United Kingdom Internal Market Bill

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Lords Chamber

Committee (2nd Day)

13:32

Relevant documents: 14th Report from the EU Select Committee, 24th and 26th Reports from the Delegated Powers Committee, 17th Report from the Constitution Committee

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

We come to the group beginning with Amendment 7. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in the group to a Division should make that clear in the debate.

Clause 2: The mutual recognition principle for goods

Amendment 7

Moved by

[Baroness Hayter of Kentish Town]

7: Clause 2, page 2, line 4, leave out “or imported into”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, my purpose in moving Amendment 7, which would exclude imported goods, is to emphasise, in rather stark terms perhaps, that the Bill goes considerably further than simply saying that goods made in one part of the UK must be able to be sold in any other part.

As written, it allows any good that one part chooses to import to be sold throughout the UK, with absolutely no say by the Governments or legislatures of the other three countries. So, if Northern Ireland, for any reason, permitted chlorinated chicken to be imported—although I am absolutely confident that it would not—those delightful carcases would automatically have the right to be sold elsewhere in the UK. Similarly, if Scotland accepted a very high salt content in crisps or we in Wales had too much sugar in our chocolate, or anything else like that, we would be able to import those things in any one country and they would automatically have the right to be sold elsewhere.

It could be something that we do not want for all sorts of reasons. For example, England might import something that perhaps does not damage particular producers, consumers or the environment within England but could affect farming, consumers or households elsewhere. With agriculture, we would well understand the problem with sheep farming—hill sheep farming in Wales being more affected. Certain things imported into England could have a more devastating effect somewhere else; nevertheless, once imported into one country, there would be an automatic right for a good to be sold across the kingdom.

When we were in the EU, of course, we had similar rules on what are called “goods on the market”, whereby goods guaranteed as safe, desirable or acceptable in one country could appear in the other 27 markets. However, the difference is that the EU has a system of mutual recognition of checks, standards, assurance and monitoring, as well as the safety alert system, which applies to all member states, so that each nation has confidence that, when something is imported and on the market in one country, it is equally acceptable in any of the other member countries.

It is not that we distrust any of the fellow Governments in the UK—even Mr Johnson’s—but the worry is the denial of the involvement of the other three nations in decisions on what to import by the fourth. Of course, that then impacts on what can be sold on that market, and that is the problem—the lack of that involvement. The noble Lord will understand that this is more of a probing amendment but I think that it needs justifying and some explanation of the risks in relation to imported goods.

Amendment 8, in the name of my noble friend Lord Rooker, who is of course something of an expert on the subject, is more targeted and would exclude food or animal feeding stuffs from the mutual recognition principle. Obviously, I will let him make the case, rather more effectively than I ever could, for himself, but I should say to the Minister that my noble friend’s amendment is absolutely on the button with regard to consumer worries, so he will need some rather robust arguments for that amendment not to be considered on Report. I beg to move.

[Lord Rooker (Lab) [V]]

My Lords, at this stage of the Bill, Amendment 8, like Amendment 7, is a probing amendment, but I should just like to comment as an aside on the reference in the amendment to the definition of “food”. Most of our discussion on food safety centres on the Food Standards Act 1999 and the Food Standards Agency, but the bedrock of food safety in the country is the Food Safety Act 1990. Thirty years on, that Act, introduced by a Conservative Government, has really stood the test of time. The change made in 1999 was to separate policy for protecting consumers from the department at the time—MAFF, the producer department.

I do not want to disappoint my noble friend but I shall deal only with animal feed issues. I took the view that there will be plenty of opportunities to raise food issues—of course, I reserve the right to come back to those—but I want to deal with some animal feed issues. There is no lobby and no brief on this; I am simply using my own experience on some aspects and have made a modest internet search for some numbers. It is a multi-billion pound business, and it is crucial for human and animal safety that it is regulated effectively. There are some matters relating to animals—we are talking about food animals—which are all-island matters and which I am not at all clear about, and the Bill does not make them clear.

Animal disease control is currently an all-island matter on the island of Ireland. I say that for obvious reasons, but does that remain the case under the Bill? That is a point that really needs bringing home. If you looked at the other aspect, particularly in Schedule 1, you would think that we in the UK were isolated. We are not. Northern Ireland is on the island of Ireland, and there are some issues—I will give some other examples—where all-island matters take priority.

Animal feed is an area worth looking at because, to be honest, it is not considered to be as important as food, although of course it is. I recall that when I was at the Food Standards Agency—this was under the then chief executive, Tim Smith, who of course is currently distinguishedly chairing the agriculture trade commission and others—discussions with Thompsons in Belfast, the largest feed mill in Europe, centred on a scheme for controlling animal feed imports into the island of Ireland. This was industry-led and was to be through very few ports indeed. Today Thompsons operates an animal feed joint venture with R&H Hall in the Republic via Origin Enterprises to provide grain and non-grain ingredients to animal feed manufacturers and the flour milling industry across the island of Ireland. I want to know how that is affected by Clause 2.

To give a sense of the importance and scale of livestock, it is much more important to the economies of Northern Ireland and Ireland than it is to the rest of the UK. I will give just one example. If we compare human populations with those of the four-legged food production animals, cattle, sheep and pigs—I have excluded horses, which people can get uncertain about; we slaughter horses for feed but we export them—in the UK the ratio is approximately 0.7 of an animal per person, but in Ireland it is 2.6 animals per person and in Northern Ireland the figure may even be 2.7. So one can see that livestock is much more important to the economies of the island of Ireland than it is to the rest of the UK.

Animal genetics are just as important on an all-island basis. For example, Elite Sires has been Ireland’s leading provider of high-quality pig semen for 30 years. It is the sole provider of DanBred cutting-edge swine genetics on the island of Ireland, based of course on Denmark’s remarkable success in pig production. It delivers what it says—because I could not argue between one sample of swine semen and another—is the best swine semen in the land all over Ireland at the time when the animals are ready. How is that affected by Clause 2?

I mentioned that the safety of feed is important. The Food Standards Agency and Food Standards Scotland are responsible for, and carry out, the function of official controls, to use the technical term, via local authorities. That is the case with most food safety issues as well. However, local authorities, particularly in England, have not in the main taken feed issues as seriously as food. The Food Standards Agency, being aware of that—I am speaking now specifically about England—has taken many steps to try to improve the situation, but the picture in its latest assessment is not a good one. I will give some short quotes from the executive summary of the latest audit for England of the way that local authorities look at animal feed, published as long ago as October 2016. Local authority service plans

“had not adequately taken into account the Agency’s National Enforcement Priorities … There had been only limited implementation of the scheme for earned recognition.”

There was “little evidence” that local authorities

“had reviewed the impact of earned recognition on the delivery of official controls”.

Local authorities were

“using an out of date version of the Association of Chief Trading Standards Officers … risk scoring system”.

Half the local authorities audited

“had incomplete feed registers and databases”,

which are absolutely fundamental to traceability. It said:

“Auditors were unable to assess the effectiveness of formal feed law enforcement actions as none had been carried out in the previous two years”.


Lastly, none of the English local authorities audited had

“any specific documented procedures for assessing the accuracy of official feed reports to the Agency”.

I have to say that if the Government want to check on this situation and there has been no significant improvement in the last few years, that function should probably be removed from English local authorities because they are not up to the job. It is fundamental to human and animal safety.

13:45

If Wales or Scotland—I do not know much about the transfer of feed from England to Scotland so I will not go into detail—wanted to give a wide berth to feed checked by some English local authorities that are failing, which would seem sensible, how could they do that under Clause 2? That is a fundamental question. There is evidence from the independent regulator that the system is failing but feed is a tradeable commodity that travels around the country, a bit like animals, so how can it be covered by Clause 2?

My final point relating to animal feed, because I want to be brief, concerns food waste. In some quarters there are calls for the return of pigswill as a means of using food waste. Given that one-third of what we grow is for food production animals and that too much of the other two-thirds is wasted, that is a very seductive argument for those who, like the Greens, think they are trying to save the planet. Pigswill was banned by the UK in 2001 and then in the EU in 2003 but it is still used in some other parts of the world; I know it is used in Japan in particular. Can the Minister confirm in due course that there are no plans to return to its use in the UK? There were rumours, when Michael —we will call him “Green”—Gove was at Defra, in his green mode, that he was giving the idea some thought. What is the WTO view on imports from nations that use pigswill to lower the cost of production?

It is self-evident why it was banned, although I will not go into the detail. We were feeding animal protein back to animals, and we discovered that that is not a very good thing to do. In terms of giving to animals what we might call food waste that humans have wasted, we have to be particularly careful, because it cost this country billions of pounds in 2001 to deal with the foot-and-mouth outbreak that was traced back to pigswill manufacturing. This is a fundamental issue and I want to know how it is going to be prevented from reoccurring if the operation of Clause 2 is left as it is. I will leave it there.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to follow the noble Baroness, Lady Hayter, and the noble Lord, Lord Rooker. I shall speak to my own amendments but I have a question following on from what they have both said which relates to an earlier debate, particularly when in summing up the noble and learned Lord, Lord Hope of Craighead, linked Clause 39 of the Agriculture Bill to the clause relating to the movement and mutual recognition of goods.

Clause 39 of the Agriculture Bill relates to marketing standards, and I have a specific question to put to my noble friend the Minister that I hope he will address head on in view of the remarks made by both the previous speakers. If, in the course of events in the new internal market arrangements under this Bill, the Food Standards Agency with responsibility for England came out with different provisions to Food Standards Scotland, and in the event that the latter adopted different rules for, especially, animal products, food and animal feed, how would that impact on the free movement of goods? Could it eventually mean that there was no longer any mutual recognition, and Scottish goods could not pass into England or other parts of the United Kingdom in those circumstances? Would the same apply if the Food Standards Agency in England produced different rules to other parts of the United Kingdom? It is extremely important that we understand those impacts.

I will now speak briefly to my Amendments 20, 22, 26 and 45. I am extremely grateful for the extensive briefing I have obtained from the Law Society of Scotland and for its drafting of these amendments, which are probing in nature but address some key issues. Amendment 20 is a probing amendment to seek the Government’s interpretation of Clause 4(2)(b). Clause 4 purports to mean that certain regulatory divergences that currently exist will continue to be able to be enforced against goods produced in or imported into other parts of the United Kingdom and would not be able to be so enforced were they introduced after the mutual recognition principle comes into force. However, the Law Society of Scotland has noticed that, in order for a statutory requirement in a part of the United Kingdom not to be a relevant requirement for the purposes of mutual recognition, the conditions in subsection (2) must be met.

There are two conditions in subsection (2), and my comments will relate specifically to subsection (2)(b), which provides:

“The conditions are that, on the relevant day … there was no corresponding requirement in force in each of the other three parts of the United Kingdom.”


What provisions do the Government imagine will be captured by the current terms of Clause 4? For example, food and feed law is mainly derived from EU law, and, in terms of the European Union (Withdrawal) Act 2018, this body of law is retained EU law, implemented throughout the UK. Are Scottish food and feed regulations, and, by implication, all retained EU law, excluded from the application of the mutual recognition principle because there are corresponding requirements implementing the same EU obligation, albeit in slightly different terms, to fit into the relevant law in each of the other parts of the United Kingdom? How does the mutual recognition principle relate to common frameworks? My Amendment 22 simply has a consequential effect, following on from the deletion of Clause 4(2)(b), making the necessary changes there.

Amendment 26 probes the meaning of Clause 5(3), regarding the effect of a statutory requirement under Clause 6. It appears that Clause 5(3) would render a statutory provision in devolved legislation “of no effect”. This lacks clarity. Am I right in thinking that the statutory requirement is valid? Is it valid but cannot be enforced? Is it voidable? It is also not clear regarding the application, if any, of Clause 5(3) if the statutory provision is in an Act of Parliament that applies to England only. I would be grateful if the Minister would take this opportunity to clarify this.

The amendment applies the statutory language that exists in Section 29 of the Scotland Act 1998 to Clause 5(3) in an effort to bring clarity to the point. Section 29(1) provides:

“An Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament.”


It is not the intention of this amendment to amend the Scotland Act 1998 but rather to say that that Act provides, in my view, much clearer language than the Bill. These statutory provisions could be challenged by private parties and will presumably also be a basis for challenging devolved legislation. Assuming the inability to modify the Bill under Clause 51, it will in all cases prohibit legislation that is contrary to its principles. Presumably that is the intention, but it is not the clearest way that that outcome could have been achieved, so I am grateful for this opportunity to seek clarification.

Finally, Amendment 45 is a probing amendment, looking to understand a phrase the Government have used: “substantive change”. What do they interpret as substantive change in connection with changes to statutory requirements? I am grateful for this opportunity to speak to these probing amendments.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, Amendment 21 in my name is effectively consequential on the changes I have already proposed to ensure that the market access principles are only applied once regulations have been brought forward, relating to a specific type of goods, when it has proved impossible to reach agreement through the common frameworks process.

The Bill proposes that legislation already in place at the time Part 1 of the Bill comes into force cannot be caught by the market access principles—at least where the restrictions imposed by that legislation are not ones that exist across the United Kingdom. This amendment would simply apply that same principle in the context of a process whereby the market access principles could only be switched on by regulations approved by both Houses, meaning that restrictions to the exercise of devolved powers would only be switched on in specific areas where the Government have made regulations to that effect. In other words, the rules on non-discrimination would apply only where a devolved legislature sought to introduce new statutory requirements in the particular area covered by the regulations. This seems to be both logical and respectful of devolved competencies.

I also record my support for other amendments in this group, notably Amendments 7 and 8, which seek to limit the mutual recognition principle in ways that seem thoroughly appropriate, and Amendment 20 in the name of the noble Baroness, Lady McIntosh. This last amendment touches on an important point and would, on its own, if adopted, broaden the scope of the exemption for prior legislation. It seems to me—and please correct me if my understanding is wrong—that this would address one of my major concerns, which is that the legislation seeks to prevent regulation that increases standards but does not impede regulation that lowers them.

The Bill as currently constructed would mean that, if this Parliament decided to legislate in England for the current ban on the use of hormones in beef cattle to be removed, for example, then the fact that a ban had previously existed in Wales and Scotland could not be invoked to prevent the sale of such beef in those nations. This is because the condition in Clause 4(2)(b) would require the Welsh and Scottish Governments to demonstrate that a “corresponding requirement” had not previously existed in England.

In a letter from the Minister that I received just as we started this debate, he stresses, if I have understood it correctly, that a potential for harmful regulatory divergence did not exist during our membership of the EU, but, at the end of the transition period, that will change and create a significant risk of harmful divergence between the four nations. He goes on to write that the Government have consulted widely on the proposals and have had overwhelming support from businesses and industry organisations on the steps they have outlined to protect our internal market from discriminatory behaviours.

I would be most grateful if the Minister could kindly tell us, either today or in a letter following today’s debate, details of the results of that consultation because I think it is important that those of us speaking to amendments really understand the background of the results that came in. I will be most interested in the Minister’s reply to all the amendments in this group, particularly Amendment 20.

14:00

[Lord German (LD)]

My Lords, I have added my name to Amendment 21 to which the noble Baroness, Lady Finlay, has spoken. It seems to me that the clarification that the amendment is seeking is to understand whether, where a statutory regulation, rule or law is passed in a devolved Administration, that would exist until such time as the UK Government decided something different. Whether or not that is the intention of the Government, I do not understand.

The difficulty that I face in trying to work out the logical progression and the sequencing of what is happening in this Bill is correlated with the issue that we had on the common frameworks. It seems to me that the Government are moving down a dual carriageway in which one road is the internal market Bill and the other is the common frameworks progression, and between them is a brick wall. I do not understand how you can cross over between one and the other. That is the understanding that I got from the discussion we had in the earlier days in Committee.

The problem is that by the end of this year—I will use this as an example, which I would like the Minister to respond to at the end, if he would—the framework on emissions trading, which is a legislative framework, will be completed. I understand that it is with Ministers for final sign-off, but it has been agreed. If that emissions trading legislative framework is agreed, presumably there will then be legislation. I would like to understand where that legislation fits within the context of this Bill. Clearly, that has been reached by agreement—it has been agreed by all parts, including the United Kingdom Government, that there will be a legislative approach to this particular area of work. Then, of course, there will be a piece of legislation that sits either within this Bill or without it. I would like to know where that legislation will occur: will it be stand-alone legislation or will it be an amendment to the Bill we are discussing today?

There are two other frameworks—one on nutrition and one on hazardous substances—that are also virtually complete. They are non-legislative, and I understand that they will be agreed by Christmas. Take those three areas: on one side we have a legislative proposal and on the other we have a non-legislative proposal that the Government have agreed will be a non-legislative proposal and will therefore not require other legislation. And it will not require this legislation, because that is what the Government have agreed. Perhaps the Government could explain how the two are interconnected.

I understand that the reason for turning down a frameworks-only approach is because there are gaps, but we are yet to find out what the Government have established is a gap. We have asked for a current example that we can use, and I hope that, over the past few days, the Minister has found a current example that he can give us.

It seems to me that the fundamental principle that Amendment 21 is trying to establish absolutely is that, where there has been a legislative agreement or legislation that has been passed by either Wales, Scotland or Northern Ireland, when the Government introduce new legislation or regulations on the back of this legislation, such legislation will look only at the future and not the past and will have no retrospective effect.

[Baroness Noakes (Con)]

My Lords, I would like to remind the Committee of two things about this Bill. First, the Bill is to facilitate trade between all parts of the United Kingdom, not make it harder. Secondly, businesses favour barrier-free trade. That was the very clear message that came from the consultation on the White Paper during the summer. We should be trying to minimise the possibility of barriers being put up to trade within the United Kingdom.

If we allow exclusions of goods from mutual recognition, that will inevitably lead to higher costs. This is analysed in quite considerable detail in the internal market White Paper. Costs generally end up being borne by consumers. Excluding goods can also result in businesses deciding to withdraw from certain markets, which can in turn restrict consumer choice. I know the noble Baroness, Lady Hayter, is keen on consumer protection; she reminded us of that on the first day of Committee. Restricting trade tends to operate against consumer interests, so we should be very careful in trying to put amendments to the Bill that make trade more difficult. I also remind noble Lords that restricting trade is more likely to hit the devolved Administrations’ economies because of their greater dependence on exporting to the rest of the United Kingdom.

I want to comment on a couple of the amendments in this group, Amendments 7 and 8. The noble Baroness, Lady Hayter, said that Amendment 7 was a probing amendment, but by seeking to exclude imports into any part of the United Kingdom we are reducing the internal market rules to a very parochial interpretation. It seems to ignore the plain fact of commercial life, which is that there are complex supply chains and complex distribution logistics. It is of course the way we have been living in the EU; at the moment, we are quite accustomed to importing in one place and those imports being accepted throughout the rest of the community.

It also seems to me that the noble Baroness’s amendment would, in effect, impact exports between different parts of the United Kingdom. For example, if something was exported to Wales and imported to England, it would stop it then being imported into Scotland with the protection of the internal market Bill. That does not seem to make any kind of sense. It is pretty clear from the impact assessment that Wales and Scotland in particular are reliant on intermediate goods coming from other parts of the United Kingdom.

The noble Lord, Lord Rooker, spoke to Amendment 8. I did not follow what he said about pig semen because I do not think that, by any definition, pig semen is an animal feedstuff. I did have a chance to check the definition of “animal feedstuff” while he was speaking, and it is not. Perhaps we can put that to one side. We have to understand that if we try to exclude food and animal feedstuffs from the UK internal market mutual recognition rules, this will again potentially impact the devolved Administrations the most, given their import and export profiles. For example, if you look at Wales’s agri-food chain, you will see that 48% of agricultural inputs to Welsh food manufacturers come from the rest of the UK and 31% of food and drink sold in Wales comes from the rest of the UK. We should be thinking really hard about who we are likely to hurt when we put amendments such as this in the Bill, which restrict barrier-free trade.

[Lord Hope of Craighead (CB) [V]]

My Lords, I support Amendment 7 in the name of the noble Baroness, Lady Hayter, and Amendment 21 in the name of the noble Baroness, Lady Finlay.

I shall start with Amendment 7. First of all, I entirely agree with the noble Baroness, Lady Noakes, that importing and exporting goods is part of the commercial life of this country. That applies across all parts of the United Kingdom, and one can well understand the point that she makes about the importance for the devolved Administrations of maintaining that system with as little interference as possible. However, the point to which Amendment 7 draws attention is a matter of real concern to the devolved Administrations. As she explained, its effect appears to be to deny them any involvement in decisions on the importation of goods from overseas, to which they might wish to take objection. Various horror stories are of course passed around as one discusses this issue, but I am not concentrating on them so much as I am on the simple lack of ability to contribute to a discussion as to whether or not these goods should be imported.

If one was talking about legislation, I suppose one would say the Sewel principle would apply and consultation would take place, but there appears to be nothing that allows for that. The effect of the way the provision is worded is that something that comes in can take the benefit of the principles and pass without any kind of control to the devolved Administrations, without their having any say. That is of real concern. This is a probing amendment, but it requires some explanation of what place, if any, the devolved Administrations have in trying to resist the importation into, and transmission across borders within, the UK of goods to which, for one reason or another, they might wish to take exception.

That covers Amendment 7. As for Amendment 21, I was attracted by what the noble Lord, Lord German, said about the dual carriageway—the parallel lines—for a particular reason, which I have not mentioned before but must be emphasised. The common frameworks are living arrangements. There is no point at which one can strictly say that a framework has come to an end, although I confess that my own amendment suggests that it could happen. These frameworks are open to subsequent discussion and revisiting as things change. For example, much of the UK emissions trading system is based on EU law and treaty arrangements that could change. If that happened, the framework would be revisited, and, no doubt, different policy decisions may need to be taken. The same is true of the hazardous substances framework.

One has to bear in mind these are two living instruments working side by side: the UK internal market and the common frameworks system. The fact that, as the Bill has it at the moment, there is no means by which they can communicate with each other, is a matter of real concern, because it affects the whole structure of how these things co-operate and will co-operate in the future, in ways we cannot yet predict. That underlines the importance of trying to find a solution to the point I drew attention to on Monday of making some arrangement whereby the decisions taken, based on common framework decisions, to legislate in the devolved Administrations are protected against the effect of the market principles, particularly the non-discrimination principle, which has very broad reach indeed.

The great value of the amendment of the noble Baroness, Lady Finlay, is that it has drawn attention once again to that very real problem. It requires some response from the Minister so that we can have some idea of how he thinks these two parallel carriageways, stretching out into the future, will ever meet and co-operate with one another.

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble and learned Lord and to agree with the thrust of his argument, which he made very well. The noble Baroness, Lady Noakes, made the valid point that the purpose of our internal UK economy is to have as few barriers as possible while recognising that we are an entity of four nations with distinct areas that can make their own policies. That is not new. The Agriculture Act 1970 had different applications within the Scottish, English and Welsh agricultural sectors. So many of the areas we are talking about within these groups predate the European Union, so the principle that we have had a different approach in many of the component nations is valid.

The Government, however, have introduced this new concept, which means, for example, that the UK’s biggest food and drink export, whisky, could now be open to a great problem because a decision made by one country, Scotland, could act against the interests of farmers in England who provide products to serve that. It is the barley question, which the Minister has referred to and on which I have asked questions before. As the noble Lord, Lord True, indicated, in summing up the debate on the previous group on Monday and correcting the noble Lord, Lord Callanan, that is an area that will be covered by a legislative framework.

14:15

The noble and learned Lord, Lord Hope, and, to some extent, the Minister, may be correct that while this framework will put in legislation recognising the powers they have had during membership of the European Union, and will continue to have, exercising some of those powers previously would have been permitted, even though it was acting against market access principles, because of environmental objectives. The Government are saying that that should no longer be the case. Until this point, I accept this thrust of the Minister’s argument, but I have been scratching my head about why the Government have inserted an exemption on fertilisers and pesticides as an amendment in the Commons stages. The Minister told me on Monday that if the Scottish Government wish to use some of the powers they have always had to amend the maximum residue level of the use of pesticides, that would now effectively trigger this Act, and that would be disapplied because it would be against market access principles and mutual recognition. That is the argument that has been put forward. Therefore, that would protect English farmers to be able to supply to Scottish distilleries.

Paul Scully, the Minister’s colleague in BEIS, moved an amendment in the House of Commons on 22 September that exempted the use of fertilisers and pesticides from the market mutual recognition principles. The Minister said this in the Commons, which I thought was necessary and is now in Schedule 1, under “Fertilisers and pesticides”:

“That is necessary to allow each part of the UK to prevent the movement and use of certain fertilisers that may be dangerous, and of pesticides unless they have been assessed as safe and authorised for use in that part of the country, thus allowing for local environments to be considered and protected.”—[Official Report, Commons, 22/9/20; col. 895.]

If the Scottish Government, or the UK Government acting on behalf of England, indicated that they chose to not certify the use of a pesticide on, let us say, barley, then under this Bill, it would be exempted from the mutual recognition principles. The Government have created the very problem that the Minister said this Bill is meant to solve in the amendment they passed on 22 September, to allow local environments to be considered and protected. How does the authorisation of the use of fertilisers and pesticides—if they are used, they will be in the product—being exempted from the mutual recognition principles, and creating the problem he outlined to me as potentially existing, fit with what he is saying about the minimum residue levels of that pesticide on that barley? He will be able to answer that question in responding to this, because I think it is wholly inconsistent.

The second thing I wanted to ask for was just a point of clarification from the Minister—this is something I get confused about—on links with the importation of goods. For goods coming into the UK, the Isle of Man is not considered part of the UK by Clause 15, but it does not mention services. I wondered why that would be the case. If goods coming from the Isle of Man are not considered to be within the UK internal market, but services are, I am not sure why that would be the case.

Thirdly, I am grateful to the noble Baroness, Lady McIntosh, for raising, in detail, the question I asked the Minister on Monday. If measures are already in place in another part of the United Kingdom, the mutual recognition principles would not apply. Why is that better than the framework route, which is, by definition, common across the different nations within the UK?

On the point about the definition in Amendment 45 of “substantive”, it would be useful if the Government clarified this. I asked elsewhere where other references to “substantive” are defined and was told that it is in Clause 24 of the Finance (No. 2) Act 2017, with the definition of “equivalent”. It states:

“For the purposes of this Part of this Schedule, arrangements are ‘equivalent’ to one another if they are substantially the same as one another having regard to—(a)their substantive results or intended substantive results”.

Is this the Government’s intended definition of “substantive” in this legislation? The reason why it is important is because we would need to know what is a substantive change to a measure that is in place already.

We know that the Government do not intend to apply the principles for measures that are already in place unless there is something equivalent in another part of the UK, but if there are changes that the Government consider substantive, it would come within the scope of this legislation. One reason this is of concern would be, for example, the minimum unit price in Scotland. That legislation has a sunset clause and must be reviewed before May 2024, so there has to be a successor piece of legislation to this. If the Scottish Government, as a result of the review, indicated that they wished to change the figures—the pricing level—is that a substantive change?

On one reading, it could be fully within a breach of the market regulation principles because it is potentially a dramatic increase or decrease in the minimum unit price. Or is the substantive change to the policy objectives? If there is no substantive change to the policy objectives, how that measure is changed could be quite dramatic but the policy objectives would remain the same. The Bill does not state what the substantive nature of the change would be. Would it be on the impact? I think that the Government’s intention was that it would be a substantive change that had an impact on the single market, because if it were not, the CMA would not be empowered to review and challenge it. Can the Minister clarify that point? Is the substantive change on the policy objectives or on the impact of the single market?

The same will apply for university fees. The Minister said, I believe, that in Scotland, free tuition for Scottish students would not be impacted by this legislation because it is in place at the moment. If the fee level changed, would that be considered a substantive change for Scottish-domiciled students, for example? At the moment, the market access principle of mutual recognition is not for citizens’ rights; it is for the goods or services they either buy or receive. As far as education is concerned, under this legislation, would a university education be considered a good that is purchased or a service that is supplied? Universities are not considered as public authorities under this legislation, at the moment, so any change to that legislation could be challenged.

The point I want to close on is that moving away from the frameworks agreement to the lack of clarity in this legislation fosters vulnerability. Even if the Government do not think at this stage that some of these will fall into foul, it is not just the Government, or any Government, that would have a dispute; it is individual complainants or companies who will be able to go to the courts on this basis. That is why we are trying to ask so many questions. Without a proper framework mechanism for the courts to interpret, at the moment I fear that, with this Bill, there are far too many grey areas that need to be clarified.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

The noble Lord, Lord Naseby, has withdrawn, so I call the noble Lord, Lord Inglewood.

[Lord Inglewood (Non-Afl) [V]]

My Lords, this is been an interesting debate. These amendments are important, focusing as they do on food, foodstuffs and animal feed, and the legal framework surrounding them in the UK internal market that is about to come into being.

While I have passed a few law exams in my life, I want to come at the issues from a slightly different perspective, as a farmer. I spoke about a number of these matters during the passage of the Agriculture Bill. What I intend to do is along the lines described by the noble Lord, Lord Rooker, in respect of his amendment, which I am pleased to speak to: probe the Government and get a bit deeper into what their actual position and thinking might be. As a number of noble Lords have said, these matters are still pretty unclear.

In the context of the amendment in the name of the noble Lord, Lord Rooker, perhaps I might say that, as a one-time chairman of Carr’s—one of the country’s largest animal feed suppliers—and as a farmer who had his livestock wiped out in the foot and mouth outbreak, I believe that the points he made merit serious consideration.

First, I declare an interest as someone who farms and manages land in Cumbria. I am also involved with a number of organisations that are stakeholders in and consultees on the forthcoming changes in policy across the UK, although I will confine myself principally to England in my remarks. I should also say that I am the chairman of the Cumbria Local Enterprise Partnership. Agriculture is one of the most important industries in the county, both on its own account and for the role it plays in underpinning the visitor economy—as your Lordships will appreciate, that has been very hard hit.

One of the characteristics of the common agricultural policy was its intention, perhaps observed as often in the breach as in anything else, to establish a single market for agricultural products across the Union. One of its purposes was to establish even-handedness across the whole; albeit it was not a homogenous area and, indeed, as I have said already, it was not always successful. Surely this must be one of the aspirations of the UK internal market that we are now considering.

Noble Lords will understand fully that the systems of support for agriculture are evolving as particular outputs of agriculture are being expanded—I do not think that there is much objection to that—and that, as this is a devolved matter, much of the detail is being dealt with at that level. In this context, as was commented on by the previous speaker, Defra is almost exclusively an English department, albeit part of the UK Government. It is clear that the systems of support are being reconfigured quite significantly across the various home nations, in respect both of quantum and of impact, so there will be real variations.

These differences can and will have a real impact on the marketplace. Perhaps the best example I can quote is historical; I hasten to add that I do not expect the Minister to be familiar with the detail, and I expect it may raise a smile. However, the evidence is clear from what happened in the Cumbrian agricultural economy in the 17th and 18th centuries, when the rules of trade relating to the English-Scots border in the period from the Union of Crowns until after the Act of Union varied quite regularly. I draw the House’s attention to Professor Peter Roebuck’s book Cattle Droving through Cumbria 1600-1900, where this is all spelled out. More recently, in my own case, as a boy I went with my father to buy an Ayrshire bull near Lockerbie. When we got it home, we found that its Scottish licence did not allow us to deploy it in England, though fortunately I am glad to be able to tell the House that, after a bit of trouble, we acquired the relevant authorisation and put it to good use.

Setting aside what is, I think, generally accepted as a better settlement for agriculture in Scotland, Wales and Northern Ireland than in England, let us look at what is about to happen. England is hell-bent on phasing out direct payments. I am not opposed to that but doing so as soon as possible is a problem—unlike in Wales, which is not starting until 2022, and Scotland, which I think will start even later, in 2023, because they want time to be able to put their houses in order and get the policy sorted out.

We must not forget that farm income is predominantly derived from the sale of agricultural commodities and is likely to be so in the immediate future. All the evidence that I have been able to glean from appropriate discussions with stakeholders and consultees is that Defra is formulating its policies for the transition in cloud-cuckoo-land. Its sustainable farming systems were described to me by one interlocutor as “nationalisation by micromanagement”—something that the Government are, at the same time, committed to reducing in the context of planning, as is spelled out in the planning White Paper. Another person, discussing the generality, commented, “Well, you’ll go bust quicker taking the money than not doing so.”

There are clearly all kinds of ramifications of these kinds of things but, in the context of the Bill, the UK marketplace for agricultural products, as has been commented on by a number of speakers, is in imminent danger of being seriously distorted because of all the changes that are being considered. It is not even-handed across the union and it becomes a cancer in the market. As such, it merits the serious attention of the UK Government; as I have said, they just happen to be the English generator, and hence also the architect, of some of the forthcoming difficulties. Furthermore, what confidence can English farmers and English agriculture have that the internal market will not be rigged against them? What will the system of market regulation being put in place be able to do about it?

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

The noble and learned Lord, Lord Morris of Aberavon, has withdrawn, so I call the noble Lord, Lord Liddle.

14:30

[Lord Liddle (Lab)]

My Lords, this is a very interesting debate to join. It is a pleasure to welcome the noble Lord, Lord Callanan, to his place, as it were, once again defending an extremely complex and difficult piece of legislation. I hope he will give pretty comprehensive answers to the points raised by my noble friend Lord Rooker, the noble and learned Lord, Lord Hope of Craighead, and the noble Lords, Lord Purvis and Lord Inglewood, because they all had great merit.

I spoke at Second Reading but was not able to attend the first day of Committee because of commitments in Cumbria. In all the furore about the unconstitutional and completely unacceptable clauses of the Bill, the Government have got away with the rest of it, which may not be unconstitutional but is certainly unacceptable. Therefore, this House should expose it to very critical scrutiny.

We need clarification—this is where my noble friend Lady Hayter’s amendment is so important—in very simple and clear language of what the Government mean by mutual recognition and how this will work out. The idea of mutual recognition was an important foundational principle in the history of the European Union and the single market, but only because mutual recognition without anything else is a weapon that results in a race to the bottom. In the single market White Paper put forward by Jacques Delors in the early 1980s, the whole point was that you had to have common standards and harmonisation in a list of certain areas—I think there were 300—to go alongside the principle of mutual recognition.

I have two points to make on this. First, on the position of the devolved authorities and the nations of Britain, do the Government recognise that an essential principle of devolution is that diversity and experimentation are good things, and that it is therefore important that in a devolved settlement the devolved nations should be able to experiment with setting standards in the areas of public health, environment and consumers? This is part of the point of devolution. It is not something the UK Government should seek to prevent. It is very important that the Government make clear their support for the principle of devolution and diversity.

My second general point is the one to which the noble and learned Lord, Lord Hope, drew attention in his support for my noble friend Lady Hayter’s probing amendment: why do the Government include in their general principle this business of goods being imported into the United Kingdom? Does this essentially tell the devolved Administrations that, in any trade agreement that the UK Government negotiate, they will have no say over the standard of goods coming into the UK and would have to accept them whatever they thought about their compatibility with their own aspirations to set standards? That seems to me a fundamental point that needs an answer. This legislation is deeply complex, but we need clarity from the Government on fundamental points.

[Lord Fox (LD)]

My Lords, this has been a relatively short debate in terms of the Bill so far, but it has raised some fundamental issues which beg some quite deep and considered answers from the Minister.

When the noble Lord, Lord Inglewood, brought up Cumbrian cattle-driving and we had the noble Lord, Lord Liddle, to follow, I felt we might have had quite a long discussion around that, although we did not. The noble Lord, Lord Inglewood, in characterising Defra as an English department, brought out the Janus face Secretaries of State have in being not only Secretary of State for the United Kingdom but in most cases also Secretary of State for England. Herein lie some of our problems and uncertainties.

The noble Baroness, Lady Hayter, set out and explained very well the issues surrounding mutual recognition. In the noble Lord, Lord Rooker, this House has the benefit of someone with fantastic knowledge and it is important to listen to him. Animal feed is an important area, although it is not always clear. If I may beg your Lordships’ indulgence for a short anecdote, in the mid-1970s our farm was subject to one of the small outbreaks of anthrax, which is very rare—I found the animal that died of it, and it was not a pretty sight. We were put into quarantine—something like lockdown—and it was tracked down to the importation of cheap beans from India. That is why the control of animal food in this country is really important.

In terms of animal feed on the island of Ireland, I was struck that the Government have already exempted the electricity market there—the Minister and I debated this on a statutory instrument—from the overall UK market. They have done that because of the integrated nature of electricity on the island of Ireland; it is an entirely sensible move, of which we approve. It seems to me that animal feed is very similarly integrated and would benefit from a similar island-of-Ireland-wide process. The Minister might like to think about that going forward.

As usual, the noble Baroness, Lady McIntosh, asked a series of excellent and important questions. We need answers to them to understand the objectives of the Bill.

In Amendment 21, the noble Baroness, Lady Finlay, seeks what I think many of us seek to do: to look at this, as somebody mentioned, through the other end of the telescope. This is turning things upside down. Why do we not start with the common frameworks and what is currently working around the devolved authorities and legislate only what needs to be done to create the market we all want? My noble friend Lord German’s twin-track, two-road approach is a very good example. Where is the gap? How do these twin tracks come together? There is no explanation anywhere of how the common frameworks and the Bill are supposed to work together. The only conclusion I can draw is that the common frameworks are allowed somehow to dwindle, because the Government seem to be putting an enormous amount of energy into the Bill.

As usual, the noble Baroness, Lady Noakes, is right: we need to facilitate trade and make it as frictionless as possible across the UK. It is a shame we cannot make it frictionless across the whole of the European Union. The fact is, we have devolution, and the internal market Bill must respect that. At present, it seems that it does not. The noble and learned Lord, Lord Hope, made this point very ably.

As usual, my noble friend Lord Purvis came up with a series of important questions, including Scotch whisky-based ones. He came up with the revelation that there is a complete and absolute internal contradiction in the Bill. The Government brought forward an amendment that causes the following to happen: if England decided to set up its own approval system and started approving active chemicals banned in the EU, Scotland could refuse them. Conversely, Scotland could presumably go further than the EU ban and ban substances which England approved. That is the Government’s position, based on an amendment they brought to the Commons. However, he Minister has said that we must stop this happening, and that the Bill will do that. Something is not right, and the Minister needs to explain what is wrong.

The telling point made by my noble friend Lord Purvis and other noble Lords, including the noble Baroness, Lady McIntosh, is that without clear definitions, it will not be the Government causing the race to the bottom—it will be companies taking this to the courts. That is why we expect from the Minister a very detailed answer to these important questions.

[Lord Falconer of Thoroton (Lab)]

I strongly endorse what has been said by the noble Lord, Lord Fox. This is an incredibly important and rich debate in which detailed answers are required. It has been a very powerful debate because it has identified a range of problems, both of principle and detail, suggesting that either the Bill has not been properly thought out—subject to what the Minister says in answer—or that there are fundamental problems with it.

I strongly echo what was said by the noble Lord, Lord Inglewood, and endorse what the noble Baroness, Lady Noakes, said—we want frictionless trade as much as possible. I do not know about the noble Baroness, but my experience of business is that if every five minutes one is in the courts trying to work out what is allowed and what is not, that is the classic recipe for a lack of certainty. This Bill, as said so accurately by the noble Lord, Lord Purvis, is creating a whole range of private rights not to be discriminated against, to be treated the same in one place as another. Unless the Bill is clear and has a practical impact, it will be an absolute goldmine for lawyers. It is therefore critical there is confidence this has been properly thought through and the principles work. I am dubious— I am not talking about Part 5 but about the internal market provisions.

We had a very important debate on Amendment 7 about imports, tabled by my noble friend Lady Hayter. My noble friend and the noble and learned Lord, Lord Hope, asked why the devolved Assemblies or Parliaments are excluded from having any voice on what is imported. We were treated by my noble friend Lord Rooker and the noble Lord, Lord Inglewood, to an explanation of all the drawbacks of including food and animal foodstuffs in the arrangements. They gave a devastating series of reasons why these are wrong. Could we have detailed answers for the point made by the former chair of the Food Standards Agency? I ask the Minister to convince us if he can that my noble friend was wrong and the Government are right in the way they have approached this.

The amendments which were very powerfully introduced by the noble Baroness, Lady McIntosh, indicated legal issue after legal issue. I draw attention to two where an answer is important. First, how do the measures already in place apply, and why are they better than the common frameworks approach? Secondly, what is meant by substantive change, rather than significant change? That feels like an issue that could be litigated over for a long period of time.

14:45

The noble Baroness, Lady Finlay, the noble Lord, Lord German, and the noble and learned Lord Hope, referred to the failure of the Bill so far to make any connection between the market access principles and the common frameworks principle. The noble Lord, Lord German, referred to a motorway, and the noble Baroness, Lady Finlay, called it the blunderbuss approach. The market access process says the lowest level applies; the common frameworks approach is that before legislating, you see whether the four areas can agree. Surely that is the better approach otherwise people will ultimately go to the courts to resolve what their rights are.

The noble Lord, Lord Purvis, drew attention to the apparent inconsistency in the approach the Government took on 22 September by in effect excluding fertilisers and pesticides from the internal market approach, giving rise to the problem the Minister said they were trying to solve in the Bill. I would be very interested to hear the answer. Is the Isle of Man in or out of the UK in terms of services? Are universities providing services? If so, what is the impact of the Bill on them, particularly in relation to the different B structure?

Amendment 61 in my name would delete the first reference in the Bill to any part of the offending Part 5. For the purposes of good management, it is far better that instead of addressing that in this group, we wait until we get to Part 5. Amendment 61 was intended to be a paving amendment to the Part 5 debate, so I will leave that until then.

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

I thank everybody who has contributed to what has been, as always in this House, a fascinating debate, ranging far and wide, from cattle droving in the 1700s, through to the immense knowledge of the noble Lord, Lord Liddle, on current EU matters. It is good to see him again to take up cudgels across the Dispatch Box. As he knows, I do not agree with him, but I always enjoy debating these matters. I hope that noble Lords will have patience today. I have quite a lot to say—many points have been raised and I intend to go into a lot of the detail. I apologise if my remarks are a little long.

Amendments 7, 8, 20, 21, 22, 26, 32, 45 and 61, all seek to alter or change the application and scope of mutual recognition and non-discrimination for the internal market and goods. The workings of mutual recognition and non-discrimination as applied in this Bill have been carefully designed to suit the UK’s unique constitutional and legal arrangements. We consulted widely on this, based on the Government’s proposals set out in the White Paper in June.

The noble Baroness, Lady Finlay, wanted to know in detail about the consultation. We published for her benefit, a response in full to the White Paper consultation on 9 September and I would be happy to send her a copy. The consultation demonstrated that UK businesses and industry representatives are overwhelmingly supportive of the measures to prevent discriminating behaviours within our internal market. I will set out the rationale why I cannot accept these amendments. I am happy to explain how mutual recognition and non-discrimination work in greater detail.

We have been clear that the UK will do nothing to diminish its reputation as a leading nation when it comes to setting and expecting high standards of its domestic businesses and international trading partners. I know this is a concern that the noble Baroness, Lady Hayter, has expressed on other Bills that we have discussed in relation to EU exit and is what she seeks to address in Amendment 7, but I contend that this simply will not arise.

Removing imported goods from the mutual recognition principle would mean that those goods, simply because of where they were sourced, could not benefit from the same regulatory treatment as goods produced in the United Kingdom. Even when produced to identical specification and quality as domestic products, this discriminatory impact would put imported goods at a conspicuously unfair disadvantage. Under such a discriminatory approach, we would be likely to be in clear breach of our World Trade Organization commitments to treat imports from other countries no less favourably than similar products produced domestically.

This amendment would also create continued uncertainty for importers. Those businesses whose supply chains rely on overseas sourcing could find themselves at a competitive disadvantage. This amendment would not tackle the issue it seeks to address and would have significant negative consequences for the UK if included.

There was considerable discussion of Amendment 8, tabled by the noble Lord, Lord Rooker, which would ensure that food and animal feedstuffs would not fall within scope of the mutual recognition principle. Like my noble friend Lady Noakes, I was slightly struggling to understand the relevance of his comments about pig semen. I think he asked whether pig semen across the island of Ireland would be affected by Clause 2, but I am happy to confirm for his benefit that pig semen will be subject to the same rules as other goods across the island of Ireland and only when it moves from Northern Ireland to Great Britain will it be subject to any checks. On pigswill, I am happy to confirm for him that the Government will not allow the reinstatement of its use.

This amendment could have serious consequences for the food supply chain, as foods sold in one nation could not be sold in another if there were different regulatory requirements, creating significant barriers to trade within the UK. As I have said, the Government remain committed to maintaining the highest standards in food and feed safety. The UK internal market approach will not change the approach to determining food and feed safety and hygiene policy. I can put at rest the noble Lord’s mind and that of the noble Lord, Lord Purvis: Schedule 1 to the Bill contains an exclusion to the market access principles to continue to enable the UK Government and the devolved Administrations to take appropriate risk-management measures to prevent or reduce the movement of unsafe food or feed from one part of the UK to other parts. I will have more to say about that later.

Turning to Amendment 20 and the consequential Amendment 22, tabled by my noble friend Lady McIntosh and relating to the exclusion of certain existing statutory requirements from the mutual recognition principle, Clause 4 ensures that pre-existing regulatory differences within the UK are excluded from the scope of mutual recognition. This is a forward-looking Bill that seeks to ensure that businesses can continue to enjoy the benefits of our well-integrated internal market after the transition period ends on 31 December. Businesses already live with and have adapted to any regulatory differences that currently exist, so mutual recognition does not need to apply retrospectively. In line with this objective, Clause 4(2)(b) ensures that this exclusion is specifically targeted at those areas in which regulatory differences have previously emerged.

This amendment would widen the exclusion to include any statutory requirement that existed prior to the relevant day set out in the Bill, regardless of whether there had been divergence in that area. However, this is not necessary. Mutual recognition has a practical effect only in areas where requirements differ across the UK, which is why the exclusion is targeted at those areas. Regulatory requirements, which are currently harmonised across the UK, do not need to be specifically excluded as the application of mutual recognition will not make any difference to the status quo. Of course, if the existing requirements excluded by Clause 4 are amended in a way that changes the effect or outcome of the legislation, they would then come within the scope of mutual recognition.

Amendment 21 is consequential on Amendment 6, which we discussed previously as part of a wider discussion on market access principles. It would amend the exclusion of pre-existing requirements from the mutual principle if Amendment 6 is also adopted. My noble friend Lady Bloomfield addressed Amendment 6 yesterday in the fifth group but, in brief, these amendments in combination would enable harmful regulatory divergence within the UK internal market into 2021 and beyond. This could lead to new barriers for businesses trading within the UK, instead of clarity and certainty.

The noble Lord, Lord German, and the noble and learned Lord, Lord Hope, asked about any follow-on emissions trading scheme. This is a non-market framework, so it would not be captured by the market access principles as it does not relate to a good or service.

The noble Lord, Lord Purvis, raised a number of questions about fertilisers. I shall give him a detailed reply. To exclude from the principle of mutual recognition as proposed by the Bill the safeguarding decisions of Administrations in relation to the placing on the market of fertilisers would allow each Administration to ban the sale of a fertiliser or impose conditions on that fertiliser in their jurisdiction in response to a risk to the health and safety of humans, animals, plants and the environment. We think it necessary to retain the current ability for the individual nations to take local circumstances into account and immediately to take a fertiliser deemed unsafe off the market in their territory without the risk of that product finding its way back into that territory via another nation. Without that amendment, it could take some time formally to ban a product through legislation—perhaps a couple of years.

The noble Lord also asked about pesticides. Decisions on which pesticides can be authorised to be marketed and sold in each part of the UK are already within devolved competence. All four Administrations work closely together, supported by HSE, and most decisions can be taken jointly by consensus. However, retaining the ability of each Administration to take its own decision where necessary is important, for example, if merely to consider locally specific factors, such as environmental or farming conditions, which can differ across the UK. This has worked well for many years where there has been occasional divergence between different parts of the UK and has not, so far, caused problems. This amendment therefore maintains the current position.

Amendment 26, tabled by my noble friend Lady McIntosh, seeks an explanation of the meaning of Clause 5(3), which I am happy to give. Clause 5(3) will operate so that any future requirements that fall within the scope of the non-discrimination principle will be of no effect to the extent that they are discriminatory. For the benefit of the lawyers, this does not mean that the requirement is to be treated as if it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effects. This aims to ensure that businesses can continue in their trade and goods can continue to be sold, despite protectionist measures that might treat goods from one part of the UK more favourably than goods from another. As the Bill deals with trade across the whole of the United Kingdom, the intention is that this will apply to all legislation: secondary legislation, primary legislation passed by devolved legislatures and legislation passed by the UK Parliament.

We believe that this does not require further elaboration in the Bill and is clear that only changes to existing legislation that affect the outcome are in scope. The amendment in question could cause confusion as there may be amendments that are considered “significant”, but do not change the outcome or effect of legislation. Fundamentally, however, the drafting in this clause will allow businesses to continue following the same regulations as they have been accustomed to, as our desire is not to disrupt their operations. That flexibility is important, because we want this provision to catch legislation only to the extent that it produces discriminatory effects. If something is not law, it cannot have any effect. As I said, we want to create a presumption that future Acts of Parliament are subject to this rule, which the current drafting allows.

My noble friend Lady McIntosh also asked whether, if the FSA and FSS had different rules, that would impact on the free movement of goods. The principles of mutual recognition and non-discrimination will apply to goods, including food, feed and animal products. This means that a good that can be lawfully sold in one territory can be lawfully sold in the other territories without having to comply with that other territory’s requirements. The only exclusion from this, as I said earlier, is set out in Schedule 1, which provides for exclusion in emergency scenarios where specific criteria are set out.

15:00

The noble Baroness, Lady McIntosh, also tabled Amendment 32. I understand that its purpose is to probe the meaning of “actual or hypothetical goods” in the Bill, and we are happy to provide further information on that. To be clear, though, this amendment would weaken the measures we are introducing to determine where relevant requirements are creating restrictions in a discriminatory way. The inclusion of “actual and hypothetical goods” within this clause is necessary, as it means that the provisions work effectively in scenarios where there are no actual local goods against which impacts on incoming goods can be compared.

To explain further, if a company has a product that is subject to a patent, it can therefore be made by only one company in the UK. If an authority were to regulate against that product because of where it is produced, there could not possibly be a local good to compare it to in order to determine relative disadvantage. Being able to compare it to a hypothetical good addresses this, and allows the rules against direct discrimination to operate properly and protect all businesses across the UK.

The existing wording is also important to deal with situations where arguments could be posited that a local good is similar to, but not the same as, an incoming good, and therefore would not be a good comparator in determining whether discrimination exists. Being able to compare to a hypothetical good that is the same as the incoming good, save for location, enables that determination to take place. I hope the noble and learned Lord, Lord Falconer, is taking careful note of this for his future legal career. This means that regulators can focus on determining whether discrimination might take effect, rather than identifying comparable goods.

Amendment 45 seeks to probe the Government’s understanding of what is meant by “substantive change” in Clause 9. A number of noble Lords have made this point. Clause 9 sets out that all existing statutory requirements will be considered out of scope of the non-discrimination principle for goods. This is to ensure that the non-discrimination principle will not have any reach-back effects on areas of pre-existing legislation.

As I said earlier, under the Government’s proposed approach, existing requirements will not be covered and businesses will have already adjusted to them. However, if these regulations are substantively changed, they would be brought into the scope of the non-discrimination principle for goods to avoid any new barriers arising within the UK. If existing regulation, which would otherwise have been in scope of non-discrimination, is re-enacted in a way that changes the effect or outcome of the legislation, it would then come within the scope of the non-discrimination principle. Where existing legislation receives technical or minor amendments that do not alter the scope of the legislation, that legislation would continue to be out of scope.

We believe that this does not require further elaboration in the Bill and it 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 the legislation. Fundamentally, however, the drafting in this clause will allow businesses to continue following the same regulations that they are accustomed to.

Amendment 61 was tabled by the noble and learned Lord, Lord Falconer. He said we would debate it in a future debate, but I will give him a brief reply now. I highlight that the protocol is clear that nothing contained within it prevents Northern Ireland goods from enjoying unfettered access to the rest of the UK internal market. The Government are committed to ensuring this. Clause 11 gives effect to a key element of the Government’s commitment to unfettered access for Northern Ireland goods to the whole UK internal market by ensuring that they benefit from mutual recognition and are not discriminated against, enabling those goods to be placed on the market in Great Britain without additional approvals.

Clause 11(8) limits the mutual recognition principle to “qualifying Northern Ireland goods”. This section ensures that the benefits of unfettered access are focused on those goods and, to ensure these benefits are felt, the Government have brought forward separate secondary legislation that establishes the definition of a qualifying Northern Ireland good from the end of the transition period. This is part of a phased approach, with a second phase to follow during 2021, which will focus the benefits of the regime on Northern Ireland traders. This clause therefore delivers a key element of our commitment to unfettered access, in line with the clear commitments we have made otherwise.

If the noble and learned Lord’s amendment were passed, there would be no definition of the goods to which any benefits would attach, meaning that Clause 11 would no longer be able to extend the UK internal market access principles to qualifying Northern Ireland goods. This would remove the basis for ensuring unfettered access and, in its place, leave uncertainty for Northern Ireland businesses.

Lastly, I will address the question put by the noble Lord, Lord Purvis, on the Isle of Man. Goods coming from the Isle of Man are not treated as imports for customs purposes. Therefore, the Government make clear, in Part 1, that goods coming from the Isle of Man count as “imported into” for the purposes of market access principles. We do not believe that this is necessary for services. In summary, for all the reasons that I have set out in great detail, we cannot accept any of the amendments tabled. I therefore hope that noble Lords will withdraw or not move them.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I have had a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

The Minister did not explain why services from the Isle of Man to the rest of the United Kingdom will be considered within the United Kingdom internal market, but goods coming from the Isle of Man are outside the single market. There are many service providers from the Isle of Man. In fact, financial services are probably a bigger part of the Isle of Man economy than goods for export. I would be grateful if the Minister could explain this. The Minister did not respond to my point about whether these regulations apply to the services that citizens receive for higher education. This is very important within Scotland.

My point to the Minister, I believe, justifies my argument on the good working relationship across the four nations on fertilisers and pesticides. The Minister referenced the justification for the government amendment about the need to work in emergencies. Paragraph 1 of Schedule 1 already has exclusions from market access principles for threats to human, animal and plant health. Emergencies were already covered. The amendment that the Government brought forward was not on emergencies; I looked at the regulations that it covers, which are in paragraph 9 of Schedule 1 on fertilisers and pesticides. The Bill will allow the Scottish Government, and a Welsh Government or UK Government acting for England, to make a different judgment on the advice they get from the single regulator about the safety of a pesticide for, as the Minister Paul Scully said, “movement and use”.

So, if English farmers, under the authority of the regulations in the Bill, decide to use fertilisers on crops—barley—that are unsafe in the view of the Scottish Government, the Bill will allow the Scottish Government to prevent that barley from being used in Scottish distilleries. The Minister said that the whole purpose of the Bill was to prevent that from arising. So he has managed to undermine the entire intent of his argument at Second Reading, which was that the purpose of this legislation was to prevent a barrier from a different decision being made on safety grounds. If this amendment, which the Government brought forward, allows for different decisions to be made on the safety of pesticides used in different parts of the UK, I hope the Minister will reflect on what he said about the justification for the Bill.

[Lord Callanan (Con)]

I understand the point the noble Lord is making, but I think we are talking at cross purposes. It would allow provisions on unsafe products, but the provisions would be based on advice from the common regulator—so presumably the authorities in England would draw the same conclusion. It does not allow a Minister to dream up a definition of “unsafe” and implement provisions on that.

On the noble Lord’s first point, if he will forgive me, I will write to him.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I have had a further request to speak after the Minister from the noble Baroness, Lady McIntosh of Pickering.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am struggling to understand the Minister’s reply on Amendments 26 and 45. I am particularly concerned about Amendment 26, which is a probing amendment and simply asks for greater clarity, which I do not think we have had. Is he saying that the statutory requirement has no effect? Does he mean that it is valid or not? Is it enforceable? I am trying to avoid a situation where there is any doubt whatever, and court action might be taken. I do not quite understand his answer that the possibility of court action is excluded if, in the view of others, a statutory requirement has effect and could, therefore, be actionable.

[Lord Callanan (Con)]

No, it does not mean that the requirement is to be treated as though it never had any legal effect. Rather, it allows the continued operation of the requirement, except to the extent that it has discriminatory effect.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I think I am Baroness Hayter of Confused. I did not understand that last reply. I thank the Minister for attempting to answer the question, though I have to warn him that I think he is in trouble with the boss. I think he admitted that there would be checks at the border between Northern Ireland and Great Britain on pig semen. The boss said, “No checks, no extra paperwork”. I am now hearing noble Lords say, “New checks”. That is not what the Prime Minister said at that reception. He said, “If there’s a piece of paper, send it to me and I’ll throw it away”. I shall make no comment on semen causing particular problems, but it seems that there would be checks on it.

I shall try to be brief because a lot of points have been raised. I thank all noble Lords who have spoken, particularly those who support the line we are taking. I fear that many of these questions flag up the problem that the Bill was drafted without the full involvement and agreement of the devolved authorities. We may not be where we are if those discussions had taken place beforehand. I think it was the noble Lord, Lord German, who talked about parallel tracks between the common framework and this Bill. It loses not only the consensus approach to the common frameworks that we have discussed before, but the flexibility that the noble Lord, Lord Purvis, mentioned. We want to build on this. I hope the Minister will hear some of these questions and see whether he can give a response that ensures clarity for business, as well as for those operating in this area.

The Minister did not answer on universities and I am not sure he answered about the all-Ireland agreement. A lot of other points were raised about animal feedstuffs and pesticides. It would help if some of those dialogues could continue before we get to Report. It is also worth listening to what my noble friend Lord Liddle said. The Government should stand up and say that they support the maintenance of the devolved settlements, and that they recognise and want to keep diversity where it would still enable us to have an internal market. That sort of statement would be helpful.

I am sorry that the noble Baroness, Lady Noakes, is now not allowed to come back at me for what I am going to say. I partly agree with her. We want trade and believe that it is good, but not at any price—not at the price of safety or the environment. This does not mean that we are not in favour of greater trade with all the benefits that it has brought. I also agree with her that, of course, we favour free, and barrier-free, trade. That is why some of us want a deal with the EU, which has no tariffs or checks, and we wanted to stay as close to it as possible. I know it was not her view that we should stay in. I think I once heard her say—I am happy to correct this at the end if I am wrong—that trading on WTO terms would not be the end of the world. Good, the noble Baroness is nodding, so she confirms that she said it. That, of course, would mean a lot of checks and a stop to free trade.

The issues raised in this debate need further consideration. We have to resolve the question that the noble and learned Lord, Lord Hope, asked. Will there be any input by the devolved authorities into importation by, particularly, the English Government? They will need some comfort over that. I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

Amendment 8 not moved.

Clause 2 agreed.

15:15

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

We now come to the group beginning with Amendment 9. I again remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this, or anything else in this group, to a Division should make this clear in debate.

Clause 3: Relevant requirements for the purposes of section 2

Amendment 9

Moved by

[Lord Callanan]

9: Clause 3, page 2, line 21, leave out “any” and insert “a particular”
Member’s explanatory statement
This amendment would clarify that the purpose of Clause 3 is to identify what are the relevant requirements that apply to a specific sale of goods (the word “sale” being defined broadly in Clause 14).

[Lord Callanan (Con)]

I apologise in advance if noble Lords are in for more technical explanations. We will take together the minor technical amendments in my name to Clauses 3 and 4. All involve drafting improvements or clarifying technicalities. None of these amendments results in a change of policy, but they need full and proper scrutiny in this Chamber and noble Lords deserve an explanation of the improvements that they make to the Bill.

First, I turn to Amendment 9. This clarifies Clause 3 by identifying what is a relevant requirement in relation to a specific case where particular goods are sold. Without this amendment, there could be ambiguity as to whether a requirement needs to apply to all sales of all goods to be a relevant requirement. For example, where a business has produced a tin of biscuits in Scotland and seeks to rely on the mutual recognition principle to sell them in England, this amendment makes it clear that the relevant requirements are those that would apply to the sale of the biscuits in England and to the equivalent, hypothetical sale of the biscuits in Scotland, Northern Ireland or Wales. Requirements that apply to other sales of other goods—for example, requirements that apply to the auctioning of a painting—would not be relevant requirements in this context. Without this amendment, there is a risk of legal uncertainty over which requirements are relevant. This could create confusion, costs and inconvenience for businesses.

Amendment 10 provides similar clarification. It emphasises that subsection (2), which defines and therefore enables one to identify a relevant requirement in relation to a particular sale, makes relevant requirements only in relation that sale. Requirements are not relevant in any general way; they are relevant only in relation to the sale in question.

Amendment 18 clarifies that Clause 4(1)(a) refers to a specific sale of goods, rather than a hypothetical sale of goods. It makes clear that we are referring to an actual sale of goods and not to a hypothetical sale. As a result, the amendment removes any potential ambiguity around which existing statutory requirements are excluded from the mutual recognition principle. This amendment also ensures consistency with Clause 3(1), as proposed to be amended by Amendment 9—also in my name. Once again, we are considering requirements which apply specifically to a particular sale—for example, the requirements that would apply to the sale of a tin of biscuits in England, as per my previous example, but not all requirements that might apply to any other sales of goods. This makes clear which statutory requirements might be excluded, if the conditions in Clause 4(2) are met.

Amendment 19 corrects a small drafting error in Clause 4(1)(a). This paragraph refers to “a” part of the United Kingdom when it should refer to “the” part of the UK mentioned in the opening words of the subsection. It removes any ambiguity around which part of the United Kingdom is being referred to in Clause 4(1)(a), so that there can be no doubt that when we are considering English requirements, we are considering how they apply in relation to a sale in England. Without this amendment, there could be confusion over whether we are referring to just those requirements which apply in England or to requirements which could apply in any part of the UK.

Finally in this group, Amendment 23 aligns the language used in Clause 4(2) and 4(5). Both provisions refer to a hypothetical sale on a particular day, rather than to an actual sale. These subsections set out the conditions for when an existing requirement will be excluded from mutual recognition. Both should refer to a hypothetical sale on the relevant day. This amendment clears up the ambiguity by making it clear that both subsections refer to a hypothetical sale, rather than to an actual sale. Aligning the language in this way will make the drafting of this clause clearer and will avoid any confusion over why the wording is different in Clause 4(2) and 4(5) when both should refer to a hypothetical and not to an actual sale.

Taking again the example of the sale of a tin of biscuits, Clause 4(2) and 4(5) refer to the statutory requirements around the sale of biscuits, which would have been enforced in different parts of the UK on the relevant day, which is the day before this Bill comes into force, if the tin of biscuits had been sold on that day. This means that we will always be talking about a hypothetical sale here, and the amendment to Clause 4(5) makes this clear. Without this amendment, it is not clear that Clause 4(5) is referring to a hypothetical sale, which may cause confusion. I beg to move.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am interested to know why the Minister felt that these amendments needed to be moved at this time; what provoked that? Furthermore, who decides—and in what circumstances—what is a hypothetical sale, as opposed to a real sale?

[Lord Liddle (Lab)]

I have no wish to add to the general confusion.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the Minister for clearing this up, because any confusion beforehand may be ongoing. Since he was so clear, perhaps he will not mind my asking a couple more questions.

As the Committee knows, I live on the border, and some of these things are very relevant for traders, especially rural traders living on either side of the border. When I was a Member of the Scottish Parliament, one of the big areas of debate when minimum unit pricing was introduced was the concern about the cross-border selling of alcohol, which avoided the decision being made in Scotland concerning the price of that alcohol. This is not hypothetical; these were real sales. It did not apply to the more expensive malt whiskies et cetera. The minimum unit pricing of alcohol was, by and large, about the low-value alcohol which could be brought across the border in large quantities to be sold in Scotland. That was a valid issue, and a key area of consideration when it was debated by the European court. The justification, which the ability of the public authorities to prevent that happening relied on, was that this was against market access principles but justified on public health grounds. The Government have chosen not to do this, so they will be relying on the market access principles.

Can the Minister clarify something that I genuinely do not know? I am not trying to catch him off guard. On the sale areas of goods, does the Bill permit alcohol for use within Scotland to be sold in Scotland on English grounds? Can alcohol be sold in Scotland by using mutual recognition, to avoid the minimum unit price stipulated for alcohol that is then sold in Scotland? I have a fear that it may be. It will be reassuring if the Minister indicates that this is not the case, because Clause 13 is about the sale of goods complying with local law and states:

“Nothing in this Part prevents goods produced in or imported into a part of the United Kingdom from being sold in another part of the United Kingdom if … the sale complies with any requirements applicable in that other part of the United Kingdom”.


Therefore, if we say that, rather than biscuits, it is gin or vodka, and a policy has a direct impact on the price of that gin or vodka because of the Scottish legislation, then Clause 13 suggests that if that alcohol was brought over from Northumberland and sold in the borders, the selling of it to a wholesaler within the borders would have to be done as if it had taken place in Berwick, Northumberland.

I ask this because there is currently a lot of cross-border trade in agricultural business. Many Scottish producers will sell livestock at the Wooler market in England. A lot of this is happening. It has been worked through with regard to the different agricultural standards. Therefore, I am anxious that Clause 13 could inadvertently be used to bypass what are correct elements.

This leads me to my final question. We will come to the definition of “goods” and “sale” with Amendments 66 and 67, but there is nothing in the definition of “sale”, or the other parts of the Bill, relating to the price. If policies are in place which directly impact on the price of an item to be sold, rather than standards, labelling or marketing, is price also considered within that? I would be very grateful and give him top marks if the Minister can answer those questions clearly.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I have mainly technical, minor drafting points, which do not require much discussion. The Minister was consumed during his speech because of the hypothetical tin of biscuits that he brought into play. I am so glad that we do not have details of what pig semen is carried in. I much prefer us sticking with the tin of biscuits as our main metaphor in these issues.

Like the noble Baroness, Lady McIntosh, I wonder why these amendments are being tabled now. After all, the Bill has been through the other place and been republished. Only now are we getting evidence of “scrubbing the text” to ensure that the sorts of issues raised in this group of amendments will not get into the final version of the Bill. It is a minor criticism of a very minor issue, and I am happy to await the answers to the questions raised by the noble Lord, Lord Purvis, which would bear substantial response and will need to be dealt with at the appropriate time.

[Lord Callanan (Con)]

My Lords, I apologise to noble Lords for hesitating in my answer earlier. There is a danger of this “tin of biscuits” example assuming the same significance that the maiden aunts of the noble Lord, Lord Lisvane, did, during the EU withdrawal Bills. I see smiles from noble Lords who were involved in those debates. However, I am not sure that we should pursue the “pig semen” argument of the noble Lord, Lord Stevenson.

To answer my noble friend Lady McIntosh, these are technical changes relating to drafting errors that became apparent in further studying the text following amendments tabled by noble Lords. Following further examination by government lawyers, the Bill was drafted fairly speedily over the summer. Our intention was to avoid government amendments, but we wanted to hear the replies to the consultation and the White Paper. They are technical and legal clarifications that change none of the policy intent.

I assure the noble Lord, Lord Purvis, that the minimum unit alcohol pricing policy is unaffected, because it is an existing measure that is excluded, and because it is specifically excluded in addition to that, via various clauses. I will write to reassure him of that. Regarding his points about gin and vodka, I am not an expert on the Scottish measure, but I think it affects the retail price of the sale and not wholesale prices, and therefore the product would need to be sold at a different price, as specified in the Scottish measure. However, I consulted officials when we first debated this legislation and was assured that the Scottish measure would be unaffected by this legislation. I am happy to write reassuring the noble Lord on that point.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

I have received a request from the noble Baroness, Lady McIntosh of Pickering, to speak after the Minister. My apologies; I gather that is not the case.

Amendment 9 agreed.

Amendment 10

Moved by

[Lord Callanan]

10: Clause 3, page 2, line 28, after first “requirement” insert “in relation to the sale”
Member’s explanatory statement
This amendment would clarify that a statutory requirement that meets the conditions in paragraphs (a) and (b) of Clause 3(2) is a relevant requirement in relation to the sale mentioned in Clause 3(1).

Amendment 10 agreed.

Amendment 11 not moved.

15:30

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

We now come to the group beginning with Amendment 12. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press anything in this group to a Division should make that clear in the debate.

Amendment 12

Moved by

[Lord Fox]

12: Clause 3, page 3, line 25, leave out subsection (8)
Member’s explanatory statement
This amendment would remove the Secretary of State’s regulation-making power, as recommended by the Delegated Powers and Regulatory Reform Committee in its 24th Report.

[Lord Fox (LD)]

My Lords, in moving Amendment 12, I will also speak to Amendments 27, 38, 46, 72, 97 and 160 in my name. These amendments would remove the Bill’s regulation-making power, which is fully in line with the recommendations of the Delegated Powers and Regulatory Reform Committee. Its report is a comprehensive review of these issues; your Lordships will be pleased to hear that I will therefore not reiterate them at length. Later, we will hear the wise words of my noble friend Lord Thomas of Gresford, who will describe that your Lordships’ House is approaching a watershed on this issue. He is of course right; this train has been coming down the tracks for some time.

A while ago, the noble and learned Lord, Lord Judge, gave a lecture at King’s College London entitled “Ceding Power to the Executive: The Resurrection of Henry VIII”. He made the stark point that parliamentary sovereignty is the antithesis of executive sovereignty. The two concepts are mutually contradictory. The democratic process is not meant to give—and our constitutional arrangements are not meant to provide us with—executive sovereignty. The burden of the noble and learned Lord’s argument was that Henry VIII powers, although paradoxically conferred upon the Executive by none other than Parliament, are an affront to parliamentary sovereignty. That lecture was held in 2016. Since then, we have seen an acceleration of the erosion of parliamentary sovereignty through these means.

As the House of Lords Constitution Committee put it in its report of the Strathclyde review some five years ago:

“Delegated powers in primary legislation have increasingly been drafted in broad and poorly-defined language that has permitted successive governments to use delegated legislation to address issues of policy and principle, rather than points of an administrative or technical nature.”


This Bill pushes that envelope yet further. The Delegated Powers and Regulatory Reform Committee was clear. It described some of the powers in that report as either “extraordinary” or “unprecedented”. To justify these extraordinary and unprecedented powers, the Government cite the need for legislation to evolve. The possibility of unknown unknowns required a yet unknowable legislative response and a yearning for law-making speed. None of these justifications is extraordinary and none of them is unprecedented.

I beg to move.

[Baroness Andrews (Lab)]

My Lords, the amendments in my name in this group are for the most part identical to those of the noble Lord, Lord Fox, although in some cases they are wider in their supplementary implications. It goes without saying that I agree with everything he said—and everything that I suspect the noble Lord, Lord Thomas of Gresford, is about to say—about the whole range of excessive and inappropriate delegations. Of course, my amendments follow the advice of the DPRRC; I declare an interest as a member of that committee.

I will make a few general points about what the Government are trying to do in these clauses and how they have justified them. I speak for myself but I suspect that I also speak for many members of the committee —certainly for our distinguished chair—when I say that we have reached a point of almost total exasperation with the Bill. The DPRRC was set up in 1992 to monitor and control the excesses of executive power and the temptation for Ministers and officials to try to avoid parliamentary interference and take inappropriate powers. So it is hardly new, but in recent years, we have been sorely tested— not least on the limits of our vocabulary. Indeed, the DPRRC has described these powers as “extraordinary” and “unprecedented”.

We have seen the increasing use of skeleton Bills and statutory instruments not for the delivery of policy but for the design of policy and for carrying the principles of legislation within the secondary framework. Most recently, we have seen mounting evidence of a Government that will go to endless lengths to avoid scrutiny. This Bill is in a class of its own because of the sheer volume and significance of the Henry VIII powers. Of the 12 delegated powers in the Bill, seven are Henry VIII powers, allowing Ministers to amend or repeal significant provisions of the Bill itself, as well as other primary and secondary legislation. We used to protest when only one Henry VIII power turned up in a Bill.

It sets a different tone, too, because the delegated powers memorandum, in its attempt to justify why these powers to expedite the mutual recognition principle and the non-discriminatory principle are necessary, does not even bother to try to find a convincing justification for the powers taken. In the clauses relating to my Amendments 13, 28, 39 and 47, for example, the explanations for using statutory instruments to amend Acts of Parliament cite the need for speed and flexibility to respond to unforeseen developments—the known unknowns and so on—respond to stakeholders and provide certainty. These are profoundly lazy and threadbare arguments, and Ministers and officials know that. I consider that contempt of Parliament. Secondary legislation does not guarantee speed, flexibility or certainty. Primary legislation, as we know from dealing with the pandemic, can be introduced at the speed of light and amended. Indeed, the Government have conceded in their own arguments that the Secretary of State is not required to declare that the making of regulations is required as a matter of urgency, so urgency is a false trail too.

This disingenuous use of language offered in the memorandum in regard to Clause 6(5) is a case in point. It argues that Ministers need to be able to respond swiftly to future-proof the operation of these principles so that they can be changed as and when Ministers decide that it is necessary. The DPRRC dismisses this as an attempt to completely rewrite the non-discrimination principle. When the Government argue that there is no way that they can change the definition of legitimate aims attached to the non-discrimination principles in Clause 8 other than by secondary legislation, they seem to have completely forgotten that such a thing as primary legislation exists. Indeed, in Schedule 2, for example, the assumption is that only secondary legislation is fit for purpose when it comes to making future amendments.

The powers that my amendments seek to remove are described by the DPRRC as inappropriate and ones that should be removed; the Constitution Committee endorses that. “Inappropriate” may seem rather feeble in the parliamentary lexicon; in fact, it could not be more powerful. Among other synonyms, it means unseemly, unbecoming, lacking in propriety, ill-judged and out of order. Nowhere are those and many other epithets more appropriate than what these clauses have to say about the devolution settlement. For in Clauses 3(10) and 6(7), in relation to mutual recognition and non-discrimination —the two main pillars of market access—there is the explicit instruction that, before making regulations, the Secretary of State must consult the Ministers of the devolved assemblies. The Government are required not to seek consent but merely to consult, so they

“can act without the need to introduce new primary legislation or to obtain the consent of the devolved administrations (the Minister being only under a duty to consult) even though the proper functioning of the internal market is essential to all the administrations of the UK.”

That is a direct quote from the DPRRC.

That most eloquently brings us to the fracture at the heart of the Bill, and to the reason for taking these inappropriate powers which removes them from the full attention of Parliament. It comes back to what the Government insist is the purpose of the Bill—to secure, despite the promise and the purpose of common frameworks, that the internal market will need a new regulatory structure flexible enough to meet the unforeseen demands in the future, notwithstanding that they cannot tell us what those demands are likely to be or explain how they are going to prevent lower common standards permitted by law in this Bill, or why the common frameworks are not sufficient in themselves to prevent that, or why the Bill cannot be amended in such a way as to ensure a tight fit between the common frameworks and the common purposes of the Bill. These inappropriate powers are seen as necessary to expedite what might happen in the future, notwithstanding the impact on the devolved nations or the devolved settlements, the role of Parliament, the balance of powers expressed in appropriate legislation or the integrity of the process itself.

There is a great deal at stake in this Bill, as has been said many times already in the process of the Bill. They are grave matters, and they have been drawn to the attention of this House by the two most senior scrutiny committees. I hope the Minister will find he can agree with me that these powers are offensive as well as unnecessary, and that they will be removed.

[Lord Hope of Craighead (CB) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Andrews. I am not a member of the Delegated Powers Committee and never have been, so I think I can, without any embarrassment, praise the work which that committee does so often on behalf of the House and, in particular, the reports it has made in respect of the Bill we are considering today. The issue which it raises, of course, is a very serious one, and it has been very well explained in its own report and spoken to by both the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews. I do not want to say very much more about it. The important point is revealed when you look at the subsection which introduces the power to make regulations in the case we are looking at, first of all in Clause 3(8). There is absolutely no qualification whatever to indicate the purpose for which that power may be exercised. It is a totally unqualified power, which may be used without any control from anybody as to the way in which the power is being exercised.

Twenty years ago, this House was looking at, among other things, the Scotland Bill. It is very interesting for the historian to compare the way in which delegated powers are conferred by that Bill with the way in which they are being conferred by this Bill. Both of them were major pieces of legislation, designed to lay the structure for the future governance of this country. On the part of the Scotland Bill, of course, it was very obvious because it was the first step toward devolution; it had to be carefully crafted, and yet it was moving into an uncertain world. The many powers to make legislation by delegated legislation are all carefully described, so that one knows exactly the purpose for which that power could be used. As the Bill went through both Houses, the reason for the power and the scope that was given to Ministers to use it was carefully scrutinised by both Houses.

We do not have that benefit in this case, in a Bill which is designed to settle the internal market—a Bill of equal importance and, perhaps I might say, equal difficulty. Nevertheless, they have in common that they are major pieces of legislation, and yet, in this case, the power we have to legislate and to scrutinise legislation is really being opened up to Ministers to deal with, without any control whatever. That is the basic flaw which runs through all of the clauses to which these amendments draw attention.

There is, of course, the point that the noble Baroness mentioned, that all that has been required with the devolved Administrations—or the Ministers in the devolved Administrations—is that they be consulted, not consent. That is not in keeping with the Sewel convention, although that is qualified by the word “normally”. I would have thought that in this case, because of the scope of the powers, consent would be appropriate here, because there is no other way of controlling what the power may be used for. That is the reason why the absence of a provision for consent is so important in these cases.

Without saying any more, I must say that I fully support the points that have already been made on these very important amendments.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

The noble Baroness, Lady Noakes, has withdrawn, so I now call the noble Lord, Lord Thomas of Gresford.

[Lord Thomas of Gresford (LD) [V]]

My Lords, the House of Lords is coming to a watershed. When we threw out the statutory instrument in relation to tax credits in 2015, the reaction of the Government was to wheel in the noble Lord, Lord Strathclyde, to set up a review. His report advised that the House of Commons should be given the power to overrule this House should it ever have the temerity to do the same thing again. Since then, the Labour Party has followed an unwavering policy of abstaining on fatal amendments to statutory instruments.

15:45

The premise of the review of the noble Lord, Lord Strathclyde, was that the issue lay in conflict between this House and the other place. But, as the Constitution Committee pointed out at the time, he had addressed the wrong question—the conflict was really between Parliament as a whole and the Government. Our unwritten constitution is praised for being flexible. If we had rules which were inscribed in a formal written constitution, they would need to be interpreted and given effect to by the Supreme Court. Then, as in the United States of America, all eyes would turn to the backgrounds and values of the judges of that court, and the appointment of Supreme Court justices would become very much under the spotlight, as we have seen in Washington this week.

The Government have taken advantage of the timidity of this House in exercising its undoubted power to strike down statutory instruments. We have now reached the situation where the Government have the gall to seek powers to act unlawfully and contrary to the rule of law, confident that we will grumble mightily but not interfere. In addition to that, the Executive seek power to bypass Parliament in this Bill with a whole series of Henry VIII clauses.

As I sought to explain in a debate on the Agriculture Bill, it was the idea of Thomas Cromwell that that unruly monarch should ignore Parliament and rule by proclamations, as though they were actually Acts of Parliament. But, importantly, even Henry’s proclamations could not interfere with existing rights; it did not give power, as the provisions subject to these amendments to the Bill do, to repeal or modify existing legislation. Henry’s Act lasted only 12 years before it was swept away.

The Delegated Powers and Regulatory Reform Committee has consistently fought against the tendency of this and the previous Government to introduce Henry VIII clauses. This Bill is an egregious example. In the provisions which these amendments seek to strike out, powers are given to Ministers not just to rectify mistakes or trivialities but to introduce policy by ministerial decree and to design policy—as the noble Baroness, Lady Andrews, said a moment ago—most significantly in the sensitive area of the Northern Ireland protocol.

The DPRRC, in its guidance to departments in drafting legislation, in July 2014 laid down expressly that a compelling reason must be given for introducing Henry VIII clauses. The Delegated Powers Memorandum provided by the department for this Bill gives the general reasons for these clauses on this occasion in these terms:

“There will … need to be powers in the Bill to enable the Secretary of State to ensure that the internal market framework can adapt in line with future developments.”

There follows some utter gobbledegook:

“This future proofing will necessitate the ability to make technical and likely unforeseen issues and therefore best suited in secondary legislation.”

That is a meaningless sentence—lazy and threadbare, as the noble Baroness, Lady Andrews, called this sort of language. What does “future proofing” mean? The memorandum goes on:

“There will also need to be powers to enable HM Government to adapt towards the specificities of the Northern Ireland Protocol.”

It concludes by praying in aid the need for speed.

The memorandum sets out its justification for each of the clauses the amendment seeks to strike out in very similar terms. As an illustration, I shall refer simply to the justification given in paragraph 21 of the memorandum for the powers taken in Clause 3(7). It is said that the power taken is necessary to enable the Secretary of State, first, to act swiftly and, secondly, to change the list of statutory requirements that are in scope of the mutual recognition principle if it becomes apparent that the existing list does not effectively deliver the objectives for the UK internal market for goods, including “unfettered access” for goods moving from Northern Ireland to the rest of the UK. That final phrase “unfettered access”, used by the noble Lord, Lord Callanan, with relish in the first debate this afternoon, gives you the clue to the real reason behind these clauses: to break the terms of the Northern Ireland protocol in a manner such that Parliament cannot interfere.

What none of these clauses, made by Westminster ministerial decree, ensure is that there should be any form of agreement by the devolved Administrations to any changes to primary legislation which significantly affect their devolved competences—a point made already by the noble Baroness, Lady Andrews, and the noble and learned Lord, Lord Hope. Noble Lords waiting patiently to get their teeth into the illegalities of Part 5 must not think that that is the only objectionable part of the Bill. If this and subsections with similar terminology are passed, the Secretary of State will have the power by statutory instrument to twiddle about with the existing law of this country and with the provisions of the protocol, as agreed by international treaty, as he thinks fit.

Of course, if Parliament had a robust way of dealing with statutory instruments—if we could amend or throw them out as a check on executive power—it might not be so crucial. But that is not the case. Cowed by the Strathclyde threat, the power we have to say no is never exercised by Her Majesty’s Loyal Opposition—or perhaps they hope that some day, over the rainbow, they may have the opportunity to exercise similar powers themselves. The DPRRC has concluded that the justification of the necessity for speed has not been made out. As a second and most important point, the committee points out that the powers taken are much wider than the justification claimed. The noble and learned Lord, Lord Hope of Craighead, also rightly argued that no purpose, no scope, is defined. I urge—including on Her Majesty’s Opposition—that the time to say no to this proliferation of Henry VIII clauses has now arrived.

I leave the House with the thoughts of Sir Edward Leigh, once a Brexit rebel but now a Tory loyalist, speaking on the other place on Mrs May’s EU withdrawal Bill. He said:

“We have heard a lot about Henry VIII. When I was a rebel, I used to care about these things. Now I am a loyalist, I let the Government get away with it … Henry VIII is a bastard, but he is my kind of bastard”.—[Official Report, Commons, 11/9/17; col.466.]

Does the noble Lord, Lord Callanan, agree with his colleague in that terminology?

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I welcome this opportunity to agree with what has been said by previous speakers, and particularly thank those who have contributed to this debate through the 24th report of the Delegated Powers and Regulatory Reform Committee, and the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews, for putting into effect the conclusions of that report. The report is indeed striking in its conclusions, and in particular in the power of the language used. I think students of constitutional law will be watching these deliberations very closely to see whether this is a new trend on the part of the Government or a one-off.

My understanding is that the Bill is in large measure to deal with the political fallout of the Government agreeing to the EU withdrawal agreement and the Northern Ireland protocol. Perhaps I am wrong, but that is my understanding. My further understanding is that, when Parliament agrees to delegate powers to the Executive, it does so on the strict understanding that the Government will act on behalf of Parliament with respect for the rule of law and parliamentary democracy. Clearly, in all five parts of the Bill, this is stretched to breaking point. As has been said, the reliance in the Bill on the sweeping Henry VIII clauses is breath-taking. So I entirely echo what has been said by previous speakers and find that I have great sympathy with the amendments.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, it is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, and to agree with the amendments in the names of my noble friend Lady Andrews and the noble Lord, Lord Fox. For me, the Delegated Powers and Regulatory Reform Committee is particularly instructive, because it has issued a very scathing report which states quite clearly that, in the absence of a convincing justification for the Henry VIII powers in those clauses, the power is inappropriate and should be removed from the Bill.

The noble Baroness, Lady McIntosh of Pickering, said that perhaps the Government wish to use these powers to get their way in terms of the withdrawal agreement—an international agreement which they signed only one year ago with the European Union—and to undermine the Northern Ireland protocol, which in turn could undermine another international agreement, the Good Friday agreement. I say to the noble Lord, Lord Callanan, that the people of Ireland, north and south, who voted for that agreement and who by and large support the principle behind the Northern Ireland protocol—to prevent a hard border on the island of Ireland and to prevent any further turmoil, trauma, distress or levels of terrorism—will not take kindly to any of that.

I was also very taken with the words—referred to by the noble Lord, Lord Fox—of the noble and learned Lord, Lord Judge, a few years ago about parliamentary sovereignty. Yes, parliamentary sovereignty is the antithesis of executive sovereignty, and I do recall, as a former Minister in the Northern Ireland Executive, that I was always told that the Executive are accountable to Parliament. Can the Minister advise the House whether there has been consultation of any kind with the devolved Administrations? I know that Scotland and Wales have so far refused to give legislative consent to the Bill, because they clearly see the powers within it as totally egregious in terms of what they can do, and in terms of no consent being required from them and no real consultation. I also know that in the Northern Ireland Assembly there was a majority vote against the UK Internal Market Bill.

I believe that there are three different issues with these powers. Giving too much power to Ministers to change the rules of the UK internal market via regulations without proper parliamentary scrutiny is wrong. It is interesting to note that the regulations in these clauses require first a consultation with the devolved counterparts, so there is a need to obtain their consent to such regulations, but that consent is clearly absent. That is what Amendments 13 and 28 are all about.

The Bill also has an extremely narrow understanding of exceptions to these principles. If we compare it with the EU internal market where other objectives such as environmental improvement can be used, at least in certain cases, to restrict mutual recognition and keep more ambitious domestic rules, we see that the Secretary of State also has the power to add, vary or remove exceptions, as set out later in Clause 8 for non-discrimination and in Clause 10 for all the principles to which Amendment 47 refers.

There is no doubt that the UK Internal Market Bill will become a protected environment that the devolved Administrations will be unable to repeal or modify. That is why these amendments tabled by the noble Baroness, Lady Andrews, and the noble Lord, Lord Fox, are apt and timely. They should be supported because both the Delegated Powers and Regulatory Reform Committee and the Constitution Committee believe that the use of these powers is wrong.

16:00

[Lord Liddle (Lab)]

My Lords, we have heard many excellent speeches in this short debate, and I agree in particular with what my noble friend Lady Andrews has said.

I am a member of the Secondary Legislation Scrutiny Committee. The committee shares many of the concerns expressed by the Delegated Powers Committee in its report. However, I would somewhat disagree with the strictures of the noble Lord, Lord Thomas of Gresford, on the behaviour of Her Majesty’s loyal Opposition. We have to be considered and careful about using fatal Motions, but to my knowledge it is certainly not Labour’s position that those fatal powers should never be used.

On the substance of the Trade Bill, the Agriculture Bill and the immigration Bill, I had assumed that the Government are putting extensive delegated powers into the legislation basically because they do not know what their post-Brexit policy is going to be—they do not really have a clue. For instance, they do not have a clue about what national strategy we are going to pursue on trade. Will it be one that maintains our high standards, or will it be one that tries desperately to get trade agreements with the rest of the world that lower standards in order to open markets in the hope that that will compensate for the loss of market access in Europe? I think that the Government do not know. There are deep divisions inside the Conservative Party on where the Government should go on these questions, so the simple thing to do is to put a lot of these policy decisions into delegated powers which Ministers will have to decide on at some future point.

However, in this Bill, I am concerned for a quite different reason: in this case the Government know only too well, in particular on the clauses on the Northern Ireland protocol, what they want to do with the powers that they would have. If we cannot remove those offending Northern Ireland clauses from this Bill, then if delegated legislation comes to this House based on them, we should vote against it every single time, because that is clearly unconstitutional and it would be perfectly within the powers of this House so to do.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, there is little to add to what my noble friend Lady Andrews and other members of the hard-working, thorough and thoughtful DPRRC have said, along with the noble Lord, Lord Fox, and others who have spoken in the debate. However, I would remind the noble Lord, Lord Thomas, whose party has been in government more recently than we have, that I do not recall any reluctance on the part of the coalition Government to reach for secondary powers when it suited them—but perhaps his memory is rather shorter than mine.

I should say to the Minister that these amendments are pretty much bound to be accepted by the House on Report. That, of course, will leave the Government having to try to defend in the House of Commons in more detail than they have had to thus far why they should gift themselves the most remarkable and far-reaching powers, none of which, as has been said, have they sought to justify by purpose, urgency or anything else. Rather than repeat what the 24th report sets out and what has just been set out so eloquently, I urge the Minister to listen to the wise words and, either after discussion or of his own accord, take these unnecessary and worrying powers out of the Bill.

My noble friend Lord Liddle touched on the powers in Part 5. Obviously we will take those out, but of course the Government might try to put them back in again. We should remember that this group of amendments covers regulations that would, if they manage to keep Part 5 in or return it, be made in some areas of Part 5. These regulations are really serious, due to the current Clause 47(2)(a), which, as everyone will know, gives the status of primary legislation for the purposes of the Human Rights Act to secondary legislation. Inexplicably and extraordinarily, those pieces of secondary legislation would therefore not be able to be struck down if they breached convention rights, rather they would have thrown around them the protective ring that is normally used only for primary legislation. But those measures are regulations that will not have been through the legislative process. They would be introduced as secondary legislation by regulation, but would suddenly be preserved as if having been given the status of primary legislation. That is set out in Clause 47(2)(a)—I hope I have got that right; I have my learned friend next to me, in case I have got it wrong.

Needless to say, the Joint Committee on Human Rights had rather a lot to say about this constitutionally unacceptable ruse. Its members have tabled an appropriate amendment to remove it when we get to Part 5, and quite right too. The Government seem to want to legislate by regulation—unchallengeable in court, therefore —giving it primary status that goes even further than the other Henry VIII powers which were considered by the DPRRC. I have a feeling that the committee met before the insertion of this clause in the Commons—I think I am getting a nod from behind me—which is presumably why the Delegated Powers Committee did not discuss it.

I add a further comment that goes beyond the Bill but is a reflection of what has already been mentioned. I have spoken in the House previously about the book, How Democracies Die, which lists institutional forbearance —along with the rule of law, respect for the opposition and a free press—as a fourth vital element of what the authors call quadrilles, which go beyond democratic elections, on how to have a robust and fully functioning democracy. Institutional forbearance is an interesting term and is defined in the book as,

“the action of restraining from exercising a legal right”,

thereby perhaps avoiding actions which, while within the law, violate its spirit. It is what my former supervisor, the noble Lord, Lord Hennessy, would call the “good chaps” theory of government. I agree that regulation-making powers can be donated to Ministers but the purpose of that was to enable small adjustments to the policy of an Act to be finalised or tweaked without primary legislation. It was not meant to gift big policy decisions—especially not of the sort included in the Bill, which I heard today was hurriedly written over the summer—to the Government with effectively no parliamentary scrutiny or agreement.

Therefore, like my noble friend Lady Andrews, and the noble Lord, Lord Fox—whose extremely useful quote from the noble and learned Lord, Lord Judge, I have not heard before—I am concerned about the extensive, unnecessary and quite unjustified use of Henry VIII powers, not simply in this Bill but in others. It is a worrying pattern that this House has a duty to curtail. I hope that this is the last occasion on which we have to remind Ministers that they should carry out the primary laws as passed by Parliament, not take to themselves powers to make their own laws.

[Lord Callanan (Con)]

My Lords, I have a sense of déjà vu about this debate. The noble Lord, Lord Liddle, will well remember our debates on the EU (Withdrawal) Bill. These amendments relate to delegated powers included in Parts 1, 2 and 5 of this Bill. I should probably decline the kind opportunity afforded to me by the noble Lord, Lord Thomas, to comment on the parentage of Henry VIII, apart from saying that the noble Baroness, Lady Bloomfield, who is an expert on all these matters, tells me that his parents were Henry VII and Elizabeth of York—officially, at least.

I should say in answer to the noble and learned Lord, Lord Hope of Craighead, and his comments on the Sewel convention that the Government are fully committed to that convention and its associated practices for seeking consent. These powers are purely there to ensure that the legislation works properly and is future proof. There is no intention whatever to use the powers to avoid Sewel processes.

I should like to take this chance to emphasise the importance of these powers for the ongoing dynamism of our internal market, and to emphasise that the Government will not take lightly their responsibility in administering these powers. I am of course listening carefully to what your Lordships say but it is important for me to explain how we intend to use these powers.

The Bill aims to ensure a smooth transition for businesses as they are no longer subject to EU constraints. However, we recognise that this is an ambitious new system and the Government want to make sure that it works as well as possible for businesses and for devolved Administrations. As the system embeds in the functioning of law and trade, we will of course be monitoring this. We will speak to stakeholders and devolved Administrations to ensure that it works as well as possible within our constitutional framework. Where it does not, the Government need to be able to make necessary amendments to the system for the benefit of all parts of the UK. In line with normal arrangements for secondary legislation covering devolved matters, we will of course engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.

16:15

I turn to the specifics of the amendments in the group, beginning with Amendments 12, 13, 27 and 28. These amendments seek to remove the ability of the Secretary of State, in consultation with the devolved Administrations, to amend the list of statutory requirements that are in scope of the mutual recognition and non-discrimination principles for goods. I remind noble Lords that with regard to these clauses the power to amend will enable us to carry out practical and useful amendments that might be needed early in the operation of the regime. They will also enable us to respond to business and consumer experience of the principles. For example, there are several types of regulatory requirements currently not covered by the market access principles, such as those on the recycling of goods. If it becomes clear that the exclusion of these categories is creating significant barriers to trade, say by allowing specific, discriminatory and unwarranted restrictions to be enforced that could add to business costs, the power in Clause 6 would provide a means of resolving this by adapting the scope of the non-discrimination principle. To reiterate: these powers are not intended for casual redrafting but simply to enable the provisions to work properly.

We are also fully committed to ensuring that the use of this power is subject to effective oversight and consultation. First, any use of the power would require an affirmative regulation to be made in Parliament. This will ensure that Parliament will be able to scrutinise and vote on any changes. Secondly, consultation with colleagues in the devolved Administrations is required for any change to the relevant requirements. I hope that I have addressed noble Lords’ concerns on those amendments.

Amendments 38 and 39 remove the power to adapt the list of legitimate aims. Again, I must emphasise the importance of ensuring that the Government have the flexibility to adapt and improve the Bill to address any challenges or inconsistencies that arise during the implementation phase. We will, as always, be listening carefully and attentively to business and consumer stakeholders to ensure the UK internal market’s continued smooth functioning and to maximise certainty as we leave the transition period. The current legitimate aims list ensures that Ministers of the UK and the devolved Administrations are not constrained by the rules against indirect discrimination when rapid action is needed—for example, to address a food or feed safety emergency or a public health emergency. The list is narrowly drawn to ensure that limited barriers to free trade can be created and, therefore, Ministers will need the flexibility provided through Clause 8(7) and (8) to respond swiftly to the feedback we get from business and consumer stakeholders.

I am aware that comparisons have been drawn with the EU system, in which there are similar lists, as part of the EU rules. However, we are not in the business of doing a copy and paste of EU rules but designing measures that will work for the United Kingdom. Our view is that it is important to have a limited list and a power to amend, based on feedback from stakeholders. For the reasons that I have set out I am unable to support the amendments and hope that the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews, will withdraw or not move them.

Amendments 46 and 47 remove the Secretary of State’s ability to make regulations to amend Schedule 1, which contains provisions excluded from the application of the market access principle. This may make it impossible for the Government to respond to business and wider stakeholder feedback and act rapidly to adjust the list of exclusions. This would be needed if implementation shows the need for a review, or if further areas are identified that need exclusion due to a shifting economic landscape. This would be the case, for example, if the application of the market access principles to a new technology would pose a threat to public security or the environment. Much like the other powers in the Bill, we are fully committed to ensuring that the use of this power is subject to effective oversight and scrutiny. Again, any use of the power would require an affirmative regulation to be made in Parliament, ensuring that all MPs, from all parts of the UK, can scrutinise and vote on any changes. I therefore hope that noble Lords will understand that for that reason I am unable to accept these amendments.

Amendments 72 and 73 seek to remove the Secretary of State’s regulation-making power in Clause 17, which contains a power to amend Schedule 2 by the affirmative resolution procedure, to add, amend or remove services or requirements to those currently excluded from the principles of mutual recognition and non-discrimination. This is necessary to ensure that the list of exclusions is appropriate and to provide the flexibility to respond to future developments in services regulation. There is also a strictly time-limited power to introduce amendments to Schedule 2 via the “made affirmative” procedure. There is a risk that a situation may arise whereby it appears necessary for a particular service sector to be added urgently to the schedule to prevent that sector being unwittingly brought within scope of the market access principles in a way that could cause undesirable outcomes.

This is, of course, particularly relevant to sectors that are currently not applying the principle of mutual recognition as a result of retained EU law, and therefore such a sudden change could be problematic. This “made affirmative” power is necessary to ensure that the Government are able to maintain the status quo at the end of the transition period where this would be appropriate. These amendments would also mean that the Secretary of State could no longer amend the list of exclusions in Schedule 2 by the normal affirmative resolution procedure. This power is necessary to make any future changes to the schedule, as there may also be some services or requirements which may no longer need to be excluded from the provisions of the Bill. It is important that the services in Schedule 2 be regularly reviewed and altered to reflect changing circumstances, which is what the power in this clause stipulates. For these reasons, therefore, I am unable to accept the amendments from the noble Lord, Lord Fox, and the noble Baroness, Lady Andrews, as they would make it impossible to fulfil the objectives set out above.

Amendments 97 and 98 seek to remove the power in Clause 20 on indirect discrimination in the regulation of services for the Secretary of State to add, vary or remove the legitimate aims. The list of legitimate aims covers a limited range of necessary objectives for regulators, which would justify a requirement that may have an indirectly 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 list of legitimate aims is vital, as it clarifies whether a requirement should be considered indirectly discriminatory and, as a result, whether it is justifiable for a requirement to result in a service provider being put at a disadvantage compared to a similar provider from another part of the United Kingdom.

The list, as drafted, is a closed and exhaustive list. However, there is a possibility that the need to add to, remove from, or vary this list might arise in the future: for example, in relation to future types of services regulation that could not have been foreseen at the present time. To allow flexibility to adapt to potential changes in circumstances, a power for the Secretary of State to add, vary or remove additional legitimate aims is crucial. Therefore, I cannot accept these amendments and I hope that noble Lords will not press them.

I turn now to Amendment 160, which seeks to remove the power for Ministers to amend the type of movement to which Clause 43 applies by regulation. The UK Government have been unequivocal in their commitment to unfettered access for qualifying Northern Ireland goods moving to the rest of the UK market, and to guaranteeing this in legislation before the end of the year. The definition of a qualifying Northern Ireland good has been set out in draft secondary legislation, and will maximise certainty and avoid disruption for Northern Ireland businesses moving goods to the rest of the UK at the end of the transition period. This first-phase approach is intended to be a bridge to a longer-lasting regime that will focus its benefits on Northern Ireland businesses. We are working with the Northern Ireland Executive and businesses to ensure that the next phase of the regime, which will come into force during the course of 2021, focuses its benefits specifically on Northern Ireland’s businesses. As part of that, in line with representations made to us by business, we would want to be able to seek to provide the benefits of unfettered access to goods moving from Northern Ireland to Great Britain, however they make that journey. That is the flexibility that the power provides, and it would seem to be against the interest of traders in Northern Ireland to unduly limit that possibility at this time.

I can reassure the noble Lord, Lord Fox, that the power in Clause 43(8) is only intended to be used as part of our phased approach to delivering qualifying status for unfettered access. As such, it would be expected to be exercised alongside any change to the definition of qualifying Northern Ireland goods. However, in order to ensure that there is appropriate flexibility as regards the sequencing and approach to further legislation, the powers are not formally linked in the Bill. Therefore, I am sure that the noble Lord will feel able to withdraw his amendment.

[Lord Fox (LD)]

My Lords, as I suspected, the speakers who came after me made a far more powerful case for these amendments than I could have managed. The noble Baroness, Lady Andrews, expressed the exasperation of her committee, and I think we could all feel that exasperation coming through in her speech. In reiterating the report of the Delegated Powers Committee, she gave a powerful and devasting critique of the measures that are sought here.

Similarly, the noble and learned Lord, Lord Hope, highlighted the absence of a purpose for these powers—and I will return to the Minister’s response in a minute. My noble friend Lord Thomas was right to characterise this as an issue between Parliament and the Executive, not between the Lords and the Commons. I am also grateful to the noble Baroness, Lady Hayter, who very clearly made the point that there is seriously bad stuff in this Bill beyond Part 5—if I may paraphrase her thus.

The noble Baronesses, Lady Ritchie and Lady McIntosh, and others shared my position on why the Government might be taking on these powers. I was worried that perhaps the noble Lord, Lord Liddle, was going to be kind to the Government for a moment, but I am happy to say that he, too, shares our view that these powers are being accrued in order to do things, not least to the Northern Ireland situation, that should not be done.

In defending the Bill, the Minister not only sorted out the Tudor family tree but put forward a very detailed response, and he and his team should be thanked for the comprehensive nature of that. If noble Lords will excuse me, I will boil most of his reply down to saying, “We might need to change stuff but we’re not sure why”. That is true for every piece of legislation that ever came before your Lordships’ House, so it is not, in itself, a justification. Further, if the Government need to change the number of things that are on the list, they do not need these levels of powers in order to do that kind of amendment.

Furthermore, your Lordships have talked at length about the value of common frameworks. The noble and learned Lord, Lord Hope, talked about these frameworks being a living process which embraces change—the very sort of change that the Minister is seeking to gain through these draconian powers. So, if the noble Lord is worried about future unknown unknowns, I commend to him and his Government the common framework process. That is what it is there for.

So we have had a preliminary debate, and I sense a lot of unity across the Floor. In a vague moment of upset, I am grateful to the noble Baroness, Lady Hayter, for raising the coalition Government’s bringing forward of secondary legislation of this nature. It came in the Public Bodies Bill. On listening to the response, the coalition Government withdrew that measure and it did not go forward in the legislation. That is precisely what we are asking Her Majesty’s Government to do here. I cannot help thinking that there is sufficient consensus to take this forward to Report, and we will be talking with fellow speakers. In the meantime, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

Amendment 13 not moved.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

We now come to the group beginning with Amendment 14. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in debate.

Amendment 14

Moved by

[Baroness McIntosh of Pickering]

14: Clause 3, page 3, line 27, leave out subsection (9) and insert—
“(9) Regulations under subsection (8) are subject to super-affirmative resolution procedure (see Schedule (Super-affirmative resolution procedure)).”Member’s explanatory statement
This amendment ensures that regulations under subsection (8) are subject to super- affirmative resolution procedure and introduces the supportive Schedule in respect of super-affirmative resolution procedure.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful to have this opportunity to speak to these amendments, which in large measure refer to the possibility of introducing the super-affirmative resolution procedure in the parts of the Bill where it is deemed most necessary. Again, I thank the Law Society of Scotland for briefing me so well and for assisting me in drafting these amendments for our consideration.

Paragraph 31.14 of Erskine May states:

“The super-affirmative procedure has been implemented in enactments where an exceptionally high degree of scrutiny is thought appropriate, for instance, for the scrutiny of certain items of delegated legislation made, or proposed to be made, under ‘Henry VIII’ powers. Sometimes it is the only procedure available and sometimes the responsible Minister is given a choice of order-making powers that includes the procedure, a choice that can be constrained at a preliminary stage by either House.”


I remind noble Lords that the super-affirmative procedure provides both Houses with opportunities to comment on proposals for secondary legislation and to recommend amendments before orders for affirmative approval are brought forward in their final form. It is important to note that the power to amend the proposed instrument remains with the Minister.

16:30

In view of the discussion that we have just had, I believe that we have identified a number of areas that would benefit from the super-affirmative procedure. In Amendment 14, I have identified where regulations under Clause 3(8) would be subject to the super-affirmative procedure, and Amendment 133 introduces the supportive schedule in respect of that procedure.

My concern is about the level of parliamentary scrutiny—currently the affirmative resolution procedure —applicable to regulations under Clause 3. Changing the scope of the mutual recognition principle might have significant consequences, and I believe that the super-affirmative resolution procedure is appropriate here. It enables longer consultation and the views of stakeholders to be taken into account, as I quoted from Erskine May. The Bill before us is of such profound constitutional significance that the Constitution Committee report states, at paragraph 4, that we need as much scrutiny of the Executive as possible. Deploying this procedure will achieve a better outcome than simply—in keeping with the Bill—the usual affirmative procedure. Therefore, I submit that Amendment 14 is necessary in this regard.

Amendment 24 is consequential, following on from the drafting of Amendment 14.

Amendment 25 is reminiscent of the discussion that we had on Amendment 45 in an earlier grouping. It is important to note that Amendment 25 goes on to discuss a different formulation, such as the substance of a change. It is curious that in the clause that the amendment seeks to change, once again “substantive change” is not defined. Therefore, we seek greater clarity on the “substance of a change” or a “substantive change”.

Amendment 29 seeks to ensure that regulations under Clause 6, which relates to relevant requirements for the purposes of the non-discrimination principle, should, again, be subject to the super-affirmative procedure. The amendment introduces the supportive schedule in respect of that procedure—again, as set out in Erskine May.

Amendment 40 looks at ensuring that regulations under Clause 8, which relates to the non-discrimination principle, or indirect discrimination, are, again, subject to the super-affirmative resolution procedure, and again it introduces the supportive schedule in respect of that procedure.

Amendment 76 seeks to do the same in respect of regulations under Clause 17, and Amendment 77 seeks to delete Clause 17(4) as a result of Amendment 76.

Amendment 101 seeks to bring the super-affirmative procedure into play in Clause 20. Amendment 133, which inserts the new schedule for the super-affirmative resolution procedure, is consequential to Amendment 101. Amendment 176 sets out that regulations under the Bill will be subject to the super-affirmative resolution procedure, as set out in the schedule relating to that procedure.

We have an opportunity here to introduce this procedure, and I make a plea that we do so. If the amendments in the previous group are not adopted, or even if they are, I put it to your Lordships that the super-affirmative procedure, in terms of the resolution under Erskine May and indeed the schedule, is best placed to allow both Houses to have greater scrutiny than is currently permitted under the Bill. I beg to move.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

My Lords, the noble Baroness, Lady Noakes, and the noble Lord, Lord Carlile of Berriew, have both withdrawn, so I now call the noble Lord, Lord Naseby.

[Lord Naseby (Con) [V]]

My Lords, as colleagues know, I had the privilege of being Deputy Speaker in the House of Commons for five years, and of course Erskine May was my bible. Indeed, one had to refer to it pretty regularly during the Maastricht Bill procedures. Just as an aside, Erskine May went to Bedford School, as I did, and history has it that he was the only Clerk of the House of Commons who managed to get Big Ben silenced in the middle of the night. However, that is by the by.

We are dealing with trade, industry and markets here; we are not dealing with life-threatening situations that obviously require anything that comes forward to be looked at in a practical manner. Only in the last few days, we have had news of the future trade agreement with Japan, which has just been signed. The agreement makes it clear that the deal that has been settled between the UK and Japan goes far beyond our existing agreement with the EU.

However, of relevance to this amendment is a letter which I have received and which went to all Peers. On the second page, under the heading “Parliamentary transparency and scrutiny, next steps”, the letter says,

“we have shared the full UK-Japan Partnership Agreement treaty text with both the International Agreements Sub-Committee in the House of Lords and the International Trade Committee in the House of Commons. This is to aid the committees’ important scrutiny work and the production of reports by them on the agreement.”

That is a practical example, in the last few days, of the way in which the Government are proceeding. I have to say to the noble Lord, Lord Liddle, that that rather shoots the fox that he produced earlier—that nobody knew what they were doing and that they did not have a strategy, et cetera. That is a practical example.

Like my noble friend Lady McIntosh, I looked again this morning at what Erskine May says about the affirmative procedures. They are pretty straightforward. Traditionally, there were three variations. The first is used where something has to take place on an SI immediately—we have seen the need for that in relation to Covid—and there is usually a specified period by which it should not continue. It has obviously expanded since the days when I was in the Chair: then, it was about 40 days, and now, it appears to be almost six months, but that is by the by.

Then there is the more normal procedure in which a draft is laid before both Houses, not to be made and have effect unless one or both Houses present an Address to the Crown praying for the order to be made or for agreement to resolutions approving the draft instrument. Therefore, there is already a whole host of procedures whereby anything that comes forward can be debated before it is voted on. The key thing is that it is voted on.

As I have said in our earlier sessions, I have been a marketing man and a trading man. We really do not want yet another hurdle—in this case, the super-affirmative procedure—that just creates more delay, and to my mind this degree of consultation on an issue that was causing a problem to one of the devolved Assemblies, a particular industry or a particular trade would do that. Any of us in trade or business knows that if you have a problem, you put it to the Government of the day and you say that the present procedures are not working. There are already safeguards, as I have indicated; in my judgment, you certainly do not need yet another layer of safeguard unless it is a matter of life and death.

I am sorry. I have to say to my noble friend that I cannot possibly agree with this; I think that it is way over the top. If it is taken to a vote, I will certainly vote against it.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

The noble Lord, Lord Liddle, has withdrawn so I call the noble Lord, Lord Judd.

[Lord Judd (Lab) [V]]

My Lords, I want to put on record my admiration for the consistent, valiant work done by the noble Baroness, Lady McIntosh of Pickering. She has proved herself over recent weeks as a champion, almost second to none, of the principle of accountability to Parliament, the importance of Parliament and the importance of always being cautious lest power drifts back to the Executive. If we are to have these new arrangements for regulation and supervision, what she has talked about is a prime candidate for this. I believe it is a test of whether the Government really do believe in parliamentary authority and the accountability and supremacy of Parliament, and whether they really believe that there is no attempt by the Executive to take back power. I thank the noble Baroness for having given us another opportunity to raise this, which I hope the Government will take seriously.

I have immense respect for my noble friends who are working so hard and consistently on our behalf on the Bill. The rest of us who have strong feelings therefore have to be very cautious about getting in their way and making generalised statements that hold up proceedings and in the end undermine the effectiveness of what they are trying to do.

I want to make this point: anyone who believes that the Bill is simply about an internal market must face the reality, given that history will judge the effectiveness of this Chamber as a scrutinising Chamber, that it is about more than that. It is about a determined drive, as I see it, by the present Government all the time to increase the powers of the Executive. We must therefore be on our toes strategically if we are not, in our preoccupation with the detail of the Bill, to lose sight of this major challenge that we constantly have to face. I thank the noble Baroness once again.

[Lord Thomas of Gresford (LD) [V]]

My Lords, it is always a delight to follow the noble Lord, Lord Judd, who always helps us with his wisdom and experience. I join him in commending this understandable attempt by the noble Baroness, Lady McIntosh of Pickering, to strengthen the scrutiny of any regulations made by the Minister under the proposed Bill, whether in the exercise of Henry VIII powers or otherwise. While I entirely support their purpose, I cannot support the precise method that the noble Baroness puts forward. The trouble is that there is no single super-affirmative procedure; there are, as the noble Lord, Lord Naseby, pointed out, a whole host of procedures.

16:45

In paragraph 88 of its report, dated 20 November 2018 and entitled The Legislative Process: The Delegation of Powers, the Constitution Committee pointed out that, over the years, there have been:

“A variety of strengthened scrutiny procedures … specified in individual Acts.”

The Hansard Society’s report, The Devil is in the Detail: Parliament and Delegated Legislation, identified 16 variations of enhanced scrutiny procedures, while the DPRRC said in paragraph 13 of its third report of 2017-19:

“Although these strengthened scrutiny procedures share a number of common features, there are marked differences between the Parliamentary procedures applicable to different powers or categories of powers.”

The Constitution Committee pointed to the view of the Law Society of Scotland, which has already got a mention, that instruments subject to these enhanced procedures

“can attract significant scrutiny which undermines the concept of speed and flexibility which delegated legislation is supposed to represent.”

Indeed, the noble Baroness, Lady Fookes, who chaired the DPRRC when I was a member of it, suggested that Parliament should “standardise these enhanced procedures”.

However, there is a more fundamental problem. If a Minister wishes to exercise his powers under the Bill, there is no requirement under the noble Baroness’s proposed schedule that scrutiny of his proposed amendment to primary legislation should in any way involve the devolved Administrations; no mechanism is proposed. It is true that, in paragraph 5, the Secretary of State must have regard to “representations”, but there is no indication from whom the representations would or should come.

Since the Minister’s powers undoubtedly include the possibility that his proposals would at the very least impinge on the devolution settlement, I would be more supportive of this proposal if it required as part of the super-affirmative procedure that, in the periods of 30, 40 or 60 days during which the proposals would be looked at in Westminster, there were a requirement that the devolved Administrations should at the very least be consulted, preferably that their consent to the proposals should be a necessary prerequisite. It is not enough that the Minister should “have regard to representations”.

That is the problem with the Bill, and it has echoed through all the debates on Monday and today: instead of consultation and consent, we have diktat from the centre without any form of necessary consultation. It is not surprising that both Wales and Scotland have informed the Government that, without significant amendments, legislative consent to the Bill will be withheld. This is not a small point. Negotiations for common frameworks, which would include arrangements for the continuation of the existing internal market, have been proceeding with some success—and these have been negotiations that, hopefully, will result in an agreed solution. If that does not happen in this important area, the scene will be set for conflict that I suggest will rock the unity of the UK to its foundations.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, I join the noble Lord, Lord Thomas of Gresford, in thanking the Scottish Law Commission for its contribution to this debate; it keeps an eagle eye on issues in front of your Lordships’ House and from time to time delivers material that is very useful to us as we go through our duties.

As the noble Baroness, Lady McIntosh, said, these are probing amendments. They are about the possible uses of super-affirmative procedures and, as she says, relate to issues in the Bill that might well qualify under her heading for a higher degree of scrutiny.

The noble Lord, Lord Thomas, gave us a useful tour d’horizon of the available ways of doing super-affirmative. I agree with him that there is a case to be made here for looking at them in more detail to make sure that they are picked up and looked at regarding their best purpose, but that perhaps is not for today; there are bigger issues here and they should be looked at, but not in this Bill.

My noble friend Lord Judd asked whether the Government really welcome scrutiny or are simply pursuing their normal process—which seems almost inevitable for any Government—to try to obtain absolute control over the legislation they are bringing forward. I suspect the answer to that question is not to be found in providing for better scrutiny. This is a Bill with deeper problems. I do not think that these proposals, although they have their merits, are the right way forward in trying to unscramble those deeper difficulties. I look forward to hearing the Minister respond.

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

My Lords, I thank my noble friend for tabling her amendments, which relate, as she explained to the Committee, to the implementation of a super-affirmative resolution procedure. This debate is something of a coda to the previous group. It teases at the questions that many of your Lordships raised there and to which my noble friend Lord Callanan responded in some detail, so, if the House will forgive me, I will not repeat those general arguments in relation to these matters, although I repeat that the Government believe that these powers are important for our internal market. As my noble friend Lord Naseby said, we are dealing with trade matters. I repeat that the Government will not take lightly our responsibility in administering these powers.

I thank all those who took part in this debate for the interesting speeches we heard. On a personal note, I always welcome seeing the noble Lord, Lord Judd. I agree with his expression of admiration for noble Lords and Baronesses on the Front Benches opposite for their work on this Bill. Perhaps he will allow me to extend that sentiment to my noble friends Lord Callanan, Lady Scott and Lady Bloomfield and my colleagues.

Pleasantries apart, of course we acknowledge that the Bill gives the Secretary of State the ability to amend the list of legitimate aims, relevant requirements and schedule exclusions through a draft affirmative statutory instrument, with just one time-limited made-affirmative power, which relates to the services exclusions in Clause 17(4). We are fully committed to ensuring that the use of these powers is subject to effective oversight and consultation. That is why any use of the power would require an affirmative regulation to be passed in both Houses of Parliament. This will ensure that Parliament would be able to scrutinise and vote on any changes.

Turning to the substance of my noble friend’s amendments, if we were to accept Amendments 14, 29, 40, 76, 77, 101, 133 and 176, to which my noble friend spoke in this group and which call for the super-affirmative resolution procedure, it would cause unnecessary delay when a change was urgently needed. That point was very forcefully made by my noble friend Lord Naseby in a compelling speech made from the standpoint of his immense experience in chairing the proceedings of the other place.

Although your Lordships’ Delegated Powers Committee had many observations on this legislation, it did not propose the super-affirmative resolution procedure. I repeat: there is a risk of undue delay in a situation that may arise where it appears necessary to act swiftly to prevent undesirable outcomes. My noble friend Lord Callanan gave a number of examples on the previous group. The Government may need to respond quickly and effectively to maintain the status quo after the transition period has ended.

We believe that the draft affirmative resolution procedure—noting that the made-affirmative power is time-limited—offers sufficient parliamentary scrutiny while enabling the Government to act quickly. I therefore ask my noble friend to withdraw the amendment. While I think her amendments attracted the interest of the Committee, and I am grateful to her for bringing them forward, I think it would be fair to say they did not carry the support of the Committee.

As my noble friend has acknowledged, Amendment 24 is consequential so I will not address it in detail. Amendment 25 seeks to probe the Government’s understanding of what is meant by “substantive change” in Clause 4. I can tell my noble friend that it means that any changes that re-enact regulation in a way that changes its outcome count as substantive. Where existing legislation receives technical or minor amendments that do not alter its substance, that does not count as a substantive change.

I hope these responses address the concerns of my noble friend and therefore ask her to withdraw her amendment.

[The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)]

My Lords, I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful for the Minister’s comments on Amendment 25. It was a question linked to the previous group that the noble Lord, Lord Callanan, did not respond to, so I am very grateful that he did.

The Minister talked about how “substantive change” is now defined. We are now in the realm of what the Minister said is a Pepper v Hart moment because what is said on the record at the Dispatch Box is very important, and these measures require a different outcome. The policy outcome intentions of many of these measures might remain the same, but some elements would be different. If the Minister is saying—on minimum unit pricing, for example, or on environmental or public health considerations—that if the intended outcome of the re-enacted or updated requirement remains the same, would that continue to be exempt? That is important because, in both the legislation and the Explanatory Memorandum, that is not so defined. If minimum unit pricing changes the level of the price, or if tuition fees continue but their level changes, if the policy intent is the same, the exemption will carry on—is that the correct understanding?

[Lord True (Con)]

My Lords, I note and hear what the noble Lord has said, but I think he would allow me not to enter into speculative discussions. I have put to the Committee a response to a question—a response provided to me to advise the Committee. As for its application, that is a matter that would be speculative and could be considered further. I will stand by the words that I put before the Committee.

[Baroness McIntosh of Pickering (Con) [V]]

I thank all noble Lords who have spoken in this debate. I was grateful for the opportunity to probe the extent to which this procedure of super-affirmative resolution may be more appropriate.

My noble friend Lord Naseby might not think that this is a matter of life and death, but if you are dealing with perishable goods—particularly animals and their movement over what will be internal borders—that might be the case. I part company with my noble friend on the EU-Japan agreement; it actually does not go that far. My understanding is that what was heralded as a bigger market for cheese, which will be very welcome, relies on the EU allowing us to use what is left of its quota that it does not wish to use. It is the leftovers—the crumbs under the table. It could be very helpful to our cheese producers, but it is not quite as straightforward as one might first think.

17:00

I still persist in saying that there are advantages—I am sorry that I have not taken the Committee with me—to the super-affirmative resolution: namely, having two bites of the cherry and a chance to look at and amend regulations before they are introduced, which I think is deeply flawed in so many instances in this Bill. It would not necessarily lead to a further delay because, as the Delegated Powers and Regulatory Reform Committee has noted, both Houses of Parliament can act extremely quickly when we need to. We just need a reasonable timeline to allow dialogue between the Government and the devolved Administrations.

I thank the noble Lord, Lord Judd, for his kind comments. We are all agreed on accountability and the supremacy of Parliament in that regard. To the noble Lord, Lord Gresford, I say that, if I have not been successful here, I hope he will look favourably on my amendments that will come very shortly, seeking consent as well as consultation in various instances where I believe that is appropriate. I join the noble Lord, Lord Stevenson, in thanking the Law Society of Scotland for giving us this opportunity to look at this.

I also thank my noble friend Lord True for his remarks in summing up and stress, without labouring the point at any length, that the noble Lord, Lord Purvis, has a point, particularly in relation to Clause 8, where the definition of “legitimate aim” could be changed. This can have significant consequences, which I fear, in relation to delegated powers, may not be sufficiently explored by the Secretary of State, the Government and the devolved Administrations. However, I am grateful to have had the opportunity to debate this procedure, which I am sure we can look at on future occasions in future Bills. At this stage, I beg leave to withdraw Amendment 14.

Amendment 14 withdrawn.

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

We now come to the group beginning with Amendment 15. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in this group to a Division should make that clear in the debate. The noble Baroness, Lady Finlay, is having difficulties connecting with us, so I call the noble Lord, Lord German.

Amendment 15

Moved by

[Lord German]

15: Clause 3, page 3, line 30, leave out “consult” and insert “obtain the consent of”
Member’s explanatory statement
This amendment requires the Secretary of State to obtain the consent of the devolved administrations before making regulations amending Clause 3(3), which specifies the types of statutory requirement that are within the scope of the mutual recognition principle.

[Lord German (LD)]

My Lords, the noble Baroness, Lady Finlay, is detained in another part of your Lordships’ House. I will move Amendment 15 and speak to Amendments 30 and 64 in this group, which attempt to place one limitation on the extraordinary and extensive Henry VIII powers that we were talking about in the last group: namely, they require the consent of the devolved Administrations to using those powers. Amendments 15 and 30 would impose this requirement in relation to Ministers’ power to remove or, more worryingly, add to the statutory requirements that are

“within the scope of the mutual recognition principle”

and “the non-discrimination principle”, respectively. Amendment 64 would require devolved consent for any guidance issued in respect of Part 1.

I must say that I am very attracted to the amendments tabled by my noble friend Lord Fox, which would simply strike out the Henry VIII powers in Clauses 3 and 6. As your Lordships will know, these have been strongly condemned by the Delegated Powers and Regulatory Reform Committee—a matter to which I will return later.

Without amendments such as these, it would be possible for the Government to strip back still further the very limited exemptions that these clauses provide for, which are far more limited than is currently the case with EU law, where the principles of subsidiarity and proportionality apply alongside far broader public policy exemptions. I remind your Lordships and the Government that they are working on the basis of principles that they repeated last month and established in October 2017—that they would move forward under

“established conventions and practices, including that the competence of the devolved institutions will not normally be adjusted without their consent”.

Those words, “without their consent”, represent a principle to which the Government have signed up. That is why the amendments of the noble Baronesses, Lady Hayter and Lady McIntosh, seek to engage with the devolved Administrations but do not require the Government to achieve their consent.

Obviously, either amendment would be preferable to the current problem, but the issue is that it would be easy for the Government to demonstrate that they had sought the consent of the devolved Administrations on a wholly unreasonable proposal, and the fact that it had not been forthcoming would have no relevance at all. Therefore, the Government could report that they had consulted the devolved Administrations and tick the box required without even attempting to address their concerns.

I return to the issue of secondary legislation; that is the source of these amendments because the powers are so sweeping and there is no restriction on, or knowledge of, what they will deal with. As noble Lords may be aware, three committees of your Lordships’ House have expressed concern about these matters. The Delegated Powers and Regulatory Reform Committee, the Secondary Legislation Scrutiny Committee and the Constitution Committee all wrote to the Lord President of the Council, the Leader of the House of Commons, who has government responsibility for the way in which delegated powers are used.

In Jacob Rees-Mogg’s reply of 19 October, he said:

“I agree that Bills with substantial powers, though sometimes essential, should not be a tool to cover imperfect policy development. As a Government, we must have a clear direction and be able to explain to both Parliament and our constituents how we are fulfilling the promises of our manifesto. I can see that extensive use of delegated powers can hinder rather than help us in that. Therefore, I am happy to consider issuing communications to Secretaries of State on this matter, encouraging them to minimise the use of delegated powers where possible”.


I ask the Minister: has the Lord President of the Council, the Leader of the House of Commons, consulted him on the matters that he is putting before us today? If so, will he heed that warning from Jacob Rees-Mogg?

The other matter that concerns me, which my noble friend Lord Purvis talked about, is the extent to which the powers can be used in a variety of ways. I reflect on the environmental aspects, which the noble Lord, Lord Callanan, just talked about, in relation to the recycling of materials, which is one of the issues on which the Government may wish to introduce regulations. The reason for that might well be that they have a concern about the environment, such as the nature of plastic film or single-use plastics; they might want to introduce those requirements.

However, it could go the other way and make the problem worse. For example, you might stop a devolved authority banning the use of plastic spoons or using plastic film on fresh food. The Government have admitted that they want to carry through all those health and environmental considerations by saying that they are looking at the recycling of materials as something that it might touch in the future.

Therefore, it seems to me that we have grave concerns about the way changes in these areas will be implemented. If we follow the advice of Jacob Rees-Mogg, then, certainly, we would not seek these powers in this Bill at this time because they do not include the policy intent that is to be provided. In these amendments, we can ensure that the consent of the devolved Administrations is given and that we can address and seek their approval, but it would be far better if we did not have these delegated powers at all.

[Lord Hope of Craighead (CB) [V]]

My Lords, as the noble Lord, Lord German, just said, it would be far better if we did not have these provisions in the Bill at all, but one must assume that they may remain. That is why these amendments, particularly Amendments 15 and 30, to which I have added my name, address the provision which talks about consultation but does not mention the word “consent”.

I have two requests for the Minister; I will not elaborate further on what the noble Lord, Lord German, said in his very helpful introduction to this group. First, would he be good enough to repeat, in the context to which these amendments refer, the assurance he has already given that the Sewel convention principles will be applied without any hesitation in regard to consultation?

Secondly, will the Minister consider whether it would not be wise, in view of the importance of the clauses in which these provisions appear, to adopt the system used, he will recall, in the European Union (Withdrawal) Act 2018 when considering the system of seeking the consent of the devolved Administrations—Assemblies, Senates and Parliaments—to the modification of EU law? He may recall that Ministers were given power to restrict the powers of the devolved Administrations to modify EU law in certain respects by delegated legislation. Provided for in Part 1 of Schedule 3 was a system whereby the Parliaments, Senate and Assembly were given an opportunity to provide consent. The wording in the Scotland provision was:

“A Minister of the Crown must not lay for approval before each House of the Parliament of the United Kingdom a draft of a statutory instrument containing”


the relevant

“regulations … unless … the Scottish Parliament has made a consent decision in relation to the laying of the draft, or … the 40 day period has ended without the Parliament having made such a decision.”


If it came to the point of there being no consent, when the Minister of the Crown laid this draft, as mentioned, before either House, he would be required to explain his decision to lay it without the consent of the Parliament.

That system was arrived at after a great deal of discussion in the 2018 Act; it is quite a useful one that might well be thought appropriate in this case to reduce the element of dismay which the devolved Administrations are feeling about how they are being treated by these provisions—all that has been provided for is consultation. They would at least have an opportunity in their legislatures to consider whether consent should be given. Of course, if they fail to give it within 40 days, ultimately the Minister can go ahead, provided he explains why he is doing so. There is no amendment to this effect, but this is an opportunity for the noble Lord to consider whether it would not be wise to soften the blow that has been felt by the devolved Administrations by adopting that system, which was so carefully worked out and eventually accepted in the 2018 Act.

Beyond that, I support everything the noble Lord, Lord German, has said in support of the amendments to which he has spoken.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord German, and the noble and learned Lord, Lord Hope of Craighead. I thank them both for setting out detailed consideration of this rather long list of amendments, the length reflecting the levels of concern in the Committee about this area of the Bill.

I will speak to a series of amendments in this group to which I have attached my name, Amendments 15 and 64 in the name of the noble Baroness, Lady Finlay of Llandaff, and Amendments 16, 41, 48, 74 and 99 in the name of the noble Baroness, Lady Hayter of Kentish Town. I apologise to your Lordships for not taking part at Second Reading. My name was down to speak, but I was caught up in the collision with the Medicines and Medical Devices Bill, which also prevented me from taking part in earlier Committee sittings.

That is not the only crucial political collision we are encountering at the moment. As a former newspaper editor, I am well aware of the problem of the media being able to focus on only one issue at a time. I sought to place an article about the environmental issues in the medicines Bill with a major news outlet, and was told “No, we’ve already run too many articles on this Bill.” We are at risk of falling into the same problem with this Bill.

I can identify at least three major areas that could in normal circumstances expect attention from the serious media. Rightfully getting top billing are the Part 5 issues that we expect to get to on the final day of this Committee’s deliberations. The second area, which would normally get massive amounts of attention, is the clauses that provide powers even greater than those of Henry VIII, as the noble Baroness, Lady Andrews, the noble and learned Lord, Lord Hope of Craighead, and others spoke to so powerfully earlier today. As a former journalist, I have a shorthand for that—Henry VIII on steroids. I share the liking of the noble Lord, Lord German, for the amendments that wipe those out altogether.

17:15

The third serious issue, which has probably got the least attention but is not the least of them, being crucial to issues of democracy and the rule of law, is the riding roughshod over devolved powers—almost wiping out devolution altogether—which these amendments seek to address. Those in the name of the noble Baroness, Lady Finlay, refer to “obtaining consent” on several crucial matters in this Bill. Those in the name of the noble Baroness, Lady Hayter, refer to “seeking consent”. The former wording seems stronger, but the latter is at least a fallback, which is why I have attached my name to both.

Today’s debate has already ranged through real pig semen and metaphorical biscuits, but I will introduce another image—a bridge. Yes, this is a hypothetical bridge; unlike our Prime Minister, building bridges in unlikely and unwanted places is not a passion of mine. I draw here on the historian Joan Wallach Scott, who in her recent book On the Judgment of History reflected on those who assume that history is progressing forwards towards a future golden age and talk about building bridges to that new age, and found there is an assumption that the traffic is only one way.

That has certainly been the expectation and desire of the peoples of Scotland, Wales and Northern Ireland. They have been streaming across the bridge in the direction of control of their own communities and lives, through the mechanisms of democratic parliaments and assemblies which reflect reasonably accurately the views and wishes of the people, as well as being far closer to where those people live. Consequently, to an increasing degree they have taken different paths on social, environmental and many other issues. That, after all, was the point of devolution: to diverge. In an earlier debate, the question was put whether the Government acknowledge the benefits and advantages of divergence; I am not sure that that has been answered. Scotland in particular, which has a separate legal and educational system, has always retained a very distinct identity, something that my later Amendments 79 and 106 address.

I do not believe anyone has raised the point that devolution is not just an issue for three nations of the UK. It is also the hope of many parts of England, from Cornwall to Yorkshire, to head in the same direction, with assemblies or parliaments of their own to take back control from faraway, distant, couldn’t-care-less Westminster. This Bill could severely hamper the freedoms they seek, as well as being an enormous flood sweeping away the existing structures of devolution.

Greener UK has pointed to a simple, very clear example. I was recently commenting on the extremely limited—indeed derisory—“plastics ban” introduced in England, covering three items. The Welsh Government are proposing to introduce a ban on the sale of nine separate single-use plastic items. Unfortunately, under the provisions of this Bill—I would be very interested in the Minister’s comments on this—they could ban only the production of these in Wales, while sale of the items made elsewhere in the UK would be forcibly allowed by this legislation. The Welsh Government have said,

“a ban that could only apply to Welsh-produced plastics would undermine the policy and render it ineffective”.

I can only agree.

I note also that the Centre on Constitutional Change reports:

“The UK Bill includes a much more restricted set of public policy justifications for exemptions from the market access principles than is permitted under EU law.”

Again, powers are being taken away from the devolved Administrations. This is not “take back control”, as the people of Scotland, Wales and Northern Ireland might have hoped for. This is control being lost, Brexit having been imposed on two of the three nations by the English nation’s size of population.

The House is really dripping with irony today, as noted earlier, with the Government and their allies lauding the benefits of free unencumbered trade while slicing that off from the continent. I look forward to the Minister’s answer to how dictatorship from Westminster over the other nations squares with taking back control.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am delighted to speak to a number of amendments in my name but also to lend my support to Amendment 16, which I have co-signed, in the name of the noble Baroness, Lady Hayter of Kentish Town. It is essential that we seek the consent of the devolved Administrations in these circumstances, rather than just simply consult, for the reasons the noble Lord, Lord German, gave in moving his Amendment 15 and those alluded to by the noble Lord, Lord Thomas of Gresford, in the earlier debate. I hope that the Government and my noble friend the Minister will look favourably on the request that we should seek the consent of the devolved Administrations.

Again, I am grateful to the Law Society for its drafting of and briefing on the amendments I have put forward. In Amendments 17 and 31, I am seeking greater transparency and inviting the Secretary of State to publish the results of the consultation and give reasons for any decision reached.

I pray in aid the conclusions of the Constitution Committee report on the Bill, at paragraphs 76 to 79, which criticise the powers set out in Clause 3(8) in particular. Paragraph 78 states the following:

“The Government should explain how the consultation process for amending the relevant requirements for goods would work and how disputes would be resolved.”


At paragraph 79, it says:

“We agree with the DPRRC that the power in clause 3(8) has not been justified and should be removed from the Bill.”


I seek to oblige the Secretary of State to consult the devolved Administrations but also to go further and make public, in the interests of transparency, the results of the consultation and the reasons for any decision taken on the basis of that consultation.

Similarly, my Amendment 42, asks for consultation with the devolved Administrations in a host of circumstances, before, as my explanatory statement refers to,

“amending the list of legitimate aims.”

Amendment 43 says that, in relation to Clause 8:

“The Secretary of State must publish the results of the consultation and give reasons for any decision reached.”


Amendment 49 seeks consultation with the devolved Administrations before amending Schedule 1. Amendment 62 seeks consultation with the devolved Administrations before preparing guidance under Clause 12. Amendment 65 is a consequential amendment. Amendment 75 seeks that consultation be sought with the devolved Administrations before amending Schedule 2.

Finally, Amendment 100 seeks consultation with the devolved Administrations before the definition of “legitimate aim” in Clause 26 is amended. I refer here to both the definition of “legitimate aim” being amended and to the guidance having earlier been published. With those remarks, I urge my noble friend and the House to look favourably on these amendments.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I concur with the comments of my noble friend Lord German, the noble and learned Lord, Lord Hope, and others concerning consent and what might be termed the proper conduct of devolution. But I will limit my remarks to the amendments in the name of the noble Baroness, Lady McIntosh, relating to the publication of decisions, to which I added my name, not for the purpose of signalling that I am satisfied with consulting rather than obtaining consent, but because I want to flag up that there must be transparency.

It is difficult to tell from provisions throughout this Bill how transparent various procedures will be, which raises my concern that they may not be very transparent at all. The internal market is a matter of significant public interest, and while individuals may not bury themselves in the minutiae, they will feel the impact. There are various organisations on the front line of helping consumers and small businesses to understand laws and their rights. Therefore, whatever the procedure, there should be publication of the proceedings that are formulating the structure of the internal market.

I have amendments on transparency elsewhere relating to the CMA and the OIM, and they are part of the same theme. If the consumer voice is to be heard and articulated by consumer organisations, access to information is paramount. Otherwise, interventions and understanding may come too late.

[Lord Wigley (PC) [V]]

My Lords, I agree with the noble Baroness, Lady Bowles, on transparency, and I look forward to coming to those points later. I am pleased to speak to this group of amendments, and in particular to Amendments 30 and 64, to which I have added my name, and to Amendments 75A and 100A, which stand in my name.

Perhaps I should first make it clear that I support Amendment 15 in the name of the noble Baroness, Lady Finlay of Llandaff, moved by the noble Lord, Lord German, which stipulates that not only should the UK Government consult the devolved Governments but that they must obtain their consent. I would have added my name to that amendment had other colleagues not got there first. I agree with the noble Lord, Lord German, that it would be far better if we did not have these powers in the Bill at all. I also believe that the points made by the noble Baroness, Lady Bennett, go to the heart of why devolution of power was made in the first place and is still very much needed.

Amendment 16 does not go as far as Amendment 15. It advocates the need to seek consent of the devolved Administrations but it does not impose a requirement to obtain that consent. Amendment 17, likewise, does not go as far as Amendment 15, in that it again requires the Government to publish the result of consultation, so the implication is that the UK Government may well consult the devolved Governments and then blithely ignore their viewpoints. There is, as the noble Lord, Lord German, implied, no earthly point in having a consultation system if the UK Government may then, willy-nilly, totally ignore the devolved Governments’ viewpoints.

I now turn to the group of amendments that relates to Clause 12. Amendment 64 in the name of the noble Baroness, Lady Hayter, requires the UK Government Minister, in this context, to consult and seek the consent of the devolved Governments. Likewise, Amendment 75 in the name of the noble Baroness, Lady McIntosh, requires the Minister to consult the devolved Governments. But both these amendments give the appearance of consulting the devolved Governments but place no obligation whatever on the Minister to take any notice of the response elicited. The Minister can happily consult then blithely ignore the views of the devolved Governments. That is not good enough. Indeed, it is highly dangerous. It gives the appearance of consultation without providing the substance of a requirement to respect the outcome of any such process. In reality, this plays out a charade of having a joint approach between the four nations and provides an open road for the UK Government Minister to totally ignore the views of the devolved Governments.

My Amendment 75A simply requires the Minister, with regard to subsection (2), to consult and obtain the consent of the devolved Governments. I readily recognise that the UK Government may argue that the devolved Governments should not have a veto over the Westminster approach. That is something I recognise and respect, but the implication is that Westminster should have such a veto. In regard to devolved functions, the whole point is that the four nations should have the right to make their own policies. That is what devolution is about. The Government seem to take the Orwellian approach that all four nations are equal but one is a little bit more equal than the others.

My Amendment 100A applies the same principle to the consultation issues relating to Clause 20(7) and the need for the Minister also to obtain the consent of devolved Governments in that regard. What this comes down to, yet again, is the need to have an acceptable mechanism to resolve disagreements, to have the common frameworks to which we have resorted on so many other occasions and not to take the approach that the Government of England—which it is for the devolved function—always has the right, by dint of its respective size, to overrule the other four nations. If such a mechanism were in place, we would not have to put ourselves through the pain of raising these questions on every occasion that the issue of consultation between the Minister and the devolved authorities arises. I implore the Minister to bring forward an amendment on Report that would obviate the need for us to return to these issues, time after time. Until such a change to the Government’s approach is forthcoming, we will have no choice but to press amendments along the lines of this group at a later stage.

17:30

[Lord Hain (Lab) [V]]

My Lords, as so often, my noble friend Lord Wigley has spoken for the wide consensus on this question in Wales. I will speak specifically in support of Amendments 74, 75 and 99, which seek to ensure that the Henry VIII powers of the Secretary of State to amend the Bill’s provisions relating to market access on mutual recognition, non-discrimination and the “legitimate aim” of regulatory requirements are referred to the devolved Administrations for their consultation and consent. I do so following a series of excellent opening speeches, notably by the noble Lord, Lord German, and the noble and learned Lord, Lord Hope.

The Bill has been justified on the basis that it is intended to support the UK internal market for goods and services once EU rules no longer apply after the transition period ends on 31 December. These rules, derived from EU law, place constraints on the ability of government institutions within the UK to impose constraints on the free movement of goods, as well as people, and significantly reduce the scope for measures that would restrict intra-UK trade. One reason that the UK Government wish to constrain the autonomy of the devolved Administrations in this area is that countries with which the UK is trying to negotiate trade deals may wish to clarify that they have access to the whole UK market, or Great Britain market if the Northern Ireland protocol survives, as it must do.

A White Paper published by the Government in July 2020 claimed that the Bill would provide “frictionless trade”, “fair competition” and protection for businesses and consumers within the UK. To achieve these aims, two market access principles were identified, namely mutual recognition and non-discrimination, which would constrain the ability of all relevant actors within the UK, be they regulators, local authorities or devolved Administrations, to impose new regulations on goods and services. These limit the ability of devolved Governments to regulate economic activity far more than did their EU predecessors. So much for taking back control. Obviously, that does not apply to devolved legislatures, which will lose control under the Bill—to Whitehall.

The UK internal market was initially seen as one strand of work, begun in October 2017 by the four Governments within the UK, to establish a common approach in key policy areas of returned EU rule, referred to as common frameworks, about which I spoke in the last Session. However, it is generally agreed that, by removing the internal market from these discussions and pushing ahead without the agreement of the devolved Authorities, the common framework approach is being completely undermined by the UK Government.

In response to the White Paper, the Welsh Government insisted that any new system must have independent oversight and dispute resolution, and that common rules must be agreed by all four Governments. When the Bill was published, Jeremy Miles, the Welsh Government Counsel General, called it an “attack on democracy”, and the Scottish Constitution Minister pointed out that the concept of mutual recognition could mean that Scotland, for example, would be forced to accept lower food standards—an area that is currently devolved—against its express wishes.

The mutual recognition provisions would, therefore, effectively prevent one part of the UK unilaterally imposing and enforcing requirements, for example for the presentation or characteristics of goods, which are covered by this principle, which also applies to services. There are exceptions under the Northern Ireland protocol. “Manner of sale” requirements, on the other hand, for example governing to whom products may be sold or their price, would not be covered by mutual recognition but by the non-discrimination provisions of the Bill. The exclusion of price from the mutual recognition principle was driven, in part, by arguments in the other place about what the Bill might mean for Scotland’s minimum alcohol pricing regime—subsequently adopted in Wales, more or less—in response to the public health challenge from excessive alcohol consumption.

Schedule 2 contains lists of services that are excluded from the principles of mutual recognition and non-discrimination, such as healthcare, transport and water supply, as well as some privately provided services. Amendments 74 and 75 require the Secretary of State to consult and/or seek the consent of the devolved Administrations before making changes to Schedule 2.

If there is wariness about enabling any one of the devolved nations to exercise a veto—for example, the Scottish nationalists simply refusing to consent to something which would benefit the rest of the UK —leading to deadlock, why, as I have suggested several times in recent debates in your Lordships’ House, do the Government not adopt the Welsh Government’s proposal for a Council of Ministers-type model with a form of qualified majority voting, in place of the current Joint Ministerial Committee, which has been dysfunctional and, frankly, worse than useless? I specifically ask the Minister to respond to this suggestion of the Welsh Government to have a Council of Ministers-type model with qualified majority voting, which could overcome many of the issues involved. This model would require the UK Government, since it represents England with its disproportionately large population and share of GDP, to secure the agreement of at least one devolved Administration before overriding any devolved Administration that wanted to exercise a veto.

The Bill prohibits both direct and indirect discrimination. The latter is permitted if it can reasonably be considered a “legitimate aim”, as defined in the Bill. However, with the Bill as it stands, the Secretary of State can redefine that term by regulations, subject only to an affirmative resolution procedure. Amendment 99 rightly seeks to ensure that there is consultation and consent from the devolved Administrations before doing so. I cannot for the life of me understand why the Government or the Minister, for that matter, would object to that.

New functions will be bestowed on the Competition and Markets Authority—the CMA—to monitor and report on the impact of specific regulations that are considered to potentially have a detrimental effect on the internal market. The Bill also proposes to establish an office for the internal market within the CMA to oversee the application of these principles and the functioning of the internal market. Expert analysis has shown that, whereas EU law had a symmetrical effect upon the UK Parliament and devolved legislatures, the Bill will have an inherently asymmetrical effect as it will become a protected enactment, which the devolved legislatures will be powerless to repeal or modify.

The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods, passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by the business department’s impact assessment of the Bill, would reduce the ability of local legislatures to produce targeted social and environmental objectives, so that the intended societal—[Inaudible.]

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

We seem to have lost connection with the noble Lord, Lord Hain, so I call the noble and learned Lord, Lord Mackay of Clashfern.

[Lord Mackay of Clashfern (Con) [V]]

My Lords, I have not tabled many amendments to the Bill—although there are many things on which I might seek reconsideration—because it is important that I confine myself to the principal matters. In this group, my amendment requires that the powers in the Bill are to be used only for the promotion of the internal market. Any idea that the Bill can be used for any other purpose should be clearly outlawed.

It is important to note that while the powers of the European Union in relation to our internal market will stop on 31 December, the retained EU law on our internal market will, of course, remain in place unless and until it is altered. Therefore, the question before the Committee now is about the rules that should apply after 31 December, and the powers that exist to change these in that time. I think it is absolutely clear that the responsibility for the internal market in legislative form must ultimately be with the UK Parliament, but of course the UK Parliament includes representatives from all four countries. Therefore, it is a suitable responsibility to carry. However, the other point is that the existing devolved Administrations and legislatures have responsibility for the laws in their particular areas. Accordingly, it is very important to ensure that, so far as possible, the rules of the internal market should accommodate that and be in agreement throughout the whole United Kingdom—in the devolved Administrations and legislatures also.

Therefore, I agree very much with a great deal of what has been said in support of the amendments in this group. I have an amendment later that suggests that every power that the Secretary of State has should be subject to the rule that they consult the JMC(EN), which I think is the committee responsible for the modification and regeneration of the common frameworks. That system seems to have worked very well, as far as I can gather from what has been said. I suggest that every power that the Secretary of State has to make regulations under the Bill should be subject to being put before that committee, which includes Ministers from the devolved Administrations, before they go forward. If, and only if, there is discontent or disagreement, the matter should then be referred to two debates, one in each House of Parliament, to resolve the matter using the responsibility that they have to solve the matters of the common market.

This is absolutely important. It is extremely important that the union we have is preserved by proper relationships between all the Administrations. I see no reason at all why that should not happen. I know that at least one of the Administrations has a desire to forsake the union, but in the meantime, while they are in the union, it is important that we have the best relationships possible with them, so that there is no feeling of resentment. An internal market is a very important part of the union, and a part that would be damaged if there were any degree of separation, both for the remaining units as well as for the unit that was thinking of leaving. This series of amendments in various forms is very important in the preservation of the union, and I support the principles laid down. I do not concentrate particularly on my own amendment, although I think it is quite important.

17:45

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, the noble Lord, Lord Hain, lost his connection, so we shall try him again now. It seems we are still having problems with the noble Lord, so I now call the noble Lord, Lord Naseby.

[Lord Naseby (Con) [V]]

I thank my noble and learned friend Lord Mackay. He certainly has a very practical sense of the law, which not all lawyers have. He is right: it is an internal market; the relationships between England, Scotland, Wales and Northern Ireland are usually very close and we all have a common cause, perhaps not in rugby, but in most things. Nevertheless, I repeat that the words used in the Bill are pretty strong. It does not say that, in making regulations, the Secretary of State “may” or “should”, as we see occasionally in law; it uses the word “must”, which is a strong word. He “must consult”; there is no option. That is quite right—absolutely right, but we need to remember what “consult” means.

It is not a soft verb. Its component parts, in my view, involve seeking out information or advice, depending on the subject matter. It means doing one’s best to find out what the views are, to have an interchange and to take into consideration all aspects of the particular action proposed. It is not a dictatorship or anything like that, and I would not believe that any Secretary of State, of any Government, would view it that way. I personally think it is as strong as it needs to be. The addition of “obtain the consent of” in place of “consult” is a threat; there are no two ways about it. When I was in local government and the leader of a local authority, if I had had some legislation in front of me that said, “You have to obtain our consent”, I would dig my heels in. Do not bother about the other 31 local authorities in London—just dig your heels in and that will foul it all up.

That is not what this is all about, so I am not in favour of Amendment 15. I think, though, that the noble Lord, Lord Hain, and my noble and learned friend Lord Mackay have taken the argument a bit further. The noble Lord, Lord Hain, was talking about a qualified majority, when one part of the nation dug its heels in for some reason, and maybe we should look at that. My noble and learned friend Lord Mackay put forward how Parliament might be brought in at a higher level in something that was particularly difficult. There is merit in looking at both aspects, but I just think the amendment before us, Amendment 15, is over the top.

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, it is a pleasure to take part in this fascinating debate, which is very much legal in content. I support the principles enunciated by the noble Lord, Lord German, and the noble and learned Lord, Lord Hope of Craighead. Like him, I would like to ask the Minister, the noble Lord, Lord True, what the Government’s view is of the Sewel convention. What is the Government’s view of devolution?

I speak as someone who was once a Minister in the devolved Administration in Northern Ireland. I dealt with legislative consent Motions all the time. The connection between the consultation and the devolved Administration was vital, particularly on benefits, where we operated the principle of parity.

I support all these amendments because they pivot the debate on the issue of seeking the consent of the devolved Administrations and the level of consultation. If the Government are serious about respecting devolution and honouring the Sewel convention, they should accept these amendments. It is my fear that this Bill is really about a power grab and Henry VIII powers. Unlike the noble Lord, Lord Naseby, who is obviously batting for the Government as a Back-Bencher, I do not think these amendments are meant as a threat to the legislation or to the Government. We must always remember that the Executive should be accountable to Parliament. The words of the noble and learned Lord, Lord Judge, in his treatise on this are very germane on this issue.

The Bill is peppered with many provisions where the Government seem intent on undermining devolution and the devolution settlements. This demonstrates a lack of respect for them and the work they do. Do the Government believe in and subscribe to devolution, or are they trying, by stealth and secondary legislation, to be an integrationist Government? In this regard, I refer to a report from the Lords Constitution Committee, which states:

“As the operation of the devolution arrangements and the respective power of the devolved institutions are constitutional matters, we would expect to see them amended by primary rather than secondary legislation or by using a statutory procedure that requires the consent of the devolved legislatures”.


I ask the Minister: when are the Government going to come back to that position? The Constitution Committee is also instructive about the role of consultation. Point 5 of its summary of conclusions and recommendations states:

“The lack of specificity about the consultation requirements in the Bill is problematic. The Government must set out the process for consultation with the devolved Administrations on the management and adjustment of the internal market arrangements.”


So be it with the mutual recognition principles for goods.

There is also a lack of reference to the common frameworks, an area that would help to resolve some of these issues. Is that because the Government wish to further control the devolved Administrations? There is a strong case for withdrawing this legislation and going back to the drawing board, while a more suitable intergovernmental approach and better consultation are used to develop an appropriate system of governance.

The Government’s approach in this Bill is about weakening devolution arrangements, hence it is important to achieve and obtain the consent of the devolved Administrations for the mutual recognition principles. I therefore fully support these amendments, which are trying to curb the Henry VIII powers.

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, I am told that we have the noble Lord, Lord Hain, again.

[Lord Hain (Lab) [V]]

Thank you, my Lords. I suddenly expired by unilateral mute for reasons that neither the broadcasting hub nor I could understand. I was about to complete what I said so, with the leave of the Committee, I will briefly do so.

The Bill will also narrow the territorial scope of devolved legislation. Regulations relating to goods passed by the Senedd, for example, will apply only to goods produced in Wales or imported directly into Wales from outside the UK. They will not apply to goods imported from the rest of the UK. This, as acknowledged by BEIS’s impact assessment of the Bill, would reduce the ability of local legislatures to pursue targeted social and environmental objectives so that the intended societal benefits “would be forgone”.

It is therefore clear that the market access principles of mutual recognition and non-discrimination set out in the Bill would present a significant threat to the purposes of devolution, which have been democratically established now for nearly two decades. Surely it is not too much to ask that, at the very least, the devolved Administrations should be consulted and their consent sought on the relevant measures in this Bill, as set out in these amendments?

[Lord Liddle (Lab)]

My Lords, there have been many excellent speeches in this debate and I doubt that I have anything much to add.

I commend to the Government that they take note of what was said by the noble and learned Lord, Lord Mackay of Clashfern. This is potentially a critical issue for the future of the United Kingdom. I want to see a United Kingdom survive; I am a passionate supporter of that. That means we must have a well-functioning internal market. However, the Government are making a great meal of this issue, building it up into a much bigger conflict than it needs to be. I urge them to follow the route of reviving and working through the common frameworks that I remember David Lidington proposed as part of the European Union (Withdrawal) Act. I do not see why this new Conservative Government have apparently abandoned the approach that David Lidington took then and are seeking to create a confrontation between the principle of consultation, which they favour, and the principle of consent favoured by the devolved Administrations.

The present Government seem to see Brexit as an opportunity for the assertion of the UK as a unitary state. This is very dangerous for the UK’s future. Take, for example, the structural funds, which play an important part in the Welsh and Scottish economies. Under the devolution settlement, the devolved Administrations were responsible for how structural fund money was spent in their areas. This Government are trying to take that away, establishing new powers to direct investment in Scotland and Wales. The Government are trying to reassert a unitary state. This is the wrong path to be following.

The person I think speaks the most sense on these questions is former Prime Minister Gordon Brown. I want to see us evolving in a federal direction and we cannot do that if we are going to tear up principles that have already been agreed. We are on the verge of making the mistake that the Conservative Party made in the 1880s when it rejected Gladstone’s visionary plan for Irish home rule and we will pay very heavily for the consequences.

18:00

[Lord Cormack (Con)]

My Lords, I am very glad to follow the noble Lord, Lord Liddle, because, not for the first time, he speaks a great deal of powerful good sense. We have to recognise that what is at stake here is the future of the United Kingdom as we now have it and not as we used to have it. As I said when I spoke briefly on Monday, I was not an advocate of Scottish devolution because I saw within it the seeds of disaster, but we have it. The fact that we have a Government in Scotland who are bent on independence adds a real danger and we must not play into the hands of those who would destroy the union.

It is all a question of getting the right balance. Far too often we have not got the right balance. I completely accept that the United Kingdom, which I want to see retained, has a Parliament and a Government which are clearly superior in political power to the devolved Administrations. Bearing in mind that one of those Administrations wishes to separate, I believe there is an enormous amount of good sense in what the noble Lord, Lord Hain, said. He talked about qualified majority voting within a council of Ministers drawn from the United Kingdom Government and the devolved Administrations. I beg my noble friend on the Front Bench to reflect on the wisdom of what the noble Lord, Lord Hain, and my noble and learned friend Lord Mackay of Clashfern, to whom the noble Lord, Lord Liddle, referred, said in very thoughtful, well-considered and powerful speeches.

It is clearly crucial that we consult within the four countries. It is clearly crucial that we recognise that one of the four countries has 80% of the population of the United Kingdom. It is clearly important that no tail wags the dog, but it is equally vital that we treat each other as equals and that Ministers meet and come to sensible decisions which are not seen as impositions. That is why I am so fundamentally opposed, as I always have been, to Henry VIII clauses. That Henry VIII should have been recruited in such large measure by the present Government is extremely unwise. To get immediate domination through a means that can only spawn long-term disaffection is not wise, and we need a Government who are able to practise wisdom at this crucial moment in our history.

We have left the European Union, we are going forward as a United Kingdom and we have got to achieve balance and symmetry and a long-term wisdom which does not lead to the replication of the sort of social division that was created in the 1880s, to which the noble Lord, Lord Liddle, just referred. History does not repeat itself, but it does—or should—teach us lessons and we should seek to derive wisdom from the knowledge of what has happened in the past. I beg my noble friend to consider what has been said in this debate, to reflect on the very wise words which we have had from the noble Lords, Lord German and Lord Liddle, the noble Lord, Lord Hain, in particular, and my noble and learned friend Lord Mackay of Clashfern, and let us try to come to an accommodation.

We need to come together in this country more than we have ever needed to. We must not dismiss opinions because they come from parties other than our own. I am not so starry-eyed as to think that we could have a national Government tomorrow, but we have to treat each other with a degree of respect. We have to recognise that it is just conceivably possible that the other side might have a few good views.

Cromwell was not a man for consensus, but he once said, in the predecessor of the other place: “Conceive it possible, in the bowels of Christ, that you may be mistaken.” My message to the Government this evening is: conceive it possible that you may not have got it quite right, and let us come together to help you to get it right.

[Lord Judd (Lab) [V]]

My Lords, I declare an interest because I am half English and half Scottish, and proud of it. I am very close to my Scottish family. I have always feared that, in this House in particular, we have underestimated the dangers ahead had devolution not happened. The lessons of Ireland are there, and I believe that the peace and stability of our peoples across the islands of Ireland and Great Britain have been ensured by the process of devolution; I am convinced of that.

When my noble friend Lord Hain says he sometimes does not understand why Ministers do not accept the logic of a particular position that is taken, I think that he is failing to look at the driving force behind all that is happening. As I said in a debate on a previous amendment today, I believe that there is a driving force against everything that I think most of us in this House have believed was vital.

There is a world of difference between the concepts of “consult” and “consent”. What builds up the resentment of the Scottish people, for example—I am sure it is true for Northern Ireland and Wales as well—is the patronising assumption that we will consult the others. Those who emphasise the importance of mutuality in this debate are absolutely right. That means that we meet, in a sense, as equals, and we seek their consent to proposals that we may be making.

The amendment is vital. It is vital not just to this internal market Bill but to recommitting ourselves to peace-building. We always seem to react and try to deal with crises when they have overtaken us. In this case, we had the wisdom to look ahead and do things in time. We will need to reassert the whole process of peace-building, mutual consent and the recognition of people as people, wherever they are with their identity. This amendment is very important indeed.

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Judd. I agree with him. Reflecting on this amendment, so ably moved by my noble friend Lord German on behalf of the noble Baroness, Lady Finlay of Llandaff, I was struck by the point made by the noble Lord, Lord Cormack. During the 20 years of devolution, none of us has had a unique monopoly on wisdom as to what devolution is. It has been a combination of people on a journey. The noble Lord started from a position of opposition but then perhaps found areas to support, while recognising that there are still frictions within our union. Within my party, there has been a consistent element of support for delivering it.

I hope the Minister accepts that no one in this House wishes our union ill harm. No one wants the internal market not to operate in the best way that it can for the benefit of our businesses and our people. Clearly, there are nationalists across parts of the United Kingdom who have a different purpose, but when we are scrutinising this Bill, we want it to be better.

I want to reflect on the points made to the Scottish Parliament by the right honourable Michael Gove. He was asked why the Government was insisting on putting this legislation forward when it had not received the normal legislative consent Motions. Michael Gove said that these were exceptional circumstances. It is arguable whether all the component parts of this Bill—which creates the framework for an internal market with its long-term consequences—are both exceptional and necessary before the end of January.

The Minister still has to persuade many that the whole of the Bill is required by the end of the IP period, given that we are still awaiting legislative frameworks. As part of EU retained law, there is a standstill period for all those pieces of legislation anyway, so we question the Bill’s necessity. The Government insist that they need it to go through but, since the noble Lord, Lord Callanan, indicated in a previous group that it was drafted in a bit of a rush during the summer, it is right to ask the Government to think seriously about those elements that will have a significant impact on the ability of the devolved Administrations to legislate and of Ministers in Scotland and Wales to act in an executive way within their competences.

Perhaps the Government could reflect and insert some provisions into this legislation in order to reassure the devolved Administrations that the level of consultation to which we have been accustomed in the past will continue in future. As the Constitution Committee report clearly indicated, it is only in Clause 6 where changes would have an impact that the Government are proposing to consult with the devolved Administrations. There is no provision for what would happen if there were a dispute or if the consultation were to indicate that the devolved Administrations did not want the Government to continue on their chosen route.

Clauses 8, 10, 17, 19, 20 and 48 all contain areas where the Constitution Committee has highlighted changes that would have an impact on the devolved Administrations and their legislative competences, and where no consultation is proposed. These areas can be rectified without a change to the timetable by which the Government wish to move forward. This is a legitimate request on behalf of all noble Lords who have contributed to this debate.

In this group, it has been helpful to reflect on the areas where it has become the practice to seek consent for significant changes to the constitutional framework impacting on Scotland, Wales and Northern Ireland. Then there are secondary areas where—if there has been an impact—consultation has been the norm.

18:15

The noble and learned Lord, Lord Mackay of Clashfern, was right, as was the noble and learned Lord, Lord Hope of Craighead, in a previous group, that this is not a new debate. We have had it within the withdrawal proceedings and, significantly, within the Scotland Act and the Government of Wales Act. I think we all thought that we had reached some form of consensus on where it would be appropriate for consultation to be carried out; the outstanding area would be disputes.

As I mentioned on a previous group, some of the changes likely to be made would ordinarily come within the Sewel convention. There is quite a bit of misconception about the Sewel convention and its operation, because often we see our politics within the constitution and the prism of a UK Government and a Scottish Government seeking independence. However, between 1999 and the Brexit legislation, a legislative consent Motion was only once denied in the Scottish Parliament, over the Welfare Act. During the 2019-20 Session, even with everything that is happening at the moment, 18 legislative consent Motions have gone through the Scottish Parliament. Only this legislation has caused significant difficulties.

We are not arguing for a carte blanche to roll back on an approach that works remarkably well. When I was a Member of the Scottish Parliament in opposition, the SNP constantly thought that a legislative consent Motion gave away powers of the Scottish Parliament, yet the SNP has used them more than any other devolved Administration. It is a very useful tool, but it works on two principles: whether there would be a change of the law over a devolved matter, or whether it would alter either the legislative competence of the Parliament or the “executive competence” of Scottish Ministers. The clauses that the Constitution Committee highlighted would all come under the category of changing the executive competence of Scottish Ministers. Therefore, a mechanism of consent would be fully appropriate.

We come now to the two areas where it is appropriate. The first is whether they would require the consent of the devolved Administrations, and what would happen if that consent was refused. Would it then come back to the UK Parliament to legislate over that refusal? If not, then, as others speaking on this group have indicated, some form of dispute mechanism will be important, because the internal market Bill is very different from other pieces of legislation. This is an ongoing piece of legislation about the operation of the market. It is not a stand-alone piece legislating on behalf of a devolved Administration, after which it would be fully within the operation of the Ministers in Wales, Scotland or Northern Ireland, never being referred back to this Parliament. This legislation would be ongoing and, given that many of the regulation-making powers within the legislation would be to update definitions or exclusions, the areas where it is particularly problematic are those where legislation on the statue book is changed. The UK Government would then determine the validity of that change.

That is why I asked the Minister to clarify the definition of “substantive”. One area where there would not necessarily be consultation is over a piece of legislation that is not covered under the Bill at the moment because it is already in place. My noble friend Lord German mentioned single-use plastic items and renewables, and I have used other examples. What if there are substantive changes in the terminology? I asked the Minister to clarify this and he said that there would only be a substantive change if the outcome was different. As my noble friend Lord German indicated, we will not know the outcome until further down the line. The policy intent is the key thing. That is one example of why consultation is so important.

Finally, on a previous group, the noble Lord, Lord Callanan, indicated that where there have been areas of disagreement, the protocol for avoidance and resolution of disputes would be used—and that is covered in the 2001 memorandum of understanding. That is not an appropriate mechanism for how the internal market will operate going forward, so it would be helpful to know how the Government intend to deal with disputes. The internal market will operate on the basis not just of a dispute between the UK Government and Scotland alone. If the UK Government take a view on which Wales and Scotland have a differing position, how will that dispute among the four nations be resolved? Without knowing what the dispute process is and the justifications for consultation, I fear that the noble Lord, Lord Liddle, is right: we have to ask what the motives of the Bill are.

I do not think that we want to get there at this stage. We want to work constructively with the Government if they are willing to listen, and one area where they could work progressively is by recognising that in areas that would have an impact on devolved legislation, which ordinarily would be done through a Sewel Motion, the commitment to consult would be the bare minimum. Then we can have a discussion about the fact that, if there are significant impacts, seeking the consent of those Administrations will be important.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, the noble Lord, Lord Cormack, always worries me when he starts talking about Henry VIII. As any woman knows, we gird our necks a little tighter if there is a threat that that is coming back.

In some ways, this is a continuation of the same debate, which is about why on earth the Government put together a Bill in such a hurry, as we heard earlier, and with so little consultation with—or even consideration of, let alone agreement with—the very devolved authorities whose competences it seeks to amend. It is partly that suspicion which has necessitated a rather sad amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern. To have to add the wording that the powers in the Bill must be used only for the purpose for which they were designed seems extraordinary. That would not normally be needed, if trust and mutual respect had been there in abundance.

Similarly, the amendments requiring consultation with the devolved authorities before introducing regulations or guidance affecting them should never be needed. If Government-to-Government relations were working properly, it would be de rigueur that that had taken place. Clearly, those relationships are not working properly, and that is why we need the amendments: to establish or obtain what the noble Baroness, Lady Bowles, called the proper conduct of devolution—or, as the noble and learned Lord, Lord Mackay, and others said, we have to get this right to protect the union.

I turn to the amendments in my name, Amendments 16, 41, 48, 63, 74 and 99. They make two particular points, one of which, as we have heard, is slightly at variance with those in the name of the noble Baroness, Lady Finlay. They are about whether any one part of the union should have a veto over something that may be of particular concern to the others, which is what the words “obtain consent” imply. Our words are “seek consent”, but make it an overriding obligation to do the necessary to try to reach full agreement. We also accept that there may be times when one party might hold up the process, at which point we will need some sort of dispute mechanism in place, which is something we ought to be discussing. As the noble Lords, Lord Cormack and Lord Naseby, said, maybe we should look at the two suggestions made today: my noble friend Lord Hain’s council of Ministers or, as the noble and learned Lord, Lord Hope, said, using the formula in the 2018 Act. But clearly we need to have thought about something like that before we get to Report, so we could add that.

But the principle, surely, is that the Government cannot simply start down the track of making regulations without first consulting. There was an issue about what consultation is—it is consultation before you even start the process. Handing over a finished draft instrument is not what I call consultation; you start at the beginning of the process. So they should not start down the track of making regulations without first consulting and then seeking to reach consensus with the devolved authorities. In a Bill about making a four-country internal market work, I would have thought that that was obvious—but history shows we need to nail it down. Surely, as I think the noble Baroness, Lady McIntosh of Pickering, said, we cannot believe that the Government would reject a requirement to seek agreement. It is motherhood and apple pie. For them to say, “No, we are not even going to seek agreement”, I think, would be an interesting response.

There is an issue about what all of this is about. Is my noble friend Lord Hain right to say that this, as we have heard, hastily written Bill is about trying to satisfy our US negotiating partners that they will have full access to the whole market and that the Government will not let anything get in the way of that? Or is it, as my noble friend Lord Liddle said, something perhaps in a way more serious, of trying to bring back control into the centre? I am not sure what the answer is to that. We will not go there tonight, but at some point, I think, we need to flesh out what is the purpose of some of this.

I turn briefly to my Amendments 41 and 48, the first of which would require the Government to consult with the devolveds before introducing legislation to amend the list of legitimate aims in Clause 8(6)—an issue touched on by the noble Baroness, Lady McIntosh. These are important—I know they sound a bit techy—because indirect discrimination is effectively excluded from the overarching principle if it can reasonably be considered as necessary to achieve a legitimate aim. So the definition, the list of legitimate aims, is clearly key. Quite rightly, the Bill lists the protection of the health of people in Clause 8(6) as a legitimate aim—amen to that.

The problem, as my noble friend Lord Hain has said, is that the list of legitimate aims can then be amended by regulation. Now, perhaps adding to the list might not constitute a problem, and Amendment 35 —not in this group but in a later one—in the name of my noble friend Lord Stevenson and others, would indeed add some more categories to the list of legitimate aims. But they would be on the face of the Bill, not stuck in by regulation, and that is surely the proper way of doing it. The problem, of course, is that while at the moment human health and, indeed, the health of animals or plants are there, they could be removed by secondary legislation from the list of legitimate aims. That would then extend the areas in which devolved Governments would not be able to set standards for products sold in their jurisdiction. This is real stuff.

18:30

We have heard a number of times about types of measures to protect the population against harmful products, including minimum alcohol pricing, increasing the age for legal purchase, setting limits on the hours of sales and single-use plastics; there are a number of others. It may well be that existing measures such as MUP could be safeguarded in, say, Scotland, but we are talking also about future measures, and therefore the issue of legitimate aims is key.

Amendment 41 requires the Government to seek the agreement of the devolved authorities before amending such an important part of the Bill. If the Government want more freedom to add rather than remove legitimate aims, I would be less worried—but the thought of removing security, public safety or the protection of health from the legitimate aims that allow particular measures should surely not be allowed without the agreement of all concerned. That is not simply because existing measures could suddenly find themselves labelled as discriminatory, but because it could halt future attempts to increase health or public security.

I turn finally to Amendment 48, which seeks to amend the regulatory powers in Clause 10 to amend Schedule 1. It covers similar ground, requiring the Government to seek the consent of the devolved authorities before any changes to the schedule of exclusions from market access principles. These currently include unsafe foods, for example—although sadly not public health. The key issue again is the need for any changes to this schedule to be made only after consultation, and hopefully agreement, with the devolved authorities. The issue is dealt with in more detail in a subsequent group. Here, as my noble friend Lord Liddle and others have said, we are talking about moving forward within our devolved system, not undermining it and not taking powers back to London. That is why the amendments in this group are so important.

[Lord True (Con)]

My Lords, I am grateful to all those who have spoken in what has been a thoughtful debate absolutely in the proper traditions of your Lordships’ House, both in the spirit of inquiry and in the main—I will come to that point in a minute—in manner. I am of course sorry that the noble Baroness, Lady Finlay, was unable to be here, but I was delighted to hear the noble Lord, Lord German, move the amendment so ably. I was also glad to learn that he is an assiduous reader of the words of my right honourable friend Jacob Rees-Mogg. I can tell him that that is a very improving activity and I heartily commend it to him. I would say in response to his point that this legislation has collective agreement and therefore it is subscribed to by all members of the Government.

Having mentioned the noble Baroness, Lady Finlay, and having in mind the remarks of the noble Lord, Lord Wigley, I would like to thank the Welsh Government, who had an involvement in some of these amendments, for what has been their positive engagement on this Bill to date at both ministerial and official levels. I have had the privilege of being present at discussions on this matter.

When I talked about taking exception, I was thinking about tone. People have asked what the Government’s intention is and what the exceptional circumstances are. Like it or not, the exceptional circumstances are that, after a lengthy period of being a member of the European Union, which effectively controlled our internal market, the British people have elected to leave the European Union and the British Government—and British Governments collectively—have a responsibility to provide for successor arrangements. I do not believe that this should be the occasion for a great set of conspiracy theories. I do not agree with the noble Lord, Lord Liddle, that the Government are making a meal of the system, and I reject what he said about the Government abandoning the frameworks. We have discussed that at length in this Chamber and I have set out the continuing commitment of this Government to the framework process.

So, as we discuss this, it is important that the process of respect goes all ways, and this Government have a profound respect for all the peoples of these islands and all those involved at every level in the difficult process of governing effectively and responsibly the people they have the honour to represent. The Government seek to go forward co-operatively with the devolved Administrations and all other people in our democracy. I do not believe—with great respect to my noble friend Lord Cormack—that it is helpful to use words such as “domination” as an aspiration of the Government, and nor is it helpful for the noble Baroness, Lady Bennett, to talk of dictatorship. That is not the way in which this Government think, behave or intend to go forward. They hope to go forward with respect and co-operation.

The Bill attempts to ensure a smooth transition for businesses, as they are no longer subject to EU constraints, and to maximise certainty through the Covid recovery and the end of the transition period. It does not remove powers from the devolved Administrations. What the Bill does do is ensure that no new barriers to intra-UK internal trade will be created following the end of the transition period, and that companies from all parts of the United Kingdom will be able to trade seamlessly with one another. That is an objective that everybody in this House genuinely shares. I agree with what the noble Lord, Lord Purvis of Tweed, said: I believe that everybody in this Chamber—or, at least, almost everybody—is committed to maintaining the union of the United Kingdom. We intend, and obviously hope, to perpetuate and protect the system where companies from all parts of the United Kingdom are able to trade with each other.

Following the end of the transition period, devolved Administrations will see an increase in their powers in multiple devolved policy areas, as the role of the EU institutions falls away. They will include areas where the EU has previously set regulatory standards. The Bill seeks to strike a balance between respecting devolution and ensuring that UK companies can continue to trade unhindered in every part of the UK. Hearing some of the things that have been said, one would not think that it was this Conservative Administration who, as recently as 2017, extended so profoundly the role of the Welsh Senedd. It is vital that legislation introduced by the Bill should act across the whole of the UK, providing all of our businesses and consumers with the same degree of certainty. That is important in whatever corner of the four parts of our kingdom businesses and consumers live, just as there must be the same protection from discrimination and the same opportunities for prosperity and well-being. We owe that to every corner of this kingdom.

Yes, the driving principle of the Bill—maintenance of the internal market—is captured by Amendment 109, in the name of the my noble and learned friend Lord Mackay of Clashfern. The purpose of the Bill is as he set it out, but I do not see how it could be used for any other purpose, and I do not believe that to restate it on the face of the Bill could be anything other than potentially confusing. But I do take the spirit and the letter of what my noble and learned friend said: this is the purpose of the Bill, and it certainly is not to be set in the context of conspiracy theory. It provides for a new system that is both ambitious and necessary and, as I have said, it is a pivotal moment for the United Kingdom to develop its own bespoke regulatory system and we must make sure that this offers benefits to businesses in every part of the United Kingdom and to the devolved Administrations.

The noble and learned Lord, Lord Hope of Craighead, made a typically thoughtful opening speech. I hope that I misheard him when he said that he regretted the provisions in the Bill as a whole; I believe he was referring to the nature of the regulatory powers. In his remarks, he put forward some ideas that obviously—as my noble friend Lord Callanan said in an earlier debate—we will read carefully.

I can answer directly on the Sewel convention, about which the noble and learned Lord asked a second question. It was addressed earlier by my noble friend Lord Callanan but, for those who were not here, I repeat that the United Kingdom Government continue to demonstrate respect for and commitment to the convention. As such, they have sought the consent of each devolved legislature for the Bill through the established practices and procedures.

However, the convention envisages situations whereby the UK Parliament may need to legislate without consent; the noble Lord, Lord Purvis of Tweed, referred to such a situation. The Government have continued to hold positive discussions with the Welsh Government and the Northern Ireland Executive at both official and ministerial level. The door remains open to the Scottish Government, should they wish to re-engage on internal market matters. It is regrettable that the Scottish Government walked away from discussions on the internal market in March 2019; we urge them to return to the table.

We consulted extensively on the UK internal market White Paper, and received more than 300 responses and overwhelming support from businesses and industry to maintain the status quo and avoid new trade barriers emerging. The consultative nature of that work does not end there. I understand the undertone of what Members have sought in these amendments. We will of course monitor the implementation of the provisions in the Bill and speak to stakeholders and the devolved Administrations to ensure that it works as well as possible within our constitutional setting. The system requires effective and clear governance to provide the necessary certainty for business. Where the system is not working, the Government need to be able to act quickly and effectively to fine-tune the system for the benefit of everyone. That matter was discussed earlier today.

It is suggested by your Lordships that some of the provisions in the Bill should be subject to the prior consent of the devolved Administrations. Amendments 15, 16, 30, 41, 42, 48, 49, 75A and 100A would require this, meaning that, as a pre-condition, Ministers from Scotland, Wales and Northern Ireland would all have to agree with any change before it could be given effect. A number of noble Lords alluded to difficulties that might arise in certain circumstances. Clearly, such a provision could undermine the Government’s ability to act rapidly and decisively to make any changes necessary to reflect the interests of all parts of the United Kingdom, although noble Lords will, I know, have different views on the likelihood of that.

However, there is also a matter of principle at stake: attaching a requirement to obtain consent from the devolved Administrations would undermine the responsibility of Parliament with regard to the internal market. My noble and learned friend Lord Mackay of Clashfern referred in his excellent and thoughtful speech to the importance of the central role of Parliament. The Government believe that this is a fundamental issue. There may at times be a need to legislate effectively for the whole of the UK and only Parliament is capable of doing that. It is a responsibility that we take seriously; we should not resile from or compromise it in any way.

We are fully committed to ensuring that the use of the powers in the Bill are subject to effective oversight and consultation. First, any use of the powers would require an affirmative regulation to be passed in Parliament. This will ensure that MPs from all parts of the UK can scrutinise and vote on any changes.

Secondly, consultation with colleagues in the devolved Administrations is required for any change to the relevant requirements in Clause 3. It is true that a legislative consultation requirement would not be appropriate for the powers relating to exclusions from the market access principles or the list of legitimate aims for non-discrimination. In this case, the Government may need to make a swift decision in the interests of all parts of the United Kingdom, should there be an emergency or an unforeseen issue in future. In these instances, there may be no time to have a consultation period to seek consent. However, for all powers, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This system has worked well for 20 years and continues to do so.

18:45

The noble Lord, Lord Hain, and others, including the noble Lord, Lord Purvis of Tweed, referred to arrangements going forward. The review of intergovernmental relations—the IGR—was jointly agreed by the Administrations of the United Kingdom to ensure that intergovernmental structures remain fit for purpose at the end of the transition period. The review will revise and build on the current memorandum of understanding on devolution. The United Kingdom Government remain committed to concluding the IGR review jointly, working closely with the devolved Administrations to agree a finalised product.

However, once consultation is undertaken, the Government believe that the right place for final decisions should then be back in Parliament. In addition, the Government do not believe that it would be effective to publish the results of those consultations, as required by Amendments 17, 31 and 43. This requirement may hinder frank and open discussion. It goes without saying that, in this spirit, we will engage with all relevant stakeholders, including the devolved Administrations, in the production of guidance on the operation of the market access principles to make them as clear and accessible as possible, because we are committed to helping regulators and traders understand the principles and make the best possible use of them. The guidance will not change the rules that apply, of course. Therefore, with regard to Amendments 62, 63, 64 and 65, neither a formal consultation with the devolved Administrations on preparing, issuing, changing or withdrawing guidance nor their consent to it should be required.

In reiterating the Government’s intent to engage in the most positive manner with the devolved Administrations going forward—as well as their sense of duty to maintain the smoothly operating status quo in our internal market—I hope that I have addressed the concerns expressed through these amendments. I ask the noble Lord to withdraw Amendment 15.

[Lord German (LD)]

This has been a very thoughtful debate. I think that it has got to the heart of the problem, which is how the UK Government regard the whole devolution settlement and the way that the United Kingdom currently operates.

I think the mood of the Committee is that we want to get a sense of moving together to sustain and develop our union. In that sense, we require consent, because consent is what eventually drives these matters forward. I pray in aid of the view of the CBI. It is often said in this Chamber, “Business needs to have this. Business needs to have that”. The CBI has said that it wants a collaborative approach, rather like the frameworks that are being used. That is the style that we need to ensure the Government provide.

We have had some very powerful commentary about the way our union should work. If you want to work together for consent, you need, as many noble Lords have said, a method for dealing with any disputes that may come at the end. There have been many suggestions, including from the noble Lord, Lord Hain, and the noble and learned Lords, Lord Hope and Lord Mackay of Clashfern. They talked about how to resolve these matters to move forward together. My sense is that, at the moment, the Government have not got the mood right. They have not felt that there is a need to move together in a way that people feel is the right way forward for the whole of our country.

In passing, one of the effects of what we have been discussing in this group of amendments is of course that it will lead to the end of EVEL in the House of Commons. Basically, everything will have a commentary on everywhere, and therefore it will not be possible to ban Scottish MPs from debating and voting on particular issues. So it will need a change of the way in which Parliament operates as well. But clearly what this whole debate has been about is the collaborative approach and the way in which we can work together in the thoughtful way that people have talked about. What the Minister needs to consider is how you can rectify the deficiencies of that mood inside the Bill.

The right honourable Jacob Rees-Mogg said that the regulations that you produce should clearly express the policy intent. I do not think the policy intent is closely laid out in what these regulations are going to be there for, whereas the collaborative approach would be to say very clearly, “Let’s work together as we go through to the future, and we’ll have some mechanism by which we can resolve disputes between us”. Because I think we are all looking for—and accept that we have to have—a fully functioning internal market. We have to have a sense of divergence, which we already have within our United Kingdom, where already we have a functioning internal market. But we also have to know that there are systems in place in this place and in the Government that will make it all happen.

I thank all noble Lords for their very thoughtful contributions and beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Amendments 16 and 17 not moved.

Clause 3, as amended, agreed.

Clause 4: Exclusion of certain requirements existing before commencement

Amendments 18 and 19

Moved by

[Lord True]

18: Clause 4, page 3, line 38, after first “a” insert “particular”
Member’s explanatory statement
This amendment would clarify that Clause 4(1)(a) relates to a specific sale of goods (the word “sale” being defined broadly in Clause 14). This is for consistency with Clause 3(1) as proposed to be amended by my amendment to Clause 3 at page 2, line 21.

19: Clause 4, page 3, line 38, leave out second “a” and insert “that”
Member’s explanatory statement
This amendment would correct a misleading reference in subsection (1)(a) of Clause 4 that should refer to the same part of the United Kingdom as is mentioned in the opening words of the subsection.

Amendments 18 and 19 agreed.

Amendments 20 to 22 not moved.

Amendment 23

Moved by

[Lord True]

23: Clause 4, page 4, line 12, leave out from “have” to “place” and insert “had the same effect in relation to the sale (if it had taken”
Member’s explanatory statement
This amendment would bring the wording of Clause 4(5) into line with Clause 4(2).

Amendment 23 agreed.

Amendments 24 and 25 not moved.

Clause 4, as amended, agreed.

Clause 5: The non-discrimination principle for goods

Amendment 26 not moved.

Clause 5 agreed.

Clause 6: Relevant requirements for the purposes of the non-discrimination principle

Amendments 27 to 31 not moved.

Clause 6 agreed.

Clause 7: The non-discrimination principle: direct discrimination

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

We now come to Amendment 32. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.

Amendment 32

Moved by

[Baroness McIntosh of Pickering]

32: Clause 7, page 5, line 41, leave out “actual or hypothetical”
Member’s explanatory statement
This amendment probes the description of local goods in Clause 7(3).

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I perhaps need to correct something. I may have mis-spoken when I spoke to Amendments 17, 31 and 42. Of course I meant to refer to the devolved Administrations, as is written in the amendments. I apologise if I did not say that on every occasion, but obviously I was referring to consultation with the devolved Administrations. I am grateful for the opportunity to correct that.

I am delighted to have a short debate on whether Clause 7 should stand part and, within that, Amendment 32 in my name. Clause 7 makes provisions relating to “direct discrimination”, and, among these, Clause 7(1) sets out:

“A relevant requirement directly discriminates against incoming goods if, for the reason that the goods have the relevant connection with the originating part, the requirement applies to, or in relation to, the incoming goods in a way—(a) in which it does not or would not apply to local goods, and (b) that puts the incoming goods at a disadvantage compared to local goods.”


Subsection (2) states:

“Goods are put at a disadvantage if it is made in any way more difficult, or less attractive, to sell or buy the goods or do anything in connection with their sale.”


The particular difficulty I have in Clause 7 is subsection (3), and in particular:

“‘Local goods’, for the purposes of this section, are actual or hypothetical goods”.


The purpose of Amendment 32 is to probe the description of local goods and, in particular, what actually constitutes “hypothetical goods”.

Again, I am grateful to the Law Society of Scotland for its help in briefing and preparing me and drafting this amendment. It has concerns about the definition of “local goods” within this purpose, including actual or hypothetical goods. It is very strange that there is no definition of hypothetical goods, and the opportunity that my Amendment 32 creates is to simply ask the Government what they mean by “hypothetical goods” and why on earth we are using such an expression in these circumstances. I am sure it will give my noble friend the opportunity to return to his favourite tin or box of biscuits in this regard.

I will also raise a question that my noble friend Lord Callanan did not answer in summing up an earlier debate, when I asked who decides what is hypothetical? So I will take this opportunity briefly to ask my noble friend the Minister why we have inserted “hypothetical goods” in this clause? What on earth does this mean, and who determines what is hypothetical and what is real? With those few remarks I beg leave to move Amendment 32.

[Lord Naseby (Con) [V]]

My Lords, I cannot presume to know what my noble friend on the Front Bench is going to define as “hypothetical”, other than to say that I spent 15 years of my life in the marketing profession, as I have already said to your Lordships. In that time, I worked with food manufacturers and pharmaceutical, agrochemical and household-product companies. Each of those markets, and many others, will have on its list test-marketing activities with different strengths, varieties, perfume levels and activity levels: a whole host of variables.

The companies will not know which is the actual product they are going to market—and they might not even market it at all—so, at a certain point in time, those products are hypothetical. They are not registered under a trade name: they are test markets and, quite frankly, that is the normal process for consumer goods. So, as far as I am concerned—and I do not think that I need to speak at great length on this—this is perfectly understandable to anybody who has worked in the pharmaceutical, agrochemical, household-product or food world, or any other product category.

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

The noble Lord, Lord Liddle, has scratched, so I now call the noble Lord, Lord Fox.

[Lord Fox (LD)]

My Lords, this is a short and vaguely surreal debate. I caught my mind wandering to the “League of Gentlemen” with the slogan “Local goods for local people”—but not even they attempted to define “hypothetical” local goods. Indeed, neither have the Government, because there is no explanation in the non-explanatory Explanatory Memorandum which sits at the back. We are indebted again to the eagle-eyed lawyers of Scotland for finding this issue. The question is simple: what is a “hypothetical good”, why are you using this word and who on earth decides what is a good and what is a hypothetical good?

19:00

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we are obviously in competition to make the shortest speech of the evening; I cannot imagine why, because this is quite an interesting question, although we had a partial answer to it in an earlier debate. My take on it was not so much about the points raised clearly by the noble Baroness, Lady McIntosh; I am worried about how acceptably these phrases, put into this Bill at this time, work in a digital world. It is clearly stated in the clause that we are talking about businesses that are local and not local, businesses which are located or not located in an area. We are talking about propinquity and the ability of those who have to interpret these clauses to understand where there are real businesses and how they are operating if they are to be seen to be local.

That does not work for Amazon or quite a lot of the shopping we will be doing between now and Christmas, which will be largely digital in form. Is “hypothetical” to mean virtual? I leave that rather complicated philosophical question for the Minister to respond to.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I understand that the purpose of this amendment from my noble friend Lady McIntosh is to probe the meaning of “actual or hypothetical goods” in the Bill, which has foxed a number of other noble Lords. I am very happy to provide further information on that. The inclusion of actual and hypothetical goods in this clause is critical, as it means the provisions work effectively in scenarios that could arise where there are no actual local goods against which impacts on incoming goods can be compared.

If a company has a product which is subject to a patent, it can therefore be made by only one company in the UK. If an authority were to regulate against that product because of where it is produced, there could not possibly be a local good to compare it against to determine relative disadvantage. Being able to compare it to a hypothetical good addresses this and allows the rules against direct discrimination to operate properly and protect all businesses across the UK.

Let us take as an example a new technology which takes an innovative approach to food processing, cutting production times by half. The technology may be completely unique, novel and unlike other technologies for food processing on the market. Without being able to compare this against a hypothetical good, it would be very challenging to deem whether any new measures taken by Administrations were discriminatory or not. Equally, as a further example, if a Scottish company patented a technological breakthrough in quantum computing, this same technology would not be present on the English market and we would therefore need a hypothetical good to be able to compare this innovation to in order to determine whether new English regulations discriminated against this Scottish technology and otherwise created an unfair disadvantage.

The existing wording is also important to deal with situations where arguments could be posited that a local good is similar to, but not the same as, an incoming good, and therefore would not be a good comparator in determining whether discrimination exists. Being able to compare a hypothetical good that is the same as the incoming good, save for location, enables that determination to take place.

I was also asked who determines what a hypothetical good actually is. Ultimately, it would be the courts, but a business would bring forward the challenge and claim discrimination.

I turn to the stand part debate on Clause 7, which sets out the test for direct discrimination. Direct discrimination is where a requirement applies explicitly differently to local goods and goods from elsewhere in the UK and that difference results in disadvantage for the goods from elsewhere. This means, for example, that a Scottish regulator cannot impose additional licensing requirements for Welsh goods unless it does the same for Scottish goods. As another example, take a scenario where Scotland regulated that only Scottish whisky could be sold in pubs; this would be directly discriminatory against the very fine Penderyn whisky produced in Wales, as they would have a clear disadvantage against similar goods on the Scottish market—I see that meets with approval.

“Disadvantage” simply means that it is more difficult or less attractive for those incoming goods to be bought or sold. In this example, any additional licensing requirements on Welsh goods may impose additional costs and potentially increase the price of the Welsh good, meaning it would be less attractive to buy. To be clear, the goods that we are comparing here are the local equivalents of the incoming goods that are materially the same, or materially share the same characteristics, but do not have the same connection to the originating part of the UK. For example, a potato produced in Wales is compared with a potato produced in Scotland. This clause will ensure that directly discriminatory barriers cannot be created by rules that aim at the way in which a good is sold to circumvent the effect of mutual recognition. For example, if English butchers were banned from selling Welsh lamb, this would be directly discriminatory.

It is worth noting that Schedule 1 to the Bill allows for direct discrimination where a requirement discriminates in a reasonable way, as a response to a public health emergency, ensuring that the rules leave scope to react to such situations. I ask my noble friend to withdraw her amendment.

[Baroness McIntosh of Pickering (Con) [V]]

I am grateful to all noble Lords who have contributed to this little debate, which I hope wins the prize for the shortest debate during the passage of the Bill. I am grateful for the attempt of my noble friend Lord Naseby to give us the benefit of his marketing experience and take a stab at what is meant here, but I am very much in line with the noble Lords, Lord Fox and Lord Stevenson, in that I think it would help to have an explanation in the Bill. Many Bills include definitions, and it would help if this was one such.

One hypothetical example that springs to mind is that, in the days before cloning, one would never have thought that a cloned animal could be bred in the way that Dolly the sheep was by the Roslin Institute, which is part of the University of Edinburgh. As my noble friend has gone to the trouble of explaining—I hope I understand it a little better—in the final analysis, it is for the courts to determine. It is regrettable that we do not have a definition in the Bill that would save court time and legal fees, going forward.

I very much enjoyed the contribution from the noble Lord, Lord Stevenson, particularly his hypothetical question about how this would apply to virtual sales. I do not think we have had an answer to that, so I would be grateful if the Minister could write to us.

Generally, the difficulty I have with Clause 7 has been eased, to some extent, by the explanation from the Minister. As my noble and learned friend Lord Mackay said in an earlier debate, a lot of EU law has been passed over and retained. The non-discrimination part of EU law, under the treaties, is on the grounds of nationality and is inherently clearer. The complicated process we have come up with in Clause 7 could be summed up by how no one can discriminate against a good—or a service in a later part of the Bill—simply because it comes from a different nation of the United Kingdom. That could have been explained more clearly, but I am grateful for the opportunity to have had this little debate and the explanation, as far as it went, from my noble friend Lady Bloomfield. At this stage, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

Clause 7 agreed.

19:09

Sitting suspended.

19:40

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, we now resume Committee stage and come to the group beginning with Amendment 33. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in debate.

Clause 8: The non-discrimination principle: indirect discrimination

Amendment 33

Moved by

[Baroness Finlay of Llandaff]

33: Clause 8, page 6, line 21, leave out paragraph (d)
Member’s explanatory statement
This amendment is consequential on the amendment in Baroness Finlay's name which leaves out Clause 10 and inserts a new Clause. It removes the provision that a relevant requirement is indirectly discriminatory if (among other things) it cannot reasonably be considered a necessary means of achieving a legitimate aim. The issue is addressed more generally in the new Clause 10.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, I am grateful to the noble Lord, Lord German, for introducing the previous group in my name. Technical difficulties were compounded by a timing clash on legislation in Grand Committee.

My amendments in this rather large group seek to achieve three different objectives which are in many ways complementary to one another, but in what is perhaps a belt-and-braces way. Amendment 54 would insert a new Schedule 1. It perhaps more properly belongs with an earlier group, because it is intimately related to Amendment 6 which we debated on Monday. Although Monday no doubt already seems a distant memory, your Lordships may recall that Amendment 6 was intended to restrict the application of the market principles to policy areas where an attempt had been made to develop a common framework but agreement had proved impossible to reach. The proposed new Schedule 1 provides a list of areas in relation to which regulations may be brought forward to apply the market access principles. It is a list of those areas where common frameworks which require legislation are currently in development.

It should be noted that this list is not intended to be unamendable. Obviously, over time, the list will need to change. Should the Government ever be able to identify an area which is not already in the common frameworks programme but where they believe there is a serious threat to the internal market, something which the Minister has so far singularly failed to point out, Ministers will be able to add to or amend the list by statutory instrument, having consulted the devolved Governments. I emphasise “having consulted”, because there is deliberately no requirement to obtain the consent of the devolved Governments in this instance.

I note that the Welsh Government, who originally drafted these amendments, have gone to great lengths to allay the potential anxieties of Ministers here. I think it is a fair-minded and sensitive strategy, in contrast to some of the things that we have seen, because neither one nor all the devolved Governments could veto the inclusion of new subjects in the list of areas to which market access principles could be applied by regulation.

I now turn to the second block of amendments in my name in this group: Amendments 33, 34, 50, 55, 56, 60, 80 and 95. They all have the same objective: to increase the scope of potential exceptions to the application of the market access principles. At Second Reading, many noble Lords pointed out that while the Government refer to the precedent of the European Union in seeking to impose the market access principles —something which one might have expected would rather stick in the throat of Ministers—the comparison is inexact. European legislation frequently gives discretion to member states, and therefore sub-state Governments, according to their powers and competence, to vary the approach to standards for goods, and indeed services and professional qualifications, where there are sound public policy reasons for doing just that.

19:45

To take an example noble Lords have used, the directive on single-use plastics allows Governments to choose whether to ban all, or only some, of the nine types of materials listed in the directive. Another example is that of genetically modified crops, where Governments can choose whether or not to ban them, and Administrations in different parts of the United Kingdom have made different choices.

Amendment 50 therefore seeks to add a much broader list of public policy exclusions from the market access principles in respect of goods in the body of the Bill, instead of in a schedule. Amendments 33, 34, 55, 56 and 60 are all consequential on this change.

Amendments 80 and 95, in similar fashion, seek to provide the devolved Governments with more scope to protect devolved competence in respect of services. The Bill as drafted would only allow direct discrimination, itself a somewhat biased terminology to use, of a decision by a legislature to exclude service providers operating at a lower standard in another part of the United Kingdom—and that is in the case of a public health emergency. Amendment 80 would extend this to include also any other overriding reason related to the public interest. Thus, for example, were the Welsh Government to decide that they wanted to introduce a national licensing system for individuals who undertook body piercing—because of the risk of health and well-being being damaged from botched operations—they would be able to ban body piercers who might legitimately be able to practice in England where there is no such requirement. Without this amendment, that would not be so.

Amendment 95 would allow a devolved Government to use the justification of a “legitimate aim” of public policy where regulation directly discriminates against service providers from the other parts of the UK. No doubt the Minister will argue that this leaves too much discretion for the courts to decide what constitutes an overriding reason related to the public interest or a legitimate aim. But I would say that we in this House believe that there is a greater threat to the constitutional order from the overreach of the ministerial powers than there is a threat from the judiciary.

I would add here that there are other amendments in this group which seek the same objective, and which I support; notably Amendment 36, from my noble and learned friend Lord Hope, and Amendments 35, 51, 57 and 58, from the noble Lord, Lord Stevenson of Balmacara.

The final amendment in this group, Amendment 174, seeks to resolve a conundrum which has occupied your Lordships’ House on other recent Bills, notably the Trade Bill and the Agriculture Bill: we have a Government that insist that the idea of deregulation in food standards or environmental standards is an anathema to them but who robustly reject any attempt to put guarantees to that effect in legislation. Amendment 174 gives the Government a light-touch way of demonstrating that this commitment is genuine and to prevent, without further primary legislation, any subsequent, less principled Government embarking without further let or hindrance on a deregulatory spree. It would require any Government, in introducing legislation relating to areas in which the market access principles might apply, to have due regard to the need to maintain high levels of protection, and to publish an analysis of whether the measure in question would maintain, increase or reduce such protection. This would not prevent a legislature moving ahead with legislation which lowered standards, but it would mean that it would do so in the full knowledge that that is what it was doing.

I said at the start of this speech that these amendments were belt and braces in approach. If the Minister were inclined to accept the approach of limiting the application of market access principles to areas where it has proved impossible to reach agreement on common frameworks, I and my colleagues might feel less determined to pursue the other amendments in this group. Conversely, only if the Government were to bring forward similar amendments to widen the public policy exceptions and increase the scrutiny of whether a Government are diluting protection would I be willing at this stage to think again on the amendments, which would make it impossible for the Government to short-circuit the patient work of agreeing common frameworks. I return again to the theme of building consensus and building agreement. That is the way for us to move forward as a single United Kingdom.

[Lord Anderson of Ipswich (CB) [V]]

My Lords, I have put my name to Amendments 35 and 51, which have a number of near relatives in this group. The noble Baroness, Lady Noakes, reminded us earlier today that the purpose of the Bill is to facilitate trade and that different rules in different jurisdictions create costs to business and so may operate against the consumer interest. That is a highly respectable economic argument against devolution, but devolution has been implemented and the logic of devolution is diversity—including, as the noble Lord, Lord Liddle, said, the ability to experiment.

A devolved power to regulate is valuable only if it can be used to give effect to a policy objective of a devolved Administration. Its use will be pointless and damaging to businesses in the devolved territory if non-conforming goods, unencumbered by the higher local standards, have to be admitted from elsewhere. A single market that inhibited the rational, proportionate and non-protectionist use of devolved powers in pursuance of vital policy objectives would put devolution into reverse. This is shown by the fact that it was deemed necessary to exempt existing measures from the market access principles. It would also, of course, be a never-ending source of grievance for nationalists and separatists.

In connection with that, there are two puzzling features of the Bill. The first is the small number of aims that it even acknowledges as legitimate. I do not, myself, insist on all the drafting of Amendment 51—I recall that the European concept of sociocultural characteristics mystified the courts during the Sunday trading litigation—but why is there no place in the Bill for aims as basic as environmental protection save, curiously, in relation to fertilisers and pesticides, and consumer protection? If aims as important as the protection of public safety and security may justify indirect discrimination, as Clause 8(6) provides, why must those same aims, however compelling the circumstances, give way to outside business interests in every case of direct discrimination or mutual recognition of product requirements?

The noble Lord, Lord Callanan, said earlier that we need not slavishly copy the EU single market and he is right—successful, as I am sure he will acknowledge, as that single market has been. However, with respect to him, that is not a sufficient answer. The issue did not go away when we left the EU, and it needs to be addressed on its merits and with proper respect for our own devolution settlement.

The second puzzling feature is the patchy treatment of such aims as are acknowledged, particularly public health. That aim is most broadly expressed in Clause 8(6), but as a potential justification only for indirect discrimination. Paragraph 1 of Schedule 1 provides a general exclusion relating to the movement of pests and disease but paragraph 2, on the movement of unsafe food and feed, applies only to mutual recognition while paragraph 5, on public health emergency, applies only to direct discrimination. The problem with defining permitted public health derogations in such a limited and piecemeal fashion is that, outside the scope of those derogations, policies motivated by public health, however necessary and well-designed they may be, must always give way to trading interests, without any ability to balance the competing factors.

An injection of principle is needed here. That principle, I suggest, is that:

“All the exceptions should apply to the entire panoply of market access rules.”


Those are not my words but those of Dr Peter Oliver, practitioner and author of the leading academic text on the free movement of goods, commenting on the Bill on the “EU relations law” blog. The same principle infuses Amendment 52A in the name of the noble Lord, Lord Young of Cookham, and I support it for that reason. Its list of legitimate aims is disappointingly short, but since the noble Lord has also put his name to Amendment 35, perhaps there is nothing between us on that. To accept that all the exceptions should be capable of applying to all the market access rules need not cause trade to suffer, because the application of those derogations would be regulated, as it is in federal and devolved jurisdictions across the world, by strictly expressed constraints based on necessity, rationality and proportionality.

If the Government are concerned about their ability to include devolved markets in a US trade deal, I add that countries from Canada to Switzerland—and, indeed, the EU—have proved perfectly capable of entering into international trade agreements irrespective of their internal allocation of powers. Consultation, consent and co-ordination are surely the keys.

Most of the amendments in this group would function as shock-absorbers. Their purpose, as I see it, is not to wreck the Bill but to remove genuine grievances on the part of the devolved Governments, weakening the case for separatism and rendering the market access principles, in the areas where they may be necessary, operable in the long term. I hope they will be viewed as the constructive proposals that I believe them to be.

Finally, I endorse the strong comments of our committees, and of other noble Lords, as regards the excessive and extremely troubling powers given to the Secretary of State by, among others, Clause 8(7) and Clause 10(2). In this group, Amendments 39A and 47A, in the name of the noble Lord, Lord Young of Cookham, would retain those Henry VIII clauses, but restrict their use to the adding or broadening of legitimate aims and exclusions. We would be authorising King Henry to act benevolently, but not, in the phrase attributed to Sir Edward Leigh, as “a bastard”. That course, though not for the constitutional purist, has a certain pragmatic attraction, at least for me.

[Baroness Jones of Moulsecoomb (GP) [V]]

My Lords, I have listened to the vast majority of the debates today and I have actually been shocked by some of the speeches: they were, unusually, wonderfully tough and very critical. Therefore, I hope that Ministers are actually listening and understanding that we are trying to help. It thrills me to be speaking alongside so many incredible noble Lords; in particular, the forensically brilliant noble Baroness, Lady Finlay of Llandaff, and the amazing legal minds of the noble Lord, Lord Anderson of Ipswich, and the noble and learned Lord, Lord Hope of Craighead. It is very comforting to be in agreement with them.

Noble and learned Lords will go into the intricacies of EU law, which is, of course, incredibly important, but to me there is one very simple principle, which is that the Government have taken a decision not to be part of the EU’s single market, saying that it is a bulldozer and prevents our Parliament legislating on important policy areas. However, the Government then seek to create their own bulldozer, a new single market that flattens everything and does not even have the carve-outs and reservations that EU single market laws protect, such as legitimate environmental and health policies. There are times when a bulldozer is the perfect machine, but not in this legislation. It is totally false of the Government to make any comparison of this UK internal market with existing EU arrangements without including any of these policy protections and derogations. The Bill actually represents a huge centralisation of power in the UK Government, and tramples over existing legislative rights of the devolved Parliaments, as many noble Lords have said already.

It also demonstrates what I see as the extremist view of this Government—that the free market and capitalism should override everything else, and that there is no legitimate policy that can challenge the free market. That is completely wrong and fundamentally at odds with what the majority of people in this country believe. For me, this legislation is a dangerous wolf that the Government are trying to dress in populist sheep’s clothing as somehow defending us from the hostile manoeuvres of the European Union. The truth is something else entirely: this is an important building block in the extremist ideology of a hypercapitalist future in which the market subverts and consumes everything else. Noble Lords must oppose this.

20:00

[Lord Young of Cookham (Con)]

My Lords, Amendments 39A, 47A and 52A are in my name and those of the noble Baroness, Lady Northover, and the noble Lord, Lord Faulkner of Worcester. They have the support of Cancer Research UK, the Faculty of Public Health and the British Heart Foundation along with Action on Smoking and Health and the Alcohol Health Alliance UK, for whose briefing I am grateful.

The amendments address some of the concerns expressed by the Scottish and Welsh Governments over the Bill, regarding a risk of a race to the bottom in relation to public health. They also complement amendments in earlier debates that sought to restore the flexibility that exists under the common framework for legitimate variations in approach within the component parts of the UK—a common theme that has run through our debates this week—so my amendments are another pair of braces for the belt of the noble Baroness, Lady Finlay.

The noble Lord, Lord Anderson, in a remarkable speech, mentioned public health. Public health is an essential part of this debate; Covid has finally brought home to us the importance of what was previously the Cinderella service of our healthcare system. To quote the Secretary of State for Health:

“The first responsibility of any government is the protection of its citizens, and threats to public health are among the most important of all.”


So it is critical that the provision of market access is balanced against the ability of Governments to protect the health of their citizens.

With regard to goods, the Bill describes exemptions in two places: Clause 8(3) and in the list of legitimate aims, including the protection of human, plant or animal health, public safety, along with a number of other more specific exclusions in Schedule 1. In both instances the Secretary of State can amend the core principles of the Bill, which are quite rightly enshrined in primary legislation, and he can do so by regulation. Again, that has been a consistent theme throughout our debate.

The House of Lords Delegated Powers and Regulatory Reform Committee has raised serious concerns that the power included in Part 1 to amend, repeal or otherwise modify legislation by regulation is inappropriate as drafted and should be removed from the Bill. The Marshalled List is full of amendments raising objections to these powers. My amendments focus specifically on the impact on public health.

The ability to alter these regulations matters. Take, for example, minimum unit pricing for alcohol, as currently exists in Scotland and Wales. The Government have argued that new policies similar to minimum unit pricing would be possible under the Bill because they are covered by the non-discrimination principle, so there is a pathway through which they might be justified. Minimum unit pricing might be a necessary means of achieving the legitimate aim of protecting human health. In future, though, through a simple affirmative resolution procedure the Secretary of State could modify that list of legitimate aims to remove the justification of protecting human health so that that was no longer the case. That is an insufficient safeguard for future legislation to protect our health, and the amendment would prevent that. The reach of market principles is so broad that a number of other potential policies, including regulations to restrict the availability of alcohol, attempts to raise the age of purchase for cigarettes, restrictions on children buying sugary drinks and other legitimate public health measures, could all be similarly vulnerable.

I turn briefly to Amendment 52A, which aims to expand the reach of the public health exclusions listed above. The proposals contained in the initial White Paper would have posed more potential risks for public health, but the Government have listened and have put in the protection of being a

“necessary means of achieving a legitimate aim”,

as I mentioned earlier. This is very welcome, but the protections are unevenly applied, allowing legislation that aims to protect our health and safety to be justified in some instances only. This is because the Bill contains two market access principles, non-discrimination on the one hand and mutual recognition on the other. Currently, only non-discrimination can be overridden by a policy that is shown to be necessary to pursue a legitimate aim. Mutual recognition contains no such clause. This is different from the status quo, where a general exclusion for the protection of human health against a broad range of other aims exists. It is in that respect a step backwards, a point made by the noble Baroness, Lady Finlay. This difference is significant, as mutual recognition covers characteristics of goods such as packaging, content and labelling, all key areas of public health.

To take one example, 40 years ago, when I was a Health Minister under Margaret Thatcher, I argued for a health warning not just on cigarette packs but on individual cigarettes. If, for example, the Welsh Government legislated to do exactly that, I would be delighted to see it implemented but, because this is subject to mutual recognition, Wales would be unable to require it for cigarettes coming into Wales from other parts of the UK, even if they were originally produced overseas. A range of similar examples includes calorie labelling on alcohol, as proposed by the Department of Health and Social Care; including information about the medical officer’s low-risk guidelines, something that Scotland has expressed some interest in legislating on; improved front-of-pack warnings on cigarettes; or even policies such as restricting the amount of sugar in goods sold in Scotland. That was an example given in the Scottish Government’s legislative consent memorandum.

Finally, this could also impact on England. Let us take, for example, the current plans of the Department of Health and Social Care to consult on requiring calorie labels on alcohol products to help reduce obesity in England. Once more, if England implemented this requirement, it would not be able to enforce it on alcohol sold in England but produced, or even first imported, into other parts of the UK.

We have made great strides forward in public health, in part because the swiftest moving parts of our union have been able to lead the others. England led the way on restricting tobacco displays in shops. Scotland and Wales are ahead on policies such as minimum unit pricing. This lack of a broad public health exclusion risks this advantage being inverted and our pace being locked into the slowest moving of our constituent parts. I know that the Minister will have taken note of the concerns raised by noble Lords in this debate and that he will endeavour to meet them, but I hope that between now and Report there will be discussions with a view to finding acceptable amendments that do not prejudice the key pursuit of legitimate public health objectives.

[Lord Hope of Craighead (CB) [V]]

My Lords, I am in sympathy with the words just uttered by the noble Lord, Lord Young of Cookham, but I wish to speak to my own amendment, Amendment 36, and I am grateful to the noble Baroness, Lady Finlay, for her support.

My amendment is concerned with the meaning of words and, to some extent, achieving compatibility, as far as possible, with devolution legislation. It is directed to the definition of the expression “legitimate aim” in Clause 8(6), which sets out two aims, one of which is

“(a) the protection of the life or health of humans, animals or plants”.

If the draftsman of the Bill was to look at Part 1 of Schedule 5 to the Scotland Act 1998, under heading C5 he would find similar words set out in one of the exceptions to the reserved powers; that is, exceptions which mean that the things described are within the devolved competences of the Scottish Parliament. It refers to the

“protection of animal products, plants and plant products for the purposes of protecting human, animal or plant health, animal welfare or the environment.”

My point is that what one finds in subsection (6)(a) takes part of what is found in that provision but misses out some other important words. The phrase I quoted from the Scotland Act draws a distinction between animal health and animal welfare. There is some basis for that distinction because there are things that are designed to achieve the welfare of animals that are not directly related to their state of health. So there is some force in considering the addition of “animal welfare” to the formula in that provision. It also refers to the environment, and nowadays, thinking of all the concerns we have about the environment, I would have thought one could, without damaging the purposes of the Bill, include the words “protection of the environment” within the formula of the clause.

These are drafting points. I draw them, if the Minister will forgive me, more to the attention of the Bill team and the draftsman of the Bill to see whether he can find room for including words in my amendment. It is to make sure that they cover what I take to be the broad aim of the language; it is the kind of discussion we might have had, had we been given time, around a table, discussing how those particular provisions should be framed.

I am not trying to damage the Bill or adjust it in any more significant way; I just want to see that the language used covers the aim of the provision fully and completely. It is on that basis that I brought forward this amendment.

[Baroness McIntosh of Pickering (Con) [V]]

I am grateful for the opportunity to speak in this interesting debate on these particular amendments, many of which I support. I will limit my remarks to Amendment 37 in my name; I am grateful to the noble Baroness, Lady Bowles of Berkhamsted, for her support in co-signing.

The purpose of Amendment 37 is to bring the definition of “legitimate aim” set out in this clause in line with the source of EU law as contained in articles 34 to 36 of the Treaty on the Functioning of the European Union. In particular, I refer to article 36 of that treaty, which states:

“The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified”


on the grounds I set out in my little Amendment 37. It goes on to say:

“Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.”


For reasons similar to those set out by the noble and learned Lord, Lord Hope, in speaking to his Amendment 36, I think that it will be helpful to have

“public morality, public policy … the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property”

brought into Clause 8. This would be a drafting improvement, so I also make a plea to the drafting team in that regard.

I listened with great interest to what the noble and learned Lord, Lord Hope, said on adding the regulation of animal welfare. It goes to his point in a debate earlier this week on the link between this Bill and the Agriculture Bill, particularly regarding the marketing standards covered by Clause 39 of the Agriculture Bill. It would help enormously if we could have some seamless references across different Bills—in this case, the Agriculture Bill and the Bill before us this evening, the UK Internal Market Bill.

With those few remarks, I am grateful to have my noble friend consider favourably Amendment 37.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, I added my name to Amendment 37, tabled by the noble Baroness, Lady McIntosh. However, there are several other amendments on the same theme, all highlighting important considerations that should be legitimate aims. The legitimate aims in Amendment 37 have been in use from the EU treaties, as the noble Baroness, Lady McIntosh, explained. That makes a starting point: they have been tried and tested as well as embodying the status quo, even though, as the noble Baroness, Lady Finlay, and the noble Lord, Lord Young, explained, in the EU, they apply in a wider context to mutual recognition as well.

20:15

I also see merit in the other amendments itemising and making certain various objectives, such as the heading of protection of public policy. I do not see the amendments as mutually exclusive, and the message is clear that Clause 8(6) is presently not wide enough. I am sure that the Minister may say that it could be amended by the Henry VIII power in Clause 8(7), but that is worrying in itself. It should be got right here, using a combination of broad categories such as protection of public policy and other fundamental ones.

I am also taken with the formulation used by the noble and learned Lord, Lord Hope. He has already explained well the basis of where he got the subject matter, but I was interested that he referenced regulation, which is rather more precise than an objective. It seems that that might tie it in to the extent of devolved powers as expressed through regulation and make it simpler to adjudicate. That is a point worth examining further to see whether it has any useful significance in a wider way.

[Lord Faulkner of Worcester (Lab) [V]]

My Lords, I wish to draw the Committee’s attention to the risk to future public health policy as a result of the inconsistent nature of this Bill and focus on the impact of artificially splitting the public health exclusion so that it applies unevenly across the market access principles.

I will concentrate on Amendments 39A, 47A and 52A —tabled by the noble Lord, Lord Young of Cookham—to which I have added my name and which are also supported by the noble Baroness, Lady Northover. As the noble Lord, Lord Young of Cookham, said, the exclusions to the market access commitment differ between mutual recognition and non-discrimination. I struggle to understand the rationale of legislation that recognises the importance of allowing policy that is necessary to protect some aspects of human health but provides no equivalent avenue for others. This is not a continuation of how our internal market is currently regulated, but a significant departure from it.

The example of minimum unit pricing for alcohol, which was mentioned by the noble Lord, Lord Young, illuminates the risk of arbitrary distinctions. Much of the discussion in the House of Commons on this Bill’s health impacts revolved around its potential effects on minimum unit pricing, which arguably was covered by the mutual recognition principle. If it were covered by mutual recognition, this could have rendered any future similar policy—possibly even modifications of the existing minimum pricing regime—largely untenable due to the lack of a public health exclusion from mutual recognition.

In responding to this, rather than applying a public health exclusion to mutual recognition, the Government instead moved minimum unit pricing and similar manner-of-sale policies from mutual recognition. When introducing these amendments, the Minister in the other place said:

“We are taking the opportunity to put it beyond any possible doubt that alcohol minimum unit pricing-type regulation and any other sales requirements are not in the scope of the mutual recognition principle, unless they amount in practice to a total ban on a good being sold.”—[Official Report, Commons 29/9/2020; col. 189.]


While your Lordships may consider that this represents an improvement at face value, on closer inspection, it is a cause for considerable concern.

First, the Government’s decision to do this indicates that a thoroughly evidenced-based policy such as minimum unit pricing, which has steadily defeated challenge in the courts, might not have been possible if it were included within mutual recognition. That illustrates just how narrow the exclusions are to this principle.

Secondly, it demonstrates the risk that this Bill poses to future public health legislation. We know about minimum unit pricing, so we can modify the Bill to attempt to protect it, but it is not hard to imagine that we might in future see innovative and effective policy based on health labelling bans or content reformulation of alcohol, tobacco or food products. All these aspects would likely be subject to the rigid mutual recognition principle.

Lastly, regarding the amendments on the powers of the Secretary of State to amend the Bill through secondary legislation, the Delegated Powers and Regulatory Reform Committee concluded that the Government’s adoption in the Bill of wide-ranging Henry VIII powers, whereby:

“Any power to make regulations under this Act is exercisable by statutory instrument”


and includes the power

“to amend, repeal or otherwise modify legislation”

is completely inappropriate. In effect, it allows the removal or weakening by ministerial diktat of the limited public health protections currently included in the Bill.

At Second Reading, I discussed the importance of allowing the Governments of the four nations of the United Kingdom to protect the health of their populations and how that can lead to innovative policy solutions. The UK has been a leader in the past on tackling smoking, alcohol and sugary drinks. This legislation risks us being unable to embrace, let alone lead, key public health policies in years to come. Our amendments will protect the future of public health legislation, and I commend them to the Committee.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Faulkner of Worcester, who, along with many other noble Lords in this group, focused on public health. Covid-19 has reminded us how unhealthy our society is and how inadequate current arrangements are.

Given that my noble friend Lady Jones of Moulsecoomb has spoken with great power and eloquence in this group, I will be brief and address only Amendment 51 in the name of the noble Lord, Lord Stevenson of Balmacara, to which I attached my name. That amendment would provide public interest defences on trade restrictions; environmental standards and protection; animal welfare; consumer standards; employment rights; the health and life of humans, animals or plants; cultural expression; regional sociocultural characteristics; and equality entitlements, rights and protections. These describe what should be the goals of a decent Government aiming to deliver a healthy life for all their citizens and the sustainable development goals that they are signed up to.

The term “public interest” makes me think of public money for public goods. I am aware that “public goods” has a technical definition but the parallels with “public interest” in this amendment are obvious. I cannot, therefore, see how the Government can oppose it, given that they want to spend significant sums of public money for some of the same goals through the mechanisms of the Agriculture Bill and the Environment Bill, whereas here we are simply applying standards to deliver public goods. I am aware that some Members of your Lordships’ House believe that trade, and the greater volume of it, is a good in itself and should be our primary or sole aim, but we come back to the question: do we work for the economic system, or does it work for us?

Many of these discussions have a distinctly Groundhog Day feeling and the Government may respond by saying, “Our intentions are good and we are trying to deliver all these things”. I come back to the word “dictatorship”, my use of which the noble Lord, Lord True, objected to. I reserve my own right to judgment on that. In fact, I do not have to go that far for the purpose of arguing for this or other amendments. We know that Prime Ministers and Governments have not had a long shelf life in recent times, and who knows how long this one will last? We are creating a legal framework and the possibility for action by any future Government, whatever they might look like. Giving the right to all devolved Governments to act on behalf of their citizens to defend them against chlorinated chicken or fruits laced with dangerous pesticides can be the only basis for continuing in a democratic manner.

[Lord Teverson (LD) [V]]

My Lords, I declare my interest as chair of the Cornwall and Isles of Scilly Local Nature Partnership. I wish to speak to Amendment 52, although I support a number of other amendments in this group. That amendment has been tabled by the noble Baroness, Lady Boycott, who, in a topsy-turvy way, will follow me.

We have naturally and correctly been obsessed by the Covid-19 crisis, yet we still very much have the climate change issues—the loss of nature, the biodiversity challenge and a raft of other environmental issues of great importance, such as plastics, marine pollution and so on. Those challenges are not just global; they are national, as well as being regional and subnational. In the United Kingdom devolution is a fact of life and something that I certainly welcome. Those devolution principles allow the nations that make up the United Kingdom to be able to set their own standards in a number of areas. One key area where those standards can be different and which I believe has been particularly successful is the environmental area, and there is potential in climate change as well.

The history of devolution and different decision-making within the UK in the environmental area has been very positive. There has been almost a competition, if you like, to get ahead of other nations within the UK, and that way the bar has been raised in terms of environmental legislation and what we are trying to do. In fact, the word “experimentation” has been used previously. It is important to see what works in one part of the UK, as this is sometimes copied by others. The plastic bag policy in supermarkets, cotton buds, plastic straws—all are examples of one leading and others following. Indeed, as we have heard many times, even within the EU single market, member states have been allowed to have enhanced standards and have not been challenged.

The challenge is: how do we meet the environmental and climate crises that we have and still keep our internal market? To do that, we cannot rest on the status quo. We have to move forward on all those agendas, as indeed the noble Lord, Lord Callanan, will know well, being the Government’s climate change Minister. We cannot stay where we are and have business as usual.

We therefore need to keep these positive, competitive aspects of environmental and climate change legislation within our devolution in the United Kingdom while keeping that important single market. As has been said before in this debate, no one in this Chamber is looking to restrict that single market in any way in principle. But I believe that this Bill undermines our ability to meet our environmental objectives easily and quickly.

What does the blanket—as I see it—market access principle risk here? One thing we have is offshoring. We have been very good performers in the United Kingdom on our carbon footprint, but that is because a lot of manufacturing has perhaps gone to Asia. That is not the whole story, but it is some of it.

As the Bill stands, if we have stringent rules within one part of the UK, manufacturers would just move to another part of it and effectively import into those other regions or nations. That would be extremely negative. But one key thing would happen: rather than having a “raising the bar” competition between national authorities within the UK, we would risk moving the power to the corporate sector, which is more likely to look for efficiencies or the lowest standards in order to make sure that they can remain strong within the market. That would be a very undesirable outcome of this legislation, which is not the Government’s intention. We risk, potentially, more of a commercial race to the bottom. I have nothing against industry whatever—indeed, I wish to see it promoted—but this would change the power structure within the supply chain. It is as if the legislation were applying the harshest WTO rules internally to our own internal market.

We need to have sensible derogations that can avoid these downsides and outcomes. Amendment 52, in the name of the noble Baroness, Lady Boycott, is exactly what we need for the environment and climate change agenda and for the United Kingdom to stay ahead in this area, not just globally but nationally and regionally as well. Without such derogations, other environmental legislation at a devolved level becomes almost redundant, as it cannot be enforced because goods will come from elsewhere in the United Kingdom—or else devolution will become redundant in this area because, since England is the largest part of the market, Westminster will effectively decide the rules. That is why this amendment is vital.

20:30

[Baroness Boycott (CB)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Teverson. I thank him and the noble Baroness, Lady Jones of Moulsecoomb, for supporting this amendment. I very much agree with what the noble Lord, Lord Young of Cookham, said. I also agree with the noble Baroness, Lady McIntosh, when she said that, if this internal market Bill does not align with the Agriculture Bill, then something is wrong and we are missing a trick.

I have tabled Amendment 52, which seeks to introduce a derogation from the market access principles to allow all four nations to put in place proportionate measures to protect the environment, support the progressive improvement of environmental standards and tackle climate change. My concern is that, in the absence of an agreed common framework, we will not be able to protect existing high regulatory standards in cases where one nation wants to introduce something new and higher, in the environmental sense, for a particular good or service—although not legally prohibited from doing so, it could be disincentivised from doing so. Under the market access provisions in the Bill, goods from other parts of the UK would not have to meet those requirements if standards elsewhere were lower. Other Peers have spoken about this. It is about protecting us against a race to the bottom in setting environmental standards or measures to tackle climate change.

At Second Reading, the Parliamentary Under-Secretary of State, the noble Lord, Lord Callanan, said of the Bill:

“It will protect our common causes, such as the setting of high standards in our economy”.—[Official Report, 19/10/2020; col. 1285.]


But the Bill does not give legislative effect to these commitments. It fails to create the proper framework and fails to deliver the safeguards and assurances needed to ensure that all four nations of the UK can legislate ambitiously, progressively and effectively to protect the environment. Currently, the Bill provides for exceptions only in a limited range of circumstances, such as preventing the spread of diseases or pests. Even then, this is only under very strictly controlled conditions.

Environmental matters generally fall within devolved competence. Regulatory divergence already exists within the UK and there have been a number of examples of really innovative policies which have delivered legitimate public policy objectives—and specifically progressive environmental rules. I know that this has been mentioned before, but Wales was the first country in the UK to introduce a charge on carrier bags. It is atrocious to think that that could somehow have been denied.

Amendment 52 would allow an individual nation to refuse mutual recognition on the grounds of measures protecting the environment or tackling climate change. To give a practical example of why this is so important, there have been mounting calls to ban the sale of horticultural products that contain peat. This is obviously to protect biodiversity, but also to avoid the extraction of peat and the release of high levels of soil-based carbon. If one of our four nations’ Governments decided to ban the sale of products containing peat, this could potentially be undermined by the failure to match those efforts in other jurisdictions, where producers could continue to actively sell these products in a market where they would otherwise be banned.

My amendment would require suppliers to comply with these devolved rules where they relate to the protection of the environment or tackling climate change, meaning that even if regulation in England were to fall behind, say, that found in Wales, those supplying the Welsh market would still have to comply.

At Second Reading, the Minister, the noble Lord, Lord True, responded:

“commerce, services and professions must be enabled to operate freely across the whole United Kingdom. That is … demanded … by business”.—[Official Report, 20/10/20; col. 1426.]

However, business coalitions such as the Aldersgate Group have commented that the objectives of frictionless trade and encouraging a race to the top for environmental standards do not contradict one another. A fully functioning and innovative internal market should strive to both reduce unnecessary costs and uncertainty and protect all four nations’ right to regulate in the public interest.

Finally, protection of our environment and tackling climate change really are not an option anymore. If you listen to Christiana Figueres, who set up the Paris Agreement, you will know that we have 10 years in which to try to get ourselves to 50% of carbon emissions. That means reducing by about 7% to 8% a year. Not to do this is a complete abdication of our rights as legislators because, if we do not put policies in place in this Government and this Parliament, then we will be left pretty legless in the fight ahead.

As the noble Lord, Lord Teverson, said, we cannot do business as usual; we have to do business in a new way. We have many excellent Bills before us that can make this happen, and I commend my amendment to the House.

[Baroness Noakes (Con)]

My Lords, as noble Lords who have attended this Committee to date know, my role is occasionally to get up and give a minority perspective on the amendments before us. There are 20 amendments in this group and, one way or another, each of them would allow barriers to trade to be erected by one or more of the devolved nations. The effect of the amendments is to restrict the amount of trade to which the market access principles will apply and thereby reduce the extent to which barrier-free trade can take place throughout the UK’s internal market. I say to the noble Lord, Lord Anderson, that that is not an argument against devolution; it is an argument for trade and economic success, which I hope that we all want to achieve for the United Kingdom.

I will not repeat all of what I said on the earlier group, but the more that laws relating to trade in goods and services diverge between the component parts of the UK, the more likely it is that costs will rise and choice will diminish for consumers. Barriers to trade are also likely to result in lower GDP, as the impact assessment analysed, and we need all the GDP that we can get at the moment, given the impact of lockdown and similar anti-Covid measures. I am sure all those noble Lords who support and voted for devolution did not vote to become poorer through devolution.

The amendments give very considerable cover to the devolved Administrations to erect trade barriers under the guise of higher standards but, actually, on grounds of protectionism. At the very least, I predict that there will be massive scope for lawyers to argue for a very long period and to mount legal challenges. That may well be good for the fees of the legal profession—and for the noble and learned Lord, Lord Falconer of Thoroton—but the important thing I want to stress is that it will result in uncertainty for business. If there is one thing that is bad for business, it is an uncertain business trading environment.

Therefore, while I understand the desire for higher standards—and many noble Lords have spoken to this in respect of the particular varieties of relaxation that they are seeking in the Bill—at the end of the day, they can result in trade barriers. We really should be very careful not to wreck the UK’s internal market before it has even started.

[Lord German (LD)]

My Lords, I shall address Amendment 54 in my name. As the noble Baroness, Lady Finlay, said in moving her amendment, it harks back to debates we have had on the mysterious absence of common frameworks from the Bill. As your Lordships will know, common frameworks are a way of doing business that is supported by the CBI. The amendment would insert a new schedule into the Bill. It may look arcane, or like an obscure pub quiz question, so perhaps noble Lords would like to answer the question: what unites ozone-depleting substances and Caerphilly cheese? The answer is that the list in the schedule is the list of subjects where all four Governments in this country have agreed that legislative common frameworks are necessary. However, this is not intended as an exhaustive list. It would be possible to add to this by secondary legislation if new areas emerge that require a common framework.

I concede that it would not have been necessary to have such a schedule if the dual carriageway with the brick wall in between the two approaches that the Government are taking—this Bill and the common frameworks—were guaranteed to coincide and meet. Both approaches are progressing and have the enthusiasm of the Government behind them. This amendment would be a way of ensuring that those approaches coincided and met. The amendment would help, since it identifies common frameworks without using the name.

One of the more striking aspects of the Bill, as noble Lords and Ministers keep telling us, is that common frameworks on their own cannot guarantee the integrity of the entire UK internal market. They are sector-specific and not intended to address the totality of economic regulation. In answer to every question asked, there has been a real silence from the Government, who have failed to identify any areas where the integrity of the internal market might be threatened that are not covered by common frameworks. We had reference to the threat to the sale of barley from English farmers to Scotland, which has proved an issue already resolved by the common framework. There is also the wholly hypothetical example of a devolved Government wishing to legislate for additives to flour, which is already in one of the common frameworks on nutrition.

We therefore have to manage this problem of having two-track approaches to the internal market. The amendment proposes a way of creating that gateway between the two and ensuring that there is a link between them, so that we know that we are on the same course for a functioning internal market.

[Baroness Randerson (LD) [V]]

My Lords, I have added my name to Amendment 174 in this group. I wish to speak to that and other amendments that I support.

Possibly the greatest asset that we gained from our decades of EU membership was the development of and assistance on the highest standards. In consumer and environmental protection, employment practices, public health standards, animal health and in the development of social policies, we have all benefited enormously and our quality of life has been greatly enhanced. Often, we as a nation were at the forefront of the development of those EU policies. On occasion, in our own legislation, we chose to adopt even higher standards, as my noble friend Lord Teverson said earlier. Those were the days when we really were world-beating. It is therefore very disappointing that the Bill contains nothing to guarantee high standards; there is no process set out to agree even minimum standards. The amendments in this group seek to rectify this, hence it is a legitimate aim to seek higher standards or to maintain existing standards.

Across the world, the experience of capitalism reveals that unfettered markets—capitalism in the raw—without a sound framework of standards often drive down standards to the lowest common denominator. For example, in the USA, hardly a country struggling for development, market access provisions unaccompanied by agreed minimum standards have led to deregulation as a way to attract business. It is well known as a ploy.

20:45

One of the notable contributions of 20 years of devolution has been an enthusiasm for new approaches—experimentation, if you like—to create higher standards. Other noble Lords have referred to this. In animal health, there was the Welsh ban on electric shock collars for dogs. On environmental standards, again in Wales, charges were introduced for single-use carrier bags. In public health, minimum unit pricing for alcohol was introduced, first in Scotland and then in Wales. Next year the Welsh Government plan to introduce further restrictions on single-use plastics. Wales is the perfect size for experiments of this type, and existing devolved powers have allowed for them. How does the Minister see the interaction between the principle of unfettered access into Great Britain for goods from Northern Ireland and EU regulations which increasingly diverge from those of the rest of the UK?

Common frameworks are designed to respect and maintain standards, and to accommodate new ones. Those that the Common Frameworks Scrutiny Committee, of which I am a member, have seen so far in draft form, illustrate that this is a viable approach, but neither standards nor common frameworks are mentioned in the Bill. Instead, there is every incentive for standards to atrophy, because the Bill recognises the status quo but penalises the devolved Administrations that seek to introduce new measures by reducing their power and freedom of movement.

The Bill freezes the existing regulatory differences at the point when this Bill comes into force. It undermines the incentive for regulatory change, improvement or experimentation. The law on the sale of air guns, for instance, is very much tighter in Northern Ireland and Scotland than in Wales and England. To buy an air gun in Scotland, you must be present in person. Would that be regarded as indirectly discriminatory against, for example, suppliers from the rest of the UK? Clearly it cannot be regarded as such at the moment because it is an existing provision. If, however, the Scottish Government introduced something like that in the future, would it be regarded as indirectly discriminatory in the terms of this Bill?

Exactly how do the Government intend to retain our reputation as a country with high standards? I remind the Minister that once we lose our reputation as a reliable partner with which to do business, we then lose our trading partners. I say to the noble Baroness, Lady Noakes, that high standards are not barriers to trade. They unlock trade. We are not the world’s shady market trader. We are an innovative trading nation known for quality and reliability. To keep that reputation through the revolution that we have wished upon ourselves, we must maintain the market mechanisms that created that reputation. We live in a rapidly changing regulatory environment, and this Bill undermines the incentive for us to be ahead of the curve.

[Baroness Hayman of Ullock (Lab)]

My Lords, I wish to speak in support of Amendments 35 and 58, in the name of my noble friend Lord Stevenson of Balmacara, particularly because I am concerned about the lack of standards protections. We have been assured that the Government have repeatedly stated their commitment to high standards and that this Bill does not change that commitment, but, as the noble Baroness, Lady Randerson, has just said, it does not alter the fact that there is no evidence of that commitment on the face of the Bill.

Amendment 35 would expand the legitimate aims laid out in Clause 8 to include protection of consumers, environmental standards, social and labour standards, public health and animal health. I do not intend to rerun the various concerns raised regarding devolution, but we need to ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU. Provisions in this Bill must not derail the Government’s ambition to become the first generation to leave the environment in a better state than they found it. I would like to give some examples of why that is so very important.

Since the Second World War, we have lost 97% of our meadows, 80% of our chalk grassland and more than half of our ancient woodland. The recent State of Nature report from the Royal Society for the Protection of Birds found that 41% of UK species that it studied had declined since 1970. It found that 15% were threatened with extinction and 133 species were already extinct. The Natural Capital Committee has concluded that only half of our habitats currently meet minimum quality targets, with bees, butterflies, birds and many plant species continuing to decline. The BMA has called for a commitment to non-regression on all current UK-wide and devolved nation health, well-being, animal welfare and environmental standards to be written into the Bill.

The EU has been a leader in environmental legislation over the last 40 years, and the UK has played a very important part. Now, our domestic legislation must ensure that environmental protections in the UK are maintained and enhanced after our exit from the EU, and we must not risk losing any of those key protections or allow for any regression. Amendment 35 would help to ensure that those minimum standards were met.

I turn to animal welfare and food standards. UK farmers and producers are rightly proud of their high agriculture and animal welfare standards compared with those in many other parts of the world. They have been very clear that they do not want those standards lowered and are calling on the Government not to allow low-quality products to come into the UK.

It is also worth remembering that, when we reach the end of the transition period, the UK will find itself outside the European Food Safety Authority and therefore outside the Panel on Animal Health and Welfare. Farm animal welfare standards post Brexit may well be threatened as UK farmers struggle to compete against cheap imported food from countries that produce to lower standards. UK farmers could become uncompetitive, and welfare standards could then come under pressure.

When I was in the other place working on the Agriculture Bill, I read your Lordships’ committee report Brexit: Agriculture and I am still hugely concerned about one of its conclusions. It said:

“It may be hard to reconcile the Government’s wish for the UK to become a global leader in free trade with its desire to maintain high quality standards for agri-food products within the UK”.


The legislation that is being passed in the run-up to the end of the Brexit transition period, including this Bill, will have huge impacts on the UK’s standards of animal health and welfare, food safety and environmental protection. Those ramifications could be felt for years, so we have to get it right. Farmers have told me that they are particularly concerned about transparency of provenance and traceability.

The United States is often mentioned in the debate about food standards, with chlorinated washed chicken and the use of injected growth hormones in cattle demonstrating the difference in standards between our countries. Both give rise to significant welfare concerns for the animals involved; both are banned by the EU and, until this point, have been banned by the UK. But we also know that a priority for the UK Government is securing a free trade agreement with the USA. This is also about food safety: the United States has 10 times more food poisonings than Europe, so food safety could be compromised. We could also end up with higher pesticide residues in food, if protections are negotiated away in trade deals.

Compassion in World Farming has pointed out that we should be concerned not just about the USA. It has looked at a potential deal with Australia, where hormone-treated beef and battery eggs are still common, and believes that, if concessions are made there, they could form a precedent for other talks and trade deals.

So we need to redefine unsafe food in the Bill, which is where Amendment 58 comes into play. That is why I am supporting it, recognising the impact that lower food standards can have on our safety and health. I ask the Minister to listen carefully to these arguments.

[Baroness Altmann (Con) [V]]

My Lords, I add my support in particular to Amendment 52, in the names of the noble Baronesses, Lady Boycott and Lady Jones, and the noble Lord, Lord Teverson. It deals specifically with environmental standards and climate protections, and has already been well explained. As so many other noble Lords have said, this amendment introduces a wider set of derogations to allow any one of our four nations to refuse mutual recognition if it believes it is justified by the legitimate public policy objective to protect the environment and tackle climate change. This is really important, to ensure that innovation is not stifled and that there is no race to the bottom, as has already been well explained.

I also support many other amendments in this group, particularly Amendments 39A, 47A and 52A, in the name of my noble friend Lord Young of Cookham, proposing similar protections for public health, safety and security. I also support my noble friend Lady McIntosh of Pickering and other noble Lords who have spoken on the protections required in the agriculture sector.

I recognise the concerns raised by my noble friend Lady Noakes that lack of uniformity could increase costs to consumers and reduce GDP. However, I do not believe that cheap goods are the be-all and end-all. Ethical production standards, safety, health concerns and environmental protections may all add costs in the short term. However, better quality and higher standards can benefit consumers and the long-term sustainability of the economy. Encouraging innovation in environmental and climate protections can and perhaps should be led by individual countries where they have specific expertise, rather than having a centralised uniform approach imposed that could reduce standards in the long term and leave us with a cheaper but less safe future.

I hope that my noble friend can confirm that the Government are in favour of building consensus and agreements across the UK, with common frameworks, while also respecting the rights of individual countries to have different policies in areas of particular importance.

21:00

[Lord Whitty (Lab) [V]]

My Lords, like the noble Baroness, Lady Altmann, I originally put my name down to speak on this group because I wanted to give strong support to Amendment 52 in the name of the noble Baroness, Lady Boycott. She, the noble Lord, Lord Teverson, and the noble Baroness, Lady Altmann, have made a good case; after all, climate change and the other environmental challenges are bigger issues than Brexit, Covid or even the break-up of the United Kingdom. We need to ensure that nothing we do in this Bill or in parallel Bills diminishes our commitment to meeting our international obligations under the Paris Agreement or our national obligations under the Committee on Climate Change’s proposals on carbon budgets and the commitments we make as a Government and as a Parliament to meet our targets on that front. Amendment 52 would help deliver that.

During this afternoon—I was not here on the first day of Committee—I have also become increasingly concerned that the Bill is, as the noble Lord, Lord German, called it, twin-tracking different aspects of government policy on the devolution settlements and the way they are going. The two do not meet. The principal commitment here is market access. There are government commitments to standards in the Agriculture Bill and elsewhere, and there is the whole process of common frameworks, many of which are still in very preliminary form.

With regard to the broad public debate, the Government have managed a great diversionary tactic by banging Part 5 into the Bill and causing public and international outrage. However, there are some fairly profound issues in the lack of commonality or melding in the approaches on market access, common frameworks and the long-term implications for our devolution settlement. They have not been resolved today in the subjects we have discussed. At Second Reading, I expressed some concern that the Bill was not clear in relation to state aid and the internal market, or the role of the proposed office for the internal market.

A lot of this needs to be pulled together before we complete the Bill. I have a proposition. We have as a House established a short-term Select Committee looking at common frameworks. That has called for evidence; the deadline is 30 November. Would it not be sensible for the Government and the usual channels to talk to it? I am afraid I have not consulted my noble friend Lady Andrews, who chairs that committee, on this; it occurred to me only this afternoon. It is looking at the role of common frameworks, but in this Bill, which the Government are trying to get through as fast as possible, we are doing something which cuts across some of the commitments on them. Would it not be sensible to ask that Select Committee to look at the relationship between the Bill and common frameworks before we move to Report, or, if that is not possible, at least between Report and Third Reading? The process we normally adopt will not resolve these conundrums in the Bill; we need to find a novel way of dealing with them, and we have a solution at our fingertips with the Select Committee, which has already begun its work. I ask the Government and the usual channels to look at that proposition.

[Lord Judd (Lab) [V]]

My Lords, what a powerful team at the end of this very interesting debate. It was great to hear the noble Baroness, Lady Randerson, putting her case on standards so strongly; she is absolutely right. I was also delighted to hear my good neighbour and noble friend Lady Hayman—we live in the same ward in the west of Cumbria—speaking with all her authority. She will bring a very important contribution to the considerations of this House. My respect for the noble Baroness, Lady Altmann, is continuing and constant, and noble Lords hear it again tonight. What my noble friend Lord Whitty was saying about the useful contribution the Select Committee could make in getting things right should be taken very seriously. We get awfully trapped in patterns of organisation for our affairs and debates. Sometimes we do not look at our assets and the contributions they can make.

I strongly support my noble friend Lord Stevenson’s amendment and I am impressed and struck by the importance of Amendments 52, 53 and 54. They all deal with the essential quality of our existence and the action that is necessary to ensure that we have some sort of quality of existence, and ensuring that we are in a strong position to ameliorate the impact of climate change. These are absolutely fundamental issues for our future.

I sometimes look back on a long time in Parliament and politics and think that we sometimes want to fit things into organisational structures. Of course, the market is crucial and what we are debating is a reform of the market and what we are going to do, but the market is not an end in itself. We should constantly be restating the challenge: in the environment, in conditions of work and workers’ rights and employment conditions, of animal welfare, and of good husbandry of our land and care of it. There is also the whole issue of understanding that this is not just a choice of what we might do; we are dependent upon getting it right. From that standpoint, these amendments are a very important part of our proceedings, and I congratulate all those who have been involved in proposing them.

[Lord Fox (LD)]

My Lords, my name is on Amendments 33, 34, 50, 55, 56, 60, 80 and 95 but, to be honest, all these amendments are trying to cover similar ground in slightly different ways. I suggest that they are trying to meet the gap that the noble Lord, Lord Anderson, in his exceptional speech, characterised —in my words, not his—as the paucity of ambition that lies within the Bill. He also effectively highlighted some of the inconsistencies that crop up throughout it.

Amendment 50 seeks to add a range of additional conditions around the aim of legislation, and Amendment 51 does much the same. The noble Lords, Lord Young and Lord Faulkner, talked specifically about public health, animal welfare came up with the noble Baroness, Lady Hayman, and my noble friend Lord Teverson and the noble Baroness, Lady Boycott, and other noble Lords, spoke very powerfully about climate change.

The last two speakers, and in particular the noble Lord, Lord Whitty, in a way characterised where I had got to; the penny had dropped. I will use slightly different language. I am slow; after 15 hours of Committee I think I am getting there. The problem is that Her Majesty’s Government may hate devolution, or they may want to grab hold of the money and spend it in Scotland—those might be by-products of the Bill. The fundamental philosophy and thinking from the Government’s position, however, is that the only way to have to have a properly ordered internal market is, essentially, for everything to be the same. With non-discrimination and mutual recognition, in the end that is what you will get.

Your Lordships’ House, with the exception of the noble Baroness, Lady Noakes— who very ably put once again the minority view, which is actually the government view—has taken a diverse approach and believes that there can be an ordered internal market that is not the same, but diverse. That is what the common frameworks are there to do. A number of noble Lords raised my noble friend Lord German’s twin highways and questioned how they will ever come together. The answer is that they do not because the Bill rides over the diversity that the common frameworks will deliver. Why are the two things happening together? One can speculate. One started three years ago with a different Government who probably had a different philosophy, and killing it is probably harder than letting it die.

I know that the Minister has been assailed with examples. He has had chlorinated chicken, whisky, all sorts of things—he even brought in hypothetical biscuits. I will give him an example that is the other way round. It is of where the devolved authorities could do things to England. England, very wisely, has banned the household burning of coal. Wales and Scotland have not. If I lived in Herefordshire all the time, I could nip over the border to Harry Tuffins, which is just the other side of Offa’s Dyke, buy a bag of coal, take it home and burn it on my fire in Leominster. So far, so good.

Within the terms of the Bill, I could—[Interruption.] Minister, you will have your chance. If I were heckling you, I suspect I would be told to sit down; I look forward to the debate. If I was a businessperson living in Leominster, I could go to Wales and import that coal. If the Minister tried to stop me, I would go to law and use this Bill to assert my right to sell that coal in England. Whether or not I won we would see, but all those things will be happening all the time. Because of the non-legislative common framework that it is covered by, where does it sit in law beside the iron-clad rules of non-discrimination and mutual recognition?

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, this has been a very good and wide-ranging debate—one of the best we have had so far on the Bill. We have heard several notable speeches and some new voices. I look forward to reading their speeches in Hansard and learning from them. The main focus has been the necessary tension between the wish to have unfettered frictionless trade in our internal market and the wish to preserve our existing high standards. This was well expressed by my noble friend Lady Hayman.

My amendments cover this ground. Amendment 35, which I am delighted is also signed by the noble Lord, Lord Anderson of Ipswich, and the noble Baroness, Lady Jones of Moulsecoomb, tries to expand the legitimate aims to include some of the standards to which I have already referred. Amendment 51 expands that and provides for a slightly wider context within which legislative aims are discussed and slightly expanded. It also comes back to the basics: standards of activity within which trading takes place and where we have rightly set high standards that are enjoyed by our consumers.

Amendment 57 deals with conditions excluded by market principles and amends the schedule only as consequential to earlier amendments, I think. Amendment 58 deals with an issue raised by the noble Lord, Lord Anderson of Ipswich, in his very good speech in which he quoted Peter Oliver, who pointed out that some of the restraints that are allowed within the Bill are very limited indeed. Our amendment tries to expand that to make sure that it is not restricted just to basic considerations.

21:15

The noble Baroness, Lady Noakes, made the point that all these amendments—not that the Government will accept them all—would erect barriers. However, as the noble Baroness, Lady Altmann, said, trade does not take place in a moral or ethical vacuum. The noble Baroness, Lady Noakes, complained that these amendments would reduce choice for consumers and increase costs, but others have pointed out, and I agree with them, that that will be worth it if these different constraints deliver a better world. I put it to the Government that these amendments are really just trying to maintain the status quo, hard fought for over a long period, in which we have arrived at a position in which we broadly balance the two issues I raised at the start of my speech.

I put it again to the Government that if there is a concern about increasing uncertainty as a result of these amendments, they should start by rethinking the Bill because, as others have said, it starts with the common frameworks and it can be added to by having effective arrangements around which the gaps in the common frameworks can be covered and a system put in place to resolve any difficulties that arise. That would give us the sort of certainty that will lead to the frictionless trade that they aspire to; it will not be a matter to do with these amendments.

[Lord Callanan (Con)]

I thank everyone who has spoken in what has been another excellent debate. Most of the points have been valid. I will disagree with many of them but noble Lords made their points well.

Before I start, the noble Baroness, Lady Jones of Moulsecoomb, knows that I have tremendous respect for her: we do not often agree, but I have tremendous respect for her views. However, talking about an “extremist ideology” and “hypercapitalism”—whatever hypercapitalism is—does not aid her cause; I would prefer that noble Lords address the issues in a better and more constructive manner.

The scope of the market access principles and the areas of regulation included in Schedule 1 have been carefully designed to avoid unnecessary barriers within the UK’s internal market while ensuring that the devolved Administrations and the UK Government can act to preserve the proper functioning of certain policy areas. This is where I part company with the noble Lord, Lord Fox, because when he talks about the principle of uniformity in an internal market, that is, of course, the EU system, and I do not recall the Liberal Democrats having much of a problem with that in years past. The system of mutual recognition does allow diversity, but while not discriminating against other countries’ goods. The principle of mutual recognition and market access principles allow diversity of policy. The EU system, of which the Liberal Democrats were previously particularly fond—as far as I am concerned—does not because you have common standards and common principles. I understand the argument about the so-called race to the bottom, et cetera, but that is the system that the Liberal Democrats happily signed up to and defended loyally for many years—indeed, it is still their policy that we should rejoin the EU and assume a further application of common principles. I do not agree with it, but it is a view.

I am listening carefully to what many noble Lords are saying this evening, but it is important, so I will take the time to explain why we have taken the approach we have to the application of the market access principles and the exclusions from these principles. Amendments 35, 36, 37, 39A and 95 seek to alter the list of legitimate aims for the disapplication of indirect discrimination against goods and services. The current list of legitimate aims for indirect discrimination against goods contains

“the protection of the life or health of humans, animals or plants”,

which will, of course, align in many cases with the protection of the environment. It also contains

“the protection of public safety or security.”

I agree with my noble friend Lady Noakes that expanding the list of legitimate aims beyond the current list would increase the grounds on which goods from one part of the UK could face discrimination in another—maybe in small, incremental steps, but with each addition steadily eroding the benefits that we all enjoy of the UK internal market. Expanding the list would also make discrimination easier to create and implement within the internal market, which would contradict our policy objectives.

I am of course aware of the comparisons that have been made to the EU system and its list of legitimate aims. The UKIM Bill and non-discrimination principle have been designed to take account of the UK’s unique circumstances, reflecting that our market consists of four highly integrated, highly aligned parts. Conversely, EU provisions deal with 27 countries, all with diverse histories, cultures and competing market priorities. It is therefore right that the list of legitimate aims in the Bill is more narrowly focused. Should a need to amend the list be identified, the Bill allows for the Secretary of State to add, vary or remove additional legitimate aims.

Let me deal with the points raised about legitimate aims by my noble friend Lord Young and the noble Lord, Lord Faulkner, as well as, on a number of occasions, the noble Lord, Lord Purvis, with regard to minimum alcohol unit pricing. I reiterate that policies such as minimum alcohol unit pricing and other innovative pricing policies are not covered by mutual recognition, unless they result in disguised prohibition. It would also be possible to enforce them regardless of what is on the list of legitimate aims or indirectly discriminatory measures, as long as they are non-discriminatory.

The noble Baroness, Lady Randerson, mentioned air guns. All the existing requirements will be out of scope—as I have said, the Bill is forward looking—unless they are amended significantly. Other than that, the air gun restrictions would have to create a significant adverse market effect for indirect discrimination to apply. That is before any consideration of whether that meets a legitimate aim. On her point about unfettered access for Northern Ireland goods, this is an unequivocal commitment from the Government precisely to take account of the possibility of divergence. It precludes qualifying Northern Ireland goods from being subject to new checks and controls and it protects their access to the whole of the UK market, no matter what the legislative regime is in Great Britain.

Amendment 39A is a more nuanced version of Amendment 38. It aims to limit the Secretary of State’s regulation-making powers to only add or broaden a legitimate aim—the Secretary of State would not be able to vary or remove a legitimate aim. Again, I appreciate the nuance of the amendment, but I must emphasise the importance, as we see it, of ensuring that the Government have the ability to adapt and improve the list of legitimate aims to address any challenges that arise—for example, during the implementation phase. We will of course listen attentively to businesses and to consumer stakeholders and may employ the powers that the amendment seeks to remove to ensure the UK internal market’s continued smooth functioning. To clarify another matter about which some have asked, Her Majesty’s Government and the devolved Administrations are not constrained by the rules against indirect discrimination when they need to take reasonable action to protect the life or health of humans, animals or plants, or to protect public safety or security.

Amendment 95 has a dual purpose. It seeks to remove the list of legitimate aims for indirect discrimination against services in Clause 20 and, as such, it would also remove the Secretary of State’s ability to amend that list. The list of legitimate aims covers a limited range of necessary objectives for regulators, which would justify a requirement that may have a discriminatory effect. The legitimate aims are the protection of the life or health of humans, animals or plants, the protection of public safety or security and the efficient administration of justice.

The inclusion of the list of legitimate aims is in our view vital, as it clarifies whether a requirement should be considered indirectly discriminatory and thus whether it is justified to put an affected service provider at a disadvantage compared to a similar provider from another part of the United Kingdom. To allow the flexibility to adapt to potential changes in circumstance—for example, in relation to future types of services regulation—a power for the Secretary of State to add, vary or remove additional legitimate aims is crucial and has therefore been included in the Bill.

I turn now to Amendments 50, 51, 52, 52A and 56, which seek to add in new clauses before and after Clause 10 of the Bill. The proposed new clauses would introduce a new set of conditions that would need to be met in order for an exclusion to be applied. Exclusions have been tightly defined to areas where the market access principles would adversely affect, or prevent the proper functioning of, the UK internal market. For example, we have made it possible for authorities to continue to consider local environmental conditions when authorising a chemical for use in a particular part of the UK.

Turning to Amendment 52, the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to. The UK leads the world in environmental standards and tackling climate change. We were the first major economy in the world to set a legally binding target to achieve net-zero greenhouse gas emissions from across the economy by 2050. The EU is only just now catching up with us. We have also been quick to take action against single-use plastic, with our ban on the supply of plastic straws, drinks stirrers and cotton buds having come into force on 1 October this year.

Moving on to Amendment 52A, broadening exclusions from market access principles could result in significant challenges for the UK’s internal market. These are intentionally narrowly drafted to ensure that there are no unnecessary trade barriers that would ultimately increase costs to businesses and consumers while reducing choice. These amendments also do not take into consideration the impact any exclusions might have on unfettered access and Northern Ireland’s place in the UK’s internal market.

Amendments 33 and 34 are both consequential on Amendment 50, which I addressed above. Amendments 55 and 56 are consequential on Amendment 50 as well. Taken together, these amendments would replace the existing schedule of exclusions with a significantly wider exclusion process. The proposed process is not sufficiently targeted and would increase the potential for trade barriers to emerge. For these reasons, I ask noble Lords not to press their amendments.

Amendment 47A limits the Secretary of State’s regulation-making powers to only add to or broaden the exclusions in Schedule 1. The Secretary of State would not be able to vary the meaning of the exclusions in Schedule 1, nor to remove the exclusions entirely under the amendment. This might make it impossible for the Government to respond to business and wider stakeholder feedback and to act rapidly to adjust the list of exclusions if implementation shows the need for a review. While we are committed to retaining this power in the Bill, we are also fully committed to ensuring that the use of this power is subject to effective oversight and scrutiny.

First, any use of the power would, of course, require an affirmative regulation to be made in Parliament. This would ensure that MPs from all parts of the UK would be able to scrutinise and vote on any changes, along with Members of this House. Secondly, in line with normal arrangements for secondary legislation covering devolved matters, UK Government officials will engage with the devolved Administrations in the spirit of the devolution memorandum of understanding. This is a system that has worked well for 20 years and continues to do so. I hope, therefore, that noble Lords will agree that it is not appropriate for us to accept that amendment.

Turning to Amendment 54, the proposed new schedule is related to the new clause in Amendment 6, to which I responded on Monday. These amendments would, in combination, prevent the market access principles from applying in time at the end of the transition period. The lengthy process they put in place before the principles can apply would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Furthermore, they would limit the areas that the market access principles could apply to. This would again unduly constrain the scope of the principles and fail to fully protect the internal market.

Amendment 57 removes the requirement that a measure meets all the conditions set out in paragraph 2 of Schedule 1 to be excluded from the mutual recognition principle. The conditions in paragraph 2 of Schedule 1 relate to the exclusion of certain food and feed measures from the mutual recognition principle, where this is required to address a serious threat to the health of humans or animals. A measure will be excluded from the mutual recognition principle if all the conditions in paragraph 2 are met. These conditions were designed to be cumulative and work as a whole, and in our view would not be effective individually. The fourth condition, for example, relates to the responsible Administration providing a risk assessment of the threat addressed by the measure in question, which is essential in situations relating to protecting human, animal and plant health, but is not a stand-alone condition for any exclusion. As this amendment weakens the ability of the Bill to ensure that we can address a serious threat to the health of humans or animals, I hope that noble Lords will agree not to move it.

21:30

Amendment 58 is related to the exclusion from the principle of mutual recognition set out in paragraph 2 of Schedule 1. It ensures that Ministers in all parts of the UK can take effective emergency action to respond to threats posed by unsafe food and feed. The amendment would alter the definition of “unsafe” in relation to food. That definition is already clearly set out in legislation and it would be inappropriate to use a definition different from that which is already in place through retained EU law and which functions effectively. Having clear conditions that must be met in order for the exclusion from mutual recognition to apply, including a clear and recognised definition of “unsafe food” is critical, in our view, to providing reassurance that the exclusions from mutual recognition will be used only where there is a genuine need to protect public health in an emergency. Altering the definition of “unsafe food” in the way proposed in the amendment would expand the scope of the exclusion from mutual recognition and thus inhibit the market access principle of mutual recognition from functioning effectively. If any food safety rules change after the end of the transition period, this will be done on the basis of independent advice based on a thorough risk analysis carried out by the Food Standards Agency, and our high standards of food safety and consumer protection will of course be maintained.

I turn to Amendment 60. Subsections (6) and (7) of Clause 11 ensure that appropriate actions can be taken to respond to threats posed by any pests and diseases associated with qualifying Northern Ireland goods. Without these two subsections, mutual recognition and non-discrimination could continue to apply in relation to certain SPS actions that are needed to protect against biosecurity threats associated with qualifying Northern Ireland goods. This would limit our ability to protect against the threats posed by pests and diseases. These subsections uphold the principle of unfettered market access for qualifying Northern Ireland goods, but will ensure that any biosecurity threats can be addressed in appropriate and specific circumstances.

In response to Amendment 80, the purpose of Clause 18 is to provide for the mutual recognition principle in relation to services. It makes sure that authorised service providers can offer their services in all four corners of our kingdom. Those who are already authorised to provide a service in one part of the UK will not be subject to authorisation requirements in other parts. Mutual recognition will not apply to an authorisation requirement to the extent that it is required to tackle a public health emergency.

This amendment seeks to significantly widen the derogation from mutual recognition. The expanded definition proposed by my noble friends is very similar to the one in the EU services directive. That derogation was formulated for very different circumstances—namely, trade between the different nations of the European Economic Area. This Bill is concerned only with the UK and there is significantly less cause for concern than there may have been when dealing with other countries in the EEA. We therefore consider that the narrower derogation contained in this Bill is completely adequate for the UK services market and the generally high standards that, I am pleased to say, are upheld throughout this country.

I can also reassure noble Lords that the Government will continue to monitor the operation of this Bill and, if it is necessary, we can add services sectors to the lists of exclusions in Schedule 2. I hope that I have offered some reassurance to the noble Baroness, Lady Finlay, and the noble Lord, Lord Fox, that their amendment is unnecessary as the Bill already contains considerable exclusions from the general rule to protect UK public interests.

Amendment 174 would place a duty on Ministers and others involved in making legislation to have regard to the need to establish and maintain a high level of protection in respect of regulatory aims. The UK Government are of course committed to maintaining high standards across the UK. However, the proposed clause as constituted would create difficulties of defining and therefore assessing what is meant by levels of protections and standards. The proposed clause also implies that there may be a compulsion on Ministers to lower standards. This would contradict the explicit commitments made in our Conservative manifesto to raise standards on workers’ rights, agriculture, animal welfare and the environment. The Government expect to use the pragmatic and productive collaboration with the devolved Administrations to continue to enable us to maintain high standards across the UK. In the light of that information, I hope that the noble Baroness will feel able to withdraw her amendment.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

I have received a request to speak after the Minister from the noble Lord, Lord Fox.

[Lord Fox (LD)]

I sometimes wonder whether the Minister sustains himself through the long periods of Committee by imagining himself throwing off the yoke of hideous EU conformity. In fact, nothing could be further from the truth. How does the noble Lord explain all the examples of diversity across the four nations of the United Kingdom if there is this conformity? How can his comment that the market has worked very well for 20 years stand up, if this conformity was so bad? Indeed, the 2020 assessment by the Government of the frameworks says that they will maintain, as a minimum, equivalent flexibility for tailoring policies to the specific needs of each territory, as afforded by the current EU rules. The Government clearly recognise the flexibility in the current EU rules.

I commend the Minister for getting through that lengthy statement without once mentioning the words “common frameworks”. There is still no explanation of how the common frameworks inform the Government’s view today of the internal market. Will he please answer that question?

[Lord Callanan (Con)]

I thought my comments might provoke a reaction from the noble Lord. Of course, there are EU common standards in many areas as well as EU minimum standards in many areas, and it is possible for Administrations to go further than those minimum standards in many areas, as he will know from his knowledge of EU affairs.

I have said a number of times that we are committed to the work on frameworks and will take it forward, but we were looking for frameworks in something like 38 different areas. So far, we have managed to agree frameworks in two of them. In terms of the frameworks that have been approved by the ministerial committee, I think those numbers are correct; I will write to the noble Lord if they are not. We are committed to taking forward that work on common frameworks, but we believe that this legislation provides an underpinning to that work. We do not believe that they are mutually exclusive; indeed, we think that they complement each other.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, this has been an extraordinary debate. At this late hour I cannot possibly do credit to all the amazing speeches that we have had, but I want to highlight a few points. The noble Lord, Lord Anderson, set the scene superbly with enormous clarity and told us very clearly where the warning signs were. My noble and learned friend Lord Hope of Craighead, reinforced by the noble Baroness, Lady McIntosh of Pickering, pointed out that the meaning of words is what this is all about.

I am surprised at the Minister reinforcing to us that the environment and climate change were a manifesto commitment and then rejecting the really powerful voices from the noble Baronesses, Lady Hayman, Lady Boycott, Lady Bennett, Lady Jones and Lady Altmann, and the noble Lord, Lord Teverson, who were all talking about ways of protecting the environment and future biodiversity. It almost felt as if their amendments would solve the Government’s problem of how to meet their manifesto commitment.

As for public health and welfare, I do not believe that people in this country vote for worse health and therefore shorter lives; they do not expect their Government not to look out for their health, neither do they want to live in a worsening biodiversity that will leave an ecological desert for the next generation. The amendments that we have considered this evening are incredibly important. The noble Lords, Lord Young of Cookham and Lord Faulkner of Worcester, laid out clearly the importance of public health overall. As the noble Lord, Lord German, and the noble Baroness, Lady Randerson, pointed out very clearly, there are enormous benefits in reinforcing the current system and not trying to override it. I am surprised that in his summing up the Minister did not pick up on the suggestion of the noble Lord, Lord Whitty, of going to the committee of the noble Baroness, Lady Randerson, and talking to it about what is going forward.

Although I will obviously withdraw the amendment, I am convinced that we will return to this matter in force on Report. I am also convinced that everyone who has spoken will need to pool resources because we heard some worrying things in the Minister’s response, which blanket-rejected the fact that we are trying to solve the problem, not create difficulties. We all want the United Kingdom to prosper and do well. This is not the time to allow it to drop to the lowest common denominator, when people are striving for higher standards and to make Britain a place of excellence, not low standards. With that, I beg leave to withdraw the amendment.

Amendment 33 withdrawn.

Amendments 34 to 43 not moved.

Clause 8 agreed.

Clause 9: Exclusion of certain provision existing before commencement

Amendments 44 and 45 not moved.

Clause 9 agreed.

Clause 10: Further exclusions from market access principles

Amendments 46 to 50 not moved.

Clause 10 agreed.

Amendments 51 to 54 not moved.

Schedule 1: Exclusions from market access principles

Amendments 55 to 59 not moved.

Schedule 1 agreed.

Clause 11: Modifications in connection with the Northern Ireland Protocol

Amendments 60 and 61 not moved.

Clause 11 agreed.

Clause 12: Guidance relating to Part 1

Amendments 62 to 65 not moved.

Clause 12 agreed.

Clause 13 agreed.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

We now come to the group beginning with Amendment 66. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment or anything else in the group to a Division should make that clear in the debate.

Clause 14: Interpretation of references to “sale” in Part 1

Amendment 66

Moved by

[Baroness McIntosh of Pickering]

66: Clause 14, page 9, line 13, leave out subsection (4) and insert—
“(4) “Sale” has the meaning given in section 61 of the Sale of Goods Act 1979.”Member’s explanatory statement
This amendment brings Clause 14 into conformity with the existing law of sale.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful for this opportunity to speak also to Amendment 67. I am grateful to the Law Society for its help, as with other amendments, including Amendment 37, in preparing and drafting them.

The amendment looks at bringing Clause 14 into conformity with the existing law of sale. The reason for this is that the Sale of Goods Act 1979 defines a contract of sale of goods as,

“a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.”

It further defines an “agreement to sell” as a contract of sale whereby,

“the transfer of the property in the goods is to take place at a future time or subject to some condition later to be fulfilled”.

The introduction of a new definition of “sale” as set out in the Bill, without reference to the Sale of Goods Act 1979, could produce confusion and lack of clarity among traders and consumers alike. I should be grateful if the Minister could explain the reasons for the Government departing from the definitions of “sale” in that Act to avoid any confusion.

Similarly, Amendment 67 would leave out Clause 14(6)(c). This has the effect that I have just set out. Clause 14(6) applies to other means of transferring possession or property unrelated to sale, including barter or exchange, leasing or hiring, and gift. I would be grateful if the Minister could explain why the Government are seeking to extend the Bill to these transactions, in particular to gifts, which transfer ownership of the item donated without payment or consideration. With those few remarks, I would be grateful to hear from my noble friend why these changes are being sought in the Bill. I beg to move.

21:45

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

The noble Lord, Lord Liddle, has withdrawn, so I call the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

My Lords, I am grateful to the noble Baroness, Lady McIntosh of Pickering, for putting down this question. The Law Society of Scotland makes a valid point about why there would be a new, and potentially competing, definition of sales between this legislation and the Sale of Goods Act. I will just ask two supplementary questions. The first is a genuine probing question about the Government’s view. Given that many sales are conducted online now—and probably the vast majority in the coming years—what is the Government’s view, with regard to this legislation, on the location where an online sale takes place and how that is covered by the definition?

The example given by my noble friend Lord Fox was about phasing in the banning of coal in England, but not yet in Wales or Scotland. It was a genuine question, and it was a shame that the noble Lord, Lord Callanan, did not have a chance to answer. On a reading of this legislation, someone in England who is banned from purchasing coal for use in their household in England would, under the definition of “sale” in Clause 13, be able to buy household coal from a Welsh or Scottish coal merchant, at a local or online sale, who would then be able to deliver. It would be good if that could be clarified, even if the Minister needs to write to us about it. It is a genuine issue to highlight.

My second question links to this amendment more directly. The noble Baroness, Lady McIntosh of Pickering, and other noble Lords who have Scottish legal qualifications will be familiar with this. I see the noble and learned Lord, Lord Falconer, on the Opposition Front Bench. Sales in Scotland often have a cut-and-paste element, stating that the law of contract of England applies. Of course, it does not in Scotland. That tends to be viewed as not having effect, and that the cut and paste is not accurate, as contract law is different north of the border. When it comes to the definition of sales through a contract, if the sale of an imported good is conducted within Scotland, is it considered local or not? If that is the case, does the contract law of Scotland apply under this legislation or is the default the law of contract for England? If the latter, that is problematic for transactions carried out north of the border.

[Lord Falconer of Thoroton (Lab)]

I am obliged to the noble Baroness, Lady McIntosh of Pickering, for raising these points. There is a raft of unanswered questions here. It is late at night, so I will try to focus on only the most important. Am I right in assuming that the market access principles, recognition and discrimination, apply to the rental and gifting of goods? If they apply to the rental of goods, what is the policy purpose? What is the purpose of applying them to the gifting of goods and what does it mean in practice? For example, does it apply to statutory requirements for the provision of food by food suppliers that are subject to statutory requirements?

The second head of issues concerns the position of public bodies engaged in commerce. I understand, but only from the Explanatory Notes, that the supplying of drugs by the NHS, even though it does so in a commercial context from time to time, is not covered by the Bill. Is this right? I have particularly in mind Clause 14(2), which says:

“‘Sale’ does not include a sale which … is made in the course of a business but only for the purpose of performing a function of a public nature.”


I read in the Explanatory Notes that that means the NHS supplying drugs. If that is right, what does the completely impenetrable Clause 14(3)(b) mean when it says:

“Subsection (2)(b) does not exclude a sale which is … not made for the purpose of performing a function of a public nature (other than a function relating to the carrying on of commercial activities)”?


Can the Minister explain this to the House? It matters quite considerably because I suspect it will cover a great deal of commercial activity performed by public bodies.

Thirdly, and separately, what is the position in relation to the goods that are made partly in one part of the United Kingdom and partly in another—for example, cars on an assembly line that crosses borders, or planes or high-tech equipment where parts from elsewhere come into it? As a result of Clause 15(3) and (4), is there a separate application to each of the individual components or does one look only at the completed goods?

Lastly, and this is perhaps the most significant, how do the Government envisage that this will operate? My understanding of Clause 6, on the non-discrimination principle, is that where a statutory or regulatory requirement in one part of the country discriminates indirectly, making the sale of those goods disadvantageous in another part of the United Kingdom, that disadvantageous provision can be supported only if it has one of the legitimate aims identified in Clause 8(6).

Let us take minimum alcohol pricing in Scotland. This is a relevant requirement which indiscriminately discriminates against incoming goods on the basis that alcohol brought into Scotland from England by a supplier is the subject of a disadvantage as defined in Clause 8(2); namely, minimum pricing makes it less attractive because the goods are more expensive to buy. As I understand it, this can be justified only if that minimum pricing statutory requirement has one of the following aims:

“the protection of the life or health of humans, animals or plants”

or

“the protection of public safety or security”.

Am I right in understanding that if, for example, a large supplier of alcohol from England into Scotland wished to challenge minimum alcohol pricing, he could do so by taking his buyer to court? There would then be a private law action in the courts of either Scotland or England—could the Minister tell me which it would be, assuming that the minimum alcohol pricing was in Scotland and the supplier was in England?—and the courts would have to decide whether or not minimum alcohol pricing was a regulation that had a legitimate aim.

The consequence of this Act—which is quite tricky to understand and is perhaps unthought-out—is that we in Parliament are handing over to the courts the determination of policies such as minimum alcohol pricing. That seems at the moment to be the consequence of the way that the Bill is drafted. I cannot believe that that is what any sensible Government would wish. Could the Minister please explain how Clause 8 works? I hope she can explain why my conclusions on the basis of Clause 8 are wrong—I really hope they are.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank noble Lords for their contributions to this short debate. There were a lot of questions in there, some of which I will just have to write to noble Lords about because my briefing does not cover the whole gamut of what was asked and I would rather give a full answer.

Amendments 66 and 67 are relatively technical amendments relating to the definitions of “sale” in the Bill. I am willing to provide further details on this issue and discuss any concerns that my noble friend has. Amendment 66 would narrow the definition of “sale” in the Bill. It would narrow the types of supply-related activities that a trader could carry out and benefit from the market access principles. It would therefore reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.

The United Kingdom Internal Market Bill is intended to provide a structural underpinning and additional protections to the status quo of intra-UK trade, ensuring certainty for businesses and investors in the form of a safety net of regulatory coherence. We should not cut holes in the safety net. The definition of “sale” that we have will ensure that businesses can continue to trade in a frictionless way, no matter how they are supplying their goods. It also seeks to align broadly with the scope of the “placing on the market” concept that is central to our existing goods regulation.

I say to my noble friend Lady McIntosh that the Sale of Goods Act 1979 was a very UK-specific way of defining a sale. The EU style of definition that has been brought into our legislation is much broader, and there is a need to ensure that the same principles align across the whole legislative piece. “Placing on the market” is therefore included in this as a concept but not in the Sale of Goods Act. In short, the Government cannot support this amendment, and I ask my noble friend to withdraw it.

Amendment 67 would exclude the supply of goods free of charge from the market access principles. It would include the rental of goods, as the noble Lord, Lord Purvis, pointed out. That would lead to the strange outcome that a good could be lawfully sold under the mutual recognition principle in a part of the UK for only a penny but could not be supplied there under that principle free of charge. This would affect a range of items such as commercial samples, marketing merchandise or introductory offers, and would reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.

I was asked a question by the noble Lord, Lord Purvis, when we were talking about coal. I think the distinction my noble friend was trying to make was between a ban on the sale of coal and a ban on its use. As in his example, you could legally buy it in Wales, but you could not then legally use it in England just because you bought it over the border due to the difference in rules. For these reasons, I ask my noble friend not to move Amendment 67.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

I have received a request to speak after the Minister from the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

I am grateful for how the Minister responded. I think that the last point she made was really important. The Government have been talking about restrictions on the ability of the devolved Administrations to sell, yet on the point that my noble friend Lord Fox made—that the Government for England have banned not the use but the sale of household coal—the Minister said that it would be possible to continue to provide household coal in England through a Welsh or online retailer. It is quite extraordinary that the undermining of public policy along those lines could be operated, but the Government seem to be perfectly content about that. However, the transparency on that, at least, has been helpful.

22:00

This is now, I think, the third time that we have tried to press the Government on whether the sale of alcohol would be treated differently from the policy of minimum unit pricing. On the previous group, the noble Lord, Lord Callanan, gave a very comprehensive response on how the policy of minimum unit pricing will be affected. We are fully aware that it will be covered under non-discrimination only if there are substantial changes to it, because it is an existing measure. The question that the noble and learned Lord, Lord Falconer, asked, which was similar to questions that I had asked before, was about provisions on the sale of alcohol. So clarity on that would be useful.

My third question is absolutely not meant to be a “gotcha”. I did not give notice to the Minister and it has not been raised, so perhaps she will be able to write to me. It comes from information provided by Universities Scotland, which is interested in whether “sale” would effectively cover tuition fees as the purchase of a good. Under this legislation, higher education is not considered to be a public authority. Public authorities are excluded under this part of the Bill, but higher education, as a provider—like, for example, the NHS—is potentially not excluded. If the Minister could write to me on that, it would be very helpful, and I think that Universities Scotland will benefit from having clarity on how it will be treated under the sale and purchase of either goods or services.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I remember the noble Lord asking that question earlier in the debate. I am more than happy to write to him on that and on the other issues that I have not been able to cover in my response.

[Lord Falconer of Thoroton (Lab)]

I am not complaining, but the Minister did not try to answer any of my questions, so I would like a comprehensive response.

I am really interested in whether the Government envisage that in private law actions the courts will be resolving whether regulations that are discriminatory on the face of it for public purposes, as defined in the Bill, are valid—that is, whether they are for a legitimate aim. If they are, then the consequence is that Parliament is subcontracting decisions on these policy issues to the courts. I am not asking the Minister to deal with the other issues, but if she could deal with that one now, I would be grateful. If she cannot, because the answer is not yet known or has not been worked out, I would be grateful if she could indicate that. This issue seems to be absolutely key to the question of certainty for business. If where we come out at the end of the Bill is the courts system deciding on the legitimacy of a whole range of regulations, I am sure that that would not be what the Government would have wished. That is why the common frameworks process looks so much more attractive.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Having looked at that question, I would rather write to the noble and learned Lord giving a full answer—but I will do so very speedily, before we come to the next stage.

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I am grateful to have had this little debate. I am particularly grateful to the noble Lord, Lord Purvis, and the noble and learned Lord, Lord Falconer, for identifying even more issues than I and the Law Society of Scotland had done.

I thank my noble friend Lady Bloomfield for her answers, as far as they went, but, bearing in mind in particular the way that procedure operates in this place as opposed to the other place, it is extremely important that we have a very full letter. Perhaps she could write to the three of us who have contributed, as well as putting a copy of her letter in the Library, before we get anywhere close to the next stage.

I would like to, and still do not, understand why we are bringing in a new definition of “sale” that has a different meaning from that in the Sale of Goods Act 1979. I do not know whether my noble friend is saying that we are widening the definition to include what is generally understood in EU law, but I do not recognise any of this from what is before us in the Bill, so I would be grateful if my noble friend could write to me and say what, precisely, is the legal basis for widening and changing the definition in the way that the Government have in that regard.

I am grateful to the noble Lord, Lord Purvis, for the definitions that he gave and the illustrations that he posted as being a particular problem north of the border. I am also grateful to the noble and learned Lord, Lord Falconer of Thoroton, because I think this is absolutely vital: none of us here this evening wants to put up barriers to trade between the four nations of the United Kingdom. However, it is absolutely essential that we have clarity on the face of the Bill for the reasons that the noble and learned Lord, Lord Falconer of Thoroton, has given: we do not wish to have to resort to private-law actions before the courts—that, surely, is not acceptable. I quite understand that the Government have had to bring this Bill forward in something of a hurry, but I am here this evening to help them identify these issues.

Certainly, I am now even more confused as to why Clause 14(6)(c) has been introduced, particularly as regards the noble and learned Lord, Lord Falconer of Thoroton, referring to Clause 8(6) in this regard. However, rather than delay proceedings this evening, I will say that it would be extremely helpful to have a written understanding from my noble friend Lady Bloomfield as to why we are in this position this evening. With those remarks, I beg leave to withdraw Amendment 66 at this stage.

Amendment 66 withdrawn.

Amendment 67 not moved.

Clause 14 agreed.

Clause 15 agreed.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We now come to the group beginning with Amendment 68. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.

Amendment 68

Moved by

[Baroness Hayter of Kentish Town]

68: Before Clause 16, insert the following new Clause—
“Purpose of Part 2
This Part promotes the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I rise to move Amendment 68 but also to speak to Amendments 89, 96 and 102 in my name. I will take Amendments 68 and 96 together. As we discussed on Monday, these are to ensure that, as we go through this process of ensuring a working single market across the UK, we have consumers—in whose interest, after all, public policy needs to act—at the forefront of our minds.

Amendment 68 is particularly important. Noble Lords may recall that, at the start of Part 1, the very first clause outlines the “Purpose of Part 1”. I may have wanted to expand this a little, but at least a purpose is there. As we turn to Part 2, on “UK market access” as it applies to services, it simply says that it will govern the regulation of service providers in the UK, but no objective is set for why this is done.

If we look at the regulation of the financial services sector, for example, we see that clear objectives for their work are set down in the appropriate legislation. It would be good to have a similar set of aims here. My amendment, unsurprisingly, would set the purpose as promoting

“the continued functioning of the internal market for services in the United Kingdom for the benefit and protection of consumers.”

Other colleagues would add other things, and I am sure the noble Baroness, Lady Noakes, if she was in her place, would also prefer a different focus—although I hope that she would recognise that it should still have an eye on consumers. Surely, however, there has to be a purpose for this regulation.

As we have found with the legal profession under the Legal Services Act, for example, or with financial services under the various FiSMA Acts, intervention was needed because uninhibited competition in a market where consumers often cannot shop around or judge the long-term outcome of services—particularly financial services—necessitates some regulatory protections. If they buy a pension scheme, they cannot tell the long-term outcome, which means as a consumer they are very vulnerable. It is the same with legal services; you have no idea if your divorce settlement was good or bad until many years later. Very often there is an intervention for that purpose, but it is clear why the intervention is happening and what its purposes are. We need a similar thing here. Incidentally, given that such interventions often level the playing field, they have not been shown to restrict the growth of the relevant sector, so one does not need to fear that this will inhibit growth in any way.

Amendment 96 would add “the protection of consumers” to the list of legitimate aims whereby a service may be deemed not to be discriminatory. This might mean providing a service only in Welsh or in some other country specific way, but if it is aimed at protecting consumers, that would allow an opt-out, if you like, from it being discriminatory. 

Amendment 89 would remove from the consideration of whether a service provider is discriminating the words,

“it cannot reasonably be considered a necessary means of achieving a legitimate aim.”

I asked not my noble and learned friend here but another of our very learned colleagues how that sounded and whether this phrase was common in law, and at that point, he could not think of an example. It seems a vague definition for a service provider to have to work to. The whole paragraph is fraught with uncertainty as to who would judge that and how something could be reasonably considered necessary, for example, to protect public health, which is defined as a legitimate aim. However, it is a very indistinct definition for someone to decide whether it is discriminatory. Given that service providers sometimes have to act at speed, one has to ask: what sort of certainty would that provide? 

Even more confusingly, when looking at whether something could be reasonably considered as necessary —as if that was not hard enough—a further bit in Clause 20(9) says that has to be decided with regard to

“the effects … in all the circumstances, and”

Whether an alternative way of achieving a legitimate aim was available. We are getting into a lot of legal difficulties for a service provider to be able to judge whether they can tailor-make a service for particular needs if they have to go through quite so many indistinct legal loops. I beg to move.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, the hour is late, and I will shorten what I was going to say. Amendment 78 is intended to achieve exactly the same objective, in respect of Part 2, as my Amendment 6 does in respect of goods. In other words, it seeks to incentivise both the Government and the devolved Administrations to commit fully to the common frameworks programme and rely on the market access principles only as a fallback when all else fails. The other two amendments in this group, Amendments 67 and 71, are consequential on it, since they would make the point at which the regulations came into force the point from which market access principles would apply. I cannot see why there is any difficulty with that.

22:15

I have been struck during this long and detailed debate by how few of us on all sides of the House share the Government’s concern about the apparent threats to the internal market. That seems to keep the Minister awake, yet we are trying to come up with a solution. This Bill seems to be a solution in search of a problem. The approach of these amendments is not to peremptorily dismiss these notable concerns of the Government with the simple reassurance that there is no monster hiding behind the common frameworks in a rather darkened room. Rather, they provide the robust mechanism to ensnare any monster or threat which, unlikely as it seems, might emerge. This is why both Houses of Parliament would control the lever to trigger this.

I urge the Minister to give serious consideration to this mechanism, which, as I pointed out earlier in Committee, is one which the Government were brought to accept as a compromise on the EU withdrawal Act. Far from being unsatisfactory, the Government clearly feel that this has unlocked a constructive process, as reported to Parliament by the noble Lord, Lord True, a little over a month ago, in the Government’s regular quarterly report, which hailed the

“significant progress … being made across policy areas to establish common frameworks in collaboration with the devolved administrations.”

In conclusion, if the common frameworks process is developing and the Government have not had to exercise the fallback option that the EU withdrawal Act provided of coming back to Parliament to impose restrictions on devolved competence, why do they not now accept the same approach that was previously accepted? I may be being dense, but I fail to understand why the solution being offered is not accepted.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord German, is not taking part in this group, so I call the next speaker, the noble Baroness, Lady McIntosh of Pickering.

[Baroness McIntosh of Pickering (Con) [V]]

I will speak briefly to several amendments in this group. Regarding Amendment 70, again I raise the question of substantial change, and whether that means a “significant amendment”. I am seeking clarification on the part of the Bill to which this refers.

Amendment 81 would delete “of no effect”, as would Amendment 84. Can the Minister say what that means when replying? It is very unclear. I am again grateful to the Law Society of Scotland for its help in putting forward and drafting these amendments.

In Amendment 92, what is meant by “less attractive”? In my view, to put a service provider at a disadvantage is a serious matter in a Bill such as this. Using a phrase such as “less attractive” as part of the assessment of disadvantage is subjective and lacks clarity. I would be very grateful if, when summing up, the Minister could just clarify what his understanding of “less attractive” is.

I turn to my Amendments 103 and 103A. Amendment 103, which would take out “mainly” and insert “substantially”, is a probing amendment to understand the meaning of “mainly” in connection with the gathering of experience—for example, in relation to Clause 23(7). In my view, Clause (23)(7)(b) requires further definition. How should “mainly” be measured? Will it be by the time spent as a proportion of the whole qualifying experience or by some other measure? How will this experience be recorded and verified?

The same questions arise in regard to that aspect of the experience obtained elsewhere than in the UK. The purpose of my Amendment 103A is to ask whether we are excluding all other experience than that obtained in the UK. I pray in aid my own experience, where I practised law in Brussels in two different situations. Would that experience, and the experience of others as well, qualify for the purposes of the Bill? I am grateful for the opportunity to move these probing amendments and I look forward to the Minister’s clarification of these points.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, I want to speak to this group of amendments for two simple reasons. First, services are incredibly important to the UK and to all four nations within it. As I said on Amendment 4, they are vital to the success of our economy, making up more than 80% of GDP. They range from financial services, mentioned by the noble Baroness, Lady Hayter, which I believe now provide more jobs outside London than in the City, to arts and entertainment of every kind. Invisibles, including legal and accountancy services where we have world-leading expertise, represent more export value than goods.

Secondly, I am mystified by the clauses on services, which are the subject of these amendments. The arrangements seem to work well currently. No doubt some protection is provided by the carryover of EU rules under the withdrawal Acts, which are relatively light touch because attempts to align local rules within the EU on services were also light touch.

We are forcing on to the service industries apparently new rules and new exemptions linked to the principles of mutual recognition and non-discrimination. There could potentially be a whole load of bureaucracy and regulation associated with this activity, which business, the service sector and regulators will need to understand. Lobbyists may try to secure new rules that benefit narrow interests, as they do in Brussels now. Moreover, as someone who takes a morbid and forensic interest in these things, I find the impact assessment—welcome though it is in principle—extremely disappointing. These are usually very helpful to Committee discussions, but the assessment asserts on page 2 that

“the cost savings to businesses, consumers and the wider UK economy would be expected to significantly offset any costs imposed by this legislation, translating into a net benefit to the UK economy.”

The small and micro business assessment on page 37, a section to which I always pay the greatest attention as small business is the lifeblood of this country and key to its dynamism, says:

“Due to a lack of historical need, there is a shortage of data on businesses trading between different parts of the UK. It has therefore not been possible to identify the volume of such businesses who operate across borders, nor the extent to which they benefit because of the hypothetical nature of the future regulatory regimes.”


So we have no evidence to justify the new powers, nor an assessment of their consequences. We almost seem to be creating borders for services where none existed before, which is surely the opposite of what we want.

We need to understand better how this part of the Bill will work, but the material presented so far has stumped me, as a business operator who has worked in various industries across the UK and the world. In that connection, let me ask a simple question on marketing activity, which is not listed in the schedules: would I be permitted to discriminate in favour of a company that was Welsh to help with the marketing of Welsh products or would I have to take time to listen to pitches from English-owned—or, indeed, US or Canadian-owned—companies?

In response to a number of understandable probing amendments in this group, can my noble friend the Minister kindly justify the provisions simply, with some good worked examples relating to significant service sectors, and assuage my fears? I must say, at this point in time, I am confused and therefore concerned.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

Both the noble Baroness, Lady Noakes, and the noble Lord, Lord Liddle, have withdrawn from this group so I call the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

My Lords, the Minister will no doubt be pleased to hear that I will not ask questions about whisky even though, after nine hours on this Bench, it seems to be at the forefront of my mind right now. I do not know why but a nice glass of whisky would be rather welcome.

I want to follow on directly from the noble Baroness, Lady Neville-Rolfe, and expand on her very good second point about organisations that are not within the Schedule 2 exclusions but may, for example, seek services that have a specific characteristic of one of our home nations or additional requirements—such as having the capacity to speak the Welsh language, which would be important for the provision of certain services in parts of the United Kingdom, or, in the highlands of Scotland or certain parts of Glasgow, proficiency in the Gaelic language. Given that these were covered in the European Union elements, which the Minister argued previously were restrictive but which are actually broad and allowed this trade to be conducted properly, I hope that the Minister can respond as to why those elements would not be covered in this Bill and whether there would be the ability to have some of the specific requirements with regard to regulatory requirements that have specific characteristics.

Aside from language and other conditions with regard to equality legislation, which would be covered under putting services to contracts, I notice that transport services are excluded but water services are not. As the Minister knows, the provision of water services is distinct in our four nations. There are separate industries and these will not be excluded. I would be interested to know whether the current contractual arrangements are out of scope of this legislation because they are current. On the non-discrimination principles in the services sector, I have a concern about the distinct nature of the legislation for the Scottish water industry, which is a public body with one shareholder—the Scottish Minister—and whether an English service provider would be able to challenge the provision of Scottish water services because they are not excluded from this legislation. I would be most grateful if the Minister could allay my concern about that.

Similarly, the provision of water in Wales is a different legal entity—it is a mutual approach. Many private enterprises in the provision of services, as we know, are of an international nature. There is an even greater concern that if, for example, an American service business, through a trade agreement with the United Kingdom, had a brass plate enterprise in the City of London with American shareholders, that might be the gateway for it to challenge the mutual model in Wales or the approach in Scotland. I hope that the Minister can allay my fear about that.

22:30

The second point I want to raise returns to the issue of building regulations. This was mentioned by my noble and learned friend Lord Wallace of Tankerness and me at Second Reading. Building services are not within the scheduled exclusions either. Services provided by a person exercising functions of a public nature are within the exclusions, but building regulations are not. Under requirements in Scotland for service providers to build to a certain set of standards—set down in Scottish building regulations that predate devolution and EU membership—an English company would be able to bid for the contract as they would at the moment. However, building certificates are currently issued only if the work is completed to the standards of Scottish building regulations. As there is no exclusion under this Bill, any contractor constructing would be able to challenge the requirement for the building to satisfy Scottish building regulations if they make that contract, to quote the legislation, “less attractive”. This might be, for example, because construction under Scottish building standards could be more expensive than constructing under English standards. They would be able to challenge the requirements insisting that they construct to the building standards.

I ask the Minister for specificity on what “less attractive” means because of the introduction of subjective terms into what will be an objective process, without a clear definition of what “less attractive” means. One service provider in one part of the UK could consider service provisions more attractive because they may have higher environmental standards or greater cultural input. Another potential contractor, who may see those aspects as additional costs, might see that as less attractive. Therefore, I would be grateful if the Minister could give specific examples of what “less attractive” means, as asked for by the noble Baroness, Lady McIntosh. With so many grey areas, we are unfortunately in the realm of requiring Pepper v Hart statements from Ministers at the Dispatch Box, because Ministers’ intentions will have to be interpreted.

When I asked the noble Lord, Lord True, for the definition of “substantive changes”, his answer was perplexing. He said that a substantive change, for both goods and services, is a change of outcome. We know that many of these regulations are phased in over time, because the outcome of the reality of that legislative move is usually down the line. That is why many will have sunset clauses, as with the banning of household coal purchases in England being phased in. Similarly, the environmental measures in Wales and the deposit scheme in Scotland are being phased in over several years. It is impossible to judge at the outset of some of these measures what the outcome will be. Many will be reviewed to consider the outcome. Therefore, if the definition of a substantive change is linked to outcome, that will simply not be considered robust. Does the Minister have further explanations of that?

In Clause 16(5)(c)(ii), there is a curious difference between the definition under services and the “substantive change” definition under goods. On services, the requirement is not considered if it

“comes into force, or otherwise takes effect, on or after the day on which this section comes into force if it re-enacts or replicates (without substantive change)”.

For goods, it simply states “re-enacts without substantive change”. For services, it says “re-enacts or replicates”. Does it simply mean that it is a re-enactment? I do not know what “replicates” means as far as this is concerned. What is a replication of a regulatory requirement that is different from a re-enactment? I would be grateful if the Minister could respond to those points?

[Lord Callanan (Con)]

It may be helpful to the noble Lord, Lord Purvis, who I know is interested, if I return to a question he asked on the previous group—the vexed question of coal and the English-Welsh border. Let me build on the answer given by my noble friend Lady Bloomfield. Under mutual recognition, the use of coal could be banned regardless of where it is bought. The sale cannot be stopped simply because the use is not permitted. The use would still not be permitted in England, even if the coal is bought in Wales, or if it is legal to use it there. It is the distinction between sale and use that my noble friend referred to. I thought the noble Lord would like early clarification of that.

Amendments 68, 69, 70, 71, 78, 81, 84, 89, 92, 96 and 102 seek to alter the application and scope of both the exclusions and non-discrimination rules for the internal market in services. Several of these amendments centre on the application of the services rules and the non-discrimination principle. This non-discrimination rule is a fundamental safeguard for businesses, ensuring that there is equal opportunity for companies trading in the UK, regardless of where in the UK the business is based. I will address the amendments in related groups, and I am happy to explain how the services rules work, and the list of exclusions, in greater detail.

I thank the noble Baroness, Lady Hayter, for tabling Amendments 68 and 96 on consumer protection. I hope to be able to persuade her that they are unnecessary. As I set out on Monday, the Government are committed to maintaining and protecting the highest consumer standards across the UK. This legislation will be to the benefit and protection of the country’s consumers. Without an updated, coherent market structure, UK services trade could be significantly and detrimentally affected. Future complexities could arise, and costs could then be passed on to consumers through an increase in prices or a decrease in choice.

Amendments 69, 71 and 78 would provide that Part 2 applies only to services specified in regulations. We believe that these amendments are contrary to the aims of the Bill, because this is the opposite to the current approach, which is that mutual recognition and non-discrimination applies to all services except those specified in the schedule. Further, the amendments set restrictive consultation and reporting conditions on a Secretary of State wishing to make those regulations, and a requirement for devolved Administration consent to regulations extending the list of exclusions in Schedule 2. My noble friend Lord True spoke about this issue earlier today in the group on the involvement of the devolved Administrations.

Clause 17 currently aligns with the wider aims of the Bill—to allow businesses and people to trade as they do now, without facing additional barriers based on which nation they are in. These amendments run contrary to those aims. They would make the raising of barriers to service provision the default position, by not applying mutual recognition and non-discrimination principles in the Bill to any services unless specified. The reporting and consultation requirements the amendments place on specifying regulations also mean that bringing services into scope of the rules of Part 2 of the Bill, including all those to which the principles of mutual recognition and non-discrimination apply under retained EU law, would be both difficult and time-consuming. This would, in turn, cause disruption to businesses seeking to provide their services across the whole United Kingdom.

Overall, these amendments could raise barriers to service provision across the UK where even the current system does not, and would seriously hinder any attempts to develop a co-ordinated and focused response to the evolution of services in the future. Therefore, while I recognise the spirit in which these amendments were tabled, I am unable to accept them. However, to answer the questions asked by the noble Baroness, Lady Hayter, and my noble friend Lady Neville-Rolfe, on financial and legal services, and to allay their specific concerns, I can reassure them that legal services are excluded from the mutual recognition principles, and financial services are excluded from Part 2 entirely.

As my noble friend Lady McIntosh makes clear in her explanatory statements accompanying Amendments 70, 81, 84 and 92, their primary purpose is to probe the drafting of the Bill. On Amendment 70, the intention of Clause 16(5)(c) is to restrict the application of Part 2 only to new requirements that take effect after Part 2 itself does. This is because the Bill is intended to prevent future obstacles to trade within the single market, not retrospectively review all existing requirements.

Clause 16(5)(c)(i) provides that requirements already in force are not subject to the principles in Part 2. Clause16(5)(c)(ii) recognises that there will inevitably be new iterations of rules, which will in fact simply restate the previous rules that were in place. This provision sets out a threshold, beyond which the new requirement will be brought within scope, and that is where the requirement has changed in substance.

My noble friend in particular asks the meaning of “substantive change”, which her amendment would replace with the phrase “significant amendment”. This wording is simply intended to distinguish between those rules which are genuinely new and different from those which may have been in place beforehand, and those which are in fact substantively the same rules. My noble friend’s suggested change uses the term “significant”, which is less easy to quantify and suggests to me a higher threshold before which a change would bring the provision within scope of the principles in the Bill. “Change” and “amendment” are of course covering fairly similar ground, but I suggest that “amendment” would more commonly be used when talking about changes to text. Since Part 2 is operating on requirements imposed by or under legislation rather than the text of the legislation itself, we think, in these circumstances, that “change” is the most fitting word— but there will probably be lots of work for the noble and learned Lord, Lord Falconer, and his friends in interpreting this.

I turn now to Amendments 81 and 84. In Clause 21, a legislative requirement is one imposed

“by, or by virtue of, legislation”.

This extends beyond legislation to rules produced by bodies with powers delegated to them in respect of a particular field of regulation, and it may include licences or requirements contained therein. My noble friend’s Amendments 81 and 84 would appear to have the same effect. However, in my view, the term “of no effect” is the more appropriate to apply in respect of a licence or a non-legislative rule.

Turning now to Amendment 92, the purpose of the words “less attractive” in Clause 20(3) is to encompass requirements which are not outright prohibitive but which otherwise make it harder to offer a service in a particular market. Without these words, the clause could be read as referring only to actively punitive measures, when in fact it is intended to cover a broader range of harms under the definition of direct discrimination. My noble friend will no doubt also be aware of the amendment in my name to Clause 20, which seeks to clarify the meaning of the test for indirect discrimination in that clause—although the language that she highlights remains unaltered by it.

Amendments 89 and 102 from the noble Baroness, Lady Hayter, seek to remove the reference to the legitimate aims in Clause 20. These amendments should be read alongside the other amendments in the noble Baroness’s name. The wider purpose of all these amendments is to alter the legitimate aims in Clause 20. The amendments would have the effect of making the principle of non-discrimination almost absolute, not allowing any requirement which had an indirectly discriminatory effect, no matter how valid or urgent the justification. I suspect that this was not what the noble Baroness intended with this suite of amendments.

Clause 20(2)(d) provides that a requirement will be discriminatory only if it cannot be justified by a legitimate aim. Amendment 89 suggests removing that. Clause 20(9) provides that, to determine whether a regulatory requirement can be considered as a necessary means to achieve a legitimate aim, particular consideration must be given to the effects of the requirement in all circumstances and to the availability of alternative means to achieve that aim. This subsection is key to determining whether a legitimate aim may be relied upon. It is designed to assist the reader and its removal would hinder the effective application and operation of the test. The subsections are both key to the effective operation of the non-discrimination principle provided for by Part 2 of the Bill. I therefore cannot accept these amendments.

Amendment 103 relates to Part 3 of the Bill, concerning professional qualifications. As used in the clause, “mainly” has been used in this context to ensure that the majority of the experience that a professional is relying on is obtained in the United Kingdom. This is so that relevant authorities can reliably assess the professional’s experience. The decision to use “mainly” rather than “substantially”, or other similar words, is so that professionals can rely on their experience for this part of the Bill without it being interpreted as the whole of their experience needing to have been obtained in the UK. I hope, therefore, that this explanation satisfies the House and that the noble Baroness feels able not to press her amendment.

22:45

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

I have received one request to speak after the Minister from the noble and learned Lord, Lord Falconer of Thoroton.

[Lord Falconer of Thoroton (Lab)]

I go back to the very interesting answer that the Minister gave on the coal example. Let us assume that the coal example, which he described as being a prohibition on sale but not use, did not come in a pre-existing requirement and that it had been entered into after this Bill became law. I would be right, would I not, in assuming that such a requirement would offend against the non-discrimination principle under Clause 8? It is obviously a disadvantage to be able to sell coal to people who cannot use it. In those circumstances, it is valid only if that was a provision entered into after the Bill became law if such a provision was justified by one of the legitimate aims identified in Clause 8(6). Would I be right in assuming that? Would I be right in assuming that the question of whether the ban on the use of coal survived would depend upon a private law action between the supplier of the coal and the buyer of the coal?

[Lord Callanan (Con)]

I do not think the noble and learned Lord is correct in his assumption, but it is a detailed legal point, so I will take further advice and reply to him in writing.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank noble Lords who have contributed to the debate, which poses more questions than even I had realised. I have also realised that I have not got a complete handle on the services that are covered. Are financial services excluded? I think auditing is excluded. It would perhaps be helpful if a note could be passed about what services are covered. I assumed they are cultural and intellectual property, education and architecture, but there are some interesting ones where there are big differences at the moment between countries.

I am particularly thinking of residential property, where Wales now licenses landlords and is ahead of us in licensing letting agents. We are now in discussion with the Government about the licensing—shortly, we hope—or authorisation of all property agents, but then that would be different between England and Wales and Northern Ireland and Scotland. Presumably all that would be caught by this, but I am not certain.

This is a genuine question and it would be really helpful to have, without it being part of the Bill and without it committing the Government to anything, a more useful note of what is covered. Then we could look at what is already different, particularly in licensing, as is certainly the case in the area that I know about of residential agencies in Wales and elsewhere.

In a sense, the bigger issue is the one I set out at the beginning. The noble Baroness, Lady Neville-Rolfe, put it much better. I was asking about the purpose of Part 2. I think the noble Baroness went further and asked whether we even need Part 2. It actually comes back to whether we need the whole Bill or whether the common frameworks road might be the better one, or, as the noble Baroness, Lady Finlay, asked, whether it might be sufficient to fall back on the 2018 position on what things could not be agreed—it would probably save an awful lot of this. The purpose of Part 2 needs justifying, rather than defining. Why do we need it? Is the noble Baroness, Lady Neville-Rolfe, correct that we do not need this level of detail?

If the Minister could also informally explain a little more about what would be covered, that would be helpful, and we might come back at a later stage to look at whether we could define why we have this part. However, for now, I beg leave to withdraw the amendment.

Amendment 68 withdrawn.

Clause 16: Services: overview

Amendments 69 to 71 not moved.

Clause 16 agreed.

Clause 17: Services: exclusions

Amendments 72 to 78 not moved.

Clause 17 agreed.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

We now come to the group beginning with Amendment 79. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this, or anything else in this group, to a Division should make that clear in debate.

Schedule 2: Services exclusions

Amendment 79

Moved by

[Baroness Bennett of Manor Castle]

79: Page 51, line 23, at end insert—

“Teaching Services

provision of teaching services in schools or colleges”

Member’s explanatory statement
This amendment would add the profession of teacher and teaching services to the scope of the exclusions from the Bill, in the same way that the legal professions and legal services are excluded.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I beg leave to move Amendment 79, and also to speak to Amendment 106, both of which appear in my name. I acknowledge support in preparing these amendments and presenting this information from the General Teaching Council for Scotland. I also draw on the submission of the Education Workforce Council of Wales to the UK Internal Market White Paper. The Welsh submission noted:

“There is no public register of schoolteachers in England. There are many aspects of the regulatory system in England that are different. For example, there is no requirement for employers to refer cases, and the teaching regulation authority has only one disciplinary sanction it may apply. The rest of the UK and Ireland have registration and regulatory arrangements.”


In its equivalent submission, the General Teaching Council for Scotland said that it

“does not consider that a system of mutual recognition can or should be applied to the teaching profession within the UK.”

It noted, as did the Education Workforce Council, that the systems are structured differently in England from the rest of the UK. The General Teaching Council continued:

“GTC Scotland is not prepared to lose this control over the standard of teachers entering the teaching profession in Scotland in this way and given the devolved education function within the UK, it does not believe that it would appropriate to do so.”


In Wales, the registration and regulatory arrangements were strengthened in 2015 with the reconfiguration of the General Teaching Council for Wales as the Education Workforce Council. That extended registration and regulation from just schoolteachers to include seven education professions. From 2022, Wales is introducing a new curriculum for initial teacher training relating to the specific circumstances of that nation and its systems. In Scotland, the teacher training system continues to be based on formal education, rather than the classroom-based learning that has been adopted as an alternative system in England, where unqualified teachers, who operate primarily in free schools, are allowed.

I am assured that almost all teachers coming from other parts of the UK who apply for registration in Scotland achieve it. This is not about discrimination, but keeping control and maintaining an existing and separate different system and rules, without seeing them swept aside by the Bill—or “bulldozed” in the powerful metaphor that my noble friend Lady Jones of Moulsecoomb used with broader application earlier this evening.

In referring to Northern Ireland, I start with a very useful 16-page briefing paper from the Northern Ireland Assembly. It begins by noting that there is a “complex educational structure” there. It notes that the Assembly has overall responsibility for the education of the people of Northern Ireland and for effectively implementing educational policy. Northern Ireland’s General Teaching Council is an arm’s-length body for the Department of Education, responsible for registering all teachers in grant-aided schools and approving qualifications for the purposes of registration.

We have here four very different systems that have evolved in different ways, for different purposes and for different situations. Three have registration systems under local control. England does not. Forcing them into mutual recognition is, I argue, clearly inappropriate. That is why these two amendments together aim to add the profession of teacher and teaching services to the scope of the exclusions from the Bill, in the same way that the legal professions and legal services are excluded. Mutual recognition is in no way appropriate for this situation. It involves sweeping away established, working, respected different systems. That of course was the point of devolution generally: to allow the nations to head in different directions to fit their particular cultures, circumstances and needs.

I stress that the Bill already acknowledges the different legal systems and the need for these to be treated differently. My amendments are minimalist in that they simply mirror the different treatment of lawyers in the treatment of teachers. However, the issues that I raise may well extend beyond teaching, and certainly beyond Scotland—for example, regarding social work in Wales. The Government have a great deal of work to do before Report to disentangle these complications and possibly extend the amendments even beyond what I have presented here. But adopting my amendments, or something very like them, would at least, by aligning the different treatment of legal systems with teaching, solve one of the problems.

I will continue to pursue these issues to that stage if I need to, but I very much hope that the Government will acknowledge the clear issues raised here and find their own solution to allow the existing, working, devolved systems for the registration of teachers, and possibly other related professions, to operate in all the nations of the UK where that is relevant. If they do not, I hope that some of the noble, and noble and learned, Lords in your Lordships’ House, who I am sure welcome the exemption for the legal profession from the mutual recognition provisions, might be prepared to join in the work to assist another profession to keep independent control of its own activities, as befits professional organisations in the nations of the UK. I beg to move.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

The noble Lord, Lord Liddle, has withdrawn from this group, so I call the noble Lord, Lord German.

[Lord German (LD)]

My Lords, I thank the noble Baroness, Lady Bennett, for raising this issue. It is of significance, and the Government will need to make some clear statements in order to avoid a very large flaring up of problems as a result of this matter.

Professional teacher registration is a devolved matter. The General Teaching Council for Scotland was established in 1965 and has ownership of the standards for teachers seeking registration and employment as a teacher in Scotland. The Education Workforce Council for Wales, Cyngor y Gweithlu Addysg, was established by the Education (Wales) Act 2014 to register schoolteachers who wish to work in schools in Wales. Teachers in Wales have to have qualified teacher status and be registered with the body in order to work in the profession. In England, since the introduction of the Teaching Regulation Agency, there is no longer a register of teachers.

Access to the teaching profession differs greatly between England, Wales and Scotland—and there are different qualification entry levels. The General Teaching Council for Scotland has an auto-recognition process for UK teachers who possess adequate qualifications for registration in Scotland. However, that does not mean that all teachers who teach in England or Wales can teach in Scotland. As such, teachers in Scotland should hold a qualification that is the equivalent of Scottish qualifications to enter the teaching profession in Scotland.

Teachers moving to Wales have to have equivalent standards. FE teachers, who are recognised by the National College for Teaching and Leadership in England and who are qualified to teach in England, are not recognised in Wales, and that means that they cannot be registered. Both Wales and Scotland have set different qualification levels to be able to work in the teaching profession.

There is an additional factor in Wales because of the bilingual nature of our education system. I know that noble Lords are aware that the Welsh language has equality status, and teachers have to be able to manage aspects of the school curriculum where they intersect with that language requirement. That does not mean that they have to speak Welsh, but they have to be able to manage aspects of the curriculum in English-medium schools.

Any flattening of qualification requirements would have a detrimental impact on the education provided in schools in Wales and Scotland and would dilute the standards that each country has set. I cannot think of any pressure to change these structures that has an impact on the internal market. The teaching profession should be excluded from this Bill as a result.

23:00

The General Teaching Council for Scotland receives about 600 applications for registration each year from the rest of the UK, and in the past five years it has registered 2,246 teachers from the rest of the UK. There is movement between each of the nations, but those nations’ teachers are working to the qualifications needed and set by the education system in that country. I would like the Minister to explain whether teachers should be excluded from these provisions, or whether indeed it is proposed to try to bring everything down to the level of one or other of the nations of the UK.

[Baroness Hayter of Kentish Town (Lab)]

As the noble Baroness, Lady Bennett, makes clear, there is really no reason why the teaching profession should not be treated the same as legal services. If there is an answer, I look forward to the Minister supplying it. However, as I think the noble Lord, Lord German, said, it also raises the question of what else is covered, be it medical research, university teaching, religious teaching or driving instruction. It is the same question that I posed before: are these areas of education and the passing on of wisdom to be covered, or are they excluded? We might not have those answers now but we need to be very clear on what is covered in this part of the Bill.

[Baroness Scott of Bybrook (Con)]

My Lords, these amendments seek to exclude teaching services and the teaching profession from the scope of the mutual recognition principle in Parts 2 and 3 of the Bill. Starting with Amendment 79, the current list of entries in Schedule 2 is largely drawn from the exclusions under the existing framework in the retained EU law. Schedule 2 aims to list those services for which it would be inappropriate to apply either or both of the provisions in Part 2. For example, legal services are excluded in recognition of the long-standing differences between the legal systems in each part of the UK.

I should allay the noble Baroness’s concerns if I explain that public services, including the public education services, are already excluded from the scope of Part 2 of the Bill under Schedule 2. That exclusion will ensure that public education services are not subject to the principles of mutual recognition or non-discrimination in Part 2. For this reason, it is my view that Amendment 79 is unnecessary.

Clause 17 requires the Secretary of State to keep Schedule 2 under review and contains the power to amend it by regulation to add services or requirements to those matters excluded from the principles of mutual recognition and non-discrimination. I can assure noble Lords that the Government will continue to keep the list of exclusions under review to ensure that it includes the appropriate services and requirements, to which either or both market access principles should not apply.

I turn to Amendment 106, which deals with recognition of professional qualifications. I assure noble Lords that teaching standards across the UK are very important to this Government. The provisions in Clause 24 allow relevant authorities to replace the automatic recognition principle with an alternative recognition process if they think that automatic recognition of different UK teaching qualifications would not be appropriate.

We are therefore answering the General Teaching Council for Scotland and the issues brought up about Wales and Northern Ireland; they will still be able to set standards in those devolved authorities, as now, and control who can teach in them. If the General Teaching Council for Scotland or a council in any other devolved authority decides that recognising teaching qualifications from other parts of the UK automatically is not appropriate, it can put in place an alternative recognition process to check qualifications and experience, as set out in the Bill. That should allay a number of the fears brought up in this short debate.

The system will enable relevant authorities to assess an individual’s qualifications before allowing professionals to practise. Relevant authorities will continue to have the ability to refuse access to those who are unable to demonstrate that they meet the standard requirements, such as the Welsh language. This makes an exception for the teaching profession unnecessary. On those grounds, I cannot accept the amendment and hope that the noble Baroness will withdraw it.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

I have received a request to speak after the Minister. I call the noble Lord, Lord Purvis of Tweed.

[Lord Purvis of Tweed (LD)]

My Lords, I wish to obtain absolute clarity from the Minister on the exemption in Schedule 2 with regard to:

“Services provided by a person exercising functions of a public nature”—


that is, a public body. That may apply to Wales but the General Teaching Council for Scotland is a charity as well as a regulatory body. The Minister outlined what it would be able to do to change, if challenged, those seeking to be registered in Scotland under the English criteria but who do not meet the Scottish criteria. The fear is that because the council is a charity—it is the oldest regulatory body for teachers in the world—it would be forced to accept teachers of a different standard than the English standard, which I automatically assumed would be a lesser standard. Will the Minister clarify that charities, such as regulatory bodies like the GTCS, are included in Schedule 2? She said it applied just to public bodies.

[Baroness Scott of Bybrook (Con)]

I am not going to give the noble Lord a definitive answer now but I will write to him to make sure that we are clear about that issue.

[Baroness Bennett of Manor Castle (GP) [V]]

I thank noble Lords who have contributed to the debate and the Minister for her response. The noble Lords, Lord German and Lord Purvis of Tweed, usefully added some pieces of history, particularly on Scotland and helped to identify that we are talking about long-separate and different systems. The noble Lord, Lord German, identified the way in which Wales has been heading in different directions. The noble Baroness, Lady Hayter of Kentish Town, stressed my point that there is no reason why teaching services should not be treated in the Bill in the same way as legal services and the noble Lord, Lord Purvis of Tweed, made an important point.

The Minister acknowledged the long-standing differences. I understood her to say that teaching would be automatically excluded without needing to be included in the Bill—at least in her initial remarks, but perhaps not so clearly in answer to the question she was asked. I know that that is not what was conveyed to the GTCS in previous discussions and that there is considerable public concern, particularly in Scotland, about these issues. I note the word that the Minister used in her comment that the nations “can” put in place alternative systems. The systems are already in place.

I will go away and look at Hansard, but I reserve the right to come back on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment 79 withdrawn.

Schedule 2 agreed.

Clause 18: Services: mutual recognition of authorisation requirements

Amendment 80 not moved.

Clause 18 agreed.

Clause 19: Direct discrimination in the regulation of services

Amendment 81 not moved.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

We now come to the group beginning with Amendment 82. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this or anything else in this group to a Division should make that clear in the debate.

Amendment 82

Moved by

[Lord Callanan]

82: Clause 19, page 13, line 27, leave out “, and section 20,”
Member’s explanatory statement
This amendment is consequential on the amendment adding a definition of relevant connection to Clause 20 (page 14, line 16).

[Lord Callanan (Con)]

My Lords, in moving Amendment 82, I shall speak also to Amendments 83 and 85 to 88 in my name.

Clause 20 provides the test for assessing whether a regulatory requirement is indirectly discriminatory in relation to service providers. The indirect discrimination test comprises several elements, including a test for difference of treatment between incoming and local service providers and a test to assess whether the difference in treatment gives rise to an adverse market effect. This group of amendments would provide greater clarity to readers, particularly in relation to differential treatment and adverse market effect. The amendments would break up concepts previously included in Clause 20(4) and deal with the unequal treatment test separately from the adverse market effect test. This revised drafting also allows for clarification of the language.

This change delivers the same policy objectives but with greater clarity. It is supported by consequential amendments throughout Clause 20, including new definitions for local and incoming service providers. The definition of “relevant connection” is also moved into Clause 20 to link it better to the provision. Limb C of that definition is deleted because it is not relevant to indirect discrimination. A consequential amendment to Clause 19 supports this.

In my detailed remarks, I will focus on Amendments 90, 91 and 93 upon which the other amendments are consequential. Amendments 90 and 91 would provide greater clarity and break up concepts that were previously packed into Clause 20(4). They deal with the unequal treatment test separately from the adverse market effect test, and this division also allows for a clarification of the language. These amendments would introduce and define the concept of “relevant disadvantage”, tying it more clearly to the concept of unequal treatment between incoming and local service providers. Importantly, the more clearly laid out test for relevant disadvantage between local and incoming providers makes plain that it does not require all incoming providers to be disadvantaged or all local providers to be advantaged. That was the intended effect of the drafting; this amendment would ensure that it is clear.

Amendment 93 does two things. First, it defines local and incoming service providers—terms used in this group of amendments. Secondly, it copies the definition of “relevant connection” over from Clause 19, linking it more clearly to this provision. Limb C of the direct discrimination provision is deleted because it is not relevant to indirect discrimination.

Amendment 94, which is unrelated to the other amendments in this group, would simply remove a provision that is now no longer necessary. I beg to move.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, I apologise to my noble friend the Minister for speaking on a technical amendment. I support much of the Bill and have limited my contributions accordingly.

However, I want to ask for a fuller explanation of Amendments 90 and 93, which again relate to services. Why do we need to make a distinction between incoming service providers and local service providers? Will that not create uncertainties and its own form of discrimination? Is this an insurance policy, for example against unwise anti-competitive moves by a devolved Administration? Is there any evidence that such an outcome is at all likely, given their well-known attachment to the EU single market? What is the underlying purpose of this approach?

The Minister was not able to answer my question on Amendment 68 about how marketing activity would be treated, or indeed the question from the noble Lord, Lord Purvis, on local language capability. The distinction between incoming service providers and local service providers may be part of the answer. I would welcome some simple examples that make some of this service area easier to understand. If the Minister needs notice of the questions, perhaps he would be kind enough to write to me on these points, as it is late.

23:15

[Lord Purvis of Tweed (LD)]

My Lords, I will be brief because of the hour. It would be churlish not to welcome amendments that have the purpose of clarification within this legislation. I just say to the Minister, “Don’t stop here. Keep them coming”. We will certainly welcome further government amendments to add more clarification to the legislation.

I am glad the noble Baroness, Lady Neville-Rolfe, mentioned the point about languages, as an example of something that the Minister did not respond to in the previous group. If certain elements are set down as part of the regulatory requirement—such as language capability, for example, or other characteristics that would have been permitted under the current legitimate aims but are not allowed under the new legitimate aims—what is the status of those? Would that be considered as putting providers at a disadvantage under Clause 20(2)(b)?

My second point was that, under Clause (20)(2)(c), the regulatory requirement has no effect. I note that I do not think there has been a sufficient answer to the question in an earlier group about what “no effect” actually means when it comes to a regulatory requirement. It has no effect if it has “an adverse market effect”. I wonder if the Minister could outline in clear terms what the test for that adverse market effect would be. Where and how would it be judged, and who would judge it? What would the test for that be, given that, as the noble and learned Lord, Lord Falconer, and my noble friend Lord fox said, this is likely to be tested in court because of the lack of clarity?

My final point is this. Given that service providers for higher education are not considered to be public bodies—and this was not answered in the previous group—and higher education is not considered to be within a legitimate aim, if a higher education provider outside Scotland were seeking to deliver services, the higher education system within Scotland would not be able to restrict it on the basis of the indirect discrimination element. If the Minister could state whether that would be the case, I would be grateful.

[Lord Fox (LD)]

My Lords, the Minister will be pleased to hear that I have got very little to add.

On the question of an adverse market effect, there are also questions around adverse to whom and adverse to what. Is it merely the price and the amount of choice, which is what the Minister appears to fall back on every time the market is described, or is there a wider adversity that comes into this?

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, like other speakers, I welcome the idea that this is a clarification of the language currently used in the Bill. However, like the noble Baroness, Lady Neville-Rolfe, I wonder whether what we have got is in fact any clearer, or makes us any more clear about what we are supposed to be doing with this part of the Bill.

The language is, in places, incredibly archaic and obscure. There seems to be no recognition of the digital world. Services provided through the internet are not going to be provided locally; they are not going to be provided “in a region” and there are not going to be local service providers, and yet there seems no reference to them or how they are to be treated. Even if that were not that case—even if we were not living in the virtual world—the idea that somehow a service provider has a relevant connection to a part of the United Kingdom if it has a registered office seems to ignore hundreds of years of the use of brass plates outside solicitors’ offices which provide registered offices but no services, no people, no contribution and no economic effect. Where is all this heading?

[Lord Callanan (Con)]

I thank noble Lords for the brevity of their contributions, particularly given the late hour, and I shall endeavour—they shall be pleased to hear—to match that brevity.

We think that these amendments make the test significantly clearer. The relevant concepts are unpacked in distinct subsections, and the new subsections more clearly express policy intention on how the test for indirect discrimination will function. The additional clarity ensures that businesses can operate with certainty, which is what this Bill is intended to ensure.

I have noted the requests from my noble friend Lady Neville-Rolfe—the noble Lord, Lord Purvis, repeated them several times—for details of how the service provisions will operate in things like marketing, language tests, et cetera, and for the legal definition of what “adverse market effect” means in practice. I will, of course, provide those for them in writing. With that, I commend these amendments to the Committee.

Amendment 82 agreed.

Clause 19, as amended, agreed.

Clause 20: Indirect discrimination in the regulation of services

Amendment 83

Moved by

[Lord Callanan]

83: Clause 20, page 13, line 34, leave out the second “a” and insert “an incoming”
Member’s explanatory statement
This amendment would make clear that Clause 20 is concerned with incoming service providers.

Amendment 83 agreed.

Amendment 84 not moved.

Amendments 85 to 88

Moved by

[Lord Callanan]

85: Clause 20, page 13, line 35, after “that” insert “incoming”
Member’s explanatory statement
This amendment follows from the amendment to page 13, line 34 in my name.

86: Clause 20, page 13, line 36, leave out the second “a” and insert “an incoming”
Member’s explanatory statement
This amendment follows from the amendment to page 13, line 34 in my name.

87: Clause 20, page 13, line 38, after “discriminate” insert “against the incoming service provider”
Member’s explanatory statement
This amendment would ensure that requirements would only be excluded from the scope of Clause 20 if they are directly discriminatory against the incoming service provider (rather than in a general sense).

88: Clause 20, page 13, line 39, leave out from “it” to end of line 41 and insert “puts the incoming service provider at a relevant disadvantage”
Member’s explanatory statement
This amendment is to accommodate the redrafting of the test in Clause 20(4)- it would treat the concept of unequal treatment (or relevant disadvantage) as a test separate from adverse market effect (which is covered by paragraph (c)).

Amendments 85 to 88 agreed.

Amendment 89 not moved.

Amendments 90 and 91

Moved by

[Lord Callanan]

90: Clause 20, page 13, line 44, at end insert—
“(2A) A regulatory requirement puts an incoming service provider at a relevant disadvantage if—(a) it puts the incoming service provider at a disadvantage in relation to the provision of services in the part of the United Kingdom in which the requirement applies, and(b) it does not put, or would not put, each local service provider at that disadvantage in relation to the provision of those services in that part (at all or to the same extent).”Member’s explanatory statement
This amendment would define the concept of relevant disadvantage, introduced by the amendment to page 13, line 39 in my name.

91: Clause 20, page 14, line 1, leave out subsections (3) and (4) and insert—
“(3) A regulatory requirement puts a service provider at a disadvantage in relation to the provision of services in a part of the United Kingdom if it makes it in any way more difficult, or less attractive, for the service provider to provide the services in that part.(4) A regulatory requirement has an adverse market effect if, by putting an incoming service provider (or incoming service providers) at a relevant disadvantage in relation to the provision of services, it has a significant adverse effect on competition in the market for those services in the United Kingdom.”Member’s explanatory statement
This amendment would rephrase what is meant by “disadvantage” and “adverse market effect” in light of the addition of the concept of relevant disadvantage in the amendment to page 13, line 44 in my name.

Amendments 90 and 91 agreed.

Amendment 92 not moved.

Amendments 93 and 94

Moved by

[Lord Callanan]

93: Clause 20, page 14, line 16, at end insert—
“(4A) For the purposes of subsections (1) to (4)—(a) an “incoming service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies, but(ii) does not have a relevant connection to that part;(b) a “local service provider” is a service provider that—(i) provides the services in the part of the United Kingdom in which the regulatory requirement applies,(ii) has a relevant connection to that part, and (iii) does not have a relevant connection to another part of the United Kingdom;(c) a service provider has a “relevant connection” to a part of the United Kingdom if the service provider—(i) has a registered office, place of business or residence in that part, or(ii) provides the services from that part.”Member’s explanatory statement
This amendment would define concepts used in the other amendments to Clause 20 in my name.

94: Clause 20, page 14, line 17, leave out subsection (5)
Member’s explanatory statement
This amendment would remove an unnecessary interpretation provision.

Amendments 93 and 94 agreed.

Amendments 95 to 102 not moved.

Clause 20, as amended, agreed.

Clause 21 agreed.

[The Deputy Chairman of Committees (Lord Alderdice) (LD)]

We now come to the group beginning with Amendment 102A. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate, and anyone wishing to press this or anything else in the group to a Division should make that clear in debate.

Amendment 102A

Moved by

[Lord Fox]

102A: Before Clause 22, insert the following new Clause—
“Purpose of Part 3
This Part consolidates existing law relating to the mutual recognition of professional qualifications within the United Kingdom.”Member’s explanatory statement
This amendment is to probe the legal basis for introducing the provisions in this part, and whether they are covered in existing UK law.

[Lord Fox (LD)]

My Lords, Amendment 102A is a probing amendment to probe the legal basis for the introduction of the provisions in this part and whether they are covered by existing law.

It is a human trait to disregard history that happened before we were born. Most of what we have been describing as previous law and previous regulation has centred on EU law and devolution settlements. However, in their Command Paper, the Government hark back much further than that to the 1700s and the Act of Union. In their July paper, the Government stated that

“the Internal Market has been enshrined in British law for over three centuries”

on the basis of the Acts of Union. I will spare noble Lords the lengthy history lesson, but within this document it says:

“For centuries, the UK Internal Market has been the bedrock of our shared prosperity ever since 1707 when the Acts of Union formally united England and Wales with Scotland.”


The reason we were talking about the General Teaching Council for Scotland regulating Scottish teachers was because that Act of Union specifically carved out education as a Scottish prerogative. That particular activity of regulating Scottish teachers is a direct result of the Act of Union. It has nothing to do with devolution and nothing to do with the European Union.

Quite simply, I am asking for clarification: where does the Act of Union sit within this scheme of things? And where does previous law, made as a result of that Act of Union over the centuries that have followed, but before all these other bits of history we have been talking about, sit? It is not a philosophical question; it is real, because the example I have just given is real. I am sure there are many others for clever people to uncover.

Therefore, I would like to have some sense of the Government’s position, which appears somewhat ambivalent towards the Act of Union. They mention it in the Command Paper but, in a sense, disregard it thereafter. With that in mind, I beg to move Amendment 102A.

[Baroness Finlay of Llandaff (CB) [V]]

My Lords, Amendment 104 is almost identical to Amendment 6, which we debated on Monday, and Amendment 69, which I moved only a few hours ago. Those two amendments related, respectively, to goods in Part 1 and services in Part 2. This amendment, in the case of “recognition of professional qualifications”, seeks to make the application of the market access principles subordinate to the common frameworks process. In other words, the market access principles can be applied to professional qualifications only in the event that it proves impossible, by consensus, for the four Governments to agree a common framework.

Amendment 105 is consequential, simply moving the time point at which the mutual recognition principle would start to apply. While Part 3 is arguably more niche and therefore less damaging than the two parts that precede it, it is even more complex. I do not understand the exceptions that it suggests or the manner in which these could legitimately be handled.

Clause 24, for example, provides that the automatic mutual recognition of qualifications does not apply where a process of individual assessment is available but only in so far as the process conforms to four different principles. This includes the following principle in subsection (4)(c):

“to the extent that the applicant cannot, on application of the principles set out in paragraphs (a) and (b), demonstrate the necessary knowledge and skills to the satisfaction of the regulatory body, the applicant should (subject to subsection (5)) have an opportunity to do so by way of a test or assessment the demands of which are proportionate to the deficiency”.

However, this is subject to a further condition:

“The process may, without contravening the principle set out in subsection (4)(c), allow the regulatory body in a case to which this subsection applies to decline the application without the applicant first being offered a test or assessment as described in that principle.”


I am not a lawyer, and I will happily defer to any noble and learned Member who can enlighten me, but this appears to me to say that you have to give an individual the opportunity to prove that they possess the attributes necessary to do the job through a process of individual assessment, but you are nevertheless allowed to decline an application without first offering the individual a test.

Although I am not a lawyer, I am assured by those who are that this whole part is, to put it crudely, somewhat of a licence for the legal profession to print money and tie up regulators in litigation that could last years. Perhaps unsurprisingly, only one of the professions that is specifically exempted from this whole part is the legal profession. I am sorry; I know that sounds cynical, but I do find this very difficult to understand. I genuinely believe that, in trying to ensure that the mutual access principles can apply only to the recognition of qualifications when it is truly needed, I am trying to rescue the Government from themselves.

I shall give some examples of where this part of the Bill could prove damaging to the rights of devolved Governments, or indeed to those of the UK Government. Let us suppose that a more enlightened Westminster Government want to make a level 3 qualification in nutrition a requirement of registration as a nursery nurse in an effort to reduce childhood obesity. Presumably a qualified nursery nurse from Northern Ireland, where such a course was not a requirement, would still be able to apply for registration in England. Would this be automatic? Would they have to undertake a test? Could they be refused even without being given the right to take a test, as Clause 22(5) seems to permit? I would really appreciate some clarification.

23:30

Or let us say that the Welsh Government decided that social workers working with elderly people needed to speak the Welsh language in order to cope with those with dementia who revert to their mother tongue as their memory fades. Would it be legitimate for Social Care Wales to refuse to register a social worker who had qualified in Scotland but did not speak Welsh?

I am sure that the Minister will try to assure me that these examples would not be “caught”. That seems to be the standard response to real-world examples of how the Bill, if enacted, might be applied. I hope that I have demonstrated my point and I look forward to the Minister’s reply.

[Lord German (LD)]

My Lords, I happen to have spent 10 years of my life working on the mutual recognition of qualifications in Europe. I left that role and, 20 years after that, it was applied to about only four or five professions across Europe. Trying to understand where people are able to employ the appropriate skills, knowledge, understanding and practice in another surrounding is an amazingly complex area. That surrounding might have a different framework of regulation and perhaps a different framework of operation.

The intention to have mutual recognition of qualifications is fine, but the timing for putting it in place is not fine, because the Government want it to happen very rapidly. It seems to me that the most sensible way of doing this would be to try to work through the professions in relation to their activities, trying to make sure that, where there are barriers, those are reduced, or where there are barriers that are appropriate, they are not legislated for by accident in advance.

The noble Baroness, Lady Finlay, has already talked about the Welsh language. There is a very interesting debate to be had about professions that can or cannot operate through the medium of Welsh. It depends on the services being provided and on the context of where those services are provided. A profession operating in a context that is different in different parts of the United Kingdom will have different requirements because of the geography, culture or operation of the services that are to be provided. Therefore, my request to the Government is that they step back a little, take some time, concentrate on trying to fix the things that they can fix and, for goodness’ sake, allow this thing to mature properly before going in with legislation that will be doomed to failure in the end.

[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, on the next group I will explain that the drafting of some clauses of Part 3 is complex and not as straightforward as it could be. One way or another, it would be useful to have a statement clarifying whether the end result is the status quo, either as a general objective or for certain circumstances.

However, as the hour is late, and as I will elaborate a specific instance on Monday, I do not need to say any more, other than to support what has been said by my noble friends Lord Fox and Lord German. This appears to be a rather complex topic. Maybe taking time to sort it out and make sure that the drafting is as clear as possible would be a good exercise.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, as we grope our way through the Bill and get to what seem even more complex and difficult to understand parts of it, we seem to reach a point where the Bill either does not add anything or is currently so badly drafted that it might destroy what we currently have. I may be being harsh, and I realise that I am asking quite a lot of the Minister, who has probably not been directly involved in any of these parts of the Bill, or concerned with some of the issues we had to deal with earlier this evening, but it seems to me that with every group, and every minute we spend on the Bill, there is a growing understanding that, as the noble Lord, Lord German, said, the Government are trying to push ahead with something that does not take the trick, as far as we are concerned, in relation to the issues before us.

The Government need to step back, take their time, concentrate on the things that they and only they can do, and encourage those who have other responsibilities that bear on what we are talking about to develop them, and out of the gloom will emerge—because they are the answer—the common frameworks. Why do the Government not realise that that is where we are heading? Why do they not get it into their heads that we need to stop being so concerned about the possibilities—the far ranges and the sunny uplands—that may be available in some nirvana they have yet to describe accurately, and work from where we are to try to get somewhere sensible in the time we have?

[Baroness Scott of Bybrook (Con)]

My Lords, I do not intend to have a debate on the union tonight, but I am sure it will come up later in the Bill. However, I reiterate to the noble Lord, Lord Fox, what I said on, I think, the group before last: the General Teaching Council for Scotland will still be able to set the standards in Scotland, as it does now, and will control who can teach in Scotland. That goes back to Scotland having control over its own education system. Similarly, the noble Lord, Lord German, brought up the Welsh language. If Welsh language requirements were introduced in respect of a profession in any other way—for example, by bringing in requirements for ongoing training—it could come under the equal treatment provisions of the Bill. As such, it would be possible for the regulator to impose Welsh language requirements on professionals qualified outside Wales if equally required of professionals qualifying in Wales. So there is an equality here.

I turn to the amendments in the group, which test and attempt to change the way in which professions would be in scope of Part 3. The purpose of the professional qualification provisions in the internal market Bill is to ensure that professionals can, in most cases, access their profession in all parts of the UK, by ensuring that there is an overarching system for recognition. It is important to ensure that, regardless of future policy changes, UK-qualified professionals will be able to practise across the whole of the UK. Divergence in professional regulation between the four nations of the UK should not increase barriers for professionals living and working in different parts of the UK.

The noble Lord, Lord Fox, has sought, with his Amendment 102A, to understand whether these provisions are covered in existing UK law. Currently, while recognition of professional qualifications between the four nations can and does occur, there is no overarching framework that ensures that it happens consistently. The Bill will create this overarching framework to guarantee that recognition of qualifications between the four nations of the UK will be possible, and that barriers to access will be minimised, so that professionals are not unduly limited in where they may work.

To that end, I must oppose the process that Amendments 104 and 105 seek to establish for bringing professions within scope of the internal market provisions. The Government’s approach ensures that nearly all professions are in scope and that barriers do not emerge. In contrast with the Government’s proposals, Amendment 104 lays out a bureaucratic process for adding professions. Amendment 105 builds on Amendment 104 and seeks to ensure that only professions that are specified in regulations are caught by automatic recognition. Ultimately, these amendments would result in delays and uncertainty, preventing barriers in the internal market being addressed. This would be to the detriment of all UK professionals.

I assure noble Lords that the Government acknowledge the importance of working with each devolved authority on the implementation of this Bill and will continue to do so, as they have done throughout this process. Clause 25 already ensures that existing divergence in professional qualification requirements across the UK is outside the scope of automatic recognition, until further changes are made. This means that there are no immediate changes for relevant authorities to make in respect of access to professions.

We must ensure the smooth functioning of the internal market for professionals. I therefore hope that the noble Lord will withdraw his amendment.

[Lord Fox (LD)]

I thank the noble Baroness for her answer. I heard the answer she gave two groups ago, which is why I did not repeat the question; I actually asked a different question, about the status of the Act of Union. It was not I who brought it up, but the Government in their Command Paper. It having been brought up, it would be quite helpful to understand how the Government see it fitting into all this. It is a perfectly reasonable question and I hope that, perhaps in writing, I could have a perfectly reasonable answer.

The market the noble Baroness described in the Government’s eyes appears to need fixing. What is broken in professional services that this Bill is seeking to mend? If this Government had a reputation for overwhelming competence, and an ability to really get hold of things and make them better, perhaps I might understand what it is about. There are many things that this Government could focus their laser attention on; mending something that is not broken is not one of them. That said, I beg leave to withdraw the amendment.

Amendment 102A withdrawn.

Clause 22 agreed.

Clause 23: Meaning of “qualified” UK resident

Amendment 103 not moved.

Clause 23 agreed.

Amendment 104 not moved.

Clause 24 agreed.

Clause 25: Other exceptions from section 22

Amendments 105 and 106 not moved.

House resumed.

House adjourned at 11.44 pm.