United Kingdom Internal Market Bill

Baroness Hayman of Ullock Excerpts

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

[Lord Whitty (Lab) [V]]

My Lords, when the debate on this group of amendments started, it seemed that it would be another round of Westminster versus the devolved Administrations, which is a major theme of the group. Nevertheless, there are other issues.

I added my name to Amendment 166, which the noble Baroness, Lady Boycott, spoke to so ably just now. I also support Amendment 169 in the name of the noble Baroness, Lady Bennett, in principle. Both amendments would correct a glaring omission: the absence of any reference to environmental outcomes in either the Bill and the Government’s earlier statements on a shared prosperity fund or my noble friend Lord Stevenson’s otherwise admirable attempt to set up a shared prosperity commission to administer the framework of financial aid across the four countries of the UK.

In effect, the shared prosperity fund concept is a sort of replacement for the EU’s structural funds and regional funds—probably other funding too—which have hitherto been provided back to the UK by the European Union, largely to level up economic and social well-being and performance across Europe. In principle, I like the concept of such a fund or a commission, which may well be a better home for the administration of that framework than the office for the internal market within the CMA, but I must confess to your Lordships that I do not like the term. I racked my brains as to why. I think that it is somehow a bit redolent of the euphemistic terminology of the Soviet era or, perhaps even more worryingly, of imperial Japanese militarily dominated eastern Asia during the time of the co-prosperity zone in the 1930s and during the war. Neither of those historical examples were ever cited by Brexiteers as preferable to the supposed centralisation by Brussels. If that rings alarm bells for me, no wonder it does for the devolved Administrations. Whatever we do, can we perhaps set up a body such as the one proposed by my noble friend Lord Stevenson, but find a better title?

More substantively, if the UK is to distribute aid to business and others to replace and improve on the benefits of the money that we previously received from the EU—which, quite rightly, disproportionately benefited the devolved nations of the UK and deprived areas in England—we need some objective criteria, constraints and rules surrounding that allocation. We also need an institution along the lines proposed by my noble friend Lord Stevenson. His amendment lists a lot of economic and social criteria that such an award of funds would have to take into account, but there are no environmental criteria.

As Amendment 166 in the name of the noble Baroness, Lady Boycott, indicates, the biggest crisis facing us all is the climate emergency. Our international obligations under the Paris Agreement and national commitments under the budget of the Committee on Climate Change surely mean that future state aid of any sort must advance progress on mitigation of and adaptation to climate change, and certainly not lead to effects that undermine our carbon and greenhouse gas targets or make worse the outcome of our industrial system. To that degree, it needs to be an improvement on the operation of some EU funding to sectors and projects that even I, as a passionate pro-European, recognise were not always done well in the EU—that is, some projects, particularly in eastern Europe, undoubtedly damaged the environmental prospects for Europe as a whole, particularly by favouring the substantial further use of fossil fuels.

It is therefore important that any such criteria are written into the terms of the proposed shared prosperity fund, and the commission must reflect those environmental aims. Indeed, any proposition for state aid subsidy, preferred public sector procurement treatment or clearance for planning permission, whether by the UK Government, a devolved Administration, local government or a quango, needs to have attached to it a clear environmental assessment of the impact on the climate, particularly regarding greenhouse gas emissions.

The noble Baroness, Lady Bennett, takes it further than the carbon figures to cover other environmental dimensions, particularly the protection and enhancement of the natural world. Some of what she refers to may be more difficult to measure than greenhouse gas effects, but in reality, if subsidised projects lead to a deterioration in biodiversity and habitats, as did some European projects under the common agricultural policy, that is a contribution to environmental degradation and in many instances leads directly to increases in carbon, methane and other greenhouse gas effects. We should adopt the concepts in these two amendments before we move any further towards something like the shared prosperity system proposed by the Government.

The negative effects of some government subsidy need to be discouraged by the criteria, but positive investment—in renewable energy and other carbon-saving outcomes, for example—needs to be sustained through this system and written into it. The noble and learned Lord, Lord Thomas, was right to say that Clause 48 in its present form should be deleted, but if we are to provide a substitute it has to be an improvement, and an improvement on my noble friend’s amendment—it has to be greener.

[Baroness Hayman of Ullock (Lab)]

My Lords, I speak in support of Amendment 166, in the name of the noble Baroness, Lady Boycott. It is an honour to follow her, along with the noble Baroness, Lady Jones, and my noble friend Lord Whitty. I also support Amendment 167, in the name of my noble friend Lord Stevenson of Balmacara, and its inclusion of the impact of climate change—particularly flooding. That is an issue close to my heart, living as I do near Cockermouth in Cumbria, which has suffered such devastating flooding over the past 10 years.

As we heard today, and in last week’s debate, Part 6 does not rule out working through the devolved Administrations, but—and this needs repeating—sets no requirements to do so, and enables Ministers to spend money directly in otherwise devolved policy areas.

Right across the world it has been recognised that we have to combat global warming and restore biodiversity. It has been agreed that the next round of European structural funds will have tackling climate change and addressing the just transition as a major theme. In May of last year, Parliament recognised, on the Floor of the other place, that we are in a climate and environment emergency. Last week, in his response to Amendment 52, the Minister said that

“the protection of the environment and tackling climate change are vitally important, and something that the Government are, of course, already committed to.”—[Official Report, 28/10/20; col. 339.]

If the Government are serious about achieving this aim, they need to ensure that where direct financial assistance is given it is consistent with these climate and environmental goals. We need to commit to environmentally sustainable, transparent legislation and policies, and apply them to any future trade deals and relationships, if we are to have any hope of tackling climate change. Whatever the formal future relationship between the UK, its constituent nations and the EU, it is vital that we maintain close environmental co-operation and do not risk undermining it through poorly thought-out legislation. As the noble Baroness, Lady Boycott, explained, Amendment 166 could avoid funding being provided for projects that are not compatible with climate and environmental targets and could undermine these goals.

Funding to support the environment needs to be secure as we leave the EU, because we will lose access to so much. I will give a couple of examples that have not yet been mentioned. The EU LIFE programme for environment and climate action has €3.4 billion to support, among other policies, the special conservation areas in the Natura network. The EU maritime and fisheries fund is a €6.4 billion programme, more than a quarter of which supports projects protecting marine environments, developing sustainable fisheries, and supporting the scientific and data-collection aspects of fisheries management. The concept of sustainability involves operating in a way that takes full account of an organisation’s impacts on the planet, its people and its future. That includes how Government operate and the decisions they take. Amendment 166 will help us to secure this for the future.

[Baroness Humphreys (LD) [V]]

My Lords, I oppose the Question that Clause 48 stand part of the Bill. I thank the noble and learned Lord, Lord Thomas of Cwmgiedd, for introducing this part of the debate so clearly. We have heard assurance after assurance from Ministers that the Bill does nothing to take powers away from the devolved Parliaments, but the inclusion of Clause 48 certainly belies their assertions.

This clause, were it to stand, would mean that powers would be returned from the EU to the UK Government to spend on areas such as economic development, infrastructure, sport and education, and will therefore give Whitehall the powers to fund projects to replace EU funding programmes in areas that are devolved to the Welsh Government. But these powers are wider than those in the EU funding programme. The EU structural funds have never funded health, housing or education, and the inclusion of this clause on financial assistance has given cause for concern. It gives rise to a number of questions, to which I hope the Minister will respond.

Our building regulations, and fire and energy safety standards are different in Wales. If the UK Government choose to fund our housing associations to build more social housing, which regulations and standards would apply? As the noble Baroness, Lady Finlay, has said, there are no academies or free schools in Wales; the Welsh Government have rejected their implementation. Clause 48 would allow the UK Government to fund education projects in Wales. Does this mean that the UK Government would march in, with no consultation, and build these schools in Wales?

The intention of the UK Government to implement the M4 relief road scheme is provocative, to say the least. It is an issue the Senedd has examined and debated in detail. It made the decision to reject the scheme on the grounds of cost and impact on the environment, and to develop plans for another route. It is an arrogance that the UK Government feel they can overthrow its decision.

The UK Government fail to understand that they have no mandate to operate in these areas in Wales. In this House, we are expected to honour the manifesto commitments made by the Government in a general election and not to vote against them. In Wales, at the last Assembly elections, the people of Wales gave the Welsh Government a mandate based on their manifesto commitments. What right do the UK Government have to act against the expressed wishes of the people of Wales? For years, we have been clamouring in Wales for the UK Government to invest in projects that they have responsibility for—in our railways and the development of tidal energy, for example. I suggest that that would be a good starting point.

Wales has been eligible for £375 million a year from EU funds for almost 20 years. The management of these schemes has always been shared between the EU and the Welsh Government. The guidelines and parameters have always been clear, and the principles of co-operation and consensus have always been evident.

Now that EU funding is coming to an end, we need clarity on its replacement. The time has come for this Minister to give this House details of the proposed replacement through the shared prosperity fund. Up until now, the UK Government have failed to explain how that fund would operate and what role the devolved Governments would have in spending decisions made under it. Will the Minister do that today?

Many speakers, from all four nations of the UK, have spoken against this Bill’s attempts to undermine our devolution settlements. At Second Reading and in debates on this and other amendments, we have heard the same calls. I hope that the Minister and, through her, the Government, are beginning to understand that, after 20 years, the devolution genie cannot be put back in the bottle. I know that to this Prime Minister and his Government a bullish determination to win at all costs is important, but we have to find ways of working with and not against each other and to find solutions to our problems together. Clause 48 is a perfect example of the Government attempting to grab the devolution genie and force it, feet first, back into the bottle. Sadly, such an attitude does nothing but provide further ammunition to those who would favour the break-up of the United Kingdom.