United Kingdom Internal Market Bill

Lord German Excerpts

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

Let us follow the example we set with that legislation. There is no need to agree to the blunderbuss approach in this Bill. A great deal of work has gone into the common frameworks already, work that can and should be built on. At the end of the day it will help restore confidence by demonstrating that the Government genuinely want to respect all four nations of the UK and do not want to fuel separatist rhetoric. I beg to move.

[Lord German (LD)]

My Lords, these amendments have been prepared by the Welsh Government and have their support; I am pleased to support them. The Welsh Government, as noble Lords know, are committed to the union of the United Kingdom. These proposals before us today seek to find a route through in the way that the Bill has been put together. In fact, they intend to put the horse before the cart rather than the cart before the horse. In the discussions that we had on the previous group and subsequently, there have been for me some very puzzling matters, and I am trying to work out quite where the Government have placed themselves.

First, on timing, the Government seem to argue that we must have the Bill in place in its entirety so that on 1 January they can move forward and have something absolutely concrete to work from. I will come back to that point in a moment. The second point is that the Government have not been able to find any way to describe something which falls outside the area of the structure.



In the last round of amendments, the Minister described additives for flour. Flour and additives are part of the common framework on nutrition. I am told that the three frameworks which are already on the way to early delivery and will be fully operational by the end of the year cover nutrition, hazardous substances and emissions.

I am puzzled why the Government are not able to provide any specific examples of what falls outside the framework, apart from “the future”. We do not know what the future is, but as it arrives we will sort out legislation and frameworks as we move along. That is bound to happen.

Timing is another puzzle because the Government do not want to proceed with the common frameworks as the underpinning structure for this Bill. They seem to want to use what the noble Baroness, Lady Finlay, called a blunderbuss. Battle axe might be another way of putting it. Basically, they do not want the co-operative approach which has been at the forefront of these frameworks.

In September, the Government published their view of the frameworks. Right at the front—on the first page—were the principles which the Government are now seeking to break about the way in which they intend to govern, and about giving and not taking away powers from the devolved Administrations. They were right at the top of the Government’s own papers as recently as last month. If the Government want to put them front and centre, but need something temporary, why not say so? Why not put in a sunset clause, or some form of clause which says this will be a temporary measure until particular frameworks are in place?

The Government’s position is not defensible inside Wales as I know it. The Welsh Government have sought to bring forward a proposal which meets the Government’s aspirations. It says, “Put the common frameworks first and then, if there is any dispute whatever, use the backstop which is being put into this Bill through regulations.” We all want to see an alteration to the way in which they have been carried out and for there to be adequate consultation and debate.

My concern is that I am not certain that the Government know where they are going. I am not certain that they know what they mean by “putting the common frameworks front and centre”. Is this a timing issue? I hope that the Government will be able to answer all these questions.

I want to talk briefly about the one-use plastic teaspoon. They will be banned next year by the Welsh Government, through the Welsh Assembly, because they are bad for the environment and do not degrade in the soil. One-use cutlery is damaging for us as a country and for our environment. However, if that legislation is passed, there is nothing to stop a whole generation of English single-use plastic spoon manufacturers bringing them across the border and distributing and selling them wholesale in Wales. This is an extreme example, but it illustrates that there are bound to be some divergences if the power exists. If, as a Government, you have been given powers and you want to enable them, but you find you are being stopped because of this sort of extraordinary behaviour by a Government somewhere else, that is not going to help the union. The union of this United Kingdom is to be treasured, but to treasure it you have to respect it. I do not believe that the Government are doing so in this Bill. So I ask them all those questions about the direction in which they are going. Will they try to outline whether these frameworks will be placed front and centre? Is it a timing issue? Can they come up with some examples—one would do—which would tell us where the gaps are?

[Baroness Andrews (Lab) [V]]

My Lords, I can speak more briefly to this amendment than the one I spoke to earlier, because my arguments will be much the same. What attracts me particularly about this amendment is that it once again asks the Government to look at the possibility of putting in the Bill the process whereby the Bill becomes the default position and the common frameworks process has to be exhausted before the market principles kick in. I have said before that I think that this is logical. It helps the Government to achieve their own objectives.

When the Minister replied to the previous debate, it was very welcome to hear him say that he was prepared to give more thought to things he had heard the House say this evening. He seemed to think that this process of exhaustion was somehow going to be rather difficult and messy to achieve. From what we have seen in the Common Frameworks Scrutiny Committee, the dispute resolutions are worked out very clearly and in detail. I do not see a problem with that process at all and I would be happy to talk to the Minister about it. If he is worried about that, we can provide some reassurance and, as we scrutinise it, there may be some things we can do to improve the process. If it is a technical problem, then that is what we are here to solve. If it is a problem in principle, then we need to know; he needs to tell us.

The rest of the amendment is slightly more legislative in structure than the amendments from the noble and learned Lord, Lord Hope of Craighead, but I continue to support it in principle because it flags up the significance of common frameworks and the importance of the need for a fit between the Bill and the common frameworks.

The noble Baroness, Lady Finlay, asked me whether we had come across any areas where there was deadlock or difficulty in securing agreement. In the summaries of the frameworks that we have seen so far, and in the one completed framework, we have not seen anything that would alert us to the fact that there is a continuing problem. The problem that the framework negotiators have is the unsettled nature of European negotiations and the issues posed by this Bill itself. They are bound to be waiting for resolutions of different sorts. The processes that they are establishing are clear, transparent and robust. As I say, they offer a solution in practical terms, as well as, frankly, in ethical and political terms, as far as the Government are concerned.

With that, I simply say that I am pleased to support the amendment in principle. I look forward to the Minister, the noble Lord, Lord Callanan, having another go at some of these very specific questions that I think we have a right to hear some answers to.

United Kingdom Internal Market Bill

Lord German Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Lord German (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Desai, because I want to talk about the union—the union of which we are all members. I remind the Government that the union that we now call our United Kingdom is very different from the union that existed prior to our membership of the European Economic Community. We have now had more than 20 years of devolution, and the Bill threatens the union as we know it. Many noble Lords have given examples of how it threatens devolution, and I pay tribute to my noble friend Lord Shipley, who talked about the health implications, and to the noble Baroness, Lady Finlay, who also spoke on this matter. So there are big questions about the union, and they are what I want to address.

First, do we need the Bill now? I do not think we do, because there is no threat to the internal market at the moment. The common frameworks, which are close to agreement, could be used in their draft form, if they are not finally detailed and ready. Common frameworks do not even get a mention in the Bill, yet that work has been going on for two years.

Have the Government put in place appropriate dispute procedures? No, they have not. The Government’s engagement with the devolved Governments has not given an inch on their involvement. Will the Bill weaken devolution in our country? Yes, it will, because it produces override and bypass mechanisms that have the effect of reducing devolved powers. Will the Bill guarantee high regulatory standards? No, it will not, by creating a system that places you at a competitive disadvantage if you follow high standards. Will the Bill promote co-operation and trust between the Governments of the UK? That is an easy one: no, it will not. It will self-evidently not, because of the approach to devolution that the Government have shown. The evidence is that it has managed to bring together three very different democratically elected Governments in their view that it is not the right thing to do.

I will mention a few words on Part 6 of the Bill. That is the add-on part, related to spending. It is not clear how that links to the proposed regulatory structure for the UK internal market, which is the intention of the Bill. Perhaps, in reply, the Minister can say why this section is there at all.

In answer to an Oral Question of mine in your Lordships’ House earlier this year, the Government stated that Wales would receive, pound for pound, what it had previously received from the EU, and that that money would be controlled by the Welsh Government. The question that the Bill documentation does not address is whether the Government still intend to follow the pound-for-pound statement they previously made, and that any money proposed to be spent in devolved areas by this UK Government is in addition to the former EU funds replacement. I must say that the reference to “EU programmes” in the impact assessment says to me that the Welsh Government are set to lose control over these funds.

As it stands, it is very unlikely, almost impossible, to see this Bill having the support of all three devolved Administrations. However, with amendment, there is a very slim chance that it could meet with the agreement of the Welsh Government. I ask the Government to live up to the agreement they made in July 2017 that a UK internal state aid framework needs to be drawn up co-operatively and consensually between the UK Government and the devolved Administrations as equal partners. The Government must avoid actions that could lead to the breakup of this union, but to defend the union, you have to have respect for it, you have to have regard for it, and that is simply not apparent from the way this Government are proceeding at this time.

Rolls-Royce

Lord German Excerpts

Wednesday 14th October 2020 Lords Chamber

[Lord Callanan (Con)]

As I said in previous answers, we are supporting Rolls-Royce extensively, but Covid-19 has had a devastating impact on the aerospace industry globally—Airbus and Boeing, the two largest companies, have reduced production by around 40%. We are doing all that we can to help companies such as Rolls-Royce at this difficult time—as its chief executive, to be fair, made clear when making this announcement.

[Lord German (LD)]

My Lords, this pre-Covid decision by Rolls-Royce has an appalling effect upon the skilled workers in that company and, at the same time, on those workers who are to follow. Advanced manufacturing technology is an important part of the apprenticeship programme and apprenticeship numbers are tumbling. How are the Government going to rectify that matter and put back into place the sort of advanced manufacturing skills which the apprenticeship scheme should provide but is failing to do?

[Lord Callanan (Con)]

We are providing extensive support for training opportunities. I have already outlined the enormous support that we are giving to Rolls-Royce and other high-tech manufacturing facilities. I agree with the noble Lord that we need to do more in this field; we need to get more people online and more jobs in these sectors.

REACH and CE

Lord German Excerpts

Thursday 17th September 2020 Lords Chamber

[Lord Callanan (Con)]

Under the terms of the Northern Ireland protocol, Northern Ireland will remain aligned with all relevant EU rules relating to the placing on the market of manufactured goods and with the EU REACH system.

[Lord German (LD)]

My Lords, the UKCA marking will not be applicable in Northern Ireland, whereas the CE marking will be, as well as the UKNI marking. Can the Minister afford the House some advice? What advice would he give to suppliers and traders working in the United Kingdom and producing in Great Britain if they might see their goods popping up in a shop in Northern Ireland? Should they register both with the CE marking and the UKCA marking to ensure that their goods can be marketed not only in Northern Ireland but across the European Union?

[Lord Callanan (Con)]

If those traders wanted to sell their goods into the European Union market, because that was the system they had, they would have to be CE marked. They would have to comply with similar standards if they wanted to sell them in the North American market.

Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

Lord German Excerpts

Wednesday 15th July 2020 Lords Chamber

[Lord German (LD) [V]]

My Lords, the Government have frequently used the argument that substantial policy changes should not be made as a result of the coronavirus pandemic, and that mixing a permanent policy change with a policy designed to deal with the Covid-19 crisis is to be avoided. In fact, this very argument was used by the Government this week in rejecting an amendment to the rules on bounce-back loans in the Business and Planning Bill. Well, here we have the Government making the very opposite argument to the one they made in another measure affecting the future of our economic base.

Also this week, the Government deployed this argument about a no-smoking ban in the spaces outside pubs and restaurants, where pavements are now being made available to these businesses. So next week, when they try once again to resist these amendments, I hope that they will not try to deploy arguments that run counter to those they are using today. I have no issue with the Government seeking to advance these policy changes, even when opportunities arise from the pandemic. I am simply asking for consistency.

The Government say that these regulations are

“brought into focus by the demands placed on the UK by the COVID-19 pandemic and its impact on the economy”

and that

“as a result of the economic uncertainty caused by the pandemic, usually stable businesses may be suffering a short-term impact to their share price or profitability”.

But they go on to say that the measures are

“not time-limited to the current pandemic”

and are therefore permanent. So, despite what the noble Lord is saying about a Bill yet to come, these regulations are permanent until such time as the Government alter them; there is no time limit in these regulations at all. So, in supporting these measures, I hope that the Government will explain their volte-face on policy-making in the same week—in fact, within the space of three days.

Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020

Lord German Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord German (LD) [V]]

My Lords, it is worth reminding ourselves that the purpose of the CfD is to incentivise investment in low-carbon electricity generation in the UK. I support the measures taken in this set of regulations, in so far as they avoid a large increase in suppliers’ payment obligations at this stage, thereby temporarily avoiding the inevitable passing on of those extra costs to the consumer or a reduction in the effectiveness and economic sustainability of those suppliers. However, we must see these regulations through the perspective of whether they will incentivise investment in low-carbon electricity generation.

As many noble Lords have said, these regulations imply a loan, which will have to be repaid. At present, that is envisaged for next year, although I note, as the Minister said, that it is not time limited. I suspect that he is not in a position to tell whether, if it is to be repeated, there will be an equivalent investment by the UK Government, putting money into the pot to make sure the books balance.

I want to consider the impacts on the generators’ side of the CfD, which are current as well. Can the Minister explain the impact of the changes that have arisen from the targeted charging review? The changes proposed will have an impact on the revenue stream of most low-carbon energy generators. Larger generators will miss out on transmission generation residual payments, which are currently equivalent to about £2.30 per megawatt hour. Once these TGR payments are reduced to zero, a wind farm bidding for a CfD will have to increase its bid by £2 per megawatt hour to ensure the same internal rate of return. This, in turn, will have an impact on new generation projects coming forward. Ofgem acknowledges the impact of the TGR on generators, stating:

“There is a risk that these changes could lead to the cancellation of some projects, including renewable generators which have been awarded CfD contracts”.


Can the Minister tell us whether these changes have been postponed? They would certainly affect the quarterly reconciliation process under the CfD, which determines obligations. In turn, that would mean a shortage of low-carbon generation to meet the Government’s targets. The regulations we are considering today acknowledge the urgency of ensuring that additional costs arising from the response to Covid-19 will not fall upon suppliers. But if the whole purpose of the CfD is to incentivise low-carbon electricity generation, these regulations must provide a temporary fix not just to one side of the equation; they must pay attention to the generation incentive as well.