United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Wednesday 9th December 2020 Lords Chamber

Moved by

[Baroness Finlay of Llandaff]

Leave out from “House” to end and insert “do not insist on its Amendment 50 to which the Commons have disagreed for their Reason 50A but do propose Amendment 50B in lieu, and do insist on its Amendments 57 and 61 to which the Commons have disagreed for their Reason 57A”

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

My Lords, I will speak to Motion L1 as an amendment to the Motion L. We now come to the vexed issue of oversight through the Office for the Internal Market. I preface my remarks by making it clear that these amendments relate to the risk as to whether the union is strengthened or weakened. They are concerned with the fundamental constitutional question of parity of esteem across, and long-term future of, the United Kingdom.

I recognise that the Government have thought and listened, and I appreciate that there is now a consultation and that they have modified their views. At the helpful Cabinet meeting today, hosted by the noble Lord, Lord True, the Government discussed the JMCEN, stressing the importance of an independent secretariat to the IGR to avoid disputes and ensure transparency. The importance of a strong, prosperous and thriving union was stressed, with emphasis on the importance of getting right the structures and the cultures within them. To lock in those cultures, the devolved Administrations wish to have a seat at the Competition and Markets Authority board. At Report, the Minister asserted that

“OIM appointees should reflect a range of expertise from all parts of the United Kingdom.”—[Official Report, 23/11/20; col. 102.]

The amendment that we inserted in the Bill and which I seek to reinstate would ensure that the CMA’s annual plans, proposals and performance reports are laid before the devolved legislatures, as well as Parliament, ensuring equal scrutiny and oversight of these developments. This would allow them to be discussed between Ministers from all Administrations.

It is the desire of the devolved Administrations to have their voice heard. Perhaps I may quote the noble Lord, Lord Cormack, in his belief, which I echo, that the union is in peril. He urged Ministers to take that reality into account. Without representation, it reads as if the Government want to have a monopoly of power and control in the country.

In rejecting Amendment 50, which we passed after our debates, the Government have tabled their own amendment. Amendment 50B from the Government appears to recognise that the CMA may not be the appropriate place for the effective and efficient performance of the OIM and that they have agreed that it needs its Part 4 function subject to review. Their amendment requires a formal review of between three and five years and they will consult with the devolved Administrations over conducting the review—so far, so good. But then the sting: the amendment from the Government allows the devolved Administrations to see the draft and comment on it, but only once. There is no need whatever for the Government to pay any attention to what they say. To quote from the amendment:

“The Secretary State need not consult the devolved authorities further if the draft is altered as mentioned in subsection (4)(b) (but is free to do so if the Secretary of State thinks fit).


That makes a mockery of seeking views. The Secretary of State can put the views of the devolved Administrations into the shredder. In disbelief, I called the Bill team to check whether I had understood correctly.

If the Government want this House to accept that Amendments 57 and 61 are not reinstated in the Bill, and to accept the Government’s proposal, we must hear from the them today a clearer commitment that the devolved Administrations will be respected as equals; that their views, at review, will be taken into account; and that they, the Government, will ensure that the finalised report represents all views, which may include a minority view within such a report.

I will repeat the words we heard from the noble Lord, Lord True, in the meeting today, because they are so important. He said that the Government were committed to a strong and thriving union. If that is the Government’s view, they must prove it by clear words today that determine future actions.

The Senedd does not believe that. Members voted today by 36 votes to 15 to deny legislative consent to the Bill, given the reversal of the Lords amendments in the Commons. While accepting that Amendment 50B replaces the deleted Amendment 50, and not wishing to reinstate the deleted amendment, I reserve the right to seek the opinion of the House on Motion L1, reinstating Amendments 57 and 61, if I do not have further adequate assurances from the Government. I beg to move.

--- Later in debate ---

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

My Lords, I am most grateful to the Minister for providing me with the additional reassurance that I was seeking, that they will share and allow representation and that the hold-up would only be to prevent procedural deadlock in the review of the OIM panel within the CMA. In light of those assurances and the tone of wanting to work with the devolved Administrations in relation to the issue of the CMA, I will withdraw my amendment.

Motion L1 withdrawn.

Trade Bill

Baroness Finlay of Llandaff Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

[The Earl of Caithness (Con)]

My Lords, I am sorry that the noble Baroness was unable to give us the benefit of her wisdom.

An advantage of being “tail-end Charlie” as the last speaker of 15, is that most of the points have already been made, which helps to speed things up. Let me start with Amendment 12 in the name of my noble friend Lord Lansley. He made some convincing arguments and, unless the Minister can convince me otherwise, we should support the amendment. The noble Earl, Lord Sandwich, said that CRaG was fit for purpose. I contend that it is not. It was designed in another era, when we were part of the EU and the EU was doing our trade deals. Now we are doing our own trade deals—good luck to the Minister and godspeed to all his civil servants; they will need it in this complicated world. The trade deals that we negotiated 50 years ago are hugely different from those we are negotiating now. Today’s deals are much more complex and involve not only trade but each and every one of us—the environment, biodiversity, the way we live. Therefore, it is important that Parliament is properly involved.

How complex trade deals have become is the compelling argument for Parliament to be given a statutory right to look into these matters. Trade deals are only going to get more complicated, therefore the discrepancy between the current situation, which is out of date, and what is needed in the future, is growing. Effective scrutiny by Parliament on a statutory basis would improve the quality of decision-making. Nothing hones a civil servant’s pen quite like getting Parliament to have a good look at what they are doing.

We have heard that a common objection to the wording of Amendment 6 is that it ties the Government’s negotiating arms and affects their room to negotiate with the other side. I do not think it does. In America, Congress is a very useful weapon that the US negotiators use. They constantly say, “We couldn’t possibly get that through Congress”. Our discussions with the EU are at a very delicate stage, and if there had been a mandate from Parliament that one of the negotiating objectives of this Government was that we would be a sovereign state equal to the EU, we would not be having prevarications with some of the EU states. We would have had a much better chance of getting a deal. Rather than the Prime Minister saying: “We are going to be a sovereign state”, he could quite rightly say: “Parliament has said that we are going to be a sovereign state”. That would have saved a lot of the rather frustrating and silly discussions that are going on at the last minute. It would also consolidate the position of the UK as a serious negotiating partner which will ratify whatever deal is agreed if Parliament has had a proper say.

I am very much aware that the Minister has made concessions on a number of points, but that is not the same as having them in statute. In this day and age, given what has happened in America and how the EU looks at its trade deals and has adapted, it is time that we adapted and took a firmer view, giving Parliament the statutory backing that it needs to look at these matters, but not to the extent of tying the hands of the Minister and the Government in any negotiating deal. Therefore, I support Amendment 6 in the name of the noble Lord, Lord Purvis of Tweed.

[Baroness Finlay of Llandaff (CB)]

My Lords, I am sorry that technical difficulties meant that I could not come in just now. I support Amendment 6 in the name of the noble Lord, Lord Purvis of Tweed, who made the case for it comprehensively. In Committee, the involvement of the devolved Administrations in consultation over trade was stressed whenever UK Ministers wished to make an agreement that included issues that fall within devolved competences. Respect for, and consideration of, the devolved responsibilities and implications of agreements will result in clearer communication between Westminster and the Government, in better relations with the devolved Administrations, and in clear messages to the population overall. This amendment would bring agreement centrally into Westminster, not disrupted by protesting voices from devolved nations that fuel separatist movements. The noble Lord, Lord Wigley, has set out the benefits with arguments that I endorse.

On issues relating to health we discussed at length the importance of the Government’s commitment that the NHS is not up for sale. This country’s unique databases have enormous potential value. As health, whether human, animal or ecological, is a devolved responsibility, it is essential that anything touching on health in its broadest context is the subject of consultation with the devolved Administrations. The noble Lord, Lord Lansley, eloquently stressed that Ministers should not ratify an agreement that would not be approved by Parliament. In respecting the royal prerogative, the individual nations must not find themselves sidelined.

Amendment 6 is essential to consolidate, not destabilise, the united nature of the United Kingdom. To break up the United Kingdom would indeed be an “abject failure of statecraft”.

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

My Lords, we have had a good and wide-ranging debate today. I want to pick up on the speeches of the noble Lord, Lord Purvis, who introduced Amendment 6, which I have signed, and the noble Lord, Lord Lansley, whom I thank for his clear introduction to Amendment 12, which we also support. The noble Earl, Lord Caithness, is not a normal ally on many of the issues we have discussed in your Lordships’ House over the years. However, he made the point about the importance of trade so well that I wanted to endorse it. Trade is now central to our existence as a country and very important to the individuals who live here because it impacts on almost every aspect of our lives.

--- Later in debate ---

[Baroness Cox (CB) [V]]

My Lords, I rise to speak in favour of Amendment 9. In doing so, I return to an issue that I have raised in your Lordships’ House on numerous occasions. Recently, in the context of the Telecommunications Infrastructure (Leasehold Property) Bill, I spoke about the use of Uighur slave labour and the dangers of working with companies like Huawei, which are complicit in using slave labour and producing the Orwellian surveillance technology that locks up 1 million people, attempting to destroy their religious beliefs and culture. This point has been highlighted powerfully by many noble Lords.

In their policies, we can see many of the indicators that constitute genocide in the strict legal definition of that word. We can also see it in the treatment of Rohingya, Shan and Kachin people in Burma and the murder of thousands of Christians and many Muslims in Nigeria by Islamist militants. Last year, Her Majesty’s Government accepted recommendation 7 of the Bishop of Truro’s report, confirming that genocide determination is a matter for courts. Over the last year, Her Majesty’s Government have had opportunities to put this into practice and support the Gambia proceedings against Myanmar before the ICJ, but they chose to remain silent, monitoring. They cannot have it both ways, saying they are for courts but not doing anything to ensure that they are considering such issues.

My noble friend Lord Alton and I recently had a meeting with the International Criminal Court, trying to get international judicial action against those responsible for or complicit in the massacres in Nigeria. However, sadly, that system now lacks effectiveness, which is why we need a judicial route that can examine evidence and, if the evidence substantiates it, make a predetermination of genocide, which is precisely what Amendment 9 will enable us to do.

Just three weeks ago, I went on a harrowing visit to Armenia and Nagorno-Karabakh with HART, my small humanitarian charity. I saw videos of the beheading and torture of Armenians captured by Azerbaijan; some were filmed by the perpetrators on the Armenians’ own phones and sent back to their families to see the horrible things that had been perpetrated towards their loved ones. I also recorded many anguished eye-witness statements. I sent our report to the Foreign Secretary and will make a copy available in the Library of your Lordships’ House.

Last week, Human Rights Watch published a report that provided evidence of the torture and humiliation inflicted by Azerbaijan on Armenian prisoners of war. Genocide Watch has designated Azerbaijan as fulfilling all 10 criteria of genocide. In the genocide unleased against the Armenians more than a 100 years ago by the Ottoman Empire, an estimated 1.5 million Middle Eastern Christians—including Armenians, Greeks, Assyrians, Chaldeans, Syriacs, Arameans and Maronites —perished between 1915 and 1923. This genocide has received recognition by many countries, including Wales—all credit to Wales—but not the United Kingdom. At the time, the world was indifferent, which led Hitler, on 22 August 1939, infamously to say,

“Who, after all, speaks today of the annihilation of the Armenians?”


Hitler considered the Armenian “solution” a precedent for his atrocities against the Jews. We know all too well what that meant.

The Genocide Convention was the response to the horrific atrocities perpetrated by the Nazis against the Jews and was meant to signify the international commitment to “never again” by introducing duties to prevent, supress and punish the crime of genocide—duties that successive Governments have neglected for far too long. It is my passionate hope that the Armenians, who are, as we speak, suffering again from a genocide inflicted by Azerbaijan and Turkey, will receive the genocide recognition that is due, and that the violations of international law perpetrated by Azerbaijan and Turkey will not be allowed to pass with impunity.

In recent months, we have heard a lot about “taking back control”. As we already have control of our own courts, we should give them the first say in recognising this most serious of all crimes: genocide. Amendment 9 would provide such a mechanism to deal with the question of genocide determination. Having just returned from the harrowing experience of witnessing people suffer a genocide while we talk here this evening, I feel passionately that it is high time that we broke the gridlock of genocide determination. Amendment 9 would enable us to do that and I wholeheartedly support it.

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

My Lords, it is an honour to follow so many powerful speeches supporting this ground-breaking amendment, particularly that of my noble friend Lady Cox just now. We are 72 years on from the UN Convention on the Prevention and Punishment of the Crime of Genocide, yet we still fail to prevent, suppress and punish this horrific crime. By ignoring it, we are complicit. Of the 17 genocide alerts around the globe, 14 have reached mass extermination. I want briefly to focus chillingly on an area that affects my own profession, with some forced to participate under extreme threats.

In China, surgeons are accused of forced sterilisations and, most horrifically, forced organ-harvesting on a mass scale. It was Nazi doctors like Mengele who perpetrated atrocities, experimenting on innocent people; the list of their actions is sickening. They hid their horrors behind the excuse of medical and scientific advancement. Now, we see the same things happening.

What can be done? Considering China and many other countries’ powerful positions, as has been said in this debate, engaging the UN will fail. We therefore must strengthen our domestic mechanisms to fill the void left by international bodies. We cannot say that now is not the time: now is never a comfortable time and we must have the courage to do what is right. Amendment 9 is a step toward strengthening our domestic response to genocide. As the noble Baroness, Lady Kennedy of The Shaws, hopes, it could start a global movement towards zero tolerance of these depravities. It is the time for action. This amendment must be supported.

[Lord Polak (Con)]

I pay tribute to the movers of this amendment, in particular my noble friend Lord Alton—for he is my friend—for his tenacity and passion. On 29 October 2018, following the horrific attack at the Tree of Life synagogue in Pittsburgh, when 11 people were gunned down, I spoke in this Chamber and posed the question:

“Have we learned nothing from history?”


I went on to say that

“it is nice to stand shoulder to shoulder and offer sympathy, but it is action that is now required.”—[Official Report, 29/10/18; col. 1122.]

Amendment 9 gives us a chance to take action. Wringing our hands and mouthing nice words will deter no one.

Just three weeks ago, I paid tribute to Lord Sacks in this Chamber and was struck by how many noble Lords, from all parties and none and from all traditions and none, spoke of him with such affection and admiration. In rereading some of his writings, I came across a lecture from 17 February 2004, entitled “Never Again”—But Will We Ever Learn the Lessons of History? The lecture by Rabbi Sacks was at a national service taking place to mark the 10th anniversary of the genocide against the Tutsis in Rwanda, which he described as

“an almost unimaginable orgy of violence”

with people

“hacked to death by machetes … in a country where perpetrators and victims had previously lived together as neighbours”.

Rabbi Sacks continued by explaining that, the next day, 18 February 2004, was Yom HaShoah, the Holocaust memorial day in the Jewish calendar. He explained:

“Apart from attempted genocide, the Holocaust and Rwanda had two things in common. First, they were preceded by deliberate dehumanisation: the Jews were deemed ‘vermin’ or ‘lice’; the Tutsis were Inyenzi, ‘cockroaches’.”


As he put it:

“In this way mass murder could be justified as a kind of sterilisation, a necessary, if painful, operation to restore a nation to its health.”


The second similarity, he argued, was that

“both tragedies were known in advance. The international representatives who gathered at Evian … in 1938 knew that a terrible fate was about to overtake the Jews of Europe.”

Yet they each

“declared that they had no room for refugees… in Rwanda, in 1990 the main Hutu newspaper had issued its own equivalent”

of what he described as “the Nuremberg laws”. By 1992, over half a million machetes had been distributed. He went on:

“In 1993, an international commission gave warning”


that a potential genocide was imminent and the head of the UN peacekeeping force, in 1994,

“passed on a warning … that a mass extermination was being planned.”

As Rabbi Sacks sombrely acknowledged:

“Both times humanity hid its face.”


Amendment 9 is a straightforward, proportionate call to action. As my noble friend Lord Cormack said in his moving speech, it says that we simply cannot turn a blind eye, even in the interest of trade deals, when a state is guilty of genocide.

I know that it is late, but permit me to state very clearly my support for the campaign led by Andrew Mitchell MP. On 21 May 2020, he wrote an article, published in the Times, under the headline “Britain has a duty to bring genocide accused to justice”. He said:

“No fewer than five alleged Rwandan genocide perpetrators live in the UK”,


four of whom receive benefits. While the US, Canada, France, Belgium and Sweden, among others, have extradited those accused to face the Rwandan justice system, which abolished the death penalty more than 10 years ago, shockingly, we have not. Andrew Mitchell ended his words with the following:

“The souls of the slaughtered Tutsis cry out for justice but Britain has turned a deaf ear. We should all be ashamed.”


I call on the Government to deal swiftly with this matter, certainly before the next CHOGM, to be held in Kigali—the Rwandan capital—next summer.

Finally, on 23 September 2020, I said in this House that the treatment by the Chinese of Uighur Muslims was horrific, yet within days, as the noble Baroness, Lady Falkner, said, China was elected to sit on the United Nations Human Rights Council. We all witnessed the footage of Uighur people being herded on to trains and transported to camps. It is footage that is all too familiar. Many of us who have heard first-hand accounts of the depredations of the Nazi camps know how major industrial companies ruthlessly used the slave labour in those camps to produce their goods and to make their fortunes. Will it be a case of business as usual as companies profit from the blood, sweat and tears of today’s slave labour or are we prepared to do something about it?

Towards the end of his presentation, Rabbi Sacks said that people often asked: where was God in the Holocaust? He maintained that that was the wrong question; the real question was: where was man? He suggested that it sometimes appears that we have learned nothing, which is why memorials are necessary. Tonight, in this House we are confronted once again with the same question: where were we when we had the chance to act against those who are responsible for today’s most grievous crimes against humanity? For those who have said and will say that the Trade Bill is not the place for such an amendment, I say that I will not join with the hand-wringing and the mouthing of nice words brigade. I will join with those who vote for action by supporting this amendment and I urge all noble Lords to do likewise.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

3rd reading & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords
Wednesday 2nd December 2020 Lords Chamber

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

My Lords, it is a great honour to be speaking at this point. My noble friends on the Cross Benches have brought their wide range of experience, wisdom and differing views to crucial amendments to the Bill.

The Bill is of huge constitutional significance: it goes to the heart of our history, to the devolution settlements that have matured as we enter a new era outside Europe. As the UK takes back control and seeks to be more independent than over recent decades, decision-making and mutual respect among the four nations of the United Kingdom will be more important than ever.

We now see that Scotland is withholding legislative consent and Wales is pending, as is Northern Ireland. To lose those nations would compound the threat to the union from a party that is called the Conservative and Unionist Party. In each nation, elected representatives know the intricacy of local problems and ways to achieve solutions to make our nations attractive for innovation and new ways of working. Covid has made the challenges greater, as many in the population have been deeply traumatised by bereavement, isolation and rising unemployment.

This House has examined every word of this Bill with rigour. The amendments it has made have been resoundingly supported around the House and outside. They have laid a foundation for the UK’s reputation to be restored, as we foster new relationships and rebuild older ones around the globe. Through its amendments, the House has shown its commitments to the future well-being of our national relationships and constitution. We have delivered a clear beheading sentence to Henry VIII’s dangerous clauses, and the rumble of Llewellyn the Great and Robert the Bruce turning in their graves was audible at times.

We have ensured that there is a secure negotiating framework on the face of the Bill to achieve that consensus across our four nations, which history has taught us achieves so much more than mere directive dominance. We have removed one clause that would allow the Government to use the allure of taxpayers’ money to work around, not with, the devolved Governments and to undermine their priorities. We have removed another that would explicitly impose new reservations on their competence in respect of state aid. We have protected the devolved institutions’ ability to introduce ecological and environmental improvements and new public health initiatives in their nations, the learning from which will benefit us all.

This Bill has posed a major threat to the union itself. With my noble colleagues on these Benches, particularly the noble and learned Lords, Lord Hope of Craighead and Lord Thomas of Cwmgiedd, we have done all we can to ensure that threat diminishes. It has been an enormous privilege, if daunting at times, to be able to participate in this Bill. So many across the House have brought their expertise—from the Select Committees on which they serve, particularly on common frameworks, as well as past experience as elected representatives of widely differing areas—to a shared goal of improving the Bill.

Now we send the Bill on to the next part of its journey, and I hope the Government will continue to listen hard and will reflect on the importance of the amendments and the eloquent speeches of many, including my noble and learned friend, Lord Judge. I genuinely believe that noble Lords should and will resist the reinsertion of distasteful parts of the Bill and the deletion of key amendments.

Finally, it is my pleasure to thank all those who have contributed to the Bill’s passage: the outstanding Public Bill Office and parliamentary clerks, the Bill team and the many who work to support us behind the scenes, particularly the digital team and broadcasting hub, which enabled so many smoothly unmuted contributions—I beg your pardon that mine failed just now—and efficient votes. We have shown that we can function very effectively as a hybrid House, voting remotely, with numbers that showed how clearly the Lords can express its collective views.

The Ministers, Whips and Peers showed they can still maintain a sense of humour under pressure. I would particularly like to thank the Lord Speaker and my fellow deputies, who chaired us through very complex parliamentary procedures. I thank them all very much indeed. Once again, to all in this House who supported these critically important changes to the Bill, I give a huge thank you.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Report stage & Report: 3rd sitting (Hansard) & Report: 3rd sitting (Hansard): House of Lords
Wednesday 25th November 2020 Lords Chamber

If there is a case for powers necessary to deliver the expenditure, and which do not already exist—although I have indicated that, in many respects, they do and have worked perfectly well—let the Government bring it forward. But this clause is not the case, as the noble and learned Lord indicated. I hope that the Minister has listened and will be clear in her winding up. If that is not the case, the House will be justified in removing these clauses at this stage, effectively forcing the Government to come back and bring forward their proposals for us to consider them further.

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

My Lords, it is a great pleasure to follow the noble Lord, Lord Purvis of Tweed, who has repeatedly shone a light into dark corners of this Bill, and to follow my noble and learned friend Lord Thomas of Cwmgiedd.

I strongly support Amendment 64 and Amendment 65, to which I have put my name. It has become increasingly apparent that Clause 42 would enable the Government to work around, rather than work with, the devolved Governments, in particular replacing the regional development funding, which has been so significant here in my own country, Wales, in addressing endemic problems such as economic inactivity and lack of skills. After all, the Government can already provide funds to support devolved matters, providing they do so in partnership with the elected Governments.

In that surprising article last week in the Daily Telegraph, already referred to, the Secretary of State claimed:

“For the first time, this money will be able to be spent by people who have been directly voted for by the people of Wales. People who know the local communities best, and who can develop coherent proposals that are aligned with broader UK-wide priorities.”


It is astonishing that this Government seem to have ignored the group of stakeholders endorsed by the Welsh Local Government Association and the majority of its members, convened—but not commanded—by those directly elected to the Welsh Senedd to develop a framework for regional investment to determine the spending priorities for this funding.

But of course we now have the Chancellor’s statement and can see in box 3.1, as referred to by my noble and learned friend Lord Thomas, the heads of terms of the UK shared prosperity fund. It states, with reference to additional funding in 2021, that the Government will provide such funding to communities using the new financial assistance powers in this Bill. This seems to bypass the elected Welsh Government by inviting local authorities to directly bid to central government. Perhaps the Minister will confirm whether I have understood correctly or not.

I am afraid this Government’s record is to spend on things that have always been the Government’s responsibility. Think of the rail infrastructure: the electrification of the Great Western main route was cut short at Cardiff, despite all the arguments in favour of extending west. Then there are major energy projects, such as the tidal lagoon or broadband, where the Welsh Government had to invest huge funds, including from the EU—which the Minister seems to loathe—to make good the underinvestment by Whitehall. Some suggest that this looks deliberately timed to be before the elections to the Senedd and the Scottish Parliament, and to drive a wedge through the devolved nations’ ability to consider their whole-population needs.

The history of the £3.6 billion towns fund, which relied on Ministers selecting which towns would receive funding, does not inspire confidence. The National Audit Office and the Public Accounts Committee were not convinced by the rationale behind these choices. The committee said:

“The justification offered by ministers for selecting individual towns are vague and based on sweeping assumptions. In some cases, towns were chosen by ministers despite being identified by officials as the very lowest priority (for example, one town selected ranked 535th out of 541 towns).”


The Minister may try to provide reassurance that this Government would not use the powers in Clause 42 to undermine the political priorities of the elected Government in Wales. But once on the statute book, this clause would open the way for future Governments of any colour to ride roughshod over an elected devolved Government. Clause 42 undermines the devolution settlement, which has functioned well for the last two decades. The clause should be removed.

Amendment 65 is an intelligent and thoughtful proposal from the noble Lord, Lord Stevenson of Balmacara, to depoliticise the allocation of funding to replace the EU structural funds to reflect economic and social need, not political expediency. It gives an appropriate role to the devolved Governments, while recognising that this is UK funding designed to level up regions with weaker economies in line with the Government’s own declared aspirations. If the Minister is unable to accept Amendment 64 and remove the offending clause in its entirety, I call on the Minister to settle for this compromise amendment, which will allay suspicions that the Government want to manipulate regional funding for their own ends rather than address objective, clear economic priorities.

[Lord Wigley (PC) [V]]

My Lords, I am pleased to support Amendment 64, moved by the noble and learned Lord, Lord Thomas of Cwmgiedd, to leave out Clause 42. I agree with him and with the noble Baroness, Lady Finlay, in her pertinent comments in support of that amendment. If, however, we do not succeed in removing this provision from the Bill or succeed with Amendment 65, the Bill most certainly needs to be amended to meet the widespread criticism, expressed in the devolved legislatures and, only last Friday, in the Western Mail—if I may quote it rather than the Telegraph—which stated in its editorial’s headline:

“This plan is a direct threat to devolution.”


And it is just that.

I wish to speak to Amendment 67 in my name, which addresses the issue at the heart of the Welsh Government’s misgivings and those of my party, Plaid Cymru. It revolves around the linked questions of what replaces the European regional funding, of which Wales has been a major beneficiary over the past few decades, and who controls the expenditure priorities for any replacement funding coming from the UK Treasury.

The need for this amendment can be properly appreciated only if it is considered in the context of the immense benefit Wales has secured from the European Regional Development Fund and the European Social Fund over the past two decades. Wales is not the only part of the UK that has benefited; Scotland, Northern Ireland, Cornwall, Merseyside and South Yorkshire have also received significant investment. However, it has been Wales—in particular, the area known as West Wales and the Valleys—that has received the most significant level of investment. There is a good reason for this or, I should say, an understandable reason, for it is bad news, not good news: West Wales and the Valleys, the area which includes most of the old coal mining, slate quarrying and marginal land farming in Wales, is, sadly, one of the poorest regions in the entire European Union. The GDP per head of population in this area has been below 75% of the EU average. We were entitled to European funding due to persistent, long-term economic poverty, which the UK Government had, for most of the 20th century, failed to address—and certainly failed to eradicate.

The system utilised by the European Union established the criteria, framework and ground rules of the funding programme, each round of which lasted seven years. The Welsh Government put forward their proposed investment programme, which had to be agreed with the EU authorities in Brussels. The Welsh Government provided matched funding, which had to be additional to the normal spending budgets. That principle of additionality caused some controversy in the early days, with the UK Treasury reluctant to make additional funds available until it was instructed to do so by the EU regional commissioner—one Michel Barnier, God bless him.

The detailed rollout of the programme was, and still is, overseen by WEFO—the Welsh European Funding Office. The funding has been used for a range of projects, two of which I was involved in: the creation of the Galeri performing arts centre in Caernarfon and the management centre of the business school of Bangor University, both assisted by some £6 million of European funding. They could not have gone ahead without it. Both projects have been tremendously successful, as I know both the noble Baroness, Lady Humphreys, and the noble Lord, Lord Hain, can testify.

The third round of this European programme is still running. For the period 2014-2020, the operational programme is worth some £3 billion to Wales. At the time of the Brexit referendum, leave campaigners stressed repeatedly that the funding coming from Brussels would be replaced in full—I repeat, replaced in full—by money from the Treasury in London. I well remember, as I am sure many noble Lords do, being told that the funding emblazoned on that Brexit battle bus—the claimed Brexit bonus of £350 million per week—would, in just a fortnight, fund the annual replacement cost of the European Regional Development Fund and the European Social Fund money coming to Wales. Of course, we were told that the Welsh Government would be fully in control of its use. Those were the promises made, on which basis Wales—regrettably, to my mind—voted to leave the European Union. The time has come to redeem those promises, and Amendment 67 facilitates that commitment.

Amendment 67 seeks to establish the principles that will safeguard the funding coming to Wales and, likewise, to Scotland and Northern Ireland from funds denoted in Part 5 of the Bill. Specifically, the amendment provides that funding should reflect need, not some ad hoc arbitrary criteria, nor a Barnett-type formula, which has been repeatedly condemned by committees of this House yet was used again today in another place by the Chancellor of the Exchequer in the Autumn Statement. Funding on a needs-based distribution, related to the GDP per head of population, would be the basis. In that way, it respects the pattern of distribution of European regional funding—a pledge made during the referendum. Amendment 67 requires the Minister to bring forward a needs-based formula to be approved by order, subject to the affirmative resolution procedure, and provides for the Minister to secure the agreement of the devolved Governments to the content of that order. The amendment also proposes that each annual figure be presented as part of a three-year rolling programme, to ensure that coherent, long-term investment programmes can be secured and the money is not frittered away on short-term fixes.

We have heard a lot during the passage of the Bill about the fears in Cardiff, Edinburgh and Belfast of a power grab by the UK Government, taking away from the devolved Governments powers they currently enjoy. The Government respond, of course, that there is no such power grab and the devolved Governments will retain the powers they currently exercise. This amendment puts those assertions to the test. Either the devolved Governments retain the power to determine capital expenditure projects in their territories, or they do not. If they do not, it will be a flagrant violation of the commitments made during the Brexit referendum and the last general election. If the Government insist on retaining the rights to impose capital expenditure projects on and in Wales, it will set alarm bells ringing. There have been press reports of projects such as the construction of reservoirs in Wales, which is an incendiary topic, given our experience over the past century.

Of course, there may be joint projects of mutual interest, but those must be negotiated by the respective Governments, not imposed by Westminster and Whitehall. The days of imperial diktat have long since gone; if there was one dimension which could trigger an avalanche of support for the independence movements, it would be such an approach by Westminster. It is my fear that this Bill, without amendment along the lines that I propose, heralds such a retrograde step—a rolling-back of the freedom we have enjoyed within a European context and its replacement by Westminster central direction of the sort that Wales suffered in the bad old days before devolution. Amendment 67 is in the interest of establishing a stable harmony between the nations of the UK and I urge the Government to accept it.

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[Baroness Penn (Con)]

I am not sure that the noble Lord’s first questions cover points that we have not covered in this debate already but, for clarity, this does not change the devolution settlements. We are talking about a UK-wide investment programme that will work in collaboration with the devolved Administrations, local partners and local authorities.

I am very happy to clear up the noble Lord’s point about £220 million. That is in addition to money that is still coming through the EU structural funds, which will continue to flow until 2023. As I believe I said in my speech, each of the nations will continue to receive the same level of funding, if not a bit more. That first year of funding is for pilot projects and to aid the transition to the shared prosperity fund, which will then ramp up and there will be a multi-year settlement for that fund in the next spending review.

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

The noble Baroness, Lady Noakes, said to be careful what you wish for. She intimated that, in the event of Clause 44 being deleted from the Bill, the shared prosperity funding being discussed might be withheld completely. Can the Minister state clearly, with a simple yes or no, whether it is indeed the Government’s policy that, without Clause 44, the funding will be withheld or diminished?

[Baroness Penn (Con)]

My Lords, I do not think that I can go any further than what has been announced in the spending review today: that it is the Government’s intention to use the powers under this Bill to deliver the shared prosperity fund.

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[Lord German (LD)]

My Lords, I am grateful to the noble and learned Lord, Lord Thomas of Cwmgiedd, for putting forward so much detail behind this amendment, which clearly lays out the course of action that could be dealt with and also talks about the way the Government propose to take these matters forward. I think that my job is to amplify some of his points and perhaps to extend them as well. I refer to the offer from the Welsh Government, which I presume has also been made by the Scottish Government at the same time: that was the indication I received last night, and perhaps the Minister could confirm that this letter from Scotland has been received as well.

This clause proposes a major recentralisation of power. It is a far cry, for those of us who live in Wales, Scotland or Northern Ireland, from the cry of bringing back our laws, because state aid is currently not a reserved power, despite the Government’s protestation that it is and always has been. Annexe 1 of the Explanatory Notes for the Bill clearly lays out that it is not a reserved matter, but the Bill, of course, makes it say so. I reiterate at the start that we on these Benches want to see a single state aid regime for the whole United Kingdom, but that regime has to be to a design on which all four parts of the United Kingdom have collaborated. If they are not prepared to do this, as this clause lays out, they will not get a legislative consent Motion from either of the devolved Parliaments or from the Northern Ireland Assembly. In fact, in his letter to the Secretary of State for BEIS yesterday, the Counsel General for Wales said:

“Even if we resolve all the other issues, this alone”—


that is, this clause—

“would make it impossible for me to recommend legislative consent to the Bill as it now stands.”

That is crucial, because it says something about the relationship that this clause makes between the four nations of this United Kingdom. It is not a way to respect our devolution settlement and, importantly, not a way to respect the union we have within the United Kingdom.

EU state aid policy is established through the Treaty on the Functioning of the European Union, and directly applicable regulations following on from that treaty. That was in place of having directives that would have required us to transpose these matters into UK law. In response to the House of Lords report on state aid, the Government said:

“We note that in practice the existing EU rules have always been sufficiently flexible to allow the UK to make innovative aid interventions when necessary.”


So the Government do not believe that there has been a problem in the way that this operated with the EU, and now they are intent on eating their own words, bringing back the rules, converting them into a straitjacket regime and not providing the flexibility that the countries in our union previously enjoyed. They also add that it would be “harmful” if this were dealt with in any other way.

A more co-operative and consensual approach is needed. The clause we are seeking to remove assumes that divergence will happen, and decrees that there shall be no divergence. Blunting and reducing the power of the devolved authorities is deemed to be a price worth paying so that the UK Government alone can determine the route they wish to follow in directing the new regime. Yet we do not know what this regime will look like. There is no sign of the detail or the choices the Government propose to take.

What this clause does, no matter what consultation the Government may eventually engage in, is drive their own agenda—an agenda that primarily has to support England. That, by the way, is no way to provide business with the certainty it is seeking. In fact, the lack of clarity at this stage prolongs the uncertainty; but it need not be like this.

We need to make progress on a UK framework for subsidy control. Again, this is another framework agreement which needs to be put in place. At the moment, without such a framework, it could easily be said that the Government are making it up as they go along. What is needed is a dialogue, not the “take it or leave it” policy that this clause entails—a policy which may well end up in the courts and will certainly amplify the feeling that the union of the United Kingdom is not respected.

Yesterday’s letter from the Welsh Government’s Counsel General, which the noble and learned Lord, Lord Thomas of Cwmgiedd, referred to, provides the UK Government with a route to a sensible solution. It recognises the ability in the EU to have variance in subsidies where there is an identified need. I must point out to noble Lords that many of us will remember that this was the case before we became members of the EU. I remember the arguments and debates on UK regional aid and regional assistance, and dividing the areas of the country up where aid could be given in greater amounts. That historical message was that there would be differences and distortions; of course, subsidies provide distortions, but they were provided for very good reasons. They were proposing to make a difference where the needs were greatest—where poverty and economic need were greatest—and so it was provided it in that way.

I can say, as somebody who had to operate within that framework as an economic development Minister, having to talk about these matters with Brussels simply to identify the boundaries, the flexibility, as the UK Government themselves say, was great indeed to manage that work. I believe we are seeing this clause put the cart before the horse—devising the policy before putting the legislation in place is what we are looking for, and that is what this amendment does.

All the devolved Governments have made it clear that they are prepared to work at pace with the UK Government to design a new subsidy regime. I would be grateful if the Minister in replying could tell us how the Government will respond to the offer from the devolved Governments. I also note that there must be unease on the Government’s side about this clause, since I have noticed that no other speaker, apart from the Minister, has come forward to support it.

Removing this clause from the Bill provides the opportunity for dialogue and the drawing up of a new subsidy regime for the UK. As the noble and learned Lord, Lord Thomas of Cwmgiedd, said, we already have a replacement in place temporarily until that is put back and the regime determined. I do hope that the Government will accept the offer from the devolved Governments as the right way forward and, as a gesture of good will, I would be grateful if they would therefore consider withdrawing this clause, supporting this amendment and, in so doing, strengthening the relationships between the various parts of our union.

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

My Lords, I speak in support of this amendment, elegantly explained by my noble and learned friend Lord Thomas of Cwmgiedd. I am pleased to follow the noble Lord, Lord German, who amplified his points.

Yesterday, as already referred to, the Welsh Government’s Counsel General wrote to the Secretary of State at BEIS about Clause 44. That letter demonstrates clearly that the Welsh Government are seriously committed to trying to save the union of the United Kingdom and recognise the need to secure the internal market. Their offer to work intensively with the Government is clear and unequivocal.

The Welsh Government have consistently put forward imaginative and thoughtful proposals about how to move the constitutional debate forward. Indeed, in Brexit and Devolution in June 2017, the Welsh Government championed the idea of common frameworks, subsequently taken up by Whitehall. If I may quote, they said:

“From the outset of the debate about our collective future outside the EU, the Welsh Government has recognised a need to develop UK frameworks. It is clearly important that no new barriers to the effective free movement of goods and services within the UK are created as a result of EU withdrawal. The development of UK frameworks should be taken forward immediately on the basis of negotiation and agreement among the four UK administrations.”


This paper suggests a qualified majority voting system within a reformed intergovernmental system, where a decision endorsed by the UK Government plus one of the devolved Governments would be sufficient to break any logjam, thus addressing head on the issue of one nation wielding a veto. Last year, the Welsh Government’s comprehensive analysis in Reforming our Union championed shared governance, describing taking responsibility for codesigning legislation and policy where devolved and reserved competences intersect. It asserted that

“devolution is concerned with how the UK as a whole should be governed, with proper account taken of the interests of all of its parts. It is a joint project between England, Wales, Scotland and Northern Ireland, based on a recognition of our mutual inter-dependence, which therefore requires a degree of shared governance.”

It foregrounded common frameworks, seeking a common approach, shared delivery systems and joint governance arrangements that should be developed on a collaborative and consensual basis. So, the intervention from the Counsel General is not an opportunistic response to this Bill but the continuation of a patient, crystal clear commitment to common frameworks at the heart of intergovernmental relations.

Over these three days of debates, Members across the House have recognised the importance of these frameworks. The Welsh Government and, I believe, the Scottish Government are not arguing to be left alone to design and implement their own rulebooks for government subsidies. They would be mad to do so. In a free-for-all between Governments of these islands to attract and hold on to investment, the UK Government would be bound to win, because they have much more significant financial resources and can set their own budget. Rather than arguing to have an equal role in designing a fair system all can work within, they are committing to do this on a timetable compatible with the one the Government have set themselves and to take no legislative action in this space until at least autumn 2021.

This is surely beyond reasonable doubt. If the efforts to reach agreement fail, the Government will have to introduce primary legislation to define the new subsidy regime, subject to the same constraints there are now, in order to achieve a coherent regime. We have repeatedly been told that this Bill does not diminish the powers of the devolved institutions, yet all we see and hear defies that. This clause explicitly and openly alters the devolution settlement by adding to the list of reserved matters in the Government of Wales Act and the other devolution statutes. I therefore urge your Lordships to support its removal from the Bill.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Monday 23rd November 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I warmly embrace my noble friend—in a metaphorical sense, he will be pleased to know—for adopting in Amendment 14 and others what was in my amendment in Committee, which is why I have appended my name to his Amendment 14. I congratulate him on moving in this regard and listening to the concerns expressed in this House so forcefully by myself and the noble Lord, Lord Foulkes of Cumnock, and as drafted for me and briefed to me by the Law Society of Scotland.

By the same token, I urge the noble Baroness, Lady Hayter, and the co-signers of Amendment 15 and others in this group not to press them. I would be interested to know the provenance of, and thinking behind, Amendment 15 and the others, because I have not picked up on any move, certainly from the Scottish Government and Parliament, to seek consent in this regard. I would be interested to know why the noble Baroness is going to press this when the Government have gone so far to meet the concerns expressed by the Law Society of Scotland and others in Committee. If we do not welcome and congratulate the Government and this Minister when they move as far as they have, it puts down a poor marker for future amendments to this Bill and others on these matters.

My noble friend has said that Amendments 18, 32 and 43 in his view are unnecessary. I think that Amendment 18 is paralleled by and complementary to his own amendment—government Amendment 19. I think that Amendment 32 is also paralleled by his Amendment 36 and his Amendment 35, which I have also signed. Amendment 43, in my name and that of the noble Lord, Lord Foulkes of Cumnock, I think is also complemented and paralleled by his Amendment 45, for which I am extremely grateful; I would like to pay tribute handsomely to my noble friend for moving in this regard.

I do have a hesitation as to why my noble friend has not accepted Amendments 26 and 28 in my name and that of the noble Lord, Lord Foulkes of Cumnock. They are actually seeking to consult in much the same way as an earlier clause that my noble friend has moved and agreed—which is extremely welcome—but, if my understanding is correct, he has not agreed to move in regard to Clause 12 to consult with the devolved Administrations before preparing guidance under Clause 12. I may be mistaken—in which case, I would be grateful if my noble friend would correct me.

I would also like to warmly welcome government Amendment 29. I would like to take this opportunity to commend the spirit of inclusion shown by my noble friend and the Government on this occasion to commit to obliging the Secretary of State to carry out a review of the use of Part 1 amendment powers and, in that regard, his commitment to consult the devolved Administrations. I wish to warmly commend his movement in that regard.

I would perhaps like to nudge my noble friend also to accept Amendments 26 and 28 as being on the same page as his own thinking. I repeat that I do hope that the noble Baroness, Lady Hayter, and the other co-signers of Amendment 15 and others will take this opportunity to withdraw or not move their amendments, given that the Government have moved as far as they have on this consultation, to which they are now committed. So I do not beg to move.

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

My Lords, I also welcome the Government’s amendments in this group and the speech of the Minister. If I may, I will try to answer the concern just expressed by the noble Baroness, Lady McIntosh of Pickering. I think it is fair to say that some of us fear that the Government might be tempted to try to overturn the amendments of the noble Baroness, Lady Andrews, in the other place, and so we would like the House to fully consider all the amendments in this group that have been tabled by the noble Baroness, Lady Hayter, and myself.

I would like to speak in favour of Amendments 15, 20, 27, 34 and 46. All of these amendments are based on the same principle: that, when issuing guidance as to the implementation of market access principles, or when seeking to extend or further limit the exceptions to the application of the market access principles, the Government must obtain the consent of the devolved Governments to doing so.

However, we are sensitive to the nervousness of the Government and wish to be helpful by providing clear reassurance in statute of coupling a consent requirement with a limited-time proviso. This states that, should consent not be forthcoming from one or more devolved Governments within a month, the Government may proceed to make the changes or issue the guidance, subject only to the need to make a statement to Parliament as to why this is necessary.

This is not an onerous requirement, and I know that what we have proposed is less than the unqualified requirement for consent that the devolved Governments in both Wales and Scotland would have preferred. But this amendment is a healthy, open compromise which can comprehensively allay the fears of the Government Front Bench as to the risk of the process somehow grinding to a halt should a Scottish or Welsh Minister try to delay. Indeed, our approach, advocated in the slightly different context of appointments to the office for the internal market by the Welsh Government, has been adopted by the Minister in government Amendments 56 and 57, so it seems difficult to see how the Government could object to this.

I therefore hope that the Minister will think again and accept these helpful amendments, rather than put us in a situation where we need to go to a vote.

[Baroness Humphreys (LD) [V]]

My Lords, I rise to speak to Amendments 26, 27 and 28 in this group, and in so doing I would like to thank noble Lords who tabled the amendments in this group and introduced them so clearly today.

Clause 12 of the Bill provides the Secretary of State with a power to issue statutory guidance about the practical operation and effect of the market access principles for goods. These amendments to the clause highlight what is, of course, a recurring theme in this Bill: the assumption that such decisions will be made by the UK Government, in the guise of the Secretary of State, without any input from the devolved Administrations, dismissing any attempt at building on intergovernmental relationships to come to consensus. It is this assumption and its consequences that I wish to address quite quickly today.

In a recent article published by the Centre on Constitutional Change, Greg Davies of Cardiff University argues that this Bill—and, I would contend, particularly clauses such as Clause 12 and others in this group—represents a failure of soft law and amounts to the introduction of

“a new constitutional settlement by stealth.”

Since the creation of the National Assembly in 1999, our two Governments have used soft-law techniques of intergovernmental political agreements and memoranda of understanding to form and guide the relationship between them. Because soft law relies on mutual trust, good will and co-operation rather than legal enforcement, it can, this article argues,

“be exploited to sidestep more fundamental reform”.

The introduction of this internal market Bill has, I believe, opened the Welsh Government’s eyes to the reality of the weakness of a system that relies on soft law; they themselves have described the Bill as a “new low”. So, in a Bill which will curtail the ability of devolved Governments to regulate products and services within their territories that originate from elsewhere in the UK, Clause 12, and the additional powers it gives the Secretary of State to act in areas of devolved competence, adds insult to injury.

The Welsh Government have no official voice in this Chamber, but they have the voice of many Members who value the devolution settlements and are determined to see the devolved Parliaments flourish and grow. So I am extremely grateful to the noble Lords who have given us the opportunity to debate these three important amendments today, together with other amendments in this group. In these amendments, this House is being asked to reaffirm Parliament’s support for the devolved settlements, to confirm its continued confidence in the soft-law process of building intergovernmental relationships, and to reject the attempts to introduce—and reject being complicit in—what is, in effect, a new constitutional settlement by stealth.

Of course, I welcome Amendments 26 and 28 in the name of the noble Baroness, Lady McIntosh, which call for consultation with Ministers in the devolved Governments when issuing guidance relating to Part 1 of the Bill, and Amendment 27, in the name of the noble Baroness, Lady Hayter of Kentish Town, which calls for the Secretary of State to obtain the consent of Ministers in the devolved Governments to such guidance. My preference is, of course, for Amendment 27, as it places this Parliament’s commitment to the soft-law process on the face of the Bill and provides for a meaningful outcome to consultation.

I also support Amendments 15, 20, 34 and 46 in this group, which also call for the consent of the devolved Parliaments. In addition, I do welcome the Government’s conversion to consultation in their amendments, but I regret that they really do not go far enough. If the noble Baroness is minded to put any of her amendments, particularly Amendment 15, to the vote, I and my colleagues on these Benches will support it.

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Exactly the same principles should apply to the CMA. I therefore beg to move this very modest amendment; all it does is ensure equality between the nations.

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

My Lords, I thank the Minister for his letter and for explaining the Government’s thinking today. It is a privilege to follow my noble and learned friend Lord Thomas of Cwmgiedd, and I am of course delighted that the Welsh Government suggestion that I promoted has been picked up.

I will speak in support of Amendments 54, 58 and 59, to which I have added my name. They deal with the need for appropriate engagement of the devolved Governments in the constitution of the Competition and Markets Authority, if that body remains the long-term home of the office for the internal market. These amendments would give an appropriate role in the appointment of the CMA’s board to the devolved Governments. They require the devolved Governments to play ball, which is crucial for that important body to function.

These are very modest amendments. They recognise that the CMA was established to deal wholly with reserved matters but is now being asked to take on responsibility for matters of the utmost sensitivity relating to devolved competence. Not to accept such amendments would be like setting up an agency within HMRC, for example, with responsibility for advising all the Governments of the UK on the best methods of reforming local taxation—a fully devolved responsibility—without making any changes at all to HMRC’s constitution.

The only two objections the Government seem to have had are, first, that it is too difficult to change the CMA’s constitution to enlarge the board—but they are already fundamentally changing the role and remit of the organisation—and, secondly, that somehow involving the devolved Governments would risk making the CMA political. I strongly suggest otherwise. Involving the devolved Administrations creates inclusion and cohesiveness for the long term across the union and dilutes political agendas. That is why Amendment 54 is so important. I commend the Government Front Bench on their amendments to this part of the Bill, which reflect points raised in Committee. Their amendments represent progress and deserve to be fully supported. When combined with Amendments 54, 58 and 59, they solve a serious problem.

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[The Deputy Speaker (Baroness Morris of Bolton) (Con)]

My Lords, I have received a request from the noble Baroness, Lady Finlay of Llandaff, to ask a short question of the Minister.

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

Does the Minister agree that good governance requires a balanced board but it also requires that each appointee fulfil the person specification as set out to ensure such balance, that they declare any interest in a relevant discussion and that they may have to withdraw during that discussion? That is all laid out for the running of an open and transparent process within a board as well as for an open and transparent appointments process. Does he further agree that it would be an incredibly narrow person specification that expected people to have only one skill, relating only to their devolved Administration experience, and that they would be coming forward with a broad range of skills to complement a balanced board?

[Lord Callanan (Con)]

There were a number of questions there, but of course I believe that there should be an open and transparent appointments process, and that individuals appointed should possess a broad range of skills—that seems self-evident.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Wednesday 18th November 2020 Lords Chamber

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

My Lords, I wish to move the first of three amendments in this group, which consists of Amendments 1, 38 and 51. They address the rules for the mutual recognition of goods in Part 1 of the Bill, of services in Part 2 and of professional qualifications in Part 3. They are all directed to the same essential point: the relationship between the common frameworks process and the internal market that the Bill seeks to create. Underlying this is a question which goes to the heart of the relationship between the Governments of the four nations in this United Kingdom.

There are two ways in which our internal market can be created. Is this to be a market created by all four nations working together, as they are doing through the common frameworks process, or is it to be created by imposition from Westminster, as the Bill seeks to do? If it is the latter, do the Government really support devolution, as the Prime Minister is now asking us to believe? Actions speak louder than words. How the Government respond to these amendments will tell us where the truth lies.

I am grateful to those noble Lords who have joined with me in proposing these amendments. I should make it clear that I intend to divide the House if the Minister is unable to give me an assurance that the Government accept the principle that lies behind the amendments and will come back at Third Reading with amendments of their own that give effect to it.

The noble Lord, Lord True, has said several times that the market access principles are designed not to replace but to complement the common frameworks. I am sure that he will not mind when I say that he was not the first to use that expression, nor, since it is not his word, if I tell him what I think of it.

The word “complements” is in the White Paper. The noble Lord assured us that the Government remain committed to the common frameworks programme. I would like to take him at his word, but what does he mean by that? Are the market access principles that the Bill sets out really complementary to each other, as he has indicated? It is hard to see how that can be, unless the Bill itself tells us how these two systems are to work together towards the same aim. As it is, when you consider the effect of the market principles on that programme, to say that they complement each other seems a complete misuse of language. My amendments seek to bring the two together, in a way that fully respects the devolution settlement while allowing the principles to operate fully in all the other areas that the common frameworks do not touch.

Without going over again all the ground that I covered in Committee, I should remind your Lordships that the common frameworks process has its origin in an agreement reached at a meeting of the Joint Ministerial Council in 2017. Something had to be done to create a harmonious working relationship between them all when we left the EU. The devolved nations had been able, within the limits of EU law, to fulfil their responsibilities as devolved Governments to formulate and apply policies that best suited their local circumstances. So it was agreed that they and the United Kingdom Government would work together through common frameworks in order to enable the functioning of the UK internal market, while—this was a crucial part of the agreement—acknowledging policy divergence. Therefore, each devolved Administration was to retain the ability to diverge from the harmonised rules in their territory within the mandate given to them by the devolution settlement, after consulting the relevant policy group to see whether a common outcome could be reached and agreed to. Now, three years later, and without the agreement of the JMC or any of the devolved nations, we have this Bill.

Not only does the Bill ignore the common frameworks process but it destroys one of the key elements in that process that brought the devolved Administrations into it in the first place: it destroys policy divergence. It destroys those Administrations’ ability through that process to serve the interests of their own people, and to innovate. The common frameworks operate by working out solutions by agreement between the four nations. If a policy divergence is sought, it has to be agreed to. The market access principles system, on the contrary, does not operate by agreement; it is hard edged. It is a set of strict statutory rules which, apart from the few limited exceptions, do not allow for any divergence at all.

A policy aim which is designed to deal with serious threats to human, animal or plant health will be protected by the exclusion in Schedule 1, but that exclusion is narrowly drawn—threats to the environment, for example, are not mentioned. So policy aims giving effect to advances in the science relating to biodegradable plastics, for example, are outside its scope. As time goes on, there will be others which one party to the common frameworks system would like to put into effect. Business is nothing if it is not dynamic, so there must be room for improvement in what we do across all four nations. The common frameworks system should be allowed to develop but, under the Bill as it stands, all of that will be inhibited by rigid rules.

It does not have to be that way. Our amendments seek to go to the heart of the problem. They assume that a requirement is enacted by a devolved Administration that has been agreed by all four nations under a common framework. They assume that it is being enacted to give effect to a policy formed within its own part of the UK, which the other nations, having assessed its effect on the market as whole, are willing to accept. The question is: how can that requirement retain its effect if traders from another part of the UK can simply ignore it when trading across the border? There is nothing that a trading standards officer—or a court, for that matter—could do to prevent that. This is an invitation to traders—who operate, after all, in their own commercial interests according to the rules of the marketplace—to disregard the requirement as they please when they cross the border.

The devolved Administrations deplore the fact that a process that all four nations have agreed to is at risk of being undermined in this way. The Welsh Government have indicated that they cannot agree to this. The Scottish Parliament has refused to consent to it. Others will speak for Northern Ireland. How can this be a UK internal market when it does not have the support of the other nations? Please do not say that there is widespread support for this Bill. That is not an answer to the very precise question that I am raising, which the White Paper said nothing about at all.

Our amendments seek to do no more than allow the two systems to live together. It will enable them both to work together towards the same common aim. In that way the market principles will truly complement the common frameworks, instead of undermining them and calling into question the whole process. Had it not been for the devolved settlements—for devolution itself—there would have been no problem. We would have been a single Administration and there would have been no need for this Bill at all. But we cannot turn the clock back. Devising rules for this internal market requires us to accept the constitutional arrangements that now exist. It is the genius of the common frameworks that a way was found, by agreement, of doing that. That is what our amendments are all about. They are no wider than is necessary. They are not seeking to undermine the Bill. I beg to move.

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

My Lords, in this group I wish to speak in particular to Amendment 1, which my noble and learned friend Lord Hope of Craighead has explained most eloquently. In Committee, the Government tried to assure us that Parts 1 to 3 of the Bill were somehow compatible with or complementary to the common frameworks process, that the Government were fully committed to that process, and that the intention of the Bill was to fill in the gaps where common frameworks did not operate. But we had no explanation of how the common frameworks process and the market access principles would work alongside each other. No real-world example was cited that the existing common frameworks process did not or could not address in the future.

For example, we were told that different building standards would tie the construction industry in knots. But there are already different building standards, including the excellent requirement in Wales that builders must install fire suppression systems in all new residential premises. This was introduced 14 years ago by the then National Assembly, and guidance to the sector on it runs to several hundred pages—understandable for a measure that will save lives. Has the construction industry been campaigning against devolution as a result? No. Then there was the risk to the English supply of malting barley to Scotland from divergent restrictions on pesticides. That case folded when the noble Lord, Lord Purvis of Tweed, pointed out that the use of fertilisers and pesticides was one of the extremely rare explicit exclusions from the market access principle.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

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

The noble Lord, Lord Purvis of Tweed, has withdrawn, so I call the noble Baroness, Lady Finlay of Llandaff.

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

My Lords, like other noble Lords, I pay my respects to the memory of Lord Sacks. His loss is immeasurable, and I am sure he would have contributed enormously this evening.

I have put my name to the proposal of my noble and learned friend Lord Thomas of Cwmgiedd that Clause 50 should not stand part of the Bill for a number of reasons. First, the clause is in direct contradiction to Ministers’ assertions that the Bill does nothing to remove powers from the Senedd. If that is the case, why is a new reservation necessary?

Secondly, and related to this, is the conundrum that the Government insist that state aid is already reserved. This position has long been strongly contested by the devolved Governments, who have always operated the state aid system, as the UK Government do in England. If there is doubt about the current legal disposition, would it not be better to ask the courts to interpret the meaning of the current reservation and whether it does or does not include state aid?

Thirdly, although I am no expert, I understand that the Government have been resisting pressure from the European Union during the still-ongoing negotiations to keep in place a state aid framework broadly similar to the one we have inherited through our membership of the EU. Indeed, the statutory instrument to revoke all state aid law is before this House. Why are a Government that seem so reluctant to commit to a rules-based system also so eager to take to themselves absolute power on this vital area of economic development policy?

The devolved Governments in Cardiff and Edinburgh are both in favour of retaining this framework in retained EU law. It is a clear system that provides a bulwark against the arbitrary use of public subsidies to support businesses in favour with the Government or to attract investment, something that is a real risk. Having the protection that this current situation affords for the Governments of the smaller nations of these islands is important because, at the end of the day, the UK Government in their “Government of England” mode can always trump any financial incentives that the devolved Administrations could offer in some kind of dog-eat-dog contest. This clause simply feeds the suspicion that, rather than maintaining a level playing field across the UK, this element of the Bill is about giving the Government the maximum freedom to do what they like with the system and channel investment to marginal Conservative seats.

Fourthly, it is probable that, despite their effort, the Government do indeed sign up to an agreement with the EU that requires the enhancement of a new system of state aid. I hope that the term “subsidy control” evaporates in the way the “implementation period” seems to. If that is the case, then the devolved institutions will have to conform to those new rules because they flow from an international treaty obligation, so this new reservation will be unnecessary.

Finally, I turn to what this clause, like so much else about this Bill, says about the Government’s approach to devolution. Quite simply, it would seem that they do not like it, would prefer it not to exist and want simply to pay lip-service to it. This is a Government that do not seem to tolerate any source of law and public policy that they cannot control and, having removed the rival source of authority of the EU, seem to be gunning for other bodies that have the power to make primary legislation. This is not just distasteful; it is profoundly dangerous for those of us who care deeply about the union. I appeal to the Government to rethink their approach urgently because, otherwise, they will see the country gradually disintegrate in front of their eyes.

[Viscount Trenchard (Con) [V]]

My Lords, when I read the three amendments of my noble friend Lady Rawlings, I was not sure exactly what had driven her to propose them. Of course, I am aware that my noble friend is a distinguished former chairman of King's College London and, therefore, well aware of the importance of research and development grants. I recognise the importance of regulating the provision by public authorities of subsidies that may be distorting or harmful.

I had thought that Clause 49 makes it clear that financial assistance for economic development may be provided in a number of forms, including grants. However, I sympathise with my noble friend’s view, which she clearly explained in her impressive speech, that R&D grants should be incorporated to safeguard against unfair state aid masquerading as legitimate subsidies. I would like to hear the opinion of my noble friend the Minister on this question.

Regarding the proposal of the noble and learned Lord, Lord Thomas of Cwmgiedd, that Clause 50 should not stand part of the Bill, although I have the greatest respect for his opinions and was impressed by his characteristically clear explanation of his reasons, I believe it is still necessary for this clause to protect against the undesirable possibility that the devolved authorities might otherwise adopt significantly different regulations on this. I look forward to hearing what my noble friend the Minister has to say about this amendment and the need for a single nationwide state aid regime.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd November 2020 Lords Chamber

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

My Lords, as other noble Lords have explained, the aim of these amendments is to ensure that not only is the office for the internal market appropriately constituted and organised so that it is accountable to all four democratically elected legislatures of the United Kingdom but also that the Competitions and Markets Authority—if this is to be the home of the new office—should be reconstituted to reflect the fact that its functions no longer relate exclusively to reserved matters.

I say “if” the office for the internal market is to sit within the Competitions and Markets Authority. Other noble Lords have already addressed that issue thoroughly and made clear that it is neither necessary nor desirable. The more radical attempts by the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson, to establish the office for the internal market as a truly independent and unattached new body are far more logical and would ensure the proper functioning of the office. The noble Baroness, Lady Bowles of Berkhamsted, explained this very clearly. Their proposal has great merit. We will all be interested to hear the Minister’s arguments as to why a truly independent office is deemed undesirable.

Ministers keep claiming that passing the Bill is extremely urgent. If it is that urgent, perhaps he could explain why it would not be possible to initially brigade the office for the internal market under the CMA as an interim measure until it can be established by statute. After all, that is what seems to be happening with the Trade Remedies Authority. If I am correctly informed, the Government found it easy enough to establish a new body—the Trade and Agriculture Commission—as an independent statutory body.

If there are compelling arguments supporting the current proposal then it is imperative that the CMA can demonstrate that it really can command the trust of the devolved Governments and legislatures. If the Minister cannot give us those arguments during this debate, can he write to us specifying the justification? Nothing in these amendments suggests that it would be impossible for the CMA or for the OIM to function should a future devolved Government simply not want to engage.

The right of appointment of a board member to the Competitions and Markets Authority is important, but the board could function without one or more of these members. In the case of the OIM panel—where the devolved authorities would have to be fully engaged in appointments—if consent is not forthcoming within one month then the Secretary of State could proceed without their consent as long as he made a statement as to why proceeding without consent was desirable. That seems to strike an appropriate balance between ensuring the operability of the new arrangements and ensuring that the devolved institutions have confidence in a body that will have such significance for the future integrity of devolution.

[Lord Wigley (PC) [V]]

My Lords, I am delighted to follow the noble Baroness, Lady Finlay of Llandaff. As she has made so many of the points that I intended to address, I shall not repeat them and I shall curtail my comments accordingly. I agree with the telling arguments made by the noble Baroness, Lady Randerson, and the noble and learned Lord, Lord Thomas of Cwmgiedd. I shall also limit my remarks because of the diabolical communications between Wales and Westminster this afternoon. Noble Lords may see this as an ironic reflection on the amendments that we have just been addressing.

I oppose Clause 30 standing part of the Bill and support Amendment 117, to which I have added my name and to which the noble and learned Lord, Lord Thomas, has spoken. Like the noble and learned Lord, I shall desist from being drawn into the argument that Wales has so often been treated as part of England; that is for another day.

In the earlier debate on Amendment 110, the noble Baroness, Lady Bowles, said that the CMA should be equally available to all four nations. During the debate on the last group of amendments, the noble and learned Lord, Lord Mackay of Clashfern, argued that the devolved Governments should have a voice. This is why I have added my name to Amendment 117.

The Bill is reinventing the CMA as a hybrid body with the OIM—very different from the widely respected body that has hitherto existed. The CMA has to be restructured accordingly.

The Bill is bringing the CMA into a highly controversial area, as it will be dragged into polarised arguments between the Governments of the four nations. Several noble Lords have already raised doubts about whether it is in any way appropriate that the CMA should be used in this way. If the CMA is going to act as an adviser to the Government, it has surely to be an adviser to all four national Governments within the UK. It has to be equally responsive to all four Governments and not beholden unto one Government more than the other three.

It is in that context that I support the amendment requiring there to be a nominee of each of the devolved Governments on the CMA board. Unless this is delivered, the CMA will be seen as the referee and as a body beholden unto one of the teams between which it potentially has to adjudicate. This will inevitably lead to conflict, and it is to give the devolved Governments greater confidence in the CMA that Amendment 117 proposes having a nominee of the devolved Governments within its structure. Having rejected earlier amendments to amend the statutory functions to avoid these dangers, the very least the Government can do is accept Amendment 117, or alternatively bring forward on Report an amendment to achieve a similar purpose. I urge the Minister for once to take a sympathetic approach to this constructive amendment.

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This Bill is not good for Scotland or the UK. These powers should be removed, and we should seek a partnership in which, where the UK Government wish to put resources into the devolved areas and territories, they do so with the support and consent of the devolved Governments, either by funding those programmes in addition to the Barnett formula or by agreeing to do it jointly, as happened with the city deals. These have been remarkably successful and are sowing the seeds for development in research, economic future planning and a lot of co-operation between the public and private sectors. It can be done well or it can be done badly but, in relation to these powers, it would be better if it was not done at all.

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

My Lords, it is a pleasure to follow the noble Lord, Lord Bruce of Bennachie, and my noble and learned friend Lord Thomas of Cwmgiedd, who has explained, from a constitutional perspective, why Clause 48 has very little to commend it. I will illustrate why the powers that Ministers want to take for themselves might, in practical terms, be dangerous and damaging.

Under the last Labour Government, the Labour-led National Assembly chose to go in a different direction on education, which was one of the ways in which the late Rhodri Morgan put clear water between his Government, reflecting the unique circumstances of Wales, and the Government in London. The Welsh Government eschewed moves to establish foundation schools, academies and free schools. They have maintained the central role of local authorities in funding and supporting all schools, arguing, not least in rural areas, that an unplanned proliferation of schools would damage the viability of all educational establishments. They have vigorously championed comprehensive education. Whether or not you support this approach, the current Welsh Government have a mandate for it, supported by Plaid Cymru, meaning that more than two-thirds of Members of the Senedd back this policy.

Were the powers in Clause 48 to be granted, the UK Government could choose to fund free schools across Wales. This would positively undermine the policies backed by a majority of the Members of the Senedd and, more relevant still, a majority of the electorate. Even if the funding for such an initiative was genuinely additional to the block grant—I ask the Minister to give an unequivocal guarantee that that would be the case—such an intervention, even though it would give extra money, would undermine the Welsh Government’s education policy. A free school in an area such as Denbighshire could easily dramatically impact on the viability of local maintained schools. This does not seem right.

The cleanest way of dealing with and preventing this threat would be to remove the clause from the Bill. Nevertheless, for my part, I would be prepared to support alternative approaches. At the heart of this is the question of the so-called shared prosperity fund, which I am afraid some in the devolved nations suspect is a way of reallocating the funds that should come their way, especially to west Wales, to benefit the prosperity of England. The proposal of the noble Lord, Lord Stevenson, to establish a shared prosperity commission would dispel such suspicions by allocating replacement funds on the basis of need, not politics. However, as my noble and learned friend Lord Thomas explained, the onus really is on the Minister to give an explanation, which has been lacking to date, of why these powers are needed now when they have never been needed before.

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

My Lords, I join the previous three speakers in giving notice of my intention to oppose the question that Clause 48 should stand part of the Bill. The grounds for my opposition to Clause 48 are based on paragraph 4(1) of Part 3 of Schedule 5 to the Scotland Act 1998. This is, after all, a devolution issue. That paragraph provides:

“This Schedule does not reserve giving financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment.”


In other words, it is within devolved competence for Scottish Ministers to provide financial assistance for these purposes. The same is true, I understand, of Welsh Ministers and in Northern Ireland.

The geographical reach of this provision is indicated by the fact that it applies to the whole of the UK. The power being sought would seem to cut across the powers of the devolved Administrations to provide this assistance in accordance with their own policies and order of preferences, although I appreciate that it extends over a wider field of activities. Providing assistance for reasons not at one with those policies and preferences would cut across the devolution settlements and for that reason be regrettable. I was very impressed by the example which the noble Baroness, Lady Finlay of Llandaff, gave of how it could interfere with preferences felt in Wales, and no doubt examples could be found in the other devolved Administrations.

More importantly, I, like others, am looking for further information about how this clause is intended to operate. As the noble Lord, Lord Stevenson of Balmacara, asked, what is the plan? Is it the intention that there should be consultation with the devolved Administrations before this power is exercised? If so, what weight will be given to any concerns that they may have? There is no attempt that I can see in the Bill to repeal the paragraph of Schedule 5 to the Scotland Act 1998 to which I referred, so presumably that power is to survive along with the power being given by this clause. To what extent, with regard to purpose and the amount of money involved, is this intended to reproduce within the UK what until now has been forthcoming from the EU? Can we expect the same amount of benefit to be spread among the nations as we have received hitherto? Will the ability of the devolved Administrations to use the powers reserved to them by the provision I quoted be limited in any way when this clause is brought into effect? If so, is that the intention? How are the funds which may be made available to be divided up between the nations? Can we be given any clarity on that point?

I hope that the Minister can shed more light on how this power is intended to operate, but at the moment, from what we have seen so far, it seems to cut across the devolution settlement and to be highly objectionable on that ground.

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[Baroness Randerson (LD) [V]]

My Lords, like the noble and learned Lord, Lord Thomas, I will be very brief. I have added my name to his amendments, which simply reiterate the need for the CMA to consult the devolved Administrations, as well as the Secretary of State, and to obtain consent. They emphasise the importance of respecting devolution. I say to the Government that small things count. They guarantee good and fair government. It is important that the Government take note of the tone of the debates this evening and pay that respect to devolution in the terms in which the CMA operates in the future.

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

My Lords, these amendments are part and parcel of the approach that my noble and learned friend Lord Thomas and I, and indeed the Welsh Government, have advocated. It seems essential to ensure that the office for the internal market is genuinely independent and accountable, on a basis of equality, to institutions in all four parts of the UK.

I want to take this opportunity to seek clarification on some of the powers that the Government propose to give the office. I understand that it would be able to compel persons to provide information and impose financial penalties on those who do not. I can see why these powers are necessary for the Competition and Markets Authority when it investigates matters of anti-competitive practices which possibly violate the criminal law. However, can the Minister please explain why the powers are necessary in the very different circumstances of providing independent advice on the potential internal market implications of measures proposed by a Government?

More specifically, one point in particular needs clarification. It is my understanding that devolved Ministers could not be compelled to provide such information, as, like UK Ministers, they are covered by Crown immunity. However, I am informed that such immunity does not extend to the devolved legislatures, meaning that the Senedd Commission could be compelled to provide information and fined if it did not. This seems wholly unacceptable, and I seek clarification.

[The Duke of Montrose (Con) [V]]

My Lords, I am pleased to be able to contribute to this stage of the debate, and to offer my support to my noble friend Lady McIntosh of Pickering, and particularly to her Amendment 134. Just recently we have heard much discussion, even by the noble Baroness, Lady Bowles, about the suitability of the CMA for this role. But there is no doubt that we need a body, and what we are discussing are the functions it would need to perform. I have sight of the briefing provided by the Law Society of Scotland, which supported some of these amendments, and it has been pretty forensic in striving to ensure, in particular, that this Bill contains enough representation and consultation.

I also support Amendment 135; it seems to me very appropriate that the CMA should have powers to decide what is a matter of importance, because the general idea that anybody could ask it to produce a report is a recipe for overenthusiastic demand from all sorts of people.

Moving on to Amendment 146, Clause 35 deals with who gets to receive the reports that the CMA produces, before, during or after measures that are being introduced, and who will present that report. Subsection (4) excuses the Secretary of State from being the one who gives the report in person. Surely most of the reports will actually be initiated by the devolved Administrations, and reports on the initiative of Secretary of State will be far fewer, so why should the Secretary of State be excused from speaking to the report that he has asked for?

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Moved by

[Baroness Finlay of Llandaff]

143: After Clause 31, insert the following new Clause—
“Advice on proposal to make regulations applying Part 1, 2 or 3
(1) Where the CMA is given notice of proposed regulations in accordance with section (Legislation to which market access principles apply)(5), (Services: application of sections 18 to 20)(9) or (Application of Part 3)(3), the CMA must give advice, or make a report, to the Secretary of State with respect to the proposed regulations.(2) The advice or report must (among other things) consider the potential effects on the matters specified in subsection (3)—(a) of any regulatory provision that any relevant national authority has proposed or might reasonably be expected to propose and that would be affected by the making of the proposed regulations, and(b) of the application of Part 1, 2 or 3 of this Act by virtue of the proposed regulations.(3) The matters mentioned in subsection (2) are—(a) the effective operation of the internal market in the United Kingdom, including—(i) indirect or cumulative effects,(ii) distortion of competition or trade, and(iii) impacts on prices, the quality of goods and services or choice for consumers,(b) the following in each part of the United Kingdom—(i) the health and safety of humans, animals and plants,(ii) standards of environmental protection, and(iii) any other aim that any regulatory provision mentioned in subsection (2)(a) would seek to promote. (4) Where the CMA gives advice, or makes a report, to the Secretary of State under this section—(a) it must at the same time send a copy of the advice or report to the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland;(b) it must publish the advice or report in such manner as it considers appropriate.”Member’s explanatory statement
This amendment requires the CMA to provide advice or a report to the Secretary of State when notified of proposed regulations applying Part 1, 2 or 3 of the Bill and it specifies matters that the advice or report must consider.

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

My Lords, Amendment 143 is to some extent a coda to our recent discussions on the role of the office for the internal market and to the amendments I moved last week, which were intended to underscore the primacy of the common frameworks process. They would ensure that the market access principles are triggered only when it proved impossible by consensus for the four Governments to agree a common framework. The triggering would be by bringing forward regulations using the affirmative procedure.

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[Lord Callanan (Con)]

I thank those hardy souls who have stayed for this brief debate. Amendment 143, tabled by the noble Baroness, Lady Finlay, is concerned with a proposed role for the CMA in the laying of regulations on the application of the market access principles. It builds on the earlier Amendments 6, 78 and 104, which concerned the scope within which the UK market access principles proposed in the Bill will apply. I understand that the noble Baroness has tabled this amendment on behalf of the Welsh Government, and I thank the Welsh Government for their positive engagement on the Bill so far. The UK Government look forward to continued and constructive future engagement with them on more aspects of these proposals.

Before I turn to the detail of this amendment, I note the previous discussion on similar amendments also tabled by the noble Baroness, Lady Finlay, which would have narrowed the scope of the market access principles. As I set out then, those amendments would, in combination, prevent the market access principles from applying in time, at the end of the transition period. Earlier, I set out that the lengthy process the amendments put in place before the principles can apply, including the need to exhaust the framework discussions first, would mean a considerable delay in securing business certainty that trade can continue unhindered within the UK’s internal market. Amendment 143 would add an additional layer of bureaucracy to that process.

In our view, it would also problematically risk bringing the CMA into potentially contentious decision-making and mean its role was weighted towards supporting the Secretary of State over the devolved Administration counterparts. This contrasts sharply with our vision for this, which is to ensure that the OIM’s expert reporting is available to all four administrations equally. Above all, however, the advice provided by the OIM will be economic in nature. Its panel will have expertise across intra-UK trade, regulatory impacts on business and competition effects, which is one reason why the Government chose to establish it within the CMA. We had that debate earlier.

The office for the internal market will not be equipped, therefore, to opine on matters related to animal welfare or environmental protection. To lay this obligation on the OIM would bring a significant risk of duplication of the remit of other public bodies, which would cause considerable confusion for the many stakeholders in this field. For these reasons, and the uncertainty and confusion that this and other related amendments would generate for businesses and citizens, the Government regretfully cannot support them, and I hope the noble Baroness is able to withdraw.

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

My Lords, I am grateful to the Minister for recognising the staying power of some noble Lords, because we have had three days of this debate. I am most grateful to the noble Lord, Lord Fox, for going through some of the aspects of this amendment in more detail and clearly pointing out that its aim is to establish a level playing field, at every level. There has to be a level playing field, because it is the only way in which the four nations will eventually be able to work together properly.

I echo the words of the noble Lord, Lord Stevenson, and I am grateful to him for stating that there is a need to have common frameworks at the centre of the Bill. This is something to which we will return on Report, because the Bill, as it is written, does not make this clear at all. In the way it is written at the moment, it looks as if the common frameworks are almost disposable. We need to come back to that.

I am glad that the Government recognise the involvement and commitment of the Welsh Government to have positive discussions, and I know that from the Wales end that that is true. They want to engage and come to a good solution. They want business certainty just as much as anyone else; they want less bureaucracy just as much as anybody else, but they need to know there will be a level playing field and fairness at the end of the day. That is why the common frameworks were so attractive, and why people have worked so hard towards them and are committed to carrying on working towards them.

Having said that and knowing that we need to have further discussions on this and that we will return to this on Report, I beg leave to withdraw the amendment.

Amendment 143 withdrawn.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

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

[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.

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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.

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[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.

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[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.

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[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.

United Kingdom Internal Market Bill

Baroness Finlay of Llandaff Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 26th October 2020 Lords Chamber

The outstanding virtue of the common frameworks process is the carefully nuanced way in which it addresses each issue while respecting the devolution settlements. The solutions that it can produce by agreement between all the nations should not be inhibited or neutralised by this Bill. My amendments are designed to do no more than is necessary to achieve that important aim. I beg to move.

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

My Lords, I support almost all the amendments in this group—particularly those tabled and introduced with such great clarity by my noble and learned friend Lord Hope—because they all tend in the same direction: to narrow the focus of the Bill on to areas where agreement cannot be reached with the devolved Governments, on ways of managing the tension between safeguarding the internal market and safeguarding the rights of the devolved institutions to take measures they have been elected to take. I shall address these issues myself later in the debate.

My role in this group is more specific: to explain why I believe that Clause 51 should not stand part of the Bill. Clause 51, regrettably, reflects the general powers of the Bill—powers which are sweeping in the Bill’s attack on the very nature of devolution. The clause would make the whole of the Bill a “protected enactment”. In other words, it would prevent a devolved legislature amending any part of the legislation as it applies in a devolved nation, even if that change would otherwise be within devolved competence.

There is precedent for that, but those precedents reflect the fact that such protection should be applied only to legislation of fundamental importance to the constitution or to human rights. Currently, only the Human Rights Act, the Civil Contingencies Act and the soon to be revoked European Communities Act are protected in their entirety. Even in the case of the European Union (Withdrawal) Act, the Government undertook a clause-by-clause analysis of the Bill to set out the case why some clauses, but not every clause, should be protected. Not only is this Bill clearly not of an equivalent weight to those that I have named; the Explanatory Memorandum even claims that this is an economic Bill, not a constitutional one. That is worryingly inconsistent. If the Bill is not constitutional, there is no justification for making any part of it a protected enactment.

I therefore ask the Minister to explain why each and every clause in the Bill should be protected. Can he please explain why the Bill shows indifference to the whole edifice of devolved government? This House needs a clause-by-clause analysis and explanation of the Bill. That is what happened with the European Union (Withdrawal) Bill, as it then was. Now we need a sound justification, before Report, for the rationale behind the Government’s asking Parliament to pass legislation that requires it to be protected in its entirety, and an explanation of the adverse consequences that would result if it is not protected when it becomes an Act of Parliament.

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Moved by

[Baroness Finlay of Llandaff]

6: After Clause 1, insert the following new Clause—
“Legislation to which market access principles apply
(1) Legislation on market access principles may only apply—(a) when the common frameworks process in respect of subjects within a description listed in Schedule (Subjects to which market access principles may be applied) has been exhausted, and(b) only so far as it relates to a subject specified in regulations made by the Secretary of State.(2) Regulations under subsection (1) may specify a subject only if it is within a description listed in Schedule (Subjects to which market access principles may be applied).(3) The Secretary of State may by regulations amend Schedule (Subjects to which market access principles may be applied).(4) Regulations under this section are subject to the affirmative resolution procedure.(5) Before laying a draft of a statutory instrument containing regulations under this section before either House of Parliament, the Secretary of State must give notice of the proposed regulations to—(a) each devolved authority, and(b) the Competition and Markets Authority.(6) The Secretary of State may not lay the draft instrument before either House of Parliament until—(a) the Secretary of State has received—(i) a statement in relation to the proposed regulations from each devolved authority, and(ii) a report or advice on the proposed regulations from the Competition and Markets Authority, or(b) the period of 12 months beginning with the day on which notice was given under subsection (5) has ended.(7) When a draft of a statutory instrument containing regulations under this section is laid before either House of Parliament, the Secretary of State must at the same time lay before that House copies of any statements, report or advice mentioned in subsection (6)(a).(8) In this section, “devolved authority” means—(a) the Scottish Ministers;(b) the Welsh Ministers;(c) the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This amendment means that the United Kingdom market access principles only apply after the process for agreeing common frameworks has been exhausted. It introduces a new Schedule, inserted by another amendment in the name of Baroness Finlay, listing the subjects to which the common frameworks apply and for which regulations may be made if common frameworks are not agreed.

[Baroness Finlay of Llandaff (CB)]

My Lords, I have tabled both the amendments in this group. Amendment 6 is arguably the most important of all the amendments that I have laid, because it aims to do what many of the amendments in the previous group also intended to achieve. In the light of the disappointing ministerial response to the amendments in the previous group, so superbly introduced by my noble and learned friend Lord Hope of Craighead, it could be said that I am having another go, in a more watertight way. Amendment 6 puts common frameworks on the face of the Bill. Amendment 44 is consequential on Amendment 6, since it would make the point at which the regulations came into force the trigger point from which the market access principles would apply. I assure the Government that these amendments are drafted with the Welsh Government, who want the process on the face of the Bill.

I am grateful to the Minister for meeting me and other Peers last week and for his letter of yesterday. In it he states:

“The common frameworks programme was designed to find effective, pragmatic and flexible ways of working with the devolved administrations. The purpose of frameworks is to ensure that intra-UK policy-making is based on agreed structures for cooperation across the UK. They are voluntary in nature and allow the UK Government and devolved administrations the opportunity to find common approaches to the exercise of powers returning from the EU. One of the main benefits of the programme is its inherent flexibility to adapt to changing circumstances.


Enshrining common frameworks in legislation would remove the voluntary element on which the common frameworks programme is based. As frameworks are developed jointly with the devolved administrations, any change of this nature which departs from the agreed principles of the programme would need to be agreed with the devolved administrations. It would also likely eliminate the flexibility which makes frameworks effective in managing intergovernmental policy development in the long term.”


I agree that they are voluntary, but without them in this Bill it reads rather like a blunderbuss, sweeping over all in its path. That is precisely why the devolved Government in Cardiff want common frameworks to be the starting point for this legislation, not hidden away and never referred to, like the first Mrs Rochester. These principles of frameworks were first agreed in October 2017. More than 150 areas have been identified where EU law intersects with devolved competence, including 24 areas, now narrowed down to 18, where legislation may be needed. Thirteen of them are well on their way for early delivery. In the Minister’s response to the first group of amendments today, he flagged up that there will be “dozens of new powers” and responsibilities for the devolved Governments—I hope I have quoted his words correctly. This will inevitably mean wider divergence and, I suggest, is an even stronger reason for an agreed mechanism to find consensus and avoid the situation outlined by the example of flour. Only when that hits the buffers should Parliament step in.

The reason they need to be in the Bill—I believe that Scotland would strongly support this approach—is that they provide an agreed framework, whereas the Bill as drafted empowers the imposition of market access principles across all areas of economic activity, regardless of whether divergence between the devolved nations on a specific issue would pose a threat to the coherence of the internal market. It ignores the frameworks process that has been developed. It seems to assume such frameworks will fail without spending time listening to both sides to reach agreement, which may—let us be realistic—be an agreed compromise. It fails, if I may draw on John Lennon, to “give peace a chance”. It may not be the intention—though some may fear it may be—to launch a full-frontal attack on the current system of devolution, but whether it is or not, its approach feels overbearing and intolerant of difference.

This amendment and equivalent ones in respect of Parts 2 and 3 reverse the burden of proof. This would require the frameworks to be worked through properly, not in a tokenistic way. Failure to reach agreement would trigger action. It would create a system where the market access principles could then be brought into effect by affirmative resolution of this House and the other place. The principles would then, and only then, apply to specified areas of economic activity: areas where attempts to agree a common framework by negotiation between the four Governments of these islands had failed and where the Government could make a credible argument that there was a threat to the economic coherence and well-being of the United Kingdom.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I am afraid that the noble Lord has the advantage of me in that I have not seen that bit of the food standards framework. I would rather look at his question again in Hansard tomorrow and reply to him in detail. I do not think that I am able to give him a full answer now.

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

My Lords, I am most grateful to all noble Lords who have spoken. I am grateful to the Minister for her response but it is disappointing.

I must say that I appreciate the noble Lord, Lord German, pressing the Government on why they cannot specify any examples of potential disruption to the internal market, because we really need to hear those. Perhaps the Minister might write to me with some of those specific points following this debate. I note that the noble Baroness, Lady Andrews, confirmed that there is no evidence that common frameworks are breaking down, nor that there is an inability to be fast.

I can see that the timing in the amendment needs to be looked at and renegotiated, and I am sure that would not be a problem. I know that the Welsh Government are sincerely committed to bridging the gap that the noble and learned Lord, Lord Hope, outlined so clearly; at the moment it is a chasm, but it can be bridged.

I agree with the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Naseby, that we all want the UK to prosper and things to work, but we must find a way to make them work by not splitting the UK, which is what the Bill seems to be doing at the moment.

I am grateful for confirmation from the noble Baroness, Lady Randerson, and the noble Lord, Lord Stevenson, of cross-party support for this approach. I have to agree with the noble Baroness that there is little evidence of the Government’s good will towards devolution in the Bill as drafted, and that at the moment the logic of the Government’s approach is quite difficult to discern.

The amendment was a genuine attempt to restore confidence between the central Westminster Government and the devolved Governments. I hope we will return to it because I think we need to. This was a hand of peace, an olive branch, and we must return to it later on Report. For the moment, though, pending further discussions and negotiations, I beg leave to withdraw the amendment.

Amendment 6 withdrawn.