United Kingdom Internal Market Bill

Debate between Lord Falconer of Thoroton and Baroness Bloomfield of Hinton Waldrist

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

[Lord Falconer of Thoroton (Lab)]

I am obliged to the noble Baroness, Lady McIntosh of Pickering, for raising these points. There is a raft of unanswered questions here. It is late at night, so I will try to focus on only the most important. Am I right in assuming that the market access principles, recognition and discrimination, apply to the rental and gifting of goods? If they apply to the rental of goods, what is the policy purpose? What is the purpose of applying them to the gifting of goods and what does it mean in practice? For example, does it apply to statutory requirements for the provision of food by food suppliers that are subject to statutory requirements?

The second head of issues concerns the position of public bodies engaged in commerce. I understand, but only from the Explanatory Notes, that the supplying of drugs by the NHS, even though it does so in a commercial context from time to time, is not covered by the Bill. Is this right? I have particularly in mind Clause 14(2), which says:

“‘Sale’ does not include a sale which … is made in the course of a business but only for the purpose of performing a function of a public nature.”


I read in the Explanatory Notes that that means the NHS supplying drugs. If that is right, what does the completely impenetrable Clause 14(3)(b) mean when it says:

“Subsection (2)(b) does not exclude a sale which is … not made for the purpose of performing a function of a public nature (other than a function relating to the carrying on of commercial activities)”?


Can the Minister explain this to the House? It matters quite considerably because I suspect it will cover a great deal of commercial activity performed by public bodies.

Thirdly, and separately, what is the position in relation to the goods that are made partly in one part of the United Kingdom and partly in another—for example, cars on an assembly line that crosses borders, or planes or high-tech equipment where parts from elsewhere come into it? As a result of Clause 15(3) and (4), is there a separate application to each of the individual components or does one look only at the completed goods?

Lastly, and this is perhaps the most significant, how do the Government envisage that this will operate? My understanding of Clause 6, on the non-discrimination principle, is that where a statutory or regulatory requirement in one part of the country discriminates indirectly, making the sale of those goods disadvantageous in another part of the United Kingdom, that disadvantageous provision can be supported only if it has one of the legitimate aims identified in Clause 8(6).

Let us take minimum alcohol pricing in Scotland. This is a relevant requirement which indiscriminately discriminates against incoming goods on the basis that alcohol brought into Scotland from England by a supplier is the subject of a disadvantage as defined in Clause 8(2); namely, minimum pricing makes it less attractive because the goods are more expensive to buy. As I understand it, this can be justified only if that minimum pricing statutory requirement has one of the following aims:

“the protection of the life or health of humans, animals or plants”

or

“the protection of public safety or security”.

Am I right in understanding that if, for example, a large supplier of alcohol from England into Scotland wished to challenge minimum alcohol pricing, he could do so by taking his buyer to court? There would then be a private law action in the courts of either Scotland or England—could the Minister tell me which it would be, assuming that the minimum alcohol pricing was in Scotland and the supplier was in England?—and the courts would have to decide whether or not minimum alcohol pricing was a regulation that had a legitimate aim.

The consequence of this Act—which is quite tricky to understand and is perhaps unthought-out—is that we in Parliament are handing over to the courts the determination of policies such as minimum alcohol pricing. That seems at the moment to be the consequence of the way that the Bill is drafted. I cannot believe that that is what any sensible Government would wish. Could the Minister please explain how Clause 8 works? I hope she can explain why my conclusions on the basis of Clause 8 are wrong—I really hope they are.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank noble Lords for their contributions to this short debate. There were a lot of questions in there, some of which I will just have to write to noble Lords about because my briefing does not cover the whole gamut of what was asked and I would rather give a full answer.

Amendments 66 and 67 are relatively technical amendments relating to the definitions of “sale” in the Bill. I am willing to provide further details on this issue and discuss any concerns that my noble friend has. Amendment 66 would narrow the definition of “sale” in the Bill. It would narrow the types of supply-related activities that a trader could carry out and benefit from the market access principles. It would therefore reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.

The United Kingdom Internal Market Bill is intended to provide a structural underpinning and additional protections to the status quo of intra-UK trade, ensuring certainty for businesses and investors in the form of a safety net of regulatory coherence. We should not cut holes in the safety net. The definition of “sale” that we have will ensure that businesses can continue to trade in a frictionless way, no matter how they are supplying their goods. It also seeks to align broadly with the scope of the “placing on the market” concept that is central to our existing goods regulation.

I say to my noble friend Lady McIntosh that the Sale of Goods Act 1979 was a very UK-specific way of defining a sale. The EU style of definition that has been brought into our legislation is much broader, and there is a need to ensure that the same principles align across the whole legislative piece. “Placing on the market” is therefore included in this as a concept but not in the Sale of Goods Act. In short, the Government cannot support this amendment, and I ask my noble friend to withdraw it.

Amendment 67 would exclude the supply of goods free of charge from the market access principles. It would include the rental of goods, as the noble Lord, Lord Purvis, pointed out. That would lead to the strange outcome that a good could be lawfully sold under the mutual recognition principle in a part of the UK for only a penny but could not be supplied there under that principle free of charge. This would affect a range of items such as commercial samples, marketing merchandise or introductory offers, and would reduce the effectiveness of the market access principles in reducing barriers to trade across the UK.

I was asked a question by the noble Lord, Lord Purvis, when we were talking about coal. I think the distinction my noble friend was trying to make was between a ban on the sale of coal and a ban on its use. As in his example, you could legally buy it in Wales, but you could not then legally use it in England just because you bought it over the border due to the difference in rules. For these reasons, I ask my noble friend not to move Amendment 67.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

I remember the noble Lord asking that question earlier in the debate. I am more than happy to write to him on that and on the other issues that I have not been able to cover in my response.

[Lord Falconer of Thoroton (Lab)]

I am not complaining, but the Minister did not try to answer any of my questions, so I would like a comprehensive response.

I am really interested in whether the Government envisage that in private law actions the courts will be resolving whether regulations that are discriminatory on the face of it for public purposes, as defined in the Bill, are valid—that is, whether they are for a legitimate aim. If they are, then the consequence is that Parliament is subcontracting decisions on these policy issues to the courts. I am not asking the Minister to deal with the other issues, but if she could deal with that one now, I would be grateful. If she cannot, because the answer is not yet known or has not been worked out, I would be grateful if she could indicate that. This issue seems to be absolutely key to the question of certainty for business. If where we come out at the end of the Bill is the courts system deciding on the legitimacy of a whole range of regulations, I am sure that that would not be what the Government would have wished. That is why the common frameworks process looks so much more attractive.

[Baroness Bloomfield of Hinton Waldrist (Con)]

Having looked at that question, I would rather write to the noble and learned Lord giving a full answer—but I will do so very speedily, before we come to the next stage.