UK Internal Market: White Paper

Baroness Kramer Excerpts

Wednesday 29th July 2020 Lords Chamber

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

My Lords, we support the principle of maintaining the UK’s internal market, which is vital for trade, jobs and prosperity across the whole United Kingdom. It is good that the White Paper has been issued, and I am sure that the responses to the consultation will be of value. Will the Minister outline the timetable for the consultation and the legislation to follow, which I assume will have to be in place by 1 January 2021? He will understand that, with the Trade Bill due to start its return journey through your Lordships’ House on 8 September, there is a danger of some overlap, which we should at least identify before we start.

It is already clear from the reactions in the devolved Administrations that there are some knotty problems to be addressed in the consultation, some of which, of course, span beyond internal trade issues, important though these are. The key issue that needs to be addressed is how we establish which powers being repatriated from Brussels can be passed directly to the devolved Administrations. I understand that a lot is agreed, but there are a number of areas where overlapping interests mean that this has not yet been formally determined. What is the current situation on the common frameworks? The unanswered question on this issue is: if a settlement cannot be agreed, or future problems arise, what resolution mechanisms will be used? The proposed independent advisory body is neither flesh nor fowl and will be problematic. However, in previous discussions a number of possible solutions have been canvassed. In this regard I reference the proposal made by the noble and learned Lord, Lord Mackay of Clashfern, who is to speak shortly after me, on the first Trade Bill.

Can the Minister confirm that the solution to this must be de minimis, involving a joint government council, with recourse to the UK Parliament where decisions by the UK Government may impact on areas of competence which are not reserved? Can he further confirm that these arrangements need to be established on the principle of co-operation and transparency? It is surely self-evident that these arrangements will work in practice only if they are based on a secure statutory framework, establishing without doubt a set of high-quality standards which must be applied across the whole United Kingdom— these were, of course, guaranteed while we were in the EU—relating to human rights, employment rights, consumer protection, animal welfare, food safety standards and environmental standards. There must be no question of a race to the bottom here.

There should be an understanding that, where a devolved Administration want to raise standards on an issue on which they have competence, that should be encouraged: the subsidiary principle can and should operate here, possibly to the extent that we could envisage separate devolved administration trade deals in the future. The Minister will have noticed that the Government have resisted all recent attempts to legislate, in successive Bills, for exactly these standards. Will he take this opportunity to look again at the ongoing Agriculture Bill and the soon-to-start Trade Bill and support measures that would achieve this vital underpinning? If not, why not?

Finally, the White Paper raises the question of state aid rules, albeit in the guise of subsidy. We are aware that this issue is one of the key concerns of the current Brexit discussions but, even so, the lack of clarity here is worrying, particularly at a time when state aid has been so crucial to the Covid-19 response and will continue to be so during the recovery. Will the Minister please confirm when further details, including the role to be played by the CMA, will be made available?

[Baroness Kramer (LD) [V]]

My Lords, I agree, as does my party, that an internal market is vital to our economic future, but we are a country of nations, and even this Government must recognise that any internal market requires building a significant consensus between the UK Government and the devolved Administrations. Will the Government commit to an impartial UK body to deal with compliance and dispute resolution, to ensure that the devolved Administrations’ concerns on trade and regulations are respected? How will this proposed legislation operate with the Northern Ireland protocol? I can see no way that unfettered access, which this Statement contemplates, fits with the technical and administrative processes required as a consequence of the protocol. Will the Minister explain how much of the internal market framework is essentially designed to enhance the Government’s flexibility to make concessions without engagement with the devolved Administrations, in order to achieve trade deals with countries such as the United States?

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

I thank the noble Lord, Lord Stevenson, and the noble Baroness, Lady Kramer, for their questions. I pay tribute to the support that he offered for the principles of this legislation, for which I am grateful. He asked about the timetable. As he is aware, consultation on the White Paper closes on 13 August and we are committed to bringing forward legislative proposals following that when parliamentary time allows—likely to be as soon as possible after the Summer Recess.

The noble Lord asked about the continuing discussions on common frameworks. Indeed, those discussions continue, and our proposals will maintain consistently high standards across the whole UK, promoting co-operation between the UK Parliament and the devolved legislatures. He referred to the Agriculture Bill and the Trade Bill. Those are, of course, separate discussions and separate legislation, but let him be in no doubt that we are committed to high standards across the whole United Kingdom. Under our proposals, the devolved Administrations will continue to have the power to regulate within their areas, and they are going to gain a whole load of new powers when we leave the European Union transition period at the end of this year and will continue to be able to exercise their powers in those areas, as long as they do not discriminate against goods and services from other parts of the country. He also asked about state aid. I cannot give him a timetable for that, but it is under active consideration by the Government at the moment.

The noble Baroness, Lady Kramer, referred to the creation of a UK body. We are indeed suggesting that for consultation in the White Paper but we envisage that such a body will act to monitor the operation of the internal market across the country. We do not envisage it as having compliance powers, and of course dispute resolution is ultimately a matter for the courts.

The noble Baroness also referred to trade deals. Again, that will be subject to separate legislation—a separate Trade Bill is coming before your Lordships. However, I reiterate that our commitment is to the highest possible standards across the whole country, and we have no intention of watering them down.