United Kingdom Internal Market Bill

Lord Bruce of Bennachie Excerpts

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

[Lord Bruce of Bennachie (LD) [V]]

My Lords, I am delighted to follow the noble Lord, Lord Dunlop. That was a thoughtful contribution, and I hope the Government will reflect on it, because it is in the interests of both the Government and the future of the United Kingdom that that kind of approach is thought through.

I speak in support of the amendment, which I contend is a constructive approach to maintaining trust in the existing devolution settlements, which are strained, and establishing a consensual way forward. I believe it is consistent with the report of this House’s Constitution Committee, which, along with others, has questioned the need for the Bill at all—a point that has been mentioned by a number of speakers. Very late in the day, it appears that some in this Government show signs of a growing awareness of the dangerous game they are playing with the devolution settlements and the implications for the future of the United Kingdom. The question arises why the Government are in such a hurry to get this through with totally inadequate consultation with business or the devolved Administrations. The Minister’s claims of business support during Second Reading was, frankly, extremely thin.

The devolved Administrations are, as has been said, opposed to the Bill as it stands, and amendments have been tabled on their behalf on a cross-party basis. When challenged as to why the powers in the Bill are needed, the Government’s responses are wholly unconvincing. From everything I have seen and heard, the Bill appears to be a solution looking for a problem. When Ministers airily suggest, for example, that Scotch whisky distillers may be prevented from buying malting barley from England, without any shred of evidence, they refer to different building standards, apparently in ignorance of the fact that Scotland has different standards that well predate devolution.

Given the flimsiness of the Government’s case and knowing what we do about the high-handed, centralising, cavalier approach of the Government, we are surely entitled to be suspicious about their intentions. After all, as the noble Lord, Lord Dunlop, pointed out, three years ago it was possible to set out in a communique the principles and approach behind the common frameworks process. The language is detailed and consensual. Specifically, the communique setting out the common frameworks describes the objective as enabling the function of the UK internal market while acknowledging policy divergence. It further stated that the devolution settlement should be respected and frameworks will

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

This approach and language are entirely missing from the Bill, so the question to the Minister is not only why the Bill is needed, but, even if that case can be made, why the hurry? More pertinently, having rejected letting common frameworks take all the strain, can the Minister explain why the eminently sensible and constructive approach of the common frameworks is not incorporated into the Bill, as I hope subsequent amendments will allow it to be? We will return to that.

That said, there remains a flaw in the common frameworks approach, which must be addressed and attached to the Bill if it goes forward, and it is identified in this amendment. It is that the devolved Administrations must be fully involved throughout the process and represented in the institutions that progress the frameworks. The proposals for the office for the internal market to be incorporated into the Competition and Markets Authority has been widely criticised. First, the CMA has a dedicated and reserved function, and there is no provision for the devolved Administrations to be represented, but they surely must be represented on the OIM or a better alternative.

As has again been commented on, so far, the common frameworks are progressing with all the appearance of a high degree of consensus and the dispute mechanism has not been called into play. It might be thought that, given the constructive, consensual approach to date, the likelihood is that if dispute resolution reached the apex, it would be accepted. However, it would not be satisfactory as it stands, and certainly not fit for purpose in relation to this Bill. The weakness is that as a dispute escalates, first to Ministers of the devolved Administrations, which includes UK Ministers acting for England, the final resolution lies with UK Ministers. The noble Baroness, Lady Neville-Rolfe, was concerned that the devolved Administrations might be the cause of delay, but I fear she underestimates the resentment of UK English Ministers overruling the devolved territories. That, I suspect, sadly helps explain the rather smug responses from UK Ministers: devolved Administrations may huff and puff, but UK Ministers can blow their houses down.

The Government have quoted examples from abroad to justify their approach but, ironically, they are mostly drawn from countries with properly established federal constitutions, notably Australia and Canada, where state and provincial governments’ views are fully involved in decision-making. In the case of Australia, a two-thirds qualified majority is required.

According to weekend reports, Michael Gove is establishing a unit to combat the SNP and its pressure for independence. I certainly believe that the largely unchallenged fantasy and lies which are fuelling the case for independence that would be so disruptive and damaging on a disastrous scale on top of Brexit and post-Covid recovery need to be challenged, but Mr Gove should have enlightened his colleagues that in its present form, the Bill will make his task almost impossible. Amendment 4 would greatly help him by delaying implementation of Parts 1 to 4 until an agreed approach is confirmed.

As the party with the deepest commitment of any to home rule—we battled for it for over a century—Liberal Democrats are determined to protect the devolution settlement against a centralising government in London and the separatist thrust of the SNP. Scotland’s best interests lie in using the powers that have been secured, ensuring they are not eroded and gaining a positive relationship with the other devolved Administrations and the UK Government. As we rebuild after a botched Brexit and a mishandled Covid-19 crisis, businesses do not need further disruption over constitutional arguments.

With the mechanisms in place and goodwill to seek the best for Scotland, the devolved territories and the UK, confidence can be restored. Ideally, the Government should abandon this Bill, which is at best premature and probably unnecessary but, so long as they push ahead, Liberal Democrats will push to secure this responsible and constructive amendment and save us from an unwanted and unnecessary constitutional crisis. Surely we have had enough disruption for one year—or even 10.

[Lord Purvis of Tweed (LD)]

My Lords, it is a pleasure to follow my noble friend. Amendment 4 was ably moved by my noble friend Lord Fox, and I want to outline some further considerations based on principles and on practical considerations.

I start by reflecting on the important contribution of the noble Lord, Lord Dunlop. I first met the noble Lord when he was the adviser to Prime Minister David Cameron in Downing Street and I was chair of the cross-party Devo Plus group in Scotland, which was arguing for enhanced powers for the Scottish Parliament, which subsequently came into legislation with the Scotland Act 2016. The noble Lord considered our proposals carefully, he has been a very thoughtful contributor to our debates and I look forward to the conclusions of his review on intergovernmental relations. The fact that he has asked for a degree of pause on what could be considered a constitutional rush is important and should be taken seriously. If despite his wise counsel and the thrust of the amendment—which has been tabled sincerely—the Government insist on moving forward on their current trajectory and in their current manner, it will be the first time in a quarter of a century that a major constitutional change will have been imposed on the nations without any form of public or parliamentary consent. That will not serve the start of a new functioning internal market well. The principle of consent is therefore not a theoretical argument; it is important at the political level for those of us who believe strongly in the continued functioning of the United Kingdom and its internal market.

That is in stark contrast with the following groups that we will be considering, where, as the Minister has heard, the frameworks process has been good and we have supported it. The fact that it has been supported across all parties and, indeed, the nations is important.

I reflected on the point indicated by the noble Baroness, Lady Neville-Rolfe, which is that we need the Bill to prevent a veto by one of the nations. That argument would have some form of justification if we had seen that approach within the common frameworks. They cover the policy areas that are being repatriated: 154 of them, of which only four remain where there is not agreement whether they are reserved or devolved. Two of them will be resolved only after we know what is the agreement with the European Union, because they concern geographical indications and state aid—we don’t know what the Government’s proposals are for those two areas because we don’t know what the agreement with the European Union is. That will leave only two. For the 18 that require legislation, it is well under way to being proposed.

So it is not the case that there will be a major gap on the statute book at the beginning of January, and nor is it the case that any of the nations that are in receipt of these powers are seeking to exercise their veto. What those nations are asking, justifiably, is whether the powers being repatriated under the Bill—not the frameworks—are being constrained in a manner that is significantly different from how they were exercised under the single market in the European Union? These are justifiable concerns. So, with the greatest respect, I do not think that the point made by the noble Baroness, Lady Neville-Rolfe, holds any water at all.

It is of concern that in the first group the Minister was not able to categorically reinforce what has been referred to so far, which was the agreement made among the Ministers of Wales, Scotland and the United Kingdom and the representative from Northern Ireland of the principles of moving forward on the framework agreement. I hope that, when the Minister responds to this, he will be more clear in supporting that. If the approach of this amendment had been followed from the outset, I believe that we would have been able to secure consensus, because it would have been consistent with the manner in which we have been approaching it so far.

The point that my noble friend Lady Randerson indicated, which I thought was a very powerful one and which I hope the Minister is not only aware of but very sensitive to, is that this Bill, probably more than most, brings into stark reality the fact that we do not have a federal Government, which means that there are not designated Ministers for England on devolved areas for England. So we will continue to have UK Ministers who will be operating both at a UK level and effectively as Ministers for England. When it comes to areas of the functioning of the internal market, which is about the four nations, and then separately a consideration at the supra-United Kingdom level, the direct conflict of interest that exists in a Minister making the decision in the interests of England, and thus being the arbiter of the approach of Wales or Scotland as to whether they are in breach of the market principles, is a very valid concern.

We have already heard the example of a decision made on legislation in Scotland, the deposit return scheme, where the Minister himself said in the debate on the first group that, under the Bill, it could be disapplied unless UK Ministers decided that it could be within the principles. Now UK Ministers will decide on that. The Minister is shaking his head. If he is shaking his head, it is on the basis of agreement—which is my point. Consensus would be secured on agreement for that.

What is certainly the case—and the Minister cannot shake his head at this—is that the Bill states that decisions made for England by the UK Parliament cannot be bound by any successor UK Parliament. But if decisions made in Scotland or Wales are overridden by the UK Parliament, those parliaments themselves cannot subsequently legislate within those areas. That is why paragraph 88 of the Constitution Committee report asked the Government to

“explain why clause 6 treats legislation intended for England differently from that passed by the devolved legislatures.”

This is the reality—which is why there is justifiable concern. If there is such a concern, what is a better way of approaching it? A better way, as my noble friend Lord Fox and others indicated, would be to look to other countries.

Before I move on to outlining why I think we could look at international precedents, I would like to pick up a further point regarding dispute resolution. My noble friend Lord Fox and I met the Minister and the noble Lord, Lord True, and I am very grateful to the Minister for sending a long letter answering the points that we raised in the question that we asked about when these issues would inevitably arise in disputes. The Minister’s reply of 13 October was very interesting. He said that

“dispute resolution between Administrations will be managed through the appropriate intergovernmental relations fora and are interlinked with the outcomes of the review of intergovernmental relations which is due to conclude in the autumn. The Office for the Internal Market will have a role in providing independent advice in the dispute resolution process.”

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

My Lords, it is a great pleasure and honour to be able to participate in this very important legislation. The search for common frameworks is something that has concerned me from the minute we went down the Brexit road. I would like to support the amendments that were put forward in the name of the noble and learned Lord, Lord Hope. I was also interested to hear the analysis by the noble Lord, Lord Vaux, of ways of solving problems.

It is very important that we go into this area in great detail. I congratulate the noble and learned Lord, Lord Hope, for bringing it in, in this way, this early in our discussion. What he gave us is a very fair and understanding analysis and I hope the Government will pay due attention to the issues that he outlined. We have also been privileged this evening to hear from four Members who have worked on the frameworks committee, and it is of course also very important to look at what they said. I was interested in the way that the noble Lord, Lord Foulkes, supported the issue from the Scottish point of view.

I would like to offer my support to Amendment 170, in the name of the noble and learned Lord, Lord Mackay, which he moved in his intervention. It is very important that agreements that are achieved are formally notified to Parliament, and that was the point he was making.

It is not a direct parallel, but noble Lords will probably remember that, on the introduction of the Scottish devolution Bill, the parties concerned when it was brought into practice in the Scottish Parliament found that they had to achieve a memorandum of understanding. One of the things that was contained in the memorandum of understanding was the Sewel convention. Here in Westminster, we received no details of what this memorandum of understanding contained. One was left wondering how some of the agreements were arrived at. This of course was rectified when we next looked at the Scottish devolution Act and the actual practice was brought in, in a legislative form, under that Act. We need to be kept fully up to date with the agreements that Governments come to. I support that amendment.

[Lord Bruce of Bennachie (LD) [V]]

My Lords, I also am a member of the Common Frameworks Scrutiny Committee. I would like to give my appreciation to the noble Baroness, Lady Andrews, for the way in which she is chairing the committee. It has a hugely demanding task, which we are all learning extremely fast.

The noble and learned Lord, Lord Hope, is of course a member of that committee. The combination of his work and his expertise in the law has been demonstrated to be one of the strengths of the House today in the amendments that he has drafted, moved and explained in such meticulous detail. This is of huge benefit, and I hope that the Minister will recognise that he should give very serious consideration to what is being proposed.

I do not have the audacity to summarise the noble and learned Lord, other than to say that his basic questions were these: how do the frameworks fit into the Bill, and how will future arrangements be conducted if there is not a proper correlation between the frameworks and the Bill, and indeed the principles behind the frameworks? That is something that we have all been asking the Government to explain.

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

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

[Lord Bruce of Bennachie (LD) [V]]

I shall not detain the Committee for long but the Minister came up with the example of flour. I think that as the Bill progresses we can all dream up examples of hypothetical possibilities. However, the question that arises from that example is: why should we not follow the principles and dispute resolution model of the common frameworks? Indeed, as the noble Baroness, Lady Andrews, said, where are the gaps that cannot be filled by the common frameworks? Why do the Government need to take such extreme powers for fast Executive action when, in nearly all these cases, the problem will emerge over time? Everybody agrees that if legislation is required, we should have it, but the Government seem to want to take powers in anticipation of unknown challenges. Therefore, why cannot the principles and model of the common frameworks be the basis on which these cases are taken forward and disputes resolved?

[Lord True (Con)]

My Lords, I should have acknowledged the very thoughtful speeches of the noble Lords, Lord Bruce and Lord Stevenson. I hoped that I had made clear that the common frameworks process would continue. I was asked to give an example of how circumstances might change in the future and how matters that need to be addressed might arise. The emergence of an unregulated new technology might be another example. However, I think it is better that we address these questions in the further discussions that we might have.

So far as pace is concerned, the transition period ends at the end of the year and there is a need to provide a climate of certainty for business when the EU system falls away. Therefore, I do not resile from the fact that it was necessary and sensible for the Government to bring proposals before Parliament to address the post-31 December situation.