold the agreement, so let us listen carefully—
“the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland. In all circumstances”—
it is important for noble Lords to remember this—
“the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.”
Lord Lilley (Con)
My Lords, we have listened to many moving and powerful speeches from right reverend Prelates and noble and learned Lords about the abstract principles raised by this Bill and, particularly, by Part 5. They are very important principles. It is a particular privilege to follow the speech of the noble Lord, Lordusb Dodds, which has been the first to spell out the practical implications for people’s livelihoods if the withdrawal agreement is not applied in the spirit of the promises made by both sides—the United Kingdom as well as the European Union—to all the people of Northern Ireland. There are practical and constitutional consequences, which somehow have escaped the notice of every single noble Lord who has spoken up to this moment.
At Second Reading, I asked a question which I make no apology for repeating: what should a state do if it finds that its obligations under one treaty conflict with those under another treaty or with its own fundamental constitutional laws? No one in your Lordships’ House has explicitly addressed that question. Maybe that reflects how difficult our hybrid procedures make the proper and effective interchange of ideas and debate in this House, but maybe it was also because most noble Lords have framed their positions in absolutist terms: we must obey international law, full stop.
By implication, there can be no circumstances in which legal obligations under one treaty can clash with those under another or with a country’s fundamental domestic laws. However, as I pointed out before, that is not the view that other countries take. The European Court of Justice itself spelled out that, although the European Union seeks to comply with its international legal obligations,
“it would be wrong to conclude that, once the Community is bound by a rule of international law, the Community Courts must bow to that rule with complete acquiescence and apply it unconditionally”.
It also says that,
“although the Court takes great care to respect the obligations that are incumbent on the Community by virtue of international law, it seeks, first and foremost, to preserve the constitutional framework created by the Treaty.”
I do not think it is wrong to say that. If I wanted to carry forward the European Union, I would have that order of priorities, but I want to carry forward the United Kingdom, so my priorities are put first and foremost—the fundamental constitutional laws of this country, when and if they clash with an international treaty.
The German Constitutional Court has ruled that if treaties—even European Union treaties—conflict with basic German constitutional law, the latter prevails. The strange thing is that, when the EU or Germany set aside any aspect of international law that clashes with their fundamental internal laws, no one suggests that they are putting at risk the entire international framework of law or rendering themselves international legal pariahs. Why is it so contentious when we suggest that we might need to do likewise when it is not contentious for them?
Although no noble Lord in the debate explicitly answered my questions or addressed these issues, the noble and learned Lord, Lord Judge, who opened both this debate and the debate on his amendment to the Second Reading Motion expressing regret, implicitly addressed the issue in his summing up of the debate. He acknowledged:
“‘We may need these powers at some stage.’ Maybe we will; I hope not. If we do, it is perfectly open to the Government to come back to us, to Parliament, to put before us emergency legislation and … proposals, and, if they are satisfactory, to endorse them.”—[Official Report, 20/10/20; col. 1431.]
But surely, once we accept that powers regarding overall aspects of the withdrawal treaty may be necessary in future, the enabling measures in Part 5 cannot be wrong in principle. Whether we take the power now or reserve doing so for a later date in a separate Bill becomes a procedural and tactical issue, not one of principle. My own view is that having the enabling power on the statute book makes it less likely that the European Union will refuse to negotiate “in good faith” and with respect for the other party’s “legal order”—wording used in our agreement with the EU—on the issues in Part 5 and the planned finance Bill.
I have the greatest respect for the noble and learned Lord, Lord Judge, and not just for his mastery of the law but for the objective and non-partisan way in which he approaches these issues and every other. He has been kind enough to correspond with me about these issues. Like him, I hope we never need to invoke the powers in Part 5 to override the withdrawal Act, be they the powers in this Bill or in the emergency legislation that he envisages. But like him, I recognise we may need to if the EU refuses to resolve these issues by negotiating in good faith and out of respect for our internal legal order—particularly, the Act of Union, which guaranteed free and unfettered trade between Great Britain and Ireland, and the Belfast agreement, which promised no change in the status of Northern Ireland without the acceptance of both communities.
Like the noble and learned Lord, Lord Judge, I accept that if such a problem does emerge, we should try to resolve it by the procedures within the withdrawal treaty. If we cannot agree in the Joint Committee, those would most obviously include activating Article 16. As the noble and learned Lord, Lord Keen, said, these powers in this Bill will be necessary even if we invoke Article 16 of the treaty. That would not enable the Government to act without legislative authority, so it is important to have that legislative authority on the statute book—indeed, it is essential. Again, like the noble and learned Lord, Lord Judge, I hope it will not be necessary.
There ought not to be any conflict between the withdrawal treaty and our fundamental laws, as long as both sides negotiate, as they have promised to do, the remaining internal contradictions in the withdrawal Act in good faith and with respect for each other’s constitutional orders. I was not alone in mentioning the potential clash between the withdrawal treaty and our fundamental laws. So did my noble friend Lord True in his brilliant closing speech at the end of the Second Reading debate, when he referred notably to the need to uphold the Act of Union, which ensures unfettered trade between parts of the United Kingdom, and the Belfast agreement.
I hope noble Lords will ponder these things and, most of all, the summing up by the noble and learned Lord, Lord Judge, that it may be necessary—though let us hope it is not—for us to resolve a conflict between the withdrawal treaty and the Act of Union and Belfast agreement. It is sensible to have that legislation on the statute book. But we are not, by doing so, rendering ourselves international pariahs or doing anything that any other country would not do in similar circumstances.
Lord Clarke of Nottingham (Con)
My Lords, it is a rather remarkable experience, as quite a new Member of this place, to find myself taking part in such an extraordinary and unusual debate, loaded with such significance and ethical and legal issues. It was a pleasure at Second Reading to follow a debate in which the eloquence of the noble and learned Lord, Lord Judge, the noble Lord, Lord Howard, and many others was extremely persuasive. I followed their speeches, which came to a dramatic conclusion when I found I was taking part in Divisions in which the Government suffered their biggest defeat in this House for over 20 years on a resounding and distinguished cross-party basis.
My first reaction was to think that, before we got to this stage, the Government would react in some constructive, positive way. I may be new here, but I have been a few years in government, and in the past, the problem would have been regarded as a fairly extraordinary one. Efforts would have been made to give the unfortunate Minister, who had drawn the short straw of defending the Government in this House, some material and opportunity to persuade, reach a compromise and perhaps move to the more pragmatic approach of the noble Lord, Lord Lilley, because this should all be resolved in a common-sense way.
The Earl of Kinnoull (Non-Afl) [V]
My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Clarke, in his very seasoned contribution for a newbie—and indeed the other 18 speakers so far in this very important debate. The European Union Committee published our report on the Internal Market Bill on 16 October, and I take this opportunity to remind noble Lords of our conclusions. Our report was short. It deals only with Part 5 of the Bill, and its interaction with the Government’s implementation of the withdrawal agreement.
The withdrawal agreement is a complex document, around a third of which is taken up by the Ireland/Northern Ireland protocol, itself a testament to the importance that all parties place on getting things right in that regard. I said before in this Chamber that there is an inherent tension at the heart of the Ireland/Northern Ireland protocol which is evident in Article 1, which describes its objectives. There are other examples, as I said in my Second Reading speech.
The only way to reconcile these tensions is for all sides to show pragmatism and willingness to compromise. Our committee reported in June on the protocol, expressing our concern that there was not enough urgency among the parties to negotiate these compromises, so protecting first the Good Friday agreement and secondly the two mighty single markets involved: those of the EU and the UK.
The report also dwelled on the multilayered dispute resolution mechanisms contained in the withdrawal agreement. The Bill before us supplants those mechanisms without their ever having been tried. As we have been reminded already several times, in September the Secretary of State made clear and repeated statements that in doing so it breaches international law. The result is that the Bill strikes at the heart of the withdrawal agreement and the protocol. It is corrosive too to the future relationship negotiations, undermining the trust that is a precondition for a successful outcome.
The Government’s argument now, as we have already heard, not least this morning on the radio, is that the Bill is a safety net: that it does not itself break international law but is a precaution in case of unreasonable behaviour by the EU. The problem with that argument, as we point out in paragraph 106 of our report, is that the Government’s decision to act pre-emptively in the absence of evidence has put the UK, and not the EU, into the wrong. Our report ended by seeking further explanation of the Government’s approach, and in particular the disclosure of any evidence that the EU had acted in bad faith. Those explanations have not been forthcoming, and I therefore hope that, even at this late stage, the Minister will indicate a change of heart and give his support to the removal of Part 5 of the Bill.
In closing, I note that amendments proposed by the noble and learned Lord, Lord Judge, are in keeping with the thrust of our report—albeit that we had asked the Government to cure the problems themselves. Convention, however, prevents me from expressing a view in the Division Lobby tonight.
Lord Pannick (CB) [V]
My Lords, it is a great pleasure to follow the noble Earl, whose work as chair of the EU Committee has illuminated the issues on this Bill, as on so many other issues that we have been debating over the years.
I agree with the speech made by the noble and learned Lord, Lord Judge. There are occasions, as this debate confirms, when clauses in a Bill raise issues of political, and indeed moral, principle of fundamental importance. This House has a responsibility to identify when that occurs.
I will make some observations on Clause 47, which has not featured in detail in this Committee debate. Clause 47 is innocuously titled “Further provision related to sections 44 and 45 etc.” Clause 47 is, however, a very substantial interference with the rule of law. Clause 47(1) says that any regulations which Ministers may make under Clauses 44 and 45
“have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.”
Clause 47(8) defines
“relevant international or domestic law”
to include
“any other legislation, convention or rule of international or domestic law whatsoever.”
So whatever Ministers produce by way of regulations cannot be challenged in a court of law on any grounds.
Baroness Hoey (Non-Afl)
My Lords, I rise to support all the clauses that deal with the Northern Ireland protocol. I am very much aware that this House is full of lawyers; I declare an interest in that I am not a lawyer—perhaps that is a good thing sometimes. Over the four years since the referendum, I have been surprised and shocked by some of the ignorance spoken about the Belfast agreement. I sometimes wonder whether people have actually read it. It is a fact that many who disliked the referendum result used the Belfast agreement to try to make it more difficult for the Government by continually promoting the idea that the agreement said that there could be no trade checks at the border. Of course, this was wrong; the agreement made no mention of trade borders.
Unfortunately, whether by accident or design, or because of the pressure from the Irish Government, the people of Northern Ireland have, in plain words, been sold out. I believe that the way in which the fears of a hard border were deliberately escalated meant that the EU was delighted. Michel Barnier himself was seen on camera and quoted as saying that the border argument was a good way of punishing the United Kingdom for leaving.
How can any of your Lordships think that creating a trade border down the Irish Sea between Northern Ireland and the rest of the United Kingdom is protecting the Belfast agreement when the one border—the key and crucial border—recognised in the agreement is that between Northern Ireland, as part of the UK, and the Republic of Ireland, as a foreign country? How can one go against the Belfast agreement while we all have to accept the other and say that it is wonderful?
Creating a new border, cutting Northern Ireland off from the rest of the UK, is already breaking the Belfast agreement, unless Northern Ireland consents to being cut off. The principle of consent, which we hear very little about in the Belfast agreement discussions now, is central to the agreement, and it is shattered by this protocol, which I did not support in the House of Commons. It is worth stating that the “Constitutional Issues” section of the Belfast agreement says that, as
“the present wish of a majority of the people of Northern Ireland … is to maintain the Union … it would be wrong to make any change in the status of Northern Ireland save with the consent of a majority of its people”.
However, this is precisely what is happening. The protocol itself is a blatant breach of the Belfast agreement and international law.
I believe that the Bill is trying to improve this in some way, and, clearly, I have no trust whatever in the good faith of the European Union on this issue. Quite rightly, Her Majesty’s Government need to be one step ahead, and this is what the clauses that some noble Lords seek to remove are doing. They do not violate any laws but merely create a mechanism to be used in trying to make less damage come from parts of the protocol if the European Union decides to play games.
If parliamentary sovereignty means anything, it must mean that Parliament can enact legislation that breaches international law on some occasions. Ministers must be free to recommend this to Parliament. I know that lawyers hate this, but the sovereignty of Parliament is supreme, and no country can be bound for ever by an international law. Political judgment has to be used as to when it might be necessary, but I would have thought that standing up for part of the United Kingdom when an action is going to harm it is such a necessity.
The protocol sets out the principle that:
“Northern Ireland is part of the customs territory of the United Kingdom”.
Therefore, goods should be able to flow freely, but the EU judging the risk of goods crossing into the Republic is worrying, as there are strong incentives to insist on a very wide definition of “goods at risk”. Let us be honest, it has a strong economic incentive to make life as difficult as possible for British-based exporters of goods into Northern Ireland to give an advantage over them to the EU’s own exporters in the Republic and elsewhere.
The problem is that, if the UK refuses to agree a wide definition and insists on a more limited class of goods genuinely at risk of onward sale into the EU, the default position, if there is no agreement, appears to be that all goods passing from GB to Northern Ireland would be subject to duties. This would create huge extra administrative costs and bureaucracy to move goods from one part of our country to another. I do not believe that that can be allowed. I feel that my duty here is to speak for those who just want to see your Lordships’ House stand up for our country against the bad faith, or the likely bad faith, of the European Union. Arbitration would take a long time and, in the meantime, the people of Northern Ireland suffer.
To take out these clauses now would be a further stab in the back of the people of Northern Ireland. To say, as some noble Lords have, that we must remove them to please the new US President is something I believe will shock decent people in the real world outside this House. First and foremost, we must stand up for our own country. Noble Lords can show today that they genuinely care for Northern Ireland and the union, and that they have read the Belfast agreement. I am not surprised about the position of the opposition Benches on this, as the Opposition do not even allow people in Northern Ireland to vote for their party. To noble Lords on the government side, I say: remember those true unionists of your party over the years who gave their lives—Ian Gow, Airey Neave—and do the right thing. I hope tonight that noble Lords will show that they really care about Northern Ireland and will leave these important clauses where they should be.
Lord Stirrup (CB)
My Lords, the Good Friday agreement was made possible, at least in part, by the fact both the United Kingdom and the Republic of Ireland were members of the EU. The common rules and procedures under which we both operated, enabled unionists and republicans to claim that the agreement went some way to advancing their political agenda. It was in many ways a classic deal—fully satisfactory to neither party but acceptable enough to allow agreement. The UK then voted to leave the EU. It was not the option I preferred, but I accepted the result. Having accepted it, I was clear that the best course for us was to leave the single market and the customs union as well. Anything else might well have had some economic advantages but would have left us in the worst of all worlds politically.
That meant that there would need to be border of some kind between the UK and the EU. The nature of the border would depend on the future relationship between the two parties, but a border there would be. This was foreseen and foretold. However, a border that separated Northern Ireland from the Republic to the south, might well have implications, both practical and political, for the Good Friday agreement. The protocol for the EU withdrawal agreement was designed to deal with this and the Government were content with it when the agreement was approved by the UK Parliament. The Government now say the EU might apply the protocol in a way that was never intended, and that Part 5 of the Bill is necessary to protect the position of the UK.
Quite why we should assume the EU would behave in such a way, no matter what ill-advised comments might have been made in the heat of argument, is not clear to me. In any event, a dispute resolution mechanism already exists to tackle any problems of interpretation and application that might arise. If this were tried and found wanting, and the Government believed the UK’s national interests were seriously at stake, they could introduce emergency legislation to Parliament at that point. They would then be responding to a breach of faith, not creating one. This would place us in a position far preferable to that which would result from accepting the provisions in Part 5. Acting in self-defence—it seems to me and, I suspect, to many others—is entirely different from getting one’s retaliation in first.
There is no reason why the Government could not have an oven-ready Bill sitting in their political refrigerator for this purpose. If it were appropriate, and proportionate, we would, I suspect, have a great deal of international sympathy and I would certainly support it. What I cannot support, however, is a Bill that authorises Ministers to break the law based on some hypothetical event and damages our power to exercise strategic influence in the wider world. I am persuaded by many of my noble and learned friends that to do so would be wrong in law. I am quite certain in my own mind that it would be wrong in principle, for all the reasons I set out in my speech on Second Reading and that I need not repeat this evening. This is not a disagreement on matters of policy; it is a question of law and principle, which we have a duty to uphold.
I am not a remoaner. I have said that I accepted the result of the EU referendum. Indeed, as I said, having accepted it, I argued for our withdrawal from the single market and the customs union. If my voting record were to be checked, it would be found that I support the Government in the Division Lobby far more often than I oppose them. I do not believe I am what the Government might regard as one of the usual suspects. However, I oppose Part 5 of the Bill and will vote accordingly in any Divisions on its clauses standing part.
I acknowledge that the Government have a difficult task in reconciling the potentially contradictory aspects of the withdrawal protocol and the Good Friday agreement. That perhaps became inevitable once we left the EU but, given the breadth and depth of the dissatisfaction with Part 5 that is evident across this House, I urge Ministers to think again about the course that they are following. It is not too late for them to adopt an approach that can command support across the United Kingdom but that maintains our hitherto exemplary status as a law-abiding and trustworthy member of the community of nations.
Baroness Noakes (Con)
My Lords, I am speaking today because I believe that the clauses that the noble and learned Lord, Lord Judge, and other noble Lords oppose are wholly in the United Kingdom’s national interests and, importantly, wholly in the interests of our fellow citizens in Northern Ireland.
Part 5 of the Bill represents a sincere attempt by the Government to protect the Good Friday agreement and peace on the island of Ireland. If the way in which Northern Ireland has to operate within the United Kingdom is harmed, it would follow that peace and reconciliation within Northern Ireland will itself be harmed. The Northern Ireland protocol explicitly recognised that Northern Ireland would remain within the UK’s customs territory and internal market. This is crucial for Northern Ireland, as nearly 50% of its exports go to the rest of the United Kingdom. This is more than double the amount exported to the Republic and four times the amount exported to the rest of the EU. Trading within the UK’s internal market is not an optional extra for Northern Ireland. An east/west trade border in the Irish Sea is bound to have an adverse impact on the Northern Ireland economy, and economic weakness would not take long to translate into political tensions.
The practical issues of trade with Northern Ireland—for example, how the risk of goods entering the EU via Northern Ireland will work—have not yet been agreed in the Joint Committee. There is no guarantee that an agreement will be reached and, if there is no agreement, a number of harmful consequences—for example, in relation to third-party listing of agricultural products—could well follow. I understand that these have been threatened by the EU. Faced with this uncertainty, I believe that this Bill is a responsible approach by the Government to protect the interests of the United Kingdom, particularly the interests of Northern Ireland.
The Government could have waited until real harm was done in Northern Ireland, economically and politically, but that would be to court disaster. The Government have not waited until they on a burning platform. Instead, they have taken the pragmatic approach of providing a contingent power in the Bill to be activated only with the consent of Parliament and used only if the dispute resolution procedures fail.
I ask noble Lords whether they would still oppose Part 5 of this Bill if the Government sought to legislate in the face of actual, rather than prospective, harm. Would concerns about the rule of law really stop noble Lords voting through whatever was necessary to protect the UK’s economic interests and peace in Ireland at that point? I do not think so. I do not think that the rule of law is the relevant point. I am not sure that what the noble Lord, Lord Pannick, said really answered the challenge on this from my noble friend Lord Lilley. If noble Lords can accept that the national interest might require us to break an international agreement in the face of actual harm, in logic they ought to support this proportionate approach to protecting the union, as well as stability and prosperity in Northern Ireland.
Lastly, I ask the opponents of Part 5 to answer one simple question: would noble Lords object to a similar power if it allowed a breach of a treaty with a state which was now an international pariah, or is the heart of opposition to Part 5 intimately linked to the fact that the EU is the counterparty to the treaty which we might need to break? I urge noble Lords to avoid unconscious bias, whether or not driven by remainer nostalgia, and put the protection of the UK, the union and peace in Ireland first.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, like the noble Baroness, Lady Hoey, I have no claim to being a lawyer, nor the son of a lawyer, but I come with 50 years of experience as a minister of the gospel in the thriving congregation in Northern Ireland and 42 years as an elected representative of the people of Northern Ireland. I have been with the people of Northern Ireland through very difficult and trying times, as well as times of joy.
I was not one of those who negotiated the Belfast agreement, nor, truthfully, did I support those who did. However, I accept the reality of its existence. Throughout the internal market Bill’s progress through this House, much has been made of certain clauses’ breach or a threatened breach of international agreement. However, it is interesting to note that those who negotiated it, some of whom are Members of your Lordships’ House and were its chief architects, do not believe that these clauses do so.
The withdrawal agreement, as it was introduced, was bad for Northern Ireland economically and constitutionally. In the other place, my colleagues repeatedly pressed the Government for change; they focused attention on the flaws and the importance of protecting Northern Ireland’s interests, as I am sure noble Lords would expect them to do. This Bill is a step forward, a recognition by the Government of the defects of the Northern Ireland protocol and its impact on the internal market of the whole United Kingdom. However, more work has to be done.
The party I belong to has been focused on ensuring that consumer choice and costs are not impeded as a result of the protocol. It is vital that Northern Ireland businesses have unfettered access to the market of Great Britain, which is so important for the Province, and this Bill sets out potential helpful steps in that respect. However, I noted the noble Lord, Lord Newby, saying “Let us not hear of unfettered trade—there will be none”. That will certainly have serious implications in Northern Ireland, if it is true.
I recently read with interest that several right reverend Prelates and other bishops wrote to the Prime Minister stating that this legislation would set a disastrous precedent and that:
“If carefully negotiated terms are not honoured and laws can be ‘legally’ broken, on what foundations does our democracy stand?”
I found that somewhat interesting, because several times in this debate I have heard about “moral responsibility” and “morality”, and how this is “immoral”. I must remind this House that I stood here some months ago where, whenever we talked about the moral issue of same-sex marriage, the Benches of the right reverend Prelates were empty. Whenever we discussed the moral issue of the most liberal abortion laws that were forced on the people of Northern Ireland against their democratically expressed will, where was morality talked about then? I do not know of any letters being written to the Prime Minister on the importance of this moral imperative.
We know that those changes were made to placate Sinn Féin as a pay-off to get them back into the Northern Ireland Assembly. When we talk about such issues, I would like such letters to be written to the Prime Minister in the midst of our present national crisis with Covid-19 to encourage him to call for a national day of repentance and prayer, acknowledging our need of God’s help and deliverance in our time of great distress, as I did in March at the beginning of the pandemic.
However, returning specifically to these groups of amendments, the EU is failing to honour its own commitments as set out in the withdrawal agreement. The Northern Ireland protocol states in Article 1 that it is
“without prejudice to the provisions of the 1998 Agreement in respect of the constitutional status of Northern Ireland”.
It also states that it
“respects the essential State functions and territorial integrity of the United Kingdom.”
I remind Members of this House that, for the majority of the people of Northern Ireland, the integrity of the United Kingdom is of paramount importance.
Indeed, yesterday, across the United Kingdom, we remembered the fallen of two World Wars. In Northern Ireland, we also remembered all those innocent people across the community who were slaughtered by a vicious and callous murder campaign. Over the years, thousands of our citizens have died—yes, British citizens have died—and tens of thousands have been injured because Northern Ireland’s ordinary law-abiding people refused to be terrorised out of the United Kingdom. That is what we believe is precious to us.
Those who are beholden to the Northern Ireland protocol ignore its threat to the household prosperity of every corner of Northern Ireland. The Freight Transport Association estimates that 70% of some 425,000 lorry crossings every year are destined for so-called dead-end hosts—that is, supermarkets, retail outlets, car showrooms et cetera in Northern Ireland. If those movements are subject to checks, these businesses will feel real pain and real financial loss, but I wonder whether people really care.
Free access to the internal market is a foundation block of the union. The 1707 articles of union between England and Scotland and those between Great Britain and Ireland in 1800 abolished all customs duties between the different parts of the United Kingdom. They also declared that citizens of all parts should be on the same footing in respect of trade and navigation and in all treaties with foreign powers. Does not the withdrawal agreement breach this? A single, unified internal market is therefore a key block in the constitutional foundations of the United Kingdom.
In my opinion, for the EU it was never about protecting peace in Northern Ireland. It has been using Northern Ireland to punish the United Kingdom, as was stated by Monsieur Barnier. Sadly, many others, whether willingly or without realising it, are being used in that cause. For those who support the protocol, the destruction of the UK’s internal borders and household prosperity is simply collateral damage.
Amendment 161 would require the Secretary of State to
“publish a statement on the impact … on … peace and reconciliation in Northern Ireland”
through the exercise of Clause 44. From whom would a threat to peace come? Those of us who have lived under the threat of IRA terrorism for over 30 years—personally—and our families do not want to see terrorism rise again. However, we must not be held to ransom because of the threat from those who have lived all their lives to make Northern Ireland a failed political entity. They made no apology for that being their belief and carried out their terrorism on that basis.
I want to see every part of Northern Ireland bear the fruits of prosperity—prosperity enjoyed by every section of the community. I believe that that is best served within the union of Great Britain and Northern Ireland. Surely those proposing Amendment 162 are speaking out of both sides of their mouths. On the one hand, they want to avoid barriers to trade between Northern Ireland and Great Britain, yet in several other amendments, they would dictate that the Government must not use the powers set out in the Bill if they counteract the protocol. In effect, that requires customs entry and exit declarations. They ought to come clean and stop being disingenuous. If this amendment is to be acceptable, surely there is a need for continuity throughout the Bill.
Baroness Couttie (Con) [V]
I, along with several colleagues, sat on the EU Select Committee, so ably chaired by the noble Earl, Lord Kinnoull. We looked closely at Part 5 of the internal market Bill. The report that we produced was the subject of some strong debate among us. The point that we all agreed on was that none of us wanted to see the UK break international law or in any way tarnish the UK’s international reputation for fair play and justice. The noble and learned Lord, Lord Judge, supported by many colleagues, seeks to have the clauses that make up Part 5 removed from this Bill. I am speaking today to support their continued inclusion.
Much has been made of Brandon Lewis’s remark stating that Part 5 of the internal market Bill breaches international law in a “limited and specific way”. However, his is not the only view on this controversial point. Having listened to the arguments put by the noble and learned Lord, Lord Keen, and the Prime Minister and the evidence given by Michael Gove to the committee, it is clear to me that Part 5 may not break international law and is an essential safety net to protect the UK, most specifically in regard to both the economy and peace in Northern Ireland.
My noble friend Lord Lilley has already quoted the ECJ, pointing out that it does not expect EU countries to apply international law unconditionally. Various articles under the Vienna convention allow all countries the freedom to protect their interests and Article 184 is clear that parties must negotiate in good faith.
The withdrawal agreement was signed with contradictory clauses in it that each side thought protected their interests. Clauses that give the UK sovereignty over all its territory, including Northern Ireland, and unfettered access for goods flowing to and from the mainland and Northern Ireland are clearly difficult to reconcile with Northern Ireland remaining inside the EU customs union. The Joint Committee was established to enable resolution of these conflicts in the clauses. One of the key enablers of the proper functioning of the Northern Ireland protocol was the fair and sensible identification of the very small number of goods that were at risk of moving from the mainland to Northern Ireland and then into the EU.
We know that, as part of its negotiation, the EU threatened to withhold third-party status from the UK. The Prime Minister has told us that the EU also threatened to use the Joint Committee to designate all goods moving from the UK to Northern Ireland as being at risk of moving into the EU. The consequence of this is that tariffs will need to be paid on all goods moving from the UK to Northern Ireland; those tariffs will then need to be reclaimed on goods with a need to prove that they were not exported into the Republic of Ireland. This will create extra costs and make some supply chains unviable. It will also divide Northern Ireland from the mainland, which is unacceptable to the unionists—a point made tonight by the noble Lord, Lord Dodds. Clearly this demonstrates that the EU has not been negotiating in good faith and gives the right, under international law, to the UK to take action to protect itself. Part 5 provides this protection.
Some, including my noble friend Lord Howard, have argued that we should use the dispute mechanism in the withdrawal agreement to resolve these issues. This will take time, during which the Northern Ireland economy will be severely impaired and the much-valued and sacrosanct peace undermined. In addition, the final determination under the dispute resolution procedure is made by the ECJ, which not everyone in the UK has full confidence in.
I am pleased to hear that the negotiations have taken a more constructive tone, both concerning third-party status for the UK and the designation of goods at risk, by the Joint Committee. If this continues to be the case, Part 5 will not be needed. I sincerely hope that this proves to be the outcome, but until the negotiations are completed, I cannot support the removal of these clauses.
Lord Mackay of Clashfern (Con) [V]
My Lords, first, I want to say how sad I am at the passing of the noble Lord, Lord Sacks, who was a great member of our community in this country and a very excellent Member of our House. It is a very sad day for us. He stood up for faith and he explained faith in a way that very few were able to do.
In my view, the rule of law is a fundamental part of our constitutional arrangements; that extends to international law as well as our domestic law. During my time as Lord Chancellor, I was privileged to visit a number of countries where it was obvious that our national reputation was built on that fact to no small degree. I confess to my reaction of shock when I heard the Secretary of State for Northern Ireland intimate the proposal that is the subject of these amendments. Parliament is, of course, sovereign in domestic law. Since the House of Lords decided in Anisminic that the then common form of clause-protecting decisions from intervention by the courts protected only good decisions, such protective clauses have become rarer.
It is also of fundamental importance in the international effort to preserve peace in the world. Your Lordships will remember the heavy burden borne by the noble and learned Lord, Lord Goldsmith, in having to give advice on the relevant international law relating to Iraq. I find it poignant that we are debating this immediately after our national recognition of the tremendous cost of war inflicted on our nation. I should of course make it clear that there are lawful ways of getting out of a treaty, as provided by the Treaty of Vienna.
I do not wish to take any part in the discussions taking place tonight, including by my predecessor—whom I am glad to follow—into the situation that arises on the present discussion of the protocol. In my opinion, however, the withdrawal agreement, and the Northern Ireland protocol in particular, make it as plain as language can that its provisions are without prejudice to the provisions of the 1998 agreement in respect of the constitutional status of Northern Ireland. That principle can be used in the proper interpretation of the somewhat conflicting provisions that exist in the protocol itself, but the point is that it makes it absolutely plain that the 1998 agreement is to be respected as part of, and as a prerequisite to, the implementation of the agreement. I therefore consider it unnecessary to say, as this part does, that the Government authorise the possible breach of international law.
Lord Moylan (Con)
My Lords, it is daunting to speak after the noble and learned Lord, Lord Mackay of Clashfern, and to find myself disagreeing somewhat with a former Lord Chancellor. I am not a lawyer; I feel as though I have stumbled into a convention of highly distinguished lawyers. Had I stumbled into a convention of highly distinguished grocers discussing this subject, they may of course have taken a rather different tone and approach to the practicalities of the matter.
At the heart of this claim about the rule of law is a statement made by the noble and learned Lord, Lord Judge, in his speech at Second Reading, that the rule of law is indivisible. This is not a legal point but a point in the philosophy of law, and it is highly contestable. The implication is that a breach of international law, however small, will lead to, for example, a rising murder rate in Scotland or the reckless parking on double yellow lines of vehicles in Birmingham—or, indeed, that the Government of China might observe their obligations better if we did not pass this Bill.
However, people outside this House understand that that is not how law works. They understand that international law is a distinct realm in which practical relations between states are codified but do not endure if they place intolerable burdens on one party. That brings us to the substance of this part of the Bill: the intolerable demands being placed on the coherence of the United Kingdom by the manner in which the European Union is seeking to interpret and implement the Northern Ireland protocol.
Some noble Lords, in talking about this in relation to another treaty—the Good Friday/Belfast agreement—presented the alternatives as straightforward: either punctilious observation of the Northern Ireland protocol or the return of the bomber and the gunman. In fact, that was very much the gravamen of the speech made by the noble Lord, Lord Hain, at Second Reading. This is a simplistic view of the state of affairs in Ireland; it rests on the fallacy that the Good Friday agreement requires the absence of a goods border on the island of Ireland. As the noble Baroness, Lady Hoey, said, that simply is not true; the Good Friday agreement says nothing at all about goods borders on the island of Ireland. It says a great deal about the principle of consent of both communities—a principle that seems to have gone seriously astray—but about goods borders it says nothing at all.
In those circumstances, when challenged, people who take that view refer not to the text of the Good Friday agreement, where they do not find such a mention, but to its context. You cannot insist on the detailed written text of the Northern Ireland protocol while ignoring the detailed text of the Good Friday agreement and instead appealing to its context. The truth is that we have entered into a mesh of largely conflicting treaties. They do not mesh well, and the question is not whether some of those principles are going to go but which will. I noticed that, when the noble Lord, Lord Newby, spoke, he quite happily cast away the principle of unfettered access of trade between Northern Ireland and Great Britain. He does not believe that it can exist in practice, but that is because he prefers one interpretation of that complex and contradictory agreement to another.
It is an understatement to say the situation in Northern Ireland requires details and nuanced handling. An illustration of that emerged even after that debate, with the breaking news that the First Minister and Deputy First Minister of Northern Ireland, representing the DUP and Sinn Féin, had written jointly to the European Commission to object most strongly to the idea that supermarket vehicles travelling from Britain to Northern Ireland might have to be subject to border checks—but it is entirely within the Northern Ireland protocol that they should be. It is a subtle situation in Northern Ireland; if you can unite the DUP and Sinn Féin on that point, it shows that simplistic views need to be avoided.
What we face is a determination, dating back to 2016, that the EU take economic control of Northern Ireland, despite the fact that even that is contrary both to the Good Friday agreement and the EU treaties themselves, all of which recognise that Northern Ireland is fully part of the sovereign territory of the United Kingdom. I am afraid that too many Members of your Lordships’ House have adopted that view. My own view is that I do not agree with them and that it would be nice if a few more Members of the peerage of the United Kingdom actually spoke up for the United Kingdom.
Lord Carlile of Berriew (CB) [V]
My Lords, on this anniversary of Kristallnacht, when some of us mourn the cruelty of the death of grandparents we never knew, I join in expressing my sadness at the death of the late Lord Sacks, a truly inspiring member of your Lordships’ House. He bore his greatness well.
It is a pleasure to follow the attractive speech of the noble Lord, Lord Moylan, disagree with him though I do. I simply suggest to him that I suspect that hungry lawyers and busy grocers share more instincts than he imagines.
I am persuaded by the clarity of my noble and learned friend Lord Judge in his presentation of the proposition that we should expunge this part from the Bill. Indeed, it is my view that we should stand fast, and make it absolutely clear to the Government that we will do everything in our power, however long it may take, to achieve that end.
I listened with great interest to the eloquent and ingenious arguments, presented in particular by the noble Lord, Lord Lilley. In my view, the noble Lord fails in those arguments for at least three reasons. First, these proposals are a deliberate and unnecessary flouting of international legal obligations which the European Court of Justice would never support. If there was any implication in what he said that it would, the noble Lord is simply wrong. Secondly, he offers no justification for the breathtaking and extraordinary use of secondary legislation on the fiat of a Minister to break treaty obligations, especially as such secondary legislation is unamendable. Thirdly, and this is a point made by my noble friend Lord Pannick, there is the issue of the arbitration provisions. To avoid those provisions is simply an abuse of process, and nothing less.
Do we learn anything from what is happening elsewhere at the moment, in relation to these proposals? Why has President-elect Biden’s election engendered such support across the democratic world? What unfolded in recent days, as I saw it in many hours of the day and night while watching the extraordinary output of CNN, promises the world the speedy return by the United States to the honouring of treaties, multilateralism, and to trust between nations. Trust between nations, however, requires one to trust the Governments of each of those nations.
I remind the House of President-elect Biden’s long-standing commitment to the Good Friday agreement, and that his commitment, and his understanding of it, will engender intensive scrutiny by the United States of the United Kingdom’s adherence to all its obligations, including the Good Friday agreement. As my noble and right reverend friend Lord Eames said in his powerful speech, the Belfast Protocol is a living instrument, and a very sensitive organism, which we should not damage in the course of negotiation tactics. The prospect of a United States-United Kingdom trade treaty, so important to this country, will not turn on the feeding and the properties of chickens.
Such issues are always negotiable. It will depend on the perceived adherence of the United Kingdom to important treaty obligations and on what the United States thinks of the integrity of the United Kingdom. Why would one make a treaty with an untrusted partner? There are plenty of other potential partners around.
My conclusion is that this part of the Bill has no place in our legal tradition. Indeed, it damages our economic interest and reputation in a key area of commerce—the extraordinarily successful legal services provided by British lawyers and the British legal system all around the world. Worst of all, as my noble and right reverend friend Lord Eames made clear, it threatens stability in Northern Ireland, which was hard won, to the credit of all sides there.
There was no manifesto commitment to break international law in this way. Rather like President Trump’s allegations of electoral irregularities, this part of the Bill is completely unsupported by anything remotely ascribable as cogent evidence. I will vote against all these clauses standing part of the Bill. I hope others will join with me in any future debates in standing firm on these extremely important issues of principle.
Lord Shinkwin (Con)
My Lords, may I begin by joining with the noble Lord, Lord Carlile of Berriew, and other noble Lords in mourning the loss of our noble friend Lord Sacks?
I shall speak to Clauses 44 and 45. I may be being thick but, for me—and I think for millions of people who voted for the UK to leave the EU—these clauses go to the heart of why we felt there was no alternative. I did not vote to leave the EU almost four and a half years ago because I hate Europe or because I am xenophobic. I did so with a heavy heart because I believed that, unless and until we had left and the transition period had passed, British democracy would be inexorably undermined by a lack of transparency, accountability and control. I did so because I believe in a stronger, not an ever weaker, Parliament, in government that is more accountable, not less, and in a people that thus have more power, not less.
The idea that we should surrender in the final round makes no sense at all. For that is what we would be doing without this insurance policy. Whether we like it or not, it is an inescapable fact that, without it, the integrity and viability of the United Kingdom of Great Britain and Northern Ireland could be at risk. Of course, who in your Lordships’ House does not hope that we achieve a favourable outcome through the Joint Committee process? However, this is not guaranteed by any means.
It is worth reflecting on the practical consequences of an unfavourable outcome. My noble friend Lord Lilley posed the key question: what would it mean for people’s lives and livelihoods in Northern Ireland? As the noble Lord, Lord Dodds of Duncairn, made clear, it would have a terrible impact.
Essentially, damaging defaults would come into effect, which would achieve the very opposite of what noble Lords, the Prime Minister, the Taoiseach, the First Minister and Deputy First Minister of Northern Ireland, and the President-elect of the United States all reject—the effective creation of a hard border in the Irish Sea between Great Britain and Northern Ireland. If I may, I would like to take this opportunity to say how excited I am personally by the election of the first woman and person of colour as Vice-President of the United States. It must mark one of the most exciting milestones in my lifetime and is a testimony to the overwhelming, inevitable logic of equality.
If Michel Barnier or President-elect Biden want to protect Northern Ireland’s integrity and equality through the Good Friday agreement, surely they must accept that a hard border would not achieve that objective. It is therefore essential that we safeguard the gains that have been made and ensure there is a safety net in place to protect the people of Northern Ireland—their jobs, their livelihoods and their financial security—should the EU fail to agree reasonable solutions in the joint committee. As my noble friend Lady Noakes said, these clauses do that pragmatically. I agree with the noble Baroness, Lady Hoey. If parliamentary sovereignty is to mean anything, these clauses must stand part of this Bill.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, earlier today in the debate on the Agriculture Bill, there was a great deal of rightful praise for the impact of your Lordships’ House, particularly on the crucial issue of trade standards. That reflected 90 hours of debate. We are already well into double figures on this Bill, and that is a good job: first, for the coverage of crucial issues, particularly the effective destruction by the Bill in its current form of the devolution settlements canvassed in earlier sessions; and, secondly, because the time taken to get to these amendments has meant that there is a positive global atmosphere for today’s debate, to which the noble Lord, Lord Carlile of Berriew, has just alluded.
I want to respectfully disagree with the noble Lord, Lord Howard of Lympne, who said that nothing had changed since Second Reading—although he was right to say that nothing had changed in the government position. But the global picture has changed. Had this debate been happening even a week ago, the atmosphere and environment in which it was occurring would have been very different—far more fearful. It would have felt more like the Committee was swimming against a fast-flowing current. But now the Government are the side in this debate that looks isolated and exposed. The global tide is running in the opposite direction, and they are high and dry.
The technical issues have been very clearly set out by major legal minds, and I do not intend to draw on the highly useful multiple briefings received from the major legal institutions of the nation—backing the action of the noble and learned Lord, Lord Judge, in particular—to repeat what they have already said. I simply offer the Green group’s support for all the amendments in this group tabled by the noble and learned Lord, Lord Judge, and for all the non-government amendments, and I will reflect on the national, and indeed global, reasons for your Lordships’ House to follow the lead of the noble and learned Lord on Part 5.
Today dawned with the dangerous forces of disorder and decay—those who want to sweep aside the rule of law and who demonise the vulnerable and the different, building walls and seeking to install nets to keep them out—very much on the defensive. Donald Trump has lost the US presidential election. The EU has decided to impose sanctions and deny funding to members that defy the rule of law—a move very clearly directed at Hungary’s far-right regime. In Poland, an outpouring of anger led by women against a further tightening of tiny abortion rights has developed into a far broader challenge against regressive forces. In Thailand, young people are standing up against the long-term repression of the combined forces of the military and tradition.
By backing the noble and learned Lord, Lord Judge, the Committee can today begin to point the UK in the direction that the rest of the world is travelling: towards restoring a democratic culture and the rule of law. That restoration protects the Good Friday agreement, that crucial bedrock of security and communal trust. That the unelected House—a phrase we hear a lot from the last-stand defenders of our isolated Government—should be doing this is, however, a pointer to the future.
Lord Campbell of Pittenweem (LD)
I begin by saying to the noble Lord, Lord Moylan, that I spend a lot of my time defending the United Kingdom of Great Britain and Northern Ireland, and I fear that the task is made more difficult on an almost daily, or perhaps weekly, basis by the fact that the Prime Minister appears to have little sensitivity to what is happening north of the Tweed.
Towards the end of his comprehensive speech at Second Reading, the noble Lord, Lord True, described the position of the Government as being an acceptable one of balance between the union of the United Kingdom and the rule of law. With that analysis I profoundly disagree. The truth is that the Government’s position and their proposed legislation have had the effect of putting these two not into balance but into competition, one with the other.
I will begin by examining the purported balance that the Government claim to have struck. They claim that, to the extent allowed by Part 5 of the Bill, which removes otherwise incumbent obligations, the Government will have increased freedom to act in relation to the departure from the European Union and, in particular, will no longer be bound by legal instruments that they negotiated as of right and successfully recommended to Parliament. It is worth considering the motive for the adoption of this position. It lies in the allegation by the Prime Minister that the European Union has acted in bad faith and may continue to do so. But, just as President Trump has produced no evidence to support claims of a similar character about the presidential election in the United States, the Prime Minister also has signally failed to support his claims.
Two fundamental questions remain unanswered. Where is the evidence that the European Union has acted, or may continue to act, in bad faith? This question has been posed on several occasions since the Second Reading debate, and yet it has still brought no answer. The second question is: why are the available arbitration and dispute-resolution procedures simply to be discarded? What sort of confidence will any subsequent party to an agreement with the United Kingdom which contains similar powers of arbitration and dispute resolution have if we discard them in circumstances in which, so far as can be established, there is no good reason? If you are asked to judge on bad faith, who would you regard as being more or less subject to bad faith—those who set off with a unilateral legislative ambition or those who stick to the terms of an agreement, in particular involving arbitration?
The truth is that the Government’s reasons for departing from the cardinal observance of the rule of law and the provisions of the withdrawal agreement lack both substance and credibility. However, in assessing balance, it is not enough to look at the flawed motives of the Government’s position: we must have regard to the consequences, actual and potential. Without qualification, I say that a breach of international law by this country weakens, at large, the rules system on which this country has steadfastly based its policies, both internal and external. We are justifiably renowned for our adherence to the principle of pacta sunt servanda, or “promises must be kept”, although I confess that, on some occasions in present circumstances, ignorantia juris neminem excusat, or “ignorance of the law is no excuse”, might be a more appropriate way to describe those in the Cabinet Office who are apparently the authors of the legislation that is so controversial in our debate.
The noble Lord, Lord Carlile of Berriew, has dealt with the contribution of the noble Lord, Lilley, as the noble Lord, Lord Pannick, also did. I will add two observations. First, both Germany and the European Union have written constitutions; we have a partly written one with more flexibility. Therefore, what happens in Germany or the European Union does not necessarily form an impressive precedent.
Of course, at the back of these two decisions, to which reference was made, was the question of necessity. Where is this question of necessity in the circumstances that we are discussing in this debate? A breach of international law, even if only in contemplation, damages our reputation and, more to the point, undermines our ability to hold others to account. It also damages our relations with our allies, damages our wider interests and divides Parliament but, perhaps more fundamentally in this case, divides the party of government.
In response to Part 5, the European Union has taken the United Kingdom to law. Who believes that the action of our Government in respect of the controversial legislation and the response of taking the United Kingdom to law will make negotiations easier for the trade deal that is absolutely fundamental to the economic and trade policy of the present Government? We are not trying to please the President-elect of the United States but to ensure that he and, indeed, the Speaker of the House of Representatives, who have already voiced adverse criticism, may be persuaded to grant the trade deal that forms such an important part of the Government’s trade policy. Not to accommodate their anxieties or understand the importance of the Irish question in domestic American politics is foolhardy, in my view. A breach of international law, even if only in contemplation, that imperils that trade deal is wholly contrary to the interests of the United Kingdom.
However, the truth is that the weight of the argument in this matter is wholly against the Government because there is no equivalence between what they seek to claim by way of legislation and the consequences of such a claim being allowed. The noble Lord, Lord McCrea, who is no longer in his place, referred us to scripture. If we are talking about balance, I refer the House to Daniel, chapter 5, verse 25: “Mene, Mene, Tekel, Upharsin”—or, “You have been weighed in the balance and found wanting”. That is the right epitaph for this piece of legislation.
Baroness Fox of Buckley (Non-Afl)
My Lords, I concede that I am new here, but I will issue a warning: outside this place and the Westminster bubble this row over Part 5 is seen as a last-ditch battle in the Brexit wars—yet another attempt at using legalese to delay the realisation of finally being free of the EU’s jurisdiction.
I beg to differ with the noble Lord, Lord Howard, because a certain type of remain supporter, having lost at the polls, seems keen to use this House to kill the Bill. Again and again, I have heard noble Lords say that this House must block, block, block. Whether or not Brexit is the reason for that, more humility is required in this House. Its job is not to act as a block to democratic decisions, and it does so at its peril.
Surely, an important lesson from the referendum result is that British voters rejected interference by the unelected in their decision-making powers. After all, the demand for more sovereignty and democracy was the decisive driver behind the revolt of 17.4 million leave voters. This Bill should be seen as a perfectly moral and good-faith attempt to temper a treaty that threatens the UK’s geographic integrity as an internal market, and as a democratic mechanism to ensure that political sovereignty is safeguarded.
The controversial part of the Bill is posed in the most dramatic terms around the morality of abiding by international law. At its heart, however, as in everything to do with Brexit, it is about who rules—who has the power to make decisions in a sovereign country. Yet opponents here today seem to believe that national sovereignty and democracy can legitimately be constrained by simply repeating the mantra about upholding international law. That phrase should not, however, be deployed as a counter to national law made by our elected Parliament. This is not a technical, or even a legalistic, question: it is one of principle.
The key question is what should take precedence in a democratic nation state: international law or the will of the democratically elected Government? To those of us who believe in democracy, the answer is clear: democratic will trumps international treaties every time. If we are to live in a democracy, national Parliaments that are elected by, and accountable to, their peoples must have the power to make national law and to seek to amend or override any external rule that might compromise that.
On the broader question, I have heard lots of fine speeches about the ideals of international law; it is talked about with reverence, as if it was a secular form of God’s law, a power above and beyond the grasp of mere mortals such as the voters. In reality, it is often—to quote one commentator—“Cooked up by diplomats in secret, smoke-free rooms and enforced by unaccountable judges”. Regardless of that, international law should never be used to supersede the process of democratic national law-making. Too often, however, it is turned into a supranational instrument for undermining national sovereignty. We cannot let this place endorse that approach.
Noble Lords must not get me wrong: Prime Minister Boris Johnson got himself into this pickle last year, by endorsing the shoddy withdrawal agreement—enthusiastically selling it as “oven-ready” and signing it, warts and all. At that time, and since, many on both sides of the argument have pointed out that it contains intolerable restraints on the exercise of sovereign decision-making. I myself favour repudiation, but the Government have opted for a legislative approach to the conundrum because, importantly—this is a key point—under pressure from Brexiteers, Boris Johnson eventually contested and won the December 2019 general election on a manifesto that effectively repudiated part of the withdrawal agreement. He pledged that the UK would not be tied to EU rules. The Government are now trying to keep that promise to the electorate, and that, at least, is honourable.
Today, great play has been made of a binding promise to the EU. The main binding promise that should concern us, however, is the one made to the electorate. The aim of this part of the internal market Bill, therefore, is to give the UK Government the power to override those aspects of an international treaty that might, for example, bind Northern Ireland to a range of EU rules that could, if not tempered, hand arbitration of disputes to the Court of Justice of the European Union. It is essential that the Government have the power to counter such egregious limits to UK sovereignty.
Lord Garnier (Con) [V]
My Lords, unlike the noble Baroness, Lady Fox of Buckley, whose vigorous reasoning I respectfully reject, I will be voting to remove Clauses 42 to 47 from the Bill. I am privileged to follow the noble and learned Lord, Lord Judge, my noble friend Lord Howard of Lympne and many other noble Lords from all parts of the House who have deprecated Part 5.
The noble and learned Lord, and those who have supported him so far, advanced compelling arguments that appeal both to my head and my heart. The arguments of the noble and learned Lord, Lord Judge, were precise, they were clear, they were right, they were devastating—and they left no room for contradiction. I agree with him.
At Second Reading I regretted the inclusion of Part 5 in the Bill. To repeat at length what I said then will not make any difference to the quality of my arguments, good, bad or indifferent, although I have subsequently discovered that my views were thought by some, although not all, close to the Government to be—let me say—extravagant. If that is what they think they are free to do so, although I have not usually found this Government’s closest advisers to be quite so delicate when they are offering their views. I hope I can tell the difference between a row and an argument—and I am advancing an argument.
At Second Reading, I did no more than advance some orthodox and widely accepted arguments against the inclusion of Part 5 in the Bill on rule of law grounds. I do so again. I also noted that the arguments put forward in and out of Parliament by the Government and their supporters for the inclusion of these clauses were risible and unconvincing. They still are. Like my noble and learned friend Lord Clarke of Nottingham, I am disappointed that nothing has changed. The proponents of Part 5 are beginning to look like post-revolution Bourbons.
Maintenance of the rule of law domestically and internationally by any United Kingdom Government, or breaking a treaty passed into British law, is no small thing and cannot lightly be tossed aside as though of no account or merely a matter of tactics in a negotiation. Moreover, denying the people access to the courts and independent judicial arbitration of disputes, or giving Ministers untrammelled executive power, cannot be acceptable. Part 5 does all these things. Eliding the sovereignty of Parliament with the international law obligations of the Government is both a confusion and a delusion. Passing the decision on when to break our legal obligations from the Executive to the legislature makes no difference and provides neither defence nor mitigation. I do not resile from a word I said at Second Reading.
No one in agreement with the noble and learned Lord, Lord Judge, is so naive as not to understand the political imperatives driving this Government in relation to Part 5, although they are imperatives of their own making, flowing directly from a treaty they freely entered into and passed into UK law within the last 12 months. This has no parallel with the European example cited by my noble friend Lord Lilley, as simply explained by the noble Lords, Lord Pannick and Lord Carlile.
I also know that the author of Part 5, our modern-day Thomas Cromwell, as I implied at Second Reading, is not on the Government Front Bench in your Lordships’ House. I entirely accept that my noble friends, as Ministers bound by collective responsibility, have no discretion or room for manoeuvre in government. I, on the other hand, am fortunately free to acknowledge some different responsibilities—to the rule of law principles that guide me as a member of the Conservative Party, as a legislator, as a lawyer and as a former law officer. I cannot in conscience support these clauses; they must come out of the Bill.
Baroness Neville-Rolfe (Con)
My Lords, I am glad to speak after my noble and learned friend Lord Garnier, although we come at the subject from slightly different directions. I have sat through much of the proceedings on this Bill. I have quite a few reservations, which I hope may be reflected in amendments or reassurances on Report. However, on Part 5 I have a great deal of sympathy with the Government and I thought my noble friend the Minister summed it all up very well in his statesmanlike speech at Second Reading.
The Government have come forward with safety net measures in domestic law that allow Ministers to protect the UK’s internal market, our union with Northern Ireland and the Northern Ireland peace process, but only if needed. There will be a vote in the other place before these are used, and any SI will be subject to affirmative resolution. To pick up on something the noble and gallant Lord, Lord Stirrup, said in a strong speech, it is now half way to that oven-ready Bill-in-waiting that he felt would have attracted much more sympathy across this House.
Of course, had everything worked smoothly in the exit negotiations, had the EU acted in those negotiations as though dealing with close friends and allies, had the previous Administration been more nimble in defending the UK interest, and could everything be guaranteed to continue to work smoothly, there would be no need to adopt the provisions in Part 5 to which many take exception. Unfortunately, none of those possibilities has yet proven to be the case. Accordingly, as my noble friend Lord Hunt of Wirral and the noble Lord, Lord Skidelsky, said at Second Reading, we should not tie the hands of the Government at this time. We should give them the elastic they need.
I am grateful for the work of the EU Committee, on which I have the pleasure to sit and support the noble Earl, Lord Kinnoull, and the work of its excellent staff on the complexities of the Northern Ireland situation and its special protocol which has helped to inform our debates. The problem—and the reason the Government are seeking the powers in Part 5—stems, I believe, from the unsatisfactory nature of the withdrawal agreement, but only if the EU were to take a disreputable and irresponsible stance. Unfortunately, that possibility cannot yet be entirely excluded. Such a development would make life very difficult for those businesses which operate in Northern Ireland and for goods and food coming in and out over either border. Indeed, today’s debate and the arresting contributions from the noble Baroness, Lady Hoey, and the noble Lord, Lord McCrea of Magherafelt and Cookstown, have heightened my concern about the risks to the Northern Ireland economy and the Belfast agreement.
The joint committee has wide powers to prepare for and sort out any mess but, regrettably, it has not done so. Perhaps it has no intention of doing so while vital and delicate discussions on an FTA continue. Perhaps my noble friend the Minister can report on discussions in that joint committee, where there are concerns or disagreements and whether there is any hope, even now, that the difficulty will be overcome so that the Part 5 provision will become unnecessary.
With the promoters of these amendments having demonstrated their nobility of mind in the earlier discussions at Second Reading, I was hoping for a full discussion in Committee of the wide-ranging powers being taken in Part 5 and not just a rerun of the debate of principle of 20 October. The noble Lord, Lord Pannick, touched on this in his speech and I am sure my noble friend the Minister, when he responds, will address some of our concerns about the breadth of the power. But, today, I think we should celebrate the fact that there was a startling breakthrough on a coronavirus vaccine. I have some hope that there will also be a breakthrough on the FTA with the EU and that Part 5 will not now be needed. In the meantime, I will be supporting the Government.
Lord Ricketts (CB) [V]
My Lords, I apologise that I was unable to participate in the Second Reading debate. Many noble Lords this evening have set out with great power and authority the legal, constitutional and moral objections to this Bill. My purpose in speaking is to take a slightly different tack—which may be a good thing at this point in the debate—and to look at the operational damage that Clauses 42 and 47 of this Bill, if enacted, would do to the effectiveness of our foreign policy.
I do that on the basis of 40 years of experience representing this country as a British diplomat. I know at first hand that Britain has been widely respected around the world as the country that evolved the concept of parliamentary democracy and the rule of law and has played such a formative part in developing the body of international law as we now have it, from the Geneva conventions on the laws of war to the International Criminal Court.
My point is that this is more than an issue of the country’s reputation. Our power of example has strengthened our powers of influence in the world. It has given our country the authority to demand that other countries uphold their international obligations. It is part of the reason, for example, that Britain has been able to play such a leading role in the UN Security Council in crafting countless resolutions, holding to account those who break their international commitments and often imposing sanctions on them.
As other noble Lords have said, we are now standing on the cusp of a new American presidency, with a President-elect who is a passionate believer in the rule of law and in resolving disputes between countries through agreement. There is a great deal of important work that we can do together. An early priority with the Biden Administration should be to bring Iran back into compliance with the agreement it signed with the US, the UK and others in 2015. But how can we preach to Iran what we do not practise at home? It would be the worst possible start to the British partnership with a Biden Administration intent on rebuilding institutions of the rule of law if the Government now plough ahead with Part 5 even after Mr Biden has explicitly warned of the dangers. In response to the noble Baroness, Lady Hoey, this is not about pleasing a new US President; it is about effective co-operation with a country that is now, once again, intent on helping to resolve the world’s problems through international agreement.
Viscount Trenchard (Con) [V]
My Lords, I agree with my noble and learned friend Lord Clarke of Nottingham in so far as he praised the speech of my noble friend Lord Lilley twice for its pragmatism. Beyond that, I find myself in agreement with my noble friends Lord Lilley, Lady Noakes, Lady Couttie, Lady Neville-Rolfe and Lord Shinkwin and the noble Baronesses, Lady Hoey and Lady Fox of Buckley, that this Bill, including Part 5, is indeed necessary.
I salute the Government for their good sense in dealing now with the inconsistencies in the withdrawal agreement. It is regrettable that the inconsistencies were not cleared up at the time of signing that agreement, but it was reasonable to believe that the EU’s negotiators would act in good faith in their efforts to reach an agreement on the future relationship that would have solved most of the inconsistencies. It seems that it remains difficult for Mr Barnier and his team to accept that the UK is becoming a sovereign, independent country and will not accept terms that effectively require us to continue to adhere to EU regulations, especially concerning state aid, nor will it accept the jurisdiction of the European Court of Justice in the determination of any part of our agreement on our future relationship or any connected enforcement proceedings.
I do not share the strong negative reaction of many noble Lords to the Government’s introduction of this Bill, for the reason that it seeks to disapply certain provisions of the withdrawal agreement signed by the UK and the EU in September 2019. I would argue that entering into the withdrawal agreement without first agreeing the framework for our future relationship with the EU was in itself a breach of Article 50 of the Lisbon treaty. Does the Minister agree that it could be argued that the signing of the withdrawal agreement and indeed the subsequent enactment of the European Union (Withdrawal) Act 2018 clearly breaches international law?
The noble Lord, Lord Kerr of Kinlochard, was wise to draft Article 50 as he did. I regret that the European Commission ignored its terms and the previous Government acquiesced in their insistence that agreeing the framework for our future relationship should be deferred. This makes it much more difficult to agree the future relationship, as we are now trying to do with very little time remaining before the end of the implementation period. If we had observed the terms of Article 50, a significant part of the provisions of this Bill, especially those that affect the Northern Ireland protocol, would not have been necessary. Furthermore, David Wolfson QC argues convincingly that the sovereignty of the Crown in Parliament means that the Government are bound to proceed with any Act of Parliament even if it should give rise to a claim under an international treaty. Mr Wolfson argues that there would be
“no breach of the rule of law.”
A similar position has been supported by Jolyon Maugham QC, who has argued that parliamentary sovereignty enables Ministers to advise on and recommend, and Parliament to enact, legislation that breaches international law. He observed:
“Whether it is a ‘good idea’ to breach international law”—
by implementing these measures—
is a political judgment”.
The noble and learned Lord, Lord Falconer of Thoroton, said that the passage of this Bill in this form risks making the UK “an international pariah”; many noble Lords have expressed a similar view. However, the whole world knows the UK is still negotiating the basis of its exit from the UK. These negotiations continue; in the event that we fail to agree a free trade agreement, it will be well understood that the Government have a duty to ensure that the integrity of the United Kingdom is protected.
I respect the view of noble Lords who think otherwise, including the noble Lord, Lord Ricketts, but I just do not believe that the UK’s well-deserved reputation for honouring its word will be negatively affected in any way, any more than the German constitutional court’s ruling on the bond-buying programme of the ECB—that European law which conflicts with the German constitution may be overridden—affects the reputation of the Federal Republic of Germany as a well-behaved international citizen. The decision of the Court of Appeal in 2018 in response to the challenge by the Gulf Centre for Human Rights that ministerial duties in international law were not truly legal duties offers another example of the same point.
The noble and learned Lord, Lord Judge, and his co-signatories seek to remove all six clauses that constitute Part 5 of the Bill. This would mean that the ambiguities contained in the withdrawal agreement would endure, and the resulting uncertainty arising from the possible erection of a customs border in the Irish Sea would clearly breach the Belfast agreement. The noble and right reverend Lord, Lord Eames, in his eloquent speech proposing Amendment 161, argued that this Bill would upset and alter the basis of trade within the United Kingdom. I admire the great contribution that he has made, and continues to make, to the peace process. I was impressed by his arguments. However, I noted that he did not acknowledge at all that the Northern Ireland protocol itself upsets and alters the basis of trade in the UK.
I agree strongly with the noble and learned Lord, Lord Mackay of Clashfern, that compliance with the Belfast agreement should be regarded as a part of, and a prerequisite to, the withdrawal agreement. I support Amendments 158 and 159, which would create an additional exclusion from the prohibition imposed by Clause 43, but the reasons for checks following a threat to food or feed safety would be well understood. I understand the intention of the noble Lord, Lord Hain, in Amendments 162 and 163; I sympathise with him. However, other clauses of the Bill already prohibit discrimination against goods produced in any part of the United Kingdom, so his amendments are superfluous. I look forward to the Minister’s comments on these and other measures.
Lord Howard of Rising (Con)
My Lords, I have read an enormous amount of very learned opinion, produced by many distinguished members of the legal profession, saying that Part 5 of the present Bill does not break international law—enough opinion to be absolutely clear that, however many people claim that the Bill is illegal, serious doubts remain over the claim that Part 5 is illegal, in spite of the many eloquent arguments for that case that have been put forward this evening.
Whatever view you take of Part 5—illegal or legal—there is sufficient doubt over the rights and wrongs that loyalty to one’s country demands that the wishes of the Government should take precedence over other views. The House should not get in the way of a Bill that will be of invaluable assistance to strengthen the hands of our negotiators in these last crucial days and weeks of the negotiations. The Bill will not make this country some kind of pariah, nor will we lose respect, as some have falsely claimed. The world will see it simply as part of us leaving the European Union.
It is not the role of this House to overturn the wishes of the other place, especially where the grounds for such action, as today, are not clear-cut. Furthermore, the other place has conceded that there must be a vote in Parliament before Part 5 is acted on. The ultimate authority in this country is the Queen in Parliament. It is what the British people have voted for, and we must do everything possible to ensure that this remains the case.
Lord Morrow (DUP) [V]
My Lords, I have listened intently for over four hours to all the fine speeches and contributions that have been made in your Lordships’ House today. The Belfast or Good Friday agreement, whichever you prefer, has largely featured; our debate has been dominated by some excellent speeches both for and against it. However, like the noble Baroness, Lady Hoey, I have been asking myself whether Members have actually read the Belfast agreement. I have it to hand. I do not fully recognise in it some of the comments that were made.
I speak to your Lordships this evening from a border town. I could be at the border in 15 minutes. I have lived all my life here. We know what goes on at the border and what has happened in the past 30 or 40 years, with all the activity that has carried on there. I listened intently to the two excellent speeches of my colleagues, the noble Lords, Lord Dodds and Lord McCrea. They have something in common: they are both survivors. The noble Lord, Lord Dodds, had an attempt on his life when he went to visit his very sick son in hospital. The noble Lord, Lord McCrea, knows what it is to have his family home spread by automatic gunfire in an attempt to wipe out him and his family. So we know all there is to know about the border. Do any of us want to go back to those days? Absolutely not. Today, we have heard the lawyers and the philosophical arguments but all we want is a practical, common-sense solution. If a noble Lord can point out to me what is wrong with that, I will be ready to listen.
My remarks this evening will focus on Amendment 161 in particular. Although it reads okay, it is a contradiction of other parts of the Bill. My party has no objection to the content of the amendment, but it is important that there is continuity throughout the Bill. It is totally contradictory to insist on this type of amendment to this clause but to tolerate similar clauses elsewhere in the Bill.
Lord Naseby (Con)
My Lords, I am not a lawyer. Nevertheless, I am in my 47th year in Parliament, of which 23 were as the Member of Parliament for Northampton South. My first majority was 179. As an aside, bearing in mind what has been happening in the States, on the first count I lost by 183. On the second count, I won by seven and on the third count by 179—so who knows what might happen in the States?
In 1979, I was honoured to be a Parliamentary Private Secretary in Northern Ireland. It was a delightful two years, I have to say. It taught me patience and understanding, and it taught me to understand the sensitivities and, above all, the commitment of the vast majority of the citizens of Northern Ireland to the United Kingdom.
In May 1992, I was proposed, unopposed, to be Chairman of Ways and Means and Senior Deputy Speaker in the other place. A couple of months later, I found myself facing the Maastricht Bill—one of the two longest Bills on the Floor of the House since the war. There were 500-plus amendments and four clauses. It was on the Floor of the House for 25 days, including three all-night sittings.
Three principles drove me and my two deputies. First, there should be no tedious repetition—I wonder whether that should not be included in your Lordships’ House. Secondly, the House should make progress. We did, but we only had four clauses. Above all, the clerk said to me, “You have to remember, Michael”—I was Michael Morris then—“that the basic principle of our constitution is that ultimate sovereignty lies with the Crown in Parliament”. She drilled that into me and I have never forgotten it. It is that sovereignty to which the Government are answerable and which the rule of law upholds.
Bearing in mind this debate, during the weekend I decided to investigate in depth the legality of any Government introducing any Bill that may or would breach a treaty obligation. As it happens—because I have a few friends in the law—my attention was drawn to an article written by a highly respected QC, David Wolfson. On 10 September, he wrote an article in the Spectator. I will quote from one or two paragraphs. He says:
“The mere act of laying a bill before Parliament which, if it were passed into statute, would breach a treaty obligation (and would amend domestic legislation bringing that treaty obligation into effect in domestic law) is not itself a breach of the treaty or of international law. Nor would merely laying such a bill be itself a breach of the rule of law.
“If the legislature passed such a bill and it became an Act of Parliament, the rule of law requires the Government to proceed in accordance with it. That is what parliamentary sovereignty, or to be more precise the sovereignty of the Crown in Parliament, means. Whether passing such an Act of Parliament gives rise to a claim under the treaty ... is a separate issue. But again, there is no breach of the rule of law.
“And what is the alternative proposition? That a government is precluded by the rule of law from even laying a bill before parliament which, if passed, would put the UK in breach of a treaty obligation? Or is it to be said that the rule of law requires that such an Act of Parliament should itself be deemed by our courts to be unlawful or of no consequence?
“I see no legal basis for any such proposition. Such a bill and resultant Act of Parliament might be unwise or foolish or damaging to the UK’s interests (or wise or clever or a show of strength)—those are matters of political debate. But those are not legal questions. Nor can it make any principled difference to the analysis that—to take two points which have been made repeatedly over the past few days—the treaty in question was signed recently, or by the same government.”
Contracts—yes, they should be honoured. He says so and I believe that they should. I understand that there is a phrase: “pacta sunt servanda”. I had some difficulty passing O-level Latin. But a breach of contract does not of itself entail a breach of the rule of law. I certainly learned that in the commercial world. Breaching a treaty obligation because Parliament has so legislated does not do so either.
So none of this is to suggest, as some still say, that international law does not exist, nor that treaties do not matter. Of course it does—and they do. But for their part, the Government will argue that preventing part of the territory of the UK from being cut off economically justifies their approach, and I—and I suspect the vast majority of the British people—totally concur.
I also found out over the weekend, because I take a great interest in aeronautical matters, that Boeing is challenging the EU in the World Trade Organization court for breaking state aid rules regarding Airbus. To go back to the QC, he asserts
“a more basic—and (at least formerly) orthodox proposition: in our constitution, ultimate sovereignty lies with the Crown in Parliament. It is that sovereignty to which the government is answerable, and which the rule of law upholds.”
He then says quite clearly:
“I do not consider there is a breach of the law in the Government’s approach”
and, frankly, nor do I.
People are saying that we must remind ourselves occasionally that we are not the elected House. Some of us have had the privilege of serving in the other place. They have that responsibility, not us. We are a revising Chamber, and we should do so properly. At this juncture, I see no evidence that my Government are in breach of the rule of law.
The people of Northern Ireland require our understanding. I was so grateful to listen to the speech from a former friend, the noble Baroness, Lady Hoey, who has joined us.
Lord Hunt of Wirral (Con)
My Lords, I declare my interests, as set out in the register. I am very pleased indeed to follow my noble friend Lord Naseby. How right he has been to remind us, through his ministerial experience in Northern Ireland and by quoting the article by David Wolfson QC, of the importance of the issue of Northern Ireland, which has been evidenced by some very powerful speeches.
Even at Second Reading, as we discussed the underlying principles of this Bill, our focus was heavily drawn to Part 5. The principle underlying it is very clear: it sets out powers and requirements which I am sure that all of us, including the Minister, hope will never come into play. The intention—and this is a point of vital importance, especially as the Brexit trade negotiations enter the final furlong—is to send a clear signal about what is ultimately acceptable to the United Kingdom and what is not.
The term “backstop” has been deployed somewhat excessively during the protracted Brexit process, but this part of the Bill is just that—a backstop. It is no secret that I have always seen the democracies of western and central Europe as allies and friends— our most proximate and, increasingly, our most important allies and friends. The new Administration in the United States, when President-elect Biden takes office in January, will also very much want to see us in that context. None the less, in any negotiation, even with good friends and allies, it is vital to be absolutely clear from the outset, and consistently thereafter, about any “red lines”, any “lines in the sand”, or however else one might term points that are simply off limits and non-negotiable.
The Good Friday agreement, which I avidly support, acknowledges that Northern Ireland is part of the sovereign territory of the United Kingdom. The clear implication must surely be that Northern Ireland is, and shall remain, fully integrated into the UK single market.
Lord Fox (LD)
My Lords, it is a great honour to be speaking towards the end of this long debate, in which so many distinguished, wise and opinionated speakers have held forth. This debate complements the one we heard at Second Reading, which ended with an overwhelmingly large regret vote. Today, we have heard the legal reasons for objecting to Part 5 of the Bill. They were set out clearly by the noble and learned Lord, Lord Judge, and have been supported by legal Peers and others across the Floor. We also heard speeches explaining the effects of this Bill across the island of Ireland; I was particularly moved by the words of the noble and right reverend Lord, Lord Eames.
I am going to look elsewhere and focus on the politics, my subtitle being: “What were the Government thinking when they drafted this Bill?” It is a rhetorical question as I do not expect the Minister to answer. In today’s media round, Ministers were sent out to plug No. 10’s messages, one of which was that this Bill gives legal certainty. Well, it is certainly illegal but, as we heard very eloquently from the noble Lord, Lord, Carlile, the only certainty it brings is that the UK cannot be trusted.
We heard at Second Reading how little faith the EU had in the Prime Minister even before he climbed over and clawed past his predecessor to become Prime Minister. This Bill now confirms the European Union’s view and cements its distrust of the negotiation process. Does the Minister suppose this distrust has made sealing a UK-EU trade deal easier or harder? If it were going to help, we would, I suggest, have seen some movement by now; yet we still do not have anything that even this shameless Government can dress up and brand as a deal.
As we have heard, there is now a seismic shift across the Atlantic where the ground is getting very shaky for the PM. He is losing his perilous foothold and scrambling around as the UK slips down the future President’s to-do list. We should not be surprised. A law-breaking Government might have impressed President Trump but, when there is an Irish-American President in waiting, this Bill is not a good look. George Eustice, sent out this morning to shield the Prime Minister, was quick to say that if Joe Biden had read the Bill, and not just reports of the Bill, everything would be all right. This is patronising. It is patronising to the future President of the United States, a man who has always taken a very close interest in Irish issues, and it is not only patronising but wrong. When the President-elect read this Bill, he saw what we see: a direct undermining of the Good Friday/Belfast agreement.
In political terms, this Bill threatens the EU and US free trade deals—the Government’s two stated paramount trade objectives—and it threatens the stability in Ireland, one of the great political achievements in my lifetime. It is not just bad law; it is absolutely terrible politics.
In a few minutes, I expect the Minister to mount a defence. He will claim that Part 5 of the Bill is vital, which my noble friend Lord Newby dealt with very eloquently. I doubt that the Minister will repeat the Northern Ireland Secretary Brandon Lewis’s statement that this Bill will break the law because—and I am sorry to Members opposite, all of whom appear to be non-lawyers pronouncing on the law—it is the Government’s settled position that this breaks the law. In this regard, I am happy—or unhappy—to say that the Government are right: Part 5 allows the Executive to break the law, when they choose and without restraint. That is why the whole of Part 5 comprises a legal affront, which is a huge political mistake.
The Committee will shortly be asked whether we want Clause 42 to stand part of the Bill. Noble Lords on these Benches will be voting “Not content” when that question is put, and we will continue to vote “Not content” when each clause is put forward. It is wrong and we are not content that the Government should bring the whole country into disrepute, not content that we should cede political leverage in the world at large, and not content with the wider implications of Part 5, not least on the island of Ireland.
Lord Falconer of Thoroton (Lab)
It is a pleasure to follow the noble Lord, Lord Fox, who has been a tower of strength throughout the course of this very complicated Bill. I join other noble Lords to express my deep sorrow at the untimely death of Rabbi Lord Sacks, who made a very major contribution to thought, spirituality and life in this House.
The noble Lords, Lord Howard of Lympne, Lord Empey and Lord Pannick, the noble and learned Lords, Lord Clarke of Nottingham, Lord Mackay of Clashfern and Lord Judge, the noble Baronesses, Lady Ritchie of Downpatrick and Lady Bennett, all Labour’s Members, all the Lib Dems, the noble and right reverend Lord, Lord Eames, the noble and gallant Lord, Lord Stirrup, the right reverend Prelate the Bishop of Leeds and the most reverend Primate the Archbishop of Canterbury constitute, by any standards, a pretty broad church—broader than you normally see in this House. Sadly, none of them is Marcus Rashford and therefore guaranteed to get a U-turn. Nevertheless, they are a powerful group and all say the same thing: first, pull back from making the United Kingdom an international law-breaker; and secondly, do not threaten to break the Northern Ireland protocol, which ensures an open border on the island of Ireland and promotes peace through the Good Friday agreement.
Today, tomorrow and in the weeks, months and years to come, the United Kingdom will depend on our international relations with the United States of America, the European Union and the rest of the world for security and trade, to fight the climate emergency, to co-ordinate the search for and distribution of a vaccine, to fight this and future pandemics and to co-ordinate the world’s response to the massive economic downturn we are in. We will need international agreements to do it. It is hard to imagine an act more damaging to the United Kingdom’s national interest than to place the UK beyond the pale of law-abiding nations, which is what the Government wish to do.
I strongly urge the Government to take the lifeline that the House of Lords is offering and accept that these law-breaking clauses were a mistake. The Government should say that these clauses will never again see the light of day. Please think about what the Government are embarking on with these clauses. If a free trade agreement and a settlement of the Northern Irish protocol issues are reached, then these clauses would never be needed. Suppose the Government do not reach agreement on free trade and the operational actions of the Northern Ireland protocol. If these clauses were ever used, they would guarantee, as President-elect Biden has said, that the United Kingdom would go to the bottom of the pecking order in Europe with the United States of America.
We have gone from popular United Kingdom to Billy No Mates in 10 weeks from 8 September as a result of the publication of this Bill. What is the justification for this disastrous proposal? Three have been given in the course of this debate. First, the noble Baronesses, Lady Hoey and Lady Fox, and the noble Lords, Lord Dodds, Lord McCrea, Lord Lilley, Lord Moylan, Lord Shinkwin and Lord Morrow, all gave variations on an argument that the Northern Irish protocol is a bad deal and they wished it to be renegotiated.
I respect those who did not like the Northern Irish protocol but it was entered into by the House of Commons with its eyes open. The House understood that the effect of the protocol was that to secure an open border, goods coming from Great Britain to Northern Ireland had to be checked to ensure that they complied with the single market regulations. Only in that way could the Republic of Ireland be sure that goods coming through the border would comply with the rules of the single market and you would not need a border as a result.
People may not like that. They may think that the checks that take place between Great Britain and Northern Ireland are inimical to the idea of Great Britain and Northern Ireland staying together, but that was the choice that the Parliament of this country made. A number of noble Lords said that democracy and parliamentary sovereignty justify this, conveniently forgetting that it was parliamentary sovereignty that led to the United Kingdom signing up to these international agreements. It was this Parliament that decided it and any call to parliamentary sovereignty is so misguided.
The second proposition advanced is that democracy demands that we allow this agreement, the Northern Irish protocol, to be broken. We are lucky to have in the House of Lords people who tell us how democracy should be interpreted. The December 2019 general election involved the winners, the Tory party, saying, “Agree to the withdrawal agreement and let us get Brexit done.” The country agreed to that. It agreed to the agreement that currently exists, not one that is about to be changed. The imprecations that we should be entitled, as a matter of parliamentary sovereignty or democracy, to change the agreement are very misguided.
Lord Falconer of Thoroton (Lab)
Anybody who says there is no debate in this place because we are complying with the coronavirus rules is very misguided and rather cross.
The third line of defence comes from the noble Baronesses, Lady Neville-Rolfe and Lady Noakes. They say, “This is just a sensible protective measure. Suppose there was to be a breach subsequently: here we are—it is in place”. I have no sympathy with that view at all, for two reasons. First, there is not a sliver of evidence that the European Union is not acting in good faith. One would have expected it to have been produced by the Government if that was the case. Secondly, the points that both noble Baronesses relied on are not covered by the terms of the internal market Bill. The at-risk provisions, for example, are not available to the Government to correct by the terms of the internal market Bill. There was a reference to the fact that they might be covered subsequently by the Finance Bill but, as the noble Baronesses know, there is to be no Finance Bill this year. Their defence has no foundation in fact.
I really hope the Government see sense quickly. This part of the Bill is the most massive own goal, but it is much more than simply the operational aspects. At its heart, this Bill breaks faith with one of the most fundamental parts of our constitution: the rule of law. It is not just the appalling position it leaves us in in the world; it is what it says about us, the United Kingdom. I proudly defend and believe in the values of my country. The rule of law protects each one of us, rich or poor, strong or weak, from all forms of oppression. We should not be, to use the words of the noble and learned Lord, Lord Judge, “complicit or supine” in this toxic, casual, un-thought out, arrogant abandonment of our values. We should vote against every one of those vile clauses in Part 5 tonight and, if necessary, again and again, to persuade the Government that this should never become part of our law.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I too begin by humbly paying my own tribute to Lord Sacks. His reflective witness to faith was, and will remain, an inspiration to very many people he never knew.
As your Lordships are unusually, as I understand it, intending to terminate all discussion on these clauses in Committee; and as some, including the noble and learned Lord, Lord Falconer, opposite have somewhat brazenly—some people in the other place may consider—stated that this House may not be prepared to consider them again if invited to do so; and as, unusually for your Lordships’ House, some of these clauses have not been considered in detail, your Lordships must forgive me if I take some time to explain the rationale. I would, of course, like to thank all those who have contributed to the debate; although I agreed with the minority rather than the majority, I have listened carefully to them all and respected them all.
Lest there be doubt, let me put it beyond peradventure. The United Kingdom has stood, does stand and will stand behind the Belfast/Good Friday agreement. Nothing in this Bill is conceived to undermine that agreement. The United Kingdom Government intend no change to the status of Northern Ireland. The United Kingdom Government will never seek or support a hard border on the island of Ireland.
Equally, the United Kingdom Government will never accept that a foreign power, in the form of the EU, could unduly disrupt the free movement of goods within the United Kingdom’s customs territory. It is solely and specifically against such an unwanted, disproportionate and unnecessary potential intervention that the parts of this Bill, to which so many of your Lordships object, are designed. They are designed, as the minority of speakers in this debate—who were listed by the noble and learned Lord, Lord Falconer—have noticed, to protect east-west links, with full respect for the interests of the EU to maintain its single market, and designed to protect the basis of the Belfast agreement.
There has been significant and robust debate about Part 5, both in this House and the other place, ended with an extremely robust statement by the noble and learned Lord, Lord Falconer. The debate has focused predominately on the safety net or backstop provisions in Clauses 44, 45 and 47. However, Part 5 of the Bill contains crucial provisions which are not safety net provisions but protections that we want to apply in all eventualities. These provisions safeguard Northern Ireland’s place in the United Kingdom’s customs territory and legislate for unfettered access for Northern Ireland goods to the rest of the UK market, which is clearly provided for under the protocol. They also codify in legislation the existing practice where state aid is notified to the European Commission by the Foreign Secretary via the UK mission in Brussels.
I understand that some noble Lords intend to divide the House to remove the whole of Part 5, and the noble and learned Lord, Lord Judge, made that clear today. However, if we go to a Division, there will be at least two groups with different issues. As your Lordships consider your votes, I urge each of your Lordships to consider each clause on its merits, and consider the signal that striking each out might send to the people of Northern Ireland. I listened carefully to what the noble and learned Lord, Lord Judge, said, and I could not hear a case made for a link between Clauses 42 and 46 with what he sees as the offending clauses. I therefore do not see how they are dependent on one another.
As for Clause 43, I must disagree with the noble and learned Lord. I am clear that it stands entirely on its own as a means of safeguarding unfettered access to the UK market. This Government have repeatedly committed, and remain committed, to precluding checks or controls on qualifying Northern Ireland goods to the rest of the UK market. This is what the Northern Ireland Executive have asked for, what Northern Ireland businesses right across the spectrum from agri-food to manufacturing have asked for, and what the withdrawal agreement preserves and protects. Helping to give that effect is the sole purpose of Clause 43. It was not drafted to be interlocking or interdependent with any other clause in the Bill. If no other clause in this Bill were passed, the Bill would be able to function and stand alone as a means of protecting access for Northern Ireland businesses to—as we have heard—their most important market. To that end, while it does refer to Clause 47 in Clause 43(3)(b), that is only as part of spelling out that the clause in fact allows checks where applicable international obligations require them.
Given the broad support in Northern Ireland for unfettered access to their businesses’ most important market—and I hope that noble Lords have been listening to the speeches made by some of those who are here from Northern Ireland—it would be hugely disappointing for them and for businesses in Northern Ireland if noble Lords were to remove them unduly.
Before coming to the main argument, let me address briefly amendments in this group which would fall if the clauses in Part 5 are removed by your Lordships. First to fall will be Amendment 161, tabled by the noble and right reverend Lord, Lord Eames. I am grateful for having been able to discuss these issues with both the noble and right reverend Lord and the right reverend Primate. Their amendment would require the Secretary of State to publish a statement on the impact on peace and reconciliation in Northern Ireland before regulations on export declarations and other exit procedures under Clause 44 can be made. As I have just underlined, central to any exercise of those powers would be our aim to ensure that the political and economic integrity of our whole United Kingdom is maintained, and that the Belfast agreement and successor agreements and the gains of the peace process are protected in all potential circumstances.
Above all, I so agree with the most reverend Primate and the right reverend Prelate that we must ensure that the delicate balance between all communities in Northern Ireland is maintained and the UK Government pursue policies for sustained economic growth and stability in Northern Ireland—the best route to sustaining peace, as the noble Lord, Lord Morrow, just reminded us. The statement that these have always been, and will remain, the Government’s priorities applies to all clauses of this Bill, not just Clause 44. Therefore, the Government do not consider it is necessary for this further step to be introduced, but we fully appreciate and endorse the motives and concerns of the opposers so powerfully spoken to by the noble and right reverend Lord, Lord Eames.
Amendments 158 and 159, introduced by my noble friend Lord Callanan, would ensure that the UK Government and the devolved Administrations can continue, as they do now, to respond to serious threats to the health of people or animals, a principle already reflected in Schedule 1. I trust that the House will accept the principle of these important amendments to protect people and accept that they are necessary for the health and safety of us all. They will fall today if your Lordships remove Clause 43.
I turn to Amendments 162 and 163 in the name of the noble Lord, Lord Hain. The Government agree with the noble Lord’s aims, and I hope that I can provide reassurance that the Bill already provides the protection he seeks. We are unequivocally committed to delivering unfettered access for Northern Ireland goods to the UK market. The Bill, unless that protection is struck out by your Lordships today, prevents any new checks or controls on those goods, thus ensuring that Northern Ireland goods have unfettered access—and, of course, those goods will not be subject to tariffs.
We are also working with the Northern Ireland Executive and businesses to ensure the next phase of the regime, which will come into force during 2021, focuses benefits specifically on Northern Ireland business, again as the noble Lord, Lord Hain, and his supporters are asking. The amendment aims at much the same outcome as the Government does, but I submit that the benefit of our approach is that we can ensure unfettered access without burdensome requirements on business and do so as part of the regime that applies right across the United Kingdom.
On Amendment 163, again I recognise the noble Lord’s aims, but this amendment would risk tying the Government’s hands on how best to support businesses trading between Great Britain and Northern Ireland in future. The trader support service is, as the noble Lord’s amendment asks, free at the point of use and is part of the extensive programme to support businesses impacted by these new processes. While we have set out that it will be reviewed after two years, I assure the noble Lord, Lord Hain, and the noble Baroness, Lady Suttee, that this is by no means a guillotine on its operation. Legislating prior to review would not be best practice; circumstances will evolve, impacting the nature and best focus of any support that may be required. I hope that the points I have made provide assurance that these amendments are unnecessary. While we are ready for further engagement, I hope the noble Lord feels able not to press his amendment.
I turn to Amendments 179 and 180 in the name of my noble friend Lady McIntosh of Pickering, which seek to amend Clause 56 in Part 7 to ensure your Lordships’ House, as well as the other place, would be required to approve a Motion before Clauses 44, 45 and 47 can commence. The process provided for in Clause 56 operates in line with precedent that has been set in recent years for significant votes, such as the meaningful votes on the previous Prime Minister’s withdrawal agreement and votes on military action, such as the Syria vote in 2013. It ensures—and I hope my noble and learned friend Lord Clarke of Nottingham has read the Bill—that a mandate from the democratically elected House should be the basis for proceeding or not while respecting the important voice this place should have in a take-note Motion. That is the right balance, and I ask my noble friend not to press her amendments.
I return to the core of the debate: the view of many of your Lordships that Part 5, considered, amended, approved and sent to us by the elected House, has no place in this Bill. The Northern Ireland protocol is clear that Northern Ireland is part of the UK customs territory, and our manifesto was clear that we would
“maintain and strengthen the integrity and smooth operation of our internal market”.
Clause 42, which the noble and learned Lord, Lord Judge, declared “contaminated”, delivers on that commitment. The Bill requires that, when exercising functions relating to implementation of the protocol or movement of goods within the United Kingdom, all authorities must have special regard to three fundamental matters:
“the need to maintain Northern Ireland’s integral place in the United Kingdom’s internal market … the need to respect Northern Ireland’s place as part of the customs territory of the United Kingdom; and … the need to facilitate the free flow of goods between Great Britain and Northern Ireland”.
Article 6 of the Northern Ireland protocol states:
“Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom's internal market.”
This clause delivers on those provisions in the protocol, in our Command Paper in May and in the Government’s manifesto. I see no contamination; I see clarity. In my judgment, it would be a serious matter for your Lordships to remove it.
Lord Judge (CB) [V]
My Lords, it is getting rather late. There is a lot to cover. If I may, I will deal with it in sequence. I took the unusual step of seeking the view of the House at Second Reading in order that, if the House agreed with my submission, the Government could take their time, reflect on the result and come back with some counterproposals about how to deal with these clauses. We heard nothing.
I am asked to pay attention to the views expressed by, among others, the noble Baroness, Lady Hoey, and by other noble Lords from Northern Ireland. I have paid attention not only to their views, but to the expressed view of every single Member of this House. As I said during the last debate on these issues, I am grateful to those who disagree with me as well as to those who agree. Strong views are held; the debate is courteous and we have to make up our mind between different points of view. When I think of the problems in Northern Ireland and the views expressed by the noble Baroness, Lady Hoey, and others, I bear in mind that their real complaint is against what this Government did way back—about a year ago—when they thought it appropriate to enter into this protocol.
I also bear in mind the views expressed by others in Northern Ireland. The noble and right reverend Lord, Lord Eames, gave best voice to the principle of the view of peace. I am well aware of all the issues arising in Northern Ireland. I recognise that there are deeply held views and that differently held views are held on all sides.
As to the Bill, I rather thought that we had tried to identify, in Clauses 42 and 43, what the problem was. With regard to Clause 42, I have no quarrel with the expressions of aspiration in Clause 42(1) but, as I tried to explain to the Committee, the problem arises with Clause 42(2), where the relevant purpose is not only implementing but otherwise dealing, by regulation, with matters arising out of the Northern Ireland protocol. One of the other purposes was moving goods within the United Kingdom, including movement that involves movement in a country or territory outside the United Kingdom. That is not the internal market.
Clause 43, too, is aspirational: unfettered access to the UK internal market for Northern Ireland goods is aspirational. However, when you turn to how it is to be operated, you run into Clause 43(3)(b), which immediately links this provision to Clauses 44, 45 and 47. Those are unacceptable clauses: the majority of the House made it clear that they were unacceptable at Second Reading. I do not accept, therefore, that we have not looked at these clauses in some detail: we have.
With regard to Clauses 44, 45 and 47, I simply rely on the Government’s own position—which is, quite rightly, that of the Minister, a man of integrity who has not sought to defend them against being in breach of international law. I will say no more about these clauses. We have gone over and over them.
The problem with Clause 46, if it were to stand alone, is simply that it reflects one provision in a whole part of the Bill, and it would be extraordinary for it to stand alone. I hope to persuade the Committee—I hope we have persuaded the Committee—that we should now proceed to deal with it.
I have been asked many other questions. As far as the fundamental problems relating to treaties are concerned, we must consider this as a matter of reality and assess whether we would want to break treaties in circumstances that did not fall within the permissive provisions of the Vienna convention. Do we just tear up treaties without reason? If we have a reason, we have a reason that would probably fall within the Vienna convention.
My other point is that suggestions that this is all lawyerly are deeply offensive. I happen to be a lawyer, but the rule of law is perfectly well understood by everyone—not just lawyers, but doctors, Indian chiefs, warriors, anyone you like. The rule of law is something to which every country and every citizen of every country has a passionate commitment. The rule of law has come to us, in this generation, as a very precious heritage that we owe to our fathers and grandfathers, and to much blood being shed. We have to pass on that principle, untarnished and unlimited, to our children and their children, so that it continues to be a salient, wonderful principle of this country—one that we can all espouse and aspire to and one that protects the weak against the strong, the vulnerable against the powerful, and, most important of all, the weak, the strong, the vulnerable and the powerful against overmuch incursion by the authorities of the state.
This Bill is riddled with powers being given by way of regulation, which are far, far from acceptable. If the crisis that could happen were to happen, there would be no reason whatever why the Minister or Government could not start again. They could come back with reasons why they need their legislation—legislation which complies with the basic principles of our constitution. I see no reason whatever to withdraw the indication I gave at the beginning of the debate that there should be a Division. I start with Clause 42.
Baroness Scott of Bybrook (Con)
My Lords, the result is clear and we have already agreed in the usual channels that Clause 43 is consequential on Clause 42.
Clause 43: Unfettered access to UK internal market for Northern Ireland goods
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
I will now put the question on Clause 44. We have heard from Members taking part remotely who say that they wish to divide the House to oppose the question. I will take that into account.
The question will be decided by a remote Division. I instruct the clerk to start the Division. The remote voting period is open. Members are now invited to record their votes using the remote voting system. Members will have 10 minutes to record their votes. I will make an announcement when the remote voting period has ended.
Baroness Scott of Bybrook (Con)
My Lords, the result is clear, and we have already agreed in the usual channels that Clauses 45, 46 and 47 are consequential on Clause 44.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, we now come to the group beginning with Amendment 169A. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and anyone wishing to press this or anything else in the group to a Division should make that clear in debate.
Clause 50: Regulation of distortive or harmful subsidies
Amendment 169A
Baroness Rawlings
Baroness Rawlings (Con) [V]
My Lords, I too pay tribute to Lord Sacks—a huge loss.
In moving Amendment 169A, I will also speak to Amendments 169B and 169C in my name. Should the UK Parliament have exclusive ability to legislate for a subsidy control regime once the United Kingdom ceases to follow EU state aid rules, without including the possibilities of hidden subsidies, for example through research and development? In these circumstances, I am not arguing at this late hour about whether the Prime Minister will achieve a deal, as the case may be, or whether we will have to abide by WTO rules. Either way, I ask your Lordships that research and development subsidies, hidden or not, be included in the Bill to provide much needed safeguards.
I made my maiden speech in the European Parliament on this subject in 1989, stressing the danger of allowing covert research and development subsidies to creep into state aid legislation before 1992, so that it did not come to stand for
“not the birth but the death of free competition.”
This was the possible abuse of state aid and member states feather-bedding their own industries.
Lord Thomas of Cwmgiedd (CB) [V]
I speak to oppose the inclusion of Clause 50 in the Bill. It is important to distinguish between what I spoke about on the last occasion the Bill was before the House: under Clause 48, what regime is to govern EU structural funds in future. This clause deals with state aid.
Both clauses have one thing in common: they seek to alter the devolution schemes as they stand, for economic development powers are devolved. For example, in respect of Scotland, paragraph 4(1) of Part 3 of Schedule 5 to the Scotland Act makes that clear. The position at present, therefore, is that it is for Scottish Ministers, Welsh Ministers and Ministers in Northern Ireland to determine what financial assistance is provided, in the same way as they determine how the structural funds are dealt with.
State aid is of obvious, considerable importance. It can help to address market failures and provide incentives for research and development, of which the noble Baroness, whom it is a privilege to follow, has spoken. They also deal with areas where the Government want to deal with strategic objectives, such as promoting the use of green technologies or promoting more sustainable agriculture.
Of course, state aid can be harmful if it is not directed in the same way; that is why there must be some form of regime in respect of state aid. The present position on state aid is, as we remain part of the European Union regime, that the devolved Governments make the decisions within the EU regime. In consequence—and it has been during the whole period of devolution—state aid is not a reserved matter. It is devolved.
The British Government’s stated position had been to retain the EU regime and put in place an independent body to police it in place of the Commission, as has happened in respect of other parts of the regime that still governs us but will not do so for much longer. That obviously would not have required any change to the devolution scheme. However, the present Government have decided to change this. They intend to use their Henry VIII powers to do so by statutory instrument. However, they have not consulted on what they want to put in its place, and seek agreement and the views of industry and others, in particular the devolved Governments. As in the other parts of this Bill, the UK Government want to do so without reference to working with the devolved Governments within the devolution schemes. However, in this case, they have hit the snag to which I have referred: they lack the power to do so. State aid and schemes are not reserved.
Clause 50, therefore, seeks to make state aid a reserved matter by what I regret to call a “device” of extending the competition reservation so that it can be used, in effect, to direct policy on state aid. This is not the way to proceed. A regime for state aid subsidies is needed unless, within the current negotiations, we agree to some arrangement that mirrors those of the EU. As is clear from the recently published IfG paper, Beyond State Aid, there are many reasons why a state aid regime is essential, but we need a properly thought-through regime before we legislate, including thinking through the role of the regulator. Such proposals should have been set out before we considered such a clause as this. They should have been consulted on and agreed with all the relevant interests—businesses, universities and others.
Furthermore, the regime to be put in place would have to command the confidence of the devolved Governments, who are responsible, under the devolution schemes, for economic development. Bodies within England also have economic development responsibility. After all that consultation, it should have been determined how this would best be implemented. One way of proceeding would be a common framework with an independent regulator such as the CMA, but a decision would have to be made on the kind of regulator wanted. Would it be the kind of light-touch regulator that some have suggested, with an advisory role, or one with policing powers? If it was a light-touch regulator, to whom would it report—to the UK Government only or to the devolved Governments as well?
Tackling all of this without a policy and through the back door is wrong, as I see it. That course of action also has long-term implications. Proceeding in this way will set policy on the legal basis that it is designed to avoid anti-competitive practices. It will not be based on a forward and positive way of setting out a policy based on looking for economic development.
Therefore, in opposing the inclusion of this clause in the Bill, in short, it is wrong to change the devolution arrangements in this way and without any consultation about the future regime, let alone agreement on it having been reached. I have no doubt that we need a competition regime and that it will need some kind of advisory or other independent policing body. However, we should do this in the proper way and not rush to do it by putting a clause such as this in the Bill. It should not stand part of the Bill.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
The noble Lord, Lord Purvis of Tweed, has withdrawn, so I call the noble Baroness, Lady Finlay of Llandaff.
Baroness Finlay of Llandaff (CB) [V]
My Lords, like other noble Lords, I pay my respects to the memory of Lord Sacks. His loss is immeasurable, and I am sure he would have contributed enormously this evening.
I have put my name to the proposal of my noble and learned friend Lord Thomas of Cwmgiedd that Clause 50 should not stand part of the Bill for a number of reasons. First, the clause is in direct contradiction to Ministers’ assertions that the Bill does nothing to remove powers from the Senedd. If that is the case, why is a new reservation necessary?
Secondly, and related to this, is the conundrum that the Government insist that state aid is already reserved. This position has long been strongly contested by the devolved Governments, who have always operated the state aid system, as the UK Government do in England. If there is doubt about the current legal disposition, would it not be better to ask the courts to interpret the meaning of the current reservation and whether it does or does not include state aid?
Thirdly, although I am no expert, I understand that the Government have been resisting pressure from the European Union during the still-ongoing negotiations to keep in place a state aid framework broadly similar to the one we have inherited through our membership of the EU. Indeed, the statutory instrument to revoke all state aid law is before this House. Why are a Government that seem so reluctant to commit to a rules-based system also so eager to take to themselves absolute power on this vital area of economic development policy?
The devolved Governments in Cardiff and Edinburgh are both in favour of retaining this framework in retained EU law. It is a clear system that provides a bulwark against the arbitrary use of public subsidies to support businesses in favour with the Government or to attract investment, something that is a real risk. Having the protection that this current situation affords for the Governments of the smaller nations of these islands is important because, at the end of the day, the UK Government in their “Government of England” mode can always trump any financial incentives that the devolved Administrations could offer in some kind of dog-eat-dog contest. This clause simply feeds the suspicion that, rather than maintaining a level playing field across the UK, this element of the Bill is about giving the Government the maximum freedom to do what they like with the system and channel investment to marginal Conservative seats.
Fourthly, it is probable that, despite their effort, the Government do indeed sign up to an agreement with the EU that requires the enhancement of a new system of state aid. I hope that the term “subsidy control” evaporates in the way the “implementation period” seems to. If that is the case, then the devolved institutions will have to conform to those new rules because they flow from an international treaty obligation, so this new reservation will be unnecessary.
Finally, I turn to what this clause, like so much else about this Bill, says about the Government’s approach to devolution. Quite simply, it would seem that they do not like it, would prefer it not to exist and want simply to pay lip-service to it. This is a Government that do not seem to tolerate any source of law and public policy that they cannot control and, having removed the rival source of authority of the EU, seem to be gunning for other bodies that have the power to make primary legislation. This is not just distasteful; it is profoundly dangerous for those of us who care deeply about the union. I appeal to the Government to rethink their approach urgently because, otherwise, they will see the country gradually disintegrate in front of their eyes.
Viscount Trenchard (Con) [V]
My Lords, when I read the three amendments of my noble friend Lady Rawlings, I was not sure exactly what had driven her to propose them. Of course, I am aware that my noble friend is a distinguished former chairman of King's College London and, therefore, well aware of the importance of research and development grants. I recognise the importance of regulating the provision by public authorities of subsidies that may be distorting or harmful.
I had thought that Clause 49 makes it clear that financial assistance for economic development may be provided in a number of forms, including grants. However, I sympathise with my noble friend’s view, which she clearly explained in her impressive speech, that R&D grants should be incorporated to safeguard against unfair state aid masquerading as legitimate subsidies. I would like to hear the opinion of my noble friend the Minister on this question.
Regarding the proposal of the noble and learned Lord, Lord Thomas of Cwmgiedd, that Clause 50 should not stand part of the Bill, although I have the greatest respect for his opinions and was impressed by his characteristically clear explanation of his reasons, I believe it is still necessary for this clause to protect against the undesirable possibility that the devolved authorities might otherwise adopt significantly different regulations on this. I look forward to hearing what my noble friend the Minister has to say about this amendment and the need for a single nationwide state aid regime.
The Deputy Chairman of Committee (Lord Alderdice) (LD)
The noble Baronesses, Lady Bowles of Berkhamsted and Lady Neville-Rolfe, have withdrawn, so I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, I express my sympathy and support for the amendments set out by the noble Baroness, Lady Rawlings. She makes a good point, and she has my support as a science graduate.
I oppose Clause 50 standing part of the Bill. It carries my name, alongside those of the noble and learned Lord, Lord Thomas, the noble Lord, Lord Stevenson, and the noble Baroness, Lady Finlay. The speeches given by the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, set out the issue. I have long wondered what the key drivers of this Bill are. We have had a debate around one of the areas, but the shared prosperity fund, which we have talked about before, and economic state aid, are key elements of the Bill, perhaps hidden in plain sight. We are now nearing the end of Committee, but we will return to this quite fundamentally on Report.
The noble Baroness, Lady Finlay, asked why the Government would reserve these powers, and then answered her own question: these are powers that the Government want for themselves. These are powers which they want to take away from the devolved Administrations; clearly, they would not be in the Bill otherwise. The Minister can shake his head, but if that is not the case, I am happy to hear why the Bill is written in this way.
The noble and learned Lord, Lord Thomas, asked a lot of very important questions on this point. I will ask a few more, and, given the lateness of the hour and the number of questions, will excuse the Minister if he writes rather than answering them tonight. However, we would like the answers in good time for Report, so that we can react to them. Around the frameworks, which the noble and learned Lord, Lord Thomas, raised, is state aid still an outstanding issue where no agreement has been reached, as it was in the last update? If it is still outstanding with no agreement, what are the stumbling blocks? What is stopping agreement and, overall, is this intended to become a legislative framework, or will this Bill and the proposed regulations simply impose a system, rather than continue with the frameworks process?
The frameworks agreement says that they will replicate existing flexibilities. Will this still be the case, or have the Government walked away from this commitment? Will the devolved Administrations still administer economic state aid? It was clear from what the noble and learned Lord, Lord Thomas, said, that he believes that they will not. Can the Minister clear up how that will be shared out, because the devolved Administrations have developed the in-depth knowledge of their areas to be able to do this properly. It would be very damaging to lose that expertise when the United Kingdom needs, more than anything, to invest effectively in growth. Finally, will de minimis levels without notification continue? One reading of the Bill is that even de minimis levels could breach the market access principles. Can the Minister confirm that?
There are too many uncertainties in this. That is why noble Lords have talked about not allowing Clause 50 to stand part of the Bill. On Report, we will have to look very closely at how this is done. It will help tremendously on Report if the Government and the Minister, today or in a written response, give a very clear picture of how they see the different cogs in this system working, how they will work together and how there will be a form of democratic and devolved Administration oversight for what is happening. If there is not, this will, I am afraid, be another bone of contention .
The Deputy Chairman of Committees (Lord Alderdice) (LD)
The noble Baroness, Lady Bennett of Manor Castle, has also withdrawn, so I call Lord Stevenson of Balmacara.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank the noble Baroness, Lady Rawlings, for introducing her amendment. She made her case extremely well: R&D is important, and the Government could easily, with advantage, accept all three of the amendments as they stand. However, her introductory speech raised all the issues that have subsequently been picked up by other speakers, because we are facing what appears to be another black hole in this Bill. The noble and learned Lord, Lord Thomas, the noble Baroness, Lady Finlay, the noble Lord, Lord Fox and I have signed up to an amendment more in frustration than any genuine feeling that the existing clause is wrong, although the noble and learned Lord, Lord Thomas, does make a very good case for how the procedures adopted there are not the ones that should be seen in the final version of this Bill.
The question really seems to be about what our state aid regime is going to be. Is it going to be central or devolved in terms of both its process and delivery? Is there going to be a central body that will be charged with making sure that all those participants who benefit from state aid do so on a fair and open basis, and are they going to be able to review and make recommendations for how it is taken forward?
It seems to me this is another area where common frameworks have an opportunity to provide the solution to a problem the Government are facing. I hope that whichever way we go on this, time will be taken to make sure we get it right, do it properly and come forward with something that will justify the effort that has been placed in it, because it will be worth it.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I thank noble Lords who have taken part in this debate. I recognise that the hour is late, so I will attempt to be as brief as possible. I begin by setting out why Clause 50 should stand part of the Bill, before moving on to discuss Amendments 169A, 169B and 169C.
Clause 50 reserves for the UK Parliament the exclusive ability to legislate for a UK subsidy control regime in future. The Government have always been clear in their view that the regulation of state aid, which is the EU approach to subsidy control, is a reserved matter. Let me say in reply to the noble Lord, Lord Fox, that the devolved Administrations have never previously been able to set their own subsidy control reviews, as this was covered by the EU state aid framework. Now we have left the EU, we have an opportunity to design our own subsidy control regime that works for the UK economy.
It is important, in our view, that there continues to be a uniform position across the United Kingdom. Reserving will ensure we take a coherent and consistent approach to the way public authorities within the UK subsidise businesses, supporting the smooth functioning of the UK’s internal market. A unified approach will reduce uncertainty for UK businesses and prevent additional costs in supply chains and to consumers.
Also in reply to the noble Lord, Lord Fox, I say this reservation does not impact the devolved Administrations’ existing spending powers. The devolved Administrations will continue to make decisions about devolved spending on subsidies—how much, to whom and for what—within any future UK-wide subsidy control regime.
The Government announced in September that the UK will follow World Trade Organization rules for subsidy control from 1 January. These are internationally recognised common standards for subsidies. Before the end of the year, the Government will publish guidance for UK public authorities to explain these rules and any related commitments the Government have agreed in fair trade agreements. We will also publish a consultation in the coming months on whether we should go further than those existing commitments, including whether or not legislation is necessary, because we want a modern system for supporting British business in a way that fulfils our interests. We do not want a return to the 1970s approach of Government trying to run the economy or bailing out unsustainable companies. We will take the necessary time to listen closely to all those with an interest in this subject.
UK government officials have been meeting, and will continue to meet, their devolved Administration counterparts on a regular basis. We are keen to ensure that the devolved Administrations are involved in the upcoming consultation process. I hope that noble Lords will agree that this approach is the best, and indeed the only, way to ensure that the whole of the UK can benefit from having a consistent and coherent system of subsidy control, which is necessary to support the smooth running of the UK internal market. I therefore commend that Clause 50 stands part of the Bill. I hope that I have answered at least some of the questions from the noble Lord, Lord Fox. If not, I will write to him to confirm the other points.
I turn to Amendments 169A, 169B and 169C, in the name of my noble friend Lady Rawlings. They seek to amend the definition of a subsidy for the purpose of their reservation. They would add to this definition that a subsidy will also include “research and development grants”. The interpretation provisions contained in Clause 50 set out what is classed as a subsidy for the purpose of this reservation. We define a subsidy as including assistance provided to a person, directly or indirectly, financially or otherwise. The definition includes examples of this assistance as income or price support, grants, loans and guarantees.
For the purpose of the reservation of subsidy control, the definition of a subsidy is deliberately broad to ensure that we have sufficient scope to design a future domestic regime that meets the needs of the United Kingdom. To ensure that we cover a broad range of financial interventions, the definition is not currently limited by reference to any specific policy purpose or sector. Subsidies may be given for a variety of purposes, and it would be anomalous to single out just one of them here. The current wording in the clause already encompasses assistance provided to a person directly or indirectly by way of grants and is therefore sufficient to cover research and development grants as my noble friend intends. Therefore, the Government do not think that the amendments are legally necessary. I hope that, in the light of that information, my noble friend will be able to withdraw her amendment.
The Deputy Chairman of Committees (Lord Alderdice) (LD)
I have received a request to speak after the Minister from the noble Lord, Lord Fox.
Lord Fox (LD)
With every answer, there come more questions, I am afraid. The Minister sought to explain that the devolved authorities will still be able to spend the money—I think those were the words that he used—but I am interested to know to which money he is referring. How in future will they get their hands on the money? Will there be a competitive bidding process? Is it part of the formula? Is that the money that he is talking about? Perhaps he could outline what he means by “the money”, because it is not entirely clear to me. He is looking at me as though I am being slightly stupid and I shall be very happy to be educated by him in writing rather than verbally.
Lord Callanan (Con)
I certainly did not intend to imply that at all and I apologise if the noble Lord got that impression. I was talking about the existing block grants that the devolved Administrations have. It is their existing spending power—the money that they spend at the moment. They will continue to make decisions about their devolved spending on subsidies, as they do at the moment—how much, to whom and for what—within any future UK-wide subsidy control regime if, following consultation, the Government and Parliament decide that we want to legislate in this space. I hope that I have resolved the noble Lord’s question; if not, I will certainly write to him.
Baroness Rawlings (Con) [V]
My Lords, I thank the Minister for his courteous and careful reply, and I thank all noble Lords who have spoken to these amendments, for and against. I am sorry that at this late hour several of your Lordships have, understandably, withdrawn.
I am most grateful to the noble and learned Lord, Lord Thomas. I take his point on the devolved matters and thank him for his very interesting contribution. I thank the noble Baroness, Lady Finlay, for her probing remarks, as always, and my noble friend Lord Trenchard, who fully understood what I am trying to do. I am most grateful to him for his kind words. I thank the noble Lord, Lord Fox, for his support. The noble Lord, Lord Stevenson, always makes good points and always asks even better questions.
My noble friend the Minister said that state aid was a reserved matter but we can design our own. I was not quite clear about that. I was even less clear on his explanation of why R&D should not be included; I feel that it is too important not to be included.
To conclude, these modest amendments are hardly revolutionary and are purely intended to help the Government in any future contracts so that we are less likely to lose out; it is a shame that the Government are not able to accept them. I hope that there may be some other way. I may return to the subject of research and development on Report. Having said that, for the time being, I beg leave to withdraw my amendment.
United Kingdom Internal Market Bill
Wednesday 18th November 2020
(4 years ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 150-II Second Marshalled list for Report - (18 Nov 2020)
16:08 - Division conducted remotely on Amendment 1 - Ayes: 367 / Noes: 209 - Amendment 1 agreed.
17:49 - Division conducted remotely on Amendment 7 - Ayes: 327 / Noes: 223 - Amendment 7 agreed.
Lord Hope of Craighead
“Common frameworks process
(1) The United Kingdom market access principles shall not apply to any statutory provision or requirement that gives effect to a decision to diverge from harmonised rules that has been agreed through the common frameworks process.(2) No regulations may be made by a Minister of the Crown with regard to a matter that is under consideration under the common frameworks process while that process in relation to that matter is still in progress.(3) The “common frameworks process” is a means, established by the Joint Ministerial 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 devolved governments.”
Lord Hope of Craighead (CB) [V]
My Lords, I wish to move the first of three amendments in this group, which consists of Amendments 1, 38 and 51. They address the rules for the mutual recognition of goods in Part 1 of the Bill, of services in Part 2 and of professional qualifications in Part 3. They are all directed to the same essential point: the relationship between the common frameworks process and the internal market that the Bill seeks to create. Underlying this is a question which goes to the heart of the relationship between the Governments of the four nations in this United Kingdom.
There are two ways in which our internal market can be created. Is this to be a market created by all four nations working together, as they are doing through the common frameworks process, or is it to be created by imposition from Westminster, as the Bill seeks to do? If it is the latter, do the Government really support devolution, as the Prime Minister is now asking us to believe? Actions speak louder than words. How the Government respond to these amendments will tell us where the truth lies.
I am grateful to those noble Lords who have joined with me in proposing these amendments. I should make it clear that I intend to divide the House if the Minister is unable to give me an assurance that the Government accept the principle that lies behind the amendments and will come back at Third Reading with amendments of their own that give effect to it.
The noble Lord, Lord True, has said several times that the market access principles are designed not to replace but to complement the common frameworks. I am sure that he will not mind when I say that he was not the first to use that expression, nor, since it is not his word, if I tell him what I think of it.
The word “complements” is in the White Paper. The noble Lord assured us that the Government remain committed to the common frameworks programme. I would like to take him at his word, but what does he mean by that? Are the market access principles that the Bill sets out really complementary to each other, as he has indicated? It is hard to see how that can be, unless the Bill itself tells us how these two systems are to work together towards the same aim. As it is, when you consider the effect of the market principles on that programme, to say that they complement each other seems a complete misuse of language. My amendments seek to bring the two together, in a way that fully respects the devolution settlement while allowing the principles to operate fully in all the other areas that the common frameworks do not touch.
Without going over again all the ground that I covered in Committee, I should remind your Lordships that the common frameworks process has its origin in an agreement reached at a meeting of the Joint Ministerial Council in 2017. Something had to be done to create a harmonious working relationship between them all when we left the EU. The devolved nations had been able, within the limits of EU law, to fulfil their responsibilities as devolved Governments to formulate and apply policies that best suited their local circumstances. So it was agreed that they and the United Kingdom Government would work together through common frameworks in order to enable the functioning of the UK internal market, while—this was a crucial part of the agreement—acknowledging policy divergence. Therefore, each devolved Administration was to retain the ability to diverge from the harmonised rules in their territory within the mandate given to them by the devolution settlement, after consulting the relevant policy group to see whether a common outcome could be reached and agreed to. Now, three years later, and without the agreement of the JMC or any of the devolved nations, we have this Bill.
Not only does the Bill ignore the common frameworks process but it destroys one of the key elements in that process that brought the devolved Administrations into it in the first place: it destroys policy divergence. It destroys those Administrations’ ability through that process to serve the interests of their own people, and to innovate. The common frameworks operate by working out solutions by agreement between the four nations. If a policy divergence is sought, it has to be agreed to. The market access principles system, on the contrary, does not operate by agreement; it is hard edged. It is a set of strict statutory rules which, apart from the few limited exceptions, do not allow for any divergence at all.
A policy aim which is designed to deal with serious threats to human, animal or plant health will be protected by the exclusion in Schedule 1, but that exclusion is narrowly drawn—threats to the environment, for example, are not mentioned. So policy aims giving effect to advances in the science relating to biodegradable plastics, for example, are outside its scope. As time goes on, there will be others which one party to the common frameworks system would like to put into effect. Business is nothing if it is not dynamic, so there must be room for improvement in what we do across all four nations. The common frameworks system should be allowed to develop but, under the Bill as it stands, all of that will be inhibited by rigid rules.
It does not have to be that way. Our amendments seek to go to the heart of the problem. They assume that a requirement is enacted by a devolved Administration that has been agreed by all four nations under a common framework. They assume that it is being enacted to give effect to a policy formed within its own part of the UK, which the other nations, having assessed its effect on the market as whole, are willing to accept. The question is: how can that requirement retain its effect if traders from another part of the UK can simply ignore it when trading across the border? There is nothing that a trading standards officer—or a court, for that matter—could do to prevent that. This is an invitation to traders—who operate, after all, in their own commercial interests according to the rules of the marketplace—to disregard the requirement as they please when they cross the border.
The devolved Administrations deplore the fact that a process that all four nations have agreed to is at risk of being undermined in this way. The Welsh Government have indicated that they cannot agree to this. The Scottish Parliament has refused to consent to it. Others will speak for Northern Ireland. How can this be a UK internal market when it does not have the support of the other nations? Please do not say that there is widespread support for this Bill. That is not an answer to the very precise question that I am raising, which the White Paper said nothing about at all.
Our amendments seek to do no more than allow the two systems to live together. It will enable them both to work together towards the same common aim. In that way the market principles will truly complement the common frameworks, instead of undermining them and calling into question the whole process. Had it not been for the devolved settlements—for devolution itself—there would have been no problem. We would have been a single Administration and there would have been no need for this Bill at all. But we cannot turn the clock back. Devising rules for this internal market requires us to accept the constitutional arrangements that now exist. It is the genius of the common frameworks that a way was found, by agreement, of doing that. That is what our amendments are all about. They are no wider than is necessary. They are not seeking to undermine the Bill. I beg to move.
Baroness Finlay of Llandaff (CB) [V]
My Lords, in this group I wish to speak in particular to Amendment 1, which my noble and learned friend Lord Hope of Craighead has explained most eloquently. In Committee, the Government tried to assure us that Parts 1 to 3 of the Bill were somehow compatible with or complementary to the common frameworks process, that the Government were fully committed to that process, and that the intention of the Bill was to fill in the gaps where common frameworks did not operate. But we had no explanation of how the common frameworks process and the market access principles would work alongside each other. No real-world example was cited that the existing common frameworks process did not or could not address in the future.
For example, we were told that different building standards would tie the construction industry in knots. But there are already different building standards, including the excellent requirement in Wales that builders must install fire suppression systems in all new residential premises. This was introduced 14 years ago by the then National Assembly, and guidance to the sector on it runs to several hundred pages—understandable for a measure that will save lives. Has the construction industry been campaigning against devolution as a result? No. Then there was the risk to the English supply of malting barley to Scotland from divergent restrictions on pesticides. That case folded when the noble Lord, Lord Purvis of Tweed, pointed out that the use of fertilisers and pesticides was one of the extremely rare explicit exclusions from the market access principle.
Lord Mackay of Clashfern (Con) [V]
My Lords, I very much support these amendments. It has been my privilege to often lead the noble and learned Lord, Lord Hope of Craighead, and today I am very glad to follow him.
I want to say a bit about the nature of the common frameworks. They were brought into being in 2017, as the noble and learned Lord, Lord Hope, said, and he and I played some little part in encouraging that to happen. It seemed to us that it would be entirely right to take account of the different views of the devolved nations and bring them together. To a great extent that is what has happened since this system was set up.
The UK internal market is not a fixed law like the laws of the Medes and the Persians. The detail in the part that deals with the Competition and Markets Authority shows that it is intended that the internal market should develop in accordance with circumstances as they develop. It is not a rigid matter. Some mechanism therefore has to be found before allowing change. As I have understood my noble friend Lord True, he has said that the common frameworks are complementary to the Bill—or the other way round, whichever way you like to take it. That was set out quite clearly in the White Paper that preceded the Bill.
The fundamental point is that the UK internal market law will apply in the whole of the UK, but that does not preclude that law allowing for circumstances that may vary from one devolved nation to another. At the moment I live in the very north of Scotland, and I can see that there is a good justification for having somewhat different rules about building regulations relating to temperatures and so on from those in London. That kind of thing is much easier to deal with if it is dealt with by people who know about it in detail, and that is what has happened in the common frameworks over quite a long time. It has been found that a large number of those frameworks do not require any innovation at all in the circumstances, although there are some, which are still under consideration, that require modification as a result of changes in the various conditions that apply across the United Kingdom.
I take it from what my noble friend Lord True, whom I greatly respect, has said on behalf of the Government from the Dispatch Box that those two ways of legislating are complementary. I am anxious that the way they complement each other should be set forth in the Bill because that is an important part of how the UK market Bill will develop. As I said, there is no question but that it is expected to develop and change.
The situation is that the common frameworks are dealt with by a committee set up by principles. So far as I know, and I have sought information on this point, it has worked very well, so why not allow it to continue? All that is required to happen is that the particular result of agreement in the common frameworks will lead to a modification of the United Kingdom Internal Market Bill agreed in the whole of the UK. That seems a very good way of dealing with some kinds of change. The Bill provides for the Competition and Markets Authority to have a function of the same general kind, leading to advice and legislation in Parliament. That is an extremely good and wise way of conducting the business of an internal market, and it makes it clear that the same law applies over the whole of the UK—nothing else but that the law recognises agreed variations suitable to the circumstances of particular nations. I cannot for the life of me see why that is not legislated for in the Bill.
As I have said already, it is said that the two are complementary. There is no provision in the Bill at the moment to say how that complementary relationship is to work. We have sought to do that after a fairly thorough consideration of how it can be done, and that is what this series of amendments is trying to do. If the Government can think of a better way of arranging it then we would be glad to hear it, but we cannot leave it without any consideration at all. If the Bill goes forward without any reference to the common frameworks, it is hard to see how those frameworks affect the issue as they ought to.
I am very much in favour of the amendment, and of the union. All my life I have been concerned with Scotland and I am very anxious that it should remain in the warmth and success of the United Kingdom, which it has done already for a long time. I have personally found that a very great comfort, as your Lordships will understand. So I hope the Government can accept this amendment or, if not, will come forward with a better way of recognising the complementarity of the common frameworks with the Bill and put it in an express form that would be better than this, if they can find one.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, I apologise to the House that I was unable to participate in Committee, but I spoke at Second Reading.
I shall speak particularly to Amendment 1. I was pleased to add my name to the signatories to this amendment. The noble and learned Lord, Lord Hope of Craighead, and my noble and learned friend Lord Mackay of Clashfern have unparalleled understanding of the principles and workings of devolution in the United Kingdom today, while my good friend the noble Baroness, Lady of Llandaff, has a very practical grasp of the day-to-day issues and realities of the operation of devolution in a plethora of policy areas, particularly health and palliative care.
My experience of devolution was initially very much at the coalface of the operation of what was then the Welsh Assembly—now the Senedd Cymru, the Welsh Parliament—for 12 years as a Member and a party leader from its establishment. The reality of life was largely driven not by idealism in those early days, and indeed now, but by ensuring that it operated in the best interests of the people of Wales and of the wider UK. I believe that that lodestar is still what guides Members of the Senedd today in making it work effectively.
The year 1999, with the setting up of both the Scottish Parliament and the then Welsh Assembly, represented a very real break with the past. There were of course pressure points between Wales and Westminster, and certainly between Scotland and Westminster, even when the parties in power were the same, which of course they were in the early days, both being Labour. That phenomenon is possibly more acute when the same parties are in power. Over time, those points of friction have decreased and eased. Politicians and officials got used to closer working. There were still points of dispute, of course, but that is the nature of politics. Devolution was extended and deepened by the Conservatives in Wales with a referendum for full powers, which was passed decisively, and the Silk commission report being acted on and introducing new powers from Westminster. There was a new devolution settlement, which has been honoured by successive Governments and needs to continue to be honoured.
Let us flash forward to the withdrawal from the EU and the work of this House and the other place on common frameworks. As was noted by my noble friend Lord Dunlop in Committee, the introduction of common frameworks was a success and agreement was
“reached … in October 2017, between the UK Government, the Scottish and Welsh Governments and the senior civil servant representing the Northern Ireland Executive, on the principles to guide the work on common frameworks.”—[Official Report, 26/10/20; col. 58.]
That approach has delivered on the policy areas that were identified, with very few exceptions, which were all truly exceptional. It is worth restating that the common frameworks have delivered and are delivering.
Lord Wigley (PC) [V]
My Lords, it is a delight to follow the noble Lord, Lord Bourne, with whom I served in the National Assembly 20 years ago and who has done a good hard day’s work for Wales. We do not always agree, but we certainly agree on the need for us to work together whenever possible in the interests of Wales and the wider interest represented in this Chamber.
I rise to support Amendments 38 and 51, to which I have put my name. I will also speak to Amendment 1, moved so effectively by the noble and learned Lord, Lord Hope. The House is indebted to him for the diligent and convincing work he did in Committee and has done on earlier legislation before this House. He has highlighted the need to establish an acceptable mechanism for facilitating a harmonious working relationship between the four Governments of these islands in the context of the UK common market. The noble Baroness, Lady Finlay, has also been diligent in pursuing these points, and has warned graphically today about the iron curtain that will fall if the Bill goes forward unamended. I know that several colleagues will have received representations from the Welsh Government on these and associated matters.
I will not restate the detailed arguments in favour of the common frameworks. I am sure that I am not the only Member participating in this debate who is, by now, heartily sick of having to restate time and again the same old arguments concerning the relationship between the devolved Governments and the Westminster Government in the context of the post-Brexit world that we inhabit. I am sure that noble Lords from England are tired of hearing the same issues arise time after time—as they have in a succession of Bills and debates over the last four years—about how new legislation to create appropriate manufacturing, farming and trading relationships between Wales, Scotland, Northern Ireland and England will work out, how a level playing field may be established and how differences may be resolved without undermining either the integrity of the UK market or the authority of the devolved Governments within their own devolved competences. Both need to be achieved, but the Government address only the first: the integrity of the UK market.
Members of this Chamber from Wales are heartily sick of having to press the same issues time after time for the simple reason that they still have not been resolved. Colleagues from Scotland and Northern Ireland may well feel likewise. The Minister is no doubt equally tired of having to trot out the same old responses. The debates continue because the uncertainty continues and, even now, six weeks before the end of the transition period, we still do not know what the trading parameters applicable from 1 January next year will be.
If that uncertainty were not enough, this week, the Prime Minister described devolution as a disaster. The tragedy of the post-devolution era is that Westminster still has not adjusted its mindset to accept that it now has to work in partnership, not as a domineering and patronising big brother that always expects to get its own way. It is that failure, more than anything else, that now stands to blow the United Kingdom apart, and it is central to this amendment.
It is facile to blame the SNP for advocating the policy that is, after all, their raison d’être. The far more relevant question is why, in every election since 2003, have the SNP secured the support of the Scottish electorate to govern Scotland? It is no use the Prime Minister shooting the messenger; he must ask himself, as must all his colleagues in government: how is it that such a clear message from Scotland has come about? One element in the answer to that is Brexit and, in particular, the failure of the Government to put forward an acceptable model for the post-Brexit trading relationships within the United Kingdom. This amendment offers them an opportunity to put that right.
Once again, these amendments seek to establish a partnership in which, as the noble and learned Lord, Lord Hope, described, there is a system of framework agreements that can help to ensure that one Government will not overrule the other three Governments on matters where responsibility is now returning from Brussels. I am glad that the noble and learned Lord, Lord Mackay of Clashfern, has his name to these amendments because, through the passage of this Bill and earlier legislation impinging on these matters, he has consistently advocated to join common frameworks. He understands how important this is in a Scottish context for such a provision to be included; indeed, he understands the reservations that many Members of the Scottish Parliament, across party lines, have with this Bill as it currently stands.
I am glad that the noble Lord, Lord Bourne, added his name to this amendment and was delighted to hear him speak from his personal experience. As former leader of the Conservatives in the National Assembly, as it was then, he understands the need to get this right. He also understands the thinking among Senedd Members in Wales today. There is enough cross-party agreement in Cardiff, Edinburgh, Belfast and Westminster that this area needs to be revisited and that the Government, surely, must move to make some accommodation along the lines of these amendments. I hope that the Minister is in a reflective mindset and, indeed, a conciliatory mood today, and that he will be positive in his response.
Lord Falconer of Thoroton (Lab)
It is a pleasure to follow the noble Lord, Lord Wigley, and a real privilege and honour to follow the speeches of the noble and learned Lords, Lord Hope of Craighead and Lord Mackay of Clashfern, the noble Baroness, Lady Finlay of Llandaff, and the noble Lord, Lord Bourne of Aberystwyth. They were speeches of real quality, and they got absolutely to the heart of the problem that had been identified in the Commons—indeed, identified time and again.
Everybody accepts the need for trade that is as frictionless as possible within the internal market of the UK. Everybody equally respects the need for appropriate divergence. How are those two matters to be dealt with? The answer, which everybody in this House and the Commons agreed with, was the common frameworks process, set up by the Conservative Government, with the agreement of the devolved Assemblies, in October 2017. It is a process that has stood the test of time and works to deliver divergence by agreement.
I note in passing that the noble and learned Lord, Lord Mackay of Clashfern, said that he often led the noble and learned Lord, Lord Hope of Craighead. However, one thing that the noble and learned Lord, Lord Hope of Craighead, did not learn from the noble and learned Lord, Lord Mackay of Clashfern, was emollience. However, the trenchant language used by the noble and learned Lord, Lord Hope, today was appropriate. He said that “actions speak louder than words”. He said that if we are to believe the commitments repeated in the last 24 hours by the Government on devolution, they need to deliver on their promise that the common frameworks process should be allowed to complement the internal market arrangements.
The noble and learned Lord, Lord Hope of Craighead, said that, without some amendments to this Bill, it would be a “misuse of language” to say that they complement each other. I beg to suggest that what he meant by that is that if you have only the market access principles and no legal recognition of the common frameworks process, that process is completely ignored because—to use the language of the noble Baroness, Lady Finlay of Llandaff, in an earlier part of the proceedings on this Bill—this is a “blunderbuss” that, in the words of the noble and learned Lord, Lord Hope of Craighead, does not allow for a key part of the functioning of devolution, namely divergence in the appropriate case.
We on this side of the House support Amendments 1, 38 and 51. We think they do give effect to the common frameworks in a legally binding way, without in any way undermining the need for a properly functioning internal market—the need for which we recognise. I earnestly ask the Government, on behalf of this side of the House, to do what they kept saying they would do: find a solution to the problem. It is so important, not just for the proceedings of this Bill but for the preservation of the devolution settlements in Wales, Scotland and Northern Ireland, and the preservation of the union.
Lord Wallace of Tankerness (LD) [V]
My Lords, it is a great privilege to follow all the speeches so far, which have so compellingly made the case for the common frameworks process. I wish to speak in favour of the amendments in this group, which have been spoken to so effectively by the noble and learned Lord, Lord Hope of Craighead. These are amendments which, rightly, seek to give effect and primacy to decisions agreed under the common frameworks process. I regret that it was not possible for me to join the Committee stage proceedings, but I have read the Official Report of the first-class discussion of similar amendments debated on 25 October.
The issue of common frameworks and the lack of any recognition in this Bill of their existence, let alone their importance, goes to the heart of many of my profound misgivings about this proposed legislation. As has been noted several times in the past and already several times today, the creation of the common frameworks process can be traced back to the Joint Ministerial Committee declaration on 16 October 2017. Among the principles set out in that communique was that:
“Common frameworks will be established where they are necessary in order to: enable the functioning of the UK internal market, while acknowledging policy divergence”—
and the noble and learned Lords, Lord Hope and Lord Falconer of Thoroton, emphasised the words “policy divergence”. Among the other principles was that:
“Frameworks will respect the devolution settlements and the democratic accountability of the devolved legislatures, and will therefore … maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory as is afforded by current EU rules”.
Crucially, and to state the obvious, that declaration was agreed by the United Kingdom Government and the devolved Administrations.
The importance of such agreement being reached was recommended by the conclusions of the European Union Committee of the House, which, in its fourth report of the 2017-19 Session, said:
“Any durable solution will need the consent of all the nations of the United Kingdom, and of their elected representatives.”
It went on to say that
“A successful settlement cannot be imposed by the UK Government: it must be developed in partnership with the devolved Governments.”
The Government themselves acknowledge in their most recent report, published only a few weeks ago, that
“the UK Government and devolved administrations have continued to work jointly to develop UK Common Frameworks, to protect the UK economy and give maximum certainty to businesses, consumers and international partners”,
and, notably, that United Kingdom Ministers commend UK common frameworks as ensuring
“regulatory coherence across the UK by flexibly managing any potential policy divergence across the four nations.”
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I am delighted to follow the noble and learned Lord, Lord Wallace of Tankerness and I support the amendments in this group in the name of the noble and learned Lord, Lord Hope of Craighead. I declare an interest as a member of the Common Frameworks Scrutiny Committee.
The purpose of this important group of amendments is to safeguard the common frameworks process and ensure that it is placed in legislation. The common frameworks process cannot be bypassed by attempts by the Government to impose themselves on the constitutional devolution settlements. I agree with the premise that the amendments seek to ensure that primacy and due recognition are given to the common frameworks and that they are enshrined in legislation. They should not be perceived by the Government as a means of conflict with the internal market Bill. As the noble and learned Lord, Lord Falconer of Thoroton, has said, there has to be frictionless trade and divergence by agreement. The best way to capture that is by ensuring that common frameworks sit within the legislation itself.
Common frameworks are built on the assumption that consent and agreement can be reached between Westminster and the three devolved Administrations and that they should not be undermined. The process of common frameworks should be respected and honoured in the legislation and should not be eclipsed in any way. It is interesting that in our Common Frameworks Select Committee yesterday Professor McEwen said that the process of common frameworks has sufficient flexibility to allow divergence. That builds on the comment of the noble and learned Lord, Lord Falconer. In Committee, it was said that the legislation is seeking to jettison the common frameworks process that was started in October 2017. In many ways it is a common approach to managing divergence, a point made to our committee last week by the Welsh Counsel General, Jeremy Miles.
The Governments have been working on a primacy or a hierarchy of Governments in this to develop common frameworks in areas where they agree it is necessary to replace EU regulations with shared EU regulations or non-legislative frameworks. The Joint Ministerial Committee made clear that common frameworks will be established where they are necessary in order to, among other things, enable the functioning of the UK internal market while acknowledging policy divergence. These points have been made by earlier speakers today. It was clear from listening to the Ministers from the Scottish and Welsh Governments last week that, although they come from different political perspectives, they see the benefits of working together in partnership to manage divergence on certain policy issues through the common frameworks. So why would the Government want to nullify that process? It is surely eminently complementary that they can work together in legislation with the regulations of the United Kingdom Internal Market Bill.
I make a plea to the Government and the Minister to change their minds and make such provisions for common frameworks in the legislation. By abstracting the internal market from these frameworks and pushing ahead unilaterally, against opposition from the devolved authorities in Scotland and Wales, the UK Government are putting the common frameworks and devolution arrangements at risk. Coming from Northern Ireland, I fully recognise that there will be divergence anyway in Northern Ireland because certain measures to do with electricity transmission and the agri-food industry will be subject to the rules of the Northern Ireland protocol. What is the Government’s view of the devolution settlements? Do they view the devolved Administrations as subordinate or equal to Westminster, which I believe they should be? Common frameworks should be allowed to work; they are an innovative process to manage divergence.
Like the noble Lord, Lord Wigley, I hope that the Minister is in a conciliatory mood today and that he can accept Amendment 1 and Amendments 38 and 51 which are consequential. The noble Lord, Lord True, said that the Bill and common frameworks are complementary as they work together to deal with future divergence. The best way to deal with that is, surely, in the internal market Bill. That would eradicate the frustrations and any difficulties, which is an important thing to do.
Baroness Andrews (Lab) [V]
My Lords, I will speak briefly in support of the amendment in the name of the noble and learned Lord, Lord Hope of Craighead. Before I do so, I thank the noble Lord, Lord True, for his graciousness in coming to speak to the Common Frameworks Scrutiny Committee, which I have the privilege of chairing, and I follow my esteemed colleague the noble Baroness, Lady Ritchie of Downpatrick, in her speech.
The Committee has since taken evidence from Ministers and leading academics across Scotland, Wales and Northern Ireland. I have to tell the Minister that we have found no evidence whatever to support the Government’s claim that the Bill is complementary to the common frameworks. We have heard, time and again, of the deep anxiety on all sides that the Bill undermines them in principle and practice and that, most significantly, it will do serious harm to trust and confidence between the four Governments, as the House has already heard this afternoon. In the words of many witnesses, those relationships have never been worse. We have heard from those witnesses of many examples of how the common frameworks themselves, in pioneering innovative, collaborative ways of working across the nations, have brought a new common purpose and are, in that way, improving relationships.
My first question to the Minister has been asked already: is this not in itself a prize worth keeping? That unity of purpose which makes it possible for two systems to live together to make the internal market stronger and more innovative is at the heart of the amendment in the name of the noble and learned Lord, Lord Hope of Craighead, which he introduced, as usual, in a measured style and with devastating power. The amendment encapsulates both the principles and the purpose of the common frameworks as a means of managing the internal market, but in a rational and predictable way by managing the future divergent policy choices made by the four countries in a post-Brexit world, as they have for many years in the past.
Divergence is the signature and symbol of devolution and a mark of confidence in the right to make choices in each country, in law, which are appropriate to each nation. Doing that brings clarity and stability in the trade in goods and services across the internal market by agreement. The amendment simply asks the Government to change the Bill so that when the common frameworks have reached agreement on divergence, whether in goods or services, that is not demolished or overridden by the operation of the Bill.
No matter what examples the Minister gives, or whatever rationale he finds, this is the effect of legislation made in Westminster. Governments may be equal, but Parliaments are not. The Minister may say that nothing is being taken away from the powers of the devolved Governments in these clauses, and he is right. The Bill does not need to do that. Its effect, however, is the same, because future legislation in Wales which would, say, have enabled the abolition of a further six types of single-use plastic—which is the ambition—would not be able to be put into effect as long as other manufacturers of plastic goods are able, as they will be under the principles of mutual recognition and non-discrimination, to bring their goods for sale in Wales.
I shall ask the Minister a direct question, and I would very much appreciate a direct answer. Was the Welsh Attorney-General right when he told the Common Frameworks Scrutiny Committee that the legislative preferences in the Senedd could not be enforced on the ground in Wales—that we would not be able to enforce the ban on the extra six plastic products if this Bill came into force? “Enforcement” is the key word. The noble and learned Lord, Lord Hope, was eloquent on how difficult is going to be for trading officers and the courts to know how to enforce it. There is no certainty here, yet certainty is at the heart of the Government’s argument. All this very modest amendment is asking is for the Government to acknowledge this and stop dodging this reality.
Baroness McIntosh of Pickering (Con) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Andrews, and I would like to congratulate her and her committee for all the work they have done in connection with common frameworks. I would also like to express my support for the amendments in this group and, in particular, Amendment 1, for the eloquent reasons set out by the noble and learned Lord, Lord Hope of Craighead, and my noble and learned friend Lord Mackay of Clashfern. I would also like to recognise and pay tribute to the work they did in instigating the common frameworks, and to note the role of the Joint Ministerial Committee on EU Negotiations in agreeing in 2017 to create the common frameworks.
If the noble and learned Lord, Lord Hope, is minded to press this amendment to a vote, I intend to support it, for two principal reasons. One is the advanced stages of discussions on the common frameworks that have been reached, as a number of noble Lords have said, and which have proved quite fruitful; the other is the lateness of this Bill and the proceedings, and the poor consultation of the devolved nations.
In progressing these arguments, I would like to refer briefly to the eighth European Union (Withdrawal) Act and Common Frameworks report and the revised analysis, which were published on 24 September. They go into some detail about the policy areas that have been covered and conclude that, in total, there are 40 active framework areas—18 legislative and 22 non-legislative. They go on to state that in some instances, policy areas include a mixture of reserved and devolved competence, including where technical standards that derive from EU law are relevant. These policy areas include four that the UK Government believe are reserved, which are subject to ongoing discussion with the devolved Administrations.
The noble and learned Lord, Lord Hope of Craighead, in moving his amendment, and the noble and learned Lord, Lord Mackay of Clashfern, and others have referred to the environmental aspects. I have a particular interest in this as I am fortunate enough to be a member of the EU Environment Sub-Committee. Paragraph 1.21 of the latest report, to which I have just referred, states:
“There have been regular Frameworks Project Team meetings between officials in the UK Government and the devolved administrations, where productive collaborative work continues.”
Examples are then given. Paragraph 1.22 states:
“Multiple meetings have taken place between officials in the Department for Environment, Food and Rural Affairs (DEFRA) and their counterparts in the devolved administrations. These include working group meetings … on Animal Health and Welfare,”
plant health,
“Waste … Chemicals and Pesticides, and Fisheries.”
The noble and learned Lord, Lord Hope of Craighead, specifically mentioned the need to recognise conditions relating to the environment where divergences and different threats need to be established. He noted that there is no specific reference to the environment in the exclusions given in Schedule 1.
As I mentioned at Second Reading, for all these reasons it is bewildering that the Government have parted from the very advanced discussions of the common frameworks process. I would like to pay tribute to and thank those involved in them, particularly the Defra officials, who, in addition to all they have had to deal with at this time, have worked closely with their counterparts in the devolved Administrations.
Unless I hear a very strong argument from the Minister as to how the progress that has been made can be accommodated, I will support Amendment 1 and the other amendments in this group.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I am one of no fewer than seven members of the Common Frameworks Scrutiny Committee, including our chair, the noble Baroness, Lady Andrews, who we have already heard from, and the mover of this amendment, who are participating in this debate, which shows our interest—one of those interests you do not need to declare. I call it a debate but I fear that, sadly, even more so than usual, because of the hybrid nature of our proceedings, it is more a series of statements. That is a great pity and I look forward to the day when we can get back to all sitting round this Chamber and having a proper debate.
I also speak as a strong supporter of devolution since the early 1960s, when, as some of my colleagues here, who are nearly as old as I am, will recall, to be a supporter of devolution was not the most popular thing to be in the Labour Party. We had to work very hard to persuade the party to move in that direction. I say that now to put into context what I will say later, but I sound a cautionary note. People sometimes get on to a bandwagon, and it goes faster and faster, more and more people jump on, and they do not always know which direction it is going in and what the consequences and all the implications are.
We have had devolution for a very long time in Scotland, but mostly it was administrative devolution. We have had a different educational service for a long time. As my noble and learned friend Lord Falconer and the noble Baroness, Lady McIntosh, who is a Scots advocate—not practising, as she keeps reminding us—could tell us, we have had a Scots law system that is entirely different. We have had that for decades—indeed, in some cases for centuries. However, for so long, legislation in Scotland was dealt with at Westminster right at the end of lots of other legislation, as a sort of afterthought or codicil. There was little time spent on it, or interest in it. I was a Member of Parliament, along with the noble Lord, Lord Cormack, and others who will remember that it was not the main business we were dealing with. That is why we pushed hard.
The main argument in favour of a Scottish Parliament was to provide democratic accountability in relation to the administrative devolution that had already taken place. But we always understood—this is what I think some people have forgotten—that Westminster remained and remains ultimately responsible for the good government of the whole United Kingdom. That is something never to forget. Some people want us to forget it, but it is very important. We have a sort of quasi-federal system. It was supposed to develop throughout the whole United Kingdom, but the proposal that the Labour Government put forward for devolution in the north-east of England was ill thought out. It was put forward at a bad time and did not get through. Had we had devolution for the whole United Kingdom things would be very different from the way they are at the moment.
The other thing is that devolution is completely different from independence. The two are completely separate concepts, and it is important never to forget that. It is in the interests of the SNP, the nationalists, to obfuscate, to muddy the waters, to pretend that one and the other are very similar, and to say, “Don’t worry”. Boris Johnson, our Prime Minister, recently showed that he does not understand devolution, but beware: equally, the SNP does not want us to understand devolution and is not using it as it is meant to be used, to benefit the people and improve the conditions of the people in Scotland.
Someone—I think the noble Lord, Lord Bourne—raised earlier that when we have Governments of similar political persuasions in Scotland and in the rest of the United Kingdom there are sometimes substantial difficulties. I know exactly that situation: I was Minister of State for Scotland in the United Kingdom Government and I dealt with an Administration in Scotland that was run by the Labour Party in coalition with the Liberal Democrats. We worked very well together. I used to meet weekly with Ministers in the Scottish Government. We had discussions about free personal care and how it should be funded. They were good, positive discussions and we all understood the position exactly.
I acknowledge as much as anyone—after all, I was a Member of the Scottish Parliament for four years, so I saw it as an MSP—the importance of involving the Scottish, Welsh and Northern Irish Parliaments and Governments, consulting where appropriate, giving them powers, allowing them total control over all the devolved areas and having them involved in other areas through the legislative consent Motions and the Sewel convention. I know that, and I felt it myself. But it is equally important to remember that each of the devolved Governments are not always right. Sometimes I think that some people assume that they are always right. I worry sometimes that we in Westminster do not want to be seen as big brothers, or to impose on or upset them, so we take what they say as gospel. We give them a veto where it is not appropriate. Sometimes I wonder whether those who came late to supporting devolution are the strongest advocates of taking account of their concerns: it is the zeal of the convert, perhaps.
Lord Naseby (Con)
My Lords, it is always a privilege to follow the noble Lord, particularly in his plea that we parliamentarians should debate in depth with all who want to take part in this Chamber. This is my first opportunity to thank colleagues on the Front Bench, my noble friends Lord True and Lord Callanan, for the way they handled Committee stage. It was not an easy Committee; nevertheless, one notes that among the amendments on Report there are a number of government amendments that follow some quite long debates on issues. We should reflect as colleagues and thank them for listening and coming forward with those amendments.
Subject to rereading the debates on the final day, I also hope that it is now recognised in the House that there is nothing illegal about the Bill. Noble Lords may disagree with it and with the politics of it, but its legality is now without question.
I am sure everybody is pleased, as I am, that there appears to be total agreement that the common framework is complementary to this Bill as matters stand and that—we have listened to noble Lords from Wales, Scotland and Northern Ireland—it appears to have worked well. That is to be cherished but, having spent five years in the chair looking at this, I note that it is pretty unusual to have a linkage across one Bill that becomes an Act and another Bill that hopes to become an Act. If there is to be such a linkage, the evidence must be absolutely conclusive, because if you go down that road you will find a clash of interests at some point. As a parliamentarian, for me that is the worst of all worlds.
At some point, arising from the dimensions of some of the contributions today, we may well need a further Bill reflecting some of the issues voiced this afternoon. However, we should not impose a new clause which appears to undermine to a degree the drive of this Bill. We need to reflect that this is a UK government Bill. It is all about the powers of the UK Government, particularly regarding the internal market but nevertheless recognising that the UK Government are responsible for external matters.
This amendment appears to me, having looked at and thought about it quite a lot, to undermine this. I am really concerned that, as it stands today, this may undermine devolution to a degree. I fully accept and understand that we may well want a full debate on a different Bill on the powers that rest with the Northern Ireland, Welsh and Scottish Governments and with the central UK Government, but this is not the Bill for that. I understand people’s concern about it, but this Bill focuses totally—and I believe should continue to focus totally—on making a success of leaving the EU.
Lord Rooker (Lab) [V]
My Lords, I reflect from the debate so far that the leadership of the main political parties at Westminster would do themselves a favour if they studied the speech of my noble friend Lord Foulkes. I will not go over the detail, but there were sufficient warnings there from someone who has had experience of the Scottish Parliament, the House of Commons and the House of Lords that really need to be listened to.
The first four speeches, from the noble and learned Lord, Lord Hope, the noble Baroness, Lady Finlay, the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Bourne, were masterclasses in argument in favour of the union, going well beyond this amendment. To be honest, I must tell the Minister that this is not a modest amendment, as far as I am concerned; no way is it a modest technical adjustment of the Bill.
This Bill, as was said earlier, destroys policy divergence. It is a one-size-fits-all Bill; to that extent, it is a rejection of devolution. I well remember the examples that my noble friend Lord Foulkes gave, as will the noble Lord, Lord Cormack. Take the 1974-79 Parliament; it was always at 10 o’clock at night that we got Scottish business, on housing and education, and we were on a three-line Whip, with slender government majorities or, most of the time, no government majority. We always thought, “Why can’t Scots deal with this themselves? This is a different legal system, which most of us do not understand.” Moreover, there was never enough time for those representing Scotland, who did understand it, to debate the matters fully. Born out of that was devolution.
My experience, which I will not go into in detail, was as a Minister at the ODPM and MAFF—which had massive contacts with the devolved Administrations simply because of the devolution of food, farming and agriculture—and then at the Food Standards Agency. At the time, the Scottish Government were in effect forced to set up their own food standards agency, as they were entitled to do by the legislation. Wales and Northern Ireland may well do the same—the legislation allows them to do it—because they will be forced into the situation as a result of issues such as this Bill.
I do not quite understand this issue of complementary arrangement. I spent a bit of time while listening to everybody’s speeches going through my dictionaries, thesaurus and everything, and I still do not understand it. There seems to be no connection between the common frameworks set-up and the Bill. If that is the case, I cannot for the life of me see how there can be any complementary arrangements. The Bill overrides the other processes; there is no connection whatever to that extent. Amendment 1 puts in a connection, which is crucial.
In terms of divergence over what is required with imports, the UK Government will take no account of what happens in the common frameworks process if the Bill goes unamended. Again, it will be one size fits all. The trade department will do the trade deals and take no account whatever of any desired or agreed policy divergence between the four constituent parts of the UK.
The Prime Minister has made the position crystal clear. It does not matter how much spin he puts on it or how many weasel words come from him and his acolytes; the fact is that he said that
“devolution has been a disaster north of the border”.
That is a fundamental attack on devolution; it would not matter who was in charge north of the border. He said it was a fundamental mistake of Tony Blair, but he later tied it to the actions of the current Government in Scotland; he did not say that to start with. He was fundamentally opposed to devolution. You cannot compare the devolution of the Mayor of London with what happens in the Governments of Scotland, Wales and Northern Ireland.
The union is at stake. Ministers seem to gloss over this. I think we are on our way to a federal Great Britain. I give full support to this amendment, which is fundamentally required. This is nothing personal, but I have never seen a spark of conciliation from the noble Lord, Lord True—I am sure he will take that from me as an absolute compliment—and I do not expect him to be at all conciliatory to what the noble and learned Lord, Lord Hope, has said, and in due course I expect to vote for the amendment.
Baroness Randerson (LD)
My Lords, I congratulate the noble and learned Lord, Lord Hope, and his fellow signatories on these amendments. Amendment 1 neatly turns this Bill on its head, so that market access principles will not apply to any decisions to diverge that are agreed through the common frameworks process. That means that common frameworks come first, and it is only when they do not provide complete cover that the provisions of this Bill need to come into effect.
The Government have maintained throughout these debates that they remain committed to common frameworks, despite their determination to avoid even mentioning them in the Bill. They have insisted that all they want to do is fill the gap left by our leaving the EU and that they have no intention of attacking devolution. The mask slipped on Monday when the Prime Minister called devolution a “disaster” and “Tony Blair’s greatest mistake”—which makes it a greater mistake than the Iraq war. The cards are now on the table.
Lord Thomas of Cwmgiedd (CB) [V]
It is a very great privilege to follow the noble Baroness, Lady Randerson, and the many other noble Lords who have spoken in support of these amendments, and in particular Amendment 1. I strongly support that amendment in the names of my noble and learned friends Lord Hope of Craighead and Lord Mackay of Clashfern, the noble Baroness, Lady Finlay of Llandaff, and the noble Lord, Lord Bourne of Aberystwyth.
It is a great shame that these issues were not addressed some time ago in the House, after the promising steps taken in the withdrawal Act. It was obvious that there had to be arrangements to deal with a common approach to standards and—a matter to which we will come later—state subsidies, and any other matters that are essential to the operation of any internal market. We are where we are, but this Government cannot say that we have to continue to proceed along the lines of the Act without thinking through the consequences of passing it—particularly passing it unamended.
Some have said that people must be sick of points being raised about devolution. But it is important to point out that the provisions of the Act and the ones we are considering not only affect the devolution settlements and the positions of Wales, Scotland and Northern Ireland, but should be as much a concern for England. We are concerned with standards that can apply to an internal market across the UK and can be enforced in England, as in other places. Sometimes, we forget the effect this could have on England.
I will take two examples. In its current form, this Bill would prevent the operation of one of the nations that wished to produce a product that was beneficial to the environment. I will take Wales as a country that would want to do that as it innovated in the case of plastic bags. I will take the example of selling ketchup in single-use plastic bottles and Wales being the first in the UK to think of introducing legislation banning that sale. In the other nations the regulations that may have to be complied with would say nothing about that, so manufacturers there would be able to sell ketchup in single-use plastic bottles. If a common framework were agreed that Wales was allowed to diverge and ban the use of ketchup in single-use plastic bottles, Wales could then proceed and make such a regulation. The effect of this Bill would be that the Welsh regulation could not be enforced in Wales against the sale of ketchup in single-use plastic bottles manufactured in England, Scotland and Northern Ireland or imported into England, Scotland or Northern Ireland. The Welsh regulation would have been rendered nugatory.
Of course, if the amendment from the noble and learned Lord, Lord Hope, is accepted, it would prevent that result. It would allow the Welsh regulation to be enforced and it would be a provision that gives effect to a decision to diverge from the common framework process—and while the common framework was under discussion it would prevent the principles in the Bill applying. That has the wholly beneficial effect of driving up standards. I will put the converse example and substitute for a beneficial aim an example where one of the Governments decided to pursue an aim that was not in the results beneficial: for example, if a Government decided to allow a manufacturer to make and sell a product in packaging that was harmful to the environment.
It is not difficult to envisage this happening when a Government bow—as they do, regrettably—to pressure from a manufacturer to allow such packaging, as it would provide much-needed employment and, at the same time, play down the harmful effects. As it currently stands, the Bill would allow that manufacturer not only to sell the packaging in the nation that was prepared to permit this, but in all the other nations. Without this amendment, the Bill would have the effect of driving down standards. These two examples show, therefore, that this is a matter of concern for the Governments of Scotland, Wales and Northern Ireland, and for the Government of the UK in its capacity as the Government of England. However, as my noble and learned friend Lord Hope has so eloquently explained, deeper issues are involved. Will the Government stick with their commitments to respect the devolution arrangements or will they undermine them? Alternatively, do they wish to achieve an internal market by consensus and with proper discussion?
I do not need to say again that, without the amendment, these provisions demonstrate a desire to undermine the devolution settlements for, without this amendment, common frameworks are pointless. However, it is worth thinking a little further. As the noble Lord, Lord Foulkes, has tried to explain, dealing with an internal market is a complex matter, and it would be much better if there was time for proper debate. Taking the second of my examples, it is easy to see how the consequences that I have outlined would undermine a proper approach to an internal market and bring about a result that no Government would want. Surely the better way of proceeding is to allow this amendment, to allow the common frameworks to develop, and to think again about how we deal with these issues of standards—as we come later in the debates to deal with the issue of subsidies—so that we create an internal market which is thought through, works, is achieved by consensus and will build the prosperity that I, like the Government, wish to see come out of this process.
Lord Garnier (Con) [V]
My Lords, without the new clause proposed by the noble and learned lord, Lord Hope of Craighead, the common framework system is redundant and, without a change of attitude by the Government, the union of Great Britain and Northern Ireland is gravely threatened. I agree with the new clause as proposed by the noble and learned Lord and his co-signatories for the reasons that they have given, and I will support them accordingly if a Division is called. That I am disagreeing with my noble friends, the hard-working and overworked Minister on the Front Bench and Lord Naseby, is a matter of avoidable sadness.
As will readily be appreciated, common frameworks are a mechanism for the UK and devolved Governments to agree among themselves some regulatory consistency for policy areas where powers returning from the EU are within devolved competence. As the noble and learned Lord, Lord Hope, told us, the principles for when a common framework is needed were agreed between the four Administrations in October 2017. It was then agreed that common frameworks would be established where they are necessary to enable the functioning of the UK internal market, while acknowledging policy divergence; to ensure compliance with international obligations; to ensure that the UK can negotiate, enter into and implement new trade agreements and international treaties; to enable the management of common resources; to administer and provide access to justice in cases with a cross-border element; and to safeguard the security of the United Kingdom. We expect common frameworks on a wide variety of topics, from the UK emissions trading system to food safety.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, speaking after so many distinguished noble Lords, I will try to avoid repeating what has been said. I formally offer the Green Party’s support for these amendments and thank the noble and learned Lord who tabled them and his co-signatories for their labours and powerful arguments.
I will offer three perspectives from green political philosophy. First, on the value of diversity, which the common frameworks approach embraces, a healthy ecosystem and a healthy governance system contain diversity. Our outdated, dysfunctional Westminster system acts to suppress that and, in response, we have seen the successful drive for devolution that has brought in political diversity across these islands. As we speak, the Senedd is considering extending that diversity to local government in Wales. That is a direction of travel that the Bill clearly and deliberately seeks to wrench into reverse, being deliberately destructive, as the noble Lord, Lord Garnier, said.
Diversity has obvious practical benefits, such as the ability to experiment, as the noble Baroness, Lady Randerson, reflected earlier, with different approaches to blocking the flood of single-use plastics into our choked islands; different approaches to producing healthy food from flourishing small market gardens and farms; and different approaches to educating our children, which later amendments in my name address. Where one approach is transparently successful, we hope others will follow its lead—unless political calculations get in the way.
The second philosophical point is about the value of localism—the people affected making the decisions that affect them, ideally democratically, as the nations other than England enjoy their democratic devolved legislative structures. “Take back control” was a very popular slogan in 2016. I entirely agree with that need, and put it to your Lordships’ House that this is what the amendments in support of the common frameworks agreement do for the people of these islands.
Finally, there is the value of co-operation. Working co-operatively is something that we, as Greens, find is very popular with the public. They are fed up with the see-saw of two-party politics, of a new Government seeking to sweep aside and to argue against everything their opponent did, just for the sake of claiming victory. The common frameworks approach is the very epitome of a co-operative way of working.
The noble Baroness, Lady Finlay, said that for the Government to reject these amendments is to reject devolution itself. I agree. She said that it would be a step towards the break-up of the United Kingdom. I agree. My view of the union is different from the noble Baroness’s. I believe there is a strong natural current towards taking back control in many parts of the United Kingdom but, if it is to happen, we can surely agree that it should be in a co-operative, positive environment, not nations feeling that they have to struggle their way out from under the boot of an overweening, care-less, distant Westminster.
Finally, taking the scientific perspective that reflects my background, I invite your Lordships’ House to consider the fate of the trilobites, whose long story of ocean success and eventual extinction was laid out in a paper in the Proceedings of the Academy of Natural Science this week. Through three periods of mass global extinction, the trilobites were a large part of ocean ecosystems but, after each challenge, they had less diversity in ecological niches and bodily forms. Eventually, they dwindled to one species and disappeared. In diversity, co-operation and local power is strength. In homogeneity, dominance and centralism is a loss of resilience, decline and the potential for disaster.
Lord Cormack (Con)
My Lords, this has been a remarkable afternoon. I agreed emphatically with my friend the noble Lord, Lord Foulkes, when he said it was not so much a debate as a series of statements. I have said similar in the past about other debates. I really believe it is essential that we do something to restore debate. My very good and noble friend Lord Naseby made an interesting speech, but I would have loved to have intervened. I would have challenged him, for instance, when he said the Bill is entirely legal. It is now, because we took out Part 5 last week but, if they attempt to put it back, it will become illegal again. He would have responded robustly and interestingly to that sort of interchange. It brings the place alive. We are in a dead, one-dimensional Parliament and we have to do something about it.
Having said that, I will make a suggestion. If we group the speakers who are in the Chamber, it should be permissible for me to intervene on the noble Lord, Lord Foulkes, the noble Lord, Lord Foulkes, on me, me on my noble friend Lord Naseby or whatever. At the beginning, whoever is on the Woolsack reads the rubric about all noble Lords being treated equally, but there is a time to depart from that. It is entirely right and proper for noble Lords to speak on the screen but, if they are there and not here, they cannot expect to enjoy all the privileges and preferences that those of us who take the risk to come here ought to have. I urge those who arrange these things to consider that.
Outside Part 5, the subject of today’s debate is the most important part of the Bill. We had a magisterial introduction to the debate from the noble and learned Lord, Lord Hope of Craighead, wonderfully and amusingly backed up by somebody who led him so often, my noble and learned friend Lord Mackay of Clashfern. I beg the Minister, in his reply, to reflect on what those two eminent lawyers said. One was a Conservative Lord Chancellor of many years, and he was backed up by others such as the noble Baroness, Lady Finlay, who was another signatory to the amendment. I think that all noble Lords who introduced this amendment gave, as one noble Lord described, a masterclass in how to do it.
Despite what my dear and good friend the noble Lord, Lord Rooker, said, the Government have demonstrated that they can listen to your Lordships’ House—not only on the Agriculture Bill a week ago, but today on the Order Paper. We have all had a letter, signed by my noble friends Lord True and Lord Callanan, thanking us for our contributions in Committee and saying that they have taken points on board. They have—not enough, but they have. If any point is to be taken on board it is that which we are debating in this first series of amendments. It is crucial, as several noble Lords have said, as the union is at stake.
We were not helped by a certain insensitive remark by an eminent personage a couple of days ago. As we have said before, the noble Lord, Lord Foulkes, and I were on opposite sides in the 1970s when we were debating devolution, but it has happened. It is a fact of life. Therefore, there has to be an arrangement between the constituent Parliaments of the United Kingdom. Every noble Lord who has spoken today, with the possible exception of the noble Baroness, Lady Bennett of Manor Castle, has expressed a fervent desire to keep the union. It is the most remarkable union in modern history, but it is at risk. It is at risk because the Prime Minister is perceived—and perceptions are so important in politics—to have a rather haughty attitude towards Scotland. It is at risk because the Government are perceived not to care sufficiently about the frameworks of the constituent Parliaments of the United Kingdom.
The noble and learned Lord, Lord Hope, laid this out with forensic and clinical precision. I beg my noble friend, in his reply, to reflect on what the noble and learned Lord said in introducing our proceedings. Notice that I am not calling them a “debate”. I beg and beseech my noble friends, Lord True and Lord Callanan, to show a degree of sensitivity, as they have on some other amendments. Sensitivity is not a political weakness; it is sign of political maturity and strength. Reflect and, as I hope, we may not have to vote this afternoon.
I hope the Minister promises to come back at Third Reading, having had conversations with the noble and learned Lord, Lord Hope, my noble and learned friend Lord Mackay of Clashfern, and my noble friend Lord Bourne of Aberystwyth. Remember that, for several years, he led the Conservative Party in the Welsh Assembly, as it then was. These are not political enemies and this is not a party-political issue. It is a constitutional issue of supreme importance to all parties. I ask the Minister, please, to take it away and have conversations with the noble and learned Lord, my noble and learned friend and other noble Lords, and to come back at Third Reading. If he cannot give that conciliatory, sensible and constructive answer, then I will have no hesitation in pressing the “Content” button on my machine.
Lord Liddle (Lab)
My Lords, first of all I say how much I agree with what the noble Lord, Lord Cormack, has said about how we should organise our affairs. We have to bring back genuine debate to this Chamber, and I hope that those responsible will take on board what he has just spoken about.
Secondly, I had prepared what I thought was an extremely well-argued speech on the subject before us today. However, having listened to far more eminent figures than me talk about the need for these common frameworks, I am not going to deliver it. All I will say is that the noble and learned Lord, Lord Hope, in opening the debate, spoke with a sharpness, a forcefulness and a logical directness that the Government would be well advised to take into account.
I have a couple of questions for the Minister because I think political questions arise from this discussion. First, does he acknowledge that the Government have changed their policy on these common frameworks since 2017-18, and why? It is clearly the case that there has been a change of policy and that Theresa May, in her commitment to “our precious union”, as she put it, saw the dangers that Brexit would pose to the devolution settlement and tried to find a consensual way of resolving them. David Lidington, with the help of people such as the noble Lord, Lord Dunlop, came up with this concept of common frameworks as a way of doing this.
Why, in this Bill, if the Government have not changed their policy on these common frameworks, can they not find a place for them in the legislation? What is the objection to actually acknowledging their existence to balance the abstract principles of mutual recognition and non-discrimination, which every single lawyer in this Chamber tells us will override the practical effect of these common frameworks? Why do the Government not come clean about this? Why do the Government not admit that what they actually want is to take power to the London Government to get their way on whatever they want in this area, rather than using the bottom-up, consensual approach that David Lidington and the noble Lord, Lord Dunlop, put together in the passage of the EU withdrawal Act? I think the Government should do that because we are marching into very dangerous territory for the future of our United Kingdom.
I remember that the noble and learned Lord, Lord Hope, in his speech in Committee, argued that common frameworks were consistent with the principles of subsidiarity and proportionality that had been underlying principles of the European Union in this area of law. The noble Lord, Lord Callanan, said in response, “Well, those are European principles. We have now left the European Union; we don’t have to follow them anymore”. What principles are the Government following? What is the Government’s vision for the future of the United Kingdom now that the Prime Minister has described devolution as Tony Blair’s biggest disaster? Will he please set out to us what is his vision of the balance of relationships between the devolved nations? We are really getting into very dangerous territory.
I hope that we can somehow rescue the situation by getting these common frameworks back. If we do not, I hope that my party will press the case hard for a major constitutional convention on the future of the United Kingdom. It seems to me that unless we provide that credible alternative, the nationalists in Scotland will break up what has been one of the greatest ventures in history.
Baroness Noakes (Con)
My Lords, I start by saying how much I agree with what a number of noble Lords have said about the nature of debate in this sterile House, and I hope that we can certainly move on. I think it is important to say that because, as noble Lords might expect, I am not going to be saying much else which will find favour with other noble Lords who have spoken in this debate.
I respect the concerns about protecting the powers of the devolved Administrations which lie behind the amendments in this group, but I believe that these amendments would not be helpful in the context of the internal market and might well be very harmful. There is no exact correlation between what the common frameworks cover and the UK’s internal market covered by the Bill. Indeed, the functioning of the internal market is only one of six objectives of the common frameworks programme. Not every common framework will have a UK internal market dimension, and not every aspect of the UK internal market is included in the common frameworks programme.
So if Amendment 1 is agreed to, we will have uncertainty from day one about which bits of the common frameworks would override the market access principles. Uncertainty kills businesses. Uncertainty might be resolved only by the courts, and that could take five, maybe 10, years to bring to conclusion. Businesses cannot in general cope with timeframes of that nature, and that is especially true in today’s lockdown-harmed business environment.
The common frameworks are by their very nature detailed and specific. They are practical solutions to well-defined problems, such as compliance with international obligations. They do, however, have two big weaknesses. First, they have no guiding star, or no guiding principle, and they cannot, by their nature, cope with future change. By contrast, the internal market enshrined in the Bill is based on the overarching and enduring principles of market access, namely, mutual recognition and non-discrimination.
I am very clear that businesses want the Government to deliver an internal market which has as few barriers to trade as possible. They do not want to have to master thousands of pages of common frameworks, which may or may not impact the internal market, just to do business 10 miles away if that is over one of the UK’s internal borders. I have to say to the noble Baroness, Lady Randerson, that I have never even heard of the Aldersgate Group she referred to as representing business opinion, and I do not believe it represents the opinion of the whole business community.
In Committee, I urged noble Lords to consider the provisions of the Bill through the lens of businesses and individuals who will be trying to live, work and trade within the United Kingdom—that is what the Bill is about. By viewing the Bill through the lens of what the devolved Administrations think they might lose in terms of devolved competence, I believe that they may end up inflicting acts of self-harm on the people and businesses in their own territories.
I remind noble Lords of the high degree of dependence of the devolved nations on trade with other parts of the United Kingdom. This is an issue for Scottish businesses and residents, Welsh businesses and residents and Northern Ireland businesses and residents. It is important but not such a big issue for English businesses and residents. If trade is made more difficult, the result, as night follows day, will be higher cost and less choice for consumers. At a time of economic stress, that does not seem a sensible route to follow.
I have heard many arguments of principle adduced by the supporters of the amendments, but I have heard less about the practical issues. We heard about Scottish concerns on minimum alcohol pricing, but that was debunked in Committee. I believe that building regulations are a new red herring that has been introduced and will not conflict with the Bill. The Bill does not outlaw every variation within the UK, as some have tried to suggest. More importantly, I am still waiting to hear what will make life better for the businesses and residents of the devolved nations if the amendments are passed.
More than 90% of UK small and medium-sized enterprises, and nearly 60% of large businesses, trade only within the UK. That is the scale of the issues we are facing with the amendments. I hope that noble Lords will not jeopardise the aims of an internal market which works for the whole of the United Kingdom by pressing the amendments.
Lord Fox (LD)
My Lords, the noble Baroness, Lady Noakes, is right: I found cause to agree with her opening statement, as I did with the noble Lords, Lord Foulkes and Lord Cormack, and others. The need to have proper debate—not least to allow the noble Lord, Lord Foulkes, to go back to his heckling—would add to the debate.
Congratulations should go to the proposers of the amendments and to the noble and learned Lord, Lord Falconer and my noble friend Lord Newby, who have managed to create a debate which gives your Lordships a proper choice. That choice centres around the words “mutual respect”, because the Bill as it stands, unamended, is disrespectful to the devolved authorities and to the process of devolution. The amendment gives your Lordships a chance to build that respect back into the Bill.
On many occasions, Ministers have freely used the word “complement” and expressed the view that the common frameworks complement the process devised by the Bill. Unless those common frameworks can be built into the Bill, and unless the Minister can explicitly explain how they complement, there is no complementary process; there is replacement, which I believe is sought by the Bill. The noble Lord, Lord Naseby, spoke of the common frameworks as if they were some Bolshevik plot. I remind him that they were the policies of a Conservative Government whom he probably supported and voted for at some point in the recent past.
The amendments give an opportunity to put respect back into the Bill, but there is also a practical element to them. We should remember, as we were reminded by, I believe, the noble and learned Lord, Lord Mackay, that trade and the internal market are flexible: they move, they change. The common frameworks are designed to be a flexible, living document. As many Peers have pointed out, they are also there to manage divergence. The common frameworks are there to manage divergence and, as we have heard from a number of speakers, not least my noble friend Lady Randerson, that divergence delivers innovation, progress and better things for this country.
My noble and learned friend Lord Wallace brought up something very important. In the words of the Minister, the Bill seeks to do that which the common frameworks do not do. The common frameworks do that which is being transferred from the European Union. Therefore, the Bill is trying to do more than was being transferred from the European Union. This is a zero-sum game. Where is that power coming from? It is being reserved by the Government from what was previously devolved. My noble and learned friend showed that that is the clear plan that sits underneath the Bill.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been an excellent debate, despite the fact that it is decidedly one-sided—although the noble Baroness, Lady Noakes, did her best to redress the balance—and I look forward to the Minister’s response. I said to him in an earlier meeting that this might be one occasion—perhaps the only one—when the House would be happy to hear a full response from him to the points made by the noble and learned Lord, Lord Hope, and his distinguished co-signatories and supporters.
I say that because, as the noble and learned Lord said, although the amendments sensibly address the rules for the mutual recognition of goods in Part 1, services in Part 2 and professional qualifications in Part 3, their underlying, ancillary purpose is to support and enhance the relationship between the Governments of the four nations of this United Kingdom. They focus on the key question raised by the Bill: is this to be a single market under new rules created and imposed from Westminster or is it to be all four nations working together, managing appropriate divergence, as they are currently doing through the successful common framework process?
I hope the Minister will give us a full answer to the important questions raised by this debate. I also hope that he will reaffirm his Government’s commitment to our devolution settlement, because, as we have heard, our current settlement is under pressure—not least because of recent comments from the Prime Minister. This is not confined to the devolved Administrations. The virus, the recession and recent spats over local lockdowns, who manages public health and welfare best and who pays have exposed a centre that seems unable to listen and outlying areas that do not feel they are being consulted. As we will come to in later amendments, these are bodies with far greater knowledge of what is happening locally, but which lack the resources to solve the problems they identify. It can be argued that the Bill is actually about gathering powers which should be devolved to an insensitive centre which is trying to imprison a multinational country composed of vibrant, diverse regions with diverse histories and needs into a straitjacket of a unitary state. We can and need to do better than that.
As many noble Lords have said, the most striking aspect of this debate so far has been the wide cross-party support for these amendments, coupled with the fact that no fewer than seven members of the Select Committee considering common frameworks have made it clear beyond peradventure that the common framework process is alive and well, doing the job that the Government say they need done: supporting frictionless trade across the UK, improving standards, managing divergence and strengthening the union. Why is this process not at the centre of the Bill?
We support these amendments and will support the noble and learned Lord if he decides to test the opinion of the House. However, we heard from the Minister in earlier stages of the Bill and in separate meetings that his mind was not closed on this issue. Obviously, other interests are at stake here. However, the case made today by virtually everyone who has spoken has been strong and formidable in the arguments deployed. I urge the Government to give the House an assurance that they accept the principle that lies behind the amendments and that they will come back at Third Reading with amendments of their own which give effect to it. If so, we would support that.
It is clear that there is more that unites us on this issue than divides us, and it is clear from the tone and content of the debate that this would be the preferred solution of your Lordships’ House.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, in preamble, I say again that I agree with those who would like to see our old proceedings back; as long as I am trusted and have the privilege to answer to this House, I will seek to do so from this Dispatch Box. However, I say to my noble friends on the Liberal Democrat Benches that if they want to have heckling from the noble Lord, Lord Foulkes, they should be careful what they wish for.
In reply to the noble Lord, Lord Rooker, I try always to be in a conciliatory mood. Particularly after a debate such as this I am mindful of the wise advice of the Emperor Marcus Aurelius: “Accept modestly; surrender gracefully.” Unfortunately, however, as noble Lords who have had the privilege of serving in office will know, conciliation does not mean that one must accept specific amendments.
This debate was rooted in a passionate and sincere spirit, almost universally shared, of concern for the union and respect for devolution. As I say, that unites almost all of us who have spoken, including the Member now on his feet. The noble Lord, Lord Foulkes of Cumnock, made a fascinating and thoughtful speech, which of course I will study carefully. Those of us who care for the union and support devolution should be cautious in echoing the separatist claim that this or that action is being done to undermine devolution when it is not. The debate about effect and perceived effect is legitimate. The claim of bad intent that we have had from some is risky, if not perilous.
The UK Government and the devolved Administrations all have a clear stake in a smooth-functioning internal market, as my noble friend Lady Noakes pointed out. However, the Government have been clear—we have made no secret of this in the Bill—as my noble friend Lord Naseby said, that the right place for final decisions on the internal market should be the United Kingdom Parliament, where parliamentarians from all parts of the United Kingdom can debate and vote on legislative proposals.
I was asked a specific question by the noble Baroness, Lady Andrews; the noble and learned Lord, Lord Thomas of Cwmgiedd, touched on it also. New restrictions on the sale of goods, including goods made from plastic produced in or imported into one part of the UK, will be subject to the mutual recognition principle for goods unless an exclusion in Schedule 1 applies. The Bill will preserve the devolved Administrations’ ability to regulate in line with their own strategies and regulate production of goods in their territory. However, goods, including ketchup, sold lawfully elsewhere in the United Kingdom will not be denied access to other parts of the UK market unless an exclusion applies. Consumers are of course not required to buy them.
The noble and learned Lord, Lord Hope of Craighead, in his powerful opening speech claimed that the Bill “destroys divergence”—that it is not possible under the Bill. I want to make it clear that to say it is not possible is incorrect. The Bill will apply only where divergence would create a market barrier under the conditions set out in the Bill. Domestic producers will have to conform to local regulation, and devolved Administrations will be able to regulate the use of all goods.
My noble friend Lord Callanan and I have welcomed positive engagement with a number of your Lordships across the House on the common frameworks programme— some noble Lords have been kind enough to allude to that. This issue and the concerns raised in our debates are important. I hope we will be able to draw lessons from these discussions in the constructive spirit that they have taken on to date and find ways to set at rest some of the concerns expressed that we believe are unjustified.
As I have said before to your Lordships’ House, we, along with the devolved Administrations, remain committed to the common frameworks programme. We recognise the importance of the issue and the need to underline unequivocally the Government’s continued commitment to the frameworks programme, before and after the passage of the Bill. An iron curtain will not fall. For all the profound respect I have for the noble Baroness, Lady Finlay, I do not believe that that sort of language is helpful.
Our commitment has been made clear to your Lordships’ House at every stage in our debates and discussions on this to date, as the noble Lord, Lord Stevenson of Balmacara, said, and in the regular publication of framework analysis, which has been in circulation since 2008. The pursuit of this aim must respect the interests of the other parties involved in the common frameworks programme. There is no indication at present that the devolved Administrations would support placing common frameworks on a statutory basis. Indeed, when I had the privilege of giving evidence to a Welsh Senedd Select Committee last week, that was not the impression I received. However, in any case, common frameworks have not been designed to carry legal force.
The Government have made it clear—yes, I will use the word—that the frameworks programme and the UK internal market are two complementary undertakings. The devolved Administrations will continue to be able to innovate and regulate in devolved policy areas, but the UKIM Bill will create limits on the extent to which they can enforce new requirements against traders from other parts of the United Kingdom. The market access principles will ensure that any divergence does not damage the ability of UK companies or investors to trade with every part of the United Kingdom. I appreciate the feeling across the House on this matter, but the Government view retaining the flexibility and voluntary nature of the programme and respecting market principles as important and viable complementary objectives.
I acknowledge that there may be an appropriate way to put frameworks into the Bill while retaining the flexibility and the voluntary nature of the programme and respecting the market principles. However, I respectfully suggest that the approach proposed here to make these amendments to the Bill is not the right one, and I will seek to explain why.
The approach proposed in these amendments would significantly change the nature of common frameworks, giving agreements within them primacy over the market access provisions in the Bill, as acknowledged and argued by the amendments’ signatories. Although I understand the intention of these amendments in seeking to define the relationship between the common frameworks and the market access principles, they are problematic in a number of respects. The approach would automatically disapply the market access principles and mutual recognition of authorisation requirements in relation to regulations or requirements that implement agreements reached under common frameworks. I disagree with my noble and learned friend Lord Garnier; this creates a risk of legal uncertainty. On this I agree with my noble friend Lady Noakes in her powerful speech about the interests of business and consumers, particularly in the smaller economies of the United Kingdom—an aspect ignored by the signatories to the amendments.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
I have received only a single request to speak after the Minister, so I am going to call the noble Baroness, Lady Randerson, to ask a short question of elucidation.
Baroness Randerson (LD)
The Minister cast doubt on warnings about the impact on devolution. Has he looked at opinion polls in Wales tracking support for independence? That is a country that only 20 years ago very narrowly accepted devolution. It is a country that voted for Brexit, and one that is governed by a Labour-Lib Dem coalition—two unionist parties. You can see in that country the clear feeling about the way in which this Government are behaving.
Lord True (Con)
My Lords, I am not sure that is directly relevant to the subject matter of the Bill. I thought I had in fact made the point that imputation of motive and intent is a political choice that should be exercised wisely. This Government’s intention in this Bill is in no way to undermine the devolution settlement and I have restated, from this Dispatch Box, our commitment to the common frameworks. As for opinion polls, if I were a Liberal Democrat I would not live by them.
Lord Hope of Craighead (CB) [V]
[Inaudible.]—perspectives have offered support to what these amendments seek to do. Picking up a point made by the noble Lord, Lord Cormack—sitting on my own in my little room, participating virtually—I too very much regret that it has not been possible for us all to join together in the Chamber. I see the value of the points he was making about introducing some more lively spirit among those in the Chamber, so there could be a real atmosphere of debate, which even remotely we would be able to enjoy.
I listened very carefully to what the noble Lord, Lord True, said. He expressed his position, as always, very clearly in careful language. I think, on a fair reading, that the clauses in Parts 1 and 2 are more absolute in their effect than he was making out, and I do not accept the criticisms that he makes of the amendments’ effect. Of course, I do not claim that the amendment I have put forward is a final solution; there was always an option open to the Government. If they thought the amendments could be improved upon or altered to meet some of the points that the Minister made, that could have been done—but there was no such offer forthcoming from him, for reasons that I understand.
The question was whether the devolved nations should continue to be free to develop and apply market policies within their devolution mandate which have secured agreement under the common frameworks process, or whether that freedom should simply be brushed aside, as the Bill really seeks to do. It is difficult to avoid the conclusion that this Government regard devolution as an inconvenience that can simply be ignored when they want to. I regret that very much indeed. I am a unionist and I believe in the union and all that it stands for, and all the values that I hope it will continue to give us in future. But I am afraid we see here an uncompromising, careless and centralist style of government, which divides our United Kingdom into pieces at a time when harmony is most needed. That has no place in our democracy.
I know that the Minister will reflect very carefully on what has been said today, and I hope that he will do his best to persuade those at the heart of government to think again, but what he has said in his reply leaves me with no alternative. I seek to test the opinion of the House on my amendment.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, we now come to the group beginning with Amendment 2. I remind noble Lords that Members other than the mover and the Minister may speak only once, and that short questions of elucidation are discouraged. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
I should inform the House that, if Amendment 2 is agreed to, I cannot call Amendments 3 or 4. In that case, the debate on the group beginning with Amendment 3 will take place with Amendment 8 or 9, as called. The debate on Amendment 4 will take place with Amendment 5, with the same list of speakers. I hope that that is all clear.
Clause 3: Relevant requirements for the purposes of section 2
Amendment 2
Baroness Andrews
Baroness Andrews (Lab) [V]
My Lords, I shall speak also to the other amendments in this group which stand in my name and those of other noble Lords. I am very grateful that such a distinguished group of noble Lords have supported them.
Since my amendments were tabled, the noble Lord, Lord Callanan, has, to my pleasure, added his name to Amendment 2. He will, of course, make his own arguments clear on why he supports this amendment, and I look forward to hearing them. However, I hope to change his mind just a little further in this debate and to say a few words in respect of the amendments as they now stand.
We had a very powerful debate in Committee, when it was made absolutely clear that the majority of your Lordships agreed with the combined censure of the Delegated Powers and Regulatory Reform Committee and the Constitution Committee that the Government had taken unprecedented and unnecessary Henry VIII powers in this Bill—powers that were too wide, too vague, opportunistic and altogether so inappropriate that the best thing to do was to remove them from the Bill entirely.
I have to declare an interest in the Delegated Powers Committee. It was set up more than three decades ago and has, particularly in the past few years, recorded the casual and accelerating abuse of the parliamentary process.
Both committees dismissed the arguments that the Government made originally in support of these extraordinary clauses as contemptuous of Parliament. They pointed out that the argument that secondary legislation could offer more speed and flexibility to deal with things that just might happen in the future were both specious and dangerous.
In particular, they referred to Clauses 3 and 6, which are the twin pillars of the archaeology of market access—mutual recognition in Clause 3 and non-discrimination in Clause 6. They said that they contained Henry VIII powers which, in each case, allowed Ministers to alter the definition of the key requirements of the Bill—for example, the fundamental nature of what is traded, and the characteristics of goods and matters related to, for instance, their inspection and production—and, in each case, to rewrite those principles substantially in secondary legislation. The DPRRC said that both clauses suffered from the same defects and both proposed to make future amendments merely by consulting the devolved Administrations but without seeking their consent.
The committee was equally clear that both clauses were conjoined and equally egregious, and that the relevant subsections in both should be removed. That is just what my Amendments 2 and 7 would do. Therefore, I was really delighted that the Government had clearly respected the weight of the argument of the committee and had agreed to withdraw completely subsections (8) to (10) of Clause 3.
In his letter to the Delegated Powers and Regulatory Reform Committee on 12 November, the Minister said that the Government had done so because they recognised
“the strength of Peers’ concerns about the number and extent of delegated powers, and therefore”
are
“prepared to remove this power.”
So far, so very good, but, sadly, and for reasons that I really cannot explain, the Government have not recognised the committee’s identical and equally grave concerns in relation to Clause 6. They merely said that they are
“fully committed to ensuring that the use of the power in clause 6(5) is subject to effective oversight and consultation.”
I really do not want to be churlish about this; I want to persuade the Government to do the consistent and logical thing. My first question to the Minister is: if they recognise the problem with Clause 3, why cannot the same grace and logic be applied to Clause 6? What is different about Clause 6? The substance of Clause 6(3) deals with slightly different aspects of trade but ones that are no less important and cover, in some paragraphs, exactly the same areas, such as inspection. Therefore, why should the non-discrimination aspect be treated differently from market recognition and be subject only to the uncertain and retrospective review that the Government offer? The Minister’s letter is silent as to the reason, but I have some hope that this evening, with encouragement, he might be prepared to reconsider whether it would not make better sense to treat these two clauses consistently, in the same way, and to remove both sets of subsections from the Bill, rather than introduce a whole new set of anomalies.
There is another reason why he might want to think again about Amendment 7. Much of the debate on the whole Bill turns on the impact it has had, from start to finish, on the future of the devolution settlements and the respect given to the devolved and equal Governments. We have just finished a debate on that point on Amendment 1—the way in which the Bill impacts on the freedom that the devolved Administrations have to apply their legitimate and different legislation. I will not repeat what I said on earlier amendments, but, as the DPRRC report puts it:
“Clause 3(4) equally affects all the administrations of the UK. If it turns out to be defective, it should be for Parliament to correct it rather than Ministers at Westminster.”
However, with these clauses the Government can act without the need to introduce new primary legislation or to obtain the consent of the devolved Administrations, the Minister being under a duty only to consult, even though the proper functioning of the internal market is essential to all the Administrations of the UK.
The identical language is applied in Clause 6, so that, I argue, is a very powerful ethical, legal and political case for removing the relevant subsections from both Clauses 3 and 6. These powers of consultation without consent stand out as a failure to understand what the Delegated Powers Committee spells out quite clearly: that this part of the Bill marginalises the devolved Governments. I simply do not understand why the Government do not grasp the significance of that.
The other amendments in my name in this group, Amendments 12, 17, 31 and 42, deal with different ways in which secondary legislation is used to deal with other, related matters in the Bill—indirect discrimination, for example. Amendments 12 and 42 concern the list of legitimate aims; Amendment 17 concerns the powers to amend Schedule 1 in relation to provisions excluded from the application of the market access principles; and Amendment 31 deals with the power to amend Schedule 2 to add, amend or remove services or requirements to or from those currently excluded from principles of mutual recognition and non-discrimination. Each of those amendments, again, reflects the egregious way in which secondary legislation has been seen as a point of first resort.
The Government have responded to the committee’s recommendations, according to the detailed letter that the noble Lord, Lord Callanan, sent to it, by tabling amendments that will provide for additional consultation with the devolved Administrations. Those amendments are not in this group, but I simply say that “consultation” is a very slippery word and a slippery concept, unless it means conducting a serious and independent consultation and taking account of and acting on the findings. If it does not, it is meaningless. To consult is not to seek consent, which is what the devolved Governments seek and are entitled to.
Baroness Meacher (CB) [V]
My Lords, I speak in strong support of the amendments tabled by the noble Baroness, Lady Andrews, to which I have added my name.
As many noble Lords made clear at Second Reading and in Committee, this Bill has plumbed new depths in undermining our democracy through the unprecedented and unacceptable use of Henry VIII powers to sidestep the scrutiny of Parliament and give Ministers extraordinary powers. It is no accident that it was Henry VIII clauses in this Bill, six of which are the subject of this debate, that prompted the chairs of the Delegated Powers and Regulatory Reform Committee, the Constitution Committee and the Secondary Legislation Scrutiny Committee to write to the Minister for the Cabinet Office and the Leader of the House of Commons expressing their deep concern about these developments. This Bill using Henry VIII powers unreasonably is of course not a one-off. As a relatively new member of the Delegated Powers Committee—I should declare that interest—I have been very conscious of its growing concerns about this Government’s increasing use of delegated legislation and ever wider Henry VIII powers. It is worth putting on the record a point made by the Leader of the House of Commons in response to the letter from the three committee chairs. Mr Rees-Mogg says that
“there will be times when the Government will still need to rely heavily on delegated powers, particularly if legislation is needed urgently, but I am clear that at all times the Government must fully justify the appropriateness of these powers to both Houses and to your Committee.”
The problem is that in the view of the Delegated Powers Committee, and certainly in my view, the Government simply have not justified the wholesale delegation of powers in the Bill.
We are very pleased that the Government have gone some way towards rectifying the problem through their many amendments. In particular, we welcome the Government’s acceptance that the Henry VIII power in Clause 3(8) should be removed. The arguments for removing that power, as set out in the Delegated Powers Committee report, are overwhelming. However, as the noble Baroness, Lady Andrews, has cogently spelled out, exactly the same arguments apply to the Henry VIII power in Clause 6. I fully support the position that if the Government are unwilling to withdraw the Clause 6 Henry VIII power then the opinion of the House on this issue just has to be tested. I hope a vote will not actually be necessary—would it not be wonderful if the Government accepted this amendment along with the one on Clause 3?—but if there is one then I will be supporting the noble Baroness.
Our amendments to Clauses 8, 17 and 20 are less broad and the issues are therefore a bit less concerning. However, I have considerable reservations about Clause 10(2), which gives Ministers the power to rewrite Schedule 1 in part or indeed in its entirety. Surely that cannot be justified. Our Amendment 17 would delete that power. I hope the Minister will give the House some assurance that he will take this issue back for reconsideration.
I welcome the Government’s new commitment to consulting the devolved Administrations before making regulations under a number of clauses of the Bill. Whether that goes far enough will be debated at a later stage of Report and I therefore will not comment further on it here. I also welcome the Government’s commitment to review the use of Parts 1 and 2 as set out in the government amendments.
Lord Carlile of Berriew (CB) [V]
My Lords, it is a pleasure to follow the speeches by the noble Baronesses, Lady Andrews and Lady Meacher, who have spoken with such cogency. I agree with them.
My name appears on Amendments 2, 7, 12, 17, 31 and 42 for two reasons. The first is that I was there at the beginning of devolution in Wales and have watched it develop in ways that were described earlier this afternoon by other noble Lords. It has been successful; it has brought the people of Wales much closer to government and resulted in faster decision-making than we ever had in the old days when the nearest we had to devolution, when I was a Member of another place, was the Welsh Grand Committee.
The second reason why I speak in favour of these amendments is a more general one. I have watched with surprise, and sometimes despair, the galloping tendency of government—and it has been successive Governments—to take more executive power through secondary legislation. Henry VIII must be very surprised, if he is aware of it at all, that his powers are being asked for so frequently and when they are not necessary.
I want to focus on Amendment 7 for I, like the noble Baronesses who have just spoken, welcome the addition of the name of the noble Lord, Lord Callanan, to Amendment 2. That is truly welcome. When I first saw it, I thought it showed a thorough recognition of the issues at stake because it is a significant concession. All that we are asking on this side of the debate is consistency with regard to the non-discrimination principle. That principle is of as fundamental importance as the mutual recognition principle for markets to which the noble Lord, Lord Callanan, has signed up in Amendment 2. They are plainly legislative siblings—indeed, they are almost identical twins—since they have a great deal of political and legislative DNA in common. Certainly they are equally important, and they are of equal moment in the devolved parts of the UK. I therefore feel bound to say that I am bemused by the lack of logic displayed by the Government’s failure to agree to Amendment 7 having agreed to Amendment 2.
I was talking earlier about the way in which devolution has worked. I can put that point very simply. These days in Wales, about which I know more than Scotland, legislative changes are brought about in real time as decisions become necessary. They are not always right—legislative changes are never always right—but at least there is an understanding by the public, those involved in politics in Wales and public servants in Wales that it is possible to make change. By that process, one has given a new self-respect regarding the way in which Wales is governed to elected Members, public officials and those who elect the elected Members.
What is still in Clause 6, the requirement for consultation without consent, is, unfortunately, a fig-leaf. It does not provide any reality to the role of Wales—on which I speak particularly—in this process because it can be overridden. Yes, reasons have to be given, but it is not very difficult to construct reasons. It relegates the devolved regions to a negligible role on matters directly affecting their interests. If it were necessary to do that, if that relegation could truly be demonstrated intellectually and logically as necessary, then I would be willing to support it, but I see no such explanation. Allowing executive powers in this way goes far beyond what is necessary.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am delighted to follow the noble Lord, Lord Carlile of Berriew. I congratulate the noble Baroness, Lady Andrews, and other noble Lords on tabling these amendments. I thank my noble friend Lord Callanan for supporting Amendment 2 and, in particular, for adopting government Amendment 35 as his own. I thank the Law Society of Scotland for its help, both in briefing me and in helping me to draft an earlier form of this amendment. I want to single out for praise Michael Clancy, whom I have known for many years. He works tirelessly on behalf of the Law Society of Scotland, and Scotland more broadly, to ensure that both Houses of Parliament and other sectors of Scotland are in tune with the constitutional implications of their thinking. I also thank my noble friend Lord Callanan for tabling government Amendments 29 and 47. They are inclusive in reaching out to consult the devolved Administrations.
Amendment 2 lays to rest the dangers of many of the original provisions in this Bill—particularly in relation to secondary legislation and Henry VIII powers— that did not find favour with your Lordships’ House. I remind the House of my interest as a non-practising member of the Faculty of Advocates. I shall pursue a similar line of thought to that expressed by the noble Baroness, Lady Andrews, in moving Amendment 2. I welcome government Amendments 29, 35 and 47, but perhaps we need to persuade the Government to move similarly further in other parts of the Bill. I shall seek to do so when the time comes. I congratulate my noble friends Lord Callanan and Lord True on their letter and thank them for listening to our concerns.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering. The noble Baroness, Lady Andrews, made a superb opening speech. I also agree with everything said by the noble Baroness, Lady Meacher. They were two superb speeches.
I want to raise something that the noble Lord, Lord Cormack, said in the last debate and with which I strongly disagree. He said that there is no debate in this House. This is an absolute fallacy. A normal debate is when one side puts its argument and the other side responds. What the noble Lord meant by “lively debate” is rude interruption. I do not see why we should accept that as normal debate; it simply is not. When I was first in this House, I found it extremely difficult because some rather nasty Peers interrupted my early speeches. It was very distracting for me and for those listening to me. I disagree completely with that concept of a debate. The reason we have no debate in this House is that we all agree that the Government’s legislation is rubbish. That is why there is no argument. Even the noble Lord agrees with the noble Lords, Lord Foulkes and Lord Fox. We are all agreeing, apart from—well, sometimes the Minister agrees.
How dare anyone suggest that people in this Chamber have more of a right to speak than those outside? I have kept away from this House because I did not want to risk my life or other people’s. I care about this very much. Why should people in this red and gold bubble think they are entitled to a different sort of debate? I am here now only because I am so angry about some of the Bills coming through and I cannot express my fury well enough virtually and remotely; it does not come across through the screen. I do not want to be here. I am here only because it is the best way to get my point across. Those staying away are being more rational.
Lord Beith (LD) [V]
My Lords, apart from the interesting diversion by the noble Baroness, Lady Jones, into wider issues affecting the House, there has been an air of unanimity in this debate. There has been unanimous support for the amendment moved by the noble Baroness, Lady Andrews, and appreciation of the clear way in which she expounded the need for it. Of course, she is referring to Amendment 7 rather than Amendment 2.
It is unusual for my name and for that of the noble Lord, Lord Callanan, to appear on the same amendment, although we have always had cordial relations. I welcome the Government’s acceptance of the case put to them—at least for this part of the Bill. On government Amendments 29 and 47, it would be churlish not to welcome the review of how delegated powers are used, but this does not answer the case against these powers being in the Bill at all. A number of speeches made that point very strongly.
Henry VIII powers—the Government’s ability to change statute law by means of secondary legislation—are repugnant in all but the narrowest of cases. They have become habitual—a “galloping tendency”, as the noble Lord, Lord Carlile described them. They present Parliament with law that cannot be amended in almost all instances. They are not subject to effective parliamentary scrutiny, partly because of the Government’s control of the Commons agenda and timetable. They can be applied to devolved areas without consent, as the noble Baroness, Lady Andrews, pointed out. From the Government’s point of view, and from the standpoint of legal certainty, it should be remembered that secondary legislation is open to legal challenge in a way that primary legislation is not.
What range of powers are we looking at in these amendments? Amendment 7 would remove a very wide power in Clause 6, allowing the Secretary of State by regulation to change the Act that this Bill will eventually become so as to vary, remove or add to parts of subsection (3). That subsection defines the statutory provisions relating to what is within the scope of the non-discrimination principle. It includes goods, transportation, display, certification and the conduct of businesses. That is where the Government’s offer of a review comes in, but I do not believe this meets the case for amending primary legislation by means of secondary legislation. It is wrong in principle and unnecessary in practice because primary legislation can be brought forward. Parliament can act quickly, and it is generally within the Government’s ability to ensure that it does so.
Secondary legislation is incapable of amendment by Parliament and not open to adequate scrutiny. That is why the Constitution Committee, of which I am a member, and the Delegated Powers Committee have so often argued against the excessive use of secondary legislation, particularly in its Henry VIII form, and I think the case is a very powerful one. It is like the sea trying to wash away a piece of particularly hard rock: we occasionally make some progress with it but before very long we find that we are unable to effectively resist the Government’s permanent tendency to create powers of this kind.
If the noble Baroness decides to test the opinion of the House on this matter, Liberal Democrats will support her amendment.
Baroness Hayter of Kentish Town (Lab)
My Lords, as I have said before, the women in the House always get a bit nervous when we talk about Henry VIII. We have only to go outside and see what happened to some of Henry VIII’s women to remind us that we are a bit uncomfortable with him.
The debate has made clear why the amendments in the name of my noble friend Lady Andrews and fellow members of our always brilliant Delegated Powers Committee should be heeded. Indeed, the unanswered question, posed by my noble friend, is why the Government have not removed the powers in Clause 6 in the way that they have now agreed to remove them in Clause 3. Why the inconsistency? What is the difference between them? Our Delegated Powers Committee certainly did not distinguish between the two pillars of the internal market—market access and non-discrimination— so we do not understand why the Government have taken such a different view on those. Without a stunning, innovative answer—the Minister looks as though he may have one, but there was none such in his letter of 12 November to the Delegated Powers Committee—when we come to Amendment 7 a little later, we will throw our weight behind it to remove the sections which, as the noble Lord, Lord Beith, has just set out, give overwhelming power to Ministers. Furthermore, as my noble friend Lady Andrews says, if these are meant to be just backstop powers to correct as yet-unknown deficiencies, then, given that Clause 13 affects all parts of the UK, it should be for Parliament, not Ministers in Westminster, to make any correction, with the full panoply of safeguards that come with primary legislation for input from the two Houses as well as from the devolved legislatures.
It is really not good enough—in a Bill which, after all, they must have known for four years they would need—for the Government at this stage still to be so unsure that they have thought of everything and drafted correctly that they need to accord to themselves these extraordinary powers to amend important parts of what will then be an Act of Parliament. That was never the purpose of secondary legislation. Indeed, as the Minister will know, we feel that it is likely that the proposed use of these ministerial powers is more the result of the Government’s tendency to rely on them rather on than proper primary legislation on a wide variety of measures. Indeed, as the noble Baroness, Lady Meacher, noted, so common has this become that my noble friend Lady Taylor of Bolton wrote on behalf of the Constitution Committee to Mr Rees-Mogg on 9 November suggesting how to diminish the practice, while the noble Lords, Lord Hodgson and Lord Blencathra, from the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee respectively, similarly wrote to Mr Rees-Mogg on 10 November, specifically with concerns about “skeleton bills and skeleton provision”, noting his acknowledgement that delegated powers
“should not be ‘a tool to cover imperfect policy development’”
and reiterating the need for the Government “at all times” to
“fully justify the appropriateness of delegated powers”.
I fail to hear such justification for these particular powers. Therefore, while welcoming the Government’s support for Amendment 2, we will support Amendments 7, 12 and the others in this group.
I am delighted that, because of the acceptance of Amendment 2, my Amendment 4 is pre-empted. For those who do not follow all this, Amendment 4 would have amended subsections (8) to (11), which was a regulation-making power. We were seeking to give the delegated legislatures a say over that. But clearly, as those powers have come out, my Amendment 4 luckily is pre-empted and not needed. However, we will return to similar amendments next week. For the moment, we welcome the moves of the Government on Amendment 2 and, in due course, unless the Minister comes up with a stunning answer in the next few minutes, we will support Amendment 7 in its place.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank everybody who has spoken in the debate so far. Just before we start, let me give my personal support—not a matter for the Government—to the gruesome twosome, the unholy alliance between the noble Lords, Lord Foulkes and Lord Cormack. I hope that we can get back to full and proper debate in this Chamber as quickly as possible. I do not know about other noble Lords, but I quite miss the heckling from the noble Lord, Lord Foulkes; it adds a bit of interest and spice to our debates. I am sure that the noble Baroness, Lady Jones, copes very well with debate in this Chamber, of which she is a noted exponent.
The Government have listened closely to the concerns from colleagues from all sides of the House and outlined in the DPRRC report. I thank your Lordships for the helpful debates that we had, and I hope noble Lords will think that I have responded at least to some of the points that were made. As I set out in my letter to colleagues last week, we listened closely to all your Lordships’ comments and, after further reflection, we are proposing a number of changes in line with many of those comments to how these powers will operate. The amendments will remove powers that are now, on further reflection, considered non-essential and will provide the fullest transparency and accountability in the use of those that remain. We hope that the package of changes proposed will address the concerns that were raised and provide some reassurance that the Government take their responsibilities seriously in administering these powers.
I understand from the comments of the noble Baronesses, Lady Hayter and Lady Andrews, and others that noble Lords intend to divide the House on this issue tonight. I hope that they will consider carefully what we hope will be very welcome steps before voting in a way that will have quite far-reaching consequences for the operation of the UK internal markets. Given that there are no other groupings today and next week on the delegated powers more generally, I hope that noble Lords will allow me to discuss this grouping in a little more detail.
First, the amendment in the name of the noble Baroness, Lady Andrews, will remove the ability of the Secretary of State to amend the list of statutory requirements that are in scope of the mutual recognition principle for goods. While our position remains that the majority of the powers in the Bill are essential, as I said, in this particular case we are now content that the removal of the power will not substantially undermine the operation and flexibility of the internal market system. Therefore, we have removed the power—I have added my name to the amendment from the noble Baroness, Lady Andrews—in combination with further changes on transparency and accountability that we are proposing.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, I have received a request to ask a short question of elucidation from the noble Lord, Lord Foulkes of Cumnock.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, at a time when the role and, indeed, the very existence of this House is under increasing scrutiny, would the Minister agree that the fact that he has put his name to Amendment 2, and that he and the Government have accepted the spirit of many of the amendments that were moved in Committee, underlines the value of this second Chamber as a revising Chamber and that that is something that should be broadcast widely?
Lord Callanan (Con)
I agree with the noble Lord, actually. If you look at the degree of scrutiny with which this House has portrayed this Bill, as opposed to the degree of scrutiny in the other place, you see the value of the debates we have here.
Baroness Andrews (Lab) [V]
I am very grateful indeed to everyone who has taken part in this debate, particularly those noble Lords who signed my amendments. It has been a very useful and illuminating debate. I am grateful to the Minister for his detailed responses and, particularly, the information he has provided on the review. Retrospective reviews are always too late to improve or perfect what has happened, but I understand that this is a useful step forward, and I look forward to more detail.
I am afraid I am unable to accept his explanation of the difference between Amendments 2 and 7 in relation to the two clauses. I was struck by the use of the term “non-essential” powers, which was applied to Amendment 2 to Clause 3 and which has enabled the Government to sign the amendment, but made them unable, in the same sense, to apply the same logic to Clause 6.
Very briefly, I will read what the Delegated Powers Committee report actually said about Clause 6, which deals with non-discrimination:
“It suffers from similar defects”
to Clause 5. The report continues:
“The Government say … that the power in Clause 6(5) is necessary to ‘future-proof’ the operation of the non-discrimination principle. They might have said ‘to completely re-write’ the non-discrimination principle.”
We believe that the extreme degree of freedom that these powers give Ministers to go back almost to the drawing board and rewrite their own legislation by way of secondary legislation is so dangerous. Although the Minister has made a case for the distinction, I am afraid it is not one I can accept. Therefore, he will not be surprised when I say that I shall press Amendment 7 to a vote when we reach its place on the Marshalled List.
I say again that I am extremely grateful that the Government have responded so positively to the arguments of the DPRRC, the Constitution Committee and your Lordships, supported Amendment 2 and brought forward these other amendments, as outlined by the Minister this afternoon and in his letter. I beg to move.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, Amendment 3 has been pre-empted, so the debate on the group beginning with Amendment 3 will take place when Amendment 8 or 9 is called with the same list of speakers. Amendment 4 has been pre-empted, so this group therefore now consists of Amendment 5.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
We move swiftly on to Amendment 6, and I remind noble Lords that Members other than the mover and the Minister may only speak once and that short questions of elucidation are discouraged. Anyone wishing to press this amendment or any other in this group to a Division should make that clear in the debate.
Clause 5: The non-discrimination principle for goods
Amendment 6
Member’s explanatory statement
This amendment clarifies the meaning of Clause 5(3) regarding the effect of a statutory requirement under Clause 6.
Baroness McIntosh of Pickering (Con) [V]
My Lords, it gives me great pleasure to speak to and move Amendment 6, which I hope is self-explanatory. It seeks to clarify the meaning of Clause 5(3), regarding the effect of the statutory requirement under Clause 6. It should have read, just for greater clarification, “A relevant requirement (see section 6) is of no effect in the destination part but only if, and to the extent that”. That is a compromise we reached for greater understanding of the text.
The effect of Clause 5(3) will be to render a discriminatory statutory provision in UK or devolved legislation of no effect. I warmly thank the noble Lord, Lord Foulkes, for co-signing this amendment. In Committee, we had reservations about the meaning of “no effect”, because it lacked clarity. That was the view put forward by the Law Society of Scotland, which has helped me to draft this amendment.
My noble friend Lord Callanan confirmed in Committee that:
“Clause 5(3) will operate so that any future requirements that fall within the scope of the non-discrimination principle will be of no effect to the extent that they are discriminatory. For the benefit of the lawyers, this does not mean that the requirement is to be treated as if it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effects.”
The amendment therefore seeks to emphasise that the lack of effect relates only to the discriminatory element of the statutory requirement and does not otherwise affect the validity of the requirement. I hope that my noble friend will take the opportunity to confirm that that is the case.
There is also concern about the application of Clause 5(3) to a statutory provision in an Act of Parliament. My noble friend Lord Callanan confirmed that:
“As the Bill deals with trade across the whole of the United Kingdom, the intention is that this will apply to all legislation: secondary legislation, primary legislation passed by devolved legislatures and legislation passed by the UK Parliament.”—[Official Report, 28/10/20; col. 251.]
Under Clause 49, legislation means, inter alia, primary legislation, which includes an Act of Parliament. Therefore, we know that this provision means that such an Act will be of no effect to the extent that it is discriminatory under the Bill. I am minded to repeat the words of the noble Lord, Lord Beith, who mentioned that secondary legislation can be open to interpretation by the courts. I would be most grateful if my noble friend could clarify and further benefit us with his understanding of this provision.
I also comment briefly on Amendment 24 in the name of the noble Baroness, Lady Ritchie of Downpatrick, and others, with which I have some sympathy, as it ensures continued compliance with the principle of non-regression in Article 2 of the Northern Ireland protocol. That is a worthy aim, and I admire the enthusiasm and energy with which the noble Baroness, Lady Ritchie, has pursued this in the interests of her nation. With those few remarks, I beg to move and wait to hear the response of my noble friend to this little debate.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I speak in support of both amendments in this group. The noble Baroness, Lady McIntosh of Pickering, has already explained the purpose of Amendment 6. Amendment 24 is in my name and those of the noble Baronesses, Lady Suttie and Lady Bennett of Manor Castle, and the noble Lord, Lord Hain.
We have been contacted by the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission, which have agreed to act as a dedicated mechanism responsible for the monitoring, supervising, advising and reporting on and enforcing the UK’s commitment, under Article 2 of the Northern Ireland protocol to the withdrawal agreement from the end of the transition period. They believe that this amendment is needed to ensure that the Bill is brought into compliance with the UK’s obligation under Article 2 of the protocol to the EU/UK withdrawal agreement.
The problem with the Bill as currently drafted arises when Clause 5 is read in conjunction with Clause 6. The commissions’ research only came to light while we were in Committee, as they were awaiting senior counsel’s advice, hence the only opportunity to have brought forward this amendment is now, on Report. I thank all noble Lords who have signed the amendment and hope that your Lordships’ House accepts that explanation.
Clause 5(1) provides that:
“The non-discrimination principle for goods is the principle that the sale of goods in one part of the United Kingdom should not be affected by relevant requirements that directly or indirectly discriminate against goods that have a relevant connection with another part of the United Kingdom.”
It may appear, on superficial reading, that Clause 5 applies only to goods and not, for example, to statutory requirements regarding employment conditions. This is incorrect, however, because Clause 6(3) provides details of what constitutes “relevant requirements” for the purposes of Clause 5(1):
“A statutory provision is within the scope of the non-discrimination principle if it relates to any one or more of the following—
(a) the circumstances or manner in which goods are sold (such as where, when, by whom, to whom, or the price or other terms on which they may be sold);
(b) the transportation, storage, handling or display of goods;
(c) the inspection, assessment, registration, certification, approval or authorisation of the goods or any similar dealing with them;
(d) the conduct or regulation of businesses that engage in the sale of certain goods or types of goods.”
The effect of these provisions, therefore, is to bring statutory provisions regarding employment conditions, including legislation regulating wages, which apply to those selling goods, within the scope of the non-discrimination requirement in Clause 5(1). This means that equality legislation regarding employment conditions introduced in Northern Ireland in order to comply with the non-diminution requirement in Article 2 of the protocol must be protected.
If there is a challenge to such employment legislation, it is not clear that the legislation can be defended on the grounds that it can, as set out in Clause 8 of the Bill,
“reasonably be considered a necessary means of achieving a legitimate aim.”
Clause 8 defines what constitutes a legitimate aim. This appears to be an exhaustive list and does not include, for example, compliance with an international treaty as a legitimate aim. To illustrate the potential impact of the Bill on the Article 2 obligation, I will set out an example of additional requirements on employers in Northern Ireland that could be introduced as a result of changes to the Annexe 1 directives that deal with the wide panoply of equality directives that could be challenged under the Bill. It is not possible to predict the exact nature and extent of future EU changes to the Annexe 1 equality directives, including new obligations on employers.
However, taking into consideration EU equality law changes already made, recent European Commission proposals and plausible future scenarios, there is a reasonable prospect that over time, the Annexe 1 directives dealing with all equality matters may be updated, amended or replaced, and additional EU requirements on employers introduced. Employers in Great Britain may consider that these changes negatively impact on their businesses and influence an employer’s decision to employ staff in Northern Ireland, and thus to provide goods in Northern Ireland, and would therefore be challengeable as indirectly discriminatory under the Bill. The equal pay example can be characterised with the EU amending or replacing the existing equal treatment directive to incorporate extended equal pay obligations on employers.
As a result of these additional requirements, an employer in Great Britain with a predominantly female workforce could decide not to employ staff in Northern Ireland and could consider that there is more limited market access in Northern Ireland than in Great Britain. Using the indirect discrimination prohibition in the Bill, the employer could challenge legislation enacted by the Northern Ireland Assembly to comply with these new obligations. Other examples could be given relating to disability discrimination, race equality, equal pay audits and gender pay reporting.
To comply with Article 2 of the protocol, there is a need to ensure that any such additional requirements on employers in Northern Ireland, introduced to keep Northern Ireland equality law aligned with future EU changes to the equality directives in Annexe 1, cannot be challenged as indirectly discriminatory under the Bill. I therefore urge the Government to accept this amendment and ask the Minister to accept a letter from me, on behalf of the Northern Ireland Human Rights Commission and the Equality Commission, which will outline in depth their main concerns about this issue. Will he meet with us and the other signatories to the amendment to discuss these issues? I honestly believe that the amendment would provide legal clarity and certainty, including for employers who have responsibility under Article 2 of the protocol.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I am delighted to speak in support of Amendment 6, moved so well by the indefatigable noble Baroness, Lady McIntosh, who has done such a good job in moving amendments in Committee and on Report. I endorse the tribute that she gave earlier to the equally indefatigable Michael Clancy of the Law Society of Scotland, who has helped us draft these amendments and examine the Bill in detail. It must be a greatly satisfying reward for his hard work to see some of his suggestions incorporated into legislation. I am sure we all endorse the thanks to him.
I underline one point made by the noble Baroness, Lady McIntosh. The amendment emphasises that the lack of effect relates only to the discriminatory element of the statutory requirement and does not otherwise affect its validity. I hope the Minister will therefore feel able to accept the amendment. I am sure he would not want to encourage discrimination in any form.
Lord Hain (Lab) [V]
My Lords, I too wish to speak to Amendment 24, so ably addressed by my noble friend Lady Ritchie of Downpatrick, to which I have added my name. As she said, the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission have explained why the amendment is necessary. It ensures that any legislation introduced in Northern Ireland after the UK leaves the EU must comply with the UK Government’s obligations under the withdrawal agreement: to implement in Northern Ireland certain amendments to, or replacements of, EU law, where this is necessary to ensure continued compliance with the principle of non-diminution under Article 2 of the protocol; and to keep Northern Ireland law in alignment with EU amendments to, or replacements of, the listed equality directives in Annexe 1 to the protocol.
The commissions have briefed us and are concerned about the Bill’s effect on the UK’s obligations under Article 2 of the protocol, in which the UK Government have committed to ensuring that there will be no diminution in Northern Ireland of vitally important rights, safeguards or equality of opportunity specified in the relevant part of the Belfast/Good Friday agreement, resulting from the UK’s exit from the EU. This commitment is binding on the UK Government and Parliament, the Northern Ireland Executive and the Assembly, as a matter of international law.
EU law, particularly EU anti-discrimination law, has formed an important part of the framework for delivering the guarantees on rights and equality set out in the Belfast/Good Friday agreement, and for ensuring that rights and equality protections continue to be upheld in Northern Ireland. However, after the end of the transition period, individuals would be able to bring challenges to the Article 2(1) commitment directly before the domestic courts and take judicial review proceedings to challenge the compatibility of Northern Ireland Executive or Assembly actions or legislation with the Article 2(1) commitment. If the Northern Ireland Assembly failed to introduce legislation required to ensure that Northern Ireland law was in alignment with EU amendments to, or replacements of, the listed equality directives in Annexe 1 to the protocol, that failure could be challenged by individuals. Such challenges would mean that individuals would not be able to benefit from any additional EU equality rights provided for under legislation implemented in Northern Ireland so as to ensure compliance with Article 2.
That could create considerable opportunity for sectarian mischief of the kind that has sadly bedevilled politics in Northern Ireland, despite the massive progress made in the last two decades. The provisions of the United Kingdom Internal Market Bill could undermine these obligations and commitments. For example, Article 13(3) of the protocol ensures equality legislation in Northern Ireland which, as my noble friend Lady Ritchie said, places additional requirements on employers in Northern Ireland, which is so important, given the discrimination historically practised against Catholics.
However, because there is no requirement under the withdrawal agreement for the UK Government to make similar changes to the equality legislation in Great Britain, there is the possibility that there could be greater equality requirements on employers in Northern Ireland than on employers in Great Britain. There is therefore a possibility that an employer in Great Britain may decide not to employ staff in Northern Ireland and, as a result, could consider that there is more limited market access in the provision of goods and services in Northern Ireland than in Great Britain.
Ministers have shown during Brexit a casual and, I am afraid, sometimes contemptuous disregard for its impact on Northern Ireland, but establishing really strong equality and human rights legislation has been crucial to eliminating the deep and historic grievances, suffered by the Catholic population especially, that provided fertile ground for paramilitarism. The stakes are very high—hence this important amendment, which I very much hope the Minister, when he replies, will support.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I shall speak to Amendment 24 in the name of the noble Baronesses, Lady Ritchie of Downpatrick and Lady Suttie, and the noble Lord, Lord Hain, to which I have attached my name.
First, I shall reflect briefly on the earlier words of my noble friend and the response of the Minister. I believe that this is highly relevant to this debate and to the nature of the Bill. We have, on one side, a combative politics of struggle and conflict—the politics of “Gotcha” —and, on the other side, our side, an attempt to work together to achieve a good outcome with which a large majority are at least comfortable, if not 100% satisfied: the politics of compromise. That, I believe, reflects the two sides of the debate about the Bill. I am a former rugby player and I do understand the pleasures of a crunching tackle, but I do not think that that is an approach that produces good outcomes for the people we are here to represent.
Going back to the specifics of the amendment, the noble Baroness, in introducing it, set out a precise and detailed explanation of the legal circumstances and the need for this clause. I do not intend to repeat that. The noble Lord, Lord Hain, has just laid out, from a position of great knowledge and experience, how this reflects the need to protect vital parts of the Good Friday agreement: rights and equalities protections. These are vital things that the Government would surely not want to downgrade.
We have a very long night ahead of us, so I shall add just one additional reflection to their words, while echoing everything they have said. I note that earlier, the noble Lord, Lord True, for the Government, said that he was concerned that the common frameworks process would create uncertainty for business. I suggest that what the speakers before me have made very clear is that, without this amendment, we have a great deal of legal uncertainty and lack of clarity, with conflicting responsibilities. That is something that creates a great deal of uncertainty for business—although, perhaps, lots of work for lawyers, reflecting many Members of your Lordships’ House. But that is not what we should be aiming for. We have some fundamental issues, concerns, rights and balances to protect here, so I commend the amendment to your Lordships’ House.
Baroness Suttie (LD) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Bennett. She makes very many important points, and I hope that noble Lords listened to them this evening. This has been a short but deeply important debate and I shall speak in support of Amendment 24, to which I have added my name. As has already been said, it is a cross-party amendment signed by the noble Baronesses, Lady Ritchie of Downpatrick and Lady Bennett of Manor Castle, and the noble Lord, Lord Hain.
As the noble Baroness, Lady Ritchie, has already comprehensively explained, the purpose of this amendment is to raise very real concerns about the potential impact on the obligations under Article 2 of the Northern Ireland protocol, which ensures that there will be no reduction of rights, safeguards or equality of opportunity in Northern Ireland, as set out in the Good Friday/Belfast agreement, following the end of the transition period in just over six weeks’ time. Article 13(3) of the protocol obliges Northern Ireland to remain in alignment with EU equality directives, as set out in Annexe 1. This amendment would ensure that Northern Ireland could not be challenged under the Clause 5 non-discrimination principle as set out in the Bill if, in future, it has to make certain changes to the law to ensure that it remains aligned to EU standards after the United Kingdom has left the European Union.
At present, all parts of the United Kingdom are aligned under EU law covering equality issues, but this will not necessarily always be the case. I will take the specific example of equal pay. Currently, the whole of the United Kingdom is covered by the equal treatment directive, but if, in the near future, the EU amends that directive to incorporate extended equal pay obligations on employers, the new obligations would have to be introduced in Northern Ireland but not in Great Britain. As the noble Baroness, Lady Ritchie, and the noble Lord, Lord Hain, spelled out very clearly, it is possible to imagine that a British company with a predominantly female workforce might decide not to employ staff in Northern Ireland. Under the indirect discrimination prohibition in the Bill, it is not inconceivable that the employer could then challenge the Northern Ireland legislation that had been put in place to comply with Article 13(3) of the protocol. It is also possible to imagine similar scenarios following future amendments to EU race, equality and disability directives, for example.
The Government will no doubt reply that it is not their intention to reduce standards in UK equalities legislation following the end of the transition period. But it is equally unlikely that, in years to come, Britain will follow and replicate every future amendment to EU equalities directives. This amendment is therefore really about future proofing. This is a complex matter. All legislation is capable of resulting in unintended consequences, but it is surely important to anticipate future problems now and to provide potential solutions to safeguard against such problems.
In his concluding remarks, I would be very grateful if the Minister could reassure the House that the Government have thought through how the non-discrimination principle set out in Clauses 5 and 6 will operate in practice in Northern Ireland, given the pre-existing commitments set out in Articles 2 and 13(3) of the Northern Ireland protocol. Equally, I would be grateful if he could give assurances that there will be no reduction in the mandate for the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission to oversee the Government’s implementation of Article 2 of the Northern Ireland protocol. I conclude by echoing the request of the noble Baroness, Lady Ritchie, for a meeting with the Minister and the Northern Ireland Human Rights Commission to discuss these matters further.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, the noble Baroness, Lady McIntosh, and my noble friend Lord Foulkes have made the case clearly around the issue raised in Clause 5(3), and I hope the Minister will be able to respond. I join them in thanking the Scottish Law Commission for its considerable work in scrutinising some of the detail of the Bill—as always, it has been very helpful. I put on record our thanks to the noble Baroness, Lady Ritchie, for her very comprehensive and clear explanation of Amendment 24 in her name, and to others who have spoken.
We on this side had the benefit of a presentation by the Equality and Human Rights Commission and the Northern Ireland Human Rights Commission on this point, and I was seized by the fact that this is very important indeed to them and a matter that really has to be dealt with. The ground has been covered very fully and I just want to make sure that it is clear that we support this important amendment. It is designed to ensure that the non-discrimination principle in Clause 5 cannot be used to challenge the statutory provisions introduced in Northern Ireland after the end of the transition period to fulfil the obligation set out in Article 2 of the Northern Ireland protocol. That is relatively easy to say, but it is rather difficult to see how it translates into legislation. I hope that, when he responds, the Minister will be able to give us clarity on this.
As my noble friend Lord Hain said, the stakes here are very high. If you have not been to Northern Ireland, it is sometimes very difficult to get why it is so important to the people there and to the institutions that have to operate within Northern Ireland. There is a very widespread respect for human rights and equalities issues in Northern Ireland; it is something that comes up in conversations wherever you have them, in relation to employment, services, goods and operating in the commercial sector in Northern Ireland. Once you have had that conversation, and once it has been explained to you why it is so important, it is very clear that this is a matter that cannot be left. It is up to the Government to explain now how it is going to happen, and I look forward to hearing from the Minister.
Lord Callanan (Con)
My Lords, I thank all noble Lords who have contributed to this debate.
Amendment 6, in the names of my noble friend Lady McIntosh and the noble Lord, Lord Foulkes, seeks to clarify the meaning of Clause 5(3). This subsection explains that
“A relevant requirement … is of no effect in the destination part if, and to the extent that, it directly or indirectly discriminates against the incoming goods.”
This wording was chosen by the Government because it targets discrimination, while leaving intact other elements of a regulation that may be perfectly useful or serviceable. For example, consider the case of one requirement covering two products. One of those products is not discriminated against, but the other faces indirect discrimination due to the particular market structure for that product. Clause 5 ensures that the regulation of the product which is not facing discrimination continues. This would not be the case if the requirement were struck down in its entirety when any part of it is discriminatory.
This amendment gives rise to a risk that a court would read this as attempting to oust its jurisdiction on normal grounds of challenge. That is clearly not the intention of this provision, which is to target the mischief of discrimination without going further or interfering with other legislation. I am sure that it goes without saying that we would not want to invoke any such confusion, nor do I think that that is what my noble friend and the noble Lord are trying to achieve. For these reasons, I hope that my noble friend will feel able to withdraw her amendment.
On Amendment 24, from the noble Baroness, Lady Ritchie, and others, I am very happy to accept a letter from the noble Baroness, and I will ensure that it gets a full reply. The Government are fully committed to Article 2 of the protocol—that goes without saying. We have demonstrated this by making the necessary amendments to the Northern Ireland Act to establish the dedicated mechanism and by working closely with the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland to operationalise the dedicated mechanism, ready for the end of the transition period.
The Article 2 commitment is about protecting the specific rights that individuals are afforded under the Belfast/Good Friday agreement and non-discrimination in this regard. It is supported by six EU equality directives that are all designed to tackle discrimination because of specified protected characteristics of individuals and to promote equal treatment. It will be part of the role of both commissions, through the dedicated mechanism structure, to monitor, advise, report on and enforce the Article 2 commitment and report to the Government and the Executive Office in Northern Ireland in this regard.
As I have said, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol, and no further amendments are required in this regard. I can assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill.
In reply to the noble Baroness, Lady Suttie, I can say that, for statutory requirements to be relevant requirements under Clause 6, they must be requirements that apply to, or in relation to, goods sold in the nation in question. If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effects.
I hope that, with those assurances, that the noble Baroness, Lady Ritchie, will not press Amendment 24.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I call the Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to those who have spoken in support of this amendment—
Baroness Penn (Con)
My Lords, I believe that a noble Lord gave notice that he wanted to speak after the Minister.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I am so sorry; I did not get the message. Who wanted to speak after the Minister?
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I am sorry. I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, I apologise for creating such a fuss, and I thank the Whip for intervening on my behalf.
The Minister has made a lot of the need to future-proof this Bill. Indeed, part of the justification of the last debate was around future-proofing. My noble friend Lady Suttie made a very clear case on where future digressions in conditions between Northern Ireland and the rest of the United Kingdom could create issues. Does the Minister not admit that this is a problem and concede that Amendment 24 is a way round that problem becoming difficult in future?
Lord Callanan (Con)
In short, I addressed the point made by the noble Baroness, Lady Suttie. No, I do not believe that this will be a problem. We will, of course, keep it under review if any such problem were to be relevant. We think that we have already legislated to ensure these requirements and that, therefore, this amendment is unnecessary.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I have just received a message that the noble Baroness, Lady Ritchie, would like to speak briefly.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I would like to ask the Minister a further question. In my submission, and the submission of the noble Baroness, Lady Suttie, we specifically asked the Minister for a meeting for the Northern Ireland Human Rights Commission and the Equality Commission, along with the signatories of Amendment 24, to further discuss the outworkings of Clauses 5 and 6 and Clause 11, and also the complex nature of our amendment and the problems that could ensue as a result of the outworkings. I would greatly appreciate it if the Minister could accede to our request.
Lord Callanan (Con)
The noble Baroness also asked me if I would receive a letter, and I said that I would do so. That is probably the best course of action. If she writes to me with her concerns, we will, of course, look at it. I am not sure that I am the right Minister for any such meeting to take place. I am a Minister in BEIS, which is responsible for this Bill, but many of its aspects are, of course, being handled by other government departments. I will certainly seek to put her in touch with the correct and relevant officials and Ministers.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I think that I am now safe to call the noble Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con) [V]
My Lords, once again I thank all those who have spoken in this debate, in particular my noble friend Lord Callanan for trying to explain the Government’s position. The Bill could be made clearer if the words that the noble Lord, Lord Foulkes, and I want to introduce were added to it. I part company from the Minister in saying that, actually, I do not see that this proposal would interfere with other legislation. There remains confusion, but I am not minded to press this to a vote at this stage.
I thank all those who have spoken, particularly the noble Lords, Lord Foulkes and Lord Stevenson, and convey their thanks also to the Law Society of Scotland. I am sorry for Michael Clancy that we have not had more success on this occasion. I also thank the noble Baroness, Lady Ritchie, for so clearly setting out her Amendment 24, which has great merit. At this stage, I beg leave to withdraw my amendment.
Baroness Andrews
The Deputy Speaker (Baroness Garden of Frognal) (LD)
I should inform the House that, if Amendment 7 is agreed to, I cannot call Amendment 8. Does the noble Baroness wish to move Amendment 7 formally?
Baroness Andrews (Lab) [V]
My Lords, I have spoken to this in an earlier group, and I anticipated that I would be pressing the Minister. I intend to test the opinion of the House on Amendment 7.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
My Lords, Amendment 8 has been pre-empted.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
We now come to the group beginning with Amendment 9. I remind noble Lords that Members other than the mover and the Minister may speak only once, and that short questions of elucidation are discouraged. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Amendment 9
“( ) The Secretary of State must publish the results of the consultation and give reasons for any decision reached.”Member’s explanatory statement
This amendment requires the Secretary of State to publish the results of the consultation and give reasons for any decision reached.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to have this opportunity to move the amendment standing in my name and that of the noble Lord, Lord Foulkes. I thank him for kindly supporting the amendments. I shall speak also to Amendments 13, 33, 44, 60 and 74.
Amendment 9 requires the Secretary of State to publish the results of the consultation referred to in Clause 6(7) and to give reasons for any decision reached. The reason for this is the history of the Bill, which we are told was drafted at pace, and had an unusually short overall consultation period of one month. I understand the responses to the consultation were published on the same day as the Bill. There was no prior consultation on drafts of the Bill, which I understand is a most unusual procedure. Once again, I am obliged to the Law Society of Scotland for its assistance in drafting these amendments.
The obligation on the Secretary of State to consult the devolved Administrations is welcome, but the clause currently lacks any obligation on the Secretary of State to report the outcome of the consultation with reasons for the decision. In the interests of transparency, the Government should make public the outcome of the consultation for that reason. I hope the Minister in winding up this debate will see fit to do that.
The other amendments in the group all relate to the super-affirmative resolution procedure. Amendment 13 adapts Clause 8 to this; Amendment 33, Clause 17; and Amendment 44, Clause 20. Amendment 60 creates a new schedule on the super-affirmative procedure and Amendment 74 creates a new clause setting out the scrutiny procedure in certain urgent cases. The reason why the amendment seeks to introduce the super-affirmative resolution procedure, the supportive schedule and the new clause, as I have mentioned, is to up the level of parliamentary scrutiny applicable to regulations under these clauses and the new schedule, which is currently by the affirmative resolution procedure. This is partly for the reason that I gave earlier: woeful time was given, in quite unusual circumstances, in which to draft the Bill. Changing the scope of the relevant clauses, in my view, that of the Law Society and of the noble Lord, Lord Foulkes, may have significant consequences. It is much more beneficial to use the super-affirmative resolution procedure, because it enables longer consultation and for the views of interested parties to be taken into account.
I mentioned Erskine May previously in Committee. Paragraph 31.14 describes the super-affirmative procedure as having
“been implemented in enactments where an exceptionally high degree of scrutiny is thought appropriate, for instance, for the scrutiny of certain items of delegated legislation made, or proposed to be made, under ‘Henry VIII’ powers… The super-affirmative procedure provides both Houses with opportunities to comment on proposals for secondary legislation and to recommend amendments before orders for affirmative approval are brought forward in their final form.”
In the view of the Law Society of Scotland, with which I concur, the Bill is of profound constitutional significance. As paragraph 4 of the Constitution Committee report indicates, we need as much scrutiny of the Executive as possible. Deploying the procedure that I propose, as set out in these amendments, will achieve a better outcome than simply keeping the Bill in its present form, with the usual affirmative procedure.
I was delighted by the debate that we enjoyed in Committee on the earlier manifestation of this amendment, as summed up by the noble Lord, Lord Thomas, in his objection. He said he could not “support the precise method” adopted. There may be many approaches to the super-affirmative resolution procedure, but the schedule that accompanies this amendment contains a detailed procedure. The noble Lord, Lord Thomas, also noted that:
“If a Minister wishes to exercise his powers under the Bill, there is no requirement under the noble Baroness’s proposed schedule that scrutiny of his proposed amendment to primary legislation should in any way involve the devolved Administrations; no mechanism is proposed. It is true that, in paragraph 5, the Secretary of State must have regard to ‘representations’, but there is no indication from whom the representations would or should come.”
Since the Minister’s power undoubtedly includes the possibility that the proposals will, at the very least, impinge on the devolution settlement, the noble Lord goes on to say that:
“I would be more supportive of this proposal if it required as part of the super-affirmative procedure that, in the periods of 30, 40 or 60 days during which the proposals would be looked at in Westminster, there were a requirement that the devolved Administrations should at the very least be consulted, preferably that their consent to the proposals should be a necessary prerequisite. It is not enough that the Minister should ‘have regard to representations’.”—[Official Report, 28/10/20; col. 279.]
I am delighted to say that the schedule now provides a requirement to receive representations from and to consult with the devolved Administrations. We have also proposed a new clause in Amendment 74, which will deal with cases of urgency when regulations need to be presented. I am further encouraged by the fact that I understand from private discussions that the Liberal Democrats are minded to support the super-affirmative procedure, but I have had less success with the Official Opposition. There is still time for them to change their mind. On this basis, and with these brief remarks, I beg to move.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I am very pleased once again to support the noble Baroness, Lady McIntosh. I want to speak briefly to three of the amendments. I will say first that the regulation-making powers in this Bill cover very significant areas. They are not minor matters. They really are important and that is why they need scrutiny. As I said earlier, the House of Lords does the work that we do best in scrutinising these issues.
I will deal first with Amendment 13. In Clause 8, the Secretary of State can under subsection (7) make regulations
“to add, vary or to remove”
a legitimate aim. That is key in defining a relevant requirement which indirectly discriminates. A legitimate aim is defined in subsection (6) as either
“(a) the protection of the life or health of”
human animals—oh, sorry, it is
“humans, animals or plants,”
not human animals; well, human animals, other animals and plants. The second legitimate aim is
“(b) the protection of public safety or security.”
Perhaps the Minister in his reply could shed light on which of these the Government would seek to amend in the future. That would be helpful.
The second amendment I want to refer to is Amendment 60. Particularly to my noble friend on the Front Bench, I commend this idea of the super-affirmative resolution. The noble Baroness, Lady McIntosh, said she has not yet got the support of the Labour Official Opposition. Once my colleagues scrutinise this in more detail, I am sure they will come round to supporting it. The super-affirmative resolution is described in Amendment 60. It provides for the laying of draft regulations and an explanatory statement by the Secretary of State to consult the devolved Administrations and to have regard to their representations and the representations of other persons, and to allow for additional time for parliamentary consideration. That is to “have regard to” these representations. The importance of the Secretary of State’s powers under the Bill requires better scrutiny than the affirmative or negative resolution procedure. We know that and know that they are not particularly helpful ways of scrutinising legislation.
The super-affirmative procedure as defined in this schedule provides better parliamentary scrutiny, allows engagement with the devolved Administrations and enables proper consultation. Holding the Government to account is important when such regulations are being made. I hope my noble friend will come round to the view that she will at least take it away and have a look and see if, at a later stage, all Labour Members can support the super-affirmative resolution.
Amendment 74 allows the scrutiny of statutory instruments containing regulations under the Bill in such a way as to allow for their urgent implementation, rather than following the super-affirmative procedure. There was concern that the super-affirmative procedure would take too much time, and this amendment provides for issues that need to be dealt with quickly. Regulations can be made under this provision only if the Secretary of State makes a declaration that he or she is
“of the opinion that, by reason of urgency, it is necessary to make the regulations without a draft being approved under”
the super-affirmative resolution procedure. The regulations will be limited in time, under proposed new subsection (4), to a period of 28 days, unless
“the instrument is approved by a resolution of each House of Parliament.”
I hope that the Minister will consider the amendments carefully and I have great pleasure in supporting the noble Baroness, Lady McIntosh, in her amendments.
Baroness Neville-Rolfe (Con)
My Lords, I speak to this group of amendments in the name of my noble friend Lady McIntosh of Pickering and the noble Lord, Lord Foulkes of Cumnock, applying a super-affirmative resolution procedure to changes to the reach of Clause 8 on indirect discrimination on services— the goods, equivalent and various other clauses having fallen. Amendment 9 requires publication of the results of consultation and reasons for decisions reached, and Amendment 74 tries to overcome the Minister’s objection to the super-affirmative procedure on the grounds that it could cause needless delay, by providing for rapid approval in cases of urgency.
I agree with the need for consultation and explanation, but I am not sure that this needs to be in the Bill. There should indeed be an opt-out in cases of urgency, but only if this route were to find favour with our House. However, I do not believe that the case has been made that the super-affirmative procedure is needed, certainly not on the scale proposed and in the light of the amendments already made by the Government in respect of mutual recognition of goods.
I echo what the noble Lord, Lord Foulkes, said about the Minister’s readiness to listen to the experts in this House and to make changes to make this legislation work. I was involved in securing the procedures used very selectively in the withdrawal Act, when the then Minister, my noble friend Lord Callanan, was very helpful. I am a practical person, and I have not seen any real evidence here of the need for the use of the super-affirmative procedure. We need much more specific and concrete concerns to justify my noble friend Lady McIntosh of Pickering’s amendment. If the proposers of the amendment are just fearful, that is not enough to merit the super-affirmative procedure.
Perhaps the Minister can provide examples of how the powers in the clauses will be used and, perhaps more important, why he believes that the super-affirmative procedure is over the top in this case. That would sit on the record, Pepper v Hart style, and minimise the risk from the use of the powers in the Bill.
Lord Naseby (Con)
My Lords, given my five years in the Chair in the other place, noble Lords will not be surprised that I had a closer look at the super-affirmative procedure, where it has been used and where it should be used.
First, we all acknowledge that this is a very important Bill, which is why there is an affirmative resolution procedure in various clauses. We start with that. Secondly, as noble Lords have said, the super-affirmative procedure involves an additional stage of scrutiny where Parliament considers a proposal for a statutory instrument before it is formally presented—what we call laid. This procedure is used for statutory instruments that are considered to need a particularly high level of scrutiny. That is self-evident, I think.
I then checked where they had been used. The statutory instruments used so far usually amend or repeal Acts of Parliament. Examples would include legislative reform orders, localism orders, public bodies orders, regulatory reform orders and remedial orders. Although I have had only a short time to do it, I have not found it within primary legislation—I stand to be corrected, but I have not found it myself. Indeed, listening to my noble friend proposing that this procedure should be used, it seemed to me that it was a sort of grapeshot approach, scattered throughout the Bill, suggesting that all the bits in these amendments are absolutely vital and must be taken specially. I just do not think that stacks up.
Furthermore, because this Bill is important, and because we are dealing with devolved powers who will be consulted and worked with, it will just add further delay. That is not in the interests of Parliament, business, commerce, or the people of the United Kingdom. So quite frankly, I certainly will not be supporting this at all—I think it is almost out of order.
Lord Beith (LD) [V]
My Lords, in answer to the noble Lord, Lord Naseby, the fact that the super-affirmative powers have not been very widely used in the past is really no excuse for not using them where they are an appropriate way of dealing with important statutory instruments and providing a higher level of scrutiny. If the noble Baroness, Lady Neville-Rolfe, doubts the need for more use of the procedure, she should recall all those occasions when we have felt that a statutory instrument should be amended but have had no capacity to do so, and our dislike of a particular feature of it was not sufficient to justify blocking it or turning it down—something, of course, that this House very rarely does. It does address, although not by providing power of amendment, the lack of amendment power which is a characteristic of almost the whole of the statutory instrument system.
An alternative to heckling is the constructive tabling of an amendment, so we should welcome that, and I think that the noble Baroness, Lady McIntosh, and the noble Lord, Lord Foulkes—this new coalition, the Foulkes-McIntosh group—have done us a service in bringing this matter forward. If you worry, as I have done over many years, about the inadequacy of our procedures for dealing with statutory instruments, especially those which try to change primary legislation, super-affirmative procedure, as its name suggests, is better than ordinary affirmative procedure and better still than negative procedure, because it opens up fresh opportunities for how the matter can be dealt with. Because it takes more time, there should be some caution over which things we think it is right to use it for, but it could be much more usefully employed than it has been in recent years. Of course, it is not a single procedure; it is a category of procedure which is usually spelled out individually in the legislation which employs it, as in this case—and the noble Baroness, Lady McIntosh, has improved and added to the process in the version of it that is now before us.
The procedure allows for measured consideration. Sometimes measured consideration is impossible because of urgency, but things are not always as urgent as the Government say they are. Usually the urgency has arisen from the fact that the Government have taken too long dealing with it and have brought it to the House at a very late stage. Throughout the coronavirus epidemic we have had all these occasions when the House has suddenly been told that something is very urgent which the Government have been dealing with for weeks, and probably even announced many days previously, but are now giving the House minimum time to address. The Government cannot always claim that there is an inherent urgency in the situation; rather, they have created urgency by delay at their stages of the process.
Where measured consideration is appropriate, the super-affirmative procedures allow for it and allow the House to suggest amendments to a Bill, which the Government can then go back and consider. I think it has advantages and would have advantages for some of the processes in this Bill. So it is not the wild suggestion that the noble Lord, Lord Naseby, and the noble Baroness, Lady Neville-Rolfe, seem to think that it is. I think it has many advantages which ought to be deployed in circumstances such as this.
Baroness Hayter of Kentish Town (Lab)
My Lords, this debate raises an important and much wider issue about how statutory instruments are dealt with and how much consultation goes into them. When we discuss them in the Moses Room, the Minister often hears from all of us: “Who did you consult and can we hear the feedback?” There are some really important general lessons to take from that, because, as all of us who have dealt with statutory instruments will know, often someone gets in touch at the very last moment to say that a statutory instrument does not work for their industry or their sector. Usually it is an issue of practicality rather than the policy, but by then it is too late, which is immensely frustrating.
The problem with the Bill is that we should not have these powers when dealing with policy. It goes back to what I said in the earlier debate: statutory instruments were never meant to be about policy shifts, but about the practicalities or some adjustment. In a way these amendments, whether right or wrong, are wrongly focused. We should not be saying, “These things need lots of scrutiny because they are terribly important.” If they are terribly important they should not be using these powers.
It will not come as a surprise that I much prefer the amendments in my name that we will get to later, since Amendments 4 and 5 were pre-empted. They are also about the internal market. We are talking about regulations that affect the other parts of the United Kingdom, and very few, if any, would have no effect. Our other amendments propose that regulation-making will need the consent of the devolved Administrations unless that has not been possible within a month. In that case this Parliament will be able to put them through, but with a reason why it is doing so without the consent of the devolved Administrations. This is interesting, and in a way has a much shorter term than this amendment. It is more focused and specifically looks at this Bill, which is about producing regulations that affect the other four nations. I am sorry, but I prefer my amendments to these ones. The issue of scrutiny of statutory instruments is serious. Maybe we can get a better practice so that we do not end up with stuff that is not quite fit for purpose, and which it is then too late to do anything about.
Lord True (Con)
My Lords, I am grateful to those who have spoken in the debate, which I will try to sum up briefly. As the noble Baroness, Lady Hayter, indicated, because of the quite proper impact of the pre-emption rule, and of how the Bill is grouped and how we consider it, there will be further opportunities to address in a later group the points she raised and those raised my noble friend Lady Neville-Rolfe on the appropriateness of the use of powers. Obviously, most amendments in this group follow on from and, as the noble Baroness, Lady Hayter, said, precede discussion on powers that are all exercised in the Bill as drafted by the affirmative resolution procedure.
We contend that those powers are necessary to provide flexibility to respond to future developments in the provision of goods and services trade. As my noble friend Lord Callanan said, and I venture to suggest might say again, we are fully committed to ensuring that these powers are used appropriately. The powers will be subject to parliamentary oversight to give them the widest legitimacy, which means that we will consult appropriately on the use of the power, including with each of the devolved Administrations.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am grateful to all those who have spoken, particularly the noble Lords, Lord Foulkes and Lord Beith, for indicating in principle their support for the super-affirmative procedure. I note especially the comment by the noble Lord, Lord Beith, that just because a procedure has never been used, there is no reason not to use it in this case for the purposes of primary legislation.
I am slightly disappointed that my noble friend Lord True, in responding to this debate, does not seem to get the strength of feeling, certainly north of the border, about the rather peremptory fashion in which the Bill was introduced, with only one month for consultation to be had as opposed to the normal longer period. I hope this is something that we can discuss in connection not just with this Bill but with other Bills as well: my clear understanding is that the Government always used to publish in full the responses to their consultation procedures. I used to find it enormously helpful, as a shadow Minister in the other place, to go through and dissect comments that had been made, and I used to table amendments on the basis of those. So I can see that there might be a reason why my noble friend might not wish to publish the full responses.
I was also disappointed that my noble friend said the Government would “consult appropriately”. I am not entirely sure from this little debate, given the background, the pace at which the Bill was introduced and the shorter consultation period than one might have expected, that that has necessarily been achieved. I note his comments that there will be other opportunities at this and later stages to consider how best to achieve the aims of these amendments. With those remarks, at this stage I beg leave to withdraw the amendment.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions or elucidations are discouraged. Anyone wishing to press this or any other amendment in the group to a Division should make that clear in the debate.
Clause 8: The non-discrimination principle: indirect discrimination
Amendment 10
“(c) the protection of consumers;(d) the protection of environmental standards;(e) the promotion of social and labour standards;(f) the protection of public health;(g) the protection of animal health.”
Lord Stevenson of Balmacara (Lab) [V]
My Lords, In moving Amendment 10, I also speak to Amendments 21, 41, 48 and 49, which together deal with various exemptions and derogations that we believe should be appropriate in the case of the market access principles. I thank the noble Lords, Lord Anderson, Lord Young and Lord Wigley, and the noble Baronesses, Lady Bowles and Lady Jones, for their support, and I look forward to their contributions.
Now that we have accepted by a majority Amendment 1 from the noble and learned Lord, Lord Hope, and the Government have said they will not oppose Amendments 38 and 51, I hope we can assume that the common frameworks process will be at the centre of our future concerns about the internal market. We think it will ensure that the devolved nations will be able, within the limits of UK law, to formulate and apply policies that best suit their local circumstances, working together in order to enable the functioning of the UK internal market. Each devolved Administration will retain the ability to diverge from the harmonised rules in their territory within the mandate given to them by the devolution settlement, but only after consulting the relevant policy group to see if a common outcome can be reached and agreed to.
We fully accept that there have to be backstop powers retained by the UK Parliament that are subject only to the normal “consult and seek consent” modality, and we accept that that brings into play the market access principles system set out in the Bill. However, that does not operate by agreement. It is hard-edged; it is a set of strict statutory rules that do not permit any real divergence. For example, my noble friend Lord Foulkes mentioned in the last group that Clause 8, on the non-discrimination principle, refers to “legitimate aims” and limits them to
“the protection of the life or health of humans, animals or plants”
and/or
“the protection of public safety or security.”
So it is very tight—but does it have to be that way? Surely we want exclusions to permit various exceptions from the lists, as set out in our Amendments 10 and 41. Others will make the case for the extension of the legitimate aims in Amendments 21 and the rest, affecting services.
The Welsh Government put around a note, which they prepared in response to the papers put around last night by the Government. They argue that the Bill’s limitations have been too tightly drawn and that they go much beyond current international regulations, and effectively put new restrictions on devolved competence. One of the policy statements issued yesterday by the Government said:
“Each part of the UK will be obliged to follow a rigorous process to justify an exclusion. This will include suitable evidence and a risk assessment shared between UK administrations, to confirm the nature of the threat posed and the effectiveness and proportionality of any proposed measure in response.”
This is hard-edged. This is not the language of consult and seek consent, let alone of a Government trusting in the common framework process.
Our amendments seek to add significant exclusions to the market access principles for goods and services and in relation to the recognition of professional qualifications. We think they are justified, we think they are proportionate and, otherwise, will not have an adverse impact on the powers we think the UK Government must retain. I beg to move.
Lord Anderson of Ipswich (CB) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Stevenson, and to have put my name to five of the six amendments in this group. The purpose of these amendments is to preserve the potential for legitimate policy divergence that is inherent in the devolution settlement. That potential is squeezed out for the future, save in limited and inconsistent respects, by the non-discrimination and mutual recognition principles as they appear in the Bill.
The scheme of these amendments is to provide for derogations from the applicable market access principles, to be available on a consistent basis across Parts 1, 2 and 3 of the Bill. Such derogations would be safety valves against the pressures that build up when central and local interests clash—safety valves of the sort that the member states of the European Union were sensible enough to gives themselves in their treaties, and that exist in devolved, federal and confederal states all over the world. Their purpose is more than merely political. The exercise of devolved powers has, in the past, produced creative and positive results in fields ranging from the requirement of fire suppression systems to the sale of electric shock collars. Noble Lords drew attention in Committee to the potential for similar action in future, if not prevented by the Bill, from measures against obesity to bans on the sale of peat.
The amendments are not a recipe for pointless and obstructive barriers to trade, which I strongly agree are to be avoided, because the use of those exceptional powers would remain subject to strict statutory controls. If challenged, rationality and the absence of protectionist purpose would have to be demonstrated, much as when the Scottish Government were put through its paces on minimum alcohol pricing. Yes, there will be cases in which compliance has to be demonstrated in the courts. Who, if not the courts, can be the arbiter of whether public authorities, whether central or devolved, have exceeded the limits of their legal authority? Litigation is always an inconvenience, and I would not wish it on my best friend, but the universal fact that the scope of a legal power must, in the last resort, be determined by the courts is no sort of justification, I would suggest, for withholding or removing that power from the devolved Administrations.
As for cases that last 10 years, as a barrister I can only dream enviously of such a durable source of income. Urgent cases can be quickly resolved, and the major source of delay will be removed once we move outside the jurisdiction of the Court of Justice of the European Union. Without its intervention, the time occupied by the Scottish case on minimum alcohol pricing —which delayed the introduction of that measure—would have been very much shorter.
The common frameworks incentivise consensus. Among their many advantages, therefore, is a likely reduction in recourse to litigation. So I welcome Amendment 1, which, if it remains in the Bill, will prioritise the common frameworks, and significantly narrow the circumstances in which the market access principles apply. For as long those principles remain in the Bill, it seems to me that something in the nature of these amendments is needed, if only and the noble Lord, Lord Stevenson, as a backstop. These amendments would diminish, in a controlled fashion, the crudely centralising force of the market access principles. They would also help to preserve the mutual respect between nations that the perpetuation of our union requires.
Lord Young of Cookham (Con)
My Lords, it is a pleasure to follow the compelling speech of the noble Lord, Lord Anderson. I have added my name to Amendment 10 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Anderson of Ipswich, and the noble Baroness, Lady Bowles of Berkhamsted.
As I said in Committee, it is essential that all the nations within the UK can pursue effective policies on public health, which is my particular interest. Last Friday, the Public Services Select Committee, of which I am a member, published its first report on the lessons from coronavirus for public services. One of the key recommendations to the Government was that there is an urgent need to recognise the vital role of public health in reducing deep and ongoing inequalities exacerbated by Covid-19. Unamended, the Bill makes that task more difficult.
While the committee welcomed the Government’s commitment to extend healthy life expectancy by five years by 2035, and to narrow the gap between the richest and the poorest, we also recognised that this would be tough to deliver. We called on the Government to wait no longer before publishing their strategy to achieve this manifesto commitment and their response to the Green Paper Advancing Our Health: Prevention in the 2020s, which was due in January this year.
Why is this relevant to these amendments? Currently, the internal market within the UK has the flexibility, through exclusions, to allow different parts of the UK to move at different speeds on public health. England was able to lead the way on restricting tobacco displays in shops; Scotland and Wales are currently ahead on policies such as minimum unit pricing for alcohol. However, the internal market Bill may limit future innovations, as the exclusions are both narrow and narrowly applied to only part of the market access principles.
While policies similar to those I just mentioned might be allowable, it is not difficult to identify future public health policies that would not. For example, in the Explanatory Notes to the Bill, the Government describe how these rules would allow a packet of crisps produced in or imported into any part of the UK to be sold in any other. However, this leaves little space for Governments within the UK to pursue future legislation that aims, for example, to restrict the salt content or size, or even to improve the labelling, of crisp packets. The justification for this is unclear, as articulated in a blog by the Institute for Government.
My view is that leaving the EU should not remove the ability we currently have for different parts of the country to move at different paces. This has meant that we have not had to move at the pace of the slowest, and the different parts of the UK can benefit from the experience of the market leader. The noble Lord, Lord Anderson, made this point well. The Government have failed to explain why their list of exceptions is so much more restrictive than that of the EU or, indeed, the WTO. While the justifications are unclear, the risks are anything but. Unless the Bill is amended, some of this ability to innovate would be lost. This would be a step back for the UK, not a maintaining of the status quo.
The background over the last few years has been to give Holyrood and Cardiff more autonomy, not less. The Bill conflicts with that trend, helping to increase demands for independence and undermining the devolution settlement. It would not limit the ability of just the devolved nations to act, but that of England too. As part of its obesity strategy, the Department of Health and Social Care will consult on requiring calories to be included on alcohol product labels. The mutual recognition principle could hamper this legislation if alcohol produced in the rest of the UK was not required to display calories. Further, if overseas companies wished to avoid displaying calories, they could simply ensure that their imports arrived in another part of the UK before moving them to England for sale. When other noble Lords and I raised our concerns about this in Committee, my noble friend Lord Callanan, responding for the Government, was unyielding. Indeed, he said that the exclusions from market access principles were
“intentionally narrowly drafted, to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice.”—[Official Report, 28/10/20; col. 339.]
The Government have demonstrated that they are willing to listen to the concerns of the House—for example, with the removal of the Secretary of State’s powers to change the scope of the mutual recognition principle—yet in other parts of the Bill they have suggested a relatively small adjustment, with the need to “consult with” but not “gain consent from” the devolved nations before using these powers. There has still been no movement on the limited nature of the public interest exceptions in the Bill, nor am I aware of any discussions on that, as I called for in Committee. That is why the amendments have been brought forward again on Report.
These amendments are supported by a wide range of health organisations: the British Heart Foundation, the British Lung Foundation, Asthma UK, Cancer Research UK, the Faculty of Public Health, the Mental Health Foundation, the Royal Society for Public Health, Action on Smoking and Health, and the Alcohol Health Alliance, for whose briefing I am most grateful.
I very much hope that, even at this late stage, the Bill might be amended and the Government might reflect the concerns that have been so widely shared on this subject.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I support the general thrust of all the amendments in this group, and I have added my name to Amendments 10 and 21, which relate to goods. I should also have put my name to the services amendments, because both I and my group support those as well.
As was debated in Committee, we already worked under a more generalised public policy, legitimate aim regime while in the EU, and, as the noble Lord, Lord Anderson, said, that provided safety valves, which have now been taken away. In Committee, the Minister argued that the UK internal market was different, and for some reason that meant that it needed to be narrower. I cannot understand why—perhaps because we are closer together—we have to have fewer freedoms because we have left the EU. Therefore, I agree entirely with the drafters of the amendments that there are many more legitimate aims that need to be spelled out.
Realistically, differences will not be introduced into the market without a lot of thought. As my noble friend Lady Humphreys said in Committee, Wales is a good size to experiment with. The noble Lord, Lord Young, gave examples of various nations progressing at different speeds. Differences will survive only when they are practical and when matters of good public policy all deal with specific problems within a particular area, but they should be allowed to be put to a proper test and should not be undermined from the start by immediate get-arounds.
These are important amendments, and I hope that the Government will consider carefully why it is necessary for the Bill to undermine the freedoms currently enjoyed. That is not how Brexit was advertised, whether you were for or against it.
Lord Whitty (Lab) [V]
My Lords, I have added my name to Amendment 11, in the name of the noble Baroness, Lady Boycott. She has her name down to speak later but has indicated to me that, because of other appointments, she might not be able to make it. She has therefore asked me to say a few words—more than I might otherwise have done.
I recognise that the amendment in the name of my noble friend Lord Stevenson lists a number of public interest exceptions that should be put into the Bill. There are good arguments for many or all of them, but surely, in this crisis period for our climate and our natural environment, the protection of the environment must be seen as an exception. It is one where, for example, the Welsh Government could take a lead, with different regulations on, for example, air quality limits, pollution in rivers, noise and dangerous chemicals that are tighter than those adopted by the UK, or English, Government.
The noble Lords, Lord Anderson and Lord Young, have both set out examples of where the devolved Administrations have indeed taken that lead. If the Government oppose long lists, they ought at least to accept a short list of environmental protections, because they are speaking with forked tongues on this. We have had that today with the 10-point plan for a long-term strategic approach to a green economy. We have had the green industrial recovery plan and commitments made for houses to be fuelled entirely by offshore wind. We have also had big commitments to green spaces and other environmental objectives. And, of course, the Government are trying to impress the world—rightly now—on our commitment when we take over to lead the COP 26 in Glasgow next year.
However, we also know that, historically, free trade is regarded as being breached when environmental protection regulations have been opposed by the WTO and in free trade agreements around the world. There is a global change in attitude towards this, and indeed to some of the WTO rules, but it would be absolutely absurd if, to preserve an internal market within the United Kingdom, we prevented progress on environmental protection by the devolved Administrations or by England alone in the name of having complete and absolute internal market access rather than mutual recognition of different requirements.
If a regulation, a tax process or a planning approach that preserves environmental protection aims is to be regarded as a barrier to trade in our internal market, we are going against the trend of the whole of the rest of government policy and actually going against what is a rather slow but nevertheless clear intent of how world trade will have to be conducted in the age of the Paris climate agreement and the need to reduce carbon and greenhouse gas emissions. If there is one public interest limitation, surely it ought to be environmental protection, and that is what would be provided by the amendment in the name of the noble Baroness, Lady Boycott, which is also signed by myself and the noble Lord, Lord Randall.
Lord Randall of Uxbridge (Con) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Whitty. I too want to speak in support of Amendment 11, in the name of the noble Baroness, Lady Boycott, which I was pleased to add my name to. We have just heard from the noble Lord, Lord Whitty, who also signed the amendment and has astutely and eloquently put the case for it.
I apologise that I was not able to join your Lordships’ deliberations in Committee, but, from reading Hansard, I see that my noble friend the Minister stated:
“The current list of legitimate aims will … align in many cases with the protection of the environment … expanding the list … beyond the current list would increase the grounds on which goods from one part of the UK could face discrimination in another … but with each addition steadily eroding the benefits that we all enjoy of the UK internal market. Expanding the list would also make discrimination easier to create and implement within the internal market.”—[Official Report, 28/10/20; col. 338.]
With respect, I disagree with that. Amendment 11 adds the protection of environmental standards to the shortlist of what constitutes a legitimate aim. It is imperative that, at a time when most acknowledge that we are in a climate and nature crisis, the protection of environmental standards should be considered a legitimate aim—indeed, as the noble Lord, Lord Whitty, said, it is probably the most important legitimate aim—and that we can do so without it being treated as indirect discrimination.
As we have also heard today, the Government have unveiled a series of measures that are ground-breaking and very ambitious, and I do not doubt that the Government take environmental standards very seriously. I hope that this amendment will give them an opportunity to give more power to their elbow. This, I believe, is a very achievable ask and I hope that my noble friend the Minister will agree that it will help to ensure that the internal market supports the achievement of environment and climate goals and targets at this crucial time.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
I call the next speaker, the noble Baroness, Lady Boycott, although I am not completely convinced that she is with us. No, she is not, so I will move on to the next speaker, the noble Lord, Lord Wigley.
Lord Wigley (PC) [V]
My Lords, I am delighted to follow the noble Lord, Lord Randall, and agree with much of what he said.
I support the amendments in this group, including the lead amendment, and will address in particular Amendment 21, which also stands in the name of the noble Lord, Lord Stevenson, to which I have added my name. I very much agree with his comments and will not repeat his references to the pleas made to us by the Welsh Government. We need to build flexibility into the Bill to deal with the issues that have been addressed.
In addition to the exclusions identified in Amendment 10, I refer to the two groups identified in Amendment 21, namely, in proposed subsection (2), paragraphs (f) and (g), which deal with cultural issues and regional socio-cultural considerations. Although there are many aspects to consider, the category that I wish to highlight is the Welsh language. It is used widely in day-to-day life in Wales, a factor recognised by many commercial concerns that use it to promote their goods or services, and for advertising. Contracts offered by either the national Government in Wales or local government may well include requirements relating to the use of the Welsh language in the delivery of services or the definition of goods.
The use of Welsh in Wales is underpinned by legislation. It is not just a question of equal validity, a principle incorporated in the Welsh Language Act 1967, replaced in the Welsh Language Act 1993 in favour of stronger provision, and further strengthened by legislation in our National Assembly a decade ago. Among other considerations is the need to provide information in Welsh, in order to give Welsh speakers the right to receive information and, where appropriate, respond, in the language of their choice. Such requirements can arise in the context of service delivery, particularly personal services, community participation and cultural activities. I therefore ask the Minister to give me an assurance that the Bill in no way overrules or diminishes Welsh language rights, and that related dimensions can be recognised under this legislation as a valid reason for a derogation.
Before I conclude, perhaps I may respond to comments made earlier by my good friend the noble Lord, Lord Cormack. I, too, would have much preferred to be with noble Lords in the Chamber. If I had, I would have pointed out to the noble Lord that the noble Baroness, Lady Bennett, is most certainly not the only Member of the House who regards the union as unacceptable in its present form. As he well knows, while I accept that all good sense tells us that there must be a close working relationship between the nations of these islands, which would probably include a customs union and possibly some form of Britannic confederation, the present relationships do not work in many ways. Those can best be encapsulated by the phrase, “Power devolved is power retained”—a feature that has raised its head on many occasions in our deliberations on the Bill. As has been acknowledged for Northern Ireland, both Wales and Scotland should have a fundamental right to determine their own future, whether in the present union, a confederal union or, indeed, the European Union. In the meantime, we should also do our best to get on with each other, co-operate on those matters in which we have common interests and avoid the excesses demonstrated by the Prime Minister in his remarks about Scotland last week.
Baroness Jones of Moulsecoomb (GP)
My Lords, I will be brief. The amendments in the group are basically about protecting the environment, consumers and public health—all legitimate aims. The noble Lord, Lord Randall, made a good point when he said that, given the Government’s U-turn or swerve towards green issues, these amendments can be helpful. I see no problem with the Government picking them up and saying thank you. One problem with the Bill as it stands is that they are trying to create a legal system more restrictive and overbearing than the EU single market ever was. The amendments reintroduce existing exceptions in EU law that allow the Government to pursue a sensible policy that will benefit people and the planet.
One of the delights of my experience here in your Lordships’ House at the moment and over the past 18 months has been that I am not the only person banging on about the environment any more. I would like to thank everybody who has written these amendments; I support them thoroughly and I hope that the Government see them as helpful towards their green aims.
Baroness Neville-Rolfe (Con)
My Lords, I must say that I am uneasy about this group of amendments because I am not sure that they achieve what many noble Lords want. This Bill is designed to provide a UK single market—like the EU’s and, indeed, that of the USA—to ensure a properly functioning market that creates prosperity and economic security for our four great nations coming together in the United Kingdom under Her Majesty the Queen.
We want trade to flourish, and we want to support business interchange and the free flow of information. This helps the devolved nations, as 60% of exports from Scotland and Wales and nearly 50% from Northern Ireland go elsewhere in the UK and they all benefit greatly from a transfer of resources, mainly from London. We want trade to increase as we see more import substitution following exit from the European Union.
Public policy can be decided within that internal market framework with some variations; we have talked about that before. I support local variations, such as minimum alcohol pricing in Scotland and plastic bag regulation in Wales, which I encouraged. However, they must be limited or the single market will be undermined. Adding consumers, the environment, labour standards, public and animal health, cultural expression, regional characteristics and equality in various ways, as these amendments do—even with an opt-out where the relevant aim is already achieved, as in the amendment in the name of the noble Lord, Lord Stevenson—changes the whole character of the legislation on non-discrimination and market access. I note the contribution of my noble friend Lord Young of Cookham but I do not see how different rules on smoking, minimum pricing or the use of the Welsh language, which I very much support, would be ruled out by this Bill.
As for differential labelling, whether on crisp packets or anything else, I know from experience that having different labels adds costs and introduces logistics issues, which puts prices up for consumers. It would be much better to introduce labelling for health reasons and significant climate change reform for the United Kingdom in the way it used to be agreed in Brussels. I fear that these undoubtedly well-meaning amendments would provide a plethora of excuses to impose protectionist and other barriers between our four nations.
A source of dispute, not collaboration and harmony, across our land and a field day for the legal profession would not help us to achieve the leaps forward that we all want on the environment, standards or anything else that has been the subject of this debate.
Lord Teverson (LD) [V]
My Lords, I will speak to Amendment 11 in the name of the noble Baroness, Lady Boycott, although I am very much in favour of the amendments in the name of the noble Lord, Lord Stevenson, as well.
Devolution has not been a disaster in Scotland, Wales, Northern Ireland or, indeed, London. It has strengthened the United Kingdom, our economy and our society. My great fear is that the overwhelming application of the market access principle—with those few exceptions: life or health of humans, animals and pets or public safety and security—is far too restrictive and will mean that important parts of devolution erode and disappear over time.
As with Amendment 11 in the name of the noble Baroness, Lady Boycott, I am particularly concerned about the environment, including climate change. I will be brief on this. We heard arguments in Committee that the most important thing was maintaining strong competition in the United Kingdom. I agree with that, but, like all things in market economies, that needs to be constrained in certain ways. While we need market competition to remain strong, it is equally important in a modern economy that innovation can take place. Competition in environmental regulation and some of these other areas is equally important to stimulate innovations in the nations of the United Kingdom that others can follow when they are successful. I see that as a key part of this process: being able to keep at the same time the different ways in which the nations of the United Kingdom can interpret environmental and climate change needs.
I am delighted that the Minister responding is the noble Lord, Lord Callanan, who is the Government’s Minister for Climate Change. I am sure he will be absolutely persuaded by these arguments that we need these environmental innovations to help with climate change as we move forward—as the Prime Minister wants us to, as he showed in his 10-point plan today—and to make sure we keep that progress and do it in the many ways the nations of the United Kingdom wish.
Baroness McIntosh of Pickering (Con) [V]
My Lords, I am most grateful for this opportunity to follow the noble Lord, Lord Teverson, who chairs our EU Environment Sub-Committee so expertly and courteously.
I take this opportunity in supporting Amendments 10 and 11—I would marginally prefer Amendment 10, but presumably they are for debating purposes—briefly to ask my noble friend Lord Callanan whether our understanding of the Bill as currently drafted is correct, in that it appears to be very tightly and prescriptively drawn, as so expertly indicated by the noble Lords, Lord Stevenson and Lord Anderson. Would protection of the environment or the labelling provisions proposed by my noble friend Lord Young of Cookham be permitted? Is my noble friend Lady Neville-Rolfe correct that, for example, the labelling provisions set out by my noble friend Lord Young would already be allowed?
My understanding is that member states such as Denmark can already provide additional information for consumers, such as the calorie content of beers and other foods, and that we have not gone that far yet. Would that be permitted under the Bill as currently drafted, or do we need the amendments in this group to be moved? That would greatly assist me understand how exactly the provisions in the Bill as drafted are to be interpreted.
Baroness Noakes (Con)
My Lords, I am sure that the supporters of these amendments are motivated only by the desire to enable the devolved Administrations to do the right thing in environmental protection and all the other fine things mentioned in these amendments, though I must say to the noble Lord, Lord Stevenson, that I have absolutely no idea what “cultural expression”, as mentioned in Amendment 21, has to do with the internal market.
I appeal to noble Lords to remember that the aim of this Bill is to ensure that the UK’s internal market operates on a frictionless basis and allows businesses to trade in the UK with the minimum of barriers as they do now. This helps businesses in all parts of the UK operate successfully and profitably, which supports the aim I hope we all share of a healthily growing economy. More importantly, it delivers for consumers because trade barriers tend to increase costs and reduce consumer choice.
I have to say that this is not a question of whether a particular regulatory rule will itself increase costs. We can argue all day about whether, say, increasing environmental regulation will increase or reduce costs for consumers. That is not the point; the point is about having different environmental regulations in one part of the United Kingdom compared with other parts and whether that will work in the interests of consumers or against them. The answer to that is clear. If such regulations have the effect of erecting further trade barriers, the consumer takes the hit.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, the noble Lord, Lord Cormack, has withdrawn from this debate, so I call the noble Baroness, Lady Clark of Kilwinning.
Baroness Clark of Kilwinning (Lab)
I speak in favour of the amendments, particularly Amendment 10, and the principle that any changes to the devolution settlement should not be made without the consent of the devolved institutions themselves and that the UK exiting the EU should not be the basis on which it is determined whether a matter is reserved. I argue that this is not the time or the circumstances in which we should be considering taking powers away from devolved institutions and overriding their wishes.
The devolved institutions were not created equal to Westminster in the devolution settlement. It has been suggested on a number of occasions today that there should be that equality, and many Peers have spoken about the need for that relationship of equals. I believe that that is the direction in which we need to be going and today’s debate again highlights that that is definitely the kind of constitutional arrangement that people in Scotland are asking for, irrespective of where they stand on the independence issue.
The examples given in today’s debate in relation to Wales being able to legislate on the use of single-use plastic are good at showing why this legislation is unhelpful. It has been confirmed by the Government in documents that Wales’s plans to bring forward proposals to ban all nine types of single-use plastics referred to in the EU directive would not be possible if this Bill were to become law.
This Bill would affect the ability of the devolved institutions to regulate any goods because they would require goods manufactured in that particular country to comply in certain ways that would only be relevant for goods made in that country. Goods made in Scotland could be regulated by the Scottish Government and required to comply with regulations, but goods brought in from other countries in the UK would not be required to do so.
I listened with great interest to the noble Baroness, Lady Noakes, and I fully understand the principles that she was outlining, but that horse has bolted and that is not where we are in the 21st century in the United Kingdom. We have to recognise the very different political cultures that exist within the different nations that make up the UK, and it is in that context that we have to look at this legislation.
Will the Minister consider the specific example about public procurement regulations raised by UNISON? Would the rules on public procurement, which have been devolved to Scotland since 1998, be protected if this legislation were enacted? For social, employment and other reasons, procurement legislation introduced in the Scottish Parliament under Labour and the Liberal Democrats, as well as under the Scottish National Party, is different from that south of the border. There is a different culture in Scotland. Can the Minister outline whether those regulations would be impacted by this legislation? This is just one example of the many areas of legislation where a huge amount of work has taken place since devolution and which could be affected by the Bill. I understand that the Minister is here to represent the Government, although he will have his own views.
These proposals are cavalier and irresponsible. I ask the Government to look at these amendments and think again. This is not just about trade. It is about the way in which we in the four nations of this country relate to each other. If we do not have the support of the devolved institutions for this approach, I respectfully suggest that this is the wrong way forward.
Baroness Northover (LD) [V]
My Lords, I support Amendment 10 and other amendments in this group. Powerful arguments have been made this afternoon about devolution. Common frameworks must continue to allow divergences within the devolved Administrations and between them and England. The Bill must not undermine this. The amendment relating to that, in the name of the noble and learned Lord, Lord Hope, was passed overwhelmingly.
At Second Reading the noble and learned Lord, Lord Judge, introduced his regret amendment by expressing shock at the Government’s plans to break international law. At the end of the debate he concluded that, stunned as he had been by these proposals, he had perhaps overlooked the extent to which the Bill also undermined devolution.
In this group we flag up some of the areas in which the devolved Administrations currently have flexibility. The Bill could prevent this, as my noble friend Lady Bowles and others have pointed out. As the noble Lord, Lord Anderson, said, these differences exist in the EU, even with its powerful single market. I am not sure how deliberate the removal of the existing flexibilities has been, or whether this simply reflects that devolution is not in this Government’s DNA.
I agree with what has been said about the environment. I want, briefly, to flag up public health, as did the noble Lord, Lord Young of Cookham. In the middle of a pandemic, this Bill potentially undermines our ability to move forward in this area. We see variations in public health which may well have played a part in encouraging the devolved Administrations to take more ambitious actions. The rates of alcohol-related deaths are more than 60% higher in the most deprived areas than in the least deprived. The highest rates of smoking are consistently found among the most disadvantaged. Scotland has the highest rate of alcohol-related deaths in the United Kingdom. Its Government have introduced a range of policies to address this. The Welsh Government have said that they will do more to extend non-smoking areas. This is also welcome.
These amendments seek to ensure that, when one devolved Administration move ahead of another, they can do so. We hope that they may be able to pull the others along with them. Undermining devolution is clearly one of the fundamental problems with this Bill.
Lord Naseby (Con)
My Lords, I respect the views of the noble Baroness who has just spoken, but I have to say that there is little in what she said that I agree with. Amendments 21, 48 and 49 are quite different from Amendments 10 and 11. They go, in my judgment, way beyond what is necessary for a successful free trade market. Really they amount to micromanaging, and on the whole Her Majesty’s Government in any form, whether it be devolved or central, certainly are not terribly good at managing commercial activities. So I suggest that those amendments are unacceptable.
Amendment 11 is one that I warm to because the environment is absolutely crucial. In that context we include climate change, which we know is affecting every nation in the world, so that is a very serious area. Whether this amendment is the right one or not is almost for the Government to decide. I care deeply about the environment. I am privileged to live outside London. I shall drive home tonight, 50 miles to Bedfordshire, and it is a very nice environment there. It is essentially a horticultural one, which brings me to the point that horticulture is changing, not least because we are looking to achieve a fair degree of import substitution. All sorts of new challenges arise from that. We virtually gave up in the glasshouse world, losing out to Holland. There is all sorts of experimentation going on—growing vegetables just in water and so on—but this is not the time to go into that.
I do worry that there are products at the margin, where there is always somebody lobbying against them. Smoking has been mentioned. I have never smoked, but I accept the current situation in which people have the right to smoke if they wish to, and there are clear frameworks in which they can follow that. Pesticides are important in the horticultural world because they affect yields; again, that is a controversial area. So I will listen to my noble friend, particularly on Amendment 11, about which I have a reasonably open mind. I know that the environment is absolutely crucial, but I do not want to see areas of our society and our market squeezed out because of some heavy lobbying from one particular group who do not like the particular industry involved.
Lord Callanan (Con)
My Lords, Amendments 10, 11 and 41 would expand the list of legitimate aims used to justify where statutory requirements in one part of the UK can indirectly discriminate against goods or services from another part of the UK. So I will start by saying that the Bill provides an updated, coherent market structure which will help to avoid future complexities and prevent costs being passed on to customers through an increase in prices or a decrease in choices. An expansive list of legitimate aims would increase the potential discrimination faced by businesses or service providers, eroding the benefits of the internal market and creating damaging costs and internal barriers to trade.
The current list in the Bill is targeted to allow nations to meet their respective goals while avoiding unnecessary damage to the internal market—a point that was well made by my noble friend Lady Neville-Rolfe. For example, the Bill already includes the protection of public, plant and animal health, and in some cases, of course, this will align with the protection of the environment. However—I cannot stress this enough—the Government have repeatedly committed to maintaining our world-leading standards across a number of different areas, whether that is in consumer protection, the environment, social and labour standards or public, animal and plant health. The Bill does not undermine the great strides that we have taken in these areas, and we will continue to be at the forefront of improving and protecting our high standards.
Under this Bill, the devolved Administrations will retain the right to legislate in devolved policy areas. Legislative innovation remains a central feature and, indeed, a strength of our union. The Government are committed to ensuring that this power of innovation does not lead to any worry about a possible lowering of standards, by both working with the devolved Administrations via the common frameworks programme and by continuing to uphold our own commitment to the highest possible standards. It is important to remember that the market access principles do not prevent the UK Government or the devolved Administrations adopting divergent rules for goods or services.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I have received no requests to ask the Minister any short question, so I call the noble Lord, Lord Stevenson of Balmacara.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank everyone who has spoken in this debate for their thoughtful and often powerful contributions. It has been a wide-ranging debate and a very interesting one. It has raised new dimensions in our debate today, and for the ones we will have in succeeding days on Report.
It made me think of two things that I want to share with the House in concluding. A lot of the problems with the Bill arise from the accelerated timetable it has gone through. The feeling I am left with after this debate is that if there had been more time for debate prior to its publication, we would not be facing the rather uncomfortable tension between the wish to maximise consumer benefit and reduce barriers to trade, which has been expressed by a number of speakers and which we fully support, and being unable to respond to local wishes in parts of the country on issues that matter to local people. We want there to be competition not only in raising standards but in innovation and finding new ways of dealing with issues of public policy that may arise.
Interestingly, various derogations and exemptions that appear in the amendments in this group mimic the concerns expressed during the Trade Bill, which we will return to later this year, and which were resolved in the Agriculture Bill, with the Government conceding that there needed to be a statement on the standards of environment, animal welfare and animal production standards in relation to the agricultural trade and products. If you add public health, social and labour standards, we are back with the lists that appear in today’s amendments. I wonder why that is; I do not really have an answer. However, it might be worth more consideration. I will look carefully at Hansard to see whether we can find a common thread that might be picked up in later amendments, and on which it might be worth pushing for further debate if we can—or perhaps to a vote.
In passing, I am sorry that the noble Baroness, Lady Noakes, whose contributions are always of interest, was foxed by the term “cultural expression”. I believe that is the term used when state aid is used to support activities that would otherwise not be possible. A reference here would be the horse race betting levy, which would otherwise be banned, or the support that this Government brought in to support the film industry, animation, high-end drama and other aspects of cultural life, building on work done initially by the Labour Government. I think that is where it comes from. If it is valid for anyone in the public sector or an elected organisation to wish to see more work, investment and activity in the green economy, for example, as the Prime Minister announced today, it is just as appropriate to say that there could be support for cultural expressions, the term used to talk about the culture industries.
The general feeling is that the Bill is too tightly constrained around how the market access provisions will work—so much so that there may be disbenefits to consumers unless people in different parts of the country can respond differently to issues they feel strongly about. As I said, I will read Hansard, but I feel that while the common frameworks will be able to carry most of the load of the issues raised today, they will not take us all the way and it may be necessary to return to this issue at some stage. In the interim, I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
I should inform the House that if Amendment 12 is agreed then I cannot call Amendment 13. Does the noble Baroness, Lady Andrews, wish to move Amendment 12 formally?
Amendment 12
Baroness Andrews
Baroness Andrews (Lab) [V]
My Lords, I spoke to this amendment in an earlier group. I beg to move.
United Kingdom Internal Market Bill
Monday 23rd November 2020
(3 years, 12 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 150-III(Rev) Revised third marshalled list for Report - (23 Nov 2020)
16:29 - Division conducted remotely on Amendment 15 - Ayes: 319 / Noes: 242 - Amendment 15 agreed.
20:17 - Division conducted remotely on Amendment 54 - Ayes: 285 / Noes: 224 - Amendment 54 agreed.
Lord Callanan
“(8A) Before making regulations under subsection (7) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending the “legitimate aims” in Clause 8 (which can mean that provision does not count as indirectly discriminatory against goods).
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I start by bringing to the attention of the House an inadvertent error that I made in one of my replies last Wednesday. In response to the noble Baroness, Lady Ritchie of Downpatrick, I misread my note on the relationship between the non-discrimination principle and employment law requirements, and got one word wrong. I should have said:
“If the employment law requirement were to meet that test, they would not be disapplied unless they had discriminatory effects.”
I reassure that House that my misspeaking in this case was, of course, entirely unintentional.
To be absolutely clear about this point, we have already delivered the relevant legislative measures to give effect to Article 2 of the protocol. I again assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward and will not be impacted by the outworkings of this Bill. Even if employment law requirements were in scope of the non-discrimination principle, which they would not generally be as they would have to relate to goods sold, they would not be disapplied unless they had discriminatory effects. As I said to the noble Baroness, Lady Ritchie, last week, I would be happy to facilitate a meeting between her and interested parties and the relevant Ministers and officials, and I stand by the commitment that I gave then.
On the subject of today’s groupings, the amendments in my name would ensure that the Government consult with the devolved Administrations when seeking to use powers. As we made clear in Committee, if the powers are required, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. We have been listening to colleagues in the House and appreciate that there is an appetite for these commitments to be included in the Bill. We are therefore introducing these amendments to put beyond doubt our commitment to consult each of the devolved Administrations if any of the relevant powers are used. The consultation requirements and the commitment behind them are clear. However, once consultation is undertaken, the right place for final decisions should be back in Parliament, where parliamentarians from all parts of the United Kingdom can debate and vote on the proposed use of these powers.
It is also worth noting the separate amendment we have tabled, requiring the Secretary of State to review and report to Parliament on the exercise and effectiveness of the powers in Parts 1 and 2 within five years. That will provide an additional degree of accountability and scrutiny, and will again involve consultation with the devolved Administrations—something that I know the House is keen on. For the reasons I have set out above, I hope that noble Lords will accept the amendments in my name, and agree that Amendments 18, 32 and 43 are therefore unnecessary.
Having set out the reasonable measures that Government have tabled, I turn to Amendments 15, 20, 34, and 46. These seek to add additional processes around devolved Administration consent before use of the relevant powers. We have been listening to noble Lords and appreciate the appetite for these commitments on devolved Administration engagement to be included in the Bill. As I have already explained, we are therefore seeking to amend this clause to require consultation with the devolved Administrations prior to use of the power, putting our commitment beyond doubt. As part of this, we will of course set out reasoning for seeking to use the powers, both to the devolved Administrations and to Parliament. We will also seek to reach agreement with the devolved Administrations wherever that is possible. Because of this, it seems to us that putting into legislation the process proposed by noble Lords in their amendments would be duplicative and unnecessary. For these reasons, I hope that the amendments we have already tabled address the concerns of noble Lords, so these amendments are unnecessary.
Amendment 16 requires the publication of the results of consultation on the exercise of the power in Clause 8. While this power was removed from the Bill last week, I will speak briefly about the Government’s position on the subject. The exercise of this power would require consultation with the devolved Administrations. They are perfectly capable of deciding to publish their responses if they so choose. It is not necessary to make that choice for them in this Bill. For these reasons, I ask the noble Baroness not to press that amendment either.
Amendments 26, 27 and 28 would require the Secretary of State to consult all three devolved Administrations before preparing, revising or withdrawing guidance on the operation of the UK market access principles. Amendment 27 specifically stipulates that the Secretary of State should seek the consent of the devolved Administrations. However, should formal consent not be received within a month, the Secretary of State may proceed none the less. This amendment further states that where the Secretary of State makes regulations without obtaining consent, he must publish a statement explaining why. The guidance is itself explanatory; it is important to note that it is not a power to make or amend regulations.
It goes without saying that as part of the guidance process we will engage with all the relevant stakeholders, including the devolved Administrations, because we are committed to helping regulators and traders understand the principles and make the best possible use of them. However, this guidance will not change the rules that apply, so the formal consent of the devolved Administrations should not be required. It is also unnecessary to have a legislative consultation process with the devolved Administrations alone in respect of the guidance, when the guidance will be explaining, not making, the law.
I hope that with those words I have reassured noble Lords on this matter and they feel able not to press their amendments. In the meantime, I beg to move.
Baroness Hayter of Kentish Town (Lab)
My Lords, first, I thank the Minister for his correction on the unforced error, I think it is called, in what happened on Wednesday. The noble Baroness, Lady Ritchie, will be speaking later and I am sure will comment on that; I hope the House can let her even if it is not specifically in this group. When the Minister responds, I would ask him to ensure the meeting that he has kindly offered takes place before Third Reading, so that if anything needed adjustments, we would be able to look at it at that point. As I say, I am absolutely certain that it was an unforced error, but it would be nice to have that clear.
We are pleased about parts of this, and certainly the review of the use of powers. It may seem odd to the House that we are continuing with these amendments, almost all of which—the guidance being the exception—set down how regulations should be made, even as the very power to make such regulations is about to be removed from the Bill. Nevertheless, we are in agreement with the Minister that it is helpful to deal with the amendments in his name and those in mine and others’ which deal with how these powers would be handled, should they be put in.
Therefore, it is helpful to have our Amendment 15, which I will formally move in due course, as well as Amendments 20, 24 and 26 in the Bill, so that the Commons and the Government will be well aware—assuming that our amendments are passed—that this House would expect any regulation about the functioning of a market across four nations to be made in partnership with those other three participants.
Amendment 15 and the others go further than what the Minister has offered in his. He has quite rightly added consultation; ours go further than that, but they do not hand a veto to any one of the devolved authorities. What they do is take further the welcome admission by the Government, in their Amendments 14, 19, 36 and 45, that it would be unthinkable to make regulations affecting devolved competences without consulting their Governments and legislatures. Our further step is to add some grip to the consultation by making it a proper involvement. The amendments say that the devolved authorities must either give their consent to the regulations within a month, or else the Government can continue but would have to explain to Parliament and the public why they were proceeding without agreement. This does not seem much to ask. It will not cause any delay, but it would ensure that there was no risk of any tokenism in the consultation. Instead, the devolved authorities will have to reply, and speedily, and the Government would simply have to explain why they wanted to proceed contrary to any of the devolved authorities’ views before proceeding.
Baroness McIntosh of Pickering (Con)
My Lords, I warmly embrace my noble friend—in a metaphorical sense, he will be pleased to know—for adopting in Amendment 14 and others what was in my amendment in Committee, which is why I have appended my name to his Amendment 14. I congratulate him on moving in this regard and listening to the concerns expressed in this House so forcefully by myself and the noble Lord, Lord Foulkes of Cumnock, and as drafted for me and briefed to me by the Law Society of Scotland.
By the same token, I urge the noble Baroness, Lady Hayter, and the co-signers of Amendment 15 and others in this group not to press them. I would be interested to know the provenance of, and thinking behind, Amendment 15 and the others, because I have not picked up on any move, certainly from the Scottish Government and Parliament, to seek consent in this regard. I would be interested to know why the noble Baroness is going to press this when the Government have gone so far to meet the concerns expressed by the Law Society of Scotland and others in Committee. If we do not welcome and congratulate the Government and this Minister when they move as far as they have, it puts down a poor marker for future amendments to this Bill and others on these matters.
My noble friend has said that Amendments 18, 32 and 43 in his view are unnecessary. I think that Amendment 18 is paralleled by and complementary to his own amendment—government Amendment 19. I think that Amendment 32 is also paralleled by his Amendment 36 and his Amendment 35, which I have also signed. Amendment 43, in my name and that of the noble Lord, Lord Foulkes of Cumnock, I think is also complemented and paralleled by his Amendment 45, for which I am extremely grateful; I would like to pay tribute handsomely to my noble friend for moving in this regard.
I do have a hesitation as to why my noble friend has not accepted Amendments 26 and 28 in my name and that of the noble Lord, Lord Foulkes of Cumnock. They are actually seeking to consult in much the same way as an earlier clause that my noble friend has moved and agreed—which is extremely welcome—but, if my understanding is correct, he has not agreed to move in regard to Clause 12 to consult with the devolved Administrations before preparing guidance under Clause 12. I may be mistaken—in which case, I would be grateful if my noble friend would correct me.
I would also like to warmly welcome government Amendment 29. I would like to take this opportunity to commend the spirit of inclusion shown by my noble friend and the Government on this occasion to commit to obliging the Secretary of State to carry out a review of the use of Part 1 amendment powers and, in that regard, his commitment to consult the devolved Administrations. I wish to warmly commend his movement in that regard.
I would perhaps like to nudge my noble friend also to accept Amendments 26 and 28 as being on the same page as his own thinking. I repeat that I do hope that the noble Baroness, Lady Hayter, and the other co-signers of Amendment 15 and others will take this opportunity to withdraw or not move their amendments, given that the Government have moved as far as they have on this consultation, to which they are now committed. So I do not beg to move.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I also welcome the Government’s amendments in this group and the speech of the Minister. If I may, I will try to answer the concern just expressed by the noble Baroness, Lady McIntosh of Pickering. I think it is fair to say that some of us fear that the Government might be tempted to try to overturn the amendments of the noble Baroness, Lady Andrews, in the other place, and so we would like the House to fully consider all the amendments in this group that have been tabled by the noble Baroness, Lady Hayter, and myself.
I would like to speak in favour of Amendments 15, 20, 27, 34 and 46. All of these amendments are based on the same principle: that, when issuing guidance as to the implementation of market access principles, or when seeking to extend or further limit the exceptions to the application of the market access principles, the Government must obtain the consent of the devolved Governments to doing so.
However, we are sensitive to the nervousness of the Government and wish to be helpful by providing clear reassurance in statute of coupling a consent requirement with a limited-time proviso. This states that, should consent not be forthcoming from one or more devolved Governments within a month, the Government may proceed to make the changes or issue the guidance, subject only to the need to make a statement to Parliament as to why this is necessary.
This is not an onerous requirement, and I know that what we have proposed is less than the unqualified requirement for consent that the devolved Governments in both Wales and Scotland would have preferred. But this amendment is a healthy, open compromise which can comprehensively allay the fears of the Government Front Bench as to the risk of the process somehow grinding to a halt should a Scottish or Welsh Minister try to delay. Indeed, our approach, advocated in the slightly different context of appointments to the office for the internal market by the Welsh Government, has been adopted by the Minister in government Amendments 56 and 57, so it seems difficult to see how the Government could object to this.
I therefore hope that the Minister will think again and accept these helpful amendments, rather than put us in a situation where we need to go to a vote.
Baroness Humphreys (LD) [V]
My Lords, I rise to speak to Amendments 26, 27 and 28 in this group, and in so doing I would like to thank noble Lords who tabled the amendments in this group and introduced them so clearly today.
Clause 12 of the Bill provides the Secretary of State with a power to issue statutory guidance about the practical operation and effect of the market access principles for goods. These amendments to the clause highlight what is, of course, a recurring theme in this Bill: the assumption that such decisions will be made by the UK Government, in the guise of the Secretary of State, without any input from the devolved Administrations, dismissing any attempt at building on intergovernmental relationships to come to consensus. It is this assumption and its consequences that I wish to address quite quickly today.
In a recent article published by the Centre on Constitutional Change, Greg Davies of Cardiff University argues that this Bill—and, I would contend, particularly clauses such as Clause 12 and others in this group—represents a failure of soft law and amounts to the introduction of
“a new constitutional settlement by stealth.”
Since the creation of the National Assembly in 1999, our two Governments have used soft-law techniques of intergovernmental political agreements and memoranda of understanding to form and guide the relationship between them. Because soft law relies on mutual trust, good will and co-operation rather than legal enforcement, it can, this article argues,
“be exploited to sidestep more fundamental reform”.
The introduction of this internal market Bill has, I believe, opened the Welsh Government’s eyes to the reality of the weakness of a system that relies on soft law; they themselves have described the Bill as a “new low”. So, in a Bill which will curtail the ability of devolved Governments to regulate products and services within their territories that originate from elsewhere in the UK, Clause 12, and the additional powers it gives the Secretary of State to act in areas of devolved competence, adds insult to injury.
The Welsh Government have no official voice in this Chamber, but they have the voice of many Members who value the devolution settlements and are determined to see the devolved Parliaments flourish and grow. So I am extremely grateful to the noble Lords who have given us the opportunity to debate these three important amendments today, together with other amendments in this group. In these amendments, this House is being asked to reaffirm Parliament’s support for the devolved settlements, to confirm its continued confidence in the soft-law process of building intergovernmental relationships, and to reject the attempts to introduce—and reject being complicit in—what is, in effect, a new constitutional settlement by stealth.
Of course, I welcome Amendments 26 and 28 in the name of the noble Baroness, Lady McIntosh, which call for consultation with Ministers in the devolved Governments when issuing guidance relating to Part 1 of the Bill, and Amendment 27, in the name of the noble Baroness, Lady Hayter of Kentish Town, which calls for the Secretary of State to obtain the consent of Ministers in the devolved Governments to such guidance. My preference is, of course, for Amendment 27, as it places this Parliament’s commitment to the soft-law process on the face of the Bill and provides for a meaningful outcome to consultation.
I also support Amendments 15, 20, 34 and 46 in this group, which also call for the consent of the devolved Parliaments. In addition, I do welcome the Government’s conversion to consultation in their amendments, but I regret that they really do not go far enough. If the noble Baroness is minded to put any of her amendments, particularly Amendment 15, to the vote, I and my colleagues on these Benches will support it.
Lord Hain (Lab)
My Lords, although I welcome the Minister’s moving of government Amendments 14, 36 and 45, I still wish to speak in support of Amendments 15, 20, 27, 34 and 46, to which I have added my name.
As the noble Baroness, Lady Finlay, said, these are modest amendments which are almost painstaking in their attempts to be reasonable. They balance the right of the devolved Governments to be asked for their consent if and when Ministers want to use Henry VIII powers to clamp down still further on the very narrow exceptions to the market access principles, with the right of the UK Parliament to act if it believes that one or more of the devolved Governments are unreasonably delaying or blocking such changes. I am happy to put my name to these amendments, but the fact that they are so modest highlights the parlous state of the union. We are faced with a Government who are so paranoid about the potential threat of a nationalist veto to their plans that they are prepared to provoke the very thing they fear: the collapse of the house of cards which is our so-called current constitution.
The noble Lord, Lord Hennessy of Nympsfield, coined the phrase “the good chaps theory of government” as a description of the way the governance of this country functioned in the absence of a codified constitution. We are faced with a Government who have defenestrated the good chaps with an insurrectionist zeal that makes Robespierre appear a model of restraint. They are unapologetic when found by the Supreme Court to be violating the constitutional rights of Parliament, responding by attacking the judiciary; they use constructive dismissal as a routine way of neutering the Civil Service; they give consultancy contracts on a breath-taking scale to their friends and relations without any proper procurement; and they tolerate a Cabinet Minister with the brass neck to remain in one of the highest offices of state after being found to have broken the Ministerial Code by bullying her officials—the list goes on.
If we are to defend devolution and indeed the future viability of the union—which I believe your Lordships’ House has repeatedly shown it wishes to do—we need to compel the Government to respect the rights of the devolved Governments and legislatures. That is why it is so important that the market access principles should be brought into play only if this House and the other place are convinced that a real-world threat has emerged to the internal market which cannot be addressed by the common frameworks. That is why the consent of the devolved institutions to legislative devices which might limit their rights should always be required. Let us be in no doubt that that is precisely what the Bill would do. Even without using the Henry VIII powers to which these consent provisions would apply, the Bill poses a real and present danger to the capacity of the devolved Governments to do what they have been elected to do.
In Committee, many Members raised the issue of single-use plastics. The Welsh Government have consulted on a proposal to ban nine types of these items—a move in line with their recognition of the climate emergency which would be fully possible under EU law, and which is very broadly supported in Wales. Ministers did not give a clear answer as to whether legislation of this sort would be possible if the Bill was enacted. However, in the policy statements published on the Department for Business, Energy and Industrial Strategy—BEIS—website last week, the issue is now crystal clear. To quote from one:
“Conversely, non-pricing policies that place an outright ban on goods being sold, for example a ban on single-use plastics, would be caught by mutual recognition. Devolved administrations could introduce a ban on the sale of a particular good, but the ban would only cover local products produced in that part of the UK (or those imported into that territory from outside the UK). Devolved administrations could not enforce that ban against sellers of goods produced in, or imported into, other parts of the UK.”
That is a quote from an official government website. Will the Minister please confirm on the record that this official BEIS advice is accurate, because its implications are pretty serious? If it is, would he explain how this is consistent with his and his colleagues’ previous assertions that the Bill does no more than replace constraints that existed by virtue of our membership of the EU?
The Bill is a tale of two halves. The one half consists of legitimate fears on the part of the devolved institutions that their role and powers are in real jeopardy, and the other of bogus claims that the devolved Parliaments are lying in wait to sabotage the union as the chimes of Big Ben welcome in the New Year. We must face down the half-truths of this unscrupulous and power-hungry Government and defend the rights of the devolved institutions, as these modest amendments seek to do.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I apologise for the fact that I am having to appear electronically, rather than be there in person, for logistical reasons. I am sorry not to be able to engage in a bit of banter with the noble Lord, Lord Cormack, for example, and in particular with the Minister, the noble Lord, Lord Callanan, with whom I have had a few exchanges of interest in the past. Nevertheless, I am very happy to speak today in support of the amendments in the name of the noble Baroness, Lady McIntosh, and myself.
These amendments would require—the important word—the UK Government to consult with the devolved Administrations in the areas described. Thankfully, the Government seem to be moving in that direction, as we see from Amendment 14. For once, I thank the noble Lord, Lord Callanan, for accepting that. In Amendment 15, my noble friend Lady Hayter on the Opposition Front Bench, and others, add a requirement to seek approval from the devolved Administrations while allowing the UK Government to go ahead if that is not obtained within a month. I will support that amendment if there is a Division on it, because it puts extra pressure on the Government to find agreements. There is in fact no difference in principle between the amendments, but they underline the need for some greater understanding of the nature and the extent of devolution. However, I repeat what others, including the noble Baroness, Lady Finlay, said, that we would prefer that the Bill had not seen the light of day and hope the Government and the Commons might think again in the light of their overwhelming defeat here in the Lords.
Meanwhile, we need to consider how these matters are dealt with if the Government do not take our advice and press ahead with the Bill. Some in Scotland, principally the SNP, have described the transfer of responsibilities from the European Union as a “Westminster power grab”. while the UK Government see it as a “power surge” to the devolved Administrations. The fact is that neither is the reality or correct. In truth, we were all willing to see common standards for the whole of the UK decided as part of the European Union common market, with some reservations as appropriate. Now we need to determine how we deal with all these powers in what will effectively be a UK common market.
There is however a constitutional difference between the European Union and the United Kingdom. Whereas the European Union is a federation of sovereign states, as we know, the UK has been a unitary state for centuries but has rightly decided to devolve some powers to three of its constituent parts over the past two decades. I support that and agreed with it, but we are still coming to terms with the new reality, and it is proving more difficult for some than for others.
In areas where there has been devolution of powers, those transferred from the European Union should of course go to the devolved Administrations as long as it can be done without any real distortion of the United Kingdom’s internal market operation. In our amendments, there is provision for them to be consulted, but not, of course, to have a veto, which I believe to be correct. However, there needs to be genuine consultation and, sadly, as my noble friend Lord Hain said, that has not been the case with the current UK Government, who have fuelled resentment and nationalist movements in the three nations.
Finally, I hope that the Minister will spell out in greater detail in his reply the procedures by which the Government intend to consult—the arrangements for consultation; secondly, how they will take account of those consultations within Westminster and Whitehall; and, finally, confirm that they will publish reasons if they are unwilling to accept the views of the devolved Administrations. That is the least that the devolved Administrations can expect, and I hope it will not be too difficult for the UK Government to do so.
I look forward to the rest of the debate and hope that when we get to Amendment 15, if there is a Division, the House of Lords will once again show its good sense.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, first, I thank the Minister for his statement at the beginning of this group, in which he indicated that he had made an error in winding-up last week on Amendment 24, which was in my name and those of the noble Lord, Lord Hain, and the noble Baronesses, Lady Suttie and Lady Bennett of Manor Castle.
I have listened to what the Minister said today. I wrote to him at the weekend about what was said on broadcast TV, which I quote:
“If the employment law requirement were to meet that test, they would not be disapplied because they had discriminatory effect.”
When the Official Report appeared, it stated:
“If the employment law requirement were to meet that test, they would not be disapplied unless they had discriminatory effects.”
The difference between “because” and “unless” leads to direct opposites, and that requires further clarification from the Minister and from the Minister who will hold the meeting. I thank him for indicating that he will facilitate that meeting with the members of both the Human Rights Commission and the Equality Commission in Northern Ireland on this issue.
As the noble Baroness, Lady Hayter of Kentish Town, stated, if we are not satisfied with the outcome of that meeting—it is important that it takes place prior to Third Reading—I would seek to bring that issue back then. For the purposes of clarification, I think I need to point out that the withdrawal Act 2020 implemented Articles 2 and 13 faithfully. Clauses 5, 6 and 8 of the Bill threaten that implementation by allowing changes to legislation implementing the obligation to keep Northern Ireland in line with equality law in future. It does this by providing that such legislation cannot be challenged on the basis that it is indirectly discriminatory. Until last week, the Government had said that Clauses 5, 6 and 8 did not apply to such legislation. The Minister’s statement today makes it clear that they will apply and may be used to challenge legislation implementing the Article 13 obligation.
Lord Cormack (Con)
My Lords, I begin by echoing my friend, the noble Lord, Lord Foulkes. I, too, am deeply sorry that he is not with us, as he was in such splendid and rumbustious form last week. All I would say to him is, “Haste you back”, and I hope he will be able to take part again on the Floor of the House very shortly.
I also genuinely thank my noble friend Lord Callanan for tabling and moving Amendment 14. That has shown that he and his ministerial colleagues have listened to what was said in your Lordships' House in Committee, and for that I am sure we are all grateful. My noble friend is exactly right when he says in the United Kingdom Parliament—we are not a federation—the buck stops with Westminster. That is entirely right, but there is deep suspicion in many quarters about the word “consult”, because it can have a variety of meanings and interpretations. “Politely inform” is often what people mean by “consult”. That is why I am particularly attracted to the wording of Amendment 20 in the name of the noble Baronesses, Lady Hayter and Lady Finlay, and the noble Lord, Lord Hain. This requires an explanation. It is entirely proper that the buck stops here. It is entirely proper that the ultimate decision is made in Westminster, given the present structure of our United Kingdom, where, as has been said, certain specific powers are devolved, but ultimate power remains here.
Having said all that, it is important that “consult” means consult—discuss, evaluate and determine the merits before a final decision is made. Therefore, I say this to my noble friend: thank you for coming as far as you have. I in no sense question or impugn his sincerity because I know from experience that he understands the proper meaning of “consultation”, but not everybody in ministerial office does. There have even been recent occasions when advice has been totally jettisoned.
If we are to move forward with the devolved Administrations, it is important that we genuinely consult. I like the idea of giving them time but not allowing them to procrastinate indefinitely; a month seems a good length of time. Then, it is perfectly reasonable that the Westminster Parliament should insist on having its will, but that it explain precisely why. We have got to treat the devolved Administrations as bodies of articulate, well-informed public servants who are trying their best to serve Scotland, Wales and Northern Ireland.
Of course, the elephant in the room—we must all be honest enough to admit this—is that, whereas the Governments in Northern Ireland and Wales accept the union of the United Kingdom, in Scotland, they do not. In Scotland, we have a Government who, perfectly honourably—it is an entirely legitimate ambition to have, although I strongly oppose it—have one ultimate aim: to break up the United Kingdom by withdrawing from it. So, it is very important that those of us who believe in the United Kingdom do not succumb to those who want to manipulate themselves out of it, and that we are able, in the interests of the United Kingdom—while there is one—to argue for policies conducive to its continuance.
The balance and wisdom implicit in Amendment 20 commends itself to me. I hope that my noble friend will reflect on that and perhaps say that he will come back at Third Reading with a slightly amplified version of the welcome and, again, genuinely meant and perfectly sincere Amendment 14, because I do not really think we can just leave it at that.
Lord Empey (UUP)
My Lords, the starting point for this group of amendments is, I suppose, that not one of the devolved Administrations has given its consent to this legislation. That is an unfortunate place to be.
However, I welcome the changes that my noble friend the Minister has introduced so far. Listening to the debate, it seems that the gap between the different amendments and the Government’s position is not huge; to be honest, I would have thought it perfectly capable of being bridged. I certainly urge that efforts to ensure it is bridged be pursued, because there is no point in having unnecessary divisions if they can be avoided.
I must say to my noble friend that consultation is in the eye of the beholder. Having been a devolved Minister for just under seven years, I have a little experience of what consultation actually amounts to from time to time. Occasionally, it can be extensive, planned and productive. On other occasions, you read about it in the Daily Mail before you have even got into the office. There is a coherent argument for having a codified process to ensure that consultation happens, and within a framework. We all know that Ministers and departments are sometimes very good at it, but occasionally and, sadly, all too frequently, that is not the case.
I totally accept that no devolved Administration can be permitted to have a veto over what happens in the whole of the United Kingdom, because, as my noble friend Lord Cormack just stated, the buck ultimately stops with the Westminster Parliament; that is totally correct. But one is brought to a position by one’s experience in these matters. What is being asked for in some of these amendments is not unreasonable and would be beneficial. We know that, as has already been referred to, vociferous nationalism is attacking at every opportunity the legitimacy of the United Kingdom. It has been used and abused. So, even though some sections in government may find it a bit tedious, having a structured consultation mechanism is a protection against those who would use it as an anti-unionist argument.
To give an example, due to the action of some of its parties, the Northern Ireland Assembly was unfortunately out of business for three years during the critical Brexit negotiations. We repeatedly asked Ministers what mechanisms they were going to use to consult the people of Northern Ireland about the huge issues arising from those negotiations; indeed, barely a day goes by now without another obstacle and tank trap appearing in the process. We were given assurances that the consultation would be very significant, but I can tell noble Lords that that did not come to pass. It was sporadic and haphazard—it certainly was not structured—and we have ended up today in the most awful mess, which, sadly, we will no doubt return to frequently in the months ahead.
We should not really have to have an argument over these issues because there is a broad level of agreement. I urge my noble friend to harness the different threads of the argument and ensure that we take a united position as we move forward with this legislation, whatever we happen to think of it. Setting out clearly that there must be consultation and that it must be done in a formal, structured way without any devolved Administration being able to frustrate the operation of the UK single market—as it will be referred to—is entirely reasonable. I hope that my noble friend will reflect on that when he sums up.
Lord Naseby (Con)
My Lords, one of the pleasant features of this Bill is the extent to which probing amendments have been put down by all sides. It is clear to me from the consultations we have had between debates and the periodic guidance we have received that, for once—this is not true too often—we have on the Front Bench two Ministers who have tried very hard to find a way forward in a controversial and difficult area. I pay tribute to that; it is particularly reflected in the amendment before us today.
Baroness Clark of Kilwinning (Lab)
My Lords, I support Amendment 15 and the other amendments which would require the UK Government to obtain consent from the devolved institutions.
The big political issue from a Scottish perspective in what we are debating is whether this legislation takes back powers that currently reside with the Scottish Parliament to the UK Parliament without consent. It seems accepted by all involved in this debate that that could be the case; I believe that is what my noble friend Lord Hain was saying, and what the Minister clarified on the first day of Report. Any further information or response the Government could give to clarify that point would be greatly helpful, in terms of the political problems from a Scottish perspective regarding this legislation. There can always be situations where it would be completely appropriate for UK legislation to be enacted covering currently devolved areas, with the consent of all parties involved, but that is not the issue we are debating here.
The suggestion of the noble Lord, Lord Empey, of a more detailed framework for consultation was incredibly useful, for all the reasons that have been outlined by noble Lords. As I understand it, the current legislation has no arbitration or other process that would deal with disputes. The genuine belief, which has been confirmed around this House, is that, as currently drafted, this Bill undermines the devolution settlements because it potentially involves areas where the Scottish Parliament currently has competence. There could be situations such as that outlined by my noble friend Lord Hain: for example, the Scottish Parliament currently has the ability to regulate for all goods in Scotland, but this legislation would mean it could regulate only for goods made in Scotland or those imported from abroad, and not those from other parts of the United Kingdom.
If that is not how this Bill, if it becomes an Act, would work in practice, or if it is impossible that that set of circumstances could come about, the Government need to be up front about that and make commitments and guarantees, given the political debate around this legislation. As I said on the previous occasion I spoke on this Bill, the concern in Scotland is that it could lead to a race to the bottom on standards and would enable a situation where the Scottish Parliament cannot legislate on matters that it could at the moment.
The concern is that the Government are effectively seeking, in certain circumstances, to take powers back from the Scottish Parliament. The backdrop is that all parties in Scotland, with the exception of the Conservative Party, have been asking and campaigning for greater powers for the Scottish Parliament, particularly financial powers, for many years. We have had rising support for independence, which gained momentum during the independence referendum in 2014, and a Brexit which is unpopular in Scotland, where there is a high level of awareness that 62% of the people voted remain. I therefore ask the Government to take all that into account.
Lord Morrow (DUP) [V]
My Lords, I will be very brief. I am concerned about Amendments 14 and 15, which both clearly state that:
“Before making regulations under subsection (7) the Secretary of State must”
consult
“the Scottish Ministers, the Welsh Ministers and the Department for the Economy”.
I asked myself why it is specifically the Department for the Economy in Northern Ireland but not in Wales or Scotland. Can the Minister clarify in winding up why it is specifically the Department for the Economy? The distinction is made in a couple of other parts of the Bill. Surely it is clear, given that the grounds for discrimination cover areas such as animal health and biosecurity, that the Department of Agriculture, Environment and Rural Affairs would have a deep interest in any changes. Thus the restriction to consult only the Department for the Economy is a bit difficult to understand.
I strongly contend that Northern Ireland should be treated in exactly the same way as other regions of the United Kingdom. Would the Minister be good enough to clarify in winding up on this group why it specifically states only the Department for the Economy, and not the Northern Ireland Assembly or other ministries? I will leave it at that.
Lord Liddle (Lab)
My Lords, it is welcome that the Government, in the shape of the noble Lord, Lord Callanan, have got up today and made some concessions to the position articulated in this House in Committee. We all welcome that, but he has not gone far enough. In Amendment 15 in particular, what he describes as imposing additional processes on government would actually be very valuable—particularly in the present political context, in which the Government have thrown a lot of doubt on their commitment to the devolution settlement.
In that context, I endorse the speech of my new Labour colleague, my noble friend Lady Clark. A serious political crisis is looming on the devolution question and, in everything we do, we have to behave with enormous sensitivity to the fact that that is a realistic prospect before us. Therefore, I do not see Amendment 15 as nitpicking, in the way that the noble Baroness, Lady McIntosh, described it; I see it as strengthening the principle that the Government have already conceded.
As a federalist and someone who believes in a federal Britain, I believe that this is an inadequate response to the devolution problem. I rather agree with the noble Lord, Lord Empey, when he says that we should have an arrangement where none of the four nations of Britain can veto a proposal that the other three agree with. I do not believe that England can always exercise that veto through the United Kingdom Parliament—that is what we have to change. If we are to keep the United Kingdom together, I believe that we have to think of new arrangements where decisions are made by a United Kingdom council that properly represents the nations, and, I hope, the regions and cities of England as well. That is a personal point about where I think we should be going.
Therefore, I do not see this as a particularly radical amendment that will address the present growing concerns about the devolution settlement. None the less, it is a sensible amendment, which I support, and I hope very much that my Front-Bench colleague, my noble friend Lady Hayter, will divide the House on it, unless we hear in the Minister’s response that the Government will make a significant move in its direction.
It seems to me that the merit of this amendment is that, by saying that the Secretary of State “must” seek consent, it puts on the face of the Bill the argument that disagreement should be the exception and that we should go into this with all sides—particularly the UK Government—determined to reach consent. Where there is no agreement, to win consent for that decision it is very important that there is a requirement for an explanation of how it is consistent with the devolution settlement, where the principle that the Government have set out is that the devolved Assemblies and Parliaments will have more, not less, powers as a result of withdrawal from the EU. In that explanation, the Government would have to demonstrate why that was so. They have already listened to some extent but I very much hope that they will listen more to what those of us on this side of the House have said, and that the Minister will indicate that he might go further.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
The noble Baroness, Lady Altmann, has withdrawn, so I call the next speaker, the noble Lord, Lord Bruce of Bennachie.
Lord Bruce of Bennachie (LD) [V]
My Lords, this has been a very constructive and interesting debate, which I think needs to be developed further.
We have all welcomed that the Government have softened their position in relation to the Bill and to consultation, and I think that that is genuinely the case. Certainly, up until this point, they had given the impression that, although they had produced the Bill in a hurry and not consulted on it, they were going to drive it through without any consideration of amendments. However, I think that they have now become aware of the degree of resistance towards the whole of the Bill and, in particular, towards the implications for devolution.
Lord Callanan (Con)
My Lords, I am sure that noble Lords will be happy to know that I can be brief, because of course I set out the Government’s position on these matters in my opening remarks. However, to summarise, we feel that we have set out a comprehensive package of changes to the delegated powers in the Bill to address many of the concerns that have been raised about the role of the devolved Administrations. Of course, it is always a great regret for me to disappoint the noble Lord, Lord Liddle, but I have to say that on these matters I am able to go no further.
Devolved Administration consultation is now required by legislation prior to any use of the key powers in Parts 1 and 2. The Secretary of State will also be conducting a thorough review of the exercise and effectiveness of each of these powers within five years, which again will require consultation with the devolved Administrations. Our approach will ensure a high degree of transparency and scrutiny and will guarantee devolved Administration involvement whenever the powers are used or, indeed, reviewed. The alternative approaches proposed in the group would, in my view, overcomplicate these very clear commitments.
I shall reply briefly to the questions that were put to me. In response, first, to the noble Lord, Lord Hain, I can confirm that the policy statement he referred to is accurate. With regard to his second question, the design of the Bill is different from the EU single market because the Government’s approach does not simply copy out EU rules, and that means that the constraints under which we operate are different.
The noble Lord, Lord Foulkes, asked about the procedure for consultation. The Bill now requires that consultation should occur as a matter of fact before Ministers exercise their delegated powers. As is normal for such legislation, it does not spell out in great detail how this must be achieved, but we will engage with the devolved Administrations as part of the process of normal policy development such as, for example, sharing draft SIs and publications and co-operating on public-facing events wherever that is possible, and then in any case more formally before a decision is made.
The noble Lord, Lord Morrow, asked why we should consult with the Department for the Economy in Northern Ireland. I can tell him that the reference to the department is consistent with the precedent of the Northern Ireland devolution settlement. Finally, perhaps I may confirm yet again to the noble Baroness, Lady Ritchie, that I will urgently seek to facilitate a meeting for her and the interested parties that she requested.
With those commitments and answers to the, I hope that noble Lords will feel able to support the Government’s approach to this matter.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I have received two requests to ask the Minister a short question. They are from the noble Lord, Lord Empey, and the noble Baroness, Lady McIntosh of Pickering.
Lord Empey (UUP)
Briefly, my Lords, a question has been raised in the House on a number of occasions: why are Welsh and Scottish Ministers referred to, but a Northern Ireland department is referred to? The reason is that, since 1921, power is devolved in Northern Ireland to the department, not to the Minister. The role of the Minister is to direct and control the department, but the department can still function without a Minister. It is a quirk that goes back 100 years, but it is there.
The noble Lord, Lord Morrow, made a relevant point. I do not know what the Minister means by “consistent with the devolution settlement”, because nothing in the settlement that I am aware of determines that this particular department is responsible. But, if you want a plural, because “Ministers” are referred to in the plural in Scotland and Wales, the only collective equivalent in Northern Ireland is the Executive—or, to meet the point made by the noble Lord, you could say, “Northern Ireland departments as appropriate”. But the reason for the difference is historic; it is not an error, as some people thought in the past. It is consistent with the fact that powers are devolved to the department and not to the Minister.
Lord Callanan (Con)
I of course thank the noble Lord for his help in answering the question more thoroughly than I did, and I can confirm my understanding that he is correct in what he says.
Baroness McIntosh of Pickering (Con)
My Lords, I am overwhelmed that my noble friend the Minister has accepted Amendment 14. Perhaps I may press him a little more on Amendment 16. If I understood him correctly, he said that it should be for all of the devolved Administrations to publish their responses to a consultation. I would beg to differ. It would be much better for all concerned, including myself, to find in one location on a national Westminster-based government website all the responses that have been published.
He did not comment—I would be grateful if he would—on why he would feel unable to give reasons for any decisions reached. I am grateful to the noble Lord, Lord Foulkes, who has also signed Amendment 16. Is there any problem the Government would have in giving reasons for any decisions if they were not prepared to accept the responses to the consultations from the devolved Administrations?
Lord Callanan (Con)
I will write to the noble Baroness with further information on that point.
“(8A) Before making regulations under subsection (7) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(8B) But the Secretary of State may make regulations under subsection (7) without the consent required by subsection (8A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it. (8C) If the Secretary of State makes regulations without the consent required by subsection (8A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”
Baroness Hayter of Kentish Town (Lab)
I wish to test the opinion of the House.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I inform the House that, if Amendment 17 is agreed to, I cannot call Amendment 18 because of pre-emption.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I am moving very carefully through these amendments on the grounds that I might get something wrong, but I believe that the next amendment is Amendment 19.
Amendment 19
Lord Callanan
“(4) Before making regulations under subsection (2) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending Schedule 1 (which contains exceptions from the rules about market access for goods).
“(3A) Before making regulations under subsection (2) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3B) But the Secretary of State may make regulations under subsection (2) without the consent required by subsection (3A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(3C) If the Secretary of State makes regulations without the consent required by subsection (3A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”
“Exclusions from market access principles: public interest derogations
(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) pursue a legitimate aim,(b) are a proportionate means of achieving that aim, and(c) are not a disguised restriction on trade.(2) A requirement is considered to pursue a legitimate aim if it makes a contribution to the achievement of—(a) environmental standards and protection,(b) animal welfare,(c) consumer standards, including digital and artificial intelligence privacy rights,(d) employment rights and protections,(e) health and life of humans, animals or plants,(f) cultural expression,(g) regional socio-cultural characteristics, or(h) equality entitlements, rights and protections.(3) A requirement is considered disproportionate if the legitimate aim being pursued in the destination part of the United Kingdom is already achieved to the same or higher extent by requirements in the originating part of the United Kingdom.”
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, as Amendment 21 was debated earlier, I should perhaps make it clear that it would leave out Clause 10, as amended, and insert a new clause. The question is that Amendment 21 be agreed to. As many as are of that opinion shall say, “Content,” and to the contrary, “Not content”. I think I heard that the Contents have it, but I can give the House one more chance on this if it would like. No? Then this amendment is agreed to.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
We now move to the group beginning with Amendment 22. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this amendment or the other in this group to a Division should make this clear in debate.
Amendment 22
Lord Wigley
“Market access principles: protection of devolved competences
The United Kingdom market access principles do not affect the existing powers of Senedd Cymru, the Scottish Parliament or the Northern Ireland Assembly, with regard to—(a) their existing procurement practices and procedures, or(b) their existing competence to legislate to secure and apply procurement policies which underpin their economic and social strategies.”Member’s explanatory statement
This amendment seeks to ensure that existing policies pursued by the devolved legislatures are not undermined by this Act and aims to prevent uncertainty regarding the legitimacy of procurement rules and regulations currently in force in the devolved territories.
Lord Wigley (PC) [V]
My Lords, Amendment 22 stands in my name and that of my good and noble friend Lord Hain. It follows on fairly naturally from Amendment 21, which we have just passed. The objective of this amendment is to put on the face of the Bill an unequivocal statement that nothing in this Bill, if enacted, will diminish or constrain the devolved Governments from continuing to use their purchasing power to help achieve their economic objectives. As there have been many worries expressed in this Chamber, in the other place, in Cardiff Bay and in Edinburgh about the danger of a clawback of powers to Westminster, I believe that it would be helpful for the devolved Governments if an unequivocal statement along the lines which I propose could be included in the Bill. I know that Ministers in the devolved Governments would welcome such a definitive statement.
I have at earlier stages, and in the context of the Trade Bill, drawn the attention of the House to the way in which successive Welsh Governments—Labour, Labour/Plaid Cymru coalition and Labour/Liberal Democrat coalition—have all regarded the purchasing power of the Welsh Government as a valuable tool in implementing their policies and achieving economic objectives. It would be very strange were that not the case.
When the late Professor Phil Williams and I, with the help of many others, published in 1970—yes, 50 years ago—An Economic Plan for Wales, we identified that a key ingredient in Wales’s economic plight, namely that the GDP per head in Wales was significantly below the UK average, was the fact that activity rates in Wales were some six percentage points below those in England and that therefore a central objective of economic policy in Wales should be to raise those activity rates to the UK average. Over the subsequent three decades, it was an uphill struggle. Only after the establishment of the National Assembly—now our Senedd, of course—were real inroads made. It was only a couple of years ago that, for a brief time, activity rates in Wales were actually higher than the UK average.
I focus on this for a very good reason: that a significant contributory factor to this success was the deliberate strategy pursued by successive Welsh Governments of using their procurement policy to support businesses within Wales. They did this within the constraints of European competition policy, and without lowering standards. When the Assembly was established, between 30% and 35% of goods and services were procured by the Welsh Government from within Wales. By now, the figure is 55% and the target, I understand, is to achieve over 70% procurement from within Wales. As the larger corporations realised this was happening, some of them opened new sales offices in Wales. In due course, this led to their also establishing local suppliers within Wales. This means that, for every pound spent by the Government, there is a multiplier effect within the Welsh economy: more jobs are created and a virtuous circle is established.
Previously, we saw on occasion the total nonsense of purchasing bodies within Wales—central government, local government, our health authorities, universities and colleges—using suppliers many miles distant when a local capability existed. I well recall during my time as an MP a school in north-west Wales having its grass cutting done by a company from England and a hospital getting its sandwiches from a supplier in the Midlands. Now, the green agenda has at long last become more generally recognised as essential for the survival of the human race, and the concept of buying local and eliminating unnecessary product miles has become mainstream. Supporting local economies is now seen as a valid, indeed essential, objective of government policy. Last month, partly as a response to the devastation that Covid could cause to small businesses, a campaign began called Where You Shop Matters, underpinned by Visa. That campaign has gained widespread support in Wales and, hopefully, will do so elsewhere.
Clearly, it will never be possible to source all Welsh government procurement within Wales. We do not produce all the goods in Wales, and where we do, they do not necessarily compete on price, standards or punctual availability. The fact that they are made in Wales certainly should not overrule all other considerations, but, other things being equal or within a tolerable latitude of being so, economic, social and environmental good sense tells us that this is a valid governmental approach.
Let us not pretend that the sourcing of relatively mundane supplies within the local economy is going to solve all our problems; it is not. The truth is that, despite raising employee activity rates, Wales’s GDP per head remains stubbornly near the bottom of the UK league table. To get to the top of that table requires innovation, creativity, investment, enterprise, self-confidence and initiative. However, as we have slowly started to depend more on ourselves and less on others, we have seen those factors move in the right direction. Within a UK single market, Wales needs the latitude to develop its own solutions to what are long-standing psychological, as well as economic, challenges. The last thing we need now is for central government in London to impose dramatic straitjackets on our capability and capacity to help ourselves.
My amendment seeks assurances that the Bill will in no way limit devolved Governments in taking initiatives in their procurement policies to create economic gain that will serve their communities. It seeks to ensure that existing procurement practices and procedures will not be constrained and that the devolved Governments may continue to legislate in a manner that helps to ensure that their procurement policies underpin their economic and social objectives. That has been permissible under European single market rules, and I ask the Minister to confirm that the Bill cannot and will not be used to undermine those policies within the UK internal market. I beg to move.
Baroness Boycott (CB)
My Lords, I agree with many of the noble Lord’s points. I have tabled Amendment 23 and I am very grateful to the noble Lords, Lord Whitty and Lord Randall of Uxbridge, for supporting it. It simply seeks a derogation from market access principles to allow all four nations of the UK to put in place proportionate measures to protect the environment, to support the progressive improvement of environmental standards and to tackle climate change.
The combination of the market access principles in the Bill and the absence of an agreed common framework means that, although different Administrations will not be prevented from introducing different standards, in practice we risk seeing a stifling of innovation and a chilling effect when one nation wants to introduce different, higher environmental standards for a particular good or service, or wants to introduce other measures to tackle climate change. Effectively, we are disincentivising Governments from aiming higher because incoming goods from other parts of the UK implementing lower standards will not have to meet the new ones.
Some examples bring this issue to life. The first is the sale of peat for horticulture, which should not happen anywhere, but if any of the four nations were to decide to ban the sale of peat for horticulture due to its impacts on biodiversity, that nation would still have to sell peat from elsewhere in the UK. A second example is single-use plastic. The Welsh Government are currently proposing to ban the sale of nine single-use plastic products, but we are proposing to ban only three. Given how the mutual recognition principle currently operates, Wales would have to allow the sale of the six additional products if they had been manufactured elsewhere in the UK, which would totally undermine that policy. Thirdly, the Government are planning to phase out the sale of household coal and wet wood next year in England. However, under the mutual recognition principle the sale of both household coal and wet wood from other parts of the UK would carry on in England.
In Committee, the Minister said that protecting the environment and tackling child climate change are vital. The EU provides that in certain circumstances, it is possible to go beyond its commonly agreed standards to protect the environment—for instance, banning particular kinds of packaging, such as metal drink cans. However, the Bill as drafted does not allow for environmental or climate-related exceptions. It provides for exceptions in only a limited range of circumstances, such as to prevent the spread of disease or pests or to authorise the use of a chemical in a particular part of the UK. There also exclusions for fertilisers and pesticides, which were added during the Bill’s passage through the Commons.
My amendment asks for one further, crucial addition to the list of exclusions—for environmental standards and for tackling climate change. I would welcome the Minister’s clarifying the decision-making process. Why was it considered necessary to introduce exclusions in certain policy areas, but not in others such as the environment and climate change? I know that that is a broad brush stroke, but it is still possible to address individual elements, which currently we are not. Surely, there can be no more important time to incentivise ambitious climate and environmental policy.
Lord Hain (Lab)
My Lords, it is a pleasure to follow the noble Baroness, Lady Boycott. I endorse everything she has said; indeed, her amendment is powerfully put. I shall speak specifically to Amendment 22, tabled by my good friend the noble Lord, Lord Wigley, to which I have added my name. He spoke very eloquently about the need for the amendment, and I shall briefly add one or two points to his compelling speech.
Procurement is clearly devolved to both Scotland and Wales, as is made clear the recent transposition of EU procurement directives being achieved via legislation in the Scottish Parliament. Does the Minister agree that that is indeed as clear-cut as I have stated and believe it to be? It would be helpful to get that on the record.
There is strong interest in the Senedd in improving the impact of procurement on the Welsh economy by encouraging suppliers to have operations located in Wales, creating employment locally and using local supply chains, a point well made by the noble Lord, Lord Wigley. That is not discrimination. A company based in Scotland or indeed Lithuania can meet these conditions, but that flexibility is important so that the Welsh Government can continue to ensure that the billions of pounds spent by the public sector each year in Wales through procurement processes creates value in the local economy for a nation that has seen massive deindustrialisation. I still live in my old constituency of Neath, which was a heavy industry and mining constituency. The consequences of deindustrialisation have been huge, dismembering those communities and depriving them of the industrial base and secure jobs they once had. The ability, using the public sector, as the Welsh Labour Government are trying to do, to create and support strong local companies is very important. Such community benefit clauses and approaches were possible even under European law.
I had an informal conversation with the noble Lord, Lord Empey, about Northern Ireland’s position. Of course, Northern Ireland is still subject to the single market and customs union rules—even after the UK leaves the EU—under the Northern Ireland protocol. It is my understanding and belief that under EU law, it is still possible to use procurement in the proactive, positive way that the Welsh Government have done to support local jobs and businesses. Can we be assured that that will not be undermined, or even made illegal, by this centralising Westminster Government?
Procurement can also be used to discourage a race to the bottom—for example, by requiring bidders to have strong employment rights policies and equal opportunity policies in order to qualify for a successful procurement opportunity. It is really important that the devolved Administrations continue to have the opportunities and rights to use procurement in that proactive and creative fashion.
Lord Whitty (Lab) [V]
My Lords, I added my name to the amendment tabled by the noble Baroness, Lady Boycott. She has made most of the points that I was going to make, so I will be reasonably brief.
If there is any area that should override the assertion of a single UK market, particularly on mutual recognition, it must be the ability of each of the jurisdictions to go faster on our environmental commitments, particularly on the horrendously difficult task of meeting our carbon and greenhouse gas emissions targets and adapting to climate change. That is the key point in this amendment.
Northern Ireland is in a different situation, since it will still be within the single market of the EU, but if, for example, the Welsh or Scottish Governments wished to go faster in limiting carbon emissions or providing alternative energy sources, and that required specific legislation within those areas, then it would be perverse for the provisions of this Bill and UK internal market rules to prevent that. There are other environmental issues—the noble Baroness, Lady Boycott, has referred to single-use plastics, which are clogging up many ecological habitats and having an effect on biodiversity and on the oceans—which might perhaps also be areas of exception.
However, my main point is on climate change. At present, the Bill does not recognise the prime importance of going faster—and, if necessary, going faster in one part of the United Kingdom than another—to achieve our climate change aims. At present, the Bill allows legitimate interests for health and pest control. These are important issues, but not as important as climate change. This single-issue amendment ought to be written into the Bill. We need a race to the top in environmental standards, not to enforce a race to stick to the bottom.
The proper functioning of the framework agreements would probably provide some way of resolving any conflict on these issues, but without framework agreements being referred to in this Bill, we need something such as the new clause that we are proposing here. As my noble friend Lord Hain said on the previous amendment, by keeping the Bill as it is, we are acting in a more rigid and top-down way than the EU single market.
Climate change needs a particular reference in this Bill, and this is the easiest way to do it in this section. I strongly support it being written in.
Lord Randall of Uxbridge (Con) [V]
My Lords, I will speak briefly to Amendment 23, in the name of the noble Baroness, Lady Boycott, to which I was pleased to add my name. We have just heard from the noble Lord, Lord Whitty, who has also signed it, and he put his finger on the case for this amendment, as did the noble Baroness herself.
As the noble Baroness, Lady Boycott, said, this amendment would ensure that there is a derogation from the market access principles of mutual recognition and non-discrimination which would allow all four UK nations to put in place proportionate measures to protect the environment and tackle climate change. I echo completely what she and the noble Lord, Lord Whitty, said. We do not need to emphasise the crisis that we are facing with climate change and the environment. It is the big issue of our time.
There are concerns that without this derogation there is a potential for stifling innovation, as there will be no incentive for a nation to set higher environmental standards for goods given that it will have to sell goods from the other three nations which may have been produced to a lower standard. I make no apology for repeating the example of a possible consequence if we do not include this amendment, and I want my noble friend the Minister to put my mind at rest on this.
A potential ban on peat for horticultural purposes is a good example, and something that I have been campaigning on for some time. It is an issue that affects climate change and biodiversity. If any of our four UK nations decided to ban the sale of peat for horticulture due to its impacts on biodiversity and emissions, and to preserve our precious peat bogs, what would that mean for another part of the UK that had, at that time, decided not to go down that line? Can my noble friend confirm that, as I read the Bill as currently drafted, the far-sighted nation that decided to ban peat would still have to sell peat from elsewhere in the UK? I am no expert on this, so can my noble friend the Minister also clarify what the situation was while we were still within the EU? I have often heard that one of the advantages of leaving the EU was being able to do exactly what we wanted.
I use that as an example, but I could have given a number of other similar scenarios, such as single-use plastics. I know well from my time as a special adviser to the previous Prime Minister that the devolved countries do not always move at the same speed on environmental measures. I do not want their ambitions to be stifled, however accidentally.
I do not want to detain your Lordships over this excessively, as we have heard already from several others, but I will just say this: without insurance, I regard this as a very serious flaw in the Bill.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I speak to Amendment 22, in the names of the noble Lords, Lord Wigley and Lord Hain, and Amendment 23, in the names of the noble Baroness, Lady Boycott, and the noble Lords, Lord Whitty and Lord Randall of Uxbridge. I too will be brief, because those introducing the amendments—which the Green group support—have done a great job of explaining the urgent need for them both.
Amendment 22 deals with public procurement. I spoke quite extensively—for three minutes, anyway—on a statutory instrument on this issue on 16 November, so I will not go on at great length. I will just point out that we have seen many states in Europe make great progress on this issue, and, as the noble Lord, Lord Wigley, set out, Wales has also made significant progress—perhaps the most progress of the nations of the United Kingdom. We have also seen great progress in England for what is known as the Preston model. Public procurement is absolutely crucial for improving the quality of our public health and our environment, for tackling climate change and for supporting small independent businesses. We are setting the model here for what we might hope to be future devolution within England—for Yorkshire, perhaps, and Cornwall, so they should also be able to leap ahead with the resources and powers to do so.
On Amendment 23, as the noble Lord, Lord Randall, just said, it is crucial that no nation in the United Kingdom is held back by others being laggards—and we know which ones that is likely to be. The point of devolution is to allow nations to diverge, to take different paths and to act according to their local circumstances. The noble Lord gave the very good example of peat, something on which we keep hearing promises of action but where we have yet to see the action needed. We hope that we will see real leadership on this and then see the laggards follow.
Lord Empey (UUP)
My Lords, I raise an issue that has already been referred to by the noble Lord, Lord Hain, pertaining to Amendment 22. It came to my attention two weeks ago, and I suspect that many Members are not aware of it, but we need to make ourselves aware very quickly. I attended Grand Committee when we were discussing the SI on common rules for exports. It was introduced by the noble Lord, Lord Grimstone. Bear in mind that the SI dealt with circumstances in which the UK Government could require one of the devolved regions or a company not to export certain items, if they were deemed to be required for the national purpose. For instance, the UK Government could say to a manufacturer of PPE anywhere in the UK, “We need that in the United Kingdom. We cannot let it go abroad.” However, in his opening remarks, the Minister said that the European Commission would exercise these powers in Northern Ireland.
In a different context last week, I asked the noble Lord, Lord True, about this and in what other areas the European Commission would exercise powers. He was unable to answer and said he would write. I put down a Written Question to which I have not yet received a response, but I am trying to get at the significant change taking place to the internal governance of the United Kingdom. In this example, a Minister of the Crown is telling us that a foreign power—which the European Commission will become on 1 January—will exercise powers in a part of the United Kingdom. I do not believe that that SI, and we have had hundreds of them, is the only SI to which this applies. I have asked for research to be undertaken on this, but the question arises in this case specifically, so perhaps the Minister will address it. If he cannot address it today, I would be grateful if he would write and place his response in the Library.
As Northern Ireland will be left in the EU, and subject to the single market and customs union regulations, and state aid rules, where, ultimately, does the power reside? If the procurement rules in the rest of the United Kingdom change, or if they change in the European Union but not in other parts of the United Kingdom, who will ultimately decide on these matters? Public procurement is an EU competence at present. It is not entirely devolved, because competition policy was a reserved matter, as I understand it, but there is a question over who actually decides. In my opinion, the constitution of the United Kingdom is being changed by statutory instrument. Very few people even seem to be aware of all this. Things like this amendment tease out who decides.
The subsequent Amendment 23 has some noble aims and objectives. A question also arises there as, if European Union environmental standards change, how will they be translated into regulations that could affect what happens in Northern Ireland versus Great Britain? There are big questions to be asked here. If the Minister cannot deal with them today, I would be grateful if he would write to me and put the letter in the Library for Members to see. There are changes taking place to our country, and people seem almost to be oblivious to their full extent and what they will mean in the long term.
Baroness McIntosh of Pickering (Con)
My Lords, I speak briefly on both these amendments. I have a lot of sympathy with what the noble Baroness, Lady Boycott, and co-signatories are pushing in Amendment 23. I presume that, in responding, the Minister will say that the Government are putting forward an economic Bill to create an internal market to compensate for us leaving the internal market of which we have been a member for 46 years.
Amendment 23, like Amendment 21, does not have regard to the one remaining part of the original Article 36 of the Treaty on the Functioning of the European Union that has been left out of Amendment 21. I gather this was an oversight that will be corrected at Third Reading. In my view, the fatal flaw is that any reference to public safety or security has been left out. It is interesting to note that environmental standards and protection of the environment—which, I would say, includes climate change—and many of the other issues in Amendments 21 and 23 are dealt with elsewhere. It is bizarre to leave out any reference to public safety and security when we are in the middle of a pandemic, which is why I could not vote for Amendment 21 at this stage.
I am full of praise for the noble Lord, Lord Wigley, for bringing forward Amendment 22. I presume that the Minister, in responding, will say that it is not this Bill but the Trade Bill that will prevent the Welsh Government or Yorkshire councils from seeking to favour their own produce in public procurement. I am particularly mindful of the work that Deliciouslyorkshire does. Obviously, all food in Yorkshire is delicious, but Deliciouslyorkshire is a marketing organisation that promotes foods made in Yorkshire.
I was very enthusiastic about one of the potential benefits, if there were to be any, of leaving the European Union in that we would be able to source more of our foods locally. Now I understand that, in the global procurement agreement in the Trade Bill, we will have to meet exactly the same threshold as we were required to meet in the European Union public procurement policies and tenders for bids. Am I right, or is the noble Lord, Lord Wigley, right? Will there be opportunities for the Welsh Government and Yorkshire councils to promote and source more of their own foods in, for example, local hospitals, prisons and schools than would otherwise have been the case?
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I support Amendments 22 and 23, but I shall refer in particular to Amendment 22 in the names of the noble Lords, Lord Wigley and Lord Hain. Again, this is about ensuring that no straitjacket or limit is placed on the procurement practices of devolved Administrations. It is about protecting their functions, with particular reference to the market access principles, which should not override devolution settlements. The noble Lords, Lord Hain and Lord Empey, referred to the situation of Northern Ireland which, in terms of goods for procurement purposes, will be subject to the Northern Ireland protocol and, therefore, the EU.
While I believe there is a need to ensure that there are no borders anywhere, whether in the Irish Sea or on the island of Ireland, notwithstanding that, there are areas of clarification required. Can the Minister say, or perhaps write to us on it at a later stage, whether any procurement practices would apply to the devolved Administration in Northern Ireland which would be subject to UK oversight as per the Bill? Will there be any at all?
Secondly, on the previous group I asked the Minister whether he could provide an update on the interparliamentary Brexit forum, which consisted of representatives of the devolved Administrations and the UK Government. It has not met since September 2019. Maybe he could provide us with an update on when its next meeting is likely to take place.
Further to the point made by the noble Lord, Lord Empey, I am reminded of those made by the UK constitution monitoring group. It said that government Ministers have occasionally asserted that the United Kingdom Internal Market Bill is not a constitutional measure at all but is concerned only with economic policy. It would therefore perhaps be better to characterise it as a key building-block in an emerging economic constitution for the UK, post Brexit. However that may be, the group believes that the Bill raises fundamental questions about the governance of the UK following withdrawal from the European Union, in particular whether it will be possible to establish a common understanding of the future role and importance of the devolved institutions in UK governance. Would the Minister like to comment on that statement in his wind-up, and will he assure the House that market access principles will not be used to override the devolution settlement?
Lord Liddle (Lab)
My Lords, I will speak briefly in favour of both these amendments, particularly Amendment 22 on the question of public procurement. When I was Europe adviser in Downing Street, I formed a view that the British authorities—in Whitehall and the Government Legal Service—took a more legalistic approach to implementing the state aid rules, the non-discrimination rules and so on of the European single market than did most other member states. It was quite an effort to get the system to think differently about these questions.
One of the most notable achievements where we thought differently was towards the end of the Labour Government, when my noble friend Lord Adonis, who is not in his place, insisted that the award of a big contract for railway carriages and new trains would go to Hitachi but on condition that it built a plant to construct them in Shildon, County Durham. That was a success in breaking the established orthodoxies; it came rather late in the day, but there we are. Then when my noble friend Lord Mandelson was trying to bring back the concept of industrial policy, also towards the end of the Labour Government, one of the big questions was that of public procurement. I really am not a protectionist; I believe in open markets and that, on the whole, the benefits of free trade are very considerable. But there are circumstances in which public procurement can be used to support local business in a way that is justified.
One of the ways of doing this, of course, is that if you have innovative local firms with a lot of potential to grow, they can easily be squeezed out of the market by competition from big companies which can produce at much cheaper prices. I believe that one reason why we have not been as innovative as we should is that we have not used public procurement to support small and medium-sized enterprises with great potential for growth. This was one of the things we were trying to do towards the end of the Labour Government.
However, I also believe that that kind of policy is difficult to run from London. That makes this kind of public intervention, which is about not spending subsidies on lame ducks but trying to grow the economic potential of a local area, one that is best decided upon as close as possible to that area. That is why it is a terrible mistake to try to limit the powers of the Welsh and Scots on these matters. In fact, I would like to see proper devolution in England so that English authorities could do this outside London. This amendment has my wholehearted support, and I hope that the Government will give it a very considered response.
Baroness Noakes (Con)
My Lords, I have spoken in several debates on Report about the impact of further restrictions on the scope of the UK’s internal market for goods covered by the market access rules. The plain fact is that, the more that is taken out of the ambit of the rules on mutual recognition and non-discrimination, the more likely it will be that consumer detriment will follow, whether by way of increased costs or reduced choice. With that background, let me turn briefly to the two amendments in this group.
In respect of the amendment of the noble Lord, Lord Wigley, on procurement, I have to confess that I am not an expert on procurement rules—unlike the noble Lord, Lord Liddle—so I will have to tread carefully not to display the extent of that ignorance. But my instinct is that if we try to take procurement out of the UK’s internal market rules, we will end up harming the UK’s internal market, which would be harmful for all parts of the United Kingdom.
The noble Lord, Lord Wigley, explained what had been happening in Wales in entirely reasonable terms, but it seems a relatively short step from that to applying discrimination in an unreasonable way—and for no reason other than to support nationalist views. I am sure that would not happen in the Welsh Government, but I can think of somewhere else where it might.
In addition, when we talk about benefits for one nation, we have to see the disbenefits to that nation’s businesses if they in turn are locked out from public procurement markets in other parts of the United Kingdom. In particular, we have to understand that Scotland, Wales and Northern Ireland export more goods into other parts of the United Kingdom than England does into the other three nations. If we have an internal market that works on parochial or nationalist principles, that is likely in the long run to harm Wales, Scotland and Northern Ireland, as much as it may appear to give them gains in the short-term, so I do not support his Amendment 22.
I turn briefly to Amendment 23, which I am not sure would work in practice. Paragraph (b) of the proposed new clause refers to
“a proportionate means of achieving a legitimate aim”—
but the term “legitimate aim” has no definition here. It is defined in Clause 8, but that deals only with indirect discrimination, so I do not think that the amendment would work on its own terms. In addition, we had a good debate on the substance of these issues in the group of amendments that we discussed on the first day of Report, and this amendment does not take us any further than that, so I hope that the noble Baroness, Lady Boycott, will not press it.
Baroness Randerson (LD) [V]
My Lords, I speak in support of the amendments. The internal market must be based on high environmental standards, as well as supporting progressive improvement, but there is nothing in the Bill to ensure that this happens—hence the amendment. There is no reference to common frameworks to support higher standards, and there is no non-regressive provision to prevent standards falling. Taken together, this could easily lead to a deregulatory race to the bottom, and have a chilling effect on attempts to improve environmental standards.
It is important to remember that improving environmental standards can be controversial in practice, even though there may be no debate about the science behind them. For example, in the early days of the pandemic, the Government very commendably made money available and encouraged councils to put in place new cycle lanes and pedestrianised areas—a policy which we would all agree is good for our health and for the climate. However, many councils found this very difficult to do in practice, and some backed down in the face of fierce opposition from motorists. Wandsworth council, for example, was one of those concerned.
So in this Bill, while devolved Administrations will not be legally prohibited from introducing new environmental standards, under the market access principles, incoming goods from the rest of the UK will not have to meet these new and higher standards—hence fundamentally undermining attempts at improvement. This is in contrast with EU law, which has created coherent shared mechanisms. The EU also allows countries to go beyond commonly agreed standards to protect the environment, such as by banning particular types of packaging. However, there is no possibility of derogation from mutually recognised requirements in the Bill, as envisaged by the Government.
Amendment 23 refers specifically to environmental standards, but the principle also applies to public health and to standards across the board. That undermines efforts at innovation, a key factor in all successful markets. In Committee, the Minister confirmed that exclusions are
“intentionally narrowly drafted, to ensure that there are no unnecessary trade barriers.”—[Official Report, 28/10/20; col. 339.]
Can the Minister explain how the Government have come to the conclusion that setting higher environmental standards or higher standards of public health creates a barrier to trade?
In the other place, the Government created an exclusion for pesticides, which was not initially in the Bill. Can the Minister explain why this is important, but not other environmental factors? Just as over the decades we have become increasingly aware of the dangers of pesticides, so we have been on a similar journey of discovery over plastics. Well over a decade ago, the Welsh Assembly voted to introduce a charge for single-use plastic bags. The reason was that there was concern that they did not break down in the environment, that they lasted for hundreds of years and that animals died after getting tangled up in them. After some protest, England followed, because it saw the success in Wales of that policy. A decade on, we know so much more about plastic and the microscopic particles that we all ingest, either directly from plastic bottles, or indirectly, for example from fish which have themselves ingested particles.
My point is that yesterday’s experiment becomes today’s norm. Wales wants to ban nine different types of single-use plastic next year, and England—via the UK Government, of course, but the Government for England in this case—seems to be thinking of banning only three. If the Bill is passed without amendment, the efforts in Wales to lead in this field will in practice be totally undermined.
I will finish with another example. Next year the UK Government want to ban the sale of house coal in England. This Bill would mean coal from Wales could still be sold in England and would thus undermine standards that the Government wish to set for England. It is important to remember that what applies to one nation applies to another. I support the amendment.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been a very interesting debate for a number of reasons, which I shall come back to as I conclude. The noble Baroness, Lady Noakes, as she often does, focused on the key issue in play here: where we best situate the balance in an internal market that is as integrated as we currently have, which needs and respects clearly harmonised rules but also allows for joint processes which allow individual parts of the market to develop at different rates in different places. I think we agree that that is the key issue but differ on where the balance must lie and whether it has to be uniform as much as the Bill seems to suggest it will be.
The main interest in this debate has been in focusing our minds on areas that we have not really touched on in recent groups. We have looked at goods and services and at qualifications and how they might be harmonised, and we are coming back to services and qualifications later in our debates this evening. The points made by the noble Lord, Lord Wigley, about whether current policy might be adapted because of the impact of this Bill when it becomes an Act need an answer, and I would be grateful if the Minister could respond in particular to that point. Is there a particular hook in this Bill that will cause difficulties across the devolved authorities?
Secondly, on the point made by my noble friend Lord Hain, could it have an adverse effect on current processes so that, for instance, we would lose the local benefit policies to which he referred? Thirdly, on the point raised by my noble friend Lord Liddle, if there are good and valuable initiatives on local growth and support for sectors that are perhaps subsets of the national economy that are appropriate and best organised and run from a local point of view, how will they be affected by the way in which the Bill imposes a straitjacket on the various initiatives that we want to see come forward? I look forward to hearing from the Minister.
Lord Callanan (Con)
My Lords, as the Government set out in Committee, we intend to consult shortly and deliver measures on procurement through a wider package of procurement reform. The aim is for primary legislation to be made in the second Session. Therefore, I hope that this will offer some reassurance to noble Lords that this amendment is unnecessary, because the market access principles will not typically operate in the area of public procurement, as they are about how business is regulated. The procurement rules cover how public authorities carry out their procurement activities. Therefore, I reassure the noble Lords, Lord Wigley and Lord Liddle, the noble Baroness, Lady McIntosh, and others that there will be no impact on public procurement.
Turning to Amendment 23, we have obviously had these debates before; in fact, I recall having them during the passage of the various Brexit Bills with many of the same speakers. As we explained on previous occasions, the exclusions we have drafted for goods in Schedule 1 are narrow and tightly defined to protect the functioning of important policy areas. This protects the ability of the devolved Administrations and the UK Government to preserve the proper functioning of important policy areas, while at the same time avoiding any harmful or costly barriers to trade within the UK internal market.
More generally, I understand that this amendment is designed to strengthen the devolved Administrations’ ability to take different approaches to public policy related to aspects of the environment. We have made it clear that the Bill contains derogations for the protection of the life of humans, animals and plants, which aligns with protection of the environment in many cases.
Secondly, the Government support and respect the devolved Administrations’ right to set policy in their areas of devolved competence. The Government also recognise the benefits of locally targeted policy and the potential for policy innovation. For example, on the environment, between 2018 and 2019 the UK nations all introduced a ban on microbeads in rinse-off personal care products, working together to take a landmark step in the fight against plastic waste. There is no reason why the provisions in this Bill would hinder similar collaborative initiatives.
However, it is important to acknowledge the unprecedented and significant flow of powers to the devolved Administrations, as well as the incoming ability of the UK legislatures to create new policy in areas previously overseen by the EU. This Bill aims only to ensure frictionless trade, movement and investment between all nations of the UK. The policies that different parts of the UK choose to pursue in future is a matter for each Administration.
A number of noble Lords, including the noble Baronesses, Lady Boycott and Lady Randerson, raised yet again the sale of coal across the English-Welsh border, and my noble friend Lord Randall introduced the new issue of peat. The same thing applies in both cases: there is a clear distinction between sale and use. Under mutual recognition, the use of coal or, indeed, peat—it is probably a form of coal, is it not?—could be banned, regardless of its origin in the UK. Requirements related to the use of goods are not within the scope of the mutual recognition principle. If the requirement instead relates specifically to the sale of coal or peat, the interaction with mutual recognition is slightly more complex and depends on whether the requirement in question counts as a relevant requirement for the purposes of mutual recognition. Broadly speaking, mutual recognition captures requirements that are intrinsic to the good itself, such as requirements for the composition of the good, whereas non-discrimination captures, among other things, requirements for the circumstances or manner in which a good can be sold. I clarified these matters in detail in a letter to the noble Lords, Lord Purvis and Lord Fox; it is in the House Library, I think, if Members require further details.
My noble friend Lord Randall asked me about the situation in the EU and whether we could ban the sale and use of such things. As noble Lords know, the machinery in the EU is wholly different: for example, there are technical notification requirements through which a member state may be delayed in implementing its legislation; or, indeed, the European Commission may step in and open negotiations on a harmonising measure. Any derogation applied by a member state is open to challenge, of course; the Scottish Government had to fight very hard to get their minimum unit alcohol pricing accepted.
The system established under this Bill is different. Pricing and other manner of sale requirements are totally out of scope. Furthermore, requirements governing how a consumer can use a good that may originally have been caught by Article 34 of the Treaty on the Functioning of the European Union are also totally out of scope.
The noble Baroness, Lady Ritchie, asked whether the Bill is a threat to devolution. No: the proposals are designed to ensure that devolution can continue to work for everyone. All devolved policy areas will stay devolved. The proposals ensure only that there are no new barriers to UK internal trade.
The noble Baroness also asked about the Interparliamentary Forum on Brexit. Of course, the clue is in the name: it is an interparliamentary forum. Such decisions are for the legislatures rather than the UK Government to take forward directly, so it is not my place to comment on that.
For all the reasons I have set out, I hope the noble Lord feels able to withdraw his amendment.
The Deputy Speaker (Lord Lexden) (Con)
I have received requests to ask short questions from the noble Lords, Lord Purvis of Tweed and Lord Randall of Uxbridge. I call the noble Lord, Lord Purvis.
Lord Purvis of Tweed (LD)
My Lords, I am grateful for what the Minister said in referring to the noble Baroness, Lady Boycott, and to his correspondence with my noble friend Lord Fox and me.
I consulted the House of Lords Library on how the Minister’s letter referring to the sale of coal—not its use—interacts with the Air Quality (Domestic Solid Fuels Standards) (England) Regulations, which this House passed on 7 October and which are the governing legislation. The regulations specifically ban the supply and sale of coal and wet logs in England. One concern is that the Bill would not ban such sales if the goods originated in Wales, Scotland or Northern Ireland, where bans are not in place. That is clear; in fact, the Minister’s letter confirmed that this issue falls within the scope of mutual recognition. In addition, the other terms of the regulations bring this issue within the scope of indirect discrimination.
However, more concerning is that the regulations have been made but are not yet in effect—they come into effect on 1 May 2021—so the Bill will take effect before them. That is a requirement under this legislation, so the regulations the House passed banning the sale of coal and wet logs in England will have no effect because they are now within the scope of the Bill. Clause 5(3) states:
“A relevant requirement … is of no effect”.
Can the Minister clarify that, regardless of whether this is allowed or not, the ban in England will have no effect because of this legislation?
Lord Callanan (Con)
Again, it is about the difference between sale and use. England can proceed to ban a sale in England but if the sale is allowed in Wales, it could still take place under the mutual recognition principle; but, presumably, use would be prohibited. My letter explains this in great detail.
Lord Randall of Uxbridge (Con) [V]
I do not want to labour the point, but I am a little dense on this issue. As I understand it, my noble friend is saying that you could ban the use but not the sale of coal or peat, which is my particular interest. I wonder how that will be affected. I am sorry to labour this point—I am sure my noble friend has lots more important things to discuss—but I would be grateful for any elucidation he can give.
Lord Callanan (Con)
My noble friend is essentially right, but it would depend on whether it was legal for the good to be sold in the other nations of the United Kingdom. Again, the difference between sale and use is the important distinction here.
The Deputy Speaker (Lord Lexden) (Con)
I call the noble Lord, Lord Wigley, to conclude the debate.
Lord Wigley (PC) [V]
My Lords, first, I thank the dozen or so noble Lords who participated in this debate, which was very focused and has raised a number of issues that will need to be taken further. I was grateful to the noble Baroness, Lady Boycott, for introducing her amendment, many parts of which overlap with mine; I certainly support her amendment in its own right, irrespective of how it interplays with mine. I am sure that she and other colleagues will accept the principle of product miles being an important element in the consideration of environmental and economic policy.
I was taken by the references the noble Lord, Lord Liddle, made to regional policy in England. This was touched on by the noble Baroness, Lady McIntosh, as well. That is absolutely valid, because circumstances vary from area to area, certainly between the south-east and the north of England, and between other areas. Where there are different circumstances one needs different policies and mechanisms of government that can deliver those policies in line with the areas’ requirements.
Therefore, in advocating these powers for the three devolved nations, I also accept entirely the argument that there should be an ability to fine tune policy for the regions in England. It is for those regions to stand up and be counted, and to demand the powers to do so. After all, the facility in Wales of having our own Government has enabled us to take new initiatives that have helped to solve some problems—not all of them, but some of them. The noble Baroness, Lady Bennett, whose support and that of the Green group I welcome for both amendments, has underlined on a number of occasions the need for there to be devolution to the regions of England.
I listened carefully to the comments made by the noble Lord, Lord Empey, in particular, who raised a question that I do not think has been fully answered by the Minister regarding how the use of orders might be undertaken in Northern Ireland. That leads me on to the question, in responding to the Minster’s argument that there will be a separate policy statement on procurement reform, of whether that new policy and the legislation associated with it will be driven through by statutory instrument. We might be in a position where Wales and Scotland could, like Northern Ireland but for different reasons, be subject to that sort of policy.
What I want from the Minister before I conclude this short debate is some assurance that, in drawing up the consultation and procurement proposals he has in mind for a later stage, that will not go through the back door, which he is not admitting to doing through the front door in this Bill. I would be grateful if he could respond specifically on that question: that the procurement reform will not undermine the thrust of the argument we have had in the debate. I would be grateful for his comments on that before I conclude.
Lord Callanan (Con)
The Government intend to deliver measures on procurement through a wider package of procurement reform. The aim is for primary legislation to be made in the second Session, as I said in my answer. I hope that is enough reassurance for the noble Lord.
Lord Wigley (PC) [V]
I am grateful to the Minister for clarifying that this will happen in the second Session, but I very much hope that it will not open a totally different view of the devolved competencies and the balance of powers needed not only between the three devolved nations, but regionally in England. I hope that that can be given greater thought.
I will not press the amendment, but I believe that the approach encapsulated in it can be combined with some of the other amendments we have already passed that will be part of the revised Bill that goes back to the House of Commons. If that is the case, there may be opportunities for Welsh MPs to pick up this matter in the House of Commons so that we can come back to it again when we consider how the House of Commons responded to the Bill as it finds it. Having said that, I beg leave to withdraw the amendment.
Lord Judge
Member’s explanatory statement
This amendment is consequential on the removal of Part 5 (Northern Ireland Protocol) at Committee Stage.
Lord Judge (CB) [V]
My Lords, Amendment 25 and the other amendments in the group are consequential on the amendments made in Committee when Part 5 was removed. To give your Lordships a simple example, Amendment 25 concerns Clause 11(8), which says:
“In this section ‘qualifying Northern Ireland goods’ has the same meaning as in section 43.”
Clause 43 has now gone and the provision is therefore meaningless. The fact of the matter is that the remaining amendments relate to provisions in the Bill that are absent of content now that the link formerly with Part 5 has been removed. I beg to move.
“(4A) Before issuing, revising or withdrawing any guidance under subsection (4), the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.(4B) But the Secretary of State may issue, revise or withdraw any guidance without the consent required by subsection (4A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(4C) If the Secretary of State makes regulations without the consent required by subsection (4A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”Member’s explanatory statement
This amendment ensures that the Secretary of State must consult with the devolved administrations before revising or withdrawing guidance under Clause 12.
Lord Callanan
“Duty to review the use of Part 1 amendment powers
(1) In this section “the Part 1 amendment powers” are the powers conferred by sections 6(5), 8(7) and 10(2) (powers to amend certain provisions of Part 1).(2) The Secretary of State must, during the permitted period—(a) carry out a review of any use that has been made of the Part 1 amendment powers,(b) prepare a report of the review, and(c) lay a copy of the report before Parliament. (3) In carrying out the review the Secretary of State must—(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland;(b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4; and(c) assess the impact and effectiveness of any changes made under the Part 1 amendment powers.(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.(5) If any Part 1 amendment power has not been used by the time the review is carried out, this section has effect—(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—(i) a statement to the effect that the power has not been used since it came into force, and(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and(b) as if the requirements of subsection (3) did not apply in relation to that power.”Member’s explanatory statement
This new Clause would require the Secretary of State to carry out a review of, and to lay a report to Parliament about, the use made of the amendment powers in Part 1. The review cannot start within three years of Royal Assent, and the steps required would need to be completed within five years.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, we now come to the group consisting of Amendment 30. I remind noble Lords that Members other than the mover and the Minister may speak only once, and that short questions of elucidation are discouraged. Anyone wishing to press this amendment to a Division should make that clear in the debate.
Clause 16: Services: overview
Amendment 30
Baroness Neville-Rolfe
Member’s explanatory statement
This probing amendment is intended to clarify the extent to which the Government has considered how the provisions of the bill in respect of services will work in practice.
Baroness Neville-Rolfe (Con)
My Lords, I seek clarification on the use of Clause 16 on services, on which hang the plentiful exclusions in Clause 17 and Schedule 2, and the related operation of mutual recognition, and of direct and indirect discrimination for services. I spoke to the amendment from the noble Baroness, Lady Hayter, in Committee but her concerns have been met by the interests of consumers being added to the objectives of the CMA in implementing this legislation by the Government’s judicious amendment to Clause 29, which we will touch on later, so I return to the charge alone. I refer to my interests in the register because of my involvement now and historically in various businesses, although I am not sure where their interests would lie.
The Government’s concession does not help to answer my questions about services, which are about the practical application of the services clauses. This is important because services make up over 80% of GDP, although I note that a large chunk—financial services, health and social services, legal services, transport, audio-visual and some others—are excluded from the reach of some or other of the clauses in Part 2. In a digital world, services are increasingly attached to goods, such as cars, white goods and smartphones, so the distinction between goods and services is also now blurred. Many service businesses sit outside London, including in the former red wall seats, and millions of them are small businesses—the sector closest to my heart for its innovation, dynamism and espousal of family values.
Services are at the heart of our economic success—it probably all dates back to the time when Napoleon accused us of being a nation of shopkeepers. However, they are also a mystery and ill understood, as I know from the excellent work we do on the EU Services Sub-Committee, of which I am honoured to be a member. Moreover, if you google services you find yourself lost between various motorway service stations and public services such as the NHS. It is our duty as a House to try to shine some light on this potentially confusing new area of law on services in the internal market.
Unfortunately, I do not really understand what Clause 16 and its associates are intended to achieve. I do not think I am alone in this. The Minister talked in Committee of the value of the non-discrimination rule and said that it is
“a fundamental safeguard for businesses, ensuring that there is equal opportunity for companies trading in the UK, regardless of where in the UK the business is based.”—[Official Report, 28/10/20; col. 357.]
But then there are exclusions on a major scale, suggesting that millions of businesses, and perhaps non-business entities, will not benefit from this principle.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friend for moving this amendment and giving us the opportunity to have a general debate on Clause 16. I will take this opportunity to ask my noble friend if he could elaborate a little on the background to this clause.
I understand that, in their consultation, the Government wrote:
“the UK Government’s proposals are an adaptation of existing rules in the Provision of Services Regulations 2009 which contain regulations on mutual recognition and non-discrimination. Rules included in the UK Internal Market Bill will look to retain the effect of the Provision of Services Regulations”.
I am sure my noble friend Lady Neville-Rolfe was being very honest when she said that this is not clear and that she does not entirely understand the background to it. I do not think that she is alone. Against that background, is it entirely fair to have only given businesses the opportunity to consult on these provisions for one month? My understanding was that the normal consultation period is at least two, if not three, months, and I wondered why the consultation on these provisions was restricted to four weeks.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I thank the noble Baroness, Lady Neville-Rolfe, for drawing this clause to our attention, and I agree with the comments that have been made. In particular, I agree with the question about how you distinguish between goods and services when, nowadays, many things are never sold but rather licensed or rented and must sit either with one foot in each camp or, possibly, goods become services and vice versa.
Other confusions also arise around things that originally can be excluded but then are not when there is a substantive change to their regulation. There was some discussion, in which I was not involved, on this in Committee. What constitutes a substantive change? If you have authorisation requirements and a list of 10 things, does it mean that five have to be changed or does it mean a significant change to one? If you had to add on another one because there are some changes in circumstances, who is to know whether it is then out or in?
There are certainly a lot of things that are not yet clear and, if it does—as the noble Baroness, Lady Neville-Rolfe, has said—interfere with our services, which are the majority of our trade, then we will be in a very difficult situation. I would welcome further clarification, or indeed amendments, to make matters clearer. I am not sure whether removing the clause actually helps because the knock-on effect elsewhere would of course be substantial, but I think that there is something that needs to be fixed.
Baroness Noakes (Con)
My Lords, I am glad that my noble friend Lady Neville-Rolfe’s Amendment 30 is only a probing amendment. I very strongly believe that the UK’s internal market will be more robust as a result of this Bill and that it needs to cover all aspects of trade and professional activity occurring between the four parts of the United Kingdom.
However, like my noble friend, I have been struggling to work out just how important Part 2 is to businesses throughout the UK at the moment, and I also understand that there is relatively little current data on trade in services across the four nations. Given the exemptions that will apply to Part 2, the Government presumably do not think that the Bill will have very much real-world impact, at least in the short to medium term. I can see that it may be necessary to protect service providers in the future, if one or more of the devolved nations chooses to make it difficult for out-of-nation services providers, and, to that extent, I can see why we may well need Part 2 of this Bill. It would be good to hear from the Minister what he sees as the biggest problems that this Bill is trying to tackle.
Lord Naseby (Con)
My Lords, I think the House should be very grateful to my noble friend for putting this probing amendment down. All of us who have worked in the services industry, as I did before going to the other place, understand it very well. However, despite this, it is very difficult to comply with this part of the Bill.
The underlying problems I have are that, first, the services industry is a real growth market for the UK and shows every sign of continuing to be so. We must be very careful not to undermine it. I note my noble friend’s mention of consultation, which I am a great believer in; I have probably spoken about it on more amendments than anybody else. At any rate, consultation of only one month is not acceptable in any industry, particularly not at this crucial point.
I have two technical questions, having read and thought about this. First, what happens to those service industries that have no regulator, which would be a fair number of them? Sometimes they are in a licensed area, and sometimes they are not in any particular area, so it is not clear to me what happens to them. Secondly, will the register, when it appears, automatically approve every existing business in the services industry and transfer them across? If not, is there to be an appeal mechanism? Again, I ask these questions on a probing basis and look forward to my noble friend giving us some guidance.
Lord Purvis of Tweed (LD)
My Lords, it is very telling that three of the Minister’s noble friends were seeking clarification as to the purpose of this part of the Bill. The fact that answers are still being sought on Report in the House of Lords should be quite worrying for the Government. The noble Baroness, Lady Neville-Rolfe, is clearly an optimistic person. She believes that there are good reasons and it is just that, at this late stage of the legislation, the Government have not said what they are. We will give the Minister another chance to explain, in clear terms, what these good reasons are, and I wish the noble Baroness luck in trying to find out.
I also agree with the comments made about the grey area of businesses and people who are service providers and sellers of goods in the 21st-century economy. As the noble Baroness said, the previous reports of her committee show that a colossal part of the UK economy now sells goods and associated services. As my noble friend said, it is now commonplace for a huge enterprise such as Rolls-Royce to provide engine services but to retain the good and sell the service of providing that engine to many other markets; or, in effect, to provide generators on leasehold for UK engineering. That is just one example; there are many others, such as the sale of cars to many different households.
If a good is sold but the service is provided by the business enterprise, which part of this legislation will take precedence? If there is a dispute regarding a person who is selling a good that can be sold only if it is part of a service provision, what takes priority in this legislation? Is it the service component or the good component? Regarding those operating in other areas, be it creative services or other key areas, what legislative requirement would be considered first if there is going to be a restriction? We already know that there have been problems within the part of the legislation dealing with services. The next group of amendments, on teaching, illustrates that—the Government have had to clarify the position on education services. I am glad they have, to an extent; that is welcome.
The provision of water services brought into sharp focus the distinction between goods and services. When we raised in Committee the fact that Wales and Scotland operate under a different legislative model for the provision of water services, the Minister kindly wrote to me saying that the distinction in the legislation is between water services that are connected with an infrastructure and those that are not. How does that distinction come about in reality under Part 2? If Scottish Water, a service company that has one shareholder—the Minister—and the infrastructure of which is owned by the Minister, seeks to deliver different services in the future, that will come under the scope of this legislation. It is exactly the same enterprise and the same entity, but if he wanted to sell the infrastructure, that is excluded. I simply do not understand that. The Minister said in his correspondence to me that the question of whether the process needs to be extended is being looked at actively. The question is: when the Government have finished the process of looking at the areas to exempt, what will be left? That was the point made by the noble Baroness, Lady Noakes. What are the problem areas the Government are seeking to identify?
I turn to an issue that has not been addressed sufficiently in Committee. I asked the Minister why the legislation excluded the Isle of Man from consideration as part of the UK for goods but not services. Under the Bill, any services provided from the Isle of Man are considered to be within the United Kingdom; goods sold from the Isle of Man are not. We all know that service provision from the Isle of Man is huge—financial services, et cetera. That is no surprise, because if you are a service provider who wants to operate in a part of these islands that has no corporation tax and a wholly different set of beneficial conditions for your business, why would you not want to be based in the Isle of Man? If the Isle of Man is considered to be covered by this legislation, why have the Government brought forward amendments for consultation that do not include the Government of the Isle of Man? If services being provided from the Isle of Man fall within the scope of this legislation, there is a clear gap. Why would you not consult the Manx Government regarding any regulations that are going to be put in place?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been an interesting debate. It has revealed many gaps in our knowledge and understanding of the Bill, which, perhaps, is very comfortable for the Government. I would go a bit further than some of the previous speakers and say that the Government are making heavy weather of this part of the Bill, not displaying to their best advantage the knowledge and understanding they should have in this area. I presume that the starting point must have been that if there is to be an internal market, it must be regulated so that it works well. It is therefore necessary for the legislation to have regard to our services sector, which, as the noble Baroness, Lady Neville-Rolfe, said, accounts for some 65% of our economy. If that is right and it is such an important part of our economy, why is this Bill so sketchy about it? Do the Government not know much about our services sector? Is it not important that we get that right? The noble Baroness, Lady Noakes, again put her finger on it: is this just a protection against possible future unknowns? If so, does that explain why there is so little in the Bill itself to reflect that?
Others have made these points very well. The noble Lord, Lord Purvis, was right to say that we have to think harder than the Bill does about the way modern companies operate in providing goods. Companies are rarely without a service component, and the Bill does not deal with that bipartisan, hybrid approach. The noble Baroness, Lady Bowles, asked about services that are licensed or rented. In the virtual space of the internet, one is rarely talking about purchase. One is talking about usage, and there is nothing here about intellectual property, copyright or associated interests. What about those companies? Do they get affected by this legislation?
What sort of world are we living in if our Bills cannot embrace the fact that, in the digital world, services are not delivered by companies based in specific parts of the UK? That point was made by a number of speakers. Most operate in more than a single place, and it would be difficult to drill down to a point where the physical geography can be identified—the “brass plate” question that was raised earlier.
At the end of the day, it would be more helpful to the House if the lists given in Schedule 2 did not try to discriminate against services. The services listed in the schedule are not covered by the Bill, and it would be more of a challenge but more interesting for us if the Bill listed the services to which the Bill does apply, thereby making it easier to discuss this issue. I challenge the Minister to write to us before Third Reading with a comprehensive list of the services he believes are caught by this Bill and to explain to us, in simple language that we can understand, the impact the Bill will have if implemented.
Lord Callanan (Con)
I thank my noble friend for tabling this amendment, which seeks to clarify the extent to which we have considered how the provisions of the Bill in respect of services will work in practice. I shall endeavour to do my best to answer my noble friend’s concerns, because I know that she appreciates and promotes just how critical the services sector is to the United Kingdom, and I share that view. It is vital, constituting more than 80% of our GDP and four out of five jobs nationwide.
The principles of mutual recognition and non-discrimination in Part 2 underpin an internal market framework which will limit the emergence of new barriers following the return of powers from the EU. This will support UK businesses trading services in other parts of the UK, and authorities regulating these services. The Bill will complement the existing services regulatory framework while building in certainty for businesses and regulators.
The mutual recognition principle means that businesses authorised to provide services in one part of the United Kingdom will not need to satisfy further authorisation requirements to provide those services in the other parts of the United Kingdom. This principle of mutual recognition applies to authorisation requirements. It does not cover matters such as non-mandatory membership of organisations, which cannot prevent a service provider from offering a service but which might be desirable to join for other reasons.
A similar form of mutual recognition already operates as part of the existing UK-wide regulatory framework for services under the Provision of Services Regulations 2009. Regulators complying with that legislation will already be subject to the principle of mutual recognition. Similarly, the non-discrimination principle is a fundamental safeguard for businesses, ensuring equal opportunity for companies trading in the UK regardless of where in the UK that business is based, from where it provides services or where its staff are based.
As my noble friend Lady McIntosh highlighted, with the non-discrimination provision, regulators have until now had to follow rules in the Provision of Services Regulations 2009 which prevent discrimination towards service providers from other European Economic Area states. These rules will be revoked at the end of the year when the transition period comes to an end, as they will no longer be relevant to the UK’s situation. It is only right that rules that have previously prevented discrimination towards businesses from the other EEA states should now be applied to ensure the continued flow of services across our United Kingdom.
To help provide clarity, Clause 16 sets out a list of requirements and provisions that are neither regulatory nor authorisation requirements and therefore are not covered by the principles in Part 2. First, those requirements dealt with in other parts of the Bill—namely the mutual recognition principle in Part 1, which relates to goods, and provisions covered by Part 3, on professional qualifications—are not within scope of Part 2. This is because it is not desirable for one set of requirements to be subject to several rules from different parts of the Bill.
Secondly, existing requirements are out of scope because Part 2 applies only to new or substantively modified requirements that come into force, or otherwise come into effect, after this section comes into force. However, for the mutual recognition principle only, existing requirements will be brought within scope of the Bill where a corresponding authorisation requirement in another part of the UK introduces a new or substantively changed requirement.
Thirdly, a requirement which applies both to service providers and non-service providers is not in scope of Part 2. This part of the Bill is concerned only with the requirements which seek to regulate service providers and not all requirements which might affect service providers.
Finally, there are administrative requirements on service providers that we consider are reasonable in all circumstances, and therefore they are also not in scope of this part. Such administrative requirements could include, for example, where a service provider may be required to notify a local regulator of their presence, or where they are required to provide proof that they are in fact authorised to provide that service in another part of the UK. These requirements are necessary for regulators to continue operating effectively under the rules in this part, but it is our view that they are limited enough in scope so as not to create any unnecessary barriers to trade.
I can therefore assure my noble friend that the Government have considered carefully how the provisions in Part 2 will work in practice, and that Clause 16 is an essential part of their operation.
My noble friend asked whether penalties apply to businesses that are excluded from the Bill. If a given matter is out of scope of Parts 1 to 3, it is also by definition out of scope of the OIM’s functions and responsibilities.
My noble friend Lady McIntosh raised the four weeks’ consultation, as did a number of other noble Lords. The consultation followed the principles for a government consultation and represented an ambitious plan to engage businesses of all sizes across all four nations, as well as many academic experts and representatives of the devolved Administrations.
My noble friend Lady Neville-Rolfe asked also about Schedule 2, which lists a number of services with the aim of reflecting those outside the scope of the Provision of Services Regulations 2009, which is the current services framework. The Government also recognise that it is appropriate for legal services to be excluded from the provisions on the mutual recognition of services to reflect the separate legal systems in England, Wales, Scotland and Northern Ireland.
The noble Lord, Lord Purvis, asked whether service providers from the Isle of Man were subject to the measures in Part 2. The answer is no. Part 2 applies only to businesses and individuals that a have a permanent establishment in the United Kingdom as defined by the Corporation Tax Act 2010, which does not include of the Isle of Man. It is also the case for all Crown dependencies.
The noble Lord also asked when the services principles apply and when the goods principles apply. The services principles apply only where the goods principles do not. Only one set of principles will apply as to a particular requirement.
I hope that I have answered the questions of noble Lords and of my noble friend. I hope that she feels able to withdraw her amendment.
Baroness Neville-Rolfe (Con)
I thank noble Lords for an interesting debate and I am grateful for the support of my noble friend Lady McIntosh, the noble Baroness, Lady Bowles, and, of course, my noble friend Lady Noakes, who rightly pointed out the probing nature of this amendment, which I obviously do not seek to press. She also said that it was right that we include the services sector in the internal market, which is obvious from its very scale—a point that she, the noble Lord, Lord Stevenson, and the Minister emphasised—I think that it is about 80% of GDP. The Minister was also right to emphasise the value of mutual recognition and the loss of the EU-based services regulations of 2009, which to some extent we are trying to replace.
The single most important thing about the services element of the Bill, in Clause 16, is to understand the Government’s intentions, particularly in view of the minimal nature of consultation in framing it. My noble friend Lord Naseby was right to emphasise the importance and use of consultation. He also asked a question about the proposed registers which I am not sure we got a complete answer to.
The trouble is, we still do not know why these provisions are needed in individual cases—I gave some examples that I did not really get an answer to, such as hairdressers and other businesses—and why they vary from sector to sector. As the noble Lord, Lord Purvis, said, I am an optimist—I have been a strong supporter of the Government on this Bill against the advice of respected friends—but perhaps the Minister can kindly reflect on whether he can do anything further on services, with services now being so linked to goods as we have all agreed, to allay my fears. Some sectors, from property to restaurants, appear to face new regulations, possibly draconian, without much of awareness of it. The noble Lord, Lord Stevenson, suggested a letter outlining what was covered within the services sector. Perhaps the Minister could reflect a little further on how we might communicate this and reassure people about the value of these provisions in creating a single market with mutual recognition, which I strongly support. But we need to make sure that people understand what their duties are and that such duties are not overly draconian and will be sensibly enforced. I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness Henig) (Lab)
I should inform the House that, if Amendment 31 is agreed to, I cannot call Amendments 32 to 35.
Clause 17: Services: exclusions
Amendment 31
The Deputy Speaker (Baroness Henig) (Lab)
Amendments 32 and 33 have been pre-empted.
The Deputy Speaker (Baroness Henig) (Lab)
Amendment 34 has also been pre-empted.
Amendment 34
“(3A) Before making regulations under subsection (3) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(3B) But the Secretary of State may make regulations under subsection (3) without the consent required by subsection (3A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(3C) If the Secretary of State makes regulations without the consent required by subsection (3A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”
The Deputy Speaker (Baroness Henig) (Lab)
No, you cannot; it has been pre-empted by Amendment 31. I am sorry.
Baroness Hayter of Kentish Town (Lab)
I think the agreement is that it will stand in its place anyway.
The Deputy Speaker (Baroness Henig) (Lab)
My advice was that, if Amendment 31 was agreed to, Amendments 32 to 35 would have been pre-empted. That was certainly the legal advice that I read out right at the beginning.
Baroness Hayter of Kentish Town (Lab)
The issue is that, although the regulations have been taken out—as with my Amendments 15 and 20 that have already gone before, and indeed Amendment 19 in the name of the Minister—the agreement was that the way we deal with them would nevertheless stand. That is why Amendments 15, 19, 20 and 27 were all allowed.
If it has been pre-empted, may I suggest that we vote on it? I gather that the Government will not resist, and I am sure that the clerks can then disallow it should they find that we should not have done it. I beg to move.
The Deputy Speaker (Baroness Henig) (Lab)
Amendment 35 has been pre-empted.
Lord Callanan
“(5) Before making regulations under subsection (2) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending Schedule 2 (which contains exceptions from the rules about market access for services).
The Deputy Speaker (Baroness Henig) (Lab)
We come to the group beginning with Amendment 37. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this or any other amendment in this group to a Division should make that clear in debate.
Schedule 2: Services exclusions
“Teaching Services | provision of teaching services in schools or colleges” |
This amendment would add the profession of teacher and teaching services to the scope of the exclusions from the Bill, in the same way that the legal professions and legal services are excluded.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I will also speak to Amendment 50 in my name, which is also signed by the noble Lord, Lord German, to whom I am grateful for his support. Also in this group is Amendment 51, tabled by the Government, for which I thank the Minister. It is clear that the Government were listening during the debate in Committee, and I note that in the letter that the noble Lord circulated this afternoon to interested Peers he acknowledges the representations made by stakeholders on this issue. I can only express my appreciation that we have seen movement from the Government on this. This is also a demonstration of the usefulness of having a House of review.
I wish to thank the General Teaching Council for Scotland, as I did in Committee, for assisting me in the analysis particularly of the differences between the government amendment and those I had tabled. I also note and thank the noble Lord, Lord Foulkes of Cumnock, with whom I consulted about this matter, as a former chair of the education committee and a member of the General Teaching Council for Scotland. He empowered me to say that he supports the push to see that the full powers of the General Teaching Council for Scotland are retained. I wish, however, at the moment to retain the possibility of taking Amendments 37 and 50 to a vote, depending on the answers to two questions that I wish to put to the Minister, of which I have given him prior notice.
The first, and perhaps the most crucial one of all, is about the word “school” in the Government’s amendment. I remind noble Lords that government Amendment 51A says that the mutual recognition provisions do not apply to “school teaching”. Could the Government confirm that they intend that this will be interpreted in a broad sense, so that it encapsulates any educational institution in which teaching is delivered? The original amendments, Amendments 37 and 50, refer to the “teaching profession”, which obviously has a potentially broader scope.
I note also that the Minister’s letter circulated to Peers says that the Government have tabled an amendment to remove the teaching profession from the recognition provisions. Clearly, “the teaching profession” and “school teaching” are not necessarily the same thing, and I think it is crucial that we make this very clear. I am not a lawyer, but I doubt that a letter from the Minister to Members of your Lordships’ House has a huge amount of legal standing. I think we need to get on the record precisely what the government amendment means.
The second question is perhaps more technical, and that is a remaining question about the application of the mutual recognition principle and the scope of the exclusions in Schedule 2 Part 1. I seek confirmation from the Minister that the above exemption would not be restricted by the provision in Schedule 2 covering:
“Services provided by a person exercising functions of a public nature or by a person acting on behalf of such a person in connection with the exercise of functions of a public nature”.
Teaching in local authority schools, which would constitute a service provided by a person exercising a public function, would appear to be covered by that. But, obviously, education and teaching extend far beyond that. In particular, what about teaching in independent schools? Teaching is not solely carried out in a public service context, which casts doubt on how the exclusion applies in the context of teaching services as a whole.
Given that the General Teaching Council for Scotland register is not employment based and that the GTCS has no role whatsoever in where a registered teacher ultimately becomes employed—indeed, this often changes over the course of registration—it is important to know that the Government’s intention, and the effect of the law, is to cover all of these elements.
I have focused here particularly on the Scottish case, and I believe the noble Lord, Lord German, will address Welsh issues in particular, but I hope that the Government have also taken full account of the particular situation of Northern Ireland and the teaching profession there.
Finally, I would like to ask a somewhat broader question of the Minister. In Committee, I noted that it would appear that there are also issues potentially with other professions, particularly social work—but there may well be others. I ask the Minister to confirm that the Government have fully consulted with all the professions which may have different arrangements—sometimes long-term, continuing arrangements—in the devolved nations regarding registration or qualification requirements. If the Minister is not able to answer now, perhaps he could write to me about that question.
I note the comments made in the last group by the noble Lord, Lord Stevenson of Balmacara. We are, at this stage of the Bill, still left with very considerable uncertainties and concerns and a real lack of clarity, which has to be a worry given the importance of the Bill and these issues and the pressing nature of the deadline approaching us. I beg to move.
Lord German (LD)
My Lords, I rise to support Amendments 37 and 50 and slightly to push the point that the noble Baroness, Lady Bennett, just mentioned, that the words “teaching profession” appear in a letter which was circulated to colleagues in the House of Lords today but the words “school teaching” are used in the amendment. People who teach in further education colleges are called teachers or lecturers, but teaching is what they do. In fact, sometimes they are called teachers in universities as well. That clarification is needed, but at the moment we clearly have two separate terms. I recognise that the Government have moved in this direction and are thinking about this issue following representations made to them, and I welcome that.
However, there is a problem with the words “school teaching” only. I consulted the Education Workforce Council, which has responsibility for the registration of teachers in Wales. It registers petitioners in seven workforce categories across four settings: schools, further education, work-based learning, and youth work. While there are no minimum qualifications for further education staff in Wales as part of EWC registration at present, that might change. In England, there is no registration system for further education staff or any minimum qualifications. It might therefore be that this is not future-proofed in this legislation, where further education might well become a regulated profession as in other forms of education.
The other issue that comes out of this is the four settings that the Welsh council regulates. I would like to ask the Minister about youth work. If you are a registered professional working in youth and it is requirement for you to be registered if you are to be in this area, is that included in the government amendment which refers to “school teaching”? The definition of “teaching” and “school” is quite wide.
I would like the Minister to have a look at the common framework in this area because there is already a mutual recognition of professional qualifications common framework. I would be grateful if she could update the House on how that common framework is progressing. If it is progressing and it is part of the common framework procedure on which we have already passed an amendment, clearly it will make a substantial change to this section of the Bill as well. The principle of automatic recognition imposed under the Bill may well prevent Welsh Ministers, for example, regulating in future on professionals qualified elsewhere in the UK who have lower qualifications or standards than those which would be required in Wales.
Finally, I turn to an issue which has come out of this discussion. Social care is also an area where there are professions. Social care regulation in Wales is also undertaken by a separate regulator. It is one of its primary functions. Under the Regulation and Inspection of Social Care (Wales) Act 2016, from 2022 a range of social care professions will be mandated by the Welsh Government. In other words, you will not be able to operate as, for example, an adoption service manager, a fostering service manager, a residential family centre manager or an adult care home worker unless you have had your registration approved by Social Care Wales.
Lord Naseby (Con)
My Lords, I have a couple of probing questions. I find the word “school” difficult to work out in terms of what happens on the ground. There are universities, many of which have teachers—some have professors, et cetera—and I do not quite see how you can exclude them, particularly the Open University, where some noble Lords may have taken courses. I have friends who have taken courses at it and, from the evidence of two people I spoke to at the weekend, there are teachers there. As someone who takes an interest in flying, having flown in the RAF, I thought also of flying schools. There are also driving schools. I am not sure whether the Government are anticipating that whole area. I look forward to my noble friend’s response; if she cannot respond this evening, perhaps I could have a note in writing.
Lord Flight (Con)
My Lords, I am not clear what being “excluded” means. I do not know whether other territories are excluded or how far they go up and down the range of teachers. More particularly, what is the reason for having excluded groups? Why should lawyers be excluded? Are any other groups excluded? This area wants a bit of tidying up and further explanation.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to those who have spoken in this debate, because we have all narrowed into one area on which we are seeking some clarification: the distinction between the language in the Minister’s email referring to the teaching profession and that in this amendment, which are not the same.
If the Government’s intention with the amendment is that they wish to exclude the teaching profession from the provisions, that will be universally welcomed. At this stage, therefore, from these Benches I thank the Government for listening to the debate in Committee and for acting, and also for engaging with the various stakeholders, primarily in Scotland and Wales. I am also grateful to the Ministers, the noble Lords, Lord Callanan and Lord True, for listening and acting on meetings that I and my noble friend Lord Fox had with them, at which we raised these matters, on which we had been in correspondence.
That said, some further clarification on specific points would be helpful. As my noble friend Lord German indicated, the reference in the government amendment to the profession of “school teaching” is not really language that is used. It is certainly not used by the General Teaching Council for Scotland in registering teachers, and clearly it is not used in England, although I thought that perhaps it was. I searched “school teaching” on legislation.gov.uk, but, to my knowledge, it is not used in any legislation, although I am sure that officials in the Box can clarify that for the Minister. It does not seem to be a term, so we might find ourselves inadvertently creating a new term or definition in this legislation. I am sure that this can be tidied up but, if we agree to this amendment, as we will, I will be grateful to know how the Minister intends to do so.
To give an illustration, the General Teaching Council for Scotland registers those who seek to be teachers in primary or secondary education, those who want to be registered as teachers for additional support needs or in named schools only, and, since 2017, college lecturers and those who teach in independent schools. Therefore, in the categories of teaching within the overall teaching profession, at no stage does the term “school teaching” apply.
I will give the Minister an example of why “school teaching” is problematic within the context of Scotland. Innovations that the Scottish Parliament brought in when I served on the Education Committee meant that there is now much more blended learning in Scottish secondary schools. Students who are nearing the end of their time in secondary school can now start to study for further education qualifications on practical courses provided by college lecturers within the school setting. That is very progressive and is working. An inadvertent difficulty might be that we create a false distinction between those who simply teach within a school setting and those who are in the profession of school teaching.
I hope that the Minister will be able to clarify the points that have been raised about the difference between the categories and that she will set out the intention behind the amendment. If it is the intention that the registry bodies—in their functions of carrying out the registration of teachers and in setting standards and qualifications—are excluded, that will be reassuring. I think that that is the intention behind the amendment. I hope that it is, and if the Minister is able to confirm it, that will be reassuring for many of us.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, the key word of this debate has been “clarity” and the fact that clarity is required. I think that the Minister needs to get to the Dispatch Box and answer as many of the questions as she can, but I assume that government Amendment 51A is intended to answer the points raised by the noble Baroness, Lady Bennett of Manor Castle. But questions have been raised that do not seem to point in the same direction, so I look forward to hearing from the Dispatch Box that the amendment does what it is required to do. If not, perhaps the Minister will confirm that she will come back at Third Reading with a better version of it, to make sure that the doubt is removed.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I will start with some of those questions, particularly because there was a common theme from the noble Lords, Lord Purvis and Lord German, and the noble Baroness, Lady Bennett, about the definition of teachers and why we have excluded them. By referring to “school teaching”, it is intended that primary and secondary school teachers, as well as teachers in maintained nurseries in England, will be within the scope of the amendment. Where further education teachers are employed to teach in a school, we suggest that they too are likely to be covered by this exclusion. However, it is not intended to cover further or higher education teachers in institutions that are not schools.
The exclusion is worded to refer specifically to school teachers rather than teachers more generally. In answer to my noble friend Lord Naseby, we do not intend to include pilates teachers or flying teachers in the scope of this. The latter is a much wider term that could be interpreted so broadly that it could be difficult to establish what would be within the scope of this exclusion.
In response to the noble Lord, Lord German, on care workers, social care workers are in scope of Part 3 as they are not included in the list of excluded professions. If the competent authority believes that the automatic principle is not appropriate, it can adopt an alternative recognition system.
I shall go back to my speaking notes. I begin by reassuring noble Lords that this Government are committed to maintaining excellent teaching standards across the UK. Given the attention dedicated to the issue in this House and representations from interested parties, we have given further consideration to the status of school teachers in Part 3 of the Bill. As part of this, it is important to note that, under the alternative recognition process in Clause 24, relevant authorities are able to assess individuals’ qualifications and experience on a case-by-case basis and can refuse access to the profession if they do not meet the required standards. This means that relevant authorities in each part of the UK will still be able to set and maintain professional standards, and are able effectively to hold professionals to those standards.
However, having taken into account the representations that have been made and the long history of differences in the regulation of teaching in schools across the UK, the Government have now decided to exclude school teachers from the scope of Clause 22. To this purpose, Amendment 51A seeks to add school teachers to the list of professions excluded from the recognition provisions in Part 3 of the Bill in the same way as legal professions are excluded. As government Amendment 51A meets the intended purposes of Amendment 50, I reassure noble Lords that Amendment 50 is now duplicative and unnecessary.
I shall explain why Amendment 37 is also unnecessary. The amendment would add “teaching services” to the list of services in Schedule 2 that are excluded from the mutual recognition principle in Part 2 of the Bill. However, the amendment does not address the noble Baroness’s concerns. I understand from Committee that the noble Baroness, Lady Bennett, is concerned that the Bill will allow individuals to teach in a part of the UK even if they do not meet the required standards in that part. However, the recognition of qualifications and the ability to practise a regulated profession such as teaching are wholly governed by Part 3 of the Bill.
Clause 16(5)(b) excludes from the scope of Part 2 provision that limits the ability to practise a profession by reference to qualifications or experience. Additionally, services provided in the exercise of a public function, including education services, are already excluded from the scope of Part 2 by virtue of the entries in Schedule 2 in respect of
“services provided by a person exercising functions of a public nature.”
Most aspects of teaching services are therefore already covered under this public function exclusion from the mutual recognition and non-discrimination principles in Part 2. For example, the exclusion covers most activity carried out within state-funded schools and further education colleges, so they would not be affected by the amendment either. The amendment would therefore have an effect on only a very limited number of service providers.
My noble friend Lord Flight asked, as did the noble Lord, Lord German, why other professions were not excluded. Legal professions, as we know, have been excluded from the Bill’s provisions because they carry out roles that rely on their expertise in the underpinning legal systems, which are different across the UK. School teachers have been excluded after considering the representations on the matter carefully and taking into account the long history of differences in their regulation across the UK, and to put beyond all doubt that teaching regulators will retain control over who can teach in a part of the UK.
So, in answer to the noble Lord, Lord German, the devolved Administrations will still have control over who can have access the profession in their jurisdiction. A relevant authority may consider that automatic recognition is not appropriate for that profession because of a difference in policy environment or specific regulatory needs in that part of the UK. If so, it is possible for it to disapply automatic recognition by putting in place an alternative process to recognition that complies with the principles set out in the Bill.
The noble Lord, Lord German, also asked about common frameworks. We continue to work constructively with the devolved Administrations on developing a common framework. We are working to make sure that any arrangements sit alongside the work to review the regulatory landscape for regulated professions, as set out in the call for evidence on the recognition of professional qualifications and the regulation of professions.
I do hope that I have managed to answer most of the questions, but I will look at Hansard and if there is anything else that I need to reply to I will of course do so in writing. I hope that the Government’s Amendment 51A will have allayed the noble Baroness’s concerns on this matter and that she will feel able to withdraw her amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, I have one request to ask a question of the Minister, from the noble Lord, Lord Purvis of Tweed.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the Minister for her thorough response. When she comes to read Hansard, perhaps she could reflect on the point that the General Teaching Council for Scotland, the regulatory body, now also includes college lecturers. Perhaps she would reflect on the point that it is the regulatory body, rather than the type of teaching that the registers are responsible for. I am sure that there is no intention to have an anomaly, but I would be most grateful if she could look at this.
Baroness Bloomfield of Hinton Waldrist (Con)
I will of course be delighted to do that and I will take the point back to the department.
Baroness Bennett of Manor Castle (GP) [V]
I thank the Minister for her answer and I apologise for not noting the changeover in Front Bench responsibilities.
To be honest, I am not entirely reassured, and I want to put a specific question to the Minister that follows on from what the noble Lord, Lord Purvis of Tweed, has just said about further education. The suggestion of Pilates teachers is something of a red herring, or perhaps a straw man or woman. I am not a lawyer, but perhaps a term like “registered teachers” would allow for an arrangement whereby those who are currently covered by the General Teaching Council for Scotland, or indeed those teachers who are covered by the Education Workforce Council in Wales, would be covered by such a term.
I do not think that we have gone into the detail of the question asked by the noble Lord, Lord German, about the common frameworks and how they work with the Bill, which is a question that noble Lords have been wrestling with right through this Bill. I will quote the noble Lord, Lord German, who said that we are trying to “bottom out the detail” of the Bill. I do not think that we are there yet, and the government amendments do not quite get us there.
Before I make a final call on this amendment, perhaps the Minister could say why a term like “registered teachers” would not do the job more clearly and fully than the term “school teachers”.
Baroness Bloomfield of Hinton Waldrist (Con)
We are talking about semantics here. We are trying to be clear that who we intend to exclude from this provision are school teachers working in a school environment, whether or not they come from a higher education college in order to work in that environment. I do not believe that I can go further than what I have said already.
Baroness Bennett of Manor Castle (GP) [V]
I thank the Minister for her answer. I am still not sure that we are where we need to be or that we have dealt with the issues raised by the noble Lord, Lord German, regarding youth work and the social care professions. However, I am not sure that pushing a vote on Amendments 37 and 50 would get us to where we need to be. I hope very much that, as the noble Lord, Lord Stevenson, said, the Government will look at the lack of clarity and problems that have been exposed in this debate and seek to tidy up the Bill, as the noble Lord, Lord Purvis of Tweed, has said. For the moment, I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
We now come to the group beginning with Amendment 39. I remind noble Lords that Members, other than the mover and the Minister, may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this, or anything else in this group, to a Division should make that clear in debate.
Clause 19: Direct discrimination in the regulation of services
Amendment 39
Member’s explanatory statement
This amendment clarifies the meaning of Clause 19(1) regarding the effect of a statutory requirement under Clause 16.
Baroness McIntosh of Pickering (Con)
My Lords, in moving Amendment 39 I will speak also to Amendment 40, relating to Clauses 19 and 20. The amendments clarify the meaning of Clause 19(1) regarding the effect of a statutory requirement under Clause 16 and a similar provision in Clause 20 on indirect discrimination.
If I understood the Minister correctly, in summing up the debate on the amendment of my noble friend Lady Neville-Rolfe, he said that the service provider and regulatory requirement were, in his view, deemed limited enough in scope not to cause barriers to trade. I would like to probe and penetrate his thinking further.
The Law Society has drafted—and I am delighted to thank my noble friend Lord Foulkes of Cumnock for supporting these two amendments—the insertion, at the end, that no effect is only
“to the extent that it directly discriminates against the service provider”
in Clause 19, or indirectly in Clause 20.
When this was debated in Committee with earlier amendments, we expressed reservations about the meaning of “no effect” as it lacked clarity. In summing up the debate on Amendments 81 and 84, my noble friend Lord Callanan said:
“In Clause 21, a legislative requirement is one imposed ‘by, or by virtue of, legislation’.”
He went on to say:
“This extends beyond legislation to rules produced by bodies with powers delegated to them in respect of a particular field of regulation, and it may include licences or requirements contained therein. My noble friend’s Amendments 81 and 84 would appear to have the same effect. However, in my view, the term ‘of no effect’ is the more appropriate to apply in respect of a licence or a non-legislative rule.”—[Official Report, 28/10/20; col. 358.]
Having taken note of my noble friend Lord Callanan’s comments, I now seek to clarify that lack of effect would relate only to that element of the regulatory requirement that directly, or in the case of Clause 20, indirectly, discriminates against a service provider. It is hoped that the Government accept this amendment, as it is meant as a helpful clarification of Clause 19, and the related amendment to Clause 20. I beg to move.
Lord Foulkes of Cumnock (Lab Co-op) [V]
My Lords, I hesitate to add to the excellent introduction that—if I may call her this—my noble friend Lady McIntosh of Pickering gave, except for one thing. We are dealing here with, in one case, direct discrimination and, in another, indirect discrimination, and only in these circumstances. Noble Lords will recall that, in a debate last week, as we were vividly reminded by the noble Baroness, Lady Ritchie of Downpatrick, the Minister got into a fankle—if I may be excused for using a Scottish word—on the question of discrimination. I hope that he will spell out these two areas carefully, so that the House is clear exactly what the Government think about this.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I do not have a great deal to add to what has been said by the previous speakers. It is an unfortunate circumstance that the word “regulation” appears in multi-use in legislative and indeed non-legislative meaning; it can be a set of regulations or an individual regulation in a set. So I understand the concerns raised that it might be possible for regulation, or regulatory requirements, to span both a discriminatory measure and a non-discriminatory measure. Therefore, I think it would be helpful for the wording in Clauses 19(1) and 20(1), which use the slightly ambiguous term “regulatory requirement”, to refine it down, so as to disapply only the discriminatory part. There could be other ways to rework that wording to give the same effect, but it would be useful to put it beyond doubt because the word “regulation” is really rather confusing.
Lord Purvis of Tweed (LD)
My Lords, I have only one element to ask the Minister about; it refers to some questions that were asked in Committee with regards to regulations that have no effect. Is it the entire regulation or the component part of that regulation that would be considered to have no effect? As my noble friend indicated, many regulations are fairly extensive and will have many component parts to them; the Government or the legislation may consider that the direct discrimination part could be only one part. Is it the Government’s intention that the entire regulation would have no effect? Indeed, how would the process be carried out to identify the specific element of that? The questions raised by the Law Society of Scotland and put forward so well by the noble Baroness, Lady McIntosh, justify a very clear response. As we have said previously in Committee, the scope for those seeking legal redress within this legislation is huge, so ensuring as much clarification on this element as possible would be very helpful.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, the general theme here, I suggest, is that we need the Minister to respond very clearly and precisely on this matter. My noble friend Lord Foulkes used the rather nice and elegant Scottish word “fankle” to describe where we are at, suggesting that this needs to be undone. I was going to use the Gaelic word “bùrach”. I suddenly thought that Hansard might have difficulty with it, so I checked it on a handy electronic device close to me—and came up with a rather interesting extension, which I leave with the Minister. You can use the word “bùrach”, which in Gaelic means a “right mess”, but I think a more appropriate term in this case is a “clusterbùrach” which, as the article on my device goes on to say, is
“a Scottish term for a hopelessly intractable mess made by hapless politicians.”
Lord Callanan (Con)
The noble Lord, Lord Stevenson, has been very helpful, adding to my knowledge of grammar. The north-east version of that would be “cluster”, followed by a word I cannot use in the House, which would not be “bùrach”. If only I had known, I would have brought my thesaurus along to aid noble Lords in their pursuit of these matters.
These amendments seek to ensure that the drafting of the non-discrimination clauses means that the discriminatory requirement is of no effect only to the extent that the requirement discriminates against the service provider in question. However, I am pleased to tell my noble friend Lady McIntosh that Amendment 39 is already addressed by this clause and is therefore unnecessary. In the case of Amendment 40, as this clause concerns indirect discrimination in the regulation of services, the amendment as drafted would make Clause 20 entirely inoperable and leave indirect discriminatory requirements to take effect.
I start with Amendment 39, which obviously concerns direct discrimination. Direct discrimination is where a regulatory requirement treats a service provider less favourably than other service providers; the reason for that is their connection, or lack of connection, to a certain part of the United Kingdom. Clause 19 already limits the application of these measures—this addresses the point made by the noble Lord, Lord Purvis—so that only the affected service provider may benefit from the requirements having no effect. While I understand my noble friend’s concern, the definition of a regulatory requirement already ensures that only the offending requirement is of no effect. This amendment therefore replicates what is already drafted in Clause 19, so I am sure she will understand that I am unable to accept it.
Turning to Amendment 40, the test for indirect discrimination requires that a requirement is not directly discriminatory, and the amendment would mean that indirectly discriminatory requirements are of no effect only to the extent that they directly discriminate. This would render Clause 20 entirely ineffective. Therefore, I am sure that my noble friend will accept that I cannot accept either of her amendments for the reasons I have set out, and I hope that she will agree to withdraw them.
Baroness McIntosh of Pickering (Con)
I am looking at Clause 19, and I must be being very dense this evening, but I do not see where it already lays out what I am seeking to achieve in Amendment 39. It would be helpful if my noble friend could point me in that direction separately.
I am grateful to all those who have spoken, especially the noble Lord, Lord Foulkes, and the noble Baroness, Lady Bowles, for supporting the arguments in favour of elucidation. I do not think the question of the noble Lord, Lord Purvis, was answered as to whether it relates to an entire regulation or only component parts of it. I am sure he is getting quite used to not having his questions answered on this Bill, so I will not elaborate that point further given the time.
I greatly enjoyed the interchange on various words that could be put in play. I am reminded of what we used to say during the time of a different leader, when we used to call it a right Eton mess, which has another connotation in that regard.
I still believe that there are strong arguments to bring into play the intention behind Amendments 39 and 40, and I may bring them back at a later stage but, for the moment, I beg leave to withdraw the amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
We come to Amendment 42. I should inform the House that, if Amendment 42 is agreed to, I cannot call Amendments 43 or 44.
Amendment 42
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
Amendments 43 and 44 have been pre-empted.
Lord Callanan
“(9A) Before making regulations under subsection (8) the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment would require the Secretary of State to consult the devolved administrations before making regulations amending the “legitimate aims” in Clause 20 (which can mean that provision does not count as indirectly discriminatory against service providers).
“(9A) Before making regulations under subsection (8) the Secretary of State must obtain the consent of the Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland.(9B) But the Secretary of State may make regulations under subsection (8) without the consent required by subsection (9A) if that consent is not given within the period of one month beginning with the day on which the Secretary of State requests it.(9C) If the Secretary of State makes regulations without the consent required by subsection (9A), the Secretary of State must publish a statement explaining why the Secretary of State has proceeded with making the regulations.”
Lord Callanan
“Duty to review the use of Part 2 amendment powers
(1) In this section “the Part 2 amendment powers” are the powers conferred by sections 17(2) and 20(8) (powers to amend certain provisions of Part 2).(2) The Secretary of State must, during the permitted period—(a) carry out a review of any use that has been made of the Part 2 amendment powers,(b) prepare a report of the review, and(c) lay a copy of the report before Parliament.(3) In carrying out the review the Secretary of State must—(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland; (b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4; and(c) assess the impact and effectiveness of any changes made under the Part 2 amendment powers.(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.(5) If either of the Part 2 amendment powers has not been used by the time the review is carried out, this section has effect—(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—(i) a statement to the effect that the power has not been used since it came into force, and(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and(b) as if the requirements of subsection (3) did not apply to that power.”Member’s explanatory statement
This new Clause would require the Secretary of State to carry out a review of, and to lay a report to Parliament about, the use made of the amendment powers in Part 2. The review cannot start within three years of Royal Assent, and the steps required would need to be completed within five years.
“( ) Section 22(2) does not apply if the provision has been agreed through the common frameworks process.”
Lord Callanan
“(7) Section 22(2) does not apply in relation to provision that limits the ability to practise the profession, or any profession, of school teaching.”Member’s explanatory statement
This amendment adds school teaching to the professions the regulation of which is excluded from Clause 22.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.
Clause 29: Objective and general functions
Amendment 52
Lord Callanan
“(2A) That objective includes, in particular, supporting the operation of the internal market—(a) in the interests of all parts of the United Kingdom, and(b) in the interests of consumers of goods and services as well as other classes of person with an interest in its operation.(2B) The CMA must also, in carrying out its functions under this Part, have regard to the need to act even-handedly as respects the relevant national authorities.”Member’s explanatory statement
This amendment would set out in more detail the considerations that the CMA (including while acting through the Office for the Internal Market) must have regard to in exercising its functions under Part 4.
Lord Callanan (Con)
My Lords, noble Lords will have noticed that we have listened carefully to the many constructive points put forward in Committee as well as from the devolved Administrations on the provisions in the Bill to establish the office for the internal market, tasked with overseeing the smooth operation of the internal market. As set out in my recent letter to colleagues on government amendments for Report, we have made a number of important changes throughout Part 4 to make it clear in statute that the OIM will work in the interests of all parts of the United Kingdom and for all Administrations on an equal basis. I believe that these changes take into careful consideration the points raised in Committee and put beyond any doubt concerns around the consumer focus of the OIM—I hope that the noble Baroness, Lady Hayter, will welcome this—and the devolved Administrations’ involvement in the OIM’s governance arrangements.
Amendments 56 and 57 ensure that there is an enhanced role for the devolved Administrations in OIM appointments, requiring Ministers to seek consent with all Administrations within a one-month timeframe. This builds on the model proposal developed by the Welsh Government and tabled by the noble Baroness, Lady Finlay, previously. We believe that this strikes a delicate balance by ensuring that the OIM can operate independently and that all Administrations can have a meaningful input in the appointments process. At the same time, we have been clear that it is essential that the OIM operates independently and at arm’s length from Ministers from all Administrations. Therefore, we do not believe that reserving the right for each Administration to make appointments to the CMA board as set out in Amendment 54 is the correct way forward. Likewise, it is important that appointments are made through fair and open competition, which is what our amendments ensure.
We believe that Amendment 57 and our changes made to Schedule 3 ensure a fair, independent and equitable process for all Administrations. It will ensure that consensus is always a first preference, but recognises that, if it is not reached, appointments can still proceed after an appropriate time has elapsed. This represents a pragmatic way forward and avoids the risk of prolonged deadlock over appointments that would prevent the OIM fulfilling its duties under the Bill.
We agree with previous arguments in Committee that all OIM appointees should reflect a range of expertise from all parts of the United Kingdom. That is why we have tabled Amendment 55, which clarifies this in the Bill, making clear the desirability that panel members have a variety of skills, knowledge and expertise. It is important to remember that the OIM will be a neutral custodian of the UK internal market through its non-binding reporting, advisory and monitoring functions. If there are potential concerns in future about how the OIM conducts its duties, Amendment 61 ensures that the CMA’s annual plans, proposals and performance reports are laid before the devolved legislatures as well as Parliament, ensuring equal scrutiny and oversight of these developments, which can be discussed between Ministers from all Administrations where that is appropriate.
Finally, I am aware that there has been considerable interest in this House in ensuring that the OIM operates in the interests of consumers. We have listened carefully to these discussions and are confident that our amendments throughout Part 4 resolve the concerns expressed and put it beyond all doubt that the OIM will operate in the interests of UK consumers.
For all the reasons I have set out, I hope that noble Lords can accept the Government’s amendments and consequently will not press their own. I beg to move.
Lord Thomas of Cwmgiedd (CB) [V]
I shall speak to Amendment 54 but, before doing so, I thank the Minister for the substantial progress that has been made in relation to the office for the internal market, and for the recognition that it is necessary for the strength of the union and for equality and fairness between the people of the four nations of the United Kingdom that that office has representations from all four nations. However, the purpose of Amendment 54 is that that principle should be applied to the Competition and Markets Authority. This is a non-ministerial department with very substantial powers, which it has exercised since its creation in 2013, but Part 4 of the Bill gives it further and more substantial powers and a role in the operation of the internal market. What precise form those powers will take may ultimately depend on further changes to the Bill, but there can be no doubt that the powers are substantial.
Amendment 54 is therefore a modest amendment, seeking to build upon what the Government have agreed to in relation to the office for the internal market. At present, the Competition and Markets Authority has its chair and members appointed by the Secretary of State and the panels under the Act. But it seems that there is no reason at all why the principles that have been brought to bear for the office for the internal market should not be applied to the CMA itself. As I shall try to explain in a moment, it is essential that the CMA should have representatives of each of the four nations.
It was said at a previous sitting that this would be politicising the body. That is not so. First, the CMA is an independent, non-ministerial department, and people appointed by the Secretary of State, including its chair, are independent. The persons under this provision would be independent in exactly the same way. They are not going to be representatives of the devolved Governments in exactly the same way that the persons appointed by the Secretary of State are not representatives of Her Majesty’s Government but independent people.
Secondly, it is very important to ensure that now that the CMA will have an important role in the internal market, it will have at least one member from each of the nations who understands the issues in the internal market as it affects that nation. Thirdly, the amendment will not politicise the position in any way because the appointment will be by an independent public appointment process, in the same way that the chair and members appointed by the Secretary of State are appointed by an independent appointments process. That is the purpose of the first amendment.
Amendment 58, which is also in this group, is now covered by government Amendment 57 if Amendment 54 is agreed to. Amendment 59 is agreed to be consequential on Amendment 54. Before explaining briefly my reasons for tabling Amendment 54, I wish to make it clear that at the appropriate time this evening, unless the Minister is prepared to come forward with some alternative proposals, I propose to take this amendment to a Division.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I thank the Minister for his letter and for explaining the Government’s thinking today. It is a privilege to follow my noble and learned friend Lord Thomas of Cwmgiedd, and I am of course delighted that the Welsh Government suggestion that I promoted has been picked up.
I will speak in support of Amendments 54, 58 and 59, to which I have added my name. They deal with the need for appropriate engagement of the devolved Governments in the constitution of the Competition and Markets Authority, if that body remains the long-term home of the office for the internal market. These amendments would give an appropriate role in the appointment of the CMA’s board to the devolved Governments. They require the devolved Governments to play ball, which is crucial for that important body to function.
These are very modest amendments. They recognise that the CMA was established to deal wholly with reserved matters but is now being asked to take on responsibility for matters of the utmost sensitivity relating to devolved competence. Not to accept such amendments would be like setting up an agency within HMRC, for example, with responsibility for advising all the Governments of the UK on the best methods of reforming local taxation—a fully devolved responsibility—without making any changes at all to HMRC’s constitution.
The only two objections the Government seem to have had are, first, that it is too difficult to change the CMA’s constitution to enlarge the board—but they are already fundamentally changing the role and remit of the organisation—and, secondly, that somehow involving the devolved Governments would risk making the CMA political. I strongly suggest otherwise. Involving the devolved Administrations creates inclusion and cohesiveness for the long term across the union and dilutes political agendas. That is why Amendment 54 is so important. I commend the Government Front Bench on their amendments to this part of the Bill, which reflect points raised in Committee. Their amendments represent progress and deserve to be fully supported. When combined with Amendments 54, 58 and 59, they solve a serious problem.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I welcome the government amendments as I would welcome any improvement, but unfortunately they do not go far enough to compensate for all the implications of the OIM being within the CMA. I shall say more on that in later groups, and I do not need to rehearse all of it now, save to say that these amendments do not sufficiently change the nature of the CMA, its culture and what it was originally set up to do, so it is no longer—or it never was—the right home for a body that has to operate with the much more sensitive and different objective of the OIM.
I recognise that requiring the CMA to support the operation of the internal market in the interests of all parts of the UK, to act even-handedly with respect to the national authorities and to recognise consumers among the other classes of interested persons all featured in debate in Committee. Indeed, I rather recognise some of the wording. Amendment 55, reflecting the balance of the panel, is also welcome. Again, I seem to recall saying similar things. But I would like the Minister to clarify one thing. I am still concerned about what is controlled by this panel amendment. If the panel size in the amendment is a minimum of three, as it is for the CMA, how can you guarantee that all those interests are represented by three? In Committee, I introduced an amendment to say that the investigating panel should be a minimum of five because I thought that that was the number of people you would need to do an investigation. So both the pool from which the investigations can be drawn and the panel need to have all these characteristics. Is that how it is going to work going forward or are we restricted to the three individuals?
Amendment 56, requiring the consent of the devolved Administrations, looks good until you get to Amendment 57 and the override of one month. While I acknowledge that that can give time for discussions or whatever else may go on, absent any other conditions or explanations of why that override has been operated, it just looks like a convenient delay that you can put up with and then have your way in the end. So I do not think that that goes far enough. As I said, I do not object to the CMA having representatives of the devolved Administrations appointed to the board, but the OIM should not be in the CMA.
Lord Wigley (PC) [V]
My Lords, I am glad that the Government have moved a little on matters relating to the CMA and the IOM, but it is not quite far enough. I support Amendment 54. The Government have opted to give the CMA a central role. They could have opted to use not the CMA, but a whole new body created to cover this essential work that would have fully understood the world of devolved politics. They have chosen not to do so, although, to be fair, they have certainly moved on the IOM.
The consequence is that the Government lay the CMA open to criticism that it is simply unaware of the detailed issues that might concern devolved Governments. If the CMA had a nominee from each of the three devolved Governments it would avoid finding itself in a whole new world, as seen through the prism of Cardiff, Edinburgh and Belfast. This is an amendment to save the CMA from getting into an almighty and unnecessary tangle—or, as we would say in Welsh, since we are all quoting from Celtic languages tonight, into a smonach. I suspect that the CMA has not a clue what a smonach is; I rest my case. Amendment 59 is merely a consequential provision to deal with occasional vacancies on the CMA’s board, so I support that also.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
The noble Lord, Lord Cormack, has withdrawn from the debate, so the next speaker is the noble Lord, Lord Bruce of Bennachie.
Lord Bruce of Bennachie (LD) [V]
This is another group of amendments where the Government have made concessions, which is welcome because it demonstrates that they are listening in ways that, frankly, at early stages of the Bill did not appear to be the case. However, I think that all speakers so far made the point that we face a consequence of the Government’s proposal to locate the office for the internal market in the CMA. That is the fundamental issue.
I have signed the amendment from the noble and learned Lord, Lord Thomas of Cwmgiedd, and I am grateful to him for introducing it in such systematic detail. Obviously, it is designed to take account of how the Government are changing the role of the Competition and Markets Authority. I detect from the mood of Ministers that there is a slight resentment in saying that we really should not be thinking of a UK-wide devolved composition for the CMA because that is not what it was set up to do—which was fair when it was set up, but it is no longer fair. It is now absolutely clear that the Government should recognise either that the office for the internal market should be a separate, stand-alone body—in which case it absolutely should have representation from the devolved Administrations, which the Government’s own amendments clearly acknowledge—or that they are fundamentally changing the character of the CMA, which requires its constitution to be fundamentally changed.
I have said repeatedly in contributions to the debate on the Bill that I am unconvinced of the case for it. Even where there is a case—I can see that some issues may require legislation—it is very much a sledgehammer to crack a nut. Indeed, it anticipates problems that might never arise but creates all kinds of problems and suspicions in the process.
If the Government go down this route, the CMA, operating with the OIM, could take decisions that will clearly have a direct effect on the effective powers of the devolved legislatures, allowing it to overrule laws that have been passed by local consent. Even if there was no suspicion of the Government’s intent—and I am sorry to say that there is intense suspicion—there is real concern about unintended negative consequences through a lack of understanding, or knowledge of sentiment or factual evidence, in any or all of the devolved areas.
Baroness McIntosh of Pickering (Con)
My Lords, I welcome government Amendment 52, in the name of my noble friend the Minister. In particular, I am looking at its proposed new subsection (2B), which states:
“The CMA must also, in carrying out its functions under this Part, have regard to the need to act even-handedly as respects the relevant national authorities.”
Would my noble friend the Minister not agree that this seems to dovetail completely with Amendment 54, in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd? This seems very attractive because this dovetails entirely with, and supports, the Government’s call for there to be one board member from each of the Administrations. I would like to hear from my noble friend a very good reason for why it would not be the case that those appointments would be made as set out in Amendment 54.
Baroness Noakes (Con)
My Lords, I thank my noble friend the Minister for the Government’s amendments in this group, which are very welcome. However, I will focus on Amendment 54, in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. Any chairman of a board, whether it is a public or private company or a public body, will say that the most important thing about the board is getting a balance of skills and experience on it. In addition, nowadays, most boards feel the need to achieve a degree of diversity, generally expressed in terms of sex and race.
Putting together a balanced board is a complex task, and trade-offs often have to be made between the different characteristics that the different candidates can bring. The more that seats on the board are allocated to particular sources or interests, the more difficult it is to achieve balance. In something like the CMA, the board is not there to bring representative interests to bear; it is there to make sure that the CMA is run properly, so it should have people who can understand whether it is achieving its objectives or running itself effectively. Those are the most important characteristics.
If one has direct appointment to a public body such as the CMA, that can actually unbalance a board—you could end up with a lack of certain skills or experience, or an overrepresentation of certain commercial backgrounds, for example. When you have a single appointor, which in the case of the CMA is the Secretary of State, the challenge of getting a balance can be worked out between the Secretary of State, his department and the chairman of the relevant body. That is what happens in most public bodies. By taking away some of the appointments, you just make that process much more difficult to achieve.
I continue to believe, despite what noble Lords said earlier, that direct appointment by the devolved Administrations will inevitably be political, because they will be seen as representatives. Indeed, the noble and learned Lord, Lord Thomas, used the word “representatives” when he introduced this amendment earlier. A representative is never completely independent if he or she feels the need to represent.
One of the changes made by the Scotland Act 2016 was direct appointment to the board of Ofcom, and that was followed by similar legislation for Wales and Northern Ireland. I was deputy chairman of Ofcom at the time, so I understand the impact that that can have on board balance—but I do not want to talk about that beyond what I have already said about the difficulties in managing a board when direct appointments are made.
I would like to draw attention to Section 65 of the Scotland Act 2016, where the devolved Administrations were allowed to appoint a member directly. However, that appointment had to be made in consultation with the Secretary of State, which allowed one avenue for conversation to try to make sure that some degree of orderly balance was maintained in relation to the appointments. Amendment 54 does not even go so far as to recognise that precedent, and it is a very extreme action to be taken in relation to the CMA. I hope that the noble and learned Lord, Lord Thomas, will not press his amendment.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
The noble Lord, Lord Liddle, has withdrawn, so I call the next speaker, the noble Baroness, Lady Randerson.
Baroness Randerson (LD) [V]
My Lords, I am pleased to see some amendments from the Government in this group. It may be the start of a little bit of emotional intelligence on the Government’s part, to see the damage that has been done to trust and confidence between the UK Government and the devolved Administrations on this issue.
However, on its own, government Amendment 55, for example, is too weak, in saying that in order to be appointed to the OIM panel, all you need is knowledge of the internal market in the different countries of the UK. That implies to me that anyone who worked, for example, for Tesco—I am not picking on Tesco; other supermarkets are available—in its London head office would, of course, know that there are different markets in different parts of the UK. However, they would not have the depth of knowledge to understand, for example, the importance of signage in the Welsh language in different parts of Wales or the difference in marketing approach required in different parts of Northern Ireland, bearing in mind the history of those parts. It is a subtle business, and it needs strength and understanding in depth.
The truth is that the OIM is being shoehorned into the CMA simply because the Government have made a promise that they are not going to create any more such bodies. They can go ahead saying, hand on heart, that the CMA is the body and the OIM is simply an arm of it—no new body has been created. But, to be honest, it is not a neat and natural fit.
Amendment 56 goes a little way towards seeking the consent of the devolved Administrations to an appointment, but it still leaves all the cards in the Government’s hand. Taken alongside Amendment 57, it makes it clear that if the devolved Administrations withhold agreement, after one month the Government can go ahead anyway—yet they might be withholding agreement for a very good and clear reason. I urge the Minister to look again at the stronger amendments, Amendments 54 and 59, tabled in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. If the Government mean what they say about genuinely wanting to respect the devolved Administrations and treat them with respect, what harm do the Government think it would do to allow them to appoint one board member each? The Government’s response is that it would make the CMA political. That in itself portrays the fact that the Government have a political approach of their own to this problem.
In conclusion, as the noble and learned Lord, Lord Thomas, pointed out, UK government Ministers are in fact—[Inaudible]—and then they change hats to become Ministers of the UK. This is a problem, and if anyone does not understand that that is a problem, it underlines a lack of understanding and experience of devolution. Anyone who had that experience and understanding would realise that the Government must give a little bit more to satisfy trust among the different Governments of the UK.
Lord Naseby (Con)
My Lords, I congratulate my noble friend on the Front Bench. Once again we see the benefit of a good Committee stage, with someone listening and coming back with a series of amendments which all strengthen the Bill. I particularly like the clarification in Amendment 56, and I was delighted to read Amendment 61. However, regarding Amendment 54, I have had the privilege of chairing four different companies and sitting on other boards, some of which had certain dimensions to them as a business that any wise chairman would wish to make sure were covered.
I am also a political animal. Anybody who has sat for a marginal seat and kept it understands the sensitivity of varying wards, varying interests et cetera, and I ask my noble friend to reflect a little on Amendment 54. Certainly I do not believe that there is anything in Amendment 59 worth having, but Amendment 54 is crucial. Whether the wording is right or not, nevertheless, the devolved powers are a very important dimension of the whole of this internal market. Somehow, as other noble Lords have said, they must have ownership of it. The CMA board is in essence one of the absolutely key elements of that. I do not expect an answer tonight, but I suggest that the Minister and his colleagues should sit back and argue this through. I understand what my noble friend Lady Noakes said. In one sense she is right but, with my political hat on, I am not so sure. So I ask the Minister to reflect a little on Amendment 54, although I do not expect him to accept it tonight.
Baroness Neville-Rolfe (Con)
My Lords, I thank my noble friend Lord Callanan for his amendments, which, as many have said, represent a real readiness to listen. The changes all seem very sensible, especially the proposal for the CMA to lay an annual plan before Parliament and before the devolved legislatures. Perhaps a similar procedure could be derived in relation to the common frameworks, over which there has been so much grief and debate. In my experience, when things go well, such reports become routine and are not even debated, but they are a good way of keeping the Executive —public servants, any boards involved and the Ministers they serve—objective, efficient and thoughtful.
However, I am afraid that I do not support Amendment 54. Board members of the CMA should not be “representative” of a territorial interest in the way this would inevitably turn out. The interests of the four nations should be taken into account in coming up with a balanced, objective board, but this is not the right way to do it. My noble friend Lady Noakes summarised the balance issues very well from her own wide experience. The amendment would also jeopardise the very objectivity and pursuit of the public interest which is vital to a better CMA.
By the way, Tesco’s head office is not in London; that was a bad example for the noble Baroness, Lady Randerson, to choose. At least in my time, we had a very high degree of sensitivity to Welsh issues, sold more Welsh food elsewhere in the UK than anybody else, and indeed from time to time had Welsh individuals of great independence sitting on the board.
Lord Fox (LD)
That is just proof that you can take the Peer out of Tesco but not Tesco out of the Peer.
My noble friend Lady Randerson hinted that she thought the Minister might be developing emotional intelligence—or perhaps we will see signs of that later. However, I think that most of your Lordships have welcomed the government amendments in this group. They are showing movement in the right direction and are an improvement on what you would expect those of us on these Benches to condemn as a deeply flawed Bill.
My noble friends Lady Bowles and Lord Bruce both made the point about where the OIM is and its presence in the CMA. We are not debating that in this group, although we will be some other time. However, Amendment 54 and consequential Amendment 59 should be seen as the safety belt in the event that the OIM remains within the CMA.
The noble Lord, Lord Naseby, made a powerful speech against Amendment 54. I did not see him in his seat when the noble and learned Lord, Lord Thomas of Cwmgiedd, was giving his strong endorsement of his amendment. He may have been oscillating somewhere between virtual and physical; if he was, I apologise. In his speech, the noble and learned Lord, Lord Thomas, put forward a very important point. The CMA is getting considerably more powers as a result of the Bill. The point he did not make but inferred is that those powers move from being reserved powers to those that step into the realm of devolved powers—there can be no doubt about that.
There is therefore a significant change in the nature of the task that the CMA is overseeing. The Government may say it is too much trouble to change the nature of the governance of the CMA, but its focus is changing from reserved issues to those which cover devolved matters, so that change should be reflected in its governance.
My noble friend Lord Bruce talked about unintended rather than intended consequences. The Government need to create a board that can reduce the number of unknown unknowns that it encounters. Amendment 54 is a perfectly reasonable amendment, which would make sure that there are people on the board who understand the nature of the markets in the devolved countries.
To take the point made by the noble Baroness, Lady Noakes, one would hope that the careful construction of a board would understand the need for that. I have to tell your Lordships—and perhaps the principles of my noble friend Lady Bowles could be passed to some Cabinet members—that the construction of boards and organisations over the course of the last 12 months has been nothing like a careful assembly of the right people. It has been a gathering of friends and known people to do the bidding of the Secretary of State. Therefore, it is right for the opposition to be very suspicious about the future board of the CMA, which will have this extraordinarily bumped-up role. That is the reason for Amendment 54 and also for consequential Amendment 59.
The noble Baroness, Lady Noakes, is correct. In a sensible world, what she suggests would happen. However, we cannot trust that to go forward, and trust is going to be very important with regard to the devolved authorities and how they work with the CMA if, indeed, the office for the internal market is located within it.
The noble Lord, Lord Wigley, the noble Baroness, Lady Finlay, and my noble friend Lady Randerson gave wise advice: rather than politicise the CMA, this is helping to inoculate it from political suspicions. That is why, if the noble and learned Lord, Lord Thomas, seeks to put it to the House, we Liberal Democrats will support Amendment 54.
Baroness Hayter of Kentish Town (Lab)
I join others in thanking the Minister for some significant moves in the amendments that he has introduced today. As others have said, it is testament to his having listened. He sometimes thinks that means “listened at length”, but he listened, considered and responded, and we welcome all the changes. I am particularly pleased about the acknowledgement in the amendments of the interests of consumers in the mapping out of the new internal market. The House will be pleased about the recognition of the need for experience across the kingdom in the appointment of the OIM panel and the need to seek the consent of the devolved authorities to such appointments.
Similarly, we welcome, perhaps unsurprisingly, the new requirement for the CMA to lay its key documents before all four legislatures. It is possible that they already do it, albeit perhaps as a courtesy rather than a legal requirement. We also strongly welcome Amendments 56 and 57, which require devolved authorities to give their consent within a month to appointments to the OIM panel. We like that—consent within a month; we have heard it before. We pinched the idea from the Minister’s words, but it is a good one. As we proposed in our amendments, if the Government proceed with an appointment despite consent not being forthcoming, they will have to explain why they are doing so. Therefore, we will not move Amendment 59.
However, the Minister will not be surprised to hear that, although we welcome these changes, we would like to nudge them a little further. On Wednesday, as others have said, we will seek to move the OIM out of the CMA. Just in case it remains in the CMA, it is vital, as the noble and learned Lord, Lord Thomas of Cwmgiedd, and others have said, that the CMA, in accepting this new role, amends its structure to accommodate the change. It is impossible to think of any other national organisation, when its remit changes, not revisiting its governance and appointments. It should not just continue with business as usual when taking on a whole new responsibility.
Indeed, although we welcome Amendments 56 and 57, we were surprised that they did not apply to the CMA as well as to the OIM panel. For an overarching body with a purview of the development of the new internal market architecture, not having to feel the pulse of, understand and have input from the constituent parts is a little odd, to say the least. For all its board members to be appointed by just one of the four Governments is particularly hard to understand, because it is a body covering the competences of all four Governments. If it was covering only the reserve competences, one could understand, but it will cover powers that affect the area of all four Governments.
As was said by, I think, the noble Baroness, Lady Noakes, if you are appointed by one place you somehow feel like a representative from it. I must say something about other boards and committees that I have sat on. It may not be a board of this nature, but the National Consumer Council included someone from the Northern Ireland Consumer Council, as I think it was called, someone from the Welsh Consumer Council and someone from the Scottish Consumer Council, but once they got on the board, they had responsibility to it as a board member. Just because we brought in someone with different responsibilities, it did not suddenly make them a representative. Similarly, the chairs of the different sub-committees of the Financial Reporting Council sat on the board. They came with that experience but, once they sat on the whole-council board, their responsibilities included that.
It is slightly hard to say that just because people are appointed by different Governments, they are then answerable only to them. Given that they would be appointed by only one Government, and given that people are saying that if you are appointed by the Welsh Government, you are then a representative of the Welsh Government, surely if you are appointed by the UK Government you also are not independent. It does not quite make sense to me.
We will shortly vote on Amendment 54 in the name of the noble and learned Lord, Lord Thomas. The Opposition will be happy to support it, to ensure that the CMA really does act on behalf of the whole of the United Kingdom.
Lord Callanan (Con)
I can be brief, on the basis that I went through the amendments in detail in my opening remarks. I thank all noble Lords who took part in this debate very much.
I say to the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Thomas, that the Bill is not a smonach at all. As I am from the north-east, I can say that, despite all this, I still consider them both marras and not at all workie tickets—I suspect that all this is driving our Hansard copywriters into a bit of a radgie.
I reiterate that my amendments to Part 4 will ensure beyond doubt that the OIM will operate in the interests of both UK consumers and all four Administrations on an equal basis. I thank my noble friend Lady Noakes in particular for her important observation that the CMA board appointments are there first and foremost to ensure that the organisation operates effectively.
I wish to emphasise strongly that changing the wider CMA structures would be wholly unnecessary and create a deeply unhelpful precedent in so far as DA appointees would have a say on reserved matters. In contrast, the OIM panel will undertake the work of the OIM. It is in that context that the government amendments have been brought forward. I believe that this directly addresses the points made in this House, ensuring that the devolved Administrations have greater involvement in OIM appointments. I therefore hope that the House will be able to accept these amendments.
There were a couple of questions. The noble Baroness, Lady Bowles, asked me to define the panel requirements. Amendment 55 makes clear the Government’s view that a balance of expertise in the round on the panel from which task groups are drawn is important. Schedule 3 makes it clear that such task groups must
“consist of at least three members”,
and therefore may contain more. We have argued consistently against a hard distinction between panel members and assigning specific members to specific parts of the UK. In my view, it would be a failure if there was seen to be an “English panel member” and a “Welsh panel member” who are then somehow adversarial.
Finally, I say in response to the noble Lord, Lord Bruce of Bennachie, that I have consistently made it clear that the functions of the OIM cover advice, monitoring and reporting only and cannot force regulatory change of any kind.
With those remarks, I hope—though without much expectation—that noble Lords will not press their amendments and I commend those in my name.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
My Lords, I have received a request from the noble Baroness, Lady Finlay of Llandaff, to ask a short question of the Minister.
Baroness Finlay of Llandaff (CB) [V]
Does the Minister agree that good governance requires a balanced board but it also requires that each appointee fulfil the person specification as set out to ensure such balance, that they declare any interest in a relevant discussion and that they may have to withdraw during that discussion? That is all laid out for the running of an open and transparent process within a board as well as for an open and transparent appointments process. Does he further agree that it would be an incredibly narrow person specification that expected people to have only one skill, relating only to their devolved Administration experience, and that they would be coming forward with a broad range of skills to complement a balanced board?
Lord Callanan (Con)
There were a number of questions there, but of course I believe that there should be an open and transparent appointments process, and that individuals appointed should possess a broad range of skills—that seems self-evident.
Lord Thomas of Cwmgiedd
“(2A) After sub-paragraph (1)(b) insert—“(c) one person appointed to membership of the CMA Board by each of— (i) the Scottish Ministers,(ii) the Welsh Ministers, and(iii) the Department for the Economy in Northern Ireland.””Member’s explanatory statement
This amendment provides for each of the devolved administrations to appoint a member to the CMA Board.
The Deputy Speaker (Baroness Morris of Bolton) (Con)
I shall now put the Question on Amendment 54. We have heard a Member taking part remotely say that they wish to divide the House in support of the amendment, which I shall take into account.
Lord Callanan
““(2ZA) In making appointments under paragraphs (iv) and (v) of sub-paragraph (1)(b) the Secretary of State must have regard to the desirability of securing that— (a) a variety of skills, knowledge and experience is available among the members of the OIM panel, and(b) there is an appropriate balance among the members of that panel of persons who have skills, knowledge or experience relating to the operation of the United Kingdom internal market in different parts of the United Kingdom.”Member’s explanatory statement
The amendment would require the Secretary of State to have regard to the desirability of having a variety of skills, knowledge and experience in the Office for the Internal Market panel and for a balance between members with specific skills, knowledge or experience in the internal market as operating in different parts of the United Kingdom.
Member’s explanatory statement
The amendment would require the Secretary of State to seek the consent of the devolved administrations to any proposed appointment to the OIM panel.
“(2B) Sub-paragraph (2C) applies if consent to an appointment 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.(2C) In that event the Secretary of State—(a) may make the appointment without the consent of the authority or authorities concerned; and(b) must, if the appointment is made, inform each authority which did not give consent of the reasons for the decision to proceed with the appointment.””Member’s explanatory statement
The amendment relates to Lord Callanan’s proposed amendment at page 47, line 29 and would give the Secretary of State the option to proceed with an appointment to the OIM panel after an interval of at least one month, even if one or more of the devolved administrations have not given their consent.
Lord Thomas of Cwmgiedd
“(2A) After sub-paragraph (2) insert—“(2A) Sub-paragraph (2) applies to a member of the CMA Board appointed under paragraph 1(1)(c) as if the reference to the Secretary of State were a reference to whichever of the Scottish Ministers, the Welsh Ministers or the Department for the Economy in Northern Ireland appointed the person.””Member’s explanatory statement
This amendment means that, if a CMA Board member appointed by one of the devolved administrations wishes to resign from membership, they must do so by giving notice to the devolved administration in question.
Lord Callanan
“Laying of annual documents before devolved legislatures
(1) Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the Competition and Markets Authority) is amended as follows.(2) In paragraph 12(3)(annual plan to be laid before Parliament), for “Parliament” substitute “—(a) Parliament,(b) the Scottish Parliament,(c) Senedd Cymru, and(d) the Northern Ireland Assembly”.(3) In paragraph 13(2)(proposals for annual plan to be laid before Parliament), for “Parliament” substitute “—(a) Parliament,(b) the Scottish Parliament,(c) Senedd Cymru, and(d) the Northern Ireland Assembly”.(4) In paragraph 14(3)(a)(performance report to be laid before Parliament), for “Parliament” substitute “—(i) Parliament,(ii) the Scottish Parliament,(iii) Senedd Cymru, and(iv) the Northern Ireland Assembly”.”Member’s explanatory statement
This new Clause would require the CMA to lay its annual plan, proposals for its annual plan and its performance report before the devolved legislatures as well as Parliament.
United Kingdom Internal Market Bill
Wednesday 25th November 2020
(3 years, 12 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 150-III(Rev) Revised third marshalled list for Report - (23 Nov 2020)
14:38 - Division conducted remotely on Amendment 62A - Ayes: 155 / Noes: 249 - Amendment 62A disagreed.
16:39 - Division conducted remotely on Amendment 64 - Ayes: 323 / Noes: 241 - Amendment 64 agreed.
17:17 - Division conducted remotely on Amendment 68A - Ayes: 298 / Noes: 257 - Amendment 68A agreed.
18:24 - Division conducted remotely on Amendment 69 - Ayes: 315 / Noes: 230 - Amendment 69 agreed.
19:31 - Division conducted remotely on Amendment 75 - Ayes: 134 / Noes: 247 - Amendment 75 disagreed.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, I should inform the House that, on Monday, Amendment 34 was agreed in error. It was pre-empted by Amendment 31.
Clause 39: Enforcement
Amendment 62
Lord Callanan
(a) each relevant national authority, and(b) such other”Member’s explanatory statement
This amendment would provide that the domestic administrations must be among the bodies consulted by the CMA in relation to its policy on enforcing information-gathering notices.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, during the Bill’s progress through Parliament, we have engaged extensively to ensure that it, and the Office for the Internal Market in particular, work for all parts of this country. We have always been clear that the Competition and Markets Authority will ensure the devolved Administrations are consulted on all important matters relating to the OIM. Following significant discussions with our devolved counterparts and noble Lords, we are pleased to introduce these two amendments, which will underscore the importance of the devolved Administrations in the operation of the OIM. The Government have emphasised throughout the introduction of the Bill that the UK internal market needs to work for all parts of this country, and these amendments are a testimony to this aim.
Amendment 62 ensures the CMA must consult the devolved Administrations when preparing or revising its policy on enforcing information-gathering notices. Alongside this, Amendment 63 will require the Secretary of State to consult the devolved Administrations over the level of fines that can be placed on bodies that do not comply with a CMA request for information. Both amendments give the devolved Administrations a significant say in the key operations of the OIM. These amendments will put beyond doubt this Government’s commitment to ensuring that the interests of the devolved Administrations are reflected in the governance of the OIM and that the OIM will continue to meet the interests of all parts of the United Kingdom.
I turn now to Amendments 62A, 63A and 63B, which seek to alter the CMA’s ability to effectively gather information. I reassure the House that, as highlighted in previous debates on the Bill, these penalty powers in Part 4 will not be commenced unless there is a clear and credible need for them—for example, to ensure that the OIM can gather credible and accurate information for its reporting and monitoring purposes. I believe this goes some way to addressing many of the concerns of the noble Baroness, Lady Bowles, regarding the design of the information-gathering and enforcement regime. This will ensure that such a regime will be well considered, based on clear evidence of need and proportionate to fulfil the OIM’s duties. I emphasise that the need for accurate, and up-to-date information is essential to ensure that the OIM’s reports and advice are credible, evidence-based and meaningfully capture the UK internal market landscape.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I thank the Minister for some of the considerations on which he elaborated around some of the penalties, but I find it hard to accept this in principle. The information-gathering procedures in the Bill seem without any limit on them in the Bill—an unreasonable measure. To try to find a way to tackle that, I tabled three amendments. I thank the noble Baroness, Lady Altmann, and the noble Lord, Lord Vaux, for signing Amendment 62A on the small business exemption. From among the amendments, we hoped the Minister might consider adopting that one or come forward with a version for Third Reading.
Understanding why the penalty provision is unreasonable requires analysis of the background. Section 5 of the Enterprise Act 2002 gives the CMA an information-gathering function for obtaining, compiling and keeping under review information about matters relating to the carrying out of its functions; it does not give a fining power in order to compel businesses to respond. Such compulsion can come later, at a stage when a market study is undertaken, but the circumstances then are that some suspicion exists that businesses themselves have contributed to failures in the market. In contrast, Clause 38 of this Bill gives the CMA, in connection with reports under Clauses 31 to 34, or under Section 5 of the Enterprise Act when it concerns those clauses, the power to collect information and impose penalties on individuals and businesses in order to make them respond.
This power exceeds what the CMA can do for ordinary information gathering, and the provisions are a copy and paste of the powers that accompany the stronger measure of a CMA market study. But there has not been any corresponding copying of the other conditions that surround a market study; nor is it a comparable situation to a market study, because there is no suggestion that the things being investigated might be happening because of what businesses themselves are doing.
The powers in this Bill are about investigating regulations, which is entirely beyond the control of business, and there is no wrongdoing by business. These investigations are about circumstances created by legislatures and which legislatures wish to investigate. It is more comparable to a departmental consultation than to a market study, so what is the justification for coercing and burdening businesses, even if the Minister says there will be rules making that perhaps a bit less onerous? In Committee, the noble Lord, Lord Tyrie, said of these powers:
“The argument that they were derived from legislation the purpose of which was very different is well taken and might point to further amendment.”—[Official Report, 4/11/20; col. 726.]
That is the view of the recent, former chair of the CMA.
One of my amendments would delete the penalties clause, which is really what I think should be done, although I see little hope of persuading the Minister. My second attempt, Amendment 63B, tried to recreate some of the circumstances of a market study, but as the Minister recently confirmed that only regulations can be investigated, not business cases, it does not fit and it does not work. So my third attempt—Amendment 62A—concentrating where it really matters, exempts small businesses from the penalties. It uses the small business definition from the Companies Act, expanded to cover non-company structures. The Companies Act recognises that small businesses should have a lesser public interest burden by exemption from some filings and it recognises that in primary legislation—it does not rely upon regulations or codes of conduct. Why not apply similar logic here?
Small businesses do not all have the wherewithal to respond to onerous consultations, although many will help when they can, but the information requirements in this Bill can require work to be done or attendance at a given place, both causing financial loss. There is no compensation save travel expenses. Yes, there is a “without good reason” defence, but the smallest businesses cannot afford a legal challenge even if they knew of the defence.
Perhaps the CMA will be reasonable itself in setting its code of practice. The Minister hopes so, but there is no certainty, and a notice detailing applicable penalties is a frightening thing. Of course, it belongs to another culture, in which the CMA’s core functions require confrontation with business and suspicion that businesses and companies are doing wrong.
In Committee I asked the Minister what would constitute a reasonable excuse, giving a wide range of examples relative to small businesses. I got no reply, nor have I had a written reply despite having asked for one—although I know the Minister is very busy, not least writing to colleagues.
This is a huge encroachment on civil liberties and the freedom to conduct business. I hope that, at this 11th hour, the Minister will listen and come back with something at Third Reading to put in the Bill that reinforces the statements he has made. But, if there is not that prospect, this is a matter of deep principle—and I speak as somebody who ran a small business for 30 years—and I must give notice of my intention to call a vote on Amendment 62A if negotiations cannot proceed at Third Reading.
Baroness Altmann (Con) [V]
My Lords, I am delighted that my noble friend has listened to many of the concerns raised in Committee. I also welcome his saying that the Government will consult carefully on penalties, and the penalties will be limited. I thank him for saying that the needs of small businesses will be taken into account as well.
However, I cannot help but continue to support the amendment in the name of the noble Baroness, Lady Bowles, which I have added my name to, alongside the noble Lord, Lord Vaux, because the points she made seem most persuasive. She has clearly explained that the proposed penalty regime is not comparable with that of the current CMA, despite my noble friend indicating that it is.
The penalties under the CMA would apply in cases where firms are suspected of wrongdoing or unfair competition or practices. But it has already been acknowledged by my noble friends Lord True and Lord Tyrie that the Bill is concerned here merely with data gathering itself, such as would occur in consultations or calls for evidence, rather than information requests that follow from suspected failures. Therefore, I urge my noble friend the Minister to reconsider the position that many small businesses could find themselves in if information is demanded of them under these powers. It would take scarce corporate resources away from operating the business and is likely to pose significant difficulties for firms that do not have lots of employees available to comply with such an information request.
I point out to my noble friend the Minister from these Benches—as a member of a party that has always been the friend of small business and has promoted the value and virtue of people starting up businesses and running small firms themselves—that there is a significant risk here of imposing unreasonable burdens. I echo the call from the noble Baroness, Lady Bowles, for a meeting with him before Third Reading to see if we can find a form of words that the Government could accept, to avoid the need for a vote on Report.
I hope my noble friend understands that this is about a fear that the Bill imposes unreasonable and abnormal demands. For example, on pensions, the Pensions Regulator has not previously had the power to demand information from schemes unless it suspected wrongdoing. I hope we can find a way in this Bill to exempt small businesses from this burden and the potential threat of penalties.
Lord Vaux of Harrowden (CB) [V]
My Lords, I have added my name to Amendment 62A, proposed by the noble Baroness, Lady Bowles. We owe her our thanks for bringing this important wrinkle in the Bill to our attention. She and the noble Baroness, Lady Altmann, have already eloquently set out the reasons why this amendment is needed, so I will not detain the House for too long.
The Bill creates draconian powers of investigation for the CMA, with associated penalties which, as we have heard, are much more suited to its duties of investigating market abuse. Indeed, as the noble Baroness, Lady Bowles, pointed out, the wording has actually been lifted from those duties. However, the purposes of the investigation set out in this Bill are very different from market abuse investigations. In this Bill they are investigations into the impacts of regulations or provisions made by the various national authorities. Businesses are not in this case being suspected of, or investigated for, market abuse, yet the Bill will mean that they will have to respond to notices subject to penalty as if they were.
Even if we reluctantly accept that these powers and penalties are appropriate—and I do not—we must surely ensure that the powers, and in particular the penalties, do not become an undue or unfair burden on business. I listened carefully to what the noble Lord the Minister had to say in this opening speech, and I am afraid that I do not think that the protections and the consultations that he mentioned go far enough in this case.
While larger businesses may be able to cope with such an investigation, small companies do not have compliance departments or in-house legal teams. They do not have the excess capacity to be able to deal with such investigations. Even in normal times, these investigations would be burdensome for small companies, and it is even more the case when they are trying to recover from the Covid crisis and at the same face up to the challenges that leaving the EU single market will create. This is no time to load additional burdens on to small businesses. Therefore, I urge the Minister to accept this simple—and, I had hoped, uncontroversial—amendment, or at least to come forward with some protections for smaller companies, as has been suggested.
Lord Liddle (Lab)
My Lords, I very much welcome the opening statement from the noble Lord, Lord Callanan. I think he has proposed an improvement in the Bill, by adding further requirements for consultation with the devolved Administrations. That is for the good. I also have a great deal of sympathy with the amendment moved by the noble Baroness, Lady Bowles. I can see the argument that, if there are impediments to the internal market in a particular sector, the new body will require an information-gathering power, and if you have that power you have to have an enforcement power. It is welcome that the Minister says that these powers will be exercised in a voluntary and proportionate way. Yes, maybe—but I do think that there is a special concern about small businesses, to which I hope the Minister can find a way of responding positively in his reply.
I have to say—and I cannot resist the temptation to poke fun at the noble Lord, Lord Callanan, on this—that if such clauses had been proposed by the European Commission, we would have heard his screams of protest from the committee rooms of Brussels to the banks of the Tyne, which he represented, and he would have raised the roof on the wonderful auditorium of the plenary in Strasbourg. I can hear him now in excellent Brexiteer mode. Of course, now that Brexit has happened, these concerns are of no consequence. The truth is—and I think this is going to become clear—that for business Brexit means more and more bureaucracy, and this is what we are seeing in terms of the new customs arrangements and in terms of this Bill. There—I cannot resist making that point.
Having said that, there are many serious issues with this Bill. I regard it as a treaty-breaking, devolution-wrecking, United Kingdom-unravelling Bill. These are serious points for debate and many of the amendments we are considering this afternoon, I am afraid, contribute to those consequences. So I hope that a compromise can be reached on this matter before Third Reading and, on that basis, I will abstain in the Division.
The Deputy Speaker (Lord Lexden) (Con)
The next speaker on the list, the noble Baroness, Lady Neville-Rolfe, has withdrawn. I call the noble Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Lord. Like him, I was surprised at the level of the penalties for these infringements. I join noble Lords who congratulated and thanked my noble friend the Minister for listening to concerns expressed at an earlier stage of proceedings and bringing forward Amendment 62. I will just ask: what form will the consultation by the CMA with the devolved Administrations take? How long will be allocated to it generally, along with the other bodies that are to be consulted?
Has the CMA taken a policy decision not to have on its board currently, as I read it, any representatives of the devolved Administrations? I notice that Jo Armstrong, for whom I have the highest regard, is represented. She is currently a commissioner with the Water Industry Commission for Scotland with whom I have had the pleasure to work for four or five years. But I do not see that any specific representatives of the devolved Administrations are there. Given the thrust and context of this Bill, it will be interesting to know if there is any policy principle as to why there are not. I know that my noble friend will say that that is a matter for the CMA, but it works under the guidance of the Secretary of State and the department, so I ask him to comment in that regard.
I echo the concerns raised by other noble Lords and I thank the noble Baroness, Lady Bowles, for her Amendments 62A, 63A and 63B. I ask my noble friend to consider to what extent the ask under Article 39 goes much wider than is currently envisaged in, I think, the Enterprise Act that forms the basis for these provisions. Against the background that these are quite substantive penalties, will the Minister be mindful of the debate that we have had, noting, in particular, the comments made by the noble Baroness, Lady Bowles, my noble friend Lady Altmann and the noble Lords, Lord Vaux and Lord Liddle? Will my noble friend have regard and perhaps pause at this stage and come forward with a further government amendment at Third Reading?
Baroness Noakes (Con)
My Lords, I support the government amendments in this group, but I put my name down to speak in order to address the other amendments tabled by the noble Baroness, Lady Bowles of Berkhamsted. Like her, I am concerned about the heavy-handed penalties that could apply in respect of the CMA’s information powers under the Bill.
The CMA has extensive information powers under the Enterprise Act 2002, as the noble Baroness, Lady Bowles, explained, which are needed so that it can carry out its competition functions effectively, in particular in the face of companies or sectors that are resistant to one of the CMA studies. However, there has to be a serious question about the information powers put into the Bill in respect of the office for the internal market. It should be remembered there was no clear consultation on this during the summer, so the proposals have not had a lot of serious attention.
The OIM will of course be focused on the effectiveness of the internal market rather than the behaviour of companies or sectors. I understand that the OIM needs to build up a picture of intra-UK trade flows in order to understand the scope of what it is looking at, and it should have the ability to request that information. However, to back up that kind of information gathering with extensive penalties is not right. It stands in stark contrast with the Trade Bill, which sets up the possibility of requesting information from businesses in respect of international trade—but it is very clearly a request, with no compulsion. My noble friend Lord Grimstone of Boscobel confirmed that in Committee on the Trade Bill.
The office for the internal market may well want to gather information from the devolved Administrations or regulatory bodies within the devolved territories. For example, it could be looking at whether particular provisions have a detrimental effect. That sort of information gathering is largely within the public sector, and the enforcement provisions in Clauses 39 and 40 do not make sense in that context.
Can the Minister say who the “persons” in Clause 39, whom the Government expect to be served with a penalty notice, are? Could one of them be, for example, the First Minister in Scotland, or one of her Ministers? If not, why not? I suspect that the serious information that may need to be extracted at some stage will come from the devolved Administrations. Why should businesses, which will be the victims of any abuses of the internal market, be treated in the way envisaged in the Bill?
So I support the noble Baroness, Lady Bowles, in particular in her Amendment 62A to try to shield small companies from these powers. I listened carefully to what the Minister said in his introductory remarks, which were very helpful, but I remain concerned that the CMA will use inappropriately the powers given to it by the Bill. There are no safeguards against that, so I hope that my noble friend will take this away for further discussions between Report and Third Reading.
Lord Naseby (Con)
My Lords, I should declare an interest in that I have a partnership with my wife to look after 40 acres of woodland in Bedfordshire. I thank my noble friend on the Front Bench. I have worked on a great number of Bills in this and the other place, and it is good that when we discuss things in depth, right across the Chamber, problems are raised and the Minister listens. I welcome enormously Amendments 62 and 63.
However, I share the concerns of some other noble Lords about the implications of Amendment 62A. It raises questions that ought to be considered—although I am not in a position to repeat what my noble friend Lady Noakes said. I hope that the Minister has listened to the concerns expressed from both sides of the Chamber and will find a means of ensuring that what might be very unusual cannot happen. I am sure that my noble friend on the Front Bench is listening. Some consideration should be given to including Amendment 62A, or something comparable, in the Bill.
Lord Rooker (Lab) [V]
My Lords, I have to declare an interest, in the sense that, due to my IT incompetence, my name appeared in error on this list of speakers. Nevertheless, I have listened to the debate. It is not an area that I know anything at all about, but I am much taken with the amendment from the noble Baroness, Lady Bowles. My views were summed up by my noble friend Lord Liddle. I agree with him. The Minister has obviously tried to meet the requests of the House with his own amendments and, to that extent, we should be grateful. However, as I say, I really was not part of this debate but the noble Baroness, Lady Bowles, has my support.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, the next speaker on the list, the noble Lord, Lord Flight, has withdrawn, so I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, many noble Lords have railed against the virtual process, but the serendipitous arrival of the noble Lord, Lord Rooker, is perhaps justification for having a virtual Parliament after all.
I thank the Minister and other speakers in this short debate. I should like to put this issue into context. Back in the day, when I worked in the real world, in many cases the sort of inquiry that we are talking about would have come across my desk. I worked for large international corporate companies and, even for us, it was difficult to find the resources to respond to some of these requests. So this is a real problem and Amendment 62A seeks to address a real issue that will genuinely cross the desks of small businesses in this country.
The Minister tried to corral these requests, saying that they would occur only when the office for the internal market needed credible and accurate information. Well, I trust that it always needs credible and accurate information, so that is no restriction on the office. He also talked about the word “proportionate”. I should correct the noble Lord, Lord Liddle: the Minister did not use the word “voluntary”. He said “proportionate”. This is not a voluntary process but a compulsory one, as it stands in the Bill. That is the problem. And proportionate to whom? Is it proportionate to the desire of the office for the internal market to get credible and accurate information, or proportionate to the fact that five, six or seven people occupy an important part of the market but do not necessarily have the resources to respond to these requests?
The Minister also said that only in a small number of cases did he expect that a formal information notice would be required. Well, that is where some of the clarification can come. What are the circumstances around which a formal information notice would be required? How do we ring-fence it and make sure that we understand what “proportionate” means in the context of this discussion? The Minister also said that leaving out, or giving this exemption to, small businesses would set a terrible precedent. However, my sense is that precedents have already been set in other Acts. I cannot remember exactly, but I think that the Corporate Insolvency and Governance Act has carve-outs for small businesses, and there are many other Acts in which small businesses already have carve-outs. So the precedent already exists; it is just a question of which precedent one chooses to select.
The nub of the problem is that the Minister said that the powers were carved out of the existing powers of the CMA. However, just as the noble Baroness, Lady Noakes, said, the powers are used for an entirely different purpose—to investigate and identify potential irregularities and law-breaking. That is not the nature of what we are saying.
When I entered this debate, I expected, for once, to be on the same side of the argument as the noble Baroness, Lady Noakes, and the noble Lord, Lord Naseby, and that proved the case. The noble Baroness, Lady Noakes, gave a very powerful and detailed explanation about why the Minister should be serious about this issue. It is absolutely true that the Trade Bill has taken a different route; it acknowledges that this information is essential but has gone down the route of gathering it voluntarily. If the Minister is in the business of precedence, perhaps that would be a better precedent for him to take.
It seems bizarre that a Conservative Government would push this level of red tape on the small, enterprising and innovative businesses of this country. It seems strange that we should be the flag carriers of this case, rather than the Minister, and it was important to hear the noble Baroness, Lady Noakes, pick this up.
My noble friend Lady Bowles talked about the possibility of something being agreed for Third Reading. I am no expert in body language, but I saw a faint shaking of the head cross the Minister’s personage when my noble friend mentioned the idea of some sort of negotiation or compromise being reached in time for Third Reading. In light of what the Minister has heard, not just from this side of the House but from his staunchest supporters throughout the Bill, making serious and important comments about this issue, I ask that, whatever decision he comes to, he makes it very clear verbally. We are in a hybrid House, and not all of us can benefit from the subtle nuances of the Minister’s demeanour in working out whether he will or will not be negotiating at Third Reading. Can the Minister be clear about his intentions between now and Third Reading, then we can be clear about whether to vote in support of this amendment?
Baroness Hayter of Kentish Town (Lab)
My Lords, partly for the reasons that the noble Lord, Lord Fox, has given, this has been an interesting debate, with some flying in without any original intent but also from across the House. It highlights many of the issues facing what was meant to be an “oh so easy” departure from nearly half a century of EU membership. Practices and rules within the EU developed over years, with input and experience from business and consumers and the experience of how things worked, and from Governments, regulators, courts and lawyers. As my noble friend Lord Liddle said, there were umpteen harrumphs, grumphs and complaints from the Minister and others who are not supporters of the EU, but the rules were created in that way. They were created by discussion, experience and by knowing what was needed when. They were not written hurriedly over the summer, as we know the Bill was.
The creation of an internal market, covering four parts of the UK with their own Governments and competences, needs as much careful thought, planning and, especially, consultation and joint decision-making as has worked so well across the EU as its single market developed. It is sad that some of these amendments need to be written into legislation—we hoped they would have been taken for granted. But we need to set down that the devolved authorities should, of course, be consulted at any stage of decision-making, and we therefore welcome Amendments 62 and 63 in the Minister’s name, and welcome this formalising of the devolved Administrations’ rights and roles.
The other issues raised by the noble Baronesses, Lady Bowles, Lady Altmann and Lady Noakes, are clearly accurate in their specific content. Our only problem with them, especially given the vital three issues in the Bill—Part 5, the Henry VIII powers and devolution—is that they are probably not the right subjects on which to ask the Commons to think again, but we would like to ask the Government to think again. There are some really big questions that we need the Commons to consider. Our fear is that sending Amendments 62A and 63B back to the Commons simply would not serve a purpose. It normally takes a nanosecond for them to be overturned there when, actually, we want to get the attention of the Minister and Government.
I have a slight problem with the idea of releasing small businesses from all penalties. We do not do that in other areas, in particular with health and safety. Offering a complete safe haven in all circumstances could be detrimental to consumers and employees—but that is a small point. More serious is the wider issue touched on by the noble Baroness, Lady Noakes, of whether these information-gathering powers are right. As the noble Lord, Lord Fox, said, the OIM is being shoehorned into the CMA, and the fit simply does not work. As a regulator, the office for the internal market would be better tailored to be independent, so it could develop rules, a code of practice or any penalties needed suited to the task in front of it, rather than brought over from elsewhere. We are going to discuss that later: the big issue of whether the OIM should indeed be part of the CMA.
My plea to the movers is not to put this to a vote today. My guess is that the Minister would prefer that, because he would be able to wait for the other place to overturn it, which is not what we want at all. I worry that it would detract from the big issues, but it would also not deal with the broader issue of how the OIM will work. For that reason, we do not support it. I do not think it is the right way of dealing with an important issue.
I make one further point on how devolution is to be strengthened, which is part of the noble Lord’s amendments. It is about recognising the devolved authorities, as we implement the plan in the Bill to make an internal market work. The Minister has protested throughout that the Government are committed to the common frameworks process and that they have not retreated from the principles under which they were set up in 2017. Ministers have said that they respect the hard work that has gone into making these frameworks over the last three years, and the way in which they are pioneering new ways of working between the four countries and the harmony, as well as harmonisation, that has emerged. They have reiterated praise of the common frameworks, at the same time as saying that they are inadequate, partial and need to be overtaken by the Bill, rejecting all evidence to the contrary and despite public concern that the Bill will lower standards and provide less certainty than the frameworks will.
Lord Callanan (Con)
I thank all noble Lords for their interventions on this subject; I understand the sincerity with which Peers have addressed it. However, as I said in my opening remarks, the amendments on which we have been able to get agreement put beyond doubt that the OIM will closely consult and work with the devolved Administrations on an equal basis, in the interests of all parts of the United Kingdom. These important changes ensure that the OIM’s policy on information-gathering and enforcement, including the level of penalties, will be carefully considered in consultation with the devolved Administrations. This will ensure greater transparency in decision-making and will help ensure that the OIM will be able to gather the accurate information it needs to independently assess and monitor the UK internal market. Of course, the Government have made it clear that reports carried out by the OIM each year will be made available both to this Parliament and to the devolved legislatures.
I reiterate a point I made in previous debates: to be clear, the penalty powers in Part 4 will not come into effect unless there is clear evidence that there is a need to do so in order for the CMA to fulfil its internal market functions. I believe that this provides the necessary assurances that any penalties regime will be proportionate and transparent.
In addressing some of the points made in the debate, I turn first to those made by the noble Baroness, Lady Bowles, and the noble Lord, Lord Fox, on precedent. I can certainly reassure noble Lords that the Bill sets out clearly the maximum limits to the level of financial penalties in Clause 40(6). They do not exceed those which the CMA can currently impose. Penalties and the enforcement regime are based on precedent, as set out in the Enterprise and Regulatory Reform Act 2013. As I mentioned in my opening speech, the justification for these powers is that, without such a deterrent in place, there is an incentive not to comply with information-gathering requests, and that runs the risk of not having completely accurate information supplied to the OIM.
My noble friend Lady Altmann gave the example of the Pensions Regulator. I can say that excluding an entire class of business from information-gathering requirements such as these does not have as firm a standing in precedent as the she suggests. The CMA acting as a reasonable public body will, of course, in all cases, take into account all relevant factors, whether on the face of the Bill or not, in considering how to act and whether to pursue penalties, if they have been commenced at all.
My noble friend Lady McIntosh asked about reasonable excuses. I am not sure whether it was she who asked me a similar question on Report on Monday, but as I said then, the CMA would set out in its statement of policy the clear steps and procedures regarding the enforcement of its information-gathering regime. The penalties will not be commenced until there is evidence that they are called for, and even then they will not be used except as a last resort, whatever the size of the business. The CMA will consult all relevant persons regarding its statement of policy. I am happy to confirm to my noble friend Lady Noakes that, as I said in Committee, the CMA will not be able to issue a financial penalty against—I am pleased to say—either this Government or any UK Government, or indeed the devolved Administrations.
My noble friend Lady McIntosh mentioned consultations. The Bill requires that Ministers should consult as a matter of fact before they exercise their delegated powers. As is normal for such legislation, it does not spell out in great detail how this must be achieved, but we will engage with the devolved Administrations as part of the process of normal policy development, by, for example, sharing draft SIs and publications, and co-operating on public-facing events wherever that is possible, and, in any case, more formally before a decision is made.
For all of the reasons that I have set out, I hope that noble Lords will accept the amendments that I have tabled and that the noble Baroness will not press hers. However, for the benefit of the noble Lord, Lord Fox, and to be absolutely clear and to put the matter beyond doubt, I am afraid that I have gone as far as I can go on these matters and I will not be reflecting further before Third Reading. Therefore, if the noble Baroness wants to test the opinion of the House, she should do so now.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, I have received no request to ask the Minister a short question. I shall therefore put the Question.
“( ) Penalties under section 39(1) or (2) may not be imposed on small companies, as defined in section 382 of the Companies Act 2006 (companies qualifying as small: general), or on partnerships or other businesses with similar criteria.”
Baroness Bowles of Berkhamsted (LD) [V]
In moving this amendment, I am sorry that the Minister is not prepared to negotiate further about small businesses. I am also sorry that the noble Baroness, Lady Hayter, and Labour do not seem to think that small businesses—which are the backbone of jobs and the economy in this country—are a sufficiently serious matter. I consider that allowing businesses to have the freedom to conduct their business without obstruction when they have done no wrong is quite a serious constitutional matter. Therefore, I wish to test the opinion of the House and to record my vote and those of my colleagues.
Lord Callanan
“(aa) each other relevant national authority,”Member’s explanatory statement
This amendment would provide that the other domestic administrations must be among the bodies consulted by the Secretary of State about regulations setting the level of penalties for contraventions of information-gathering notices issued by the CMA.
The Deputy Speaker (Lord Lexden) (Con)
We now come to the group beginning with Amendment 64. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in debate.
Clause 42: Power to provide financial assistance for economic development etc
Amendment 64
Lord Thomas of Cwmgiedd
Member’s explanatory statement
This amendment is intended to remove the provision for a Minister of the Crown to provide financial assistance for economic development etc. anywhere in the United Kingdom.
Lord Thomas of Cwmgiedd (CB) [V]
My Lords, I rise to move this amendment to remove Clause 42 of the Bill. This amendment and Amendment 69, to which we shall come later and which stands in my name, deals with two clauses that are in some ways closely related. This clause authorises the UK Government to spend funds on the huge area of government expenditure—indeed, almost any aspect of government expenditure. Clause 44 deals with the quite separate question of state aid, and it is very important to keep them distinct. I make it clear in moving this amendment that I intend to press this to a Division.
First, I shall say a little bit about the clause. What is it for? The Conservative manifesto spoke of a shared prosperity fund which was intended to be a successor to the European Union regional structural funds. I looked on it as something that would strengthen the union by sharing the prosperity of our four nations. However, because it wore the word “shared”, it carried with it the connotation that the Governments of the four parts of the United Kingdom would share in the way in which it was distributed in accordance with the constitutional arrangements in place.
That such a fund would be greatly welcomed does not need to be stated. There are parts of the UK—and being here in Wales it is evident—that are far poorer than other parts of the United Kingdom, and investment is needed. Of course, we need to look carefully and in a structured way at how they are to be dealt with. I think we have—and I shall come to this later—some guidance published this afternoon in the Red Book, at box 3.1 on page 37. It is convenient for me to deal with that when I come to deal with the role of the devolved Governments.
There is one thing I ought to say—and I hate that this is something that will not come to pass. In Committee, the noble Baroness, Lady Bennett of Manor Castle, drew our attention to another term. She pointed out that in the European Union there were rules about funds allocated for the remediation of poverty and for equalling people up which had been made available to parts of the United Kingdom, including Wales. She pointed out that there would be detailed rules, and that Europe operated detailed rules. However, this shared prosperity fund still has no detailed rules, despite what is said in box 3.1, to which I have referred. She pointed out that the Americans have a term, pork barrelling, for this kind of fund. I would like to continue to call it a shared prosperity fund, because I believe in the union and in sharing the way our country is governed, and I hope that we will never have this aspect of American politics brought into our way of doing things but, plainly, there are dangers along those lines.
This clause is best analysed by asking eight questions. The first is why it is included in the Bill? As it stands, it is wholly separate from the other provisions we have been debating, which are to do with the internal market. The Bill is not concerned with the allocation of government powers to spend money between the devolved Governments and the Government of the United Kingdom with England. Secondly, what is its aim? I have addressed that: as was stated in the Government’s manifesto and now in box 3.1, it is intended to level up the divisions of society within the union and to help.
One immediately has to ask why this clause is needed. The Government have done city deals and have provided money, perfectly property, under our existing constitutional arrangements. Why do they need this power? If they were to provide the funds through the existing constitutional arrangements, this power would not be needed. The devolved Governments of Scotland, Wales and Northern Ireland would be involved and the spending programmes would go along the way they have always gone along, this fund being an additional fund provided from moneys no longer remitted to the European Union. Indeed, if it were to follow the lines of the city deals or its predecessors in the European Union, the Government would negotiate the other Governments, in the case of the devolved nations, or, in the case of England, the various regions and cities, what they felt the money should be spent on, consider it and make a decision. That is all perfectly feasible. So, yes, it is a very good idea to have a shared prosperity fund, and it needs no legislation.
The Deputy Speaker (Lord Lexden) (Con)
I should inform the House that if Amendment 64 is agreed to, Amendments 66 and 67 cannot be called.
Lord Purvis of Tweed (LD)
My Lords, it is a genuine pleasure to follow the noble and learned Lord. I admire how thoroughly he outlined his amendment, to which I have added my name. I inform the House that I believe Amendment 68 in my name is consequential to Amendment 64, so if Amendment 64 is agreed to by the House then I will move Amendment 68.
As the noble and learned Lord concluded his remarks, he hit on a fundamentally important point, about which we raised concerns in Committee and earlier, which have been reinforced by the Chancellor’s Statement today. Both before and during Committee, the concern was that the Government sought these financial powers to override one of the core elements of devolution: that expenditure on devolved areas in our devolved nations should be taken by the bodies accountable to them for those policy areas. As a member of five years’ standing of the Finance Committee in the Scottish Parliament, I know that that spending would come with agreed policy platforms, financial strategies and a degree of accountability.
The Government, I think, believe that the people owe loyalty to those who spend the money, and therefore the main priority is to identify the source of the money—not how it is delivered and not the accountability for it. However, as the noble and learned Lord raised, can the Minister clarify whether that is the case as she responds to the debate on these amendments?
If the Government have indeed announced their intention to override the devolution settlement and to use this Bill to deliver spending on devolved areas without the agreement of the devolved Administrations, that will indeed confirm the fears that we outlined, both at Second Reading and in Committee. I hope that the Minister will be able to say clearly that that is not the case, but I fear from the announcement that has been made today that it is.
The concern started because we had seen very little consultation with the devolved Administrations—or indeed English local authorities—on the spending powers that were to be in this Bill, and we had not been given any indication that these powers had been the result of consultation. There had been consultation on the replacement of EU structural funds, and that consideration was fairly extensive. But there was a mismatch between the consultation on how to repatriate the structural funds and the powers under this Bill, which are catch-all. Not only that, there surely could not have been consultation based on the manifesto commitment of the Government, which was to replace those funds with a skills fund—that was in the Conservative Party manifesto. So the powers that seem to be indicated go far beyond what the manifesto itself said, and indeed the results of the consultation on what the structural funds should be.
There is no reference in the Bill to what the delivery mechanism would be. The noble and learned Lord indicated quite clearly that, under the previous scheme—where, I remind the House, 76% of all European investment had been allocated to the member states—it was to be managed through the devolution settlement, and that management was through our existing frameworks. The current multiannual financial framework, from 2014 to 2020, which is coming to an end, was a UK partnership agreement. It gave granular detail—373 pages of it—of the fund: where it was going, the administration of it, how it was administered and how complementarity would be secured between the legitimate devolved policy areas. The Government have indicated that that approach is no longer fit for purpose because that was the European structural funds. Before we see announcements at a political level about the political intention, surely it is right that the Government publish the respective replacement process.
My party on these Benches and I, as a former Member of the Scottish Parliament, have never been opposed, since devolution, to the UK Government supporting schemes within Scotland. But that was under a recognition that it was linked to the correct competences of the UK Government. For example, in 2018, the UK Government supported the Edinburgh Fringe Festival in supporting artists to promote the United Kingdom around the world in one of the world’s premier cultural events. Local to home in my area, the wonderful Common Ridings used to be very familiar with receiving support from the local authority, the Scottish Government and the UK Government.
The point is not that the UK Government should be restricted from supporting reserved areas in the devolved countries, but that the policies for delivery of the replacement of the structural funds should be done under an agreed process. That agreed process seems to be set on its head now, with the Government believing that they will deliver the programmes, regardless of consultation, regardless of agreement and, more worryingly, regardless of an agreed framework for how these funds can be delivered.
Baroness Finlay of Llandaff (CB) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Purvis of Tweed, who has repeatedly shone a light into dark corners of this Bill, and to follow my noble and learned friend Lord Thomas of Cwmgiedd.
I strongly support Amendment 64 and Amendment 65, to which I have put my name. It has become increasingly apparent that Clause 42 would enable the Government to work around, rather than work with, the devolved Governments, in particular replacing the regional development funding, which has been so significant here in my own country, Wales, in addressing endemic problems such as economic inactivity and lack of skills. After all, the Government can already provide funds to support devolved matters, providing they do so in partnership with the elected Governments.
In that surprising article last week in the Daily Telegraph, already referred to, the Secretary of State claimed:
“For the first time, this money will be able to be spent by people who have been directly voted for by the people of Wales. People who know the local communities best, and who can develop coherent proposals that are aligned with broader UK-wide priorities.”
It is astonishing that this Government seem to have ignored the group of stakeholders endorsed by the Welsh Local Government Association and the majority of its members, convened—but not commanded—by those directly elected to the Welsh Senedd to develop a framework for regional investment to determine the spending priorities for this funding.
But of course we now have the Chancellor’s statement and can see in box 3.1, as referred to by my noble and learned friend Lord Thomas, the heads of terms of the UK shared prosperity fund. It states, with reference to additional funding in 2021, that the Government will provide such funding to communities using the new financial assistance powers in this Bill. This seems to bypass the elected Welsh Government by inviting local authorities to directly bid to central government. Perhaps the Minister will confirm whether I have understood correctly or not.
I am afraid this Government’s record is to spend on things that have always been the Government’s responsibility. Think of the rail infrastructure: the electrification of the Great Western main route was cut short at Cardiff, despite all the arguments in favour of extending west. Then there are major energy projects, such as the tidal lagoon or broadband, where the Welsh Government had to invest huge funds, including from the EU—which the Minister seems to loathe—to make good the underinvestment by Whitehall. Some suggest that this looks deliberately timed to be before the elections to the Senedd and the Scottish Parliament, and to drive a wedge through the devolved nations’ ability to consider their whole-population needs.
The history of the £3.6 billion towns fund, which relied on Ministers selecting which towns would receive funding, does not inspire confidence. The National Audit Office and the Public Accounts Committee were not convinced by the rationale behind these choices. The committee said:
“The justification offered by ministers for selecting individual towns are vague and based on sweeping assumptions. In some cases, towns were chosen by ministers despite being identified by officials as the very lowest priority (for example, one town selected ranked 535th out of 541 towns).”
The Minister may try to provide reassurance that this Government would not use the powers in Clause 42 to undermine the political priorities of the elected Government in Wales. But once on the statute book, this clause would open the way for future Governments of any colour to ride roughshod over an elected devolved Government. Clause 42 undermines the devolution settlement, which has functioned well for the last two decades. The clause should be removed.
Amendment 65 is an intelligent and thoughtful proposal from the noble Lord, Lord Stevenson of Balmacara, to depoliticise the allocation of funding to replace the EU structural funds to reflect economic and social need, not political expediency. It gives an appropriate role to the devolved Governments, while recognising that this is UK funding designed to level up regions with weaker economies in line with the Government’s own declared aspirations. If the Minister is unable to accept Amendment 64 and remove the offending clause in its entirety, I call on the Minister to settle for this compromise amendment, which will allay suspicions that the Government want to manipulate regional funding for their own ends rather than address objective, clear economic priorities.
Lord Wigley (PC) [V]
My Lords, I am pleased to support Amendment 64, moved by the noble and learned Lord, Lord Thomas of Cwmgiedd, to leave out Clause 42. I agree with him and with the noble Baroness, Lady Finlay, in her pertinent comments in support of that amendment. If, however, we do not succeed in removing this provision from the Bill or succeed with Amendment 65, the Bill most certainly needs to be amended to meet the widespread criticism, expressed in the devolved legislatures and, only last Friday, in the Western Mail—if I may quote it rather than the Telegraph—which stated in its editorial’s headline:
“This plan is a direct threat to devolution.”
And it is just that.
I wish to speak to Amendment 67 in my name, which addresses the issue at the heart of the Welsh Government’s misgivings and those of my party, Plaid Cymru. It revolves around the linked questions of what replaces the European regional funding, of which Wales has been a major beneficiary over the past few decades, and who controls the expenditure priorities for any replacement funding coming from the UK Treasury.
The need for this amendment can be properly appreciated only if it is considered in the context of the immense benefit Wales has secured from the European Regional Development Fund and the European Social Fund over the past two decades. Wales is not the only part of the UK that has benefited; Scotland, Northern Ireland, Cornwall, Merseyside and South Yorkshire have also received significant investment. However, it has been Wales—in particular, the area known as West Wales and the Valleys—that has received the most significant level of investment. There is a good reason for this or, I should say, an understandable reason, for it is bad news, not good news: West Wales and the Valleys, the area which includes most of the old coal mining, slate quarrying and marginal land farming in Wales, is, sadly, one of the poorest regions in the entire European Union. The GDP per head of population in this area has been below 75% of the EU average. We were entitled to European funding due to persistent, long-term economic poverty, which the UK Government had, for most of the 20th century, failed to address—and certainly failed to eradicate.
The system utilised by the European Union established the criteria, framework and ground rules of the funding programme, each round of which lasted seven years. The Welsh Government put forward their proposed investment programme, which had to be agreed with the EU authorities in Brussels. The Welsh Government provided matched funding, which had to be additional to the normal spending budgets. That principle of additionality caused some controversy in the early days, with the UK Treasury reluctant to make additional funds available until it was instructed to do so by the EU regional commissioner—one Michel Barnier, God bless him.
The detailed rollout of the programme was, and still is, overseen by WEFO—the Welsh European Funding Office. The funding has been used for a range of projects, two of which I was involved in: the creation of the Galeri performing arts centre in Caernarfon and the management centre of the business school of Bangor University, both assisted by some £6 million of European funding. They could not have gone ahead without it. Both projects have been tremendously successful, as I know both the noble Baroness, Lady Humphreys, and the noble Lord, Lord Hain, can testify.
The third round of this European programme is still running. For the period 2014-2020, the operational programme is worth some £3 billion to Wales. At the time of the Brexit referendum, leave campaigners stressed repeatedly that the funding coming from Brussels would be replaced in full—I repeat, replaced in full—by money from the Treasury in London. I well remember, as I am sure many noble Lords do, being told that the funding emblazoned on that Brexit battle bus—the claimed Brexit bonus of £350 million per week—would, in just a fortnight, fund the annual replacement cost of the European Regional Development Fund and the European Social Fund money coming to Wales. Of course, we were told that the Welsh Government would be fully in control of its use. Those were the promises made, on which basis Wales—regrettably, to my mind—voted to leave the European Union. The time has come to redeem those promises, and Amendment 67 facilitates that commitment.
Amendment 67 seeks to establish the principles that will safeguard the funding coming to Wales and, likewise, to Scotland and Northern Ireland from funds denoted in Part 5 of the Bill. Specifically, the amendment provides that funding should reflect need, not some ad hoc arbitrary criteria, nor a Barnett-type formula, which has been repeatedly condemned by committees of this House yet was used again today in another place by the Chancellor of the Exchequer in the Autumn Statement. Funding on a needs-based distribution, related to the GDP per head of population, would be the basis. In that way, it respects the pattern of distribution of European regional funding—a pledge made during the referendum. Amendment 67 requires the Minister to bring forward a needs-based formula to be approved by order, subject to the affirmative resolution procedure, and provides for the Minister to secure the agreement of the devolved Governments to the content of that order. The amendment also proposes that each annual figure be presented as part of a three-year rolling programme, to ensure that coherent, long-term investment programmes can be secured and the money is not frittered away on short-term fixes.
We have heard a lot during the passage of the Bill about the fears in Cardiff, Edinburgh and Belfast of a power grab by the UK Government, taking away from the devolved Governments powers they currently enjoy. The Government respond, of course, that there is no such power grab and the devolved Governments will retain the powers they currently exercise. This amendment puts those assertions to the test. Either the devolved Governments retain the power to determine capital expenditure projects in their territories, or they do not. If they do not, it will be a flagrant violation of the commitments made during the Brexit referendum and the last general election. If the Government insist on retaining the rights to impose capital expenditure projects on and in Wales, it will set alarm bells ringing. There have been press reports of projects such as the construction of reservoirs in Wales, which is an incendiary topic, given our experience over the past century.
Of course, there may be joint projects of mutual interest, but those must be negotiated by the respective Governments, not imposed by Westminster and Whitehall. The days of imperial diktat have long since gone; if there was one dimension which could trigger an avalanche of support for the independence movements, it would be such an approach by Westminster. It is my fear that this Bill, without amendment along the lines that I propose, heralds such a retrograde step—a rolling-back of the freedom we have enjoyed within a European context and its replacement by Westminster central direction of the sort that Wales suffered in the bad old days before devolution. Amendment 67 is in the interest of establishing a stable harmony between the nations of the UK and I urge the Government to accept it.
Baroness McIntosh of Pickering (Con)
My Lords, I preface my remarks by saying that what will replace the European structural funds is a matter of interest not only to the devolved Administrations but to the regions, such as Yorkshire, as well. I was fairly agnostic about this group of amendments before the debate commenced but now I think that the noble and learned Lord, Lord Thomas of Cwmgiedd, and the other noble Lords who tabled these amendments have done the House a great service.
In the briefing on the spending review, the emphasis now appears to be much more on UK-wide spending. It states:
“The Spending Review takes advantages of our departure from the EU to benefit the union. We will ramp up funding, so that total domestic UK-wide funding will at least match EU receipts … for the introduction of the UK Shared Prosperity Fund, we will provide additional UK funding to support our communities to pilot programmes and new approaches. We will also deliver £1.1 billion to support farmers in Scotland, Wales and Northern Ireland, £20 million to support fisheries—and we will build one freeport in each part of the UK.”
It goes on to say that the spending review is UK-wide and refers to the UK shared prosperity fund and the shared rural network. Although I welcome the funding that has been announced, it is incumbent on us today to find out whether, in the words of the noble Baroness, Lady Finlay, the Government are now working around the devolved Administrations rather than with them.
I am particularly concerned with one aspect relating to economic development, which I hope is relevant to this group of amendments. England and Defra have clearly stated that they are committed to phasing out direct payments to farmers from 2021, but the new system involving an environmental land management scheme will not be in place until 2024. As I understand it, however, the Scottish Minister has announced that direct payments to farmers will be retained for the foreseeable future. That begs the question of what the impact on economic development will be for English farmers as opposed to Scottish farmers and whether that will potentially distort the market between England and Scotland. That would seem to flout the principles of mutual recognition and non-discrimination, which we have heard so much about during the Bill’s passage.
I welcome this debate. I am particularly supportive of Amendments 64 and 67, both of which have been spoken to so eloquently by their authors. I urge my noble friend the Minister to say how the payments under the shared prosperity fund will be distributed. Obviously, I would add a rider that Yorkshire would like to have its fair share of that fund, but it is incumbent on my noble friend to state whether we are departing from what we have become accustomed to under devolution or whether this is simply a red herring.
Baroness Humphreys (LD) [V]
My Lords, I support Amendment 64, which seeks to remove Clause 42 from the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling such an important amendment and for his excellent explanation and analysis of its intent.
Clause 42 empowers the UK Government to provide financial assistance for economic development in any area of the UK. At the outset, I want to make it clear that I have absolutely no objection to the UK Government making investments for economic development in Wales—nor, I believe, would anyone else in Wales. It is the intrusion into devolved powers that is so offensive. Those of us who live in the Objective 1 area of West Wales and the Valleys understand that our economy is weaker than those in other areas of the UK and that we live in one of the poorer regions of Europe. We have appreciated the EU’s investment in the past 20 years; for example, the investment in the A55, which provides such a vital transport link across north Wales, and the projects that we have seen come to fruition under the rural development fund.
In my contributions on Second Reading and in Committee, I said that investment in our region is desperately needed—it was before we received Objective 1 funding and it will be when it ends—but this clause gives the Government extraordinary powers to act in areas of devolved competence and in areas where the EU structural funds have never operated. It is extremely disappointing that, throughout this clause, there is no mention of consultation, joint planning of schemes, joint programmes of work or joint management of projects—all examples of the collaborative approach to investment programmes initiated by the EU that we have become used to. There appears to be no clear setting of objectives, other than, I suspect, that the Government’s prime objective is to see projects in the UK—in the Prime Minister’s words—emblazoned with the union flag. I have no problem with that either. In West Wales and the Valleys we are used to seeing EU blue flags or plaques on projects. They are an indication that the needs of our area have been recognised, and so it would be with the union flag.
There is, however, still no clarity on how needs will be determined and recognised in the UK under the shared prosperity fund, whether projects will be imposed or applications sought and, crucially for us in Wales, what impact there would be on our financial settlement. We still do not know whether a UK Government investment in a road-building programme, for example, would lead to a reduction in the Barnett allocation, or whether projects imposed on us would be financed by loans that require repayment by the Welsh Government. All this curtails the Senedd’s ability to deliver on its objectives and will have an impact on its ability to deliver on its manifesto commitments.
Of all the attacks on the devolution settlements in this Bill, this is probably the most blatant—so much so that the powers and responsibilities of our Parliaments do not even merit a mention. It is another example of the introduction of a new constitutional settlement by stealth, as I referred to in my speech on Monday. It is another item to add to the list of examples fuelling the interest in independence, which, under this UK Government, is reaching a level never seen before in Wales. People are witnessing the performance of an almost colonial Government emanating from Whitehall and comparing it with the more progressive Government and Senedd we see in Wales—a progressive Senedd that voted last week to allow councils to change the electoral system for local elections by introducing the STV system and open up the franchise for local elections to 16 and 17 year-olds in addition to their existing rights to vote in Senedd elections; importantly, it supported voter participation by paving the way for automatic voter registration.
I must admit, I am surprised that, after listening to concerns expressed by the noble and learned Lord in Committee and hearing the support for his stance from other noble Lords, the Government have not come back on Report with an amendment of their own that recognises and ameliorates the impact of this clause on the devolved Parliaments.
In a Bill about the regulation of the UK internal market, this clause and its assault on the devolution settlements has no place, and I support Amendment 64 to remove it. I hope that the noble and learned Lord will be minded to call a Division on the amendment. If he does, he will have the support of these Liberal Democrat Benches.
Lord Naseby (Con)
My Lords, I will speak first to government Amendment 66, on how the power in Section 42 will be used. There is a very welcome statement that there is to be an annual report, which can be fully debated in Parliament. We had some discussions about this in Committee, and this amendment is very welcome.
Turning to Amendment 64, I hope that the noble and learned Lord, Lord Thomas, will not find it offensive if I allude to the fact that I used to own ferrets. Ferrets are beautiful animals, very ingenious and very inquisitive—but of course they have one failing. Sometimes they succeed in catching or flushing out rabbits, but quite often they turn around, get distracted and think of something far less important. Listening to the noble and learned Lord’s introduction to his amendment, it was based, according to him, on finding in paragraph 3.1 of the Red Book something that he thought was relevant to this debate on Clause 42.
I am sufficiently brave to suggest that he has perhaps forgotten what the basic elements of this Bill are. On the front page, it says:
“To make provision in connection with the internal market for goods and services in the United Kingdom … to authorise the provision of financial assistance by Ministers of the Crown in connection with economic development, infrastructure, culture, sport and educational or training activities and exchanges”.
This is what the whole Bill is about. So here we have before us an amendment which is a pretty wide-sweeping reversal of that primary purpose of the Bill. A whole new concept is being proposed in this new clause, at a time when the whole country faces massive challenges arising from Brexit.
After five days looking exhaustively at the Bill in Committee, lo and behold, here we are on Report, and this pretty revolutionary amendment is put forward. For me it is basically pre-empting the role of the Chancellor of the Exchequer and the Government of the day. It does not matter what the colour of the Government is: in structural terms it pre-empts the Westminster Government, setting up a whole new semi-department, with little oversight and, frankly, huge costs. There does not seem to be any constraint on it at all. In my judgment it is way outside the scope of the Bill and should be rejected.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, in his very clear and crisp outline of the reasons for his Amendment 64, the noble and learned Lord, Lord Thomas of Cwmgiedd, referred to my speech in Committee about pork barrelling. The noble and learned Lord helpfully informed us about box 3.1 in the Red Book, which I have not yet had a chance to read but which seems deeply revealing about the Government’s clear political intentions. The smell of roast meat is certainly in the air.
Government Amendment 66, offering retrospective annual transparency, is a slight improvement on the Bill, but so slight that I find the words “slightly better than nothing” rather hard to get out. Considerably better improvement is offered by Amendment 65, in the name of the noble Lord, Lord Wigley, which provides stronger democratic control and devolved Administration involvement. However, that is clearly the opposite of the Government’s apparent intention, as the noble Baroness, Lady Finlay of Llandaff, demonstrated, using their own words. I agree with the noble Baroness, Lady McIntosh of Pickering, that this is also of great interest to the English regions, whether Yorkshire, which I hope will soon have a democratic parliament of its own, or Cornwall, which has similar ambitions.
Baroness Noakes (Con)
My Lords, I support Clause 42 and Amendment 66, but I do not support the various other amendments in this group, and in particular I wish to speak against Amendment 64, which seeks to remove the financial assistance power from the Bill.
I have been very concerned, throughout this Bill and again today, at the way in which grievances about devolution have been elevated into some kind of holy crusade which sees only evil in the UK Government. Noble Lords supporting various amendments on this theme have often alleged that the Government are playing a dangerous game with the devolution settlement and that this Bill represents a major power grab which must be resisted. I believe that the only people threatening the constitutional settlement on devolution are those who have set their face against—or at least ignored—the existence and value of our United Kingdom and our precious union.
I have also heard a lot of wishful thinking about the UK as a federation of equal states, which it is not. Many noble Lords have been pretending that “the UK Government” is synonymous with “an English Government”—which is also far from the truth. If there is a gap or weakness, it is that the UK Government and UK Ministers act mainly in the interests of the whole of the United Kingdom, and England gets left a bit to one side.
The Government have been consistent and clear that they intend to act in the interests of levelling up the whole of the United Kingdom. The actions of my right honourable friend the Chancellor of the Exchequer in today’s expenditure review are testament to that, and I say to the noble and learned Lord, Lord Thomas, that it is a very fine blue book—a Red Book, I believe, is normally reserved for a Budget Statement.
The UK Government will always act in the interests of the whole of the United Kingdom, and it is disingenuous of noble Lords to paint a picture of a domineering Government trying to strip powers away from the devolved nations. No powers at all are going to be taken from the devolved nations. Devolved Administrations still have the same powers to spend their money as at present.
Clause 42 creates the power to grant financial assistance across the UK so that it is put beyond doubt that the UK can replicate the sorts of financial flows that existed when the EU took money from the UK and graciously gave a bit of it back to us to use in the way it decided. In future the UK Government will make those decisions about how UK money is directed, rather than Brussels. The guiding light will be the needs of the UK as a whole, although I am sure my noble friend the Minister will confirm that there will be extensive discussions with and the involvement of the devolved Administrations.
Clause 42 talks about financial assistance but let us be clear: this is simply public expenditure. Public expenditure is sourced within the overall fiscal policies of the United Kingdom as set by the Chancellor of the Exchequer. It will be financed by UK taxation or UK borrowing, both of which are carried out by Her Majesty’s Treasury as part of its UK-wide economic policies. These are not matters for the devolved Administrations, however much they might wish otherwise.
Noble Lords really should be careful what they wish for. If Clause 42 is removed from the Bill, noble Lords will remove the mechanism the Government have chosen to funnel public money into their agenda to level up the whole of the UK. How do noble Lords think that the devolved Administrations will get the kinds of money that used to flow via the EU without Clause 42?
Of course, the Government have powers, in general terms, under the appropriation Act to decide upon and distribute public expenditure, but it is a well-known rule and general practice to take a specific legal authority for major expenditure that will be made on a recurrent basis. So the result of taking Clause 42 out of the Bill may well be that the large sums that the devolved nations expected to receive will disappear. Is that really what the noble Lords promoting Amendment 64 want to achieve?
Lord Rooker (Lab) [V]
My Lords, I again partly apologise to noble Lords because I intended to speak on later amendments and to support the noble and learned Lord, Lord Thomas, on Amendment 69. I will settle for Amendment 64.
I take exception to the definition of the Long Title from the noble Lord, Lord Naseby. Whichever way we read it, it is about devolved matters in the United Kingdom. We have only to look at the definition of infrastructure in Clause 42 to see that it absolutely covers devolved matters. His was a bit of a cheap shot at the noble and learned Lord, Lord Thomas, to try to imply that this was inconsistent with the Long Title.
My other beef is one I have had in the past regarding Wales and the Barnett formula. I have never understood why the people of Wales, including the politicians, have never risen up. Some years ago I was a member of the Select Committee that looked at the Barnett formula. It was abundantly clear that Wales had been cheated for years. If the Barnett formula was based on need, rather than population, Wales would be on about a third more than it is now. We told leading MPs about this, but I have never noticed any great kickback. Wales has been short-changed under Barnett for years. There is no easy answer to that.
The noble and learned Lord, Lord Thomas, was absolutely bang on in delivering the information from box 3.1 out of the Red Book at the beginning of the debate. I thought his eight questions were incredibly telling. I would use the term “pork barrel”, because that is what it is about. The Chancellor of the Exchequer, whose Statement I heard earlier, made it quite clear that the spending of this money relied on the consent of the constituency Member of Parliament, although I understand that the Treasury might have disowned this since. I tweeted, saying that it is incredibly dangerous for constituency Members of Parliament to be involved in executive functions. Local councils are always involved in executive functions; Members of the House of Commons are not. It is incredibly dangerous territory for them to get involved in, particularly in view of incidents that arose in the past.
I understand that the Treasury might have backpedalled a little on that, but it shows the thought process of those who constructed the Statement today, which is intricately involved with the Bill: destroy devolution, open up the pork barrel and give money to your friends based on the constituency MP. That cannot be a good form of governance. It cuts across devolution massively, whichever way anyone defines it. I have said before that my experiences have been at Defra and MAFF before devolution, then at the Food Standards Agency, which was a four-nation, non-ministerial department at the time. Whitehall has never really done devolution and never really understood what was happening. It has taken a while even for the House of Commons to become clear about the quite distinct advantages of devolution. It all went wrong, of course, when the proportional electoral system gave a majority Government. That is not supposed to happen, but neither, on the other hand, is first past the post designed to give coalitions, which is what we had in 2010. You cannot base the future construct of the constitution on such whims.
Governments come and go and will not be there for ever, but I very much agree with what the noble Baroness, Lady Bennett of Manor Castle, said: with devolution now under acute and very massive threat, there is no question but that this will push the independence movements of Wales and Scotland wider and further, particularly in Scotland, where it is stronger. I cannot see a solution to it. I think that we are heading headlong towards the break-up of the union. I will fight like hell to stop that and a lot of people will. The problem is, keeping the fight in words and debate. We are heading for the destruction of our country, without any policy announcement, a clear vote or a manifesto commitment. It is being done by subterfuge and backhanders.
In my view this is the direct effect of the Bill, particularly these attacks on devolution. Amendment 69 covers the same for Clause 44; they are two sides of the same coin. I was going to speak about Amendment 65, but I will leave that to my noble friend. This fundamental attack on devolution, with the push to break up the United Kingdom, is a much more serious affair than has been recognised by your Lordships’ House, where it has been recognised more than in the House of Commons. We need to send a signal to the elected House that our country, our constitution and the make-up of the union are under direct threat as a result of the Bill.
Viscount Trenchard (Con)
My Lords, I am very pleased to follow the noble Lord, Lord Rooker, but I could not disagree with what he said more. The threat to our United Kingdom results from the power grab being attempted by devolved authorities, led by nationalist parties, of powers that were never theirs in the first place.
Lord Fox (LD)
My Lords, once again, this has been a very widespread and high-quality debate. To the Minister, who has not had the benefit of the soap opera that you tend to have on Report, I say that we have reached the point that—here I agree with the noble Viscount, Lord Trenchard—is the meat of this Bill. At Second Reading, in Committee and on Report, many of your Lordships asked why this Bill was necessary. Of course, there was the political and negotiating posturing that came with Part 5, but I put it to your Lordships that one of the central, driving reasons for this Bill is exactly what we are discussing here today: it is so that central government can get its hands on this money and administer it through whatever means it sees fit, because there is no detail on that administration —here, again, I echo the point made by the noble Viscount, Lord Trenchard.
Some people called it pork-barrel; I would perhaps call it a hobby horse. We saw the benefit of the Prime Minister’s attempts at hobby horses when he was the Mayor of London: we saw the amount of public money that was spent on “Boris Island”, the green bridge and the Emirates wire crossing of the Thames. These are just small potatoes compared to what we could look forward to.
In her speech, the noble Baroness, Lady Noakes, characterised those of us on these Benches and in Her Majesty’s Opposition as, somehow, thinking that the Government are evil in this. I make it absolutely clear to the noble Baroness and the Minister that I do not think that she is evil, and we do not have a policy of thinking that the Government are evil. However, we do think that the Government are wrong, and we are allowed to do so. Many of the speeches on the Benches opposite have also been factually wrong on the subject of devolution, and I will correct some of those facts.
However, I will err on the side of giving the benefit of the doubt, because I do not believe that the people who drafted this Bill misunderstood devolution in the way that many of the speeches we have heard today have. I believe that there is a very deliberate attempt in this Bill to bypass the processes that have become normal in devolved government and, unless we see actual details as to how this will go forward, this suspicion will only get greater.
Very recently, the Government introduced the notion of the role of local councils. This has come along only in the last 24 to 48 hours in relation to their possibly getting involved in the process of disbursing. I can only assume that it is the antidote to the Prime Minister’s loose lips around devolution, but perhaps the Minister can explain what role the Government see in any future disbursement process for local councils—and, if there is not one, perhaps they can disabuse us of that as well.
My noble friend Lord Purvis set out how the multiannual financial framework works. In answer to the noble Baroness, Lady Noakes, who said that the devolved authorities are not having financial powers taken away from them, I say that they most definitely are, because they had functions under EU structural funds and state aid within the fiscal framework which are being withdrawn.
I am afraid that the noble Baroness was similarly wrong on the subject of public finance and tax. If you happen to live in Scotland, as my noble friend Lord Purvis will tell you on many occasions that he does, you pay Scottish income tax, which is set by the Scottish Government: it is a different tax. Perhaps the noble Baroness, Lady Noakes, would acknowledge that there are differences across this country in the fiscal arrangements for the people who live in the nations of the United Kingdom. Those differences arise through the devolved process, which, somehow, is now being withdrawn and pulled back by this Government under the misapprehension that, by being seen to spend this money, they will somehow become popular. That is not the way to be popular, and it will fail. The noble Lord, Lord Naseby, spoke about ferrets. My experience of ferrets is that they usually bite the people who are handling them—so perhaps he should be warned.
I have one final point, which is a question that I really do want an answer to—it is not a rhetorical question. The noble Baroness, Lady McIntosh, raised the interesting point about how the markets could get distorted. I would like the Minister to explain the role of the office for the internal market in this. As we have discussed in previous amendments, considerable powers are being vested in the OIM, not least Clause 31 powers, so can the Minister confirm that the OIM will be able to investigate the UK Government’s use of the powers that they seek in Clauses 42 and 43 to investigate whether this distorts the market? Can the Minister also confirm that devolved authorities will be able to request such an investigation from the CMA?
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I am going to say much the same things as the noble Lord, Lord Fox, but I will focus a little on my Amendment 65, which has been supported by the noble Baroness, Lady Finlay, as well as offering support from the Opposition Benches for Amendment 64 in the name of the noble and learned Lord, Lord Thomas, and—if it is treated as consequential—Amendment 68.
The last time she joined us, the noble Baroness, Lady Penn, responded to my amendment on the shared prosperity fund with a very full and useful speech, part of which the noble and learned Lord, Lord Thomas, has already quoted. It was helpful to hear, because it was so clear what the purpose behind the new approach to the shared prosperity fund was to be. Although she may have to slightly change the way she expresses it when she responds in a few minutes, she confirmed, stressing the collaborative nature of the future, that this would
“allow the UK Government to complement and strengthen the support given to citizens in Scotland, Northern Ireland and Wales, without taking away devolved Administrations’ responsibilities.”
That is all good stuff, but she went on to say—this was not quoted by the noble and learned Lord earlier—that
“the response to Covid has shown how the UK Government … can save jobs and support communities. This could only have been delivered strategically and at that scale by the UK Government.”
That interesting formulation has been much explored during this debate. I do not think the Minister will find much support across the House for that statement.
The Minister went on to say:
“The UK Government are uniquely positioned to level up across every part of the UK”. —[Official Report, 2/11/20; col. 596.]
That also needs to be challenged. It is the sort of thinking from which comes the “Westminster knows best” process, which has been criticised, and spending decisions being taken against the advice of those in the best position to know about them. As the noble Lord, Lord Fox, said, this may lead to follies of the type of the garden bridge and, perhaps, the much-mooted bridge between Scotland and Northern Ireland, which seems to be the answer to the Northern Ireland protocol problem.
I will talk a little about Amendment 65. I was grateful to my noble friend Lord Rooker for talking about the work done in your Lordships’ House on a critique of the Barnett formula. He is absolutely right: if that formula had been replaced by something of a different nature, the funding levels in Wales and Scotland would have changed, because of inward immigration to Wales and external emigration from Scotland. There has been a change in the population levels which has not been reflected in settlements. The system does not command much love and affection, let alone support.
The proposal in Amendment 65 challenges the Government to think again about how they might wish to do the shared prosperity fund. If it is not clear, because the drafting is somewhat complicated, it is based on a model to which the closest analogue would be the Low Pay Commission. Despite allegations to the contrary, it weighs heavily on subsidiarity and proportionality as the principles under which it might be set up. Under the proposal in Amendment 65, it is the Secretary of State who sets the level of the fund, it is clearly the Government’s funding and their authority to set a level every year for that is not, in any sense, taken away. What the amendment does is to mandate consultation and provide an alternative, needs-based basis for judging the bids. As set out in proposed new subsection (11), this approach looks at an area’s proportion of children below the poverty line, low income, economic weakness, the age structure of the population, the impact of the pandemic and the impact of climate change—something we might want to consider more fully, though it has also been picked up today.
I thank the noble Baroness, Lady Finlay, for her kind words. For anyone in the Official Opposition to be ruled as “intelligent and thoughtful” is almost too much to take, but it probably rules out any further consideration of my amendment. It would not do to be seen to be endorsing that, would it?
As the noble Lord, Lord Purvis, said, if Amendments 64 and 68 are passed, there will be a bit of a hole in the Government’s thinking on this area. They might want to think again about how do to that by looking at this amendment, certainly in the context of the responses to the now notorious box 3.1. I congratulate the noble and learned Lord, Lord Thomas, on being able to adapt his speech to take account of the fact that he could have had only a few minutes to look at that box. His critique of it was spot on. As the noble Baroness, Lady Finlay, said, box 3.1 is based on the assumption that the Government will receive the new financial assistance powers in this Bill—it says so straight out, at the beginning. It is also interesting that this is clearly a top-down approach:
“The government will develop a UK-wide framework for investment in places receiving funding and prioritising: investment in people … investment in communities … investment for local businesses”.
There is nothing exceptional or egregious about the list of things to do, but the idea that there is a top-down approach jars with everything we have been doing in the last 20 years to develop a much more responsive, local environment.
Baroness Penn (Con)
My Lords, I begin by reminding noble Lords of the purpose of this part of the Bill. The power to provide financial assistance supports the Government’s determination to deliver on the commitments on which they were elected: levelling up and delivering prosperity across the whole United Kingdom, and strengthening the ties that bind our union together. It provides for a unified power that operates consistently UK-wide—one which will allow for strategic investment throughout the UK, underpinning the Government’s determination to see all parts of the UK flourish. It makes sure that we meet our manifesto commitment to deliver a UK shared prosperity fund which allows the Government to invest in communities across England, Scotland, Wales and Northern Ireland. Previously, in many of these areas, the EU mandated how our money had to be spent, with little say from elected politicians in the United Kingdom. The UK Government intend to take a much more collaborative approach in delivering any funding that replaces EU programmes.
In this context, I will speak to Amendments 64 and 68, which seek to remove Clauses 42 and 43. The noble and learned Lord, Lord Thomas, asked why such a power should be included in this Bill. The ability of the UK Government to invest in and support businesses and communities in all parts of our union, as these clauses provide for, helps to achieve a stronger and fairer internal market. Indeed, this is the argument the EU makes on the role of European structural and investment funds in strengthening the European single market. It is right that, as we leave at the end of the transition period, the UK Government have the right tools to make sure the whole country can benefit from investment which strengthens communities, economies and connectivity within and between all parts of the UK.
Another point of focus from noble Lords, including the noble Lords, Lord Purvis and Lord Fox, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Finlay, among others, was the role of the devolved Administrations and other local partners, including local authorities. Let me be clear: this power is in addition to the devolved Administrations’ existing powers. It will allow the UK Government to complement and strengthen the support given to citizens, businesses and communities in Scotland, Northern Ireland and Wales. It does not take away responsibilities from the devolved Administrations. Rather, the power will enable the UK Government to deliver investment more flexibly and dynamically and in collaboration with the devolved Administrations and other partners.
We have taken a collaborative approach to investment with devolved Administrations already, for example through our successful city deals programme, as noble Lords have talked about. The UK Government intend to continue to work in this spirit of partnership with stakeholders. We will make sure that this new power can facilitate UK government support for projects, making it far more responsive and responsible for addressing the needs of communities and businesses throughout the country.
We have seen how important this can be. Colleagues on these Benches and in the other place have already noted that our experiences of Covid-19 have demonstrated the value of a responsive UK Government. The noble Lord, Lord Stevenson, questioned the support in this House for that statement; I tend to disagree, unless the party opposite does not support the furlough scheme and the Bounce Back Loan Scheme that have protected thousands of jobs and businesses across the UK during this pandemic. To make sure that the UK Government can deliver on this ambition for all parts of the UK, I hope these amendments will be withdrawn or not pressed.
Turning to government Amendment 66, we listened carefully to the debate by noble Lords on this part of the Bill in Committee, where questions were asked on how the clause would operate. Through Amendment 66, the Government seek to introduce a requirement in Clause 43 to report annually to Parliament on the use of this power to provide financial assistance. This would put a requirement in legislation to provide a summary on the use of the power for scrutiny by parliamentarians, other key partners and the wider public. This is in addition to the scrutiny role that Parliament already performs for public spending through voting on the spending allocations, as part of the estimates process and in line with the principle of the PAC concordat.
This requirement makes sure that key partners, including devolved Administrations, have transparency on where funding under the power has been directed. Any future funding decisions are subject to fiscal events. Accordingly, the requirement added by Amendment 66 requires a summary of the use of the power in the previous financial year. I hope your Lordships’ House will agree that this government amendment improves the opportunity for Parliament to see and scrutinise financial assistance provided under the power in Clause 42.
I will now discuss Amendments 65 and 67. Amendment 65 would mean that this new clause would seek to establish a UK shared prosperity fund commissioner, whose primary task would be to make recommendations for the disbursement of the UK shared prosperity fund. Amendment 67 would mean that financial assistance for economic development would be managed and administered through the devolved Administrations. As I have said, this power to provide financial assistance is wider than any single fund or organisation. It will ensure that the UK Government are well positioned to deliver financial assistance, following the end of the transition period, and to replace EU structural funds. It is crucial that the UK Government can use successor funds to invest strategically and have the additional flexibility needed to invest across the whole UK that this power provides. These amendments, including the establishment of a commissioner, would curtail that flexibility. In addition, decisions on governance for the fund should not be made through legislation.
Noble Lords are, however, right to seek progress on the UK shared prosperity fund. The Covid-19 pandemic presented exceptional circumstances, and it is right that our focus and priorities shift accordingly. The Government have conducted a one-year spending review to prioritise the response to Covid-19 and focus on supporting jobs. However, in these challenging times it is important we do not lose sight of our long-term objectives. I reassure my noble friend Lord Trenchard that investment under EU structural funds peaks next year and will tail off until 2023, with spending in each of England, Scotland, Wales and Northern Ireland remaining higher than the annual average.
To ensure a seamless transition from EU structural funds into the UK shared prosperity fund, we announced additional spending today in the spending review to help local areas prepare over 2021-22 for the introduction of the UK shared prosperity fund, supporting our communities to pilot programmes and new approaches. As noble Lords have also referenced, we have published the heads of terms setting out our plans for the shared prosperity fund.
The noble and learned Lord, Lord Thomas, asked whether the spending would be efficient and effective. The bureaucratic burden of EU programmes meant that places have had to wait a long time before they received any funding. Places typically see no investment in their communities until at least a year after the programmes have started. The provision of additional funding next year will be quick and responsive; it will be phased in as EU investment declines.
The heads of terms also set out that there will be two portions of the fund: one targeting places most in need to support people and communities to open up new opportunities; and a second targeted differently at people most in need through bespoke employment and skills programmes, again tailored to local need. As the noble Lord, Lord Stevenson, noted—I hope the noble Baroness, Lady Bennett, who had not seen the spending review document, will take some reassurance from this—the terms also state that investment should be aligned with the Government’s clean growth and net-zero objectives.
We have not taken back control over investment to hoard it in Whitehall or to roll over EU prescriptions on how we invest in our local economies. Local places across the UK will be able to shape investment to reflect their needs. This means a strong role for local partners across the UK. The UK Government intend to work with devolved Administrations and local communities to ensure this power is used to best effect and that the UK shared prosperity fund supports citizens across the UK. This includes engaging with local authorities and devolved Administrations, as well as wider public and private sector organisations. I reassure noble Lords that the Government have held 26 engagement events across the UK on plans for the shared prosperity fund, including 16 events in devolved Administrations, and that UK government officials regularly speak with their counterparts in the devolved Administrations to discuss the design and operation of the fund to ensure it supports every part of the UK.
Further details on additional funding for next year will be published in a prospectus in the new year. We will set out further details on the UK shared prosperity fund in the UK-wide investment framework, to be published in the spring. A multiyear profile will be set out at the next spending review.
The short answer to the noble Lord, Lord Fox, on his final question on the role of the office for the internal market is no. It looks only at Parts 1 to 3 of the Bill and relevant effects, so it would not look at decisions under this power.
Given the further details I have set out today, I encourage noble Lords not to press their amendments.
The Lord Speaker (Lord Fowler)
My Lords, I have received requests to ask a short question from the noble Lord, Lord Liddle, the noble Baroness, Lady Finlay of Llandaff, and the noble Lords, Lord Fox and Lord Purvis of Tweed. I call the noble Lord, Lord Liddle, to ask a short question for elucidation.
Lord Liddle (Lab)
My Lords, I strongly support the Government’s levelling-up agenda but, having listened to the noble Baroness, they seem to have a fundamentally different approach to how this should be achieved from what has been a shared consensus for the last 20 years or so. We all thought the way to achieve levelling up, economic development and all the other things mentioned in Clause 42 was through devolution, bringing economic powers closer to the people. That was the logic of Scottish and Welsh devolution and the logic of the Chancellor of the Exchequer in the Cameron Government, George Osborne, who promoted the northern powerhouse, the Midlands engine and all the rest. The Government now seem to be saying, “We want to run the show centrally”. Is that so?
Do the Government not recognise that all this talk about the EU directing how the funds were spent is nonsense? I was very involved with the North West Development Agency; we directed how the funds were spent from that agency. Are the Government not proposing to weaken the powers that the devolved bodies have over structural funds? Finally, is it not the case, as I have been told—someone made a cursory reading of the Red Book—that next year the Government are allocating £220 million to the shared prosperity fund, which is a far lower sum than was available under the EU structural funds?
Baroness Penn (Con)
I am not sure that the noble Lord’s first questions cover points that we have not covered in this debate already but, for clarity, this does not change the devolution settlements. We are talking about a UK-wide investment programme that will work in collaboration with the devolved Administrations, local partners and local authorities.
I am very happy to clear up the noble Lord’s point about £220 million. That is in addition to money that is still coming through the EU structural funds, which will continue to flow until 2023. As I believe I said in my speech, each of the nations will continue to receive the same level of funding, if not a bit more. That first year of funding is for pilot projects and to aid the transition to the shared prosperity fund, which will then ramp up and there will be a multi-year settlement for that fund in the next spending review.
Baroness Finlay of Llandaff (CB) [V]
The noble Baroness, Lady Noakes, said to be careful what you wish for. She intimated that, in the event of Clause 44 being deleted from the Bill, the shared prosperity funding being discussed might be withheld completely. Can the Minister state clearly, with a simple yes or no, whether it is indeed the Government’s policy that, without Clause 44, the funding will be withheld or diminished?
Baroness Penn (Con)
My Lords, I do not think that I can go any further than what has been announced in the spending review today: that it is the Government’s intention to use the powers under this Bill to deliver the shared prosperity fund.
Lord Fox (LD)
My Lords, I thank the Minister for attempting to answer my final question but I fear that she may have been wrongly advised. Clause 31 states:
“The CMA may from time to time undertake a review”.
Subsection 1(b) certainly points to “Parts 1 to 3”, as in the Minister’s answer. However, subsection 1(a) says that such a review can refer to
“the internal market in the United Kingdom”,
which is a far broader swathe than the narrow answer given just now.
While I am up and reading the legislation, subsection (2) states:
“The CMA may receive and consider any proposals that may be made or referred to it for undertaking a review”.
Can the Minister confirm that the devolved authorities are one of the bodies that can request such a review of the whole UK internal market as in Clause 31(1)(a), rather than the answer that was just given?
Baroness Penn (Con)
The noble Lord will probably be unsurprised to know that the advice I have received has not changed in the short time since he asked his further question. I will commit to reviewing that advice; if any part of it was not accurate, I will write to the noble Lord. My understanding is that those reviews do not refer to the powers in this Bill, and whether the devolved Administrations or others can refer matters to the CMA for review relates to other parts of this Bill.
Lord Purvis of Tweed (LD)
The Minister gave a number of examples of how the UK Government are currently able, under their powers, to fund UK priorities across all parts of the United Kingdom. The Government do not have the legislative powers to spend on devolved areas within devolved competencies. What powers are the Government seeking to have by January next year for them to spend on devolved policy areas in our devolved nations?
Baroness Penn (Con)
The Government are seeking the power under this Bill to spend across the whole of the United Kingdom in the areas set out in the Bill. The operation of the £220 million announced at the spending review will start from the next financial year and the full shared prosperity fund will begin the year after. More detail on how that will operate will be set out in due course.
Lord Thomas of Cwmgiedd (CB) [V]
I thank all noble Lords who have spoken in this interesting debate. I apologise to the noble Baroness, Lady Noakes, for referring to the document published today as the Red Book instead of its true colour which, as one sees on the screen, is blue. I was misled by the heading Google has for it, which is the Red Book.
However, Google had another use because it took up a point made by the noble Lord, Lord Naseby, and alerted me to the fact that the great and late Senator McCain had a member of staff who would go through Bills before Congress and find where there were pork-barrel provisions. He was known as the ferret, so ferrets do have great uses in politics.
To return to the points made, it is clear from the debate that we all share a number of objectives: first, to have a more prosperous United Kingdom; secondly, to spend the money wisely; and thirdly, to spend it in a way that is effective and goes to those areas that need it. We all believe that such spending and levelling up will benefit the union. However, there is profound disagreement as to the way in which this should work with our devolution settlement. It seems to me from the response given to my noble friend Lord Purvis of Tweed and from the Minister’s speech that only one conclusion can be drawn from what the Minister is saying and that these powers are needed not to spend the money outside the areas of devolved competence but to spend it in the areas of devolved competence. That is the aspect that fundamentally divides us and is fundamentally wrong about this clause. It seems to me that, given the Minister’s position and the clarity that comes through her statements, this is a direct attack on devolution under the guise of some other words. Therefore, I seek to press to a Division the amendment that I tabled to remove this clause, which is so destructive of our union.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, Amendments 66 and 67 have been pre-empted.
Lord Purvis of Tweed
The Deputy Speaker (Lord Russell of Liverpool) (CB)
We now come to the group consisting of Amendment 68A. I remind noble Lords that Members other than the mover and the Minister may speak only once, and that short questions of elucidation are discouraged. Anyone wishing to press this amendment to a Division should make that clear in debate.
Amendment 68A
“State aid and the Office for the Internal Market
(1) Within the period of six months beginning with the day on which section 30 comes into force, and within the existing budget, the Secretary of State must by regulations establish the Office for the Internal Market (“the OIM”) as independent of the CMA.(2) The Secretary of State must consult and seek the consent of Scottish Ministers, the Welsh Ministers, and the Department for the Economy in Northern Ireland on appointments to the OIM.(3) Following public consultation about the United Kingdom’s state aid provisions and with the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland the Secretary of State may by regulations make the OIM the competent body for—(a) investigating harmful and distortive subsidies and subsidy races made by any administration within the United Kingdom and relating to harm in the United Kingdom;(b) recommending to the Secretary of State and the Devolved Administrations changes to the test for a harmful subsidy, remedies, the scope of exemptions and time limits on approvals;(c) recommending changes in its powers and functions.(4) After two years and before three years, beginning with the day on which section 30 comes into force, there shall be a review of the competences of the OIM.(5) Regulations under this section are subject to the affirmative resolution procedure.”
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, the amendment in my name and that of the noble Lord, Lord Stevenson, borrows much from other amendments tabled in Committee and on Report, and credit is due to the authors of those amendments.
This amendment has three purposes. The first is to take the OIM out of the CMA after six months and set it up independently, using the budget already allocated for that purpose. For appointments to the OIM the Secretary of State must consult and seek the consent of Scottish and Welsh Ministers and the Department for the Economy in Northern Ireland.
The second purpose is enabling, not compulsory. It is to allow the OIM to become the competent body to investigate harmful and distorted subsidies and subsidy races made by any Administration within the United Kingdom that relate to harm within the United Kingdom. This can happen only after public consultation about state aid provisions, which the Government have already said will take place, and requires the consent of the devolved Administrations. The OIM will also, subject to the devolved Administrations’ agreement, be empowered to make recommendations to the Secretary of State for changes to the tests for harmful subsidies, and to its powers and functions. Finally, there is to be a general review of the competence of the OIM between three and five years after Section 30 comes into force.
The changes, following the devolved Administrations’ agreement, can be brought about by affirmative regulation. Overall, the amendment solves the problem of the unsatisfactory location of the OIM in the CMA and gives a vision for the consensual evolution of the OIM in its investigations of subsidy effects.
We have already debated, in Committee and since, why the CMA is not the right body. The mismatch stems from three sources. First, the CMA is expert in matters that are reserved, not devolved. Secondly, the CMA deals largely with disturbances to the market caused by market participants, whether that be through anti-competitive activities such as cartels, or through market concentration—which is culturally very different from looking at the actions of Administrations as they affect markets in the context of devolution. Thirdly, the tie to BEIS does not make it neutrally positioned in how it is embedded, or perceived, no matter what its objectives may be.
To some extent this proposal follows the TRA precedent of setting up in one location and spinning off, utilising whatever preliminary work has been done. Furthermore, if there is to be a body to examine subsidies —and it is an ‘if’ that can develop in the light of experience—an independent OIM, specialising in the workings of devolution, would seem the right home. As required, I give notice that it is my intention to test the opinion of the House on this amendment. I beg to move.
Lord Wigley (PC) [V]
I support this amendment, the remarks of the noble Baroness, Lady Bowles, on these matters, and the need to have the OIM and CMA working at arm’s length. I have spoken several times on the need to have an office of the internal market that is at arm’s length from all government and is responsive to the needs and reservations of every nation—Wales, Scotland, Northern Ireland, and, yes, England. I would prefer the OIM to be required to obtain the consent of all four nations, but I accept the wording in this amendment as a significant step in the right direction. I am very happy to support it and to vote for it if a vote is taken.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
The noble Lord, Lord Flight, does not appear to be present in the Chamber and the noble Baroness, Lady McIntosh of Pickering, has withdrawn from this group, so I call the noble Lord, Lord Naseby.
Lord Naseby (Con)
My Lords, I cannot support this amendment. We had a considerable debate on the OIM in Committee. There are already too many examples in the United Kingdom of where a service can be challenged, one way or the other, particularly in the financial services area, where there is the Financial Services Authority and the appeal mechanism of the Financial Ombudsman Service.
My experience is in the area of what are called doorstep loans. There is, of course, a rogue element, and that must be dealt with, but genuine operators have been servicing that market for decades, including the credit unions and two or three other companies of the highest repute. However, at some point the FSA may say that what they are doing is absolutely right, while five minutes later somebody has appealed and the ombudsman says the opposite.
We must have a uniform, single agency to deal with. The decision made by the Government to put the OIM underneath—for want of a better phrase—the CMA is absolutely right. This amendment would be a retrograde step that would confuse everybody.
Baroness Noakes (Con)
My Lords, as the Minister knows, I am a strong supporter of the Bill and believe that it is important to allow the UK’s internal market to function, but I genuinely believe that the location of the office for the internal market is problematic. I fully support the OIM itself, as it will be essential to monitor the effectiveness of the UK’s internal market. However, the CMA is the wrong place for it at the wrong time.
It is the wrong place because monitoring the internal market is a radically different activity from the core functions of the CMA. To oversimplify, the CMA is focused on businesses which can and do behave badly on competition. By contrast, the office for the internal market will not target individual businesses or sectors; its targets will end up being the Administrations of the devolved nations or their regulators if they act in a way that undermines the internal market. Businesses trying to trade throughout the UK should be the beneficiaries of the OIM’s work, not the villains. Most of the CMA’s battles are fought on legal and economic analysis, which are often big battles with a lot at stake but a world apart from the kind of political battle in which CMA may find itself pitted against one of the devolved Administrations.
In Committee, I said that putting two different activities into a single organisation ran the risk of that organisation being a jack of all trades and master of none. Having thought about that further, it is potentially worse. If the CMA and the OIM get embroiled in long political feuds about restrictions on trade within the internal market, it could be very damaging to the CMA’s focus, which may take away from the attention it gives to its core competition-based work. We may end up throwing the baby out with the bath water. It is also the wrong time to put the OIM into the CMA, given the significant increase in size as it takes on additional activities following our departure from the EU. Organisations that try to take on too much and do too many things at once often end up achieving very little.
For those reasons, I support creating the office for the internal market as a separate body. I cannot, however, support the amendment in the name of the noble Baroness, Lady Bowles of Berkhamsted, because it has gone beyond the simple purpose of setting up an independent OIM and has strayed into state aid, with its own version of how that may be taken on in future. That goes too far.
Baroness Neville-Rolfe (Con)
My Lords, I support the main thrust of the amendment, as I explained in Committee when leading a debate on my amendment, for which there was considerable support across the House. There is a good case for establishing a UK office for the internal market, but the CMA is the wrong home, for all the reasons that my noble friend Lady Noakes articulated so well. The CMA operates with values—notably a deep suspicion of the good business can do and an aggressive approach to enforcement—that are not appropriate to the new office.
Subsections (1) and (2) of the proposed new clause come from an earlier amendment which, frustratingly, was not moved, and are on the right lines. However, the proposed subsection (3) is not sensible. If any of the devolved Administrations withhold consent for appointments on whatever grounds, the whole purpose of the new office could be stymied. One is reminded of President Trump and the World Trade Organization, when unexpected and unforeseen actions by an elected officeholder—in this case, the President—in an advanced and democratic country came close to wrecking the operations of a major component of the global economic order. We would be foolish voluntarily to run such a risk.
It may be argued that it is unlikely the devolved Administrations will act like President Trump or that this is an issue of the same order. I would retort that, five years ago, it was deemed impossible by all informed observers that a US President would act as he has towards the WTO. Life can contain surprises, and we act foolishly if we unnecessarily set up arrangements that risk being sabotaged.
Accordingly, I call on the Minister to agree to bring forward an amendment at Third Reading that incorporates proposed new subsections (1), (2) and (5) of Amendment 68A, which seem entirely sensible and widely supported. I regret that I cannot support Amendment 68A as it stands.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, I now call the noble Lord, Lord Flight.
Lord Flight (Con)
My Lords, I apologise for having to move my timing, but I had to get something urgently for my wife.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I regret that I do not believe that the noble Lord, Lord Flight, was here for the start of the debate and, therefore, cannot speak. His name has already been called.
The Deputy Speaker (Lord Lexden) (Con)
I apologise. The noble Lord, Lord Flight, told me that he was here at the start of the debate, but that is not so. I am sorry, Lord Flight. In that case, I cannot call you, as you were not here at the start of the debate.
Lord Fox (LD)
My Lords, the debate on this amendment has been relatively short, but the Minister should not conclude from that that it is unimportant. The reason why the debate has been short is that it crystallises points that have recurred since Second Reading, through Committee and in various discussions on other groups of amendments, around the basic suitability of the CMA as a home for the OIM. That is the central point.
I am pleased to follow the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, whose analysis of the concerns around the location of the OIM I completely concur with. They conclude that they do not necessarily like the full nature of this amendment, and I respect that point. This amendment is the culmination of several other attempted amendments but, without it, we will not get the focus on this issue that we need from the Minister. Even though it may be a bitter pill to swallow for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, we need to get somewhere to concentrate minds—and this is the amendment.
It was ably set out by my noble friend Lady Bowles, and I know that the noble Lord, Lord Stevenson, will also set out a good case, so I will not point to any more issues. I simply say that this is a really important issue, which will colour the culture of the market in this country and how it is run. I had not considered the point brought up by the noble Baroness, Lady Noakes, that it may also jeopardise the CMA’s current role, which is a good point and well made. This is an important amendment to get behind. Noble Lords on the Liberal Democrat Benches will vote for this amendment when it is put, and I hope that other noble Lords, who find problems with some words in this amendment, will stave that to one side and consider that, without it, we cannot change the culture of how the market will be run in future.
Lord Stevenson of Balmacara (Lab) [V]
I am going to disappoint the noble Lord, Lord Fox, as I will not go through my arguments at length, because they have been made so well by the noble Baroness, Lady Bowles, and the noble Lord, Lord Wigley. I put on record my absolute support for the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, who, while they have comments about the detail of the amendment, support the principle of it. I am grateful to them for that.
It is a simple proposition: the internal market must work and be seen to work for all and, therefore, must have buy-in and support from all. It should not favour one geographical area or country over another. It is important that we do not upset the balance struck in the CMA and its functions. The noble Baroness, Lady Noakes, is right that there may be an adverse impact on the CMA, if it is forced to take on something that is not its primary purpose. Thirdly, the devolved Administrations need to be part of the organisation, its process and appointments.
There are reservations about proposed new subsections (3) and (4) in the amendment. It is beyond our hopes, but perhaps the Minister will consider bringing forward an agreed amendment at Third Reading. If he did, we would support it but, if he will not do that, we will support the noble Baroness if she tests the opinion of the House.
Lord Callanan (Con)
I thank noble Lords who participated in the debate, particularly for their brevity. This is, I suspect, a simple difference of opinion, but I will give it a go anyway.
In previous groupings we have discussed the detail of how the office for the internal market would be governed, including the composition of its board, and so noble Lords will be delighted that I am not going to go through all that again. I have set out consistently in this House why the CMA was chosen as, in our view, the most appropriate body to undertake the new UK internal market oversight functions. The CMA has an outstanding international reputation as an independent regulator and is already equipped with highly relevant economic expertise, necessary to undertake its new functions in the context of the operation of the UK market. Moreover, the CMA has well-established relationships with all the Administrations, with offices in London, Edinburgh, Belfast and Cardiff. This UK-wide presence will help ensure that the OIM will work in the interests of all parts of the United Kingdom.
However, we have made it clear that some bespoke arrangements for the OIM will be necessary, in recognition of the focus on devolved matters. As provided for in the Bill, the OIM will be able to benefit from the CMA’s existing expertise and operate within its overall framework, while having its own functions and powers, including distinct governance arrangements such as the OIM panel and task groups. The Government have recognised that some degree of separation is vital and have developed proposals for the OIM accordingly. I wish to strongly emphasise that the distinct statutory objective for the OIM, and for the targeted adaptation in the Bill of the CMA’s statutory framework, enshrines this separation from the outset.
On Monday, we had a good debate on the composition of the board and the role of the devolved Administrations in appointments. The Government have taken a number of reasonable and pragmatic steps to secure the appropriate balance between ensuring that the devolved Administrations have a real say and that the appointment process is not held up unduly—that would, of course, be risked by the amendment.
Finally, I would like to discuss in a little more detail how this amendment would seek to propose a new role for the OIM regarding subsidy control. I recognise that the amendment reflects a desire for reassurance on the enforcement of any future UK subsidy control regime. However, we believe that it risks undermining and prejudging the outcome of the forthcoming consultation that we have announced. This consultation will inform our future approach to subsidy control, including the role of oversight and enforcement.
The Government have been clear that the UK will have its own approach to subsidy control; we want a modern system for supporting British business in a way that fulfils our interests. The amendment is therefore premature, as it seeks to confer specific regulatory functions on the OIM in respect of subsidies before the wider details of any legislative UK domestic subsidy control regime, including the appropriate mechanism for oversight and enforcement, have been developed and brought before this House or the other place.
On another point that we will discuss in more depth in our next debate, the Government’s view is that state aid—the EU’s approach to subsidy control—is a reserved matter. Therefore, the effect of the amendment’s provisions for consent from the DAs would be to create unacceptable uncertainty over the extent to which subsidy control is a reserved or devolved competence. As an issue of national importance, it should be treated in the same way as other nationally significant areas of economic policy, which are reserved. Having a single unified approach to subsidy control across the United Kingdom is vital to ensure that we continue to have fair and open competition across our internal market.
Finally, proposed new subsection (4) would require a review of the OIM’s competences within two or three years after Clause 30 enters into force. I recognise the need to ensure that the CMA’s new functions are undertaken effectively, but the broadness of this proposed review is unprecedented and unhelpful.
For the reasons that I have set out, therefore, I am obviously unable to support this amendment. I ask—perhaps more in hope than in expectation—the noble Baroness to withdraw her amendment.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I thank all those who have participated in this short debate. Some very telling points have been made, yet again, regarding separating the OIM from the CMA.
As noble Lords will know, this is not the first amendment to include proposed subsections (1), (2) and (5); indeed, we had hoped to be able to vote on that amendment, but the timing did not work. I will not conceal from your Lordships that this amendment was constructed so that we had something to vote on.
It is important. The parts that extract the OIM from the CMA are immediately functional. The rest is written so that it is fail-safe—and perhaps, as the noble Baroness, Lady Neville-Rolfe, astutely pointed out, it may never happen. It does not stop there being some further primary legislation to make it happen, but, of course, there are restrictions on what it is possible to put in when there are identical amendments already tabled. Therefore, this is not the end of the road on the wording of this amendment, but it does a lot more good than harm by inserting it into the Bill at this stage. I wish to test the opinion of the House.
The Deputy Speaker (Lord Lexden) (Con)
My Lords, we now come to Amendment 69. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press an amendment to a Division should make that clear in debate.
Clause 44: Regulation of distortive or harmful subsidies
Amendment 69
Lord Thomas of Cwmgiedd
Member’s explanatory statement
This amendment is intended to remove provisions changing the legislative competence of the devolved legislatures to prevent devolved Acts making provision about the regulation of the provision of certain subsidies by public authorities.
Lord Thomas of Cwmgiedd (CB) [V]
My Lords, in a way this issue is much simpler because Clause 44 has been put in with one purpose only: to alter the devolution scheme. I intend to move that it be removed from the Bill and, if necessary, I will press this to a Division.
I ought to say from the outset that the regime of state aid is plainly necessary, and it is necessary to have one for the whole of the UK, as I will explain in a moment. It is necessary first to say a little about the background. Until relatively recently, the British Government’s stated position had been to retain the EU regime and put in place an independent body, such as the CMA, that would police it. Whether it was like the Commission or whether it was advisory was something to be worked out. Obviously, that would not have required any change to the devolution scheme because we would have been proceeding as we had during our membership of the EU.
However, the present Government decided to change that, and they intend to use Henry VIII powers to do so by statutory instrument. That instrument has been drafted and is no doubt to be debated soon. It has been considered by the Secondary Legislation Scrutiny Committee, which has concluded, and I think it important that noble Lords hear its conclusion:
“The House will be aware of the Committee’s concern, raised on several previous occasions, that secondary legislation is being used to introduce policy changes about important issues which should more properly be the subject of primary legislation, thus affording a higher degree of parliamentary scrutiny. This is another such occasion and one on a subject that appears central to the UK’s negotiation position with the EU. We take the view that it is neither a welcome nor indeed acceptable use of secondary legislation”.
That is a clear intimation that we should look at this in a proper debate on state aid.
Obviously, that is for another occasion, but if that instrument is passed and the EU regime is revoked, the Government’s position is very simple, and we will live under this regime for the next several months—that is, the World Trade Organization rules will apply. We, as the United Kingdom, are bound by them as a matter of treaty obligations and the devolved Governments are bound to follow World Trade Organization rules in relation to subsidies. Of course, it will be without any direct policing authority, but that is the course that has been decided on, so there is no urgency about this issue and I will return to that in a moment. Of course, the position could change.
I very much hope that there will be a deal with the EU, and no doubt there is a prospect that a deal may deal with the subsidy regime, but at the moment we have to proceed on the assumption that, first, the current regime will be withdrawn, and that we will move to the WTO regime. That is the background.
Secondly, I emphasise again that this is not an amendment suggesting that the UK does not needed a regime. It is perfectly obvious that any internal market has to have a state aid regime, just as world trade has to have a set of state aid rules, weak though the WTO rules are on this issue. One cannot see a stronger argument for a properly thought through regime of state aid than in the recently published paper of the Institute for Government Beyond State Aid. It explains why it is necessary, how it should be done, what should be done before it is established and that it should be widely consulted on. Of course, there has been a lot of time to do this, but nothing has been done.
I think it must be accepted that the Government desire to proceed. Why they want to do so now is unclear, but they believe that they have hit a snag, which is the fact that for the time of our membership of the European Union we lived with the devolved Governments dealing with all these issues and, as I outlined in the previous debate, this competence is not reserved. Therefore, unashamedly, the Government want to use this legislation to alter the devolution settlements. Whereas in other parts of the Bill I have been critical of the fact that the Government are trying to do something by stealth, here what they are trying to do is much clearer. What they are trying to do is, if I may say so, not open dealing or being straightforward. They are trying to make state aid a reserved matter by the device of expanding or extending the competition policy reservation. If they wanted to do this properly, one would have expected it to be dealt with in a much more straightforward manner.
The real issue is how should we now proceed, and there are three alternatives. The first, obviously, is to leave this clause in the Bill. I will come back to that in a moment. The second is to work out a policy and enact it by primary legislation. The third is to use the common frameworks. I shall deal with the second of those suggestions first.
If there is to be a state aid policy, it cannot be denied that it would need widespread consultation. If we were to go down this route, the Government would need to carefully craft legislation and bring it before Parliament. If, in such legislation, there is a need to change the devolution settlements, that can be in the Bill so that we know what is required and how it can be dealt with. That is one solution. There is absolutely no reason why we cannot do that, because we will be living under a World Trade Organization regime in the interim and the devolved Governments will be bound by that.
Secondly, to my mind a much more attractive way forward is to use a common framework. I regret that this matter came up in Committee very late on a night when, as the Minister will remember, we were all fairly exhausted at the end of the debate on Part 5. I hope he will recall that I then suggested that maybe one way forward was a common framework.
Having the privilege of being a member of the Common Frameworks Scrutiny Committee, I raised the question of a common framework with the Counsel General for Wales, Mr Jeremy Miles, and the Cabinet Secretary for the Constitution, Europe and External Affairs in the Scottish Government, Mr Michael Russell. They expressed a view that this was a way forward. Last night the Counsel General wrote in very clear terms, and I hope that the letter has safely reached the Minister and many others. He made it clear that state aid had always featured on the list of common frameworks but there had been no progression. He continued:
“The Welsh Government has been clear that it would wish there to be a single state aid subsidy control regime for the whole of the United Kingdom, or at least for Great Britain if the Northern Irish protocol makes this impossible, provided it is co-designed by all the Governments which have to implement it. I therefore wish to make a clear and unequivocal offer on behalf of the Welsh Government. If the Government will remove Clause 44 and agree without prejudice to its legal position to participate in discussions on a legislative framework on state subsidy control, we will commit in good faith to work intensively on such a framework on a tight timetable to reach agreement within three months of the Government tabling a proposal, or in any event by 31 March next year. In the meantime, we will commit to not put forward any primary or secondary legislation to the Senedd which in any way touches on the regulation of state aid subsidies until these discussions have concluded.”
So there is a plain offer of a way forward on the table. That is the second alternative.
The third alternative is to proceed with this clause. I urge noble Lords to take the view that it would be quite wrong to do so. At this stage there is no clear knowledge of what the policy will be. It is not clear what changes, if any, need making to the devolution settlements. The appropriate time to make such a change would be with the policy properly devised and the powers that are needed.
I urge noble Lords to take the view that tackling all this now, with this proposal to change the devolution settlements without a policy by this back-door device of altering the competition reservation, is wrong. It would be better by far to work out what is needed and, if possible, to proceed by a common framework, because that will produce a legal regime with no doubt proper enforcement powers across the UK. We should not put this in at the tail end of a Bill without proper thought as to the context. There is time to do this: the WTO regime will tide matters over until a common framework is agreed or until there is legislation. I therefore move the amendment and I will be prepared to test the opinion of the House on this matter.
Lord German (LD)
My Lords, I am grateful to the noble and learned Lord, Lord Thomas of Cwmgiedd, for putting forward so much detail behind this amendment, which clearly lays out the course of action that could be dealt with and also talks about the way the Government propose to take these matters forward. I think that my job is to amplify some of his points and perhaps to extend them as well. I refer to the offer from the Welsh Government, which I presume has also been made by the Scottish Government at the same time: that was the indication I received last night, and perhaps the Minister could confirm that this letter from Scotland has been received as well.
This clause proposes a major recentralisation of power. It is a far cry, for those of us who live in Wales, Scotland or Northern Ireland, from the cry of bringing back our laws, because state aid is currently not a reserved power, despite the Government’s protestation that it is and always has been. Annexe 1 of the Explanatory Notes for the Bill clearly lays out that it is not a reserved matter, but the Bill, of course, makes it say so. I reiterate at the start that we on these Benches want to see a single state aid regime for the whole United Kingdom, but that regime has to be to a design on which all four parts of the United Kingdom have collaborated. If they are not prepared to do this, as this clause lays out, they will not get a legislative consent Motion from either of the devolved Parliaments or from the Northern Ireland Assembly. In fact, in his letter to the Secretary of State for BEIS yesterday, the Counsel General for Wales said:
“Even if we resolve all the other issues, this alone”—
that is, this clause—
“would make it impossible for me to recommend legislative consent to the Bill as it now stands.”
That is crucial, because it says something about the relationship that this clause makes between the four nations of this United Kingdom. It is not a way to respect our devolution settlement and, importantly, not a way to respect the union we have within the United Kingdom.
EU state aid policy is established through the Treaty on the Functioning of the European Union, and directly applicable regulations following on from that treaty. That was in place of having directives that would have required us to transpose these matters into UK law. In response to the House of Lords report on state aid, the Government said:
“We note that in practice the existing EU rules have always been sufficiently flexible to allow the UK to make innovative aid interventions when necessary.”
So the Government do not believe that there has been a problem in the way that this operated with the EU, and now they are intent on eating their own words, bringing back the rules, converting them into a straitjacket regime and not providing the flexibility that the countries in our union previously enjoyed. They also add that it would be “harmful” if this were dealt with in any other way.
A more co-operative and consensual approach is needed. The clause we are seeking to remove assumes that divergence will happen, and decrees that there shall be no divergence. Blunting and reducing the power of the devolved authorities is deemed to be a price worth paying so that the UK Government alone can determine the route they wish to follow in directing the new regime. Yet we do not know what this regime will look like. There is no sign of the detail or the choices the Government propose to take.
What this clause does, no matter what consultation the Government may eventually engage in, is drive their own agenda—an agenda that primarily has to support England. That, by the way, is no way to provide business with the certainty it is seeking. In fact, the lack of clarity at this stage prolongs the uncertainty; but it need not be like this.
We need to make progress on a UK framework for subsidy control. Again, this is another framework agreement which needs to be put in place. At the moment, without such a framework, it could easily be said that the Government are making it up as they go along. What is needed is a dialogue, not the “take it or leave it” policy that this clause entails—a policy which may well end up in the courts and will certainly amplify the feeling that the union of the United Kingdom is not respected.
Yesterday’s letter from the Welsh Government’s Counsel General, which the noble and learned Lord, Lord Thomas of Cwmgiedd, referred to, provides the UK Government with a route to a sensible solution. It recognises the ability in the EU to have variance in subsidies where there is an identified need. I must point out to noble Lords that many of us will remember that this was the case before we became members of the EU. I remember the arguments and debates on UK regional aid and regional assistance, and dividing the areas of the country up where aid could be given in greater amounts. That historical message was that there would be differences and distortions; of course, subsidies provide distortions, but they were provided for very good reasons. They were proposing to make a difference where the needs were greatest—where poverty and economic need were greatest—and so it was provided it in that way.
I can say, as somebody who had to operate within that framework as an economic development Minister, having to talk about these matters with Brussels simply to identify the boundaries, the flexibility, as the UK Government themselves say, was great indeed to manage that work. I believe we are seeing this clause put the cart before the horse—devising the policy before putting the legislation in place is what we are looking for, and that is what this amendment does.
All the devolved Governments have made it clear that they are prepared to work at pace with the UK Government to design a new subsidy regime. I would be grateful if the Minister in replying could tell us how the Government will respond to the offer from the devolved Governments. I also note that there must be unease on the Government’s side about this clause, since I have noticed that no other speaker, apart from the Minister, has come forward to support it.
Removing this clause from the Bill provides the opportunity for dialogue and the drawing up of a new subsidy regime for the UK. As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, we already have a replacement in place temporarily until that is put back and the regime determined. I do hope that the Government will accept the offer from the devolved Governments as the right way forward and, as a gesture of good will, I would be grateful if they would therefore consider withdrawing this clause, supporting this amendment and, in so doing, strengthening the relationships between the various parts of our union.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I speak in support of this amendment, elegantly explained by my noble and learned friend Lord Thomas of Cwmgiedd. I am pleased to follow the noble Lord, Lord German, who amplified his points.
Yesterday, as already referred to, the Welsh Government’s Counsel General wrote to the Secretary of State at BEIS about Clause 44. That letter demonstrates clearly that the Welsh Government are seriously committed to trying to save the union of the United Kingdom and recognise the need to secure the internal market. Their offer to work intensively with the Government is clear and unequivocal.
The Welsh Government have consistently put forward imaginative and thoughtful proposals about how to move the constitutional debate forward. Indeed, in Brexit and Devolution in June 2017, the Welsh Government championed the idea of common frameworks, subsequently taken up by Whitehall. If I may quote, they said:
“From the outset of the debate about our collective future outside the EU, the Welsh Government has recognised a need to develop UK frameworks. It is clearly important that no new barriers to the effective free movement of goods and services within the UK are created as a result of EU withdrawal. The development of UK frameworks should be taken forward immediately on the basis of negotiation and agreement among the four UK administrations.”
This paper suggests a qualified majority voting system within a reformed intergovernmental system, where a decision endorsed by the UK Government plus one of the devolved Governments would be sufficient to break any logjam, thus addressing head on the issue of one nation wielding a veto. Last year, the Welsh Government’s comprehensive analysis in Reforming our Union championed shared governance, describing taking responsibility for codesigning legislation and policy where devolved and reserved competences intersect. It asserted that
“devolution is concerned with how the UK as a whole should be governed, with proper account taken of the interests of all of its parts. It is a joint project between England, Wales, Scotland and Northern Ireland, based on a recognition of our mutual inter-dependence, which therefore requires a degree of shared governance.”
It foregrounded common frameworks, seeking a common approach, shared delivery systems and joint governance arrangements that should be developed on a collaborative and consensual basis. So, the intervention from the Counsel General is not an opportunistic response to this Bill but the continuation of a patient, crystal clear commitment to common frameworks at the heart of intergovernmental relations.
Over these three days of debates, Members across the House have recognised the importance of these frameworks. The Welsh Government and, I believe, the Scottish Government are not arguing to be left alone to design and implement their own rulebooks for government subsidies. They would be mad to do so. In a free-for-all between Governments of these islands to attract and hold on to investment, the UK Government would be bound to win, because they have much more significant financial resources and can set their own budget. Rather than arguing to have an equal role in designing a fair system all can work within, they are committing to do this on a timetable compatible with the one the Government have set themselves and to take no legislative action in this space until at least autumn 2021.
This is surely beyond reasonable doubt. If the efforts to reach agreement fail, the Government will have to introduce primary legislation to define the new subsidy regime, subject to the same constraints there are now, in order to achieve a coherent regime. We have repeatedly been told that this Bill does not diminish the powers of the devolved institutions, yet all we see and hear defies that. This clause explicitly and openly alters the devolution settlement by adding to the list of reserved matters in the Government of Wales Act and the other devolution statutes. I therefore urge your Lordships to support its removal from the Bill.
Baroness Randerson (LD) [V]
Clause 44 says it unequivocally: the UK Government, also parading as the English Government in this Bill, are specifically removing from the devolved Administrations their power to provide state aid, by inserting it as a specific reservation or excepted matter in each of the devolution Acts. When I said in earlier debates that the Government were using the Bill to roll back devolution, the Minister insisted that devolved Administrations were being given additional powers. We have already seen in these debates that the Government are using the Bill to sideline and undermine the common frameworks, which have been well established as the basic foundation for the future internal market. At the same time, the Bill removes any incentive for devolved Administrations to develop improved standards. Removing from the devolved Administrations the powers over state aid is fully in line with the thrust of the Bill, which is a barely disguised attempt to emasculate devolution.
I want to concentrate on how this Bill affects Wales, and Clause 44 refers to the Government of Wales Act 2006. In relation to this issue, that Act says:
“The First Minister may give financial assistance (whether by way of grant, loan or guarantee) to any person engaged in any activity which the First Minister considers will secure, or help to secure, the attainment of any objective in the Minister’s functions.”
In Field 4 of Schedule 5, it lists economic development as one of those functions.
Lord Purvis of Tweed (LD)
My Lords, it is a great pleasure to follow my noble friend, with the very great experience and knowledge that she has on this issue. Given the fact that all four speakers so far in this group have been from Wales, I thought that, to avoid a degree of market distortion across the United Kingdom, there should be a little bit of northern balance. All I wish to do is to endorse the points that they have so ably made.
I put my name to this amendment, and if the noble and learned Lord, Lord Thomas of Cwmgiedd, presses it and the House agrees, the Government have an opportunity now to bring back a more considered proposal as a result of some consultation. None of the speakers in this group has indicated that it is easy. If it was easy, agreement would have been reached at the outset. It is about being aware that the frameworks update highlighted that one of the four areas of dispute around where the competences lie with this power being repatriated is state aid. It is obvious that it was not a straightforward situation of saying that this had been uniquely a United Kingdom responsibility—so by definition, it is an issue.
It is also perfectly clear from all speakers that, without there being an understanding about the tests, de minimis levels, the administration and the type of ministerial direction that has existed up to now—without clarity as to how all that will go forward—any Minister in a devolved Administration will quite rightly be concerned about what impact this will have on the economies of the powers that they do have under the devolved competences.
I just wish to reinforce the point that the letter from Jeremy Miles to Alok Sharma, which I read, made a very fair offer. We share the concern that, without there being a further set of discussions to seek a degree of common ground on a framework agreement about how this will operate in the future—which there is time to do, because the Government have indicated that they are seeking to effectively have a window under the WTO approach, and there is consensus that that will be respected—this is potentially the way forward.
I hope that, although often it may not seem so, the Minister will see defeat as a bit of a silver lining in order for him to come back with a more considered approach, to take the Welsh offer and to allow us to consider the Government’s position from a degree of consensus and agreement. I support the noble Lords who have spoken on this group so far.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, like the noble Lord, Lord Purvis, I agree with the case that has been made so well by the previous speakers. I put my name to the amendment put forward by the noble and learned Lord, Lord Thomas, and we would support him if he chooses to divide the House.
It is very simple: we agree that there has to be a UK-wide policy on state aid—or subsidy, if that is what it is to be called. The question that hangs around but never seems to get answered is: why has it not yet been articulated what this policy would be? It cannot be a question of timing. This suggests yet another shroud of mystery that surrounds this increasingly perplexing Bill.
It is certainly a novel way of developing policy for a Government to remove policy that is in force and that everybody knows and understands, increasing the uncertainty and making it more difficult for businesses. However, as the noble and learned Lord, Lord Thomas, said in his opening speech, the statutory instrument removing the current rules—taking us out of the current system that has been operating for a great number of years—has already been laid and will be debated next week, and we will not be able to stop it.
We therefore seem to be heading towards WTO rules, which are not well respected and do not seem to be applied properly, and there is no policing or organisational structure in which they can be dealt with properly. If that is where we are, we would at least have a period of stability during which we can sort out how we want to set up the rules that will apply to the internal market and how, if necessary, they are to be policed. This could all be part of the yet-to-be-announced deal with the EU—and it may be that is the case, because it is clear that this is a significant area of interest within the negotiations. But without any further detail on that, it is hard for us to speculate.
However, as others have said, the Welsh Government have come forward with an extraordinarily generous offer to expedite work on a common framework that relates to state aid and make a voluntary agreement to pause any legislation that would impinge on that in the intervening period. That is almost too good an offer, and I hope that the Minister has an adequate response to it.
Lord Callanan (Con) (Con)
I thank noble Lords who have contributed to another admirably brief debate. We are making good progress this afternoon.
As I outlined in Committee, Clause 44 reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime. I greatly enjoyed the many contributions on this matter. I particularly liked the suggestion of the noble Lord, Lord Purvis, that I should take defeats as a silver lining, which prompts the obvious response that the Liberal Democrats have been defeated in the last three general elections and therefore have some experience of that.
Our debate in Committee on this clause served to highlight that, while some noble Lords might disagree on the approach taken, we all recognise the importance of ensuring that the UK continues to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in their view that the regulation of state aid—the EU’s approach to subsidy control—is a reserved matter. The Government are clear that they want to maximise the economic opportunities available to us when we are no longer bound by EU state aid rules. To achieve this economic ambition, it is important that, as now, we take a coherent approach to the system that governs how public authorities subsidise businesses across the United Kingdom. Reserving subsidy control is the best way in which to guarantee that a single, unified subsidy control regime could be legislated for in future.
In previous debates, there has sometimes been a misplaced conflation between the devolved spending powers and the systems that regulate the potentially harmful and distortive effects of this spending. To be clear, these are two distinct and separate responsibilities. Although the devolved Administrations can and should make spending decisions on subsidies, the wider rules in which they operate are, and should continue to be, consistent across the whole nation. In response to the intervention from the noble Baroness, Lady Randerson, I reiterate that the reservation does not change the devolved Administrations’ position in practice. They have never previously been able to set their own subsidy control regime, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies as they do currently.
The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. That would potentially give rise to inconsistency if there were different regimes to regulate subsidies across the UK. Ultimately, it could undermine fair and open competition across our internal market and inevitably discourage investment in the United Kingdom, bringing additional costs to supply chains and consumers.
The reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, as I said in Committee, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation on this subject is necessary.
The Deputy Speaker (Barness McIntosh of Hudnall) (Lab)
My Lords, I have received one request to ask the Minister a short question for elucidation, from the noble Lord, Lord Liddle.
Lord Liddle (Lab)
Can the Minister reflect a bit more on what he has just said about treating this issue as a matter for common frameworks? It sounded as though he wanted a co-operative solution to this problem, one that would bring all the devolved Administrations into a common framework. However, at the end, he said that it is not appropriate—but why not? He has not given a satisfactory answer to that question. I remember challenging the noble Lord, Lord True, in an earlier debate at Report, on whether the Government had changed their policy on common frameworks and were no longer taking them seriously. I got a very vigorous shaking of the head from the noble Lord, Lord True. Would this not be a perfect example of how common frameworks were still being taken seriously by the Government, and would it not resolve a real problem that the Government have had?
The Minister talked about unacceptable uncertainty, but frankly, the unacceptable uncertainty about state aid has come from this Government. Mr Dominic Cummings had one view of state aid, as against the traditional Conservative view. That is where the uncertainty came from. Now that he has gone and now that he is out, thank goodness, we have an opportunity to create a sensible common policy. There is a need for balance, and it must be sensible. The best way is through a common framework in co-operation with the devolved Administrations.
Lord Callanan (Con)
I am not sure whether that was a question or a speech in the wrong place—but I take the noble Lord’s point. I think he is getting issues conflated. The common frameworks programme of course is a programme of work with diffuse levels of power and ultimately it is not clear where regulation lies. To resolve those matters on a cross-UK basis, there is no doubt in our mind where the proper operation of these powers is—state aid, or rather subsidy control, is a reserved matter for the UK Government. However, we have said that we want to work collaboratively. We want to work with the devolved Administrations and of course, as we have said, we will consult closely with them on any new policy that we develop and indeed on whether legislation is necessary. But, given my general support for the framework and the Government’s support for the framework programme, I do not believe that it is appropriate for this matter to be included in the framework programme.
Lord Thomas of Cwmgiedd (CB) [V]
I will be brief, as obviously it would be very unfair if the Welsh were totally to outnumber everyone else in the number of speeches delivered this evening. I thank all noble Lords for their contributions to an interesting, though short, debate.
First, it is very encouraging that there is complete consensus on the need for a single subsidy regime for the internal market. There is no doubt about that. Secondly, there must be a consensus that at the moment this is not something that the UK Government have power over—otherwise this clause would be unnecessary. It is not a reserved matter and therefore under the devolution schemes it is a matter for all the devolved Governments. Thirdly, it is clear that there is no uncertainty. The Government are taking us out of the EU regime, assuming the instrument is passed, and we will go into the WTO regime—so that is the regime for the foreseeable future.
The real question is: are we going to go forward by diktat from Whitehall and Westminster or are we going to go forward by consensus? An obvious way of going forward is a common framework. I regret to say that I cannot agree with the Minister that a common framework is inappropriate. It is absolutely appropriate, because it will cater for the kind of divergence that will be allowed in the subsidy regimes. This is a matter of acute importance to people such as fishermen and those involved in agriculture. We need to know what level of divergence is permissible and negotiate that.
Finally, a decision has to be made on the role of the CMA. I moved amendments earlier this week in relation to the CMA simply because I imagine it will have to be the policeman of this regime. But what is it to be? Is it to be an adviser? Is it to have a central role? Or are things to be laid out in a common framework?
I therefore say that this clause ought to be removed. Get the policy right first. Try it by common framework and let us go forward on that basis. Therefore, I want to take the opinion of the House on the appropriate means of going forward—and the appropriate means is taking this clause out of this Bill.
Lord Judge
“(1) Section 11 ceases to have effect when Articles 5 to 10 of the Northern Ireland Protocol cease to apply.”Member’s explanatory statement
This amendment is consequential on the removal of Part 5 (Northern Ireland Protocol) at Committee Stage.
Member’s explanatory statement
This amendment is consequential on the removal of Part 5 (Northern Ireland Protocol) at Committee Stage.
Member’s explanatory statement
This amendment is consequential on the removal of Part 5 (Northern Ireland Protocol) at Committee Stage.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, we now come to the group beginning with Amendment 73. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this or any other amendment in this group to a Division should make that clear in the debate.
Amendment 73
Lord Mackay of Clashfern
“Joint Ministerial Committee on European Negotiations: agreement of regulations
(1) Regulations to be made under any provision of this Act must be brought before the Joint Ministerial Committee on European Negotiations for discussion and agreement before they may be laid before Parliament.(2) If the Joint Ministerial Committee on European Negotiations do not agree to the regulations, the Secretary of State must lay before Parliament the reasons for the disagreement, and table a motion in both Houses of Parliament to debate the regulations and disagreement before they are approved.”Member’s explanatory statement
This new Clause seeks to ensure the Joint Ministerial Committee on European Negotiations, representing all four nations, have sight of the regulations made under this Bill.
Lord Mackay of Clashfern (Con) [V]
My Lords, I am happy to move Amendment 73. It is the same sort of amendment that I moved in Committee, when my noble friend Lord True was kind enough to say that it was a unionist type of amendment and, therefore, could be considered. Since then, the Government have accepted a number of situations covered by my amendment. It has therefore probably served its purpose and I do not propose to put it to a Division.
However, it illustrates what I am anxious to achieve: a degree of co-operation between the devolved Administrations and the Government of the United Kingdom, which will put the Bill in a much happier situation than it appeared to be in at first sight. A good deal has happened already. I just hope that they will go a little further.
I am under a certain restraint, because my computer has decided to restart without giving me any notice. I may not be able to speak at all when my turn comes at the end of this group but, if not, I end in that spirit.
Lord Purvis of Tweed (LD)
It is a pleasure to follow the noble and learned Lord and we are grateful that he is more reliable that his technology. In Committee and with this amendment, he has suggested to—and sought to persuade—the Government that there is merit in them thinking again about further consultations on developing the frameworks to the extent that, where they can reach their limit, there would then be the legislative requirement within this Bill.
I will speak to Amendment 75, in my noble friend Lord Fox’s name, which tries to put forward a structure for these discussions and, in effect, to codify it within this legislation—providing that framework, as it were, for the talks that should happen. In so doing, I will display what some colleagues in the House consider my usual characteristic of being rather pernickety—to which I say mea culpa. In our amendment, we reference the “Joint Ministerial Council”; it should refer to the Joint Ministerial Committee, so I admit that that was an error in the drafting.
When we started Committee, we had heard reflections at Second Reading and the concerns of the devolved Administrations about this Bill. At this stage, there is no need to rehearse the concerns; we have done so in Committee and on Report. Ministers—the noble Lords, Lord True and Lord Callanan, and the noble Baroness, Lady Bloomfield, in particular—have been very willing to meet with us and discuss this. We have not always been in agreement; nevertheless, personally speaking, I am grateful for the opportunities to discuss some of these issues with the Ministers.
Ultimately, the House has made the decision that we have not been persuaded by many of the Government’s arguments. Even today, key elements of the legislation have been excised, such as those on spending and subsidy powers. From the government Benches, the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, indicated that it was not appropriate for the OIM to be in the CMA. In a whole series of areas, this House has taken a view that we are concerned about how the Bill had been drafted.
Fundamentally, one of the themes has been a genuine ongoing concern, not fully addressed by government amendments on consultation, that the powers which the Government are taking under this legislation will damage, rather than strengthen, devolution. In particular, they will put at risk one of the areas where we have seen consensus not only within the parties in this House but within the nations and the UK Government: namely, that the frameworks process has been positive, notwithstanding a pause and a disagreement. The amendment of the noble Lord, Lord True, which this House passed with a large majority, the reference that the noble and learned Lord, Lord Mackay of Clashfern, indicated with his amendments and our amendment show that we also wish for that process to see its natural conclusion.
At this stage, we believe there is merit in seeking support for a further set of discussions at a plenary session of the Joint Ministerial Committee, which can agree the principles of the market access and an intergovernmental relationship that will put this on a sound footing for many years to come. That is why we are asking the House to consider a proposal that we believe will allow there to be agreement and consensus, but not a veto.
This is the final thing that I will say. We accept that the operation of the UK market is a shared UK aspect, but it will be a complex set of discussions and potentially contentious. That is why in this amendment we have sought a mechanism to prevent a veto but to allow consensus to be brought about. I know that my noble friends Lord Bruce of Bennachie and Lord Fox will cover the details. Personally, having gone through all the stages of the Bill, I will say that while we recognise Ministers’ willingness to be open, as I have indicated, there is still a case to be made for one further opportunity to seek consensus.
Lord Cormack (Con)
My Lords, I put my name to my noble and learned friend Lord Mackay of Clashfern’s amendment out of admiration for him and for the way in which he has sought positively to contribute to our debates on the Bill, both in Committee and on Report. All his contributions have been informed by his passionate unionism. He is a truly remarkable man. He was a most revered Lord Chancellor and, of course, had he lived in Edinburgh in the Age of Enlightenment he would have been one of the adornments of that age. We are extremely fortunate to have him as a Member of your Lordships’ House.
I say to my noble friend Lord True that my noble and learned friend Lord Mackay has indicated that he does not wish to push his amendment to a Division because he is appreciative of the recognition of the importance of the union displayed by my noble friends Lord True and Lord Callanan, and indeed all those who have spoken from the Front Bench. However, and I say this on my own account, while I completely understand why my noble and learned friend does not want to divide on this amendment, and I admire him greatly for all that he has done, I still believe that the union is in peril, and it is terribly important that my noble friends on the Front Bench take most carefully into account all that has been said today on the subject of the union. All the amendments have been informed by a great love for the union, a recognition that it is at risk and a passionate, consuming desire to ensure that the most successful union in European history does not come to grief.
If, when he comes to wind up, my noble friend Lord True could emphasise his own devotion to the union, that would be a reward to my noble and learned friend Lord Mackay for his persistence, and a recognition from your Lordships’ House of the esteem in which we hold him.
Baroness Bennett of Manor Castle (GP) [V]
It is a pleasure to follow Lord Cormack, who has neatly demonstrated in this last group on Report how much this has been a cross-party, cross-House effort. There may be many things that we disagree on, but what has been broadly agreed is that the Bill is not currently fit for purpose. We have seen that again and again, with very strong votes for the amendments put forward by your Lordships’ House from a wide range of directions. It is fitting that, in opening this group, the noble and learned Lord, Lord Mackay of Clashfern, demonstrated the House’s persistence in the face of technological challenges, which has been a great credit to the House right through this debate and, indeed, through the entire Covid-19 pandemic.
I will speak briefly to Amendment 75, introduced by the noble Lord, Lord Purvis of Tweed, to which I have attached my name, as have the noble Lords, Lord Fox and Lord Wigley. I shall not go through it in detail; it is a very detailed amendment, but that reflects of the nature of this debate and the issue of trust. Your Lordships’ House has heard again and again, including in reports from its respected committees, of great concern about details, plans and policies not being put in the Bill. This is one more amendment that seeks to tackle that. Looking at the overview of this, your Lordships’ House has, perhaps slightly ironically, been standing very firm as a defender of devolution and democracy. We will almost certainly return to this again and I urge all Members of this House to stand up for these issues, which are crucial for the future of the United Kingdom, whatever shape that might take.
Lord Wigley (PC) [V]
My Lords, I am glad to have the opportunity to speak in this group of amendments and to follow the noble Baroness, Lady Bennett, who has made a massive contribution to our work on the Bill. As I have stated in previous debates, the House would be well advised to listen to the words of the noble and learned Lord, Lord Mackay of Clashfern. Time after time, he has alerted the House to the need to find an acceptable compromise on these matters. In particular, Amendment 75, in the name of the noble Lord, Lord Fox, to which I have added my name, serves that purpose. The amendment addresses the need to have a coherent framework for the work of the Joint Ministerial Committee and to provide a mechanism for when there may be disagreements. The noble Lord, Lord Purvis, stated that this amendment provides for any opportunity to achieve a consensus where that is possible—an excellent aspiration.
Likewise, the noble Lord, Lord Cormack, stressed tonight, as he has before, the need to find ways of co-operating. As I am sure he would be glad to hear, I add that my main objective in seeking greater powers for Wales is not primarily to demolish the union, but to change it into something that better serves the interests of our respective countries. That means giving greater power and being prepared to be flexible, something that has not been entirely apparent in the Government’s attitude to the Bill.
There clearly has to be some mechanism for dealing with situations where there is a disagreement among our four nations. It should have been the duty of the Government to find an acceptable solution, but they have failed to do so. I therefore believe that we should give MPs in the other place an opportunity to address this matter again by writing an amendment along these lines into the Bill.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Lord, Lord Wigley. I endorse everything that my noble friend Lord Cormack said about our noble and learned friend Lord Mackay of Clashfern.
I have not spoken in general terms about the union. Suffice it to say that, as a Scot by birth with a Scottish father, who made her maiden speech next door on the Scotland Bill, I care passionately about this area. I lend my support to the terms of the amendment as set out by my noble and learned friend. I urge my noble friend Lord True to show the same spirit as our noble friend Lord Callanan when he accepted many of the areas, identified by the Law Society of Scotland in earlier parts of the Bill, on which we felt that the Government should consult. I am just disappointed that those fell to the terms of consent being sought. I am not sure that is appropriate in all those circumstances.
We must not lose sight of the fact that the Scottish Parliament withheld its consent to this legislation. It behoves the Government to move as far as possible and to consult. I am mindful of the old BT advert: it is good to talk. By talking and consulting, many misunderstandings are removed. It also behoves the Government to ensure that the common frameworks are allowed to reach their natural conclusion in the areas that are already well advanced. I wish my noble and learned friend Lord Mackay and his amendment the best, and hope that our noble friend Lord True might be magnanimous and come forward with something similar at the next stage.
Lord Bruce of Bennachie (LD) [V]
My Lords, I am speaking in support of Amendment 75, and I recognise the constructive intentions behind Amendments 73 and 76. I want to be clear that I have not been persuaded in any way of the case for this Bill. It is wrong in almost every respect, and that is why it has been substantially amended: I think the House takes a similar view. Of course, I have supported amendments that mitigate its worst effects, but I view with growing despair the failure of the Government to grasp just how negative and dangerous is the thrust of this Bill.
The Bill is clearly driven by an ideological and deluded belief that the UK Government can negotiate trade deals more far-reaching and radical than have been achieved within the EU and that, in doing so, they do not wish to allow the existing devolution arrangements to account for any friction in the process. Of course, however, Part 5 of the Bill destroys the negotiating capacity of the Government, who have had no experience of negotiating trade deals in more than 40 years, by advertising in advance their preparedness to set aside unilaterally any agreements that they might sign. The trouble is that the Government seem completely oblivious to the friction that will result from unilaterally overriding decision-making under the devolution settlements.
It has been argued repeatedly that decisions involving the devolved Administrations should be based on seeking agreement. The principles behind the common frameworks have been met with wide support and approval, and I welcome their inclusion in Amendment 76 in the name of the noble Lord, Lord Stevenson of Balmacara. However, there is still a serious lacuna in the process for reaching agreements across the four nations, and Amendment 75 addresses this. The amendment also seeks to utilise the joint ministerial committee, which, in practice, has not been used enough, but which could be an effective means of producing a dispute-resolution process.
The problem at the moment is that the default position leaves it to UK Ministers—who, of course, are also English Ministers—to have the final say. It is not desirable for any one of the four nations to have a veto on achieving agreement. We are quite clear about that. That is why a premium should be placed on seeking agreement wherever possible. Where it is not possible, however, there needs to be a mechanism that is seen to be fair and collaborative and not one-sided. That might involve qualified majority voting, which I have advocated on a number of occasions. However, this amendment proposes not a solution but a mechanism for finding one. My noble friend Lord Purvis, in previous contributions, alluded to the Australian example where the mechanism was unanimously agreed by all the state premiers, but decisions relied on qualified majority voting.
This Bill will do immense damage to the union and to what is left of Britain’s good standing in the world, which this Government seem determined to destroy. Amending it is only damage limitation, but Amendment 75 would go a long way to help. I support it: it is a mechanism by which we can find solutions to disagreements among our four nations that do not allow for veto but do seek consent and will have the support of all the component parts of the union, apart from those who have no desire to maintain it. Many of us want this union to survive and to be effective: this kind of amendment is a way to try to ensure that.
Viscount Trenchard (Con)
My Lords, my noble and learned friend Lord Mackay of Clashfern made some powerful arguments on this subject in Committee. As he said, the UK internal market is not a fixed law, like the law of the Medes and Persians. He made a great contribution, together with the noble and learned Lord, Lord Hope of Craighead, in bringing the common frameworks programme into being in 2017.
I believe that the nationalist-led Administrations in Scotland and Wales, by arguing that powers that have been held by the European Commission in maintaining common frameworks at a European level should not return to Westminster but should be returned to the devolved authorities, are acting against the economic interests of their stakeholders. They might want to increase the powers of the institutions of which they are members, but they do not give enough consideration to the damage to the UK internal market that their power grab threatens to cause.
The Duke of Montrose (Con) [V]
My Lords, it is a pleasure to follow my noble friend Lord Trenchard, who has contributed so much to the different stages of this Bill. Once again, it has also been a great pleasure to support my noble and learned friend Lord Mackay of Clashfern as he tries to prompt the Government to outline a process of devolved consultation on any major disputes in the creation of regulations or statutory instruments that future Administrations will consider adequate to the task under this Bill.
Almost all the issues discussed today fall very much into the area that recalls the off-the-cuff remark that slipped from the lips of my right honourable friend the Prime Minister, which he has since spent some time trying to explain in any way that fits with government policies going forward. Speaking as a Scotsman, however, I believe that the First Minister of Scotland should take some comfort from what the Prime Minister said and the fact that as devolution has progressed she has been able to move many Scots institutions and practices—never as far as she might like, but always in the direction that she would like, towards an independent nation. The situation in Wales has not been the same; it has been much healthier. Naturally, this is the approach that we can expect the First Minister to use with any future changes, and it presumably explains the lack of consent from that area.
Like my noble friend Lord Cormack, today I wish to support a Government who aim to maintain a United Kingdom. The Government are looking for support and settlements in structures and frameworks that can support devolution within, and as part of, the United Kingdom. In supporting my noble and learned friend, we are all seeking a truly robust mechanism that has the possibility of overcoming disagreements at the highest level. The debates in your Lordships House today are more and more an illustration of the levels of disagreement that will have to be solved.
In Committee, my noble friend the Minister in his reply gave some idea and suggestions of the criteria that the Government have in mind for resolving disputes at a more mundane level. Some of it sounded quite good, as far as it went. Disputes such as those he outlined are frequently liable to comprise very technical elements, and the Government would like to resolve these at a departmental level, or, as they say, at as low a level as possible—whatever that is.
In Committee, my noble and learned friend Lord Mackay insisted that his suggestion for working these things out through the Joint Ministerial Committee on EU Negotiations was exactly what is needed. However, he is hoping that the amendments the Government have now introduced will move it some way in that direction.
In his response in Committee, my noble friend the Minister enticed us—and it was repeated at a briefing I received today—with the thought that there is in train a revision of the workings of the Joint Ministerial Committee, where already
“The proposal for reforming the formal process for avoiding and resolving intergovernmental disputes was jointly drafted”.—[Official Report, 2/11/20; cols. 529-30]
Having said that, the Minister was then asked by the noble Lord, Lord Purvis of Tweed—who has also prompted us today—whether we would be given some indication of what this reform contained, as it is of consequence to our consideration of disputes under this Bill. But the Minister would not be drawn, and we are being asked to consider this Bill without this knowledge and without the proper mechanism. It sounds as if the Government are going to rely on some political bargaining somewhere along the line.
I have another question of clarification for my noble friend the Minister. Will the Competition and Markets Authority—which is above political interference —and its office of the internal market task force be given the support they need to face disputes in a court of law? That appears to be where this is all heading.
Lord Fox (LD)
My Lords, this has again been a high-quality debate. It is an honour to follow the noble Duke, the Duke of Montrose, who spoke with great wisdom. In offering Her Majesty’s Government support, that support was heavily nuanced with some important questions, which I look forward to hearing the Minister answer.
In the previous debate, on Amendment 69, the noble and learned Lord, Lord Thomas of Cwmgiedd, set the question of whether it was diktat versus consensus. It is the same with group. I am pleased to speak in a group which has heard the contribution of the noble and learned Lord, Lord Mackay, and I share in the admiration of the noble Lord, Lord Cormack, for his contribution. He painted a rather half-full picture of where we have got to in the Bill, and the noble Lord, Lord Cormack, was a little more half-empty. I am afraid that I side with the concerns of the noble Lord, Lord Cormack. Those concerns were further illustrated by my noble friend Lord Bruce, who set out the flaws and problems that remain with the Bill.
I am speaking to Amendment 75, in my name, and I am grateful for the support of my noble friend Lord Purvis of Tweed, the noble Baroness, Lady Bennett, and the noble Lord, Lord Wigley. Overall, my noble friends have been very clear and helpful in setting out the purpose of this amendment. It is essentially to help drive a process whereby the consensus that the noble and learned Lord, Lord Thomas, talked about in the last group can be delivered—an explicit process.
Why do we need an explicit process? One thing that has come through the Bill, and through amendments brought by both Ministers, is an acknowledgement of the need for consultation. However, as we heard from the noble Lord, Lord Empey, who was here just a few minutes ago and I am afraid is not here now, one Minister’s consultation is not necessarily one recipient’s feeling consulted. There is a process that is called consultation, whereby people are informed marginally before the general public, and then there is genuine consultation. All Governments practice both these forms of consultation.
Amendment 75 sets out a process whereby consensus is driven, rather than relying on the Minister or the Government of the day, whether this one or future ones, to deliver that consensus around the Joint Ministerial Committee. That process has been set out, as I said, by my colleagues. The purpose is, in a sense, to bookend the amendment of the noble and learned Lord, Lord Hope. After Part 5 discussions, we started these discussions with the amendment of the noble and learned Lord, Lord Hope, which pushed the common frameworks to the forefront of how the future internal market should be organised. Amendment 75 seeks to put in place a process by which this can happen and, as my noble friend set out, avoids the pitfall of a veto.
The noble Lord, Lord Cormack, said that he had concerns about the union. I have concerns about the union. It is only by delivering a truly consensual process that is seen to be transparent and set out, rather than optional, for people, that that danger can start to be averted. That is why I will be pressing Amendment 75 to a vote—unless, of course, there is a damascene conversion on the Benches opposite.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, like others, I congratulate the noble and learned Lord, Lord Mackay, on his campaign. The Government have listened to it and that has resulted in a number of good and important changes to the Bill. He exerts great influence on our work, and long may it continue.
I admire the thinking that has gone into Amendment 75, in the name of the noble Lord, Lord Fox, and his supporters. It proposes a response to another of the gaps that we keep encountering in the Bill—the need to reform the JMC system and the need for a mechanism for getting agreement, with particular reference, in this case, to the market access principles, about which we have different views. This may not be the time to bring this particular proposal in, but it shows us the way forward and I hope that that will influence the Government’s thinking in other ways and in other parts of our political consciousness.
Amendment 76, in my name, was intended as a fallback, in case our plans for ensuring that the common frameworks programme was made the centrepiece of the process for agreeing the rules required to underpin the UK internal market fell by the wayside. However, this House has strongly supported the amendments of the noble and learned Lord, Lord Hope, on the common frameworks, and we hope that, in time, we can persuade the Government that they can and should do likewise.
I am less sure that we have persuaded the Government about the damage they will do to the devolution settlement if they do not change tack on how state aid is to be organised and their current top-down plans for the shared prosperity fund. I urge them to reflect on the opportunity they have been given by the votes today, but I do not think Amendment 76 will actually take the trick that it was intended to in this case, so I shall not be pressing it to a vote.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I must say that any computer that tries to silence my noble and learned friend Lord Mackay of Clashfern should be carried to the top of the Old Man of Hoy and dropped from a very great height, hopefully with destructive power—unless any environmentalist thinks that that is a serious suggestion; it is a figure of speech. Those who are not familiar with the Old Man of Hoy should understand that it is an extremely high stack in a very beautiful part of the country. It is very hard to climb, too; I have never attempted it—you only have to look at me to see that.
These amendments have difficulties because they would all introduce, in our judgment, a serious risk of the internal market system not being in place at the end of the transition period. That is a serious consideration in our contention. I agree with my noble friend Lord Trenchard, with his great experience of business—indeed, of business with Japan—that a secure, stable and functioning market is part of the bedrock of our union. It is a unionist principle that we should have a common functioning market; I think that that is assented to by almost all of those who have spoken in our debates. Of course, I repeat my personal commitment and this Government’s commitment to the union. My party has always been a unionist party, and we remain as such.
Coming back to the amendments, in our judgment, a considerable delay would undermine business certainty and consumer confidence at a time when it is vital that the economy is able to bounce back in the Covid recovery phrase, about which my right honourable friend the Chancellor spoke so eloquently earlier today.
Amendment 73, as others have said, absolutely underscores the honourable intent of the noble and learned Lord, Lord Mackay of Clashfern. We have had a meeting of minds on that. I am grateful for his kind words; I can certainly assure him that he has been a great influence in securing constructive change, as have other noble Lords in the course of these debates. I can affirm that the union will remain at the heart of the Government’s objectives. I am grateful for his withdrawing the amendment with the comments and, indeed, warnings that he set around that withdrawal because of the clear limitations—I will come on to these—of linking any proposal to the Joint Ministerial Committee.
For that reason, I will move on to Amendment 75, which specifies a process of debate and consent that must be achieved with the devolved Administrations through the joint ministerial council before the market access principles can take effect. This process would add an unacceptable delay to the implementation of the market access principles when the very reason for the Bill that we are here to discuss is to provide certainty to businesses from 1 January 2021, when the European structure falls away. The objective to provide certainty as powers flow back from the European Union is not new or rushed; indeed, efforts have been made to discuss this over a lengthy period. I must remind your Lordships that, sadly, the Scottish Government walked away from the internal market project in spring 2019. However, there has been continuing, positive and helpful engagement at official, and indeed ministerial, level since then. I do not share the pessimism, suspicion or doubt of a number of your Lordships that our union cannot prosper with this internal market after January 2021.
There is a valid question on how governance and disputes relating to the internal market should be dealt with through intergovernmental machinery; my noble friend the Duke of Montrose alluded to our earlier discussions on this. As I updated your Lordships earlier in these discussions, the Government are looking with the devolved Administrations at reforms to the Joint Ministerial Committee structure. The intent is to move on through the joint intergovernmental relations review.
This review will deliver the overarching architecture to support the delivery of improved and effective engagement with the devolved Administrations at all levels of government—as my noble friend the Duke of Montrose alluded to—from officials upwards and, if necessary, the consideration of cross-cutting issues above departmental level. I repeat what I said earlier: this is not complete, but work is progressing positively in this respect. I think that all the various Administrations would accept that. We welcome further discussions with the DAs on finalising the format of these engagement structures, including to complement those relating to the internal market, and I look forward to reporting back to this House on our finalised governance structures when we have concluded the review, which, as I have said, we aim to do by the end of the year.
In addition, as set out in my letter to colleagues prior to Report, the Government propose that a meeting be held in the new year with devolved counterparts once the Bill becomes law to agree a programme of official and ministerial-level engagement on the—my brief says “operationalisation”; can you imagine such a thing?—implementation and operation of the Bill. This includes determining the practical arrangements to deliver our commitment to meet Ministers in the devolved Administrations annually, as undertaken on this Bill, to review the operation of the UK internal market as supported by Parts 1 to 4 of the Bill, including new developments that might require the use of such delegated powers. This annual meeting will be just one of the regular intergovernmental meetings between BEIS Ministers and officials on other portfolio matters, such as the Covid-19 response.
On Amendment 76, I do not mean to disparage the noble Lords, Lord Fox and Lord Purvis of Tweed; indeed, I thank them for their openness and engagement in the process so far. I was going on to thank the Labour Party for its engagement, and I never want to give unintended offence to anyone in your Lordships’ House.
I thank the noble Lord, Lord Stevenson, for what he said; I am grateful for the engagement and discussions that we have had on this and the common frameworks programme. His amendment seeks to create a link between the common frameworks programme and the market access principles. While it is true that the internal market provisions and common frameworks programme are complementary, as we have tried to persuade your Lordships—that is how the Government see it—it is not appropriate to create a link with the common frameworks programme in that specific way in this amendment. I will not go on at length because the noble Lord has said that he does not intend to press it, but I underline that I appreciate the strength of feeling in the House on common frameworks, which I and other Ministers continue to reflect on. In saying that, I will not undertake to come back to this House on Third Reading, so if any noble Lords wish to test the opinion of the House on this issue, it would have to be at this point.
I assure noble Lords that the Government remain committed to the common frameworks programme. The processes established in it will work with future intergovernmental relations machinery. As the noble Lord, Lord Stevenson of Balmacara, pointed out, with the inclusion of the amendment of the noble and learned Lord, Lord Hope—although the Government did not and do not accept it—your Lordships have ensured that common frameworks will be discussed in another place; no doubt we will have opportunities to consider it further. I think that was the spirit in which the noble Lord, Lord Stevenson, was withdrawing his amendment. I appreciate that and offer him those words of assurance.
The process proposed in his amendment and Amendment 75 undermines the purpose of the market access principles, which are designed to provide underpinning certainty that the UK internal market will continue to function in all circumstances. These amendments would create uncertainty about whether and when the market access principles would apply. Leaving businesses to manage this uncertainty and friction is not acceptable. Indeed, it undermines the core purpose of the Bill of providing businesses with certainty that they can continue to trade across the UK at the end of the transition period. For these reasons, the Government cannot support these amendments and I hope the noble and learned Lord will withdraw his amendment.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
I have received no requests to speak after the Minister. I now call the noble and learned Lord, Lord Mackay of Clashfern.
Lord Mackay of Clashfern (Con) [V]
My Lords, I am glad to be able to speak to noble Lords, although I cannot now see them. I appreciate what has been said. I do not think it necessarily involves uncertainty about the principles, as my noble friend Lord True suggested. I think it could be quite clear that the principles apply, except so far as they are modified by the common frameworks agreements. That does not in any way make them uncertain. If it were needed, some kind of notice that a common frameworks decision was to become part of the internal market rule would possibly deal with that if it had to be dealt with, but it is perfectly reasonable to think that the common frameworks could work as part of the arrangements in such a way that the results of agreements in the common frameworks are put into effect in the UK internal market rule.
I agree that the internal market is fundamental to the union of the United Kingdom. As has been said, it was the rule right from the first day of the union. I entreat the Government to think carefully about how to engage the common frameworks policy in the rule of the common market in a way that is acceptable and does no harm. I cannot see that it does any harm. It makes it all the more constructive. The internal market rule is a living instrument, which should accommodate degrees of innovation that might well bring forward the whole market in due course. I shall not press my amendment, as I indicated, because I think the Government have already done what I wanted in most of the situations where it would be suitable. I beg leave to withdraw the amendment.
(3A) A statutory instrument containing regulations under subsection (3) may not appoint a day for the commencement of Part 1, 2, 3 or 4 until the following requirements are met—(a) the requirement in subsection (3B), and(b) the requirement in subsection (3C) or the requirement in subsection (3D).(3B) The requirement in this subsection is that the Prime Minister must convene a plenary session of the Joint Ministerial Council in order to seek agreement of the market access principles set out in section 1(2).(3C) If an agreement on the market access principles is reached at the conclusion of the Joint Ministerial Council session, the requirement in this subsection is that the Secretary of State must lay before Parliament a memorandum of understanding which sets out—(a) details of the agreed principles; and(b) proposals for the establishment of an agreed dispute resolution mechanism relating to the internal market in the United Kingdom for any disputes among the Secretary of State, the Welsh Ministers, the Scottish Ministers, and a Northern Ireland department.(3D) If unanimous agreement is not reached at the conclusion of the Joint Ministerial Council session, the requirement in this subsection is that the Secretary of State must lay before Parliament a report outlining—(a) why unanimous agreement could not be reached; and(b) proposals for the operation of the internal market in the United Kingdom in light of the fact that an agreement under subsection (3B) was not reached unanimously.”
Lord Fox (LD)
My Lords, it has been very helpful to hear the Minister. His description of the intergovernmental discussions is very important and we wish the Government good speed on that. If the Minister or his colleagues can keep us updated on the progress of those very important discussions, we would be grateful.
On Amendment 75, the Minister made great play about the timetable, but it should be noted that the Bill does not affect any existing legislation on day one. Furthermore, the devolved authorities have agreed to a standstill arrangement. The Minister is creating a false timetable pressure on your Lordships. I do not believe that your Lordships need to be constrained on time for this.
In conclusion, the noble and learned Lord, Lord Mackay, spoke about the internal market as a living, breathing, changing process. To run that, there needs to be a structure with the JMC and the devolved authorities. Amendment 75 would set in place one way of doing that and I am sure we would be very happy to discuss other ways of doing that with the Government if they have ideas. To put that pressure on, I would like to test the will of the House.
Lord Judge
Member’s explanatory statement
This amendment is consequential on the removal of Part 5 (Northern Ireland Protocol) at Committee Stage.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
That concludes the Bill. We will now go straight on to the next session, so I ask the Ministers to swap.
United Kingdom Internal Market Bill
Wednesday 2nd December 2020
(3 years, 11 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 155-I Marshalled list for Third Reading - (27 Nov 2020)
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, before the House begins its Third Reading on the United Kingdom Internal Market Bill, it may be helpful to say a few words about Third Reading amendments. In line with the procedure agreed by the House, the Public Bill Office advises the usual channels that Amendment 2 in the name of the noble Baroness, Lady Ritchie of Downpatrick, on the Marshalled List for Third Reading today, falls outside the guidance in the Companion on Third Reading amendments. On the advice of the Public Bill Office, the usual channels met and have recommended to the House that Amendment 2 should not be moved. The noble Baroness, Lady Ritchie, was informed of the view of the usual channels. She has confirmed to my office that she will not move her amendment today.
I am grateful to the noble Baroness and the other signatories of the Report stage amendment and for the positive engagement with the noble Baroness that took place yesterday with my noble friend Lord Callanan and Ministers in the Northern Ireland Office, of which the House will hear more later.
The Deputy Speaker (Baroness Henig) (Lab)
I call the Minister to make a Statement on legislative consent.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I am required to inform the House that on 7 October the Scottish Parliament voted not to grant legislative consent because of its assertion that the Bill negatively impacts the devolution settlements. We have remained open to engagement with the Scottish Government on the contents of the Bill, and this offer still very much stands. The Senedd and Northern Ireland Assembly have not yet voted on legislative consent, but we have continued to engage with both Administrations on the Bill’s contents in recent weeks. This engagement has been fruitful, and the Government have listened closely to concerns. It has resulted, for example, in the Government tabling an amendment to ensure that the devolved Administrations have a strong role in appointments to the Office for the Internal Market panel, in light of Welsh Government proposals.
We appreciate the significance of the UK Government legislating without consent for this Bill. Our ambition, of course, remains to secure legislative consent Motions for the Bill. As I have said throughout the passage of the Bill, the UK Government remain open to discussions with all the devolved Administrations.
Clause 12: Modifications in connection with the Northern Ireland Protocol
Amendment 1
Lord Stevenson of Balmacara (Lab) [V]
My Lords, my original Amendment 21 on Report, also signed by the noble Lords, Lord Anderson and Lord Wigley, and the noble Baroness, Lady Bowles, on which I spoke on 18 November 2020 and moved formally on 23 November 2020, replaced the original Clause 10 with a new clause listing public interest derogations from market access principles. I was pleasantly surprised and grateful that the Government accepted the amendment without a Division. The clerks subsequently advised us that the amendment required some consequential changes to the Bill to remove minor inconsistencies. These changes are set out in the amendments before your Lordships’ House today. Amendment 1 removes two subsections on page 8 and Amendment 3 removes Schedule 1 entirely. I beg to move.
Lord Callanan (Con)
The Government regret the changes made to the previous Clause 10 on Report, but I will not reopen that debate here. I appreciate the need for these amendments to tidy up the Bill text so the Government will not oppose them.
Lord Callanan (Con)
I thank noble Lords from across the House for the quality of the debates and the scrutiny provided throughout the passage of this Bill. I am grateful for the constructive engagement from many noble Lords from all parts of the Chamber that we have had both in and out of the Chamber, and hope that we can continue these discussions in the same spirit. I extend my thanks to other members of the ministerial team: my noble friends Lord True, Lady Bloomfield of Hinton Waldrist, Lady Scott of Bybrook and Lady Penn, as well as Shreena and the rest of the excellent civil servants on the Bill team.
I have said throughout the debates that this Bill is essential for guaranteeing the economic and political integrity of the United Kingdom. It will ensure much-needed certainty for businesses as we leave the transition period. It will preserve our ability to trade freely across all parts of the United Kingdom. Having listened to all the debates in this House on this Bill, I believe I can say that all noble Lords share this objective. While noble Lords and I may not have always agreed on every single point—to put it mildly—the challenges posed by noble Lords and debates we have had have always been conducted in a constructive and courteous manner—except, obviously, the noble Lord, Lord Foulkes, but we accept his contributions.
On a related note, I want to touch briefly on an amendment in the name of the noble Baroness, Lady Ritchie of Downpatrick, referred to by the Leader of the House. As I committed to do on Report, I facilitated and joined a meeting on this issue between my honourable friend Robin Walker, Minister of State in the Northern Ireland Office, the noble Baronesses, Lady Ritchie, and Lady Suttie, to discuss this in more detail. I thank the noble Baronesses for a good meeting, which assuaged their concerns on this issue.
For the benefit of the House, let me be clear: Article 2 of the Northern Ireland Protocol is vital, and the Government are fully committed to upholding it. I assure noble Lords that the rights for individuals in Northern Ireland captured within the scope of the Article 2 commitment will continue to be protected going forward, and will not be impacted by the workings of this Bill. I have explained this in greater detail in a letter to the noble Baroness, Lady Ritchie. To reassure noble Lords who may have similar concerns, I will place a copy in the Library. I beg to move.
Baroness Finlay of Llandaff (CB) [V]
My Lords, it is a great honour to be speaking at this point. My noble friends on the Cross Benches have brought their wide range of experience, wisdom and differing views to crucial amendments to the Bill.
The Bill is of huge constitutional significance: it goes to the heart of our history, to the devolution settlements that have matured as we enter a new era outside Europe. As the UK takes back control and seeks to be more independent than over recent decades, decision-making and mutual respect among the four nations of the United Kingdom will be more important than ever.
We now see that Scotland is withholding legislative consent and Wales is pending, as is Northern Ireland. To lose those nations would compound the threat to the union from a party that is called the Conservative and Unionist Party. In each nation, elected representatives know the intricacy of local problems and ways to achieve solutions to make our nations attractive for innovation and new ways of working. Covid has made the challenges greater, as many in the population have been deeply traumatised by bereavement, isolation and rising unemployment.
This House has examined every word of this Bill with rigour. The amendments it has made have been resoundingly supported around the House and outside. They have laid a foundation for the UK’s reputation to be restored, as we foster new relationships and rebuild older ones around the globe. Through its amendments, the House has shown its commitments to the future well-being of our national relationships and constitution. We have delivered a clear beheading sentence to Henry VIII’s dangerous clauses, and the rumble of Llewellyn the Great and Robert the Bruce turning in their graves was audible at times.
We have ensured that there is a secure negotiating framework on the face of the Bill to achieve that consensus across our four nations, which history has taught us achieves so much more than mere directive dominance. We have removed one clause that would allow the Government to use the allure of taxpayers’ money to work around, not with, the devolved Governments and to undermine their priorities. We have removed another that would explicitly impose new reservations on their competence in respect of state aid. We have protected the devolved institutions’ ability to introduce ecological and environmental improvements and new public health initiatives in their nations, the learning from which will benefit us all.
This Bill has posed a major threat to the union itself. With my noble colleagues on these Benches, particularly the noble and learned Lords, Lord Hope of Craighead and Lord Thomas of Cwmgiedd, we have done all we can to ensure that threat diminishes. It has been an enormous privilege, if daunting at times, to be able to participate in this Bill. So many across the House have brought their expertise—from the Select Committees on which they serve, particularly on common frameworks, as well as past experience as elected representatives of widely differing areas—to a shared goal of improving the Bill.
Now we send the Bill on to the next part of its journey, and I hope the Government will continue to listen hard and will reflect on the importance of the amendments and the eloquent speeches of many, including my noble and learned friend, Lord Judge. I genuinely believe that noble Lords should and will resist the reinsertion of distasteful parts of the Bill and the deletion of key amendments.
Finally, it is my pleasure to thank all those who have contributed to the Bill’s passage: the outstanding Public Bill Office and parliamentary clerks, the Bill team and the many who work to support us behind the scenes, particularly the digital team and broadcasting hub, which enabled so many smoothly unmuted contributions—I beg your pardon that mine failed just now—and efficient votes. We have shown that we can function very effectively as a hybrid House, voting remotely, with numbers that showed how clearly the Lords can express its collective views.
The Ministers, Whips and Peers showed they can still maintain a sense of humour under pressure. I would particularly like to thank the Lord Speaker and my fellow deputies, who chaired us through very complex parliamentary procedures. I thank them all very much indeed. Once again, to all in this House who supported these critically important changes to the Bill, I give a huge thank you.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Finlay of Llandaff. At this stage, I thank the Ministers, the noble Lords, Lord True and Lord Callanan, the Opposition Front-Bench team, the noble Baroness, Lady Hayter, the noble Lord, Lord Stevenson of Balmacara, and the noble and learned Lord, Lord Falconer of Thoroton. I thank the noble Lord, Lord Purvis, on the Liberal Democrat Benches, and the noble Baroness, Lady Finlay of Llandaff, and the noble and learned Lord, Lord Judge, from the Cross Benches.
In his speech today, the Minister, the noble Lord, Lord Callanan, referred to the meeting that he had with the noble Baroness, Lady Suttie, and myself yesterday on the non-discrimination principle in relation to Clause 11 of the Bill, which specifically refers to Northern Ireland and the two commissions: the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland, which have agreed today with the dedicated mechanism in respect of the Northern Ireland protocol. Our meeting yesterday was very productive, and, in fact, the Minister’s subsequent letter to me, following our exchanges on Report, was also productive and provided good clarification on the point of the market access principles and the non-discrimination principle in relation to the Bill.
Both commissions found it very helpful, because the issue was central to the recent amendment and recent correspondence with the Minister and concerned the operation of those market access principles introduced in the Bill, particularly the non-discrimination requirement. The question was whether these principles applied to legislation introduced to ensure that there will be no diminution of certain rights in Northern Ireland resulting from the exit of the UK from the EU, as required by Article 2 of the protocol. As already referred to, the two commissions have direct responsibility, as they have agreed to act as the dedicated mechanism responsible for monitoring, supervising, advising, reporting on and enforcing the Government’s commitment under Article 2 of the Northern Ireland protocol of the withdrawal agreement from the end of the transition period.
Following that period of uncertainty, shall we say, the Minister’s letter to me of last Friday—which was productive—and our meeting yesterday proved a very useful exchange, providing the necessary clarifications, for which the noble Baroness, Lady Suttie, and I are extremely grateful. I further note that the Minister has agreed to our request to put that letter, plus another one to do with procurements, in the Library of your Lordships’ House.
Robin Walker, Minister at the Northern Ireland Office in the other place, has agreed to write to both commissions: the Northern Ireland Human Rights Commission, for which he has responsibility, and the Equality Commission for Northern Ireland, which is the responsibility of the Northern Ireland Executive. In that letter, he will state what the Minister, the noble Lord, Lord Callanan, has already stated to me.
I thank Ministers for their deliberations with us and productive outcomes, and I hope it all works well. I hope that Part 5 of this Bill, which deals specifically with the Northern Ireland protocol, will not be reinstated in the other place, because I firmly believe in the principle of reconciliation. Breaking international law and the other international agreement, the Good Friday agreement, at any point would not be good for peace or political progress in Northern Ireland.
Lord Garnier (Con)
My Lords, to save time, I ask your Lordships’ House to read into my remarks the kind words of the noble Baroness, Lady Ritchie, about those behind this Bill. I think it is appropriate for me, a disagreeable Conservative Back-Bencher, to congratulate the Ministers, my noble friends Lord Callanan, Lord True and Lady Bloomfield, as well as my other friends on the Front Bench, for their conduct of the Bill, good spirit and sense of humour, as they have watched large parts of the Bill of which they had conduct, crumble during its passage. The Bill has had a bumpy ride; I do not think that is controversial. Today, we will return a somewhat different Bill to the other place compared to the one that it sent to us.
None the less, I urge that we do let it pass and go back to the other place. As I implied on Report, it has, on occasion, been tempting to think that, in relation to the progress and development of the Bill, Downing Street had
“learned nothing and forgotten nothing”.
Of course, Talleyrand was referring to the Bourbons after the abdication of Napoleon: they seemed determined endlessly to repeat the mistakes of their predecessors who had been swept away in the French Revolution. That is clearly not a fate I wish for the Government, although last night’s revolt in the Commons suggests that they need to have a care.
It may be said that all that needs to be said has already been said about the Bill. In the other place, that is often seen as a good reason to say it all over again. I will not say it all over again, but I will point out two themes that have emerged from our consideration of the Bill, which I hope the other place will not ignore when it considers the Bill we return to it.
The first relates to the rule of law. The Bill did not start well. It began with my right honourable friend the Secretary of State for Northern Ireland announcing that the Government would deliberately renege on their international treaty obligations, albeit, as he said, in a very specific and limited way. It was not a slip; it was a deliberate statement. But it was certainly a mistake, and it made the Government look ridiculous.
The Government sought to cure that error by passing the buck to the other place, and then sought to avoid the error by arguing that they were not breaking their rule of law obligations, or that there was a difference between our international law and domestic rule of law duties, or that it did not matter, or that they had to break their obligations because, in some unspecified manner, the EU was going to act in bad faith. I sincerely regret that the Lord Chancellor and the Attorney-General took part in this because, objectively observed, they did not assist. Few Britons who believe in the rule of law and in our respecting treaty obligations were convinced by any of that.
Part 5 of the Bill was unsupportable and it was rightly removed for the reasons set out by the noble and learned Lord, Lord Judge, and many other thoughtful contributors, from all parties and none. I therefore gently ask the Government and the thinking majority in the other place not to put Part 5 back into the Bill.
Lord Garnier (Con)
It is always a joy to have the support of my noble friend.
No British Government, and certainly no British Conservative Government, should be in the business of persuading the United Kingdom Parliament to enact a law that breaks a treaty that is barely a year old, the terms of which were put into domestic law earlier this year by the very same Government and Parliament. They cannot break the law, still less the law of their own making, and expect to engender respect at home or abroad.
My second theme relates to the maintenance of the United Kingdom—something already touched upon by the noble Baroness, Lady Finlay. I am a unionist, and I want to see the United Kingdom of Great Britain and Northern Ireland continue and thrive. Of course, I know that there are some people in Scotland, Wales and Northern Ireland who want to see a different constitutional arrangement, whether that be through greater devolution, a federal system or the separation of Wales and Scotland from the United Kingdom and the unification of Northern Ireland and the Republic. But there are, and there were, provisions in the Bill—no doubt sincere arguments were made in favour of them by the Government—that will encourage those against the continuance of the union to conclude that the United Kingdom Government do not care about their views and that they should therefore try even harder to leave. My noble friend Lord Callanan’s statement at about 2.20 pm exemplified that.
The law too often passed by Parliament is the law of unintended consequence. If we are not more aware of the effect of our words and deeds upon the minds of those who want to bring the union to an end, it is we unionists who will live to regret it. It was, after all, the leader of the Scottish Conservatives, my honourable friend Douglas Ross, who recently said that the case for separation was being won in London, not in Scotland.
I therefore ask the Government, in relation to this second theme—the maintenance of the United Kingdom —not to do anything that will give the separatists any excuse to say that the United Kingdom has had its day and that London knows nothing and cares less for the opinions and self-respect of the devolved Administrations. Of course separatists will find insult where none is intended and make good use of every slight, actual or perceived, so let us not give them any excuse to do so. Let us treat the devolved Administrations with respect and co-operate together as a functioning union, with more to gain from being one country than four separate ones.
I urge the other place to rest content with the Bill as we return it to them. It is in better shape now than it was and it will do less damage to the union and our country’s international reputation.
Lord Fox (LD)
My Lords, when the Bill entered your Lordships’ House, it presented many problems—not to put too fine a point on it. It is a great honour to follow the noble and learned Lord, Lord Garnier, who, among his many pieces of advice, advised Peers not to rehearse the arguments that we have heard over the course of the Bill. So I will not do that, but I agree that the Bill leaves your Lordships’ House in a better state than when it arrived, though it is of course still far from perfect.
During the scrutiny process, as the noble Baroness, Lady Finlay, alluded to, over 30 amendments have been inserted into the Bill through your Lordships’ overwhelming votes. At the same time, as other Peers have said, large and important parts of the Bill were removed as a result of this process. I hope this gives Her Majesty’s Government cause to reflect further, rather than simply trying to move on.
Additionally, the Government themselves have made more than 30 amendments to the Bill, and that indicates that the Ministers have been listening to and participating in this debate. I thank the noble Baronesses, Lady Bloomfield, Lady Penn and Lady Scott, and the noble Lords, Lord True and Lord Callanan—the full cadre of Ministers—for their stamina and general good humour through this process. I agree that the Ministers listened, and the government amendments are testimony to that. The departmental Bill teams must get much credit for keeping Ministers on the straight and narrow—if indeed they did. The Bill has been drafted and debated on an extremely tight schedule, and I am sure that the Bill team lost many weekends and evenings as it stewarded Ministers through this process—as well as drafting the many letters for my noble friend Lord Purvis that have emerged.
I thank all the Cross-Bench and Labour speakers, the Bishops and their teams for the great collective effort on the Bill. It is invidious to pull out names but I would like to thank the noble Baronesses, Lady Hayter and Lady Finlay, the noble Lord, Lord Stevenson, and the noble and learned Lords, Lord Judge, Lord Hope, Lord Thomas and Lord Falconer, who put in many hours to get us to where we are today. Perhaps the Law Society of Scotland and the Welsh Government should also get a special mention for the hours that they have put into drafting amendments.
I would also like to mention the parliamentary clerks, as well as the Whips’ Office and the usual channels, for helping to get the Bill timetabled and get us through it. It was not an easy task in the circumstances. From our team, I would single out Elizabeth Plummer and Sarah Pughe in the Lib Dem Whips’ Office, who have done a fantastic job. Finally, I thank the cadre of colleagues I have on the Benches today, my noble friends Lady Bowles and Lord Purvis, and the 20 other Lib Dem Peers who have participated in the various stages of the Bill.
It is clear from what I have been saying over the past weeks that this is not the way the Liberal Democrats would have done it, but I feel that the debates have been deep as well as wide, and serious and well considered on all sides. It is important that this is considered as the Bill leaves this House and goes forward.
The Minister mentioned legislative consent. Other speakers have said how important it is that Part 5 remain out of the Bill; that is very true. Many of the other amendments were also targeted at the grab at devolution that the Bill seeks. The principle of legislative consent requires that those amendments be given full consideration in the other place. If they are summarily dispatched, as is often the case with your Lordships’ amendments, the message will be sent clearly to the devolved authorities about what this Government consider to be important in terms of the devolution settlement. That runs far past this Bill, and far past the term of this Parliament. It is a very important issue—and not one that I think the Government, in the end, want to have on their hands.
I am wont to give Ministers advice, and they are wont to ignore it, but there are many other people wiser than me who are also giving Her Majesty’s Government this advice. I hope that, when it all comes out in the wash, that advice will be listened to— because this issue is far more important than just this Bill.
Lord Stevenson of Balmacara (Lab) [V]
I thank the ministerial team for their time and accessibility while we have been working on the Bill. Bills that span departments—three, in this case—are a nightmare to run. Credit is due to those involved, in BEIS, the Cabinet Office and the Treasury, for their seamless performance. We tried hard to find divisions between them, but we failed. I particularly want to thank the Minister from the Cabinet Office, Chloe Smith MP, at a difficult time for her. I am sure the whole House will want to join me in wishing her well for the next six months, and a speedy recovery.
Our team in the Lords is used to working collaboratively, and we have tried to blend our experiences and interests to good effect in working on the Bill. I thank in particular my noble friend Lady Hayter for her endless supply of wit and wisdom, and my noble and learned friend Lord Falconer, who must have been a terrifying vision when he rose at the Dispatch Box to take on the combined ministerial skills that he was dealing with. We have also worked closely with Commons colleagues, and we now pass to them the responsibility for defending the changes that we have made.
The Bill team has supported the parliamentary processes very well and has managed the large number of Zoom meetings and letters with huge professionalism. We thank them. We should also thank the technical teams who have supported the hybrid House so well. Last, but not least, I thank Dan Harris, our legislative support team member, who has absorbed huge amounts of work and juggled his other commitments so as to keep us on track, drafting all our amendments and dealing with the Public Bill Office to get us to where we are. He celebrates a big birthday this week, and he deserves the break that he is taking.
As the noble Lord, Lord Fox, said, it is customary to say that Bills that have been sent to us for consideration by the other place leave here much improved by the detailed scrutiny that your Lordships’ House brings to legislation. I am not sure that this Bill—with, as the noble and learned Lord, Lord Garnier, observed, its 65 amendments in all, and shorn of about one third of its original material—can qualify for that appellation. It still seems to have some problems and deficiencies. However, we think it has been improved.
My colleagues and I were heartened by the handover meeting we held yesterday with the ministerial team, involving Commons Ministers as well, which seemed to open up possible joint solutions to many of the remaining issues. Of course, external events may well intervene, but we are not far apart on many issues, and we remain willing to work together with the Government to resolve the outstanding issues over the next period.
Lord Callanan (Con)
My Lords, let me first thank all those who have contributed to the debate for their remarks. Again, all noble Lords have approached the subject in a timely and constructive manner, in the finest traditions of this House, as has been demonstrated throughout the passage of the Bill. It is now up to the other place to scrutinise the changes that this House has made to the Bill. It would be wrong of me to prejudge what will happen there, but I can say that should the Bill return for further consideration in this House, I look forward to working with all noble Lords in the spirit of constructive—well, sometimes constructive —co-operation that we have all shown so far.
United Kingdom Internal Market Bill
Monday 7th December 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 7 December 2020 - (7 Dec 2020)
20:55 - The House divided: - Ayes: 359 / Noes: 265 - Question accordingly agreed to.
21:06 - The House divided: - Ayes: 360 / Noes: 265 - Question accordingly agreed to.
21:23 - The House divided: - Ayes: 357 / Noes: 268 - Question accordingly agreed to.
21:34 - The House divided: - Ayes: 359 / Noes: 55 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 48, 49 and 50. 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.
Having given careful consideration to Lords amendment 50, which refers to state aid and the Office for the Internal Market, Mr Speaker is satisfied that it would impose a charge on the public revenue that is not authorised by the money resolution passed by this House on 14 September. In accordance with paragraph (3) of Standing Order No. 78, the amendment is therefore deemed to be disagreed to and is not available for debate.
After Clause 1
Common frameworks process
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move, That this House disagrees with Lords amendment 1.
Madam Deputy Speaker
With this it will be convenient to discuss the following:
Lords amendments 2 to 7.
Lords amendments 8 to 19, and Government motions to disagree.
Lords amendment 20 to 29.
Lords amendments 30 to 34, and Government motions to disagree.
Lords amendments 35 to 41.
Lords amendment 42, and Government motion to disagree.
Lords amendment 43, Government motion to disagree, and Government amendments (a) and (b) to the words so restored to the Bill.
Lords amendments 44 to 57, and Government motions to disagree.
Lords amendments 58 to 60.
Lords amendment 61, and Government motion to disagree.
Paul Scully
This Bill has generated a lot of debate in both Houses, and rightly so. It is a Bill that is vital in providing certainty for businesses and for protecting the Union. It is a Bill that allows the continuing smooth functioning of our UK internal market at the end of the transition period. Our approach will give businesses regulatory clarity and certainty and ensure that the cost of doing business in the UK stays as low as possible, and it will do so without damaging and costly regulatory barriers emerging between the nations of the United Kingdom.
In the other place, the Government and peers had good discussions and debates on the principle behind the Bill, and they have come to very reasonable proposals in some areas. It is right that both Houses work constructively to scrutinise and improve legislation, and the Government are therefore accepting a number of Lords amendments. That is why the Government are disappointed that in some cases amendments put forward by the other place would do the opposite and generate more ambiguity and uncertainty. Other amendments put forward go further, in hampering the Government’s ability to protect the Union and our internal market, to level up the country and to take advantage of the opportunities afforded by the end of the transition period. That is why today the Government are disagreeing with a series of amendments, to which I will now turn.
Regarding Lords amendments 1, 19 and 34, the other place and Her Majesty’s Opposition in this House have been clear about their strong support for common frameworks. I am pleased to hear that, because the UK Government are strongly committed to them as well. Joint work with the devolved Administrations to develop common frameworks is progressing well, and the first three frameworks are currently undergoing parliamentary scrutiny. The common frameworks programme represents successful joint working, ensuring that our shared objectives of making coherent policy, upholding high standards and supporting the distinct needs of each part of the UK can advance as one. They are evidence of our mutual respect for devolution.
I am pleased that work is well under way on the 33 frameworks that we expect to conclude jointly with the devolved Administrations. Thirty of those will be provisionally agreed by the end of 2020 and will then be scrutinised by Parliament and the devolved legislatures. A small number are likely to clear scrutiny by the end of the transition period, at which point they will become full frameworks.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is good that the Minister recognises the importance of common frameworks. All four nations of the United Kingdom have agreed a common framework on an emissions trading system, so why is the Treasury now considering imposing a carbon emissions tax instead, against the wishes of the devolved Administrations? Surely that does not respect common frameworks.
Paul Scully
Discussions on that are ongoing and it is right that we have them. On the common frameworks, the devolved Administrations and representatives of England in the UK Parliament have made their views well known.
Jim Shannon (Strangford) (DUP)
We have a strong agrifood sector in Northern Ireland. There needs to be an understanding between the Northern Ireland Assembly and this place, to ensure that our agrifood sector can continue to expand and sell its products around the world. Will the Minister reassure us that that will happen and that nothing will hinder it?
Paul Scully
The whole purpose of this is that we can get the internal market right. We do not want to hamper any business, wherever it is in the UK, from being able to trade overseas with the opportunities afforded by global Britain at the end of the transition phase and beyond.
I want to make progress because I want to get across some detail and allow other Members to have their say. The common framework programme was never designed to be an all-encompassing solution to the maintenance of the internal market. This Bill will instead provide the additional legislative protection to internal UK trade, which is required for business certainty. As an aside, I note that half of the active frameworks have little or no interactions with this Bill, as they do not pertain to the internal market. That has sometimes been forgotten in recent debates.
The flexibility that underpins the framework programme is key to its success. It was set up in 2017 with an objective to manage regulatory coherence in specific devolved policy areas of returning EU law. While the frameworks are envisaged in very high-level terms in schedule 3 to the European Union (Withdrawal) Act 2018, they are taken forward by voluntary agreement, which is the reason why neither the UK Government nor the devolved Administrations have so far felt the need to codify the common frameworks process in legislation. I thank the noble and learned Lord Hope for his considered contributions to the debate and for his thoughtful amendments to the Bill. However, while the Government have carefully considered the arguments made in both Houses about putting common frameworks on the face of the Bill, we feel that that may not sit well with the flexible and voluntary nature of the common frameworks programme.
In addition to their voluntary nature, we must also bear in mind that the current frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme overall. I am therefore concerned that the Lords amendments would automatically disapply mutual recognition and non-discrimination principles. This would create a very broad exclusions regime and uncertainty for businesses and consumers over the terms of trade within which they are operating. That is clearly not in keeping with the aim of this Bill, which is to provide maximum certainty and a stable trading environment.
Joanna Cherry (Edinburgh South West) (SNP)
I will just take the Minister back to his statement that the common frameworks were never supposed to be all-encompassing in relation to the internal market, because I am looking at the Joint Ministerial Committee communiqué from 16 October 2017, which says in its first principle that the common frameworks were to be
“established where they are necessary in order to…enable the functioning of the UK internal market”
The Government have gone back on that, have they not?
Paul Scully
The hon. and learned Lady will note that the document states “where…necessary”. As I said earlier, many of the common frameworks do not relate to the internal market. That was my point exactly.
It is a core point that none of us should wish to see internal barriers to trade erected inside our country to the detriment of jobs and growth. We have been clear in the other place about how we see the common frameworks programme and the market access principles interreacting with this point at the heart of the argument. While common frameworks are jointly owned, the UK’s full internal market regime can only be owned by the UK Government and overseen by the UK Parliament.
The Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith) looks forward to completing the delivery of the common frameworks programme, discussing further with our partners in the devolved Administrations and the devolved legislatures how we can capitalise on working ahead through common frameworks and put these areas of co-operation on a sustainable footing for the longer term to the benefit of citizens and businesses. We welcome the support of right hon. and hon. Members in achieving that, but we have been clear that amendments 1, 19 and 34 are not necessary and have considerable drawbacks. I therefore call on the House to disagree with them.
To speak to Lords amendments 8 to 13, 15, 16 to 18, 30 to 33 and 56, the Government have taken positive steps to reach a compromise position that balances concern about delegated powers with the ability of the Government to act to protect our internal market. The Government have already made significant steps. We have removed the power, which is no longer considered essential, for the operation of flexibility in the internal market system. We have made further changes on transparency and accountability, such as a review mechanism on the use of such powers. In the other place, we tabled amendments to require consultation with the devolved Administrations before the use of key powers, reflecting our previous commitments. However, once consultation is undertaken, the right place for final decisions should be back in Parliament where parliamentarians from all parts of the UK can debate and vote on the proposed use of the powers. The Government are therefore disappointed by the decision in the other place.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
My understanding is that the Welsh Senedd will vote tomorrow to decline to approve the legislative consent motion for the Bill. Does that not indicate the problem with the British Government’s approach to consent? Consent means nothing without the power of veto.
Paul Scully
If the Welsh Assembly decides that way, that will be regrettable—[Interruption.] The Welsh Senedd. It will be regrettable, because it is important that we continue to work together and allow continuity of trade and business between Wales, Welsh businesses and, indeed, the other nations of the UK. That is what Welsh businesses have been asking us for as we have been talking to them. They want certainty, and this Bill will give them certainty.
The Government are disappointed that the other place did not take up our reasonable offer and removed key provisions needed to ensure the operation of the internal market.
Sammy Wilson (East Antrim) (DUP)
Does the Minister not accept that for places such as Northern Ireland, Wales and Scotland, common standards that allow free trade between those parts of the United Kingdom and their main market, which is probably in England, are an advantage to everyone? The provisions in the Bill should not scare or frighten anybody.
Paul Scully
The right hon. Gentleman puts it correctly. When I have spoken to businesses in Scotland, Wales and Northern Ireland, they have agreed with businesses in England. The main market for so many of these businesses is within the United Kingdom. We talk about global Britain, but we have to make sure that we have our internal market right. The opportunities for business, including those in Northern Ireland, are absolutely at the heart of this Bill, and I appreciate his intervention.
Removing the powers that I have outlined would make it difficult for the Government to respond to businesses and the wider stakeholder feedback and act rapidly to respond to changes in the UK internal market due to the shifting economic landscape. The other place also added in conflicting, inconsistent amendments accepting our consultation offer, but also adding consent mechanisms.
Moreover, the other place’s three amendments 12, 13 and 56 introduce a new system for excluding requirements from market access principles, based on a long list of legitimate aims. This new clause would render the protections in part 1 almost meaningless. The regulator or legislator could justify a very wide variety of discriminatory measures using the justifications in the new clause. It would result in uncertainty as to what is in scope and leave little protection from regulatory barriers for businesses operating across the whole of the UK. However, the door remains open to the other place to reconsider, and we have kept our offer on the table.
I will turn now to Lords amendments 48 and 49. Clauses 48 and 49 support the Government’s determination to deliver the commitments on which we were elected—levelling up and delivering prosperity for the whole United Kingdom and strengthening the ties that bind our Union together. They provide for a unified power that operates consistently UK-wide.
Paul Scully
I will just make progress for a minute.
The power will allow for strategic investment throughout the UK, underpinning the United Kingdom Government’s determination to see all parts of the UK flourish. It will make sure that we can deliver UK-wide replacements for EU funds, including meeting our manifesto commitment to replace EU structural funds, and allowing the UK Government to invest directly to support communities and businesses across all four parts of the UK.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Can the Minister explain how this can be strategic investment if the Senedd and the Scottish Parliament have no say in arranging it?
Paul Scully
As we said in the last debate in this place, this is complementary to existing spending powers in Wales and Scotland. We will always look to work for the good of the people there, which will reflect—undoubtedly, I am sure, on so many occasions, if not all occasions—the mood and direction from their elected politicians in the Senedd.
We need to make sure that we can deliver the UK-wide replacements for EU funds, including meeting our manifesto commitment to replace EU structural funds and deliver the UK shared prosperity fund, which will allow the UK Government to invest directly to support communities and businesses across all four parts of the UK. Previously in many of these areas, the EU mandated how our money had to be spent, with little say from elected representatives in the United Kingdom. The UK Government intend to take a much more collaborative approach in delivering any funding that replaces EU programmes.
The UK Government remain committed to working collaboratively with key partners, including devolved Administrations, in the provision of financial assistance under this power. Let me be clear that this power is in addition to the devolved Administrations’ existing powers. It will allow the United Kingdom Government to complement and strengthen the support given to citizens, businesses and communities in Scotland, Northern Ireland and Wales. It does not take away responsibilities from the devolved Administrations.
Chris Elmore (Ogmore) (Lab)
The frustration at this utter confusion is that this actually circumvents the devolution settlement. Devolution has been in place for some 20 years, and it is Ministers in Wales who have been working with the European Union on how European funding is allocated within projects in Wales. This new system removes the decision making from Welsh Ministers and circumvents the devolution that has existed for more than 20 years. Can the Minister not understand the frustration on the Opposition Benches and the bewilderment of Welsh, Scottish and Northern Ireland Ministers about why they are just not being consulted on priority projects in Wales and any of the other nations of the UK?
Paul Scully
I can understand the frustration if that is the wilful misinterpretation of what is actually happening. The EU mandates so much of this spending before it gets to the Welsh Senedd, the Scottish Parliament and the Northern Ireland Assembly and, indeed, here in England, from where we are speaking, but we will work collaboratively to ensure that so many of those concerns are met.
We are disappointed as a Government that the other place has decided to take out the power and hamper the Government’s ability to level up the country and drive investments into all parts of the UK. These Lords amendments also alter the financial arrangements made in this House, and I therefore call on this House to disagree with them.
Turning to Lords amendment 51, I emphasise the importance of the UK continuing to take a clear and consistent approach to subsidy control as we move away from EU state aid rules. The Government have always been clear in our view that the regulation of state aid and the EU’s approach to subsidy control is a reserved matter. This reservation does not change the devolved Administrations’ position in practice. The devolved Administrations have never previously been able to set their own subsidy control rules, as this was covered by the EU state aid framework, but they will continue to make their own spending decisions on subsidies, as they do currently. The effect of the amendment would be to create unacceptable uncertainty regarding the extent to which subsidy control is a reserved or devolved competence. This would potentially give rise to inconsistency if there were different regimes to regulate subsidies across the UK. Ultimately, that could undermine fair and open competition across our internal market, inevitably discouraging investment in the UK, bringing additional costs to supply chains and consumers.
This reservation will enable the UK to design a bespoke subsidy control regime that meets the needs of the UK economy. The Government have been clear that any future domestic regime will operate in a way that works best for all UK businesses, workers and consumers. In the coming months, we intend to publish a consultation on whether we should go further than our World Trade Organisation and international commitments, including whether further legislation is necessary. The House should therefore disagree with this amendment.
Sir Robert Neill (Bromley and Chislehurst) (Con)
The Minister will appreciate, having had some hand in the amendments, that I have an interest in this matter. He will have seen that a statement has been put out by the Government—following the meeting of the Joint Committee earlier today—in which they undertake that they would, in effect, remove clause 44 and deactivate clauses 45 and 47, which were the subject of some concern in this place. Will he confirm that that is the case? Will he also confirm that were there to be any like clauses included in the taxation (post-transition period) Bill, which may come before us, they should, at the very least, be subject to the same parliamentary lock as was inserted in this Bill, if they were to be required at all?
Paul Scully
I thank my hon. Friend for his contributions not just here and now, but in the earlier stages of this Bill, which allowed for that important lock. The taxation Bill and this Bill work in lockstep as well, and I can confirm his interpretation. I will come on to that in a second regarding the statement earlier today.
After the transition period ends, Northern Ireland will and must remain fully integrated with the UK’s internal market. There should be nothing controversial about that. The protocol expressly recognises that Northern Ireland will remain part of the UK’s customs territory and qualifying Northern Ireland goods will enjoy unfettered access to the rest of the UK market. We will never accept additional burdens or barriers on goods moving from Birmingham to London, and neither should we accept those on goods moving from Belfast to Liverpool. Moreover, clause 46 would codify in legislation the existing practice where state aid is notified to the European Commission by the Foreign Secretary via the UK mission in Brussels.
Ian Paisley (North Antrim) (DUP)
I thank the Minister for the commitment he has made about goods travelling from GB to Northern Ireland. Can he tell us whether the same assurance will be in place for all goods moving from Northern Ireland to GB?
Paul Scully
I can indeed.
Part 5 of the Bill contains vital provisions to ensure that this will always be the case, whatever the outcome of our negotiations within the EU. Since these clauses were originally introduced, the UK and EU have worked constructively together through the withdrawal agreement Joint Committee discussions, which continue to progress, and final decisions are expected in the coming days. I can confirm today that if the solutions being considered in those discussions are agreed, the UK Government will be prepared to remove clause 44, concerning export declarations, from the Bill. The UK Government would also be prepared to deactivate clauses 45 and 47, concerning state aid, such that they could be used only when consistent with the United Kingdom’s rights and obligations under international law.
Stephen Farry (North Down) (Alliance)
I wonder whether the Minister could reflect on two points. First, I am relatively new to this place, but my understanding is that there has not been a bigger vote in the other place against a proposal from this House for many decades, if not centuries. Secondly, does he recognise that the majority of people and businesses in Northern Ireland want to see the solutions he set out work through the Joint Committee and not through any breach of international law? It is important that there should be a solid legal framework to enable businesses in Northern Ireland to conduct their affairs.
Paul Scully
Indeed, we all want this to be dealt with through the Joint Committee. That is why the discussions are continuing, and that is why, in these crucial hours of negotiations between the UK and the EU, we wish them well in that regard.
Sir Robert Neill
I will not trespass on the Minister’s time again, but will he confirm that the deactivation of clause 47 would remove one of the areas—the “notwithstanding” clauses—that caused most concern, particularly to legal commentators? Does he agree that that is a significant gesture of good faith on the part of Her Majesty’s Government’s and that it will hopefully remove some of the real concerns that have, for legitimate reasons, been expressed in other places? Does he agree that this demonstrates that we want to find a constructive way forward?
Paul Scully
My hon. Friend is right again. I know the debate that has surrounded the “notwithstanding” clauses, and it is important that we work in collaboration and partnership as we do these difficult negotiations, but, ultimately, that is where we want to solve these problems, rather than having to legislate for them in the first place. As I say, we will deactivate them when we get to the point that that is consistent with the United Kingdom’s rights and obligations under international law. While we are hopeful of success, it is only prudent that until such time as the discussions have successfully concluded, we retain these clauses in their current form as a fall-back option.
As has been said many times, the Government are fully committed to implementing the withdrawal agreement and the Northern Ireland protocol, and we have already taken many practical steps to do this, but these clauses will ensure that, irrespective of the outcome of our negotiations with the EU on implementation of the protocol, we will always protect Northern Ireland’s place in the United Kingdom. They will ensure that businesses based in Northern Ireland have unfettered access to the rest of the United Kingdom and that there is no legal confusion or ambiguity in UK law about the interpretation of the state aid elements of the Northern Ireland protocol.
Sammy Wilson
I thank the Minister for giving way again. I just want to get some clarification. Article 16 of the Northern Ireland protocol makes it quite clear that where the protocol does serious economic, societal or environmental damage to Northern Ireland, the Government have the right to act unilaterally. If this clause is to be removed and set aside, how will the Government be able to take unilateral action if changes in the protocol or demands from the EU do the kind of damage that is outlined in article 16?
Paul Scully
As I have said before in regard to these clauses, the changes that we set out in a statement earlier today work on the assumption that we have had success in the discussions and that we can solve this elsewhere. We hope that the “notwithstanding” clauses will never have to be used, and we understand the concerns that have been raised. Making regulations of this nature would not be done lightly. That is why, before this clause is commenced, this House, as we have discussed, will be asked specifically to approve a motion to that effect, and the other place will hold a take note debate. Any regulations made under this clause would be subject to the affirmative or made affirmative procedure, meaning that they will be subject to debates requiring a vote in both Houses.
Moreover, as the Prime Minister has made clear, in addition to taking these steps in domestic law, if we had to make it clear that we believed the EU was engaged in a material breach of its duties of good faith as required and provided for under the withdrawal agreement and the Vienna convention on the law of treaties, we would seek an arbitration panel and consider safeguards under article 16 of the protocol in parallel. We must ensure that, in any scenario, we are upholding the economic integrity of the United Kingdom, maintaining the Belfast or Good Friday agreement and the gains of the peace process and protecting the delicate balance between communities in Northern Ireland.
These “notwithstanding” clauses are a limited and reasonable step that create a safety net to enable those aims to be met. They ensure that the UK Government can always act as necessary to protect and maintain our UK internal market and Northern Ireland’s integral place in it. That is entirely in keeping with what the Government have constantly said, including in public commitments from the Prime Minister, our manifesto commitments and our commitments to the people of Northern Ireland. That is why the Government cannot agree with the Lords amendments, which would remove what was part 5, and why I urge hon. Members to disagree with the Lords amendments and restore the critical provisions in full.
Ian Paisley
I thank the Minister for allowing me to intervene in this way. Does he welcome the comments made by the Irish Foreign Minister, Mr Coveney, who said that, essentially, all the commentary for the past three years on erecting borders on the island of Ireland was basically a game of bluff by the Irish Republic? Does he welcome the fact that it has now conceded that point?
Paul Scully
I have not heard those words, so I will not comment on them. There has been a lot of commentary, but what is important is the reality. Northern Irish businesses want the certainty offered by this Bill and the unfettered access to the GB market.
I emphasise that the Government has been reasonable, and will continue to be reasonable, in discussions on this Bill. We have made many positive changes to the Bill and they are on the table, but the Government need to balance this with the need to deliver a Bill that provides the certainty that businesses want and need to invest and create jobs, to maintain high standards and choice for consumers while keeping prices down, to ensure that the Government can continue to continue to level up the whole of the United Kingdom and strengthen our precious Union, and, ultimately, to preserve the UK internal market that has been an engine of growth and prosperity for centuries.
Madam Deputy Speaker (Dame Rosie Winterton)
Colleagues will see that there are a large number of right hon. and hon. Members who want to contribute to this debate. If we have any chance of getting them in, I will have to start with an immediate five-minute limit on Back-Bench speeches, but that may well have to go down.
Edward Miliband (Doncaster North) (Lab)
It is a pleasure to be opposite the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam (Paul Scully). This big Bill began its life with the Prime Minister, then the Secretary of State and now it is a pleasure to be opposite him. I must say that I have enormous respect for him, but I did feel that I was living in a parallel universe when I heard him this afternoon. This Bill has been absolutely savaged in the other place. It has been absolutely savaged not just on international law, but on devolution as well, not just by Opposition parties, not just by Cross-Benchers, not simply by the former Lord Chief Justice or the Archbishop of Canterbury, but by the heart of the Conservative party—by Lord Howard, Lord Hague, Lord Clarke, Lord Cormack, Lord Lamont, and Lord Barwell, the former chief of staff to the right hon. Member for Maidenhead (Mrs May). The right hon. Member for Gainsborough (Sir Edward Leigh) laughs from a sedentary position. He may not consider him exactly Conservative, but he is a Conservative peer. Believe it or not, Madam Deputy Speaker, even the Duke of Wellington spoke out against this Bill. I gather that he has recently left the Conservative party—and who can blame him?—but nevertheless, he said this:
“In a single piece of proposed legislation, the Government have managed to antagonise almost everyone, including a multitude of counterparties and international public opinion.”—[Official Report, House of Lords, 18 October 2020; Vol. 806, c. 1342.]
The Duke of Wellington is right, and given his family history around our relationship with Europe, he is in a position to know. That is why we saw the largest defeat in a generation on this Bill, including 44 Conservative peers, seven former Conservative Cabinet Ministers and many other former Ministers.
I make that point because I think we heard the beginnings of the grinding wheels of the climbdown in what the Minister was saying. After three months of posturing, undermining our reputation in the world, today, an hour before the debate begins, we perhaps see some preparations for the brakes being applied before we go over the cliff. I am not going to give the Government any credit for that, and I do not take their word for it either. The one thing that this whole sorry saga has shown the world beyond any doubt is that this Government’s word is not their bond—they cannot be trusted, because they are willing to rip up international agreements they made less than a year ago.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I was going to congratulate the right hon. Gentleman on endorsing the hereditary principle, which I did not know he was such a big supporter of. The real question I want to ask him is, what should a state do if it finds that its obligations under one treaty conflict with those under another treaty or its own constitutional law?
Edward Miliband
As the hon. and learned Member for Edinburgh South West (Joanna Cherry) says, do not sign it, but I make another point. This is an agreement that the Government signed, and as the right hon. Member for East Antrim (Sammy Wilson) exposed, under article 16 of the protocol, there is not only a Joint Committee set up but a capacity for unilateral action in the case of social and economic disruption. He asked whether the protection will still be in place for unilateral action if these clauses go away—I can answer him, since the Minister did not: yes, they will still be in place, because they were in place all along. This has all been a completely unnecessary charade.
It is not just on international law that this Bill was savaged; it was savaged on devolution as well. This is very important, because it goes to the heart of the way we are governed as a country and the heart of our future as a country. Like the Government, the Opposition believe in our United Kingdom, but many people—including Conservatives—feel that this Bill deeply undermines devolution. Let us just listen to Lord Dunlop. For the benefit of the House, Lord Dunlop is the Government’s devolution guru—he is the guy advising the Government on devolution. He describes the Bill as
“an unnecessarily heavy-handed approach to balancing the demands of free trade within the UK with respect for the roles and responsibilities of devolved institutions.”—[Official Report, House of Lords, 19 October 2020; Vol. 806, c. 1336.]
He also says that the Government should
“think long and hard before overturning…on the back of Conservative votes alone, any sensible changes”—[Official Report, House of Lords, 2 November 2020; Vol. 807, c. 585.]
made to the Bill on devolution. So on devolution and international law, the Bill has been savaged.
Something has changed in Government on the Bill during the last three months. The truth is that the top brass of Government are running a million miles from the Bill, not just on international law but on devolution as well. We learned a few days ago from the very reliable Paul Waugh that the Chancellor of the Duchy of Lancaster has some thoughts on the Bill. He wrote:
“Even some Whitehall officials were baffled why the bill was drafted in the first place.”
He went on:
“Sources tell me that Gove has been looking at ways to either amend the devolution section of the bill, or ditch it altogether. If the whole bill is quietly left”—
Edward Miliband
The hon. Gentleman says that that is completely untrue. I hope it is true, in the following sense: unless we remove the provisions in the Bill on lawbreaking and amend the provisions on devolution, we are massively undermining the Union, because as I will explain, we are departing from the principles of shared governance that we have developed over 20 years.
It is not surprising that the Government top brass are running from this Bill. Has it succeeded in improving our international standing? No—it has been calamitous, embarrassing and toxic for our international reputation. President-elect Biden, among others, is deeply concerned about the Bill. Has it succeeded in upholding and strengthening the United Kingdom, which I know the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) supports? No, it has not—it has given a stick with which those who want to undermine the United Kingdom can beat the Government.
Has the Bill succeeded in getting the Brexit deal that the Government told us it would hasten? Remember what they said—that it would show we were standing up to the EU, show that we meant business and face them down. This is a very important day to be talking about this issue. Where is the deal then, less than a month before the end of the transition period? Where is the deal? As a country, we desperately need a deal for business, workers and our economy. It is 12 weeks since this piece of legislation had its Second Reading and still no deal has been struck. And on this of all days the Government choose to bring this Bill back to the House. Our message to the Government is simple: deliver the deal that they said was oven-ready so that business can plan, even in these short weeks. Deliver what was promised.
Let me turn to the detail of the Lords amendments from the Opposition point of view. I start by going back to the issue of the rule of law. As I said, Members across all parties in the other place worked together to defeat the Government on part 5 of the Bill. I cannot do any better than Lord Howard—I have never said that before—who said:
“I do not want”
the UK
“to be an independent sovereign state that chooses as one of the first assertions of that sovereignty to break its word, to break the law and to renege on a treaty that it signed barely a year ago.”—[Official Report, House of Lords, 19 October 2020; Vol. 806, c. 1295.]
That is not some remoaner, as I think the saying goes—it is not some person who voted remain; it is Lord Howard, a Brexiteer and the former leader of the Conservative party.
The House could instead listen to Lord Cormack, who said
“this is shameful; there is no other word for it. I am deeply ashamed that a Conservative Government should have embarked on this course.”—[Official Report, House of Lords, 19 October 2020; Vol. 806, c. 1301.]
I am proud to be defending the rule of law.
Sir William Cash (Stone) (Con)
Would the right hon. Gentleman be kind enough to give way on that point?
Edward Miliband
It is always a pleasure to give way to the hon. Gentleman, so I shall.
Sir William Cash
Perhaps the right hon. Gentleman recalls the fact that section 38 of the European Union (Withdrawal Agreement) Act 2020 was passed not only by the House of Commons—by 120 votes—but by the House of Lords itself. That contained the same principle regarding the notwithstanding arrangements specifically in relation to section 7A of the European Union (Withdrawal) Act 2018.
Edward Miliband
I think the hon. Gentleman and I have had this exchange before. The fact is that the reason this Bill has caused such concern—among five former Prime Ministers and all the people in the House of Lords I have mentioned—is that it will rip up a treaty that we signed. That message has been sent loud and clear around the world. As I said, there is already provision in article 16 of the protocol for unilateral action in the event of
“serious economic, societal or environmental difficulties”.
The provisions are not only wrong, then, but unnecessary.
I wish to deal with the “insurance policy” argument that has been put forward—the Minister used the term “safety net”. This legislation is not a safety net or an insurance policy; it is a trapdoor for us, and I will tell him why. Let us say that the worst happens and we fail to get a deal, and we then trigger these provisions. What then? We set off an escalating dispute with the EU, and we do not know where that dispute ends; we further alienate President-elect Biden and scupper any chances of a US trade deal; and we destabilise the politics of Northern Ireland. This is no insurance policy; it is a guarantee of the destabilisation of our country piled on to no deal—in other words, the very last thing the country needs. That is why we will vote to uphold the Lords amendments that keep part 5 out of the Bill.
Sir Edward Leigh (Gainsborough) (Con)
Of course we all want agreement and we all want a trade deal, but what happens if relations break down? Will the right hon. Gentleman confirm that, first and foremost, the Labour party is a Unionist party that believes 100% in the economic integrity of the United Kingdom and will not act as a poodle for nationalists? Can he give me an absolute guarantee that if relations break down and we reject this Bill, we will not be in a very difficult place in terms of the economic integrity of the United Kingdom?
Edward Miliband
The right hon. Gentleman and I agree absolutely about the United Kingdom, and I am now going to come on to why I have such fear about this Bill. I fear that it is ignorant and blundering on the most important question about the way in which we share power across the United Kingdom. My fear about that and about the Bill is that it has given those who want to undermine the United Kingdom a further weapon with which to do so. That is why I want to turn to the devolution aspects of the Bill.
I particularly want to put on record my thanks to Lord Hope, former Lord President of the Court of Session and Lord Justice General, for his work on the Bill. The common frameworks are a complex issue, but it is worth spending some time explaining them. The common frameworks process—the Government deserve some credit for this—was established in 2017 to enable us to agree high standards across the United Kingdom and manage any divergence in those standards. The problem with the Bill is that there is no mention of common frameworks. Instead, it provides a blunderbuss principle that the lowest standard in one jurisdiction is the standard for all, with no voice for the devolved nations.
Take the issue of single-use plastics, which is a very concrete example. The Welsh Government want to legislate to ban the use of single-use plastics, but the problem is that the Bill as it stands enables the UK Parliament to simply come along, without discussion and without a voice for the Welsh Government, and legislate to stop them doing that. In a written answer earlier this month, they said very clearly that they believe that they will not be able to make that legislation stick. The Bill in its current form allows the UK Government simply to undercut the powers of the devolved Administrations in key devolved areas, including the use of plastics, other environmental standards, animal welfare and other consumer standards. That is very serious, because the common frameworks are a way in which we can both secure high standards—this is the intention of Lord Hope—and manage divergence when it occurs across the United Kingdom.
Jonathan Edwards
The right hon. Gentleman is making a very valid point. Does he agree that the problem with the Bill is that it enables the British Government, through its control of the UK Parliament, to become like a boa constrictor around the devolved Parliaments, restricting their ability to act in the policy fields for which they have responsibility?
Edward Miliband
However we describe it, I do not believe that the Bill properly respects the principles of devolution. These are principles that we have developed in a very British way, in a sense, over the past 20 years or so. The principles of devolution are, I think, principles that it is crucial that we uphold. I ask the Minister to think again. He should think again, and should agree to Lord Hope’s amendments, which put the common frameworks into the Bill. It makes no sense that the Governments of the four nations have spent three years working on the common frameworks only for them to make no appearance in the Bill.
Then we have a related issue, which is that in the absence of legislation for the common frameworks—the Minister mentioned this—amendment 12 seeks a wider set of exclusions for market access principles. The reason for that is very simple. In the absence of common frameworks, the market access principles apply with very narrow exclusions—on human, animal and plant health, I think—so if the Government are not willing to agree on the common frameworks, another way forward would be to have broader exclusions that allowed the devolved nations to uphold their powers. This is very important. It is about whether powers that have been devolved over 20 years are effective or ineffective, and whether this Parliament can simply override them without a voice for the devolved nations. These are deeply serious issues, and I think that their importance is recognised by Conservatives such as Lord Dunlop.
Let us be absolutely clear what will happen if the old version of the Bill is restored and passed into law—this is a sort of prediction, but I am afraid that this is what will happen: this is a recipe for a constitutional punch-up within a very short period of the Bill’s becoming law. Frankly, if that does not happen naturally, it will be provoked by those who wish to have the punch-up. The Government will find themselves accused, rightly, of undermining the devolution settlement, and it would be a disaster for those who believe in the United Kingdom—and I think that includes the Government. The most generous interpretation is that the Government have been cavalier and have blundered into this. [Interruption.] Yes, that may be too generous. I hope that they will put it right.
Alan Brown
On that point, the national infrastructure strategy has just been published, and under the heading,
“changing how decisions are taken”,
it says:
“Increasing the UK government’s ability to invest directly in Scotland, Wales and Northern Ireland through the UK Internal Market Bill”.
Does that not just smack of, “We’ll spend the money and we’ll make the decisions, and it won’t be collaborative at all.”?
Edward Miliband
I think there is a very legitimate anxiety, which I hope the Minister will reflect on. Again, it was expressed in the Lords. Yes, the Government were defeated in the Lords—all Governments get defeated in the Lords at some point—but we are talking about unprecedented margins, because of the depth and breadth of concern among their lordships about the Bill, including on devolution. In a sense, because the Bill went through so quickly here, there was less time for us to discuss the devolution issues, and the focus was more on international law, but there is deep concern about this.
It is the same on state aid. We support a UK-wide state aid regime, but once again there was no mechanism in the Bill to engage with the devolved nations on setting out this regime. Again, the best that can be said is that maybe the Government have blundered in; the worst would be that they simply do not believe in giving power away when it comes to it in practice; they believe in holding it here. We cannot overestimate the seriousness of this collection of devolution issues. I believe deeply in the United Kingdom; the way we uphold it is by upholding the settlements of the last 20 years, and recognising that commitment to shared governance, but that is not what this Bill does.
Ian Paisley
I make this point very genuinely. Fidelity to devolution is now being expressed from the Dispatch Box, but Members from Northern Ireland and the Northern Ireland Assembly ask: where that was six, eight or 12 months ago? The Labour party was prepared to ride roughshod over the views of the people of Northern Ireland on the issue of abortion, and to impose laws on Northern Ireland that are there forever, even though the Northern Ireland Assembly has a completely different view from this House on those matters. This fidelity to devolution rings very hollow tonight in many houses in Northern Ireland.
Edward Miliband
The hon. Gentleman and I have known each other a long time, and if one looks at the record of Labour Members on the devolution settlement, and at everything that has happened over the past 20 years, I think we have absolutely shown fidelity to that devolution settlement in what we have done. [Interruption.] I will conclude because lots of Members wish to speak.
This not just a technical discussion about the Lords amendments; it is about a much deeper set of issues to do with what kind of country we want to be. We must be a country that is confident of our place in the world, and in working with others on the basis of shared democratic principles. We must be a country that stands up for the rule of law, and that recognises that we will be better governed if we share and devolve power, and do not hoard it at Westminster. The Bill achieves none of those things. Indeed, it undermines them. I am afraid that is a mark of cavalier government—cavalier with our international standing, cavalier with the law, and cavalier with the United Kingdom. Labour Members will fight for the values that our country needs, and I hope that as the Bill proceeds back—and, I suspect, forth—from the other place, the Government will listen and work with us in the national interest.
Madam Deputy Speaker (Dame Eleanor Laing)
We will now have a time limit of five minutes.
Sir William Cash
When I read the account of proceedings in the House of Lords, I found that the Lords were very strong on assertion, but empty when it came to the question of argument. I found that rather disturbing, because, after all, they have potential power under the Parliament Acts. I also appreciate that, towards the end of the proceedings, in reference to the powers in part 5 of the Bill, and the clauses under discussion regarding “notwithstanding”, Lord Judge said:
“‘We may need these powers at some stage’. Maybe we will; I hope not.”
He then said that it would be
“open to the Government to come back to us, to Parliament, to put before us emergency legislation.” —[Official Report, House of Lords, 20 October 2020; Vol. 806, c. 1431.]
The circumstances that we face could not be more important and relevant, and my view is that what he said effectively conceded the principle.
Sir Bernard Jenkin
I was going to make exactly that point. Lord Judge, very respected as he is, basically conceded the principle that we might need “notwithstanding” provisions to overturn the provisions in the withdrawal agreement. We are not talking about the principle anymore; we are just talking about when it would be appropriate to introduce the provisions. They might as well be introduced now with the parliamentary safeguard that the Government have conceded.
Sir William Cash
More or less the same took place in my exchanges with my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), who said very much the same. There is a threshold beyond which it would be necessary for us to take such action. Without going into the detail, I just wanted to put those two things on the record.
The issue is, and basically always has been, about parliamentary sovereignty. In the UK context, this is an internal law of fundamental importance, as expressed in article 46 of the Vienna Convention. It is by virtue of parliamentary sovereignty that we have taken the line that we have. I certainly have taken that line on many occasions, including in my proposal for section 38 of the European Union (Withdrawal Agreement) Act 2020, which I referred to earlier, and which has the whole concept of “notwithstanding” built into it. Section 7A of that Act also deals with direct effect. Given that the Act was passed with a large majority in the House of Commons, and then passed again in the House of Lords without any dissent of any description, I find it quite extraordinary that this has been turned into a matter of such fundamental anxiety, without any supporting argument that I have ever seen.
When I read the debates, I found there was a great deal of posturing going on. I understand the emotional concern of some people who are quite incapable of accepting that we have lawfully left the European Union; that a series of enactments were passed by both Houses; and that, on top of that, we had a general election—not to mention that under the Salisbury-Addison convention, it would be inconceivable, in the context of a general election manifesto, for the Lords to take a stand against these clauses if the House of Commons passed them again tonight, and perhaps again on another occasion.
Why do I say all this about constitutional and international law? I will deal with that very briefly. First, in my judgment, the European Union has breached article 184 of the withdrawal agreement, which is about negotiating in good faith. It has manifestly multiplied that fault over the past few days by refusing to accept the manner in which the negotiations have been conducted so far. There is also the question of its demand to retain power over crucial aspects of our sovereignty—both economic and relating to our national interest—as a precondition to concessions on trade.
The EU has also, in my judgment, breached article 184 on the basis of the recognition, as it puts it, of our internal market. I believe in the basic principle that one party to a treaty cannot obtain from the other the execution of its obligations if it does not respect its own commitments. If the EU continues to act as it has done in the negotiations, particularly over the past few days, the United Kingdom would be entitled to terminate the withdrawal agreement on the basis of the EU’s breach of article 184.
Lastly, as I said in Committee and on Report, there is a long list of occasions when Conservatives, Labour and Lib Dems, as part of the coalition, have agreed to override treaties. There are not just one or two quite explicit examples, but hosts of them. In infinite Finance Bills and Independence Acts, and in relation to prisoner voting and various other things, there have been quite clear and deliberate overrides of treaties. The EU, as well as the EU member states, frequently violates international law; the Western Sahara case, the defiance of security council rulings, and breaking the Lisbon treaty are a few examples.
Indeed, in conclusion, the EU grants supremacy to its own constitutional principles when they are in conflict with international law. In the Kadi case, the European Court stated:
“The obligations imposed by an international agreement cannot have the effect of prejudicing the constitutional principles of the…Treaty”.
So there it is. I say again that I strongly support the Government’s position, and reject the amendments by the House of Lords.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
In. Out. Reinstate? As the right hon. Member for Doncaster North (Edward Miliband) has pointed out, the Prime Minister and the Secretary of State have dropped this, and it is left to the Minister to hold Dominic Cummings’s baby, and to front this up in Parliament. I almost feel sorry for him, but then I remember that both the Treasury solicitor and the Advocate General for Scotland have already resigned over this, because it is such a terrible move by the Government.
The House of Lords, as we have heard, has rightly carved up this disastrous, petty, grubby, law-breaking, power-grabbing Tory Bill—and after the announcement made just an hour before we came in here tonight, we can add “shambolic” to that as well. We welcome the Lords’ removing a number of threats to devolution from the Bill. We already know that the Tories hate devolution, as the Prime Minister has made clear.
Clause 42 authorises the UK Government to spend on devolved areas. The UK Government intend to use clause 42 for the purpose of a shared prosperity fund. However, as we have heard, we have yet to see details of that. I personally have been asking about it since 2017, yet we have heard nothing on it. As we have heard, we have also yet to see any sign of the long-promised consultation. It has been repeated over and over that there will be a consultation, but we have not seen it. Lord Thomas confirmed in the other place:
“It is therefore plain that the purpose of Clause 42 is to cut across the powers of the devolved Governments to provide financial assistance in areas such as economic development and commercial activities”.—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 276.]
That takes away a power from the Scottish Parliament. Baroness Finlay said that
“Clause 42 would enable the Government to work around, rather than work with, the devolved Governments”.—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 280.]
Andrew Bowie
The hon. Gentleman may disagree with the right of the UK Government to intervene financially on all the areas that have been specified, but he cannot say that this amounts to us taking away a power from the Scottish Parliament, because that is fundamentally untrue, and he is in fact misleading the House when he does so. [Hon. Members: “Withdraw.”]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Gentleman is not misleading the House.
Drew Hendry
Thank you, Madam Deputy Speaker. I could have come back with a different response, but I appreciate you intervening.
The hon. Gentleman tries to say that this is not a power grab—not taking back powers from the Scottish Parliament. What I am quoting is not SNP folks saying this, and not even the Scottish Government—it is other people, as we have heard from around the different parties, including his own, right across the nations of the UK, and across the world. What he says really does not hold any water.
On clause 49, the Lords amendment removes the UK’s Government’s attempt to re-reserve state aid. Lord Thomas noted that
“unashamedly, the Government want to use this legislation to alter the devolution settlements…They are trying to make state aid a reserved matter by the device of expanding or extending the competition policy reservation.”—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 317.]
Lord German confirmed:
“Blunting and reducing the power of the devolved authorities is deemed to be a price worth paying so that the UK Government alone can determine the route they wish to follow in directing the new regime. Yet we do not know what this regime will look like.”—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 319.]
Leading for the Government in the Lords, Lord Callanan confessed that
“Clause 44 reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime.”—[Official Report, House of Lords, 25 November 2020; Vol. 808, c. 325.]
I can tell the House that the SNP will not accept this brazen power grab. State aid must remain a devolved competence.
Lords Amendment 11 means that devolved Governments must either give their consent to regulations within a month, or the Government could continue but would have to explain to Parliament why they were proceeding without agreement. Lord Bruce noted that it
“takes the need for consultation but adds to it by saying that there must be a requirement to secure consent.”
That is absolutely what is required. He went on to say:
“That draws on the common frameworks principles, which suggest that every sinew should be bent to secure consent.”—[Official Report, House of Lords, 23 November 2020; Vol. 808, c. 50.]
I stress: not consultation but consent.
On Lords amendment 57, Lord Thomas noted that
“the composition of the CMA should now reflect its different position and role under this Bill...it is critical that it commands the confidence of all the people of all the nations of the United Kingdom and therefore that it has representations from them.”—[Official Report, House of Lords, 23 November 2020; Vol. 808, c. 103.]
Lords amendment 1 seeks to protect the role of the common frameworks from the Bill. When moving his amendment on Report, Lord Hope summarised:
“Not only does the Bill ignore the common frameworks process but it destroys one of the key elements in that process that brought the devolved Administrations into it in the first place: it destroys policy divergence. It destroys those Administrations’ ability through that process to serve the interests of their own people, and to innovate.”—[Official Report, House of Lords, 18 November 2020; Vol. 807, c. 1432.]
Baroness Finlay warned that the Bill
“is not based on warm support for devolution but rather on hot resentment of the fact that the devolved Governments and legislatures can innovate at speed and take their populations with them.”—[Official Report, House of Lords, 18 November 2020; Vol. 807, c. 1434.]
That is something that this Government cannot do.
Lords amendment 8 removes sweeping Henry VIII powers that allow the Minister to alter the definition of key requirements for the Bill and in each case rewrite those principles substantially in secondary legislation. In the Lords proceedings, the Government accepted the argument and removed the Henry VIII powers from clause 3, but refused to remove them from clause 6. Under clause 6, the Secretary of State can act without the need to introduce new primary legislation or to obtain the consent of the devolved Governments, taking power away from them. As I have said before, the UK Government’s offer to consult is meaningless. “Consult” is not the same as consent, which is what is required.
David Linden (Glasgow East) (SNP)
The truth is that the Bill is an absolute abomination and drives a Trojan horse through the devolution settlement, but my hon. Friend is right to put his finger on that very issue. Brexit was supposed to be about Parliament taking back control. How does he reconcile the idea that Parliament is taking back control with granting these sweeping Henry VIII powers to the United Kingdom Government?
Drew Hendry
Indeed, it is the UK Government who are seeking to take back control from Scotland, and from Wales, with the Bill, which is a clear and utter power grab.
Jonathan Edwards
I am extremely grateful to the hon. Member for his forensic analysis of the British Government’s tactics in relation to the Bill. Essentially, the British Government are hollowing out devolution as the middle ground in the constitutional debate in Wales and Scotland. For the people of Wales and Scotland, the choice becomes independence or direct Westminster rule.
Drew Hendry
The hon. Member is absolutely right. It is no surprise that in Scotland we have now had 15 opinion polls in a row that show that a majority of people support independence. That has not happened overnight; that has happened because they have been watching what has been happening here, and have seen the contempt with which Scotland and Wales’s Parliaments have been treated. The result is the growing demand for us to protect our Parliament in that way.
When it comes to devolution, the Tories used to wear a mask to hide their contempt, but the Bill, and recent comments from the Prime Minister and the Leader of the House, have ripped it away once and for all. The Prime Minister recently told his MPs that devolution was a disaster and Tony Blair’s biggest mistake—the latest in a long line of statements that he has made to show his distaste. We all remember him saying that
“a pound spent in Croydon is far more of value to the country…than a pound spent in Strathclyde.”
The Leader of the House has called devolution a failure and is arrogantly dismissing it, while the Scottish social attitudes survey shows that only 7% of the Scottish people do not support devolution. As I have said, the Bill is an orchestrated attempt by this Tory Government to re-centralise powers.
Andrew Bowie
I thank the hon. Member for giving way to me for a second time. I simply cannot sit here and listen to him describe this party and this Government’s position on devolution in the way that he is. Under the Calman commission and the Scotland Act 2016, we have devolved more powers to Scotland than any Government in the history of devolution. We have created police and crime commissioners across England and Wales. We have devolved power to our greater cities and regions across England and Wales. Next year we will publish our devolution White Paper. To stand there and say that the Government do not respect or believe in devolution is simply baloney.
Drew Hendry
This is the man who said:
“The UK Government is back in Scotland. Get used to it.”
We have seen the Tories for an awful long time. In Scotland, we have not voted Tory since 1959, I think. [Interruption.] Sorry, 1951. That is how long the Scottish people have seen what the Tories are at. We do not want a Tory Government making decisions for people in Scotland. That is why the vast majority of Scottish people voted, with a settled will, to have their own Parliament, and all polls and the social attitudes survey show that, more and more, they support not only devolution but independence.
The Government want to drive a wrecking ball through the devolved settlements. That is reflected by the fact that this Bill, as we have heard, has been ripped apart in the House of Lords. On the shared prosperity fund, it said:
“The Government should explain why such a broad power for the UK Government to spend money in devolved territories has been included in this Bill.”
It also said that the delegated powers in the Bill are “extraordinary” and “unprecedented”,
“and many of them are constitutionally unacceptable.”
Of course, we know from experience what happens when UK Ministers have control of spending. The former Tory Prime Minister John Major took much-needed cash from the highlands and redirected it to Tory marginal seats that were under pressure in the south-east of England. Decades on, nothing has changed. As we know from the pork barrel scandal whereby the Secretary of State for Housing, Communities and Local Government directed funding to 61 towns that were key to the Tories gaining or retaining seats in the general election, priorities for Scotland will mean little or nothing to the Tories—probably the latter—unless they see some political advantage. Their naked intention to break devolution and break the law has been condemned across the world and even from their own Benches.
This Bill is not worthy of this or any other Parliament. Outside of Tory Government circles, it has been rightly and absolutely panned. Catherine Barnard, professor of European law at Cambridge University, said
“This is a remarkable piece of legislation and it expressly contravenes our international legal obligations to a point that the legislation itself says this is the intention”.
Imagine that. Steve Peers, a professor at the University of Essex, said:
“It is an obvious breach of international law.”
David Anderson, QC, tweeted:
“The Ministerial Code still mandates compliance with international law, despite a change to its wording, as the Court of Appeal confirmed in 2018”.
Simon Davis, president of the Law Society of England and Wales, said:
“The rule of law is not negotiable.”
Perhaps most tellingly, George Peretz, QC, tweeted:
“But it is hard to think of a better argument for Scottish independence than a UK government that is prepared to use Westminster’s unconstrained sovereignty to override a binding treaty commitment it entered into less than 12 months ago.”
Former Tory Prime Ministers, including a Member still sitting in this House, have savaged this shoddy piece of legislation. From their own Benches, the Government have been told that
“a willingness to break international law sits ill for a country that has always prided itself on upholding the rule of law.”
They have also been told by their own Members that it is an act of bad faith and that the rule of law is not negotiable.
The Bill has also been condemned in the United States. This is a Government who are really good at negotiating no deals, and it looks like they are about to negotiate another one with the US. Nancy Pelosi, the Speaker of the US House of Representatives, said:
“The U.K. must respect the Northern Ireland Protocol as signed with the EU to ensure the free flow of goods across the border.
“If the U.K. violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress.”
We have also heard comments from the Taoiseach and others across the European Union. In America, Antony Blinken, the chief foreign policy adviser to Joe Biden, said that Joe Biden
“is committed to preserving the hard-earned peace & stability in Northern Ireland. As the UK and EU work out their relationship, any arrangements must protect the Good Friday Agreement and prevent the return of a hard border.”
Sammy Wilson
I am glad that the hon. Member is so supportive of the Belfast agreement, but would he accept that the Belfast agreement was all about ensuring that Northern Ireland stays within the United Kingdom as long as the people of Northern Ireland wish that to be the case, and a border between Northern Ireland and the rest of the United Kingdom, as is in this protocol, certainly does not protect the Belfast agreement and therefore does not even meet the criteria he has set himself?
Drew Hendry
Indeed, it should be the right of people living in any country to determine their own future, and he is right: if the people of Northern Ireland choose a different path, they should be respected, as should be the case for those in Wales and Scotland as well.
I will start to wind up my comments now, Madam Deputy Speaker. I could go on for much more time, but I know that you have packed Benches of Members waiting to come in. I was just about to talk about Joe Biden. He said:
“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit. Any trade deal between the U.S. and U.K. must be contingent upon respect for the Agreement and preventing the return of a hard border. Period.”
That is what he said.
This Bill continues to facilitate a race to the bottom on standards, threatens our quality food and drink, opens the door to genetically-modified beef and chlorinated chicken, among other products, and opens the door to privatisation of our water and our NHS. As I have pointed out, the House of Lords has rightly carved up this disastrous, petty, grubby, law-breaking, power-grabbing, messy Tory Bill. Its amendments must be respected and agreed. The Scottish Government have always engaged willingly to take forward the common frameworks progress this devolution-wrecking—
Drew Hendry
The hon. Member says “Rubbish”, but he knows that is not the case. We understand that the Tories have a very casual relationship with the truth, but we expect them to at least have a one-night stand with it.
This Bill confirms the contempt that the Prime Minister and his Government have for devolution. People in Scotland see this clearly. As I have said, 15 polls in a row are showing that independence is the only way to save our Parliament’s powers and the voice of the Scottish people, and as the Defence Secretary confirmed earlier, we can have that discussion in the referendum that is coming.
Madam Deputy Speaker (Dame Eleanor Laing)
There is a five-minute limit on speeches.
Dr Liam Fox (North Somerset) (Con)
When I voted to leave the European Union, it was not primarily over concerns with immigration or concerns about how we would divvy up the money that came back from the contributions we would not be making to the European Union; it was entirely as a constitutional lever. I believe in the principle that the people who live under the law should have the right to choose the people who make the law. Incidentally, that also shapes my views on how the House of Lords should be reformed. However, that principle could not survive as soon as we had the direct application of EU law and the use of the ECJ. Therefore, for me that meant that there was only one choice, which was to leave the EU. I explained that to an American audience by saying that, if in the United States there was a court in Ottawa or Mexico City that could override the US Supreme Court and there was nothing legislators could do in the US, how would they like it? They said, “Absolutely, we would never ever accept it.” That, for me, is the key principle.
When I first heard of this internal market Bill, I was at the World Trade Organisation in Geneva and, frankly, I was shocked to hear that the Government were intending to break international law. That was until I came back and looked at the provisions themselves, and found out that nothing whatsoever was actually being broken in this Bill. In fact, nothing was actually being done in this Bill, other than setting out a set of contingency measures, which is of course a well-accepted legal principle.
Sir Edward Leigh
There has been virtually no discussion during this entire debate about the fact that this is a safety net, which we hope will never be used. If we are on the high wire—and when we are dealing with the EU, we are on the high wire—we may not want to use a safety net, but it does no harm to have one.
Dr Fox
I entirely agree. I have used the analogy myself that this is a lifeboat that we hope we never have to launch. We hope the ship will never go down because we will reach a trade agreement, and we should reach a trade agreement because, as I said earlier in the House, there has never been a trade agreement that has begun with the two parties in complete identity of trade law, of tariffs and of regulation. It should be, if it was only about trade, an easy agreement to reach, but it is not just about trade. The main stumbling blocks are constitutional—the very constitutional issues that made me want to vote to leave the European Union in the first place.
There are those who have said that this Bill is outrageous and that it sets new precedents, but in fact it says only that, under certain circumstances, domestic law might have to be used to overrule treaty law. Is it revolutionary? Is it unprecedented? Well, on 12 February 2016, the German federal constitutional court said:
“Treaty overrides by national statutory law are permissible under”
the German constitution. It added:
“Under the system of the Basic Law, international treaties have the same rank as statutory federal law. Therefore, they can be superseded by later federal statutes that contradict them.”
That is merely the power that the United Kingdom Government are seeking to use as a contingency power, should they need it, yet nobody screams about the German Parliament being able to exercise an identical power.
In the short time that I have, I want to make a couple of comments about the value of free trade in the internal market to the Union itself. The 1707 articles of Union between England and Scotland, and those between Great Britain and Ireland in 1800, abolished all customs duties between the different parts of the United Kingdom. Free trade across the whole of the United Kingdom was not only integral to the development of the whole of the United Kingdom from the industrial revolution on, but it was particularly important to Scotland and Ireland, whose citizens could freely trade with the much bigger English market—something that exists today. That point was made very well by the right hon. Member for East Antrim (Sammy Wilson) earlier in this debate.
It is easy, given how successful it has been, to forget how important that single market is, and how easily it could be damaged and what the what the implications would be if it were interfered with or restricted. Of course, that is why the hon. Member for Glasgow North (Patrick Grady)—I am sorry that he has left his place—was unwilling to engage in debate with me last week when I asked what estimates had been made by the Scottish nationalists of the break-up of the UK internal market in terms of the Scottish economy. He said, “We will come and make those arguments in due course,” because they do not want to hear those arguments aired in front of the Scottish people at the present time.
The devolved legislatures were created after the UK joined the European Community and then the European Union. Because the single market rules apply to regional Governments and legislatures as well as central Governments of member states, there was no pressing need during our membership of the European Union for specific UK-based rules maintaining the UK internal market against fragmentation. Brexit changes all that, and that is why I believe that we should reject the Lords amendments tonight.
However, in supporting the Government, I just ask this one question: when did the Government’s legal advisers advise Ministers that the withdrawal Act indeed, by direct application, threatened the internal market of the United Kingdom? It was not something that I heard discussed at the time, but I would like to know the answer to that question, as would many of us who are supporting the Government tonight and who believe that what we are seeing is proportionate contingency planning, fulfilling the duty of the maintenance of the UK internal market, the key part of the United Kingdom itself.
Hilary Benn (Leeds Central) (Lab)
Who would have thought that we would be here on 7 December—there are 24 days to go—with the Government wanting to put these international law-breaking clauses back into the Bill and the Brexit negotiations still going? I have always thought that there will be an agreement, but I must confess that in the last few days I have felt a bit gloomy. I do not know whether the announcement in the last 20 minutes that the Prime Minister and Ursula von der Leyen are going to meet later this week to pore over the areas of disagreement should raise our hopes or not. What do they say? It’s the hope that kills you.
Anyway, the truth about this Bill is out. The offending clauses are nothing more and nothing less than a piece of negotiating leverage, which we now know will be dropped the moment a satisfactory resolution is found to the questions that the Joint Committee is properly considering. That was confirmed in the Prime Minister’s statement this afternoon.
The Prime Minister’s dilemma with this Bill and, indeed, with the talks is best explained in this way. Four and a bit years ago, he famously decided to publish the second of two articles that he had written about Brexit. One of them was for leaving the EU, and the other was against. When he made that decision, he climbed on the back of what I would describe as the Brexit tiger. It has taken him on quite a journey—it has taken him through the door of 10 Downing Street, which I am sure was his hope, but there is just one problem: it is not entirely clear he knows how to get off the tiger in order to secure a deal. He is the prisoner of the fateful decision that he made.
It is not that he was not aware of the consequences, because thanks to Tim Shipman, we now know what he wrote in the other article, which was not published. He said:
“Almost everyone expects there to be some sort of economic shock as a result of a Brexit. How big would it be?”
Well, we know the answer, because the Government have done their own economic assessment, and we saw what the Office for Budget Responsibility reported a couple of weeks ago: the economy is hit either way, but it is much worse if no agreement is reached.
The question now for the House and for the negotiators is, how do we get out of this? It is clearly not by the clauses that the Government are seeking to put back in the Bill. One of the reasons why the Government are having so much trouble with the level playing field negotiations is the existence of those clauses. Let us think about this for a moment. Why do Ministers think that the EU negotiators are so keen to tie down commitments that both sides will be asked to give in the negotiations? It is for the very simple reason, as my right hon. Friend the Member for Doncaster North (Edward Miliband) made clear in another brilliant speech, that we have shown that we are not to be trusted to keep our word. If a country is in the process of negotiating a new international treaty, it does not do wonders for its credibility if it is busy preparing to tear up part of the previous treaty that it negotiated with the same partners and signed just over a year ago.
The other issue is sovereignty, about which we have heard an enormous amount today. If sovereignty is absolute, and if we were to take it to its logical and absurd conclusion, for example, why should we be negotiating on fish at all? Would not giving any of “our fish”, as some people describe it, be a betrayal? If sovereignty is absolute, what are we doing in the World Trade Organisation? As the right hon. Member for North Somerset (Dr Fox) knows only too well, the WTO has a dispute resolution body that gives other countries, if they win a case against the UK, the ability to impose countervailing measures upon us, including tariffs. How could that be acceptable to a sovereign country that claims complete sovereign control? The truth, of course, is that sovereignty is not absolute. It is what we choose to do with it that matters, and we cannot avoid that choice. We cannot avoid that choice in these negotiations, because the only way out of this mess, in the interests of the country, is for both sets of negotiators to grasp the heavy responsibility that they have at this moment to make the choices that will secure the deal that the country desperately needs.
In conclusion, since German car makers, as was once rather fancifully suggested, are not going to turn up late in the day to rescue the negotiations, a bit like Blücher at Waterloo, we have to save ourselves. That is what we have to do at this point. Whatever the bluster, I simply say to those on the Front Bench that the country will not forgive this Government if they impose no deal upon us.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
It is always an enormous pleasure to follow the right hon. Member for Leeds Central (Hilary Benn). For decades, the EU was a train that we had to stay on, and now Brexit is a tiger that we have to get off. There is not time to re-engage in the old arguments about sovereignty, but it was very telling that he thought the importance of sovereignty was what a country chooses to do with it, not what it is imposed with. There is no international organisation of which we are a member in the world that is like the EU, which imposes its will on us through our own laws and courts; every other international body—such as the WTO, to which the right hon. Gentleman referred—is a voluntary association governed by international law, which is a completely different matter.
Sammy Wilson
As the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) pointed out, one of the most important principles of the United Kingdom is to have a common market and trade between the different parts—that is where the prosperity that attracts people to be part of the United Kingdom comes from. My view, which I have expressed in the House many times, is that the withdrawal agreement undermines the United Kingdom’s economic integrity as well as of course undermining its constitutional integrity, because as a result of the withdrawal agreement part of the United Kingdom will now have its laws made in Brussels and not in London or, indeed, in Belfast. That is why I believe this internal market Bill is so important. First, it ensures that standards within the UK internal market are maintained and that each part of the United Kingdom, for maybe very selfish, very parochial and even very temporary reasons, may want to make differences in its laws, regulations and standards, and, in doing so, damage not only the internal market but their own markets as well.
When it comes to the controversial clauses, I believe that the Lords have done a great disservice to Northern Ireland. I believe, as someone has already pointed out, that they are strong on assertions but very poor on arguments. The withdrawal agreement, while it promises unfettered access, while it promises that Northern Ireland will remain part of the UK customs territory, while it promises that the integrity of the United Kingdom will be maintained, in reality means that we will finish up with a plethora of trade barriers. We will finish up with laws made that are different from the laws in the rest of the United Kingdom. We will finish up with Northern Ireland being part of the EU single market, rather than the UK internal market.
Paul Girvan (South Antrim) (DUP)
Does the withdrawal Act that has been put forward or the Northern Ireland protocol included in this Bill not send the message to those who are from the Unionist community, “Your views do not matter, but appease those who are nationalist and republican, and who are only interested in their links with the Irish Republic. Europe has done us a disserve in not giving us free access to both the Republic of Ireland and the UK, and forget about the links we have with the United Kingdom”? That seems to be the message they are sending.
Sammy Wilson
Any agreement that means laws can no longer be made in the United Kingdom, and puts economic barriers between ourselves and our main market, is bound to be a change in the position of Northern Ireland that is totally contrary to the Good Friday agreement, which requires consent.
Some have argued that the Bill puts a safety net in place and that some of the aspects—only some of the aspects; I have to make that very clear—of the withdrawal agreement which could damage the Northern Ireland economy can be countered through the measures in the Bill. That, by the way, is totally in line with the withdrawal agreement itself, which allows the UK Government to act unilaterally where there is economic or societal damage done by the withdrawal agreement. The right hon. Member for Doncaster North (Edward Miliband) said, “Well, there you are. You’ve got your assurance in the withdrawal agreement.” But all the withdrawal agreement states is that the Government will have the right to act unilaterally. They must have the means to act unilaterally. The provision in this Bill gives them the means to act unilaterally. Ministers, notwithstanding what is in the agreement, can make new regulations and new laws that protect the Northern Ireland economy and the Northern Ireland market. That is why it is so essential to have these provisions.
What disappoints me is that we now have the Prime Minister today saying, “By the way, once we have a negotiated settlement and the work of the Joint Committee, then we can withdraw this.” That fails to recognise the nature of what we have entered into. The safety net is there not just for a one-off event, but because we will be continually walking the withdrawal agreement tightrope. Northern Ireland is still going to be subject to the rules of the internal market. Indeed, the withdrawal agreement makes it quite clear that the work of the Joint Committee will go on and on. At any stage, EU officials could demand that checks be placed in Northern Ireland and that UK officials would have to adhere to that. If those demands become unreasonable, we will then need a safety net. If we need a safety net, we do not need it until these negotiations are over. We need it while any part of the withdrawal agreement and the Northern Ireland protocol is in place.
I would therefore like an assurance from the Minister that if the Government intend to withdraw the safety net—if negotiations turn out fine this week—what protection will there be for Northern Ireland from the depredations of the withdrawal agreement in the future? That is important. I believe that this Bill is essential. The Government owe it Northern Ireland, having signed a disastrous agreement this time last year. If the integrity of the UK is to be maintained, the provisions in this Bill and, indeed, other provisions will be necessary.
Sir Robert Neill
It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson), although I fear that I cannot agree with him on one point. I understand the point of view of those who voted against the withdrawal agreement that they can attack what they regard as its inadequacy. I voted for the withdrawal agreement, as did pretty much everyone else on the Government Benches, and I take the view that one should not deviate or depart from it, save under the most exceptional and pressing circumstances. At the end of the day, despite a great deal of debate, that is pretty much where we have ended up. I would not be comfortable about doing so were it ever necessary. I would not find it attractive. Sometimes, though, events occur in the nature of international negotiations that may render it necessary.
The Government having reflected, as I am glad they did in the Bill’s passage through this House and added the parliamentary lock to clause 56, there is a proportionate means of dealing with such an unwelcome eventuality should it arise. It is not something that we should look to. It is not something that we should desire and it is not something that we should make easy either. It is something that should be done only if a high bar of evidence is met and if this sovereign Parliament—to use a phrase that has been much used—is itself satisfied of that. That is reasonable. It is also not inconsistent with the international law approach under article 46 of the Vienna convention where it is possible, in limited but urgent circumstances, to deviate from an international rule of law if it is necessary to maintain the fundamental internal rule of law of the state. This is not something that has been dreamed up without sound legal foundation, which is why, while I am normally most reluctant to disagree respectfully with two former Lord Chief Justices, Lord Judge and Lord Thomas of Cwmgiedd, both of whom I regard as friends and admire greatly, I do take the view that they take a more restrictive approach than is necessary in this case.
To take a contingent power is not of itself a breach of international law, or of itself a breach of good faith. If that were used disproportionately, or without the sort of checks and balances and proper lock that we have now adopted, I can see that that would be the case. I do not believe that the taking of the power, which has not yet been brought into force and would not be without certain hurdles having been met, itself offends against the principle of the rule of law with every respect. Indeed, I hope that, in that respect, we have managed at all times to adhere to the rule of law. That is why, I am pleased to say, the Government intend to reinstate the parliamentary lock, which was removed by their Lordships as well as those clauses that they found offensive. That was perhaps surprising. I say charitably to my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) that it was perhaps seen as consequential and inevitable if we removed the commencement part of part 5, to be kind.
The reality is that, because the Government have committed to, and reaffirmed today that they are committed to, restoring the parliamentary lock and gone further and indicated that, in subsequent related pieces of legislation, they will adopt the same approach, that does show an internal consistency, a logic, in what is being done. The situation makes me, as somebody who was a lawyer before I came here, and will, I suspect, still regard myself after I have left here, not happy but satisfied that the proper tests have been met in these exceptional circumstances. That is why I am content to support the Government in these motions to disagree tonight, but with the very profound hope that this is never necessary, that we never come anywhere near this, and that the Prime Minister is able to achieve a deal. If he does come up with a deal, he will have my wholehearted support, and the support of many others with a like view, because that is by far the best outcome for the whole country, for the Union and for business.
At the end of the day, I do not think that the clauses that the Lords sought to remove actually offend against propriety and, for that reason, I am prepared to support the Government tonight. They have shown willingness to be pragmatic, to make compromises and to listen. That should be something that one should applaud. I hope therefore that we will be able to return the Bill to their lordships so they can perhaps reflect that it is not necessary for them to insist upon their amendments.
Alison McGovern (Wirral South) (Lab)
It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Sir Robert Neill). I feel that if anybody has a chance in this place of persuading the vast ranks of angry Lords in the other place that my right hon. Friend the Member for Doncaster North (Edward Miliband) described earlier, it is him. Unfortunately, even he does not have much of a chance given the levels of consternation down the corridor at the clauses in particular that we have been discussing.
Unfortunately, to add insult to injury, this afternoon—while we have been debating—the Prime Minister has given the game away, because he has said that if the negotiations that we are all very concerned about are completed in a positive way, these clauses will not even be needed. I am worried about that because, as any parent knows, when it becomes clear that it is just a negotiation tactic and you do not really mean it, you have already lost. More seriously, I listened to the right hon. Member for East Antrim (Sammy Wilson) describe the situation—he and I do not agree on much politically, I would think—and he said that, if these clauses are really needed, they are needed. If they are just able to be removed, depending on the negotiations, they are not really needed, and that is at the heart of the problem.
Their lordships have explained why the rule of law matters for its own sake. I am no great legislative or legal theorist, but I know why the rule of law matters for all our sakes. It is because of the terrible economic impact of the current situation that we all face. Unfortunately, the Chancellor, when he gave his statement last week, did not make much of it, but the OBR described it in all its horrendous glory—that on top of the gruesome impact of the pandemic on jobs and the economy of this country, the situation that we are facing next year with Brexit could be horrendous.
This matters, because this Bill describes exactly how economies function by common rules, by frameworks applying consistently to markets over space and time. They do that because there are institutions that police those rules, and therefore the institutions that we create matter, and the trust in those institutions matters. They matter not just for their own sake, but for the markets that they underpin, the jobs of the people who work in them and the fate of the people who are part of them. Every step that we take either builds those institutions or knocks them down. Every action creates trust or undermines that trust. Because trade is a repeated exercise, as others have mentioned, all of this debate makes it harder for us to agree new institutions, new frameworks and new rules in the future. That is how our reputation as an international party is won or lost. I know this: when we engage in this kind of madness, there is always a price, and not just some kind of theoretical, legalistic nicety of a price. There is a price in jobs for my constituents and there is a price at the shops every time my constituents do their shopping. So we can have no more of this.
Finally, on devolution, we have heard about the deep consternation among those in the devolved institutions about the clauses in the Bill that relate to them. It is about time we realised the connection between unpredictable and unreliable action from the UK Government, and the deep dissatisfaction in the constituent parts of the United Kingdom. I speak not only having heard those from Scotland, Wales and Northern Ireland; I speak from Merseyside, where European structural funds made a profound difference to our economy. Why? Because the investment was predictable; it was possible to understand why that investment was being made; and it was possible to understand what would happen to that investment for the future. The European Union was a reliable investment partner. If the UK Government choose never to be reliable, the people in this country will pay the price.
Madam Deputy Speaker (Dame Eleanor Laing)
After the next speaker, the time limit will be reduced to four minutes. With five minutes, I call Andrew Bowie.
Andrew Bowie
It is a pleasure to speak in this debate and to follow the hon. Member for Wirral South (Alison McGovern).
There is a distinct sense of déjà vu today. The House of Commons is debating Brexit legislation, and the Prime Minister is locked in talks with the President of the European Commission regarding our exit from and future relationship with the European Union, so hon. Members will forgive me if I break out into a cold sweat when the Division bell rings later today. It will bring back some rather tense memories for me in this place.
I will focus my remarks today on the devolution aspects of the Bill, but I want first to say a bit about the common frameworks. We know that there is still work to do regarding common frameworks. The Government and the devolved Administrations have already agreed the principles that will guide the development of common frameworks. Indeed, Lords amendments 1, 19 and 34 address the issues. However, I do not agree with those amendments, as they would have the effect of undermining the UK Government’s ability to set new rules and divergence through modifying appropriate exemptions to market access rules, and the power to ensure unfettered access for Northern Irish goods into Great Britain. That is why I will be opposing those amendments this evening.
Let me turn to devolution. It was a real pleasure to listen to the right hon. Member for Doncaster North (Edward Miliband). I believe him when he says that he is a passionate advocate for our United Kingdom. I remember him campaigning in the referendum in 2014. I disagree with him, however, because this is a very good Bill for the Union of the United Kingdom of Great Britain and Northern Ireland. I know that because the SNP is so vehemently opposed to it. If this was not a good Bill for our United Kingdom, they would of course be supporting it. This Bill is good for business, good for jobs and good for people, and it will bind the United Kingdom closer together. This Bill will deliver a significant increase in decision-making powers to the devolved Administrations. There will be no power grab, as we have heard time and again.
Joanna Cherry
The hon. Gentleman has repeatedly said that there is no power grab, but Lord Hope of Craighead, who is very widely respected in Scotland and across these isles, said in the Lords that when the SNP described the Bill as a power grab, he initially thought it was “hyperbole”, but
“having read the Bill and…report of the Constitution Committee,”—[Official Report, House of Lords, 19 October 2020; Vol. 806, c. 1361.]
he could very well see why the expression “power grab” is being used. Who is right: Lord Hope or the hon. Gentleman?
Andrew Bowie
There is disagreement about this Bill, of that there is no doubt. But we have debated this matter time and again in this place and in other places, and every time that it has been put to the Scottish National party, the Scottish Government or anybody else who opposes the Bill that the term “power grab” is false, they cannot in any way describe one power that is being taken away from the Scottish Parliament.
Andrew Bowie
I will give way because I like and respect the hon. and learned Lady.
Joanna Cherry
It is not as simple as listing a power. [Interruption.] No, it is the whole scheme. This is not my view. It is the view of Professor Michael Keating, a very well respected constitutional expert across these islands. It is about the cross-cutting powers that give not just this House, but this Government, the last say across a whole range of devolved fields that Donald Dewar devolved to Edinburgh.
Andrew Bowie
The hon. and learned Lady knows full well that this place will not have the last say over vast swathes of devolved powers. No powers are being taken back to this place. In fact, we are giving more than 70 powers to the Scottish Parliament and the Scottish Government as a result of our leaving the European Union. Professor Keating, who I know very well, as he was a professor of politics of mine at the University of Aberdeen, knows that it will not be the first time I have disagreed with him on such a point.
Andrew Bowie
I will not, because I know there are far more people who want to speak.
It is not just me who says it is not a power grab. Former SNP deputy leader Jim Sillars said that
“Nicola Sturgeon has been dancing up and down on the ball saying, you know you’re stealing powers from us. The irony is that if she gets these powers, she wants to hand them all back to Brussels. That’s a massive contradiction in her policy position.”
The hon. and learned Member for Edinburgh South West (Joanna Cherry) cannot shake her head and disagree with that, because that is a fact.
Andrew Bowie
I am afraid I cannot, because we have not got very much time.
This Bill will amount to more money being spent in Scotland. That is a fact. As a result of the Bill, no powers are being taken away and the Barnett consequentials will not be affected. Jobs will be safeguarded as a result of the Bill. It does amuse me to hear Members of the Scottish National party defending and supporting amendments being put in the other place. I hope the Scottish National party one day will come in here and stand up for democracy and the democratically elected Chamber of this United Kingdom. When will the Scottish National party defend the democratic will of the British people?
I seriously urge SNP Members to reconsider their support for the Lords amendments and to stand up for the Bill because it is good for Scotland. But I know they will not. Frankly, the Scottish National party and the Scottish Government do not care that the Bill protects jobs and is good for business and for the country because it binds the United Kingdom closer together. That is why they do not like the Bill: it binds the United Kingdom closer together. That is the truth of it. They do not want the internal market to succeed. They do not want it protected. They do not want the United Kingdom to succeed, and they will sacrifice Scotland’s prosperity, Scottish jobs and anything else, as long as they achieve their aim of undermining the United Kingdom and achieving separation.
As if to make my point, on BBC Radio Scotland’s “Good Morning Scotland” today we heard from Mike Russell, the Minister for constitutional affairs in the Scottish Government. Like the hon. and learned Member for Edinburgh South West—I congratulate her on her election, by the way—he is a member of the national executive committee of the Scottish National party. He said that the Scottish National party will not vote for a Brexit deal even if one is achieved. The SNP would vote against the deal. It has not even seen a deal, but it would rather say no, because it thinks that will further the cause for separation. SNP Members want the United Kingdom to fail, and that is why they are against the Bill this evening, and that is why they will vote against the Brexit deal if we get one in the coming days.
We want to level up the United Kingdom and, as my hon. Friend the Minister has set out, that is why we are disappointed that their lordships have in amendments 48 and 49 attempted to remove the power of the UK Government to intervene to provide financial assistance across the United Kingdom. It is a fact that formerly EU assistance powers now rest with the UK Government. It is right that through the UK prosperity fund, and with consultation with the devolved Administrations, we have the same powers now that the European Union had previously.
I have great respect for my hon. Friends and, indeed, some Members across the aisle for supporting the Lords amendments tonight. I disagree with them, but they have principled objections to the Bill, as do many of their lordships. Although I respect the hon. and learned Member for Edinburgh South West personally, I am afraid I do not respect the position of the Scottish National party, which, as ever, is opportunist, divisive and seeks only to further the aim of breaking up our country, with everything that that means. I will back the Government today because this Bill binds our country closer together and is good for trade, good for jobs, good for people, good for Scotland and good for our entire United Kingdom.
Sarah Olney (Richmond Park) (LD)
This was a controversial piece of legislation on Second Reading, so it is no surprise to find that our noble Friends in the other place have made historically substantial amendments to it. It is probably a sign of the remarkable times we are living in that the Government should attempt not only to table legislation that effectively breaks the law, but to do so in such a way as to destabilise a critical bilateral negotiation, the outcome of which will have a major impact on the lives of every single UK citizen.
According to announcements made while we have been here in the Chamber, the Government have so far been unable to conclude our negotiations with the European Union over a future trading relationship. To proceed with this legislation when these critical discussions are at such a crucial stage ought to be unthinkable, were it not for the fact that the Government have routinely ridden roughshod over every convention, broken faith with every promise and undermined every pillar of our society when they threatened to stand in the way of Brexit.
I feel somewhat relieved therefore that their lordships have inserted some normality into proceedings by taking as their first principle that legislation and legislators should not break the law. The Liberal Democrats wholly endorse their amendment that removes the whole of part 5 from the Bill, and we oppose the Government’s motion to reject the amendment.
Since 2016, the Conservative Government have repeatedly ducked the difficult choices required following their decision to implement the referendum outcome in the most damaging way possible. Many of us thought that these choices would finally have to be confronted once Brexit stopped being a right-wing dream and became a reality, but it comes as no surprise that the Government will break the law and destroy our international reputation in order to delay unpleasant reality for a little while longer.
We do not know what unintentional consequences will be unleashed by reinserting this clause into our national legislation, but if we as a nation break treaties, act in bad faith and undermine our international relationships, we should expect there to be a price to pay. This is a recklessly foolish action at a time when we urgently need to build and strengthen our links with other countries, not just because we need new trade deals, but because we urgently need co-ordinated global action to defeat coronavirus and fight against climate change.
Mr David Jones (Clwyd West) (Con)
I will, if I may, focus on the amendments that seek to remove the entirety of part 5 of the Bill, which is its most controversial part because of the remark by my right hon. Friend the Secretary of State for Northern Ireland that it would breach international law. That remark proved as incendiary in the other place as it did in Brussels, and I can well understand the consternation that greeted it at the other end of the corridor. However, we must remember that the purpose of the Bill, as the right hon. Member for East Antrim (Sammy Wilson) pointed out, is straightforwardly to ensure that trade can flow freely within the internal market of the United Kingdom.
The internal market is specifically preserved and protected by the Act of Union 1800. Equal access to the internal market is therefore a constitutional right of the people of Northern Ireland, as, in due course, will be parity of treatment in the future trade relationship with the European Union. Pursuant to the Belfast-Good Friday agreement, that right should not be disturbed without the consent of the people of Northern Ireland. However, considerable difficulties arise under the terms of the withdrawal agreement and the Northern Ireland protocol. It became increasingly clear during the negotiations with the European Union that the EU was intent on using the provisions of the withdrawal agreement as leverage in the negotiations on the future relationship. Those provisions could disrupt UK state aid policy and cause considerable friction in trade between Northern Ireland and Great Britain.
Part 5 of the Bill, and the forthcoming Taxation (Post-Transition Period) Bill, therefore seek quite properly to neutralise that potentially detrimental effect. However, it must be remembered, as my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) pointed out, that the powers in part 5 do not come into effect until such time as the Secretary of State makes a commencement order, and that can happen only with the approval of this House.
The Government have a positive duty to safeguard the integrity of the UK’s internal market, and to take whatever action is lawful in order to do that. The Bill gives the Government the power to take necessary action to neutralise the abusive implementation by the European Union of the provisions of the withdrawal agreement, including the Northern Ireland protocol. Furthermore, the same provisions safeguard against the potential breach of the Belfast-Good Friday agreement by ensuring that the constitutional rights set out in article 6 of the Act of Union are not infringed.
There can be no doubt as to the constitutional propriety of Parliament enacting these provisions. Parliament is sovereign; that is the fundamental principle of the constitution of this country. Moreover, and importantly, it is a principle that is specifically reasserted in section 38 of the European Union (Withdrawal Agreement) Act 2020, the statute that brought the withdrawal agreement into domestic law, notwithstanding the direct effect provisions of the withdrawal agreement.
It is to be hoped that a free trade agreement will shortly be concluded. If it is, there will be no need to trigger the powers in part 5 of the Bill, but as my hon. Friend the Minister pointed out, this Bill acts as a safety net. It is therefore clearly in the national interest that these provisions be reinstated in the Bill, and I urge hon. Members to vote accordingly this evening.
Mr Tobias Ellwood (Bournemouth East) (Con)
My 10-year-old son asked me what we were debating this evening. I confessed it was Brexit, to which he replied, “Not again! Haven’t you been doing that for a while?”. I tried to come up with an analogy to explain why we are still doing this, and I compared it with the Apollo programme, which had a commitment, an obvious mission—to land a man on the moon—a clear tactical goal with a strategic objective. Our 2016 referendum could not have been more different. Think back to the question that we were asked: “Should the UK remain a member of the European Union or leave the European Union?”. In the case of the moon landing, the difference between success and failure was clear to absolutely everybody, but what “leave” meant was never formally articulated or agreed.
The world watched with trepidation as Apollo 11 completed its mission, targeting not just the moon, but a specific place on its surface. Years later, a global audience would witness another journey into the unknown. This time, it was Brexit that was given the green light to launch—but without our formally agreeing a specific destination. There was a vast spectrum to land in, and four years later, we continue to dissect the issue in detail. Now, with talks going down to the wire, we have to think the previously unthinkable and prepare for the possibility of no deal. To be clear, I absolutely respect the result of the referendum; I care, though, about where this project lands, and that is what we are discussing today.
If we step back from the details of the battle, we begin to appreciate the impact a no-deal Brexit will have on global Britain. The world order that we helped to create after 1945 and globalised after the fall of the Soviet Union is in decline. Threats are diversifying and becoming more complex at the very time that we are witnessing a decline in western resolve—in what we believe in, stand for, and are willing to defend. As the UK assumes the G7 presidency and hosts COP26, we will have the chance to stand tall with a new White House Administration, invigorated, and the chance to repair our frail world order and contest the rise of authoritarian state and non-state actors, which for too long have been given free rein to pursue their own agendas.
Yet here we are, seemingly willing to retreat from the world stage, potentially distancing ourselves from the continent and, indeed, the US by entertaining the prospect of no deal only a week after we cut our overseas aid budget. Our soft power, arguably the most influential in the world, has already been bruised by the UK’s willingness, however good our intentions, to flout international law by breaching the withdrawal agreement. Indeed, we are here today to put back the offending part 5, which was removed by the Lords because of the wider implication that the UK was willing to breach international law.
I am pleased that the Government intend to remove clauses 44, 45 and 47 in the event that a trade deal is confirmed, but it would be an abject failure of statecraft to leave the EU with no deal. If more time is required, so be it. We will live with the consequences for years—indeed, decades. We must summon the political courage to get this right. The west is about to regroup. Our voice, our experience and our leadership are needed on the global stage.
Claire Hanna (Belfast South) (SDLP)
It is a pleasure to follow that thoughtful speech from the right hon. Member for Bournemouth East (Mr Ellwood). I have a daughter who is younger than the Brexit negotiations, and I think she would probably concur with his son.
I have been around enough tortuous, protracted negotiations in Northern Ireland to know that when a U-turn is being executed, it is polite to let it be done, so I welcome the apparent acknowledgement that the clauses relating to the breach of the protocol will be removed, but it is fair to point out just how damaging their inclusion was in the first place. That proposal to breach international law has proven to be, as many of us said when we discussed this in September, cack-handed and a massive own goal. Threatening the operation of the protocol again through the Taxation (Post Transition Period) Bill would be equally wrong-headed, reckless and counterproductive, and I hope that that will be affirmed before legislation is taken forward. The Joint Committee is, as we all know, the place to resolve issues relating to the protocol. Far from showing that the UK is serious about a deal, as the Government tried to do with this Bill, they have shown that it is untrustworthy. That undermined the very UK negotiators who were trying, through the Joint Committee, to get resolution on some of these issues.
It is fair to say that nobody loves the protocol. It is not beloved in Northern Ireland, but it is a response to the challenges presented by Brexit—challenges that we and others have sounded the alarm on for years before and since 2016. It is a response to decisions made on the Government Benches. The irony is that that is the threat to the Union. I see that my colleagues from Northern Ireland are no longer here, but it is worth saying that those of us in the centre and nationalists in Northern Ireland were minding our own business in 2016 when this was thrust upon us. In fact, it is Brexit, laying out the imbalances in the United Kingdom, that is the threat to the Union. Those of us who got into politics not to bang on about constitutional change but to improve people’s lives can get on with doing that while others appear to make our case for us.
Neither the EU nor the UK is happy about what the protocol means, so we have to think about how it feels to those of us in Northern Ireland, but it is a necessary protection from Brexit. Businesses do not want it to be repudiated and trashed. They want it to be implemented. Moves such as those we have seen leave Northern Ireland more exposed. They leave us looking vulnerable to those who want to invest and are trying to develop their businesses. The point of the protocol was to take Northern Ireland and its complexities and fragilities off the table and try to manage those, rather than undermine them. It remains a fact—one that is always worth repeating—that if people really want to minimise the friction between Britain and Northern Ireland, the way to do that is a closer EU-UK relationship, but somehow that argument never gets made.
I turn to the amendments. We welcome the clear message that the Lords sought to send about good faith, the rule of law and devolution, including the need to enhance the duty to consult and co-operate with devolved Administrations. I will not repeat the points that I made when we discussed this legislation in September, but it is important to say that devolution—local decisions in local hands—is a fundamental part of the Good Friday agreement. The proposals in the Bill offend devolution, which is supported by people in Wales, Scotland and Northern Ireland. We agree with the Lords’ attempt to offer us protection against that direct overrule and trespass into that settlement.
All that is left to say is that it is time to get this done. I regret that in the biggest economic contraction in living memory, no deal is still somehow on the table, and I urge those who have this decision before them to make it and get this sorted.
Katherine Fletcher (South Ribble) (Con)
The hon. Member for Belfast South (Claire Hanna) is a big act to follow. I rise to talk about the Lords amendments to part 5 of the Bill. Without this part of the Bill standing as it was originally intended, the United Kingdom risks being divided. We could get into a position where goods and services from Northern Ireland are treated differently from those in the rest of our Great Britain. That cannot happen. As Conservatives, we have a manifesto commitment, barely a year old, to give Northern Ireland unfettered access to Great Britain’s markets. Article 6 of the Northern Ireland protocol also states that. The Good Friday agreement states that Northern Ireland’s constitutional status cannot be changed without the consent of both communities. Even the Acts of Union 1800 stated it.
As an MP in the north-west of England, I know that the people of Northern Ireland are closely entwined with us, both geographically and culturally. It is a short ferry ride or a quick hop on a plane, and barely a street, let alone a community, does not have someone with an Irish accent. They are not separate; they are part of a wonderful whole, and for artificial lines to be drawn across our shared sea is unconscionable. For a business in Northern Ireland to have customs checks for its products, or to be treated differently, is not something I would propose, consider, or support.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to follow the hon. Member for South Ribble (Katherine Fletcher).
Noble peers in the other place have given the Government a chance to reconsider the irreparable damage that passing the Bill will do to Britain’s international reputation by undermining the rule of law. We must be clear that using the powers in the Bill will break international law, and attempts to justify that by saying that it will be done only in a limited and specific way are laughable. When it comes to deciding what the impact of the Bill will be, I prefer to listen to two Lord Justices and five former Prime Ministers regarding the rule of law.
The Bill will also affect Britain’s ability to influence matters globally. As the former Conservative party leader, Lord Howard, asked: how can the UK reproach Russia, China and Iran for their conduct, when it is prepared to break international laws? That runs contrary to the principle of good faith set out in the Vienna convention on the law of treaties, which governs so many international treaties and allows nations to enter agreements with free consent and good faith.
Why should anyone trust negotiations by a nation that gives itself permission to go back on its word? I think we found the answer to that today, when the Prime Minister decided that he would remove the offending clauses if a deal is done. Such a stance is hampering negotiations by fostering mistrust in other nations. Is that not a further erosion of Britain’s place in the world? The rule of law, keeping one’s word and the sanctity of treaties were once bywords for Britain’s respectability, yet we now see a Government who are trashing Britain’s reputation. The Lords recognised that, which is why they voted to remove part 5 of the Bill.
Measures in part 5, which peers rightly voted to exclude, give Ministers the power by secondary legislation to disapply powers to Northern Ireland, in clear breach of the Northern Ireland protocol. In doing so, Ministers will, without any scrutiny, be able to subvert the rule of law and break international law. The measures in the Bill are also contrary to the dispute resolution articles in the withdrawal agreement.
Government Members have in recent weeks been complaining about the lack of scrutiny and opportunity to challenge the Government’s restrictions imposed on England due to covid-19, yet they seem blithely willing to surrender power to the Executive and have Ministers make decisions away from Parliament. This is not so much taking back control as relinquishing all power. What is worse is that the measures will be put beyond any meaningful judicial review.
The United Kingdom Internal Market Bill is a bad Bill, which the noble Lords in the other place have tried to salvage. There can be no rational dispute with the logic that they have applied in trying to get part 5 removed. The Bill disregards the rule of law, trashes Britain’s international reputation and gives power to the Executive, away from parliamentary, public and judicial scrutiny. The Lords amendments go some way to fixing this mess, but if the Government seek to disagree with them I will vote against.
Liz Saville Roberts
It is an honour to follow the hon. Member for Enfield, Southgate (Bambos Charalambous). I have spoken on numerous occasions about the invidious creeping damage that the Bill will do to devolution; therefore the decision to press ahead without changing course, while unsurprising, does nothing but drive home the disregard that the Government have for Wales and its people.
First, the Bill attacks the devolution settlement by hollowing out and reserving the Senedd’s powers—powers for which the people of Wales have voted not once but twice. This is not merely an abstract argument about constitutional arrangements; the Bill paves the way for the deregulation of goods and services. That means that in the coming years we can expect a weakening of devolved standards in Wales, with bad consequences—from substandard beef finding its way into the diets of people in Wales to landlords providing inadequately regulated services in the private rented sector.
Turning to the Lords amendments, I support the exemptions from market access principles for existing regulatory divergence, as agreed under the common frameworks approach, as they safeguard existing Welsh standards and policy divergence, such as the minimum unit pricing for alcohol. However, the amendments do not offer protection to future legislation, and offer no protection, therefore, to future divergence.
The Lords’ removal of clauses relating to additional financial powers is also welcome. These measures are completely disproportionate to the aims of the Bill and act as a cover for further centralisation of power by the UK Government. The removed clauses would reserve state subsidy powers to this place, while undermining a future Welsh Government’s ability to manage and invest in the economy, cutting across devolved areas such as health, education and housing.
Lord Thomas said it well when he said that clause 42 is unnecessary and
“will enable the UK Government to spend funds in ways that the UK/English Government think best, but which the people of Wales, for example, may have rejected. That is not democracy. In effect, it would give legislative underpinning to the now discredited principle that the Government in Westminster know best”.—[Official Report, House of Lords, 2 November 2020; Vol. 807, c. 574.]
The Senedd’s Finance Committee has noted that the constitutional and financial implications of the Bill passing unamended would undermine devolution and set in motion the means for the UK Government to reduce the Welsh block grant in future. We should be alert to that. In addition to the Finance Committee, two other Committees of the Senedd have called on the Senedd to withhold its consent to the Bill. Consultation without consent is a deceit. Consultation without the power of veto is worthless.
The removal of clauses in part 5 related to the Northern Ireland protocol is welcome. Plaid Cymru, of course, unequivocally supports upholding our international commitments in the EU withdrawal agreement. The Government’s disregard for the rule of law internationally, coupled with their bulldozing of the UK devolution settlement, exemplifies their totalising approach to governance, with power and control at the heart of their modus operandi. When the Prime Minister described devolution as a disaster he insulted our young democracy as a disaster. The Bill is entirely consistent with the contempt in which the Government hold Wales. If the Government can talk up sovereignty and taking back control, then Wales can seek our sovereignty, our control and our independence.
Gary Sambrook (Birmingham, Northfield) (Con)
I rise tonight to support the Government in their approach to handling the United Kingdom Internal Market Bill, which is incredibly important for this United Kingdom. I shall also speak in favour of disagreeing with the Lords amendments.
There are a couple of reasons behind that for me. The first is the issue of high standards. In this place, we constantly hear lots of myths about what we will be doing with our high standards post Brexit as if the European Union was, of course, some sort of beacon for food and animal welfare standards. We see a live issue with fur in the EU. Back in 2002 we outlawed the production of fur across the United Kingdom, but because of single market restrictions we cannot ban the import of fur across the country. The same applies to things such as live animal exports or the sale of whalemeat. When we leave the single market at the end of the transition period and have our own single market across the United Kingdom, we will be able to ban those things, increasing animal welfare protection to a much higher level than in the EU. We need only look at the last couple of months in Denmark, where we saw millions of mink being culled because of intensive farming that has meant that they have been infected with coronavirus. Such standards, which we would not accept in our own country, are things that we will be able to outlaw after the end of the transition period.
Where the single market has held back the United Kingdom’s high standards, the UK will be able to become a world leader when the transition period is over. Earlier, my right hon. Friend the Member for North Somerset (Dr Fox) said that for him the reason Brexit was so important was the constitutional settlement. For me, it is about clauses 48 and 49, which will enable this country to fulfil our manifesto commitment about levelling up. I look at communities across my constituency—I have mentioned MG Rover several times in this place, including on Second Reading—and the opportunities that have been lost there for many years. We can spend this money in the United Kingdom to offer jobs, opportunities, skills and training in communities that have felt left behind for far too long. When we look at places such as GKN Aerospace in my constituency, which unfortunately is closing, we need to look at ways in which we can upskill and retrain people who have worked for 20 or 30 years in the same factory unit, giving them the opportunity to move on and work in new jobs and new industries.
My hon. Friend the Member for Stone (Sir William Cash) set out earlier why it is important that we have this safety net, because the EU has acted in bad faith over the last days, weeks and months. It is important that this Union, through its internal market, continues to provide the economic and social benefits that it does. Seeing the democracy dodging from some of the separatists on the other side of the House, for whom 2,000 people in an opinion poll are more important than 3.6 million people in the 2014 independence referendum and millions of people across this country who voted for our manifesto last year are less important than a couple of hundred unelected peers down the corridor, I think it is very important that we get this Bill through.
Bill Esterson (Sefton Central) (Lab)
What are we being asked to do by the Government this evening? We are being asked to break international law, albeit in a “limited and specific” way. It is still breaking international law. It tears up a deal that was negotiated by this Prime Minister, put to the people of this country by this Prime Minister and voted on by every single Member of the governing party earlier this year. It is not just about breaking international law; it is a breach of trust with the same partners with whom we are now 24 days away from ending a transition period and with whom we desperately need to conclude a deal. Did not those Government Members who are sitting laughing at the prospect of no deal and its effect on the jobs and prosperity of their constituents anticipate the European Union’s reaction to the Government’s proposal to breach international law? Did they not know that one of the key elements of negotiation is to understand what the negotiating partner will ask for? Is it any surprise that they have asked for level playing field protections, given the breach of faith and the breaking of international law?
Matt Rodda (Reading East) (Lab)
My hon. Friend is making an excellent speech. Does he agree that many people around the country will find it absolutely staggering that the Government can make an agreement one year and go back on it the next?
Bill Esterson
That is exactly right, and it was the right hon. and learned Member for Torridge and West Devon (Mr Cox) who pointed out to Government Members that they all voted for the withdrawal agreement that they now want to abandon. Most people believed the Prime Minister’s guarantee—that he had an oven-ready deal for them—when they voted for him in last year’s general election. This is not about ignorance or dishonesty, as the right hon. Member for Braintree (James Cleverly) would have us believe; it is about the shameful abandonment of the trust of the people of this country. If no deal is the consequence, people will remember the promise made by Conservative Members when they were elected last year on the back of the Prime Minister’s promise.
They must move on from this. They have 24 days left and the clock is ticking. No deal will be disastrous. It will be disastrous for those workers in the car industry, whom the hon. Member for Birmingham, Northfield (Gary Sambrook) mentioned. It will be disastrous for livelihoods and for national security as well. It will be disastrous for security in Northern Ireland if the Good Friday agreement is upended, and it will be disastrous for the prospects of future trade agreements. In the United States, President-elect Biden has already made clear what it would mean to him if the Good Friday agreement is threatened by this Bill.
As for our reputation and authority on the world stage, prior to this debate we had an urgent question on Hong Kong. My hon. Friend the Member for Enfield, Southgate (Bambos Charalambous) mentioned those countries mentioned by Lord Howard. We will be in no position to lecture anyone on the world stage if we go ahead and break international law. Our credibility will be shot. How will investors be able to trust that their investment will be safe in this country if we are prepared to tear these things up so readily? Who will trust our word? Who will believe anything we say? Who overseas will believe in this country?
Our people deserve better than this. For the sake of the jobs and livelihoods of the people I represent and the people that those on the Government Benches represent, I say to the Government: do not allow no deal to happen. If they fail, the British people will remember who was responsible and they will blame the Prime Minister. They will hold him responsible and they will hold Conservative Members responsible, too.
Marco Longhi (Dudley North) (Con)
The withdrawal agreement, as agreed by the UK and the EU, contains a statement, under section 38 of the European Union (Withdrawal Agreement) Act 2020, that preserves parliamentary sovereignty. To be clear, section 38 states:
“It is recognised that the Parliament of the United Kingdom is sovereign”,
despite sections 1, 5 and 6. This means two things in my opinion: that this Parliament is quite within its rights to propose its own laws, as the United Kingdom Internal Market Bill does; and that, as a consequence, any such proposal that detracts from sovereign control is contrary to section 38 of the European Union (Withdrawal Agreement) Act itself.
The United Kingdom Internal Market Bill ensures that, if a trade agreement is not possible, sovereignty is preserved, given that the withdrawal agreement does itself detract from parliamentary sovereignty, such as by giving the ECJ binding powers of interpretation. Unfortunately, Lords amendments 48, 49 and 51 are but examples of how sovereignty is diminished, as the EU would control how taxpayers’ moneys are spent in the UK. We know that this is a stumbling block for the EU negotiations, and clearly it is the preference of some Members here and in the other place for the EU to retain control.
Much has been reported about control of our fisheries. Control over our territorial waters is important for our fishermen, even though many detractors of this argument seek to ridicule the amount it contributes to GDP. Yes, the contribution to GDP is in fact small, but that is because our fishing industry has been decimated since we relinquished control of fishing rights to the EU. Aside from the GDP argument, those who use it miss the point completely. It is about who exerts control over our waters, and a sovereign nation must have that control. This is what my constituents of Dudley North and the rest of the country voted for.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
To present this appalling Bill to the House once was outrageous, showing contempt for our European friends and neighbours, trampling all over international law and riding roughshod over devolution. To push it through for a second time, deliberately putting back in place all the same flaws as before, is therefore simply shameless, but that is exactly what the Government are attempting to do today by way of these motions to disagree. The Government simply are not listening to some of the most serious, widespread and weighty criticism that any Government Bill has received in recent times, and they certainly are not listening to the devolved Governments and Parliaments. Every single one of the reasons for rejecting this Bill previously remain equally valid now as reasons for opposing these Government motions.
Like others, I will focus on the amendments that relate to international law and to devolution. On the former, the House of Lords did what had to be done by taking out the clear breach of international law and the attack on the rule of law that part 5 represented. It bears repeating again that the Government are expressly asking us to pass legislation in breach of an agreement they signed just months ago with a counterpart they are still negotiating with. That is simply astonishing, and we cannot let it be spoken about as if this is no big deal or in any way normal. Proceeding in this way represents a
“very real and direct threat to the rule of law, which includes the country’s obligations under public international law.”
These are not my words, but those of the Law Society and the Bar Council. When these provisions were first introduced, it seemed simply a totally cack-handed and counterproductive negotiating tactic, but, embarrassingly, here they are still pursuing this reckless possibility and offering up the removal of these clauses as part of negotiations on the future relationship changes nothing. It simply confirms that the Government are happy to threaten to go back on their word as a means of trying to get their own way. What an astonishing way for any Government to behave.
On devolution, all the House of Lords did was to water down the clear, obvious and extensive power grab on devolution. It did this through some modest obligations around consultation and giving the common frameworks process priority over ministerial diktat. It ditched the reservations of state aid and powers to bypass devolved Governments and devolved public spending. It provided greater scope for divergence on environmental, social and other grounds. None of that should be controversial, but, again, shamefully, the Government are seeking to restore the power grab to its fullest extent. Doing so undermines the possibility of policy divergence and the opportunities for the devolved Governments to deliver policies that protect and advance the interests of their citizens, and it restores the grim prospect of a race to the bottom. These Government motions are anti-devolution and they are anti-democratic. Again, they should be rejected.
In conclusion, let us be clear about what these proceedings tell us about the UK Government and the UK constitution. They tell us that Governments can, and that this one will, rip up international agreements signed just months ago. They tell us that power devolved is as exactly as was promised: power retained, with the devolved settlement to be amended or deleted at the will of the UK Government. Finally, with the UK out of the EU, the human rights regime under review, judicial oversight under attack, the second Chamber in reality toothless, this Chamber a rubber stamp for the Government, and devolution undermined, we say that the checks and balances on the UK Government have never, ever been weaker. In short, the Bill shows us that the UK’s political system and constitution are not fit for purpose, and that the sooner we are out of it, the better.
Fleur Anderson (Putney) (Lab)
It is a pleasure to follow the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald).
We are in the middle of a public health emergency and an economic crisis, yet as always the Government are doing their assignment the night before it is due, or maybe later. Now is the time for competence and consensus, so the country can move on and recover. Instead, the Government have introduced legislation that knowingly and openly breaks international law, and will frustrate the process of getting a deal further still. It is unnecessary, it undermines the rule of law, it undermines devolution, it is internationally damaging to our reputation and it threatens to undermine the Good Friday agreement.
I have had 80 constituents write to me ahead of the debate expressing their disgust at what this deal is attempting to do and urging me to support the amendments made in the other place. They are representative of constituents across Putney, across London and across the country. It is not just my local constituents who were left bemused by the first publication of the Bill. President-elect Joe Biden made it crystal clear that the Good Friday peace agreement in Northern Ireland cannot become a casualty of Brexit. He has made it clear that a future trade deal hinges on that. The Bill will end up undermining trust in us as a country.
I therefore urge colleagues to accept Lords amendments to part 5 of the Bill. For those of us who still believe in the rule of law, the amendments are crucial. As the motion from the convenor of the Cross-Bench peers, Lord Judge, stated:
“Part 5 of the bill…would undermine the rule of law and damage the reputation of the United Kingdom.”
He said that by supporting it, Parliament, which is responsible for making the laws and expects people to obey the laws it makes, would be knowingly granting power to the Executive to break the law.
The strength of feeling on this from the learned and noble peers in the other place cannot be ignored. In Committee, Members in the other place voted by 433 to 165 to remove clause 42. That vote was the largest in terms of turnout since remote voting was introduced in the other place and the third largest since the House was reformed in 1999. How can we ignore the disappointment and anger in the other place? How can the Government expect the public to follow lockdown restrictions or China to respect the Sino-British joint declaration, when they grant themselves a mandate to break the law? States and citizens alike are going to rightly think that it is one rule for them and another for us.
This is about Britain’s reputation, not Brexit. Do we want to be a trustworthy nation that stands by its commitments? Do we want to be able to strike good trade deals with other countries? As we deal with the economic damage inflicted by the pandemic, we need to be winning international friends and not alienating them. Brexit has actually done enough damage already. In my own constituency, businesses have already had to close and jobs have already been lost. Let us not compound that by not accepting the Lords amendments this evening. I welcome the Lords amendments and I urge colleagues, for Britain’s sake, to support the Lords amendments to part 5 of the Bill.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
I rise to speak in support of the Government and against the Lords amendments. I do so as somebody who campaigned and voted in the referendum for the United Kingdom to remain in the European Union. I believe passionately that a close, positive relationship with our friends and allies is very important to us and very important to them for the future.
However, it seems to me that, in addressing these issues tonight, we need to be enormously pragmatic. Those of us on the Government Benches, when we fought an election and accepted that our plan was to acknowledge the decision of the British people and to put it into effect, accepted the responsibility to make the decisions that would enable that to happen. Taking the stand that the Government are on this matter this evening is, in my view, a crucial step on that journey.
Stephen Farry
I want to focus largely on the Lords amendments to part 5 of the Bill and to speak in support of them. I am conscious that we may well be part of a charade this evening, in the light of discussions that are happening elsewhere, but it is surely self-evident that no deal with the European Union can be concluded, let alone ratified, if the offending clauses remain part of the Bill. If we end up with a no-deal situation—I very much hope that we do not—the UK will face huge economic damage and will be forced back to the negotiating table. I think most people privately would recognise that that is the reality. Once again, these issues will have to be addressed and overcome.
Since this House last debated the Bill, we have had the very welcome election of Joe Biden as President of the United States. It is clear that there is no prospect whatsoever of a trade deal with United States if there is any threat to the Good Friday agreement, in particular from this Bill or, indeed, the subsequent taxation Bill that may well follow. Obviously, that is of fundamental importance to the UK going forward. I think that the Biden Administration will be very much open to a deal with the United Kingdom, but that will not come at the price of undermining the Good Friday agreement, which Americans of both parties are extremely proud of in terms of their role in and contribution to. The internal market Bill is not helping those negotiations at all. At best it is a distraction from them, and certainly not a source of leverage, but at worst it gives the indication that the UK cannot be trusted with regard to agreements. In particular, if there is a sudden deadlock around issues of governance, the European Union will be very reluctant to give too much in that respect, given the very sad precedent that has been set. Again, the UK is shooting itself in the foot in terms of crucial negotiations.
I want to stress that the majority of the people of Northern Ireland, the majority of Members of the Northern Ireland Assembly and the majority of businesses in Northern Ireland do not want the UK breaking, or threatening to break, international law on their behalf. The outcomes from this Bill are of course very seductive, but they represent a false solution. The only way to address these issues is via the withdrawal agreement and the Joint Committee on the Withdrawal Agreement. To achieve these flexibilities and derogations, we must again look to that word “trust”, which is again being undermined by these actions. That will make it more difficult to reach a conclusion through the Joint Committee processes.
Breaking international law may give some short-term relief to businesses, but it actually ends up hurting them because it puts them in the situation of not having a secure legal environment in which to do business going forward. That is of fundamental importance to businesses. It also potentially risks the return of a border on the island of Ireland. I know that some people want to dismiss that, but the difficulty comes from the fact that if there is not a guaranteed alternative system via the protocol, the pressure from the EU to protect the integrity of its customs union and single market falls back on the island of Ireland. That is one of the key concerns in terms of how the Good Friday agreement may well be breached through this Bill.
Some people seem to think that everything can stay the same as regards how things operate across these islands. The difficulty is that this reflects the choices made by the UK and its Government around Brexit and the nature of Brexit. Northern Ireland is a different place, and because of those choices special arrangements have to be put in place. The backstop was a better alternative, but the protocol is where we have landed, warts and all in terms of the negative consequences from that.
Alan Brown
Yet again we have been reliant on the Lords to try to remedy matters in this Bill, which from the outset has shown a complete disregard both for the rule of law and for devolution. The fact that the Government are going to overrule the Lords amendments tonight prompts the question: what is the point of the Lords even when it is doing good work?
In this Chamber, right from the outset of the debates on the internal market Bill, we have been treated to Back-Bench Tories standing up and telling us that they are proud Unionists. However, saying that they are proud Unionists wedded to the idea of the United Kingdom and the Union jack while supporting a Bill that rides roughshod over devolution shows that they do not really care about the Union, and they do not care about Scotland, or understand Scotland. That goes for the Prime Minister, in particular. We know that the Lords has Unionists, and the Lords has told the Government that this Bill puts the Union at risk. Are the Government and their sycophants wilfully stupid or just naturally stupid, because they are certainly not listening?
I want to focus on Lords amendments 48 and 49, which aim to delete the clauses with the same numbers. This is the real power grab about spending in Scotland. Lord Hope summarised the debate:
“It is difficult to avoid the conclusion that this Government regard devolution as an inconvenience”.—[Official Report, House of Lords, 18 November 2020; Vol. 807, c. 1468.]
As a matter of balance, I will quote Lord Forsyth, who reckoned:
“The…Act of Union…has brought about more than 300 years of prosperity.”—[Official Report, House of Lords, 19 October 2020; Vol. 806, c. 1323.]
If the Union has been so successful and brought so much prosperity, why are this Government having to embark on a levelling-up agenda? Why do Scotland and other regions around the UK have to rely on EU structural funds to plug the gaps from Westminster over the years? Incidentally, the EU has never imposed a single project on Scotland against its will, whereas this Bill allows the Government to create projects and spend money against Scotland’s will. Where is the shared prosperity fund anyway? Sadly, it is missing in action.
If the Union was so successful, why are this Government legislating for support for cultural activities, projects and events that Ministers consider benefit the UK and devolved nations? The same goes for sport, education and training activities. What kind of education projects do they want to impose in Scotland? Why do they think that that should be in the Bill in the first place? It is clear that they want to subject us to a Union jack fest, but I can tell the Minister that that will not go down well in Scotland either; actually, it will help our cause.
We have also been told that infrastructure spending will mean additional money coming to Scotland, yet when we look at the spending review we can see that we have just suffered a 5% cut to our capital budget. It is quite clear that that the Government will top-slice the Scottish budget, take some money off and then recirculate it in Scotland with a Union jack. It is so transparent, and the fact that the national infrastructure policy says that the Bill allows the Government to spend directly in the devolved nations tells us that it has been planned all along.
The consequential clause 49 remains a complete affront. Basically, the UK Government can interfere and spend money in Scotland on projects that might not be wanted by the Scottish Government, and clause 49 then allows them to impose repayment conditions on the taxpayers in Scotland. That is ridiculous—it is a con. Any Scottish Tory who argues that this is not a power grab and who thinks that these conditions are acceptable must be completely devoid of self-respect.
Lord Dunlop, a former Scotland Office Minister, said:
“I hope the Government will think long and hard before overturning in the Commons, on the back of Conservative votes alone, any sensible changes”—[Official Report, House of Lords, 2 November 2020; Vol. 807, c. 585.]
There is no long and hard thinking being done on the Government Benches, but there is by the people of Scotland. Those who voted no in 2014 are changing their minds rapidly, because they know the contempt with which this Government treat Scotland.
Ruth Jones (Newport West) (Lab)
It is a pleasure to follow the hon. Member for Kilmarnock and Loudoun (Alan Brown). I am pleased to speak in support of the Lords amendments and thankful to Members in the other place for trying to restore a shred of decency to this legislation. Sadly, the Government seem determined to destroy the rule of law, Britain’s international reputation and the devolution settlement that holds the UK together.
The provisions that were removed in the other place would
“enable ministers to derogate from the United Kingdom's obligations under international law in broad and comprehensive terms and prohibit public bodies from compliance with such obligations”—
not my words, but those of the Law Society of England and Wales. Such a legislative statement would be unprecedented, cutting across the precedent that political and judicial bodies uphold the rule of law.
Turning to devolution, I am deeply troubled to hear that if the Government vote to reintroduce the parts of the Bill that the other place so sensibly removed, the Welsh Government’s proposed ban on single-use plastics would be prevented. That would be another ground-breaking step by the Welsh Government stopped by this Government’s complete disregard for the devolution settlement. If it is plastics first, what next? This legislation will prevent the Welsh Government from standing up for Wales’s interests, legislating to ban chlorinated chicken or hormone-injected beef, or setting higher standards on house-building or the environment. By proposing mutual recognition without legally underpinning minimum standards, the UK Government are proposing that the lowest standards chosen by one Parliament must automatically become the minimum standards across all nations.
There are also significant concerns about the financial aspects of the Bill. By legislating to allow the UK Government to spend in devolved areas, the Bill undermines the devolved Governments’ ability to outline their own spending priorities. Of course none of the devolved Governments would be opposed to having more money to spend on their citizens, but this Government have had numerous opportunities to increase the amount received by each Government or reform the Barnett formula, yet they have chosen not to.
This is not kindness, but a cage. The Welsh Government have said that they are open to negotiating common frameworks, but they must be worked out in common and must contain mutually agreed minimum standards. A UK single market is vital to the continued internal trade of these islands, but if this is how the UK Government go about ensuring it, they will soon be the Government of England only.
The Welsh Government have called the Bill
“an attack on democracy and an affront to the people of Wales, Scotland and Northern Ireland, who have voted in favour of devolution on numerous occasions.”
I implore the UK Government to act as a Government for the whole United Kingdom, not just for themselves.
Joanna Cherry
I want to concentrate my remarks on the Lords amendments in relation to devolution, but first I will say something about the reports that the Government may yet agree to the removal of part 5 of the Bill. That is all very well and good, but the problem is that the damage is done. It is now known across Europe and internationally that this British Government are prepared to break their word on an international treaty in order to get their own way. Of course, we knew that this Government were prepared to break their word in Scotland already—and, for that matter, so did the Irish—but now everyone knows it across Europe and the world, including the new American Administration.
Mr Deputy Speaker (Mr Nigel Evans)
I call Wera Hobhouse; please resume your seat at 8.50 pm.
Wera Hobhouse (Bath) (LD)
The desire and the right of the UK as a sovereign nation to trade unhindered with all its regions and nations is undeniable, but it is what was part 5 of the Bill that is highly politically charged and controversial. It has serious implications for the relationship between the UK and the Republic of Ireland, and, most importantly, represents a direct challenge to the rule of law.
The rule of law is not just a domestic obligation, but applies to our international obligations, including the principles of good faith and co-operation with the withdrawal agreement that the Prime Minister himself signed only a year ago. If the Bill is unamended, it will severely undermine the UK’s reputation across the world and have a long-term global effect. Not only will it damage the UK’s current trade talks with the EU, which are on a knife edge; it will have severe consequences for any trade deals with any country. So why is it here?
I wonder to this day why those who so uncompromisingly campaigned to leave the European Union ever gave a serious thought about Northern Ireland. At the core of the Good Friday agreement is the ability of the people of Northern Ireland to look both ways—to the United Kingdom and to the Republic of Ireland—and of people, goods and services to move unhindered across boundaries. EU membership greatly facilitated the Good Friday agreement. The balance was always going to be severely upset by leaving the EU, and to this day Tory Governments of any shade have not solved the problem. With the unamended Bill the current Government have chosen the nuclear option not only to upset and destabilise a domestic settlement between all four nations but to blow to bits the remaining good will between the UK and the EU—
Mr Deputy Speaker (Mr Nigel Evans)
Order. My apologies to the seven Members who did not get in to speak. I call the Minister.
Paul Scully
I thank everybody who spoke in the debate today and all the right hon. and hon. Members who have engaged with the Bill throughout.
From many speakers, especially at the beginning of the debate, we heard about exactly what businesses and people throughout the country have wanted—the certainty and consistency that the Bill will deliver. Unfortunately, we have heard, as we have throughout the Bill’s passage, a lot of inconsistency from Opposition Members. We have heard the SNP talk about the fact that we are not going to get a trade deal with America but, by the way, when we do, we have to accept chlorinated chicken. Neither of those things are true.
We have heard that people want the Government to change and negotiate and work with the European negotiating team, but when we reach out to them to explain what part 5 of the Bill is all about and the fact that we will not need a safety net should we get successful talks in the Joint Committee, it is described as shambolic. Which would people like? Would they like change? I think we want certainty.
People have talked about the need for devolution in Northern Ireland and the need to respect Northern Irish businesses and the parties in Northern Ireland and give their businesses certainty, but Opposition Members will vote against part 5 and, in doing so, vote against unfettered access for Northern Ireland into GB.
We heard an SNP Member describe the UK Government as a boa constrictor, yet they want independence from the UK Government and from the other nations to go back to the boa constrictor that is the EU.
We need the Bill and these clauses now because parliamentary time dictates as much and we want the legislation to be ready for the end of the transition phase, whatever happens in the remaining days of discussions with the EU. I wish both sides well in their discussions.
To conclude, the UK’s internal market has been the bedrock of our shared prosperity for centuries. It has enabled businesses and individuals to thrive and has been the source of unhindered and open trade throughout the country. It has helped to demonstrate that our country is greater as a Union than the sum of its parts.
The Government are committed to safeguarding the Union. We fully support devolution and continue to put the Union at the heart of everything we do. I very much believe that the four corners of the UK are stronger together and that the Bill supports and respects the devolution settlements. Some Members have said that the Bill is a threat to devolution, but in reality they are trying to further their narrow political arguments rather than look at the wider political arguments. Their narrow political arguments about independence have nothing to do with devolution.
I stress that the proposals in the Bill are designed to ensure that devolution can continue to work for everyone. All devolved policy areas will stay devolved and the proposals ensure only that there are no new barriers to UK internal trade. Indeed, at the end of the transition period hundreds of powers that are currently exercised by the EU will flow back to the UK. Many of these powers will fall within the competence of the devolved Administrations, and this flow therefore represents a substantial transfer of powers to the devolved Administrations that they did not exercise before the EU exit.
The 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. It will ensure that UK businesses can trade across our four home nations in a way that helps them to invest and create jobs, just as they have for hundreds of years. I want to emphasise again that the Government have been, and will continue to be, reasonable in discussions on this Bill. We made many positive changes, and they are on the table, but ultimately the Government need to balance this with the need to deliver a Bill that provides the certainty that businesses want and the need to invest and create jobs. I therefore call on hon. Members to support the Government in these objectives, which I believe we all share, when they vote today.
Question put, That this House disagrees with Lords amendment 1.
Mr Deputy Speaker (Mr Nigel Evans)
As Madam Deputy Speaker informed the House earlier, Mr Speaker has given careful consideration to Lords amendment 50, which refers to state aid and the Office for the Internal Market. He is satisfied that it would impose a charge on the public revenue that is not authorised by the money resolution passed by the House on 14 September. In accordance with paragraph (3) of Standing Order No. 78, the amendment is therefore deemed to be disagreed to.
Lords amendment 50 deemed to be disagreed to (Standing Order No. 78(3)).
Lords amendments 51 to 57 disagreed to.
Lords amendment 61 disagreed to.
Lords amendments 2 to 7, 20 to 29, 35 to 41 and 58 to 60 agreed to.
Motion made, and Question put forthwith (Standing Order No. 83H), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 1, 8 to 19, 30 to 34, 42, 44 to 57 and 61;
That Paul Scully, Michael Tomlinson, Jo Gideon, Mark Fletcher, Ed Miliband, Gill Furniss and Drew Hendry be members of the Committee;
That Paul Scully be the Chair of the Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(Mike Freer.)
Question agreed to.
Committee to withdraw immediately; reasons to be reported and communicated to the Lords.
Mr Deputy Speaker (Mr Nigel Evans)
In order to observe social distancing, the Reasons Committee will meet in Committee Room 12.
PARLIAMENTARY WORKS SPONSOR BODY
Ordered,
That, under the provisions of Part 1 of Schedule 1 to the Parliamentary Buildings (Restoration and Renewal) Act 2019, Sir Robert Syms having resigned as a Parliamentary member of the Parliamentary Works Sponsor Body, Ian Levy be appointed to the Body in his place.—(Mr Rees-Mogg.)
United Kingdom Internal Market Bill
Wednesday 9th December 2020
(3 years, 11 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 156-I Marshalled list for consideration of Commons reasons and amendments - (8 Dec 2020)
14:18 - Division conducted remotely on Motion A1 (as an amendment to Motion A) - Ayes: 320 / Noes: 215 - Motion A1 (as an amendment to Motion A) agreed.
14:53 - Division conducted remotely on Motion B1 (as an amendment to Motion B) - Ayes: 295 / Noes: 250 - Motion B1 (as an amendment to Motion B) agreed.
16:39 - Division conducted remotely on Motion K1 (as an amendment to Motion K) - Ayes: 305 / Noes: 236 - Motion K1 (as an amendment to Motion K) agreed.
17:42 - Division conducted remotely on Motion L2 (as an amendment to Motion L) - Ayes: 313 / Noes: 236 - Motion L2 (as an amendment to Motion L) agreed.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
My Lords, hybrid proceedings will now resume. If the capacity of the Chamber is exceeded, I will immediately adjourn the House.
Proceedings on consideration of Commons reasons and amendments on the United Kingdom Internal Market Bill will follow guidance issued by the Procedure and Privileges Committee. When there are counterpropositions, any Member in the Chamber may speak, subject to the usual seating arrangements and the 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 are. 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. If a Member speaking remotely intends to trigger a Division, they should make this clear when speaking on the group. Noble 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. We will now begin.
Motion A
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I think I was on mute for a minute there.
Lord True (Con)
The noble Lord, Lord Adonis, says, “Keep it up,” which I know is a sentiment widely shared.
Noble Lords have been clear throughout this debate on the UKIM Bill about their support for the common frameworks programme. I and the Government concur with those sentiments, and I reiterate the Government’s continued commitment to this programme. I am pleased to update your Lordships’ House that common frameworks are developing well, with three common frameworks currently undergoing scrutiny, including in this House’s committee chaired by the noble Baroness, Lady Andrews—and I pay tribute to the work of that committee.
Out of 33 active frameworks that we have assessed are needed, we expect 30 to be agreed by the end of 2020, mostly on a provisional basis, pending scrutiny by Parliament and the devolved legislatures. The common frameworks programme embodies the value of strong intergovernmental relations. The UK Government and the devolved Administrations are working together, on a voluntary basis, in support of cohesive policy-making and the maintenance of high standards in respect of the specific needs of each part of the United Kingdom. While recognising this positive collaboration, we also need to acknowledge that the common frameworks were always intended to cover only a specific set of issues where powers are returning from the EU. Common frameworks support the functioning of the internal market but cannot by themselves ensure regulatory coherence across the whole UK internal market—the key objective of this Bill.
As the Government have noted previously, we regret that the Scottish Government walked away from the joint internal market workstream in spring 2019. Detailed engagement has been ongoing with the Welsh Government and Northern Ireland Executive on this Bill, and the door remains open to the Scottish Government to join similar discussions. The strength of common frameworks lies in the fact that they provide a forum for discussion and collaboration, with a clear process in defined, but limited, areas of economic activity.
I thank the noble and learned Lord, Lord Hope, for his thoughtful participation in these debates and his considered amendments to the Bill, which he has now partly revised. I welcome also the willingness of the noble and learned Lord to continue engaging in discussions on his amendment with my officials, and those discussions may continue. I also thank noble Lords opposite for their own positive and practical engagement on these matters. Discussions are not exhausted on this topic.
On the amendment before us, I have cautioned your Lordships’ House before, regarding the previous amendments of the noble and learned Lord, Lord Hope, that this would lead to the automatic disapplication of the market access principles, creating a very broad exclusions regime, with the attendant risk of legal uncertainty for businesses and consumers over whether or not market access principles apply. It is the Government’s view that these revised amendments carry similar risks, both in terms of the breadth of the exclusions regime created and in terms of uncertainty. As to the latter, there is no safeguard against different Administrations attempting to implement different interpretations of an agreement into law, potentially leaving the courts in the unenviable position of adjudicating on these different interpretations. That would potentially invite the courts into the common frameworks process, which is inherently undesirable. Any such litigation would create great uncertainty for businesses. This is clearly not in keeping with the need to provide certainty and a stable trading environment for citizens across our United Kingdom.
Moreover, Amendments 1B and 1C prevent the introduction by a UK Government Minister of any new regulations in any area where discussions under the common frameworks process are ongoing. This could mean Ministers would be unable to act, even if there were an urgent need to do so.
Furthermore, the common frameworks programme was established in 2017 to manage the powers returning from the EU in devolved policy areas. In line with its voluntary nature, the programme has not been put into legislation, although I recognise that it is alluded to, in very high-level terms, in Schedule 3 to the European Union (Withdrawal) Act.
While it is a key objective of common frameworks to agree consistent regulatory standards, in practice there may be cases where divergent approaches could be agreed through a common framework. If this were to occur, and if any such divergence were to fall within the scope of the market access principles, we should be in no doubt that the market access principles set out in the United Kingdom Internal Market Bill would apply. That means that even if divergence is agreed in a particular case, it would not prevent businesses from other parts of the United Kingdom being able to sell their products into the relevant place. This would ensure that barriers to trade are not erected through the introduction of divergent policy.
We must also bear in mind that common frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme. While we have carefully reflected on the arguments made in both Houses, I respectfully suggest that the approach put forward in these amendments brings significant drawbacks to the Government’s ability to provide businesses with the certainty they need to operate across the United Kingdom.
I and colleagues across government look forward to discussing further with our partners in the devolved Administrations and devolved legislatures to consider how we can capitalise on the ways of working agreed through common frameworks. We are also working towards concluding a joint review of intergovernmental relations with the devolved Administrations. These future intergovernmental structures will create a system that secures strategic co-operation and proactive discussions on shared areas of interest, including on common frameworks. The aim of any reform will be to establish an adaptable and effective system of governance that facilitates building long-term trust between the Governments.
We are, of course, open to considering how to put these areas of co-operation on a sustainable footing for the longer term, complementing the IGR review and the market access principles to the benefit of citizens and businesses. I beg to move.
Motion A1 (as an amendment to Motion A)
Lord Hope of Craighead
At end insert “and do propose Amendments 1B, 1C and 1D in lieu—
“Common frameworks process
(1) The United Kingdom market access principles shall not apply to any statutory provision or requirement that gives effect to a decision to diverge from harmonised rules that has been agreed through the common frameworks process and states that its purpose is to give effect to that agreement.
(2) No regulations may be made by a Minister of the Crown with regard to a matter that is under consideration under the common frameworks process while that process in relation to that matter is still in progress.
(3) The common frameworks process is a means, 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.”
“Common frameworks process
(1) The mutual recognition of authorisation requirements shall not apply to any regulatory requirement that gives effect to a decision to diverge from harmonised rules that has been agreed through the common frameworks process and states that its purpose is to give effect to that agreement.
(2) No regulations may be made by a Minister of the Crown with regard to a matter that is under consideration under the common frameworks process while that process in relation to that matter is still in progress.”
“( ) Section 22(2) does not apply if the provision has been agreed through the common frameworks process and it states that its purpose is to give effect to that agreement.””
Lord Hope of Craighead (CB) [V]
My Lords, I shall speak to Amendments 1B, 1C and 1D in lieu, which are in my name. The fact that the Commons have disagreed with your Lordships’ amendments about the common frameworks process is a matter for regret, but they were good enough to give us a clear and simple reason. They told us that these amendments
“will create legal uncertainty, which would be disruptive to business.”
I took this to be a reference to what the noble Lord, Lord True, said when we were considering these amendments on Report:
“No one could know for sure, until the question was determined in court, whether a regulation or requirement, or a combination of regulations or requirements, was giving effect to an agreement reached within a common framework. There would be uncertainty as to whether or not the market access principles applied”.—[Official Report, 18/11/20; col. 1466.]
I can well understand the point that he and the other House are making, but I do not believe that it is incapable of being met, so I have added some words of my own to each of my proposed amendments to suggest how this could be done.
To be given the benefit of exemption from the market access principles, the regulation or exemption would need to state that it was their purpose to give effect to an agreement that had been reached through the common frameworks process. It seems to me that, if this were to be stated in the relevant instrument, the problem that the noble Lord referred to on Report would be overcome: everyone would know what it was and why it was there. No doubt there are other and better ways of achieving this, but my point is that, if there really is a will on the Government’s part to make this system work, a solution can be found. There is surely room for further discussion on this issue; the door must be kept open—and I am encouraged by some of the points that the noble Lord, Lord True, made in opening this debate. I ask your Lordships to invite the Commons to think again, and I will be seeking the opinion of the House as to whether we should do so.
Of course, I appreciate that it is not as simple as that; there are important issues of principle too. The Parliamentary Under-Secretary, Paul Scully, said in the other place that to legislate the common frameworks into the Bill would,
“not sit well with the flexible and voluntary nature of the common frameworks programme.”—[Official Report, Commons, 7/12/20; col. 601.]
I appreciate, as has been stressed many times in your Lordships’ House, that the whole purpose of the market access principles is to enable traders to do business without internal barriers to trade across the UK. It is about
“a job, someone’s pay packet at the end of the week”,
as the Minister, Chloe Smith, said in evidence to the Common Frameworks Scrutiny Committee last week. But it all depends on how this is done.
It has to be said, too, that the issues about market access and the problems it may create are not all one way. Spare a thought for the trader in one of the devolved nations who has to have regard to the relevant requirements of all the other parts of the UK when considering whether a good which does not meet his own area’s requirements is something that he can properly market in his own area. It is not sunshine and roses for everyone.
Simply to say that the market access principles do not apply to an agreed decision, which is all that my amendments seek to do, does not seem to me to justify the concern that this would deprive the common frameworks process of its flexible and voluntary nature. Whether a given policy divergence really does create what amounts to a barrier, given its purpose, nature and effect, should be a matter for examination and assessment: that is what the common frameworks process is designed for. It is not about creating barriers, but about allowing for policy divergence in ways that are found, by agreement, to be consistent with the internal market.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
The following Members in the Chamber have indicated that they wish to speak: the noble Lords, Lord Moylan and Lord Naseby. I call the noble Lord, Lord Moylan.
Lord Moylan (Con)
My Lords, I recognise that the noble and learned Lord, Lord Hope of Craighead, and many other noble Lords who have spoken on this subject burn with a passion for their interpretation of the rule of law, but I ask them to reflect that statute needs to have more than principle; it needs to have practicality in its application as well. The effect of these clauses resubmitted in lieu would be to tie the Government’s hands completely in response to any emergency that might arise in Northern Ireland which might need to be addressed. I look in vain in these clauses for any exception that says, for example, “in an emergency”, “if the food in the supermarkets runs out” or “if there is a shortage in supply of medicines”. In such cases, those matters, as I understand these clauses, would need to be addressed through the joint committee, and if the European Union was not willing to accept them, it would need to go through a lengthy process of arbitration. I do not believe that that is acceptable.
My second point relates to devolution and democracy in Northern Ireland. The effect of these clauses is to privilege a particular interpretation of a particular international treaty, the withdrawal agreement.
Lord Moylan (Con)
This is very much how I read the clauses, but if noble Lords generally feel that I have got the wrong bit of the Bill, then I shall subside at that point.
Lord Naseby (Con)
My Lords, the news that my noble friend from the Front Bench gave us this afternoon is encouraging. Clearly, discussions have been taking place and issues have evolved from them. I do not think that any of us in your Lordships’ House expected every single one of the agreements necessarily to be in a state to be written in and accepted in toto. To hear that 30 agreements have been agreed in broad principle is very encouraging news.
As someone who had a commercial life before coming into the political world, I wonder sometimes whether all your Lordships really understand. A chief executive—such as I was for a division of Reckitt and Colman Group—needs to know, as a certainty, what is happening. They cannot call in the company lawyer and say, “Well, it’s no good, George, you telling me on the one hand this and on the other hand that.” They have spent 15 months producing a new product—or whatever it may be. I sat as MP for an industrial town, Northampton, and I know the industrialists there. I spoke to them on Zoom only yesterday morning, and they are deeply concerned. I then read that the reason why the Commons have disagreed with our Amendments 1, 19 and 34 is
“Because they will create legal uncertainty, which will be disruptive to business.”
I also reflect that I had the privilege—as some of my noble friends in the Chamber did—of being in the other place. They are elected by the people. They have close contact with industry and commerce. When I am told, in writing, that it will be disruptive to business and that is why these Motions A and A1 are before us, I accept it. We have done our part. We are a Chamber that asks people to reflect. We have done that bit and we have done it well. The time comes, at a certain point, when you have to decide one way or the other. In my judgment, Her Majesty’s Government have got it right at this point.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
Two other Members in the Chamber have indicated that they wish to speak—the noble Lords, Lord Adonis and Lord Foulkes, and I will call them in that order. I call the noble Lord, Lord Adonis.
Lord Adonis (Lab)
My Lords, in respect of the point made by the noble Lord, Lord Naseby, that because the Commons has given a view we should therefore immediately defer, the proposition is shown to be totally absurd by what is happening with amendments we will consider later. Between the Commons itself expressing a view on Monday and your Lordships meeting today, the Government have changed their mind. We have the unprecedented situation where a Minister of the Crown will move from the Dispatch Box in this House—maybe it will be the noble Lord, Lord True; I cannot wait to watch this performance take place—that this House do insist on its amendments when, 48 hours ago, a Minister of the Crown in the other House moved that the Commons should disagree with the House of Lords. If the noble Lord, Lord Naseby, is concerned that we should respect the will of the House of Commons, since its will appears to change every day at the moment—in response to the invitation of Her Majesty’s Government to take stock of negotiations in Brussels—I think our duty to the Government is to send back everything at the moment. This will give them maximum flexibility to disagree with themselves over the remaining four days of this week. Then let us see how the cards fall next Monday.
These are not trivial matters; they go to the fundamental integrity of the United Kingdom and our relationship with the European Union. I strongly urge your Lordships, in respect of all these amendments, that we obey the precautionary principle. If we are not sure whether there is an impediment to the proper conduct of negotiations or the flexibility that we wish to give the Minister and his colleagues in these negotiations with the President of the European Commission, we should send everything back so that the Government have the maximum opportunity to disagree with themselves over the next week. Let us see where we are thereafter.
The House holds the noble and learned Lord, Lord Hope, in extremely high regard—there is nobody who has a greater grasp of the technicalities of the issues we are addressing. We pay huge tribute to him and his colleagues, and the assiduous attention that they have given to the Bill’s passage in this House. He made a very good technical response to the Minister. In his Amendment 1B, the words at the end of his proposed new subsection (1),
“and states that its purpose is to give effect to that agreement”
make it absolutely clear that any divergence will be within the framework of the common frameworks process. Therefore, it cannot be outside it under the terms of the noble Lord’s own amendments. The only issue—which I think the Minister raised; we are all very fair-minded on this side of the House and give full credit to the noble Lord where he makes persuasive arguments—is what happens if the discussions, during the conduct of which it is not possible to make regulations under the terms of the amendment from the noble and learned Lord, Lord Hope, do not come to a conclusion. The noble and learned Lord’s proposed new subsection (2) says that:
“No regulations may be made by a Minister of the Crown with regard to a matter that is under consideration”.
I hope that the noble and learned Lord can respond to that point when he replies. As a non-lawyer—I fear to tread in this territory—my reading of this is that all parties to these discussions would have to behave reasonably. It would not be open to a devolved Government to keep these discussions going interminably purely for the purposes of avoiding a Minister of the Crown making a regulation. I say that with some trepidation, because I am surrounded by former Supreme Court judges and Lord Chief Justices who will no doubt correct me on that, but if that is the case, then I think that would give a response to the Minister.
I make no apology for speaking on this as a non-lawyer, because behind all this is a very important political point, which comes shining through the words of the Minister. The basic, fundamental political point is whether devolution is a reality or a sham. If it is a reality, then it is absolutely right that the devolved Governments exercising powers conferred by Parliament—these are no small matters—should have the right to engage in discussions about a proper level of divergence that meets the market access principles and common frameworks process. Indeed, I am amazed at how restrained these amendments are because, under their terms, it is not the case that devolved Governments can simply diverge, even if their opinion of the law is that they have the power to diverge. They can only do so with the consent of the United Kingdom Government, because there has to be consensus between them. The amendment from the noble and learned, Lord Hope, in fact gives a very narrow scope—but proper scope, it seems to me—for the devolved Governments to engage in discussion with the United Kingdom Government to meet the United Kingdom market access principle on a level of divergence that would meet their judgment of what is appropriate for their own territories. The noble and learned Lord gave the example of higher food standards. This seems be the absolute minimum, consistent with the proper operation of devolution.
The big underlying point, which we might as well flush out, because it is right to be frank about this, is that the Prime Minister believes—he has told us this—that devolution was Blair’s biggest mistake. He does not believe in these devolved institutions at all; we know that because he has told us. It is always a good idea when people tell you what they think that you take them at their word. He has said that setting up the Scottish Parliament and Welsh Assembly was Blair’s biggest mistake. If we take the view that the establishment of the institutions was itself a fundamental mistake, then of course we would not want to give them any power—even to discuss divergence—because we would think it was a mistake. If on the other hand we take the view that devolution is a beneficial part of the arrangements for the governance of the United Kingdom—which I take to be the official policy of the Government as opposed to the unofficial view of the Prime Minister—without which that governance might well collapse, then it seems to me that the provision that noble and learned Lord, Lord Hope, sets out, for a proper level of divergence to reflect the judgment of devolved governments on what is appropriate for their territories, is absolutely right. We should therefore insist on these amendments.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, I fear I will not match the eloquence of my noble friend Lord Adonis. I want to say a few words in support of the amendments of the noble and learned Lord, Lord Hope, who, like me, is a member of the Common Frameworks Scrutiny Committee. In his introduction, the noble Lord, Lord True, praised my noble friend Lady Andrews and the work she and that committee are doing. If the Minister thinks that method is so good, why does he not accept these amendments, since that is exactly what we are suggesting—that it should be done through the kind of procedure that the Common Frameworks Scrutiny Committee is operating? He argued that case, perhaps without realising it, from the Dispatch Box.
Yesterday, I heard a very interesting debate. On one side of the argument was the importance of a level playing field for an internal market—I thought the United Kingdom Government were arguing that case in relation to what we are discussing—and on the other was sovereignty. I thought it might have been the Scottish or Welsh Governments arguing that case. Ironically, it was not. It was the European Union arguing the case for a level playing field for a common internal market and the United Kingdom Government arguing the case in relation to sovereignty. The tables were turned; the UK Government were arguing entirely the opposite case in relation to Europe that they argue in their dealings with the devolved authorities. It is about time they got their arguments right on this and accepted these amendments.
Lord Fox (LD)
My Lords, throughout the many stages of this debate the common frameworks have been given a great airing, and many of your Lordships have had a chance to vent their respective spleens on the subject. The Minister may be assured that my spleen will remain in its correct place, because enough has been said on this issue. Indeed, he observed that noble Lords have made their position on common frameworks very clear.
However, the Government have shown great and steadfast reticence on writing the common frameworks into this Bill. The Minister set out two reasons for this: first, in stressing the word “voluntary” on several occasions, and, secondly, in pointing out the joint ownership of the common frameworks between the devolved authorities and the UK Government. On that second point, have any of the devolved authorities objected to the idea that common frameworks might be a central part of this Bill? I have seen no such objections; on the contrary, I have seen enthusiasm from devolved authorities that this might happen.
The noble and learned Lord, Lord Hope, has drafted elegant solutions in his amendments, which I hope will help the Minister to get to the point of developing the market access principles and legal certainties—the Minister is right to say that we need them—but, at the same time, respecting the devolution settlement. A key part of the noble and learned Lord’s speech was about the respect that this Bill needs to show the devolved authorities and the settlement that has developed so well there.
I was impressed by the tone of conciliation and consultation in the Minister’s speech, which came through in his “willingness to continue to engage in discussion”, “discussions have not been exhausted” and “open to discussions.” The door is clearly open. With respect to the noble Lord, Lord Naseby, there is time; I have also worked in commercial life and while the idea of “give me certainty” works within a correct framework, if it is “give me certainty” in a terrible framework then I would rather wait a little and get it right. We can spend a few days more getting this right. A vote for the amendments set out by the noble and learned Lord, Lord Hope, would help keep the door open for those discussions with the Minister. That is why we on these Benches will vote in favour of them.
Baroness Hayter of Kentish Town (Lab)
My Lords, the noble Lord, Lord Callanan, who is not in his place, will recall how the notion of common frameworks evolved. When we were doing the first EU withdrawal Bill, it became clear that some of the powers returning from Brussels clearly fell within devolved competences. It was therefore widely understood that, to facilitate trade throughout the UK—as otherwise the rules affecting trade could vary across internal borders—a coming together of the four authorities would be needed to balance the desire for, and attraction of, diversity on some issues with a UK-wide approach to help consumers buy and manufacturers trade throughout the UK.
From the start, it was agreed that such frameworks would be established where needed—this is from the communiqué of October 2017—to
“enable the functioning of the UK internal market, while acknowledging policy divergence”
and that they would
“respect the devolution settlements … based on established conventions … including that the competence of the devolved institutions will not normally be adjusted without their consent”.
That was how they started. At that point, a list of 24 such topics was identified and, with a lot of good faith and hard work—as the Minister has acknowledged—the initial three Governments, along with Northern Ireland officials, set to work developing frameworks to enable that UK-wide market to flourish while recognising where devolved authorities might want variations for whatever reason. The basis was, to quote again from that document signed by the Government, to
“maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory”.
Until this Bill arrived, everyone thought the system was working well and would accomplish the aims set for it. This should have been something for the Government to celebrate, as they have today, and build on. In fact, it has never been necessary for the Government to use their powers to freeze any devolved authority’s power—a provision set into the EU withdrawal Act, as the Minister has acknowledged.
While this Bill was anticipated, the expectation was that it would help build a new, in some ways unique, internal market across our four nations, which have different cultural, linguistic, agricultural, geographical and industrial histories and realities. Above all, our nations have different democratic governance structures from when we ceded rule-making to the EU in 1973. We thought the Bill would respect the devolution realities while helping to ensure the UK market could prosper for the sake of business, consumers, workers, our agriculture and the environment. As we now know, in addition to throwing the quite unnecessary Part 5 grenade into the Bill, the Government pulled the pin on another grenade by writing into the Bill market access rules which trumped, rather than solidified, the common frameworks programme, which is an approach built on consensus rather than top-down diktat.
The noble and learned Lord, Lord Hope, is not a revolutionary. He is not trying to rewrite the Bill. He is seeking—rather like the Minister himself through the Government’s welcome amendments on regulation-making, for which we will give thanks when we come to them later—to start the process on the basis of consent across the four devolved authorities, and, where that is not possible, leaving it to the UK Parliament, rightly, to legislate. We support a union, and therefore we support Parliament’s right at that point to have its proper role. But we start with consent, and then move to Parliament. What we do not support is starting here in Parliament and government, rather than with the four-party common frameworks. So, we welcome the noble and learned Lord’s upending of the procedure, starting with common frameworks and, where or if those do not work, using the market access approach of the Bill in areas obviously otherwise within devolved competencies.
I think we would all warn the Government to be very careful about clawing back decisions from our now quite long-established devolved settlements. I find today’s vote in the Senedd, by 36 to 15, to deny legislative consent to this Bill extraordinarily regrettable. It is an important Bill; it is not a small one. That was denied because of the message sent to Wales and the other devolveds by the rejection in the Commons last night of this approach. So we need a backstop for any failure to agree, but we fail to understand that what should be a backstop has become the starting gun.
The amendments in the name of the noble and learned Lord, Lord Hope, build on the devolution settlements and would support and strengthen the union, as well as creating what we all want: a successful, growing internal market, which is in the interest of all our citizens. We are right, as my noble friend Lord Adonis said, to ask the Government very genuinely to think again about the mechanisms—because that is what we are discussing—to achieve what I think we all want.
The noble and learned Lord, Lord Hope, said that if there was a will on the Government’s part to make the common frameworks system work, a solution could be found. Along with the noble Lord, Lord Fox, we concur with that view, and we welcome the Minister’s saying that “discussions are not exhausted”—I think I have his words right. Whether we do that by recognising the framework system in some way, extending the freeze provisions when they expire or pausing market access for a period of time while the four Governments talk—as mentioned by my noble friend Lord Adonis—there is surely a way forward. But I believe we need this amendment to get the Government to continue to discuss, so that we can get that way forward. That is why we will support the noble and learned Lord, Lord Hope, when he calls for a vote shortly.
Lord True (Con)
My Lords, I am grateful to all those who have contributed to this short debate and for the general tone of the interventions made. I was of course intrigued by the noble Lord, Lord Adonis, who emerged as a tribune of the people in this august senatorial assembly with his powerful oratory—a latter-day Gaius Gracchus, who said that your Lordships should reject everything sent to us by another place as a constructive contribution to law-making. I would respectfully give to the noble Lord, and indeed to any others who may share his views, the advice I would give to an overweight gentleman like myself: rejecting some of what is set before you, whether it is legislation or food, may well be desirable from time to time, but to reject everything is not conducive to the health of the legislature or of an individual. I hope that rather “Radical Jack” approach will not carry too much weight on the Opposition Benches.
I preferred the broader tone of the debate, which, as I heard it, actually reflected this Government’s resolve and the resolve of the parties represented in this place, at least—I cannot speak for down the Corridor: that all of us are committed to the security and future of this great union, to the common frameworks process and, as part of that, to hopefully developing further the next stage of inter-governmental relations, as I have explained to the House during the course of this Bill.
This Bill, however, works in tandem with the common frameworks programme by providing a broad safety net and additional protections to maintain the status quo of seamless intra-UK trade across all sectors of the economy, and there ought to be agreement on that in your Lordships’ House. It will ensure maximum certainty for businesses and investors, both domestic and overseas. I agree with what my noble friend Lord Naseby said from his perspective and experience in business. I am sure all noble Lords at heart support that objective and understand the need for a coherent internal market.
Lord Hope of Craighead (CB) [V]
My Lords, I am grateful to all noble Lords who have contributed to this debate. I must say that I entirely agree with the noble Lord, Lord True, that we need to create and indeed preserve a coherent internal market. I do not think anything I said in my presentation, or anything in the aims I am seeking to achieve through my amendments, is in any way in conflict with that overriding aim. It is all a matter of finding a solution that is consistent with that and with the devolution system to which the noble Baroness, Lady Hayter, spoke so movingly this afternoon.
I think the noble Lord, Lord True, will agree that the noble Lord, Lord Adonis, did raise an interesting point about subsections (2) of my Amendments 1B and 1C. All I can say to the noble Lord is that I would rather not go into the details at this stage in the debate. It is, among all the things I have raised in my amendments, a subject for further consideration and discussion—if, as I hope, discussions will continue. It was with that aim that my amendment was framed for debate this afternoon.
I think we all know what the issues are; they have been thoroughly debated several times. It is time for a decision. With reference to Amendments 1B, 1C and 1D, I wish to test the opinion of the House.
Lord Callanan
That this House do not insist on its Amendments 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 30, 31, 32, 33 and 56 to which the Commons have disagreed for their Reasons 8A, 10A and 15A, but do propose the following amendments in lieu—
Commons Reasons
“(7A) 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.
(7B) If regulations are made in reliance on subsection (7A), 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.”
“(8A) Before making regulations under subsection (7), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
(8B) 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.
(8C) If regulations are made in reliance on subsection (8A), 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.”
“(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 (4), 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.”
“(4A) Before issuing, revising or withdrawing guidance under subsection (4), the Secretary of State must consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.”
“Duty to review the use of Part 1 amendment powers
(1) In this section “the Part 1 amendment powers” are the powers conferred by sections 6(5), 8(7) and 10(2) (powers to amend certain provisions of Part 1).
(2) The Secretary of State must, during the permitted period—
(a) carry out a review of any use that has been made of the Part 1 amendment powers,
(b) prepare a report of the review, and(c) lay a copy of the report before Parliament.(3) In carrying out the review the Secretary of State must—
(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland,
(b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4, and(c) assess the impact and effectiveness of any changes made under the Part 1 amendment powers.(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.
(5) If any Part 1 amendment power has not been used by the time the review is carried out, this section has effect—
(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—
(i) a statement to the effect that the power has not been used since it came into force, and
(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and(b) as if the requirements of subsection (3) did not apply in relation to that power.”
“(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.”
“(8A) Before making regulations under subsection (7), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
(8B) 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.
(8C) If regulations are made in reliance on subsection (8A), 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.”
“Duty to review the use of Part 2 amendment powers
(1) In this section “the Part 2 amendment powers” are the powers conferred by sections 17(2) and 20(7) (powers to amend certain provisions of Part 2).
(2) The Secretary of State must, during the permitted period—
(a) carry out a review of any use that has been made of the Part 2 amendment powers,
(b) prepare a report of the review, and
(c) lay a copy of the report before Parliament.
(3) In carrying out the review the Secretary of State must—
(a) consult the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland,
(b) consider any relevant reports made, or advice given, by the Competition and Markets Authority under Part 4, and
(c) assess the impact and effectiveness of any changes made under the Part 2 amendment powers.
(4) The permitted period is the period beginning with the third anniversary of the passing of this Act and ending with the fifth anniversary.
(5) If either of the Part 2 amendment powers has not been used by the time the review is carried out, this section has effect—
(a) as if the report required by subsection (2), so far as relating to that power, is a report containing—
(i) a statement to the effect that the power has not been used since it came into force, and
(ii) such other information relating to that statement as the Secretary of State considers it appropriate to give, and
(b) as if the requirements of subsection (3) did not apply in relation to that power.”
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, this group covers the exclusions to the market access principles and delegated powers-.
I turn first to Amendment 8L and other consequential amendments relating to the exclusions from the market access principles. These amendments, to which the other place have already disagreed, would replace the current Clause 10 with an expansive list of aims, which could be used to justify creating trade barriers for goods in the United Kingdom. The exclusions approach, as originally drafted, 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 that they continue to operate for the particular conditions where they are needed under the bespoke constraints relevant to those circumstances. This targeted approach provides certainty to businesses while ensuring that important or high-risk policy areas, such as chemicals, pesticides or sanitary and phytosanitary measures, can operate effectively.
However, the protections and benefits of the internal market proposals would quickly begin to fade with an expansive list of exclusions for part 1. This would allow unnecessary trade barriers and unjustifiable costs to businesses and consumers. The Government’s view is that a targeted list of exclusions in the Bill, combined with how the principles of mutual recognition and non-discrimination interact, is the best way in which to allow each part of the United Kingdom to meet its respective goals while avoiding unnecessary damage to the UK’s internal market.
The noble Lord’s amendment would not achieve that balance. Although the new list of exclusions that he has presented is slightly changed from his earlier amendment, the list remains very wide. It captures almost all kinds of public policy objectives, and only requires a new regulation “to make a contribution” to any of the aims in the list. This means that almost any regulation proposed by the UK Government or the devolved Administrations in future could be excluded from the scope of the market access principles. The Government reject the idea that a large list of exclusions is needed to preserve standards. The UK Government share with the devolved Administrations commitments to maintaining our existing high standards, whether environmental protection, animal welfare or consumer standards. We will continue to work together on these as a united kingdom as we leave the transition period. We should not forget that the Bill’s design will continue to allow all Governments to innovate, so that new ideas can emerge—as they did with plastic bag charges, for instance—to build better and higher standards for us all, including in the many social policy areas that the noble Lord clearly is concerned about.
I turn to the amendments relating to delegated powers, which underpin the realisation of these market access principles and make sure that they continue to function as effectively as possible. Noble Lords will be aware that the Government’s view remains that these key delegated powers are necessary. My colleague, Minister Scully, successfully argued in the other place that the amendments to remove these powers should be rejected. These powers will ensure that the system continues to evolve, facilitating frictionless trade across the United Kingdom. This will be necessary to react to developments in technology and regulation that cannot be foreseen at present. They also allow the Government to respond rapidly to business and wider stakeholder feedback—for example, to amend the list of exclusions, if implementation shows the need for adjustment.
It is important to note that any of these powers would require an affirmative procedure statutory instrument to be made in Parliament. This will ensure that there is full transparency on any changes and that MPs from all parts of the UK can scrutinise and vote on any changes. Furthermore, these powers are now supplemented by the comprehensive and reasonable package of amendments that we have proposed. This includes new amendments tabled ahead of this debate, giving more certainty on the role of the devolved Administrations in developing changes. I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson, for their constructive engagement on this matter.
We have listened to your Lordships’ House carefully. Indeed, at Report, we removed the power for the Secretary of State to amend the list of statutory requirements which are in scope of the mutual recognition principle for goods. In this case, having looked again after hearing from your Lordships, we changed our position, having assessed that the removal of the power will not substantially undermine the operation and flexibility of the internal market system.
We have also retabled the Government’s amendment from Report, removing the main affirmative power in relation to the exclusions to part 2. When the other place disagreed with this House’s amendment, removing the main affirmative power and the draft affirmative power, both parts of that power were restored to the Bill. I am happy to make the change that I proposed in my amendment at Report once again. We have also proposed new amendments that give an enhanced role to devolved Administrations in relation to these powers, building on the model proposed by the noble Baroness, Lady Hayter, at Report and ensuring that agreement across all Administrations to the use of the power is achieved whenever possible. The Secretary of State will be required to seek the consent of the devolved Administrations prior to any use of this power. If consent is not provided within one month, the Secretary of State will be able to proceed without that consent but must publish a statement setting out the reasons for proceeding in this way. As this adapts the model that your Lordships previously supported, I hardly need to stress the merits of this approach, which ensures that the devolved Administrations have a say but not a veto. I am hopeful that this time noble Lords will support it. The noble Baroness, Lady Hayter, is nodding; we are in a good place on this one.
Thanks to government amendments introduced at Report that are retabled today, the impact and effectiveness of any use of these powers will be subject to review within five years. A report setting out the conclusions of that review must then be laid before Parliament. I hope this offers comfort to this House that we are taking seriously the concerns that have been raised, and we are working to address them constructively. The uses of the powers to make delegated legislation contained in parts 1 and 2 of the Bill will be scrutinised, not only when they are being laid before Parliament, but also in a more holistic way, after a suitable period has elapsed. This review will again give an opportunity for the devolved Administrations to provide their views.
I briefly address the power to issue guidance, to which we have deliberately taken a more distinct approach. Clause 12 explains that the Secretary of State may issue explanatory guidance on the practical operation of the market access principles for goods. It is not a power to make or amend legislation and, therefore, it differs from other delegated powers in part 1 of the Bill. As part of this process, we will, of course, engage with all the relevant stakeholders, because we are committed to helping regulators and traders to understand the principles and make the best possible use of them. This includes the devolved Administrations, and we are including a legislative commitment to consult them before issuing, amending or withdrawing that guidance. Guidance will not change the rules themselves, so a requirement to seek the consent of devolved Administrations, as proposed for other powers, is not needed.
I urge your Lordships to support all the amendments to these powers, which I hope noble Lords will agree represent a reasonable approach. Crucially, they also enable the internal market system to remain up to date while ensuring the highest degree of scrutiny and accountability. I beg to move.
Motion B1 (as an amendment to Motion B)
Lord Stevenson of Balmacara
Leave out from “12,” to end and insert “15, 16, 17, 18, 30, 31, 32 and 33 to which the Commons have disagreed for their Reasons 8A, 10A and 15A, do propose Amendments 8B to 8D and 8F to 8K in lieu, do propose Amendment 8L in lieu of the words restored to the Bill by the Commons disagreement to Amendment 12 and do insist on its Amendments 13 and 56—
“Exclusions from market access principles: public interest derogations
(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) pursue a legitimate aim,
(b) are a proportionate means of achieving that aim, and
(c) are not a disguised restriction on trade.
(2) A requirement is considered to pursue a legitimate aim if it makes a contribution to the achievement of—
(a) environmental standards and protection,
(b) animal welfare,
(c) consumer standards, including digital and artificial intelligence privacy rights,
(d) employment rights and protections,
(e) health and life of humans, animals or plants,
(f) protection of public health, or
(g) equality entitlements, rights and protections.
(3) A requirement is considered disproportionate if the legitimate aim being pursued in the destination part of the United Kingdom is already achieved to the same or higher extent by requirements in the originating part of the United Kingdom.””
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank the Minister for his opening remarks and have listened carefully to his views. I will reverse the order in which he spoke and hope he will not mind and is able to follow.
I start with the question about powers, on which he ended. I thank him and his colleagues for the considerable time over the last few months—and increasingly the last few days—that they have provided to discuss this Bill and the wider context with which it engages. I confirm that we are happy to continue to talk in the remaining time. We agree with the stated aims of the Bill to ensure that our internal market works well for consumers in all parts of the United Kingdom for workers and businesses trading here and for importers. But we also support the DPRRC in its criticisms of the delegated powers which were initially included in the Bill. The DPRRC argued that they were not appropriate and were in excess of what was needed to ensure the continued operation of the UK internal market, so we are delighted that the Government said in their letter issued this morning that they have:
“listened closely to and acknowledged the strength of Peers’ concerns regarding the position of the devolved administrations in relation to the application of … delegated powers”.
Your Lordships owe a considerable debt of gratitude of my noble friends Lady Andrews and Lady Hayter for their work on this over the last few weeks. They have been tireless in their pursuit of the issue and it has resulted, as the Minister said, in three major concessions, which we welcome, and some other changes. The concessions 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, and introducing a statutory requirement to consult with the devolved Administrations before issuing, revising or withdrawing guidance. We welcome these, and the statutory requirement for a review of these powers in Part 1 and Part 2 of the Bill within five years. Finally, on this issue, it is good to see the change in tone towards the devolved Administrations, which is reflected in these changes, in the speech today, and in the letter to which I have already referred.
I turn to Amendment B1 in my name, and the amendment in lieu, and look forward to the debate. I give notice as requested that I intend to test the opinion of the House at the end of that debate. We agree with the Government that, at the core of any approach to setting the rules for the UK internal market, there should be harmonised rules underpinned by a strong consultative process. We seek a combination of common frameworks on the one hand and market access principles on the other.
In the debate that has just occurred on the amendment in lieu offered by the noble and learned Lord, Lord Hope, the House has confirmed its position on the common frameworks process, which, as my noble friend Lady Hayter said and the Minister agreed, builds on substantial progress made to date. The Government’s main objection continues to be that as the common frameworks are, at heart, a voluntary and co-operative system, with all the strengths and benefits that brings to the devolution settlement, it could bring unnecessary uncertainty into the system. We acknowledge that, but we think that there are ways in which that could be tackled, some of which are based on powers that the Government already have in place. We remain willing to explore a possible solution to the Government’s concerns over the next few days—perhaps over dinner, if that is how things are done these days.
However, there is also a need for statutory underpinning of the internal market. The purpose of our amendment is to preserve the potential for managed policy divergence that is central to the devolution settlement. As the noble Lord, Lord Anderson of Ipswich, said on the first day of Report:
“That potential is squeezed out for the future, save in limited and inconsistent respects, by the non-discrimination and mutual recognition principles as they appear in the Bill.”—[Official Report, 18/11/20; col. 1508.]
My amendment provides the derogations to the market access principles. They are commonly available in devolved, federal and confederal states all over the world. Their purpose is more a safety valve than a threat to market integrity, and their use would remain subject to strict statutory controls. As currently drafted, the structure is unbalanced. The common frameworks incentivise co-operation and consensus, and my amendment would diminish in a strictly controlled fashion the crudely centralising force of the market access principles, provide balance and encourage innovation.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
Does any noble Lord in the Chamber wish to speak on this amendment? If not, I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, like the noble Lord, Lord Stevenson, I will take the amendments in the opposite order to the Minister, if the House is happy with that.
The delegated powers issue has almost become a ritual in your Lordships’ House. A Bill is published and in it are many very draconian powers, which seek to change almost everything the Bill can do at the will of the Minister. There is then a report from the DPRRC which condemns it, and then there is a debate and we start to move towards a more reasonable situation. I hope, perhaps, that we can learn from this and maybe cut out a few of the steps, so that we can get to the reasonable situation. The Government have given considerable ground on this, and for that we should all be accepting and reasonable and, I suppose, grateful, although perhaps gratitude is the wrong word.
With respect to Clause 12, I think we will all be watching quite closely to see how those powers are exercised, because advice can come in many forms and we will be seeking to observe that.
The characterisation that these delegated powers are required in order for the Government to react and act with speed has been absolutely confounded by the way in which the Covid crisis has been addressed by the Government. There has been very rapid legislation and very rapid reaction. Looking forward, we have got to a better place than we were in when we started. I still do not think that we would call it perfect, but we have taken a long time to get there.
My reading of the amendment proposed by the noble Lord, Lord Stevenson, is that it is the return of Amendment 21, or at least most of it. Listening to his very reasonable presentation of the amendment and having listened to the debates on Report, I am somewhat surprised that the Government continue to dig their heels in. I can understand that the list in subsection (2) of the proposed new clause might have raised some concerns, and it can of course be subject to negotiation, but as the list now stands—with environmental standards and protection; animal welfare; consumer standards, including digital; employment rights and protections; the health and life of humans, animals or plants; the protection of public health; or equality entitlements—it seems that the Government could not possibly object to it, so I am surprised. The Minister has set out his concerns about an ordered market, but it is very clear that any market that did not observe these things would not be one that we wanted anyway.
With that response, I suggest that we will be supporting the noble Lord, Lord Stevenson, when this Motion is put to a vote. We hope that the Government will be able to have discussions with the noble Lord and others, so that next time they can come back with something much closer to what we have seen today.
Lord Callanan (Con)
I thank both noble Lords for a good, albeit brief, debate. To summarise, earlier I expressed my concerns about Amendment 8L and the expansive list of exclusions from the market access principles that it introduces. The list that we have included has been carefully drafted to strike what is, in our view, a measured balance. It protects the ability of the devolved Administrations and the UK Government to deliver policy, while avoiding harmful or costly barriers to trade within the UK internal market. The Bill does nothing to stop all nations working together to achieve mutual goals and build on our shared high standards.
On the delegated powers in the Bill, it is not proportionate to remove the Government’s ability to ensure that the list of exclusions and legitimate aims remains appropriate. The Government have already set out a comprehensive package of changes to the delegated powers in the Bill, including for the removal of certain powers and for reviews and reporting to Parliament, and new amendments on the role of the devolved Administrations. This provides for effective transparency and scrutiny of the remaining powers.
We believe that there is a reasonable middle ground here. Many noble Lords tabled and supported amendments to alter, but not remove, the powers in the Bill. We agree with those colleagues. These powers are necessary, and we believe that the changes we have proposed should address their concerns. I therefore hope that noble Lords will be able to support the Government’s approach to reinstating these powers in the Bill.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank both speakers in this short debate. We have not had much buy-in from others, but that just shows that the issues are very clear, and I think that people may well have already made up their minds.
I was interested that the noble Lord did not really come back on the points that I made. His concern seems to be that the list is too expansive, although he does not seem to attack the principle on which it is based. I signal again, and reaffirm, that we would be very happy to discuss how such a list should be configured better to suit his interests and meet his concerns. I hope that I am not misreading the willingness to do that over the next few days—we would certainly be available to talk if he wanted to do so.
I think that we have covered the ground very carefully. We support and welcome the Government’s amendments in the area of delegated powers, but I would like to test the opinion of the House on my Motion B1.
Lord True (Con)
My Lords, it seems that I am muted again, but I will find my way to the right spot. I turn now to Part 5 of the Bill. These clauses, as your Lordships may be aware, have been the subject of much debate here and in the other place.
Noble Lords will have seen that the Government announced yesterday that they have reached agreement, in principle, on all of the issues in the UK-EU withdrawal agreement Joint Committee. The Government have been clear throughout that they are committed to implementing the withdrawal agreement and the Northern Ireland protocol. We said that when the Bill was introduced to Parliament and have done so at every stage of its passage. We are also clear that, as a responsible Government, we could not allow the economic integrity of the United Kingdom’s internal market to be compromised inadvertently by unintended consequences of the protocol. That is why, through clauses in this Bill, we have sought limited and reasonable steps to create a legal safety net by taking powers in reserve whereby Ministers could guarantee the integrity of our United Kingdom and ensure that the Government are always able to deliver on their commitments to the people of Northern Ireland.
We sought these measures to guard against the possibility of not reaching agreement with the EU in the Joint Committee. As we have now reached agreement with the EU, I am pleased to say that the clauses which provided for the safety net are no longer needed and the Government are content for them to be removed from the Bill. I refer to Clauses 44, 45 and 47.
Lord True (Con)
However, as I said in Committee, the clauses that provide for the safety net are not the only ones that make up this part of the Bill. It is vital that the other clauses are passed so that we can deliver on our commitments to the people of Northern Ireland. The protocol is clear that Northern Ireland is part of the UK customs territory, while our manifesto is clear that we would maintain and strengthen the integrity and smooth operation of our internal market. Clause 42 delivers on that commitment by ensuring that all authorities must have special regard to the following fundamental matters when exercising functions that relate to the implementation of the protocol on the movement of goods within the United Kingdom.
The first is the need to maintain the integral place of Northern Ireland in the United Kingdom’s internal market. The second is the need to respect Northern Ireland’s place as a part of the United Kingdom’s customs territory, while the third is the need to facilitate the flow of goods between Great Britain and Northern Ireland. The clause is also entirely in line with the protocol. Indeed, Article 4 states
“Northern Ireland is part of the customs territory of the United Kingdom.”
Article 6 goes on to state
“Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”
In the recitals it states that the application of the protocol
“should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.
This clause delivers on the commitments made in the Government’s manifesto, in the Command Paper published by the Government in May on the implementation of the protocol and on the protocol itself. These are not controversial aims, and indeed some were surprised that your Lordships feel differently.
Let me be clear that as there was some confusion about this in Committee, this clause is not dependent on any other in the Bill. There is no infection or so-called contamination here; it is merely about a Government fulfilling their commitment to the people of Northern Ireland. Indeed, the fact that the Government are seeking to ensure that the clause remains in the Bill, while Clauses 44, 45 and 47 are removed, proves the point. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and is entirely in keeping with the protocol.
I turn now to Clause 43. As I have said, and as noble Lords will know, the Government have committed to providing unfettered access for Northern Ireland’s businesses on multiple occasions. Clause 43 gives effect to that commitment by prohibiting the introduction of new checks and controls on Northern Ireland goods, with some very limited exceptions. This is in keeping with what the Government have said constantly and with what was promised in our manifesto. That commitment is critically important to the businesses and people of Northern Ireland. By including Clause 43 in the Bill, we will protect the vast majority of the £8.1 billion-worth of goods sales from Northern Ireland to Great Britain, and guarantee Northern Ireland’s place in the United Kingdom’s internal market. I hope all of us can now agree on the importance of providing unfettered access for Northern Ireland goods to the rest of the United Kingdom. This clause delivers on that.
As with Clause 42, this clause is not dependent on any other in the Bill. I of course recognise that Clause 43(3)(b) refers to Clause 47, but that is only part of spelling out that it in fact allows checks where applicable international obligations require them. That subsection is being removed. This clause does not provide for or allow for a breach in any way of the withdrawal agreement and it is entirely in keeping with the protocol.
Given the broad support there is for unfettered access, the Government’s repeated commitments to legislate for unfettered access—including in the New Decade, New Approach Deal to restore the Executive, our May Command Paper on our approach to implementing the protocol and the manifesto that brought this Government to office in the last election—and given how important it is to protect access for Northern Ireland businesses to their most important market, it would be hugely disappointing for them and for business certainty in Northern Ireland if noble Lords were to remove these subsections unduly.
I turn to Clause 46. Under state aid rules, notification is the process through which EU member states inform the Commission about state aid or potential state aid. This process will continue to apply to the United Kingdom from 1 January 2021, but in relation only to the limited circumstances where Article 10 of the Northern Ireland protocol applies. This clause simply establishes a statutory requirement that no one besides the Secretary of State may notify the European Commission of state aid or potential state aid. It codifies existing practice in legislation and would not be considered novel or controversial to the Commission, as it is unlikely to accept notification from anyone other than authorised persons.
Motion C1 (as an amendment to Motion C)
Lord Judge (CB)
My Lords, I am relieved that Clauses 44, 45 and 47 are being removed from the Bill. They were constitutionally improper and a constitutional aberration. They subverted the rule of law. As we have known for centuries, and was summed up by a former Lord Chief Justice in the 17th century, Edward Coke, the rule of law is our “safest shield”.
The way in which the debate over the Bill unfolded perhaps reminded us of something else, something which perhaps noble Lords do not need to be reminded of, but needs occasionally to be drawn to the attention of the Executive: we are a Parliament of two Chambers. The Executive has no sovereignty; Parliament has sovereignty. Of course, the Commons is the first, the prime, the pre-eminent, the most significant and the most important part of the two Houses of Parliament, but that does not mean that this House is without some modest power.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
The following Members in the Chamber have indicated that they wish to speak: the noble Lord, Lord Howard of Lympne, the noble Baroness, Lady Hoey, the noble Lords, Lord Naseby, Lord Cormack and Lord Dodds, the noble Baroness, Lady Fox of Buckley, and the noble Lord, Lord Adonis. I therefore call the noble Lord, Lord Howard.
Lord Howard of Lympne (Con)
I will be brief. I agree with everything that has been said by the noble and learned Lord, Lord Judge. I welcome how the Government have seen fit to remove these clauses, which, for the reasons given by the noble and learned Lord, should never have found their way into draft legislation. The Government should never have asked Parliament to agree to the breaking of international law, which these clauses would have provided.
I also welcome how the issues to which this part of the Bill gave rise have been resolved in the way that so many of us asked of the Government: through the procedures for dispute resolution that are set out in the withdrawal agreement. Who knows? Could this conceivably form a precedent for the resolution of other issues yet to be resolved? We must devoutly hope so. For the moment, I rise to welcome the removal of these clauses from the Bill. They should never have been there and it is a great relief that they will not be there any more.
Baroness Hoey (Non-Afl)
My Lords, I understand the pleasure that many noble Lords have in the fact that the Government have withdrawn—or want and are likely to withdraw—these clauses. However, it is a pity, in a way, that this House did not have the Statement from the Cabinet Office Secretary, heard already today in the other place, before discussing this. It is very wrong that that Statement will not come to this House before last business tomorrow. If you read it, you will find that much of what has been said is not set in stone. Yes, an agreement in principle was made yesterday—it is important to mention the words “in principle”—by the Secretary of State going over to Brussels. After all this time, he suddenly came back, after a cup of tea or, perhaps, a lunch, with something that was meant to make everything okay. It is important that your Lordships consider today what we are doing about this protocol and are under no illusion about what has now been agreed in principle by the Secretary of State and the European Union, and the co-chairs of the committee.
Noble Lords should look at why these clauses were originally put in. I accept that the noble and learned Lord, Lord Judge, has been very clear about the breaking of international law; he talked about the constitutional improperty. I urge your Lordships to think about the constitutional improperty of what is being done to a part of the United Kingdom. Let us be clear: nearly 45% of Northern Ireland people voted to leave the European Union; they voted to leave as the United Kingdom. We are not now in a position where Northern Ireland is leaving with the rest of the United Kingdom. This is important, because of all the safeguards that were being put in by these clauses. For example, the Commons Reason says:
“Because the regulation-making power conferred by clause 44 provides a necessary safety net to ensure Ministers can secure that qualifying Northern Ireland goods have full, unfettered access to the whole of the UK internal market.”
The other clauses were all designed as a safety net. Let us be clear: that safety net has now gone. We are now in a position where Northern Ireland will still be subject to the European Court of Justice, which will still exercise control there. Northern Ireland will be subject to any new European rules to do with trade. Much of the agreement announced by the Secretary of State is only for six months. What happens after six months when we have seen it on the ground? The proof of all this will be in the implementation. For example, we have already seen the very welcome announcement that, now we have left the EU, the Government can ban the export of live animals. That will not apply to Northern Ireland. There are even discussions that, if you move your dog from Great Britain to Northern Ireland, you will need a special permit. So let us not kid ourselves—to use words that are not very House of Lords—that we are not starting down the road of setting up Northern Ireland to be different and a place apart. We were promised that we would leave as a United Kingdom. Northern Ireland is not leaving the European Union in the same way as the rest of the United Kingdom. In future, noble Lords will look back on this as a very sad day for the unity of our United Kingdom.
Lord Naseby (Con)
My Lords, I think I am brave enough to suggest to the noble and learned Lord, Lord Judge, that his ruling or reading that Part 5 was illegal is not shared by those I have consulted since. David Wolfson QC said:
“The mere act of laying a bill before parliament which, if it were passed into statute, would breach a treaty obligation (and would amend domestic legislation bringing that treaty obligation into effect in domestic law) is not itself a breach of the treaty or of international law. Nor would merely laying such a bill be itself a breach of the rule of law”.
The noble Baroness who has just spoken is absolutely right. I had the privilege of being a very junior Minister in Northern Ireland. The safeguards of Part 5 of the Bill were there for a purpose, for a very difficult area of the United Kingdom. We all know that it needs sensitivity, understanding and, as anyone who has served in Northern Ireland will know, patience. Things do not happen quickly there—and against that particularly the Belfast/Good Friday agreement.
I welcome the joint statement received from the co-chairs of the EU-UK Joint Committee that:
“Following intensive and constructive work over the past weeks by the EU and the UK, the two co-chairs can now announce their agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland.”
In my judgment, as a practical man, the original procedure has worked, not the threats from a certain section of the upper House. I therefore thank my noble friend on the Front Bench, who I imagine has been in detailed discussion with those who have come to this decision.
As an aside, I am someone who looks at votes and the results of Divisions. Noble Lords may have noticed that, in the first Division this afternoon, the votes of those voting for the Motion and, therefore, against the Government, appear to have dropped by about 100 from last time. On the second Division it dropped to 45. I venture to suggest that the Government have taken action, worked hard and made progress. It would be good if this House now got on and accepted some of the proposals from Her Majesty’s Government.
Lord Cormack (Con)
I do not think this is the occasion for a heated and contentious debate, although I say to my friend, the noble Baroness, Lady Hoey, that 56% of the people of Northern Ireland did vote to remain in the European Union. To assert superiority from a position of inferiority does not really do justice to the noble Baroness, whom I have known for many years, who served on my Northern Ireland Affairs Select Committee, and whom I admire.
I believe very strongly that the noble and learned Lord, Lord Judge, did this House, and this country, a service when he introduced his Motion at the end of Committee, which deleted the whole of Part 5. I was proud to support him, as I know my noble friend Lord Howard of Lympne was. We were devastated at the thought of a British Government—particularly, for the two of us, a Conservative one—putting themselves in a position where they were not destroying but tarnishing their reputation in the wider world.
However, we are we where we are, and I am extremely grateful to my noble friend for what he said this afternoon. Inspired by sitting on the same Bench as a Bishop, I say that there is more joy in heaven—as she well knows—over one sinner that repenteth; and there is more joy in the House of Lords over one Government who see the light than over many that are benighted.
Lord Dodds of Duncairn (DUP)
My Lords, I will speak briefly. I listened carefully to the eloquent contributions of the noble and learned Lord, Lord Judge, and others on these issues of international law, although I am struck that, over the years, there have been examples of Governments backing away from commitments in international treaties. It happened under a Labour Government and during the coalition Government, so it was nothing particularly new. What was new was the stark way in which the Minister outlined it at the Dispatch Box. I only wish that Ministers in the Lib Dem/Conservative coalition and past Labour Governments had been equally free and open and admitted honestly that they had done it.
What was behind the Government’s efforts in the United Kingdom Internal Market Bill? It was to deal with the state-aid point, as we heard, but also to guarantee unfettered access for Northern Ireland goods to the rest of the United Kingdom. That is hardly, in itself, terribly contentious, since it is to the benefit of everyone in Northern Ireland that business should flow free and unfettered. It is to the economic benefit of business, all communities, employment and the creation of jobs, all of which add to the stability and prosperity of Northern Ireland going forward. It was agreed by the EU itself in the joint report of December 2017, and by the parties in Northern Ireland that signed up to the New Decade, New Approach document. All the parties agreed: nobody reneged from it. It was in the Conservative Party manifesto, as the Minister has mentioned. So, there should not be anything contentious about that principle, which was well outlined, clear and supported—indeed, in amendments put down in the other place—by parties other than unionist parties as well.
Section 38 of the European Union (Withdrawal Agreement) Act 2020, passed by more than 120 votes in the other place, allows for “notwithstanding” arrangements. Article 16 of the Northern Ireland Protocol itself makes it clear that where the protocol would do serious economic, societal or environmental damage to Northern Ireland, the Government have the right to act unilaterally. I can think of nothing more designed to cause serious economic damage than putting extra, multiple costs, restrictions and administrative burdens on businesses in Northern Ireland, the vast bulk of which do their trade with the rest of the United Kingdom, thereby causing economic damage, job losses and the rest of it.
I appeal to noble Lords as they consider these matters to think of the practical consequences of some of the arguments being put forward. Think of the effect on people’s businesses in Northern Ireland, most of which are small or medium-sized. Think of the people working there, who will lose their jobs if unfettered access is not guaranteed or if some of the other restrictions, from Great Britain to Northern Ireland, are not dealt with. The protocol, as noble Lords know and as the Government know all too well, was opposed by these Benches and by many in Northern Ireland for the reasons set out, passionately and rightly, by the noble Baroness, Lady Hoey. It creates differences within the internal market of the United Kingdom, with economic and constitutional implications.
People have pointed to the Belfast agreement, but I hear very little reference among noble Lords and commentators to the St Andrews agreement, the Stormont House agreement and so on. I urge people to refresh their memories of all those agreements which, taken in the round, are about a consensus in Northern Ireland of unionists and nationalists. If border restrictions, a presence and north-south tariffs on the island of Ireland are utterly unacceptable because they might breach the Belfast agreement, then likewise, it is unacceptable for many people in Northern Ireland that such restrictions—tariffs et cetera—should be imposed between Northern Ireland and the rest of the United Kingdom. That is a simple principle that should not be contentious. We hear people saying that Part 5 of the Bill drives a coach and horses through not just international law but the Belfast agreement, but they have no regard, it seems, to the serious concerns that many people have voiced, including many who were instrumental in drawing up the Belfast agreement.
This does serious damage to the agreement in Northern Ireland and importantly, it destabilises the Executive. I am a believer in devolution and I want to see it succeed, but it will not succeed if we have a one-sided approach to the Belfast agreement. It has to be a rounded approach. The Government have said that they are withdrawing certain clauses in the Bill and standing by others. I welcome the clauses they are putting in and those they are standing by; they are important statements of principle. But we will now have to wait and see how the Statement made in the other place today is actually implemented.
The noble Lord, Lord Howard, talked about matters being resolved. Some have been, perhaps, but others have deliberately been put on hold and are not resolved. It will therefore be important to see how this works out in practice, but the Government must keep under review how these measures, taken under the provision I mentioned at the start of my speech, help to preserve stable government and economic prosperity and uphold the agreements made in Northern Ireland by both unionists and nationalists, and those of neither persuasion.
Baroness Fox of Buckley (Non-Afl)
I would like to remind noble Lords, especially on the Government side, that the clauses being removed were themselves argued for as a necessary legal shield for the internal integrity of the United Kingdom and its sovereignty. I am told now that the Government are content with assurances. I am not sure that many leave voters are content simply to be assured. Goodness knows, he might be surprised when I say this, but the noble Lord, Lord Adonis, made a very important point when he said that at the beginning of the week, he did not anticipate this debate. Many in the House did not expect these clauses to be removed, and now we are told to be assured; yet they were crucial clauses only last week. I therefore at least want to raise the question of trust and whether we should be expected simply to trust. It sometimes feels as though some of us have been marched up a hill and marched down it again.
Baroness Fox of Buckley (Non-Afl)
We know by whom. As an aside, I rather like a heckling atmosphere, but I would prefer it if it happened not just when I am speaking.
With absolute due respect to the noble and learned Lord, Lord Judge, who speaks so eloquently about constitutional and unconstitutional principles—I have listened very carefully to him for many years, not simply in recent weeks—I would be rather disappointed, and I think it would tarnish those principles, if it was thought that the decision was made because of the strength of feeling in this House. I would rather think that it was because the Government were satisfied by the debates, not that this House, rather unconstitutionally, might have got in the way of parliamentary sovereignty. There is a danger that some of the comments being made are self-aggrandising and self-congratulatory.
However, the main point for me—made clearly by the noble Baroness, Lady Hoey, and emphasised by the noble Lord, Lord Dodds—is that Northern Ireland is being treated separately, as a different entity. I am afraid that some seem to relish this: in many debates that I have sat through in this House, I have felt as though the 2016 referendum of the whole United Kingdom was being used as an excuse to interpret devolution as some kind of federalisation of the United Kingdom. Interestingly, even today, one noble Lord noted that 56% of Northern Ireland voted to remain in the European Union—that is of no matter, indeed no interest, if you believe in the United Kingdom.
Baroness Fox of Buckley (Non-Afl)
Here we go. There will be those who would say that the debate about the unity of the United Kingdom and the status of Northern Ireland might be contentious. That is a different debate; a different referendum would need to be called. In 2016, the United Kingdom was asked whether it wanted to leave the EU; all of it voted to do so, and yet one part of it is now to be held in thrall, to a certain extent, to the EU—a body that I do not entirely trust to respect the integrity of the sovereign rights of the United Kingdom, I am afraid. Therefore, I am not content.
Lord Adonis (Lab)
I am not sure how far I should follow the noble Baroness except by making a few obvious points. First, the Good Friday agreement and the Northern Ireland protocol were warmly welcomed in Northern Ireland; this is not being done to Northern Ireland against its will. These provisions are very warmly welcomed because the people of Northern Ireland see them as a guarantor of peace and stability there; this requires an open border with the Republic of Ireland, so I do not follow the noble Baroness on that point.
I also did not follow the noble Baroness when she said that the House of Lords was standing “in the way” of parliamentary sovereignty. We are part of Parliament and performing our functions as a part of it. In that respect, I pay great tribute to the noble and learned Lord, Lord Judge, and—I never thought I would hear myself saying this—the noble Lord, Lord Howard, who have played an absolutely central part in the ability of this House to perform its proper constitutional role to see that the House of Commons is invited to reflect further on provisions that it believes are injurious to the public interest.
We have reached this point in a very convoluted way, because the Government changed their mind mid-way through the parliamentary process. However, the noble Lord, Lord Cormack, likened the noble Lord, Lord True, to the prodigal son, and we welcome all those who have seen the error of their ways and repented. The process by which they do so is not significant; what is significant is the opportunity that this House gives to Parliament at large—including the Government, which operate as a part of Parliament—to consider its view on these big and important matters that are of concern to us. We have reached the right decision on this matter.
The only point I want to make is about the consequences because, as we now move forward, they are significant. To understand them, we need to understand why the Government did what they did. It was never my view that they intended these provisions to become law; they knew that the noble Lord, Lord Howard, the noble and learned Lord, Lord Judge, and a whole galaxy of the most heavyweight Members of your Lordships’ House would object to them—they knew that.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
Does anyone else in the Chamber wish to speak? No one does, so I shall go to the listed speakers. I call the noble Lord, Lord Newby.
Lord Newby (LD)
My Lords, it is a great pleasure to be able to support the noble and learned Lord, Lord Judge, again in his amendments before your Lordships’ House. These amendments will remove the stain of illegality from the Bill, and we should be grateful that that is what we are going to achieve this afternoon—but in doing so, they also let the Government off the hook. Were it not for the ability of this House to ask the Commons to think again, and to give a pause, the Government would now still be wriggling on the hook, because this would not be a Bill any more, but an Act, and we would be stuck with those illegal clauses, which would have caused longer-lasting damage to the reputation of this Government, and of this country, than will, I hope, now be the case.
I am amazed by the coincidence that just by chance, yesterday, after months of toil, Minister Michael Gove reached an agreement. It seems like an extraordinary coincidence, but when we read what he says about it, we see that there is no coincidence at all. This so-called agreement, in which everything is allegedly resolved, is simply a point in the negotiations at which it was appropriate for the UK Government to announce some progress. Although a number of principles have been agreed, the letter that we received from the noble Lord, Lord True, says that
“The parties have also reached an agreement”
on the issues on which decisions have still to be taken
“before 1 January.”
That is the agreement in principle, on some quite significant things, including
“the practical arrangements regarding the EU’s limited and light touch presence in Northern Ireland when UK authorities implement checks and controls under the Protocol, determining criteria for goods to be considered “not at risk” of entering the EU when moving from Great Britain to Northern Ireland, thereby ensuring that the overwhelming majority of goods will not attract tariffs”.
So there is quite a bit of substance there.
Among the substance is, first, that there will be EU officials based in Northern Ireland, at the ports, checking that our customs officers are doing their jobs—something that, I believe, the Government said at an earlier stage they would never countenance. There will also be— because the letter says so—checks and controls on goods moving from Northern Ireland to the rest of the UK. Indeed, one of the principles that has been agreed is the detail of the export declarations.
There is also the possibility—although obviously, this will apply only if there is no deal—of tariffs being applied to some goods moving from Great Britain to Northern Ireland and vice versa. If the noble Lord, Lord Dodds, thinks he has unfettered access, he needs to read what the Government are doing. Every declaration takes time. Every declaration costs money. Every declaration fetters trade.
The dilemma that a number of noble Lords have referred to, which this agreement merely seeks to amplify, is where we have the border. There has to be a border; it could be on the island of Ireland or in the Irish Sea. We as a country have decided, in the agreements that we have made, that it will be a border in the Irish Sea. There should be no question but that that border exists or that there are checks across any customs border —and they cost, which means that trade is fettered.
We will no doubt spend many happy hours discussing these detailed issues in future, but for today we should simply be grateful that the stain on our legislation, at least, if not the entire stain on our reputation, has been removed by the amendments tabled by the noble and learned Lord, Lord Judge, and accepted by the Government.
Lord Falconer of Thoroton (Lab)
We are in a much better place now, thanks to the Statement made by the Chancellor of the Duchy of Lancaster yesterday, and the statement made by the noble Lord, Lord True, to us today. The effect of what the noble Lord is proposing is that all the unlawfulness is stripped out of Part 5. He proposes that parts of Part 5 remain in the Bill, but none of those parts can legally overtop the withdrawal agreement entered into in 2020, as the Government of the United Kingdom agreed at the time to legislate so that the withdrawal agreement, including the Northern Ireland protocol, could trump everything except primary legislation that purported to overrule it.
Now, as a result of what the noble Lord, Lord True, has said, the Government accept that there shall be no provisions in the Bill that can overtop the withdrawal agreement, which they agreed to give direct effect to. They have gone back to the position they committed themselves to with the European Union.
I completely respect what the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, have said. They have issues with the Northern Ireland protocol. They are both right when they say that Northern Ireland is being treated differently, for reasons that have been widely debated. But that is not what these issues, in this Bill, are about. For better or worse, this Parliament, earlier, had agreed to the Northern Ireland protocol and the withdrawal agreement.
Why did we see the Government try to escape from the provisions of the Northern Ireland protocol? I cannot remember whether it was the noble Baroness, Lady Hoey, or the noble Baroness, Lady Fox, who said that it meant that their troops were marched up to the top of the hill and then marched down again. The reason given was that the Government feared what the European Commission might do in the negotiations.
Let me tell the House how the Chancellor of the Duchy of Lancaster described the attitude of the European Commission in these negotiations. He described Maroš Šefčovič, the vice-president of the Commission, and his team as displaying
“their pragmatism, their collaborative spirit—and their determination to get a deal done that would work for both sides.”
If that was the attitude of the Commission, it is difficult to see why we needed those provisions.
I agree with everything that the noble Lord, Lord Newby, said about this being an agreement in principle, not a locked-down agreement, as is much more candidly accepted in the letter sent by the noble Lords, Lord True and Lord Callanan, to Members of this House this morning, than it was by the Chancellor of the Duchy of Lancaster.
Later, in the Statement that he made earlier today, the Chancellor of the Duchy of Lancaster said:
“the agreement we have reached also enables the Government to withdraw clauses 44, 45 and 47 of the United Kingdom Internal Market Bill … Having put beyond doubt the primacy of the sovereignty of this place … we rest safe in the knowledge that such provisions are no longer required.”
I understand him to be saying that putting in these provisions and then running scared from them when it looked as if they might stand in the way of a trade deal constitutes putting beyond doubt the primacy of the sovereignty of this place. That is absolute nonsense.
I agree with what my noble friend Lord Adonis said, and I am glad that the Government have retreated. However, what they did has damaged the position of this country, and shows a terrible misjudgement. I am glad that the noble Lord, Lord True, has been so gracious in his withdrawal, and we are all grateful for it—but it would have been so much better if the Government had been straightforward about why they did this. They did it because they know they cannot get a trade deal without withdrawing those clauses. I do not know whether they will get a deal, but they hope for one and they cannot get one without withdrawing them. That is why it has been done—and it was done today because this House is debating this today.
Although I apologise to the noble Baroness, Lady Fox, for the fact that some attention has been paid to the Lords, I am glad that she is here to help the Lords influence the Government, which is what it does. It is because the Lords stood firm that constitutional crisis is averted. A good message is sent by the work of the noble and learned Lord, Lord Judge, and I single out the noble Lord, Lord Howard, for his stalwartness in standing up for the principle. If we had not, goodness knows what a mess this Government would have got this country into. We send a message that there are certain principles we will stand up for and will not be moved from.
Lord True (Con)
My Lords, I am not a lawyer, as I am frequently reminded in your Lordships’ House, but I am a historian by vocation and occasional practice, and I know that history is the study of cause and effect. I have heard one version of a proto-history just put to us by the noble and learned Lord, Lord Falconer; there are many other versions which no doubt could and will be put—indeed, some have been put in this debate. The thing to do now is to move forward. Once all the documents are revealed, no doubt people will be able to say what had an effect on what. We are here today to make a judgment on carrying draft legislation, a Bill, forward.
I, too, welcome prodigal sons, and indeed prodigal daughters, if I may say so. The noble and learned Lord was kind enough to say that the Government had graciously changed their position. I heard less comment in the debate—although the noble Lord, Lord Dodds, and the noble Baroness, Lady Hoey, referred to it—about the change of mind, if I may use the phrase, by your Lordships. I hope it is forthcoming on Clauses 42, 43 and 46. I welcome that change of mind. I do not believe that unfettered access should have been called into doubt in your Lordships’ House, and I heard no one speak against that principle, although the noble Lord, Lord Newby, appeared at one moment to exult in the idea that it might not exist. I welcome and am grateful for what I hope will be the change of mind on those other clauses, and I hope that the noble and learned Lord, Lord Judge, will be able to confirm that.
I thank all those who have contributed to the debate. I must say to the noble Lord, Lord Adonis, although I do not want to pick him out particularly, that I do not think that, whoever he or she may be, personal vilification of the Prime Minister is a conducive or beneficial way to broaden consensus in debate in your Lordships’ House. I counsel the noble Lord that vilification of the current Prime Minister will not particularly persuade me to listen to his arguments.
As I said in my opening speech—I thank noble Lords for their comments on the facts of it, not the speech —the Government will not be opposing the removal of Clauses 44, 45 and 47. I can confirm to the noble and learned Lord that new Clause 45 is in accordance with the rule of law. However, as I have argued, the remaining clauses in the Bill are vital to the Government delivering on their commitments to the people of Northern Ireland.
I must say to the noble Baroness, Lady Hoey, that I will be repeating a Statement tomorrow, and I will obviously answer questions on that matter. I am sorry, but I do not make the rules and customs of the usual channels in this place, but I understand her feeling, and no doubt she will examine that Statement tomorrow. I do not think I am telling anybody anything that they do not know when I say that, unfortunately, that Statement will be repeated relatively late tomorrow.
The clauses which I hope your Lordships will allow to return seek to protect Northern Ireland’s place in the UK’s customs territory and internal market, and that is something, as the noble Lord, Lord Dodds, recited, that not only this Government and the Northern Ireland Executive but the EU absolutely committed to—unfettered access, so please let us see that back in the Bill.
Whatever the rights and wrongs of the history, I hope that the reality of the day is that people in different parts of this House will be able to have some satisfaction in where we have reached at this point. I always agree that, in life, negotiation is desirable. As I said in my opening remarks, Clauses 42, 43 and 46 have now been sent to us twice by the democratically elected House, and on those I urge your Lordships, if the Question is put, not to vote them out again. I beg to move.
Lord Judge (CB)
I do not think there is anything I could usefully add; I think we should get on.
(i) is necessary for the purpose of dealing with a threat to food or feed safety in Great Britain.”
“(6A) For the purposes of this section the exercise of a function “is necessary for the purpose of dealing with a threat to food or feed safety in Great Britain” if the exercise of the function consists of—
(a) the making, or operation, of legislation which satisfies the conditions set out in paragraph 2 of Schedule 1, or
(b) any other activity which satisfies the conditions set out in paragraph 2(2), (3), (4) and (6) of Schedule 1 (reading any reference in those conditions to “legislation” as a reference to the activity in question).”
Baroness Penn
That this House do not insist on its Amendments 48 and 49 to which the Commons have disagreed for their Reason 48A.
Baroness Penn (Con)
My Lords, the Government have reinserted into the Bill the power to provide financial assistance. This was removed by your Lordships’ House through Amendments 48 and 49. There is a point of parliamentary principle at play here, which is that the other place wishes to assert financial privilege and preserve that House’s right to decide on public spending arrangements. Indeed, that is the reason for disagreement that has been sent from the other place, and we must respect its financial primacy. It would be contrary to normal practice for noble Lords to insist on any amendment disagreed for a privilege reason. Indeed, it is the only reason given by the Commons, as it alone should be deemed sufficient.
However, we have also heard clearly from the other place that this is a power they wish to remain in the Bill for other reasons, when asked to think again by your Lordships’ House. These clauses form the financial assistance power, which enables the UK Government to deliver strategic investment in all four corners of the United Kingdom. This is all the more important as businesses and communities throughout our countries recover from the Covid crisis. The past few months have demonstrated clearly how important the responsiveness and scale of UK Government support can be to protecting lives and livelihoods.
This power will cover infrastructure, economic development, culture and sport, and will support educational and training activities and exchanges both within the UK and internationally. These are policy areas in which funding was previously provided by EU programmes under terms and conditions set by the EU. It is right that, as we leave the transition period, 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 again that this power is in addition to the devolved Administrations’ existing powers. 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 make sure that 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.
We have taken this collaborative approach to investment with devolved Administrations already: for example, through our successful city deals programme. The UK Government intend to continue to work in this spirit of partnership with stakeholders as we deploy support with this power. Practically, the power means that the UK Government can make good on our commitment to the UK shared prosperity fund. We have published our heads of terms for the fund online. The UKSPF will help to level up and create opportunity across the UK in those places most in need—such as ex-industrial areas, deprived towns, and rural and coastal communities —and for people who face labour market barriers. These places will then develop investment proposals, with input from a range of local partners, to be approved by the Government. We will set out further details on the objectives and administration of the UKSPF in a UK-wide investment framework published in the spring. We will continue to engage the devolved Administrations as we develop the investment framework and in advance of its publication.
The noble and learned Lord, Lord Thomas, has put forward Amendments 48B and 48C. Let me be clear that the UK Government intend to work with both the devolved Administrations and 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, the devolved Administrations will be represented in UKSPF governance structures. Our intention is to work with the devolved Administrations and respect the devolution settlements, and I hope that noble Lords will take this as a demonstration of that commitment. I can assure the House that officials in the Ministry of Housing, Communities and Local Government will continue their ongoing conversations with their counterparts in the devolved Administrations, and will discuss the detail in due course. This provides one example of what we seek to deliver with this power, but I hope it makes plain our intended approach for working collaboratively, while taking a UK-wide view of investment opportunities, to support all parts of the country. As such, I hope that this will encourage the noble and learned Lord not to test the opinion of the House on his Motion.
Motion K1 (as an amendment to Motion K)
Lord Thomas of Cwmgiedd
At end insert “and do propose Amendments 48B, and 48C to the words restored to the Bill by the Commons disagreement to Amendment 48—
“(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) with the consent of the relevant authority where the financial assistance is assistance that could be given by a relevant authority.”
““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]
I thank the Minister for the opportunity to discuss this matter with her. In light of what she said about wishing to set up a governance structure, I am sure that progress could be made. However, there are five short reasons why I hope the House will accept the compromise I have offered in Motion K1, which I now seek to move. First, the Commons reasons were, as has been stated by the Minister, to do with financial primacy. With the utmost respect, they are not correct. Powers to spend in devolved matters are powers of the devolved Governments, not the UK Government. Most of what is covered in this clause are matters that are devolved. Secondly, the clause therefore seeks to change the devolution settlements to enable the UK Government to override the devolution settlements. The clause is therefore a constitutional and not a financial issue.
My second reason is that, at present, funds provided by the EU for regional aid for matters within devolved powers are provided to the devolved Governments, who have to agree how the funds are to be spent. The amended clause would continue this architecture for the shared prosperity fund, the successor fund to that. Under the amendment, the UK Government would agree with the devolved Governments the way in which the funds would be spent where the funds were for matters within the devolved competences—roads, health, education and the like. This would combine the benefit of an overall strategy for the UK with the benefit of devolved Governments agreeing how funds were to be expended in the areas for which they and they alone were responsible.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
One Member in the Chamber has indicated he wishes to speak. I call the noble Lord, Lord Adonis.
Lord Adonis (Lab)
My Lords, I do not wish to cover the ground that the noble and learned Lord, Lord Thomas, has just covered so compellingly. He has made absolutely compelling arguments for why we should send this matter back to the Commons again. As he says, it goes to the heart of the devolution settlement: you just need to read the wording of his amendment to Clause 48 to see why it is so compelling.
What the Government are proposing is a provision that says they should make financial arrangements in respect of spending in the devolved territories of the United Kingdom without consultation with the relevant authorities, whereas the noble and learned Lord’s amendment says that it should take place only with consultation with the relevant authorities. So the noble Baroness would need to explain to us why it is appropriate that these arrangements should be entered into with no consultation with the devolved authorities to which they apply. That is an absolutely fundamental point about whether devolution is for real.
The point I want to add, which is so important and why it is a vital that we send this back to the other House, is that what is essentially going on here is an attempt by the Prime Minister to undermine and make as weak as possible the existing devolution settlement. He said, and we should take him at his word, that devolution was the worst mistake of the Blair Government; he does not agree with the setting up of the Scottish Parliament; he does not agree with the Welsh Assembly; he has played very fast and loose with the role of the Northern Ireland Assembly in the way he has conducted policy in respect of Ireland over the last year.
We have a constitutional duty to see that that the devolution settlement, as constructed by Parliament in successive Acts, all of which have represented consensus settlements between the territories concerned and the United Kingdom Parliament, is safeguarded. This Bill is deliberately intended to cut across and undermine the devolution settlements because the Prime Minister does not agree with them, and it is therefore vital that we send this matter back to the House of Commons again.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
Does any Member in the Chamber wish to speak? No? Then I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, this has been, again, a short but important debate. I thank the previous speakers and I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for his detailed proposal.
First, I will address the comprehensive and well-laid out response by the Minister on why your Lordships’ amendment has been knocked back. I will not come between the noble and learned Lord and the Minister when it comes to deciding whether it is a financial issue; I shall leave those two to have that argument. However, I will pick up on the second issue. The Minister painted a genuinely exciting picture of all this wonderful investment that will happen across the country—I am not being ironic—and I agree that there needs to be a response to what we have seen this year, and it needs to be comprehensive, co-ordinated and well organised. This cuts to the point made by the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Adonis: without working with the devolved authorities, the efficiency and the effectiveness of any investment are massively undermined. Leaving aside the devolution issue for now, the efficiency issue raised by the noble and learned Lord, Lord Thomas, is absolutely called into question here. The measures from the noble and learned Lord in Motion K1 bring the devolved authorities back into this process. It recognises the importance of the devolved settlement, as set out by the noble Lord, Lord Adonis, and makes sure that this investment, which will be so important to the future prosperity of this country—if indeed there is enough of it and it is delivered properly—can be made efficiently and in keeping with the needs of the people of that particular country.
As someone who comes from Herefordshire, which is a far-flung part of England, I wish that we had similar regional structures in England, whereby the same level of consultation that should be coming through this amendment could also be offered to the regions of England. While some parts of England have unitary mayors and some parts have negotiations directly with Government, places such as Herefordshire that are in as much need as some of the worst-affected places across the United Kingdom, do not have the benefit of that access. This is not the place, but going forward, I ask that when these proposals are brought, an approach towards the English regions that the Government have towards the devolved authorities would be appreciated.
With that, we look forward to supporting the noble and learned Lord, Lord Thomas, when he presses this.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, I thank the Minister for her clear and concise introduction to this topic. Although she said she was relying primarily on the Commons argument that this issue engages financial privilege, she recognised there were other issues going on, and it was good of her to take the argument a bit further. We are, as the noble Lord, Lord Fox, has also said, completely cognisant of the restrictions placed on the House due to financial privilege being engaged. The noble and learned Lord, Lord Thomas, made a compelling case about the wider issues, and it is important to have those on the record. I will add to the list of points he made.
The Government clearly assert—and we believe them —that these will be additional to existing powers, and we should not be concerned, as we have been, that the devolved Administrations will have their responsibilities and authority challenged in this way. The Minister said that the driving force behind the shared prosperity fund is to add and complement existing arrangements. If she wishes to repeat it when she winds up, that would be helpful. In that sense, there should be no need for the concern that is currently in the devolved Administrations about that particular aspect of it. We do not have the detail, and I think she said the likely outcome for their consultation would not be before spring 2021, which seems a long way away in terms of what we are doing. We accept that existing programmes are currently running out—but they are running out; they are not being continued at the same level and, therefore, there will be a shortfall unless the Government are prepared to move a bit faster than the current timescale suggests.
The Minister also confirmed—and this is good news —that there will be engagement with the devolved Administrations. When she responds, perhaps she could explain a bit more about what that means. We have already heard from the Government today about programmes of engagement that have involved substantial change in previous views; it would be good to hear that language repeated when she talks about how the devolved Administrations might be engaged with this process.
The Minister has confirmed there will be some form of shared prosperity fund board, which is interesting. She may recall that at the previous stage of this Bill, we proposed a shared prosperity commissioner. I said at the time, and I still think, that that was code for a board, because we were trying not to engage financial privilege. We have clearly failed in that. Can she confirm the board will be independent and say more about the powers that might be invested in that board? Can she also talk a bit more about whether the programme itself, when it is brought forward, will be subject to guidelines? Will those be published and discussed before they are invented? Will there be themes to it, as there have been in previous rounds of the regional structural funds? Will the funds be competitive and open to all countries to bid for? Can she confirm, most importantly, that the plan will be for the funds under the shared prosperity fund to be separate from any Barnett formula calculations? That is not in the sense of making people not eligible for funding—that is not what we are about here—but a needs-based or different set of indicators to set out the ideas under which the shared prosperity fund will operate. I look forward to hearing her response.
Baroness Penn (Con)
My Lords, I thank noble Lords for this short but very useful debate. I think it might be useful to take the points of the noble and learned Lord, Lord Thomas, in turn. On the first point on financial privilege, I think the noble Lord, Lord Fox, was wise to stay out of that one. All I can say to this House is that the decision on financial privilege is made by the Speaker on advice from the clerks. It is the only reason, when invoked, that can be given. Though I have spoken to others, that is the process in the other place.
On the second point on the consultation of, and consent from, the devolved Administrations on spending on these matters, I have said before, and will again, since the noble Lord, Lord Stevenson, asked me to reiterate, that this is about an additional programme of spending to support the work of the devolved Administrations but also about taking a strategic look across the whole of the UK. It is important to remember that the main fund we are talking about, when it comes to the use of this power and the shared prosperity fund, replaces EU structural funds that were determined at an EU level for the needs of many different nation states. They were determined at an EU level and, while they may have been managed and delivered at a local level, the structure, framework and principles that people had to deliver were decided at an EU level.
The third point was about a principled basis for the funding. The Government set out, at the spending review, the heads of terms for the shared prosperity fund. Those have begun to outline how the shared prosperity fund will work. A portion of the SPF will target the places most in need across the country, such as ex-industrial areas, deprived towns and rural and coastal communities.
The Deputy Speaker (Lord Russell of Liverpool) (CB)
I have received a request to ask a short question of elucidation from the noble Lord, Lord Fox.
Lord Fox (LD)
The Minister will be aware that the current structural fund does not reach many regions across the United Kingdom, compared, I think, to the planned extent of the new shared prosperity fund. Can the Minister confirm whether that is true? If it is, and the money put into the shared prosperity fund is only—I use the word advisedly—as much as that put into the structural fund, it will be spread more widely. There will be losers among those who have been able to take advantage of the structural fund, because the money they would bid for will be spread to other regions and countries. Will the Minister acknowledge that? Is that perhaps one reason that the Government are rather reluctant to allow the devolved authorities any more involvement in this, because they know there will be issues around losing out on money that would have come through the structural fund but is now to be spread more widely across the United Kingdom?
Baroness Penn (Con)
My Lords, the Government made a number of commitments on the shared prosperity fund in the manifesto, both about the overall quantum of the fund and the funding that different parts of the UK can expect to receive. We set out in the spending review that that would ramp up to £1.5 billion per year as the structural funds tail off. Our approach will be guided by that but, as I say, more detail will be set out in advance of the operation of the fund in spring next year, with the multiyear settlement coming in the following year.
Lord Thomas of Cwmgiedd (CB) [V]
I thank all noble Lords who have spoken in this short but interesting debate. I will deal with the Minister’s points in turn.
First, it seems clear that these powers—the Minister actually said this in Committee—were being taken to give the UK Government power to spend across the United Kingdom. These powers would plainly not be needed unless they were encroaching on devolved powers. City deals can be done without them; the Government can spend without them. I say respectfully to the Minister and to those who say this is a financial matter that it is not. When powers are devolved, the spending power goes with them. The reason of financial privilege is not correct.
Secondly, on how the funding works, I find it difficult to understand why, in light of what the Minister has said, she cannot agree to the very short amendment I have put forward. It spells out the principles, deals with consultation and ensures that, within the areas of devolved spending only—the amendment is clear on this—there should be agreement so that funds are spent together. With respect, the importance of this amendment is to show that, as we go forward, we do so as a United Kingdom with the central UK Government and the devolved Governments working closely together. Putting this provision in the Bill, particularly the structure under which this is to be done in this area, would be an enormous reassurance. It would strengthen the union, not imperil it, by enabling inconsistent spending to occur in devolved areas. Having listened to the debate and heard what all noble Lords have said, I seek to take the opinion of the House on this issue.
Lord Callanan
That this House do not insist on its Amendments 50, 57 and 61 to which the Commons have disagreed for their Reasons 50A and 57A, but do propose Amendment 50B in lieu—
Commons Reasons
“40A Duty to review arrangements for carrying out Part 4 functions
(1) The Secretary of State must, within the permitted period—
(a) carry out a review of the appropriateness, for the purpose of securing the most effective and efficient performance of the Part 4 functions, of—
(i) the provision made by section 30(1) and the amendments made by Schedule 3, and
(ii) any arrangements made under or in connection with that provision and those amendments;
(b) prepare a report of the review (see subsection (4) for specific requirements relating to the report), and
(c) lay a copy of the report before Parliament, the Scottish Parliament, Senedd Cymru and the Northern Ireland Assembly.
(2) The review must, among other things, assess—
(a) the way in which Part 4 functions have been carried out by the CMA through Office for the Internal Market task groups authorised under section 30(1), and
(b) any advantages or disadvantages of continuing with—
(i) the provision made by section 30 and the amendments made by Schedule 3, and
(ii) the arrangements made under or in connection with that provision or those amendments,
as compared with other possible ways of providing for the Part 4 functions to be carried out (including possible arrangements not involving the CMA).
(3) In carrying out the review the Secretary of State must consult the other relevant national authorities.
(4) Before finalising the report required by subsection (1)(b) the Secretary of State must—
(a) send a draft of the proposed report to each of the other relevant national authorities, inviting the authority to make representations as to the content of the proposed report within a period specified by the Secretary of State, and
(b) consider any representations duly made in response to that invitation and determine whether to alter the report in the light of that consideration.
(5) The Secretary of State need not consult the devolved authorities further if the draft is altered as mentioned in subsection (4)(b) (but is free to do so if the Secretary of State thinks fit).
(6) The permitted period for the review is the period beginning with the third anniversary of the day on which section 30 comes into force (or first comes into force to any extent) and ending with the fifth anniversary.
(7) In this section “Part 4 functions” means functions of the CMA under this Part.”
Lord Callanan (Con)
My Lords, I now turn to the amendments on the office for the internal market and the subsidy control grouping.
First, I want to emphasise that Part 4 establishes the office for the internal market within the Competition and Markets Authority, which is, in our view, a natural home for the OIM, given its existing technical expertise that is highly relevant to the operation of the UK internal market. But, as I have set out, the office for the internal market will be independently governed within the CMA, and Schedule 3 sets out a carefully balanced set of governance arrangements which guarantee that independence and ensure a meaningful role for the devolved Administrations through the appointments process to the OIM panel. This gives the devolved Administrations a proper voice, while guaranteeing that the OIM can operate without delay or obstruction if four-nation consensus cannot be reached on appointments.
The Government have listened carefully to the discussions in this House and have acted, tabling a number of pragmatic and constructive amendments throughout Part 4. These make it clear that the OIM will work in the interests of consumers and ensure that it will operate in the interests of all parts of the United Kingdom and on an equal basis towards the four UK Administrations. This is further to the significant change put forward previously, requiring the Secretary of State to seek consent from all Administrations within a one-month timeframe, based on proposals developed originally by the Welsh Government. This change provides yet another enhancement for the devolved Administrations in the appointment process, which, as I have explained, fully reflects the even-handed approach to governance that runs throughout Schedule 3.
I hope your Lordships can appreciate that the Government have listened and moved accordingly. However, I cannot support your Lordships’ Amendments 57 and 61, which go further than this, requiring direct devolved Administration appointments to the CMA board. As already set out here and in the other place, it is the OIM panel that will undertake the work of the OIM. The CMA board is responsible for the operations of the organisation as a whole, which otherwise fall wholly within reserved competence. It is therefore not appropriate for the devolved Administrations to make appointments to the CMA board, as those board members would, in consequence, be involved in a range of reserved matters with no relation to the OIM functions set out in Part 4.
With regard to Amendment 50, your Lordships will be aware that this has invoked a financial privilege claim and has not been agreed to by the other place. Although this of course is sufficient in itself, I will remind your Lordships’ House that there is a consultation forthcoming on this matter of subsidy control. It would be premature and unjustified to agree to confer specific regulatory functions on the OIM in respect of subsidies before the wider details of any legislative UK domestic subsidy control regime—including the appropriate mechanism for oversight and enforcement—have even been developed and brought before Parliament, let alone agreed.
However, I have listened to concerns regarding the decision to have the CMA perform these duties, and I am pleased to announce that the Government have tabled Amendment 50B, which will require the Secretary of State to review, after between three and five years and in close consultation with the devolved Administrations, the appropriateness of, effectiveness of and potential alternatives to the CMA carrying out its Part 4 functions. This will allow Ministers from all Administrations to closely consider the CMA’s performance and the pros and cons of continuing with the CMA as the delivery vehicle for the Part 4 functions. This proposal makes it clear that the Government are committed to ensuring due diligence on the CMA’s new functions and facilitating further scrutiny by all Administrations.
This amendment requires the devolved Administrations to be consulted as the review is carried out—but it goes further, giving the Administrations the right to consider and make representations on the draft report itself, and requiring the Government to fully consider those views. Subsection (5) rules out an unlimited obligation to consider repeated rounds of representations that could block the review, but I want to be clear that the Government will consider all views offered in good faith. I note for the benefit of noble Lords that this final point applies equally to Clause 50—to which I will now turn—which reserves to the UK Parliament the exclusive ability to legislate for a UK-wide subsidy control regime in future.
I was pleased to note in the debate on Report that many noble Lords did in fact recognise the importance of maintaining a consistent approach in what is a nationally significant area of economic policy. In addition, I welcome the devolved Administrations’ support for the principle of a unified approach to subsidy control throughout the United Kingdom. For these reasons, the Government believe it is right that we retain the provisions for the reservation of subsidy control in the Bill.
Now we have left the EU, it is important that we continue to take a coherent approach to the system that governs how public authorities subsidise business across the UK. I reiterate that this reservation is not about sources of funding or who makes decisions on individual subsidies across the UK. This reservation will ensure that any future system we put in place to regulate against the distortive or harmful effects of spending on subsidies then applies to the whole of the UK.
A unified approach to that overall framework will reduce uncertainty for UK businesses and prevent additional costs to supply chains and consumers. As such, continuing our UK-wide approach to subsidy control and confirming it in law remains the best way to ensure that we continue to take a consistent approach to regulating the harmful effects of subsidies across the United Kingdom.
To be clear, all UK public authorities are and will remain responsible for their own spending decisions on subsidies—how much, to whom and for what—within any overall subsidy control regime. This reservation is not seeking to change public authorities’ responsibilities for spending decisions. However, the wider rules which they operate should continue to be consistent across the United Kingdom.
I acknowledge the concerns that some of your Lordships have raised in previous debates regarding the principle of reserving a policy area in advance of the forthcoming consultation the Government have committed to publish. However, this reservation is a necessary step to ensure that, if a legislative regime were introduced, it would apply then to the whole of the UK. Given that this is a national issue, the future subsidy control mechanism should be the responsibility of the UK Parliament to determine.
Baroness Finlay of Llandaff
Leave out from “House” to end and insert “do not insist on its Amendment 50 to which the Commons have disagreed for their Reason 50A but do propose Amendment 50B in lieu, and do insist on its Amendments 57 and 61 to which the Commons have disagreed for their Reason 57A”
Baroness Finlay of Llandaff (CB) [V]
My Lords, I will speak to Motion L1 as an amendment to the Motion L. We now come to the vexed issue of oversight through the Office for the Internal Market. I preface my remarks by making it clear that these amendments relate to the risk as to whether the union is strengthened or weakened. They are concerned with the fundamental constitutional question of parity of esteem across, and long-term future of, the United Kingdom.
I recognise that the Government have thought and listened, and I appreciate that there is now a consultation and that they have modified their views. At the helpful Cabinet meeting today, hosted by the noble Lord, Lord True, the Government discussed the JMCEN, stressing the importance of an independent secretariat to the IGR to avoid disputes and ensure transparency. The importance of a strong, prosperous and thriving union was stressed, with emphasis on the importance of getting right the structures and the cultures within them. To lock in those cultures, the devolved Administrations wish to have a seat at the Competition and Markets Authority board. At Report, the Minister asserted that
“OIM appointees should reflect a range of expertise from all parts of the United Kingdom.”—[Official Report, 23/11/20; col. 102.]
The amendment that we inserted in the Bill and which I seek to reinstate would ensure that the CMA’s annual plans, proposals and performance reports are laid before the devolved legislatures, as well as Parliament, ensuring equal scrutiny and oversight of these developments. This would allow them to be discussed between Ministers from all Administrations.
It is the desire of the devolved Administrations to have their voice heard. Perhaps I may quote the noble Lord, Lord Cormack, in his belief, which I echo, that the union is in peril. He urged Ministers to take that reality into account. Without representation, it reads as if the Government want to have a monopoly of power and control in the country.
In rejecting Amendment 50, which we passed after our debates, the Government have tabled their own amendment. Amendment 50B from the Government appears to recognise that the CMA may not be the appropriate place for the effective and efficient performance of the OIM and that they have agreed that it needs its Part 4 function subject to review. Their amendment requires a formal review of between three and five years and they will consult with the devolved Administrations over conducting the review—so far, so good. But then the sting: the amendment from the Government allows the devolved Administrations to see the draft and comment on it, but only once. There is no need whatever for the Government to pay any attention to what they say. To quote from the amendment:
“The Secretary State need not consult the devolved authorities further if the draft is altered as mentioned in subsection (4)(b) (but is free to do so if the Secretary of State thinks fit).
That makes a mockery of seeking views. The Secretary of State can put the views of the devolved Administrations into the shredder. In disbelief, I called the Bill team to check whether I had understood correctly.
If the Government want this House to accept that Amendments 57 and 61 are not reinstated in the Bill, and to accept the Government’s proposal, we must hear from the them today a clearer commitment that the devolved Administrations will be respected as equals; that their views, at review, will be taken into account; and that they, the Government, will ensure that the finalised report represents all views, which may include a minority view within such a report.
I will repeat the words we heard from the noble Lord, Lord True, in the meeting today, because they are so important. He said that the Government were committed to a strong and thriving union. If that is the Government’s view, they must prove it by clear words today that determine future actions.
The Senedd does not believe that. Members voted today by 36 votes to 15 to deny legislative consent to the Bill, given the reversal of the Lords amendments in the Commons. While accepting that Amendment 50B replaces the deleted Amendment 50, and not wishing to reinstate the deleted amendment, I reserve the right to seek the opinion of the House on Motion L1, reinstating Amendments 57 and 61, if I do not have further adequate assurances from the Government. I beg to move.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
I now call the noble Lord, Lord Thomas of Cwmgiedd, to speak to, but not at this point move, Motion L2.
Lord Thomas of Cwmgiedd (CB) [V]
I am grateful to the Minister for the opportunity to discuss this clause with him. I hope that there is a basis on which we can move forward to agree this. I will explain the purpose of the amendment in five short reasons. First, it has always been the position that there must be a competition regime that must apply to the whole of the UK. The issue is how we get there in a way that preserves and strengthens the union.
The position at the moment is that there is no agreed new competition policy. We will be operating, subject to anything that may be agreed with the EU, under the WTO regime, which devolved Governments are bound to apply under the existing devolution settlements. There is therefore time to set about this constructively. It is clear that, in devising a competition regime for the control of subsidies, a lot of things need to be ironed out. What is the role of the CMA to be? Is it to be an independent adjudicator or merely advisory? If so, whom does it advise? What does control over subsidies mean? These issues need to be examined carefully.
There are two ways forward. Way one—what I would call the UK Government’s way—is, first, to change the devolution settlements. This is a change to the devolution settlements because they operate on the basis that, if a power is not reserved, it is devolved—and there is no reservation in respect of this matter. It is therefore plainly devolved, and the purpose of this amendment is to change the devolution settlement. Having changed the settlement for a policy that they have not yet devised, the Government then wish simply to consult—and I am grateful for the clauses that affirm that they will at least do that—and then announce their decision. That is what I would call “way one”—the UK Government way.
But there is a better way, which is to do it by agreement but with a backstop. I think that there are good prospects of agreement. The Welsh Government offered unequivocally, in a letter sent on 24 November—the day before the Report stage of the Bill—to try to agree a common framework, but what I do not think many have appreciated the significance of is that the Scottish Government committed themselves to joining in that. I am not sure the extent to which that might have been appreciated at the highest levels of government, but if we simply reject this offer by the Scottish Government, that will, in my view, have very serious consequences.
Therefore, the amendment seeks to build on the progress that we have been able to make and to provide that an attempt should be made to agree a common framework—which is a regime that can govern the control of subsidies. However, if one is not agreed in the specified period of time—I have suggested three years—this clause would then take effect. If there is a view that that period is too long, obviously that is a matter that can be discussed.
The vital question is that the amendment, I respectfully urge, would allow for a further strengthening of the union, with an agreed way forward and the UK Government and the devolved Governments working together to achieve a regime applicable across the UK under the mechanism of consensus through a common framework. This would achieve what the Government want by consensus, not simply consultation. To reject the amendment and restore Clause 50 would be to impose unilaterally a change in the devolution settlement by reserving a power that is not reserved. This would be a gratuitous present to those who say that the union does not work.
There is an offer to work together from the Scottish and Welsh Governments. This House should not allow the Government simply to reject a consensual solution, as there is a time limit for that consensual process. In due course, I will move my Motion and seek t test the opinion of the House.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
My Lords, the following noble Lords have indicated that they wish to speak: the noble Baronesses, Lady Bowles of Berkhamsted and Lady Neville-Rolfe, and the noble Lord, Lord Liddle. I call the noble Baroness, Lady Bowles.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, I speak in favour of Motion L2 in the context of having been the mover of the original Amendment 50, which was rejected as involving a charge on public funds, despite my budget reference endeavours.
I broadly welcome the Government’s Amendment 50B in lieu. It picks up the final point of my Amendment 50 regarding a review. The review also specifically includes the concern underlying the first part of Amendment 50 around the location of the OIM by requiring an assessment of the advantages and disadvantages of continuing with the provision of Part 4 functions via the CMA, compared with alternatives, including possible arrangements not involving the CMA.
I also welcome the fact that the relevant national authorities are to be specified as consultees at the stage of both review and draft report, but I hope that it will also be fulsome at the finalising stage as well as the draft stage.
Both in Committee and on Report, concerns about the CMA culture and the enforcement provisions were brought forward by myself and other noble Lords. It would be good for the OIM and the CMA to know that they will be watched and that these issues will be among those which are checked when it comes to the review and the report. I thank the Minister for the various amendments and assurances about the OIM, and in particular I note and thank him for the reassurances made regarding the penalties relating to information gathering, including proportionality, consultation with the devolved Administrations, and that
“these penalty powers in Part 4 will not be commenced unless there is a clear and credible need for them”—[Official Report, 25/11/20; col. 259.]
or unless
“there is evidence that they are called for, and even then they will not be used except as a last resort,.”—[Official Report, 25/11/20; col. 270.]
There are further quotations like these.
A review clause is often seen as a weak compromise, but here it serves an important function in the context of new regulatory powers and as a vehicle for monitoring and checking the concerns raised in Parliament and the assurances given.
Baroness Neville-Rolfe (Con)
My Lords, I share the feeling of the noble Baroness, Lady Finlay of Llandaff, and the noble and learned Lord, Lord Thomas of Cwmgiedd, that the Government have come a long way on this Bill, and I thank my noble friend the Minister for that. Noble Lords will recall that I had reservations about locating the Office for the Internal Market within the Competition and Markets Authority. I believe that it is the wrong place with the wrong culture, a point just echoed by noble Baroness, Lady Bowles. There is a practice of aggressive enforcement that is hardly suitable to some of the sensitive issues that it will be asked to investigate. I am concerned in particular that small businesses in those sectors that are not lucky enough to be excluded will be fearful and suffer relative to the way they are being treated at present in the EU single market. A formal discrimination is now being introduced between services that are in and those which are not included within Schedule 2. I therefore very much welcome the review being proposed in the government amendment. It is an idea that featured in an earlier amendment to which I added my name.
However, I have a question on the wording. Could that review look not only at the track record of the OIM panel and its task groups, which are mentioned in Clause 30, and its constitution as set out in Schedule 3, but also at the location of the OIM itself and whether it should be within the CMA or somewhere else? I ask this obviously without commitment, but it would certainly be helpful to know that the review would be suitably wide-ranging.
I rise also to express doubts about Motions L1 and L2. Many of us have been clear in the endless debates on this Bill that we should avoid a situation where a particular nation can veto important new measures that are in the national interest. The Government have, of course, wisely conceded that the devolved Administrations should be included as a statutory consultee and, of course, the views of all the four nations will be properly taken into account in that process. But I agree with my noble friend the Minister that we should not accept Amendment 50C. It risks a delay of up to three years in implementing a UK subsidy control regime because of the need for agreement with the devolved Administrations. The existing arrangements for spending decisions on subsidies under the devolved settlements will continue, so I strongly support the Government on this matter.
Lord Liddle (Lab)
My Lords, I make a brief intervention in the hope that the Government will listen to the wise words of the noble Baroness, Lady Finlay of Llandaff, and the particularly wise words of the noble and learned Lord, Lord Thomas of Cwmgiedd. We are at a delicate moment in our constitutional history. The future of the United Kingdom, with Brexit, is now in doubt. This will be the great issue of the next two years: can we keep the United Kingdom together? In that context, these are detailed matters, but the UK Government should go out of their way to ensure that those who want to break up the United Kingdom are not given just cause. I think that elements of the Bill and the Government’s position on it will be used in this way.
First, in the argumentation, I recognise that the Government have tried to strengthen consultation with the devolved Administrations in the amendments that they have put forward. So well done to the noble Lord, Lord Callanan, on that—we are to be thankful for that. But the line that state aid is a reserved UK matter and the devolved Administrations have never had any power over it will not go down well in Scotland, Wales and Northern Ireland. Wales and Scotland have had their development agencies. To tell the Welsh and Scottish people that these bodies have had no rights or independence to make decisions that promote economic development in their nations is very odd. To them, it looks as though the Government are taking away powers that they presently have. That is how it looks. The noble Lord shakes his head but, honestly, it is how it looks. Therefore, I think the Government should be bending over backwards to carry the nations of our United Kingdom with them.
I cannot understand the reasoning behind rejecting the proposal that has come from both Cardiff and Edinburgh to see if we can sort out, by consensus, a regime of state aid through a common framework. I do not understand how the Government can arrogantly say that this is something that we must control ourselves. It seems that the consensus for the future of the United Kingdom is much the best way forward.
The same applies to the argument about appointments to the body that is going to administer the new regime. The devolved nations should be treated as equals in this process. They should be able to nominate their own people to this body, not just be consulted. That is on the principle of equality between the nations and not appropriating to the UK Government, who, in my part of England, northern England, are seen as a London Government. That is how people look at it; it is not seen as a United Kingdom Government. I am sure that in Edinburgh and Cardiff it is not seen as a UK Government, particularly because of the Prime Minister we have. We have to bend over backwards to bring the nation together. Here is an opportunity, and I am very sorry that the Government appear to be wasting it.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
Does any other noble Lord in the Chamber wish to speak? No noble Lord does, so I call the noble Lord, Lord Fox.
Lord Fox (LD)
My Lords, as the Minister set out, this group relates to state aid, the Competition and Markets Authority and the office for the internal market. At Report, your Lordships removed a clause that changed the devolution statutes to specify that state aid powers are a matter exclusively for the UK Government. This was overturned in the Commons. Notwithstanding that, the Government have come back with the proposals set out by the Minister, which are welcome. My noble friend Lady Bowles set out where they have come from and should be congratulated for her work on this Bill.
Notwithstanding that, the noble Baroness, Lady Finlay, has tabled Motion L1, which would enable the devolved Administrations to appoint people to the CMA board. The Minister has stressed that the OIM, while being within the CMA, will be independently governed. One of the reasons for not allowing previous amendments was a financial rule. This indicates clearly that the CMA will be holding the OIM’s purse strings. In that respect, culture is one thing, but budget is something completely different. We have heard from the noble Baroness, Lady Neville-Rolfe, and from my noble friend Lady Bowles, and as I have said, we remain extremely concerned about the culture and role of the OIM. The Minister again stressed the technical expertise in the CMA, but the OIM is being asked to do something that is essentially different from the CMA. Frankly, this technical expertise, if deployed in the way the Minister hopes, is the problem we are warning the Government about. That accepted, one of the small ways of dealing with this issue is to support the amendment from the noble Baroness, Lady Finlay, and to make sure that there is at least some board-level representation from the devolved authorities.
Motion L2, from the noble and learned Lord, Lord Thomas, would insert a new provision relating to Clause 50, on state aid. As the Minister has acknowledged, it would create a common framework process whereby state aid is managed.
The noble Lord, Lord Liddle, and others have talked about the message all this sends to the devolved authorities, at a time of great fragility and change. To set this up in this way sends a bad and dangerous message to the devolved authorities. The noble and learned Lord, Lord Thomas, set out a reasonable response—a reasonable way of involving the devolved authorities centrally in the process of delivering the structures and frameworks for, and areas of, state aid. To simply consult with the devolved authorities on draft and not go back on the final decision is a little derisory, to say the least. The Government need to understand the message they are sending—a message clearly articulated in the Senedd vote today.
We are pleased that the noble and learned Lord, Lord Thomas, is going to test the mood of the House regarding his Motion, and we will support it when he does.
Lord Stevenson of Balmacara (Lab) [V]
My Lords, this has been an interesting debate, covering a wide range of issues previously discussed in Committee and on Report. I will not go through them in detail but I will say three important things. First, I welcome the Government’s movement on the matters raised in the Minister’s opening address on the OIM: its membership, the review within three to five years of the potential location of the OIM, and the firm commitment to ensuring that the DAs are consulted and their views fed in to this report. That was not as much as we wanted, but it is certainly a positive step forward that we welcome at this stage.
Lord Callanan (Con)
My Lords, I thank all noble Lords who have contributed to what was another short but powerful debate. I have listened carefully to the points that have been made. I will set out in my closing remarks why I cannot support Amendments 51, 57 and 61 in the name of the noble Baroness, Lady Finlay. Turning first to the OIM, I emphasise that the Government have listened and responded directly to points made in this House. This is reflected in the meaningful changes made throughout Part 4. They include putting beyond doubt that the OIM will work in the interests of consumers, and making it clear that its functions will be available to the benefit of all parts of the UK, and for all Administrations, on an equal basis.
The Government have recognised the need for the devolved Administrations to be closely involved in OIM panel appointments. That is why the proposal for a one-month consent requirement on OIM panel appointments with the devolved Administrations is being introduced, providing them with an enhanced role in the process. This amendment originated with the Welsh Government.
Finally, the Government have tabled an amendment that will require a review and a report between three and five years after the CMA takes on the Part 4 functions. This will examine the way in which the CMA has carried out these functions, and the devolved Administrations will be closely involved throughout. The review and the report will provide the necessary assurances that the operation of the OIM within the CMA will be closely scrutinised, providing enhanced transparency and accountability to all four UK Administrations.
I will reply to the point made by the noble Baroness, Lady Finlay: in seeking to go further than a normal requirement to consult the devolved Administrations on the review of the OIM, the Government have included an additional and explicit requirement to share and allow for representations on the resulting draft report. As I have said, providing that the Government are not required to follow this operation an unlimited number of times is simply intended to prevent a procedural impossibility if no consensus is reached. I am happy to say again that all views offered in good faith will be considered by the Government in preparing their report, as required in the proposed clause. The amendment makes clear that the Government have the option of sharing as many drafts and considering as many rounds of representations as are appropriate and feasible in the circumstances.
I am happy to assure my noble friend Lady Neville-Rolfe that these proposed reviews would assess the pros and cons of the CMA as the delivery vehicle of the OIM, including whether possible arrangements not involving the CMA could carry out the Part 4 functions in the future.
I turn to the knotty issue of subsidy control. The purpose of this reservation is to provide stability and continuity as we move forward in forging a new UK-wide subsidy control regime. This Bill continues the UK-wide approach to subsidy control and confirms this in law. State aid has never been a devolved issue, as I have said on a number of occasions, and this reservation will ensure that we can continue to take a uniform approach to subsidy control across the UK. I reiterate that, in practice, nothing will change for the devolved Administrations. All UK public bodies, including the devolved Administrations and in the areas that the noble Lord, Lord Liddle, highlighted, will still have responsibility for spending decisions on subsidies and should make these in a way that is consistent with the overall approach taken across the United Kingdom.
In the coming months, we intend to publish a consultation on whether we should go further than our World Trade Organization and international commitments, including whether further legislation is necessary. We will take the necessary time to listen closely to the devolved Administrations and design a system that promotes a competitive and dynamic economy throughout the whole of the United Kingdom.
The proposed amendment makes clear that the UK Government are committed to involving the devolved Administrations in the forthcoming development of proposals for a UK-wide subsidy control regime. We recognise the importance of working constructively and co-operatively in this policy area, and it is in all our interests that a new regime works to the benefit of the whole country. That is why the Government cannot agree with Amendments 50C, 51, 57 and 61, so I urge noble Lords to accept Amendments 50B and 51B put forward in my name and reject the others.
Baroness Finlay of Llandaff (CB) [V]
My Lords, I am most grateful to the Minister for providing me with the additional reassurance that I was seeking, that they will share and allow representation and that the hold-up would only be to prevent procedural deadlock in the review of the OIM panel within the CMA. In light of those assurances and the tone of wanting to work with the devolved Administrations in relation to the issue of the CMA, I will withdraw my amendment.
Lord Thomas of Cwmgiedd
Leave out “Amendment 50B” and insert “Amendments 50B and 50C—
“(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, three years after the passing of this Act.””
Lord Thomas of Cwmgiedd (CB) [V]
My Lords, I am very grateful to all who have taken part in this very interesting and difficult debate. The points may seem obtuse, in that they concern state subsidies, but there are very real issues of principle involved. In the first place, it is quite clear, as the noble and learned Lord, Lord Hope of Craighead, pointed out earlier in this debate, that the state subsidies are devolved. For example, Schedule 5, Part III, paragraph 4(1) of the Scotland Act says:
“This Schedule does not reserve giving financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment.”
When one then looks at the amendment that is brought in by Clause 50, it speaks of:
“Regulation of the provision of subsidies which are or may be distortive or harmful … to persons supplying goods or services.”
There can obviously therefore be an argument, as any subsidy may be distortive, that the whole of the power is subsumed in what the Government are seeking to do through their Amendment 50.
Where we have got to is an almost Alice in Wonderland situation: they want to change the devolution settlement first, in this way, which cuts right across agreed provisions, quite apart from the general reservation, and then work out the policy second. Surely, the better way to do this is to work out the policy first, and to do it in consultation with the devolved Governments. The amendment I have put forward gives a way of doing that and, most importantly of all, apart from these technical issues, to take away power—express power in the devolution agreements—because all these powers are not reserved. The Government would not need this change. Not having a clear idea that you can explain and work out how this works with the devolution settlement in my view is a gift to those who say, “The union will not work. We offered to co-operate and they won’t”. I therefore want to test the opinion of the House on this amendment, which is a compromise to try to secure the future of our union, in which so many of us have such faith.
Lord Callanan
Moved by
That this House do not insist on its Amendment 51 to which the Commons have disagreed for their Reason 51A, but do propose the following amendment in lieu—
Commons Reason
United Kingdom Internal Market Bill
Thursday 10th December 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Message as at 10 December 2020 - (10 Dec 2020)
14:33 - The House divided: - Ayes: 356 / Noes: 259 - Question accordingly agreed to.
14:45 - The House divided: - Ayes: 357 / Noes: 259 - Question accordingly agreed to.
14:59 - The House divided: - Ayes: 358 / Noes: 260 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
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)
I beg to move,
That this House disagrees with the Lords in their amendments 1B, 1C and 1D.
Madam Deputy Speaker (Dame Rosie Winterton)
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
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)
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
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)
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
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)
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)
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.
Edward Miliband
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
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)
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.
Drew Hendry
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)
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 Robert Neill
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)
I will call Mr Scully to close the debate no later than 2.30 pm.
Wendy Chamberlain (North East Fife) (LD)
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)
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
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)
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)
To sit down no later than 2.30 pm, Mr Tim Farron.
Tim Farron (Westmorland and Lonsdale) (LD)
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)
A few references to “you” there, Mr Farron—you should know better.
Paul Scully
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
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
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)
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)
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.
United Kingdom Internal Market Bill
Monday 14th December 2020
(3 years, 11 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 158-I Marshalled list for consideration of Commons reasons and amendments - (11 Dec 2020)
15:51 - Division conducted remotely on Motion A1 - Ayes: 332 / Noes: 229 - Motion A1 agreed.
16:34 - Division conducted remotely on Motion B1 - Ayes: 302 / Noes: 254 - Motion B1 agreed.
18:34 - Division conducted remotely on Motion G1 - Ayes: 142 / Noes: 241 - Motion G1 disagreed.
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
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
The Minister of State, Cabinet Office (Lord True) (Con)
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
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]
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)
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)
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)
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]
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
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)
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
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]
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)
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)
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)
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)
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]
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)
Members taking part remotely have given their voices in support of this Motion, and I will take that into account.
Lord True
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)
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]
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)
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)
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)
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
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.”
Baroness Penn
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)
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
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]
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)
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)
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)
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)
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)
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)
Does anyone else in the Chamber wish to speak?
Lord Fox (LD)
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]
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)
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)
I call the noble Lord, Lord Adonis, to ask a short question for elucidation.
Lord Adonis (Lab)
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)
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]
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)
Is it your Lordships’ pleasure that Motion F1 be withdrawn?
The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)
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)
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)
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
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)
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
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]
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]
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]
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)
I have received a request to speak from the noble Lord, Lord Adonis.
Lord Adonis (Lab)
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)
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]
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)
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]
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
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)
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.
United Kingdom Internal Market Bill
Tuesday 15th December 2020
(3 years, 11 months ago)
Lords ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 159-I Marshalled list for consideration of Commons reason - (15 Dec 2020)
The Deputy Speaker (Baroness Pitkeathley) (Lab)
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
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
“(2A) The power under subsection (2) may, for example, be exercised to give effect to an agreement that—
(a) forms part of a common framework agreement, and
(b) provides that certain cases, matters, requirements or provision should be excluded from the application of the market access principles.
(2B) A “common framework agreement” is a consensus between a Minister of the Crown and one or more devolved administrations as to how devolved or transferred matters previously governed by EU law are to be regulated after IP completion day.
(2C) References in this section to devolved or transferred matters include reference to corresponding matters in England.
(2D) When determining whether a matter is a devolved or transferred matter for the purposes of this section, the following provisions are to be ignored—
(a) section 30A of the Scotland Act 1998;
(b) section 109A of the Government of Wales Act 2006;
(c) section 6A of the Northern Ireland Act 1998.
(2E) In making regulations under subsection (2), the Secretary of State must have regard to the importance of facilitating the access to the market within Great Britain of qualifying Northern Ireland goods.”
(7) In this section—
“devolved administrations” means—
(a) the Scottish Ministers,
(b) the Welsh Ministers, and
2 United Kingdom Internal Market Bill
(c) a Northern Ireland department;
“qualifying Northern Ireland goods” has the same meaning as in section 43.”
“(2A) The power under subsection (2) may, for example, be exercised to give effect to an agreement that—
(a) forms part of a common framework agreement, and
(b) provides that certain cases, matters, requirements or provision should be excluded from the application of this Part.
(2B) A “common framework agreement” is a consensus between a Minister of the Crown and one or more devolved administrations as to how devolved or transferred matters previously governed by EU law are to be regulated after IP completion day.
(2C) References in this section to devolved or transferred matters include reference to corresponding matters in England.
(2D) When determining whether a matter is a devolved or transferred matter for the purposes of this section, the following provisions are to be ignored—
(a) section 30A of the Scotland Act 1998;
(b) section 109A of the Government of Wales Act 2006;
(c) section 6A of the Northern Ireland Act 1998.”
“(7) In this section “devolved administrations” means—
(a) the Scottish Ministers,
(b) the Welsh Ministers, and
(c) a Northern Ireland department.”.
“(c) any interaction between the operation of those Parts and common framework agreements;
(d) the impact of common framework agreements on the operation and development of the internal market in the United Kingdom.”
““common framework agreements” has the meaning given by section 10;”.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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]
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)
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)
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)
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.
United Kingdom Internal Market Bill
Tuesday 15th December 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 159-I Marshalled list for consideration of Commons reason - (15 Dec 2020)
15:07 - The House divided: - Ayes: 362 / Noes: 262 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Rosie Winterton)
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)
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)
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
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)
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
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)
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
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)
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
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)
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)
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
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
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
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.
Lucy Powell
Yes, I will give way, if the hon. and learned Lady has something she wants to say.
Joanna Cherry
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
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.
Lucy Powell
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
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)
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
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)
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)
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)
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)
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
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
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)
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)
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)
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)
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
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
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
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
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
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.
Paul Scully
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)
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.
United Kingdom Internal Market Bill
Wednesday 16th December 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate United Kingdom Internal Market Act 2020 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Message as at 16 December 2020 - (16 Dec 2020)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
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)
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
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)
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
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)
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
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)
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
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
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
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
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)
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
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
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)
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)
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)
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
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
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
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
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
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
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
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
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.
Paul Scully
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.
Madam Deputy Speaker (Dame Rosie Winterton)
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)
We will suspend for three minutes, in order to allow safe exit and entry.
Royal Assent
Thursday 17th December 2020
(3 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 15 December 2020 (large print) (PDF) - (15 Dec 2020)
Lord Ashton of Hyde (Con)
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.