Lord Callanan

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That the Bill be now read a second time.

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

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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 Callanan

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That the Bill be now read a second time.

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

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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.

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

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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.

Lord Callanan (Con)

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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.

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

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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 Callanan (Con)

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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 Callanan (Con)

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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 Callanan (Con)

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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.

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

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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.

Lord True (Con)

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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.

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

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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.

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

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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.

Lord True (Con)

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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.

Lord True (Con)

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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 Callanan (Con)

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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.

Lord Callanan (Con)

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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.

Lord Callanan (Con)

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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.