United Kingdom Internal Market Bill

Lord Adonis Excerpts

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

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

My Lords, I think I was on mute for a minute there.

[Lord Adonis (Lab)]

Keep it up.

[Lord True (Con)]

The noble Lord, Lord Adonis, says, “Keep it up,” which I know is a sentiment widely shared.

Noble Lords have been clear throughout this debate on the UKIM Bill about their support for the common frameworks programme. I and the Government concur with those sentiments, and I reiterate the Government’s continued commitment to this programme. I am pleased to update your Lordships’ House that common frameworks are developing well, with three common frameworks currently undergoing scrutiny, including in this House’s committee chaired by the noble Baroness, Lady Andrews—and I pay tribute to the work of that committee.

Out of 33 active frameworks that we have assessed are needed, we expect 30 to be agreed by the end of 2020, mostly on a provisional basis, pending scrutiny by Parliament and the devolved legislatures. The common frameworks programme embodies the value of strong intergovernmental relations. The UK Government and the devolved Administrations are working together, on a voluntary basis, in support of cohesive policy-making and the maintenance of high standards in respect of the specific needs of each part of the United Kingdom. While recognising this positive collaboration, we also need to acknowledge that the common frameworks were always intended to cover only a specific set of issues where powers are returning from the EU. Common frameworks support the functioning of the internal market but cannot by themselves ensure regulatory coherence across the whole UK internal market—the key objective of this Bill.

As the Government have noted previously, we regret that the Scottish Government walked away from the joint internal market workstream in spring 2019. Detailed engagement has been ongoing with the Welsh Government and Northern Ireland Executive on this Bill, and the door remains open to the Scottish Government to join similar discussions. The strength of common frameworks lies in the fact that they provide a forum for discussion and collaboration, with a clear process in defined, but limited, areas of economic activity.

I thank the noble and learned Lord, Lord Hope, for his thoughtful participation in these debates and his considered amendments to the Bill, which he has now partly revised. I welcome also the willingness of the noble and learned Lord to continue engaging in discussions on his amendment with my officials, and those discussions may continue. I also thank noble Lords opposite for their own positive and practical engagement on these matters. Discussions are not exhausted on this topic.

On the amendment before us, I have cautioned your Lordships’ House before, regarding the previous amendments of the noble and learned Lord, Lord Hope, that this would lead to the automatic disapplication of the market access principles, creating a very broad exclusions regime, with the attendant risk of legal uncertainty for businesses and consumers over whether or not market access principles apply. It is the Government’s view that these revised amendments carry similar risks, both in terms of the breadth of the exclusions regime created and in terms of uncertainty. As to the latter, there is no safeguard against different Administrations attempting to implement different interpretations of an agreement into law, potentially leaving the courts in the unenviable position of adjudicating on these different interpretations. That would potentially invite the courts into the common frameworks process, which is inherently undesirable. Any such litigation would create great uncertainty for businesses. This is clearly not in keeping with the need to provide certainty and a stable trading environment for citizens across our United Kingdom.

Moreover, Amendments 1B and 1C prevent the introduction by a UK Government Minister of any new regulations in any area where discussions under the common frameworks process are ongoing. This could mean Ministers would be unable to act, even if there were an urgent need to do so.

Furthermore, the common frameworks programme was established in 2017 to manage the powers returning from the EU in devolved policy areas. In line with its voluntary nature, the programme has not been put into legislation, although I recognise that it is alluded to, in very high-level terms, in Schedule 3 to the European Union (Withdrawal) Act.

While it is a key objective of common frameworks to agree consistent regulatory standards, in practice there may be cases where divergent approaches could be agreed through a common framework. If this were to occur, and if any such divergence were to fall within the scope of the market access principles, we should be in no doubt that the market access principles set out in the United Kingdom Internal Market Bill would apply. That means that even if divergence is agreed in a particular case, it would not prevent businesses from other parts of the United Kingdom being able to sell their products into the relevant place. This would ensure that barriers to trade are not erected through the introduction of divergent policy.

We must also bear in mind that common frameworks are jointly owned by the devolved Administrations. Any proposal to legislate them into this Bill would need to take into account their involvement in the programme. While we have carefully reflected on the arguments made in both Houses, I respectfully suggest that the approach put forward in these amendments brings significant drawbacks to the Government’s ability to provide businesses with the certainty they need to operate across the United Kingdom.

I and colleagues across government look forward to discussing further with our partners in the devolved Administrations and devolved legislatures to consider how we can capitalise on the ways of working agreed through common frameworks. We are also working towards concluding a joint review of intergovernmental relations with the devolved Administrations. These future intergovernmental structures will create a system that secures strategic co-operation and proactive discussions on shared areas of interest, including on common frameworks. The aim of any reform will be to establish an adaptable and effective system of governance that facilitates building long-term trust between the Governments.

We are, of course, open to considering how to put these areas of co-operation on a sustainable footing for the longer term, complementing the IGR review and the market access principles to the benefit of citizens and businesses. I beg to move.

Motion A1 (as an amendment to Motion A)

--- Later in debate ---

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

Two other Members in the Chamber have indicated that they wish to speak—the noble Lords, Lord Adonis and Lord Foulkes, and I will call them in that order. I call the noble Lord, Lord Adonis.

[Lord Adonis (Lab)]

My Lords, in respect of the point made by the noble Lord, Lord Naseby, that because the Commons has given a view we should therefore immediately defer, the proposition is shown to be totally absurd by what is happening with amendments we will consider later. Between the Commons itself expressing a view on Monday and your Lordships meeting today, the Government have changed their mind. We have the unprecedented situation where a Minister of the Crown will move from the Dispatch Box in this House—maybe it will be the noble Lord, Lord True; I cannot wait to watch this performance take place—that this House do insist on its amendments when, 48 hours ago, a Minister of the Crown in the other House moved that the Commons should disagree with the House of Lords. If the noble Lord, Lord Naseby, is concerned that we should respect the will of the House of Commons, since its will appears to change every day at the moment—in response to the invitation of Her Majesty’s Government to take stock of negotiations in Brussels—I think our duty to the Government is to send back everything at the moment. This will give them maximum flexibility to disagree with themselves over the remaining four days of this week. Then let us see how the cards fall next Monday.

These are not trivial matters; they go to the fundamental integrity of the United Kingdom and our relationship with the European Union. I strongly urge your Lordships, in respect of all these amendments, that we obey the precautionary principle. If we are not sure whether there is an impediment to the proper conduct of negotiations or the flexibility that we wish to give the Minister and his colleagues in these negotiations with the President of the European Commission, we should send everything back so that the Government have the maximum opportunity to disagree with themselves over the next week. Let us see where we are thereafter.

The House holds the noble and learned Lord, Lord Hope, in extremely high regard—there is nobody who has a greater grasp of the technicalities of the issues we are addressing. We pay huge tribute to him and his colleagues, and the assiduous attention that they have given to the Bill’s passage in this House. He made a very good technical response to the Minister. In his Amendment 1B, the words at the end of his proposed new subsection (1),

“and states that its purpose is to give effect to that agreement”

make it absolutely clear that any divergence will be within the framework of the common frameworks process. Therefore, it cannot be outside it under the terms of the noble Lord’s own amendments. The only issue—which I think the Minister raised; we are all very fair-minded on this side of the House and give full credit to the noble Lord where he makes persuasive arguments—is what happens if the discussions, during the conduct of which it is not possible to make regulations under the terms of the amendment from the noble and learned Lord, Lord Hope, do not come to a conclusion. The noble and learned Lord’s proposed new subsection (2) says that:

“No regulations may be made by a Minister of the Crown with regard to a matter that is under consideration”.


I hope that the noble and learned Lord can respond to that point when he replies. As a non-lawyer—I fear to tread in this territory—my reading of this is that all parties to these discussions would have to behave reasonably. It would not be open to a devolved Government to keep these discussions going interminably purely for the purposes of avoiding a Minister of the Crown making a regulation. I say that with some trepidation, because I am surrounded by former Supreme Court judges and Lord Chief Justices who will no doubt correct me on that, but if that is the case, then I think that would give a response to the Minister.

I make no apology for speaking on this as a non-lawyer, because behind all this is a very important political point, which comes shining through the words of the Minister. The basic, fundamental political point is whether devolution is a reality or a sham. If it is a reality, then it is absolutely right that the devolved Governments exercising powers conferred by Parliament—these are no small matters—should have the right to engage in discussions about a proper level of divergence that meets the market access principles and common frameworks process. Indeed, I am amazed at how restrained these amendments are because, under their terms, it is not the case that devolved Governments can simply diverge, even if their opinion of the law is that they have the power to diverge. They can only do so with the consent of the United Kingdom Government, because there has to be consensus between them. The amendment from the noble and learned, Lord Hope, in fact gives a very narrow scope—but proper scope, it seems to me—for the devolved Governments to engage in discussion with the United Kingdom Government to meet the United Kingdom market access principle on a level of divergence that would meet their judgment of what is appropriate for their own territories. The noble and learned Lord gave the example of higher food standards. This seems be the absolute minimum, consistent with the proper operation of devolution.

The big underlying point, which we might as well flush out, because it is right to be frank about this, is that the Prime Minister believes—he has told us this—that devolution was Blair’s biggest mistake. He does not believe in these devolved institutions at all; we know that because he has told us. It is always a good idea when people tell you what they think that you take them at their word. He has said that setting up the Scottish Parliament and Welsh Assembly was Blair’s biggest mistake. If we take the view that the establishment of the institutions was itself a fundamental mistake, then of course we would not want to give them any power—even to discuss divergence—because we would think it was a mistake. If on the other hand we take the view that devolution is a beneficial part of the arrangements for the governance of the United Kingdom—which I take to be the official policy of the Government as opposed to the unofficial view of the Prime Minister—without which that governance might well collapse, then it seems to me that the provision that noble and learned Lord, Lord Hope, sets out, for a proper level of divergence to reflect the judgment of devolved governments on what is appropriate for their territories, is absolutely right. We should therefore insist on these amendments.

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

Here we go. There will be those who would say that the debate about the unity of the United Kingdom and the status of Northern Ireland might be contentious. That is a different debate; a different referendum would need to be called. In 2016, the United Kingdom was asked whether it wanted to leave the EU; all of it voted to do so, and yet one part of it is now to be held in thrall, to a certain extent, to the EU—a body that I do not entirely trust to respect the integrity of the sovereign rights of the United Kingdom, I am afraid. Therefore, I am not content.

[Lord Adonis (Lab)]

I am not sure how far I should follow the noble Baroness except by making a few obvious points. First, the Good Friday agreement and the Northern Ireland protocol were warmly welcomed in Northern Ireland; this is not being done to Northern Ireland against its will. These provisions are very warmly welcomed because the people of Northern Ireland see them as a guarantor of peace and stability there; this requires an open border with the Republic of Ireland, so I do not follow the noble Baroness on that point.

I also did not follow the noble Baroness when she said that the House of Lords was standing “in the way” of parliamentary sovereignty. We are part of Parliament and performing our functions as a part of it. In that respect, I pay great tribute to the noble and learned Lord, Lord Judge, and—I never thought I would hear myself saying this—the noble Lord, Lord Howard, who have played an absolutely central part in the ability of this House to perform its proper constitutional role to see that the House of Commons is invited to reflect further on provisions that it believes are injurious to the public interest.

We have reached this point in a very convoluted way, because the Government changed their mind mid-way through the parliamentary process. However, the noble Lord, Lord Cormack, likened the noble Lord, Lord True, to the prodigal son, and we welcome all those who have seen the error of their ways and repented. The process by which they do so is not significant; what is significant is the opportunity that this House gives to Parliament at large—including the Government, which operate as a part of Parliament—to consider its view on these big and important matters that are of concern to us. We have reached the right decision on this matter.

The only point I want to make is about the consequences because, as we now move forward, they are significant. To understand them, we need to understand why the Government did what they did. It was never my view that they intended these provisions to become law; they knew that the noble Lord, Lord Howard, the noble and learned Lord, Lord Judge, and a whole galaxy of the most heavyweight Members of your Lordships’ House would object to them—they knew that.

--- Later in debate ---

[The Deputy Speaker (Lord Russell of Liverpool) (CB)]

One Member in the Chamber has indicated he wishes to speak. I call the noble Lord, Lord Adonis.

[Lord Adonis (Lab)]

My Lords, I do not wish to cover the ground that the noble and learned Lord, Lord Thomas, has just covered so compellingly. He has made absolutely compelling arguments for why we should send this matter back to the Commons again. As he says, it goes to the heart of the devolution settlement: you just need to read the wording of his amendment to Clause 48 to see why it is so compelling.

What the Government are proposing is a provision that says they should make financial arrangements in respect of spending in the devolved territories of the United Kingdom without consultation with the relevant authorities, whereas the noble and learned Lord’s amendment says that it should take place only with consultation with the relevant authorities. So the noble Baroness would need to explain to us why it is appropriate that these arrangements should be entered into with no consultation with the devolved authorities to which they apply. That is an absolutely fundamental point about whether devolution is for real.

The point I want to add, which is so important and why it is a vital that we send this back to the other House, is that what is essentially going on here is an attempt by the Prime Minister to undermine and make as weak as possible the existing devolution settlement. He said, and we should take him at his word, that devolution was the worst mistake of the Blair Government; he does not agree with the setting up of the Scottish Parliament; he does not agree with the Welsh Assembly; he has played very fast and loose with the role of the Northern Ireland Assembly in the way he has conducted policy in respect of Ireland over the last year.

We have a constitutional duty to see that that the devolution settlement, as constructed by Parliament in successive Acts, all of which have represented consensus settlements between the territories concerned and the United Kingdom Parliament, is safeguarded. This Bill is deliberately intended to cut across and undermine the devolution settlements because the Prime Minister does not agree with them, and it is therefore vital that we send this matter back to the House of Commons again.

United Kingdom Internal Market Bill

Lord Adonis Excerpts

Consideration of Commons amendments
Monday 14th December 2020 Lords Chamber

[Lord Thomas of Cwmgiedd (CB) [V]]

My Lords, I thank the Minister for the opportunity to have had discussions with her on two occasions. I am grateful indeed. There are three short reasons why I hope that the House will accept Motion F1 and Amendments 48E and 48F, which I seek to move and the compromise within that is intended. Those reasons can be explained briefly as follows.

The first is that the assertion of financial privilege is one to which there are two answers: it is not a financial issue, it is a constitutional and devolution issue. The scope of financial privilege is a question that will need to be discussed further in due course as the precedents on financial privilege need to be considered in the light of devolution. However, this is not the occasion. The issues in relation to devolution are addressed in this amendment in a way that simply seeks to clarify the need for consultation, principles and advice, all of which are so essential to the function of a union, but they do not impinge on the power of the other place.

My second reason for the amendment is that the way in which it seeks to proceed is to set out a principal reason for spending in the devolved areas. The UK Government and the devolved Governments should work together to strengthen confidence both in the Governments and in the union. The clause requires, as before, consultation in establishing the publication of principles and—this is new—the consideration of advice from the devolved Governments in the field where powers have been devolved. This goes nowhere beyond the devolved powers and it seeks simply to uphold the devolution settlement. The keys are consultation, principle and advice.

It is of course for the UK Government to decide whether they will follow that advice, but perhaps I may make three short points. If the advice were to be followed, it would stop the UK going back, as the Minister has observed, to “Westminster knows best.” If the UK Government were to follow the advice, it would say that they can work with the Governments that have been elected by the people of Northern Ireland, Scotland and Wales to spend wisely in the devolved fields by accepting the advice of those who know best in the devolved institutions. Secondly, it would also give the spending of those funds a considerable degree of democratic legitimacy by ensuring that the democratic mandate to spend in the devolved fields was heeded. Thirdly, if the advice was followed, spending would be much more efficient, as there should be co-ordination of spending. The real risk of inconsistent and, worse still, competitive spending, would be avoided.

My last main reason is, in short, is that the amendment seeks to lay part of the foundation for the exercise of statecraft, something that is so necessary to ensure the future of our union. The question may therefore be asked: why is it necessary to put this into a Bill? We simply cannot afford the failure of statecraft in relation to the union. Experience has shown that a clear mechanism is the best way of providing for co-operation between the four nations. There can be no more important area in which to do this than in relation to the working together, with a common and unified purpose, to increase the prosperity of each of the four nations, and here I refer in particular to the very deprived areas within those four nations. I beg to move.

[Lord Adonis (Lab)]

I strongly support everything that has just been said by the noble and learned Lord, Lord Thomas, and I hope that my noble friends in the Labour Party will support him in his amendment if he presses it to a vote. The points he has raised are absolutely fundamental to the devolution settlement. The big issue here is what happens in lieu of the big decisions that used to be made about the structural funds. The noble Baroness the Minister said in our last debate that it was the European Union that would decide, which of course was technically true because these were EU funds, but the advice upon which projects are prioritised within the devolved Administrations very clearly flowed from the devolved Administrations themselves. If we do not observe that principle in respect of the Shared Prosperity Fund and whatever may replace it over time—the noble and learned Lord, Lord Thomas, has explained that we are putting in place within statute a regime that could now last for decades—what we will be doing is substantially rolling back the devolution settlement.

The noble and learned Lord used a slightly antiquated term, “statecraft”, but it is coming back into vogue, because we have so little of it. Indeed, as some noble Lords might recall, the Prime Minister told us some while ago that it would be a failure of statecraft if there was not a deal, which he very nearly railroaded the country into over the past weekend. It would be an equal failure of statecraft if the devolution settlement starts to break down because of irreconcilable differences between the devolved Administrations and the UK Government on fundamental issues relating to the allocation of structural and regional funding within the UK.

The position that we are in, which is why I think it is so important that the noble and learned Lord presses his amendment, is this: can we simply take the rather vague assurances that the Minister has given us today as being sufficient? In respect of the operation of the whole devolution settlement, which is something that one would expect to roll over from Government to Government as a part of our constitution, I do not think that the assurances which have been given as set down in Hansard are sufficient. It is important to have them in statute. Thus, I think that the arrangements that the noble and learned Lord has set out in his Amendment F1 are absolutely appropriate to what we are facing in this area.

The other reason is that in my experience, people’s past behaviour is always the best guide to their future behaviour. On the basis of the Government’s past behaviour, I do not believe that we can accept those assurances as being sufficient. This is the Government that introduced the towns fund under which Ministers themselves could decide on a wholly arbitrary basis that was not related to any objective statements of need, how they would allocated hundreds of millions of pounds—I think in the end billions of pounds under the fund; I have just been told £4 billion—based on arbitrary and essentially political criteria. How can we accept a vague assurance about consultation with the devolved Administrations when we know that that is how Ministers of the Crown have behaved?

It seems to me to be absolutely essential, not simply desirable, that we put into statute the requirements of the noble and learned Lord’s Amendment F1. They seek that the Government should make these further investments only after consultation, which is the crucial element of his proposed new wording for Clause 48

“on the principles under which financial assistance may be provided by a Minister of the Crown.”

That would set out in law the requirement that there must be consultation on principles.

If I have a concern about the noble and learned Lord’s amendment, it is that it is too weak. This is the classic problem when one starts to compromise. You end up by giving up too much ground. As I read it, I think that the wording of his amendment is too weak because it requires consultation on principles. On my reading of the amendment, it does not require the consent of the devolved Administrations to disbursements that are made in respect of additional investments like the Shared Prosperity Fund.

I will put this to the noble and learned Lord: what would happen if, having consulted, the United Kingdom Government do what they now seem to do routinely—the Prime Minister has told us that he does not believe in devolution—and simply override the view of the devolved Administrations and decide on a political basis to make what are essentially politically motivated investments anyway?

I hope the noble and learned Lord can disabuse me, but my reading of the wording of his new amendment is that the United Kingdom Government would, having consulted, none the less be able to ride roughshod over the devolved Administrations and decide what they want to do for political reasons in London and Westminster. The noble Baroness said—we liked her words—that she was seeking to give backing to the principle that it is not the case that Westminster knows best; my reading of the state of the law, which is what will matter on these things, is that it would be perfectly okay for future Governments to say not only that Westminster knows best but that the Conservative Party knows best and will distribute funding in Scotland, Wales and Northern Ireland in respect of Conservative Party priorities and not any priorities agreed with the devolved Administrations.

I strongly support the noble and learned Lord’s amendment. It goes to the heart of what will happen to devolution after Brexit. My concern is that, in the process of compromising as this Bill has gone through, the amendment is too weak to deliver the objectives which the noble and learned Lord so rightly set out.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

My Lords, I have had three more requests to speak. I will take them in order: the noble Lord, Lord Liddle, the noble Baroness, Lady Bennett of Manor Castle, and then the noble Baroness, Lady Noakes. I call the noble Lord, Lord Liddle.

--- Later in debate ---

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

I call the noble Lord, Lord Adonis, to ask a short question for elucidation.

[Lord Adonis (Lab)]

I want to ask the Minister a very specific question. She talked about consultation, but will she undertake on behalf of Her Majesty’s Government to commit that they will not make investments under the shared prosperity fund, or any of its successors, in the territories of the devolved Administrations without their consent? This is about not just consultation but consent. Further, does she realise that, if she does not do so, none of the other assurances that she has given is worth the paper they are written on?

[Baroness Penn (Con)]

I believe that this issue was the subject of the amendments tabled by the noble and learned Lord, Lord Thomas, in the previous round of ping-pong. Those amendments were sent to the Commons and the Commons rejected them, so we are discussing a new set of amendments in this round of ping-pong. This question was dealt with in the previous round and is, as the Speaker of the House of Commons determined for previous amendments, subject to financial privilege.

--- Later in debate ---

[The Deputy Speaker (Baroness Fookes) (Con)]

I have received a request to speak from the noble Lord, Lord Adonis.

[Lord Adonis (Lab)]

My Lords, before I address the specific amendments in the names of the noble Baronesses, Lady Finlay and Lady Bowles, I will make an observation on the ruling from the Deputy Speaker on the previous group, when the noble and learned Lord, Lord Thomas, sought to withdraw his amendment. It directly relates to this because, for all I know, the same might happen in this case, too. I put on record for future discussions the question of why, as is the normal practice of the House, amendments are not the property of the House once they have been moved.

I understand that was the case when, on 26 November, the noble Lord, Lord Woolley, moved his amendment in the ping-pong on the Parliamentary Constituencies Bill. He sought to withdraw it, but other noble Lords were not content that he should and the House then voted on it. I do not understand the difference between what happened on 26 November on the Parliamentary Constituencies Bill and what happened today when the noble and learned Lord sought to withdraw his amendment. I think this is quite an important point about the procedure of the House and whether, on significant issues of this kind, the House, rather than an individual noble Lord, has responsibility for amendments that have been moved.